09
Regulatory Activities and Management
Agenda of the Communications Regulation Commission (CRC)
2021 started out with a ruling by the CRC determining that Claro is the dominant operator in the market of voice and data packages, defined as “mobile services.” The above was decided in Resolution 6146 of January 28, which following two years of review did not impose any specific measures, and ordered to prepare a report on competition conditions in 2023.
CRC ratified its dominant position by means of Resolution 6380 in September. However, any specific measures on the dominant position are still pending.
Since the national government maintained the status of health, economic and ecological emergency due to the Coronavirus (COVID-19), based on the government’s guidelines, the Commission extended several measures for the sector related to customer care at physical offices and electronic means, and the telephone service hours from 8 AM to 6 PM throughout the week, except for reports on theft or loss of cell phones, activating prepaid recharges and failure of services, which continue to be 24/7. In August, the service hours at the telephone service centers went back to 5 AM to 12 M.
In March, Resolution CRC 6242 was published, which was adopted to digitalize interactions with users and to modernize telephone customer assistance using computers that incorporate artificial intelligence and voice recognition. This provision promotes digital channels as the main response channel by including new rules for communicating, filing and directing Petitions, Complaints and Claims. It also promotes the delivery of invoices by electronic means, allowing the user to decide whether he/she wishes to receive them physically or digitally. It also allows migrating assistance from physical offices to other virtual channels, ensuring that users can carry out any interaction in a quick and efficient manner.
In May, the CRC published for comments a draft to amend the rules of the interconnection regime from a technical update perspective. This topic will continue to be reviewed in the 2022 CRC Agenda.
In the same month, the industry regulator amended the remuneration conditions for accessing Automatic National Roaming (ANR) through Resolution 6298. It maintained the current upper limit on voice ANR prices and defined its geographic scope for application with a list of 460 municipalities listed in the regulation. The list of municipalities also applies to data ANR.
In June, the CRC published a draft for comments to revise the quality terms of the main telecommunications services, to verify whether the quality regime is suitable for the measurement needs produced by changes in the networks and services. It September it published a document with several alternatives, and the text of the 2023 CRC Agenda indicates that the decision would be made in the second quarter this year.
The review of the Mobile Voice market began in July with the publication of the objectives, including an assessment of wholesaler remuneration and its relationship with the technological reality and downstream rates to determine whether existing regulations should continue. In December the regulator published a draft for consultations regarding the value of the charges for mobile termination, SMS and Automatic National Roaming, which proposes a downward trend. A new item is the suggestion to apply the Bill and Keep arrangement starting in 2025. The review of this matter will continue in 2022.
In July a draft was announced for the review of the fixed services markets at the retail and wholesale levels. The planned initial phase was the review and updating of the market, and the second phase, which will be carried out in 2022, involves an assessment of competition.
In October the regulator published a draft for consultation on Network Neutrality, to assess whether it should amend the regulation that has been in place since 2011. Telefónica Movistar Colombia suggested that any decision should be made after allowing for a prudent post- COVID period, and we acknowledged that the current principles of free choice, non-discrimination, transparency and information are appropriate and sufficient for the current context. On this same topic, in December, the Constitutional Court announced that it will review a lawsuit against the companies’ right to structure selective Internet plans that offer certain types of applications for free, such as social media.
By means of a draft for simplification published in November, the CRC is considering eliminating the procedure of mobile terminal registration by users and the obligation to detect and block terminals that are not registered in the positive Administrative Database. This discussion will continue in 2022. Another draft published in the same month was on infrastructure sharing for the deployment of networks and the mass use of telecommunications services – Phase II.
With Resolution 6141 of January 26, the Commission fulfilled its duty of issuing regulations for the implementation of the National Alert for missing children and adolescents, to facilitate the activities of the entities responsible for tracking and locating them. The established National Alert System is based on activating, issuing, aggregating and disseminating alert messages through the providers of telecommunications network and mobile services, which will disseminate the SMS in the geographic areas defined by the competent entities such as the National Police and the Office of the Attorney General (Fiscalía). The time limit for the operators to send out the SMS will be 2 minutes. The system will be implemented in 12 months.
Agenda of the Ministry of Information and Communication Technology (MinICT)
In November, the MinICT made public statements on the postponement of the 5G Auction, indicating that this administration will probably not carry out the process, which could take more than one year. On the other hand, it does expect to leave in place the terms for the auction.
