A senior executive of Embratel says the argument that Anatel violates the Constitution by granting licenses for the provision of public services without holding auctions wasn?t part of the plea submitted to seek an injunction preventing Telefonica from offering domestic long-distance service. ?We never referred to such an argument at any stage of the litigation,? stresses Purificación Carpinteyro, VP for local services. The ruling by Judge Luciana da Costa Aguiar Alves, of the 15th Civil Court in São Paulo, used this argument as the principal justification for granting the stay on Telefonica?s long-distance license, although the judge didn?t attribute it to the plaintiff. According to Ms Carpinteyro, Embratel argued that no telco should be given a ?concession? and an ?authorization? for the same ?service modality?.
Embratel is in fact as embarrassed by the ruling as it is relieved to have stopped Telefonica?s bid for the domestic long-distance market in its tracks. The problem is that casting doubt on the constitutionality of Anatel?s licensing rules could stymie Embratel?s chances of receiving the local license it so desires and needs. In addition, the incumbent long-distance carrier is hardly interested in a confrontation with Anatel and the Government. Communications Minister Juarez Quadros has said that the ruling ?challenges the very basis of the Brazilian telecommunications model?. Given all these issues, Embratel?s executives are taking care not to comment on the validity of the judge?s argument. ?It?s not up to us but to Anatel and Telefonica to challenge the ruling and its basis in law,? says VP Purificación Carpinteyro.