The Importance of Reforming Telecom Regulations

Tomorrow, Wednesday (Sept. 18), the Brazilian Federal Senate will vote on bill 3832/2019 that improves domestic telecom regulations allowing for new business models to operate across the country.

The bill is now at the Science and Technology Committee (CCT) in the Senate and has “terminative” status, which means it does not need to pass on the Senate floor if it passes the committee, going directly to the Chamber of Deputies.

The last update these regulations had was in 2011 with the SeAC law, before the streaming revolution. The SeAC law does not allow the same company to produce and distribute telecommunication content on TV. This cripples vertical integration and makes TV less competitive compared to Netflix or Amazon Prime, companies that produce and distribute their own content online.

The bill aims to eliminate restrictions on vertical integration in the telecom market, allowing for the same company to produce and distribute its content not only on the internet but also on TV. Most stakeholders support the reform, including the Bolsonaro administration and Anatel, the federal agency in charge of regulating the telecom market.

Senator Rodrigo Cunha, a member of the committee, pointed out that this bill will strengthen the rule of law giving companies legal certainty that their investments will be protected by domestic institutions such as Anatel and will make more content available to the average Brazilian consumer.

Most countries already allow for vertical integration and Brazil is one of the few that haven’t reformed in this direction. This reform is essential to allow companies to stay competitive and invest in the Brazilian telecom market, one of the largest in the world. Brazil must reform in order not to fall behind.

After weeks of discussion, the committee will hold the final vote on Wednesday. The senators must prove they have a commitment to the reforms the country deeply needs to bring back investments and economic growth.