The Hungarian Parliament adopted the Act on "amendment of certain acts related to electronic communications” on 11 July 2011, with most of the changes detailed below becoming effective today, on 3 August 2011.  Changes affecting subscriber relations that require amendments to the service provider’s standard terms and conditions, or developments and investments on behalf of service providers, will be implemented only after 1 November 2011 and 1 February 2012 respectively.

The main purpose of the act is to implement the amended EU telecom regulatory framework (NRF) into Hungarian law, however, the process was also used to incorporate experience collected by the communications authority and case law in relation to customer relationships, reallocate regulatory competencies between the Ministry of National Development (“Ministry”) and the National Media and Communications Authority (“NMHH”) and correct certain defects in the Media Act.

Key changes include:

  • Power to create secondary legislation in frequency management is transferred from the Ministry to the NMHH. Other than drafting a general spectrum management policy, all substantive powers have been transferred from the Ministry to the NMHH, including the currently separate frequency allocation table and detailed rules regarding the use of certain frequency spectrum. The NMHH is now also authorised to subsequently revise individual licences granted for periods of more than 10 years, and has to revoke a spectrum licence in the case of 3 months delay in payment of the usage fee.
  • NMHH becomes significantly more powerful.  The competence of the NMHH has also significantly widened in regulating the contractual terms between subscribers and service providers and in any obligatory data provision of service providers related to the quality of their services. NMHH has a wider mandate to apply injunctions and may impose larger fines related to breaches in procedural rules.
  • Strengthened consumer protection rules. A limit of 24 months to loyalty periods in customer contracts (also applicable to business customers) has been introduced along with the obligation that service providers offer contracts with 12 month loyalty periods. In addition, liquidated damages upon early termination by the subscriber cannot exceed the received discounts. Provisions where contracts with business customers may deviate from regulated residential customer contracts will be set out in upcoming NMHH secondary legislation. Heavier transparency and information requirements towards customers have also been prescribed. Rules on the modification of the channel line-up by the program distributors are introduced.
  • Consultation procedures with NMHH are weakened. The scope of issues when mandatory consultation is required remains very narrow but NMHH will no longer be required to consider comments received or to explain why comments were or were not taken into account. The right of interested service providers to ask for a hearing in the process is deleted. The NMHH is no longer obliged to hold biannual public hearings.
  • Personal data breach registry prescribed for service providers. Service providers must keep a register of and notify NMHH of cases of personal data breaches.  If the breach is likely to adversely affect a subscriber’s personal data or privacy, he must be notified as well.
  • Extended co-location and facility sharing obligations. The scope of facilities that can be ordered by NMHH to be shared is extended to civil engineering network elements – irrespective of the operator holding significant market power – under certain circumstances.
  • Functional separation introduced. Legal separation of the wholesale and retail business of a vertically integrated service provider is introduced as a potential last resort remedy that NMHH can implement on service providers with significant market power if, despite the application of traditional remedies, there is no effective competition.
  • Rules on parental lock amended. Due to the amendment, it is now not only the media service provider but also the program distributor who may or shall use effective technical solutions to prevent minors from accessing harmful content.
  • Must carry obligations modified. The number of media services defined by the Media Council in its authority decision to fall under the must carry obligation increased from two to three; out of which one may be a community media service and two may be public service media services.
  • New right of the Media Council to terminate or change pubic media services. By a new regulation, only one public service audiovisual and one public service radio media service must be offered to the pubic, and the media authority may review whether public media service providers have fulfilled the objectives of public service and economical operation.
  • Only investigation authorities and courts may oblige journalists to reveal sources. One of the amendments restricts the circle of authorities that can oblige journalists to reveal their sources of information in “exceptionally justified cases” for an investigation or the prevention of a crime, and in connection with safeguarding national security and public order to investigation authorities.