Regarding the renewal of permits for use of the radio spectrum, on October 19 the Ministry issued a Resolution to renew the 15 MHz at 1900 MHz of Telefónica Movistar Colombia. Unfortunately, the Resolution was not explicit on the methodology used to set the price for the 20-year renewal of the 15 MHz, establishing a price that is about three times higher than international standards, along with an obligation to perform a technological upgrade in a maximum term of 4 years, to provide theoretical peak speeds of 73.7 Mbps Downlink peak, and 36.7 Mbps Uplink peak, in municipalities with populations of less than 100,000, which is not computed as part of the price. On November 3, the Company submitted a motion for reconsideration, requesting to align the price in regional benchmarks, in order to comply with the legal principles of providing reasonable and non-discriminatory terms for access to the spectrum, so as to maximize social well-being rather than fiscal revenues. It also requested that the technological upgrade obligation be proportional to use of the band and the quantity of spectrum covered by the renewal, and that the amount derived from fulfillment of this obligation be computed with the payment for the renewal. At December 31, 2021, the reply by the MinICT was pending.
The Ministry published a draft for comments of spectrum assignment regulations. On May 25, Telefónica Movistar Colombia announced an agreement with DIRECTV to acquire its FWA Internet services operation. Subsequently, the transaction was approved by the Superintendence of Industry and Commerce.
In August, the MinICT issued Decree 934, which set general rules for spectrum assignments, subject to prior approval by the MinICT. The Assignor must certify compliance with the obligations derived from the license, and the Assignee must take over any pending obligations and present an operating plan indicating how it will use the spectrum. It allows temporarily exceeding the spectrum limit for the effects of service continuity: the Assignee must submit a transition plan or technical measures indicating the reasons for exceeding the limit, and the actions to be taken to comply with the limits within a reasonable term.
In November, the Ministry published a new draft for comments to amend Decree 934. This initiative was met with concerns about legal uncertainty because it changes criteria that had become effective only three months earlier. At December 31, 2021, the Ministry had not communicated its final decision on the amendment to Decree 934, nor its final decision on the assignment transaction of Telefónica Movistar Colombia / DIRECTV.
In May, the MinICT published a draft to amend the spectrum limits. The proposal included a new band interval and considered amending the limits.
In November, a new version was published that updated the spectrum limits.
This version would increase the current limits for bands under 3 GHz and would establish a new category between 3 GHz and 6 GHz, with the aim of enabling the assignment of the band of 3.5 GHz, which has about 400 MHz available. The draft was published for comments until December 15 with the following spectrum limits:
50 MHz for low bands (between 698 MHz and 960 MHz)
100 MHz for medium bands (between 1710 MHz and 2690 MHz)
80 MHz for medium high bands (between 3300 MHz and 3700 MHz).
At December 31, 2021 the Ministry had not communicated any final decision.
In January, the Ministry amended its policy on preventive oversight (PrevenTIC, for the Spanish original). Even though the draft had repealed the entire preventive oversight and control policy, in issuing Resolution 0057/2021 the following adjustments were made:
It allows operators to self-assess compliance with the obligations, identifying threats and risks that may lead to non-conformance, when they deem it necessary.
It enables submitting commitments for improvement with preventive or corrective actions, which may be submitted once each semester.
It grants a term of three months to perform the preventive or corrective actions.
Even if the commitment to improve is fulfilled, MinICT will anyway carry out the investigation and will impose penalties, and if the commitment is fulfilled it may reduce the penalty to a reprimand and/or reduce the fine by 75%.
Before initiating an investigation, the report on findings will be published, on which an improvement plan may be submitted to be performed within three months. If all non-conformities are corrected, a reprimand will be issued or the fine will be reduced by 75%.
In March, Congress approved Law 2108, which declared the Internet an essential and universal public utility, adopting the measures taken during the health emergency for new cases of emergency or commotion. These provisions include the prohibition of suspending service due to debt on plans for less than COP 54,462 (1.5 Tax Value Units – UVT), the deferral of payment without surcharges and allowing users 200 free SMS and free navigation in 30 URLs, over the duration of the health emergency, which is currently in effect until February 28, 2022.
