The Antitrust Review of the Americas 2009

Reforms in Brazilian Telecommunications Regulations and their Impact on Sector Competition

The Brazilian legal system: competition authorities and regulatory agency Until the late 1980s, public telecommunications services were a state monopoly under the control of the Telebrás System. The system comprised the Brazilian public entities Telebrás (holding) and its controlled companies, including Embratel (for long-distance and international services), plus 27 local companies for each of the 27 states in the Federation. In 1988, the sector was included in the privatisation programme, giving rise to an amendment to the Federal Constitution, which ended the legal monopoly in this sector. In 1997, Law No. 9,742 (General Telecommunications Law, GTL) was enacted. It is the legal milestone for the sector model transition, whereby the state shifted from service provider to telecommunications sector regulator, playing a supervisory role and promoting public policies to attract private investment and create conditions for the symmetric development of that sector, in addition to promoting competition, service diversity and consumer welfare. GTL also established the National Telecommunications Agency (ANATEL), the regulatory and supervisory body for the sector. As well as its typical role as a regulatory body, ANATEL was also assigned express competences in the area of protection of competition to ensure free competition, consumer protection and suprepression of abuse of economic power, except for those competences specific to the Administrative Council of Economic Defence (CADE) in this area. As such, ANATEL has been operating effectively, both in cases of investigations of anti-competitive behaviour and analyses of concentrations among companies. In practice, the role played by ANATEL in the sector has been strictly technical and directly associated with regulatory issues, without performing detailed market analysis from a competition standpoint.

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