Brazilian Government Faces Legal Action Over Regulator Sacking

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2004-17-Jan

The recently elected Brazilian government has come under fire from opposition parties following its decision to oust the president of the telecoms regulator Anatel.

The Brazilian Social Democratic Party (PSDB) has launched legal action against the government after it was revealed that the head of Anatel, Luiz Guilherme Schymura de Oliveira, had been forced to leave his post.

He has now been replaced with Pedro Jaime Ziller de Araujo who has close ties with the Communications Minister, Miro Teixeira.

The PSDB believes that Schymura was sacked because of his opposition to government proposals during the annual round of telecoms tariff setting last year.

The opposition party has already lodged injunctions against the government over its radical plans for restructuring the power generation industry.

In both cases the PSDB alleges that government influence will be significantly increased at the expense of independent regulation.

Meanwhile, investors are waiting to see to what extent the new Anatel President will use his position to ensure that the telecoms sector follows the government line on low inflation and reducing the cost of essential services for Brazil’s poor.

It is possible that he may veto any large increases in fixed line telephone charges when they come up for annual review later this year.

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