Fixed broadband internet franchise and the internet market in Brazil

The debate about the fixed broadband internet speed limit is always controversial, but also important and necessary.

Since the beginning of 2016, when the debate on broadband internet franchise began in Brazil, much happened and there were numerous twists. We initially went through the approval of the Internet Speed ​​Limit Application by the current possibility of change in the Internet Civil Mark, through PL 7182/2017 , which adds another item to the 13 items of Article 7 of the Civil Mark, which consists of: “ Sealing the implementation of limited consumer franchise in fixed -band internet plans.

In practice, the change makes the providers forbidden any limitation or cut in the consumption of fixed broadband traffic and obliges them to always guarantee the same internet speed, according to the contracted speed, regardless of the consumption generated within a period. The opposite of what currently happens in mobile telephony.

This change generated by PL 7182/2017 does not apply to the General Law of Telecommunications, but to the Internet Civil Mark , which has only three years of existence ( Law 12.965/2014 ). Marco Civil aims to “regulate the use of the internet in Brazil through the provision of principles, guarantees, rights and duties for those who use the network, as well as the determination of guidelines for the state's performance”.

This change can be one of the most relevant in the telecommunications market since the current model was implemented almost 20 years ago.

What makes this change in the legislation so significant is that, on the side of the offer of internet connection services, it is possible only one form of fixed broadband marketing: through differentiation at the speed of the connection . Since Marco Civil himself limited the differentiation by the quality of the service, establishing principles of neutrality of the network.

The big problem is that this restriction has a general application, as it does not specify the size of the providers that should follow the rules and so little the technologies used to provide the service. 

Therefore, the restriction of internet franchise will affect everyone in the same way, from the internet supplier in a public square, through small and medium regional providers, to large fiber optic internet suppliers in large centers. Likewise, it affects all technologies used, satellite broadband, radio access providers, fiber optics, pay -TV companies and other means that exist and may emerge for internet connection.

The measure also does not foresee any analysis or review in the future. As we know, technology and the Internet are constantly evolving, it is not possible to know today how services will be offered in the coming years, nor dimensioning the network quality or the necessary infrastructure in the future.

This situation creates great possibilities for future problems with the internet market, as the restriction applies in a generic and broad manner to all internet providers and forms of connection. Errors like this are due to the lack of analysis and debate of the actors involved, in situations where it is necessary to evaluate the different scenarios and existing variations.

In this case, we have politicians more concerned with meeting popular movements and using the situation for their own benefit than creating an efficient solution to the problem. We have Anatel , who as a regulatory agency has the responsibility to position themselves, where initially did not place themselves against the internet franchise model, but ended up having a neutral stance, “washing hands”, not to go against the negative repercussion in society in relation to the internet speed limit for fixed broadband. And we also have the telecommunication companies and the entities that represent it, which failed not to present a set of information, practical proposals and benefits to the market, from the Internet franchise model in fixed broadband.

The reality is that the internet provider market is very wide and diverse. There are dozens of technologies, small regional providers to large national internet suppliers, various types and different customer needs, different forms of competition in different markets, as well as the numerous business model options that providers can follow.

For the performance of telecommunication activities, the Constitution itself defines that the rules to be followed in the provision of services are established in the General Telecommunications Law , where it is stated that in the provision of services prevails freedom (“Freedom is the rule”), still establishing a regulator (Anatel) for supervision. Marco Civil itself ensures the “freedom of business models promoted on the Internet, provided they have no conflict with the other principles established in this law” for business action in the market.

The debate is now focused precisely to alter the market principles and business practices provided by law, to create a legal limitation on the activities of infrastructure companies, with the allegation of possible threat to consumer rights in the case of franchise application. 

Considering that the internet franchise model is a common practice in mobile telephony, where operators offer numerous options and plan formats and practice restrictions with connection speed limit according to consumption. It is totally incoherent not to allow the franchise to apply to fixed broadband telephony, both legally and by the positioning of the regulatory organs and entities involved.

In analyzing this theme, a point to consider is the understanding that, with greater freedom in the telecommunications market, we can have a healthy competition among providers and more alternatives in the offer of services, with more internet plans options, greater variety of services and, especially, better quality in the provision of internet connection services.

Considering that quality internet access is still a critical problem in Brazil, both in the corporate market and for homes. It would be up to the government to seek ways to encourage the development of improvements to the telecommunications market, offering better infrastructure and investment subsidies by providers. In Brazil only half of the homes have broadband internet and only 4% of connections are by fiber optic.

Another point that is worth being addressed is that in Brazil generally internet providers services are seen as bad companies and criticized by the common sense of society. Of course, most companies are sinned to offer quality service and satisfactory service, but part of this bad image should also be attributed to the precarious infrastructure in much of Brazil, the endless bureaucracy for the implementation of new infrastructure, the very high tax burden on the need for investment and the return generated, the large amount of rules and regulatory limitations on service provision and all other complications in business development in our country.

Concluding, throughout the analysis and debate, two main values/objectives should prevail: the purpose of improving the services provided to citizens and the guarantee of a principle of freedom and free trade for companies, customers and the market in general.

Considering that the application of restrictions on market practices limit companies and make it difficult to offer personalized and even better quality services, and that as the internet in Brazil still needs to evolve and we have no government incentives and regulatory entities to make it happen, it is possible to allow the possibility of limiting internet consumption in fixed broadband (contrary to mobile telephony) is not the best way to improve the telecommunications market in telephone. Brazil.

What is your opinion on the subject? What do you think can be done to improve the internet in Brazil? Share your opinion in the comments!

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