Telecom law to be signed this week
As members of Parliament bask in the sunshine during their annual month-long summer recess, the new national telecommunications legislation that they mulled over for more than a year will likely be signed into law by President Aleksander Kwasniewski in the next few days, an adviser to Parliament said last week.
Piotr Rutkowski, the managing partner of Rotel, a Warsaw-based telecommunications consulting service that advises members of Parliament on telecommunications regulatory issues, said that Kwasniewski received the act on July 21 after Sejm deputies voted on the Senate-proposed amendments and approved the act's final version.
Pending the president's signature, the law is to take effect Jan. 1, 2001. But while most of the Senate's amendments were not significant, one would have implications for the Communications Ministry's plans to sell four or five third-generation Universal Mobile Telecommunications System (UMTS) mobile phone licenses, Rutkowski said.
The Senate's amendment would have allowed the sale of the UMTS licenses to take place in 2001. This contradicted the government's previous policy, which requested that the Sejm require a one-year transition period before new licenses could be issued, Rutkowski said. He said that next year would be the transition period since the law would go into effect at the beginning of 2001.
The transition period was intended to protect all existing telecom operators from increasing competition, but was "especially forced by Telekomunikacja Polska (TPSA) in the context of (its) privatization," Rutkowski said. In other words, the amendment was intended to protect the monopolistic position of TPSA to ensure the maximum amount from the sale of the 35% stake. On July 26, a 35% stake of TPSA was sold for zl. 18.6 billion ($4.3 billion).
Although the proposed amendment made an exception for all radio-communications licenses, including UMTS, it was rejected by the Sejm because it contradicted the previous policy, Rutkowski said. The amendment's defeat means that the bidding process for the UMTS licenses that the Communications Ministry intends to sell will be concluded by the end of 2000. The rejection was significant, he said, because the government now can take the revenue from the sale of the licenses this year and apply it to the 2001 federal budget instead of waiting until 2002 when a government not controlled by Solidarity Election Action (AWS) may come into power.
The government expects to raise about zl. 14 billion ($3.26 billion) from the UMTS license sale. Winning bidders will pay in two installments so that the federal coffers will receive zl. 7 billion for next year's budget and zl. 7 billion for the budget in 2002.
The new act was created to bring the telecommunications regulatory system in line with European Union (EU) laws by ensuring the completion of the country's full market liberalization and transparency of market practices. Poland aspires to become a member of the EU in 2003, but Brussels has said that an offer to join won't likely be extended until 2005 or 2006. Rutkowski said that as EU telecommunications regulations are updated, Poland will amend its telecommunications law accordingly.
But despite the new legislation's harmony with EU regulations, some areas of the Polish legislation are still fuzzy. Rutkowski pointed out that the overlapping or ill-defined sections may be problematic in the future. One outstanding issue that the act fails to adequately address is the lack of technological flexibility with converging networks, he said. In addition, the responsibilities the Office of Telecommunications Regulation (OTR), the new independent regulatory body that will oversee telecommunications activities, and the National Radio and Television Broadcasting Council (KRRiTV) may overlap in certain areas, he added. Another outstanding issue, according to Rutkowski, was that frequency management would be shifted from the government to the OTR without clear explanations of how to protect the government's responsibilities on electromagnetic capability problems, or the complications that occur when telecommunications equipment disturbs electromagnetic radio frequencies.
The new telecommunications legislation was passed by the Sejm in May, and then routed to the Senate for review and amendment proposals. The upper house returned it to the deputies with 99 proposed amendments, most of which contained procedural adjustments. The Sejm deputies discussed the amendments and voted to accept or reject them before the final version was submitted to the president.
The current telecommunications act the first post-communist telecom law was passed in 1991 with amendments added in 1995. At present, the Communications Ministry oversees the activities of the telecommunications market.
