|Issue:||Latin America 2005|
|Topic:||IP and the law in Latin America|
|Author:||Helena de Araújo Lopes Xavier|
|Organisation:||Xavier, Bernardes, Bragança, Sociedade de Advogados|
Helena de Araújo Lopes Xavier, is a lawyer and a senior partner at Xavier, Bernardes, Bragança – Sociedade de Advogados, with offices in Rio de Janeiro, São Paulo, Brasília, Joinville, in Brazil, and Lisbon and Madeira, in Portugal. As a business lawyer, she practices administrative law, focused on ICT and telecommunications, airports, public service concessions, tax law and foreign investments. Mrs Xavier is the author of ‘The Special Competition Regime in Brazilian Telecommunications Law’, as well as numerous articles in Brazil and abroad. She is a member of the Brazilian Association of Computer and Telecommunications Law, the Brazilian Institute of Tax Planning, TELECOM-ABT, TELEBRASIL, the Computer Law Association, the United Telecom Council, Deutscher Anwaltverein and the Portuguese Association for Communication Development. Helena de Araújo Lopes Xavier earned her degree in Law from Lisbon University. She has lectured on Administrative Law at Lisbon University and International Telecommunications Law at the Institute of Legal Research (IPEJUR – Rio de Janeiro and São Paulo).
Technological evolution has shaken the legal frameworks in the telecommunications sector. New technology based upon the Internet Protocol has raised questions in countless legal fields from property rights to taxes. Technological convergence has blurred the line between the traditionally unregulated information technology sector and the traditionally regulated telecommunications sector. The regulation of Voice over IP (VoIP) networks presents serious difficulties as does the production and distribution of content on the Internet, intellectual property rights and the carriers’ control over creation.
Much has been said about the devastating impact of technological evolution upon the stability of legal frameworks in the telecommunications sector. The development of new communication technologies based on the IP protocol has raised countless legal questions, pertaining to fields as varied as civil law, intellectual property rights, tax law, competition and regulatory law, to mention just a few examples. One of the most relevant legal issues raised by the dissemination of new communication technologies refers to the definition of an adequate regulatory approach to be taken with respect to services rendered with the use of IP over convergent networks, such as VoIP or Internet content distribution. Among the major difficulties faced by regulators is the problem of determining how the new IP-based services fit into the existing legal and regulatory framework and, consequently, if and how they should be addressed. The convergence brought by technological evolution has blurred the fine line that separates information technology, traditionally unregulated, from telecommunications services and media (broadcasting, cable TV, etc), which are subject to numerous regulatory restrictions and obligations. Challenges presented by the convergence of networks and services include the need to determine the extension of regulatory obligations to be imposed upon providers of new services, having in view the need to ensure minimum quality and reliability standards, while stimulating the development of new services and networks and promoting competition. The regulation of voice services offered over IP networks, for example, presents serious difficulties in view of their considerable differences in comparison with traditional telephone services. An inevitable by-product of convergence is the increasing demand for audiovisual content, especially in the context of triple play (voice, data and video). This raises important issues related to the production and distribution of such content, such as foreign capital restrictions, intellectual property rights and the carriers’ control over creation. This article aims to examine how the Brazilian legal and regulatory frameworks deal with these issues and how the national regulatory agency, ANATEL, has responded to the challenges of modernisation and convergence. Telecommunications, Internet and media sectors in Brazil: a brief overview Telecommunications The process of liberalisation of the Brazilian telecommunications market began in 1995, with Constitutional Amendment 8/95, which gave autonomy to the telecommunications and broadcasting sectors, by submitting the former to the jurisdiction of one sole and independent regulatory authority (art. 21, IX). The Brazilian Federal Communications Agency (ANATEL), created in 1997 by Law 9472/97 (LGT), which also established criteria for the privatisation of federal concessionaires of fixed switched telephone service, rules concerning the gradual liberalisation, and specific competition rules within telecommunications markets, with the intent of stimulating user benefits as well as social and economic growth. In a very forward-looking approach, art. 60 LGT defined telecommunication service in a very broad, neutral and convergent manner as any activity which allows the offering of ‘transmission, emission or reception, by wire, radio, optical means or any other electromagnetic process, of symbols, characters, signals, writing, images, sounds or information of any nature’. However, licences are still granted according to different modalities of services as defined by ANATEL, which may be critical to innovation in new services delivery models. The exploitation of any telecommunications service or networks is generally conditioned upon obtaining a licence granted by ANATEL, with the exception of some specific situations in which a mere communication to ANATEL is