ICT is one of the largest economic sectors in Poland. It has been developing dynamically for many years, and in 2015 the value of sales in this sector exceeded 105 billion zlotys (approximately €24 million).2 However, the sector also faces many challenges, such as slow and ineffective development of e-government and delays in expanding broadband networks.3 In the future governmental e-services will probably seek more support from private partners, as the example of the registration for the 500plus benefit programme shows that using the infrastructure of private partners (banks in this case) is cost-saving and may be more effective. One of the answers to the delays in the development of networks is the amendment of the Act on supporting the development of telecommunications services and networks, which should facilitate construction investments (see Section III.ii, infra).
Like other sectors, the Polish ICT sector is facing security challenges, cybersecurity in particular. The introduction of a legal act that would comprehensively cover cybersecurity is still only a subject of discussion. One of the measures to improve the situation is the establishment of the National Centre for Cybersecurity, which will coordinate cooperation between private and public institutions, mainly through enabling the more effective exchange of information.4 The obligation to register each user of telecommunications services, including prepaid telephony services, which entered in force in July 2016, should help the fight against terrorism.
The new BEREC Guidelines on the Implementation by National Regulators of European Net Neutrality Rules published in August 2016 will shed light on how to understand the concept of net neutrality, which has for years been a topic of dispute between the telecommunications operators and the regulator.5
i The regulators
The specific laws that apply to ICT and media include the Act of 16 July 2004 on Telecommunications Law (TL), the Act of 7 May 2010 on supporting the development of telecommunications services and networks, the Broadcasting Act of 29 December 1992 (BL) and the Act of 18 July 2002 on Provision of Services by Electronic Means. Market players are also subject to the decisions of regulators.
There are two specific regulators in the field of telecommunications and media: the President of the Office for Electronic Communications (UKE) and the National Broadcasting Council. The UKE is the regulatory body for providers of telecommunications services and operators of telecommunications networks. It is responsible for allocating frequencies for broadcasting purposes. The National Broadcasting Council is the regulatory body responsible for media content. Other non-specific regulators that are important for the TMT sector are the President of the Office for Competition and Consumer Protection (UOKiK), who safeguards the principles of competition by approving mergers and acquisitions, running antitrust proceedings and combating collective infringements of consumers’ rights. In some proceedings, the President gives an opinion on the impact of the telecommunications regulator’s decision on competition (e.g., within the UKE’s analysis of the market to find entities with significant market power, and while imposing additional regulatory obligations on them in accordance with Article 16 Section 1 of the TL).
As ICT and media service providers usually process personal data, they are subject to the respective regulations of the Inspector General for Personal Data Protection (GIODO). The TL contains a specific regulation that providers of telecommunications services must report infringements of the rules concerning personal data processing to GIODO (Article 174a Section 1 of the TL).
ii Regulated activities
Providing telecommunications services and operating a telecommunications network does not require a licence, but does require notification to the President of the UKE. The President holds a registry of telecommunications undertakings and enters notifying entities into the register (Article 10 Sections 1 and 2 of the TL). The notification must be submitted before starting a telecommunications activity, but a UKE decision is not a condition to commencing the activity. If the President of the UKE does not issue a decision within 14 days of the date on which the application was submitted or does not request additional information, the entity may start operating (Article 10 Section 9 of the TL).
A licence is required for the use of spectrum and numbering. The process of obtaining a frequency licence is set out in Article 111 et seq. of the TL (see Section IV.ii and iv, infra). Numbering is granted by the President of the UKE upon a telecommunications firm’s application. If there are several applications concerning the same numbering, the numbering is allocated after consultations or within tender proceedings (Article 126 Section 1 et seq. of the TL). An annual fee for numbering, the cost of which depends on the type and quantity of numbers, must be paid to the President of the UKE (Article 184 Sections 1 and 2 of the TL).
