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VOD regulation introduced in Congress


Raphael Moraes Paciello; Lisa Worcman; Beatriz Landi Laterza Figueiredo

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On October 18, 2017 a bill of law intended to regulate video on demand business was introduced in Congress by  the congressman Paulo Teixeira (PT). The matter has been debated inside the National Films Agency (ANCINE) and the Minister of Culture for a long time and was subject to a public consultation in the beginning of 2017.
As drafted, the bill of law applies to “Audiovisual Communication on Demand” (CAvD) activities, defined as the activities aimed at offering audiovisual content for single acquisitions, to be retained (download) or accessed (streaming) by users, on the users’ demand and at the time they wish, using telecommunication resources as support.
Under the bill of law, CAvD providers are (a) programmers of channels available for individual acquisition in the pay-TV services; (b) internet application providers that offer audiovisual content on demand; or (c) companies that provide audiovisual content on demand to a select audience on top of any telecommunication service; in any case (a, b or c), whenever the content is offered to a Brazilian resident audience, regardless of the location of the CAvD provider’s headquarters or infra-structure.
The bill of law expressly excludes from the concept of CAvD providers any individuals and any internet application providers that provide content on a free-of-charge basis, including social medias and social networks, and also excludes from its scope the offering of journalistic content, services that have audiovisual content ancillary to literature or musical content, and public services.
According to the bill of law, ANCINE would have authority to regulate and supervise CAvD activities and all CAvD providers would be subject to prior mandatory registration with that Agency, as a condition for running their business. Companies that currently provide CAvD services and are not registered would have 180 days to conform.
The bill of law also sets forth several regulatory obligations to CAvD providers, such as obligation to disclose business information to ANCINE (e.g. revenues  and content offering and consumption data),  minimum quotas of national content and national independent content, obligation to give prominent position to Brazilian content in their catalogues, obligation to inform parental ratings, among others.
Finally, the bill  of law amends the Provisional Measure 2,228-1 to impose the payment of the Contribution for the Development of the National Cinematographic Industry (CONDECINE) on CAvD providers with revenues higher than BRL 3.6 million.
The bill is currently at a very preliminary stage and has still to be reviewed and voted by the House of Representatives and the Senate, which are the two houses of the Brazilian Congress and, afterwards, needs to be sanctioned by the Brazilian President. During the applicable legislative procedure, amendments to the original text may be proposed.  Given the current political instability in Brazil, it is not possible to estimate a processing time or the likelihood of the bill being passed.

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