New regulation for Internet service providers (ISP) in Colombia

The Colombian government has issued a new regulation that defines more clearly value added telecommunication services. This type of services, in which Internet service providers are included, had been regulated in the early 1990s, but recent technological developments required an urgent updating of this regulation.

The new decree defines value added services as services that use basic, telematic or diffusion services as support, and provide full capacity for information delivery or exchange. For a network to be deemed a value added network, its technical characteristics in terms of information transmission must allow its differentiation from a switched telephone network.

Concessions of value added services will be awarded by the Ministry of Communication for ten years, with possibility of extension for equal period. ISPs may render their services using their own networks, others? networks, or a combination of the same.

With respect to the coverage of the license, it is possible to render services within the national territory or abroad. In the second case, the services are provided between one or more points located in the national territory and one or more points located abroad.

ISPs shall pay the Colombian government an annual percentage for the value added concession, which is equivalent to three percent the net income derived from the services rendered and is independent from the area covered.

ISPs must initiate operations within one year counted as from the date of the resolution that grants the license. Otherwise, their concession shall terminate in advance.

If ISPs fail to comply with the provisions of the decree, the Ministry of Communications may impose economic penalties, and may even order the cessation of the service.

The possibilities in terms of market expansion for ISPs in Colombia are promising. According to the Information Technologies and Communications Research conducted by the National Statistics Department (DANE), for a population of nearly 45 million inhabitants, there are 1,728,593 computers, 727,770 (42%) of which have access to Internet. From the total number of computers in use, 933,454 (54%) are installed in households, in the 13 major cities of Colombia.