Anti-monopoly Office gives TPSA slap on wrist

"The Anti-monopoly office has ruled that TPSA was using its monopolistic position to block the activities of a local telecommunications company," said Elzbieta Ostrowska, the UAM's general director. "I want this to be treated as a sign that TPSA should not use its position to fight competitors."
Analysts say the fine is important not for the penalty imposed - peanuts for a company that reported pre-tax earnings in 1994 of zl. 1.1 billion ($480 million) - but for the swipe it took at TPSA's reputation and also the opening of a new, independent channel for dispute settlement between operators.
"It's a really good sign," said Lech Zdziech, managing director of ICC Millennium. "The strongest weapon is the announcement itself, and not the money attached to it."
The complaint was filed against TPSA by Lublin Telekom, which is 88% owned by R.P. Telekom, the leading independent operator of local public telephone networks. R.P. Telekom has obtained local operators' licenses in 11 regions, including Kalisz, Pila, Torun and Silesia.
The basis of the claim was an almost three-month delay in connecting Lublin Telekom's network, based in the small suburb of Swidnik, to TPSA's nationwide backbone, despite a previously signed interconnect agreement between the two companies. While the network went technically operational on Oct. 3, 1994, TPSA waited until Dec. 28, 1994, to hook up the two networks.
Aleksander Szwarc, president of Lublin Telekom and co-founder of R.P. Telekom (along with Andrzej Radziminski), said the real impact of the decision is not its immediate effect on Lublin Telekom, but the precedent it sets for dispute settlement.
"It doesn't make me very happy," Szwarc said, commenting on the UAM announcement. "I don't think it has in any way contributed to the Swidnik case - it's strictly after the fact. "But I'm not looking for satisfaction - I'm looking for a tool that would help operators avoid and settle situations like this in the future."
For independent operators, interconnect agreements are crucial to the success of a project. While a company may have the financial and technical resources to build a network in a given region, if it can't connect to subscribers of competing networks, its system is practically worthless.
While negotiating the agreements is a painstaking task the world over, in Poland it has proven doubly difficult. Whereas more than 110 operators' licenses have been issued by the Communications Ministry to date, only seven interconnect agreements have been signed.
To add to the difficulty, the body responsible for regulating the telecom industry and settling disputes is the Communications Ministry, which is also the owner of the state network operator (TPSA), party to all interconnect negotiations due to its monopolistic position in the long-distance network.
That's why it's significant that this dispute was settled by the Anti-monopoly office, independent of either party to a potential dispute.
"That's what we are proposing," Szwarc explained. "That conflicts be settled by the Anti-monopoly Office as long as the ministry continues to be the owner of TPSA."
Lublin Telekom has learned that it may now be investigated by the Anti-monopoly office, as it has now signed on more than three times TPSA's subscribers in Swidnik. TPSA, for its part, is currently under investigation by the High Auditing Chamber on the basis of thousands of complaints that have come in charging TPSA with everything from poor service to intentionally overcharging subscribers. A decision is expected on the claims in January.