Dow Jones Newswires' Alastair Stewart reports that Fernando Xavier Ferreira, head of Brazilian telco Telesp, insists that Brazilian fixed-line telephone companies "must be allowed to operate WiMax Internet services, as only these companies have the infrastructure to offer this low-cost Internet option to Brazil's vast rural interior."

Now that fixed-line operators have invested huge sums to extend telecommunications services throughout Brazil, Ferreira says, it's unfair for regulators to try to exclude them from the country's upcoming auction of WiMax spectrum. "We are the only ones likely to expand the service," he says. "A new entrant would just cover the cities."

"Telecoms regulator Anatel wants to stop fixed-line operators from bidding as it sees WiMax as a good option for new competitors, since it requires less infrastructure investment than landline cable or DSL networks," Stewart writes. "However, fixed-line operators have managed to defeat Anatel's attempts to preclude their participation in the courts. A Brasilia judge rejected the latest Anatel appeal on Sept. 27."

Ferreira says fixed-line companies need WiMax to offer triple play services. "The WiMax contracts would lead to major investment," he says. "You can't shackle convergence."