Parliament Overhauls Telecommunications Legislation

On May 16 2000 the Parliament of the Czech Republic adopted a new Telecommunications Act, which brings Czech telecommunications regulation into line with prevailing regulatory practices in the European Union. It replaces the existing law, which was passed in 1964 and amended several times in order to to separate the regulatory and management roles of the state and further foster liberalization and competition in the industry.

Independent Regulatory Authority

The Czech Telecommunications Office (CTO) will become an independent regulatory authority with jurisdiction over the following areas:

• telecommunications regulation;
  
  
• network and service licensing;
  
  
• management and allocation of limited resources;
  
  
• price regulation,
  
  
• state inspection in telecommunications; and
  
  
• resolution of disputes relating to network access and interconnection.

The CTO will be headed by a chairman appointed for a term of four years by the government on the recommendation of the minister of transport and communications.

Licensing

The provision of telecommunications services and the operation of a telecommunications network will be subject to the prior receipt of an additional licence or subsequent registration with the CTO. Special frequency or number assignments will require a separate permit.

Individual licences
Individual licences are required for the provision of public fixed and mobile voice services, and for the installation and operation of public telecommunications networks. An application for an individual licence must include the following information:

• a description of the services that will be provided;
  
  
• the term of the licence;
  
  
• the expected date of commencement of service provision;
  
  
• proof of sufficient financing; and
  
  
• the applicant's technical and operational qualifications.

The maximum term of an individual licence is 20 years. The CTO may withdraw the licence in the case of a failure to meet legal requirements or the terms and conditions of the licence, provided that (i) the CTO has advised the licence holder of the failure and (ii) the violation has not been remedied within a 30-day remedy period.

General licence
The performance of telecommunications activities, including the installation and operation of cable television networks and the provision of leased-line services, is regulated by general licences and subject to registration with the CTO. The terms and conditions of a general licence are set out in the CTO's official bulletin. The CTO must publish a draft general licence, upon which interested parties are invited to comment within 30 days of its publication. A general licence will not become effective until at least 60 days have elapsed from its initial submission for comments. The CTO will carry out the registration and will issue a registration certificate within 15 days of receipt of a request for registration.

Universal Service Obligation

The universal service obligation (USO) is a new element in the Czech legal framework. The USO comprises a minimal set of services, and will consist of certain services that are available to all customers throughout the country of a specified quality and at affordable prices.

The USO should consist of a public voice service, including:

• facsimile and data transmissions;
  
  
• operator services;
  
  
• free emergency calling;
  
  
• public telephone directory services;
  
  
• the issue of telephone directories;
  
  
• operation of public payphones; and
  
  
• special discounts for disabled people.

A more detailed description of USO quality requirements will be provided in a special regulation. In order to ensure the USO's availability, the CTO may impose the USO on one or more public fixed voice service providers. A USO provider will have the right to recover demonstrable losses incurred in connection with the USO. A special regulation will set out the rules and procedures for contributing to a special fund that will be established and maintained by the CTO for the purposes of compensating USO providers for related demonstrable losses.

Open Network Policy

All significant market position operators of public telephone networks or providers of leased line services must grant other licensed service providers access to their networks. In addition, any public network operator or public service provider that controls at least one terminal point must, upon request, interconnect with another entity duly authorized to conduct telecommunications activities. The terms and conditions of network access or interconnection will be negotiated and the agreements should be concluded within 90 days of the initial request.

Ten days after the conclusion of the interconnection agreement, the parties involved should report to and file a complete copy of the agreement with the CTO. Requests for interconnection can only be rejected for technical reasons. If a requested party intends to reject the request for interconnection, it must petition the CTO within 15 days of the request and seek the CTO's approval of the rejection.

A special regulation will provide more detailed specification of the terms and conditions to be set forth in the draft agreement regarding interconnection. The CTO will participate in interconnection or network negotiations upon the request of any party involved in them. If the parties fail to agree on the terms and conditions of the network access or interconnection within 90 days of the commencement of negotiations, they will be bound by the CTO's written views and recommendations.

The SMP public network operators or service providers must file their reference bids for interconnection with the CTO. These should set forth the economic, technical and operational terms and conditions involved. The CTO is entitled to make changes to these reference offers.

Facility Sharing

If a new installation of telecommunications equipment is technically unfeasible or prohibitively expensive, operators of public networks may not refuse a request from another licence holder for co-installation. The terms and conditions of such facility sharing will be negotiated by the parties involved on a nondiscriminatory basis. Any disputes will be finally resolved by the construction office with appropriate jurisdiction and the CTO will be a participant to the proceedings.

Limited Resources Management

The CTO is responsible for preparing a National Frequency Allocation Table, which provides for national frequency allocation among various industries and services. Together with the Czech Radio and Television Council, the CTO coordinates the allocation of frequencies for radio and television broadcasting. The CTO also supervises individual frequency and number assignments.

A special regulation is expected to set forth charges for frequencies and numbers, and more detailed provisions regarding their allocation, use, reassignment and withdrawal.

For further information on this topic please contact Vladimira Papirnik at Squire, Sanders & Dempsey, v.o.s., advokatni kancelar by telephone (+420 2 2166 2111) or by fax (+420 2 2166 2222) or by e-mail ([email protected]).