Independently of the frequency licence, the use of some telecommunications equipment may require radio permits (Article 143 of the TL). However, the frequency licence may release the licence holder from this obligation (Article 115 Section 2a of the TL).
iii Ownership and market access restrictions
Polish law does not make a distinction between Polish and foreign nationals with regard to investment or the establishment of companies. However, in the case of frequencies used for radio and television broadcasting, a frequency licence may have stipulations concerning the promotion of cultural and linguistic diversity or pluralism in the media (Article 115(1) Section 1(6)d of the TL). Further restrictions with regard to broadcasting are described in Section V.i, infra.
The provisions of the TL regarding frequency licences contain restrictions that aim to preserve competition. If more than one entity is interested in a certain spectrum and the spectrum is to be granted within tender proceedings, one of the deciding criteria is the preservation of competition in the market (Article 118a Section 1(1) of the TL). The same applies to the extension of an existing spectrum allocation, which may not be extended if competition is endangered (Article 116 Section 9 of the TL). In both cases, the President of the UKE’s decision is issued after consultations with the President of UOKiK.
The President of the UKE may make an administrative decision designating providers of telecommunications services or telecommunications operators as having significant market power. Such decision is issued after a market analysis that includes defining the relevant market and proving whether any entity or entities have significant market power in it (Articles 21, 22, 24 and 25a Section 1 of the TL). The President of the UKE may impose additional obligations on providers of telecommunications services or on telecommunications operators, such as an obligation of equal treatment. In the case of telecommunications companies that are vertically integrated (i.e., active on the wholesale and retail markets), the President may oblige them to functionally separate. A vertically integrated firm with SMP has to inform the President of the UKE about any plans to transfer the assets of local networks to a separate legal entity owned by a different owner or to a newly established entity at least six months before the planned transfer. Informing the President of the UKE is in the interest of the firm with SMP because, as a result of such transfer, the firm may release itself from its SMP status. Any change in this respect may only take place as a result of the President of the UKE’s decision (Article 44g Section 5 of the TL). As the market is becoming more and more competitive, the amount of market regulation has declined significantly in recent years.
iv Transfers of control and assignments
Changing the entity that holds a frequency licence requires the President of the UKE’s consent (Article 122 Section 1 of the TL). Such change is possible if the entity holding the licence submits a request for a change to a specified entity, the new entity agrees in writing to take over the rights and obligations resulting from the licence, and the new entity meets the legal requirements to hold the frequency licence. If the change is made within tender, auction or contest proceedings, the President of the UKE must consult with the President of UOKiK (Article 122 Section 5 of the TL). In the case of frequencies used for broadcasting, decisions about a change of frequency holder are made together with the National Broadcasting Council (Article 122 Section 6 of the TL). The length of such proceedings depends on the frequencies that will be transferred. The involvement of the President of UOKiK or the National Broadcasting Council may significantly prolong the procedure.
All mergers and acquisitions, including those in the ICT and media sector, are subject to clearance from the President of UOKiK. The Act of 16 February 2007 on Competition and Consumer Protection (ACCP) provides that an intention of concentration (i.e., merger or acquisition) is subject to notification if the combined worldwide turnover of the undertakings participating in the concentration in the preceding financial year exceeded €1 billion or the combined turnover of undertakings participating in the concentration in Poland exceeds €50 million (Article 13 Section 1 of the ACCP). The obligation to notify applies not only to mergers or acquisitions concerning whole companies; notification is also required in the case of an acquisition of a company’s property if the turnover achieved by that property in any of the two financial years preceding the notification exceeded €10 million in Poland (Article 14 Section 1b of the ACCP). A decision concerning a concentration is issued within one month of the notification or, in more complicated cases, within five months. These periods are extended while UOKiK waits for answers to any additional questions (Articles 96 and 96a Section 1 of the ACCP).
III TELECOMMUNICATIONS AND INTERNET ACCESS
i Internet and internet protocol regulation
VOiP services, which are publicly available telecommunications services provided on publicly available networks, are subject to the regulation of the TL in the same way as all other telecommunications services. This is regardless of whether the VOiP provider has its own telecommunications network or uses another operator’s network, or whether the provider has numbering or the calls are initiated and answered via a software application.
ii Universal service and broadband infrastructure
The TL defines ‘universal services’ as a set of telecommunications services, including facilities for the disabled, provided in any technology, with good quality and at a reasonable price, which should be available in the territory of Poland (Article 81 Section 1 of the TL).
