The International Comparative Legal Guide to: Telecoms ...€¦ · Monereo Meyer Abogados Mori Hamada & Matsumoto Nikolinakos – Lardas & Partners LLP Pinsent Masons Germany LLP

Published by Global Legal Group, with contributions from:

Arioli LawArnold & PorterAshurst Hong KongAttorneys-at-Law TRUSTBagus Enrico & PartnersBEHRINGBello, Gallardo, Bonequi y Garcia, S.C.BTG LegalCairn LegalCMS (UAE) LLP D’LIGHT Law GroupDrew & Napier LLCFaskenFocaccia, Amaral, Pellon & Lamônica AdvogadosJingtian & GongchengKahale Abogados

Kalema Legal & AssociatesKhaitan & CoMazanti-Andersen Korsø JensenMinterEllisonMonereo Meyer AbogadosMori Hamada & MatsumotoNikolinakos – Lardas & Partners LLPPinsent Masons Germany LLPPortolano CavalloPreiskel & Co LLPRato, Ling, Lei & Cortés – AdvogadosRIAA Barker GilletteShearn Delamore & Co.Tilleke & GibbinsÜnsal Gündüz Attorneys at LawWilkinson Barker Knauer, LLP

ICLGThe International Comparative Legal Guide to:

A practical cross-border insight into telecoms, media and internet laws and regulations12th Edition

Telecoms, Media & Internet Laws & Regulations 2019

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DisclaimerThis publication is for general information purposes only. It does not purport to provide comprehensive full legal or other advice.Global Legal Group Ltd. and the contributors accept no responsibility for losses that may arise from reliance upon information contained in this publication.This publication is intended to give an indication of legal issues upon which you may need advice. Full legal advice should be taken from a qualified professional when dealing with specific situations.

The International Comparative Legal Guide to: Telecoms, Media & Internet Laws & Regulations 2019

General Chapters:

Country Question and Answer Chapters:

1 European Digital Single Market: A Year in Review – Rob Bratby, Arnold & Porter 1

2 Re-Thinking Regulation – Tim Cowen & Daniel Preiskel, Preiskel & Co LLP 4

3 Liable vs. Accountable: How Criminal Use of Online Platforms and Social Media poses Challenges to Intermediary Protection in India – Vikram Jeet Singh & Prashant Mara, BTG Legal 7

4 Argentina Kahale Abogados: Roxana M. Kahale 10

5 Australia MinterEllison: Anthony Borgese & Athena Chambers 16

6 Belgium Cairn Legal: Guillaume Rue & Frédéric Paque 26

7 Brazil Focaccia, Amaral, Pellon & Lamônica Advogados: Rafael Pellon 36

8 Canada Fasken: Laurence J. E. Dunbar & Scott Prescott 43

9 China Jingtian & Gongcheng: Chen Jinjin & Hu Ke 51

10 Congo – D.R. Kalema Legal & Associates: Fulgence Kalema Bwatunda & Gabson Mukendi Kabuya 61

11 Denmark Mazanti-Andersen Korsø Jensen: Hans Abildstrøm 68

12 Finland Attorneys-at-Law TRUST: Jan Lindberg & Terhi Rekilä 75

13 France BEHRING: Anne-Solène Gay 83

14 Germany Pinsent Masons Germany LLP: Dr. Florian von Baum & Dr. Igor Barabash 94

15 Greece Nikolinakos – Lardas & Partners LLP: Dr. Nikos Th. Nikolinakos & Dina Th. Kouvelou 104

16 Hong Kong Ashurst Hong Kong: Joshua Cole & Hoi Tak Leung 115

17 India Khaitan & Co: Harsh Walia 125

18 Indonesia Bagus Enrico & Partners: Enrico Iskandar & Bimo Harimahesa 133

19 Italy Portolano Cavallo: Ernesto Apa & Eleonora Curreli 141

20 Japan Mori Hamada & Matsumoto: Hiromi Hayashi & Akira Marumo 149

21 Korea D’LIGHT Law Group: Won H. Cho & Hye In Lee 157

22 Macau Rato, Ling, Lei & Cortés – Advogados: Pedro Cortés & José Filipe Salreta 166

23 Malaysia Shearn Delamore & Co.: Janet Toh 178

24 Mexico Bello, Gallardo, Bonequi y Garcia, S.C.: Carlos Arturo Bello Hernández & Bernardo Martínez García 188

25 Pakistan RIAA Barker Gillette: Mustafa Munir Ahmed & Shahrukh Iftikhar 198

26 Singapore Drew & Napier LLC: Lim Chong Kin & Shawn Ting 209

27 Spain Monereo Meyer Abogados: Consuelo Álvarez & Christian Krause 219

28 Switzerland Arioli Law: Martina Arioli & Antonio Bernasconi 228

29 Thailand Tilleke & Gibbins: David Duncan 235

30 Turkey Ünsal Gündüz Attorneys at Law: Burçak Ünsal & Dr. Okan Gündüz 242

31 United Arab Emirates CMS (UAE) LLP : Rob Flaws & Rachel Armstrong 250

32 United Kingdom Arnold & Porter: Rob Bratby 256

33 USA Wilkinson Barker Knauer, LLP: Brian W. Murray & Rachel S. Wolkowitz 263

34 Vietnam Tilleke & Gibbins: Tu Ngoc Trinh & Waewpen Piemwichai 272

Contributing EditorRob Bratby, Arnold & Porter

Sales DirectorFlorjan Osmani

Account DirectorOliver Smith

Sales Support ManagerToni Hayward

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Senior EditorsSuzie LevyCaroline Collingwood

Chief Operating OfficerDror Levy

Group Consulting EditorAlan Falach

PublisherRory Smith

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EDITORIAL

Welcome to the twelfth edition of The International Comparative Legal Guide to: Telecoms, Media & Internet Laws & Regulations.

This guide provides the international practitioner and in-house counsel with a comprehensive worldwide legal analysis of telecoms, media and internet laws and regulations.

It is divided into two main sections:

Three general chapters. These chapters provide readers with an overview of key issues affecting telecoms, media and internet laws and regulations, particularly from the perspective of a multi-jurisdictional transaction.

Country question and answer chapters. These provide a broad overview of common issues in telecoms, media and internet laws and regulations in 31 jurisdictions.

All chapters are written by leading telecoms, media and internet lawyers and industry specialists and we are extremely grateful for their excellent contributions.

Special thanks are reserved for the contributing editor Rob Bratby of Arnold & Porter for his invaluable assistance.

Global Legal Group hopes that you find this guide practical and interesting.

The International Comparative Legal Guide series is also available online at www.iclg.com.

Alan Falach LL.M.

Group Consulting Editor

Global Legal Group

[email protected]

ICLG TO: TELECOMS, MEDIA & INTERNET LAWS 2019 1WWW.ICLG.COM

Chapter 1

reported back to the Commission in March 2018 with recommendations; and

■ announced that the Parliament, the Council and theCommission had reached a political agreement to endunjustified geo-blocking for consumers who wish to buyproductsorservicesonlinewithintheEU.

InDecember2017, theCommissionwelcomedagreedchanges toVATrulestohelponlinesmallbusinessesandincreasecomplianceforgoodssoldthroughlargeonlineplatforms.InJanuary2018,theCommission:■ reachedanagreementonanewregulationtomakepricesfor

cross-border parcel delivery servicesmore transparent andaffordable, and to increase regulatory oversight of the EUparcelmarket;and

■ welcomed the coming into force of the second PaymentServicesDirectiveanditsrules,thatmakeitcheaper,easierandsafertomakeonlinepaymentsintheEU.

InMarch2018,theCommission:■ startedtheprocessofsettingupanexpertgrouptolookatthe

impactofartificialintelligence;and■ announced proposals to extend the Eurozone cross-border

payments rules to cross-border paymentswithin theEU toincludecountriesandcurrenciesnotintheEurozone.

InApril2018,theCommission:■ presentedaseriesofmeasurestoputartificialintelligenceat

theserviceofEuropeansandboostEurope’scompetitivenessin this field. The Commission proposed a three-prongedapproach to increase public and private investment inartificial intelligence, prepare for socio-economic changes,andensureanappropriateethicalandlegalframework;

■ putforwardasetofmeasurestoincreasetheavailabilityofhealthcaredataintheEU,buildingonpreviousinitiativestoboostthefreeflowofnon-personaldataintheDigitalSingleMarket, by allowing citizens to easily access and managetheirhealthcaredata,andallowingpublicauthoritiestousedata more effectively in research, prevention and healthsystemreforms;

■ proposed new rules for online platforms to provide smallbusinesses that are relianton thoseplatformswitha safetynetinthedigitaleconomy;and

■ proposedmeasurestotackledisinformationonline,includingan EU-wide Code of Practice on Disinformation, supportforanindependentnetworkoffact-checkers,andaseriesofactions to stimulate quality journalism and promotemedialiteracy.

Introduction

This chapter reviewsand summarises legislativedevelopments inthe European Digital Single Market (DSM) since the EuropeanCommission’sMay2017mid-termreview. Itwill thenreviewinmoredetail theupcomingchangestotheEU’stelecomsrulesandtheproposalstostimulatefreemovementofnon-personaldata,andthenfinallyconsiderstheimplicationsofthelackofprogressontherevisedePrivacyrules.Launchedin2015,theDSMcomprisespolicyactivityinthreeareas:(1) betteraccessforconsumersandbusinessestoonlinegoods;(2) therightenvironmentfordigitalnetworksandservices;and(3) economyandsociety.Whilstactualprogresshassofarbeenrelativelyslow,theDSMisakeyareaoffocusfortheEuropeanCommission;itislikelytohavesignificant impact over themedium term as the variousmutuallysupportingproposalsprogressandareimplemented.

Overview of DSM activity in 2017–18

At the 2017 Tallin Summit, Commission President Junckerstated that theDSM comprised 43 initiatives put forward by theCommission,ofwhich24werelegislativeproposals.However,henoted thatonlysixof thesehadso farbeenadopted. During theyear,theCommissionissued30pressreleasesrelatedtotheDSM,butprogresswaslimitedtoasmallernumberoftopics:InSeptember2017,theCommission:■ publishedtheirproposalsforaregulationgoverningthefree

flowofnon-personaldata,whichwaspoliticallyagreedbytheParliamentandCouncilinJune2018;

■ announcedtheirproposalsforanEUCybersecurityAgencyandarelatedEuropeanCertificationScheme;

■ started a process to determine the approach that should betakentowardstaxingthedigitaleconomyinEurope–drivenby a perception that some large, mainly US-based, onlinefirmswerenotpayingtheir‘fairshare’oftax;and

■ issued guidelines and principles for online platforms,withthe aim of increasing the proactive prevention, detectionandremovalof illegalcontent incitinghatred,violenceandterrorismonline.

InNovember2017,theCommission:■ started a public consultation on ‘fake news’ and online

disinformation, convening a high-level expert group toreviewtheissuesandpotentialactions,whichsubsequently

Arnold & Porter Rob Bratby

European Digital Single Market: A Year in Review

WWW.ICLG.COM2 ICLG TO: TELECOMS, MEDIA & INTERNET LAWS 2019

Arnold & Porter European Digital Single Market

As with all EU legislative proposals, the final text representscompromise. TheCommissionwanted to further harmonise andcentraliseregulation,buttheMemberStatespushedbackstronglyagainstthisproposal;thefinalproposallargelyretainsthestatus quo ofregulationandenforcementatthenationallevel.Therulesonco-investmentwerehighlycontentious,anditremainsto be seen whether they will achieve their policy objectives ofstimulating additional investment, or if they will just form aregulatoryopportunitytobeexploitedbysomemarketparticipants.

Free Movement of Non-Personal Data

TheCommission explains that the June 2018 agreement reachedwith theParliament and theCouncil for aRegulationon the freemovementofnon-personaldatawillensure:■ “Free movement of non-personal data across borders:

every organisation should be able to store and process data anywhere in the European Union;

■ The availability of data for regulatory control: public authorities will retain access to data, also when it is located in another Member State or when it is stored or processed in the cloud;

■ Easier switching of cloud service providers for professional users. The Commission has started facilitating self-regulation in this area, encouraging providers to develop codes of conduct regarding the conditions under which users can port data between cloud service providers and back into their own IT environments; and

■ Full consistency and synergies with the cybersecurity package, and clarification that any security requirementsthat already apply to businesses storing and processing data will continue to do so when they store or process data across borders in the EU or in the cloud.”

In theCommission’s January2017Communicationon this topic,abroaderrangeofmoreintrusiveregulationwasproposed;buttoreachagreement,thefinalproposedregulationisnowmoreanodyneandlessintrusive.However,aswehaveseeninotherareas(e.g.,roaming), once regulation starts, it can gain momentum over atimeperiodlargerthanthelife-spanofanyParliamentornationalgovernment. This proposal, overshadowed by the GDPR, hasreceived relatively little press coverage, but I regard it as one ofthemoreimportantlegislativedevelopments(initsfutureiterations)overthemediumterm.

Delays in the Revised ePrivacy Rules

What are the current rules?

ThecurrentePrivacyruleswereintroducedin2002andupdatedin2009.TheePrivacyrules(containedinDirectives)weredesignedtositalongsidetheoldDataProtectionDirective(nowsupersededbytheGDPR)andtheoldtelecomsregulatoryframework–soontobesupersededbythenewEuropeanElectronicCommunicationsCode.Theold rules (still inplace)dealtwith twoconceptuallyseparateareas:(1) the specific application of the data protection rules to

providers of electronic communications providers (i.e.,telecomsoperators);and

(2) consumertelemarketingandcookies.

InMay2018,theGeneralDataProtectionRegulation(GDPR)cameinto force. However, the revised ePrivacyRegulation (whichwasoriginallyplannedtobeeffectivesimultaneouslywiththeGDPR)didnotcomeintoforce,theimplicationsofwhicharediscussedbelow.In June 2018, the Commission, the Parliament and the Councilreachedapoliticalagreementto:■ update the EU’s telecoms rules – the European Electronic

CommunicationsCode;and■ progressaRegulationofthefreeflowofnon-personaldatain

theEU.Thenextsectionsofthischapterdescribethesetwoareasinmoredetail, and end by discussing the implications of the delay inimplementingtherevisedePrivacyrulestositalongsidetheGDPR.

Agreement on New Telecoms Rules – the European Electronic Communications Code

In its June 2018 press release, the Commission explained that itintendsthenewEuropeanElectronicCommunicationsCodeto:“Enhance the deployment of 5G networks by ensuring the availability of 5G radio spectrum by end of 2020 in the EU and providing operators with predictability for at least 20 years in terms of spectrum licensing; including on the basis of better coordination of planned radio spectrum assignments.Facilitate the roll-out of new, very high capacity fixed networks by making rules for co-investment more predictable and promoting risk sharing in the deployment of very high capacity networks; promoting sustainable competition for the benefit of consumers,with a regulatory emphasis on the real bottlenecks, such as wiring, ductsandcablesinsidebuildings;andaspecificregulatoryregimefor wholesale only operators. Moreover, the new rules will also ensure closer cooperation between the Commission and the Body of European Regulators for Electronic Communications (BEREC) in supervising measures related to the new key access provisions of co-investment and symmetric regulation.Benefit and protect consumers, irrespective of whether end-users communicate through traditional (calls, sms) or web-based services (Skype, WhatsApp, etc.) by: ■ ensuring that all citizens have access to affordable

communications services, including universally available internet access, for services such as e-government, online banking or video calls;

■ ensuring that internationalcallswithin theEUwillnotcostmore than 19 cents per minute, while making sure that the new rules would not distort competition, innovation and investment;

■ giving equivalent access to communications for end-userswith disabilities;

■ promoting better tariff transparency and comparison ofcontractual offers;

■ guaranteeingbettersecurityagainsthacking,malware,etc.;■ betterprotectingconsumers subscribing tobundledservice

packages;■ making it easier to change service provider and keep the

same phone number, including rules for compensations if the process goes wrong or takes too long;

■ increasing protection of citizens in emergency situations,including retrieving more accurate caller location in emergency situations, broadening emergency comm-unications to text messaging and video calls, and establishing a system to transmit public warnings on mobile phones.”


Arnold & Porter European Digital Single Market

Status of new rules

TheCommission’s original planwas that the new ePrivacy ruleswould be updated and come into effect at the same time as theGDPR.Thesenseofthatapproachisobvious;specificrulesrelatingto data protection should be consistentwith the general rules ondataprotection.However,anumberofthechangesproposedhaveprovedcontroversial;whilst theGDPRwasagreed,at thetimeofwriting the proposed new ePrivacy Regulation has still not beenagreedand is subject toongoingamendmentanddebate,withnocleardateforagreementandimplementation.

Impact

ThedelaysinupdatingtheePrivacyrulesareunfortunate.FollowingtheentryintoforceoftheGDPR,therearenowinconsistenciesandconsequentialareasofregulatoryriskforanybusinesswhichneedstocomplywithboththeGDPRandtheoldePrivacyrules.

Conclusion

Europe’s Digital Single Market continues to progress. Whilstprogresson individual initiativescanbeslow,or sometimesevenderailed, it remains an area of intense focus and activity for theCommission and will have a significant impact over the comingyears.

Rob BratbyArnold & Porter 25 Old Broad StreetLondon EC2N 1HQUnited Kingdom

Tel: +44 77 3831 2629 Email: [email protected]: www.arnoldporter.com

With more than 1,000 lawyers practising across nine US and four international offices, Arnold & Porter is built on a foundation of history and experience. We bring renowned regulatory expertise, a powerful cross-border litigation bench, and a sophisticated transactional practice, together with leading multidisciplinary practices in the telecoms, life sciences and financial services industries. We hold true to our core values of: excellence in the practice of law; adherence to the highest standards of ethics and professionalism; appreciation and respect for diversity among our colleagues; and a deep commitment to public service and pro bono.

Rob provides regulatory and transactional advice to companies in the telecoms, media, and technology sectors in Europe and Asia.

Rob advises on regulatory issues in the telecoms, media and technology sectors and on data privacy and cyber security issues more widely.

Rob advises clients on mergers, acquisitions, disposals, joint ventures, and equity and debt investments, and provides strategic counsel to companies and their boards.

Rob advises on complex commercial transactions including sourcing, cloud, mobile services and applications, digital and mobile money, e-commerce and m-commerce, telecoms network roll-out, network sharing, commercialisation and exploitation of intellectual property (IP), procurement, interconnection, MVNOs, roaming, broadcast and transmission, construction, maintenance and operation of sub-sea cable systems, satellite as well as customer, resale distribution and partnering arrangements.

Rob has extensive experience in structuring foreign investment into emerging markets.

Rob has a B.A. (Hons) and M.A. (Cantab) from Cambridge University and is a solicitor of the Supreme Court of England and Wales. He has an MBA from Henley and has completed the INSEAD International Directors Programme. His work experience includes OFTEL, the UK telecoms regulator, and senior commercial roles at a European telecoms operator. Now again working in London, he spent over four years working across Asia from Singapore.

Rob has been recommended as a leading telecoms, media, technology and e-commerce lawyer in both London and Singapore by independent guides including Chambers & Partners, The Legal 500, and the IBA’s Who’s Who of Lawyers.

Rob blogs as The Digital Watcher at www.thedigitalwatcher.com.


Chapter 2

Preiskel & Co LLP

Tim Cowen

Daniel Preiskel

Re-Thinking Regulation

viewtoensuringthebestoutcomesforconsumers,inparticularbyreferencetoprice.UKmergercontrolhasalsotendedtofocusonthepriceimplicationsofmergers,and,withsomeexceptions,onlyscrutinisesmergerswherethepartiesinvolvedmeetcertainturnoverthresholds.The focus on financial outcomes is not inherently illogical orwrong,per se,andafocusonshort-termconsumerwelfare–intherelatively easy-to-model form of pricing outcomes – is a centraltenet of competition law and regulation worldwide. However,the risk is that thecurrent framework is implementedwithunduefocusontheshortterm,failingtoproperlyconsiderthelong-termoutcomesof regulatorydecisions,or thefutureshifts thatmaybeseeninthemarket.Thefocusonshort-termconsumerwelfareandmeasurableimpactson post-merger prices is a common issue among merger controlauthorities. One example of the issues of overly focusing onconsumerwelfareisthatdominantcompaniesmaybeabletostiflecompetitionthroughacquisition.InternetgiantssuchasGoogleandFacebook,whoholdconsiderablemarketsharesinInternetSearchand SocialMedia, respectively, as well as various other projectseachcompanyinvestsin,areabletopurchaseinnovativestart-ups“undertheradar”,sincetheturnoverofthepurchasedcompanyisbelowmergerassessmentthresholds.An example of telecoms regulation is found in Ofcom’s 2016Business Connectivity Market Review(BCMR),wheretheregulatorimplemented a price cap in the form of the Leased Line ChargeControl (LLCC) on BT/Openreach’s wholesale Ethernet lines.The essential rationale was to drive the dominant incumbent’sinfrastructure wholesale prices down towards cost. The reducedwholesalepriceswouldbepassedontobusinessesandconsumers,allowingforpricereductionsacrosstheindustry.Lowerpricingsoundslikeafantasticoutcomeforallinvolved,sowhat’stheproblem?BT/OpenreachisahugeorganisationwithalegacynetworkalreadybuiltacrossthewholeoftheUK.Economiesofscaleandscopemeanitscostsarelikelytobebelowthatofanynew-entrantcompetitor,althoughOfcomdidnotdothemodellingtodeterminethisforsure.Withfastandreliablefibreconnectionsbecominganecessity forbusinessand leisure, theupcoming“5Grevolution”inmobile,andBT/Openreach’strackrecordofunder-investmentandfailuretomeetFTTxtargets,theUKnowmorethanever needs alternative infrastructure providers, with innovative,faster,andmorereliablenetworkarchitecturethanBT/Openreach’stree-and-branchnetwork.LowerpricesintheshorttermmaythusrestricttheopportunityforcompetitiveinvestmentandunderminetheUK’sdigitalfutureinthemediumtolongerterm.

1 Introduction

TheUKandEuropewerepioneersintheliberalisationoftelecomsmarkets, which saw the break-up and regulation of former statemonopoly telecoms companies. The implementation of theEuropeanFramework has, inmany parts ofEurope, been hugelysuccessful,leadingtobetteroutcomesforconsumersandbusinesses,wherecompetitionandinvestmenthasfollowedliberalisation.ThelateLordLeonBrittan,theUK’sEUCompetitionCommissionerinthelate’80sandearly’90s,playedakeyrole,includingsettingupEUmergercontrol.SomeinsidetheEUCommissionatthetimewerescepticalastohisvisionthatcompetitioncouldbeintroduced,ending themonopolies of the likes ofDeutscheTelekom,FranceTelecom,TelecomItaliaandTelefonica.However,hisvisionwasrealised, and in his ownwords: “I like to think that my work in bulldozingthroughreformswhichleveredopenmarkets,intensifiedcompetition and put public sector monopolists on the back foot contributed to changing the terms of the debate.” The authorscertainly agreewith his assessment, and itmay now be the timefor theUKto take the leadbyadoptingabullishapproach in re-assessingregulationforthebigdatasociety.With increasing technological convergence, in any event, it iscertainly time to considerwhether theUK’s regulatory regime isfitforpurpose.Intelecoms,theUKisplaguedbyquestionablemobilesignalcoverageinmanyruralareasandoneofthelowestlevelsofFTTxpenetrationintheOECD,raisingquestionsaboutthenation’s5Greadiness.Intheinternetsector,thepastdecadehasseenconsiderablemarketconcentration and consolidation of market power, often withoutmuchregulatoryscrutiny.ItispossiblethatBrexitwillgivetheUKanopportunitytore-visitandre-assessexistingEUregulatoryapproaches.Thisraisesanumberofquestions:■ Areweblindlywalkingintoanotherageofmonopoly?■ Howcanwebetterimplementourregulatoryframeworkto

ensurethebestconsumeroutcomesinthelongterm?■ Howwilltheever-omnipresentshadowofBrexitimpacton

this?

2 Issues with Current Regulation

ThebasisfortheUK’stelecomsregulationisfoundinaseriesofEUDirectives.Historically,thewayinwhichthisframeworkhasbeenimplementedintheUK,andacrossEurope,hasbeenwitha


Preiskel & Co LLP Re-Thinking Regulation

businessbyGeneralElectricsubjecttodivestmentofcentralpartsofAlstom’s heavy-duty gas turbines business. The recent Dow/DuPontdecisioncontinues in thisvein,asapproval to themergerwasgivenconditionallyondivestmentofDuPont’sglobalpesticidebusiness,overinnovationconcernsaboutreducednumbersofnew“activeingredients”inthepesticidesbusinesstobedevelopedperyearbythemergedentity.It isclear that innovationissomethingtheEuropeanCommissionis increasingly concerned about; even so, the indications are thatauthoritiesarepredisposedtofavourrelyingontheavailablehistoricevidenceofpricingimplicationsthanininvestigatingtheevidenceof detrimental impact upon innovation. To avoid unsatisfactorymedium-andlong-termoutcomesforconsumers,morefocusneeds tobeplacedonfactorsotherthanshort-termconsumerwelfareintheformofpricing,andthescopeisthereinthelawtodothis.Indeed, it does seem that the issues raised above do appear tobe filtering through to legislature. The UK, for example, hasimplemented two key changes to its merger regime to take intoaccountnationalsecurityconcernsincertainsectors.Itmaybethattheseleadthewaytoawiderre-considerationofthemergercontrolregimeandahigherfocusonnon-economicconsiderations,suchasimpactuponinnovation.

4 An Opportunity to Reform UK Competition Law and Regulation After Brexit to Encourage Infrastructure Investment and Innovation

Theprevioussectionfocusedonwhatcanbedonewithinthecurrentlegalandregulatoryframework.However,asreaderswillbeaware,muchof this framework isbasedonEuropean legislation, andastheUKiscurrently in theprocessofnegotiatinganexit fromtheEuropeanUnionasofMarch2019, theobviousquestion is:whathappensnext?Whilesomecompetitionlawyers,manyofwhomstartedtheircareersas“Europeanlawexperts”,maybeconcernedbytheapproachofthe great unknown,might it be best to see the upcoming shift inparadigmsasanopportunityfortheUKtobecomealeader,attheforefront of competition and regulatory law and policy, to createaregimesuitableforafast-paced,technology-dominatedmarket?

What possible reforms could be implemented?

Intelecomsregulation,thefocuscouldshiftfromensuringthatshort-termpricesmatchthedominantprovider’scosts.Emphasiscouldinsteadbeonensuringbarriers toentryare lowered toencouragethemarketentryofdisruptivenewplayers,whoinvestincompetinginfrastructure.Thiswouldleadtomoreintensecompetitionintheprovision of telecoms infrastructure and services, which would,in time, increase capacity in the system, andbringbetter quality,innovativeproductstoconsumersatlowerprices.In themerger control regime, changes could alsobemade to theturnoverthresholds.Thismightincludeloweringthethreshold,tocapturesomeofthe“under-the-radar”mergersmentionedabove.Itmightincludemakingamergerassessmentbasedonthevalueofthetransactioninquestion,ratherthantheturnoverofthetargetentity,whichhasbeendoneinGermany.Anotherapproachwouldbetomonitortheacquisitionsofalldominantcompaniesfortheireffectoninnovation.Tobeclear,onlythosecompaniesthathavealreadybeenfoundtobedominantwouldbesubjecttosuchscrutiny,sincemanysmallerdealsbetweennon-dominantplayerswouldbeofnoconcern.

3 Improving the Implementation of the Current Framework: Should there be a Shift away from the Emphasis on Short-Term Assessment?

The current framework for regulation and competition law is notnecessarily broken beyond repair; regulatory and competitionauthorities have scope to work within the legal framework toaddresssomeoftheissuesofmarketconcentrationanddecreasinglevelsofinnovation.There is scopewithin the existing framework for the focus to beonmorethanjustpricingoutcomes.Yes,itiseasiertoaccuratelymodelshort-termpricingeffects,withconceptssuchasinnovation,particularly in the long term, being generally more difficult todetermine and calibrate. This may be limited by the currentmodellingmethodsusedbyeconomists,withtheirfocusonUpwardPricingPressure(UPP)andpost-mergeroutcomesbasedonhistoricinformationofpre-mergermarketdynamicsandpricing.Andyes,ofcourse regulatorybodiesandcompetitionauthorities feelmoreabletomakedecisionsbasedonthemorereliableshort-termdatathanpotential long-termoutcomes. However,no investigationoftheeffectsoftransactionsoninnovationisroutinelyconducted.Seeninthecontextoftheincreasinglyconcentratedmarketstructure,it is vital for the UK’s digital future that regulatory bodies andcompetitionauthoritiesinvestigateinnovationandmarketstructure.TakeGoogle’sacquisitionofBeatThatQuote,forexample.BeatThatQuotewasanonlineinsurancecompany,smallbycomparisonto others in the insurance industry. Economic modelling in theOFT’s investigation indicated that it was unlikely Google woulduse itsmarketpower in InternetSearchandonline advertising topromotethisonlineinsurancecompanyinsearchrankings,becausethatwouldmean foregoing revenue fromother companieswhichweresponsored linksat the topof theGooglesearch. If theaimofanyreasonablebusinessendeavour is tomaximiseprofit, therewouldbelittleeconomiclogicintheshortterminsuchaction.However,somewhatpredictably,afterthedealwasapproved,thatis exactlywhatGoogle did. The economic rationale for such anapproach is anti-competitive and recognised in the case law onabuse of dominance; Google sought to promote its own productto the detriment of its rivals, in an effort to exclude others fromthe market and maximise its profits from being one of the veryfew players left providing online insurance quotations. Googlehas now been fined £2.4bn for self-promotion of its own onlineprice comparison products at the expense of its rivals by theEUCommission. Actions like this aim to guarantee future revenuestreamthroughmaintainingacompany’spositiontothedetrimentofcompetitors,whileforegoinganelementofshort-termrevenues.Theauthorities’focusonshort-termprofitmaximisationmeanssuchpossibleoutcomesareoftennotdulycapturedinmodelling;yettheimpactoncompetitioninthemarketandtheeffectonotherplayers,thechoicesavailabletousers,andtheprospectsformarketstructuretodeliverfutureinnovationcanbesignificant.Indeed,theEUhas,toanextent,beenleadingthewayinthisrespect,raising innovation concerns in a number of merger situations inthe last fewyears – although there is undoubtedlymore that canbedone.OneexampleofthisisintheNovartis/GlaxoSmithKlinemerger, where concerns were raised about the parties’ oncologybusiness,wheretheCommissionrequiredthepartiestodivestoneof the pipeline projects in order to mitigate risks to innovation.AnotherexamplewhereinnovationconcernswereaddressedbytheCommissionistheGeneralElectric/Alstommerger,whereconcernswere raised about the impact on innovation in the energy sector.Again,theCommissionapprovedtheacquisitionofAlstom’senergy


Preiskel & Co LLP Re-Thinking Regulation

Tim Cowen Preiskel & Co LLP4 King’s Bench Walk, TempleLondon, EC4Y 7DLUnited Kingdom

Tel: +44 20 7332 5645Email: [email protected] URL: www.preiskel.com

Daniel PreiskelPreiskel & Co LLP4 King’s Bench Walk, TempleLondon, EC4Y 7DLUnited Kingdom

Tel: +44 20 7332 5656 Email: [email protected] URL: www.preiskel.com

Preiskel & Co LLP is a boutique TMT law firm, focusing on these three industry sectors of telecommunications, media and technology. The firm specialises in international transactions, litigation, commercial and regulatory matters (including telecoms-specific regulation and competition law) that arise in and which affect these sectors of the economy.

The firm’s telecoms and competition partners are all independently recognised in publications such as Chambers & Partners and The Legal 500 as leading individuals in these sectors, as is the firm for its leading expertise.

Preiskel & Co, founded in 2004, has also developed a substantial international litigation practice and has recently acted successfully in various cases before the High Court, Competition Appeal Tribunal, Court of Appeal and Supreme Court.

Tim is independently recognised as one of the leading competition/regulatory lawyers specialising in the technology sector. Tim’s practice covers the full range of competition law and regulatory matters. He has a long and successful track record of defending and taking contentious matters before the authorities.

Daniel is co-founder of Preiskel & Co LLP and has around 25 years’ experience working in the telecoms, media and technology sectors, advising across the globe. He has been ranked for over 20 years in major independent research guides as one of the world’s leading communications lawyers.

He speaks seven languages and is particularly recognised for commercial and regulatory work in the UK and overseas. He was formerly an investment banker specialising in telecoms and technology, and was elected during MWC to the EMEA Board of MEF (Mobile Ecosystem Forum), and is a former Vice-Chair of the IBA Communications Law Committee.

5 Conclusions

The success and achievement of the EU telecoms liberalisation,creating viable competitive alternatives to the traditional PTTmonopolies,shouldnotbeunderestimated.However,withthepaceof data-hungry technology and services creating unprecedenteddemandsfornationwidehigh-speedbroadband,theabovehighlightsjust someof the current regulatory issues to be re-considered andpotentiallyreformed.Thiswillnodoubtbeaninterestingsectortowatchoverthenextfewyears,andtheseissuesarelikelytodevelopwithorwithoutBrexit,orwhateverformBrexiteventuallymaytake.

