As a general rule, to provide any telecommunications services, it is necessary to obtain a concession, permit or licence from the telecommunications authority, which are granted to the interested party on a ‘first come, first served’ basis. However, if there is a technical rule that allows only a limited number of concessions or permits of a certain service (eg, mobile telephony and other wireless services), the relevant concessions and permits shall be granted through a public bid process.
The GTL classifies the different telecommunications services by describing their purpose (rather than its features, capabilities or platforms through which they are supplied), each of which may have different specific regulations and requirements. The classification of telecommunications services according to the GTL includes the following:
- Public telecommunications services (PTS), which are services destined to satisfy the telecommunications needs of the community in general (fix telephony, mobile telephony, trunking, etc). These services must be designed in order to be interconnected with other PTS.
- Limited telecommunications services (LTS), which are services aimed at satisfying specific telecommunications needs of determined companies, entities or persons who have previously requested and agreed the provisions of the services. This kind of service may not give access to public telecommunications networks.
- Intermediate telecommunications services (ITS), which are services provided through facilities and networks, aimed at satisfying the transmission and switching needs of other telecommunications concessionaires or permissionaires or at providing long-distance telephone services to the general community.
- Complementary telecommunications services (CTS), which are not telecommunications services in the strict sense of the definition but are additional features provided by PTS concessionaries or any other third party through the connection of equipment to the public networks.
Fixed, mobile and satellite services are generally considered by Chilean telecoms regulations as public, intermediate or limited telecoms services, as the case may be. Therefore, except for the technical rules established specifically for each of them and for the circumstance where, in certain conditions, the tariffs of fixed local telephone services may be set by the authorities, all such services are subject to the general rules contained in the GTL and its ancillary and complementary regulations.
The installation, operation and exploitation of PTS and ITS require the prior obtaining of a concession granted through a supreme decree issued by the MTT. These concessions have a 30-year term and may be renewed for equal periods at the request of the corresponding concessionaire. Only legal entities duly incorporated and domiciled in Chile may be granted this kind of concession (there is no restriction, however, for these entities to be partially or wholly owned by foreign capital).
The installation, operation and exploitation of LTS requires the prior obtaining of a permit granted through an exempt resolution issued by Subtel. These permits have a 10-year term and may also be renewed for equal periods at the request of the corresponding permissionaire. LTS permits that do not use the radio electric spectrum are granted for an indefinite period of time. Please note, however, that no permit is required in the case of LTS whose transmissions do not exceed the limits of the real estate where they are installed or that exceed such limits using only the infrastructure of ITS concessionaries. This would be the case, for example, of public or private Wi-Fi services, as the Wi-Fi service itself (without taking into consideration the data transmission and public internet access service) would not be subject to any regulation provided that the Wi-Fi signal does not exceed the actual state in which Wi-Fi equipment (ie, wireless routers) is located.
The installation, operation and exploitation of CTS does not require any previous concession, permit, agreement or authorisation from any PTS concessionaire or governmental authority (including Subtel). Nevertheless, the equipment that the CTS operator connects to the public networks must comply with technical regulations issued by Subtel and shall not alter the essential characteristics and capabilities of the networks to which such equipment is connected. For such reason, prior to starting the provision of complementary services, Subtel shall issue a resolution stating that the equipment of the respective CTS operator complies with the above-mentioned technical regulations. Subtel shall issue the resolution within 60 business days from the reception by Subtel of the respective request from the interested party. Otherwise it shall be understood that the respective CTS operator is authorised to start its operations by the mere effect of the law.
Even though procedures for the granting of telecoms concessions, permits and licences are clearly defined in the GTL and its regulations, the duration of such procedures depends on a series of variables that may differ from one specific case to another (particularly when there is opposition from third parties, which sometimes may need to be resolved by the courts). In standard cases, however, the granting of PTS or ITS concessions may take between three and eight months. The granting of LTS permits (ie, for cable television) may take between two and six months.
