Could Starlink lose its Brazil license amid the X imbroglio?

The possibility of Starlink having its license revoked in Brazil for failing to comply with court orders and having to cease operations is remote, for now at least, according to sources consulted by BNamericas.

However, the situation will depend on how the case develops and the consequences of recent events.

Following the ban of X, satellite provider Starlink initially announced that it would not stop providing access to the social network in the country. On Tuesday, however, the company said on X that it would comply with the court order and block access. Both Starlink and X are controlled by Elon Musk.

Telecoms regulator Anatel is assessing whether X remains accessible via the satellite service before starting administrative procedures aimed at the company. 

Measures could range from notifications, fines and, ultimately, the revocation of the company's license – an extreme action Anatel has rarely resorted to.

What is more, Starlink might be too big and too important.

“Unlike X, there is an issue essentiality related to the satellite service offered by the company that can be taken into consideration in the outcome of the case,” Alexander Coelho, a lawyer specialized in digital law and data protection, told BNamericas.

According to data from Anatel, Starlink operated almost 225,000 accesses in July. Since its launch, the company has quickly become the leader in the country’s satellite broadband segment.

For now, Starlink remains the only provider in the country operating low-orbit satellites, which represent the only means of connectivity in many parts.

Starlink also provides connections for the army, federal oil firm Petrobras and local banks, among other companies.

Coelho, who is also member of the privacy, data protection and AI commission of the Brazilian bar association (OAB), said that the ban ordered by judge Alexandre de Moraes, later backed by other supreme court justices, was excessive, especially regarding the application of fines for users who try to access X via virtual private networks (VPNs).

The lawyer also criticized the freezing of Starlink accounts ordered by De Moraes to pay for outstanding fines of X. 

According to Coelho, these are different companies, of different natures, with different investors and shareholders.

He added that De Moraes’ interpretation of the case is unprecedented in the country and could set worrying precedents for other cases involving companies with the same controlling shareholder, and even affect the business environment in the country.

INTEGRATORS

Starlink's dishes are sold in the country, as well as in other markets in Latin America, indirectly via integrators.

These include groups such as Telefónica and Sencinet, but also smaller companies in small locations.

A source from one of these companies told BNamericas on condition of anonymity that he is concerned about a possible interruption of Starlink's services.

According to the executive, Starlink's solutions have boosted the company's sales in the country.

"We do not believe that the company's license will be revoked. In any case, it is a situation that brings some concerns to us."

Anatel's president Carlos Baigorri said that an administrative procedure will be opened to investigate Starlink's failure to comply with a court decision, with room for full defense and according to the procedures specific to such cases.

“It follows the law of administrative proceedings. Possible sanctions are those provided for in the general telecommunications law, starting with a warning, a fine and then the cancellation of the license,” Baigorri told broadcaster Globonews.

Contacted by BNamericas, Anatel said it is still working on an official position on the Starlink case.

HACKER ATTACKS

The agency also saw a rise in hacker attacks following X's ban in Brazil. 

Its own systems have been reportedly targeted, as well as those of the supreme court and the federal police.

"Anatel clarifies that, as a highly relevant public organization, it is a frequent target of cyberattacks, especially in circumstances involving sensitive issues," the agency said in a statement.

Following the court's decision to block X, the agency observed an expected increase in these attacks, which "caused momentary instability in its systems and networks."

In response, Anatel's IT team acted continuously to mitigate the impacts and ensure the security of operations. The systems were promptly restored, and additional measures were adopted to strengthen the network infrastructure, ensuring the continuity of services provided to society, said Anatel.

The regulator said it continues to monitor the situation and reaffirmed its commitment to cybersecurity and data protection, maintaining best practices to safeguard its operations and customer service.