Alternatively, or additionally, the merger control regime with itsfocusonconsumerwelfarecouldbe reformed tobring inmattersthatareofpublicconcernandgeneral regulationunderconsumerprotectionlaw.Further(non-economic)publicpolicyconsiderationscouldbeincludedforscrutinyofmergersandacquisitions,suchasthelevelsofpersonaldataheldbyeachrelevantparty.TheEUdataprotectionauthoritieshavebeencallingforthisapproachforsometime.Thesechangescouldbetiedintoanoveralloverhauloftheregime,along with the implementation of further reforms to address theconcernsovercriticalnationalinfrastructure.


Chapter 3

BTG Legal

Vikram Jeet Singh

Prashant Mara

Liable vs. Accountable: How Criminal Use of Online Platforms and Social Media poses Challenges to Intermediary Protection in India

TheUnitedStates dominates in a study of governance landscapefor online intermediaries, as US law provides robust protectionsfor speech, rooted in the FirstAmendment to the United StatesConstitution.ThisiscoupledwiththefactthatmostleadingInternetcompaniesarebasedintheUS.Tellingly, US law relating to intermediary protection evolvedas a result of defamation cases. InCubby vs. CompuServe Inc. (1991),aNewYorkdistrictcourtapplieddefamationliabilitylawsto an Internet service provider hosting an online news forum.1 CompuServeargued that itwasadistributor,notapublisher,andthereforecouldnotbeliablewithoutknowledge.Thecourtnotedthattherequirementforadistributortohaveknowledgeofthecontentsofapublication,beforeliabilitycanbeimposedfordistributingthatpublication,isdeeplyrootedintheUSFirstAmendment.SincenospecificfactswereshownindicatingthatCompuServekneworhadreasontoknowofdefamatorycontent,itwasheldtobenotliableforsuchcontent.An intermediary’s knowledge was again at question in Stratton Oakmont vs. Prodigy (1995). This time, the New York State’sSupremeCourtestablishedthattheintermediary,ProdigyServices,who published a “Money Talk” bulletin board, clearly madedecisionsregardingcontent,andhad“uniquely arrogated to itself the role of determining what is proper for its members to post and read on its bulletin boards”.2 In1996,theStrattondecisionledtheUSCongresstopassSection230oftheCommunicationsDecencyActinordertoprotectInternetintermediaries from liability for third-party content. Section 230statesthat“No provider or user of an interactive computer service shall be treated as the publisher or speaker of any information provided by another information content provider”.Thatistosay,online intermediaries that host or publish content are protectedagainstarangeoflawsthatmightotherwisebeusedtoholdthemlegallyresponsibleforwhatotherssayanddo.Section 230 of the Communications Decency Act, 1996, was aseminalstep;ithasbeencalled“The Law that Gave Us the Modern Internet”.3FollowingtheUS’lead,anumberofotherjurisdictionshave taken a pro-intermediary stance when providing for orinterpretingsafeharbourprovisions.

Indian Laws on Intermediaries

IndiaenacteditsintermediaryprotectionlawsfouryearsaftertheUS,aspartof its InformationTechnologyAct,2000. Section79of theInformationTechnologyAct,2000(“IT Act”),providesintermediarieswith qualified immunity from liability under all other laws.“Intermediary”isdefinedwidelytomean“any person who on behalf

Abstract

Theterm“Cybercrime”feelsparticularlyoutdatednowadays.Itisusedtosignify(comparatively)humdrumactslikeonlineobscenity,identitytheft,orfinancialmalfeasance.Now,thereisanargumentthattheInternetenables(orevenabets)extremecasesofcriminality,such as rioting, hate speech, terrorist recruitment, targeted fakenews,illegallobbying,andunprecedentedtheftsofpersonaldata.Anumberofthesecasesinvolveonlineplatformsandintermediaries(being used as primary tools for commission of crime), the newgatekeepersoftheInternet. Countries around the world are struggling to apply old legalparadigmstothesenewproblems.Theconceptthatanintermediaryisonlyaneutral“pipeline”forinformationisnolongersacrosanct.Germany’snewsocialmedialawmakesthesocialmediaplatformliable for the content they carry. The IndianSupremeCourt andthe Ministry of Electronics and Information Technology haverepeatedly called for the regulation of intermediaries providingInternetplatforms.Infact,theSupremeCourthasinthepastmadeintermediaries responsible for actively monitoring platforms, toensure that they are compliant with child and women protectionlaws.Itisbecomingevidentthattheoldstandardofintermediaryliabilitywillnotsurvive therealityof thenewInternet. Inacountry likeIndia, where more than half a billion people have access to theInternet, these issueswill be at the forefront of regulation in thenearfuture.Itisalsoimportantnottooverlookthetransformativepotential of Internet access in India. Laws that indiscriminatelyinhibittheopennessandaccessibilityoftheInternetwillbenefitnoone.Itwouldbebetteriftheselawswerewritteninpartnershipwithintermediaries,ratherthanbeinghandedonfromhighwithaflawedunderstandingofhowtheInternetworks.ThischapterexaminestwoquestionsinthecontextofgrowingcallsforregulationinIndia:Are we moving from a “did-not-know” standard to a “ought-to-have-known” standard, and to what extent is this practical? Do we need a new hypothesis of intermediary liability, which is limited but varies with degrees of potential harm?

Evolution of Intermediary Protection “Safe Harbour”

“The law should allow internet platforms to stay out of editorial decisions so that people can share and speak freely.”

–Wikimedia Foundation


BTG Legal Liable vs. Accountable

In India, the derogation from an absolute theory of intermediaryliabilityhascomefromtwosources:copyrightprotectionlaws;andpublicorderoffences.Following the Supreme Court’s decision in Shreya Singhal, theDelhiHighCourt inMySpace Inc. vs. Super Cassettes Industries Ltd.5seemstoholdthatincasesofcopyrightinfringement,acourtorder is not necessary, and an intermediarymust remove contentupon receiving knowledge of the infringing works from thecontentowner. Assuch,itseemsthattheintermediaryprotectionprovidedintheMySpacecasewasconsiderablylessthanthe“actual knowledge”requirementunderSection79oftheITAct,asreadbyShreya Singhal.The other challenge to intermediary protection has been the useofplatformsincriminalactivities.Incidentsoflynchingandmobviolencehavebeenreportedfromvideosandmessagescirculatedon theWhatsApp platform in India.6 The Indian Government’sMinistryofElectronicsandInformationTechnologyhas takenupthese matters with WhatsApp on at least two occasions, askingit tofindeffective solutions to themisuseof itsplatform.7 Most worryinglyforintermediariessuchasWhatsApp,theGovernmenthasindicatedthatiftheydonotfindsuchsolutions,theyare“liable to be treated as abettors”and“face consequent legal action”. Inthe worst case scenario, this may mean that intermediaries areprosecutedasabettorsundertheIndianPenalCode.

Preserving the Safe Harbour

We seem to be living in the sunset of the traditional theory ofintermediaryprotection.Ablank-chequeapproachtointermediaryprotectionhasledtoaglobalbacklash.Giventhegrowingnumberof Internet users in India, the serious impact that intermediaries’passiverolehasonsocietyandpoliticsiscomingunderincreasingscrutiny from regulators. It ismore than likely that a regulatoryalternative will emerge which will water down the overarchingprotectionsavailabletointermediaries.The question, then, is what would this regulatory alternative be, and could intermediaries drive the discussion to an alternative that balances their liability, the freedom of speech of their users, and law enforcement requirements? Possibleways forwardhavebeenshownbyacombinationof theGerman Netzwerkdurchsetzungsgesetz, and jurisprudence aroundcopyright content removal. Intermediaries may have to take aproactiveroleinpolicingandremovingcertainkindsofcontent.Solongasthereisbroadconsensusonwhatthese“high-risk”typesofcontentare,intermediariesshouldbeallowedtoevolveaninternalself-regulatory mechanism to track and address such content.Obvious examples are child-harming content, and material thatincitesviolence, religious intoleranceorenmity,etc. Asnoted intheGermanNetzwerkdurchsetzungsgesetz, suchcontentshouldbebanned/removedexpeditiouslywithin12–24hours.Forcontentthatisnotobviouslyapartofsuchillegalcategories,alongerprocessofadjudication/discussioncanbespecified.Anexampleofthelatterwouldbecopyrightviolation.In terms of process, itmay be useful for intermediaries to cometogether and design a cross-platform format that can be used byuserstoreportsuchillegalcontent.Agrowingbodyofsuchreportscanthenbeusedtoanalysethetrendsofremovalofcontent,andcanslowlybecomethebasisforanyguidelinesforself-regulation.Such “increased” or “pro-active” diligence on the part of theintermediaries should be recognised in any future law as beingsufficient a criterion to preserve the safe harbour defence. One-off “misses” in removing high-risk content should not impose

of another person receives, stores or transmits that record or provides any service with respect to that record”andincludes“telecom service providers, network service providers, internet service providers, web-hosting service providers, search engines, online payment sites, online-auction sites, online-market places and cyber cafes”.The“intermediary defense”underSection79 isavailableas longasintermediariesfollowprescribedduediligencerequirementsanddonotconspire,abetoraidanunlawfulact.TheprotectionunderSection 79 lapses if an intermediarywith “actual knowledge” ofanycontentused tocommitanunlawfulact,oronbeingnotifiedof such content by the Government, fails to remove or disableaccess to the unlawfulmaterial. The due diligence requirementstobeobservedbyintermediariesunderSection79areprescribedintheInformationTechnology(IntermediaryGuidelines)Rules,2011(“Intermediary Rules”). Theintermediaryisrequiredtopublishrules and regulations, a privacy policy and a user agreement foraccessorusageofitscomputerresources.In2015,inShreya Singhal vs. Union of India,theSupremeCourtof India readdown the term“actualknowledge”,used inSection79,tomeanthattheintermediarywouldberequiredtoremoveordisableaccesstounlawfulmaterialonlyuponreceivingknowledgethat a court order has been passed asking the intermediary to doso,oruponreceivingnotificationfromanappropriategovernment.ThisbroadlyfollowstheconceptinSection230ofnotattributingknowledgeorliabilitytoanintermediarywithoutgoodcause.ItisinterestingtonotethatthedecisioninShreya Singhalwascouched,inpart,intermsofthefundamentalrightoffreespeech.

The Breakdown of the “Safe Harbour”

Theprincipalofsafeharbourforintermediarieshasheldformorethan two decades, but is now increasingly questioned. This is afunctionofbothtimepassing,andofthewiderformthisprotectionhastaken.TheCommunicationsDecencyAct,1996,wasenactedduetoconcernsoverpornographyontheInternet.UScourtshavesinceinterpreteditexpansively,grantingbroadimmunityevenfromcivilrightsviolations.4 The biggest challenge to the Intermediary’s safe harbour rulehas been from laws aiming to prevent online sex trafficking. In2017,theStopEnablingSexTraffickersAct(“SESTA”)amendedthe protection in Section 230. ThisAct specifies that provisionsprotecting providers from liability shall not limit civil action orcriminal prosecution relating to sex traffickingof children or sextraffickingbyforce,fraud,orcoercion.In the EU, efforts are being made to compel intermediariesto combat hate speech on their platforms. A new GermanNetzwerkdurchsetzungsgesetz (anAct to ImproveEnforcement oftheLawinSocialNetworks)aimstodojustthat.ItappliestoallInternet platforms that enable users to share content. It requiressuch platforms to delete manifestly unlawful content within 24hoursofacomplaint.Thismakestheplatformliabletomakesuchdeterminationitself,withinaveryshortperiodoftime.Contentthatisnot‘manifestly’unlawfulcanbedeletedinalongertimeframe,withinsevendays.Thelawrelatingtointermediariesevolvedataverydifferenttime(when online bulletin boards were the norm) to address a verydifferent need (applying the publishers’ liability for defamationstandardtotheInternet).The“library vs. newspaper” debate that dominatedthe’90shaslostrelevanceinanagewheretheInternethas replaced not just the library and the newspaper, but the postoffice, the television, the landline phone and the cinema. Asdevelopments in the US and the EU show, the safe harbour forintermediariescannotbeappliedinallcases.


BTG Legal Liable vs. Accountable

Vikram Jeet SinghBTG Legal804 Lodha SupremusDr. E. Moses Road Worli, Mumbai – 400018India

Tel: +91 22 2482 0820Email: [email protected]: www.btg-legal.com

Prashant MaraBTG Legal804 Lodha SupremusDr. E. Moses RoadWorli, Mumbai – 400018India

Tel: +91 22 2482 0820Email: [email protected]: www.btg-legal.com

Vikram Jeet Singh is a partner in the Digital Business practice group and specialises in laws relating to digital payments, social media, online marketplaces and e-commerce.

Vikram has advised clients on acquiring entities in the digital payments space, acquiring card payment businesses through asset sales, interacting with regulators to implement online business models for his clients and managing related investigations and disputes.

As India counsel, Vikram has assisted his overseas technology clients in suits against the Indian Railways (in Lucknow District Courts) and in enforcing foreign arbitral awards against Indian counterparts (in the Delhi High Court). In addition, Vikram has independently assisted Indian subsidiaries of overseas companies in defending suits filed by ex-employees in local courts in Delhi.

Vikram qualified at the National Law School of India University, Bangalore. He has previously worked at Unilever India and at the Indian relationship firm of a leading US-headquartered firm.

BTG Legal is a transactional law firm with best-of-breed technical expertise, a culture of innovation, and an unrelenting commitment to excellence. We are particularly focused on the following sectors, where we track industry issues: digital business; defence; industrials; energy (renewables and nuclear); retail; transport (railways and electric vehicles); and financial services.

Our practices include corporate transactions (raising capital, M&A, JVs, investments, exits, restructuring and reorganisations), commercial contracting, public procurement, private equity & venture capital, regulatory compliance & risk mitigation, labour & employment, pre-litigation advisory & dispute management, business crime and other areas of law that are fast-developing, with rapid changes in technology and methods of doing business.

Our clients continue to trust us with their work due to our understanding of their sectors and our appreciation of the challenging business environment in which they operate.

Our lawyers have worked in-house in large companies as well as in established law firms, bringing immense depth to the team. Our service delivery is commercial, direct and simple with emphasis on compliance, risk mitigation and finding solutions for our clients.

Prashant Mara is a commercial and regulatory lawyer with a focus on strategic investments and collaborations, compliance, procurement projects, investigation support and dispute management. He specialises in the technology, defence (with a focus on technology transfer and licensing) and industrials (with a focus on technology deployment) sectors.

Prashant was previously co-head of the India Group at Osborne Clarke and prior to that ran the India desk of a Franco-American firm in Paris. He started his career as in-house counsel in Infosys and managed their European legal operations.

Prashant is qualified to practise in India and read law at the National Law School of India University, Bangalore.

Endnotes

1. 776F.Supp.135(S.D.N.Y.1991).2. 1995WL323710.3. https://www.theatlantic.com/business/archive/2013/09/the-

law-that-gave-us-the-modern-internet-and-the-campaign-to-kill-it/279588/.

4. The Overexpansion of the Communications Decency Act Safe Harbor, Joey Ou, Hastings Communications andEntertainmentLawJournal,455Volume35Number3.

5. 2017(69)PTC1.6. Viral WhatsApp Messages Are Triggering Mob Killings

In India, July 18, 2018, Lauren Frayer, https://www.npr.org/2018/07/18/629731693/fake-news-turns-deadly-in-india.

7. TheMinistryissuedtwopressreleasesinthisregard,onJuly3,2018andonJuly19,2018.

liability on intermediaries if they can demonstrate that a processwasavailable.Admittedly,thiswillbeasubjectivedetermination,butaswehaveseeninthecaseofGDPR,somelevelofsubjectivityandapplicationofjudgmenthasbecomeunavoidableinthegrowingbodyofnewlegislationgoverningonlinebehaviour.

Conclusions

Inactionontheissueofintermediaryliabilitywillnotbeanoptionformuch longer. In the absenceof a solution from the industry,governments and regulators may go for an extreme “banning”approach, or try to affix “criminal liability” on intermediaries.TheIndiangovernmenthasalreadyreferencedthecriminalactof“abetting” in connectionwithWhatsApp. At the same time, theIndianSupremeCourthas,inthePrajwalacase,shownwillingnesstoworkwith intermediaries to come upwith solutions to onlinecontentproblems.Thechoicemaycomedowntointermediaries,inwhethertoworkalongsideregulatorsandevolvethenextstandardofintermediaryliability,ortotakeupareactive,defensiveviewtotheregulationsthatarelaiduponthem.


Chapter 4

Kahale Abogados Roxana M. Kahale

Argentina

subjecttomedialawassatelliteTVis.Videoon-Demand(VOD)is regulated by Telecommunications Law 27.078 if the platformsupporting it is cable, or byMediaLaw26.522 if the supportingplatformissatelliteTV.Ifnoneoftheseplatformsareused,thereisnoregulationofVODotherthanthepaymentofVATforthoseVOD operators non-resident inArgentina. Telephone companiesmayrendercableTVservices,asfromthisyear(2018),whichwaspreviously forbidden.Transfers of licences (ICT licences), as perTelecommunicationsLaw27.078, can bemadead referendum ofENACOM’s approval and shall be communicated to ENACOMwithin30daysofthetransfer.Ifthereisnoexpresspronouncementof ENACOM in the 90 days following the communication, thetransfer is essentially approved. With regards to licences relatedtomedia law,Decree 267/15 establishes that there is, at first, anautomaticrenewalforafive-yeartermand,afterwards,successiveextensions for a 10-year term each granted by ENACOM, whoin turn may call for bids for new licensees. Also, the numberof licences to be held has been increased. Regarding foreigninvestment,audio-visualmediadistributorsmaynotbeownedbyaforeigninvestorinaproportionexceeding30%ofitscapital,unlesstheforeigninvestorisfromacountrythathasaBilateralInvestmentTreatywithArgentinathatallowsfullownershipofmedialicencesinsuchforeigncountry.

2 Telecoms

General

2.1 Is your jurisdiction a member of the World Trade Organisation? Has your jurisdiction made commitments under the GATS regarding telecommunications and has your jurisdiction adopted and implemented the telecoms reference paper?

Argentina has made commitments under GATS regarding tele-communications that have been implemented in accordancewiththeliberalisationofthetelecommarket.

2.2 How is the provision of telecoms (or electronic communications) networks and services regulated?

There is a specific statute: Telecommunications Law 27.078, asamendedbyDecree267/15.

1 Overview

1.1 Please describe the: (a) telecoms, including internet; and (b) audio-visual media distribution sectors in your jurisdiction, in particular by reference to each sector’s: (i) annual revenue; and (ii) 3–5 most significant market participants.

Telecoms and audio-visual media distribution are very dynamicmarkets in Argentina. According to data collected by industryanalysts, the annual revenue for 2018 was 181 billion Pesoscomposedinthefollowingmanner:(a)landlines–13billionPesos;(b) internet – 23 billion Pesos; (c) mobile phones – 103 billionPesos;and (d)audio-visualmediadistribution–42billionPesos.ThemostsignificantmarketparticipantsareCablevision,themaincableoperator,and telephonecompaniesTelecom,TelefonicaandClaro, which recently merged, followed by DirectTV and otheroperators.Withregardstomobilephoneoperators,thekeyplayersareMovistar,PersonalandClaro(inthatorder).

1.2 List the most important legislation which applies to the: (a) telecoms, including internet; and (b) audio-visual media distribution sectors in your jurisdiction.

Telecommunications are governed by Telecommunications Law27.078andaudio-visualmediadistributionissubjecttoMediaLaw26.522.BothstatuteshavebeenmodifiedbyDecree267/15.

1.3 List the government ministries, regulators, other agencies and major industry self-regulatory bodies which have a role in the regulation of the: (a) telecoms, including internet; and (b) audio-visual media distribution sectors in your jurisdiction.

AsperDecree267/15,thereisasoleregulatoryentityfortelecoms,internetanddenominatedmedia:Ente Nacional de Comunicaciones (ENACOM),undertheauthorityoftheMinistryofModernization.

1.4 In relation to the: (a) telecoms, including internet; and (b) audio-visual media distribution sectors: (i) have they been liberalised?; and (ii) are they open to foreign investment?

As per Decree 267/15, the market has been liberalised. CableTelevision(TV)hasbeenincorporatedintotelecomsandisnolonger


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Public and Private Works

2.8 Are there specific legal or administrative provisions dealing with access and/or securing or enforcing rights to public and private land in order to install telecommunications infrastructure?

In Telecommunications Law 27.078, ENACOM has establishedthe general criteria of infrastructure sharing betweenmobile andlandlineserviceproviders,andincaseofconflictthedisputeshallbesubmittedtoENACOMforitsapproval.Additionally,thereareprovisionsintheCivilandCommercialCoderelatedtoeasementsandsimilarrights.

Access and Interconnection

2.9 How is wholesale interconnection and access mandated? How are wholesale interconnection or access disputes resolved?

Regarding interconnection, all parties need to be interconnectedand it is agreed between the intervening private parties, throughinterconnection agreements, that there are requirements to havestandards of transparency, no discrimination, and no abuse of adominantposition.ThepartyofferingtograntinterconnectionhastopresenttoENACOManOfferofReference(OR)tobeapproved.Onceapproved,ifthepartyrequestinginterconnectionacceptsit,anagreementhastobeexecutedwithin10days.Iftheagreementisnotexecuted,thereisaprocedureestablishedthroughwhichthereis a hearing before ENACOM. The party requiring the hearingmust present the claim and evidence related thereto; ENACOMwill transfersuchclaimtotheotherpartyandwillholdahearing10daysaftersuchpresentation inwhichbothpartieswillpresenttheir positions, and 10 days thereafter ENACOM will render apreliminarydecisionorderingtheinterconnectionandpricethereof,and establishing that the party obtaining the interconnectionwillhavetorenderaguaranteetoreturnpaymentsandinterestincasethefinaldecisionisfavourabletotheotherparty.ENACOMwillthenhavea60-dayperiodtoissueafinaldecision.Thepartiesmayatanytimedesistofthisprocedureandexecuteaninterconnectionagreement.

2.10 Which operators are required to publish their standard interconnection contracts and/or prices?

All operators have to submit their agreements to ENACOM forregistrationwithin10days from their executionand,within suchterm,bothpartieshavetopublishtheagreementsontheirrespectivewebsitesandrequireENACOMtopublishasimilarpublicationonitswebsite.Thepublicationshallcontain,asaminimum,thenameofthepartiestotheagreement,theservicesrendered,andthepriceoftheinterconnectionandchangestotheagreement.

2.11 Looking at fixed, mobile and other services, are charges for interconnection (e.g. switched services) and/or network access (e.g. wholesale leased lines) subject to price or cost regulation and, if so, how?

As stated above, the parties are free to combine interconnectionand access prices and respect the charges that ENACOM may

2.3 Who are the regulatory and competition law authorities in your jurisdiction? How are their roles differentiated? Are they independent from the government?

ENACOMistheregulatoryentitythatgovernstelecoms,ICTandthemedia.AnewcompetitionlawwasenactedinMay2018,whichreplaces the current Competition Commission that had the two-foldpurposeofauthorisingmergersandpenalisinganticompetitiveactivities.Thenewlawcreatesanewdecentralisedandautarchicentity within the National Executive Branch of the NationalCompetitionAuthority. No other governmental entity would beallowed to apply the competition law, although in the telecomandmedia regulations there are provisions on significant marketparticipants.

2.4 Are decisions of the national regulatory authority able to be appealed? If so, to which court or body, and on what basis?

Any kind of sanction underTelecommunications Law 27.078, asamended by Decree 267/15, can be subject to an administrativereview. Once the administrative review has been completed,judicial recourse is available before the Federal AdministrativeCourt,exceptforconsumerclaims.

Licences and Authorisations

2.5 What types of general and individual authorisations are used in your jurisdiction?

ICT licences are granted individually to partieswhich require it.ThereisagenerallicenceandthenforeachICTservicethelicenseehastoregisterseparatelyforeachservice.

2.6 Please summarise the main requirements of your jurisdiction’s general authorisation.

Thegenerallicencerequiresthepresentationonlineofcorporateandtaxdocumentationoftheapplicant,anaffidavitofnothavinganyincompatibilityforthelicence,evidenceoftechnicalcomplianceoftheirequipmentforthepurposeoftheservicetoberendered,andanyotherinformationthattheapplicantmaydeempertinent.

2.7 In relation to individual authorisations, please identify their subject matter, duration and ability to be transferred or traded. Are there restrictions on the change of control of the licensee?

Rather than individual authorisation, there is a registry in whicheachlicenseehastoincludetheservicesthatwillberendered,whichcanincludelandlines,mobilephones,voiceoverIPservices, ICTservices,datatransmissionandcableTV.With regards to licences, there is no time limit. Transfers oflicencesandchangeofcontroloflicenseesaresubjecttoENACOMapproval. The transfer of the licence or change of control canbe made ad referendum of ENACOM’s approval and shall becommunicatedtoENACOMwithin30daysofthetransfer.IfthereisnoexpresspronouncementofENACOMinthe90daysfollowingthecommunication,thetransferiseffectivelyapproved.

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2.18 Are there any obligations requiring number portability?

Ownersofmobilephone lineshavenumberportabilityrightsandmay change providers whilst maintaining their numbers. Theprocess is simply carriedout through themobilephone companyandshouldbecompletedinonedaywithnomorethanthreehoursof interruption of the service. There is a 30-daymandatory staybeforerequestinganewtransfer.

3 Radio Spectrum

3.1 What authority regulates spectrum use?

ENACOMregulatesspectrumuseandisthesoleauthorityto:grantauthorisationsandlicences;andmonitorthesystem.

3.2 How is the use of radio spectrum authorised in your jurisdiction? What procedures are used to allocate spectrum between candidates – i.e. spectrum auctions, comparative ‘beauty parades’, etc.?

Theradiospectrumiscomposedbyasetoffrequenciesgroupedinfrequencybandsandcanbeusedbylicenseesoftelecommunicationservicestorenderwirelesscommunications,broadcastingofradioandTV,theinternetandfixedandmobilephones,orfordefence,security,emergencies,scientificuse,andmilitaryuse,amongothers.Usually,theuseofspectrumisgrantedthroughanauthorisationandrecentlythroughspectrumauctions.

3.3 Can the use of spectrum be made licence-exempt? If so, under what conditions?

Therearenon-licensedbandsthatapplyforveryparticularissues,such as the band for wireless home phones and certain internetspectrums.

3.4 If licence or other authorisation fees are payable for the use of radio frequency spectrum, how are these applied and calculated?

TheuseofspectrumissubjecttochargescalculatedbytheformerSecretaryofCommunications.

3.5 What happens to spectrum licences if there is a change of control of the licensee?

AspectrumlicenceimpliestheexistenceofanICTservicelicence.IfthereisachangeofcontrolitmustbenotifiedtoENACOMandcan be made ad referendumofENACOM’sapproval,andshallbecommunicatedtoENACOMwithin30daysofthetransfer.IfthereisnoexpresspronouncementofENACOMinthe90daysfollowingthecommunication,thetransferiseffectivelyapproved.

3.6 Are spectrum licences able to be assigned, traded or sub-licensed and, if so, on what conditions?

Assignment ispermittedasperTelecommunicationsLaw27.078,undersimilarconditionsassetforthinquestion3.5.Notradingorsublicensingisauthorised.

establishwhenessential facilitiesare involved(suchas theoriginandlocaltermination,co-location,localtransit,port,etc.).Historiclicenseesofbasic telephone services andmobile communicationshavetopresentanORtoENACOMandENACOMshallestablishprovisionarychargesbasedonaveragechargesinLatinAmerica.

2.12 Are any operators subject to: (a) accounting separation; (b) functional separation; and/or (c) legal separation?

Operators with substantial market predominance must keep acc-ountingseparation.

2.13 Describe the regulation applicable to high-speed broadband networks. On what terms are passive infrastructure (ducts and poles), copper networks, cable TV and/or fibre networks required to be made available? Are there any incentives or ‘regulatory holidays’?

AsperDecree1340/2016,infrastructurehastobemadeavailable.Theonlyexceptionisforthosepartieswhichinvestedinlastmilenetworks, and which are not allowed to open such network. InCongress,thereisabillthathasbeenapprovedbytheSenateandispendingapprovaloftheHouseofRepresentativesthateliminatessuchrestriction.

Price and Consumer Regulation

2.14 Are retail price controls imposed on any operator in relation to fixed, mobile, or other services?

Therearenopricecontrols,althoughwith regards tofixedphoneservicesthereareindicativetariffsperpulse.Inallotherservices,the prices are freely fixed but ENACOM has the authority tointerveneifthereisaseriousdeviationinthemarket.

2.15 Is the provision of electronic communications services to consumers subject to any special rules (such as universal service) and if so, in what principal respects?

Universal service is guaranteed. There is a fiduciary trust forinvestmentcommitmentsoflicencesequivalentto1%ofthetotalincomeaccruedpertherenderingofICTservices.

Numbering

2.16 How are telephone numbers and network identifying codes allocated and by whom?

Telephone numbers and network identifying codes have beenestablished by the former Secretary of Communications byResolution46/97.Today,ENACOMhassuchauthority.

2.17 Are there any special rules which govern the use of telephone numbers?

AspertheSecretaryofCommunications’Resolution46/97,thereareguidelinesestablishingareserveofcertainnumbers,andnumbersaredividedintogeographicalnumbers,non-geographicalnumbers,codesforspecialservices,codesofaccesstointernationaloperatorsandprefixesforservices.


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4.6 What data are telecoms or internet infrastructure operators obliged to retain and for how long?

TheissueofdataissubjecttotheDataProtectionLaw.TheDataProtectionLaw,whichisintheprocessofbeingamendedtocomplywiththeGDPR,setsforththeobligationofregisteringdatabases(ofcustomers, suppliers andemployees) andmaintaining thedatabyupdatingit.Section17.7oftheDataProtectionLawsetsforththatpersonal data shouldbekept as long as applicable laws establish(i.e.,taxlawsimposeafive-yearterm)orforthetermcontractuallyagreedbetweenthepartyresponsibleforthedatabaseandthedataowner.

5 Distribution of Audio-Visual Media

5.1 How is the distribution of audio-visual media regulated in your jurisdiction?

Distribution of audio-visual media is regulated by Media Law26.522inrelationtoopenTVandsatelliteTV.CableTVisdeemedtobeanICTregulatedbyTelecommunicationsLaw27.087.BothlawshavebeenamendedbyDecree267/15.

5.2 Is content regulation (including advertising, as well as editorial) different for content broadcast via traditional distribution platforms as opposed to content delivered over the internet or other platforms? Please describe the main differences.

There is strict regulationwith regards to content and advertisinginMediaLaw26.522.Someoftheserestrictionsareanextendedminor protection time lapsing from 6am to 10pm in which onlythecontentappropriateforminorscanbebroadcasted. Therearetimelimitationsonadvertising;openTVhas12minutesperhour,satelliteoperatorshaveeightminutesperhourandcablechannelshave six minutes per hour. Additionally, there are warnings tobe placed in news broadcasts stating that there may be violentand/or inappropriate content for children and adolescents. Thereare restrictions on alcohol and tobacco advertising, aswell as ongamblingadvertising.InfringementsaresubjecttopenaltiesappliedbyENACOM.OTTandsimilarplatformsarenotregulated;theyarenotregisteredwithENACOM,sononeoftheserestrictionsapply.

5.3 Describe the different types of licences for the distribution of audio-visual media and their key obligations.

There are two licences and one authorisation applicable to thedistributionofaudio-visualmedia. OpenTVandsatelliteTVaresubjecttolicences.Suchlicencesmaybegrantedtoindividualsorlegalentities. Withrespect to legalentities,bothas theowneroflicencesortheshareholdersofacorporatelicensee,theyshall:(i)be legallyconstitutedinArgentina;(ii)nothavea legalcorporateconnection or direct or indirect submission to a foreign audio-visualcompany;and(iii)notbeaffiliatesorsubsidiariesofforeigncompanies,norcarryoutacts,contractsoragreementsthatallowadominantpositionofcorporatecapitalinthelicenseeentity.Points(ii)and(iii)arenotapplicablewhentheforeignentitybelongstoastatethathasexecutedBilateralInvestmentTreatieswithArgentinathatallowinvestmentsofArgentinecompaniesintheseactivitiesinsuchforeignstate.

4 Cyber-security, Interception, Encryption and Data Retention

4.1 Describe the legal framework for cybersecurity.

In2008,ArgentinaenactedTelecommunicationsLaw26.388,whichmodifiestheCriminalCodethroughthefollowingprovisions:■ equalprotectionofemailsandhandwrittenletters;■ establishingthathackingandITfraudarecrimes;and■ theinclusionoftheconceptofITdamage.TheCriminalCodealsopenalises: theonlinedistributionofchildpornography;illegalemailaccess;theonlinepublicationofsecrets;illegalaccesstoadatabase;denial-of-serviceattacksandhacking;andstealing,hidinganddestroyingofdigitalevidence.InNovember2017,Congress ratified theBudapestConventiononCybercrimethroughTelecommunicationsLaw27.411.Thisimposestheobligationofadaptinglocallawstotherulesofsuchconvention.The Convention covers three main areas: (i) substantive criminallaw in the area of cybercrime (illegal access, illegal interception,system interference, misuse of device, computer-related forgery,computer-related fraud,offences related tochildpornography,andoffences related to infringements of copyright and related rights);(ii) procedural law (such as the expedited preservation of storedcomputer data; expedited preservation and partial disclosure oftrafficdata;real-timecollectionoftrafficdata;andtheinterceptionofcontentdata);and(iii)therulesofinternationaljudicialco-operation.However,therearestillpendingfurtherregulationstopenalisethesecrimes,particularyintheproceduralcodes.

