Pedro Jaime, head of the Communications Ministry?s new department of telecommunications, said Monday, April 28, that the draft contract to be presented to local exchange carriers in June doesn?t necessarily have to include tariff resetting and universal access rules. The LECs? current contracts expire at the end of 2005 but the law requires negotiations on renewal this year. If there isn?t time to work out an agreement on these two key issues, he went on, clause 3.2 entitles the Government to add new items to the draft contract at a later stage. The clause states that new terms and conditions can be included provided they ?respect the economic and financial equilibrium? of the LECs, and that sources of funding must be defined for new universal access targets.
The document to be presented in June won?t be ?vague or imprecise?, however, he stressed. The contractual obligation to protect telcos? financial health is sufficient guarantee that a new tariff resetting formula will be reasonable even if it isn?t in the contract. The Communications Ministry hasn?t decided what formula to put forward for tariff resetting in the new contract that will come into force in 2006, he said. No hypothesis should be ruled out, including retention of the IGP-DI inflation index, but the Brazilian economy needs to be de-indexed. ?Government-controlled prices are rising more than free-market prices,? he said, echoing the arguments on which Communications Minister Miro Teixeira has insisted recently. A possible alternative would be to reset tariffs ?in accordance with economic and financial equilibrium criteria?, using no index at all.
Pedro Jaime said the ministry?s chief concern is to make sure the proposed General Universalization Target Plan is effective. The Government considers universal access to telecoms a matter of paramount importance. The ministry is working hard to implement a ?correct and coherent? plan as soon as possible. ?The idea is to present the plan in June, but if that proves impossible we?ll publish it later,? he said.