Brazil’s Anatel Extinct a Norma N° 4 Separating Internet from Telecom Services
São Paulo. The National Telecommunications Agency of Brazil, Anatel, has resolved to extinguish a norma that, in tax terms, distinguished Internet from other telecommunications products offered in Brazil since 1995.
The norma, set to be extinct on January 1, 2027, after over thirty years of enforcement, also separated Internet services from telecommunications such as telephony or restricted television in legal criteria. This move has sparked new fiscal and regulatory discussions regarding the matter, as this norma structured Brazil’s Internet ecosystem since the 1990s.
Historical Context and Relevance
In 1995, Brazil’s telecommunications landscape was different. Regulators considered Internet a value-added service, distinguishing it from the rest of telecommunications with a separate tax policy. Internet was not yet fully considered a telecommunications product.
Anatel’s decision aligns with its goal to implement sector-wide normative changes through the Telecommunications Services General Regulation.
Mexico’s Parallel: The Impuesto Especial sobre Producción y Servicios (IEPS)
In Mexico, the IEPS on telecommunications services like fixed and mobile phone lines and pay TV has been at 3% since 2009. This tax was implemented during President Felipe Calderón’s administration to boost revenue amidst the 2008 crisis. Over four right-left administrations, this tax has been contested by the telecommunications industry and academia for not promoting connectivity in Mexico.
Brazil’s Telecommunications Landscape in 2025
Brazil is distinct in telecommunications in 2025, with 87% of its population having Internet access (184 million people) and 75 million households connected. The country has become one of the largest and most lucrative markets for Internet services globally, despite Norma N° 4 focusing more on fixed Internet.
Anatel’s Rationale for Extinction
Anatel argued that there is no technical reason to separate telecommunications services from Internet when the market does not differentiate them, especially in mobile services. They also interpreted Law 14.744/23 to equate Internet and telecommunications services within the context of regulatory simplification, which does not necessarily mean deregulation or favoring specific business niches.
Future of Norma N° 4 and Potential Impact
Anatel stated its intention to continue observing the telecommunications sector, replacing outdated regulations from 1997 that no longer support industry growth and local connectivity. They acknowledged potential disagreements among telecommunications industry stakeholders due to fiscal, regulatory, or legal criteria.
Mozart Tenório Rocha from Anatel mentioned that they would “accept reality” and reverse the Norma N° 4 decision if its effects are detrimental to market well-being and consumers. However, the decision is final unless necessary revisions arise.
Key Questions and Answers
- What is the significance of Anatel’s decision on Norma N° 4? Anatel decided to extinguish the norma that separated Internet from other telecommunications services, aiming for regulatory simplification and recognizing the interconnected nature of modern telecommunications.
- How does this decision relate to Mexico’s IEPS on telecommunications? Mexico’s IEPS on telecom services mirrors Brazil’s historical differentiation of Internet from other telecom offerings. Anatel’s decision could prompt Mexico to reconsider its tax policy on telecommunications, potentially promoting better connectivity.
- What are the potential impacts of this decision in Brazil? The decision may lead to discussions on whether Internet and telecommunications should be classified similarly, potentially affecting domain names and IP addresses. Anatel has expressed its willingness to revisit the decision if necessary.