4.2 Describe the legal framework (including listing relevant legislation) which governs the ability of the state (police, security services, etc.) to obtain access to private communications.

Inprinciple,TelecommunicationsLaw27.078setsforthinSection5 that all communications through ICTareprivateandcannotbesubject to interception, registration or analysis except through ajudicialorderfromacompetentcourt.

4.3 Summarise the rules which require market participants to maintain call interception (wire-tap) capabilities. Does this cover: (i) traditional telephone calls; (ii) VoIP calls; (iii) emails; and (iv) any other forms of communications?

As explained above, no call interception on any form ofcommunication can be made without a judicial order from acompetentcourt.Onlyundersuchcircumstancescaninterceptionproceed.

4.4 How does the state intercept communications for a particular individual?

Onlythroughajudicialorderissuedbyacompetentcourt.

4.5 Describe the rules governing the use of encryption and the circumstances when encryption keys need to be provided to the state.

Therearenospecificrulesregardingencryption.However,ArgentinawilladoptanewPersonalDataLawtocomplywiththestandardsandregulationsoftheGDPR,sothiswillbeamatterofregulation.


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provider,thegeneralrulesofcivilliabilitymustbeapplied.Itstatedthatsearchengineshavetheintentionoffacilitatinguseraccesstowebpages,butthecontentofsuchwebpagesistheresponsibilityofthepartiesthatmanagesuchwebpagesandnotthesearchengine,whichisamereconduittothecontentinquestion.Ifliabilityweretobeattributed to thesearchengine, thenegligenceof thesearchenginemustbeproven.Ingeneral,firstinstancecourtshaveadmittedtheliabilityofsearchengines, but in the appellate level suchdecisions are reversed, insomecasesequatinginternetserviceproviderservices tofreedomofpress.The Supreme Court has determined, in a divided decision, thatfreedom of expression contains the right to transmit ideas, factsandopinionthroughtheinternet,andthatthereisthepersonalrightthatanyindividualcan,throughtheinternet,publish,transmit,andexteriorisehisideas,opinionsandbeliefs.Duetotheabsenceofaspecificregulation, it isconvenient tosetarule thatdistinguishesbetweenthecasesinwhichdamagesaremanifest(childpornography,apologies for genocide and racism, data intended for committingcrimesandincitingextremeviolence),asopposedtocasesinwhichdamagesaresubjecttoopinion,doubtorrequireclarification,whichshouldbedeterminedinadministrativeorjudicialinstances.

6.2 Are telecommunications operators and/or internet service providers under any obligations (i.e. to provide information, inform customers, disconnect customers) to assist content owners whose rights may be infringed by means of file-sharing or other activities?

Therearenoimmediatetake-downobligations.Thecontentownersmustenforcetheirproprietaryrightsincourtandobtainadecisionthat orders the takingdownof the infringing content, despite thefactthatSection57bofTelecommunicationsLaw27.078statesthatifrequestedbyauser,suchtake-downshouldtakeplace.Toavoidliabilityissues,andpursuanttothecourtinterpretationssetforthinquestion6.1,telecommunicationoperatorsandtheinternetserviceprovidercanonlytakedownmaterialsifrequestedbyacourtorder.

6.3 Are there any ‘net neutrality’ requirements? Are telecommunications operators and/or internet service providers able to differentially charge and/or block different types of traffic over their networks?

Section56ofTelecommunicationsLaw27.078warrants therightof each user to access, use, send, receive or offer any content,application, service or protocol through the internet,without anykindofdistinction,block,interferenceordegradation.Section57ofTelecommunicationsLaw27.078prohibits ICTfromblocking,interfering, discriminating upon, degrading or restricting the use,delivery, reception, offer or access to any content, application,serviceorprotocol,unlessthereisacourtorderoranexpressrequestfromtheuser. ICTmaynotfixtheaccesspricetotheinternetinrelationtothecontent,services,protocolsorapplicationstobeusedoroffered,orarbitrarilylimittherightofausertouseanyhardwareor software to access the internet as long as such devices do notdamagetheweb.

6.4 Are telecommunications operators and/or internet service providers under any obligations to block access to certain sites or content? Are consumer VPN services regulated or blocked?

Asstatedabove,telecommunicationoperatorsand/orinternetserviceprovidershaveno statutoryobligations toblock access to certain

Corporate licenseesmay not be a shareholder that owns 10% ormore of the votes of a legal entity that holds a concession for apublicservice.Additionally,theymaynotissuebonds,debentures,negotiableobligationsoranykindofsecuritieswithoutauthorisationfrom ENACOM when these transactions involve a percentageexceeding30%ofthevotesofthecompany.The licensee may not be a debtor of tax, social security, unionobligations, fees from a collection society or debtor of the taxesand/orfines imposedbyMediaLaw26.522, and shall be able todemonstrate the origin of the funds committed in the investmentto be made. Licences of open TV can broadcast 12minutes ofadvertising per hour, and have responsibility for content, screenquotasandmaintenanceoftheconditionsunderwhichthelicencehas been granted. Licensees of cable distribution services aresubject toTelecommunications Law 26.522 and have obligationsrelatedtothecarryingoutofprogrammingsignals,grids,theeightminutesperhourofadvertisingtime,screenquotas,taxobligationsandmaintenanceof theconditionsunderwhich the licenceshavebeengranted.Programmers are subject to a registration similar to anauthorisation,inwhichtheyhavetoestablishadomicileinthecityofBuenosAiresandalegalrepresentativebeforeENACOM.Theyareresponsibleforthecontent(advertisingtimeislimitedtosixminutesperhour)andhavetaxobligations,andsomeobligationsdiffer as to whether they are national or foreign programmers.Nationalprogrammersarethosewithwhich60%oftheircontentisdeemedlocal.

5.4 Are licences assignable? If not, what rules apply? Are there restrictions on change of control of the licensee?

Licences are assignable. Section 41 of Media Law 26.522, asamendedbyDecree267/15,setsforththatlicencesandshareholdingin licensees shall be transferable to parties that comply with theadmissibilityconditionsforthegrantingoflicences.Suchtransferswillbemadead referendumoftheapprovalofENACOMandmustbecommunicatedwithin30daysfromthetransfer. IfENACOMdoesnotexpresslyrejectthetransferwithin90daysfromreceivingthe communication thereof, the approval is deemed essentiallygranted and registration shall be made in the name of the newlicenseeorshareholders.Incasethereareobservations,the90-dayperiodforapprovalshallbecountedasfromthedateofsubmissionoftheresponsestotheobservations.Transfersnotapprovedshallresultintheterminationofthelicence.

6 Internet Infrastructure

6.1 How have the courts interpreted and applied any defences (e.g. ‘mere conduit’ or ‘common carrier’) available to protect telecommunications operators and/or internet service providers from liability for content carried over their networks?

Ourcourtshaveadopteddiversecriteriaonthemattersincethereis no specific statute that regulates it. In the case of “D.C.V. v. Yahoo de Argentina SRL et al. on damages”, Chamber D of theCivilCourtofAppealsreversedadecisionofthefirstinstancecourtthat condemned Google andYahoo for moral damages, orderingthe elimination of relations between the search engines ofYahooandGoogle and siteswith sexual, pornographic or erotic contentthatmaycontainthename,imagesandphotosoftheplaintiff.TheCourtofAppealsreversedsuchdecision,statingthatsincethereisnospecialstatutethatrulestheresponsibilityoftheinternetservice


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Roxana M. KahaleKahale AbogadosSarmiento 1230 Piso 4Buenos AiresArgentina

Tel: +54 11 4382 8412Email: [email protected]: www.kahaleabogados.com.ar

Roxana Kahale holds a J.D., magna cum laude, from the University of Buenos Aires and an LL.M. from New York University. She is specialised in M&A and TMT having counselled major international investors in the areas of media, telecommunications, content regulation, distribution of TV and movie content, digital legal issues, data protection, competition and cybersecurity. She is a former Chair of the Media Committee of the International Bar Association and a former Chair of the Women Interest Group of the International Bar Association. Ms. Kahale has lectured on her areas of expertise in Argentina, Brazil, the US, Australia, France and Japan, and has participated in several publications. She is acknowledged as one of the main TMT specialists in Argentina.

Kahale Abogados is a full-service law firm in Argentina with a highly specialised TMT department. We are leaders in providing advice on complex regulatory matters involving TMT. We participated in establishing the first company to monitor changes in number portability and in the obtainment of several value-added services licences. We have actively participated in the regulation of media law in Argentina and advised several international programmers on regulatory matters. Our group deals with collection societies’ claims, counsels studios in foreign film distributions, has conducted due diligences in the acquisition of open TV channels and licensing of soccer rights to private companies. The TMT department of Kahale Abogados is very active in US and Argentine trade organisations related to cable TV programmers.

sitesandcontent,althoughincasesofflagrantinfringements,suchas child pornography, blockages have occurred. With regards toVPNservices,theyprovideanavenueforpiracyofcontentprotectedbyIPlawsandtherehavebeensomeinitiativesonplatformslikeYouTube,inwhichprotectedproducts(suchasvideoclipsorsportsrights)immediatelytakedownsuchcontentwhenadvisedbytheirlegalowner.VPNservicescanbeblockedthroughajudicialorder.The reformed internet service provider laws inArgentina, whichhavebeenapprovedbytheSenateandarependingapprovalfromtheHouseofRepresentatives,donotincludeautomatictake-downforIPviolationsrequiringcourt intervention,whichmaynotbeaquickremedyforinfringementsthatcancauseenormousdamagestoholdersofvaluableIPrights.


Chapter 5

MinterEllison

Anthony Borgese

Athena Chambers

Australia

remains2020,but thebudgetrosefrom$49billionto$51billionin2018,withadditionalcostsbeingsourcedfromprivatemarkets.Telstra,Optus,TPGGroup(TPG)andVocusGroup(Vocus)accountforapproximately94%ofthenbnTM market,butnewentrantssuchasAmaysimandVodafonecontinuetoimplementcompetitivepricingstrategies. Theanticipated launchof5GnetworksbyTelstraandOptusin2019isexpectedtodisruptfixedbroadbandservicesduetocomparablespeedsandportability, increasing infrastructure-basedcompetitionfornbnTM.InMarch2018,theGovernmentannouncedthat125MHzofspectruminthe3.6GHzband,whichiskeytothedeploymentof5Gservices,wouldbesoldatcompetitiveauctioninOctober2018(5G spectrum auction).Competition continued to intensify in the telecommunicationsindustry in2017–2018,continuing thefive-year trend. InAugust2018, TPG Telecom Limited (TPG) and Vodafone announceda proposed merger of equals to establish a fully-integratedtelecommunicationsoperatorinAustralia.ThemergerwillcreateamoreeffectivecompetitorforTelstraandOptus,withanintegratedmobileandfixed-lineofferingvaluedatapproximately$15billion.TPGandVodafonehavealsoformeda jointventure tobid in theGovernment’s5Gspectrumauction,evidencingstrongcommitmentto new technologies. TheAustralianCompetition andConsumerCommission (ACCC) has commenced a public review of theproposedmerger, and an investigation into competition concernsraisedbythejointventurebetweenthetwocompanies.On the regulatory front, theACCC published its final report forthecommunicationssectormarketstudyinApril2018,examiningexisting and emerging competition and consumer issues in thesector.Thereportfoundthatdespitehighlevelsofconcentration,the markets for broadband and voice services were operatingcompetitivelyandforecast that this trendwouldcontinue,spurredonby thedeploymentof5Gservices. TheAustralianParliamentis also considering new legislation to encourage competition inthe telecommunications industry, with the Telecommunications Legislation Amendment (Competition and Consumer) Bill 2018 providingforthereductionofregulationforsmallerandsuperfastnetworks.The $9.5 billion (revenue in 2017–2018) Australiantelecommunications reseller industry is expected to expandover the next five years, driven by the stronger uptake of resoldwireless telecommunications services and the continued nbnTM rollout. This industry is highly competitive and has lowmarketconcentrationwithVocusGroupLimited(Vocus),beingthelargesttelecommunicationsresellerwithanestimatedmarketshareunder5.0%. Resellers are heavily dependent on the price that theyacquiretelecommunicationsservicesfromcarriers,astheindustry’sofferingsaredifferentiatedonprice.

1 Overview


The telecommunications and audio-visual media distributionsectorscontinuetobeaffectedbyshiftsinconsumerbehaviourandattitudesdrivenprimarilybytechnology.Telecommunications (including internet) sectorAs mobile and internet connectivity in Australia approachessaturation, industry growth for the highly-regulated tele-communicationsindustryhasremainedrelativelyflat.Consumerscontinuetoswitchtomobiletelecommunications(whichaccountedfor 52% of telecommunications products and services in 2017–2018)coupledwithcableornakedDSLbroadbandservicesthroughinternet service providers (ISPs), reducing demand for fixed-linetelecommunicationsandtelephones.Revenue for the telecommunications industry in 2017–2018 wasAUD$42.8 billion, representing a 1.3% decrease year-on-year(YOY)andinlinewithpredictionsformarginal industryrevenuegrowth at an annualised rate of 1.7% through to 2022–2023.Revenuecontinues tobeconcentratedat the topwith incumbentsTelstraCorporationLimited (Telstra) (38.1%)andSingTelOptusPtyLimited(Optus)(16.4%)accountingforacombinedestimateof54.5%ofthetelecommunicationsmarket.TelstraandOptusfocusonbothwiredandwireless telecommunicationsservices,whereasVodafone Hutchison Australia Pty Limited (Vodafone) (8.2%)has historically focused solely on wireless telecommunications.Householdsrepresent63.4%ofthemarketfortelecommunicationsservices, continuing a five-year trend fuelled by higher mobileusages by individuals. However, a slowdown in the growthof mobile telecommunications sales in Australia results fromsmartphone penetration peaking, with smartphone ownership inAustraliareaching88%in2017.TheAustralianFederalGovernment(Government)continueswiththe rollout of the largely public-funded nbnTM fixed-line multi-technologynetwork,introducedbytheformerLabourGovernmentin 2009 to supply allAustralianswithwholesale-onlyhigh-speedbroadbandaccessservices(nbnTM). Designed,builtandoperatedbyNBNCo (established under theNationalBroadbandNetworkCompaniesAct2011),thenbnTMnetworkincludesacombinationoffibre-to-the-premises, fibre-to-the-node/basement/curb and hybridfibrecoaxial(HFC)technologies.Thetargetfornetworkcompletion


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MinterEllison Australia

Theprincipallegislationgoverningthesesectorsare:■ the Telecommunications Act 1997(Cth)(Telecommunications

Act)–dealswithlicensingandtherightsandobligationsofcarriersandserviceproviders;

■ the Broadcasting Services Act 1992 (Cth)(BSA)–regulatesbroadcasting (including digital television services),subscription services, online content (for ISPs), narrowcastinganddatacasting;

■ the Radiocommunications Act 1992 (Cth)(RCA)–regulatesradio-frequencyspectrummanagementandlicensing;and

■ the Competition and Consumer Act 2010 (Cth) (CCA)– provides both general competition regulation and atelecommunications-specificcompetitionregulationregime.

Thetelecommunications(includinginternet)sectorisalsosubjectto:■ the Telecommunications (Consumer Protection and Service

Standards) Act 1999(Cth)–establishestheuniversalserviceobligationandconsumerprotectionregulation;

■ the Telecommunications (Interception and Access) Act 1979 (Cth) (TIA Act) – regulates interception and lawenforcement,prohibitstelecommunicationserviceprovidersfrom disclosing information about their customers’ use oftelecommunications services, andwas recently amended toincludedataretentionobligations;and

■ the National Broadband Network Companies Act 2011(Cth)–governstheownership,controlandreportingobligationsofNBNCo.

The Vertigan Panel’s Independent Cost-Benefit Analysis andReviewofRegulation(Vertigan Review)maderecommendationsto the Government in relation to the introduction of a newtelecommunicationssectorregulatoryframework.In June 2017, the Government published the ‘2017 Tele-communications Reform Package’ (which was consulted onin December 2016 to February 2017), aimed at reforming thetelecommunicationsmarkettopromotecompetition,andtoimproveaccess to broadband services to all Australians in response tothe Vertigan Review. These reforms will come into effect withthe passing of legislation, and include the repeal of Part 7 andamendmentofPart8oftheTelecommunicationsAct.


Telecommunications,internetandaudio-visualmediadistributionisregulatedbytheGovernment.Thekeybodiesare:■ the Minister for Communications and the Arts (Comm-

unications Minister) and the Minister for RegionalCommunications – administers the Department ofCommunicationsandtheArts,theGovernment’sdepartmentthat provides advice, analyses, develops and deliversprogrammes on the communications industry (includingtelevision, radio, internet, phone, post and the changes indigitaltechnologies);

■ the Attorney-General’s Department – administers the TIAActbutdoesnotinvestigatecrimes;

■ the Australian Competition and Consumer Commission –promotescompetitionwithinthetelecommunicationsindustryandensuresthattheconsumers’interestsareprotected;

■ the Australian Communications and Media Authority(ACMA)–overseestheregulationofthetechnicalandnon-competition aspects of the telecommunications industry,including the development of and the monitoring ofcompliancewithindustrycodesofpractice;and

TheGovernmentisalsodemonstratingincreasingconcerninrelationtothesecurityoftelecommunicationnetworks.InSeptember2018,the Government’s ‘Telecommunications Sector Security Reforms’entered into force, introducing a new requirement for carriers tonotify theGovernment of any proposed changes to their networksthatareanticipated tohave implications fornational security. TheGovernmentisalsoconsideringthecontentiousTelecommunications and Other Legislation Amendment (Assistance and Access) Bill 2018 (Assistance and Access Bill)which,ifpassed,willcompelcompaniesin the communications supply chain to assist law enforcementagenciestoaccessencryptedcommunications(seequestion4.5).The ISP industry, composed of operators that own or leasetelecommunications infrastructure to provide internet services,continues to grow as a result of rising data usage, greater webaccessibilityandanincreasingrelianceontheinternetforbusinessandpersonalaffairs.TheISPindustryrevenuewas$5.4billionin2017–2018,withgrowthexpectedtoincreaseatanannualisedrateof 4.6% until 2022–2023, partly as a result of the nbnTM rollout.This industry is highly concentrated, with the top four playersTelstra (45.8%),TPG (25.7%),Vocus (11.5%) andOptus (8.6%)accountingforover90%ofindustryrevenuein2017–2018.Audio-visual media distributionFree-to-air televisionbroadcasting (FTA)viewershipcontinues todecreaseasaresultofcompetitionfromalternativemediaplatforms.Accordingly,revenuefortheFTAindustrydeclinedby2.4%YOYin 2017–2018 to $4.6 billion, with advertisers moving towardsonline platforms. The FTA industry remains highly competitiveand concentrated,with over 70% of themarket share being heldby SevenWest Media Limited (26.4%), Nine Entertainment CoHoldings Limited (24.3%), Ten Network Holdings Pty Limited(13.7%)andtheAustralianBroadcastingCorporation(11.7%).Thepaytelevision(Pay TV)industryhassimilarlycontractedoverthepastfiveyears,withviewershipbeingdivertedbysubscriptionvideoondemand(SVoD)platformslikeNetflixandStan,aswellastheriseoftelco-tainment.FoxtelGroup(Foxtel)remainsdominantintheindustry,holding79.6%ofthemarketshare,withthesecondlargest player, Telstra, trailing at 20.2%. The Pay TV industryrevenuefellto$3.8billionin2017–2018,andisexpectedtocontinuetodeclineatanannualisedrateof1.9%throughto2022–2023.ItisanticipatedthatFoxtelwillfocusincreasinglyonitsInternetProtocolTelevision (IPTV) service offerings to remain competitive, as thenbnTMrolloutcontinuestoincreasethevalueofIPTVoverPayTV.TheGovernmentremainscommittedtocombattingonlinepiracy.InFebruary2018,theGovernmentannounceditwouldbeconductingareviewintothemechanismintroducedbytheCopyright Amendment (Online Infringement) Act 2015 (Cth) (Online Infringement Amendment) to reduce online copyright infringement. TheOnline InfringementAmendmentprovides copyright ownerswiththeabilitytoapplytotheFederalCourtofAustralia(FCA)foraninjunctionrequiringanISPtotakereasonablestepstoblockaccessto certain copyright-infringing sites. Since December 2016, theFCAhasgranted several such injunctions andmore than65 sitesand340domainshavebeenblockedasaresult,butonlinepiracyisexpectedtobeanongoingissue(seequestion6.2).


The object of regulation in the telecommunications market is topromoteaccessbycustomerstoinnovativeandaffordableservicesbyincreasingcompetitioninthetelecommunicationsindustryandprotectingtheinterestsofconsumers.


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■ aggregateownershipinTelstrabyanindividualforeignperson(andtheirassociates)cannotexceed5%ofTelstraSharesnotownedbytheCommonwealthofAustralia,subjecttocertainexemptionsprovidedforinTelstra Corporation (Ownership – Interests In Shares) Regulations 1997.

The Communications Minister may impose additional carrierlicence conditions on individual carriers in relation to foreigninvestment.The Government’s increasing focus on the security oftelecommunication networks also has implications for foreigninvestment. NBN Co cannot be invested in by foreign personsuntil such time it is privatised, and may be subject to certainforeign investment restrictions, including if the CommunicationsMinister prohibits certain ownership or control over NBN Co.TheGovernmenthas also effectivelyblockedChinese companiesHuawei Technologies Co Ltd and ZTE from participating in the5GspectrumauctionthroughtheintroductionoftheTSSR,citingnationalsecurityconcerns.In September 2017, the FIRB announced an increased focus onenhancing its compliance arrangements for foreign investment.Thisincludesplacingadditionalresourcesintoforeigninvestmentcompliance, developing a revised framework, undertaking rollingannual compliance audits and establishing clearer enforcementpolicies.MediaGovernmentapproval isrequiredforforeigninvestmentof5%ormore in themedia sector, regardless of value. InOctober 2017,the American commercial broadcasting network, CBS, securedthenecessary approvals from theFIRB tofinalise its takeoverofembattled network Ten Network Holdings Limited. CBS beat ajoint bid from Australian media moguls Lachlan Murdoch andBruceGordon,whichpromptedtheGovernmenttoreformexistingmedia ownership laws by way of the Broadcasting Legislation Amendment (Broadcasting Reform) Act 2017 (Cth) (Broadcast Reform Amendments),whichrepealedkeycross-mediaownershiplimitations(discussedinquestion5.3below).

2 Telecoms

General


Australia has been a member of the World Trade Organisation(WTO) since 1 January 1995. Australia hasmade commitmentsunder theGATS in aScheduleofSpecifics andunder theFourthProtocol on Basic Telecommunications, and adopted the WTOBasicTelecommunicationsReferencePaper.


The provision of telecommunications networks and services areregulated under legislation listed in question 1.2 above, and bybodieslistedinquestion1.3above.

■ the Telecommunications Industry Ombudsman – providesanindependentdisputeresolutionservicefortelephoneandinternetcomplaints.

Thekeynon-governmentindustrybodiesare:■ theCommunicationsAlliance – unifies theAustralian com-

munications industry and its members in facilitating open,effective and ethical competition between service providersandinprovidingaforumforthetelecommunicationsindustry;

■ BroadcastAustralia–ownsandoperatesmultimedia trans-mission infrastructure inAustralia, and provides analogueanddigital televisionandanalogue radio for theAustralianBroadcastingCorporationandSpecialBroadcastingService;

■ theAustralianCommunicationsConsumerActionNetwork– a Government-funded communications consumerorganisation that represents individuals, small businessesand not-for-profit groups as consumers of communicationsproductsandservices;and

■ the Australian Information Industry Association –representativebodyandadvocacygroupfortheICTindustryandthewidertechnologysector.


LiberalisationAsdiscussedinquestion1.1,thesesectorscontinuetobeliberalised,inparticular:■ competition in the telecommunications sector is being

liberalised inorganically by the increase in competition,driven by the building of nbnTM and increasing regulatoryfocus, andorganicallybydigitisationand the shift towardsmobiletelecommunicationsservices;and

■ in the audio-visual media distribution sector, competitionin the FTA and Pay TV industries has continued to beintensified,drivenbytheriseofSVoDplatformsandonlinemediaconsumptionsources.

The telecommunications sector had historically been largelycentralised and monopolised before the establishment of anadditional publicly-owned carrier in 1981 by the Government,AUSSAT,whichwaslateracquiredbyOptusin1992.Foreign investmentTheTreasurerofAustraliaisultimatelyresponsibleforalldecisionsrelated to foreign investment and for the administration of theAustralian foreign investment policy. The Foreign InvestmentReview Board (FIRB) administers theForeign Acquisitions and Takeovers Act 1975(Cth)inaccordancewiththeAustralianforeigninvestmentpolicy,inadditiontoadvisingandassistingtheTreasurer.Thetelecommunicationsandaudio-visualmediadistributionsectorsareopentoforeigninvestment,subjecttorestrictions.Telecommunications (including internet) sectorThe telecommunications sector is considered to be sensitivewith regard to foreign investment and, therefore, there are lowerthresholdsprovidedforforeigninvestment.Foreigninvestmenttoacquiredevelopedcommerciallandonwhichstoredcommunicationisheldorthathasatelecommunicationsnetworkunitisalsosubjectto a lower threshold. Approvals may also be subject to stricterrequirements.TheTelstra Corporation Act 1991(Cth)restricts:■ aggregate foreignownership inTelstra to35%of shares in

theissuedcapitalofTelstra(Telstra Shares)notownedbytheCommonwealthofAustralia;and


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Carrierlicences(asdescribedaboveinquestion2.6)donothaveastatedterm,butcanbesurrenderedbythecarrierorcancelledbytheACMA.Whiletherearenoexpressprohibitionsforthetransferofcarrierlicences,itistheACMA’sviewthatcarrierlicencescannotbetransferred.



Carriers may install, inspect and maintain telecommunicationsinfrastructureinaccordancewiththeTelecommunicationsCodeofPractice (TCOP) on public and private land, subject to statutorynotification as applicable, objections by owners or occupiers ofthat landmade under theTCOP to the carrier, and any directionhanded to the carrier by theTIO. A 2015 court case interpreted‘maintain’toincludeconductthatensurestheproperfunctioningofatelecommunicationsfacility,includingdrawingelectricityfromapremises,subjecttothecarrierprovidingappropriatecompensation.Such telecommunications infrastructure must be ‘low-impactfacilities’ with a low visual impact (e.g., antennae, undergroundcabling and cable pits and public payphones), with additionalcategories applicable specifically to nbnTM. nbnTM, in particular,has takenadvantageof these low-impact facilities rules todeployimportantnetworkinfrastructureandequipmentpotentiallyoutsidethescopeoflocalplanninglaws.In June 2017, the Government commenced consultation onproposed reforms to the Telecommunications (Low-impact Facilities) Determination 1997 (1997 Determination) to widenthe powers and immunities of carriers to deploy, expand andmaintain telecommunications infrastructure. InMarch 2018, theCommunicationsMinister announced that theGovernmentwouldbe proceedingwith the implementation of 10 of the 24 proposedreforms to the 1997 Determination, while conducting furtherconsultation on the remaining proposals. The agreed changesinclude defining omnidirectional radio communications antennasas low-impact facilities in commercial and residential areas, andincreasingthemaximumsizeofsolarpanelsinruralareas.Under section 42 of Schedule 3 of the TelecommunicationsAct,carriersmay be required to pay an amount for anyfinancial lossordamagetothelandownercausedbythatcarrierwhenenteringandinspectingthe land,or installingormaintaininga low-impactfacility.Additionally, carriers that install low-impact facilities formobilephonenetworksneedtocomplywiththeCommunicationAlliance’sIndustryCodeforMobilePhoneBaseStationDeployment.The powers and immunities above may not apply in somecircumstances,inwhichcase,rightsoflandaccessandtenuremustbenegotiatedwitheachindividuallandowner,subjecttostateandterritorylaws.


ThekeyregulatorsaretheACCC,whichregulatescompetitionandconsumerissues,andtheACMA,whichregulatestechnicalissues.TheACCCandACMAfunctionindependentlyfromtheGovernmentexceptwheretheCommunicationsMinisterhasresidualregulatorypowers, including, in relation to, the imposition of conditionsto carrier licences, and directing theACCC andACMA in somerespectsoftheirperformanceoftheirregulatorypowers.Otherkeybodiesaresetoutinquestion1.3above.


Decisionsmadeby theACCCmaybeappealed to theAustralianCompetitionTribunal(ACT)onitsmerits,andtheFederalCourtofAustraliacanhearappealsfromtheACTinlimitedcircumstances.DecisionsmadebytheACMAmaybeappealedtotheAdministrativeAppealsTribunalonitsmerits,andtotheFederalCourtofAustraliaforjudicialreviewonadministrativelawgrounds.



TheTelecommunicationsActdistinguishesbetween:■ carriers–entitiesthatowntelecommunicationsinfrastructure

onwhichcarriageandcontent services areprovided to thepublicandholdacarrierlicence;

■ carriageserviceproviders(CSPs)–entitiesthathavedirectcontactwithconsumersandusecarriageservices tosupplyphoneand/orinternetservicestothepublic;and

■ contentserviceproviders.Mostcarriersarecarriageserviceproviders.


Each entity has to apply for an individual carrier licence. Theapplicationrequirementsare:■ theapplicanthastobeacorporation,eligiblepartnershipora

publicbody;■ theapplicationhastobemadeinwritingintheformapproved

bytheACMA;and■ anyapplicablefeemustbepaid(includinganyannualcarrier

licencecharges).TheACMAmayrefusetograntacarrierlicencetoanapplicantundercertaincircumstances,includingiftheapplicantisdisqualified(e.g.,failuretopayanyapplicablecharges),andmustnotgrantacarrierlicenceifitisdeemedtobeprejudicialtosecurityanddirectedbytheAttorney-General.CSPsandcontentprovidersarenotrequiredtobelicensed,butarestillsubjecttotheTelecommunicationsAct.


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NBN Co, NBN Tasmania Limited, NBN Co Spectrum Pty Ltd,andanycompaniesoverwhichNBNCoisinapositiontoexercisecontrol,must publish a standard access agreement or provide anaccessundertakingtotheACCCforcertainservices.


TheACCCcansetdefault‘upfront’price termsandissueaccessdeterminations.TermsinSAUsprevailoveraccessdeterminations,andaccessagreementsprevailoveraccessdeterminationsandSAUstotheextentofanyinconsistency.


Telstra is subject to a Structural Separation Undertaking (SSU)whichcommencedon6March2012inrelationtoitsinvolvementinthedeploymentofnbnTM,underwhichTelstraundertakesto:■ progressively migrate its fixed-line voice and broadband

customersontothewholesalenbnTM; and■ promote equivalence and transparency, and ensure that

wholesalecustomersgainaccesstokeyinputservicesduringthe transition from Telstra’s copper and HFC networks tonbnTM.

Operators of superfast carriage networks built, upgraded, alteredorextendedtoresidentialandsmallbusinessusersafter1January2011mustofferservicesonawholesale-onlybasis(seequestion2.9above),whichimposesstructuralseparationonproviderswhoalsoofferretailservices.TheACCCcanmakerecordkeepingrulesforaccountingseparation;however,noneare in existenceafter the revocationof theTelstraAccountingSeparationRecordKeepingRulesin2014.


