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General Telecommunications Law approved; text goes for presidential sanction

regulation mark

New legislation modernizes the industry and extinguishes goals to universalize fixed telephony

It was approved last Wednesday (11), in the Federal Senate, the House Bill (PLC) No. 79, 2016 . The project, which was supported by the Ministry of Economy, amends the current General Telecommunications Law (LGT) and allows, for example, that operators no longer have to reach fixed telephony universalization goals. Operators can also become owners of fixed networks received as a government concession, converting them to broadband investments. The matter now goes to sanction of the President of the Republic.

According to the Secretary of Infrastructure Development (SDI) of the Ministry of Economy, Diogo Mac Cord, the new legal framework of Telecom transforms concessions into authorizations, which leaves outdated requirements, such as the obligation to invest in earphones, and brings a Competitive market design for the sector “We understand that it will be extremely important for the next 5G auction and to develop the internet of things (IoT),” he said.

According to César Mattos, Secretary of Competition and Competitiveness Advocacy at the Ministry of Economy, the approval of PLC 79 is a major step forward for the regulatory reform of the electronic telecommunications sector as a whole. In Brazil, because fixed telephony is no longer of great relevance, now the relevant media are: the internet, broadband, mobile telephony, which are otherwise regulated by authorization, ”said Mattos.

The secretary also considered that the problem today is that, in the case of a concession, there is the reversibility of assets to the government. And if it happens, these assets are all mixed, both broadband and mobile. “It would be very difficult for you to make this separation, and it is not at all efficient. In the end it is important and critical that you can look to the future, not the past, where fixed telephony is languishing, ”he concluded.

According to the text, the economic value associated with the adaptation of the concession instrument should be reversed in investment commitments for the implementation of high capacity data transmission infrastructure, based on guidelines stipulated by the Executive Power. Commitments should prioritize the coverage of areas without adequate competition and the reduction of regional inequalities, as well as incorporating the provision of inclusive technologies for people with disabilities in both network access and consumption plans.

The law maintains the remaining deadlines of the authorizations for use of the radio spectrum held by the concessionaires. It also allows the concession period to be extended for periods of up to 20 years instead of a single extension for the same period. Regarding the Brazilian satellite exploration right, the text allows the current exploration period of 15 years to be renewed on successive occasions.

Radio Frequency Market
Regarding the management and granting of the right to use radio frequencies, the legislation provides for the transfer of authorization to use radio frequencies between telecommunications service providers. This transfer will depend on Anatel's consent. Thus, a company that acquired in a bid the right to use a certain frequency band can transfer it, with the approval of the agency, directly to another interested operator.

The device also eliminates the need for bidding to obtain the satellite exploration right, which will be granted through an administrative process organized by Anatel, and establishes that the payment for this exploration right may be converted into investment commitments, of according to guidelines imposed by the Executive Power.