High-tech rush reaches legal system
The new year will not only usher in a new century, a few hangovers, and many personal resolutions that will never be fulfilled, but it will also see the new Telecommunications Law (the "Law") come into effect. The Law will govern the most rapidly changing business (the new tech and new, new tech) where innovations and inventions occur so frequently that the Law may turn out to be out-of-date even before it becomes effective. The Law replaces the antiquated Communications Act, which was adopted in 1990 and subjected to a patchwork of amendments since then. The Communications Act will remain effective after Jan. 1 with respect to postal services, but even in this aspect it will soon be replaced by a new act.
The Law encompasses a broad sweep of activities in its definition of "telecommunications." This term includes transmission, reception or transfer of information of any kind (including but not limited to signal, signs, writing, pictures or sounds) via wires, radio or optical waves or other means using electromagnetic energy. The Law distinguishes between two basic sectors of the telecom industry: public telephone networks (including transmission of voice, fax and data via modems) and public networks designed for the transmission and distribution of radio and television programs ("public radio and television networks").
From the perspective of a potential foreign investor, the most important change introduced by the Law is the abolition of most limitations on foreign ownership in telecom service providers. The Communications Act currently limits foreign ownership in public telephone networks to 49% and in public radio and television networks to 33%.
Liberalization with respect to foreign ownership does not mean unlimited access to the Polish telecom market. To the contrary, the basic principles of regulating the telecom industry in Poland set forth in the Law remain similar to those provided for in the Communications Act. Thus, most telecom activities will still require a license.
Moreover, from a practical perspective, opportunities to benefit from the Law may be limited, at least in the near term, because the Law does not allow for the granting of any licenses for the operation of a public telephone network in 2001. Additionally, little room remains for new public telephone network operators using current technology. The communications minister has already announced the tender for UMTS licenses, and all UMTS licenses are to be issued this year. Fixed-line, GSM and DCS licenses have already been granted, and it is not likely that any new tender will be announced anytime soon.
Even if there won't be any new licenses for public telephone networks granted in the near future, the Law enumerates some instances in which a license is not necessary to provide telecom services. In addition to telecom activities for the (Polish) military, intelligence, governmental and (foreign) diplomatic purposes, a license is not needed to operate a public telephone network if all equipment is located exclusively within one commune (gmina). Also, providing fixed-line telephone services using telephone numbering made available contractually by a public telephone network operator does not require a license. As to the transmission of radio and television programs, the operation of a public radio and television network within one housing estate is exempt from licensing.
As a corollary to telecom services, the Law also places limits on the use of radio equipment. In general, a permit is needed to use radio equipment, but the Law also lists a number of exemptions to this rule. Most importantly, the requirements concerning these permits (and the licenses discussed earlier) may be liberalized by the communications minister through the issuance of an ordinance, without the necessity of amending the Law.
The Law also clarifies the competence of the regulatory agencies that will control the telecom industry. Under the Communications Act, while the most important licenses and permits are granted by the communications minister, the State Radio Communication Agency grants permits for radio telecom services and regulates radio telecom activities, and the State Telecommunication and Post Inspectorate regulates other telecom activities. These regulatory agencies will be merged before Jan. 1, to form the Telecommunications Control Office. The president of the Telecommunications Control Office will have the authority to grant all licenses and permits under the Law.
As the Law introduces massive amendments to the regulations on rendering telecom services, it also contains many transitional provisions. Among other things, the Law confirms the special legal status of Telekomunikacja Polska, which will have exclusivity on rendering international telephone services through Dec. 31, 2002. More importantly for existing telecom service providers, licenses and permits granted under the Communications Act will become the licenses under the Law.
As a final note, although most of the provisions of the Law will become effective on Jan. 1, some of them are already in effect to allow the practical application of the Law starting from Jan. 1, such as the establishment of the Telecommunications Control Office. Provisions concerning granting licenses for rendering services through a public telephone network will, however, come into force only as of Jan. 1, 2002.
This article was prepared by Lejb Fogelman, the managing partner of Hunton & Williams Poland, with the assistance of Maciek Zalewski, an associate attorney.