In addition to existing telecommunications regulation, Parts 7and8of theTelecommunicationsActapplyspecificallytocertainsuperfastcarriagenetworksbuilt,upgraded,alteredorextendedtoresidentialandsmallbusinessusersafter1January2011,requiringsuchnetworkstooperateonanopenaccess,wholesale-onlyandnon-discriminatorybasis(seequestion2.9above).Theserequirementsare extended to all superfast carriage networks in the Carrier Licence Conditions (Networks Supplying Superfast Carriage Services to Residential Customers) Declaration 2014 made bytheCommunicationsMinister,whichsetsoutadditional reportingrequirements on certain wholesale-only and non-wholesale-onlycarriers.NBN Co was established with a wholesale-only, open accessmandate (subject to certain exceptions) with the nbnTM Multi-TechnologyMix (seequestion1.1above). NBNCoentered intoarenegotiatedagreementwithTelstratoacquireitsHFCassetsin



It is a standard term in carrier licences that the carrier providesany-to-any connectivitybetween the carriers’ telecommunicationsnetworkandanyinterconnectednetwork.Networksbuilt,upgraded,alteredorextendedtoresidentialandsmallbusinessusersafter1January2011withausualdownloadspeedofmorethan25megabitspersecond(i.e.,superfastcarriageservices)arerequiredtooperateonanopenaccess,wholesale-onlyandnon-discriminatorybasis,andofferabasicconnectivityservice(layer2bitstream)onawholesalebasis.UndertheCarrier Licence Conditions (Networks supplying Superfast Carriage Services to Residential Customers) Declaration 2014 (CLCs), the CommunicationsMinister declared that all superfast carriage services provided bylicensed carriers are subject to these conditions. The requirementwasdesignedtoensurethatprivateoperatorsdonotfavourprofitablemetropolitan areas andplace thenbnTMmodel at risk, asNBNCowas establishedwith awholesale-only, open accessmandate. TheCLCswereinitiallyscheduledtoexpireon30June2018.However,afterapublicconsultationprocesstheexpirationdatewasextendedto30June2020.TheCommunicationsMinisterconsidersthatsuchextension will give the industry greater certainty while long-termregulatory arrangements are finalised. The Telecommunications Amendment Bill 2018(Cth),whichiscurrentlybeforetheAustralianParliament,includesclausesthatextendtheCLCsindefinitely.TheACCCcan‘declare’acarriageserviceoraservicethatfacilitatesthat carriage service, to promote competition, achieve any-to-anyconnectivity and encourage economically efficient use of, andinvestmentin,infrastructure.CarriersandCSPsarerequiredtomakedeclaredservicesavailableonrequestbyaccessseekers,andto:■ allowinterconnectionoffacilities;■ take all reasonable steps to ensure that service quality and

fault handling is equivalent to what the service providerprovidestoitself;and

■ providebillinginformationtotheaccessseeker.Types of telecommunications services that have been ‘declared’includesuperfastbroadbandaccessservices,localbitstreamaccessservices,wholesaleADSLandline-sharingservices.Thereisnogeneralrightofaccessbyaccessseekersorconsumersto telecommunications services. The telecommunications servicemustfirstbe‘declared’bytheACCC,asdescribedabove,orhavetheir specialaccessundertakingacceptedby theACCC. Carriersare required to provide access to their passive infrastructure toother carriers on request. Part 20A of the TelecommunicationsActalsosetsoutaregimeforcertaindevelopers to installcertainfixed-line facilities and provide access to carriers, to supporttelecommunicationsrolloutinnewdevelopments.Interconnectionoraccessdisputesareresolvedasfollows:■ the ACCC can set default ‘up front’ price and non-price

terms,andissueinterimandfinalaccessdeterminationsforeachdeclaredservice;and

■ the Communications Minister can make principles to beappliedindeterminingprice-relatedtermsandconditionsin‘Ministerialpricingdeterminations’.

A person can also give theACCC a special access undertaking(SAU) or access agreement (forNBNCo), setting out the termsandconditionsofprovidingaccesstoanaccessseeker.SAUsaresubjecttoacceptancebytheACCC.


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Carriageserviceprovidersorcarriersmustensurethattheyhavethetechnicalcapabilityrequiredtogiveeffecttonumberportability,andtheavailabletechnologytodosoinawaythatprovides‘equivalentservice’toanyportednumberandenablesend-to-endconnectivity.TheNumberingPlanand theCommunicationsAlliancecodes setoutproceduresandrequirementsfornumberportability.

3 Radio Spectrum


The ACMA, principally under the RCA and the BSA. TheCommunications Minister retains some additional powers inrelationtotheregulationofspectrumplanningandspectrumlicenceallocation.


Authorisationis inaccordancewith the tripartite licensingregimesetoutintheRCA,andinamannerconsistentwiththespectrumplanandanyapplicablefrequencybandplans.TheACMAmayissuethefollowing:a) spectrumlicencesauthorisingtheuseofpartsofthespectrum

inaparticulargeographicareabyspecifiedlicensees;b) apparatus licences authorising the operation of specified

radio-communicationsdevicesbyspecifiedlicensees;andc) class licences authorising any person to operate specified

radio-communications devices, or radio-communicationsdevicesforspecifiedpurposes.

TheACMA is required todetermine inwriting theprocedures tobeappliedinallocatinglicences,buthasrelativeflexibility in theselection of the mechanism. Multi-bid auction processes havetypically been favoured as the preferred approach for the issueof spectrum licences and apparatus licences that are used forbroadcasting purposes, while other forms of apparatus licenceare typically issued over-the-counter in accordance with a pre-determinedfeeschedule.This licensing regime is currently the subject of a two-stagereviewand consultationprocess. Adraft bill to amend spectrumlicencing released for consultation inmid-2017 contemplates theconsolidation of spectrum and apparatus licences into a singlelicenceclass,butstillundertheregulatorypurviewoftheACMA.Thefirstroundofconsultationontheproposedlegislationisnowcomplete and the feedback received is being used to inform thesecondconsultationpackage.ThebillwillundergoasecondroundofconsultationandreviewbeforeitisfinalisedforintroductionintotheAustralianParliament.


Licenceexemptionsexistinrespectofcarryingoutspecificdefence,international relations, emergency services and law enforcementfunctionsandincertainemergencysituations.

2014;however, it recentlyswitched from itsplans touseOptus’sHFCnetworkinfavourofdeployingfibre-to-the-distributionpointtechnology.Withregardtopassiveinfrastructuresharing,carriersarerequiredto provide access to their passive infrastructure to other carrierson request under the Facilities Access Code. Part 20A of theTelecommunicationsActalsosetsoutaregimeforcertaindeveloperstoinstallcertainfixed-linefacilitiesandprovideaccesstocarriers,tosupporttelecommunicationsrolloutinnewdevelopments.



CSPsthatofferorprovidelocalcallsareobligedtogiveresidentialandcharitycustomerstheoptionsofuntimedlocaldataandvoicecallservices.CSPsmustalsoofferuntimedlocalvoicecallservicestotheirothercustomers.The Communications Minister can make price control deter-minationsforspecificcarriers.ThepricecontroldeterminationforTelstrawasrepealedin2015andisunlikelytobereintroduced.


RegisteredindustrycodesmaintainedbytheACMAsetoutcertainminimumstandardsandrequirementsinrelationtotheadvertisingof services, billing practice and information, credit managementpractice,transferoftelecommunicationsservicesbetweenproviders,thecomplainthandlingprocessandprivacy.The ACMA also sets out procedures for transferring (porting)telephonenumbers betweenproviders and enabling consumers tochooseapreferredproviderforpre-selectableservices.

Numbering


The ACMA makes the Numbering Plan under theTelecommunications Act, setting out the framework for thenumberingof,anduseofnumbersinconnectionwiththesupplyof,carriageservicesinAustralia.


TheNumberingPlansetsoutrulesincluding:■ thenumbersforpublicandnon-publicuse;■ thespecificationofandrestrictionsonuseofcertaintypesof

numbers;■ therequirementforcarriersorcarriageserviceprovidersto

implementnumberportability;and■ rateschargeableonparticulartypesofnumbers.IndustrycodesbytheCommunicationsAlliancesetoutadditionalrequirements and procedures that govern the use of telephonenumbers.


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maximumof30daysfromthetimeofbeingawarethatapotentialbreachhasoccurred)aboutwhethertherehasbeenaneligibledatabreach. As soon as it is practicable afterwards, the entity mustprepareastatementaboutthebreachandprovideittotheOfficeoftheAustralianInformationCommissioner.Assoonasispracticableafterthestatementisprepared,theentitymustnotifytheindividualsaffectedbyoratriskasaresultofthedatabreach(or,ifbotharenotpracticable,publishastatementonitswebsiteandpubliciseit).Failure to comply with this regime may result in compensation,enforceable undertakings or civil penalties of up to $2.1 millionbeingawardedagainsttheentity.


Thekeylegislationrelevanttotheabilityofthestatetoaccessandinterceptprivatecommunicationsarethe:■ TIAAct,which regulates the interception of and access to

telecommunicationsdataheldbycarriersorcarriageserviceproviders(CSPs)bythestate;

■ TelecommunicationsAct, which requires that carriers andCSPsprovideassistancetorelevantagenciesforthepurposesoflawenforcementandnationalsecurity;

■ Surveillance Devices Act 2004 (Cth), which providesfor eligible agencies to obtain warrants to install and usesurveillancedevices,includingdatasurveillancedevices;

■ Australian Security Intelligence Organisation Act 1979 (Cth), which provides theAustralian Security IntelligenceOrganisation (ASIO) with various powers, including theability toobtaincomputeraccesswarrantsandsurveillancedevicewarrants;and

■ Crimes Legislation, which include various search andinformation-gatheringpowers for lawenforcementofficers,including the ability to access data held in a computer orotherdatastoragedevice.


The TelecommunicationsAct requires carriers and CSPs (whichinclude ISPs and VoIP service providers) to ensure that theirnetworks are capable of interception and to prepare annualinterceptioncapabilityplans.There is an ongoing obligation to disclose to the ACMA anytechnologicalchangesthatwouldhaveanadversematerialimpactontheirabilitiestofulfiltheseobligations.These interception capabilities are mandated with respect to‘communications’–broadlydefinedtoincludetraditionaltelephonecalls, VoIP calls, and emails as well as various other forms ofcommunications.


In accordance with the TIA Act, if a state authority wishes tointercept communications for a particular individual, itmust firstobtainawarrantfromacourtortribunal.Suchwarrantmustspecifytherestrictionsimposed,suchasthetimethewarrantisinforce.Inlimitedcircumstances,suchasinemergencies,awarrantisnotrequired.Additionally,thereisnoobligationforvariousauthorised


Nolicencefeesarepayableforclasslicences.Withrespecttospectrumlicencefees, thecalculationwilldependon the method of allocation. For example, the ACMA has setminimumstartingpricesforthelotsofeachproductonofferintheforthcoming5Gspectrumauction,andlicencefeeswillultimatelyreflectthewinningbidprices.In the 2016–17 financial year, commercial radio broadcastersreceivedalicencefeeexemptionasaone-offreliefmeasure.


Aspectrumlicencewillbeunaffectedbyalicenseechangeofcontrolprovidedthattheconditionsimposedbythelicencecontinuetobemet,andthechangeofcontroldoesnotresultinaconcentrationofmediacontrolthatisunacceptableundertheBSA.


Generally,spectrumandapparatuslicencesareabletobeassigned,traded and sub-licensed. However, theACMA has the power toissueadeterminationthataparticularlicenceisnottransferable,orthataparticularlicenceisnottransferableincertaincircumstances.For example, theACMAmay restrict the assignment of licencesissued for defence purposes, or where a licence was issued forpublicorcommunityservices.TransferonlytakeseffectuponregistrationbytheACMA.



CybersecurityisregulatedbytheCriminal Code Act 1995 (Cth)andthe Crimes Act 1914 (Cth) in conjunctionwith various state andterritorycrimeslegislation(together,theCrimes Legislation).TheCrimesLegislationestablishcertaininternet-basedoffencesrelatingto unlawful access and computer trespass, damaging data andimpedingaccesstocomputers,theftofdata,computerfraud,cyber-stalkingandharassmentandpossessionofchildpornography.Theyprovidearangeofinvestigatory,searchandseizurepowerstolawenforcementauthoritiesinrelationtodataanddatastoragedevices.In addition, theAustralian Privacy Principles (Schedule 1 of thePrivacy Act 1988 (Cth)) regulate the collection, holding, use anddisclosure of personal information that is included in records forgovernment organisations and private organisations with annualrevenue greater than $3 million, and provides penalties for theunauthorisedreleaseofpersonalinformation(APP Entities).The Privacy Amendment (Notifiable Data Breaches) Act 2017(Cth), which came into effect on 22 February 2018, has takentheseprovisions furtherwithanadditionalmandatorynotificationscheme for eligible data breaches. A data breach occurs whenpersonalinformationheldbyanorganisationislostorsubjectedtounauthorisedaccessordisclosure. There isanobligationonAPPEntitiestomakeareasonableandexpeditiousassessment(uptoa


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itunnecessarilyexpandsthescopeoftheABSIAS,overlapswithexistinginformationsourcesandwillleadtoincreasedcompliancecosts.Submissionstotheconsultationforthisproposalclosedon21September2018.



Distribution of audio-visual media is primarily regulated by thebroadcastinglicensingregimeestablishedundertheBSA.Amongotherthings,theACMAisresponsiblefor:■ broadcastingspectrumplanning;■ allocatingandadministeringbroadcastinglicences;■ administeringcross-mediaownershipandcontrolrestrictions;

and■ overseeing Australian content programming requirements

applyingtocertainbroadcastinglicensees.


Content regulation varies across the distribution platform, and istypicallycharacterisedbyindustryself-regulationwithdiscretionaryoversightpowersbyaCommonwealthauthority.Broadcast mediaTraditionaldistributionviatelevisionisregulatedbyindustrycodesofpracticeundertheBSA,theAustralian Broadcasting Corporation Act 1983(Cth)andtheSpecial Broadcasting Service Act 1991(Cth),whichprovidearangeofcontent,advertisingandtimingrulesandrestrictions.Separateindustrycodesofpracticeexistinrespectof:■ commercialTVnetworks;■ subscriptionTVnetworks;and■ thenationalbroadcasters(theABCandtheSBS).Compliancewithan industrycode isvoluntaryunless theACMAdirects a particular participant in the content industry to comply.Failure to do so then becomes punishable by criminal, civil andadministrativepenalties.OnlineOnline audio-visual distribution is also subject to industry self-regulation. Codes such as the internet andmobile content code,andthecontentservicescode,imposeobligationsoncontenthosts,ISPs,mobilecarriersandcontentserviceprovidersto,amongotherthings, provide certain information to users, establish complaintsproceduresandrestrictaccesstocertaincontent.Film, publications and computer gamesThe Classification(Publications,FilmsandComputerGames)Act1995 (Cth)provides for the review,classificationand labellingoffilms,publicationsandcomputergamesprior tosale inAustralia,butleavesimplementationtonon-unifiedstate-basedlegislation.


TheBSAmakesprovisionforthefollowingtypesoflicences:■ commercialfree-to-airtelevisionbroadcastingservices;

agencies toobtainawarrant tocompelcarriersand ISPs tosharecertainmetadataassociatedwiththecommunicationsofaparticularindividual.


Under the Crimes Legislation, various law enforcement agenciesmayobtainanorderforcertainpersonsto‘provideanyinformationorassistancereasonableandnecessary’toenableanofficertoaccesscomputerdataoradigitalstoragedevicethatissubjecttoawarrant,andtoconvertthatdataintoaformthatisintelligible.Such orders can only be made with respect to a person underinvestigation,anownerofthedevice,anemployeeoftheowner,arelevantcontractor,apersonwhohasusedthedevice,orasystemsadministrator, and who has relevant knowledge of the device ormeasuresappliedtoprotectthedataheldbythedevice.On 20 September 2018, the Assistance and Access Bill wasintroduced to the Australian Parliament, shortly after theconsultation process on the draft legislation concluded. Thelegislation seeks to impose an obligation on ‘designated serviceproviders’ to provide security and enforcement agencies withaccess to end-to-end encrypted communications. ‘Designatedserviceproviders’isbroadlydefinedtocapturenotonlycarriers,butforeign and domestic devicemanufacturers, software developersand others involved in the communications supply chain. Thelegislationproposesthreesetsofamendments:■ newrequirementsonserviceproviderstoassistsecurityand

enforcementagencies;■ newpowersforenforcementagenciestosearchdevicesand

accesscontentsecretly;and■ greater powers for enforcement agencies, ASIO and the

AustralianBorderForcetocollectdataunderwarrants.


2015 amendments to the TIAAct require that carriers and ISPsrecordandstorethefollowinginformationaboutacommunication:■ thesubscriberof,andaccounts,services,telecommunications

devicesandother relevant services relating to, the relevantservice;

■ thesourceanddestinationofacommunication;■ thedate,timeanddurationofacommunication;and■ thetypeofcommunicationandrelevantserviceused,foraminimumoftwoyears.Authorisedagenciesdonotrequireawarranttoaccessthisinformation.TheTIAActalsoestablishesasystemofpreservingcertainstoredcommunicationsheldbyacarrier. Thesemustbe retained foraslongasanauthority-issuedpreservationorderspecifies.Under the TelecommunicationsAct, carriers, CSPs and number-databaseoperatorsarerequiredtoretaincertainrecordsforaperiodofthreeyearsinconnectionwithcertaindisclosureobligations.In August 2018, the ACCC announced a proposal to introducea new Internet Activity Record Keeping Rule (Internet RKR)under section151BUof theCCA, to facilitate the collection andanalysisofinternetactivitydatafollowingthediscontinuationoftheAustralianBureauofStatistic’sInternetActivitySurvey(ABS IAS).WhilenbnTMhasexpressedsupportfortheInternetRKRandarguedfor its expansion to services supplied over non-nbnTM networks,carriers includingOptus andTelstra have expressed concern that


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■ cachingthroughanautomaticprocess;■ storingcopyrightmaterialontheirsystemsornetworks;and■ referringuserstoanonlinelocation.TheHighCourtofAustraliaupheldadecisionoftheFullFederalCourtin2011thatanISPwasnotliablefortheallegedcopyrightinfringementofitscustomers,findingthattherewasnotsufficientdetail provided on how the infringement was proven to haveoccurredand,thus,suspensionorterminationofcustomeraccountsbytheISPwasunreasonable.


TheOnlineInfringementAmendmentcameintoeffectinJune2015,withsection115AprovidingtheFederalCourtofAustraliapowersto grant injunctions, by application, requiring carriage serviceproviderstodisableaccesstoonlinelocationsoutsideAustraliathat:■ infringeorfacilitatetheinfringementofcopyright;and■ have a primary purpose of infringing or facilitating the

infringementofcopyright(whetherornotinAustralia).TheFederalCourtgrantedsection115Ainjunctionsforthefirsttimeinlate2016,requiringcertainISPstoblockaccesstoastreamingsiteandfourfile-sharingsites.AsecondinjunctionwasgrantedbytheFederalCourt toblockapeer-to-peerfile-sharingsite inApril2017.Section115AiscurrentlythesubjectofareviewandconsultationprocessinordertoexaminetheeffectivenessandefficiencyofthemechanismoftheOnlineInfringementAmendment,andhowwelltheapplicationprocessandinjunctions(oncegranted)workforthepartiesinvolved.


TherearenospecificlawsonnetneutralityinAustralia.ThenatureofAustralia’s user-pay model of broadband has allowed ISPs tothrottlecertaintrafficinordertoallocatenetworkresources,basedonaconsumer’susageoftheirdatacap. Assuch,therehasbeennoneedforISPstosetupdifferent trafficlanesanddifferentiallychargetraffic.However,ISPsareabletoeffectivelychargedifferenttypesoftrafficthroughzero-ratingdatausageplans,wherecertainISPshaveofferedconsumersaccesstocertainservicesonazero-ratingsbasis.TheACCChasextensivepowersinrelationtocompetitionandtheprotectionofconsumerinterests,andcanintervenetoensurethereistransparencyinthetrafficmanagementpracticesofcarriersandcarriageserviceproviders.


Carriersandcarriageserviceprovidersareundernoobligation toblockaccesstocertainsitesorcontent.However,theywillhavetocomplywithasection115AinjunctionifitisgrantedbytheFederalCourtofAustralia(seequestion6.2above).

■ localandcommunity(notforprofit)broadcastingservices;■ internationalbroadcastingservicesdeliveredfromAustralia;■ subscriptiontelevisionbroadcastingservices;■ datacastingservices;and■ openandsubscriptionnarrow-castingservices.Key obligations vary but will typically involve advertisingrestrictions, the restriction of certain classifications at particulartimesandminimumlocalcontentquotas.AnimportantfetterintheAustralianmedialandscapeimposedbytheBSAhasbeenrestrictionsoncross-ownershipoftelevision,radioandnewspaperassets.However,inOctober2017,theGovernmentpassedtheBroadcastingReformAmendments,amendingtheBSAtorepealkeycross-ownershiplimitations,includingthat:■ apersoncouldnotcontrolcommercialtelevisionbroadcasting

licencesreachingmorethan75%oftheAustralianpopulation(75% reach rule);and

■ apersoncouldnotcontrolacommercial television licence,a commercial radio licence and an associated newspaperlicenceinonecommercialradiolicencearea(2 out of 3 cross media control rule).

Thefollowingcross-ownershiplimitationscontinuetoapply:■ apersoncannothavecontrolofmorethanonecommercial

televisionbroadcastinglicenceinalicencearea;■ apersoncannothavecontrolofmorethantwocommercial

radiobroadcastinglicencesinasingleradiolicencearea;and■ mediaacquisitions(commercialtelevision,commercialradio

andassociatednewspapers)thatwouldresultinlessthanfiveindependentmediaoperationsinametropolitancommerciallicencearea,orfourinaregionallicencearea,areprevented.

The Broadcasting ReformAmendments are likely to enable theconsolidation of existing media operators, leading to a greaterconcentrationofmediaownershipinAustralia.


Attheoppositeendsofthespectrum,commercialbroadcastingandsubscriptiontelevisionbroadcastinglicencesareassignable,whileinternationalbroadcastinglicencesarenotassignable.Datacasting licences and community broadcasting licences areassignabletocertainqualifiedentities;thelatterisonlysubjecttocertainconditionsandwiththeapprovaloftheACMA.Additionally, the BSA provisions relating tomedia diversity andownership may prevent licences from being assigned in somecircumstances.



CSPs that provide carriage services to the public are covered bythesafeharbourprovisionsintheCopyrightAct,whichdefinefourcategoriesofeligibleactivities:■ acting as a conduit for internet activities by providing

facilities for transmitting, routingor providing connectionsforcopyrightmaterial;


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Anthony BorgeseMinterEllison Level 40 Governor Macquarie TowerOne Farrer PlaceSydney NSW 2000Australia

Tel: +61 2 9921 4250 Email: [email protected]: www.minterellison.com

Athena Chambers MinterEllison Level 40 Governor Macquarie TowerOne Farrer PlaceSydney NSW 2000Australia

Tel: +61 2 9921 4342Email: [email protected]: www.minterellison.com

Anthony has extensive experience assisting clients in their IT, telecommunications and complex outsourcing arrangements. His practice includes domestic and cross-border outsourcing, reviewing and negotiating long-term supply and outsourcing arrangements, vendor management, cloud computing, the internet, technology disputes and cybersecurity.

Anthony leads the outsourcing team with over 20 years’ experience of delivering strategic, commercially focused solutions within the ICT arena for client organisations. He has a solid understanding of the commercial drivers of a wide range of both public and private sector organisations and service providers.

Anthony is recognised for his expertise in leading independent guides such as Best Lawyers 2018 in the areas of commercial law, information technology law, outsourcing law and telecommunications law, and listed as a Leading Individual in Chambers Asia Pacific 2018 (TMT: IT category).

MinterEllison is one of the Asia Pacific’s leading full-service law firms. Established in Sydney in 1827, today the firm operates in Australia, Hong Kong, mainland China, Mongolia, New Zealand and the United Kingdom through a network of integrated offices and associated offices.

With about 200 partners and 700 legal staff worldwide, we understand the challenges faced by businesses operating in a globalised marketplace and offer clients services that are multi-disciplinary and industry-facing. In 2017, we expanded our market-leading legal technology practice with the acquisition of ITNewcom, a top-tier technology consultancy.

MinterEllison’s large and diverse client base includes blue-chip public and private companies, leading multinationals, global financial institutions, government and state-owned entities.

Our lawyers have been independently recognised amongst the world’s best for their strong technical skills and ability to deliver commercially practical solutions that assist clients to achieve their business objectives.

Athena is a lawyer in MinterEllison’s technology team. Athena has gained experience advising both private and public sector clients on a range of technology-related matters, including outsourcing, IT procurement (including software, hardware, cloud computing and ‘X-as-a-service’ models) and transitional service arrangements for M&A transactions. Athena also has an interest in the rapidly evolving field of cybersecurity and privacy law.

ThereisnoregulationofconsumerusageofVPNsinAustralia.Itiscurrentlyunclearifconsumeractionstocircumventgeoblockingtechnology breach the provisions in the Copyright Act ontechnologicalprotectionandaccesscontrolmeasures.IntheInquiryreport released in December 2016, the Productivity CommissionrecommendedthattheGovernment:■ makesitclearthatcircumventionofgeoblockingtechnology

byconsumersisnotaninfringementofAustralia’scopyrightsystem;and

■ should avoid international obligations that would precludethecircumventionofgeoblockingtechnology.

Major ISPs will be required to block the INTERPOL ‘Worst-of’listundercurrentFederalGovernmentPolicyinlinewiththeISPs’statutory obligations in theTelecommunicationsAct, as it assistslawenforcementagenciestoenforcecriminallaw.Thispowerhasnot beenused extensively; however, it has been identifiedby theStanding Committee on Infrastructure and Communications as abroadandflexibletool.


Chapter 6

Cairn Legal

Guillaume Rue

Frédéric Paque

Belgium

servicesinWalloniaandBrussels.Itcurrentlyaccountsforanapproximate5%shareofthe2017turnovergeneratedbytheelectronictelecommunicationsandtelevisionsectors.


a) Telecoms sector, including InternetIn Belgium, the competence to regulate the telecoms sector iscurrentlyretainedbytheFederalState.TheprimarypieceoflegislationgoverningtelecommunicationsinBelgiumistheLawof13June2005onelectroniccommunications(or“E-CommunicationsAct”),whichbroughtforthmajorchangestotheformerlegalregimeontelecommunicationsencompassedintheFederalLawof21March1991;itreformedsomepubliceconomicentitiesandimplementedtheEU-Telecompackage,i.e.,thevariousEuropeanDirectivesdealingwithtelecommunications.TheLawof12July2012hassincethenslightlyamendedtheLawof13June2005,introducingseveralchangesinfavouroftheconsumer.Themostnotablechangewasthatasof1October2012,anoperatornolongerhastherighttodemandanycompensationfortheterminationofopen-endedcontractsorfortheearlyterminationofafixed-termcontract,ifthecontractenteredintoforceatleastsixmonthsbeforeitstermination.The Law of 21 March 1991 created BIPT. Then, through theenactment of the Law of 17 January 2003,BIPT became a fullyindependent parastatal with a public interest status, mandated toregulate the electronic communications market and the postalsector.ThisActwasaccompaniedthatsamedaybyanotherpieceoflegislation,dealingwithappealsanddisputessettlementsarisingfromtheformer.This sector is supplementedbyBookXII “Lawon the electroniceconomy”oftheEconomicLawCodeof28February2013.TheEUGeneralDataProtectionRegulation(“GDPR”)cameintoforceon28May2018. It replaces theDataProtectionDirective95/46/EC and is designed to harmonise data privacy laws acrossEurope, in order to protect and empower all EU citizens’ dataprivacy,toreshapethewayorganisationsacrosstheregionapproachdata privacy. As of 28 May 2018, non-compliant organisationscouldfaceheavyfines.Although the GDPR has been immediately applicable in everyMemberStatesinceitsentryintoforce,itleavesthesaidStateswithroom formanoeuvre to clarify the application of certain rules orconditionsofapplication. Belgium therefore recentlypassed twopiecesof legislationaddressing thespecificationsandderogations

1 Overview


Telecoms, including Internet and audio-visualmedia distribution,are closely intertwined throughout the Belgianmarket. Most ofits key players are proposing bundled packages and joint offers,creatingaconvergencebetweenthetwosectors.According toBIPT (theBelgian Institute for Postal Services andTelecommunications), the 2017 turnover for the convergencemarket amounted to €8.43 billion (+0.4% in comparison to the2016turnover).However,BIPTnotedthat,iftakenseparately,theelectronictelecommunicationssectorsustainedaslightslowdownintermsofturnoverin2017incomparisonto2016(-0.3%),whereasaudio-visualmediadistributionshowedgreatperformancesduringthesameperiod(+4.7%).Furthermore, basedonBIPT’s last annual report, four companiesaredominatingthemarketinthosesectors:■ Proximus,theincumbentfixedandmobileoperator(formerly

Belgacom), currently remains themost prominent actor inthe Belgian market, with its market share keeping around48% of the global turnover generated by the electronictelecommunicationsandtelevisionsectors.

■ It is followed by Telenet Group, which comes in secondposition in theBelgianmarket,nowapproximatelyholdingaround 30% of the market share. Telenet Group wasoriginally primarily active in Flanders and Brussels, butit is gradually expanding southwards, namely through theacquisitionofBaseinFebruary2016,oneofthethreelargestmobiletelecomsoperatorsinBelgium;andmorerecentlyofSFRBelgium inDecember2016, inorder tostrengthen itspositionintheBelgianmarketandtocatchuponitsprincipalrival.

■ In 2016, Orange Belgium (formerly Mobistar) made anoticeable entrance on the convergence market, thusbringing back some competition into theBelgian telecomsmarket,whichischaracterisedbyabnormallyhighpricesincomparisontoothercountries.OrangeBelgiumownsaround15%ofthemarketshareofthe2017globalturnovergeneratedbytheelectronictelecommunicationsandtelevisionsectors.

■ Finally, thecableoperator tradingunder thebrand“VOO”,an economic interest group born from the collaborationbetween the public cable operators Brutélé and Nethys(formerlyTecteo), is themainproviderofcablebroadband


Belg

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b) Audio-visual media distribution sectorIn theDutch-speakingCommunity,Mr.SvenGatz is theMinisterinchargeofmedia.In theFrench-speakingCommunity,Mr. Jean-ClaudeMarcourt istheVice-Minister-Presidentinchargeofthemedia.IntheGerman-speakingCommunity,Mrs.IsabelleWeykmansistheVice-Minister-Presidentinchargeofculture,includingthemedia.The competent regulators are the Flemish Regulator for theMedia (“Vlaamse Regulator voor de Media” or “VRM”) in theDutch-speaking Community, the Audio-visual Council (“Conseil Supérieur de l’Audio-visuel” or “CSA”) in the French-speakingCommunity, and theCouncil for theMedia (“Medienrat”) in theGerman-speakingCommunity.c) In both sectorsSince the Federal State and BIPT are together in charge oftelecommunication policies, and the decentralised entities are inchargeof the regulationof themedia and their content, and sincethere is an unavoidable convergence between both of them, theFederalStateandthethreeCommunitiesenteredintoaco-operationagreement on 17 November 2006 (“Co-operation Agreement”);this sets grounds for co-operation between the Federal State andthecommunitieswhendraftinglegislationinthefieldofelectronictelecommunicationsnetworksandexchanginginformation,aswellasforbroaderco-operationbetweenthetelecomsandmediaregulatorswhile exercising their respective powers. From this co-operationbetweenalltheregulatorswasborntheConferenceoftheRegulatorsoftheElectronicCommunicationsSector(“CRC”),whichregroupsthe relevant federal and community regulators (CSA, BIPT,Medienrat,VRM)tomakedecisionsandestablishrulespertainingtoelectroniccommunicationissues(federalcompetence),withclosetiestothemediaandtheircontent(communities’competence).The Belgian Competition Authority (“BCA”) is an independentadministrativeauthoritywithalegalpersonalitythatcontributestothedefinitionandimplementationofcompetitionpolicyinBelgium,by pursuing anticompetitive practices and reviewing the mainmergeroperations(forinstance,TelenetGrouptakingoverBASE).Onitsowninitiativeorattherequestofthecomplainant,theBCAinvestigates any case of distorted competition within a market,regardlessofthebusinessinquestionorthepublic/privatestatusoftheoperators.


a) TelecommunicationsInBelgium, the liberalisationof the telecoms sectorwasput intomotionwiththeLawof21March1991,knownasthe“BelgacomAct”, which authorised the foundation of a new kind of Statecompany enjoying amuch largermanagement autonomy. It thustriggered a full reorganisation of theBelgian telecommunicationssector. The liberalisationof the telecomsandaudio-visualmediadistributionsectorsbecamefullyofficialisedin1998.Nowadays, the incumbent operator Proximus still dominatesBelgium’stelecomssector,butcompetitionisgrowingfiercerbytheyearamongthekeyplayers.Furthermore,mostcompetitorsarelistedonEuronextandarethusopentoforeigninvestment:■ Proximusisstate-ownedat53.5%.Itcurrentlyowns4.55%

ofitsshare.Therestiscomposedoffluctuantshareholders,20% of whom are private individuals, whereas the rest is

to theGDPR. Firstofall,Belgiumpassedanewframeworklawon30 July2018 (“DataPrivacyAct”),whichcame into forceon5September2018,notablyaddressingtheissuespertainingtothedigitalageofconsent,togenetic,biometricandhealthdataprivacy,totheremediestodataprivacybreachesandtothecriminalisationofthebreachesofthedataprotectionrules.Thisframeworklawissupplementedbya lawfrom5September2018,whichcameintoforceon10September2018andcreatesanewpubliclawbody,the“InformationSecurityCommittee”,inaccordancewiththeGDPR,amendingvariousotherlaws.TheEU also adoptedDirective (EU) 2016/1148 of theEuropeanParliamentandoftheCouncilof6July2016,concerningmeasuresforahighcommon levelof security fornetworkand informationsystems across the Union (“NIS Directive”). This minimumharmonisation Directive establishes common security and co-operationrulesforallEUMemberStates.Despiteaformalwarningfrom theEUCommissionon19 July2018,Belgiumstill fails toimplementtheDirectivebytransposingitintoitsdomesticlaw.Finally,sincethebeginningofJune2017,Regulation(EU)2015/2120of the European Parliament and of the Council of 25November2015 – laying down measures concerning open Internet access,andamendingbothDirective2002/22/EConuniversalserviceandusers’ rights relating to electronic communications networks andservices,andRegulation(EU)No531/2012onroamingonpublicmobile communications networkswithin theUnion– enforces inEurope, and therefore inBelgium, the abolitionof retail roamingsurcharges,alsoreferredtoas“roam-like-at-home”.b) Audio-visual media distribution sectorDuetothefederalisationoftheBelgianStatein1971,thefederatedentitieshavebeenawarded thecompetence to regulate theaudio-visualmediadistributionsector. TheDutch-speakingCommunitypassed the Decree on radio and television broadcasting on 27March 2009 (“Dutch-speaking Media Decree”). A co-ordinatedDecreeonaudio-visualmediaserviceswasenactedbytheFrench-speakingCommunityon26March2009(“French-speakingMediaDecree”). Finally, the Decree of 27 June 2005 on radio andtelevisionbroadcastingappliesintheGerman-speakingCommunity(“German-speakingMediaDecree”).The only exception concerns the Bilingual Region of Brussels-Capital,wheretheFederalStateretainsthedecision-makingpower.Recently,theLawof5May2017pertainingtoaudio-visualmediaservicesreplacedtheLawof30March1995.


a) Telecoms sectorMr.Alexander de Croo is the Federal Deputy PrimeMinister inchargeof the telecomsand thedigitalagenda,whileMr.PhilippeDeBackeristheFederalSecretaryofStateinchargeofprivacy.BIPTisthetelecomsregulator.On 25May 2018, the Commission for the Protection of Privacy(“CPP”)gavewaytothenewDataProtectionAuthority.Thisnewsupervisorybodyhasbeengrantedextensivepowers,includinganinspectionandsanctionmechanism.TheDataProtectionAuthoritymonitors the processingof personal data and ensures compliancewiththeGDPRandthenewBelgianDataPrivacyAct.Inparticular,itmayimposefinesonnon-compliantcompanies.