required. There are no restrictions to the technology that may be employed and, with exception of mobile services, there are no limits to the number of operations. The LGT also determines that networks shall be organised to form integrated ‘highways’ so that traffic can freely circulate among them and imposes mandatory interconnection between all networks supporting services offered to the public, the collective interest services, guaranteeing their integrated operation. Furthermore, with respect to the networks, the LGT conditions the property rights to the duty of compliance with their social role. In this way, interconnection is a major instrument for convergence. There are no restrictions to foreign capital in regards to the exploitation of telecommunications. This has resulted in significant investments, driving the achievement of universal services goals. Constitutional Amendment 6/95 completely revoked the general principle of different treatment for foreign capital, which was contained in article 171 of the Constitution. Foreign companies entering the markets of collective interest services are required only to incorporate a Brazilian holding company to control the operating company. Any operator either of collective or restricted interest services must be a Brazilian company. Information technologies In addition to the legal definition of telecommunications services, Article 61 LGT establishes a legal definition of value added services, which expressly declares that such services are not telecommunications services and classifies the value added service provider as a user of the underlying telecommunication service or network. Therefore, with exception of data transmission itself any Internet services are outside ANATEL’s jurisdiction and may be rendered free from any regulatory constraints. Broadcasting and media sectors In accordance with broadcasting’s role of offering broad and indiscriminate audiovisual content to the public in general, and its impact upon social values, the legal obligations that apply to broadcasting activities differ substantially from those that apply to telecommunications services. Article 222 of the Brazilian Federal Constitution provides that television and radio licences may only be granted to Brazilian individuals or Brazilians naturalised for over ten years, or to companies organised according to Brazilian laws and with headquarters in Brazil. At least 70 per cent of the total capital and of the voting capital of the service provider must belong directly or indirectly to Brazilians or Brazilians naturalised for over ten years, who must manage activities and define the content of the broadcasting. Furthermore, the same article establishes that only born Brazilians or Brazilians naturalised for over ten years may have editorial responsibility and be in charge of the selection and direction of the broadcasted programmes. Broadcaster’s activities are characterised by the right to organise their own networks. In order to broadcast terrestrial television or radio programmes, it is necessary to obtain a concession from the President of the Republic – for regional or national TV or sound broadcasting, or a permission from the Ministry of Communications – for local sound broadcasting, through a competitive bidding process. Approval by the National Congress is required for the granting and the renewal of licences. The use of the necessary radio frequencies requires an authorisation by ANATEL. Conversely, Cable Television, Microwaves and Satellite Television are not subject to such rigid restrictions. Microwave and Satellite television services suffer no restriction at all as to foreign capital ownership. Cable television is regulated by a specific law and is subject to a concession, granted through a competitive bid. This law was enacted prior to the Amendment of the Constitution that abolished the general principle of different treatment for foreign capital, and includes foreign ownership limits (49 per cent). However, since cable television is not listed in the Constitution, the discrimination may be challenged. In fact, such pre-existing restrictions contradict the constitutional principle of non-discrimination, which itself prevents a wide interpretation or analogous application of the broadcasting constitutional rule. Convergence in the Brazilian legal framework It is therefore clear that under the Brazilian legal system, telecommunications, broadcasting and pay-TV, media activities and IP-based services rendered through the Internet are distinct and autonomous sectors, subject to completely different constitutional, legal and regulatory norms. While broadcasting is characterised by a broad and indiscriminate offer of audiovisual content to the public in general, telecommunication is legally defined as the mere transmission, emission or reception of any kind of information signal. Pay-TV services require a service agreement between the user and the provider, while Internet technologies, on the other hand, make available a wide range of content which is accessed and chosen selectively by each individual user. For these reasons, it is not acceptable to compare telecommunications, broadcasting, Pay-TV and Internet-based services for the sole purpose of imposing similar legal restrictions upon all providers. In fact, due to its continental dimensions and the need for social and economic growth, and inclusion, Brazil has a dramatic need for voice and data connectivity. Therefore, in addressing convergence in Brazil, the legislator and the regulator should look at the issues raised by convergence from all sides, since inclusion and growth depend on adequate incentives to diversified investments and upon the harmonic development of all sectors.