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Liberalization of the Uruguayan telecommunications marketGomez Pinzon & Asociados Bogota

On December 20 2000, the House of Deputies approved a bill which, among other things, puts an end to the state monopoly of telecommunications services, and creates a regulatory entity over telecommunications operations. Although the bill has not been formally enacted yet, it can be confirmed that it will become binding law shortly (most likely in February 2001), as it has already been approved by both the Senate and the House of Deputies, and no vetoes have been placed by the executive branch in connection with its relevant telecommunications-related provisions.

The bill is encompassed within a more comprehensive policy of the Uruguayan government, aimed at opening up the economy and encouraging free competition.

A summary of the main aspects of the bill are:

It restricts the scope of the Administración Nacional de Telecomunicaciones' (ANTEL) exclusivity to basic telephony, defined as local traffic effected through fixed telephones.

Up to now, ANTEL – the national telecommunications company – benefited from exclusivity over a wide array of telecommunication services (including local and long distance telephone calls) which consequently were excluded from free competition.

Following the bill, long-distance telephone services, value-added telecommunication services and cellular operations would be excluded from ANTEL's exclusivity, and subject to free competition and private capital. Under the bill, companies interested in providing international long-distance telephone services will require the authorization of the executive branch, which will be granted upon compliance of proceedings ensuring equal rights to all interested parties.

The bill authorizes ANTEL – with the authorization of the executive branch – to incorporate or participate in public or private companies, based in Uruguay or abroad, with the purpose of rendering any telecommunications services other than basic telephony. The sale of ANTEL's shares in such companies will require the authorization of the executive branch and will be effected through bid, auction, or stock exchange sale.

Under the bill, telecoms activities must be rendered in accordance with certain basic principles, including broad coverage of the services, adequate levels of investment, appropriate protection for users and consumers, encouraging free competition without prejudice to ANTEL's surviving legal exclusivities, and users' free choice based on clear and accurate information.

The bill creates a regulatory entity – the Communication Services Regulatory Unit (Unidad Reguladora de Servicios de Comunicaciones, or URSEC) – as an autonomous entity (organo desconcentrado) within the scope of the executive branch.

URSEC will be governed by a three-member commission, designated and removed by the President of the Republic, acting jointly with the Cabinet. Commission members will remain six years in office, be precluded from undertaking any activities – other than teaching – related to the scope of URSEC, and have no professional relationship with the companies subject to URSEC's controlling powers.

URSEC will be responsible for:

  • advising the executive branch in determining and applying the communications policy;
  • controlling compliance with applicable regulations;
  • administering the national radio-electric spectrum;
  • granting licences (locally designated as authorizations) for the use of frequencies in the national radio-electric spectrum;
  • in those cases in which, upon generic authorization of the executive branch, the use of the frequencies are assigned by auction, URSEC will be entitled to set out the term of the assignment and the performance bonds to be placed;
  • approving technical control regulations;
  • enacting rules ensuring compatibility, interconnection and inter-operation of the networks – including the public network – and also ensuring the correct operation of equipment connected to the networks;
  • maintaining international relationships with similar foreign entities;
  • enforcing compliance with this bill and any other applicable regulations; and
  • advising the executive branch on the requirements to be met by those companies or individuals rendering telecom services.

Jonás Bergstein

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