In an extraordinary meeting of the Directing Council, the Anatel put an end to the impasse between programmers and operators. After complaints by Claro against Fox, the regulator defined that streaming services with linear channels over the internet are not covered by the Pay TV (SeAC) law and, therefore, should not be regulated by the agency. This frees up the creation of the Internet Pay TV.
The matter was one of the main points of the meeting of the Directing Council that took place on August 27, 2020, but a request for views made by Emmanoel Campelo caused the decision to be postponed.
Linear Internet Pay TV (TVLAI)
The rapporteur, Vicente Aquino, said that the SeAC is one of the least competitive services, fearing concentration as the category has lost millions of subscribers in recent years. Aquino also made a comparison with the United States, where services like SlingTV, DirecTV Now and YouTube TV emerged that increased the base of viewers in the country.
Aquino pointed out the consequences of considering streaming as traditional pay TV: services would suffer from a higher tax burden, higher consumer prices and stifling startups. On the other hand, the inclusion of TVLAI as a value-added service (SVA) would stimulate competition with the entry of new competitors, increase the population with access to audiovisual content and, finally, bring expansion of the fixed broadband service.
On the other hand, Campelo disagrees with the adoption of the term “Linear Pay TV on the Internet”, which can confuse consumers about the service provided by the SeAC law. Aquino defended that TVLAI providers do not have management over the network, and, therefore, are considered Value Added Service.
Anatel’s technical and legal areas had already argued that streaming is not considered a conditional access service, and the agency’s regulation does not fit. A possible revision would have to be made in the law, something that is outside the competence of Anatel and falls to the National Congress.
The saga between Claro, Fox and Anatel
It all started with a complaint from Claro to Anatel. The operator pointed out that Fox + was in breach of the SEAC Law, for violating cross-ownership. Pay TV regulations prohibit operators from producing their own content, just as a programmer cannot distribute it directly to consumers.
Anatel accepted Claro’s complaint and forbade Fox to market the channels on the internet, but the Justice suspended the measure. The agency appealed, lost the appeal, then won again and had the injunction suspended.
In July, Anatel revoked the injunction prohibiting the sale of Fox + directly to consumers. In the meantime, Fox withdrew from service across Latin America for strategic reasons: Disney + will arrive in Brazil in November with the programmer’s content.
Operators prepare to launch TV via streaming
With the new definition, operators are given legal certainty to offer linear channels via streaming. One of the main motivations for adopting a business model is the tax difference: the service by SeAC is charged with ICMS, Fust, Funttel and Condecine, while online services pay only ISS.
Another major advantage is reduced obligations: as SeAC is not regulated by Anatel, companies would not have to comply with quality obligations, content quotas and mandatory channels. On the other hand, when selling pay TV via the internet, operators would reduce costs, avoiding technical visits, installations, equipment, cables and antennas.
THE Tecnoblog showed exclusively that Claro already prepares an alternative to common pay TV. The company will market plans with the Streaming Box, which allows access to content on demand, sports channels and open channels. Oi has also shown interest in launching a streaming service with linear channels.