RESTRICTEDWORLD TRADE
ORGANIZATIONS/C/W/160
13 July 2000
(00-2861)
Council for Trade in Services Original:  English
COMMUNICATION FROM BRAZIL
Fourth Protocol – Revised Schedule of Specific Commitments
The attached statement has been received from the delegation of Brazil with the request that it
be circulated to Members of the Council for Trade in Services.
_______________
1. When Brazil presented its offer of Specific Commitments on Basic Telecommunications in
February 1997 under the IV Protocol to the GATS, it was indicated the intention of revising it,
particularly with respect to public services, one year after the enactment of the Brazilian General
Telecommunications Law (July 1998). At that time, it was in force in Brazil what was called  the
“Minimum Law”, enacted in July 1996 and containing some basic directives to market access incellular, and limited satellite services.
2. Two major reasons contributed for the postponement of this revision. Firstly, there was the
perception that the systemic opening of the Brazilian market on telecommunications was so broad that
a few adjustments would not reflect the whole context of changes. Secondly, it was more suitable to
wait for the consolidation of all the norms and regulations that would develop the harmonious system
of new concepts, principles, and procedures prescribed by the General Law.
3. Under these circumstances, the new Schedule of Specific Commitments we are now
presenting can be seen as a formal representation of a whole set of recent practices aimed at
increasing competition and consumer satisfaction with respect to telecommunication services. The
successful privatization of the Telebras System in 1998 is, among others, a good example of the
efforts in that direction.
4. Also taking into account the aforesaid, we had to suspend the procedures for ratification of
our schedule of specific commitments by Congress in order to avoid a conflict of regulations.
Following the necessary procedures at the WTO, it is our intention to forward the new Schedule to
Congress for ratification.
5. To allow a better appraisal of the changes that demand the replacement of Brazil’s schedule
under the IV Protocol by the new one that is now being presented we have added the commentsbelow.
6. Brazil’s 1997 offer referred to the need for a governmental license for the provision of each
telecommunication service, specifying that this license would only be granted to juridical persons
duly constituted according to the Brazilian legislation. This would require head office and
management located in the Brazilian territory.S/C/W/160
Page 2
7. In the new schedule, the same principle is maintained – licences granted according to the
Brazilian Law – which now also means that the majority voting shares of the supplier companies must
be owned by natural persons resident in Brazil or companies duly constituted according to the
Brazilian Law. The compliance to these rules has not posed any problems according to experience of
the regulatory authorities. Also, they assure the legal reach of the Brazilian legislation on the action ofthe companies operating in the Brazilian market.
8. Embratel no longer has the monopoly of access to INTELSAT and INMARSAT satellites.
Direct access by other suppliers is now possible according to the procedures defined by these entities.
9. Brazil is maintaining the preference for the use of Brazilian satellites whenever they can offer
at least the same technical, operational and commercial conditions. Brazil also intends to keep the
exclusion of radio and TV direct broadcasting services, which are the object of an MFN exemption
listed in 1997. In the first case, the intention is to allow the development of the Brazilian satellites ona fair basis. In the second, Brazil believes that reciprocity is the best way to ensure effective market
access for Brazilian suppliers of these services.
10. In the new schedule it is clarified that, according to the General Telecommunications Law,
value added services are no longer considered as telecommunication services and that there are no
restrictions to their provision. These services are accorded access to and use of telecommunicationservices in a transparent and non-discriminatory way.
11. In this new, more specific concept of telecommunication services, there is no place for control
and commitments with regard to the contents of the information transported by telecommunication
networks. That is the reason the regulation of these matters is left to other sectors and authorities.
12. It should be pointed out that the General Telecommunications Law sets out the prerogative
for the President of the Republic to consider the es tablishment of limits to foreign capital participation
taking into account the context of our relations with other countries. However, it is important to note
that this prerogative has never been used during the existence of the new legislation.
