Exhibit 10.4
[LETTERHEAD OF ANATEL]
INSTRUMENT OF AUTHORIZATION NO. 205/2002 SPB-ANATEL
INSTRUMENT OF AUTHORIZATION FOR THE RENDERING OF SWITCH FIXED TELEPHONE
SERVICE, OF THE NATIONAL LONG-DISTANCE TYPE, ENTERED INTO BY AND BETWEEN
AGENCIA NACIONAL DE TELECOMUNICACOES - ANATEL AND TNL PCS S.A.
By this instrument, AGENCIA NACIONAL DE TELECOMUNICACOES (National
Telecommunications Agency), hereinafter referred to as ANATEL, a FEDERAL
GOVERNMENT entity, pursuant to Federal Law No. 9472 dated July 16, 1997, the
General Telecommunications Law (Xxx Xxxxx de Telecomunicacoes - LGT), enrolled
in the National Register of Legal Entities of the Finance Ministry (CNPJ/MF)
under No. 02.030.715/0001-12, herein represented by its acting President,
XXXXXXX XXXXXX XXXXXXX XX XXXXX, Brazilian, married, engineer, bearer of
identity card XX Xx. 31.547/D-CREA/RJ and enrolled in the Individual Taxpayers'
Register of the Finance Ministry (CPF/MF) under No. 000.000.000-00, jointly with
board member XXXX XXXX XXXXXXXX, Brazilian, divorced, engineer, bearer of
identity card RG No. 38.592/D-issued by the Regional Council of Engineers,
Architects and Agronomists (CREA/RJ) and enrolled in CPF/MF under No.
000.000.000-00, according to approval from its Board of Governors set forth in
Act No. 22185 of January 21, 2002, published in the Official Gazette of the
Federal Executive (DOU) on January 23, 2002, on the one hand, and TNL PCS S.A.,
enrolled in CNPJ No. 04.164.616/0001-59, herein represented by its Chief
Executive Officer XXXX XXXXXXX XXXXX XXXXX XXXXXX, Brazilian, married, engineer,
bearer of identity card RG No. 6056736-SSP/SP and CPF No. 000.000.000-00, and by
the Chief Executive Officer of its controlling company TELE NORTE LESTE
PARTICIPACOES S.A., XXXX XXXXXXXXX XXXXXXXX, Brazilian, married, business
manager, bearer of
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identity card RG No. 4.031.638-IFP/RJ and CPF/MF No. 000.000.000-00, hereinafter
referred to as AUTHORIZED PARTY, on the other hand, enter into this INSTRUMENT.
SECTION I - PURPOSE
CLAUSE 1.1 - The purpose of this Instrument is to issue an Authorization for the
rendering of the Switch Fixed Telephone Service (STFC) under a private system,
of the NATIONAL LONG-DISTANCE type, of any scope whatsoever, with mandatory
joint and simultaneous provision of INTERNATIONAL LONG-DISTANCE SERVICE in the
service area corresponding to Sector 3 of Region I and Regions II and III of the
General Concession Plan - PGO, effective as of January 1, 2002.
SOLE PARAGRAPH - The purpose of this Authorization includes the Switch Fixed
Telephone Service rendered under a private system in bordering and frontier
areas, in accordance with the Anatel regulations, as provided for in the General
Concession Plan.
CLAUSE 1.2 - Switch Fixed Telephone Service is a telecommunications service
that, via transmission of voice and other signals, is designed to establish a
communication between given fixed points, using telephone processes.
CLAUSE 1.3 - AUTHORIZED PARTY has the right to implement, expand and operate
trunks, networks and switch centers required for provision of the service, as
well as to industrially exploit same, as established in the regulations.
CLAUSE 1.4 - AUTHORIZED PARTY shall ensure free access to the emergency services
provided for in the regulations.
SECTION II - AUTHORIZATION AMOUNT
CLAUSE 2.1 - The amount corresponding to this Authorization for providing STFC
in the National Long Distance modes of any scope within the national territory
service area, with
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the right to render this service as of January 1, 2002, is included in the
amount paid for the Authorization to explore the Personal Mobile Service(s)
using the "D" radio frequency sub-band, in Region I of Exhibit I of Bidding
Notice No. 001/2000/SPV-ANATEL, which is the subject matter of Instrument of
Authorization No. 001/2001/ SPV-ANATEL.
SECTION III - USE OF RADIO FREQUENCIES AND SERVICE RENDERING CONDITIONS
CLAUSE 3.1 - AUTHORIZED PARTY may use radio frequencies to install fixed land
radio communications systems that may be needed for the rendering of the STFC,
as established in the regulations.
CLAUSE 3.2 - The right to use radio frequencies for the rendering of STFC shall
be granted upon payment of a fee, the amount of which shall be calculated by
applying the Public Price Collection Regulations for the Right to Use Radio
Frequencies, approved by Resolution No. 68 issued by XXXXXX, dated November 20,
1998, subject to article 3, paragraph 1 of these Regulations, which is granted
based on the Radio Frequency Use Regulations.
CLAUSE 3.3 - AUTHORIZED PARTY undertakes to provide the service hereunder in
such a way as to fully comply with the obligations inherent to the private
rendering of such service applying thereto, with due regard for the criteria,
formulas and parameters defined in this Instrument of Authorization.
SOLE PARAGRAPH - Noncompliance with the obligations related to the purpose of
this Instrument shall subject the AUTHORIZED PARTY to the sanctions established
herein, shall allow for the temporary suspension of the Service by Xxxxxx, and,
to the extent applicable, shall determine the cancellation of this
Authorization, as provided for in article 137 of Law 9472/97.
