Lobbies involving Embratel target Lula?s entourage

The pressure is building up on President-Elect Luís Inácio Lula da Silva and the Workers Party (PT) to do something about Embratel. Two weeks ago Lula and Antônio Palocci heard a number of proposed solutions at Granja do Torto, the president-elect?s official residence in Brasília. Mayor Palocci is widely expected to be the next finance minister. Communications Minister Juarez Quadros and President Fernando Henrique Cardoso are reportedly anxious to see the PT take action soon. Purificación Carpinteyro, a senior executive of Embratel, met last week with Luiz Gushiken, also a prospective member of Lula?s cabinet, and with Congressmen Walter Pinheiro and Jorge Bittar, considered the PT?s experts on telecoms. Telefonica has also presented its views to Deps. Pinheiro and Bittar, and to Mr Palocci. As widely reported in the press, incumbent local exchange carriers Telefonica, Brasil Telecom and Telemar are interested in taking over Embratel, the incumbent long-distance carrier. They also aim eventually to acquire Net?s and TVA?s cable networks, according to Folha de S. Paulo, a leading daily. The question is whether all the fuss is justified: after all, is Embratel in imminent danger of failure? Not really, say seasoned observers, and that?s probably what Anatel told the PT?s transition team when they met this week. A former top executive with a telco who?s very close to Mr Palocci says he told Lula in no uncertain terms that the telecommunications system will continue to operate normally with or without Embratel and there?s no need to force a sale to the ILECs, let alone renationalize. However, it?s important to bear in mind that Embratel operates a cluster of satellites and provides the backbone for public-sector communications, including the armed forces and public TV.

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