SPECIALIZED NETWORK AND CIRCUIT SERVICES 1. Concep: Specialized Network and Circuit Services are subsets of Specialized Limited Services. The Specialized Limited service is considered limited insofar as it is used by a person or group of people, and is considered specialized as it is a service provided to third parties. Specialized Network Service consists of a telecommunications service not available to the public , of a type that establishes separate telecommunications networks for a company or a group of people involved in the similar or equivalent activity. Specialized Circuit Service consists of a fixed service, not open to the public destined to provide point to point, or point to multi-point telecommunications via the use of circuits placed at the disposition of users. Therefore, the specialized network service unites various people or groups of people while Specialized Circuit Service links distinct points or a single point to multiple points. The definition of the so-called "group of persons or companies involved in the same specific activity" is not further defined in the regulations relating to this material allowing a broad and unrestricted definition. Both of the services could involve the assignment of radio frequencies, and thus the medium could be fixed (copper wire, fiber optic cable etc.) or by air (Satellite and Microwave) In the situation where radio frequencies are used, a bid proceeding (public competition) must be used to acquire the corresponding rights. 2. Service Rules: Within thirty days of the date of publication of a summary of the respective Authorization Contract in the Diário Official, R$ 9,000.00 (nine thousand Reais) will be required to be paid for each service of the grant of the right to develop Specialized Network and Circuit Services. Requests for a grant for the right to develop services that involve the assignment of radio frequencies may be analyzed by reviewing the rational use of the radio spectrum and the public interest. The amount to be charged for the use of the radio frequencies, the form of payment and the term for the use of radio frequencies are fixed by the Agência Nacional deTelecomunicações - Anatel according to specific regulations. The payment will be in addition to that referred to in the previous paragraph. However, to obtain a grant to develop each of the services not involving the assignment of radio frequencies, the interested party must pay an administrative fee of R$ 9,000.00, without prejudice to the accomplishment of other demands. The authorized party must elaborate a technical plan for its Limited Service telecommunications system, which must be kept in its possession, keeping it up-to-date and making it available to Anatel whenever necessary. The authorized party must assure that its telecommunications stations conform with the pertinent rules and regulations, and that it does not interfere with instructions concerning radio communication stations close to airports, landing zones, the navy's direction-finding stations, installation of stations in indigenous areas and local zoning and building regulations. 3. Limited Service telecommunications stations may only commence operation after specific authorization: Before beginning installation, or changing the characteristics of telecommunications stations, the authorized party must notify Anatel of the project, for information purposes, with at least 30 days prior notice, by summarizing the project on standardized forms, duly completed and signed by a qualified professional accompanied by a "Note of Technical Responsibility" ("ART"), and such other document that may be required under appropriate rules. Within the time period established for beginning commercial service, the authorized party may, for the purpose of tests operate the telecommunications stations experimentally for 30 days, provided this has been communicated to Anatel at least five working days prior to the beginning of the tests. 4. Possibility of Interconnection with the Public Service Telecommunication Network: Public Service concessionaires are prohibited from adopting anti-competitive practices and proceedings that result in discrimination of whatever type in the relationship with Limited Service authorized parties or permission holders. There exists the possibility that an authorized party may proceed with interconnection with the public telecommunications network in the domestic or international sphere. There are specific regulations governing interconnection rights but Anatel has issued telecommunications services regulations whose provisions need to be clarified . In this point the following is allowed: a) A Limited Service authorized party (Network and Specialized Circuit Service) may request interconnection to the public telecommunications network at such places as required, provided it is technically viable in the service provision area. b) Traffic between the public telecommunications network and the Limited Service network must be able to be sent through whatever point between them independently of the points of origin and destination of the communication. Concessionaires of Public Telecommunications Service must provide interconnection at the points requested, or indicate alternatives when technical conditions require them. Traffic that simultaneously originates and terminates with the public telecommunications network in the domestic or international domain may not be sent via the network of Specialized Network and Circuit Services. Concessionaires of Public Telecommunications Services and the Limited Service authorized parties (Specialized Network and Circuit Services) must sign an interconnection contract that must establish all the conditions according to which interconnection between the networks will be governed. Once contractual negotiations between the parties have been initiated the contract must be signed within 60 days , obliging interconnection implementation between the networks to be operationally concluded within 90 days from contract execution. Anatel will function as an Arbitration Court in the case of disagreements. Interconnection between the Limited Service Network and the Public Telecommunications Network, could be implemented, in whole or in part, through agreement between the parties, by whatever entity involved, or by third parties. Interconnection with the international telecommunications network must be effected through the company that is duly authorized by the appropriate authority. The Limited Service authorized party must communicate that a contract has been signed with the company responsible for the international telecommunications network, as well as send information judged relevant to Anatel. 5. Transfer of the Authorization: Transfer of the Authorization is guaranteed, at whatever time, provided the candidate presents the documents specified in the Limited Service Regulations . Authorizations will be forfeited that are transferred, or where corporate control of a party holding an authorization changes, without the prior approval of the appropriate authority. 