CLAUSE 3.4 - AUTHORIZED PARTY shall explore the service provided for herein at
its own risk and cost under the full and fair competitive system established in
Law 9472, of
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1997, and in the General Concession Plan, and it shall be paid the prices
charged as provided for in this Instrument of Authorization.
SOLE PARAGRAPH - AUTHORIZED PARTY shall not be entitled to any kind of
exclusivity, to any kind of guarantee of financial and economic balance, nor
shall it be entitled to claim any right in relation to the admission of new
carriers for this same service under either a public or private system.
CLAUSE 3.5 - AUTHORIZED PARTY shall establish the prices it will charge for
providing the STFC, and define Service Plans with a framework, form, criteria
and prices that are reasonable and nondiscriminatory.
CLAUSE 3.6 - AUTHORIZED PARTY shall establish a standard Basic Service Plan,
which shall mandatorily be offered to all prospective users within its entire
STFC service area.
CLAUSE 3.7 - AUTHORIZED PARTY may establish Alternative Service Plans with a
structure, criteria and prices that are different from those of the Basic
Service Plan, which shall be optional to users or prospective users, any
discriminatory treatment to be banned.
CLAUSE 3.8 - AUTHORIZED PARTY shall make full disclosure of such Basic and
Alternative Service Plans before selling them, informing Anatel with respect to
their entire content no later than five (5) business days after each Plan goes
on sale.
SECTION IV - SERVICE QUALITY CRITERIA
CLAUSE 4.1 - The adequate quality of the service provided by the AUTHORIZED
PARTY is presumed herein, this to mean a service that meets such requirements as
regularity, efficiency, security, currentness, universality and courtesy.
PARAGRAPH 1 - Regularity shall be characterized as the ongoing rendering of the
service, in strict compliance with the rules issued by Anatel.
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PARAGRAPH 2 - Efficiency shall be characterized as the achievement and
maintenance of the parameters established in this Instrument of Authorization
and provision of services to users in the timeframes established herein.
PARAGRAPH 3 - Security in the provision of the service shall be characterized as
the confidentiality of the data related to use of the service by users, as well
as fully assured nondisclosure of information transmitted with respect to this
service, with due regard for the provision in item V of Clause 7.1.
PARAGRAPH 4 - Currentness shall be characterized by the modernity of the
equipment, installations and techniques of the service, with incorporation of
new technological developments that definitely benefit users, with due regard
for the provisions herein.
PARAGRAPH 5 - Universality shall be characterized as nondiscriminatory provision
of the service to any and all users, with the AUTHORIZED PARTY undertaking to
render the service to any party requesting same, at the place indicated by the
requesting party and according to the regulations.
PARAGRAPH 6 - Courtesy shall be characterized as the respectful and prompt
provision of the authorized service to all users, as well as strict compliance
with the obligations to promptly and politely offer information or assistance to
all those who request the AUTHORIZED PARTY for information, steps or make any
other request, be they users or not, as provided for herein.
CLAUSE 4.2 - AUTHORIZED PARTY shall observe the parameters and indicators of the
General Quality Goals Plan.
CLAUSE 4.3 - In the event the provision of the service is interrupted, the
AUTHORIZED PARTY may in no way claim noncompliance with any obligation by Anatel
or the federal government.
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CLAUSE 4.4 - The rendering of the authorized service may only be interrupted as
established in the Switch Fixed Telephone Service regulations issued by Anatel.
SECTION V - NUMBER PLAN
CLAUSE 5.1 - With due regard for the regulations, the AUTHORIZED PARTY
undertakes to abide by the Switch Fixed Telephone Service Regulations on
Numbering issued by Anatel, and shall assure to the service subscriber the
portability of access codes within the timeframe defined in these Regulations.
PARAGRAPH 1 - The cost of the investments needed to provide access code
portability shall be divided between the AUTHORIZED PARTY and other private or
public telecommunications service carriers.
PARAGRAPH 2 - The cost related to management of the consignment process and
access code occupation of the Regulations on Numbering shall be imputed to the
AUTHORIZED PARTY, as established in the Regulations on Management of Number
Resources.
CLAUSE 5.2 - AUTHORIZED PARTY shall be entitled to the Carrier Selection Code
without exclusivity, to be defined by XXXXXX.
SECTION VI - USER BILLING
CLAUSE 6.1 - The billing documents issued by the AUTHORIZED PARTY shall be
presented in a clear and well-explained form and shall identify the type and
amount of each service provided to the subscriber.
SOLE PARAGRAPH - AUTHORIZED PARTY shall state in the billing document, provided
it does so clearly and explicitly, the amounts owed for the rendering of value
added services, as well as other amenities or utilities related to the
authorized service.
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CLAUSE 6.2. - AUTHORIZED PARTY shall collect from the other telecommunications
service providers, with respect to the use of networks, the maximum amounts
established by Anatel, with due regard for the regulations.
CLAUSE 6.3. - AUTHORIZED PARTY shall offer a discount to the subscriber affected
by any interruption in the rendering of the authorized service, provided it has
not been caused thereby, which discount shall be proportional to the period of
the interruption, pursuant to the regulations.
