RESTRICTED
GENERAL AGREEMENT S/NGBT/W/3/Add.7
13October 1994
ONTRADE INSERVICES
(94-2057)
Negotiating Group onBasic Telecommunications Original: Spanish
COMMUNICATION FROM CHILE
Response toQuestionnaire onBasic Telecommunications
Theattached communication iscirculated attherequest ofChile toMembers oftheNegotiating
Group onBasic Telecommunications.S/NGBT/W/3/Add.7
Page2
Basic Telecommunications
PART I
Definition
1. InChile, thelocalpublic telephone service isconsidered tobebasictelecommunications. This
istheservice supplied bythepublic telephone service concession-holder, ortelephone company, not
including themobile phone system, within aservice areaknown astheprimary zoneandsubject to
regulations concerning theobligation toprovide aservice, technical quality, etc.Allother services
additional tothelocaltelephone service, suchaslongdistance andother non-telephone services, are
notconsidered basic andarenotsubject toservice obligations.
2. Yes. There isafacilities concession, known astheintermediate services concession, under
which theconcession-holder maysupply services toother concession-holders orlicensees byproviding
facilities andnetworks intended tomeettheswitching ortransmission requirements ofthelatter.
3. Seethereply toquestion 1.Allother services additional tothelocaltelephone service, such
aslongdistance andother non-telephone services, arenotconsidered basicandarenotsubject toservice
obligations.
Market structure
4. There isnosupply ofthistypereserved tomonopoly orexclusive supplier(s).
5. Theregime doesnotprovide forthistypeofsituation.
6. Seethereply toquestion 4.
7. Notapplicable.
8. There arenone.
PART II
Competition
A. Subsectors
Thereplies areapplicable toallsubsectors.
(i) Overview
Thepresent Chilean Lawestablishes theprinciple offreecompetition, without legalmonopolies
ofanytype, theregulatory roleofthestatebeing totally separated from theentrepreneurial function
oftheprivate sector. Accordingly, theinstallation, operation andexploitation ofthetelecommunications
network infrastructure, theterminal equipment market andthesupply ofpublic, private andvalue-added
telecommunications services areallopentocompetition.
InChile, telecommunication services maybesupplied byanyproperly authorized person or
entity, without anylimitation, inparticular oncompeting inthesame geographical area. Theonly
restriction onsimultaneous participation intheprovision oflocalandlongdistance public telephone
services isthatitshould bedonethrough separate enterprises setupasopencorporations.S/NGBT/W/3/Add.7
Page3
(ii) Modes ofsupply
Inthecaseofthepublic telephone service, cross border supply canonlybeprovided by
intermediate services concession-holders established andequipped inthemanner prescribed bylaw.
Inother cases, there arenolimitations orrestrictions oncross border supply.
Norarethere anyregulations concerning consumption abroad.
(iii) Market access
Ingeneral, toobtain atelecommunications services concession theapplicant must bealegal
entity. Tobeanintermediate services concession-holder providing alongdistance telephone service
theapplicant must alsobeestablished asanopen corporation. Ifthesame concession-holder is
simultaneously involved inproviding localandlongdistance public telephone services hemustdoso
through separate enterprises established asopencorporations. Thelegislation places nolimits onforeign
ownership orequity participation.
(iv) National treatment
Thereisnodiscriminationofanykindasregardsthetreatmentofdomesticandforeignsuppliers.
(v) Licensing
Aconcessiongrantedbysupremedecreeisrequiredfortheinstallation,operationandexploitation
ofthefollowing telecommunications services: (a)public services; (b)intermediate services supplied
totelecommunicationsservicesthroughpurpose-builtfacilitiesandnetworks;and(c)soundbroadcasting
services.
Concessions aregranted tolegalentities; theylast30years forpublic andintermediate services
andcanberenewed forthesame period.
Applications tobegranted aconcession forortomodify public andintermediate
telecommunications services aresubmitted directly totheMinistry together withtechnical proposals
describing indetail thefacilities andtheoperation oftheconcession, thetypeofservice andother
particulars required bythelawsandregulations concerned. Theproposals mustbesigned byanengineer
oratelecommunications specialist. Theapplication must beaccompanied byproperly documented
financial proposals relating exclusively totheinstallation, exploitation andoperation oftheconcession.
