[governance] FW: [OIA] Meanwhile, in Argentina

Sat Nov 1 18:09:23 EDT 2014

From: oia-bounces at lists.bway.net [mailto:oia-bounces at lists.bway.net] On Behalf Of Joly MacFie
Sent: Friday, October 31, 2014 6:09 PM
To: Bruce Kushnick
Subject: [OIA] Meanwhile, in Argentina

http://www.buenosairesherald.com/article/173442/gov

A bill presented by President Cristina Fernández de Kirchner’s administration yesterday may change the country’s telecommunications sector for years to come.

The broad measure appeasing long-held demands by the opposition declares information and technology communications a public service and establishes a broad definition of net neutrality, an issue that was discussed last week in a Senate committee.

The so-called “Digital Argentina” bill, unveiled yesterday morning by Economy Minister Axel Kicillof, Federal Planning Minister Julio De Vido and Communications Secretary Norberto Berner, implies substantial changes to the 2009 Media Law as it opens the possibility for providers to offer “triple play” (telephone, cable and Internet) services.

This reform would put Argentina in a similar situation to most of Europe and the Americas within the framework of technological convergence, even though conflicts could be raised in the near future regarding the winners and losers in this new stage of regulation.

The aim of the proposed regulation is to “stimulate competition and put an end to concentration” in the telecommunications sector, Kicillof said during a news conference. For his part a private source from the cable and Internet market called the bill “a new stage in the battle against media conglomerate Clarín.”

The government, meanwhile, framed the reform as important, declaring that telecommunications could hardly be considered a trivial issue.

“We need new regulations in order to be able to access services that are considered human rights,” Kicillof said.

TAKES ON EXCLUDED ASPECTS

According to the dictates of the bill, the restriction on telephone companies to provide audiovisual services that was part of the 2009 Media Law will collapse. But the anti-monopoly limits set by the Media Law will continue, including the market share of 35 percent, a maximum of 24 districts for cable providers and 10 TV and radio licences as well as geographic incompatibilities.

The proposed reform of the 1972 Telecommunications Law takes on part of the initial conception of the Audiovisual Communications Services Law (LDSCA), also known as the Media Law, which gave a green light to convergence with state monitoring in terms of costs and conditions for the telecommunications networks to be at the service of other providers.

This goal was removed from the bill during congressional negotiations in order to obtain support from centre-left parties. At the time, lawmakers from the Socialist (PS) party and Project South said that the Media Law sought to favour the telephone companies — a position also defended by the Clarín Group, the country’s largest media conglomerate.

The government gave in on this point in order to earn support from from these caucuses — but the law lost in terms of technological innovation and the emergence of competitive players.

This discussion is provisionally resolved in Article 9, which clearly states what telecommunications licences “may be able to offer audiovisual services,” a permission that works the other way round since media licences will also be enabled to sell “telecommunication services” to subscribers. Specialists, however, agree that the latter option is less profitable and more complex.

PUBLIC SERVICES

The measure — which also guarantees the privacy of e-mail, regardless of the channel used — also takes on deregulation aspects first outlined by Decree 764/2000, a regulation passed during the Fernando De la Rúa administration.

Should the law be passed, telecommunication networks will be considered “essential public services” and therefore allow the state to set minimum standards and maximum prices, a long-held demand by progressive lawmakers.

The government may establish a minimum compulsory speed for all networks, a figure that will be updated every two years aimed at guaranteeing egalitarian access to quality services throughout the country.

Another key aspect mentioned by the bill is the declaration of “net neutrality” and free access to information.

A week ago, a net neutrality bill was cleared for debate in the Senate. The bill — which could be replaced by this new, broader bill — establishes that companies must ensure equal treatment for all Internet traffic.

Yesterday afternoon, UNEN lawmaker Roy Cortina — who has presented in the past a number of bills to declare mobile services a public service — expressed his “serious doubts” about the official reform bill.

“It’s a good thing that the national administration finally acknowledged this demand... but the government has been an accomplice of skyrocketing fees and lousy services provided by mobile phone operators,” Cortina said in a news release.

Radical lawmaker Hugo Maldonado hailed the news but warned he was not going to “let the government surprise us again.”

“Declaring mobile technology a public service means we may turn the page on this essential service,” Maldonado expressed.

POSSIBLE CONSEQUENCES

If the proposal is approved by Congress:

- Telefónica may be able to keep leading broadcast TV channel Telefe — a decision that the AFSCA media watchdog had failed to make in the past, despite Telefónica having filed its adjustment plan several months ago. Officials from AFSCA had already acknowledged the presence of the Spanish company in the broadcast market was at odds with the 2009 regulation.

- Telecommunication companies may be able to offer paid TV services, with the restrictions set by the Media Law. Namely, Telefónica and Telecom would be allowed to offer cable TV services through its Buenos Aires network — but only as long as the former gets rid of the Telefé broadcast channel.

- Mexican businessman David Martínez, the head of the Fintech Advisory fund who has just bought 17 percent of Telecom Argentina, may be able to keep his share in Cablevisión, Clarín’s cable TV company.

ENCOURAGING COMPETITION

Another central aspect of the government-sponsored reform is that it would declare Internet a public service. On the one hand, this enables the state to determine a final subscription price. On the other, this could allow other companies to use the network of already-established firms such as Fibertel in exchange for a fee, which can also be determined by the national administration.

“This could mean hundreds of new providers may appear,” a source from the paid TV and Internet market told the Herald.

(This is linked to the deregulation of the last mile, another key aspect of the bill. A telecommunications network is considered to have four segments: backbone, middle mile, last mile and the last 100 feet. Deregulating the last mile would help new or smaller telecom providers use the structure of the largest players.)

The same source linked the bill with the ongoing conflict between the government and Clarín.

On October 8, the head of the AFSCA media watchdog Martín Sabbatella announced the forced divestment of the Clarín Group on the grounds that the conglomerate was trying to “cheat” his department by presenting a bogus divestment plan. Observers see Clarín taking the issue to courts in coming days.

At the same time, Clarín was left out of the country’s 4G bidding process which is expected to go ahead tomorrow. Telefónica’s Movistar, Telecom’s Personal, and firms Claro (headed by Mexican magnate Carlos Slim) and Arlink (part of the Vila-Manzano Group) were all pre-selected to participate in the tender process.

“This constitutes a new chapter in the fight against Clarín media group”, the private source pointed out. “A new bill should promote competition with fair rules. The mobile phone market represents 45 billion pesos out of 70 billion pesos for the entire telecommunication market.

“On the other hand, Cablevisión (Clarín’s cable-television provider) only has a market share of six percent,” the source added.

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