Telecommunications Regulation. EL SALVADOR Romero Pineda & Asociados

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1 Telecommunications Regulation EL SALVADOR Romero Pineda & Asociados CONTACT INFORMATION Antonio R. Méndez Llort Romero Pineda & Asociados Edificio World Trade Center Torre I, Suite 305, San Salvador, El Salvador, Centro América (503) What is the name and nature of the regulatory body(ies) in your jurisdiction? To which bodies (if any) are decisions appealed? The name of the Salvadoran regulatory body on Telecommunications is Superintendencia General de Electricidad y Telecomunicaciones (SIGET) The body is an autonomous Governmental body. By autonomous is meant that it is not under hierarchical dependence of any other Governmental body, not even the Executive or the Presidency itself. Decisions by this body can be appealed before a tribunal of 3 members denominated Board of Directors of SIGET. Decisions by this body can in turn be appealed before the Supreme Court of Justice of El Salvador, either before the Contentious Administrative or Constitutional jurisdictions of the Supreme Court. 2. Has your jurisdiction adopted the WTO Basic Telecommunications Agreement? If yes, with what exceptions, if any? Not specifically, but El Salvador is a member of the WTO since 1999, and as a consequence all WTO agreements have been adopted, in which case, not exeption has been made to the Agreement. 3. Are operators in your jurisdiction privately or publicly/state owned?

2 Most operators in the telecommunications sector are private, that includes telephone operators, wireless and wireline, cable, VoIP, and broadcasting. Nevertheless, as an exception to that rule, there are radio and television stations owned by the Government but in both cases it is only one channel of open television broadcasting (channel 10) and one radio station (Radio Nacional) 4. What are the primary differences between the regulation of wire line, wireless, satellite, cable and VoIP providers? The main difference is that wireless and wireline telephone services are considered public service and therefore communications through the telephone network are heavily regulated, and tariffs to the public have to be approved by the regulatory body. On the other hand Satellite, cable and VoIP are not considered public service and are not regulated, and fees are determined by the market. 5. Are broadcasters regulated separately from telecoms? Broadcasters and Telecoms are regulated both by SIGET regarding issues of telecommunications itself. Nevertheless the regulation of broadcasters, either radio or television is limited to grant concessions for the use of the electromagnetic spectrum and ordering of its use to avoid interference, while telecoms that provide telephone services are regulated from tariffs, to relations with clients, interconnection, etc. 6. How are satellite earth stations and submarine cable landings regulated? Satellite earth stations require registration with SIGET, and verification of their compliance with standards of transmission by International Communications Union, satellite orbital position, and registration of transmission equipment with SIGET. In case transmissions are to use regulated portions of the electromagnetic spectrum a concession from SIGET shall also be required. Submarine Cable is regulates as an essential resource for telecommunications public service, and therefore it is required from every operator of a Submarine Cable system to grant indiscriminate access to telecom operators. 7. How is the radio spectrum generally regulated? Radio spectrum is considered to be owned by the Government. The Government therefore has the right and obligation to administrate, order, and watch over use of the spectrum. The radio spectrum has been divided in bands of free access, bands of use by the Government, and all other bands, which are to be used by private individuals based on concessions granted by the Government. The concessions can be freely exchanged and sold among private parties, but its use is determined by the concession itself in the sense that it has to be used for the purpose established in the concession, and for the time the concession is granted.

3 8. Are any operators granted exclusivity? No, no operators of any telecommunications service are granted exclusivity. 9. Are anti-competitive practices subject to regulation or general competition (e.g., antitrust) laws? In El Salvador there is a Competition Law in effect since January 2006, and the Superintendence of Competition is in charge of anti-trust regulation and implementation of the law. Nevertheless, if the anti-trust investigation has to do with telecommunications, the Superintendence of Competition has to request the opinion of SIGET. 10. What services have been liberalized or designated as competitive services? In El Salvador all telecommunications services have been liberalized and designated competitive services since Are there regulated tariffs or price lists? If so, for what types of services? Yes, tariffs are regulated for wireless and wireline telephone services throug the public telephone network. All other telecommunications services, as long as the public telephone network is not used for transmission are not subjected to regulated tariffs. 12. Are there restrictions on foreign investment in any types of communications companies? If so, what are the restrictions? Yes, concessions for air television and radio broadcasting can only be granted to Salvadoran individuals or to Salvadoran corporations, and in that case the corporation shall be owned by Salvadoran individuals at least in a proportion of 51%. Also commercials broadcasted either in air television or radio in El Salvador, have to be produced with at least 90% of resources of local production companies. 13. What are the approval processes for mergers and acquisitions? Do these vary by type of operator? No, the approval processes for Merger and Acquisitions are handled by the competition authority, not by the telecommunications regulator SIGE, and the kind of operator involved is not a criterion to request authorization for a merger or acquisition. The main criteria for having to request authorization for a merger or acquisition have to do with the transaction exceeding the thresholds established in the Law, regardless of industry involved. 14. Is interconnection between carriers mandatory?

