Challenges Facing the Telecommunications Sector

In the dynamic telecommunications ecosystem, where the proliferation of technological innovations and the pressing need for connectivity are intertwined, a thorough analysis of the immediate challenges facing companies in this sector is essential. On the other hand, it is necessary to highlight the basic but impactful obstacles that directly affect the progress and expansion of what is considered to be an essential public service.

Today, as we celebrate International Telecommunications Day, we would like to bring up issues that directly affect our sector’s ability to thrive. One of these major challenges is safeguarding free competition and economic freedom.

Unfortunately, we see cases in which these basic principles are subjugated by the practices of certain companies which, under the pretext of managing telecommunications and information technology services provided in large commercial centers, impose illegal restrictions and tariffs on regular companies wishing to operate in these locations.

These entities, which assume the questionable role of intermediaries between operators and condominiums in general, arrogate to themselves the right to dictate which companies can or cannot offer their services in condominiums in big cities, imposing subscriptions to platforms created for this purpose, exorbitant tariffs – which make the operators’ activities unviable – and illegally restricting the consumer’s right to choose. Both individuals and companies are restricted in their freedom to contract the services of their choice, while operators face barriers ranging from operational vetoes to onerous entry fees.

It is essential to recognize that this practice not only goes against fundamental principles, but also violates regulations and authorizations established by ANATEL itself. By assuming a stance of wanting to determine the rules of the telecommunications sector in the spaces they occupy, these entities go beyond the limits of the free initiative of the private sector, harming the healthy and competitive development of the market.

Sharing poles

Another significant challenge concerns the sharing of poles between different service providers. Over the years, regulation has evolved, marking significant points with Joint Resolutions No. 4/2014 and ANATEL Normative Resolution No. 712/2023. It is crucial to understand the distinctions between these regulatory instruments for a comprehensive analysis of the current regulatory landscape.

Joint Resolution No. 4/2014, approved on December 16, 2014 by ANATEL and ANEEL, was the first standard to establish guidelines for pole sharing throughout the country. It establishes the obligation to share, criteria for occupying poles, prices for fixing points, and prohibits pole companies from installing their own networks.

On the other hand, Normative Resolution No. 712/2023, approved on October 24, 2023 by ANATEL, aims to repeal Joint Resolution No. 4/2014 with regard to pole sharing in urban areas. This new resolution introduced more detailed and specific rules, including the definition of prices for fixing points by means of public consultation, establishing an occupancy limit of just one (1) point per pole. In addition, Normative Resolution 712/2023 addressed crucial issues such as network security, environmental impact and specific mechanisms for resolving conflicts.

Current challenges include the completion of Normative Resolution 712/2023, especially with regard to the definition of prices for fixing points and other pending issues. In addition, it is necessary to establish a specific regulatory framework for sharing in rural areas.

The effective implementation of the rules, including inspection and monitoring of compliance, is fundamental. Investments in infrastructure, such as expanding the capacity of poles and modernizing networks, are equally essential.

Regulatory update

At the same time, the regulatory agencies need to work hard to find a new contractual scenario for the desired regulatory advances, overcoming disputes between telecommunications companies, electricity utilities and other interested parties, as well as encouraging the regularization of infrastructure based on spontaneous declarations by telecommunications providers.

One suggestion is to provide for performance clauses, i.e. to set windows for spontaneous declarations to be verified. In these windows, fine exemptions or smaller fines would be applied according to predefined deadlines: (i) declarations in year 1 would be exempt from fines and the price of each point would be discounted more; (ii) statements in year 2 would apply discounts to fines and smaller discounts to prices per point, and so on.

In addition, current regulations often do not comprehensively address issues related to the load capacity and structural safety of poles, and are not even suited to the fiber optic infrastructure currently in use – copper is no longer used.

Another aspect that is closely related to the expansion of infrastructure is obtaining authorization to carry out a project to share pipelines for the passage of underground telecommunications network infrastructure, necessary for the provision of its services.

On a daily basis, operators are faced with unjustifiably lengthy procedures that go against the provisions of various regulations, including municipal laws, which encourage the sharing of infrastructure and the replacement of aerial infrastructure networks with underground networks.

Rules such as art. 7, caput and § 1, of Federal Law 13.116/2016, which establishes general provisions for the implementation and sharing of telecommunications infrastructure, notably the deadline for granting infrastructure installation licenses – which has been internalized by municipalities through local rules – are left aside without any reasonable justification.

The role of local authorities is a determining factor in the movement to expand telecommunications and information technology services throughout Brazil.

The enjoyment of rights guaranteed by the Brazilian legal system, such as art. 73 of Law no. 9.472/1997 (“General Telecommunications Law”), art. 12 § 1 and § 2, of Law no. 13.116/2016 (“Sharing Law”) and other municipal laws, will only be achieved through the direct involvement of municipalities that, in fact and in law, have the attribution and legal power to advance the availability to citizens of these essential services to today’s society.

Given this scenario, a proactive and results-oriented regulatory approach is essential, with clear and transparent guidelines that promote fair competition and ensure the quality of the services offered. In addition, there is a need to promote greater cooperation between the various players involved, including regulatory agencies, companies in the sector, electricity utilities and government bodies, in order to tackle the challenges in a collaborative and assertive manner.

Only through joint efforts and appropriate policies will it be possible to overcome the obstacles that prevent operators from fully developing the telecommunications sector on a day-to-day basis, thus guaranteeing the provision of quality services, the expansion of connectivity and universal access to communication, which are fundamental to the country’s social and economic progress.