SECTION VII - RIGHTS AND GUARANTEES OF USERS AND OTHER CARRIERS
CLAUSE 7.1 - With due regard for the rules and conditions found herein, users of
the service hereunder shall have the following rights:
I - access to the service and enjoyment of the same within the quality,
regularity and efficiency standards established herein and in applicable
regulations;
II - possibility of requesting suspension or interruption of the service;
III - nondiscriminatory treatment as regards access to and enjoyment of the
service;
IV - secure proper information regarding the conditions governing the provision
of services and prices thereof;
V - inviolability and secrecy of all communications, with due regard for any
cases and conditions established in the Constitution and in law on the breaking
of telecommunications secrecy;
VI - achievement, free of charge and upon request to the user service center
maintained by AUTHORIZED PARTY, of the non-disclosure of their access code;
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VII - not having subscriber service suspended without due authorization, except
in the event of any existing debt directly resulting from use of the service or
from noncompliance with the obligations set forth in article 4 of Law 9472, of
1997;
VIII - prior notice regarding any and all changes in the service rendering
conditions that affect them directly or indirectly;
IX - privacy in relation to the billing documents and use of their personal data
assured by the AUTHORIZED PARTY;
X - AUTHORIZED PARTY's efficient and prompt reply to complaints;
XI - forwarding of complaints and legal claims against the AUTHORIZED PARTY to
Anatel and consumer protection organizations;
XII - reparation of damages caused as a result of a breach of their rights;
XIII - assured compliance with all the terms of the subscription agreement they
may have entered for the service;
XIV - freely choose the national or international long-distance telephone
service carrier;
XV - assured observance of their right to portability of access codes, subject
to the regulations;
XVI - not be under any obligation to use services or acquire goods or equipment
that are not in their interest, or to submit to any condition in order to be
provided the services hereunder, as established in the regulations;
XVII - substitution of their access code as established in the regulations; and
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XVIII - interception, free of charge, and for a period of at least thirty (30)
days, of the calls forwarded to the former access code and information of the
new access code at the time the provider is changed.
PARAGRAPH 1 - AUTHORIZED PARTY shall diligently regard the obligation of
telephone service secrecy and confidentiality of data and information, and use
all means and technologies that assure users of this right.
PARAGRAPH 2 - AUTHORIZED PARTY shall make available all technological resources
required to assure suspension of the telecommunications secrecy ordered by a
court authority, as established in the regulations.
CLAUSE 7.2 - All other telecommunications service carriers shall be assured the
following rights in addition to those listed in the preceding Clause:
I - interconnection to the AUTHORIZED PARTY's network on nondiscriminatory
economic and operating conditions and technically adequate terms, at equal and
fair prices, which are strictly consistent with the provision of the service,
with due regard for the Anatel regulations;
II - be provided the service they request to the AUTHORIZED PARTY without any
type of discrimination, at market price or at a price negotiated by the parties,
and with the applicable discounts in view of cost saving resulting from large
scale consumption, with due regard for the regulations; and
III - obtaining of all information that may be required for their provision of
services, including billing information, with due regard for the AUTHORIZED
PARTY's right to maintain corporate data confidential, as well as for
third-party rights.
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PARAGRAPH 1 - Conflicts between the AUTHORIZED PARTY and other carriers shall be
resolved administratively by Anatel, as established in the regulations.
PARAGRAPH 2 - Anatel shall permanently monitor the relationships between the
carriers that use the service authorized hereunder and the AUTHORIZED PARTY, and
shall restrain any conduct that may result in injury to any of the parties or
violation of economic policy and free competition, and shall, in these cases,
report such conduct to the Administrative Economic Defense Council - XXXX, after
exercising its authority, as provided for in article 19, item XIX, of Law 9472,
of 1997.
CLAUSE 7.3. - According to the regulations, any user shall be assured the right
to render and enjoy value-added services, which shall occur on technically
adequate terms, at equal and fair prices, and AUTHORIZED PARTY shall be
forbidden to restrain or limit the enjoyment of the service.
SOLE PARAGRAPH - Value-added service shall mean all activities that add to the
service hereunder, without however being confused with them, any new utilities
related to access, storage, forwarding, movement or recovery of information.
SECTION VIII - AUTHORIZED PARTY'S RIGHTS, GUARANTEES, OBLIGATIONS AND
RESTRICTIONS
CLAUSE 8.1 - In addition to the other obligations arising herefrom and
pertaining to the rendering of the service, AUTHORIZED PARTY shall be
responsible for the following:
I - to render the service in strict compliance with the provisions herein, and
fully abide by the Anatel regulations;
II - to install all equipment and installations needed for rendering the service
hereunder in accordance with the specifications set out in this Instrument;
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III - to furnish all data and elements related to the service it is requested to
Anatel, in the manner and at the interval established in the regulations;
IV - to submit to monitoring by Anatel, and give its agents access to service
facilities and to its accounting records;
V - to keep separate accounting records for each service;
VI - to have adequate user information and customer services;
VII - to forward a copy of all covenants and agreements related to the provision
of services signed with foreign telecommunications service carriers;
VIII - to disclose, either directly or through third parties, the access code of
its subscribers and other subscribers of STFC carriers, under a private and
public system, in the Authorization area, excluding those that expressly request
omission of their personal data;
IX - to provide, at reasonable dates and prices and on a nondiscriminatory
basis, the list of its subscribers to whom it wishes to disclose it;
X - to strictly regard the obligation of telecommunications secrecy and
confidentiality, in strict compliance with legal and regulatory provisions;
XI - to respect the privacy of subscribers in relation to billing documents and
all their personal data;
XII - to submit first to Anatel any and all changes it proposes to make to its
bylaws or articles of incorporation, including any spin-offs, mergers,
transformations, amalgamations, as well as control transfers or changes in
corporate capital;
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XIII - to assure interconnection to its network to any other telecommunications
service carrier, with due regard for the regulations;
XIV - to observe all the rights of other telecommunications service carriers,
and refrain from performing any discriminatory conduct or conduct that obstructs
the business of such carriers;
XV - to use, where required in the regulations, equipment certified or accepted
by Anatel;
XVI - to observe the technical standards and rules in force in Brazil, and
refrain from any discriminatory conduct with regard to goods and equipment made
in Brazil;
XVII - to place all means, systems and availabilities at the service of civil
defense authorities and agents in the event of a public disaster, in order to
give them support and to assist the population affected by such disaster;
XVIII - to give priority service to the President of Brazil, his registered
representatives, support personnel and committee members, as well as to foreign
heads of state, when on an official visit or passing through the Brazilian
territory, and provide all necessary means for the adequate communications of
such authorities, with due regard for the Anatel regulations;
XIX - to pay all monitoring and operating charges related to its facilities, as
provided for in the regulations;
XX - to annually publish its balance sheet and financial statements at the end
of each fiscal year, independently of the legal system under which it operates,
with due regard for the provisions in applicable law and in the Anatel
regulations;
XXI - to comply with the applicable rules in Brazil governing use of foreign
labor, including those holding higher positions;
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XXII - to comply with treaties signed between Brazil and other countries and
international organizations, as established in the Anatel regulations;
XXIII - to send Anatel a list of all shareholders, separately or as a group,
owning five percent (5%) or more of its stock with voting rights, at the time
intervals defined by Anatel; and
XXIV - to provide to Anatel any technical, operational, economic, financial,
corporate and accounting or other information it may request; and
XXV - to pay a contribution to the Telecommunications Services Universalization
Fund, pursuant to applicable law.
