01/10/2023
Regulatory issues to monitor in 2023
- End of fixed telephony concessions
- The value calculated by Anatel for concessionaires to migrate to the authorization regime reaches R$ 22.6 billion. From this value R$ 12.2 billion from Oi, R$ 7.7 billion from Vivo, R$ 2.2 billion from Claro, R$275 million from Algar and R$167 million from Sercomtel.
- R$ 16 billion and R$ 10 billion are the compensation values requested respectively by Oi and Vivo in the Arbitration process at the International Chamber of Commerce, due to the economic-financial imbalance of the concession.
- It should be noted that the copper network is deficient and is being abandoned by fixed telephony users. In Oct/22, 39% of the fixed telephones in Brazil used the copper network.
- The arbitration process is expected to be concluded this year. A small difference between the value calculated by Anatel and the result of the arbitration may make it possible for concessionaires to migrate to the authorization regime, with the balance converted into commitments.
- This would be the best solution for both sides. It has long ceased to make sense to have landline concessionaires. The obligations for service existence in remote areas, where there is no cell phone or broadband, could be converted into commitments in the authorization regime, like in cell phone.
- The migration from concession to authorization is fundamental to the strategy of the new Oi, but if a good term is not reached in the negotiations with Anatel, it will be necessary to wait for the end of the concession contracts in 2025.
- In view of these uncertainties, Anatel began preparing a Bidding Notice for the concession of the Switched Fixed Telephone Service in 2025, which would have reversible assets as attraction.
- Revision of the Regulation for the use of utility poles
- 2022 was a year of many debates on the regulation of the use of utility poles, provoked by the public consultation on the subject launched by Anatel and Aneel.
- Access to poles was fundamental for the expansion of fixed broadband in Brazil and must be preserved. This process generated, however, an overoccupation of the poles in several cities. Among the proposals to order this occupation is the creation of a non-profit National Entity, which would be responsible for administering and supervising the use of the poles.
- Another important point is the standardization of prices charged from providers, avoiding the large disparities that currently exist. It would also be important to establish lower prices for the occupation of poles in rural areas, where the density of customers is lower.
- The expectation is that this year Anatel and Aneel will publish a new resolution together, which will point out solutions to these problems.
- General Plan of Competition Targets
- Anatel will put a proposal to update the General Plan of Competition Targets in public consultation this year, reassessing the markets for which it established asymmetric measures in 2018: EILD, Pipelines, Interconnection, Roaming and Wholesale Offer for transport and data interconnection.
- Anatel is evaluating the exclusion of some of these markets from this list, such as EILD, and the inclusion of others, such as Neutral Networks, MVNO and spectrum. These last two, together with roaming, were already subject to asymmetric measures by Anatel/Cade when Oi Mobile was sold.
- Other points to be evaluated refer to considering OTTs in the competitive analysis, to the Wholesale Offer Negotiation System and the market for distributing packages or audiovisual content.
- Use of Spectrum
- Spectrum Market. Law 13,879/19 established the possibility of transferring frequency authorization among providers, what could generate a secondary spectrum market, as happens in other countries, notably the United States. To this end, it will be important to monitor how secondary use evolves, the application of the regulation for idle spectrum use (white space) and the review of the regulation on spectrum use that is part of Anatel's Regulatory Agenda for this year. The commitments assumed with Cade by Vivo and TIM, upon the acquisition of Oi Mobile, are a step in this direction.
- WiniTy, which acquired the 700 MHz lot in the 5G auction to operate wholesale, faces the challenge of getting Anatel's approval for the agreement about the use part of these frequencies by Vivo.
- Private Networks. It will be interesting to monitor the use of the 3.7 GHz and 3.8 GHz bands by private networks, in order to confirm the interest in using these frequencies.
- The ITU Conference WRC-23, which will take place in December of this year, has on its agenda the attribution of several frequency bands for mobile, including 6 GHz, which Brazil has destined for restricted radiation applications, such as WiFi 6.
- Quality
- This year it's expected the publication, for the first time, of the Seals of Quality, classified in categories A, B, C, D or E, to be attributed by Anatel to the providers, according to the new quality regulation approved by Anatel in 2019 (RQUAL), which came fully into force in March 2022.
- These Seals, based on technical measurements, complaints and consumer satisfaction surveys, will be awarded by service, by municipality, state and national consolidated amount.
- The new regulation represents a new approach to quality on the part of Anatel, as one of its main objectives is to provide more transparency to information about the quality of Telecommunications services disclosed to consumers.
- Regulation of Big Techs
- The Big Techs (Alphabet, Amazon, Apple, Meta and Microsoft) grew without regulatory control and got significant market power in several segments. More recently, they began to be fined for anticompetitive practices, mainly in Europe, which approved the Digital Markets Act (DMA), which will prohibit certain practices used by large platforms.
- Anatel is studying institutional changes to deal with the regulation of internet platforms and the new government has stablished that the Social Communication Secretariat will be responsible for discussing the rules for digital platforms.
In addition to these items, it is worth mentioning the changes in municipal legislation on cellular antennas, which are fundamental for expanding mobile coverage and updating the SeAC law, which is important to correct the existing competitive imbalance between Pay TV and video streaming.
You could ask:
- Will fixed telephony concessionaires migrate to the authorization regime?
- Will the new regulation on the use of poles be satisfactory?
- Will it be possible to trade spectrum in 2023?