13. It is also convenient to clarify that the provision of space segment by satellite suppliers is no
longer defined as a telecommunication service. Brazil now grants “rights of exploitation” to the spacesegment providers and it allows them to offer means to the telecommunications suppliers.
14. With regard to public services, which were closed to foreign commercial presence in the 1997
offer due to monopoly by state-owned companies, it  can be better realized the huge extent of the
market opening option adopted by the Brazilian government. In fact, as  established in the new
schedule, Brazil is committed to totally free competition, which will be reached even for the public
telephony at the beginning of 2002, after a transition period aimed at the construction of a balanced
development of the competition in the different regions of the country.
15. The same can be said with regard to mobile phone services. Only one region will keep the
duopoly in the cellular service until the end of 2001 because the region concerned was the last one to
have an alternative service supplier.
16. Because Brazil is adopting new concepts like “collective” or “restrictive” with respect to the
interests met in the provision of the services and “public” and “private” with respect to the regime inwhich these services are provided there is no use in referring to  “Closed User Groups” in this context.
17. Brazil decided to keep the reference to value added services that appeared in the 1997 offer.
They are all listed under 2.E – Other communication services.S/C/W/160
Page 3
18. Finally, Brazil is also adopting the Reference Pa per with three specific notes. The first two
notes make clear that we give preference to free negotiation in matters such as costs and unbundling
of charges related to interconnection, applying concepts such as cost-oriented rates and economic
feasibility only to voice telephone services. The final note expresses Brazil’s option for an
asymmetrical treatment of obligations concerning uni versal service, which is essential for assuring a
level-playing field for the incumbent and the new competitors.
19. In conclusion, and considering the aforementioned, we request to replace the offer made in
1997 under the IV Protocol by the attached revised and substantially improved Schedule of Specific
Commitments.S/C/W/160
Page 4BRAZIL  -   SCHEDULE OF SPECIFIC COMMITMENTS - JULY 2000
Modes of supply: 1) Cross-border supply 2) Consumption abroad 3) Commercial Presence 4) Presence  of  natural persons
Sector or Sub-sector Limitations on Market Access Limit ations on National Treatment Additional Commitments
2.C.  TELECOMMUNICATION SERVICES:
(i) Value added service is not defined as  a telecommunication se rvice in the Brazilian legislation. These services can be suppl ied with no restrictions and to any supplier
of VAS is accorded access to and use of telecommunication services on reasonable and non-discriminatory terms and conditions.
(ii) The present schedule does not include any commitment related with the activities which have their information transported b y a telecommunication service. The
content and  treatment of those activities are regulated by their respective sectors.
(iii) The Executive Branch, in the use of  its legal prerogative, may consider the establishment of  limits regarding foreign pa rticipation in the capital composition of
telecommunications service providers.
(iv) The sub-sector (g)- Private leased circuit services- compri ses the lease of any type of network capacity for the supply of telecommunication services, which includes
the supply of  space segment facilities of satellites that occupy  orbital positions notified by Brazil and by foreign countrie s.
(iii) The supply of space segment facilities of  satellites that o ccupy orbital positions notified by foreign countries is allow ed whenever they offer better technical,
operational or commercial conditions. Otherwise, satellites that occupy orbital positions notified by Brazil must be used. Regu latory decisions on this regard will be based on
a transparent, objective and non-discriminatory process.
(iv) This schedule does not include telecommunication services supplied for distribution of radio or television programming for  direct reception by service consumers.