PARAGRAPH 1. - Noncompliance with the provisions in this Clause shall subject
AUTHORIZED PARTY to the penalties established in this Instrument of
Authorization.
PARAGRAPH 2. - AUTHORIZED PARTY, its affiliates, subsidiaries or controllers
shall not condition the offer of the service to the acceptance of any other
service, or offer any advantages to the user due to said user using additional
services to that established hereunder, even if provided by third parties.
CLAUSE 8.2 - Irrespectively of the other provisions set out herein and of the
guarantees established in law, the AUTHORIZED PARTY shall have the following
rights:
I - to provide the service in accordance with its corporate strategy, and freely
establish its investments, with due regard for the Anatel regulations and the
provisions herein;
II - to waive its right to provide the authorized service, as established in
article 142 of Law 9472, of 1997, provided it expressly notifies Anatel and
users of its decision eighteen (18) months in advance;
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III - to appoint a representative to follow up on the monitoring activities of
Xxxxxx;
IV - to interrupt or disregard a request for service by a subscriber whose name
is on the delinquent subscriber list, as established in Clause 4.4 hereof;
V - to be able to interconnect with other STFC carriers, on nondiscriminatory
economic and operational conditions and on technically adequate terms, at equal
and fair prices, which are strictly necessary to render the service, with due
regard for the Anatel regulations;
VI - to be provided the service it requests from other carriers without any type
of discrimination, at market price or at a price negotiated by the parties, and
with the applicable discounts in view of cost savings resulting from large scale
consumption, with due regard for the regulations;
VII - to obtain all data needed to provide the service, as provided for in item
VI, including any on billing, with due regard for the other carriers' right
to maintain corporate data confidential, as well as for third-party rights;
VIII - availability of number resources according to the regulations;
IX - to request that Anatel maintain confidential any information gathered
during its monitoring activities; and
X - outsource to third parties the undertaking of activities inherent, accessory
or supplementary to the service, as well as the implementation of related
projects.
CLAUSE 8.3 - Throughout the validity of this Instrument, AUTHORIZED PARTY shall
be solely liable as regards third parties for any acts carried out by its
personnel, assigns or contractors in the rendering of STFC, as well as for use
of equipment, facilities or
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networks, and shall hold federal government and Anatel harmless from any claims
and/or indemnity demands.
CLAUSE 8.4 - AUTHORIZED PARTY may not create any obstacles to works of public
interest, irrespectively of their nature, whenever it is necessary for any
public administration body or entity to remove facilities or telephone networks
to make such works feasible directly or indirectly.
CLAUSE 8.5 - AUTHORIZED PARTY shall directly enter into agreements regarding the
conditions for placing posts and crossbars to hang aerial cables and lines, as
well as underground ducts and pipelines to pass cables under public streets and
places, with the local municipal authorities governing the service areas, and
also with other public service utility companies.
PARAGRAPH 1 - AUTHORIZED PARTY shall make due request to the titleholders of
public and private properties over and under which it has to place cable ducts
and pipelines or install supports to hang such cables, and secure their consent
or easement therefor.
PARAGRAPH 2 - AUTHORIZED PARTY shall negotiate the conditions to overcome any
interferences in the network that may be necessary to render the service,
including cutting and pruning of trees, with the respective municipal
authorities.
CLAUSE 8.6 - In accordance with the provision in article 73 of Law 9472, of
1997, the AUTHORIZED PARTY may use posts, ducts, pipelines and easements
belonging to or controlled by other carriers of telecommunications or other
services of public interest.
PARAGRAPH 1 - Use of the means mentioned in the main section of this Clause
shall be made on a nondiscriminatory basis and at reasonable and fair prices.
PARAGRAPH 2 - AUTHORIZED PARTY shall make available to the other
telecommunications service carriers, classified by Anatel as being of collective
interest, all
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means referred to in the main section of this Clause which it owns or controls,
on the same conditions established in the preceding paragraph.
PARAGRAPH 3 - Whenever the AUTHORIZED PARTY fails to come to an agreement with
the other carriers on the use of the means referred to in this Clause, it shall
be incumbent on Anatel to, alone or together with the other regulatory agencies
involved, establish the conditions for such use.
CLAUSE 8.7 - AUTHORIZED PARTY shall maintain a user information and customer
service department that is able to receive and process requests, complaints and
claims made by users personally or via any remote communication medium fully
operative twenty-four (24) hours a day, throughout the validity of this
Instrument.
PARAGRAPH 1 - AUTHORIZED PARTY shall disclose to all users the addresses and
access codes to its user information and customer service department, and such
information shall necessarily be included in the Standard Agreement signed with
them in connection with the provision of the service.
