The validity of UKE president’s appointment issue can shake the telecoms market
2007-06-01
The ruling of the Competition and Consumer Protection Court (SOKiK), which stated that the Office of the Electronic Communications (UKE) president has been appointed illegally, might cause turmoil on the Polish telecommunications market. The ruling will be used by the operators to challenge the regulator’s decisions in courts. As a result, the UKE’s actions might be paralysed for a long time. In May 2006, Anna Strezynska was appointed as the regulatory office president by Prime Minister Kazimierz Marcinkiewicz on the basis of the amended Telecommunications Law and the radio and television act. According to the amendments, the UKE’s president should be appointed by the Prime Minister from the candidates selected by the National Broadcasting Council (KRRiTV). However, Ms Strezynska was not on the short list, which was a surprise, as she was regarded as the best candidate. Nevertheless, she was appointed as the head of the UKE.
TP SA has claimed, in an appeal against a PLN 100m fine imposed by the regulator, that the decision should be overturned because the UKE’s president has been appointed unlawfully. The SOKiK supported the incumbent’s claims and ruled that the law was breached by Ms Strezynska’s appointment. The UKE has expressed its surprise by the ruling and stated that it would lodge an appeal. The appeal procedure might take months before the ruling is either upheld or overturned. If the court of appeal upholds the ruling, the regulator will petition the Supreme Court (SN) for a cassation.
The SOKiK ruling might be used by the telecommunications operators to challenge the regulatory decisions in court and to overturn them. The decisions made during Ms Strezynska’s term of office will not, however, be automatically declared invalid. According to the Office’s spokesperson, Jacek Strzalkowski, there are several tens of decisions per annum that could be questioned by the telecoms market players on the basis of the SOKiK ruling. These refer, among others, to tenders, fines, decrease of prices and interconnection offers. Mr Strzalkowski also stated that the UKE is not considering the suspension of its activity and waiting for the final ruling, as this would paralyse the telecoms market for months.
We expect, however, that the operators would refer to the ruling when complaining about the regulatory decisions. The UKE insists that the incumbent has been, to date, filing lawsuits against all the regulator’s decisions that involved fines or were meant to increase competition. TP SA is now likely to use the argument about Ms Strezynska’s illegal appointment in such hearings more frequently. In our opinion, this might cause the procedures to extend, as the courts would wait for the final ruling on the legal validity of the UKE’s presidential nomination. Therefore, the regulatory policy might be somewhat hampered, even though the UKE emphasises that it is not going to cease making decisions.
The worst scenario, however extremely unlikely, is that the operators, and particularly TP SA, will now try to overturn all the regulator’s decisions essential to the increase of competition that were made during the last 18 months and that these applications will be supported by the courts. As a result, the Polish telecoms market would go back to the state from before Ms Strezynska’s term of office.
Mateusz Malicki
IT & Telecoms Analyst
PMR Publications
mateusz.malicki@pmrpublications.com
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