| Back to InterAmSM Directory / Brazil / Communications / Supplementary Materials - Materiales Suplementarios |
Fabio de Sousa Coutinho (Brasilia)
Tel: (55-61) 224-4377
Fax: (55-61) 226-6743
The participation of foreign investors in the Brazilian telecommunications industry has been a controversial issue over the years. In the past, telecommunications services were considered a key sector which should be reserved to the Brazilian government (especially the public services) and/or Brazilian nationals (radio, TV, etc.). In addition, the informatics market reserve enforced until recently included the marketing of telecommunications equipment.
The 1988 Constitution reserved to the Federal Government, directly or through government-controlled companies, the exploitation of telegraphic, telephonic, data transmission and other public services of telecommunication. The Brazilian Telecommunications Code (Law No. 4,117/62) defines public services as those executed by stations available for public correspondence, for use by the public in general.
By way of Constitutional Amendment No. 8 of 15 August 1995, the Brazilian Congress lifted the above restrictions, but on 28 November 1995 President Cardoso sent a Bill to Congress (No. 1,287/95), which stated that concessions for the exploitation of cellular telephony, classified as a "restricted public service," shall be granted, through a public bidding procedure, to Brazilian companies, with at least 51 percent of their voting capital belonging, directly or indirectly, to Brazilian nationals. The public bidding procedure is aimed at the granting of "Band B" licenses, for which a fee must be offered as part of the bid procedure.
The Bill has been approved by the House of Representatives with modifications, one of them limiting the voting capital restriction to the first 3 years of enforcement of the law. Under No. 32/96, the bill now is in the Senate, where one of the Government's supporting parties (PFL) has indicated its disagreement with the restriction, mainly on the grounds that the Constitution no longer contemplates any kind of distinction between companies on the basis of origin of capital (Constitutional Amendment No. 6 of 15 August 1995).
Regardless of the current controversy, once Bill No. 32/96 is finally approved, the bidding procedures for "Band B" should follow. This is not likely to happen before the second semester of 1996, for, after its approval by the Senate and the subsequent presidential enactment, the Ministry of Communications should issue the corresponding notices (Editais), which shall lead to a series of concession contracts with the different bidding winners, probably before the end of the current year. Several consortia have been formed with a view to participating in the bidding process for "Band B," including well-known multinational telecommunications companies, financial institutions and also traditional Brazilian publishing companies.
The National Law Center is a non-profit 501(c)(3) Research and Educational Corporation