PARAGRAPH 2 - AUTHORIZED PARTY shall make available and disclose easy and free
access codes where users can send requests via the telephone.
PARAGRAPH 3 - All requests, claims or complaints sent by users via any medium
shall be given a service order number, which shall be given to users so that
they can follow up thereon.
PARAGRAPH 4 - The user shall be informed by the AUTHORIZED PARTY within the time
frames established in the General Quality Goals Plan regarding steps to be taken
in reply to their request, claim or complaint.
PARAGRAPH 5 - Should Anatel find that there is any difficulty in users'
accessing the information and customer service department, it may order the
AUTHORIZED PARTY to
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expand the available means of access, under the penalty of its defaulting on the
obligation established in this Clause.
CLAUSE 8.8 - On hiring the services and acquiring equipment and materials
related to the purpose of this Instrument, the AUTHORIZED PARTY undertakes to
consider offers of independent suppliers, including of domestic suppliers, and
base its decision regarding the different offers on compliance with objective
price, delivery terms and technical specification criteria established in
pertinent regulations.
PARAGRAPH 1 - Where offers are equivalent, the AUTHORIZED PARTY undertakes to
give priority to companies established in Brazil, equipment and materials made
in Brazil, and among these, those using Brazilian technology as a tie-breaking
criterion, with the equivalence mentioned herein to be established when
cumulatively:
I - the domestic price is lower than or equal to the price of the imported good
after customs clearance, plus all due taxes;
II - delivery timeframes are in line with service requirements; and
III - the technical specifications established in pertinent regulations are met
and they are certified or accepted by Anatel, as applicable.
PARAGRAPH 2 - Services mean those related to telecommunications systems research
and development, planning, design, implementation and physical installation,
operation, maintenance, supervision and evaluation tests.
PARAGRAPH 3 - Operation of the provisions of this clause shall be regulated by
Anatel, including the applicable sanctions.
CLAUSE 8.9 - With due regard for the provisions in Clause 8.10, AUTHORIZED
PARTY, its subsidiaries, controllers or any of its shareholders holding,
directly or indirectly, five
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percent (5%) or more of the voting shares of the AUTHORIZED PARTY, may only own
nonvoting shares in a STFC concessionaire, capped at twenty percent (20%) of the
capital stock. {clause applicable only to sub-band "C"}
CLAUSE 8.10 - Transfer of the shareholding control or of the Authorization shall
comply with the provisions in article 136, paragraph 2 of Law 9472, of 1997.
SOLE PARAGRAPH - After the conditions have been met and the timeframe expired as
established in Clause 8.10, the transfer of control or Authorization that
results in the direct or indirect control by the same shareholder or a group of
shareholders, of STFC carriers acting in distinct PGO areas, may not be carried
out while Anatel considers that such impediment is necessary for compliance with
the Plan, or while the transfer entails losses to competition or places at risk
the execution of this Instrument of Authorization, pursuant to the provisions in
article 7 of Law 9472 of 1997.
SECTION IX
OBLIGATIONS AND PREROGATIVES OF ANATEL
CLAUSE 9.1 - In addition to the other prerogatives inherent to its duty as
regulatory agency, and the other obligations arising out of this Instrument, it
shall be incumbent on Anatel to:
I - follow up on and inspect provision of the service to ensure compliance with
regulations;
II - regulate provision of the authorized service;
III - apply the penalties set out in the service regulations and specifically in
this Instrument;
IV - ensure the good quality of the service, receive, verify and resolve claims
and complaints from users, notifying them within ninety (90) days of the action
taken to curb any violations of their rights;
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V - declare the Authorization extinguished in the events contemplated by Law
9472, of 1997;
VI - put forth its best efforts to guarantee the interconnection, settling any
disputes arising between the AUTHORIZED PARTY and the other carriers;
VII - continuously follow up on the relationship between the AUTHORIZED PARTY
and the other carriers, settling any conflicts that may arise;
VIII - curb any conduct on the part of the AUTHORIZED PARTY that runs counter to
the competitive system, with due regard for the authority of XXXX, regulations
and particularly the provisions of Clauses 9.2. and 9.3. of this Section;
IX - inspect the service pursuant to this Instrument; and
X - collect the fees relating to the Telecommunications Monitoring Fund -
FISTEL, adopting the steps set forth in the law.
CLAUSE 9.2 - Anatel may initiate administrative proceedings to verify the
untruthfulness and inconsistency of the conditions declared by the AUTHORIZED
PARTY relating to nonparticipation in the control of other companies or to other
prohibitions regarding economic concentration, whenever there are indications of
material influence of the AUTHORIZED PARTY, its affiliates, subsidiaries or
controllers, over STFC carrier(s), such as:
I - the existence of any kind of material credit or debt transactions among the
AUTHORIZED PARTY, its affiliates, subsidiaries or controllers, and STFC
carrier(s);
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II - the rendering of guarantees in rem, personal or of any other kind by the
AUTHORIZED PARTY, its affiliates, subsidiaries or controllers to STFC
carrier(s), or vice versa;
III - the transfer of assets between the AUTHORIZED PARTY, its affiliates,
subsidiaries or controllers and STFC carrier(s), on conditions, terms or amounts
different from those adopted in the market;
IV - the existence of strategic know-how transfer between the AUTHORIZED PARTY,
its affiliates, subsidiaries or controllers and STFC carrier(s);
V - the rendering of telecommunications or related services between the
AUTHORIZED PARTY, its affiliates, subsidiaries or controllers and STFC
carrier(s) on favored or privileged conditions vis-a-vis other companies
operating in the market;
VI - the existence of interconnection agreements between the AUTHORIZED PARTY,
its affiliates, subsidiaries or controllers and STFC carrier(s) that stipulate
favored or privileged conditions vis-a-vis other companies operating in the
market;
VII - the existence of infrastructure sharing agreements between the AUTHORIZED
PARTY, its affiliates, subsidiaries or controllers and STFC carrier(s) on
favored or privileged conditions vis-a-vis other companies operating in the
market;
VIII - the shared use of significant material, technological or human resources
by the AUTHORIZED PARTY, its affiliates, subsidiaries or controllers and STFC
carrier(s);
IX - the existence of any juristic act between the AUTHORIZED PARTY, its
affiliates, subsidiaries or controllers, and any company holding control over a
STFC carrier the subject matter of which is the transfer of shares between them
or the granting of right of first refusal with regard to transfer of shares
between them;
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X - the joint contracting of goods or services by competitors; and
XI - other conduct defined in regulations as characteristically indicating
economic concentration or exercising of control power among STFC carriers.