From 2013, the list of universal services has included internet access with a speed enabling common applications to handle matters of daily life (e.g., electronic mail and applications supporting payments) (Article 81 Section 3(1) of the TL). Universal services do not include broadband internet access.
Development of broadband infrastructure is carried out on the basis of the National Broadband Plan, which provides that by 2020, 100 per cent of households will have access to the internet with a speed of at least 30MB/s and 50 per cent of households with a speed of at least 100MB/s. The development of broadband infrastructure is in large part financed by the EU.6 Due to delays in development there has been a risk that some EU subsidies may not be used in time. Many of the delays are due to the long investment procedures in Poland.7
On 1 July 2016 the amendment to the Act of 7 May 2010 on supporting the development of telecommunications services and networks came into force. The new provisions implement Directive 2014/61/EU on measures to reduce the cost of deploying high-speed electronic communications networks and should facilitate telecommunications firms using existing technical infrastructure (road, railway infrastructure) for network construction as well as accessing real estate to build telecommunications infrastructure.
iii Restrictions on the provision of service
Generally, telecommunications services are regulated in the TL. An agreement for the provision of telecommunication services has to be in written form and contain provisions that are specified in the TL. Article 56 Section 3 of the TL contains a list of these provisions, while Article 60a of the TL provides for the content of the general terms and conditions. The terms of price setting are specified in Article 61 of the TL. The TL provides for the procedure of changing an agreement, the general terms and conditions and changes in the price list. Such a change may give the user a chance to terminate the agreement (Articles 60a, 61 of the TL).
Telecommunications operators have to act and cooperate with each other within the detailed legal framework of the TL. Each operator is obliged to carry out negotiations concerning interconnection of networks for the purposes of providing telecommunications services or ensuring the interoperability of the services. If the operators do not act in line with the law, the President of the UKE has the right to intervene. For example, if operators do not give access to their network for the purpose of interconnection, the President of the UKE may issue a decision granting access in accordance with Article 28 of the TL.
There are plans to launch a legal act which would deal comprehensively with the issue of cybersecurity in Poland. The act should create a national early warning system which will help to qualify an incident and set out the competences of public institutions responsible for cybersecurity as well as the principles of cooperation between them. The act should also define the requirements to be fulfilled by the public and private institutions to ensure IT security.8 Currently, there is no such complex regulation, and some principles of the protection of IT systems from unauthorised access are, for example, regulated under the Regulation of 29 April 2004 of the Minister of Internal Affairs and Administration as regards the documentation required to undertake personal data processing, and the technical and organisational conditions that should be fulfilled by devices and computer systems used for personal data processing. Minimal standards of IT systems that process personal data are set out in the appendix to that Regulation.
Under the TL, entities that provide public telecommunications services are obliged to inform the GIODO about each infringement concerning personal data (e.g., loss or leakage of personal data). The GIODO must be informed as soon as possible, but not later than three days after the date of the incident (Article 174a Sections 1 and 2 of the TL). A telecommunications undertaking must also inform the user about the incident if the incident may have a negative impact on the user’s rights (i.e., it may lead to unlawful use of personal data, property damage, an infringement of personal rights, or a breach of banking secrecy or any other professional secrecy (Article 174 Sections 3 and 4 of the TL)). The user does not have to be informed if the data is technically protected as required by law (Article 174a Section 5 of the TL). Telecommunications undertakings must hold a registry of personal data infringements (Article 174d Section 1 of the TL).
Other recent measures to improve security include establishing the National Centre for Cybersecurity and the obligation to register each user of telecommunications services, including prepaid telephony services, which entered into force in July 2016, both described in Section I, supra.
IV SPECTRUM POLICY
On 25 January 2016, after a long auction process, the President of the UKE granted frequencies within the 800MHz and 2.6 GHz spectrum. The frequencies enable the delivery of broadband internet to areas that so far have had limited access to it.
