Embratel reiterates demands for unbundling

This week Anatel has been meeting with representatives of all the incumbent fixed-line telcos to discuss license renewal. On Wednesday, November 6, Embratel once again emphasized its view that the ILECs must unbundle if competition is to be effective in local services. Technology has advanced enough in the segment to enable providers to offer subscribers not separate services but service packages, such as voice and data, Embratel argued. This gives ILECs an advantage over long-distance carriers like Embratel: ILECs have direct contact with customers and aren?t interested in a level playing-field for potential competitors to offer their own packages. The ILECs will always monopolize the local market unless unbundling is made compulsory, Embratel said, suggesting that Anatel grant local licenses for networks and service providers separately.

Legal opinion

According to an expert opinion from the Sundfeld law firm, this approach would be legal under the General Telecommunications Act, Embratel also said. Carlos Ari Sundfeld worked for the Communications Ministry as a consultant when the Act was being drawn up. Nevertheless, the long-distance carrier acknowledges the practical difficulty of separate licensing and would be happy to see Anatel take a first step by requiring separate legal entities to own the network and provide services, although they could both belong to the same holding company. This would facilitate monitoring of operating costs in each segment, it argues. Pricing would be more transparent and competitors would have to be given equal treatment for unbundling purposes. Embratel also wants a review of interconnection agreements so as to drive competition in local services. Interconnect rates should be based on incremental long-term cost, it says.

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