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Oneof themost important changes triggeredby theEUTelecomPackage is that an individual licence or authorisation fromBIPTisnolongerrequiredtolegallyprovideelectroniccommunicationsservicesornetworks,exceptinrespectoftheallocationofnumbersor radio frequencies (see question 2.5 hereinafter). However,operatorsarestillrequiredtoofficiallynotifytheregulatorpriortolaunchingtheiractivities.


a) Independent regulatorsOn the one hand, there is BIPT, which is Belgium’s parastatalauthoritywitharegulatorypowerintheelectroniccommunicationsmarket, the postalmarket, the electromagnetic spectrum of radiofrequencies and radio and television broadcasting in theBrusselsCapital-Region.Withineachofthesesectors,BIPThasthetasktopromotecompetition,tocontributetothedevelopmentoftheinternalmarketandtoensurethatconsumerinterestsareprotected. BIPTachieved complete independence from the State in March 2015,aftertheEUCommissionpressuredBelgiumtotakethenecessarymeasuresagainstthethreatstoitsregulator’scompleteautonomy.TheLawof16March2015removesthefederalgovernment’srighttosuspendtheregulator’sdecisions,aswellasitspowertoapproveorrejectBIPT’smulti-annualstrategy.Ontheotherhand,thereistheBelgianCompetitionAuthority,whichisafullyindependentadministrativeauthoritythatcontributestothedefinitionandimplementationofcompetitionpolicyinBelgium,bypursuinganticompetitivepracticesandreviewingthemainmergeroperations.TheBCAcollaborateswiththecompetitionauthoritiesof theotherMemberStatesof theEuropeanUnion, andwith theEuropean Commission within the framework of the EuropeanCompetitionNetwork.Thetwoauthoritiesthusmostlyhaveseparatespheresofinfluence,but their range of actions sometimes overlap. For instance, onthe one hand,BIPTplays a role in promoting competition in thetelecoms,audio-visualmediadistributionorpostalsectors,buttheregulatorypower toassessanddealwithcompetitionissues(e.g.,stateaids,mergerregulation,andcartels) isretainedbytheBCA.On the other hand, some disputes between telecoms operators(pertaining to interconnectionagreementsand leased lines) fall totheBCA,withthesupportofBIPT,whichsendsarepresentativetoassistintheinvestigations.b) State regulatorTheCRCalsoplaysanimportantregulatoryroleintheconvergentfieldbetweentelecommunicationsandthemedia(see question 1.3).


a) BIPTIn accordance with the Law of 17 January 2003 on the appealandsettlingoflawsuitsarisingfromsaidLawonthestatusoftheregulatoroftheBelgianpostalandtelecommunicationssectors,anappealmaybe lodgedagainstoneofBIPT’sdecisionsbefore theBrusselsCourtofAppeal.BIPT’sdecisionsmayonlybechallengedbyanindividualoralegalpersonwithadirect interest in thematter,whichmeans that theymusthavebeenconcernedbyBIPT’sdecisioninthefirstplace.

mostly shared among institutional shareholders from theUSA,followedbytheUK,theBENELUXUnionandFrance.

■ 56.36%of theTelenetGroup is owned byLibertyGlobal,the telecoms and audio-visual media distribution giant,including94,827LiquidationDispreferenceshares.31.52%of the Group is public-owned, including 16 LiquidationDispreferencesharesheldbyInterkabelVlaanderenCVBA,and30goldensharesheldbythefinancingintermunicipalitiesFlemishregionanditsintermunicipalities.TheremainderofTelenetGroup’sshareholdingbaseiscomposedofBlackrockInc. (4.84%), Lucerne Capital Management, L.P. (3.01%),employees(0.64%)andsharebuy-back(3.63%).

■ OrangeBelgiummostlybelongstotheFrenchOrangeGroup,whichowns52.91%ofitssharesthroughitssubsidiaryAtlasServicesBelgium. Therest isotherwiseownedbyforeigninvestors(British,CentralEuropeans,NorthAmericans).

■ VOO is a public-owned cable operator born from a co-operationbetweenNethys(PubliFin)andBrutélé.Assuch,ithasnotbeenmadeopentoforeigninvestment.

b) Audio-visual media distributionInthe1980s,audio-visualmediadistributionwentthroughagradualliberalisationofitssectorbyopeningitselftonewdistributors,andthusputtinganendtoStatemonopoliesownedbyRTBFandVRT,the incumbent audio-visual media distributors in southern andnorthernBelgium.However, liberalisation of the sector is still in progress. Forinstance,therightforforeigndistributorstobroadcastcommercialsis still subject to strict authorisations delivered by the competentfederatedCommunities (e.g., theFrenchgroupTF1obtained thisauthorisationin2017afterapprox.20yearsofnegotiations).

2 Telecoms

General


Belgium has been aWTO member since 1 January 1995 and amemberofGATTsince1January1948.ItisaMemberStateoftheEuropeanUnion.AllEUMemberStatesareWTOmembers,asistheEUinitsownright.On 15 April 1997, the European Communities (the formername of the European Union) signed the Fourth Protocolto the General Agreement on Trade in Services (“GATS”)dedicated to telecommunications, thus committing to open basictelecommunications markets (telephone, data transmission, telex,telegraph, fax, satellite systems and services) up to internationalcompetition. TheProtocolcame into force in theMemberStates(Belgiumincluded)on5February1998.


The E-Communications Act of 2005 sets forth the principle offreeprovisionofelectronicnetworksand services inBelgium,asrequiredbytheEuropeanAuthorisationDirective2002/20/EC.Thisprincipleissubjecttocertainconditionsandexceptions(Articles3and4).


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AuthorisationfromBIPTandthepaymentofalicencefeearealsorequiredwhenofferingmobilesatelliteservices.In addition to requiring authorisations from BIPT, the use ofnumbersandfrequenciesissubjecttoannualfees.


Theuseofscarceresources(frequenciesandnumbering)issubjecttoarightofuse(licence)undertheE-CommunicationsActandapplicableRoyal Decrees. These conditions vary depending on the type ofresourcesandthetechnology.Pleaserefertosection3inrelationtofrequencyallocation,andtoquestions2.18to2.20fornumbering.



InBelgium,operatorsoftelecommunicationsnetworksareentitledto execute, at their own expense, all works connected to theestablishment andmaintenance of their network (e.g., cables andadditional infrastructures) on or under the squares, roads, streets,paths,waterwaysandcanalsthatarepartofthepublicdomain;ontheconditionthattheoperatorrespectsthelawsanddecreesgoverningthepublicdomainandthedestinationofthepublicdomain.ThelegalprovisionsregardingtheinstallationofinfrastructureandequipmentonpublicandprivatelandcanbefoundintheLawof21March1991.ItiscompletedbyprovisionsfromtheLawof25June2005(E-CommunicationsAct),namelyconcerningtherighttogainandshareaccesstoinfrastructureandequipmentofotheroperators.



a) InterconnectionAccording toArticle 52, first paragraph of the E-CommunicationsActof13June2005,alltheoperatorsprovidingapublicelectroniccommunicationsnetworkmustnegotiateingoodfaithinterconnectionagreements,forthepurposeofprovidingpubliclyavailableelectroniccommunicationsserviceswitheveryoperatorapplyingforit.Ifpartiesdonotreachanagreementduringthenegotiations,BIPTis empowered to intervene, either on its own initiative, or at therequestofoneofthepartiesinvolved,inordertosecurethepolicyobjectives,whicharethepromotionofcompetitionintheprovisionofelectroniccommunicationsnetworks,electroniccommunicationsservicesandassociatedfacilities,thecontributiontothedevelopmentof an internalmarket in electronic communicationsnetworks andservices,andpromotingtheinterestsofusers.b) Access to the infrastructureThe E-Communications Act specifically deals with the issue ofgrantingaccess tosites, to infrastructureand tootherelementsofthenetwork.

Thehigherappealshallbelodged,onpenaltyofnullitypronouncedautomatically,byfilingasignedrequestwiththecourtregistryoftheBrusselsCourt ofAppealwithin a period of 60 days startingfrom the notification of the decision; or in the absence of suchnotification,fromthepublicationofthedecision–orintheabsenceofsuchpublication,fromtheinspectionofthedecision.b) The CRCDecisionsfromtheCRCmaybechallengedinfrontoftheBrusselsCourt ofAppeal following the same process and rules as for theappeal against BIPT’s decisions (Co-operation agreement of 17November2006,Article5).



TheprovisionofelectroniccommunicationnetworksandservicesnolongerrequiresanyauthorisationfromBIPT.Theonlyremainingrequirement concerns the obligation for an operator to send anotificationviaregisteredlettertoBIPT,priortothebeginningofitsactivities.The sole exception to what precedes covers the allocation andexploitationofradiofrequenciesandnumbers,whicharesubjecttotheassignmentoflicencesfromBIPT.


An operator must notify BIPT prior to offering any publiccommunicationnetworksorservices.ThecontentofthenotificationisfullydetailedunderArticle9,§1oftheE-CommunicationActof2005:identificationdetails;contactperson at BIPT; a short but precise description of its services ornetwork;andthedatewhichitsactivitiesarelikelytobeginon.Notification is made by completing a form displayed on BIPT’swebsite(www.bipt.be).NotificationentersintoforceonthedaythenotificationissenttoBIPT.Filingsuchanotificationissubjecttothepaymentofafee,theevidenceofwhichmustbeprovidedwiththerelevantform.The operator must also inform BIPT of any change to theaforementionedinformation.However,priornotificationtoBIPTisnotrequiredintheeventthat:■ The provision of electronic communications services does

notoccurinthepublicdomain.■ Theserviceproviderorresellerprovidesorresellstheservice

exclusivelytoalegalperson(itsclient),inwhichtheproviderhasamajorityshare.

■ The service is provided or resoldwithin the framework ofa convention under which the service is made availablesecondarily,andonlybywayofassistance.

ApartfromtheobligationtonotifyBIPT,theprovisionofelectroniccommunicationsservicesdoesnotinitselfrequireanyauthorisationorlicencefromBIPT.Forfixedservices,anoticemustbefiledwithBIPTandtheabovefeesmustbepaid.Theuseofnumbersandfrequencies,ontheotherhand,issubjecttoauthorisationsfromBIPT.Forinstance,withinthescopeofmobiletelecommunicationsservices,2G,3G,4G(andsoon5G)licencesaresolelygrantedafterauction,andaresubjecttoalicencefeefortherighttousethefrequencies.


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TheE-CommunicationsActprovidesforanaccountingseparationobligation. It consists of having accounts in which operationsare grouped per relevant market in which a company hassignificantmarket power. It is a powerful tool toverifywhetherthe company meets its obligations regarding non-discrimination,and to detect possible illegal cross-subsidies. Each year theseaccountsareverifiedandapprovedbyBIPT.Thelegalseparationisnotaddressed,however,intheAct,andthefunctionalseparationrequiresaninterventionoftheEuropeanCommission.Inpractice, inmostcaseswhereBIPThas identifiedProximusasanSMP, it hasbeen required tooperateanaccounting separationas a way to implement its obligation of transparency and non-discriminationbetweeninternalcharges.In July 2017, after having analysed the market analysis issuedby theBelgian regulators in July 2017, theConsumer ProtectionAssociation “Test-Achat” stated that, since telecoms tariffs arerisingfasterthanthecostofliving,regulationishighlyneeded,and,assuch,itsuggestsinstallingafunctionalseparationofthemarketwith thenetworkmanagementactivitieson theonehand,and thesupplyofservicesontheotherhand.


In an attempt tomanage competition in thewholesalebroadbandandTVmarket,theCRC(ConferenceofRegulatorsoftheelectroniccommunicationssector,gatheringtheVRM,theCSA,theMedienratandBIPT)hascalledfortheopeningupofnetworksfurthertoalsoincludefixedtelephony,andmaketheincumbentProximusprovidewholesaleaccesstoitsFTTHnetwork.Thedominantoperators in themarket suchasProximus,Telenet,andVOOmust now offer access to their networks to alternativeoperators. BIPThasproposed termssuchas:non-discrimination;transparency; and a new pricingmodel forwholesale access thatwillstillmeanoperatorswillfaceacost-orientationobligation,butcable and fibre networks could only charge fair prices a marginhigherthancosts,allinordertostimulateinvestment.Withthischange,theCRCisalsoimposingageographicalapplicationoftheregulation.Inareaswheretherearethreeormoreoperatorsofferingspeedsofmorethan30Mbps,therewillbealightertouchofthisregulationapplied.Theareaswillbedefinedbytheregulatortakingintoaccountco-investmentbyvariousoperators.Also,areaswithreducedaccesstohigh-speedserviceswillexperiencereducedregulationinordertostimulategrowthinruralareas.TheCRCisalsosuggestingtherequirementofwholesaleaccesstoEuroPacketCable,whichfollowstheimplementationofwholesaleaccesstocablenetworksinthedecisiononbroadbandmadein2011.TheCRCthendetermined the tariffscableoperatorscouldbill toalternativeoperators:■ Start-up contributions (intended to cover implementation

costsincurredbycableoperators).■ Linetariffs(owedeverytimeaclientleavesacableoperator

foranalternativeoperator).■ A “minus” (of 20 to 30% according to the situation)

applicableon retail tariffsof everycableoperator. Sucha

Measures have been taken to prevent the construction of moreantennas than necessary as a way to protect the environment.Article 26 of the E-Communications Act provides a mandatoryconsultation of other operators via a Letter of Intention. Beforeapplyingforanurbanplanningpermit,eachoperatorhastoenquireabout the other operator’s interests in a commonusage of a site.If there is a possibility of the shared use of a site, the operatorswill negotiate a reasonable, proportional and non-discriminatoryagreement.TheoperatorwhichownsthesitemaynotdenysharedaccesstothesiteforreasonswhichwouldbedeemedunreasonableanddiscriminatorybyBIPT.Intheeventofadisagreement,BIPTcan review thewhole negotiation and issue an opinion based onthereasonableness,theproportionalityandthenon-discriminatorycharacteroftheaforementionedagreement.Whentheseaspectsofthenegotiationarenotcompliedwith,BIPThastheauthoritytoforcetheownertograntsharedaccesstothesite,solongastheprincipleofproportionalityisrespected.


If,pursuanttotheE-CommunicationsAct,therelevantmarketdoesnotshowsufficientsignsofefficientcompetitionamongitsactors,BIPT identifiesalloperatorsenjoyingadominantposition in thatmarketandsubmitsthemtospecificobligationsdeemedappropriatetorestorethebalance(remedies).Thus,BIPTforcesthosesignificantpowersonthemarkettopublishclear and understandable reference offers, with a description ofthe commercial and operational terms, including their access andinterconnectiontariffs. ThisinformationmustbefreelydisplayedontheInternet,whereasthecontractsbasedontheseoffersremainconfidential.For instance, it has been assessed that Proximus still assumesa dominant position in many a sector related to electroniccommunications. As such, it is obligated to publish a referenceofferandperformanceindicatorsandtoclarifyitscost-accountingsystem.In 2018,BIPTwas consulted by the federal government in 2018inordertoassesstheimpactofapotentialfourthmobilenetworkoperator’s entryon themarket, thegoalof thegovernmentbeingultimatelytofostercompetitionandthewelfareofconsumersinthemobilephonemarket.


The telecommunications and audio-visual media distributionsectorsarestill seenas lackingefficientcompetition,andassuchmust remain subject in Belgium to ex ante regulation. Notably,keypricecontrolsandtransparency,non-discriminatoryaccessandaccountingobligationsstillexistinanumberofmarkets.For instance, in the framework of the decision of 26May 2017,BIPTexaminedthemarketforcallterminationonindividualmobilenetworks. Eightoperators (JoinExperience,Lycamobile,OrangeBelgium, Proximus,Telenet, TelenetGroup,VectoneMobile andVoxbone) were presented as companies with significant marketpower. The main obligation imposed was to reduce the mobileterminationrate.


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a) Universal serviceAccordingtotheE-CommunicationAct,theprovisionofelectroniccommunication is subject to universal service. The servicesprovidedunderuniversalserviceare:■ the fixed geographic element of universal service, which

consists of the provision to any individual asking for it,independentlyfromitsgeographicallocation,ofabasicpublicphoneserviceandofaconnectiontoapubliccommunicationnetworktogiveandreceivephonecalls,totransferdata,andtohaveaccesstotheInternet;

■ the social element of universal service, which consists ofthe provision of access to electronic communications toconsumersatparticularpricingconditions;

■ theprovisionofpublicphones;■ universalserviceofdirectoryenquiries;and■ access to the universal phone directory over the whole

nationalterritory.b) Protection of consumersThe provision of electronic communications is also subject tospecificrulesaimedatprotectingconsumersasfinalusers.Generally,priortoenteringacontractwithanyoperator,consumersmust receive complete information on the operator’s identity andaddress, its financial terms (pricing, invoicing and terminationcosts),themaincharacteristicsofitsservices,itswaytohandledataprivacy,aswellasthetermsandconditionstowaivethecontract,thedurationof thecontract, thedisputesettlementconditionsandhowtodealwithsecuritybreaches.Furthermore,consumersaregenerallyentitled to free informationonoperators’tariffsplansinordertocomparethemandtochoosethemostprofitableone.Furthermore, after the new Telecommunication Act of 10 July2012,consumersnowhavetherighttoterminateandswitchfromcontracts(Internet, televisionorabundledoffer includingat leastoneoftheseservices).Viathe“EasySwitch”procedure,consumersmayterminatefixed-termcontracts(maximum24-monthcontracts)freeofchargeaftersixmonths,andpermanentcontractsatanytime.

Numbering


Development andmanagement of the national numbering plan isin thehandsofnationalorganisations (inBelgium, this isBIPT).BIPTmustensure thatequalaccess toanadequatenumberseriesiscreatedforeachoperator,bothquantitativelyandqualitatively.Numbers are allocated by BIPT in a transparent and non-discriminatory way. (See Royal Decree of 27 April 2007 on management of the numbering space.)

2.17 Are there any special rules, which govern the use of telephone numbers?

In itsfightagainst terror,Belgiumdecided, inDecember2016, tomodifyArticle 127of theE-CommunicationsAct in order to put

“minus”determineswhatthealternativeoperatorhastopayonamonthlybasis toacableoperator inorder toresell itstelevisionandbroadbandoffers.Theprincipleofthe“retailminus”methodologyconsistsof establishing thepriceofawholesale service by reducing the retail service price by apercentagecorrespondingtocertainirrelevantelements.

Recently, the European Commission commented on the CRC’snew proposals on how to regulate the Belgian broadband andbroadcasting markets. The European regulator assessed thecompetitive conditions on the retail broadband and broadcastingmarkets. It found that themarket sharesaredistributedamongalimitednumberofoperatorsandthatpricesareabovecompetitivelevels. It therefore concludes that it is necessary to imposewholesale regulation on the main operators active in the market–Proximus,and the regionalcableoperatorsTelenet,NethysandBrutélé(thetwolatteroperateatretaillevelundertheVOObrand)–totacklethesecompetitionproblems.Initsdecisionof29June2018, following the EU Commission’s comments, the CRC hasissuedavarietyofmeasures aimedat ensuringmorecompetitioninthebroadbandandbroadcastingmarkets.AsProximus,Telenet,BrutéléandNethyscontinuetohavesignificantmarketpowerinthewholesalemarket,theCRCnotablyorderedalltheirnetworks(thenewfibrenetworksfromProximusincluded)toremainopentoallthirdparties requestingaccess. TheCRCdecision should reducewholesaleprices,insomecasesbyasmuchas20%,startingfromAugust2018.Thereareno“regulatoryholidays”assuchproposedtobuildfibreaccessnetworksinBelgium.However,theE-CommunicationsActprovidesthatBIPTmustallowareasonablereturnoninvestmentinordertoencourageoperatorstoinvestinnew-generationnetworks.Moregenerally,asmentionedunderquestion2.9b),thesharingofpassive infrastructure (suchasductsorpoles) is addressed in theE-Communications Act, with some basic requirements ensuringefficiency.



Inanumberofcircumstances(whenaretailmarketisnotcompetitiveand the regulationof the correspondingwholesale services is notsufficient),BIPT can imposemeasures such as the prohibition tocharge excessive prices, and other practices such as wrongfullyfavouringcertainusersorunreasonablygroupingservices.BIPTdoesnotcurrentlyimposeretailpricesonoperators.Roamingsurcharges used to exist on the retail prices applied by operatorsonend-usersusingtheirphone/internetpackageabroad.However,theEUdecided to gradually reduce these surcharges on roamingby setting retail price caps applicable on calls, SMS messagesand,lastly,dataroaming.Finally,since15June2017,theEUhasimplementedthe“roam-like-at-home”mechanism,thereforeendingroamingsurchargesforallpeopletravellingwithintheEU.Nevertheless, in its draft decision regarding the analysis of thebroadbandandtelevisionbroadcastingmarketsfrom10July2017,BIPTstatesthatsaidmarketsshowhighbarrierstoentry,thattherearehighconcentrationswithinthem,and,assuch,thattheevolutionof the retail price in thesemarkets appears quite unfavourable totheconsumer.Therefore,BIPTconcludedthatretailpricecontrolsshould be set in order to restore a competitive balance and toincreasetheconsumer’ssatisfactioninthesesectors.


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PursuanttoArticle39oftheE-CommunicationsAct,noindividualorcompanymayhold,installorrunatransmittingorreceivingradiotransmittingdevicewithoutpriorwrittenauthorisationfromBIPT.ThisauthorisationispersonalandmayberevokedbyBIPT.Thereare,however,someexceptionstothisrule.Licence-exemptedsituationsare listedunderAppendix2of theRoyalDecreeof18December2009onprivateradiocommunicationsanduserrightsforfixednetworksandtrunkednetworks.Finally, authorisations are not required for radio communicationsstations installed and run by military and public safety servicesdirectlyfromtheJusticeDepartment,NATOortheAlliedforces.


AccordingtoArticle43oftheE-CommunicationAct,theuseofaradiofrequencyprogramissubjecttoafeeowedtoBIPTinordertocoverthecostsofcontrollingthetermsandconditionsimposedontheoperators,aswellasmakingfrequenciesavailabletothemandgivingthemtherighttousethesefrequencies.Licensedradiostationsandnetworksaredividedintosixcategories,in accordance with their destination and the manner in which theyoperate. Theamountcharged, therefore,variesbasedonthecategoryinwhichtheparticularuseoftheradiospectrumhasbeenlogged.Appendix1oftheRoyalDecreeof18December2009,onprivateradiocommunicationsanduserrightsforfixednetworksandtrunkednetworks,definestheamountowedforeachcategory.


According toBelgian law, spectrum licences are personal and assuchnon-transferable. BIPTmustbenotifiedat leastamonth inadvanceshouldamajorchangeoccurintheshareholdingbaseandtherefore in the control of the licensee. Accordingly,BIPTmustinform the Minister who decides whether the conditions underwhich the licence has been issued are seriously compromised bythechangeofcontrol. If so, theMinistermaypropose to revokethelicence.Inadditiontothis,RoyalDecreesmay,ifneedbe,setspecificrulesregulatingthismatter.


Inprinciple,spectrumlicencesarepersonallyassignedandthereforenon-transferable. However, when an operator wishes to transferorrentoutitslicence,itmust,asapriority,informBIPTaboutit.BIPTmay thenauthorise the transferor rentingout,as longas itrespectstherequirementssetforthforguaranteeinganefficientandsuccessfulmanagementoftheradiofrequencyspectrum.



As a member of the Council of Europe, Belgium entered intothe Council’s Convention on Cybercrime of 23November 2001.

abanonanonymousprepaidmobilephoneSIMcardsby7 June2017.Bythattime,about400,000unregisteredSIMcardsandtheiradjoinednumbersweredeactivated.Furthermore, theRoyalDecreeof27April 2007onmanagementof the numbering space contains rules regarding the numberingplan fornational short (three-digit) numbers. Thesenumbers arereservedforemergencyservices,theBelgianRedCrossandsoon.


TheRoyalDecreeof2July2013onnumberportabilityforelectroniccommunications service subscribers sets number portability as afree,fundamentalfeatureofthetelecommunicationspolicy.Hence, end-users may keep their numbers while changing to adifferent operator. Geographic numbers, on the other hand,mayonlybetransferredfromoneoperatortoanotherundertheconditionthatthechangeoccurswithinthesamegeographicalzone.

3 Radio Spectrum


Byvirtue ofArticle 13of theAct of 13 June 2005on electroniccommunications,BIPT is in charge ofmanaging radio frequencyspectrum,examiningrequestsforuseofradiofrequencyspectrum,with the exception of requests destined for radio and televisionbroadcasting,co-ordinatingtheradiofrequencies,bothonnationalandinternationallevels,andmonitoringtheuseofspectrum.ThethreeCommunities(Flemish,FrenchandGerman-speaking)areresponsiblefortheexaminationoftherequestsforradiofrequencyspectrumusedestinedforradioandtelevisionbroadcasting.


BIPT ensures that spectrum is allocated to candidates based onobjective,transparent,non-discriminatoryandproportionatecriteria.TheBIPTlicensingdepartmentgrantsthelicencesthatarerequiredinaccordancewithArticle39oftheActof13June2005fortheuseofprivateradionetworksandindividualradiostations.The conditions for obtaining and carrying out the access rightsto radio frequencies partially or fully used to relay electroniccommunicationsservicestothepublicaresetintheRoyalDecreeof 18December 2009 on private radio communications and userrightsforfixednetworksandtrunkednetworks.Thedepartment reviews theapplications for authorisations tohaveandtouseaprivateradiocommunicationsstation,ortosetupandrunaprivateradioelectricalnetwork.Itallocatesthefrequenciesbasedonnecessity,availabilityandona“first-come,first-servedbasis”.The allocation of spectrum varies based on the frequency. Theauctionprocessiscommonlyusedfortheallocationoffrequenciestomobiletelephony.TheCommunitieshandletheallocationofindividualauthorisationstouseradiofrequencies,whereastheFederalStateretainsthepowertoallocatefrequenciesattributedtootherservices.


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4.3 Summarise the rules, which require market participants to maintain call interception (wire-tap) capabilities. Does this cover: (i) traditional telephone calls; (ii) VoIP calls; (iii) emails; and (iv) any other forms of communications?

TheE-CommunicationsActrequiresthatnetworkoperators,aswellasend-users, arecapableofallowing theauthorities to“listen to,gainknowledgeof,andrecord”communications.The Royal Decree of 12 October 2010 requires electroniccommunications serviceprovidersalongsidenetworkoperators tohave,atalltimes,thetechnicalabilitytoprovideclearandreadable(decoded,decompressed,anddecrypted)copiesofcommunicationsrequestedbyBelgianintelligenceservices.TheRoyalDecree of 9 January 2003 governing the co-operationof electronic communications providers with judicial authorities,amended in 2011, requires electronic communications serviceproviders and network operators to have the technical ability toprovideclearandreadablecopiesofcommunicationsrequestedbyBelgianjudicialauthorities.Theaforementionedpiecesoflegislationapplytoallprovidersandoperatorsof communication services andnetworks related to anykindofphonecommunications,Internetaccess,emails,andpubliccommunicationsnetworks.


a) Intelligence servicesAn intelligence service must obtain prior authorisation from aspecialindependentcommissionbeforesecretlyaccessing,listeningto, or recording private communications. When an intelligenceservice has obtained the required authorisation to conduct thiskindof surveillanceon an electronic communicationsnetwork, itcanserveawrittendemandtothenetworkoperatorortheserviceprovider, uponwhich the network operator or service provider isrequiredtogivetechnicalassistancetotheintelligenceservice.b) Judicial investigationsAn investigative judge must authorise the communicationinterceptionoperationbyareasonedordinance,whichmustbesenttotheRoyalProsecutor.Aninvestigativejudgemayorderanyonewhohasaparticularknowledgeofthecommunicationserviceor,ifthecommunicationisprotectedorencrypted,oftheprotectionandencryptionservice,tohelpaccessthecommunicationinareadableformat.


The E-Communications Act grants a freedom of encryption.However,serviceprovidersandnetworkoperatorsmaynotuseormakeavailableanyformofencryptionthatwouldmakethecontentcompletelyunreadablebytheauthorities.UndertheBelgianCodeofCriminalInvestigationsArticle88,§4,aninvestigativejudgeorpoliceofficerisallowedtoorderapersontodecryptencrypteddatawhereheknowshowtodoso.Failuretocomply is punishable by imprisonment of between sixmonths tooneyearand/orafine.

Belgium implemented theConvention’s requirements through theamendmentoftheActof28November2000onCybercrime,whichintroducedcybercrime into theBelgianCriminalCode, andmorespecificallytheprovisionspunishingtheillegalinterception(Article259bis) and unauthorised release (Article 314bis) of confidentialdataandcommunication,computerfraud(Article504quater)orthehackingofcomputersystems(Article550bisandthefollowing).With the Act of 15 May 2006, Belgium also implemented therequirements of the Additional Protocol to the Convention onCybercrimeof28January2003,concerningthecriminalisationofactsofaracistandxenophobicnaturecommittedthroughcomputersystems.Thegovernment alsoadoptedagrandCyberSecurityStrategy in2012. However, the scope and implementation of its frameworkremainsomewhatlimited.Nevertheless,Belgiumdoeshaveanestablishedcomputeremergencyresponse team, CERT.be, and a well-developed cybersecurityincident-reportingstructure.BelgiumhasalsodecidedtocreateanewCybersecurityCentre(RoyalDecrees10October2014).TheBelgianCyberSecurityCoalition,apartnershipbetweenplayersfrom the academic world, the public authorities and the privatesector (i.e., from financial institutions, universities, consultancycompanies,professionalorganisationsandgovernmentbodies),wasestablishedinOctober2014,andhassincethenbecomeaplayertobereckonedwithinthefieldofcybersecurity.As stated in the response to question 1.2,Belgium is still due totransposetheDirective(EU)2016/1148oftheEuropeanParliamentandoftheCouncilof6July2016,concerningmeasuresforahighcommon level of security for network and information systemsacrosstheUnion(NISDirective)intonationallaw.


The main legislative framework for intelligence gatheringin Belgium is the Law of 30 November 1998, organising theIntelligence and Security Services. Article 18/17 of this Lawprovidesthat intelligenceservicesmay“listento,gainknowledgeof,andrecordcommunications”inordertofulfiltheirmissions.TheBelgianCodeofCriminalInvestigations(Article90ter)allowsinvestigative judges to“listen to,gainknowledgeof, and record”privatecommunicationswhenwarrantedbycertainlegallydefinedcircumstances.Electronic telecommunicationsprovidersmustmakeaccessible tojudicial authorities, upon their simple request and without delay,data for the instructionofand investigationfor judiciary,securityand intelligence purposes (Article 126, section 2, ElectronicCommunications Act). The new Article 126 of the ElectronicCommunicationsActaddstheemergencyservicesandOmbudsmanfor Telecommunications to the list of competent authorities thatare entitled to request access to newly defined categories ofcommunicationsdata.Thedatathatcanberequestedfromoperatorsincludes:■ Trafficdata.■ Locationdata.■ End-useridentificationdata.■ Serviceandterminalequipmentdata.


