New Rules for Fixed Wireless Multipoint Telephone Service

Purpose
Classification
Coverage Areas
Registry
Nature and Exploitation of the Service
Licences

The new fixed wireless multipoint telephone service is regulated by National Telecommunications Commission (CONATEL) Resolution 30 of January 11 2001.

Purpose

The new regulation aims to:

• establish provisions for the granting of licences for the service;

• define the different systems that comprise the service and the corresponding allocation of frequency bands;

• define the distribution of frequency blocks;

• establish provisions that regulate the installation, operation, functioning and exploitation of the service; and

• allow for the amendment or derogation of any provisions, regulations or rules that do not conform with it.

The regulation notes that licences for this service will be conferred in the spirit of equal access and free competition.

Classification

The service is classified in terms of:

• local wireless system;

• local wireless wideband system; and

• local multipoint distribution system.

Coverage Areas

The resolution distinguishes between the following classes of coverage:

• Class A, with permitted coverage only in urban and suburban areas of certain cities;

• Class B, with permitted coverage in areas between certain cities and the suburban and rural areas that separate them; and

• Class C, with permitted coverage throughout the country.

Registry

CONATEL will establish a special registry that will form part of the National Frequency Registry, created by the General Regulation of the Telecommunications Law (Decree 14,135/96). The registry will contain sections corresponding to each of the aforementioned classes and areas of coverage.

Nature and Exploitation of the Service

The Telecommunications Law classifies 'telecommunications services' as:

• basic telephone services;

• broadcasting services;

• value added services;

• private services; and

• other services, such as low-frequency broadcasting and services reserved to the state.

According to the Telecommunications Law and the general regulation, the fixed wireless multipoint telephone service is classified as 'other services'.

Licences

The provision of the service requires a licence granted by CONATEL resolution. Licences are granted for five years and may be renewed at the request of the holder for a maximum of three subsequent five-year periods.

A licence for the fixed wireless multipoint telephone service also allows the provision of the following services (through the local wireless system, local wireless wideband system or multipoint local distribution system):

• data transmission services;

• video conference services;

• radio distribution services; and

• radio and television transport services.

New services and transmission applications may be added to the fixed wireless multipoint telephone service in the future. The provision of any unmentioned services (and specifically basic telephone services) is expressly prohibited.

Licences are not transferable unless CONATEL gives its authorization to the transfer. The sale of shares and other corporate interests of licensees also require CONATEL's consent. Any violations will result in the automatic cancellation of the licence. An individual or entity that acquires a licensee's rights is subject to the obligations of the licensee.

Licence holders must be (i) individuals of Paraguayan nationality, or (ii) public or private legal entities organized in Paraguay with a Paraguayan domicile and with bylaws establishing one of their purposes to be the provision of telecommunications, radio communications and/or television services.

Prior to the granting of a licence, CONATEL will carry out a radio electric compatibility study and determine the coverage area to be granted.

CONATEL will not grant a licence when:

• national security or public interest is likely to be adversely affected;

• the applicant fails to comply with the relevant regulations or the terms and conditions of the bidding process;

• the applicant's previous concession, licence or authorization was cancelled (unless this was due to non-payment of a tariff for use of the radio electric spectrum or fee for the commercial exploitation of the service, in which case a licence may be granted if payment is made); and

• the applicant is affected by any of the prohibitions established in the Telecommunications Law or its regulations.

Licences will not be granted to the following, in order to guarantee equal access to (and free competition for) the licences:

• telecommunications service providers that have a licence to provide a cellular or PCS in different frequency bands;

• telecommunications service providers with two or more licences, one of which is for cellular or PCS services and the other, which was granted before e the new regulation entered into force, for the exploitation of one of the frequency bands specified in this regulation; and

• telecommunications service providers in which one of the shareholders owning more than 5% of the company's stock falls into one of the aforementioned categories.

Licences shall be granted through a process of direct conferral by demand or public bid, depending on the frequency bands requested. The qualification procedure comprises the following steps:

• A licence is applied for;

• The applicant is classified as an individual or legal entity;

• A technical pre-project and economic project report/survey is prepared;

• The service schedule is initiated; and

• A guarantee of performance is declared (in cases of direct conferral by demand);

A licence for the fixed wireless multipoint telephone service is granted seven days after receiving the direct conferral request or corresponding public bid. The relevant CONATEL resolution establishes the following:

• the identity of the licence holder;

• the allotted system, band and frequency block;

• the area of service provision;

• the term of the licence;

• the timetable for initiation of the service;

• the amount to be paid for the licence; and

• the obligation that a company must be established before the regulatory contract is executed, if applicable.

One individual or entity may obtain a number of licences for the fixed wireless multipoint telephone service, pursuant to certain limitations established in the regulation.

The regulation also governs the renewal and modification of licences, as well as technical rules for the development, installation, operation and control of the system, and applicable sanctions.

The regulatory contract must be executed within 60 days of conferral of the licence.

The regulation does not apply to licences granted before it entered into force. However, existing regimes must comply with any modifying terms and conditions of the regulation, particularly the terms and conditions stipulated by CONATEL.

For further information on this topic please contact Luis Breuer at Berkemeyer Attorneys and Counselors by telephone (+595 21 446706) or by fax (+595 21 449694) or by email ([email protected]). The Berkemeyer Attorneys and Counselors website can be accessed at www.berke.com.py.