Tobeinstalled, operated andexploited, private services, described inthelegislation aslimited
services, require alicence granted byadecision taken bytheUnder-Secretary 'sOffice, andvalid for
tenyears renewable. However, limited television licences which donottakeupanyoftheradio
frequency spectrum arevalidindefinitely. TheUnder-Secretary 'sOffice musttakeadecision concerning
thelicence application within 60daysofitssubmission, andifitfailstodosothelicence isconsidered
tohavebeengranted. Adecision refusing alicence mustgivereasons, andtheapplicant mayappeal
against itwithin theperiods laiddown intheseventh, tenthandsubsequent paragraphs ofArticle 13.
Theperiod laiddown inparagraph 7begins torunassoonastheperson concerned hasbeennotified
oftheadverse decision.
Limited services whose transmissions donotgobeyond thepremises inwhich theyareinstalled
orwhich, toexceed thatrange, useonlytheauthorized facilities andnetworks ofintermediate services
concession-holders, inside oroutside thecountry, donotrequire alicence. Toqualify forthesepurposes
thepremises must beimmovable bynature, notmerely bydestination.S/NGBT/W/3/Add.7
Page4
B. Categories
Local/long distance/international
1. Forthepurposes ofthepublic telephone service theonlydistinction isthatmade between local
andlongdistance.
Thelawstates thatforthepurposes ofthepublic telephone service, excluding themobile phone
system, thecountry isdivided into24primary zones. Anycommunication which extends beyond the
limits ofaprimary zoneisconsidered tobelongdistance.
2. Theholder ofalocalpublic telephone service concession mayusehisownfacilities orthose
ofthirdparties andisresponsible forthequality oftheservice onhispartofthenetwork. Theholder
ofanintermediate services concession orcarrier whosupplies alongdistance telephone service may
usehisownfacilities orthose ofthirdparties andisresponsible forthequality ofhispartoftheservice.
Wire-based
There arenolimitations orrestrictions ontheuseofwire-based networks bytheholders of
concessions orlicences foranytelecommunications service.
Radio-based
There arenolimitations orrestrictions ontheuseofradio-based transmission systems bythe
holders ofconcessions orlicences foranytelecommunications service, except where there exists a
technical standard permitting thegranting ofonlyalimited number ofconcessions orlicences, inwhich
casetheMinistry must organize apublic competition.
Resale basis
3. Astheholders ofintermediate services concessions areauthorized tousethefacilities ofthird
parties andprovide services toother concession-holders orlicensees, international resale ispermitted
foroperators whoholdthistypeofauthorization.
4. Theholders ofpublic service concessions andlimited (private) service licences mayusethe
facilities ofotherconcession-holders, inconformity withtheconcessions which theyhavebeengranted,
including basic telecommunications. Onlythetariffs forthefacilities belonging toconcession-holders
subject totariff-setting areregulated.
Facilities-based
5. Anylegalentity mayconstruct andoperate itsownnetworks.
Public/non-public supply
6. Theregime distinguishes between thepublic services intended tomeetthetelecommunications
requirements ofthecommunity ingeneral andlimited services whose purpose istomeetthespecific
telecommunications requirements ofparticular enterprises, entities orpersons byprioragreement with
thelatter.Theprovidersoftheseservicesmayobtaintheappropriateauthorizationsthroughaconcession
inthefirstcaseandalicence inthesecond.S/NGBT/W/3/Add.7
Page5
7. Onlythelocalpublic telephone service isunder theobligation toprovide aservice. Theother
public services arenotunder obligations ofthistype, except forthenormal requirements relating to
technical standards.
8. None oftheotherservices, whether public orlimited (private), isunder theobligation toprovide
aservice.
9. Thesuppliers ofpublic telephone services areunder anobligation toprovide aservice within
theirservice zone, defined bythesupplier, foraperiod oftwoyears from thedateofsubmission of
theirapplication.
10. Theonlyrestriction isthatsince thetechnical standards forprivate networks arelessstringent
thanthose forpublic networks, theformer cannot handle traffic from ortopublic network users.
11. Atpresent, public pay-phones arebeing operated bythelocaltelephone companies, inside or
outside theirservice zone, and,inthecaseoflongdistance public pay-phones, bythecarriers. However,
themodifications required toenable anyinterested party tooperate public pay-phones arebeing studied,
andthetelephone company willhavetoprovide suitable linesatregulated prices.
PART III
Regulatory issues
Relationship between regulatory andoperational functions.
1. Thesuppliers areinvolved directly andindirectly informulating standards andmaydirectly,
inaccordance withthelaw,report noncompliance withtheregulations andstandards.
2. Theauthority isresponsible forformulating standards andmonitoring compliance.
3. Only theUnder-Secretary 'sOffice hasregulatory functions atgovernment level. There are
procedures enabling suppliers toappeal, bothtotheappropriate administrative authority andtothe
courts.