SOLE PARAGRAPH - Evidence of the existence of any situation that typifies
untruthfulness or inconsistency of the conditions declared by the AUTHORIZED
PARTY after the procedure set forth in this Clause may give rise to revocation
of this Authorization, pursuant to article 139 of Law 9472, of 1997.
CLAUSE 9.3 - Anatel may furthermore initiate administrative proceedings to
investigate the anticompetitive practice set out in Law 8884, of 1994, and, in
particular, the adoption of collusive practices or practices that restrain free
competition, upon verification of the following indications, among others:
I - the prolonged stability of relative market shares of competitors;
II - the uniform commercial conduct among competitors;
III - the joint contracting of goods or services by competitors;
IV - the prolonged stability of the price levels or structures for the services,
or parallelism in price variations;
V - the adoption of uniform service offering conditions or terms among
competitors;
VI - the exchange of material information between competitors, relating, among
other aspects, to technological, financial or commercial strategies;
VII - the stable division of market operations among competitors;
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VIII - the complementarity of plans or projects for network expansion or
implementation;
IX - the discrimination in prices or service conditions that benefit certain
companies to the detriment of other market players;
X - purchases, sales, leases, free leases or any other form of transfer, either
on a temporary or definitive basis, of assets of significant value or of
strategic importance among competing companies;
XI - the shared use of significant material, technological or human resources,
by competing companies;
XII - the existence of interconnection agreements that stipulate favored or
privileged conditions vis-a-vis certain companies in relation to those offered
to other market players;
XIII - the existence of infrastructure sharing agreements on favored or
privileged conditions for certain companies vis-a-vis those offered to other
market players;
XIV - distortion, manipulation, omission or delay on the part of competitors
when supplying the information required by Xxxxxx; and
XV - other practices defined as indicia of collusion under the regulations.
SOLE PARAGRAPH - Evidence that the AUTHORIZED PARTY is engaging in collusive or
anticompetitive practices may entail, in addition to imposition of the penalties
set forth in this Instrument and those imposed by XXXX, the cancellation of this
AUTHORIZATION.
SECTION X - THE AUTHORIZEE
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CLAUSE 10.1 - AUTHORIZED PARTY is a company organized under the laws of Brazil,
with its principal place of business and management in Brazil, subject to the
provisions of Law 9472, of 1997 and Decree 2617, dated June 5, 1998.
SECTION XI - MONITORING SYSTEM
CLAUSE 11.1 - Anatel shall monitor the services so as to ensure performance of
the commitments hereunder.
PARAGRAPH 1 - Anatel's monitoring shall comprise the inspection of and follow-up
on the AUTHORIZED PARTY's activities, equipment and facilities, implying full
access to all data and information related to the AUTHORIZED PARTY or third
parties.
PARAGRAPH 2 - Information gathered during the monitoring activities shall be
published in the Library, except for any information that is considered
confidential by Xxxxxx at the AUTHORIZED PARTY's request.
PARAGRAPH 3 - Any information that is deemed confidential pursuant to the
preceding paragraph shall only be used in the proceedings related to this
Instrument, whereupon Anatel and its designees shall be liable for any full or
restricted disclosure of such information unrelated to the use set forth herein.
CLAUSE 11.2 - AUTHORIZED PARTY, by its representative duly appointed, may be
present at any and all monitoring activities conducted by Xxxxxx, but it shall
not hinder or impair performance of such monitoring activities, on pain of being
imposed the penalties contemplated by this Instrument.
SECTION XII - INTERCONNECTION
CLAUSE 12.1 - AUTHORIZED PARTY shall permit, facilitate, make available and
effect the interconnection between its network and the networks of other
carriers of
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telecommunications services, under a public or private system, upon request of
the latter, subject to the regulations.
SOLE PARAGRAPH - The availability of interconnection points shall be negotiated
directly between the AUTHORIZED PARTY and the respective carriers, subject to
the regulations.
CLAUSE 12.2 - AUTHORIZED PARTY shall be paid a fee for the use of its network in
accordance with the Regulations on Fees payable for the use of networks of STFC
carriers.
CLAUSE 12.3 - AUTHORIZED PARTY shall have the same rights and shall observe the
same interconnection conditions as those applying to other STFC carriers.
SOLE PARAGRAPH - AUTHORIZED PARTY shall make available for interconnection
purposes the network elements with the highest technically possible level of
unbundling, pursuant to the regulations.
