Government and Musk announce partnership for program already in operation

Despite the government’s announcement of a partnership with Elon Musk to improve the internet connection in the Amazon region, the billionaire – owner of Tesla and SpaceX – will not be alone. The program has been in existence for four years and is operated by two other companies.

Musk’s latest move comes after he received the green light from Anatel (Agência Nacional de Telecomunicações) in January to sell satellite internet packages across the country. Other competitors – such as Kepler, OneWeb, Swarm and Lightspeed – obtained authorization months later.

The agency even decided to authorize these companies — which operate equipment around the Earth at 570 km from the ground (low altitude) — 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) this Friday (20), in the interior of São Paulo.

At that time, all requests from companies that intended to operate with this satellite technology in the country were still awaiting a decision from Anatel on the subject.

At the time, agency technicians had doubts about the viability of this new market. The concern was that companies would occupy the airspace over the country in a way that would jeopardize the launch of new satellites and jeopardize the reception and sending of signals from the operators’ equipment that already operate more than 35,000 kilometers from the ground.

The signals from the devices at higher altitude could “hit” the new (lower) satellites, which would prevent reception on the ground. Musk’s company alone has 4,800 devices.

The decision in Brazil was faster than in other economies. Europe, for example, preferred to wait for 5G to come into operation before deciding later on the role of companies like Musk’s — which will have operational and commercial advantages over others with the same technology.

These companies will also be able to form 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.

Lawyers for these companies are still unsure whether the government will be able to bid this year – which would be open to all companies – to hire a new partner for the program. Among them, it is commented that the government announced a winner without having done the bidding.

They also assess that there may be restrictions imposed by the electoral calendar for such an agreement, which would throw the announced partnership into the next government.

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

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 forced 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.

For this reason, they felt uncomfortable with the event and the government announcement that they felt obliged to attend.

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 the 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 event.

The telecoms are obliged by the contracts with the Union to take connection following a rule defined by Anatel that gives priority to more populous municipalities.

Another difficulty is the geography of the region. Operators would like the agency to release the way they now take the signal to the Amazon.

By auction rules, they have to install cable networks – a huge difficulty in an almost continental area like the Amazon. They could take it via satellite, but the rules prevent it.