On October 4, 2019, Law No. 13,879/2019 entered into force and introduced significant changes to two major laws of the telecommunications regulations in Brazil, namely Law No. 9,472/1997, known as the General Telecommunications Law (LGT), and Law No. 9,998/2000, which created the Telecommunications Services Universalization Fund (FUST).
Among the significant changes provided by Law No. 13,879/2019 to the telecommunications’ legal framework, the following can be highlighted:
Migration of telecommunication concession services to private regime:
The current concessionaires of telecommunication services may elect to convert their concession contracts (under a public regime) to authorizations granted under a private regime. These authorizations will be exempted from the universalization obligations (such as, for example, the installation of payphones). In this situation, the interested concessionaire shall:
(i) Maintain the commercial offering of the adapted service and commit to assign network capacity in areas lacking adequate competition, in accordance with the regulation to be enacted by the National Telecommunications Agency (Anatel);
(ii) Commit to invest in high capacity data transmission network infrastructure, on an amount based on the economic value to be calculated by Anatel, which will take into consideration the value attributed to the reversible assets. The investment commitment will prioritize the coverage areas lacking adequate competition and the reduction of regional inequalities, in addition to the offering of inclusive technology to the disabled;
(iii) Deliver a term of guarantee to assure compliance of the investment commitments; and
(iv) Make all entities of its corporate group to adapt, in one single instrument, all the authorizations granted to the use and the provision of radio frequency services.
Definition of the reversible assets scope and evaluation criteria:
Reversible assets are defined as those essential assets effectively engaged in the provision of the concession services. With respect to their economic assessment, the law establishes that the value of the reversible assets engaged in the provision of other telecommunications services, exploited in the private regime, will be calculated proportionately to their use in the service provided under the public regime.
Possibility of consecutive extensions of concession contracts:
From this point in time, the terms of concession contracts may be extended for consecutive periods of up to twenty years.
These major changes, introduced by Law No.13,879/2019, aims to update the telecommunications regulations in light of the technological development and it is expected to contribute to the improvement of the business environment.
According to information of the Ministry of Science, Technology, Innovation and Communications (MCTIC), Law No. 13,879/2019 shall yet be regulated, by a presidential decree, which will establish the procedure to change the concessions under a public regime to authorizations under a private regime, as well as the guidelines of the telecommunications infrastructure investment commitments in Brazil.