Step forward

   The government last week accepted a schedule for liberalizing Poland's telecom market, finally giving investors and competitors assurance that the days of a protected Telekomunikacja Polska (TPSA) are coming to an end. The government said that by Jan. 1, 2003, the market will be fully opened, allowing competitors to enter unhindered. The government also intends to offer at least three more licenses to provide mobile communications. One hopes that those three licenses do not again go to the existing three competitors, Polska Telefonia Cyfrowa (Era GSM), Polkomtel (Plus GSM) and TPSA's Centertel (Idea).

   Poland's economy has been hamstrung throughout most of its transition by inadequate telecom services. Hopefully, the government's decisive proclamation will be followed with concrete action. Among the issues that need to be cleared up is exactly how much TPSA should be allowed to charge competitors for connecting to its network, an issue of particular importance for every independent operator from Netia to El-Net. By not regulating how much TPSA can charge, the government virtually allows the telephone giant to cripple independent providers' ability to offer low rates. In no way is that fair competition.

   At the same time, the Communications Ministry should not squash the development of internet-based services, such as international calls over the net. Era has already tried this approach and gone to war with the ministry over it. Technology has outpaced Poland's archaic regulations and the ministry should be willing to bow to that.

   Poland has taken decisive steps in the last year to unchain its telecom market, such as choosing winners for three long-distance domestic telephone licenses and awarding El-Net the right to offer local telephone service in Warsaw. While positive, these moves are only the beginning of what needs to be done. The Communications Ministry needs to keep awarding more local telephone licenses for Warsaw, despite El-Net's objection that it was promised exclusivity to compete with TPSA. More mobile operators need to be brought in, and long-distance services of all types need to be freed.

   In general, the government should follow a policy that takes the gloves off of all telecom competitors – a move that will hopefully lower rates and expand and improve service. But in doing so, the government should also carefully look at regulatory issues – such as interconnection fees – to ensure that the competition goes beyond surface rhetoric.

   If it follows that path, then hopefully Poland's sorry telecommunications infrastructure will improve. Whatever it takes to get the cable laid and satellites launched to finally connect Poland to the 21st century must happen. Failing to do so will hamper more than telecom's development – it will slow the pace of all economic improvements.