6. Infringements and Penalties: Penalties for infringements of provisions of Norma 13/97 and complementary rules, that regulate Specialized Network and Circuit Services, Limited Service regulations as well as pertinent legal provisions are: a) Fines b) Suspension c) Annulment d) Forfeiture Authorized parties are civilly and administratively liable for acts practiced in the development of the service by their workers, employees and people that co-operate in its development. Where a penalty is not justified for an infringement, the infringing party may be given a warning, with the warning being considered as an aggravating factor in the application of punishment for subsequent non-compliance with these rules, or other rule in this "Norma", or whatever other rule relative to the service, including pertinent legal provisions. A warning may be considered as an aggravation for a period of one year only from the date of issue. Before deciding about applying penalties, Anatel will notify the authorized party so that it may exercise its right of defense within five days from the date of receipt of the notification. 7. How to Obtain the Licenses? The provision of Specialized Network and Circuit Services, which deals with the exploration of services in the private framework, is granted through an Authorization of public power , and therefore is of unlimited term and may be cancelled only through forfeit, disenfranchisement, resignation or annulment . In the situation where radio frequencies are used, the term for use will be up to twenty years. In order to obtain a grant to develop specialized services, interested parties must present, to Anatel in Brasilia, a request, in addition to documentation relating to legal, technical and economic-financial qualification, and tax compliance (Annex II). The corporate control of the licensee must belong to Brazilians or to a Brazilian-based company that may be controlled by non-Brazilian legal entities or persons. The term for the beginning of commercial development of services may not be greater than 24 months counting from the date of publication of the contract summary in the Diario Oficial. Foreign language documents must be legalized by a notary public in the country of origin, authenticated by the corresponding Brazilian Consulate and translated by a qualified translator . The interested part must present to Anatel the documentation referred to in sub-item 8.3.1. of Norma # 13/97 when assignment of radio-frequencies is involved. The Agência Nacional de Telecomunicações - Anatel will issue a grant, that will be formalized through a signed contract, after the interested entity has met all of the requirements. 8. Bidding Procedures: There are three possibilities in which a bidding process would not be required: a) When a request does not require radio frequencies b) When the available spectrum of radio frequencies is sufficient to meet the needs of all interested parties, or there is no exclusive concession that is not eligible to be extended to whatever other interested party that fulfills the conditions for service provision. c) When exclusivity of service development does not occur. In cases in which bids are not required or are dispensed with, Anatel will solicit interested parties to present documentation concerning legal, technical and economic-financial qualification and tax compliance. In a situation where bids are required, Anatel will announce a bid proceeding through the publication of advice of bid in the Diario Oficial of Brazil, containing an indication of the place and time interested parties may examine and obtain the full text of the RFP, as well as the date and time of presentation of qualification documents and proposals. Annex I Documentation relating to legal competence consists of: a) Articles of Association, statutes and later amendments, duly filed and registered with the competent government office, containing objectives and principal activity as the provision of telecommunications services. b) In the case of a company with shareholders, a list of shareholders with more than 5% of the voting capital, containing the quantity and type of shares; composition of shareholder control, and documents concerning the election of its administrators, duly registered in the competent government office. When dealing with a partnership that designates a board of directors in the same way as a shareholders corporation these demands are also made. Documentation relating to Technical Qualification consists of: a) Registration of the company in the Regional Counsel of Engineering and Architecture - CREA in the place of the company's headquarters under the terms of law 5,194 of December 24th 1966. b) List of technical personnel qualified and available to execute the service, as well as the qualifications of each of the members of the technical team responsible for the work, with at least one professional possessing the Registration of Technical Responsibility. Documents referring to Economic-Financial Qualification consists of: a) Equity value and financial statements for the most recent fiscal year, already presented as required by law, representing a healthy financial situation, with provisional financial statements, or summaries being forbidden. b) Negative pledge concerning bankruptcy or creditors agreement expedited by the clerk of the court located in the place where the company has its headquarters. Documents relating to Tax Compliance consist of: a) Proof of inscription in the General Register of Taxpayers - CGC. b) Proof of inscription in the state or municipal register of contributors, if necessary, from the legal domicile of the company, pertinent to the field of activity and compatible with the object of the contract. c) Proof of compliance with the Federal, state and municipal treasuries of the legal domicile or headquarters of the company, or other equivalent under the law. d) Proof of compliance with Social Security and the Guaranty Fund for Time of Employment ("FGTS") showing a compliant situation for payment of social charges as obliged by law. The company is considered in a healthy financial situation when its financial statements indicate a solvency index equal or superior to 1.2 (one point two). The calculation of the solvency index, for this end, will be effected in agreement with the following formula: IS = (AT) / (PC + ELP) where: IS = Solvency index AT = Total Assets PC = Short-term liabilities ELP = Long term liabilities The interested party must present a document in which it is stated that it is not affiliated to, controlled by or controls an entity authorizing the Specialized Network and Circuit Services in the same area. Annex II Requirements for the Application of Radio Frequencies must include: a) The duly completed standard form "Request for Telecommunications Services" from Anatel. b) The service intended, its type and extent. c)Use and object of the service. d) Area of service provision. e) Technical description, made through appropriate forms of the Ministry of Communications, necessary and sufficient to describe the proposed system, its operation and the radio frequencies or the physical means to be used, as well as the interconnection characteristics with the public telecommunications networks.

volta