The long-awaited bill containing Brazil’s new General Telecommunications Law was handed to the lower house of Congress yesterday. The bill authorizes the restructuring and sale of the federal Telebras SA system and creates a watchdog agency under the control of the Communications Ministry. Telebras’s long distance Embratel unit and 27 local subsidiaries as eligible to be merged and privatized. Shareholders or groups of shareholders would be barred from controlling more than one concession, but the Telebras subsidiaries can be separated into fixed and cellular phone units. The law would also bar any practices deemed to go against against freemarket principles or competition, including subsidies to lower rates. Concessions will only be granted to firms based in Brazil and which observe Brazilian corporate law.
