New Multimedia Communication Services Regulations

On May 23, 2013, Brazil′s telecommunications regulatory body, Anatel, enacted new regulations for certain multimedia communications services (Resolution No. 614 of May 28, 2013). The services in question are prized by companies seeking to provide convergent services such as data and voice transmission. According to current estimates, more than 4,000 providers are authorized to supply this service in Brazil. This memo will address the main changes introduced by the new regulations. The definition of "multimedia communications services" ("SCM") was amended in order to expressly include the provision of Internet connection services. In fact, it was established that companies dedicated to Internet access services must request the granting of the new SCM license within the period of six (6) months beginning May 28, 2013. The new regulations also establish that an Internet access provider offering this service through an Internet access provider of its own economic group must ensure free Internet access to users (this rule is applicable to SCM providers with less than 50,000 users). The change has been causing serious disputes between Internet access providers and companies that provide telecommunications services. Indeed, Standard 4 of 2005, conceived some years before the privatization of the Telebrás system, provided for the provision of Internet services by means of two different activities: telecommunications services and Internet access services, which represented (and still represent) a value-added service. According to the new regulations, the SCM concept now includes the provision of Internet access. As a result, entering into an agreement to connect the user to the telecom network of a given provider is no longer required. Certain restrictions that were already imposed on SCM remain in the new regulation, such as the prohibition against providing switched fixed telephone services ("STFC"), broadcasting services, paid TV or "conditional access services", and the supply of unrestricted and simultaneous video and audio signal to subscribers. The term for the beginning of the provision of services continues to be eighteen (18) months from the date of grant, extendable for an additional twelve (12) months upon a showing of good cause. An important change (although not necessary, in our opinion) occurred in regard to the transfer of control of the SCM provider. Previously, post-closing communication to Anatel was sufficient. As per the new...