The history of mobile telephony in Poland starts in 1992, when the first mobile network on the basis of the NMT-450 system was launched by Centertel, the daughter company of the incumbent telephony operator, Telekomunikacja Polska SA (TP). In 1996, two further licences were granted by the Minister of Communications to Polkomtel and Polska Telefonia Cyfrowa for the use of the 900MHz spectrum. All three operators are still present on the market, and in 2001 they were granted frequencies for the use of the 1,800MHz spectrum. In 2005, Netia Mobile (later renamed P4) won the tender and was granted the 1,800MHz spectrum. In 2007, two further entities (Centernet and Mobyland) were granted the GSM frequencies. Despite the President of the UKE’s support (e.g., decisions on settlements of mobile termination rates favourable for newcomers), only one of these, P4, launched mobile telephony services.
The entrance of new market players has always raised objections from existing market players. In 1996, Polkomtel and TP had a dispute concerning the interconnection fees to be paid to TP that ended in TP disconnecting Polkomtel from foreign operators. As a result of TP’s action, the President of UOKiK declared that TP had abused its dominant market position and imposed a financial penalty on TP.9 In order to support new entrants on the market and enable them to fulfil obligations concerning the development of the network, the President of the UKE introduced asymmetric fees for mobile termination rates that were more favourable to new mobile operators. This caused a long-lasting legal battle between the three incumbent mobile operators and the UKE.10
ii Flexible spectrum use
A frequency licence may be leased or transferred on the basis of an agreement between the holder and a new user of the frequencies (Article 122(1) Section 1 of the TL). The holder must inform the President of the UKE about the agreement. If the performance of the agreement endangers competition, state defence or public security or leads to the inefficient use of frequencies, the President may change the conditions of use of the frequencies or forbid their use (Article 122(1) Sections 2 and 5 of the TL).
iii Broadband and next-generation mobile spectrum use
In 2013, the President of the UKE, Magdalena Gaj, expressed her opinion that sharing frequencies is a solution to the growing need for spectrum for broadband mobile services. At the same time, the regulator emphasises that sharing frequencies must be subject to regulations and cannot restrict competition.
iv Spectrum auctions and fees
In the case of frequencies used for broadcasting, if several entities are interested in a particular spectrum, the President of the UKE will grant the frequency licence following a contest. In the case of all other frequencies, the President of the UKE will grant the frequency licence following a tender or auction (Article 116 Section 1 of the TL). The judging criteria in the tender are the preservation of competition, proposed additional fees for the frequencies and any other criteria laid down in the tender documents (Article 118a Section 1 of the TL). In the case of a contest, the criteria are the preservation of competition and other criteria laid down in the contest documentation (Article 118a Section 3 of the TL). The only decisive criterion in the case of an auction is the proposed additional fee for the frequencies (Article 118a Section 2a of the TL). The additional fee, which is a criterion in tenders and auctions, must amount to at least the annual fee for the use of the frequencies (Article 185 Section 4 of the TL).
Auction proceedings consist of two parts: initial verification and bidding. Within the initial verification, the President of the UKE may reject offers from entities if any entity from their capital group is a holder of frequencies similar to those subject to the auction. This only applies if this additional requirement was introduced to the auction documentation. The bidding is carried out in accordance with the rules specified in the auction documentation (Sections 29 and 30 of the Ordinance of the Minister of Digitalisation and Administration of 19 July 2013 regarding tenders, auctions and contests for the reservation of frequencies).
Apart from the fee set forth within the tender, contest or auction proceedings, there is an annual fee for the use of the frequencies. The amount of the fee is set out in a regulation of the Council of Ministers (Article 185 Sections 1 and 11 of the TL).
The broadcasting of channels is regulated under the BL and, with the exception of public radio stations and television, requires a licence. However, the licence is not required if the television is broadcast exclusively on ICT systems, except where such channel is distributed via terrestrial, satellite or cable networks (Article 33 Sections 1 and 1a of the BL). In the case of broadcasting television exclusively on ICT systems, a notification to the register kept by the President of the National Council for Radio and Television is required instead of a licence.
