LACNIC Blog > Events > Latin America’s Digital Infrastructure at a Turning Point
Latin America’s Digital Infrastructure at a Turning Point
June 25, 2026
Regulations, fragmentation, connectivity, energy, and artificial intelligence were the focus of the closing session of LACNIC 45 during a panel discussion on the challenges of digital infrastructure in Latin America and the Caribbean.
LACNIC 45 closed with a discussion on one of the central issues for the future of the Internet in Latin America and the Caribbean: what kind of digital infrastructure does the region need to support expanding connectivity, data demands, and new workloads associated with artificial intelligence?
The panel titled A Turning Point for Digital Infrastructure: Data Centers, Submarine Cables, IXPs, and ISPs brought together four specialists with complementary perspectives: Evandro Varonil, Vice President of the LACNIC Board and representative of Brazilian ISPs through ABRINT; Giovanni King, CEO of BlueNap Americas and Chair of the Caribbean Data Centers Association; Pablo Ruidiaz, Executive Director of InteRed Panama; and Carlos Pazmiño, Head of Submarine Cable Systems at Telconet, Ecuador. Carmen Denis, Director of Internet Exchange Service Yucatán and member of the LACNIC Board, moderated the discussion.
Carmen opened the conversation with a direct question: “If you had to name a single challenge currently limiting the Internet’s potential in your sector, what would it be?” The responses were revealing, not only because of what the panelists said but also because of the commonalities among them.
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Varonil did not hesitate and his answer was regulations. King pointed to fragmentation in the Caribbean, a region surrounded by undersea cables but divided into dozens of small economies that struggle to negotiate individually. Ruidiaz echoed this diagnosis for Central America, where similar fragmentation prevents the subregion’s 50 million inhabitants from presenting themselves as a unified market. And Pazmiño, who had originally intended to reply “regulations,” chose instead to name the second issue on his list: the inability to think collectively as a region, the “us first, not our neighbor” mentality that ultimately deprives everyone of infrastructure.
The Brazilian Model
The first part of the panel focused on the case of Brazil, which accounts for more than 9,000 of the 14,000 autonomous systems registered in Latin America. According to Evandro Varonil, this is the result of more than 30 years of sustained public policy.
In the mid-1990s, the Brazilian Ministry of Communications legally separated Internet service providers from telecommunications companies. While telephone companies controlled the physical infrastructure—the cables and the last mile—ISPs could operate as independent legal entities without having to be telecommunications carriers. This separation, known as Rule 4, allowed thousands of small and medium-sized providers to flourish in a country of continental dimensions.
Varonil did not hesitate and his answer was regulations. King pointed to fragmentation in the Caribbean, a region surrounded by undersea cables but divided into dozens of small economies that struggle to negotiate individually. Ruidiaz echoed this diagnosis for Central America, where similar fragmentation prevents the subregion’s 50 million inhabitants from presenting themselves as a unified market. And Pazmiño, who had originally intended to reply “regulations,” chose instead to name the second issue on his list: the inability to think collectively as a region, the “us first, not our neighbor” mentality that ultimately deprives everyone of infrastructure.
The Brazilian Model
The first part of the panel focused on the case of Brazil, which accounts for more than 9,000 of the 14,000 autonomous systems registered in Latin America. According to Evandro Varonil, this is the result of more than 30 years of sustained public policy.
In the mid-1990s, the Brazilian Ministry of Communications legally separated Internet service providers from telecommunications companies. While telephone companies controlled the physical infrastructure—the cables and the last mile—ISPs could operate as independent legal entities without having to be telecommunications carriers. This separation, known as Rule 4, allowed thousands of small and medium-sized providers to flourish in a country of continental dimensions.
“If it depended on a single operator, Brazil wouldn’t have the connectivity it has today,” Varonil summarized. He added that, in parallel with this proliferation of ISPs, Brazil built an Internet exchange point in each of its states. These IXPs, he explained, were not only a consequence of the ecosystem but also one of its causes: without local Internet exchange points to connect to, many of those autonomous systems would not have made sense from an operational point of view.
The current challenge is that Rule 4 is in the process of being phased out and scheduled to expire in early 2027. The industry is watching with concern how a regulatory change could affect the architecture that made this ecosystem possible.
