OREANDA-NEWS. November 08, 2012. The VI Annual Conference “Antimonopoly Regulations in Russia”, organized by the “Vedomosti” newspaper and “Sodeistvie Razvitiyu Konkurentsii [Promoting Competition]” Non-Commercial Partnership, included a session “Developing Competition on Telecommunications Market”, reported the press-centre of FAS Russia.

The session moderators were Deputy Head of the Federal Antimonopoly Service (FAS Russia), Anatoly Golomolzin, and the Director of the Department of Regulatory Risks Management of “MTS” OJSC, a member of “Promoting Competition” Non-Commercial Partnership, Andrey Rego. The event was attended by representatives of business community, law firms and non-governmental organizations.

Opening the session, Anatoly Golomolzin said: “We shall discuss the issues of resolving old problems as well as today’s pressing problems, and elaborate proposals for resolving possible future problems. It is necessary to universally introduce the principle of technological neutrality in industry regulations, in particular, building-up communications networks and traffic transmission or making decisions on using the earlier allocated radio-frequency sector for providing communications services not only of the second generation but also of the fourth generation (high-speed broad-band mobile Internet access). Finally, we must resolve the problems of number portability (MNP).

It is already done by all EC countries and our nearest neighbours, for instance, Belarus. I am referring to both eliminating “mobile slavery” – organizing number portability when changing a mobile provider, and ensuring number portability provided by landline operators. It is important to exercise competitive pressure upon the sector of landline telephone communications. In most Russian provinces regulated landline communications services have already become more expensive than mobile communications.

FAS continue receiving significant number of complaints about decision of regional and local authorities that prohibit operators to use aerial lines of communications established in accordance with the standards. Today we are going to discuss the problems of access to technological infrastructure and importance of adopting the relevant rules of non-discriminatory access. Another pressing item on the agenda can be non-discriminatory access to services and content-applications, such as video streaming, on-line games and others”.

Participants discussed several issues. The Head of FAS Department for Transport and Communications, Dmitry Routenberg, made a presentation about “rebooting” the reform in the telecommunications industry and the new initiatives on market regulation. He emphasized that communications services is high-technology market that is experiencing rapid changes. Several market segments are oligopolies, which makes it necessary to employ further measures for stimulating and developing competition, including simplification of inter-operator relations, changing approaches to tariff regulation, changing the rules for providing communications services, amending the content of universal communications services, reducing the number of lisenced activities.

The relevant proposals are devised by the inter-agency working group led by Anatoly Golomolzin, which was formed upon instructions of the Government Transport and Communications Commission. “We plan that all major proposals of the Group will be formalized in the Competition Road Map, which is at the final state of discussion by the interested authorities and organizations. The agencies, including, FAS, the Ministry of Communications and the Ministry of Economic Development, have reached agreement on the document”, pointed out Anatoly Golomolzin.

The Head of the Department of “Megafon” OJSC on Legal Support of Commercial Activities, Dmitry Petrov; the Head of FAS Department for Transport and Communications, Dmitry Routenberg; and the Director of the Department of Regulatory Risks Management of “MTS” OJSC, Andrey Rego, addressed the issue of developing competition in access to the infrastructure. They pointed out that the telecommunications industry was experiencing infrastructure restrictions. FAS enforcement practice with regard to accessing cable canals, buildings and structures facilities, and counteracting regional and local authorities that prohibit using aerial communications lines helps resolve these issues, however, not cardinally.

Therefore, participants discussed adopting the Rules for Non-Discriminatory Access to the communications infrastructure, and amendments to the Housing Code, the Land Code and the Civil Code that support the norms of the law on communications for possibilities to place communications equipment on various facilities. Anatoly Golomolzin stated that the “acts of some regional authorities restricted use of aerial communications lines upon an excuse of the requirements for the architectural look of cities, while local self-government bodies explain their decisions by the requirements for land improvements.

However, both do not have the right of non-compliance with the federal law, including the federal norms and rules. It is necessary to understand that at the moment up to 40-50% of Internet access services are rendered using aerial communications lines. Such prohibitions result in reducing the volume of services; forcing the lines “underground” makes the services considerably more expensive, which is unacceptable.

A possible solution to the problems is to more clearly formalize the relevant requirements in the federal norms and rules, to ensure compliance with the architecture and land improvement standards. Currently we are discussing these issues with the Ministry of Communications, and we plan to engage the Ministry of Regional Development in the discussion. If necessary, the issue can be included in the agenda of the Government Transport and Communications Commission”.

The President of the Association of Regional Communications Operators, Yuri Dombrovsky, made a presentation regarding approaches to MNP in Russia. Discussing MNP implementation, Anatoly Golomolzin pointed out that “from 2014 it is planned to ensure that subscribers exercise the right for number portability when choosing an operator. Initially it will be possible within the boundaries of a constituent territory of the Russian Federation; however, the authorities are discussing further expansion of MNP to the entire territory of Russia. We expect that there will be a demand for MNP-transfer”. Shortly before the Conference, the Chairman of the Government of the Russian Federation Dmitry Medvedev encouraged to accelerate drafting the law on abolishing “mobile slavery”.

The balance of interests in implementing the network neutrality principle in Russia was discussed by the Director of the Department of Regulatory Risks Management of “MTS” OJSC, Andrey Rego; the Head of the Antimonopoly Practice of “ART DE LEX” legal firm, Yaroslav Kulik; and the Head of the Department of “Megafon” OJSC on Legal Support of Commercial Activities, Dmitry Petrov. According to Cisco, by 2016 data traffic in mobile networks can increase by 18 times. On the developed markets the so-called “heavy content” (for instance, video streamlining, on-line games) forms up to 40% of all mobile traffic and generate increased burden on communications networks.

In view of the US and EC experience on resolving the situations with network overburden, a possible solution can be traffic control based on the neutrality principle – based on the type of traffic rather than on particular service providers, and the tariff-setting rules must be made public with maximum transparency for subscribers. “The problems of “network neutrality were discussed by OECD Competition Committee as well as at the latest meeting of the Headquarters for Joint Investigations of the Interstate Council for Antimonopoly Policy of the CIS member-states” said Anatoly Golomolzin.

“There is an established global practice when the problems emerging on the market are resolved within the framework of individual cases on violations of the antimonopoly law. So far the practice is very limited but it is important to study experience of other countries, being guided by the best practice”, continued Deputy Head of FAS. A senior lawyer of GoltsBalt, Vitaly Dianov, reported about antimonopoly enforcement practice with regard to embedded programs on mobile and other devices.