ALL SERVICES
The services listed herein cannot be supplied
through resale.(3) Licenses shall be granted only to
suppliers duly constituted according to theBrazilian legislation, which requires headoffice and management located in theBrazilian  territory, and ownership of themajority of the voting shares by natural
persons resident  in Brazil  or companies
duly constituted according to the Brazilianlegislation, which requires head office andmanagement located in the Brazilianterritory.Brazil adopts the attached
Reference Paper, with added
notes.S/C/W/160
Page 5Modes of supply: 1) Cross-border supply 2) Consumption abroad 3) Commercial Presence 4) Presence  of  natural persons
Sector or Sub-sector Limitations on Market Access Limitations on National Treatment Additional Commitments
Local, long distance and international
services, for public and non-public use,provided with the use of any networktechnology (cable, satellite, etc)
a. Voice telephone  services 
(CPC 7521)(1) None
(2) None(1) None
(2) NoneBrazil adopts the attached
Reference Paper, with addednotes.
b. Packet-switched data transmission 
services (CPC 7523**)
c. Circuit-switched data transmission
services (CPC 7523**)(3) (ii) Until 12.31.2001, up to two
suppliers of local, long distance inter-regional and international voice telephone
services will be allowed and up to four
suppliers of long distance intra-regionalvoice telephone services will be allowed.After this date, other licenses may begranted.(3) None
d. Telex  services ( CPC 7523**)
f. Facsimile services (CPC 7521**+ 
CPC 7529**)
g. Private leased  circuit  services
(CPC 7522**+ CPC 7523**)(4) Unbound, except as indicated in the
horizontal section.(4) Unbound, except as indicated in the
horizontal section.S/C/W/160
Page 6Modes of supply: 1) Cross-border supply 2) Consumption abroad 3) Commercial Presence 4) Presence  of  natural persons
Sector or Sub-sector Limitations on Market Access Limitations on National Treatment Additional Commitments
o. Mobile services
Analog/ Digital cellular
services  (CPC 75213)
Global mobile satellite services
(CPC 75299)
Paging services (CPC 75291)Trunking services (CPC 75299)(1) None
(2) None
(3) Duopoly for the cellular services
until 12.31.2001 in the States of Amazonas,Roraima, Amapá and Maranhâo.
(4) Unbound, except as indicated in the
horizontal section(1) None
(2) None
(3) None
(4) Unbound, except as indicated in the
horizontal section.Brazil adopts the attached
Reference Paper, with addednotes.S/C/W/160
Page 7Modes of supply: 1) Cross-border supply 2) Consumption abroad 3) Commercial Presence 4) Presence  of  natural persons
Sector or Sub-sector Limitations on Market Access Limitations on National Treatment Additional Commitments
2.E. Others
Value Added Services
Electronic mail
Voice mail
On-line information and data base retrieval
Electronic data interchange (EDI)(1) None
(2) None
(3) None(1) None
(2) None
(3) NoneThe use of PTTNS will be
ensured to any supplier ofValue Added Services,according to the applicableregulations.
Enhanced/value-added facsimile services,including store-and-forward, store-and-retrieve
Code and protocol conversion
On-line information and/or data processing
(including transaction processing)(4) Unbound, except as indicated in the
horizontal section.(4) Unbound, except as indicated in the
horizontal sectionS/C/W/160
Page 8BRAZIL – LIST OF ARTICLE II (MFN) EXEMPTIONS
Sector or subsector Description of measure indicating its
inconsistency with Article IICountries to which the
measure appliesIntended duration Conditions creating  the need for
the exemption
2.C. Telecommunicationservices supplied for
distribution of radio ortelevision programming fordirect    reception by service
consumers.Measures or international agreements
allowing for access to markets on a
reciprocity basis or providing for
differential treatment to specific countries.All Indefinite Ensure effective market access
for Brazilian suppliers in all
markets.S/C/W/160
Page 9
REFERENCE PAPER
Scope
The following are definitions and principles on the regulatory framework for the basic
telecommunications services.
Definitions
Users mean service consumers and service suppliers.
Essential facilities mean facilities of a public telecommunications transport network or service
that
(a) are exclusively or predominantly provided by a single or limited number of
suppliers; and
(b) cannot feasibly be economically or technically substituted in order to provide a
service.