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oftelevisionbroadcasting,broadcastersareonlyrequiredtomakeadeclarationtotheVRM(Article161).IntheFrench-speakingCommunityofBelgium,editorsofterrestrialradio services need to obtain a licence, which entitles them tobroadcastusingadesignatedfrequency.It isthegovernmentthatdesigns the allocation scheme and opens calls for applications.Operators that provide radio services transmitted by othermeans(cable or Internet) are only required tomake a declaration to theregulatorCSA.ThisisalsothecaseforeditorsoftelevisionservicesthatintendtobroadcastintheFrenchCommunity.IntheBilingualRegionofBrussels-Capital,theaudio-visualservicedistributors must send a formal notification, similar to the onerequiredintelecomsmatters,toBIPT.


a) Dutch-speaking CommunityAbroadcastinglicenceispersonalandcanonlybetransferredtoathirdpartywithwrittenapprovalfromtheVRM.b) French-speaking CommunityRadio broadcasting licences are non-transferable. However, theCSAmay allow the exchange of radio frequencies under certaincircumstances.AnychangeinthecontrolofthelicenseemustbecommunicatedtotheCSAwithinamonthofthechange.c) Bilingual Region of Brussels-CapitalNo broadcasting licence is required to specifically broadcast inBrussels.



National courts have tried to impose an obligation of directsupervisiononthehostingproviders.However,theEuropeanCourtofJusticegaveaclearanswerinfavouroftheInternetprovidersintwocases(Sabam c/. Tiscali,C-70/10,24November2011;Netlog/Sabam,C-360/10,16February2012)initiallybroughtinfrontoftheBrusselscourts.Itconfirmedthatnationalcourtscouldnotimposea general obligation of direct supervision on hosting providers,namelybyforcingthemtosetupattheirowncostandwithoutanytimelimit,ageneralfilteringservicepreventivelytargetingalluserswithout infringing theE-CommerceDirectiveand the freedom totrade.


Therearecurrentlynoregulationscompellingtelecommunicationsoperatorsand/orInternetserviceproviderstoassistcontentownerswhose rightsmay be infringed bymeans of file sharing or otheractivities.Theonlywaytoforcethemtoactontheseinfringementsistocompelthemwithacourtsentence.

4.6 What data are telecoms or Internet infrastructure operators obliged to retain and for how long?

The matter of the retention of data by operators is covered byArticles 126 and 145 of theAct of 13 June 2005 on electroniccommunications andby theRoyalDecree of 19September 2013implementing Article 126. These texts ensure the completetranspositionintoBelgianlawoftheEuropeanDirective2006/24/ECcalledthe“DataRetentionDirective”.Operatorsprovidingpublicnetworksofelectroniccommunications,aswellasoperatorsprovidingelectroniccommunicationsservices,mustretainthefollowingcertaindataforadurationof12months,onpainoflegalpenalty:■ datawhichallowstheuserorthesubscribertobeidentified,

aswellasthemeansofcommunication;■ datapertainingtotheaccessandconnectionoftheterminal

equipment to the network and to the service aswell as tothelocalisationofthatequipment,includingtheterminationpointofthenetwork;and

■ communication data, content excluded, but origin anddestinationincluded.



Seequestion1.2b).


ContentregulationforcontentbroadcastviatraditionaldistributionplatformsisfarstrongerthancontentregulationovertheInternet.The differentBelgian regulators have the authority and power toregulatethecontentbroadcastviatraditionaldistributionplatforms,and inparticular to imposeabanonaudio-visualmediaservices,whichposeaseriousthreattopublicorder(i.e.,contentinfringingregulationontheprotectionofminors,ofhumandignityoragainstracism,xenophobiaanddiscrimination),topublichealthprotection,topublicsafetyandtoconsumers’protection.The content broadcast on the Internet, however, is far harder tocontrol, since the content is not necessarily broadcast from theBelgianterritory.Therefore,theonlyoptionistogetacourtordersentencing Internet operators or web-hosting providers to blockaccesstoillegalcontent.


InFlanders, terrestrial radiobroadcastersneed toobtaina licencein order to broadcast (Article 134 of the Dutch-speaking MediaDecree).IfradiobroadcastersonlytransmitviacableorInternet,they simply need to make a declaration to the regulator VRM(Article147).Televisionbroadcastersneedtoobtainalicenceonlyiftheybroadcastregionaltelevision(Article166);forallothertypes


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Cairn Legal Belgium

Guillaume RueCairn Legal Chaussée de la Hulpe 177/12 1170 BrusselsBelgium

Tel: +32 2 787 70 70Fax: +32 2 787 70 71Email: [email protected]: www.cairnlegal.be

Frédéric PaqueCairn Legal Chaussée de la Hulpe 177/121170 BrusselsBelgium

Tel: +32 2 787 70 70Fax: +32 2 787 70 71Email: [email protected]: www.cairnlegal.be

For more than 15 years, Guillaume has built strong international legal and business experience focusing on the Technology, Media & Telecommunications (TMT) industry. He regularly negotiates complex, multi-jurisdictional deals and has developed a pragmatic business approach to negotiating. Guillaume’s practice covers Belgian domestic laws as well as EU laws. He regularly assists hardware manufacturers, software developers, system integrators, e-commerce players, telecommunications operators and suppliers of ICT-related services.

Guillaume also regularly advises techno and web start-ups to address the intricate issues that can arise during a deal, or along the road to market. He is also on the boards of communication and online marketing industry associations developing self-regulation of the market. He navigates clients through issues related to regulatory compliance, data privacy, transfer and security, government contracts and funding issues. Guillaume has a specific expertise in the FinTech and telecoms industries.

Cairn Legal is one of Belgian’s leading independent business law firms. Established in Brussels, we advise Belgian and international companies on the legal aspects of transactions, projects and disputes. Our lawyers are multilingual, combine local and international experience and focus on thinking creatively with clients to offer tailor-made solutions.

Cairn Legal’s practice focuses on corporate M&A, banking and finance, restructuring and insolvency, commercial and distribution, employment, real estate, TMT and dispute resolution.

Our Technology, Media & Telecommunications practice covers all aspects of information and communication technologies, including data protection. The team provides guidance on complex transactions and projects in relation to IT (including software licensing, development, implementation, integration and maintenance), outsourcing (including cloud computing), and e-business projects as well as data protection work (including GDPR implementation projects, compliance due diligence, dealings with regulators and big data projects). We also advise numerous start-ups in various areas (blockchain, sharing economy, FinTech, cybersecurity, etc.).

Frédéric Paque graduated from the Université Catholique de Louvain in 2014. He then pursued an L.L.M. in International and European Business Law at Trinity College, Dublin, in 2015.

His practice focuses on commercial law and TMT. He provides legal support to companies and start-ups requiring assistance for commercial contracts, especially for the development of e-commerce and collaborative economy platforms. He also works on IT contracts (including the areas of e-invoicing, e-payments, e-marketing, liability of intermediaries, etc.), media law, market practice and consumer protection.


Since 30 April 2016, a European Regulation (Regulation (EU)2015/2120) has been protecting net neutrality in Europe. Noconnection may be discriminatorily blocked. The Regulationpreciselyspecifiesconsumerrights in termsof Internetspeedandservice quality, imposing obligations on service providers. Theonlyauthorisedexceptionsconcernthefightagainstillegalwebsitesbroadcastingxenophobicorheinouscontent.TheRegulationalsoprovidestheconsumerwithmoretransparencyconcerningtrafficmanagement,andaccuracyconcerningtheactualspeedoftheInternetprovided.In the event that Internet providers do not respect net neutrality,BIPTplaystheroleofapoliceagentoftheInternetandhastherighttoinflictfinesonwrongdoers.


TherearenospecificrulesdealingwithblockingwebsitesinBelgianlaw.However,thisquestionisundersomedebate.In2011,theCourtofAppealofAntwerporderedacertainnumberof Internetproviders toblocka certainnumberofdomainnamesbelonging to “Pirate Bay”, in retaliation to the infringement ofintellectualpropertyrights.Withintheframeofthejudicial inquirythatfollowed,allBelgianInternetproviderswerethenorderedbyajudgetoblockaccesstothemaindomainname“thepiratebay.org”,aswellastoallrelateddomainnames.ThatjudgeorderwaseventuallyconfirmedbytheBelgianCourtofCassationon22October2013.Finally,therearecurrentlynoregulationsorblockageonconsumerVPNservicesinBelgium.


Chapter 7

Focaccia, Amaral, Pellon & Lamônica Advogados Rafael Pellon

Brazil

5. Law9610/1998–CopyrightsLaw,whichreformedauthor’srightsinBrazilandsetupnewregulationsandlegalmeasurestoprotectintellectualcreations;

6. ANATEL Resolution 477/2007 – SMP (Mobile PersonalService), which established the rules for mobile telecomservicesinthecountry,openingthepathformobileinternetservicesandmobilebroadbandaccess;

7. Law 12.485/2011 – SeAC, which reformed the legalframework for audio-visual media distribution services inBrazil,establishedquotasfornationalcontent,andbalancedthecommercial relationshipbetweencontentproviders,TVnetworksandcableTVoperators;

8. ANATEL Resolution 614/2013 – SCM (MultimediaCommuni-cationsService),whichreformedandestablishedbroadband internetaccessasa telecommunicationsservice,updating the regulation and duties of internet broadbandproviderswithinthecountry;

9. Law 12.965/2014 – Internet Civil Rights Law, whichestablished thebasiccivil rightsof internetusers inBrazil,net neutrality rules, the limitation of liability of internetapplication companies and internet platforms, besidesusers’ basic privacy rights in their relationshipwith onlinecompanies; and

10. Law13.709/2018–GeneralDataPrivacyLaw,whichupdatestheInternetCivilRightsLawandestablishestheframeworkfor the collection, management and treatment of personaldatainBrazil. ThisLawiscurrentlyonvacation legis and willbefullyeffectiveinFebruary2020.


ThetelecommunicationindustryinBrazilisheavilyregulated,withthree(3)mainregulatorybodiesoverseeingthesector:1. theMinistryofCommunications,responsiblefor theset-up

ofpublicpoliciesandthedevelopmentoftelecommunicationservicesinthecountry;

2. ANATEL–BrazilianTelecomRegulatoryBody,responsiblefor the implementation of Government policies, fixed andmobiletelecommunicationservices,includinglong-distancetelecommunication services, cable TV and broadcast TVservices (in technical matters, frequencies and coverageareas), radio and public radio services, and broadbandinternetservices,amongotherduties;and

3. ANCINE – Brazilian Cinema Regulatory Body, originallyresponsible solely for the advancement of cinema andaudio-visual media policies set up by the Ministry of

1 Overview


ThetelecomindustryinBrazilhasbeenoneofthemostimportanteconomic sectors of the country since its privatisation in 1997,becoming a strategic driver of development. Its annual revenuetopsR$330billionperyear(US$84.43billion),withestimatesfor2018ofR$340billion (US$90billion), consideringmobile,fixedandlong-distancetelecomservices,broadbandinternetservicesandaudio-visualmediadistributionservices.In the20yearssinceprivatisation,fourmaingroupshavethrivedin thecountry:TelefonicaGroup;AmericaMóvil;TelecomItalia;andOiTelecom.OnlyOiTelecomisoriginallyfromBrazil,withTelefonica Group being a Spanish conglomerate,AmericaMóvilbeingMexicanandTelecomItaliabeingSpanishandItalian.Thesegroups generate around 87%of the total revenue of telecom andaudio-visualmediadistributionservicesinBrazil.


Brazilapproveditsnewregulatoryframeworkin1997, twoyearsafter thestartof thecommercialofferingof internetaccess in thecountry. Since then, the country set up landmark regulations fortelecom, internet and audio-visualmedia distribution services, astheywerebeginningtomatureintotheindustryoftoday.ThefollowingregulationsapplytotelecommunicationindustriesinBrazil:1. Norm04/1995–CommercialInternetAct,whichallowedthe

private accessof individuals andcompanies to the internetwithinthecountry;

2. Law 9279/1996 – Intellectual Property Law, whichestablished legal rights for immaterial property, patents,trademarks and inventions inBrazil, adapting its norms tointernationalstandards;

3. Law9472/1997–GeneralTelecommunicationsLaw,whichestablishedthegroundsfor theprivatisationof theindustryin Brazil and created ANATEL, the Brazilian TelecomRegulationBody;

4. Law9609/1998–SoftwareLicensingLaw,whichestablishedthegroundsforsoftwarelicensingandtherightsofitsauthors;


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InanyoperationthatrequirestheregulatoryapprovalofANATEL,ANCINE or CADE, the roles of those regulatory bodies aredifferentiated.ANATEL’s main responsibility is the maintenance of fullyoperationalnetworkswithoutanyharmtocivilsociety.ANCINE’stasks,ontheotherhand,areensuringcompliancewithregulatorypoliciesrelatedtoaudio-visualcontentdistribution,thepreservationofcontentquotas,theobservationofthe30%foreignownershipcapforbroadcastingandnewspapercompaniesandtheprohibition on cross-ownership amongst network operators andcontentproviders.CADE, by its side, evaluates any potential economic damagesto competition in the telecommunication environment in thecountry, analysing any potential changes of operational controlin telecommunication companies and avoiding any unlawfulconcentrationofmarketshareortelecommunicationnetworksinasmallnumberofcompanies.


All decisions taken on an administrative level are subject to anappeal to the counsellors of the regulatory agencies. Any finaladministrativedecisioncanalsobe subject to judicial reviewandcanbechallengedinacourtoflaw.Itisnotuncommonthatduringanadministrativeprocedure,thepartiesinaninvestigationrecurtotheJudiciarytodemandthefulfilmentoftheirrightsunderthelaw.



TheprovisionoftelecommunicationservicesissubjecttoANATEL’sauthorisation.Suchauthorisationmaybesubjecttoapriorpublicbid,in thecasesofmobile telecomservicesorsatelliteservices,or justsubjecttothepaymentofthecorrespondentpublicfees,inthecaseofcableTV,fixedtelecomservicesorinternetbroadbandservices.AllservicesdependonthepriorauthorisationofANATELinordertobeginoperating.Forsuchauthorisationtobeissued,ANATELrequires information about the legal structure and ownership ofcompanies, technical informationon theservicesandnetworks tobedevelopedandtheproposedcoverageofanynetworks.


All authorisations depend on the presentation toANATELof thefollowing:a) information on the legal structure of companies willing

to develop telecom services within the country. AlltelecommunicationcompaniesmustbeincorporatedinBraziltodeveloptelecomserviceswithinthecountry;

b) technicalinformationonthenetworkstobedeveloped;c) technical team responsible for the development and

managementofthenetworks;d) proofofpaymentofthecorrespondentfeesforeachtypeof

telecommunicationservicetobedeveloped;e) proofoftechnicalcompliancewiththepriorcertificationat

theEngineersCouncil(CREA);

Communications, but with many more duties since 2011,when theSeACLawexpanded its role so that itbecameaGovernment regulatory body for content distribution oncableandbroadcastTV,responsibleforthemanagementofaudio-visual content in Brazil as well as the managementofstimulationprogramstoboostthenationalproductionofaudio-visualcontent.


Telecommunicationservicesingeneraldonothaveanyrestrictionsnowadaysforforeigninvestment,andarefreetoreceiveinvestmentfromallovertheworld.Broadcasting services, on the contrary, are the sole restrictedservicesforforeigninvestmentorownership,withathirtypercent(30%) limitationon foreignownershipof radio,TV, cableTVorprintedmedia,asperLaw10.610/2002.SuchLawdoesnotrestrictthe foreign ownership of internet companies that perform similarservicesinBrazilinvideoon-demand,electronicoronlinemedia.Brazilian lawmakers are currently in initial discussions to eitherupdate suchLaw for all kinds ofmedia companies that could beconsidered as delivering broadcasting services, even if throughonlinemethods,ortoupendtheLawanditslimitationsentirely.

2 Telecoms

General


Brazil has been member of theWorld Trade Organisation since1995,andamemberofGATTsince1948.Since1997,Brazilhasadopted specific commitments for Telecommunication Servicesas per Supplement #2 of GATS/SC/13 (available at https://bit.ly/2ycwzmb).


The provision of telecommunication services is provided underthe specifications of Law 9472/1997 and the regulatory policiesenacted by ANATEL, the Brazilian Telecom Regulatory Body,whichestablishestheframeworkfortheuseoftelecommunicationnetworksinthecountry.


ThetelecomregulatorybodyisANATEL,thecompetitionauthorityisCADE–AdministrativeCouncilofEconomicDefence,andtheaudio-visualmediaregulatorybodyisANCINE–NationalAgencyof Cinema. All of them are independent from the Government,with their counsellors elected for different terms than those ofGovernmentofficials,beingdulyapprovedbytheSenate.

Focaccia, Amaral, Pellon & Lamônica Advogados Brazil


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All telecom providers listed as having a significantmarket sharemustsharetheirinterconnectionpricesannuallyorintheirserviceplans for telecommunication users. ANATELmight also publishany other information on interconnection pricing as it considersnecessary.Currently, as the telecom industry matures, telecommunicationservice plans are not billing specific fees for interconnectionamongst telecom networks; as a result, many telecommunicationprovidershavezeroedtheirfeesonsuchservices.


Yes,ANATEL issued Resolution 588/2012 with the premise forsetting maximum fees on telecommunication interconnectionservices,andhastherighttosetupmaximumfeesannuallyonthem.ThemaximumpricingonthewholesaleofleasedlinesisregulatedbyResolution639/2014,basedoneconomicprinciplesandhistoriccostsfortheinstallationandmaintenanceofsuchinfrastructure.


Satellite,mobile and fixed telecom servicesmust have their ownlegal structurewith separate accounting for eachof them, but nofunctional separation is required for those services, which arecurrentlymanagedundersharedemploymentstructures.CableTVandbroadbandinternetdonotrequireaseparatedlegalstructuretobeprovided,sotheprovidersofsuchservicessharetheiraccounting,legalandfunctionallayouts.TheprovidersofbroadcastservicesonradioandTVendupsettingaspecificlegalandaccountingstructureforthem,giventhelimitationonforeignownershipforsuchservices.


Currently,therearenospecificprovisionsmandatingspecificrulesforinternetbroadbandnetworks,asidetheregulationofwholesaleleased linesasperResolution639/2014 fromANATEL. Brazil’sapproachisthatcompaniesshouldcompetetoprovidecoverageandreachforitsnetworks,andarefreetonegotiatesharingagreementsofinfrastructureamongthemselvesandpublicentities.



Satellite,mobileandfixedtelecommunicationservicesaresubjecttomaximum pricing byANATEL, reviewed annually. All othertelecommunicationservicesarenot.

f) presentationoftaxcertificatesbeforetheBrazilianStateandFederalGovernments;and

g) paymentofthemonthlytaxesrelatedtotelecommunicationservices inBrazil, thatgo toFUST(universalisation fund),Funtell(R&Dfund),Fistel(regulatorycompliancyfund)andICMS(Statetaxesovertelecomservices).


Satellite,mobileandfixedtelecommunicationlicenceshavea15-year term that can be extended for another 15 years, totalling30yearsoflicensing.Thelicencesforbroadbandinternet,cableTV,broadcastTVorradiodonothaveaspecificterm,beingvalidwhiletheirrequirementsarefulfilledwithintheGovernment.Other licences for telecommunication services that require theexclusive use of radio frequencies are subject to specific terms,usuallyof15years,undertheprovisionsofANATEL.



Telecomprovidersmayrequesttherightofpassagethroughpublicor private land in order to install their infrastructure, but privateproprietorsmayrequestthepaymentoffeesforsuchuse.ANATELworkstoensurethepassageofcablesandtheinstallationofantennasbyengagingwithpublicandprivatelandownersandmediatingtheusageofland.In the case of usage of poles from energy companies, public- orprivate-owned,ANATELworkswithANEEL(theenergyregulatorybody)tosetupfixedfeesfortherightofusefortelecomproviders.



ANATEL issued Resolution 588/2012 for the regulation ofinterconnection amongst telecom providers in Brazil. Its mainpremisesare:a) all telecom providers of telephony services, fixed, satellite

ormobile, are obligated to interconnect their serviceswithothertelecomcompaniesthatrequireaccessandconnectionto their networks;

b) themaximumfeessetupamongsttelecomprovidersaresetupbyANATELandreviewedannually;

c) ANATEL defines which telecom providers might have asignificant market share and mandate that such providersconnectwithsmallernetworks;

d) since 2014, no interconnection fees are needed amongsttelecomprovidersforlocaltransitoftelephonycalls;and

e) it is forbidden to concede discounts by volume from onetelecom provider to the other, unless such discounts areisonomicandavailabletoalltelecomproviders.


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3 Radio Spectrum


ANATELregulates theuseof radiospectrum inBrazil,asper itsspecificregulations.


ANATELisobligatedtoestablishpublicbidsfortheallocationofradiospectrum,givenitsscarcity.


If there are no interested parties in any given region or radiofrequency,ANATELmay issue a licence for a sole company forafixed term,usuallyofup tofifteen (15)years,with the rightofpreferenceforarenewaloffifteen(15)moreyears.


Historically, ANATEL would calculate authorisation fees basedupon economic costs and business plans for the duration of thetermoftheradiolicence.In2018,ANATELupdateditsmethodsandissuedResolution695/2018,whichestablishestherulesforthecalculationofpublicpricingfortheuseofradiospectrum.


ANATELmustapproveanychangeofownershipcontrolofalicensee,and issue a new permit after evaluating the new legal structurepresentedtoit.Forpublicradiobroadcastingspectrum,isnotpossibletohaveforeignownershipofmorethanthirtypercent(30%).


Spectrum licences are only able to be transferred with the priorauthorisationofANATELasatradeorsaletoathirdparty,whichneedtobeauthorisedwithinANATEL’sregulationsforeachtypeoftelecommunication service. Radio spectrum, however, cannot besub-licensed.



Therearenocybersecurity-specificlawsinBrazil,asalllegislationis spread intopublicsecurity laws. Brazil iscurrentlydiscussingaNationalCybersecurityPlaninCongressandwiththeExecutivebranchoftheGovernment.


Electronic communication services such as broadband internetaccess are considered as value-added services (VAS) in Brazil,andarenotsubjecttoANATEL’sregulationunderarticle61oftheGeneralTelecommunicationsLaw. ANATELhashad theright toregulate the infrastructureofbroadbandinternetsince2013underthelicenceforMultimediaCommunicationServices(inPortuguese,SCM), establishing policies to ensure minimum speeds forbroadbandaccessandmonitoringthequalityofservices.Since the current regulation does not require any electroniccommunication providers that have underfifty thousand (50,000)userstoreportorrequireaSCMlicencetoANATEL,itsknowledgeoftheecosystemofusersandinternetprovidersisbleak.Suchservicesarealsonotdeemedaspublicservices,butasprivateones. Under such framework, there are no provisions for theuniversalisationoftheseservices.GivenANATEL’s inability to regulate electronic communicationservices,since1995,lawmakershaveissuedlawsestablishingrightsforinternetandonlineservices.Themostimportantonesare:a) the Consumer Defence Code of 1990 (Law 8078/90),

which establishes provisions for themarketing of services,the mandatory value of publicity offers and rules for thesubscription of services online, establishing the “right ofregret”uptoseven(7)daysafterapurchaseismade;

b) the Internet Civil Rights Law (Law 12.965/2014), whichestablishesthebasiccivilrightsofinternetusersinBrazil,netneutralityrules,thelimitationofliabilityofinternetapplicationcompanies and internet platforms, as well as users’ basicprivacyrightsontheirrelationshipwithonlinecompanies;and

c) the General Data Privacy Law (Law 13.709/2018) whichupdates the Internet Civil Rights Law and establishes theframeworkforthecollection,managementandtreatmentofpersonaldata inBrazil. ThisLaw iscurrentlyonvacation legisandwillbefullyeffectiveinFebruary2020.

Numbering


ANATELallocatesnumbersamongst telecomproviders inBrazil,asperResolution679/2017formobilenumberingandResolution84/1998 for fixed numbering. ANATEL is currently studying anumberingprovisionforSCMlicensees(electroniccommunicationproviders).


Yes, there are specific rules as per Resolution 679/2017 for themanagement of mobile numbering, and Resolution 84/1998 forfixednumbering.


ANATEL has issued Resolution 460/2007, which determinesthe obligations of portability among telecom providers. AnytelecommunicationprovidersthathavenumberingassetsaresubjecttothisResolution.


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Brazil does not have any specific regulation demandingtelecommunication providers or internet providers to supply anyencryptionkeystotheState.Anyprovisionofencryptionkeysisdecidedonacase-by-casebasisonjudicialdemands,whichtakeintoconsiderationpublicsecurityissuesversusencryptionpracticesandprivacypoliciesfortheusersofanygivencommunicationservice.The Internet Civil Rights Law (Law 12.965/2014) previewsthe hypothesis in which data related to the usage of internetapplicationsorelectroniccommunicationservicescanbedemandedby Government authorities, police forces or fiscal authorities inarticles10and11,whilearticle12liststhepenaltiesincaseofnon-compliance, which can range frommonetary penalties up to thesuspensionofacompanytooperateinBrazil,foraprovisoryperiodordefinitively.


It is important tonotethatalldatacollectedcanonlybesuppliedvia a prior judicial mandate, given that the right of privacy fortelecommunicationusersismandatory.Telecommunicationprovidersareobligatedtoretaindatarelatedtophonecalls(calldetailreceiptsorCDRs)foratleastfiveyears,aspertheregulationsofANATEL.Recordingsofphonecallsarenotcollectedorstoredunlessinthecaseofacommunicationinterception.Electronic communication providers are obligated to retain datadependingonitstype,consideringthat:a) infrastructureprovidersneedtocollectandretainIPaddresses

andalllogsrelatedtointernetconnectionforatleastone(1)year.Infrastructureprovidersorinternetaccessprovidersareblockedfromcollectingdatarelatedtointernetnavigationorapplicationusageofitsusers;

b) applicationprovidersorcompaniesprovidingonlineservicesin a professional and organisedmanner, orwith economicobjectives,shallcollectandstoreIPaddresses,personaldataandlogsofusageforatleastsix(6)months;and

c) applicationprovidersshouldnotcollectorstoredatarelatedto the usage of other applications or websites from thirdparties,nordatathatcanbeconsideredexcessiveinlightoftheobjectivesforwhichsuchdatawasoriginallycollected.

All data should be encrypted and stored in secrecy in controlledenvironments.



Brazil approved the creation of the National Cinema Agency– ANCINE in 2001, originally as a public body to pursuethe development of the national film industry. In 2011, Law12.485/2011–SeACwasapproved,updatingthelegalframeworkforaudio-visualmediadistributionservicesinBrazil,establishingquotasfornationalcontent,balancingthecommercialrelationshipamongst content providers,TV networks and cableTV operatorsandforbiddingcross-ownershipbykeystakeholders,amongotherprovisions.

Themostup-to-dateregulationcomprisingcybersecurityprovisionsis Decree 8771/2016, which regulates parts of the Internet CivilRightsLaw(Law12.965/2014).TheDecreeestablishesminimumsecurity and secrecy standards for the collection and storage ofpersonaldataandelectroniccommunicationsovertheinternet.


Brazil has implemented Law 9296/96 to specifically regulatethe interception of telephone calls, electronic communicationsor mail communications, setting the requisites for the breach ofcommunicationdataanditsinterception.


AccordingtoLaw9296/96,apriorjudicialmandateisnecessaryforany telecommunicationprovider to intercept anycommunicationsservice, be it telephone calls, VoIP calls, emails or any otherforms of communication, even printed mail. All interception isperformedwiththesupportandcoordinationofpoliceauthoritiestotelecommunicationproviders.


Police forcesneed tomake a judicial request for the interceptionofcommunications tospecificnumbersor individuals.Oncesuchrequestismade,theJudiciaryhasuptotwenty-four(24)hourstosetout the interception, issuingamotivated judicialorderexplainingthereasonsforit.Alljudicialmandatesmustalsoobservethefollowing:a) only criminal investigations allow for the interception of

communicationservices;b) non-criminal investigations can solely require data related

tothecommunicationservicesbeingbreached,butnottheirreal-timeinterception;

c) criminal infractions penalised with minimum detentionshouldnotmotivatetheinterceptionofcommunications;

d) any judicial mandate authorising an interception ofcommunicationsshallengagePublicAttorneystofollowuppoliceinvestigations;

e) any interception of communications shall be completedwithinfifteen (15) days, although this can be extended foranotherfifteen(15)-dayperiod;

f) all interceptions of communications shall be processedin separate from the investigation that motivated it, withthe parts that are of no interest for the investigation beingsummarilydismissed;and

g) any interception of communication done without a priorjudicialorderisunlawfulandconstitutesacrime.


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Electronic communications providers, on telecommunication orinternet provision services, are obligated to takemeasures solelytocomplywithajudicialmandate. Anyprovisionofinformationdeemed private or listed as personal data can only be suppliedthrough a judicial order requesting it. Information considered aspublicisthename,affiliationoraddressthatdoesnotrequireapriorjudicialordertobegivenbyaprovider.Electronic providers, can, though, take down specific types ofcontent.Inthecaseofdistributionofsexualcontentoraviolationof intimacy, whenever notified by the persons appearing in suchcontentdirectly,theelectronicprovidershavetheobligationtotakeactionwithouttheneedforapriorjudicialcommand.Theonlyscenariowhereelectroniccommunicationproviderscouldbedeemedresponsibleiswheneverajudicialmandateisissuedandnotcompliedwith.Insuchcases,theJudiciarymayforcecompliancetoitscommandsandpenaliseanelectroniccommunicationproviderwithfinancialpenaltiesordetentionofitslegaladministrators.


The Internet Civil Rights Law (Law 12.965/2014) establishednet neutrality rules in Brazil under article 9th, forbidding thedifferentiation of content or traffic type, its blockage or othermeasures that may harm the open status of internet networks.Article9thalsolistedtheexemptionsinwhichanelectronicservicesprovidercandifferentiateordegradetraffic.All possibilities for doing so can only be based upon: (i) thetechnicalneedtomaintainfullyfunctionalinternetnetworks;and/or(ii)toprioritiseemergencyservices.Ifanydegradationneedstobedone,thefollowingmeasuresneedtobetaken:a) noharmtofinalinternetusersmustbedone;b) electronic communication providers need to act with

proportionality, transparency and with isonomy towardsusers;

c) allusersmustbepreviouslyadvisedofthemeasuresthatcanbetakenintermsofdegradationoftraffic,eventhoserelatedtonetworksecurity;and

d) electronic communication providers must abstain fromadoptinganyanticompetitivepracticesthatcouldbenefitoneinternetapplicationoveranother.

Moreover, the Law establishes that in the activity of internetprovision,inagratuitousoronerousmanner,providerscannotblock,monitor,filteroranalysethecontentofdatapackagestransitingonitsnetworks.Thesamearticle9thoftheInternetCivilRightsLawalsopredictedfurtherregulationfortechnicalclarificationondegradationmethods.SuchregulationcameintheformofDecree8771/2016that,besidesissuingfurtherdetails,reaffirmsthatanydegradationoftrafficmustbeconsideredasanexceptionalprovision.


Yes,itis.SinceBrazilhasnotapprovedanynewlawsregulatingthedistributionofelectroniccontentovertheinternet,libertyistheruleinthisenvironment,withpoliciessolelyintermsoftaxation.ItisalsonotclearhowtheBrazilianGovernmentorCongresswouldregulatethedistributionofcontentthroughinternetnetworks,sinceregulation of telecommunication services is done by ANATEL,audio-visual media distribution regulation is done by ANCINE,andthetelecommunicationpoliciesarelaidoutbytheMinistryofCommunications.Asof today, thedistributionofcontenton internetnetworksdoesnotneedtoobservequotasfornationalcontent,qualityrequisites,foreignownershiplimitationsorotherrulesapplicableforcableTVcompaniesorbroadcastingcompanies.


ANCINE only requires cable TV, audio-visual media producers,advertisingproducers,movieproducersandtelecomcompaniestoregisterinordertocollectCONDECINEtaxes,determinedoverthedistributionofitsworks.Suchlicencesarenotmandatoryfortheincorporationordevelopmentofsuchactivities,butmostlyforthepaymentofsuchtax.


Licencesareassignablethrougha30-daypriornoticetoANCINE,withoutanyrestrictionsincaseofachangeofownershipcontrol.



Since the commercial deployment of internet access in Brazil in1995,courtshavestruggledwiththelimitationofliabilityofinternetprovidersortelecommunicationprovidersofferingtheinfrastructureforinternetaccess.SincetheapprovaloftheInternetCivilRightsLawin2014(Law12.965/2014),thematterhasbeenpacifiedwitharticles 18 and 19 of suchLaw, establishing that internet serviceprovidersareexemptfromliabilityofthecontenttransmittedoverits networks, and internet application providers are exempt fromliabilityofthecontentgeneratedbyitsusers.The Internet Civil Rights Law also defined net neutrality rulesfor internet service providers and telecommunication providers,mandating them to treat internet traffic agnostically and withoutdiscriminationoverthetypeofcontentbeingtransmitted,ameasurethatalsolimitstheirliabilityoverthem.


