Legal & Tax Updates

IT and Telecommunications Newsletter No. 1/2011

I. Legislative News

1. Decision no. 1167/2011 on reporting certain statistical data by the network providers or electronic communications services providers for the public, issued by the President of the National Authority for Management and Regulation in Communications (“Decision no. 1167/2011”) published in the Official Gazette no. 321 of May 10, 2011.

Decision no. 1167/2011 provides that the public electronic communications network providers or electronic communications services providers have the obligation to provide ANCOM periodically with certain statistical data in view of drafting reports, studies, analysis and other similar documents in the field of electronic communications.

By means of its Annexes, Decision no. 1167/2011 sets forth the sets of indicators relevant to the supply of networks or electronic communications services and also the information categories relevant to each indicator.

The statistical data will be communicated annually or biannually, depending on the nature of the information, by means of an informatic application available on the web site of ANCOM.

Decision no. 1167/2011 enters into force on July 1, 2011 when the Decision of the National Authority for Management and Regulation in Communications no. 151/EN/2006 on reporting certain statistical data to network and electronic communications services providers will be repealed.

2. Decision no. 1201/2011 on establishing quality indicators for the supply of internet access services and publishing the relevant parameters issued by the President of the Romanian National Authority for Management and Regulation in Communications (“Decision no. 1201/2011”) published in the Official Gazette no. 353 of May 20, 2011.

Decision no. 1201/2011 has as subject matter the establishment of the quality indicators for the supply of internet access service and setting forth the obligation of the electronic communications services providers for public to publish the parameters relevant to these indicators. Additionally , it is also provided that until January 20, 2012 the providers have the obligation to include also the general service supply conditions and, on a case by case basis, the levels of quality for the internet access service, in the contracts concluded with the end-users, as follows:

• data transfer speed (nominal/maximum data transfer speed and the minimum guaranteed data transfer speed). In case the provider does not ensure a minimum guaranteed speed, this fact will be specified expressly in the contract and the general conditions
• the transfer delay in case the provider ensures a guaranteed value;
• the variation in the transfer speed in case the provider ensures a guaranteed value;
• the share of the loss of packages in case the provider ensures a guaranteed value

Concomitantly, the internet access service providers will also include in the contracts a series of quality and administrative parameters such as:

• the date when the internet access supply starts expressed in calendar days;
• the remedy period in case of defects expressed in hours;
• the resolution period in case of users’ complaints expressed in hours

Until January 1, 2012, the providers have the obligation to publish a procedure regarding the measurement of the quality parameters and the first data will be published by April 25, 2012 for the reporting period relevant to 1st quarter.

ANCOM will create, administer and make available for the public on its web site an interactive application which will allow users to measure the technical quality indicators of providers.

3. The Emergency Ordinance no. 19/2011 on certain measures for the amendment of certain normative documents in the field of electronic communications (“GEO no.19/2011”) published in the Official Gazette no. 146 of February 28, 2011.

Given the notice of delay sent to Romanian by the European Committee, followed by the formal request represented by the grounded endorsement within the infringement procedure whereby Romania was asked to comply with the provisions of Directive 2002/21/EC within two months, otherwise the Court of Justice of the European Union will be notified, GEO no. 19/2011 adds a series of amendments and supplementations to the Romanian normative documents in the field of communication in an attempt to ensure the actual structural separation of regulatory functions, on the one hand and the activities related to property or control, on the other hand, as follows:

(i) Amendments to GEO no. 79/2002 on the general regulation frame of communications;

As per GEO 19/2011, the National Authority for Management and Regulation in Communications (“ANCOM”) is assigned new duties as follows:

• adopting the National Table for granting radio bandwidth (“TNABF”) with the approval of the Inter-departmental Radio-communications Committee for assignment of radio bandwidth for governmental use or subject to governmental/non-governmental division;
• it may prohibit for a limited period the partial of full use of a bandwidth or of a certain frequency by natural or legal entities upon the grounded request of public authorities having jurisdiction in case the national safety , the public order or the national defense so requires;
• establishes the detailed regulation of the way in which the competitive or comparative selection procedure will be carried out

Additionally, upon ANCOM’s proposal, the followings are established by means of Government decisions initiated by the General Secretariat of the Government:

• the set-off method of the costs incurred due to the change of the destination or reorganization of the use of certain radio bandwidths;
• the amount of the license fee on which the granting of usage licenses for radio bandwidths depends by means of competitive or comparative selection procedures;
• the type of selection procedure applied for granting the right to use the radio spectrum

