The Federal Court of Accounts (TCU) approved this Wednesday (25) the notice for the auction of 5G, the new generation of mobile internet. There were seven votes to one.
The National Telecommunications Agency (Anatel) was waiting for the court’s analysis to make adjustments to the notice and schedule the auction, scheduled for october.
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In the 5G auction, four fifth-generation mobile internet frequency bands will be offered: 700 MHz; 2.3 GHz; 26 GHz; and 3.5 GHz. These bands function as “avenues” in the air for data transmission.
The grant period, that is, the right to exploit the bands, will be of 20 years. The auction will be held in 16 lots, divided between national and regional lots.
The bands have investment commitments in return. These are obligations that the operators that win the auction will have to fulfill, such as bringing internet to the country’s highways and to isolated places, among others.
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The 5G process began to be judged last week, when ministers formed a majority in favor of approving the notice, but a request for a view (more time for analysis) by minister Aroldo Cedraz postponed the judgment to this Wednesday.
Cedraz was the only minister who accompanied the technical area of the court, which pointed out a series of irregularities in the notice. The minister wanted to postpone the judgment for 60 days, but the other ministers reduced the deadline to one week, in response to a government request to speed up the auction.
“It is necessary to consider that the real delay would be to allow the bidding process to proceed along the proposed lines, since, in this case, we would be condemning Brazil and Brazilian citizens to live for another 20 years with expensive and low-quality telecommunications services,” he said Cedraz in his vote released last week.
On Wednesday, in an unusual move in the Court sessions, the minister gave a long slide presentation to justify his vote. On the slides, Cedraz pointed out what would be the main irregularities in the notice, such as errors in the pricing methodology of frequency bands, in the number of base radio stations that should be installed, in the classification of urban areas, among others.
“The modeling adopted by Anatel led us to the conclusion that the economic exploitation of 5G would be unfeasible in 5,510 Brazilian municipalities, including capitals such as Brasília, Salvador and Curitiba, as well as large cities such as Campinas and Ribeirão Preto,” stated Cedraz. “This bid proposal is riddled with blunders, not to mention fraud,” he added.
Reporter of the process at TCU, Minister Raimundo Carreiro recommended the inclusion of the obligation to bring quality mobile internet to public schools of basic education in the country. This is a request from the Chamber of Deputies’ education bench.
Last week, he had voted to determine the inclusion of schools, which would force Anatel to change the notice. As it is only a recommendation, it will be at the discretion of the agency and the government.
The rapporteur also decided to maintain in the public notice the installation of a private communication network for the government and the installation of a fiber optic network in the Amazon region, the so-called Integrated and Sustainable Amazon Program (Parents), which is part of the “Norte Conectado” program.
Carreiro opposed the technical area of the Court, which recommended the exclusion of the two obligations. According to the technicians, the two commitments violate the General Telecommunications Law, bidding rules and budget and fiscal rules.
In April, the TV Globo showed that the maneuver opens a loophole for the government to invest up to R$ 2.5 billion “outside” the spending ceiling and the Budget, as it will transfer this cost to operators.
For Carreiro, the private network and the Pais program are exceptional measures to be adopted out of “relevant collective interest”, translating a choice of the “executive power in the condition of formulator of public policies”.
The construction of a private communication network in Brasília is one of the government’s priorities. The Chinese company Huawei will not be able to supply the equipment for the installation of this private network, due to rules in the notice. For commercial frequency bands, there will be no impediment.
The four bands that will be auctioned in the 5G bidding were initially evaluated by Anatel at R$45.6 billion, of which R$37.1 billion were turned into investment commitments. With that, the initial forecast was that the Union would collect the difference, around R$ 8.5 billion.
The numbers, however, may change until the publication of the notice by Anatel, since the agency will have to make some adjustments to requests from the ministers of the Court.
In the 5G auction, it is the telephone operators that will compete for the right to explore the frequency bands. Afterwards, the winners will have to buy the necessary equipment to offer the technology to their customers, in addition to making the investments provided for in the notice in return.