Complaints by,between oragainst concession-holders, usersandindividuals ingeneral relating
toanyquestion deriving from theLaw, theregulations ortheschedules andtechnical standards for
whose observance theUnder-Secretary 'sOffice isresponsible aresettled bythatbody afterhearing
theparties.
Anypenalties imposed bytheUnder-Secretary 'sOffice canbeappealed totheAppeals Court
ofSantiago ortheSupreme Court.
Frequency allotment orassignment
4. Forallthepurposes oftheLaw, theuseandenjoyment offrequencies forming partoftheradio
frequency spectrum isavailable onafreeandequal basisthrough mainly temporary telecommunications
concessions, permits andlicences granted bytheState.
5. Yes.S/NGBT/W/3/Add.7
Page6
Numbering andidentification codes
6. Theyareassigned attherequest oftheconcession-holder andinaccordance withtheprovisions
ofthetechnical regulations.
7. Yes.
Standards, typeapproval andequipment attachment
8. Therearetechnicalstandardsforpublicandintermediateservices,andtypeapprovalandtechnical
characteristics standards forlimited services.
9. When theUnder-Secretary 'sOffice isamending astandard ordeveloping anewone,itconsults
theinterested parties whomaysubmit theircomments before thestandard isadopted.
Theprivate sector mayformally propose amendments totheregulations inforce. Noformal
mechanism hasbeenestablished forconcession-holders orlicensees topropose standards, butifthey
dopropose anytheywillbeconsidered bytheUnder-Secretary 'sOffice.
10. Theequipment ofdomestic andforeign origin which issubject totypeapproval isdefined in
thecorresponding regulations. Thepolicy oftheUnder-Secretary 'sOffice isnowtoreduce toa
minimum boththeneedfortypeapproval andtherequirements, since practically noequipment is
produced domestically. TheUnder-Secretary 'sOffice isresponsible forcertification, butthework
oftypeapproval isdonebyservice suppliers andtechnical institutions. There arenoagreements with
other governments.
Foreign produced equipment requires typeapproval, buttheprocedure takes intoaccount the
presentation ofatype-approval certificate from thecountry oforigin.
11. Anyclassofequipment thatsatisfies thetechnical regulations canbeattached tothenetwork.
Thetechnical regulations arebased onthefollowing criteria: thattheessential characteristics ofthe
network arenotaffected andthatnooneisinjured.
12. Thepublic network isowned bytheprivate operators.
13. Theterminal equipment market isopentocompetition. Theusermayattach hisownterminal
equipment tothenetwork.
Interconnection
14. TheLawmakesinterconnectionscompulsory.Therelevantruleswillbelaiddowninthegeneral
regulations oftheLawandthespecial regulations, which havenotyetbeenupdated.
15. TheLawstates thatsuppliers ofpublic services andcarriers (intermediate services) whoprovide
along-distance telephone service mustestablish andaccept interconnections, inaccordance withthe
technicalstandards,proceduresandtime-limitsspecifiedbytheUnder-Secretary'sOffice.Thisobligation
applies tointerconnections between public telephone service networks andintermediate service networks
andbetween thepublic telephone service networks ofdifferent concession-holders within thesame
zone andtothe"dominant" intermediate service concession-holder with respect toother
concession-holders ofthesame type.
Theinterconnectionofsupplementaryservicesthroughthepublicnetworks(value-addedservices)
bypublic service concession-holders orthirdparties isobligatory.S/NGBT/W/3/Add.7
Page7
16. Theholders ofpublic datanetwork concessions mayusetheirownfacilities orthose ofthird
parties. Theusers mayemploy leased circuits toobtain access tothese networks.
17. Theprices ormaximum tariffs between concession-holders forservices supplied through
interconnections aresetbytheauthority, inaccordance withtheprocedure laiddown intheLaw, as
afunction ofthecosts. These prices andtariffs arepublished tomake themgenerally known andthe
same charges areapplied toallthose requesting suchservices.
Themaximum charges thatthepublic telephone service concession-holder canapply tothe
holders oflongdistance intermediate services concessions fortheinterconnections thattheyrequest
aresetbytheauthority, inaccordance withtheprocedures laiddown intheLaw.
Competitive safeguards
18. Allmeasures relating toanti-competitive practices aretheresponsibility oftheanti-trust bodies
andaregeneral innature, applying toallsectors oftheeconomy.
19. TheLawobligesthecarrierwhoprovideslong-distanceservicessubjecttotariff-setting(dominant
carrier) tosupply those services toother concession-holders ofthesame typeonnon-discriminatory
terms.
