The Communications Ministry announced Tuesday, May 20, a new policy for the national telecommunications industry comprising significant changes in four key areas.
New rules will be proposed for tariff reviews (covering both interconnection and user charges). Telcos will be subject to tougher scrutiny in terms of disclosure, transparency, consolidation etc. Incentives to the industry will be extended. And the Government will foster competition and universal service.
A spokesperson for the Communications Ministry highlighted competition, transparency and socio-economic inclusion as the pillars of the new policy.
Tariffs
The proposal on tariffs covers methodological and conceptual changes. The ministry wants to abandon the practice of resetting tariffs on the basis of each telco?s costs and past performance. Instead it proposes to adopt an economic methodology based on a model telco with long-term incremental costing. This is a kind of simulator to test different cost structures in advance, including interconnect and unbundling rates.
User charges may be reviewed under a different methodology, depending on decisions to be taken jointly by the Communications, Finance and Justice Ministries not later than December 2004.
It?s worth noting that Embratel has been lobbying hard for this modeling approach, as evidenced by the pride of place given to a discussion of the method at a seminar held in Teresópolis on April 12 and 13.
Universal service & competition
The Communications Ministry?s policy document clearly states that its objectives include ensuring that every citizen has at least a phone line and Internet access at affordable prices.
The measures to achieve these goals include regulation of unbundling, resale of telecoms services, separation of different services provided by the same company for accounting purposes (long distance, local access, data etc.), and number portability.
All these obligations will come into force under new licenses to start in 2006.
This is the first time the ministry has clearly said it will lay down targets and other conditions in the contracts signed by carriers. It doesn?t mention Anatel in this part of the document, although the regulator?s role is defended by Pedro Jaime Ziller, head of the ministry?s telecoms department.
Transparency
According to the ministry?s policy document, the new licenses will oblige telcos to adopt high standards of transparency. They must disclose details of ownership structure including any foreign shareholders and enable regulators to verify compliance with the requirements on competition, absence of concentration, and legal or technical qualification.
As soon as a decree with the new policy is published in the Federal Register, Anatel will be obliged to ensure transparent disclosure of its scrutiny of mergers and acquisitions or other changes of ownership specified in the General Telecommunications Act, article 7, paragraph 1.
Technological development
The policy document places great emphasis on actions to foster technological development of the telecommunications industry, focusing on local needs, social benefits and incentives for research into access technologies.