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Rafael PellonFocaccia, Amaral, Pellon & Lamônica AdvogadosRua Gomes de Carvalho 1507 – 4th floor Vila Olímpia São Paulo – SPBrazil

Tel: +55 11 3805 0222Email: [email protected] URL: www.fasadv.com.br

Focaccia, Amaral, Pellon & Lamônica Advogados – FAS Advogados – has a philosophy of delivering added value to their clients’ businesses, by working at the pace required by the market and understanding the peculiarities of each industry.

We believe that legal services can only be fully realised by bringing continuous in-depth technical qualifications and specialisation to our clients’ businesses, deeply focused on their expectations.

Since 2003, FAS Advogados has established itself as one of the most dynamic firms on the Brazilian market, by providing legal services that are able to positively and strategically impact businesses.

Our team is comprised of highly qualified professionals, dedicated to providing top legal services within strict ethical standards. We aim to establish legal services in a way that rewards personal qualities, aligned with the most contemporaneous methods of highly successful corporate relations.

Internally, we strive for participative management, by providing our team with the opportunity to collaborate on ideas, suggestions and innovation aimed at achieving in our practice.

Graduated in Law from Universidade Federal do Rio de Janeiro – UFRJ; post-graduated in Information Law from Universidade Cândido Mendes; post-graduated in Procedural Strategies at Fundação Getúlio Vargas/SP. Has over 17 years of experience in legal practice, specialised in contracts, intellectual property, media and entertainment. Worked for flagship technology and telecom companies such as Claro, Embratel, IG and UOL. Acts as Legal Consultant of Policies & Initiatives of the Mobile Ecosystem Forum, the Mobile Marketing Association – MMA, and NeoTV – Independent Cable and Internet Providers.


Under the current laws there is no specific content that needs tobe automatically blocked by internet service providers, nor areVPNserviceseitherregulatedorblockedbylaw.Theblockingofcontent,applicationsorwebsitesshouldbesupportedbyajudicialdecisionorcommand,baseduponapriorlawsuitthatdemandsso.Furthermore, the Internet Civil Rights Law (Law 12.965/2014)determines that any judicial decision ordering the blockage orfiltering of any content, application or website must appoint theexactURLthatmustbeblockedorfiltered,undertheriskofbeingconsideredvoidofmerit,asperthefirstparagraphofarticle19oftheLaw.


Chapter 8

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Laurence J. E. Dunbar

Scott Prescott

Canada

audio-visualmedia distribution from theTelecommunications Act and Broadcasting Act,respectively.TheMinister of Innovation, Science andEconomicDevelopment(“ISED”)and the federaldepartmentof ISEDare responsible forlicensing and administering radio spectrum in Canada under theRadiocommunicationAct.TheFederalCabinet (referred toas the“Governor inCouncil” inlegislation) reserves broad powers to direct the CRTC on policyissues or review its decisions under theTelecommunicationsActandBroadcastingAct. TheGovernor inCouncilmay alsomakeregulationspursuanttothegoverninglegislation.The Copyright Board of Canada is established pursuant to theCopyright Act and is the administrative tribunalwith rate-settingauthority over various uses of copyright, such as the tariffs forperformancerightsinmusicsoldbydigitalmusicservices.TheCommissionerofCompetitionisappointedbytheGovernorinCouncil toenforce theCompetition Act. TheCommissionermayreviewahost of conduct, includingmergers, for anti-competitiveeffects.


TheCanadiantelecommunicationsandbroadcastingindustriesarecomprised primarily of private entities, subject to a few notableexceptions,whichinclude:■ theCanadianBroadcastingCorporation (“CBC”),which is

Canada’s national public radio and television broadcasterandreceivesfundingfromthefederalgovernmentaswellasthroughtelevisionadvertising;and

■ “SaskTel”,which is a crowncorporation thatoperatesas asignificant provider of telecommunications services in theprovinceofSaskatchewan.

Thetelecommunicationsandbroadcastingindustriesare,however,subjecttorestrictionsonforeignownershipandcontrol.Under the Telecommunications Act, telecommunications carriers,including Internet Service Providers (“ISPs”), that own andoperatetransmissionfacilitiesaresubjecttoownershiprestrictionsif they hold a 10% or greater share of total annual Canadiantelecommunications market revenues. In those cases, they aresubjecttothefollowingrestrictions:■ Canadiansmustholdaminimumof80%ofthevotingshares;■ Canadiansmustcomprise80%ofthedirectors;and■ thecorporationmustnototherwisebecontrolledbypersons

whoarenotCanadians.

1 Overview


Canada’scommunicationsindustryincludesbothbroadcastingandtelecommunicationsmarketsectors.Thetelecommunicationssectorgeneratesannualrevenuesofapproximately$49billionCAD(73%of all industry revenues),while the broadcasting sector generatesannualrevenuesofapproximately$18billionCAD(27%).The five most significant market participants offer both tele-communications and broadcasting services in all or significantregionsofCanada.With respect to both telecommunications and broadcasting, themost significant market participants in terms of market shareare: BCE Inc.; Rogers Communications Canada Inc.; TELUSCommunications Inc.;ShawCommunications Inc.; andQuébecorMediaInc.(throughitssubsidiaryVidéotron).


Themost important legislation applicable to telecommunications,internet and audio-visual media distribution activity is theTelecommunications Act, Radiocommunication Act, Broadcasting Act and the Copyright Act.Allofthesestatutesarefederal,reflectingthefactthatthefederalgovernment has constitutional authority over telecommunicationsandbroadcastinginCanada.


Canada’s primary regulator of the telecommunications andbroadcasting industry is the Canadian Radio-television andTelecommunications Commission (“CRTC”). The CRTC is anindependentadministrativetribunalcreatedbytheCanadian Radio-television and Telecommunications Commission Actanditderivesauthorityforregulatingtelecommunicationsincludinginternetand


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internationaltelecommunicationsservices(“BITS”).BITSlicencesaregrantedasofrightandwithoutchargewhentheTSPsubmitstherequiredinformation.TheCRTChastheabilitytoforbearfromregulatingspecificservicesorclassesofservicesprovidedbycarrierswhenitfindsasaquestionof fact thatcompetitivemarket forcesaresufficient toprotect theinterests of users and that forbearance would be consistent withCanada’s telecommunications policy objectives set out in section7 of theAct. For example, the CRTC currently forebears fromregulating retail rates of non-dominant carriers and providers ofretailmobilewirelessvoiceanddataservices.


TheCRTC’sroleasCanada’stelecommunicationsandbroadcastingregulator has already been discussed above. While the CRTCpursuesitsregulatorymandateindependentlyandenforcesitsownrules,policies,anddecisions,itultimatelyreportstotheParliamentofCanadathroughtheMinisterofCanadianHeritage,theMinisterresponsiblefortheCRTC’sconstatingstatute.TheGovernorinCouncilalsohastheabilitytorequiretheCRTCtoreconsideradecision,policyororderandmayrequireittoreportto Parliament on any matter within its jurisdiction. Under theTelecommunications Act,theGovernorinCouncilmayalsovaryaCRTCdecision.TheCommissionerofCompetitionisresponsibleforadministeringand enforcing theCompetition Act andmanages theCompetitionBureau. WhileCRTCapproval ofmergers is not required underthe Telecommunications Act, mergers are subject to review bythe Competition Bureau, with transactions exceeding proscribeddollar thresholds requiring pre-notification to theBureau. Underthe Broadcasting Act, however, the Commission must approvechangesofcontrolorownershipof licensedundertakings. WhiletheCompetitionBureauwillreviewchangeofcontrolorownershiptransactions in the broadcasting sector, the CRTC examines thebroaderCanadianbroadcastingpolicyobjectivesundertheAct.PursuanttotheRadiocommunication Act,ISEDcanreviewtransfersorchangesincontrolofmobilecommunicationsspectrum.


DecisionsofCanada’sregulatoryauthoritiesmaybechallengedorappealedthroughavarietyofmeans.CRTCdecisions andOrdersmade under theTelecommunications Actmaybechallenged:■ by requesting that the CRTC review and vary its decision

duetosubstantialdoubtastothecorrectnessoftheoriginaldecision;

■ byappeal,withleave,totheFederalCourtofAppeal,basedonanerroroflaworjurisdictionalgrounds;or

■ bypetitiontotheGovernorinCouncil.As a federally created statutory Commission, the CRTC is alsoboundbyadutyofproceduralfairness.FailuretoupholdthisdutyisgroundsforjudicialreviewtotheFederalCourtofAppeal.DecisionsoftheMinisterofISEDundertheRadiocommunication Actmay be challenged by seeking judicial review in the FederalCourt on the grounds that theMinister actedwithout appropriate

Ifthecarrierisasubsidiarycorporation,theparentcorporationmustbe incorporated inCanada andCanadiansmust hold aminimumof66.6%of theparent’svotingshares. Astheydonotowntheirowntransmissionfacilities,resellersarenotsubjecttorestrictionsonforeignownershipandcontrol.Spectrum authorisations under the Radiocommunication Act are subject to the same rules but the licence may only be held byCanadianpersons,includingcompaniesincorporatedinCanadathatsatisfytherestrictionsonforeigninvestment.The broadcasting industry is subject to greater restrictions onforeignownershipandcontrol.BroadcastingundertakingsmustbeCanadian-owned and controlled,with similar requirements as setout above regarding voting shares, directors, and overall control.Under the Broadcasting Act, however, the CEO must also beCanadian,theshareholdinglimitappliestovotesaswellasvotingshares,andnon-Canadianscannotexercisecontrolorinfluenceoveranyoftheundertaking’sprogrammingdecisions.Inaddition,thereisnoexceptionforcompanieswithlessthana10%marketshare.Onenotableexceptiontothisregimeisthat,presently,digitalmediabroadcastingundertakingslikeNetflixandotherdirecttoconsumerstreaming services are exempt from licensing under the DigitalMediaExemptionOrder(“DMEO”)andarethereforenotsubjecttoforeignownershiprestrictions.Foreign investments in the telecommunications and broadcastingsectorsmayalsobesubjecttothefederalInvestment Canada Act,alawofgeneralapplicationthatallowsforfederalreviewofproposednew businesses in Canada or transactions that lead to change ofcontrol of a Canadian business if the value of the investment isabovecertaindollar thresholds. Notably, a lower,more stringentthresholdappliesifthebusinessisa“culturalbusiness”.

2 Telecoms

General


Canada is amember of theWTOand has undertaken a range oftelecommunications-specificmarketaccesscommitmentsinGATS.CanadahasmadeconsiderablenationaltreatmentandmarketaccesscommitmentsinGATS,withnotablelimitationsonthepermissiblelevelsofforeigninvestment.


Telecommunicationsnetworksandservicesareregulatedbyamixoflegislation,subordinateregulations,anddecisionsoftheCRTC.As noted above, the Telecommunications Act is Canada’sprimary statute and it establishes requirements for operating as atelecommunicationscarrierinCanada.Facilities-basedcarriersandresellers may provide telecommunications services in Canada iftheycomplywiththerequirementsoftheTelecommunications Act anditsregulations,applicabledecisions,policies,andordersoftheCRTC,andregisteronasaTelecommunicationsServiceProvider(“TSP”)ononeormoreoftheCRTCregistrationlists.TheexceptiontothissystemofregulationisthatalicencemustbeobtainedbyaTSPthatregisterswiththeCRTCtoprovide‘basic’

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TheTelecommunicationsActgives carriers the right to enter andbreak up public places in order to construct,maintain or operatetransmission lines, subject to certain requirements, includingconsentof themunicipalityorother localauthority. Carriers thatprovideservicestothepublicmayapplytotheCRTCtogainaccessiftheycannototherwisedosoonacceptableterms.TheCRTChasdevelopedastandardformofaccessagreementtoguidethepartiesinnegotiatingsuchaccess.



UndertheTelecommunications Act,theCRTCmayorderaCanadiancarrier to connect any of its telecommunications facilities to anyother telecommunications facilitiesunderconditions itdeems justand expedient. The CRTC regulates wholesale interconnectionand access, including rates, terms and conditions for a variety ofservices,including:■ domestic roaming rates for services of the three largest

incumbentwireless carriers to smaller or regionalwirelesscarriers;

■ wholesale high-speed broadband access services providedbycableandtelephonecompaniestocompetitorsinordertopromotecompetitioninretailservices.TheCRTCcurrentlyhasregulatedinterimratesinplacefortheseservices;and

■ themandatory local network interconnection regime underwhich local exchange carriers, including VoIP serviceproviders,arerequiredtoconnectwithotherlocalexchangeproviders,wirelesscarriersandinterexchangecarriers.

Standard requirements for interconnection and access have beendeveloped by the CRTC for most forms of interconnection andaccesstoessentialfacilities.


Standard agreements for the mandatory local networkinterconnection regime set out in question 2.9 have been pre-approvedbytheCRTC.Carriers are also required to publish their building accessarrangements.


The incumbent carrier’s rates for local exchange interconnectionare regulated by the CRTC. Other competitive local exchangecarriersmay charge up to the amount charged by the incumbentintheexchangeinquestion.Thereisabillandkeeparrangementfordirectinterconnectionoflocalnetworks,subjecttoachargefor

jurisdiction,erred in law,failed toobserve thedutyofproceduralfairness,orotherwiseactedinanyotherwaythatwascontrarytolaw.CopyrightBoardofCanadadecisionsmaybechallengedbyanyonedirectly affected by thematter via judicial review to the FederalCourtofAppeal.



TheCRTCgenerallydoesnotissuelicencesorotherauthorisationsunder theTelecommunications Act. Telecommunications carriersandresellersmayprovideservicestothepublicforcompensationif they complywith the requirements of theTelecommunications Act and register as a TSP on the appropriate CRTC registrationlist(s).Asnotedaboveinquestion2.2,theexceptiontothisistherequirementthatTSPsobtainaBITSlicencefromtheCRTCbeforeoffering basic international telecommunications services. ISEDissuesspectrumlicences for theuseofspectrumunlessaspecificapplicationisdeemedlicence-exempt.


Telecommunicationscarriersandresellersmayprovideservicestothepublicforcompensationiftheycomplywiththerequirementsofthe Telecommunications ActandregisterasaTSPontheappropriateCRTCregistrationlist(s).Compliancewith theTelecommunications Act includes satisfyingtheCanadianownershipandcontrolrequirementssetoutinquestion1.5andanypoliciesapplicableforthetelecommunicationsservicesunderconsideration.


TheonlyindividualauthorisationthattheCRTCrequiresforTSPsistherequirementtoobtainaBITSlicencepriortotheprovisionofbasicinternationaltelecommunicationsservices. Asconditionsoflicences,BITSlicenceholdersmust:■ not engage in anti-competitive conduct in relation to

internationaltelecommunicationsservices;■ complywithannualcontributionreportingrequirements;■ furnish the CRTC with current information and file any

changeswithin30days;and■ provide any additional information report requirements as

prescribedbytheCRTC.TheCRTCdoesnot regulatechanges in theownershiporcontroloffacilities-basedTSPsorresellersprovidedtheentitycontinuestocomplywith theCanadianownershipandcontrolrequirementsofthe Telecommunications Act.As noted above in question 2.3, change in ownership or controlof TSPs by way of merger may require pre-notification to, orbe reviewed by, the Commissioner of Competition under theCompetition ActorbytheMinisterofISEDunder theInvestment Canada Act.


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this fund helped to defray the cost of local exchange service inhigh-costserviceareas. Thisuseofthefundisbeingphasedout.Initsplace,anewfundisbeingcreatedtohelpoffset thecostofextending broadband infrastructure to rural and remote areas ofCanadathatdonothaveaccesstodownloadspeedsof50Mbpsanduploadspeedsof10Mbps.Thecurrentcontributionrateis0.0054oftotaltelecomservicerevenues,lesspaymentstootherunderlyingcarriersandotherspecifiedadjustments.

Numbering


Telephone numbers in Canada are allocated by the CanadianNumberingAdministrator, establishedby theCRTC,ona requestbasis.


There are no special rules which govern the use of telephonenumbers.


The CRTC has mandated number portability for wireless andwireline carriers that offer services that are connected with thepublicswitchedtelephonenetwork(“PSTN”).ThisincludesVoIPservice providers if they offer their service by using the NorthAmericanNumberingPlan(“NANP”)toroutecallstousersontheirnetworkandprovideaccessoregresstothePSTN.

3 Radio Spectrum


InnovationScienceandEconomicDevelopmentCanada(afederalgovernmentdepartment) regulates theuseof spectrum inCanadapursuanttotheRadiocommunication Act.


RightstousespectrummustbeobtainedeitherdirectlyfromISEDbywayof a licence, purchased fromanother spectrumholder, orthroughasubordinatelicence.Wheredemand is not expected to exceed supply, ISEDgenerallyissueslicencesonafirst-come,first-servedbasis.Wheredemandisexpectedtoexceedsupplyandgovernmentpolicyobjectivescanbemetthroughacompetitiveprocess,ISEDwilltypicallyholdsomeform of auction (e.g. sealed bid, combinatorial clock). Auctionshave generally replaced comparative “beauty contests”. TheMinisterof ISEDmayalso set asidecertainportionsofavailablespectrumforsmallerprovidersorotherwisetailorthetermsoftheauctiontoachieveagovernmentpolicyobjective.

imbalanced traffic. Most rates forotherfixedserviceshavebeenderegulatedwhere there is sufficient competition on the route inquestion.Inthemobilemarket,thewholesalerateschargedbythethreelargestmobilecarriersforroamingareregulatedbytheCRTC–butnottheretailrates.


The CRTC no longer requires accounting, functional or legalseparation of TSPs. The CRTC does require the larger TSPs toestablish separate customer service groups to take orders fromcompetitorsandtoprotectcommerciallyandcompetitivelysensitiveinformationtheyreceivefromcompetitors.


High-speedbroadbandnetworksmustregisterwiththeCRTC–butaregenerallynotrate-regulated.Incumbent Local Exchange Carriers (“ILECs”) support structureservices are tariffed wholesale services that make poles, strands,andconduitsavailabletothird-partycarriersforuseasaninputtoprovidecompetitiveretailtelecommunicationsservices.TheCRTCapprovestheratesthatILECsmaychargeforaccesstothesesupportstructures.Local exchange carriers and broadcasting distribution companiesmustalsomakein-buildingwiringavailabletocompetitors.TheseruleshavenotyetbeenextendedtoISPs.Due to thegrowth in internet trafficover recentyears, theCRTChasestablishedaframeworktoevaluateexistingandfutureinternettrafficmanagementpractices(“ITMPs”)beingemployedbyISPs.



TheCRTChaslargelyforbornefromtheregulationofretailpricesfor telecommunications services offered by carriers and has notregulatedtheretailratesoftelecommunicationsresellers.Twoexceptionsaretheincumbentcarrier’slocalexchangeratesinareaswithout sufficientcompetition,andwholesale roaming rateschargedbythethreelargestmobilewirelesscarriers.While theCRTChasnotdirectly regulated rates, it hasopenedapublicconsultationinwhichitaskedCanada’sthreelargestwirelessservice providers (Bell, Rogers,TELUS) to provide examples oflower-cost,data-onlyplansthattheywilloffer.TheCRTCinitiatedthis public consultation immediately after declining to mandatewholesalereselleraccesstotheincumbents’wirelessnetworks.TheCRTCiscurrentlyconsideringtheincumbents’proposals.


AllTSPs, including ISPs and other providers of communicationsservicesmustcontribute toauniversalservicefund. Historically,


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organisations and commercial organisations in all provinces thatdonothave“substantiallysimilar”legislation. Threeprovinces–Québec,Alberta,andBritishColumbia–currentlyhavesubstantiallysimilarlegislation.Thesestatutesrequireorganisationsthatcollectpersonalinformationtoensurethatadequatesafeguardsareinplacetopreventtheloss,theftorunauthorisedaccess,disclosureorotherusesoftheinformation.Inaddition,therearesectionsoftheCriminal Code of Canada that applytocybersecurity.AsaresultofamendmentstotheCriminal Code in 2014, offences with an element of communication nowexplicitlyincludecommunicationsbymeansoftelecommunication,unlessthemeansofcommunicationarespecified.


The Criminal Codecontainsbasicprovisionsforobtainingaccessto private communications, including through wire taps, searchwarrantsandproductionorders.PartVI of theCriminal Code empowers judges to issuewiretaporders.Peaceofficersmayalsolawfullyinterceptcommunicationswithout an order from a judge, but only in order to prevent thecommissionofanoffenceinvolvingbodilyharm.Thisappliestotextanddatacommunicationsaswellasvoicecommunications.The Criminal Code also contains procedures for obtaining aproduction order. A production order ismade by a judge and issimilar to a searchwarrant, except under a production order, thepersoninpossessionoftheinformationmustproduceitonrequest.Production orders may be general or specific. Unlike a searchwarrant,wherealawenforcementagencygoestothesitetoobtaininformation by searching for and seizing it, a production orderrequiresthepersoninpossessionoftheinformationtoproduceitonrequest.Productionordersofferlawenforcementagenciesamoreeffectivewaytocollectinformationinanothercountry,forexample.Recent amendments to theCriminal Code create a new class ofspecific production orders for peace officers to obtain “trackingdata” and “transmission data” from telecommunications serviceproviders. Tracking datameans data that relates to the location,individualorthing.Transmissiondatameansdatathat:■ relatestodialling,routing,addressingorsignalling;■ is generated during the creation, transmission or reception

ofacommunicationandidentifiesorpurportstoidentifythetype,direction,date,time,duration,size,origin,destinationorterminationofacommunication;and

■ does not reveal the substance, meaning or purpose of thecommunication.

As discussed below in question 4.6, recent amendments to theCriminal CodehavealsoaddedadditionalvoluntaryandobligatoryretentionrulesforISPs.TheSupremeCourtofCanadahas ruled that telecommunicationsserviceprovidersmustnotvoluntarilyproducedataordocumentscoveredunderPIPEDAforpoliceofficersactingwithoutasearchwarrantorproductionorder.


Wirelesscommunicationsdifferfromwirelineinsofarasthereare


Certainusesofspectrumarelicence-exemptundertheRadiocomm-unication Act. TheAct reserves for theGovernor inCouncil theability to make regulations and exempt any radio apparatus, orclass thereof, from the requirement to be installed or operated inaccordancewitharadioauthorisation.ISEDmaintainstheLicence-exempt Radio Apparatus Standards List of devices that may usespectrum without a licence. For example, certain low-powerapplicationsarelicence-exempt,asarecertainfrequenciesusedforWi-Fi.


InadditiontotherevenuesISEDreceivesthroughspectrumauctions,italsocollectslicencefeespayablefortheissuance,continuanceinforceorrenewalofalicencefornon-auctionedspectrumorfortherenewalofanauctionedlicencethatisexpiring.Under ISED’s Framework for Spectrum Auctions in Canada,licencesissuedthrougharenewalprocesswillbesubjecttoapublicconsultation with the goal to establishing fees that reflect somemeasureofmarketvalue.Thisvariesbylocation(Tier)withlargeurban areas attracting the highest licence fees. Licence fees arepublishedbyISED.


Under theRadiocommunication Regulations, licencesmaynotbetransferred,assigned,orsub-licensedwithoutthepriorapprovaloftheMinisterofISED.Thisiscommonlyenforcedbymakingitaconditionoflicencethattransfersreceivepriorapproval.Prior approval is generally required for changes of ownership orcontrolofa licenseeoraffiliateof terrestrial“commercialmobilespectrum”.Priorapprovalisalsorequiredfor“deemedtransfers”ofalicenseeoraffiliate.Deemedtransfersincludethegrantingofany rightor interest in a spectrum licence throughan agreement,strategicalliance,jointventureorsimilaragreement.ISED’scurrentpolicy is to restrict transferofcommercialmobilespectrum licences where it would lead to undue concentrationof spectrum in the hands of the transferee. These transfersmayharmcompetitionbypreventingthetransferorandpotentialfuturecompetitorsfromprovidingservicesinthelicenceareas.


Seequestion3.5above.Inaddition,licencescanbesub-licensedtoeligiblelicenseesonthesametermsastheoriginallicence.



Canada’s primary privacy statute is the Personal Information Protection and Electronic Documents Act, a federal statute thatprotects personal information collected by federally regulated


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subscribers, and digital media broadcasting services deliveredand accessedover the internet (“DMEO”). Exemptundertakingsare sometimes required to nevertheless register with the CRTC,dependingontheexemptionorder.Under theRadiocommunication Act, radio and television stationsarerequiredtoobtainaseparatelicenceorcertificatefromISEDiftheyrequire theuseofradiospectrumtobroadcast theirservices.Pleaseseequestions3.1–3.6formoreinformationonthelicensingofspectrum.


Yes, there are significant distinctions between the regulation ofcontent distributed by traditional broadcasting undertakings andcontentdistributedviatheinternet.TheCRTCregulatesthecontentofradioandtelevisionprogrammingdistributedtoCanadiansbytraditionalbroadcastersandbroadcastingdistributionundertakingsinavarietyofways,including:■ Canadiancontentrequirements;■ programmingpackagesofferedtoconsumersbybroadcasting

distributionundertakings;■ journalisticandotherprogrammingstandards;■ advertisingrestrictions;■ prohibitedprogrammingcontent;and■ accessibilityofcontent.Asnotedaboveinquestion5.1,contentdeliveredandaccessedovertheinternetisexemptfromcontentregulationundertheDMEO.Asa result, thecategoriesofcontent regulationdonotapplyequallytotraditionalbroadcastingundertakingsanddigitalmedia. Giventhenewandevolvingnatureofvideo-on-demand(“VOD”)services,the CRTC has also exempted a class of “hybrid” VOD servicesthatareofferedoverclosedbroadcastingdistributionundertakingsnetworks,aslongastheyarealsodistributedovertheinternet.TheprecisetermsoftheDigitalMediaExemptionOrderandotherbroadcastingexemptionorderscanbefoundbyreviewingtheindexofordersontheCRTCwebsite.


The CRTC’s system of broadcast licensing is complex and theobligations that attach vary, depending on the type of servicesofferedbythelicensee.All broadcasting in Canada is regulated by the CRTC under theBroadcasting Act. The CRTC issues licences for broadcastingdistribution undertakings (cable, IPTV, direct-to-home satelliteservices), as well as television (e.g. television, discretionary on-demand)andradiostations.Key obligations for licensees are enforced through conditions oflicence.Theseconditionssetoutvariousrequirements,dependingon the nature of the service offered by the licensee. The mostimportant requirement relates to the creation and distribution ofCanadiancontent.LicenceholdersarerequiredtodevoteaportionoftheirrevenuestotheproductionofCanadiancontent.Forexample,cable,IPTVandsatellitelicenseesarerequiredtocontributeaminimumof5%ofannualbroadcast-relatedrevenuestothecreationandproduction

mandatory requirements, through conditions of licence placed onspectrumlicenseestoadapttheirnetworkstoaccommodatelawfulinterception of wireless communications. There is no specificobligationplacedonothercarriersorresellers–buttheyarerequiredtocomplywithwire-taporders.


Assetoutaboveinquestion4.2,thestatemayonlyinterceptactivevoice, textanddatacommunicationswithpriorauthorisationofajudge.Peaceofficersmayalsolawfullyinterceptcommunicationswithout an order from a judge, but only in order to prevent thecommissionofanoffenceinvolvingbodilyharm.


There is no obligation under Canadian federal privacy law thatspecifically requires companies to use encryption technology.CanadianlawdoesnotcreateanydecryptionrequirementsforISPs.


TheCRTCdoesnotrequirecarrierstoretaindata.UnderPIPEDA,theonlypreservationrequirementrelatestodatathatisthesubjectofacomplaintmadeknowntotheserviceprovider.Amendments to the Criminal Code in 2014 added additionalvoluntary and obligatory retention rules. These amendmentsintroduced “preservation demands” by peace officers and“preservationorders”by judges. Inbothcases, ISPsarerequiredtoretain“computerdata”intheirpossessionorcontrolwhentheyreceivethedemandororder.Theretentionrequirementisspecifictoanindividualtelecommunicationorperson,inthecontextofaninvestigation;thereisnorequirementtoactivelycollectnewdata.Asaresult,datathatissubjecttoapreservationdemand,preservationorder,productionorder,orsearchwarrantundertheCriminal Code mustbepreserved.



Under the Broadcasting Act, all broadcasting undertakings arerequired to be either licensed or exempt from licensing by theCRTC.TheCRTCisrequiredtoholdapublichearingtoconsiderapplications for new licences. Licencesmay be issued for up tosevenyearssubjecttoconditionsrelatedtothecircumstancesofthelicensee.Licensedbroadcastingundertakingsalsooperatepursuanttovariousregulationsthatestablishadditionrequirementsrelatingtothebroadcastanddistributionofprogramming.TheCRTCalsohasthepowertoissueexemptionordersforspecificclasses of broadcasting undertakings to operate in Canada onappropriatetermsandconditions,whereitdeterminesthatlicensingwillnotcontribute inamaterialmanner to the implementationofCanada’sbroadcastingpolicy.Thiscurrentlyincludesbroadcastingdistribution undertakings with less than 20,000 subscribers,discretionary programming services with fewer than 200,000


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Canadahasestablisheda“noticeandnotice”regimeforpursuingcopyrightinfringement.ArightsholderprovidesnoticetoanISPofpotential infringementbya subscriber and the ISP is required,withoutdelay,toforwardthatnoticetothesubscriberandmaintainrecords of the user’s activity for a minimum of six months.Although ISPs are required to forward notice to the infringingsubscriberwithoutcharge, theSupremeCourtofCanada recentlyruledthatISPsmayrecoverfromtherightsholdersomeofthecostsassociatedwithsubsequentidentificationofthesubscriber.


The Telecommunications Act prohibits a Canadian carrier fromcontrolling content or influencing the meaning or purpose oftelecommunications to the public, except where approved bytheCommission. ISPs that own networks are treated as carriersand are subject to the non-discrimination provisions in theTelecommunications Actthatareapplicabletocommoncarriers.Several CRTC decisions have imposed further net neutralityrequirementsonISPs. TheCRTChasestablishedrulesrelatedtoITMPsbyISPs.TheregimerequiresISPstopubliclydisclosetheirITMPsandprohibitsunjustdiscriminationorunduepreferenceinrelationtoaparticulartypeoftraffic.Further,theCRTCestablisheda framework and evaluation criteria for determining whetherdifferential pricing practices (the practice of charging differentrates for retail internet data traffic) respect the principle of netneutralityby treatingdataagnostically. Generally,preferentialordiscriminatorypricingisnotpermitted.


As stated in question 6.3 above, the Telecommunications Act prohibits Canadian carriers from controlling or influencing themeaning or purpose of telecommunications to the public. Thisincludes blocking access to certain sites or content. As a result,the onlyway an ISP is permitted to block access to a site is byorderoftheCRTCortheCourts.ISPsarenotsubjecttoanyotherrequirementtoblockaccesstoparticularsites.Nonetheless, ISPs generally block traffic to known childpornographysitesonavoluntarybasisthroughCleanfeedCanada,anundertakingoftheCanadianCoalitionAgainstInternetChildExploitation.

ofCanadianprogramming.Generally,televisionandradioserviceprovidersarerequiredtodevoteaportionoftheirrevenuestodirectfinancialcontributionstoCanadiancontentdevelopment.The CRTC also requires licence holders to carry, play, offer, orotherwise feature Canadian content. For example, the CRTCrequires licensed broadcasting distribution undertakings to givepriorityofcarriagetotheCBC,localandregionaltelevisionstationsand a number of Canadian discretionary services that have beenaccorded “mandatory carriage” or “must offer” status. LicensedradiobroadcastersalsohavearequirementtodevoteapercentageoftheirdailyairtimetoCanadiancontent.Asnotedinquestion5.1above,allcontentdeliveredandaccessedover theinternet iscurrentlyexemptfromlicensingbytheCRTCundertheDMEO.Asaresult,thesedigitalservicesarenotsubjecttothesameCanadiancontentrequirementsaslicensedbroadcastingservices.


BroadcastinglicencesarenotassignableandmaynotbedirectlyorindirectlytransferredwithoutthepriorapprovaloftheCRTC.TheCRTCmustapproveanytransactionthatwouldresultinthechangeofcontrolofalicensee.Approvalisalsorequiredwhereapersonacquires,directlyorindirectly,morethan30%ormoreofthevotinginterests of a licensee or a personwho controls the licensee, andwhereapersonacquires50%ormoreofthecommonsharesofthelicenseeorofapersonthatcontrolsthelicensee.Apart from theCRTC, changeof control transactions of licensedandexemptedbroadcastingundertakingsmaybe reviewedby theCommissionerofCompetitionundertheCompetition Act,or,inthecaseof foreign investment,by theMinisterofCanadianHeritageandtheMinisterofISEDundertheInvestment Canada Act.



The Supreme Court of Canada has held that ISPs that merelyprovide“passiveconnections”forcontentdonothaveanyliabilityforcontenttheycarry,includingcopyrightinfringingcontent.Thisprinciple was effectively codified in amendments to Canada’sCopyright Act, which states that ISP’s do not infringe copyrightsolely by providing any means of telecommunication or thereproductionofaworkthroughtheinternet.


