Regulator receives mixed reviews
By Aleksander Nowacki
Witold Graboś is a charming man and an easy conversationalist with impeccable manners. Clearly, these are qualities that have been useful in his experience handling potentially explosive matters, namely overseeing the liberalization of two of the country's most important and sensitive sectors of the national economy - television and telecommunications.
But Graboś, who has been president of the Office of Telecommunications and Post Regulation (URTiP) for a year, can hardly be said to possess a Midas touch. Wherever he goes, it seems trouble is just around the corner. For five years, he was a member of the controversial National Radio and Television Council (KRRiT), which is now under close scrutiny by the Sejm commission investigating the Rywin-gate bribery scandal.
But now as head of the URTiP, Graboś oversees another agency that has been beset by criticism from those who believe that the telecom regulator's failure to ensure a level playing field for all the players on the telecommunications market calls its very existence into question. The URTiP was created a year ago, combining the former Office of Telecommunications Regulation (URT) and oversight of the postal sector under one roof.
Andrzej Szablewski, a telecommunications professor at the Polish Academy of Sciences, is one such critic. He says that the record of the regulator's activities to date does not justify its existence and that its watchdog role could be done more effectively by the Office for Competition and Consumer Protection.
"It seems that the recent institutional changes, that is the creation of URTiP, have done little to encourage the regulator to efficiently promote competition on the market," Szablewski said.
Graboś's first decision upon taking office in March 2002 was to drop two hefty fines for anticompetitive practices meted out to TPSA by his predecessor. He argued that the fines would not stand up in court, but not all market watchers were convinced. Some say that the decision to drop them encouraged TPSA to continue its efforts to block the further liberalization of the telecom market through anticompetitive practices.
"It is a sensitive and political issue," said one industry insider, who asked not to be identified. "The (URTiP) was created especially so that Graboś, President Kwaśniewski's protégé, would not be out of work. There is no point in looking for trouble."
If people listen to what TPSA's competitors have to say about Graboś, however, they might believe that his personal charm works miracles indeed.
"We are extremely happy about the work he has done," said Lech Młodawski, vice president of Telefonia Dialog, a fixed-line operator based in Wrocław. "From our point of view, his interventions have been both effective and beneficial." Młodawski went on to cite the case of his company's fruitless quest for increased capacity on its interconnections with TPSA's network. It was only Graboś's intervention that finally led to an agreement between the operators.
Executives at other telecoms companies, however, don't share Młodawski's enthusiasm for the regulator.
"It is not in anybody's interest to publicly criticize the dominant operator (TPSA) or the regulator," said a senior manager at an independent fixed-line operator. "We are all dependent on their goodwill; such is the difference of potential between TPSA and even the largest of its competitors."
Graboś is aware of the criticism leveled against him.
"I am sometimes criticized for not doing enough," he said. "I have only imposed one fine on TPSA. I would love to impose 40 or 50 such fines, but the small operators are afraid to bring complaints against TPSA. I encourage them to do so, but there has been little response on their parts."
Graboś sees himself as the champion of small telecoms, pointing out that he has issued 49 permits for new fixed-line operators. But this argument seems to fall on deaf ears with market analysts.
"Is there any sense in supporting all these small companies?" said Włodzimierz Giller, a telecoms analyst at Erste Securities Polska. "Nearly 93% of the market is controlled by one operator. Is that competition?"
Giller added that the URTiP is merely affecting the pose of a champion of competition, while allowing TPSA to block any measures that could present a genuine threat to its quasi-monopolistic position.
Apart from eulogies in Graboś's honor, some independent operators also agree that the regulator could do more. Dialog's Młodawski said that his company had hoped by now to operate on an open call-by-call basis for domestic long-distance and international long-distance services without having its clients sign a contract and use a separate prefix when dialing, but it has not happened. The need to sign deals with each individual customer is therefore a major obstacle to growth.
Mołdawski also mentioned the "common path" principle by which each operator is obliged to lease its underground infrastructure to the competition. Independent operators could cut their investment outlays in half, while reducing the time it takes them to connect new customers by 70%, if TPSA adhered to this regulation and opened its network to them.
"The regulator is trying to address these issues," Młodawski said, "but there is only so much you can do in the face of TPSA's lobbying."
The question of lobbying is one that comes up in connection with the work on a new amendment to the telecommunications act, which seeks to eliminate some of the loopholes that TPSA regularly exploits at the expense of other operators.
"You have to ask yourself why is it taking so long to get through the Sejm," Graboś said, but provided the answer himself: "There has to be a limit to lobbying. I even said it at a Sejm commission session and was chastised by Józef Oleksy (president of the Sejm's European Integration Commission)."
Overall, Graboś gives himself fairly high marks for the job he's done for the past year.
"For the first time you can say that the regulator knows its direction, knows where it wants to go," he said.
Some impartial observers evaluate Grabós's yearlong term with a more balanced eye.
"I wonder what he means," said Bob Creamer, a telecoms analyst at Raiffeisen Bank Polska. "I have not come across any clear statement from the regulator. Liberalization is not going smoothly, and it is largely due to the incompetence of the authorities."