The licence is granted by the President of the National Council for Radio and Television, based on a resolution of the Council, and lasts for 10 years (Article 36 Section 3 of the BL). It may be granted to natural persons with Polish citizenship and permanent residence in Poland, or (often) a legal person with its seat in Poland.
Foreign investors and vendors of audiovisual media services should note that there are additional restrictions and limitations on legal persons (companies) with a foreign element applying for a licence.
Under Article 35 Section 1 of the BL, a licence for a company with foreign participation may be granted if:
- a the participation of foreign persons in a company or participation of foreign persons in the share capital of the company does not exceed 49 per cent; and
- b the company deed or articles of association stipulate that:
• most persons authorised to represent or manage the affairs of the company or members of the board will have Polish citizenship and permanent residence in Poland;
• within the shareholders’ meeting or general shareholders’ meeting, the votes of foreign entities and foreign subsidiaries within the meaning of the Commercial Companies Code may not exceed 49 per cent;
• foreign persons may not directly or indirectly hold more than 49 per cent of votes in a commercial partnership; and
• most members of the supervisory board will have Polish citizenship and permanent residence in Poland (see Article 35 Sections 1 and 2 of the BL).
The licence may also be granted to a foreign person or a subsidiary (within the meaning of the Commercial Companies Code) of a foreign person whose registered office or place of residence is in a Member State of the European Economic Area without the above-mentioned use restrictions.
As regards audiovisual media services on demand, providing such services does not require the obtaining of a licence or notifying the register. However, as the BL applies to such services (e.g., in relation to promoting EU productions (content) and gives the President control rights towards the providers), voluntarily notifying the President about offering such services in Poland is recommended.11
ii Changes to the rules of management of state media
In January 2016, changes to the BL law were accepted by the President of the Republic of Poland. This has changed the way that members of the supervisory boards and management boards of the state television (Telewizja Polska SA) and the Polish Radio are elected, and ex lege led to the expiry of the term of the previous members of the boards. The statute granted the Minister of the Treasury the authorisation to appoint the members of the above-mentioned boards. The changes do not affect private media and should not disrupt media plurality (or freedom of speech, particularly online) in Poland.
VI THE YEAR IN REVIEW
In the past year numerous important changes have been made to the regulations on telecommunications and media services. The last of them was an amendment to the Act of 7 May 2010 on supporting the development of telecommunications services and networks. The change is aimed to facilitate investments in broadband and should make it easier to use existing technical infrastructure (road, railway infrastructure) for network construction and to access real estate to build telecommunications infrastructure.
Recent months have been dominated by security issues. Since July 2016 telecommunications firms have been obliged to register all users, including those using prepaid telephony services. This is a safety measure aimed at fighting terrorism. At the same time there are preparations for a new act of law which will comprehensively regulate safety issues.
VII CONCLUSIONS AND OUTLOOK
The dynamically developing ICT sector faces challenges that often require the intervention of law. Amendments to existing acts of law may not always be enough as sometimes only an entirely new and consistent system can provide a solution to a problem. This particularly applies to cybersecurity.
Some issues have an international dimension and have to be solved on a pan-European level, a good example being the BEREC Guidelines on the Implementation by National Regulators of European Net Neutrality Rules published in August 2016, which shed light on how to understand the concept of net neutrality.
1 Tomasz Koryzma is a partner and Agnieszka Besiekierska and Marcin Lewoszewski are senior associates at CMS Cameron McKenna Greszta i Sawicki sp k.
3 https://mc.gov.pl/aktualnosci/nik-o-e-uslugach-ministerstwo-cyfryzacji-juz-dziala; www.nik.gov.pl/aktualnosci/nik-o-internecie-szerokopasmowym.html.
10 https://uke.gov.pl/raport-z-dotychczasowej-regulacji-mtr-6359; www.uke.gov.pl/implementacja-stawek-mtr-8814.