SECTION XIII - PENALTIES
CLAUSE 13.1 - By signing this Instrument, the AUTHORIZED PARTY agrees with the
following penalties, to be imposed by means of a substantiated decision of
Xxxxxx, it being understood that the AUTHORIZED PARTY shall be ensured the right
to defense pursuant to its Internal Regulations and without prejudice to other
penalties set out in the regulations:
I - for any act or omission that violates the provisions of this Instrument and
injures competition in the telecommunications sector: a fine of up to fifty
million reais (R$ 50,000,000.00);
II - for violation of the provisions of this Instrument resulting in
non-observance of the quality standards and targets envisaged for the service: a
fine of up to forty million reais (R$ 40,000,000.00);
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III - for any other act or omission not stated in the preceding items and
resulting in violation of the user's rights defined herein or entailing losses
thereto: a fine of up to thirty million reais (R$ 30,000,000.00);
IV - for any act or omission in violation of clause 8.8 hereof, which deals with
retaining of services and acquisition of equipment and materials manufactured in
Brazil: a fine of up to thirty million reais (R$ 30,000,000.00);
V - for any act or omission that hinders or impairs Anatel's monitoring
activities set forth in this Instrument: a fine of up to twenty million reais
(R$ 20,000,000.00); and
VI - for nonperformance of any obligation expressly set out in this Instrument,
except for those indicated in the preceding items: a fine of up to ten million
reais (R$ 10,000,000.00).
PARAGRAPH 1 - The seriousness of the violation set forth in items I and III
above shall be defined exclusively in accordance with the general criteria
prescribed by clause 13.2, and such violation shall be characterized by the
AUTHORIZED PARTY's conduct that may directly or indirectly injure competition in
the sector, especially:
A) the creation of obstacles or hindrances to the option by another authorized
service carrier or national and international long distance service carrier;
B) the refusal to offer interconnection services to a telecommunications service
carrier;
C) the creation of obstacles or hindrances to the activity of value-added
service carriers;
D) conditioning of the rendering of the authorized service or offering of
advantages due to the acquisition by the user of a service outside the scope of
this Instrument;
E) the execution of any telecommunications service that is not subject to
Xxxxxx's approval;
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F) the failure to maintain the quality levels related to interconnection; and
G) the delay in providing information that is essential to the activity of other
carriers, particularly with regard to data record.
PARAGRAPH 2 - The provisions set out in item II above shall be considered
violated when the quality parameters defined in the General Quality Goals Plan
are not observed and the seriousness of such violation shall be defined
vis-a-vis the number of users affected thereby and the losses caused, and the
following shall be characterized due to the violation, by commission or
omission, directly or indirectly, of an obligation established herein that
entails violation of the users' rights, especially:
A) interruption in the provision of services for a term exceeding that
established in the General Quality Goals Plan;
B) non-allocation in the operation and maintenance of the service of the human
and material resources necessary to maintain the minimum quality levels;
C) negligence in modernizing the network, thus affecting the service quality;
D) non-observance of the duty to provide information to user;
E) violation of the telecommunications confidentiality, outside the events set
forth by law, even if committed by third parties at the facilities under the
responsibility of the AUTHORIZED PARTY;
F) failure to comply with the duty to provide free telephone directories;
G) failure to maintain the user information and service department in the manner
prescribed by this Instrument; and
26
H) price collection in violation of the rules set out in this Instrument and the
regulations.
PARAGRAPH 3 - The violation established in item IV shall be deemed to have
occurred in the event of nonperformance of the obligation set out in Clause 8.8
and its seriousness shall be defined as provided for in the regulations.
PARAGRAPH 4 - The seriousness of the violation established in item V above shall
be defined according to the relevance of the monitoring activity hindered and
shall be established according to the violation perpetrated, by commission or
omission, directly or indirectly by the AUTHORIZED PARTY or its designees, which
may prevent or impair the monitoring activity performed by Xxxxxx, its designees
and agents, especially:
A) the AUTHORIZED PARTY's refusal to meet a request for information posed by
Anatel in connection with the authorized service or the properties related
thereto;
B) the creation of obstacles to the activities performed by Xxxxxx's monitoring
agents;
C) the omission in complying with the advertising obligation set forth herein or
in the regulations; and
D) failure to provide or untimely provision of any information, data, report or
document that pursuant to the regulations or this Instrument, should be remitted
to Anatel.
PARAGRAPH 5 - The sanction contemplated by item VI shall be established on
identifying the violation of any obligation set out herein that is not included
in the previous paragraphs.
PARAGRAPH 6 - The sanction established in item I shall be applied by Anatel
irrespectively of any procedures that may be adopted by XXXX.
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PARAGRAPH 7 - Nonpayment of any fine stipulated in this clause within the time
frame established by Anatel shall typify a severe fault and entail collection of
a default fine of zero point three three percent (0.33%) per day, capped at ten
percent (10%), added by the SELIC reference rate for federal instruments, to be
applied on the value of the debt, taking into account all days of the payment
delay.
CLAUSE 13.2 - To apply the fines set forth in this Section the rules contained
in Title VI of Book III of Law 9472 of 1997, and in the regulations, shall be
observed.
PARAGRAPH 1 - Anatel shall observe the circumstances below when defining the
seriousness of the sanctions and establishing the fines:
I - the proportionality between the intensity of the penalty and the seriousness
of the fault, including as to the number of users affected;
II - the damages caused by the violation to the service and users;
III - the advantage obtained by the AUTHORIZED PARTY as a result of the
violation;
IV - the AUTHORIZED PARTY's market share within its geographic service area;
V - the economic and financial situation of the AUTHORIZED PARTY, especially its
capability of generating income, and its assets;
VI - the background of the AUTHORIZED PARTY;
VII - specific recidivism, that is, a repeated fault of a like nature after
receipt of previous notice; and
VIII - the general circumstances that aggravate or mitigate the violation.
