Brazilian telco association slams "abusive" city fees for fixed broadband deployment

Thursday, January 30, 2014

Brazil's telecommunications competition association TelComp has slammed what it has called "abusive" fees allegedly charged by some municipal authorities for the installation of fixed broadband infrastructure.

In a press statement the entity, which incorporates over 50 local telecommunications service providers, criticized the measure as being "artificial barriers" to investment for "opportunist gains" which end up hindering projects that could be potentially beneficial for the population.

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"The municipalities that create these difficulties are sacrificing their own development for immediate revenues, which then have a significant impact on public accounts. Also, they do not compensate for citizens' losses due to inferior telecommunications services," TelComp wrote.

According to TelComp, these fees for the deployment of broadband infrastructure have a "questionable legal basis," which is being challenged in court by the association.

A further problem is the disregard of cities' size or relevance. The entity mentions as an example, the case of a city in São Paulo, the country's richest state. There, authorities allegedly charge an "analysis" fee of 5 reais (US$2) per meter of the fixed infrastructure to be installed, in addition to another 0.50 reais per meter, per year as a "monitoring" fee.

Estimating the cost of a meter of fiber optics cable with 12 pairs at around 2.20 reais, TelComp argues that the fees charged in such São Paulo city are therefore more than double the value of the fiber itself.

In its letter, TelComp urged telecoms regulator ​Anatel and the country's congress to act to curb the charges and said proposals for bills to that end have already been submitted to lawmakers, though they have not been made a priority.

"Another way [to fight against the problem] is to engage the population: to what extent do voters know that their city's mayor makes decisions that ​​directly affect the cost and quality of the telecommunications services they hire?" said the association.