The difference from the scenario in the question is that I declared as int the variable TYPE in the class, as opposed to the code in the question, which reads "type = 1", not "int type = 1".
My point here is to ask if, in the question, could it be that the compiler was unhappy about the missing type "int" declaration in "type = 1"; as opposed to what I understood to be stated in the explanation - "...you cannot assign any value to 'type' outside the interface definition."
Sorry if confusing, that variable name in the question did not help to query a point about typing..

The compiler-happy code is below, with the variable reassignment. Thanks for any clarification,
package sandbox;
interface I1 {
int TYPE = 1;
void m1();
}
class TestClass implements I1 {
int TYPE = 3; // >>>>>>>>>> this compiles fine!!
public void m1() {
System.out.println(TYPE);
}
}
public class SandBox {
public static void main(String[] args) {
TestClass tc = new TestClass();
tc.m1();
} // fim main
} // fim SandBox