Communications Minister Miro Teixeira is to submit to President Luiz Inácio Lula da Silva three alternative methods for annual adjustments of fixed-line telephone rates in the new ILEC contract due to come into force in 2006. All three eschew use of an inflation index. Mr Teixeira announced the move during a public hearing held by the Senate education and infrastructure committees on Wednesday, May 7. He didn't go into details on the three alternatives but said his own preference is for the "creation of a model telephone company" that would function as a basis for calculating costs and rate resets for the ILECs.
Defending his campaign to deindex prices of public services in general, the minister reiterated the argument that government-controlled prices are driving inflation. That's why the idea is not to swap the IGP-M for another index but to introduce an entirely different formula for resetting rates, he said.
The alternatives will be part of an overall telecommunications policy proposal now being drafted by the Communications Ministry for approval by the Presidential Chief of Staff.