On May 23, 2013, Brazil′s telecommunications regulatory
body, Anatel, enacted new regulations for certain multimedia
communications services (Resolution No. 614 of May 28,
2013).
The services in question are prized by companies seeking to
provide convergent services such as data and voice transmission.
According to current estimates, more than 4,000 providers are
authorized to supply this service in Brazil.
This memo will address the main changes introduced by the new
regulations.
The definition of "multimedia communications services"
("SCM") was amended in order to expressly include the
provision of Internet connection services. In fact, it was
established that companies dedicated to Internet access services
must request the granting of the new SCM license within the period
of six (6) months beginning May 28, 2013.
The new regulations also establish that an Internet access
provider offering this service through an Internet access provider
of its own economic group must ensure free Internet access to users
(this rule is applicable to SCM providers with less than 50,000
users).
The change has been causing serious disputes between Internet
access providers and companies that provide telecommunications
services. Indeed, Standard 4 of 2005, conceived some years before
the privatization of the Telebrás system, provided for the
provision of Internet services by means of two different
activities: telecommunications services and Internet access
services, which represented (and still represent) a value-added
service. According to the new regulations, the SCM concept now
includes the provision of Internet access. As a result, entering
into an agreement to connect the user to the telecom network of a
given provider is no longer required.
Certain restrictions that were already imposed on SCM remain in
the new regulation, such as the prohibition against providing
switched fixed telephone services ("STFC"), broadcasting
services, paid TV or "conditional access services", and
the supply of unrestricted and simultaneous video and audio signal
to subscribers.
The term for the beginning of the provision of services continues
to be eighteen (18) months from the date of grant, extendable for
an additional twelve (12) months upon a showing of good
cause.
An important change (although not necessary, in our opinion)
occurred in regard to the transfer of control of the SCM provider.
Previously, post-closing communication to Anatel was sufficient. As
per the new regulations, companies that fall within the purview of
the new antitrust law (Law 12529/2011 - "New Antitrust
Law") must obtain prior authorization from Anatel. Currently,
domestic revenue limits for notification under the New Antitrust
Law stand at R$750 million for one economic group and R$75 million
for the other economic group involved in the
transaction.
For transfer-of-control transactions that fall below such
notification thresholds, Anatel shall be informed of the
transactions in within sixty (60) days as of the closing.
SCM providers must make customer service available for subscribers
on a 24/7 basis. For SCM providers with less than 50,000
subscribers, the obligation to provide customer support is limited
to business days from 8 a.m. to 8 p.m. Calls must be saved for 180
days by the service provider, while providers with less than 50,000
customers must keep such records for a period of ninety (90)
days.
The granting of discounts is still mandatory in the event quality
of service is degraded or services are interrupted, proportional to
the number of hours or fractions of hours above thirty (30)
minutes. Upon the occurrence of such events, Anatel must be
informed within twenty-four (24) hours.
Service providers must keep all termination requests, complaints,
and service orders for a period of two (2) years. Providers should
also maintain an electronic system that permits verification of
this information by Anatel.
An innovation intended to assist criminal investigations is the
storage of subscriber log access and registration data records for
a period of one (1) year. Connection records include the date and
time of the beginning and end of Internet access, its duration, the
IP address used by the terminal to send and receive data packages,
and other information that allows identification of the access
terminal used.
Obligations arising in connection with the purchase of equipment
and contracting of services surpassing R$500,000.00 are still
governed by Resolution No. 155/99, which establishes the need for
publication of requests for proposals on the provider′s
website, the definition of judgment criteria, the communication of
results, and the availability of documents for interested
parties.
Regarding service plans and advertising materials, providers must
make available clear, proper, and visible information about maximum
download and upload speeds, and other information on use
conditions, minimum allowance limits, and speed reductions in case
contracted capacity is exceeded.
Finally, although the new regulations do not provide new details
regarding such matters, the new SCM regulation opens up the
possibility of using a simplified grant procedure for SCM, STFC,
and conditional access services, as well as the adjustment of the
existing grants to this set of licenses, both at a total
administrative cost of R$9,000.00.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.