Aspects of the Regulation
Provision of Interconnection
Quality of Service
The General Telecommunications Law 9,472/97 defines interconnection as "the connection between functionally compatible telecommunication networks, whereby users of one of the network services may communicate with users of other network/access services". The General Interconnection Regulation (Resolution 40/98) condenses the basic interconnection rules and replaces previous regulations.
Both the telecommunications law and the interconnection regulation state that:
- network interconnections are obligatory;
- integrated operation shall be assured at domestic and international levels; and
- network ownership rights are conditional upon the fulfillment of social functions.
The regulation establishes general guidelines for interconnection between telecommunication service provider networks and systems (including commercial, technical and legal aspects) and provides rules for the interconnection agreements which must be executed by the providers.
The regulation does not cover access to networks involving interests of the Brazilian Federal Union, including those related to the armed forces and national security. Such interests are subject to specific regulation.
The regulation divides interconnections between networks into five classes, depending on the service supporting network.
The interconnection conditions are subject to free negotiation between the parties (with the exception of cases named in the regulation). Behavior that is prejudicial to free and fair competition under public and private regimes is prohibited. Once the conditions for interconnection between networks are established, service providers must observe the principles of non-discriminatory treatment of applicants, the preservation of the integrity of the network and confidentiality of users' private information.
In accordance with the General Telecommunications Law (Article 146(I)), collective interest telecommunication service providers must make their networks available for interconnection upon request by any corresponding service provider.
The interconnection shall be conducted at appropriate points of the provider's network, taking into consideration the conditions strictly required for the service provision. When the media or facilities are not available at the requested interconnection point, the provider receiving the interconnection request must offer an appropriate alternative (to be agreed either between the parties or by arbitration through the National Telecommunications Agency).
The interconnection should meet the service's quality standards as stated in the interconnection agreement (for fixed-switch providers, standards are stated in the General Quality Goals Plan).
Network failure that causes any interruption in service affecting more than 10% of the total locality shall be communicated to other providers with interconnected networks to the faulty network, the National Telecommunications Agency and the public. All service providers must provide contingency alternatives in order to guarantee continuity and quality in the event of failure in the interconnection points.
Alterations in the planned network by a service provider, affecting the networks of other providers, shall be communicated at least 120 days prior to their intended implementation date, and may only be implemented following an agreement with affected providers.
The interconnection shall be the subject of ongoing and integrated planning between the providers involved and this information may be requested by the General Telecommunications Agency at any time.
A monthly operating capacity of over 99.8% shall be ensured in each interconnection point. This capacity is defined as the ratio between the time during which the system presents specified technical and operating characteristics, and the total time considered.
The use of interconnection routes to forward artificially generated traffic or excess traffic of other internal routes to the interconnected networks is forbidden.
When the installation of equipment in the same facilities of the interconnection point applied for is not possible, the provider that received the interconnection request must offer an alternative location for the installation of the equipment as near to the originally requested interconnection point as possible.
Providers must supply facilities such as cables, fibres, ducts, posts and towers, for use by fixed-switch providers when requested for the specific purpose of setting up their networks, under fair and non-discriminatory conditions.
Interconnection agreement negotiations begin from the moment the interconnection is requested by one of the parties. The conditions for network interconnection shall be the subject of free negotiation between interested parties, by means of an agreement up to 60 days from the date when the interconnection request was made.
The enforceability of the executed agreement depends on approval from the National Telecommunications Agency. Approval may be denied if the agreement is prejudicial to free and fair competition. If the agency orders that the agreement be amended, the parties have 30 days to do this and forward the new version for examination. Following approval, a copy of the interconnection agreement and its amendments will be available to the public for reference purposes at the agency's library.
However, if the term for negotiation between the parties expires and there is no agreement, the agency will arbitrate the interconnection conditions, at the initiative of one of the parties.
Following approval of the interconnection agreement by the agency, the implementations shall be operational for the full interconnection between the networks in approximately 90 days. In the event of non-compliance with the agreement, the responsible party must indemnify the aggrieved party as provided in the interconnection agreement, unless otherwise covenanted by the parties.
The interconnection agreement shall indicate the following:
- the method, manner and conditions under which the interconnection will be provided;
- the rights, warranties and obligations of the parties;
- the prices to be charged, when not established by the agency;
- the methods of settling accounts between the parties;
- the infrastructure sharing conditions;
- the technical conditions related to the implementation and quality of the interconnection;
- penalties and other sanctions; and
- the place and methods for the extrajudicial solution of contractual controversies.
Agency arbitration may be initiated by either party in order to settle any conflicts regarding the application or interpretation of the regulations, during the development of negotiations for the interconnection agreement. Arbitration is distinct from administrative claims and mediations. If the parties reach an agreement during the course of arbitration, the agency will approve this, following analysis of the terms of the agreement.
The submission of any issue to arbitration does not exempt the providers and the agency from the obligation to fully perform the interconnection agreements in force, or permit the interruption of activities associated to such agreements.
Articles 44 to 67 of the regulation establish the basic rules and procedures to be observed by the parties and the agency itself.
The Arbitration Commission is composed of three members appointed by the president of the agency; they meet whenever necessary.
In the event of risk to the country's security or detriment to either party, they may request that information remain confidential.
The decisions of the Arbitration Commission may be the subject of appeal, not being conditional upon the appellant's prior participation in the respective arbitrage procedure.
The regulation offers parties the possibility of developing their own arbitration process, the result of which shall be forwarded to the agency for evaluation and approval.
Annex II of the regulation also defines the goals related to interconnection points, which may be defined and reviewed by the agency taking into account the evolution and adaptation of the concessionaire networks and the growth in competition.
The implementation goals for the concessionaires of local and domestic long distance fixed-switch services are as follows:
Following the enactment of the regulation, companies had to re-adapt the interconnection agreements then in force. The companies had 120 days from the introduction of the regulation to submit their new interconnection agreements to the agency for approval. This term was extended twice, and was eventually complied with by the operators in the months of February, March and April 1999.
The incumbents did not hinder the execution of the network interconnection agreements in the country. However, some cellular mobile-service operators and incumbents did not forward the interconnection agreement that was the subject of consensus between the respective companies. In these cases, the agency is conducting arbitration processes. In many of these processes the operators have already covenanted the terms and conditions of the interconnection agreement, while some processes are still awaiting a solution.
With the exception of possible requests for confidentiality, all procedures will be public, thus ensuring transparency throughout the decision process.
One of the fundamental principles of the interconnection regulation is that companies must treat one another with absolute equality when establishing conditions. The agency is playing an extremely relevant role in the regulatory sphere, guaranteeing a competitive and secure model for the development of interconnection in the country.
For further information on this topic please contact Fabio F Kujawski or Ricardo Baretto at Carvalho Barretto Ferreira, Kujawski, Brancher e Gonçalves – Sociedade de Advogados by telephone (+55 11 3066 5999) or by fax (+55 11 282 8735) or by e-mail ([email protected] or [email protected]).
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