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Liberalization of Telecoms: Recent Amendments to the Telecommunications Law
Important amendments to the Law of Ukraine "On Telecommunications" were recently introduced by Law no. 3566-VI (the "Market Access Law") and Law no. 3610-VI (the "National Commissions Law") which became effective on 27 July and 7 August 2011 respectively. The new laws are aimed at facilitating access to the market in telecommunications services and introduce serious changes in the organization of state authorities regulating this market.
The National Commissions Law changed the name of the state authority regulating telecommunications from "National Commission on Communications Regulation" to "National Commission Conducting State Regulation in the Area of Communications and Informatization" (the "National Commission"). Along with the change of the official name of the National Commission, the law has enlarged the latter's powers. Notably, the power to regulate informatization activities and all powers of the now-defunct State Inspection for Communications in the Area of State Supervision over Telecommunications Market have been added to the powers of the National Commission. Accordingly, all references to the State Inspection for Communications in the relevant laws have been deleted.
In addition, the new laws have introduced the following changes aimed at simplifying access to telecommunications services market:
• the activities on the provision of local, long distance and overseas telecommunication channels for their usage were excluded from the list of activities in the area of telecommunications, which are subject to licensing.
Therefore, the list of licensed telecommunication activities has been reduced from eleven to eight items. It should be noted, however, that the Market Access Law in the effective wording does not fully meet the expectations of telecommunications market players, because the initial plan was to reduce the number of licensed activities to four.
• the laws change the procedure for entering the business entities intending to conduct their activities in the telecommunications sector into the Register of Telecommunications Operators and Providers (the "Register").
According to the new rules, business entities wishing to work in the telecommunications sector and to engage in activities that require a license, must submit to the National Commission an application for license and a set of accompanying documents together with an application for entry into the Register.
The Market Access Law has also abolished the procedure for notification about the commencement of activities in the telecommunications sector. Under this procedure, now abolished, businesses intending to conduct activities in the telecommunications sector had to notify the National Commission about commencement of their activities, and the National Commission had to enter such businesses into the Register upon receipt of such notices. Under the new rules, instead of notifying about commencement of activities the businesses must apply to be entered into the Register.
• the Law authorizes the National Commission to enact Rules on Conducting the Activities in Telecommunications Sector, which will include a list of organizational, qualification, and technological requirements, mandatory for providers operating in the telecommunications sector.
Previously, the law provided for the enactment of special requirements (licensing conditions) only for those operators engaged in the telecommunications sector on the basis of a relevant license.
• the term of permit for the use of a number resource to conduct non-licensed activity is stipulated to be at least five years.
The Law now stipulates providers' right to use the number resource. At the same time, the Market Access Law failed to amend certain provisions of the Law of Ukraine "On Telecommunications" which in effect block the possibility for providers to obtain the number resource. It is hoped that this inconsistency will be eliminated by future legislative amendments.
• the Law introduces the principle of technological neutrality as regards the provision of generally available (universal) telecommunications services.
In particular, it stipulates that operators must provide universal telecommunications services using wire and wireless access technologies. Previously, the Law provided for the use of wire access technologies only. Moreover, the Law on Simplification of Market Access empowers the National Commission to impose the requirements to develop and provide generally available telecommunications services not only upon operators which enjoy monopoly (dominant) position, but also upon operators, which have a significant privilege on the relevant market.
For further information please contact Anna Novodvorska, Associate