(ii) Amendments to GEO no. 22/2009 on incorporating the National Authority for Administration and Regulation in Communications

GEO no. 19/2011 establishes the following new duties as incumbent on ANCOM:

• proposes normative documents for the amendment and supplementation of the legal framework regarding the exercise of certain regulatory functions and duties in the field of electronic communication, audio-visual communication, radio equipment and telecommunication end-equipments, including from the point of view of electromagnetic compatibility, as well as in the field of mail services
• adopts, without prior consultation with the Ministry of Telecommunication and Informational Society (“MCSI”) as provided under the prior law, the National Numbering Plan (“PNN”) and any amendments thereof, within the limits imposed by national security reasons, and having the obligation to previously inform MCSI with regard to the amendments made
• adopts the TNABF and any amendments and/or supplementations thereof;
• grants licenses for the use of radio frequencies for the supply of network and electronic communications services using radio spectrum, as well as broadcasting licenses and establishes and collects the usage fee for the spectrum without MCSI having the possibility to appoint 2 representatives from the committees created for the purpose of drafting the documentation relevant to the tender procedure and the assessment of offers;

Additionally, pursuant to the new amendments, ANCOM no longer grants technical endorsements.

(iii) Amendments to the audio-visual law no. 504/2002

The new provisions of GEO no. 19/2011 regulate the followings:

• a mixed committee for advisory purposes will be created and will comprise 3 members appointed by the council, 3 members appointed by ANCOM and a member appointed by MCSI, acting as observer, in view of establishing the strategy in the field of radio frequencies usage, the national plan for radio frequencies assigned to audio-visual media services and for the analysis of the issues related to the use of the radio spectrum assigned to media, audio-visual services, as well as to those regarding new technological developments with impact on the audio-visual media services
• the way in which the procedures are carried out and the conditions for granting usage licenses for radio frequencies in terrestrial digital system, as well as the amount of the license fee are established by means of a Government Decision and, according to the amendments made, the decision is initiated by the General Secretary of the Government only upon ANCOM’s proposal;
• the broadcasting license, as well as the usage license for radio frequencies in terrestrial digital systems may be revoked or suspended by ANCOM, on a case by case basis;
• the radio broadcasting terrestrial sound stations and terrestrial television under Romania’s jurisdiction in view of supplying any program service on and respectively from the territory of Romania may be used only after obtaining the technical authorization issued by ANCOM based on the procedure established by the latter

4. Decision no. 7/2011 issued by the President of the National Authority for Administration and Regulation in Communications on the implementation of the universal service in the field of electronic communications (“Decision no. 7/2011”) published in the Official Gazette no. 39 of January 17, 2011.

The provisions of Decision no. 7/2011 which repeals the Decision issued by the President of the National Authority for Administration and Regulation in Communications no. 1074/EN/2004 on the implementation of the universal service in the electronic communications field have the purpose of harmonizing the measures imposed by the new National Strategy on the implementation of the universal service in the field of electronic communications with the amendments made to the European regulatory frame by transposing these on the electronic communications market in Romania. The main aspects approached by the new legal framework are:

• Ensuring the access and connection to a fixed location in case of public telephone networks and the access to a fixed location in case of telephone services intended for public at household level

The provisions of Decision no. 7/2011 aim to replace the measure of ensuring the access to the public telephone network, in a fixed location, by means of telecentres, with the measure of ensuring the access and the connection to a fixed location by means to public telephone networks and the access to a fixed location to telephone services for public, “access to a fixed location” meaning the residence of the user and not the obligation of the operator to use a certain fixed technology.

ANCOM also established by means of Decision no. 7/2011 that the “functional access to internet” should be defined as the internet access service which allows a maximum transfer speed of data “best effort” in view of a download of at least 144kbp/s.

• The access to public pay telephones

Decision no. 7/2011 sets forth the conditions in which the access to paid public telephones will be ensured by means of universal service mechanisms, namely in those areas in which the requests cannot by complied with under commercial conditions, as well as in locations in which the telephone services at mobile locations cannot be used (e.g., hospitals, penitentiaries) or, on the contrary, the public mobile networks are overloaded (e.g., rail stations, airports).

The request for the installment of a public pay telephone may be submitted to ANCOM by the authorities of the local public administration of municipalities, cities and communes, provided that the conditions set forth in Decision no. 7/2011 are met.

