Supported by Bolsonaro, Musk’s company violates rules that protect consumers in the country

Starlink, a company owned by billionaire Elon Musk, obtained approval from Anatel (National Telecommunications Agency) to operate in Brazil nine months ago and is already breaking the rules defined for the sale of satellite internet packages.

An admirer of Musk, President Jair Bolsonaro (PL), a candidate for reelection, even announced in May that the company will connect schools and help monitor the Amazon, even before a tender for services is opened.

Although no partnership between Musk and the government has yet been formalized, the company already operates in the country, selling satellite internet connections to private customers. Hiring is through the Starlink website.

Starlink’s business practices violate the RGC (General Regulation of Consumer Rights in Telecommunications Services) and the CDC (Consumer Defense Code), which serve as a guide for the performance of companies in the field.

It is up to Anatel to investigate and decide whether to punish once provoked. However, there are no ongoing processes in the case yet.

According to advisors at Palácio do Planalto, this Friday (22), the Minister of Communications, Fábio Faria, announced the launch of a Starlink signal reception base in Manaus (AM) during an event that should be attended by the President Jair Bolsonaro, on campaign.

The government advocates that Musk’s company connect schools in hard-to-reach places in the Amazon and help monitor the forest to contain deforestation, which, under his management, has reached high levels.

Those who choose Starlink today will not know, for example, who will provide the service, because the company’s documents do not contain an address or corporate name, a basic requirement of the agency.

The company informs that it may suspend the service for reasons other than the lack of payment of invoices by the consumer, which hurts the RGC.

It also says that it will charge R$ 2,000 for the reception equipment to be installed in the client’s house.

In the market, in general, they are loaned and exchanged, at no extra cost to the customer, when there is a technological update.

Starlink informs that, in such situations, the customer will have to spend again on the purchase of another device.

While the company does state the monthly fee, Starlink “reserves the right to adjust the price charged for other factors.”

In other words, unlike other operators, which itemize costs in the account as required by the regulator, Elon Musk’s company does not make it clear which factors may influence the price adjustment, contrary to the Consumer Defense Code and Anatel’s regulations.

There is also provision for the collection of deposits and amounts before the activation of services or delivery of equipment.

There is no list of rights and duties of the subscriber in the contract. The Preliminary Order and Service Provision Agreement does not, strictly speaking, list the cases of suspension of services at the request of the subscriber.

Finally, item 14 of the contract defines that arbitration — an expensive process aimed at disputes between billionaire companies — will be the mechanism for resolving conflicts with users, ignoring the Consumer Defense Code.

Technicians in the sector consider that the imposition of a dispute resolution mechanism chosen exclusively by the provider, as well as the creation of rites that make it difficult for consumers to complain, are contrary to the rules established by law and applicable regulations.

THE Sheet was unable to contact Starlink, which does not publish its address or business telephone numbers.

When consulted, Vitor Urner, who signed the documents for opening Starlink in Brazil, said that he is not legally responsible for the company and refused to give the contact details of its executives and lawyers for violating internal rules.

Partnership for a program that already exists

In May, during a meeting with Elon Musk and entrepreneurs in the interior of São Paulo, President Jair Bolsonaro announced a partnership with the billionaire for services in schools in the Amazon.

However, the program has been in existence for four years and is in charge of two other companies, Telebras and Viasat, which operate the Brazilian satellite.

At the time, Musk, who also owns Tesla and SpaceX, posted on social media that he was “super excited to be in Brazil for the launch of Starlink for 19,000 disconnected schools in rural areas and environmental monitoring of the Amazon.”

At the time, the company did not have bases for receiving satellite signals in the Amazon. Despite the government’s preference for Musk, there are other competitors operating in the country, such as Kepler, OneWeb, Swarm and Lightspeed.

Anatel’s consent for these companies to operate on Brazilian soil occurred after an embarrassment caused by the Minister of Communications, Fábio Faria.

At the end of last year, Faria visited Musk in Europe and posted a video in which he announced a partnership with the businessman – released again at the event with President Jair Bolsonaro (PL) in May, in the interior of São Paulo.

Other companies in the sector will also be able to establish partnerships with the government within Wifi Brasil, the connectivity program in remote areas within which Musk intends to provide the service. The focus is schools in the North and Northeast, mainly in rural areas. However, they still have doubts whether there will be such a possibility – for both them and Musk.

Financially suffocated, Telebras is unable to advance in schools

The Wifi Brasil program has existed in the country since 2018 and has already cost more than BRL 700 million. Launched by the then minister Gilberto Kassab, one of the chiefs of the PSD de Faria, it has its own satellite operated by Viasat, owned by billionaire Mark Dankberg, and by Telebras.

The project’s continuity, however, is threatened by government cuts in the area. With the electoral campaign, which led the government to spend R$ 42 billion on Auxílio Brasil, the resources for Telebras dried up.

The state-owned company’s budget for this year was halved, from R$ 800 million to R$ 400 million. A supplement of R$ 150 million will be necessary until December to close the accounts.

With no money, the state-owned company has not paid Viasat for three months, a debt that already totals R$ 12 million, according to company technicians.

The objective of the program is precisely to bring connection to remote areas. For this, Viasat and Telebras exploit 30% of the capacity of the Brazilian satellite SGDC-1. The remaining 70% stays with the Armed Forces.

This, however, does not prevent other companies that have satellites from operating within the same program.

The connection in the Amazon was also a concern of the last cellular telephony auctions (4G and 5G). The operators that won the competition were obliged to bring connections to the Amazon with ever-increasing capacity and connection speed.

In the last auction (5G), held in November last year, the government managed to guarantee R$ 1 billion for the installation of cables along the Amazon River that will allow access in the region. The project was named Connected Amazon.

Behind the scenes, the telecoms say that taking the connection to these areas with strict coverage contracts imposed by radiofrequency auctions (avenues in the air where they carry their signals) give the wrong signal to consumers.

For them, the image is that telecoms do not fulfill their role and that Musk arrives as the “savior of the homeland”, in the words of one of the executives who attended the May event, with Bolsonaro.