EXPLANATORY NOTES TO THE DRAFT STATUTE

At present, in the context of global changes in the world economy caused by a new stage of the scientific and technical revolution, the telecommunications industry in Russia has become one of the most promising industries. This is confirmed by intensive construction of optical fiber highways, development of cable and satellite TV services, ubiquitous development of cellular radio telephone communications systems, growth of political and economic appeal of the Russian Internet segment. Only few spheres of the Russian economy can now be characterized by a permanent escalation of production facilities, intensity of the infrastructure construction, development of the services range, which facts are distinctive for the Russian telecommunications industry. However, in comparison with growth rates of the telecommunication sector in the Western Europe, USA and some Asian countries, the Russian telecommunications market yields to them considerably. Both transition of the traditional economic relations to the new rails, where information becomes a determinative and a major economic resource, and construction of foundations for the so-called information society, constitute an inevitable stage in the economic development of any state, which aspires to play in the future a noticeable role in the global economy and world relations.

The telecommunications services development in Russia have been hampered by numerous problems, which are not always connected with the under-financing or weak investment activities. It’s such basic factors as the archaic and stiff system of state administration of the telecommunications sector, domination of the mechanisms of administrative influence on subjects of the telecommunications relationships, pressure exerted by natural monopolists in the field of telecommunications on new operators appearing in the market, weak consumer base of the telecommunications services, that in reality impede the development of this industry. In this connection one might indicate the long-standing need to formulate a fundamentally new legislative basis for the telecommunications legal regulation. This is the purpose of the draft statute, developed by the Moscow Media Law and Policy Center.

Strictly speaking, our concept would be better expressed by the draft statute "On Telecommunications". Yet for practical reasons we have couched our proposals in the form of the draft statute, which amends and supplements the acting statute on communications. The point is that certain Russian departments (such as the Ministry of Communications and Informatization, the Ministry of Antimonopoly Policies, etc.) are also developing a draft statute on amending and supplementing the acting statute on communications. In these circumstances, the elaboration of an independent and integrated statute on telecommunications (as is required by virtue of the reasons stated above), not based on the regulatory traditions of the Russian statute “On Communications” of 1995, could result in that such a project would be of a minor practical importance and would have the same destiny as many other legal initiatives that have vanished completely unnoticed. For this reason, not breaking away in principle from general structure of the Russian statute on communications, the draft statute makes essential amendments thereto. Mainly, the matter concerns such central questions in the telecommunications legal relationships, regulated by the statute on communications services, as the communications networks interconnectivity problem, licensing system, mechanisms of a competition, principles and model of a universal service.

The changes and additions of the draft statute begin with correcting the basic terms, applied in the statute. In the 1995 statute there have been no definitions of such terms as “activity in the communications sphere”, though it was one of the key concepts for the licensing system and for the law as a whole, or “ market of the telecommunications services ”. While deciding mainly issues of organizing the state management of the communications services industry and solving problems of technical correctness of the communications systems operation, the statute paid not enough attention to optimization of the regulatory component of market relationships in the telecommunications sphere. Our draft statute proposes to fix the terms defining market policy of the state in this area, and to make them more operational. Thus, the definition of “market of the telecommunications services” is being fixed, as well as such terms as “geographically limited market of telecommunications services” and “materially defined market of telecommunications services”. The terms necessary for the definiteness of relations in the new regulatory mechanisms, introduced by the draft statute, are also being fixed. In particular, it applies to the concepts of “the Communications Regulating Authority”, “universal communications service”, “number resources”, “certificate of registration”, etc.

The draft statute is also aimed at the normative reconstruction of a principle of the communications networks interconnectivity. It proposes a new approach to the construction of communications networks in the Russian Federation, which would abolish an archaism in the system of communications networks construction under the effective law. Moreover, the proposed draft statute is not so complicated and intricate, as the departmental draft statute developed by the Ministry of Communications. The interconnectivity in the Russian practice has long ago crossed its especially technical framework and purposes, for the sake of which it had been once introduced. Nowadays interconnectivity has turned into administrative and organizational structure, because it has become to show up in a monopolistic pressure exerted by large regional telecommunications services operators on new alternative operators, entering the communications services market and trying to compete with them.

The draft statute also makes an attempt to change the existing approaches to licensing activities in the communications sphere in the Russian Federation. The virtually universal licensing of all active subjects in the market of communications services is an out-of-date approach, that complicates work both of communications service operators and of state departments. In the Russian Statute “On Licensing of Certain Types of Activity” of 1998 it is fairly established, that licensing (as one of the most rigid forms of the state control) makes sense only if all other mechanisms of control are inapplicable or extremely inefficient. In this connection the draft statute proposes a differentiated approach to the control of activities of the subjects in the market of communications services. While not refusing entirely the necessity to license certain activities in the field of communications services, connected with the scarcity of resources used during such activities, necessity to ensure functionality of the communications services infrastructure and other reasons, and also for the reason that the elimination of licensing in these directions would be nonsense in the world practice, the draft statute confines itself to licensing only of these activities. As for the rest, there takes place a control by means of the registration mechanisms of communications services operators, as well as control of compliance with the rules of the certified equipment use and quality requirements for communications services etc. In the aggregate, these control methods should in practice be ensured by way of a more dynamic work of the State Communications Supervision Agency (Gossvyaznadzor), the Ministry of Antimonopoly Policies and other governmental bodies authorized to apply strict administrative sanctions to violators.

The Article on competition has also been renewed. The provisions fixed by this Article are aimed at promotion of the market entry of new communications services operators, which is the main precondition for the formation of competitive relations in the communications services markets. One may find in this Article a rather essential expansion of the rights of alternative operators, ensuring guarantees of their efficient work, particularly in the initial period of their market entry. Some experts might perceive in these provisions an encroachment on the rights of proprietors of the constructed communications networks and infrastructure. However, owing to the fact that the command by a proprietor of his own property is not absolute in character and depends on the conventionalities, such restrictions appear quite logical. Thus, for example, in order to avail oneself of the right to own a pistol with ammunition, a person must obey a plenty of rules and restrictions, since otherwise the owner might infringe rights and interests of other persons. According to the antimonopoly law rules, a monopolist may be restricted in the right to strike a bargain, in the right to sell or purchase a property, if this infringes upon the interests of other market participants in the realization of their rights on entrepreneurship in this sector of relations. As regards the amendments proposed in the draft, they pursue the same purposes, i.e. non-admission of infringement by privileged market participants of rights of their real or potential competitors — alternative communications services operators.

One of the basic innovations in the draft is a set of provisions devoted to universal services. In circumstances, when even an ordinary wire telephone service remains a dream for a vast share of the Russians, there is no need to speak about the urgency of developing the most necessary, public or universal services. The draft statute establishes the definition of a universal service, basic principles of providing universal services in Russia, and a legislative basis for definition of the rules concerning compensation paid to the communications services operators for their losses related to ensuring provision of a universal service. The problems of a universal service occupy the central place in the strategy of telecommunications development of Russia, which precedes the draft statute in the book prepared by the Moscow Media Law and Policy Center, since without provision of at least an initial customer base of telecommunications services, any discussion of a wide development of telecommunications sector becomes meaningless.