Fabio Ferreira Kujawski Eduardo Hayden Carvalhaes Neto Ricardo Barretto Ferreira da Silva October 17 2001 ANATEL Tells Infrastructure Owners: It is Time to Share Barretto Ferreira e Brancher Sociedade de Advogados | Tech, Data, Telecoms & Media - Brazil Fabio Ferreira Kujawski, Eduardo Hayden Carvalhaes Neto, Ricardo Barretto Ferreira da Silva Tech, Data, Telecoms & Media On September 5 2001 the Brazilian Telecommunications Agency (ANATEL) published Resolution 274, which approves the Regulation of Infrastructure Sharing between Providers of Telecommunications Services, with the aims of: avoiding duplication of the existing infrastructure; optimizing use of the existing infrastructure; and guaranteeing the existing infrastructure's supply and availability to community-interest telecommunications service providers. The regulation is an important step towards minimizing the conflicts that arise from the need to use a third party's infrastructure for the provision of telecommunications services, insofar as it aims to create equitable rules and procedures, and establish norms for the sharing of infrastructure. Conflicts tend to arise particularly in respect of the price to be charged for the infrastructure.According to Article 3 the regulation applies when sharing is "requested by one community-interest telecommunications service provider from another that is operating in the same service-rendering area", and "when requested by a community-interest telecommunications service provider from a restricted-interest telecommunications service provider that is operating in the same service-rendering area". Thus, the regulation does not provide for sharing requests made by companies that provide restricted-interest telecommunications services.The regulation divides the types of sharing into those concerning (i) public easements and (ii) ducts, conduits, posts and towers. As a basic premise, the regulation only comtemplates the sharing of available and not in use infrastructure. The owner of the infrastructure to be shared must give advance notice in national newspapers and local newspapers where the infrastructure is located for three days, containing the following information: the class and item of infrastructure available; the sharing conditions; and the dates and times when interested parties may obtain detailed information. Article 15 of the regulation prohibits infrastructure sharing without this prior publication, which guarantees that all interested parties will have the opportunity to express their interest and receive non-discriminatory treatment.Requests for infrastructure sharing must be answered by the infrastructure owner within 30 days of receipt, in chronological order. Requests are denied only when there are capacity, safety and stability limitations, or violations of the engineering requirements or conditions established by ANATEL. The infrastructure owner cannot allege insufficiency of technical, operational or any other type of information as a way of delaying the sharing negotiations. If any additional information is necessary to answer a request, it must be asked for within five days of receipt of the request.In cases of denial of a request, the requesting company must be informed in detail of the grounds for denial and pertinent evidence must be provided.If a request is accepted, the relevant sharing agreement must be executed within 60 days of the owner's reply to the request, and the sharing must be implemented within 120 days of the agreement execution date. This period may be extended at the parties' mutual agreement.In practice, delays of up to 210 days are permitted to complete a sharing (ie, 30 days to answer the request, plus 60 days to negotiate the contract, plus 120 days for implementation, without counting periods for publication, additional clarification of information, sending of pending documentation and possible postponements), which can lead owners to delay the supply of the infrastructure to be shared, thus adversely affecting competition. ANATEL ought to address this problem and act promptly to prevent extended periods from affecting competition, particularly as of 2002 with the total opening of the Brazilian telecommunications market.The regulation further establishes that sharing agreements cannot limit the type of telecommunications signal nor the services to be rendered in the infrastructure. The sharing agreement must be filed with ANATEL, with which it remains available for public access.The most eagerly awaited innovation introduced by the regulation, the definition of the 'maximum reference value' for each item of shared infrastructure, can be deduced by applying the formula that is outlined in the resolution's annex. The formula aims to treat infrastructure lessees equally, thus avoiding the discriminatory practices that have occurred in the past. Sharing agreements that were entered into prior to the enactment of the regulation must be adapted accordingly and filed with ANATEL within 180 days of September 5 2001.In cases of conflict, ANATEL will settle existing disputes through its fledgling mediation and arbitration procedure. Submission of a dispute to mediation or arbitration does not exempt the provider from fully performing the prevailing agreement nor allow it to interrupt services related to the relevant concession, permit or authorization.For further information on this topic please contact Ricardo Barretto, Fabio Ferreira Kujawski or Eduardo Hayden Carvalhaes Neto 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], [email protected] or [email protected]).