Era given deadline to turn off calling service
The Communications Ministry last week said that it would take action if cellular provider Polska Telefonia Cyfrowa (Era GSM) did not stop offering international calls over the internet by Feb. 8.
Last week, the National Telecommunications and Postal Inspection Office, an arm of the Communications Ministry, sent a letter to Era GSM asking that the cellular provider shut down its international calling service, which it began providing via the internet in early January. The office also asked Era to respond to its request by Feb. 7.
On Friday, the ministry said that it would decide this Tuesday what to do if Era does not turn the service off.
Era last week was still pondering how to respond to the Communication Ministry's official request that the cellular company stop providing long-distance telephone service over the internet.
"Our lawyers have still not finished analyzing the letter," Bogdan Markiewicz, deputy press spokesman for Era, said last week. He said the company planned to continue offering the service, however, until its lawyers drafted an official opinion.
The internet service enables Era GSM to provide international service at substantially lower rates up to 50% less than what state carrier Telekomunikacja Polska (TPSA) charges, Markiewicz said. While the amount of discount depends on what type of plan individuals choose, the service is already attracting subscribers, Markiewicz said.
Era has about 1.8 million cellular subscribers, but Markiewicz would not say how many of those are using the internet service. But "the service has found loyal users," he said.
Era's success has been at the expense of the Communications Ministry, which is trying to protect the monopoly TPSA has on international calls until the end of 2001. The Communications Ministry has threatened to sue Era over the issue if it does not stop the service immediately.
The government has also accused Era of violating the guidelines of its internet license, which it holds through internet company Zephyr. However, the Communications Ministry did not include that complaint in its letter.
The ministry is in part getting up in arms over the issue because TPSA's privatization is not yet complete. The government is scheduled to sell a 25-35% stake in the telephone monopolist this year, and stripping TPSA of its lock on international calls would make the company much less attractive, observers said.
"It is one of the situations where the law cannot catch up with reality," said Marek Rosinski, head of the technology group with law firm Cameron McKenna.
They said the government is being somewhat unrealistic because existing global trade treaties that Poland has signed allow for international calls over the internet. Specifically those treaties allow for data information which is basically how voice calls over the internet are transmitted to move unhindered.
Mieczyslaw Nogaj, director of the tax department at PricewaterhouseCoopers, said that the government must respect those international treaties, specifically the GATT agreement, which came into effect Jan. 1, 1995.
"Poland does not restrict packet-data switch servers," Nogaj said.
To keep peace with the Communications Ministry, though, Era may have to budge on the issue, Markiewicz said. "It is possible that on Monday we will stop offering voice over (the internet) and at the same time we will choose a legal way to prove our position in this affair," Markiewicz said.
If the matter does end up in court, Markiewicz said he was sure Era would win the case. He pointed to similar cases in the Czech Republic and Hungary, where the independent telecom company was allowed to continue offering voice services over the internet.
"In Hungary such a service is offered and recognized as legal," Markiewicz said.
Several providers in the Czech Republic, both internet and cellular, are also planning to offer long distance and even local telephony services using data transmission through the internet.
The concept of voice over the internet is not new in the West and is already being viewed by some as full telephone service, although the quality is somewhat inferior.
"In the EU and the United States the argument is whether some providers should pay an additional charge, while in Poland they are talking about whether they can do it all," Cameron McKenna's Rosinski said.
Era is not the only company in Poland interested in using the internet for telephone calls. Internet providers such as SM-Media are already offering such services. And independent telephone company Netia, which in a consortium with several other companies won a tender for domestic long-distance service, has also said it is interested in using voice over the internet to expand its reach.
Rosinski admitted that the trend toward the internet for telephony can be painful for classical telephone companies, which invested a great deal of money to lay down cable. But he said that many of these companies are also trying to use the technology in their services.
"Most of the companies see this trend and they're adapting themselves," he said.
