ABTA confab mulls crisis for economy

Deregulation could hurt Brazilian broadcasters

RIO DE JANEIRO — Talk of economic crisis and looming deregulation will dominate the annual three-day confab hosted by the Brazilian Pay TV & Telecom Assn. (ABTA), which begins Oct. 1 in Sao Paulo.

Brazil’s economy is slowing, its currency has devalued by 40% since January and the Sept. 11 attacks in the U.S. have raised concerns about a worldwide economic slowdown along with fears about world travel.

Despite these problems, ABTA has more than doubled exhibition space in the Hotel Transamerica Expo Center compared to the 2000 edition, and is expecting attendance to rise to 6,000 from 4,000 last year.

The main issue is the anxiously awaited, partial deregulation of the country’s telecom and pay TV sectors, which begins Jan. 1. The regulations are both an opportunity and a threat to pay TV operators.

The MSOs will be able to diversify into telephony and rent their cable and wireless infrastructure, upping revs. But at the same time, they will face competition from the telecom players.

Field is wide open

Pay TV executives and industry reps are particularly concerned about the regulatory agency Anatel’s recent approval of one measure. “The way it is written, any company will be able to offer pay-per-view and video-on-demand services, including the telephone companies,” said Alvaro Pacheco, an exec of the ABTA.

Participants also will discuss August’s presidential decree to boost Brazil’s film industry, in part via a fund to finance production, distribution and exhibition.

The decree will have a profound impact on pay TV programmers, since networks will have to pay fees for the right to show foreign films and series.

The decree also established a new 11% tax on profits of the local subsidiaries of foreign programmers. The tax comes on top of a contribution programmers already pay, which varies from 15% to 25% according to the country where the operator is based. But a foreign programmer will be exempt from the 11% tax if it invests in co-productions of local films.

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