The transfer of power to Lugo's former vice president, condemned by regional pacts Mercosur and Unasur as a coup against Lugo, remains beset by controversy with frequent accusations that Venezuela tried to intervene in the country.
Paraguay's suspension from the two regional organizations raised tensions with neighbors Argentina, Brazil and Uruguay, which were seen behind Asuncion's diplomatic isolation.
A new security council announced by Franco in August is seen behind extensive restructuring of the country's intelligence operations and upgrades to communications networks.
Swedish company Millicom recently completed a takeover of Cablevision Paraguay, which is set to modernize mobile communications across Paraguay and with neighboring countries.
Officials say more efficient telecommunications and logistics will be the key to the government's fight against drug trafficking and armed dissident group, chief among them the Paraguayan People's Army.
New security structures will be supervised by a high-powered group led by Franco, his ministers of interior, defense and national intelligence agencies.
The new security council, led by former armed forces chief Admiral Cibar Benitez will focus on the fight against the EPP.
"Although they are a weakened group, the effects provoked by their crimes are important in terms of security," an Interior Ministry statement said, referring to EPP.
"It is perhaps a lesser phenomenon than international drug trafficking, but they must be fought in order to keep them from growing," the statement said.
Franco has linked EPP with the Revolutionary Armed Forces of Colombia, which is contemplating reconciliation with Bogota amid indications disagreements over peace terms will produce new splinter groups that want to continue their violent activities against regional governments.
Franco's aides say EPP's declaration of opposition to his presidency is particularly unwelcome at a time when the president is having to deal with diplomatic campaigns in Mercosur, Unasur and the Organization of American States to secure his diplomatic isolation.
Efforts to have Paraguay suspended from OAS were rejected the organization, which has headquarters in Washington.
Officials say recent EPP attacks on government posts have sought to give those acts a patriotic coloring by citing Brazilian business groups' "exploitation" of Paraguayan farmers and other Paraguayan economic sectors.
Paraguay's narcotics problem is seen to be escalating, with reports citing a rise in local addiction to crack cocaine and other hard drugs.