do business in the Dominican Republic - Pellerano & Herrera

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DOING BUSINESS INTHE DOMINICAN REPUBLICfixed by the Superintendence of Electricity based on the long-term cost of thetransmission system.Before commencing operations, the Superintendence of Electricity shall verifythat the installations comply with the respective conditions of quality, safety andpreservation of the environment.Law 125-01 establishes the necessary safeguards to ensure non-discrimination,continuity and lack of arbitrariness in the provision of the service for the benefitof consumers.d) Pricing. The end price of electricity to consumers shall be determined freelyby the market, provided there are conditions of free competition in the market,with the exemption of public service consumers.It should be noted here that average electricity prices raised in the year 2002,going from RD$1.88/KWH in 2001 to RD$2.04/KWH in 2002, as a result of higherinternational oil prices and oil products used in generating units, as well as theelimination of Government subsidy on energy consumption.The Superintendence of Electricity shall fix the rates applicable to public serviceconsumers. Maximum power supply to public service consumers has been set at2.0 megawatts for the year 2002, and shall be thereafter gradually reduced eachyear (1.4 Mw for 2003, 0.8 for 2004 and 0.2 for 2004).e) Sanctions. Law 125-01 sets forth administrative and criminal sanctions for violationsrelated to electricity services.The destruction of electricity installations ornetworks, as well as the misappropriation of electric energy, are criminaloffences.Infringement of electric companies to the provisions of the law, in particularwithholding information to the authorities,monopoly practices or failure to complywith conditions of quality, safety, continuity and environment protection, maybe subject to the payment of a fine of up to 10,000 times national minimumwages.7TELECOMMU-NICATIONS72OVERVIEW AND PERSPECTIVESDuring the last years the telecommunications sector has been one of the mostdynamic of the national economy, mainly as a result of the positive effects of thecompetitive conditions currently prevailing in the market.After the year 2001,the sector experienced a record growth of 24.2%,mainly dueto the increase in cellular phones, which raised their market participation from32.8% in 2000 to 55.9%, chiefly as a result of the introduction of many innovativeservices and promotional offers caused by the increase of competition in themarket. Telephone lines increased 6.8%, wireless local loop 41.10%, cellularphones 80% and Internet accounts 21.5%.In the year 2002, telecommunications showed a 17.4% increase, with a 17.5%
Pellerano & HerreraAttorneys at lawincrease in the volume of installed telephones. The mobile service continuedshowing more dynamism than residential and business lines.During the year 2003 it shows a 15.2% growth due to the increase of mobilephone connections.The sector kept this level of growth, reaching in the year 2004 a 18.3% rate,which makes it the most dynamic of the Dominican economy. In 2005,Verizonhad a total of 1,234,016 lines (468,664 mobile, 754,360 wire lines and 10,992public phones); Tricom had a total of 464,024 lines (161,411 local wire and302,613 mobile), Centennial Dominicana had 68,000 mobile lines; FranceTelecom Dominicana has 215,000 users; Turitel had 768 lines; and Economitelwas in process of implementation.As a result of the strong growth of this sector, it was necessary to obtain a newarea code for the Dominican Republic.In addition to the 809 area code,the countryhas also the 829 as a second area code.The implementation process and therequired adjustments have already started.LEGAL FRAMEWORK: LAW 153-98General Telecommunications LawOn 27 May 1998 the General Law on Telecommunications 153-98 was passed,which derogated Law 118 of 1966 on Telecommunications. This legislation,which seeks to modernize the measures for the regulation of the sector andadapt them to the parameters set forth in the field by international organizationssuch as the World Trade Organization (WTO) and the InternationalTelecommunications Union (ITU), has contributed to the expansion that this sectorhas been experiencing since the 80´s.Law 153-98 regulates the installation, maintenance and operation of telecommunicationnetworks, as well as the provision of services and equipment related totelecommunications with the following aims:To ensure that the whole population has access to telecommunications services.To promote free competition in the telecommunications market.To promote the development of the sector with the view of increasing theeconomic growth of the country.To adapt national laws to the international agreements signed in the field bythe country.To regulate the radio electrical spectrum.To ensure that the regulatory functions of the State are carried out effectivelyand impartially.73a) The Dominican Telecommunications Institute (INDOTEL). Law 153-98 abolishedthe General Telecommunications Office,providing that the regulatory bodyof the sector will be the Dominican Telecommunications Institute (INDOTEL).ItsBoard of Directors has five members appointed by the Executive Power: a presidentwith rank of Minister of State, an Executive Director, a representative of the
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