The Ministry also published the Guide of Reference for the adoption and implementation of Blockchain technology at Colombian government public entities (on February 19). Colombia has important experiences in this regard: in 2018, the National Land Agency developed a prototype for the process of awarding lands; in 2019 the Office of the Inspector General (Procuraduría) incorporated blockchain for preventive surveillance of public contracting.
The MinICT also worked on a draft to amend the satellite regime. In January and October it published two drafts for consultations to establish the conditions and requirements to grant permits of use for the satellite communications spectrum and set the value of the consideration to be paid by operators to use the radio spectrum.
Agenda of the National Spectrum Agency (ANE, for the Spanish original)
In September, the ANE published to receive comments in October its five (5) year Spectrum Management Master Plan. Its approach is based on markets, services and applications, and seeks to incorporate best international practices.
Telefónica Movistar Colombia submitted contributions focusing on two aspects: i) it is essential that the spectrum not be viewed solely from a revenue raising outlook, and ii) 5G will be the central technology of the future of communications, and its success will depend on the availability of the mobile spectrum harmonized in three categories of frequency bands: less than 1 GHz, 1 to 6 GHz and over 6 GHz.
In October, the ANE published a draft for consultations to amend the National Frequencies Chart in the 6 Ghz band. This draft proposes the possibility of free use of WAS services, in the range of frequencies 5925 – 7125 MHz. Given that this band can support several 5G technology services, including the IoT, and if it is of free use with no license, the approval of this initiative would put all telecommunications providers that do pay for use of the spectrum at a disadvantage. The best decision would be to subdivide the band into two segments, from 5925 to 6425 MHz for free use (WiFi or NR-U), and from 6425 to 7125 MHz for IMT services (5G).
Simultaneously, the ANE published another draft for consultations on the use of the 900 Mhz band, proposing that the range of frequencies from 894 – 915 // 939 – 960 MHz be available starting on January 1, 2026, under the following scenarios: (i) expand the portion for IMT on the 900 MHz band, which would have a range from 894 – 915 / 939 – 960 MHz; (ii) expand the portion of the band for free use, from 915 – 928 MHz to 902 – 928 MHz; and allocate the remaining spectrum, 894 – 902 // 939 – 947 to broadband networks. In both cases the range could be reduced depending on measures for coexistence with services that are adjacent to the lower part of the band.
Superintendence of Industry and Commerce (SIC)
In June the process was initiated before the SIC for the acquisition of the FWA business of DIRECTV, in connection with the agreement whereby Telefónica Movistar Colombia is committed to acquire the Fixed Internet service and FWA Spectrum of DIRECTV in Colombia. The Superintendence of Industry and Commerce approved the transaction for the Internet business between DIRECTV and Telefónica Movistar Colombia on August 5.
On December 23, the Superintendence of Industry and Commerce approved the project for the operation of ON*NET Fibra, the new company of Telefónica Movistar Colombia and KKR, valued at USD 500 million. The shareholdings will be 60% for KKR and 40% for Telefónica Movistar Colombia, which will contribute its FTTH infrastructure. This would be the first and largest independent network of open access fiber optics to homes, and will offer greater access to ultra-fast fiber optics. The plan calls for expanding fiber optics coverage to some 4.3 million homes by the end of 2024, in 90 Colombian cities.
ON*NET Fibra the new company of Telefónica Movistar Colombia and KKR, valued at USD $500 million.
Change of Dialing Codes
In 2021, the Company carried out the work required to implement the new dialing codes from and to land lines.
The work involved configuring all the fixed network stations, including legacy stations, configuring the regulatory announcements for customers who use the old 7-digit dialing system, development of the communications plan for users on the change of dialing codes, and adjustments in the technology area so that all platforms are enabled for the 10-digit dialing.
The new dialing system became effective on September 1, including a stage of coexistence that allowed dialing in either system until December 1 for local calls and until February 1, 2022, for incoming international calls. After these dates, only the new dialing system can be used, and if the user dials with the old system he/she will hear an announcement informing about the change, but the call using the old dialing system cannot be made.
Regulatory Sandbox
During 2021, the CRC made the first call for submission of projects as part of its Regulatory Sandbox exercise, under Resolution 5980/2020.
23 projects were submitted for this first invitation, of which the Commission selected three to initiate the experimentation phase in a controlled environment of flexible regulations. Two of these are projects of Telefónica Movistar Colombia: the implementation of the SOC tool and the project Internet para Todos (Internet for All).