Notice with Invitation to Bid
On August 8 2001 ANATEL (the Brazilian Telecommunications Agency) published Notice with Invitation to Bid 003/2001/SPV - ANATEL to Confer Brazilian Satellite Exploitation Rights for the Transportation of Telecommunications Signals. The notice launches the bidding process for the assignment of three orbital slots notified by Brazil with the International Telecommunications Union.
The provision of satellite services is not considered to be a telecommunications service as such, but rather a medium through which telecommunications services may be rendered. However, it is incumbent upon ANATEL to assign orbital slots and associated radio frequencies. Resolution 220 of April 5 2000 is the main rule regulating this service, as discussed in Satellite Exploitation Rights.
To date ANATEL has auctioned two Brazilian orbital slots bought in by Loral Skynet and Hispasat respectively.
Prior to the privatization of the federal telecommunications companies in 1998, Embratel already held the right to operate satellites. These authorizations were transferred in the privatization process and, together with other recently auctioned authorizations, constitute the totality of Brazilian satellites.
Additionally, foreign companies also obtained the right to operate foreign satellites in Brazil, albeit subject to specific regulatory environment laid down in Resolution 220.
The notice with invitation to bid foresees the bidding of three notified orbital slots and the process of notification by Brazil within 15 years. The bidders can win more than one orbital slot and may choose those that suit them best from the notice. However, one company may not directly or indirectly hold all three auctioned slots.(1)
The notice could be contested up to September 4 2001 in the case of any illegalities or irregularities. The manner of contestation had to comply with the terms of the notice. After September 4 it was assumed that the bidders unconditionally accepted and agreed with its terms, thus submitting themselves to the resulting obligations.
Clarifications on the notice may be forwarded to the Special Bidding Commission until September 20 2001. All clarifications regularly submitted to ANATEL and with the respective filing certificates will be answered and made available to the public.
The notice provides for the possibility of the participation of companies that are incorporated in accordance with Brazilian law, with their principal place of business and administration in Brazil, and that are not prohibited by the notice. Consortia and foreign companies that do not satisfy these conditions and undertake to adapt or incorporate a company with the appropriate characteristics if they win one or more licences that are the subject of the invitation to bid are also admitted.
Companies cannot participate if:
- they have been declared bankrupt or are in receivership;
- they have been declared unfit by any agency of the public federal, state or municipal administration;
- they have been barred from bidding or contracting with the state; or
- their right to bid with ANATEL has been suspended.
The qualification of bidders includes proof of legal, technical, taxation and economic/financial prerequisites. The notice details the necessary documentation. The economic/financial qualification includes proof of deposit of a guaranty in the amount of R333,000 which can be made by means of a letter of guaranty or bond in cash.
The minimum reference price for the satellite exploitation right for the transportation of telecommunications signals is R3.3 million (approximately $1.3 million).
The first public session of this invitation to bid to select the winner of the first right to exploit satellites will take place on October 16 2001 at ANATEL's headquarters. First the opening of price proposals will occur, classifying the bidders. Then the bidders that offered a price of more than 80% of the highest price offered will be able to reformulate their proposals to cover the best price, in which case the bidder of the highest price will also be able to reformulate its proposal to cover the new offer, allowing for new proposals until only one bidder remains. The next step is the analysis of the qualification of the bidder offering the highest price. If this bidder has satisfied all the prerequisites of the notice, the Special Bidding Commission will declare it the winner.
The bidder will have three working days in which to correct any error that has occurred on its part (eg, the absence of necessary documentation).
Should the Special Bidding Commission declare the bidder disqualified, an appeal may be brought. Moreover, an administrative appeal is appropriate for any decision of the commission, within three days. The entire procedure for the presentation of appeals is laid out in the notice.
The exploitation right term will be signed within 10 days of the declaration of qualification by the Special Bidding Commission.(2)This declaration will also start the selection process of the second winner of the invitation to bid. Likewise, when the second winner is adjudicated the third and last phase of the invitation to bid will commence.
Once it has signed the exploitation right term, the adjudicatee will have three years to commence the commercial operation of the space segment. If the adjudicatee has obtained two licences, the term for commencing the operation of the second satellite is five years.
For further information on this topic please contact Ricardo Barretto or José Leça 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 e-mail ([email protected] or [email protected]).
(1) The notice makes reference to ANATEL Resolution 101/99, which establishes broad indirect control criteria among telecommunications companies. The main provisions of the resolution are described in Resolution Creates New Control Concept.
(2) This period is extendable once for an equal period.
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