Onlycarriers established asopencorporations, which could besubsidiaries oraffiliates ofpublic
service supplier enterprises, mayinstall, operate andexploit long-distance facilities connected tothe
publictelephoneservice,provideanationalandinternationallong-distancetelephoneserviceandconclude
agreements withforeign correspondents.
20. There isananti-trust Law which regulates allsectors oftheeconomy. TheGeneral
TelecommunicationsActpermitsthetransferandassignmentofconcessionsandlicencesandthegranting
oftheright tousethem, inanycapacity, subject toauthorization bytheUnder Secretary 'sOffice,
which maynotbewithheld without good reason. Theanti-trust commissions areempowered torule
onmergers andacquisitions, iftheyaffect freecompetition.
21. No.
Pricing-related measures
22. Ingeneral, there isafreepricing regime forservices. However, inthecaseofthepublic
telephone service, excluding themobile phone system, andtheswitching andtransmission services
provided bythe"carriers", theanti-trust bodies areempowered todeclare them monopolies and,
consequently, subject them totariff-setting, aslongasthissituation continues.
Thestructure andleveloftheregulated tariffs andtheindexation formulas areestablished by
theauthority forperiods offiveyears onthebasis ofthecosts ofanefficient enterprise, thetariffs
being regarded asmaxima.
Inthecaseofinternational communications, theaccounting ratesarenotsetbytheauthority;
theyaredetermined bytheoperators oftheservice themselves.
23. TheLawprohibits transfers ofcostsorprofits, bymeans otherthanthedistribution ofdividends,
between carriers andsuppliers ofpublic services, andifthecarrier isasubsidiary oraffiliate ofthe
public service supplier orifthelatter owns 20percentormore ofitscapital, thepenalty could be
thelapse oftheconcession.S/NGBT/W/3/Add.7
Page8
24. Theregulated tariffs aremaxima andinapplying them theconcession-holders maynot
discriminate between users inthesame category; volume discounts fallwithin these provisions.
25. Each enterprise subject totariff regulation isinvolved onlyinitsownproceedings.
26. Thestructure andleveloftheregulated tariffs andtheindexation formulas areestablished by
theauthority forperiods offiveyears onthebasis ofthecosts ofanefficient enterprise, thetariffs
being regarded asmaxima.
27. No.Asalreadymentioned,thereisingeneralafreepricingpolicy,withtheexceptionsindicated
inconnection withlocalandlong-distance telephone services supplied under conditions thatarenot
adequate toensure freecompetition.
Rights ofwayfortheconstruction ofinfrastructure
28. Thetelecommunications facilities areprivate property andbelong totheconcession-holders
orlicensees.Theauthorizationsgrantedempowerthemtobuildinfrastructureorfacilities.Thesuppliers
oftelecommunications services havetherighttorunoverhead andunderground linesalong andacross
streets, squares, parks, highways andother national public property, provided thattheyobserve the
technical standards andregulatory requirements andtherelevant (municipal) ordinances.
Where private property isinvolved, rights ofwaymust beagreed between theparties.
Where public telecommunication services areconcerned, iftheinterested parties failtoarrive
atadirect agreement, inthecaseofprivate rights ofwaytheUnder-Secretary 'sOffice maydeclare
theservice indispensable, byreasoned decision, andalegalrightofwaywillbeunderstood tohave
beenestablished dejureovertheprivate property inquestion. Inthiscase,theappropriate compensation
willbedetermined bythecourts insummary proceedings.
29. Yes. Nodistinction ismade between domestic andforeign suppliers.
Newtelecommunication services
30. Ifthe"new" services correspond tothesupplementary services orvalue-added services category
thelegalprocedures andregulations areverystraightforward. Theinstallation andoperation ofthe
equipment forsupplementary services doesnotrequire aconcession orlicence. Within 60daysof
receiving arequest, accompanied bythecorresponding technical data, theUnder-Secretary 'sOffice
willgivearuling onwhether therequirements havebeenmet(noeffect ontheessential technical
characteristics ofthepublic networks norontheuseswhich theymake technologically possible nor
onthemodalities ofthebasicservice thereby supplied). Ifbythetimethisperiod haselapsed noruling
hasbeenissued, itwillbeunderstood thatthesupplementary equipment complies withthetechnical
regulations andtheservices maybeintroduced.
Newservices corresponding toother categories mayrequire technical regulations before they
canbeapproved.
31. Thelegislation andtheregulations specify thegeneral characteristics thatenable thestatus of
theservices tobedetermined.