Annual Report 2005 - UKE

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Annual Report 2005

The Office of Electronic Communications (UKE) was established on 14 January 2006 in place of the Office of Telecommunications and Post Regulation (URTiP). Thus, this Annual Report of the President of URTiP for 2005 was drafted and submitted by the President of UKE.

 

Pursuant to the Act of 29 December 2005 on transformations and modifications to the division of tasks and powers of state bodies competent for Communications and broadcasting (Official Journal of 30 December 2005, No 267, item 2258), a central-level government administration body - the President of the Office of Electronic Communications (President of UKE, Prezes Urzędu Komunikacji Elektronicznej) was established on 14 January 2006 in place of the central-level government administration body - the President of the Office of Telecommunications and Post Regulation (President of URTiP), which was liquidated on 13 January 2006. The President of UKE assumed the tasks and powers that had so far rested within the competence of the President of URTiP as well as certain powers of the President of the National Broadcasting Council (KRRiT).

The President of the Office of Telecommunications and Post Regulation (President of URTiP) was a regulatory authority within the scope of telecommunications and postal markets. It was also a specialised body with respect to the inspection of apparatus, including telecommunications terminal equipment and radio devices. The powers of the President of URTiP were specified in the Telecommunications Act of 16 July 2004 (Official Journal No 171, item 1800 with subsequent amendments), in the Postal Act of 12 June 2003 (Official Journal No 130, item 1188 with subsequent amendments) and in the Conformity Assessment System Act of 30 August 2002 (Official Journal of 2004, No 204, item 2087).


Major Activities

The assumptions of the regulatory policy of the President of URTiP translated into particular activities aimed at the implementation of major statutory objectives, i.e. ensuring universal access to telecommunications and postal services and consumer interest protection through monitoring the quality and prices for services on offer. The major achievements in 2005 included, inter alia:

First Report on the Telecommunications Market

At the end of April 2005, the President of URTiP published for the first time a comprehensive Report on the telecommunications market in 2004. The Report was based on Information provided directly by telecommunications undertakings as well as on publicly available reports and studies ordered for the purposes of URTiP The Report also presents regulatory objectives of the President of URTiP for 2005.

Report on the Study of Universal Postal Service Quality

In May 2005, a Report on the study of universal postal service quality with respect to timely deliveries of letter items as well as the amount and types of complaints and the manner in which they were handled was published in URTiP's Bulletin. The study was based on surveys conducted by URTiP data provided by postal operators and external entities operating independently of URTiP The basic parameters for the quality of universal service provided by Poczta Polska subject to analysis included: timely delivery, security of traffic, availability of services and adaptation of postal points of contact for the provision of services to disabled people.

Tenders for UMTS and GSM 1800

On 9 May 2005, the President of URTiP completed tender procedures for the reservation of frequencies in the mobile telephony. The objective of both tenders was to designate radio frequencies released by the army for the purposes of one mobile network in the UMTS standard and one network in the GSM 1800 MHz standard. The winner of the tender for UMTS was Netia Mobile, whereas the second tender for the reservation of frequencies in the GSM 1800 MHz band remained unresolved since none of the tenderers had achieved the qualifying minimum.

Thus, following public consultation, the President of URTiP announced on 23 November 2005 another tender, this time for three reservations in the GSM 1800 MHz mobile telephony.

A new proposal assumes that 99 channels available will be offered in three equal portions, each making 33 duplex radio channels. The frequency resources put on offer, following the imposition of national roaming obligations, may form the basis for the deployment of further mobile networks in Poland. In comparison with previous tender conditions, changes were made regarding the method of evaluating the impact of competitiveness and the declared amount on the ranking of offers.

Results of the Second Tender for the 3.6-3.8 GHz Band

On 25 July 2005, the President of URTiP announced winners in the second tender for nationwide wireless networks. The objective of the tender was to select entities for which a reservation of frequencies for nationwide fixed wireless access networks (e.g. in order to provide telephone services and broadband Internet access) will be made. As a result of a final evaluation made by the Tender Commission the winners were: Netia Globe S.A., Netia Świat SA. and NASK.

