Communication with subscribers, or How the new law on e-communications will work

06-10-2020

How can telecom market consumers and operators benefit from this document?

On September 30, 2020, the Verkhovna Rada adopted the long-awaited law “On Electronic Communications” No.3014 in the second reading. It protects the rights of subscribers and simplifies authorization procedures for operators. Ihor Samokhodsky, IT&Telecom Sector Head at the Better Regulation Delivery Office (BRDO), told Mind what rules the deputies voted for and how they would affect all stakeholders.

The fact is that outdated regulation significantly hinders the development of telecom market technologies, so updating the legislative framework in this sector is a long-needed step. The law will enter into force on January 1, 2022, and before that, the government should update some bylaws in the field of communications.

The first version of the draft law was developed by the Better Regulation Delivery Office, which is an analytical centre involved in the deregulation of Ukrainian legislation. Since last year, they have advocated the implementation of the new EU Code, rather than the old directives listed in the Annexes to the Association Agreement (2014).

In other words, the adopted law not only fulfils the requirements of the Agreement but also complies with modern European legislation.

The first text of the draft law based on the EU Code was presented to the Office of the President a year ago. The draft law was prepared for the first reading by a working group within the Verkhovna Rada’s Committee on Digital Transformation. The working group included representatives of operators, providers, associations, and experts from the Better Regulation Delivery Office (BRDO).

Let’s see what exactly will be changed for subscribers and operators.

What will be changed for subscribers?

Subscribers will be able to choose a specific service provided separately from the package of services, as well as order the service they need separately (not with the package of services) and pay exclusively for it. This feature will make life much easier for subscribers who need certain services for a certain period of time. Additionally, the law will oblige operators to indicate the cost of each service included in tariff packages, thus justifying their pricing.

Operators will be required to report the minimum, average, and maximum speed of the Internet service. This innovation is in line with European practices.

So, when choosing a tariff plan, subscribers can expect receiving a clear minimum service speed, instead of buying a pig in a poke.

Internet coverage will be improved in Ukraine. The state will ensure the Internet affordability and geographical coverage throughout Ukraine. The current legislation provides for that the state guarantees the availability of only wire telecommunication. From now on, the state’s actions will be aimed at making broadband Internet available as well.

There will be a possibility of out-of-court settlement of disputes between subscribers and operators. Now it is expensive and difficult for subscribers to protect their rights. In the case of wrongful charging, they need to go to court. The dispute amounts are usually tens or hundreds of hryvnias.

But the costs, on the contrary, are high: it is necessary to hire a lawyer, file a lawsuit, prepare for lengthy litigation. Such subscribers will face with a professional team of operator’s lawyers with maximum resources because any loss for the operator is a negative precedent. In such a situation, it is easier for subscribers to accept the violation of their rights than to defend them.

Previously, subscribers also had the opportunity to file a complaint to the National Commission for the State Regulation of Communications and Informatization (NCCIR), but the agency did not have the necessary powers. From now on, the NCCIR will be able to consider disputes and make a binding decision. This will allow subscribers to protect their rights more effectively and quickly.

What will be changed for business?

There will be fewer bureaucratic barriers to the introduction of new technologies. State regulation implies the concept of “technological neutrality” (the so-called minimal state intervention in the telecom technology development). Ukraine did not have this “technological neutrality”.

Previously, operators received a license for a specific frequency for a clearly defined technology and could not use another technology in this frequency. Because of this, for example, 3G was much delayed in Ukraine. The new law allows operators to choose any technology from the defined NCCIR’s list and use it at their frequency.

Operators will be allowed to deploy low-power base stations under a simplified procedure. There will be no need to assign a specific radio frequency to equipment. This provision will contribute to the IoT market development (Internet of Things) and 5G technology introduction.

The Ukrainian telecom market will become more attractive to European investors. The updated regulation is harmonized with European legislation.

In the long run, this will allow us to have a single digital market with the European Union, which provides for the free movement of capital, companies, and people without additional permits in EU countries.

Deployment of fixed and mobile broadband Internet access networks will be cheaper. The law provides for the possibility of operators to cooperate and access each other’s infrastructure, including both voluntary access and joint network engineering.

The NCCIR will also have the power to make binding decisions on access for operators. Such decisions are made during the out-of-court settlement of disputes between operators.

The NCCIR may oblige to provide access only in cases when direct communication between subscribers is under threat and if duplication of relevant network elements is costly or physically impossible.

However, the regulator should take into account the technological capabilities of providing access and the need to maintain the interest of operators, which are subject to such obligations in the network and infrastructure deployment.

Operators will be able to transfer their radio-frequency resource for use to third parties subject to the consent of the NCCIR. Radio-frequency resource (RFR), which is a part of the radio frequency spectrum suitable for the electromagnetic energy transmission and reception by radio-electronic means, is physically limited and divided between different operators.

Currently, operators are prohibited to provide their spectrum for use to third parties. This deprives them of flexibility and efficiency in its use. As a result, the RFR may be “idle” or not be fully used. This negatively affects the quality of services provided to subscribers.

The law will allow operators to transfer spectrum for use to third parties (the so-called spectrum sharing, which is practised in EU countries). The Cabinet of Ministers will coordinate the procedure.

What will be changed for the state and international partners?

The state will have objective information on Internet coverage in Ukraine. Now, it is almost impossible to understand where the coverage is available and where it is not. There is no single system that collects data from operators and users.

From now on, the NCCIR will conduct geographical surveys of networks and update data at least once a year. This will help build new networks in areas with poor or no coverage.

There will be a transparent electronic system for the interaction of all market players. The so-called electronic regulatory platform will allow subscribers to find out information about prices and quality of services provided by operators (they will be obliged to submit this information to the NCCIR), receive various administrative services, and file complaints to the NCCIR.

It is important to note that the adopted law does not outline in detail all the procedures, so there is still a lot of work on updating the existing bylaws for its entry into force.

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