The Brazilian Telecommunications Act (Law 9,742), enacted in 1997, brought important changes to the regulatory framework, which denationalised the state-owned telecommunication companies (the so-called Sistema Telebrás) and gave to the private sector the leading role for the development of telecommunications in the country. In order to deal with this new reality, the law created a robust normative framework. Whereas the essential telecommunication service at the time was fixed telephony (Fixed Switched Telecommunications Service – FSTS), and that it would be provided by private companies, the Law defined mechanisms to ensure its universality and continuity.
In this regard, the Law established two regimes for the provision of telecommunications services, the public and the private. Under the public regime, the telcos are subject to a concession contract with the National Telecommunications Agency (Anatel) that assures a greater state control over universalization, continuity obligations and tariff prices.