Tenders for Local Internet Access Networks

On 21 September 2005, 317 tender procedures for frequency reservations in the 3.6-3.8 GHz band designated for local digital radio subscriber access networks (e.g. to provide broadband Internet access) were launched simultaneously. Each tender refers to the reservation of two duplex channels in the fixed land radiocommunication service.

Establishment of a Consumer Arbitration Court

In early January 2005, the President of URTiP signed with non-governmental organisations an agreement on the establishment of a Permanent Consumer Arbitration Court to operate by the President of URTiP The court deals with disputes related to property interests resulting from agreements for the provision of telecommunications and postal services. The parties to the agreement with the President of URTiP are social organizations uniting the representatives of consumers and under-takings.

 Local Loop Unbundling

On 28 February 2005, the President of URTiP issued a decision laying down standard terms and conditions for agreements concerning local loop unbundling with respect to full and shared access. The decision was immediately enforceable due to its particular importance for further liberalisation of the Polish telecommunications market. Following comments and opinions received from interested parties, an amended LLU offer to be applied by TP S.A. was introduced ex officio by the President of URTiP by its decision of 9 August 2005. Local loop unbundling facilitates the development of competition in the area of an access network through granting operators access to the existing technical infrastructure of an operator with significant market power.

WACC

By its decision of 14 March 2005, the President of URTiP laid down the amount of weighted average cost of capital for Telekomunikacja Polska S.A. at 11.47%. The WACC corresponds to the average value in other EU Member States, which according to the data for 2004 was 11.36%. WACC is in particular used by the management of companies in order to assess the size and resources of capital capture as well as to assess how the capital is used in different investment projects. While defining WACC, the President of URTiP analysed parameters which have an influence on its level as well as the opinions of market analysts and compared these results with similar rates applied in the European Union. In addition, the President of URTiP took into account the opinions of the telecommunications industry.

Approval of a Cost Calculation Method

On 7 March 2005, the President of URTiP approved an instruction on regulatory accounting and a description of cost calculation for services provided by TP S.A. The decision was immediately enforceable since the absence of defined cost calculation principles may have a negative impact on further liberalisation of the market. The introduction of regulatory accounting may support the President of URTiP in ensuring transparency with respect to settlements applied by TP S.A. towards external entities as well as within its own company. It should also prevent unfair cross subsidising, i.e. financing uneconomic services from revenues from economic services.

Leased Lines Offer

A Leased Lines Offer to be applied by TP S.A. in its relations with other operators was introduced ex officio by the President of URTiP by its decision of 9 August 2005. The decision was immediately enforceable. Leased lines service is normally used by operators to construct their own, competitive to TP SA, offers targeted at users of telecommunications services.

Absence of Effective Competition in the Mobile Market

In August 2005, the President of URTiP commenced consultation of a draft ruling stating that the national market for access and call origination on public mobile telephone networks is not effectively competitive. The issuance of a consulted ruling was further to enable URTiP to prepare a decision designating SMP in this market and imposing regulatory obligations, inter alia, with respect to the provision of mobile networks for the purposes of national roaming on GSM and UMTS networks.

Imposition of a Financial Penalty on TP SA

The absence of defined terms of cooperation between Multimedia Polska - Mielec and TP for months hampered the development of an alternative operator. Limited possibilities to provide services by Multimedia Polska - Mielec (services provided in the entire national territory to subscribers of its own access network and to TP subscribers using a network access code) because of a protracted process to define the terms of cooperation and settlements with TP affected the operator's financial condition which had been gradually deteriorating. Thus, on 7 November 2005, the President of URTiP imposed a financial penalty of PLN 10 million on TP with respect to its failure to implement an interconnection decision of 30 June 2003.

IMEI Blocking Inspection

In January 2005, the President of URTiP carried out an inspection of IMEI blocking. The results of this inspection showed that the three mobile operators had implemented relevant procedures and, according to the Telecommunications Act, blocked IMEI numbers (International Mobile Equipment Identity) of stolen handsets. During the inspection URTiP found that all operators handled requests for blocking a stolen mobile phone received from their own clients. Although the provisions of the Telecommunications Act mention only stolen handset blocking, operators offer a complementary service of unblocking previously blocked handsets, applying the same procedure as in the case of blocking IMEI numbers.