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PARAGRAPH 2 - Notwithstanding the specific graduation criteria laid out in each
item of the previous clause and others provided for in the regulations, the
penalties shall be gradually applied as follows:
I - the violation shall be deemed minor in the event of an involuntary or
excusable conduct on the part of the AUTHORIZED PARTY, from which the latter
does not benefit;
II - the violation shall be deemed of medium seriousness in the event of a
conduct that is inexcusable but does not result in any benefits or gains for the
AUTHORIZED PARTY, nor does it affect a significant number of users; and
III - the violation shall be deemed serious when Anatel verifies the existence
of one of the following factors:
A) AUTHORIZED PARTY acted in bad faith;
B) the violation resulted from a direct or indirect benefit for the AUTHORIZED
PARTY;
C) AUTHORIZED PARTY violates the same provision; and
D) the number of users affected is significant.
PARAGRAPH 3 - For minor violations, when committed for the first time, Anatel
may, at its sole discretion, impose a warning penalty on the AUTHORIZED PARTY,
which shall be formally notified of the sanction, without prejudice to
publication of the decision in the official press.
PARAGRAPH 4 - For imposition of the penalties established in this Section, the
Sanctioning Procedure provided for in Anatel's Internal Regulations shall be
observed.
29
PARAGRAPH 5 - Anatel may determine, for the violations set out in clause 13.1,
that the AUTHORIZED PARTY deduct from the amount to be paid by way of fine the
sums to be refunded to the affected users, and upon application of the penalty
Anatel shall set the refund criteria, the payment deadline, and the maximum
deduction amount.
PARAGRAPH 6 - The event established in the previous paragraph may only be
adopted after verification that the interest or necessity of the users will not
suppress the AUTHORIZED PARTY's responsibility for the other civil indemnities
payable.
CLAUSE 13.3 - The fines provided for herein shall be levied independently of the
events entailing the declaration of expiry set out herein having been
established.
CLAUSE 13.4 - The value of the fines stipulated in this Section shall be
adjusted on a yearly basis by applying the IGP-DI, and the first adjustment
shall mature one year after signing of this Instrument.
CHAPTER XIV - EXPIRATION OF THE AUTHORIZATION
CLAUSE 14.1 - The Authorization shall be deemed expired in the event of
withdrawal, forfeiture, lapse, waiver or annulment, as per articles 138 through
144 of Law 9472 of 1997 and according to the procedures set out in the
regulations.
SOLE PARAGRAPH - The statement of expiration shall not eliminate the imposition
of the appropriate penalties hereunder resulting from the violations committed
by the AUTHORIZED PARTY.
CLAUSE 14.2 - Expiration of the Authorization for the national or international
long-distance type of service shall result in the automatic expiration of the
other Authorization.
CHAPTER XV - LEGAL SYSTEM AND APPLICABLE DOCUMENTS
30
CLAUSE 15.1 - Without prejudice to other rules set forth in the Brazilian legal
system, this Authorization is governed by Law 9472 of 1997 and by the
regulations resulting therefrom, especially those related to the authority of
the Executive Branch, as provided for in article 18 of such Law, whereupon the
latter provisions shall prevail in the event of controversies.
CLAUSE 15.2 - When providing the service authorized herein the Anatel
regulations shall be observed, as an integral part of this INSTRUMENT,
especially the documents listed below:
I - General Concessions Plan;
II - General Quality Goals Plan;
III - General Telecommunications Services Regulations;
IV - Regulations on Switch Fixed Telephone Services;
V - General Interconnection Regulations;
VI - Regulations on Numbering of the Switch Fixed Telephone Services;
VII - Regulations on Management of Numbering;
VIII - Regulations on Fees for Use of Networks of STFC Carriers;
IX - Regulations on Disclosure of Subscribers' Lists and on Issuance and
Distribution of Mandatory and Free of Charge Telephone Directories; and
X - Regulations on Bidding for Concession, Permission and Authorization
regarding Telecommunications Service, and Authorization to Use Radio
Frequencies.
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CLAUSE 15.3 - Bidding Notice No. 001/2000/SPV-ANATEL, and its exhibits,
questions and answers, is also an integral part of this Instrument as if it were
transcribed therein.
CLAUSE 15.4 - When interpreting the rules and provisions contained in this
Instrument, not only the documents mentioned in this Chapter shall be taken into
account, but also the general hermeneutics rules and the rules and principles
set out in Law 9472 of 1997.
CHAPTER XVI - JURISDICTION
CLAUSE 16.1 - The matters arising out of this Instrument shall be settled by the
competent court of the Judiciary Section of the Federal Justice of Brasilia,
Federal District.
CHAPTER XVII - FINAL PROVISION
CLAUSE 17.1 - This Instrument shall take effect as of publication of its extract
in the Official Gazette of the Federal Executive.
IN WITNESS WHEREOF, the parties sign this Instrument in two (2) counterparts of
identical form and content, in the presence of the undersigned witnesses, so
that it can produce its legal and juridical effects.
Brasilia, February _____, 2002.
BY ANATEL:
-------------------------------------
XXXXXXX XXXXXX XXXXXXX XX XXXXX
Deputy President
-------------------------------------
XXXX XXXX XXXXXXXX
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Board Member
BY THE AUTHORIZED PARTY:
-------------------------------------
XXXX XXXXXXX XXXXX XXXXX XXXXXX
Chief Executive Officer of TNL PCS S.A.
-------------------------------------
XXXX XXXXXXXXX XXXXXXXX
Chief Executive Officer of Tele Norte
Leste Participacoes S.A.
WITNESSES:
-------------------------------------
Name: XXXXXXX XXXXXX XXXXX XXXXX
XX: 1.477.302 SSP/DF
-------------------------------------
Name: XXXXXXX XXXXXX XXXXXXX JUNIOR
RG: 1.557.007 SSP/DF
33
