The pay-TV sector has generated a lot of debate in recent days due to the clash between Anatel and Fox, and the government’s economic team has signaled its intention to change the SeAC (conditioned access service) law: the idea is to allow companies to operators can produce content and own pay TV channels.
THE SeAC Law, approved in 2011 and still in force, has as one of its main pillars the prohibition of cross ownership. In addition, it brought other regulations, such as the imposition of loading the analogue channels open on pay TV, as well as quotas of national production on closed channels.
In practice, the cross-ownership ban it means that the same company cannot produce content and distribute it: that is, pay-TV operators serve as mere channel distributors. The idea was to avoid the monopoly of channels by a certain operator, as this would harm competitors.
At the time of approval, the company most affected was Grupo Globo, which had control of the operator NET (now Claro) and had to dispose of shares. Only the years have passed and others conflicts started to happen, as was the case with the purchase of Sky by AT&T. In addition, the Anatel vs. Fox again questioned the model: the regulatory agency says the company cannot sell channels over the internet without the operators.
According to State of S. Paulo, the technical area of the Ministry of Economy has already formulated the draft of a Provisional Measure on the subject, allowing cross ownership. Ministry technicians question the effectiveness of this ban, which could cause the closure of channels in Brazil.
Sky and Warner channels
THE ATT bought the DirecTV group, owner of Sky Brasil, in May 2014. Only, in October 2016, the American operator announced the acquisition of Time Warner, now WarnerMedia – owner of several channels like Warner Channel, Cartoon Network, Boomerang and HBO.
Thus, it is true to say that there is cross ownership, since the operator is controlled by the same owner of several channels. Anatel technicians even recommended the sale of Sky, but this was not done.
It is difficult to find anyone who wants to buy Sky in Brazil. Of the national operators, the Claro group holds the largest fraction of the market share pay TV and would certainly encounter regulatory impediments. Vivo has been abandoning the DTH (satellite) technology used by Sky, and concentrates its efforts on IPTV through optical fiber. Oi survives through a judicial recovery, and TIM does not operate in the pay TV segment.
The SeAC law can also prevent the launch of new services. AT&T recently stated that would only return to invest in Brazil following an Anatel decision on the merger with Time Warner; in addition, Warner claims that the regulatory environment would prevent the service from arriving HBO Max.
The Anatel vs. Fox
Claro accused Fox of violating the SeAC law by selling access to its channels through the Fox + streaming service. Anatel determined that Fox should stop selling access to its linear channels over the internet to those who do not subscribe to pay TV.
Fox secured an injunction allowing Fox + to remain on the air. Anatel tried to appeal, but failed: the court ruling says that Fox + does not fit the concept of conditioned access audiovisual communication, and that the application meets the requirements of the Marco Civil da Internet to democratize content.
If the new legislation proposed by the economic team removes the ban on private property, the novel between Fox and Anatel can reach the last chapter.