National laws regarding property transactions can affect the effectiveness of the telecommunications legislation in several ways. Property taxes, for instance, can affect investment in the sector. In addition to taxes, property laws with regard to ownership rights and government confiscation are other factors that investors usually consider when deciding whether to invest in a particular country, and affect the level of public confidence in the stability of the sector. Some countries, such as Jordan, have “investor friendly” property laws. Foreign entities are allowed to own or lease property in Jordan for investment or personal use, provided that their home countries permit reciprocal rights to Jordanians. Investment properties have to be developed within five years from the date of approval, and foreign companies which hold a majority share in a Jordanian company or wholly owned subsidiaries of foreign companies, are automatically given national treatment with respect to ownership of land where the company’s business allows for ownership of land or real estate.
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Property laws also affect the actual application of the rights granted to licensees under the telecommunications legislation with regard to their access to critical networks and infrastructure. The ability of operators to offer telecommunications services often requires the building of infrastructure, such as installation of cable or optical fiber lines, poles, ducts, and construction of towers, which in turn involves the need to access public or private property. Telecommunications operators’ access to rights of way is often reflected in telecommunications legislation, which gives the government the right to appropriate property for such use. Where such appropriation involves private ownership, the landowner is usually compensated for the use of property. However, access to property as provided under the telecommunications law can become complicated in practice, depending on the property laws existing in the particular country. While the federal government has control over federal property, states and municipalities often have jurisdiction over property under their administration.
For example, some countries, such as Brazil, have property laws that are applied at the federal, the state and the municipal level. Rights of way and access of telecommunications operators to property in Brazil are governed in part by the federal Civil Code,2 the Telecommunications Law,3 and the municipal laws of each state. Articles 21 and 22 of the Constitution establish the exclusive authority of the federal government to legislate and exploit telecommunications services in Brazil, which is defined as a public service. The power of the government to regulate telecommunications has been delegated to the regulatory agency, Anatel, which regulates the sector under the provisions of the Telecommunications Law. Article 74 of the Telecommunications Law specifically states that the telecommunications licensee is not exempt from complying with engineering regulations and municipal, state and federal laws regarding construction and cable and equipment installation in public areas. Articles 20 and 30 of the Constitution provide that states and municipalities may be authorized to legislate upon specific matters related to the provision of telecommunications services, such as the rights of municipalities to legislate on urban planning and environmental matters and to charge telecommunications operators for the use and occupation of the land under their jurisdiction. Under Title II, Article 1286 of the Civil Code, the owner of a real property must allow public service providers to install cables, ducts and conduits for the provision of public services, pursuant to the payment of a proper indemnity. Article 1369 of the Civil Code states that property owners may confer to any third party the right to build on its land by means of a public deed, and under Article 1371, the tenant is responsible for payment of fees and taxes applicable to the property.
ENDNOTES
1 Jordan Economic Boycott Law no. 11 of 1995. See also U.S. Department of State, 2005 Investment Climate Statement – Jordan, available at http://www.state.gov/e/eb/ifd/2005/42064.htm.
2 Brazil Civil Law, as amended, (Código Civil Brasileiro), Law no. 10.406, 10 January 2002.
3 General Telecommunications Law, Law No. 9.472 of 16 July 1997, available at http://www.planalto.gov.br/ccivil_03/Leis/L9472.htm.