End of unlimited fixed broadband draws near in Brazil

Telecom watchdog blames companies for misleading customers but allows cap to go ahead

Fixed broadband provision with no data limits is about to become a thing of the past in Brazil, according to the country's telecommunications regulator Anatel.

The news that operators are planning on selling fixed broadband services with a data cap enraged millions of Internet users across Brazil as well as consumer rights associations, who called on Anatel to take a stand on the topic.

However, the president of the telecom watchdog João Resende told journalists at a press event yesterday (18) that it is unlikely that Anatel will challenge operators, since "not all models can accommodate an unlimited service provision and also because the networks won't be able to cater for everybody."

Resende added that operators are guilty for making users think that unlimited service provision would be available indefinitely.

In addition to making it clear that it will let operators impose data limits to fixed broadband plans, Anatel has published its official stance on the matter.

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In summary, companies will be able to introduce the new plans 90 days after they demonstrate to the regulator that consumers will be provided tools to monitor their own data consumption.

Vivo, the Telefónica-owned operator and the largest provider in the country, said data limits would be introduced in 2017 and for packages acquired after February (ADSL broadband) or April (fixed broadband) this year.

As Brazil descends into a spiral of economic and political uncertainty, limiting fixed connectivity even further represents a major backward step as it is inconsistent with driving economic growth.

Companies argue that caps are needed to prevent network congestion, but continued investment in infrastructure to cope with forecast demand consistently announced by these same firms in recent years suggest that usage caps really have nothing to do with network congestion issues.

In addition, bandwidth costs for telcos largely remain fixed, and despite major growth in their user base, providers such as Vivo are paying less today for raw bandwidth than they were a decade ago. So really, there is no technical or economic justification for a cap.

What operators are doing in Brazil is unfairly skewing the playing field in favor of its own services, and to protect their own offering (such as TV revenues) from Internet video and music content streaming from competitors.

So could it be that the Brazil-based operators are creating an impression of scarcity around a commodity in order to boost its perceived value?

It also sounds unbelievable that the industry's rationale for the introduction of fixed broadband data in Brazil hasn't at all considered the net neutrality rules that are core to the Marco Civil da Internet, the country's "Internet Constitution", introduced in 2013.

If Brazil wants to ensure that its business and entrepreneurial environments flourish and are ready to lead an economic recovery, it needs to investigate the attempts from operators (and a watchdog that has effectively walked away from this debate) to skirt around regulations to be able to rip off customers.

While it is true that companies will continue to look for ways to engage in anti-competitive behavior and double charge its customers, they will now be allowed to do whatever they want with the regulator's blessing. So the citizens, organizations and government bodies that introduced the world's most forward-thinking online bill of rights now need to speak up.