Convergencia Research, Consultoría especializada en Latinoamérica y Caribe
Tuesday, July 14, 2020

Post pandemic regulation in Latin America: universalization and cybersecurity, axes for new normality

In the past four months, the Latin American telecommunications industry was able to adapt to teleworking, remote education, and agreements with content providers. However, the Covid-19 pandemic revealed inequalities in coverage and quality of three types: users who stopped contracting due to lack of income; geographical areas with service failures due to less availability of services; and digital illiteracy. Initially, the reaction of Latin American regulators was to attend to the emergency and ensure the continuity of services: it is expected that after the emergency, mechanisms of greater flexibility and innovation will be installed in the regulations field, with access universalization as the central axis.

A clear symptom of the revision that the regulation must go through in the “new normality” is the lack of consensus in the Brazilian Ministry of Economy on the format of the 5G tender. At the end of June, the undersecretary of Regulation and Market of the Ministry of Infrastructure, Gabriel de Braganca, indicated that there are conflicting opinions in that government entity, as some areas seek greater collection for the Treasury, while others defend a greater return in the future from the incentives available in the competition for the rapid deployment of 5G.

Héctor Huici, former ICT secretary from Argentina and current Senior Consultant of Access Partnership in the Southern Cone, considered that the regulation for the ICT sector in the post pandemic will focus on expansion and universalization of services, after the emergency reflected the criticality of telecommunications benefits, as well as gaps. In dialogue with Convergencialatina, he anticipated processes of regulatory simplification to face a complex economic era and with difficulty in accessing credit, whereby regulatory burdens must be reversed and investments made cheaper.

Along the same line, Lucas Gallito, director of Public Policy for Latin America at the GSMA, agreed on a different perspective based on three axes: the need to eliminate barriers to deployment, reforms of tax structures, and roadmaps and policies for the use of spectrum. Regarding the availability of frequencies, the pandemic served as a test of temporary awards: Panama had 120 Mhz in AWS distributed equally among the four mobile operators in the market, for 90 days; and Peru authorized Movistar and Claro in the 3.5 Ghz and 2.5 Ghz bands, for a period of six months, extendable for a single time for the same period. In the latter case, the frequencies were awarded in exchange for free Internet access for educational and health institutions in neglected areas.

Other alternatives that are gaining strength in Latin America for the post-pandemic discussion table are the minimum broadband speed laws; the contemplation of emergency situations in net neutrality regulations (to enable one service over another for reasons of force majeure); and strategies for access to devices sustained over time.

Cybersecurity and 5G. The region's infrastructure supported the increase in demand, in turn, with a marked increase in cyber attacks: 83.7 million were registered in April, compared to 18.5 million in February (Kaspersky Lab), with extreme cases such as Peru, where the rise was 359%, going from 787,000 in the second month of the year to 3.6 million in April. In parallel, the transfer of the workforce to the home - with several family devices in simultaneous use - exacerbated a reality that the region was already experiencing: more than 60% of cyber attacks originate from user problems, as commented to Convergencialatina Maryleana Méndez, Secretary General of Asiet.

The still timid progress of Latin America on cybersecurity regulations - Chile has the issue in public consultation, among the most advanced cases - must turn around and accelerate in the post pandemic. Not only because the facility for attacks was evident, but because the structuring of 5G bidding processes will open a new area of ??discussion, with more geopolitical edges, but that will require an already explored cybersecurity base. The political-commercial confrontation between China and the United States, technological neutrality and the dilemma between international and independent standards will come into play in auctions in the region, as it is already doing in Brazil, due to the pro-Trump orientation of President Jair Bolsonaro and the impact that this alignment may have on Huawei's participation as a provider of the new networks.

Potential of the sandbox to create controlled environments

Colombia will be a pioneer in the use of the concept “sandbox”, imported from the financial sector. The local regulator, the Comisión de Regulación de Comunicaciones (CRC) (Telecom regulator), will implement this alternative regulatory mechanism, unique in the region, which consists of the experimentation of products and services by companies under the control and supervision of the CRC. This seeks to promote innovation and increase the speed of adaptation of the regulatory framework to technological advances.

The Colombian so-called "regulatory sandbox" implies the relaxation of the regulations or regulatory exemption granted to a project or company, to allow it to test new business models, within a period of up to 12 months, extendable for a single time by 12 more months, in a defined geographic space, under the monitoring of the regulatory entity. From Asiet, Mendez highlighted the implementation of the sandbox, as a "different way of observing the behavior of the actors at a certain time, under controlled conditions".

Carlos Lugo, Executive Director of the CRC, admitted that the pandemic forced them to take temporary measures to promote digitalization, which will be reviewed when the emergency ends. In line with the sandbox, throughout 2020 they will be in a project incubation phase, for example in the case of 5G: five companies -ETB, Telefónica, Claro, Xiro Investment Group and ITICS- obtained permits for the use of spectrum destined to technical tests of the next mobile generation, for six months extendable for an equal period. The pilot tests will start this month in 36 localities in Bogotá, Medellín, Cali, Barranquilla and Tolú, for temperature control through thermal cameras, creation of private networks and IoT applications, remote medical monitoring, among other applications. In addition, environmental, mobility, energy and public safety sensors will be tested to evaluate use cases in different scenarios.

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