New telecom bill "too little, too late" for ISPs
If the government passes the telecommunications draft law this year, internet service providers (ISPs) will not escape the burden of bureaucratic paperwork they are now required to file and technology may have overtaken it anyway, sources said.
The legislation would scrap the licenses required for ISPs, but still oblige them to register with the Communications Ministry, which regulates the telecom sector. Companies offering internet access and data transmission fall under the proposed act since they handle data transmission by telephone.
"It will not change the situation so dramatically, but it will make more clear what the rules are," said Juliusz Donajski, the creative director at ISP company WebLab and former public relations director of the Polish Chamber of Information Technology and Telecommunications.
Parliament is reviewing the draft law to bring the country's telecom industry in line with European Union (EU) regulations. The legislation would set the stage for the sector's full liberalization, mainly by loosening the anti-competitive grip of national telephone monopolist Telekomunikacja Polska (TPSA). Poland has agreed to fully liberalize telecoms by the end of 2002.
When Polish internet companies began to appear in the early 1990s, their services fell under the existing law requiring any company that renders services connected with telecommunications to hold a license. "You have to remember that in our history everything had licenses," Donajski said. "The internet was new and it was not really recognizable how close to telecom operations it was."
Presently ISPs are subject to two different license requirements, said Jaroslaw Grabowski, marketing director of the ISP company Super Media. An ISP needs a license to offer internet access using the infrastructure of a telecommunications company. An ISP needs an alternative license to transmit data or provide services such as voice over internet protocol via its own network, Grabowski said.
But the new draft Telecommunications Act, written by the Communications Ministry and adopted by the Council of Ministers in 1998, would drop license requirements for businesses providing internet access or data transmission via telephone lines. The law would also reverse vague and obsolete regulations established by the Telecommunications Law of 1990, which was amended in 1995.
"I don't think licensing internet access makes sense," said Pawel Rymarz, a partner at the Warsaw office of law firm Weil, Gotshal & Manges, who specializes in telecommunications law. "There is no reason to limit or control (access) because there is nothing to protect. The Telecommunications Law is supposed to protect consumers if you don't have enough space and capacity and to limit competition. All this is unnecessary with the internet."
Currently ISPs must file an application with the ministry, submitting technological information and a fee based on operational area. After a review, the license is usually granted within three to six months, though the process can take longer, Donajski said.
According to a September 1998 Council of Ministers document, the ministry had granted 211 internet services licenses and 44 data transmission licenses by the end of 1997. Super Media's Grabowski estimates there are now 300 companies licensed to offer internet services.
Under the new act, these licenses would remain in effect, and new players would register their services with the Communications Ministry without paying a fee. The ministry would have 28 days to accept or reject an application, said Marek Rusin, an undersecretary of state in the Communications Ministry. The act may be ratified on June 8 and the text published in July or August. The law would then take effect before January 2001, he said.
But since the draft went to Parliament over a year ago, some observers see deputies dragging their feet. "Judging by how slowly Parliament is discussing it it's not the highest (priority) of the government," said Krzysztof Stefanowicz, a partner at the Warsaw office of the law firm Salans, Hertzfeld & Heilbronn, who specializes in telecommunications and information technology (IT) law.
And by the time a new law passes, some sources said, it too will be obsolete. "No one thought about the internet in Poland (when drafting the 1990 law)," said Rymarz, who sees the new legislation's language as failing to address recent technological developments.
Some ISP professionals predicted that the draft will undergo further amendment by parliamentarians before its adoption, and that additional uncertainty surrounds its outcome because of the recent dismissal of Communications Minister Maciej Srebro.
But despite the government's intention to align Polish telecom regulations with those of the EU while also encouraging the internet business here, the proposed law most likely won't entice new entrepreneurs to set up shop, sources said.
"All the important players already hold a license," Grabowski said. "If the (license requirement) is abolished, the only result will be that some small firms will emerge, which will be unable to provide an adequate standard of service."