Number Portability Inspection

On 19 September 2005, the President of URTiP started an inspection in order to verify how Polkomtel, Polska Telefonia Cyfrowa and PTK Centertel complied with their statutory number portability obligations as well as with a decision of the President of URTiP specifying time limits for the suspension of subscriber rights to retain an assigned number when changing a mobile operator. According to the schedule attached to the decision of the President of URTiP the three mobile operators were obliged to adapt their telecommunications infrastructure and to ensure that their subscribers would be able to retain their mobile phone number when changing an operator starting from 10 October 2005. The pilot phase of number portability was launched in line with the schedule and operators were prepared for the implementation of number portability.

 Audit of Poczta Polska

From 28 July until 21 September 2005, a verification of compliance with the requirements for keeping accounting books and cost accounting in line with legal provisions by the public utility company Poczta Polska was completed. Regulatory accounting and cost calculation are among key regulatory Instruments of the President of URTiP The audit report enabled URTiP to evaluate whether regulatory accounting run by Poczta Polska was correct.

Assessment of the Postal Market Operation

In May 2005, the President of URTiP submitted to the Minister of Infrastructure a study called Assessment of the postal market operation in 2004together with results of postal activity inspection. The documents prove that liberalisation of the postal sector had a significant impact on the development of this market, and in particular in terms of increased volume of postal items, increased competition in the express services market and improved quality of service.

Frequencies for First DVB-T Multiplexes

On 13 June 2005, the President of URTiP handed over TV channels for two multiplexes to become operational during the first stage of digital terrestrial TV implementation to the President of the National Broadcasting Council. The initial scenario of the transition period in the implementation of DVB-T in Poland was split into 10 stages specifying the sequence in which digital TV will be launched in particular provinces (until complete analogue switch-off on 31 December 2014). The sequence in which DVB-T will be launched results from currently anticipated availability of channels for the purposes of television.

Results of Work by the Team for Digital Terrestrial Broadcasting

At the end of August 2005, the Team for Digital Terrestrial Broadcasting appointed by the President of URTiP completed its work. The objective of the Team was to deliver technical parameters for the implementation of terrestrial transmission of television and radio programmes in the following digital systems: DVB-T, T-DAB, DRM. The analysis of options for digitalisation of radio transmission in Poland in the frequency band below 30 MHz presents technical conditions for the implementation of a digital terrestrial radio broadcasting using DRM system at long and medium waves and in the upper part of a short wave band.

ISO Quality Certificate for URTiP

On 30 June 2005, the Polish Centre for Testing and Certification extended the Quality Management System certificate No 1309/1/2004 granted to the Office on 21 June 2004. The new ISO certificate covers all administrative, regulatory and monitoring activities in broadcasting, radiocommunication, telecommunications and posts performed within relevant organisational units of URTiP's Head Office and in Regional Offices. Currently, the ISO certificate is held by all Regional Offices and eight departments or bureaus of the URTiP's Head Office.


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    INTRODUCTION
    The President of the Office of Electronic Communications (President of UKE) is the national regulatory authority for the market of telecommunications and postal services. The President of UKE is also the specialised authority in the area of equipment conformity assessment, including telecommunications terminal equipment and radio equipment.

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    INTERNATIONAL ACTIVITY
    Here you can find information about the most import ant international events, significant for the development of telecommunications and postal markets In Poland and for the statutory activity of the Office of Electronic Communications.
    International activity of the President of UKE consists of, inter alia, cooperation with the European Commission, other EU institutions and Regulatory Authorities of EU Member State. It includes also the cooperation within organizations of which UKE is a member, i.e. the International Telecommunications Union (ITU), the Body for European Regulators of Electronic Communications (BEREC) and the European Committee for Postal Regulation (CERP).


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    CONTACT
    Contact details representatives of the Office of Electronic Communications (UKE).
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