• Ensuring the information services regarding subscribers and making available the subscribers registries

The subscriber registry and the information service regarding subscribers will contain information on the subscribers of telephone services intended for public, provided at fixed locations or at mobile locations, regardless whether the payment for the telephone services for public is made in advance or subsequent to the provision of services.

Within 14 days as of the communication of the appointment decision, the universal service providers will request the providers of telephone services for public who assign telephone numbers to subscribers to send all relevant information necessary in view of creating a complete database and the providers of telephone services for public who assign telephone numbers to subscribers have the obligation to make available to the universal service providers (based on a contract) all relevant information in view of creating a complete database and in view of updating the information sent by the 10th of each month within 6 months from the receipt of such request under fair, objective and non-discriminatory conditions and for cost effective fees.

• The insurance of equivalent access conditions to services included in the range of universal service for final users with disabilities

Decision no. 7/2011 includes a series of obligations imposed by ANCOM on the universal service providers designated to ensure that the ends users with disabilities have access to the services included in the range of universal service in conditions equivalent with those applicable to the other end users.

With respect to the procedure of designating the universal service providers, ANCOM decided to maintain as a rule the procedure of appointing by means of open public tender or by means of appointment ex officio by ANCOM under the conditions provided by Decision no. 7/2011 while the effective period for the designation of the universal service provider will be established by ANCOM within each procedure organized.

II. Recent Actions of ANCOM

1. Revocation of the capacity of universal service provider for companies Infoclick SA and Newsphone Hellas SA

As of March 31, 2011, all rights and obligations provided in the decisions to designate Infoclick SA and Newsphone Hellas SA, represented in Romania by Newsphone Hellas SA Athens Greece Bucharest Branch, as universal service providers appointed for the purpose of providing the end users with an information service regarding the subscribers and of an electronic registry of subscribers, were terminated.

The revocation of the capacity of provider is generated by the failure to comply with certain obligations they had as universal service providers. The breaches were ascertained by ANCOM pursuant to verifications carried out as of the appointment date until the present date.

2. The execution of the financing contract from nonrefundable funds for the fees comparison measurer.

At the seat of the ministry ANCOM signed the nonrefundable financing agreement for creating the online application for comparing the electronic communications offers for end users.

We remind the fact that as per Decision no. 77/2009 on the obligation of the providers of electronic communications services for the public to inform the end users, the providers have the obligation to make available to ANCOM the necessary information so that ANCOM will create and make available to the public an internet portal which would allow the comparison between fees and conditions offered by mobile telephone providers, fixed telephone providers and broadband internet access providers by means of an interactive application type “price calculator”. The application will allow the insertion by the user of a set of options for the consumer and will make a comparative analysis of the offers existent on the market (included in the database) providing a ranking of the offers.

III. EU Telecom News

The new standard mobile charger will be rolled out during 2011.

EU consumers should soon be able, within this year, to purchase a standard mobile phone charger with which to charge all data-enabled phones – including smartphones – which are sold in the 27 EU member states.

In March 2009, the Europenan Commission issued an ultimatum to mobile phone manufacturers, either to become subject to mandatory EU legislation or to voluntarily adopt a common charger. The manufacturers chose the latter and fourteen of the largest mobile phone manufacturers on the market, including Nokia, Sony Ericsson and Samsung (producing 90% of the mobile phones that are sold in the European Union) agreed to cooperate and signed a memorandum of understanding with the commission in 2009.

The industry committed itself to providing chargers which are compatible with the standard Micro-Universal Serial Bus (USB) connector.

Once this commitment becomes effective, it will be possible to charge compatible data-enabled mobile phones with any common charger. As a result, not only will the need for consumers to buy a new charger with every mobile phone be removed, but they may also benefit from more efficient and cheaper standalone chargers.

Furthermore, consumers will soon be able to purchase mobile phones without also buying a charger. It is expected that this will lead to savings for consumers, who will also be able to purchase more cost-effective standalone chargers. That said, the commission will not interfere with manufacturers’ pricing strategies.

The agreement covers data-enabled mobile phones (ie, those phones which have a data port and can be connected to a computer). The agreement excludes mobile phones which do not support data exchange and certain unusual formats of phone (eg, phones worn as wristwatches). However, taking into account that, on average, people replace their mobile phone every two years, and that market trends show that ever-increasing numbers of data-enabled mobile phones are being purchased, it is hoped that the common charger will be predominant by 2013.