4 Yes, interconnection between carriers is mandatory, and SIGET has the power to force an interconnection and its terms if the parties do not agree upon the issues involved. Nevertheless, for purposes of interconnections the Law has defined what resources are esential for an interconnection, and which are not, and the obligation of interconnection only extends to those resources deemed essential by the Law. 15. Are interconnection fees/rates regulated? Only in the sense that interconnection agreements have to be registered with SIGET and therefore made public, and operators have the right to be granted interconnection within the same terms as interconnection has been granted to other operators. 16. Must carriers make available network components to competitors? If so, what are fees/prices based on cost, or market rates? Yes, carriers must make avilable to competitors network components that are considered essential as defined by the Law. The fees or prices are regulated in the sense that operators have the rigth to the same terms and conditions granted to previous operators, and the contracts dealing with this issues have to be registered with SIGET for public access. 17. Is there an obligation to serve all customers? If yes, is there a fund to subsidize eligible carriers? Which carriers contribute to the fund? Which carriers are eligible to receive these funds? Are broadband services subsidized or otherwise promoted through tax or other incentives? No, a company shall only serve those customers that can pay the tariffs approved. If the Government requires a specific obligation to serve any specific kind of customers under conditions different from the general conditions of services it would have to apply the telecommunications fund. The terms of eligibility shall be determined on a case by case basis. Up to this date the Government has not made any calls for aplication of the telecommunications fund to subsidize services. Broadband services are not promoted or subsidized by tax or any other kind of incentives. 18. Are there mandatory requirements to customer agreements (subscriptions, etc.)? No, a company shall only serve those customers that can pay the tariffs approved. If the Government requires a specific obligation to serve any specific kind of customers, under conditions different from the general conditions of services; it would have to apply the telecommunications fund, to compensate for subsidizing such coverage. The terms of eligibility shall be determined on a case by case basis. Up to this date the Government has not made any calls for application of the telecommunications

5 fund to subsidize services. Broadband services are not promoted or subsidized by tax or any other kind of incentives. 19. Are there any general or telecommunication specific requirements as to data retention? Not, in telecommunications regulations. Nevertheless the Consumer Protection Law forbids sharing any consumers data with third parties, without express consent of consumer. 20. Is number portability mandatory? If so, for which types of carriers (e.g., wireline, wireless, voice over internet protocol)? Number portability is mandatory under general principles of the Telecommunications Law. However, up to this date, SIGET has not been able to implement the conditions to enforce such principles, accordingly, there are no specific rules or obligations regarding number portability in place in the Salvadoran market as of this date. 21. Is equal access dialing selection mandatory? If yes, for which types of carriers? Yes, equal acces dialing selection is mandatory for international carriers through assignation of a specific 3 digits prefix to each carrier, which can be dialed by the customer when initiating an international call. 22. Is access or other contributions ( ADCs ) required of new entrants? No, no access contributions or other contributions are required from new entrants. 23. Is VoIP regulated? If yes, to what extent? VoIP is regulated only in the sense that if VoIP uses the telephone public network for transmission it shall be considered public service telephony. If transmission occurs over internet only, it is not regulated. 24. Are any major changes to telecommunications laws expected in the near future? No, in fact the telcommunications industry has remained without major changes in Laws for the last 10 years. 25. Is resale of telecom services permitted? If yes, is this activity regulated? What is the process to become a reseller? Are foreign companies permitted to be resellers? Yes, resale of telecom services is permitted. The activity requires registration with SIGET which is a process that only needs to show proof of existence as a legal entity,

6 and the resale contract with a provider. The Telecommunications Law has established as a general principle that main operators can not sell to resellers their products at prices larger that what they sell to final use customers.