Telecoms concessions and permits are generally granted on a free basis. However, telecoms concessions and permits may be subject to auction by the telecoms authorities only in cases when the relevant concessions must be granted through a public bid process, because there is a technical rule that allows only a limited number of concessions or permits, and two or more bidders present equally suitable offers.
The GTL also provides that concessionaires, permit holders and holders of telecoms licences that use the radio electric spectrum are subject to an official fee or duty for the use of the spectrum. This fee is charged on an annual basis according to the Collection Regulations, depending on several factors, such as type of concession, permit or licence, portion of spectrum granted and service area that has been authorised. According to the GTL, a payment delay of more than six months is punishable by Subtel with the cancellation of the corresponding concession, permit or licence.
Regarding mobile services, in September 2000 Subtel issued a technical rule reserving the 1,710-1,770MHz and 2,110-2,170MHz bands for 3G mobile services to be granted through a public bid process.
On 27 January 2009, the Supreme Court ruled that no operator may concentrate more than 60MHz in any band assigned for public mobile telephony services as a consequence of the 3G public bid. If any operator receives 3G spectrum and exceeds the 60MHz cap, the operator will have to surrender the spectrum either by returning it to the state or through a sale by public auction. The general terms and conditions for the public bid were issued by Subtel in April 2009, confirming the spectrum cap fixed by the Supreme Court and regulating the assignment of three spectrum blocks of 30MHz each with national coverage (90MHz overall). Considering that there were already three operators that could not increase their spectrum owing to the cap (Entel already had 60MHz and Movistar and Claro 55MHz each), this became an opportunity for new entrants.
The public bid took place during 2009 and, after a public auction, Nextel obtained two concessions of 30MHz each and VTR (a subsidiary of Liberty Media) obtained the remaining 30MHz, permitting the entrance of two new competitors into the market of next generation mobile services.
In 2012 a public bid process took place in Chile for the granting of public telecommunication service concessions based on 4G technology for the provision of fixed or mobile data transmission public services in the 2,505-2,565MHz and 2,625-2,685MHz frequency bands. After a public auction, Subtel announced that Claro, Entel and Movistar (the incumbents that participated in the public bid process) were all awarded one of the three 40MHz spectrum blocks granted through this public bid (blocks ‘A’, ‘B’ and ‘C’ respectively).
During 2014 a new public bid process took place in Chile for the granting of public telecommunication service concessions based on 4G technology for the provision of fixed or mobile data transmission public services in the 713-748MHz and 768-803MHz frequency bands. After a public auction among the bidders, Subtel announced that Movistar, Entel and Claro (the incumbents that participated in the public bid process) were each awarded one of the three spectrum blocks granted through this public bid (blocks ‘A’ of 20MHz, ‘B’ of 30MHz and ‘C’ of 20MHz, respectively). In addition, on 7 November 2014, Subtel issued a technical rule reserving 20MHz of the 700Mhz band in favour of the Chilean state in order to cover the needs of public protection and help in case of catastrophes and emergencies.
Notwithstanding the foregoing, Telestar, Netline and Conadecus presented an opposition before the MTT, arguing that the limit of 60MHz established by the Supreme Court (in January 2009 in the 3G awarding process) was not being considered in the public bid process and that the bidding conditions were discriminatory. The MTT ruled in favour of the incumbents that participated in the public bid process, noting that this topic is currently being treated by the Antitrust Court and that, therefore, is not of its competence and that the bidding conditions were fair and sufficient. Telestar appealed before the Court of Appeal of Santiago, which ruled in favour of the incumbents that participated in the public bid process, following the general reasoning of the MTT in its first instance decision. Finally, the Antitrust Court also ruled in favour of the incumbents.
In March 2018, a new public bid process was announced regarding the deployment of land portions of the Southern Fiber Optics Project. During 2017, another land portion and also submarine portions of the project were awarded. This project is part of an initiative to bring higher level connectivity to the most southern and extreme areas of the country. Finally, in connection with the above, there have been some announcements and speculations of new submarine cable projects. For example, Google has announced that they will build a submarine cable connecting the United States and Chile, and Huawei have announced that they are analysing the possibility of building a submarine cable between China and Chile.
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