A major supplier is a supplier which has the ability to materially affect the terms of participation
(having regard to price and supply) in the relevant market for basic telecommunications services
as a result of:
(a) control over essential facilities; or
(b) use of its position in the market
1.  Competitive Safeguards   
1.1 Prevention of anti-competitive practices in telecommunications
Appropriate measures shall be maintained for the purpose of preventing suppliers who,
alone or together, are a major supplier from engaging in or continuing anti-competitive
practices.
1.2-  Safeguards
The anti-competitive practices referred to above shall include in particular:
(a) engaging in anti-competitive cross-subsidization;
(b) using information obtained from competitors with anti-competitive results; and
(c) not making available to other service suppliers on a timely basis technical
information about essential facilities and commercially relevant information
which are necessary for them to provide services.
2. Interconnection
This section applies to linking with suppliers providing public telecommunications
transport networks or services in order to allow the users of one supplier to communicate withS/C/W/160
Page 10
users of another supplier and to access services provided by another supplier, where specific
commitments are undertaken.
2.2  Interconnection to be ensured
Interconnection with a major supplier will be ensured at technically feasible point in the
network. Such interconnection is provided
(a) under non-discriminatory terms, conditions (including technical standards and
specifications) and rates and of a quality no less favourable than that provided
for its own like services or for like services of non-affiliated service suppliers or
for its subsidiaries or other affiliates;
(b) in a timely fashion, on terms, conditions (including technical standards and
specifications) and cost-oriented rates that are transparent, reasonable, having
regard to economic feasibility, and sufficiently unbundled so that the supplier
need not pay for network components or facilities that it does not require for the
service to be provided ;1
(c) (c) upon request, at points in addition to the network termination points offered
to the majority of users, subject to charges that reflect the cost of construction
of necessary additional facilities. 2
2.3 Public availability of the procedures for interconnection negotiations
The procedures applicable for interconnection to a major supplier will be made publicly
available.
2.4 Transparency of interconnection arrangements
It is ensured that a major supplier will make publicly available either its interconnection
agreements or a reference interconnection offer.
2.5  Interconnection : dispute settlement
A service supplier requesting interconnection with a major supplier will have recourse,
either:
(a) at any time or
(b) after a reasonable period of time which has been made publicly known to an
independent domestic body, which may be a regulatory body as referred to in
paragraph 5 below, to resolve disputes regarding appropriate terms, conditionsand rates for interconnection within a reasonable period of time, to the extent
that these have not been established previously.
                                                     
1 According to the Brazilian legislation, the pr ovisions related herein to cost-oriented
rates and economic feasibility apply only to the suppliers of  voice telephone services (CPC
7521); the conditions related to unbundling must be agreed between the suppliers.
2 The charges must be agreed between the suppliers; taking into account a ceiling for the
use of  networks of voice telephone services providers.S/C/W/160
Page 11
3. Universal  service 3
Any Member has the right to define the kind of universal service obligation it wishes to
maintain. Such obligations will not be regarded as anti-competitive per se, provided they are
administered in a transparent, non-discriminatory and competitively neutral manner and are notmore burdensome than necessary for the kind of universal service defined by the member.
4.  Public availability of licensing criteria
Where a  licence is required, the following will be made publicly available:
(a) all the licensing criteria and the period of time normally required to reach a
decision concerning an application for a licence and
(b) the terms and conditions of individual licences.
 The reasons for the denial of a licence will be made known to the applicant upon request.
5. Independent regulators
The regulatory body is separate from, and not accountable to, any supplier of basic
telecommunications services. The decisions of and the procedures used by regulators shall be
impartial with respect to all market participants.
6. Allocation and use of scarce resources
Any procedures for the allocation and use of scarce resources, including frequencies,
numbers and rights of way, will be carried out in an objective, timely, transparent and non-
discriminatory manner. The current state of allocated frequency bans will be made publiclyavailable, but detailed identification of frequencie s allocated for specific government uses is not
required.
__________
                                                     
3 According to the Brazilian legislation, the obligations concerning Universal Service are
intentionally asymmetrical.