ANATEL Creates Multimedia Communications Service

Exploitation
Installation and Licensing
Rights and Obligations
Comment

In light of the continuous technological development of the platforms that support the provision of telecommunications services and the desire of operators to provide multimedia communications in broadband, the Brazilian Telecommunications Agency (ANATEL) has created the multimedia communications service (Resolution 272 of August 9 2001).

The new service is viewed positively as the first regulatory step towards the convergence of telecommunications services. Multimedia licence holders will be able to exploit more services with fewer limitations.

Pursuant to the regulation, the new service is a fixed telecommunications service of community interest, provided at domestic and international levels under the private regime. It enables the transmission, emission and receipt capacity of multimedia information (using any media) to the subscribers of a service provision area. 'Multimedia information' is defined as audio, video, data, voice and other sound signals, as well as images, text and other information.

According to the regulation the following are not included in the service:

• the switched-fixed telephone service;

• mass electronic communications services (eg, cable television, Multipoint Multichannel Distribution Service and direct-to-home satellite); and

• radio broadcasting services.

Multimedia communications services can be provided to individuals or companies. Providers may use the networks of other community interest telecommunications service providers, in a non-discriminatory manner and at reasonable prices. Third parties interested in the provision of a value added service may also use these networks, again in a non-discriminatory manner and at reasonable prices.

With the approval of the regulation, authorizations will no longer be issued for the exploitation of:

• the specialized limited and network services;

• the specialized circuit service sub-classes; and

• the telecommunications carrier network service.

Companies' authorizations to provide services can be adapted to the new regime if the conditions of the new resolution are satisfied.

The specialized limited service is designed to be rendered to third parties, provided that they are one and the same person, or a group of individuals or legal entities that is characterized by the performance of a specific activity. Sub-categories include the specialized circuit service, which is a fixed service (closed to public correspondence) designed to provide point-to-point or point-multipoint telecommunications through the use of circuits available to users. The specialized network service (also closed to public correspondence) is designed to provide telecommunications between distributed points and establish distinct telecommunications networks between groups of legal entities that perform a specific activity (eg, the provision of voice, data and image communications services).

Exploitation

Exploitation of the multimedia communications service is dependent on ANATEL authorization, which will be granted for an indeterminate period on an onerous basis.

The regulation establishes that in order to obtain authorization for exploitation of the service, interested companies must:

• be organized according to Brazilian laws with their head offices and administration in Brazil;

• not be responsible for rendering the same type of service in the same service provision area, or a part thereof; and

• have the necessary legal and technical qualifications to render the service satisfactorily.

ANATEL will determine whether these conditions are satisfied and will decide on an application within 90 days of its submission date. The number of authorizations for the exploitation of the multimedia communications service will be unlimited.

Authorizations will be formalized by execution of the contract, which will stipulate (among other things):

• the authorized service and provision area;

• general and specific conditions for the exploitation of the service;

• the rights and obligations of the authorized company and subscribers;

• the types of consideration for the service rendered; and

• provisions on interconnection, transfers and inspection.

Authorized companies will have up to 18 months from the publication of the authorization term in the Official Gazette to commence commercial operations. However, this period may be extended once for a further 12 months if the justifications presented are considered to be relevant by ANATEL.

Transfers of authorizations for the exploitation of the multimedia communications service and the use of associated radio frequencies require ANATEL's prior approval. The transfer of the provider's share control will also be subject to ANATEL's approval, with the aim of maintaining the authorization conditions (and other conditions foreseen in the regulation). ANATEL will not allow any transfer of authorization or share control which is prejudicial to competition or jeopardizes the performance of assumed obligations and duties, with due regard to the general rules for the protection of economic order.

Installation and Licensing

Prior to commencing the commercial exploitation of the service, the provider must apply to ANATEL for an operating licence of the station which will be delivered upon proof of payment of the installation inspection fee. A condition for the attainment of authorization for installation and licensing is that the provider presents basic and installation projects to ANATEL.

It will be incumbent upon the provider to:

• observe the municipal legislation and other legal requirements in relation to buildings, towers and masts;

• observe engineering rules concerning the observance of the coordination of radio frequencies and non-emission of interference in the radio frequency bands used; and

• obtain the assignment of the necessary radio frequency, if only confined media or third-party media are used.

Rights and Obligations

Providers may hire equipment and infrastructure, and may contract the development of activities inherent or complementary to the service to third parties. However, the provider will be fully responsible before the subscriber and ANATEL for the exploitation and operation of the service, particularly in respect of the correct operation of the service's supporting network.

The provider may not make an offer of the service conditional upon the purchase of its other services (or those offered by its associated, subsidiary or parent companies). Similarly, it must not offer favourable terms to a subscriber that are conditional upon the purchase of additional services, even if these are rendered by third parties.

Furthermore, the providers of multimedia communications services must:

• not refuse to serve persons whose premises are within the service provision area;

• make available to subscribers information related to prices, the conditions for enjoying the service, their alterations, characteristics and technical specifications of the terminals; and

• have regard to discretion and confidentiality in relation to subscriber data.

For the contracting of services and the purchase of equipment and materials associated with the multimedia communications service, the provider must consider offers from independent (including domestic) suppliers, and base its decisions on the criteria of price, delivery terms and technical specifications established in the pertinent regulations.

Comment

The publication of this regulation heralds the possibility of a series of specific services rendered by providers in a single comprehensive service, using the current speeds and broadband.

For further information on this topic please contact Ricardo Barretto or Fernanda Bottura Casella at Barretto Ferreira, Kujawski, Brancher e Gonçalves – Sociedade de Advogados by telephone (+55 11 3066 5999) or by fax (+55 11 3167 4735) or by email ([email protected] or [email protected]).