Fixed broadband internet franchise and the internet market in Brazil

The debate over fixed broadband internet speed limits is always controversial, but also important and necessary.

Since the beginning of 2016, when the debate about broadband internet franchising in Brazil began, a lot has happened and there have been countless twists and turns. We initially went through the approval of the application of internet speed limits by internet providers to the current possibility of changing the Marco Civil da Internet, through PL 7182/2017 , which adds another item to the 13 items of article 7 of the Marco Civil, which consists of: “ prohibiting the implementation of limited consumption allowances in fixed broadband internet plans.

In practice, the change prohibits providers from any limitation or cut in the consumption of internet traffic via fixed broadband and obliges them to always guarantee the same internet speed, in accordance with 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 Telecommunications Law, but rather to the Marco Civil da Internet , which is only three years old ( Law 12,965/2014 ). The purpose of the Marco Civil is to “regulate the use of the Internet in Brazil by providing principles, guarantees, rights and duties for those who use the network, as well as determining guidelines for State action”.

This change could 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 legislation so significant is that, on the supply side of internet connection services, only one way of selling fixed broadband is now possible: through differentiation in connection speed . Since the Marco Civil itself limited differentiation by quality of service, establishing principles of network neutrality.

The big problem is that this restriction has general application, as it does not specify the size of the providers that must follow the rules, nor the technologies used to provide the service. 

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

The measure also does not provide for 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 to measure the network quality or infrastructure needed in the future.

This situation creates great possibilities for future problems in the internet market, as the restriction applies generically and broadly to all internet providers and connection forms. Errors like this are due to the lack of analysis and debate by the actors involved, in situations where it is necessary to evaluate the different scenarios and variations that exist.

In this case, we have politicians more concerned with responding to popular movements and using the situation for their own benefit than creating an efficient solution to the problem. We have Anatel , which as a regulatory agency has the responsibility to take a position in this regard, where it initially did not oppose the internet franchise model, but ended up taking a neutral stance, “washing its hands”, so as not to go against the negative repercussions. in society in relation to the internet speed limit for fixed broadband. And we also have telecommunications companies and the entities that represent them, which failed to present a set of information, practical proposals and benefits for the market, based on the fixed broadband internet franchise model.

The reality is that the internet provider market is very broad and diverse. There are dozens of technologies, from small regional providers to large national internet providers, varied types and different customer needs, different forms of competition in different markets, in addition to countless business model options that providers can follow.

For the performance of telecommunications activities, the Constitution itself defines that the rules to be followed in the provision of services are established in the General Telecommunications Law , which states that freedom prevails in the provision of services (“freedom is the rule”), also establishing a regulator (Anatel) for supervision. The Marco Civil itself ensures the “freedom of business models promoted on the internet, as long as they do not conflict with the other principles established in this Law” for business activity in the market.

The debate now focuses precisely on changing the market principles and commercial practices provided for by law, to create a legal limitation on the activities of infrastructure companies, with the allegation of a possible threat to consumer rights, in the case of applying franchises. 

Considering that the internet franchise model is a common practice in mobile telephony, where operators offer numerous options and plan formats and impose restrictions with connection speed limits according to consumption. It is completely incoherent not to allow the application of franchises in fixed broadband telephony, both legally and due to the positioning of the regulatory bodies and entities involved.

When analyzing this topic, a point to be considered is the understanding that, with greater freedom in the telecommunications market, we can have healthy competition between providers and more alternatives in the provision of services, with more internet plan options, greater variety of services and, mainly, better quality in the provision of internet connection services.

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

Another point worth addressing is that in Brazil, internet provider services are generally seen as bad companies and criticized by society's common sense. Of course, most companies fail to offer a quality service and satisfactory service, but part of this bad image must also be attributed to the precarious infrastructure in a large part of Brazil, the endless bureaucracy for implementing new infrastructure, the extremely high tax burden before the need for investment and the return generated, the large number of rules and regulatory limitations in the provision of services and all other complications that exist in business development in our country.

In conclusion, throughout the analysis and debate, two main values/objectives must prevail: the purpose of improving services provided to citizens and guaranteeing the principle of freedom and free trade for companies, customers and the market in general.

Considering that the application of restrictions on market practices limits the performance of companies and makes it difficult to offer personalized and even better quality services, and that as the internet in Brazil still needs to evolve and we do not have incentives from the government and regulatory entities to If this happens, it is possible to conclude that not allowing the possibility of limiting internet consumption in fixed broadband (unlike what happens in mobile telephony) is not the best way to improve the telecommunications market in Brazil.

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

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