IXPs: Essential Infrastructure That Often Goes Unseen
Internet exchange points play an essential role in ensuring that local content does not have to leave the country or region to reach nearby users. “We don’t have the glamour of an undersea cable or a data center,” Ruidiaz acknowledged. “But we are essential infrastructure.”
From Panama, InteRed has achieved sustained traffic growth of more than 100% over the past seven or eight years, largely thanks to the presence of undersea cables and its ability to build an ecosystem of interconnected operators. But Ruidiaz also highlighted the limitations of this model: Panama is a relatively small country, and its growth may depend less on scale and more on efficiency, low latency, and digital sovereignty.
The concept of digital sovereignty came up several times during the panel discussion. In practical terms, digital sovereignty means that when a user completes a transaction with a local bank or accesses a government service, that information should not have to leave the country to be processed. A well-connected IXP, with the right operators and participating institutions, can help keep traffic local. Without this infrastructure, dependence on international connectivity is not just a latency issue, but also a matter of control.
The Caribbean: Surrounded by Cables Yet Disconnected
Giovanni King described a paradox that defines the Caribbean: a region with decades of investment in undersea cables, where virtually every island has at least one connection, but where connectivity costs remain among the highest in the world.
The explanation, he noted, is structural. Many of the cables were deployed years ago and are approaching the end of their lifespan. At the same time, the limited size of individual economies makes replacing these cables financially unfeasible for each island on its own.
Compounding this is a historical design feature of this connectivity: the cables were oriented toward the north, toward the United States, because that was where traffic was expected to go. The logic of content platforms and hyperscalers, however, is changing this geography, and the Caribbean needs to adapt.
The Caribbean Data Centers Association is exploring a response that combines digital sovereignty mechanisms, multilateral agreements, and federated cloud models that allow information to be processed and transferred across jurisdictions without losing control over the data.
Undersea Cables, Data Centers, and Energy
Carlos Pazmiño contributed the perspective of someone with more than two decades of experience in undersea cables, first with PCCS—the system connecting Ecuador to Jacksonville via the Caribbean—and now in the deployment of a second cable that is nearing completion.
Why Ecuador? According to Pazmiño, the reason was necessity. Northern Colombia has a larger population and greater investment capacity. Peru has historically been well served by Telefónica. Ecuador, situated between them, was in a less-served position. Cables are built out of necessity, but also for commercial, political, and, in some cases, humanitarian reasons.
The arrival of hyperscalers changed the equation. In recent years, companies such as Google, Meta, and Amazon have invested heavily in undersea connectivity to link their own data centers. That investment is substantial and real, Pazmiño acknowledged, but it serves a specific purpose, which is to connect the infrastructure of large companies to one another, not necessarily to strengthen the local ecosystem.
The critical issue he highlighted was energy. Fortaleza, in northeastern Brazil, has become a hub for undersea cables and data centers not only because of its geographic location but also due to the availability of energy. For the rest of Latin America, having reliable and affordable energy to power energy-intensive digital infrastructure, particularly data centers associated with artificial intelligence, will be a determining factor in attracting and sustaining new investments.
Artificial Intelligence: The Challenge That Is Already Here
The final part of the panel’s discussion focused on artificial intelligence as a reality that is changing the demands placed on digital infrastructure. Pazmiño described this challenge in practical terms: Telconet currently operates 29 NVIDIA servers, several of which are from the H100 series. The power requirements, connectivity demands, and processing density associated with this equipment are on a scale far beyond previous workloads.
Is Latin America prepared for what lies ahead? The panel’s response was nuanced. Some nodes are indeed better positioned—Brazil, Panama in certain respects, and major capital cities with established data centers. However, the region as a whole faces a structural gap between the demand that is rapidly approaching and the installed capacity available to meet it.
The message from the panel was clear: the region is not starting from zero, but it will require more coordination, less fragmentation, and placing digital infrastructure on the regional agenda. Connectivity, IXPs, undersea cables, data centers, energy, and artificial intelligence can no longer be discussed in isolation.
This debate will continue at LACNIC 46 in Mendoza, where the community will have a new opportunity to delve deeper into the challenges and opportunities of a more integrated, resilient, and future-proof digital infrastructure.