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Laurence J. E. DunbarFasken 55 Metcalfe Street, Suite 1300Ottawa, ON, K1P 6L5Canada

Tel: +1 613 236 3882Email: [email protected]: www.fasken.com

Scott PrescottFasken55 Metcalfe Street, Suite 1300Ottawa, ON, K1P 6L5Canada

Tel: +1 613 236 3882Email: [email protected]: www.fasken.com

Fasken is a leading international business law firm with more than 700 lawyers and 10 offices on four continents. Clients rely on us for practical, innovative and cost-effective legal services. We solve the most complex business challenges, providing exceptional value and putting clients at the centre of all we do. Fasken’s Communications Law Practice Group is ranked as a Tier I Practice Group in Canada by Chambers. For additional information, please visit our website at www.fasken.com.

Chair of Fasken’s Communications Law Practice Group, Laurence (Laurie) Dunbar advises a wide range of Canadian and foreign carriers, resellers, utilities and telecommunications services providers in the wireline, satellite, wireless, cable television and internet markets. He advises on broadcasting and digital media issues and on internet-based telecommunications, VoIP, messaging and gaming services. He has advised extensively on strategies to open domestic and international telecommunications markets to competition as well as on related interconnection, ownership, licensing and tariff issues. Laurie advises both domestic and foreign governments on legislative and policy issues related to privatisation, competition and regulatory reform in the telecommunications and broadcasting sectors. Chambers Global – The World’s Leading Lawyers for Business ranks Laurie in the top tier of communications lawyers in Canada, and also ranks Fasken’s communications practice group in the top tier. There are only two law firms in Canada that have received this ranking.

Scott Prescott practices communications and administrative law. He is an expert on the legal, regulatory and policy frameworks governing the broadcasting and telecommunications industries in Canada. Providing complex legal and strategic advice, Scott’s clients include leading Canadian and international communications companies. He advises a number of cable, IPTV and satellite distributors, television and radio broadcasters, online content providers, foreign programming services, Internet Service Providers and wireline and wireless telecommunications carriers.

Scott acts for clients in a broad range of proceedings before the Canadian Radio-television and Telecommunications Commission (“CRTC”). Scott’s communications practice includes advising on various matters relating to licensing and regulatory compliance, dispute resolution, regulatory and statutory interpretation, transfers of ownership and control, Canadian ownership and foreign investment, regulatory and policy frameworks, building access and telecommunications interconnection, licensing and tariffs. Assisting clients operating in the communications industry on privacy and access to information matters commercial transactions and agreements and a range of competition, constitutional and administrative law issues is also a significant part of Scott’s communications practice. Scott is the Co-Managing Partner of the firm’s Ottawa office.


Chapter 9

basictelecomsinfrastructure,onJuly15,2014,thethreetelecomsgiantsestablishedtheChinaIronTowerCompanytofacilitatetheco-constructionandsharingofirontowers,basestations,andotherbasictelecomsfacilities.Telecoms sector and internet infrastructure In2017, revenue from the telecoms industrywasestimated tobeRMB1,262billion,anincreaseof6.4%from2016.Mobilephonesubscribers in China have reached 1.42 billion. ChinaTelecom,ChinaMobileandChinaUnicom,whicharestate-ownedenterprises,arethethreemajorplayersinthetelecomssector.Theseareasarenotfullyliberalisedandopentotheprivatesectorandarestillsubjecttorestrictiveconditionsforforeigninvestment.However, as part of the efforts by the Chinese government tointroduce private investment into state-dominated sectors, ChinaTelecom has announced that it will initiate a trial of a mixedownership structure for telecoms business (public capital, privatecapitalandforeigncapital).Inaddition,in2013,theMIITissuedtheNoticeConcerningtheImplementationofMobileCommunicationRe-salesBusiness,whichopensupthemobilecommunicationre-sales business to private capital. So far, theMIIT has awardedMVNOtrialapprovalsto50privatecompanies(includingJD.com,Suning,Guomei,Xiaomi, and a subsidiary ofAlibaba). In early2016, the MIIT issued two instruments to set forth operationalrequirements for MVNO operators (e.g. regulating pricing andimplementingareal-namesystem).Audio-visual media distribution In 2017, the coverage percentage of radio and television reached98.71%and99.07%,respectively.Therevenueforthedistributionof audio-visual content via the internet reached RMB 14.298billion. However,broadcasting is still tightly regulated inChina.Currently,onlytheGeneralAdministrationofPressandPublication,Radio, Film and Television (“GAPPRFT”) and certain educationadministrative departments are allowed to establish radio andtelevision stations. China Central Television (“CCTV”) is thelargest national television station, but there are over 100 satellitetelevisionchannelsandthousandsoflocaltelevisionchannelsspreadthroughout the different provinces ofChina.Youku, iQIYI, SohuandLETVarethemajorinternetaudio-visualserviceproviders.Foreignshareholdingisprohibitedinthissector.(Note: Revenue data sources of the telecoms sector and internetinfrastructure are available at: http://www.miit.gov.cn/n1146312/n1146904/n1648372/c6048643/content.html; and audio-visualmedia distribution data is available at: http://www.gapp.gov.cn/sapprft/contents/6588/379318.shtml.)

1 Overview


Since its accession to the WTO, China has made tremendousprogress in the telecoms, audio-visual media distribution, andinternet infrastructure sectors in terms of market liberalisation,revenues, mobile phone and internet penetration rates, andinnovation capability. In particular, the government establishedthe China (Shanghai) Pilot Free Trade Zone (“SHFTZ”) andrelaxed several restrictions on foreign investment in the value-added telecommunications services (“VATS”) sector in late2013.Since the SHFTZ is a pilot zone set up to test reform initiativesthat may significantly impact China’s relevant markets, the newSHFTZ policies serve as an important signal that shows thegovernment ismoving towards liberalising the telecoms industry.Inlate2014,threemorepilotfreetradezones(i.e.Tianjing,FujianandGuangdong)were established. WhileSpecialAdministrativeMeasures (Negative List) on Foreign InvestmentAccess to PilotFreeTradeZoneswaspublishedbytheStateCouncilinMay2015,whichisintendedtobeapplicabletoallofthefourpilot-freetradezones (i.e. SHFTZ, Tianjing, Fujian and Guangdong), the effectofimplementingthepoliciesonforeigninvestmentinthetelecomsectorneedstobefurtherassessed.China initiated its triple-network (telecoms, internet, andbroadcasting networks) convergence process in 2009 and issuedthePromotionalProgramofTriple-networkConvergenceinAugust2015. In May 2016, the Ministry of Industry and InformationTechnology(“MIIT”)issuedaBasicTelecommunicationsServices(“BTS”) Licence to China Broadcasting Television and InternetCompany(tooperateInternetDomesticDataTransmissionServicesandDomesticCommunicationFacilityServices),whichisexpectedto further promote the triple-network convergence process andthe involvement of cable televisionnetworks in general telecomsservices.In late 2013, theMIIT awarded 4G licences to three of China’stelecoms giants (i.e., China Telecom, China Mobile and ChinaUnicom)toestablish4Gmobilenetworksthatwouldoperateunderthe TD-LTE standard championed by China. In February 2015,the MIIT awarded 4G licences, which would operate under theFDD-LTE,toChinaTelecomandChinaUnicom.Withrespectto

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■ Regulations for Administration of Network PublishingServices(2016)(“NetworkPublicationRegulations”),whichregulatespublicationactivitiesviatheinformationnetworks.

■ RegulationsonInternet-basedLiveBroadcast(2016),whichregulatestheusersandprovidersoflivebroadcastserviceontheinternet.

■ Interim Provisions on Internet Advertising (2016), whichregulates the internet advertisement service provider,advertisementownerandtheissuer.

■ Regulations on Internet News and Information ServiceManagement (2017), which regulates the production anddisseminationofnewsandinformationontheInternet.

Foreign investment in the three sectors is also subject to:■ CataloguefortheGuidanceofForeignInvestmentIndustries

(2017) (“FIE Industry Catalogue”), which classifies theindustriesintoeither:“prohibited”,“restricted”,“permitted”or“encouraged”forforeigninvestment.

■ Special Administrative Measures for Access of ForeignInvestment(“NegativeList”)(2018Edition).

■ Provisions on Administration of Foreign-Invested Tele-communications Enterprises (last revised in 2016) (“FITEProvisions”),whichregulatestheestablishmentofFITEs.

■ OpinionsontheIntroductionofForeignCapitalintoCulturalIndustry (2005), which provides guidance for foreigninvestmentinChina’sculturalindustry.


The following government authorities are the major industryregulatorybodies:■ TheMIIT,whichisresponsiblefortheregulationofChina’s

telecomssectornationwide(e.g.,grantingoflicencesinthesector).

■ The National Development and Reform Commission(“NDRC”),whichhasjurisdictionoverprojectapprovalandpricingfortelecomsservices.

■ TheMinistry of Commerce (“MOFCOM”), which has theauthoritytoapproveforeigninvestmentprojects.

■ The State Administration for Industry and Commerce(“SAIC”),whichisresponsibleforindustrialandcommercialregistration forenterprisesand for the issuanceofbusinessregistrationlicences.

■ GAPPRFT, which has jurisdiction over the approval andadministration of publication activities (including thosevia the internet), and over the administration of radio andtelevision broadcasting, transmission of audio and videocontent,andalsocontentcensorship.

■ The Ministry of Culture (“MOC”), which has jurisdictionover the cultural industry, including the responsibility forpre-approvingonlinetransmissionsof“culturalproducts”.

■ TheStateOceanicAdministration(“SOA”),whichregulatesthelayingofunderwatercablesandpipelines.

■ The Ministry of Housing and Urban-Rural Development(“MOHURD”), which has jurisdiction over the approvalprocess for construction and engineering design activitiesthatrelatetothetelecomssector.


TheChinesegovernmenthas issuedagreatnumberof regulatoryinstruments in the formof administrative regulationsof theStateCouncil,whichtakeprecedenceinthehierarchyofadministrativeprovisions,andvariousministerialruleswithrespecttothesethreesectors,includingthefollowingprincipalprovisions:Telecoms and internet■ PRC Telecommunications Regulations (last revised in

2016) (“Telecommunications Regulations”), which setsforth thegeneralprinciplesgoverning the telecomsmarket,construction, services and safety, including the internetsector.

■ TheClassificationCatalogueofTelecommunicationServices(2015) (“Telecommunications Classification Catalogue”),whichcontainstheclassificationsoftelecomservices.

■ Measures for Administration of TelecommunicationsBusinessOperatingLicences (2009) (“TelecommunicationsBusinessLicenceMeasures”),which regulates thegrantingandadministrationoftelecomsbusinesslicences.

■ MeasuresforAdministrationofInternetInformationServices(last revised in 2011) (“ICP Measures”), which regulatesthe licensing and administration of services providinginformationviatheinternet.

■ Opinions on Further Opening up Value-added Tele-communicationServicestoForeignInvestmentintheChina(Shanghai)PilotFreeTradeZone(2014)(“SHFTZOpinions”)and Circular on Removing the Restrictions on the ForeignEquity Ratios in Online Data Processing and TransactionProcessing Services (Operating E-commerce) in the China(Shanghai)PilotFreeTradeZone(“SHFTZCircular”),whichsetforththefieldstobeliberalisedtoforeigninvestmentandthe safeguarding measures required to promote the furtherliberalisationofVATSwithintheSHFTZ.

■ CyberSecurityLaw (2016),which regulates the standards,measuresforinternetenvironmentandinfrastructuresecurity.

■ MeasuresonInternetProductandServiceSecurityCensorship(2017), which regulates the internet security censorshipactivitiesunderinternetsecuritycensorshipcommittee.

Audio-visual media distribution■ RegulationsforAdministrationofRadioandTelevision(last

revisedin2013)(“RadioandTelevisionRegulations”),whichnotonlyregulates theestablishmentofradioandtelevisionstationsandthebroadcastingandtransmissionofradioandtelevision programmes, but alsoworks as the fundamentalinstrument governing the audio-visual media distributionsector.

■ Regulations for Administration of Audio-Visual ProgramServices through Oriented Transmission and DesignatedNetworks (2016), which regulates the transmission ofaudio-visualprogrammesthroughVAN,IP/VPN,orcertainorientedtransmissionchannelsontheinternetintheformofIPTV,designatednetworkmobilephoneTV,internetTV,etc.

■ Provisions on Administration of Internet Audio-visualProgramServices(lastrevisedin2015),whichregulatethetransmissionofaudio-visualcontentviatheinternet.

■ InterimProvisionsontheAdministrationofInternetCultureActivity(lastrevisedin2011),whichregulatestheproductionand dissemination of “cultural products” (including onlinegamesandaudio-visualcontent)viatheinternet.

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2 Telecoms

General


China has been a member of the WTO since December 10,2001, and has made commitments under the GATS regardingtelecommunicationsasset forth inAnnex9(ScheduleofSpecificCommitments on Services) of the Protocol of Accession of thePRC, which includes the Telecommunications Reference Paper.China’sWTO commitments are subject to certain restrictions onforeign investment. China has beenmaking significant progresstowardsapro-competitive,independentandtransparentregulatorymechanismforthetelecomssector.


Theprovisionofelectroniccommunicationnetworksandservicesis regulated under two broad categories, namelyBTS andVATS,inaccordancewiththeTelecommunicationsRegulationsandotherrelatedinstruments(seequestion1.2above).


The key governmental regulators at the central level (or theirdelegatesat theprovincial level),asapplicable, includetheMIIT,NDRC,MOFCOM,SAIC,MOC,GAPPRFT,SOAandMOHURD.These authorities undertake responsibilities in their respectivejurisdictions(seequestion1.3above).Among them, three central government agencies are responsiblefor the enforcement of the Anti-Monopoly Law (2008): (i) theAnti-Monopoly Bureau of MOFCOM; (ii) the Bureau of PriceSupervision and Anti-Monopoly of NDRC; and (iii) the Anti-Monopoly and Anti-Unfair Competition Enforcement Bureau ofSAIC. MOFCOMisresponsibleforexaminingtheconcentrationofbusinessoperators. NDRCandSAICareboth responsible forregulatingmonopolistic agreements, abuse ofmarket dominance,andabuseofadministrativepowerinlimitingcompetition.Betweenthetwo,NDRCisresponsibleforprice-relatedviolationsandSAICisresponsiblefornon-price-relatedviolations.


InaccordancewiththePRCAdministrativeReviewLaw(lastrevisedin2009)and theMIIT’s ImplementationRulesonAdministrativeReview (2002), specific administrative decisions of the MIIT(suchas theMIITdecisionsonnetwork interconnectiondisputes)can be appealed through either administrative review or judicialreview. Specifically, one can appeal against the decision of theMIIT’smunicipalcounterpartsattheMIIToratthePeople’sCourtin accordance with the Law of the Procedure forAdministrative


Foreign investment in these three sectors is subject to varyingdegreesofrestriction.Telecoms and the internetAt a national level, the ratio of foreign investment in ForeignInvested Telecommunications Enterprises (“FITEs”) mustnot exceed 49% for the operation of BTS (excluding wirelesspaging services, very small domestic aperture terminal earthstation communications services, fixed network domestic datatransmission services, customer premise network servicesand network hosting services) and 50% for the operation ofVATS (including wireless paging services, very small domesticaperture terminal earth station communications services, fixednetwork domestic data transmission services, customer premisenetwork services, network hosting services, cellular mobilecommunicationsservicesprovidedbywayofresale;andexcludinge-commerceactivitiesoperatedforprofit(asubcategoryofonlinedataprocessingandtransactionprocessingservices),inwhichtheratioofforeigninvestmentcanreach100%).ForaFITEthatoperatesBTSservices,the“majorforeigninvestor”in the FITE (i.e., the investor who holds the largest investmentamountamongall foreign investors, accounting for30%ormoreofthetotalcontributionofallforeigninvestors)mustholdalicenceforoperatingbasictelecomsservicesinthecountryorregionwhereit is incorporated. For a FITE that operates aVATS service, themajorforeigninvestormusthaveagoodbusinessrecordandhaveexperienceinthisarea.Topromotereformandopeninguptoforeigninvestment,theMIITissued theSHFTZOpinionsand theSHFTZCircular,whichonlyapplyintheterritoryoftheSHFTZ.Theyintroduceanumberofnewinitiativesthatincreaseparticipationbyforeigninvestorsinthetelecoms industry. More specifically, a FITE incorporated in theSHFTZisauthorisedtoprovide:■ six kinds of telecoms services without any restrictions on

foreigninvestment,i.e.theforeigninvestorcanmakeupto100% investment in theFITE, including in: (i) applicationstoreservices; (ii)store-and-forwardbusinessservices; (iii)call centre services; (iv) internet access services (provisionofinternetconnectionservicestoonlineusers);(v)domesticmulti-partycommunicationservices;and(vi)onlinedataandtradeprocessingservices(operatinge-commercebusinesses);and

■ onekindoftelecomsservice,subjecttorestrictionsonforeigninvestment, i.e. domestic internet virtual private network(“VPN”) services, subject to a 50% investment restriction.All of the above-mentioned services can be provided on anationwidebasis,exceptinternetaccessservices,whichareonlyallowedtobeprovidedtocustomerswithintheSHFTZ.With certain exceptions (i.e. facilities used for providingcall centre services, and edge routers for domestic internetprotocol VPN services, may now also be installed withinthe Shanghai municipality area, and website accelerationserver nodes are now permitted to be set up nationwidewhere the relevant website constitutes an essential part ofthe service provider’s operation of the licensed VATS), aFITEincorporatedintheSHFTZmustlocateall itsservicefacilitiesintheSHFTZinorderenjoythebenefitsprovidedintheSHFTZ.

Audio-visual media distributionIn the context of electronic communications, the distribution ofaudio-visualcontentisnotopentoforeigninvestment.


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withthecategoriesandclassificationsundertheTelecommunicationsClassificationCatalogue. The duration of aBTSLicence is fiveor10years(dependingonthetypeofbusiness)andfiveyearsforaVATSLicence(thedurationofaLicenceforPilotOperationofValue-AddedTelecommunicationsBusinessbyForeignInvestorsinChina(Shanghai)PilotFreeTradeZoneisthreeyears).Notransfersortradingoflicencesisallowed.



Urban construction and construction in villagesmust include theestablishmentofcorrespondingtelecomsfacilities.BTSoperatorsaregenerallyempoweredby theTelecommunicationsRegulationstolawfullyengageintelecomsinfrastructureconstructionwithoutobstruction,withsomeexceptionsforprohibitedorrestrictedareas,asprovidedbystateregulations.Afterfilingtheappropriatenotice,andmakingpaymentfortheappropriateusagefees,BTSoperatorsmayattachpublictelecomsfacilitiestocivilbuildings(solongastheydonotaffectthesafetyofthebuilding).



Inprinciple,theTelecommunicationsRegulationsandtheRegulationsfor the Administration of Public Telecommunications NetworksInterconnection (last revised in 2014) require that interconnectionmust be established among telecoms networks on a technicallyfeasible, economically efficient, fair and justified, and mutuallycollaborativebasis.Inparticular,“principaltelecomserviceoperators”arenotallowedto refuse a request for interconnection by other telecoms serviceoperators, andmust formulate their interconnectionprotocols andoperatewithinthescopeapprovedbytheMIIT.“Principaltelecomserviceoperators”aredefinedunderthelawasoperatorswhocontrolvital basic telecoms facilities, who own a relatively large shareof the telecomsservicemarket(for thepublic telecomsnetworks,thisratiomeansexceeding50%ofthemarketforthesametypeofservicewithinthescopeofthelocalgrid),andwhoareabletoexertsubstantialinfluenceoverothertelecomsserviceoperatorsenteringthetelecomsservicemarket.AccordingtotheMeasuresforResolutionofTelecommunicationsNetworksInterconnectionDispute(2002),anydisputesarisingoutofnetworkinterconnectionmustberesolvedthroughconsultationfirst. If no agreement is reached, the disputemust be submittedto the MIIT or its provincial counterparts for mediation. If themediation is unsuccessful, an administrative decision would bemade.Theadministrativedecisioncanbechallengedeitherthroughadministrativerevieworjudicialreview.


Telecoms service operators are not statutorily required to publishtheir standard interconnection agreements or prices, though it is

Litigations(last revised in2014). OnecanfurtherappealagainstthedecisionsofanadministrativereviewoftheMIITthroughthejudicialprocessifoneisdissatisfiedwithsuchdecisions,orapplyforafinaldecisionfromtheStateCouncil inaccordancewiththePRCAdministrativeReviewLaw.In principle, an administrative review will give attention to the“lawfulness”and“appropriateness”ofthedecisionwhilstajudicialreviewwillbemorefocusedonthe“legality”and“fairness”ofthecase.However,neitherprocedureisconductedona“meritsreview”basis.



Telecoms services in China are subject to two broad licensingcategories, “BTS” and “VATS”. These two categories are notmutuallyexclusive.TheBTSLicenceappliestobasicpublicnetworkfacilities,publicdatatransmissionandbasicvoicecommunicationservices. The VATS Licence covers telecommunications andinformationserviceswhichutilisebasicpublicnetworkfacilities.The BTS Licence and VATS Licence are further divided intoseveral different sub-categories by business type (such as “fixedcommunication services” under BTS, and “domestic internetvirtualprivatenetworkservices”underVATS)undertheTelecomsClassification Catalogue and by regional coverage. The serviceprovider can only operate within the respective sub-categorisedscopeandwithinthegeographicalterritoryofthelicenceasitwasapprovedandgrantedbytheMIIToritsprovincialcounterparts.


In addition to requirements on technical capabilities, theTelecommunications Business Licence Measures also set forthcertainconditionsoncapitalandequityownership,includingthat:(i)theapplicantmustbealawfullyestablishedcompany,andforaBTSLicence,thecompanyshouldbeatleast51%state-owned;and(ii)theminimumregisteredcapitaloftheapplicantmustbeRMB100million (RMB1billion foracross-provincialbusiness) foraBTSLicence, andRMB1million (RMB10million for a cross-provincial business) for a VATS Licence. Foreign ownership issubjecttoadditionalrestrictionsundertheFIEIndustryCatalogueandtheFITEProvisions,includingtheratioofforeigninvestmentinFITEs(seequestion1.4above).Inaddition,theregisteredcapitalofanFITEincorporatedintheSHFTZmustbeRMB1millionormore,which isonly10%of the registeredcapital requiredbyanFITE(forprovidingVATSnationwide)undertheFITEProvisions.In practice, the regulatory authorities generally appear to haveconcerns about, and have imposed a moratorium on approving,foreign investment in the telecoms industry. This is especiallytrueforcertaintypesofbusinesses,suchasfortheprovisioningofinformationservicesthroughtheinternet(“ICP”)forprofit.


A BTS Licence and VATS Licence will specify the type(s) ofpermitted operations for the particular telecoms enterprise in line


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Propulsion of Fibre Broadband Network Construction on March17,2010,whichsetsforthcertainincentives,includingpreferentialtax treatment, for enterprises engaging in the development andconstruction of fibre-based broadband networks. In addition, in2012,theMIITissuedtwonationalstandardsfortheadministrationof the design, construction, and acceptance of communicationengineering for the FTTH programme, including GB50846-2012andGB50847-2012(“FTTHStandards”).InMay2015,theNoticeof Implementation of Broadband China Program for 2015 wasissued.TheNoticeunveiledseveralgoalsforthisyear,including:(i)extendingFTTHcoverageby80millionhouseholdsandrollingout broadband services to 14,000 administrativevillages; and (ii)with regard to 4G, theMIIT has set a target of 200million new4Gsubscribersby the endof theyear, andwill construct at least600,0004Gbasestations.Accordingtothe2008UrgentNoticeandthe2014Opinions,telecomstowers,poles,andductsmustbeshared(forexistingfacilities)orco-constructed(fornewfacilities)bytherelevant BTS operators. Other types of telecoms facilities (e.g.,opticalfibrecables)mustbesharedtotheextentconditionspermit.Inaddition,ithasbeenreportedthataftertheestablishmentoftheChinaIronTowerCompany,someexistingfacilities(includingbasestations,ductsandpoles)of the threeChinese telecomsoperatorsmaybeoperatedundertheChinaIronTowerCompany.



Before May 10, 2014, telecoms service fees were divided intomarket-orientedprices,government-guidedprices,andgovernmentsetprices.However,withtheimplementationoftheCircularoftheMIITandNDRConAdoptingMarket-orientedPricesforTelecomService Tariffs on May 10, 2014, telecoms operators are nowpermittedtoautonomouslyset their telecomsservicefeeswithoutobtainingregulators’approval.


Inadditiontothegeneralobligationsimposedonserviceprovidersunder the PRCLaw on Protection of theRights and Interests ofConsumers(lastrevisedin2013),telecomsserviceoperatorsmustalso comply with several telecoms service standards and rules,includingtheNormsforTelecommunicationsServices(2005).Theserulesandstandardsaremainlyintendedtoregulatetheprovisionofinformation,non-discriminationofservice,communicationquality,handling complaints, privacy protection, billing processes, andexecution of a written service agreement with consumers. Withrespecttoprivacyprotection,theStandingCommitteeoftheNPCpromulgated theDecisionof theStandingCommitteeof theNPConStrengtheningNetwork InformationProtection in2012,whichcontains several specific provisions concerning the acquisition,collection,use,anddisclosureofpersonalinformation.In2012,theMIITpromulgatedtheInformationSecurityTechnology– Guideline for Personal Information Protection within theInformationSystemforPublicandCommercialServices(“PersonalInformation Protection Guideline”). Even though the PersonalInformationProtectionGuidelineisnotlegallybindingonnetworkservice providers, it represented the current best practices of theindustryandmaypotentiallyindicatelikelylegislativetrendsinthefuture. In 2013, theMIITpromulgated thePersonal Information

required by relevant regulation that the standard interconnectioncontractsshouldincludecertainkeyprovisions,suchasnameandaddress of the operator, the service programme, basic fee chargestandard, rights and obligations of the parties, representations oftheoperatoronservicequality,etc.Exceptwhereinterconnectionpricesaresubjecttoagovernment-setorgovernment-guidedpriceand,therefore,thepriceinformationispubliclyavailable,operatorsarenotobligedtopublishactualinterconnectionprices.


In general, interconnection prices for public telecoms networksmustbeinstrictcompliancewithgovernment-setpricesasstatedintheMIIT’s InterconnectionSettlementandRelayCostsAllocationMeasures between Public Telecommunications Networks (2003)(“SettlementMeasures”).However,inexceptionalcases,suchasforinterconnectionsettlementsbetween“satellitemobilecommunicationnetworks and other telecommunication networks”, the telecomsoperator may negotiate interconnection prices by referring to theSettlementTablefortelecommunicationsInterconnection,whichisattachedtotheSettlementMeasures. In2009and2013,theMIITrespectivelyissuedtheCircularontheAdjustmentofInterconnectionSettlementamongthePublicTelecomNetworksandtheCircularofMIITonAdjustingInterconnectionSettlementStandardsamongthePublicTelecomNetworks,which added new settlement standardsor replaced certain settlement standards thatwere provided in theSettlementMeasures. In addition, with respect to the settlementstandards related to the internet backbone networks which areinterconnected through the internet exchange centre designatedby theMIIT, the InterconnectionSettlementMeasures for InternetExchangeCentre(2007)willapply.


Currently,thereisnoregulationspecificallydealingwithoperators’accounting separation, functional operation, or legal operation.However, the Anti-Monopoly Law may, in theory, potentiallyprovidealegalbasisforrequiringanoperator’sfunctionalorlegalseparation, if the relevant government authority determines thattheoperator’s businessmaypreventnecessary competition in thetelecomsmarket.Historically,theseparationofbusinesslines,andtheconsolidationbetweenkeytelecomsserviceoperatorsinChina,occursfromtime-to-time.Forexample,thisoccurredinrelationtoChinaTelecomin1999whentheChinesegovernmentsplititintosmallerentities.


Presently, existing interconnection and regulatory conditionsgenerally apply to next-generation (IP-based) networks. OnJanuary 21, 2010, the State Council promulgated the OverallPlanforPropelling theIntegrationofThreeNetworks topromotethe construction of “fibre to the home” (“FTTH”) and a nationalbroadband network. The MIIT, together with other relevantgovernment authorities, further issued a Notice Regarding


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(“RRB”),undertheleadershipoftheStateCouncilandtheCentralMilitaryCommission, is responsible for themanagementof radiooperations(includingspectrumuse)nationwide.Inparticular,theprovincial counterpartsofRRBand the relevantministriesof theStateCouncilareresponsiblefortheadministrationofciviluseoftheradiospectrumwithintheirrespectivejurisdictions.TheradiomanagementorganisationoftheChinesePeople’sLiberationArmyisresponsiblefortheadministrationofthemilitary’suseoftheradiospectrum.


AlicencefromRRBoritsprovincialcounterparts(asapplicable)isrequiredfortheuseofradiospectrum(spectrumlicence)andtheusermustsubmitanapplicationtotheregulatoryauthorityforapproval.Radio spectrum is allotted by RRB on a centralised basis. Therelevantgovernmentauthorities(suchasGAPPRFT)mayassigntheallottedspectrumwithinitsjurisdictionandfiletheseassignmentswithRRB.RRBanditsprovincialcounterpartsarealsoresponsibleforgranting two typesof related licences,a licence tosetupandusearadio(station),andaradiotransmissionequipmentlicenceforthedevelopmentandimportationofradiotransmissionequipment.


Theuseofspectrumcannotbelicence-exempt.


Chinaimplementsacompensatoryusesystemfortheuseofaradiofrequency spectrum. With exceptions for certain types of radiostationsprescribedby law, frequencyoccupancy fees arepayableon a yearly basis andmust be calculated in accordancewith thepricing standards listed in the Fees Collection Regulations forAdministrationofRadio(1998).


The Measures for Administration of Radio Spectrum and otherrelatedinstrumentsconcerningtheregulationofspectrumlicencedonotspecificallyaddressrulesforcircumstancesinwhichachangeofcontrolofalicenseeoccurs.Inpractice,thespectrumlicencewillstayvalidandnospecialformalitieswillneedtobefollowedjustbecausethecontrolofthelicenseehaschanged.


WithoutapprovalfromRRBoritsprovincialcounterparts,spectrumlicencesmaynotbetransferred.Spectrumrightsareforbiddentobeleasedeitherdirectlyorindirectly.

ProtectionMeasuresforTelecomandInternetUsers,whichsetforththemethodsfortelecomsoperatorsandinternetinformationserviceproviders to collect and use personal information, aswell as theMeasuresforRegisteringtheTrueIdentityofPhoneUsers.In2014,theSAICissuedtheAdministrativeMeasuresforOnlineTransactions (2014), which provides particular requirements thatonline sellers, third-party online transaction platforms operators,andotherpartiesrelevanttoonlinetransactionsmustfollowintheonlinetransactionenvironment.

Numbering


According to theTelecommunications Regulations andMeasuresfor Administration of Telecommunication Network NumberResources (last revised in 2014) (“Network Number ResourcesMeasures”), telephone numbers and network identifying codesbelongtotheState.TheuseofsuchnumberresourcesissubjecttoacompensatoryusesystemandrequirestheapprovaloftheMIIToritsprovincialcounterparts.Allocationismadebytheregulatoryauthoritybywayofassignment,randomselection,andauction(asapplicable).


AccordingtotheNetworkNumberResourcesMeasures,anumberholdermustuse thenumberwithintheprescribedtime-frameandcomplywiththeauthorisedscopeandpurpose.Allocatednumberresourcesmay not be transferred or leased. Currently, the threeChinese telecoms operators (China Mobile, China Telecom andChina Unicom) are permitted to allocate mobile phone numbers(startingwiththedigits“170”)totheMIIT-approvedMVNOsforresaletoend-users.


OnMay17,2014,theMIITissuedtheAdministrativeMeasuresforTrial of Porting forMobile Subscribers,which sets out the basicrules(e.g.,relevantapplicationandexamination,feeandsettlement,and supervision and management matters) for porting telephonenumbers.While number portability is not amandatory requirement for theoperators, trial projects for porting telephone numbers have beenlaunchedinseveralareasinChina.TheMIITinitiatedtrialprojectsforportingtelephonenumbersinthecityofTianjinandtheHainanProvincein2010byissuingtheCircularoftheMIITonLaunchingtheTrialofPortinginTianjinandHainanforMobileSubscribers.Later,onSeptember20,2014, trialprojects forporting telephonenumbers in another threeprovinces (i.e., JiangxiProvince,HubeiProvinceandYunnanProvince)werelaunched.

3 Radio Spectrum


In accordance with the Measures for Administration of RadioSpectrum (1993), the Radio Regulatory Bureau under the MIIT


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There are no specific rules concerning telecoms serviceoperators’ interception capabilities currently available in China.However, according to the Telecommunications Regulations,generally, telecoms service operatorsmustmeet national securityrequirements. Particularly, operators are obliged to assist publicsecurityauthorities,national securityauthorities, and thepeople’sprocuratorates in examining the content of telecommunicationsin accordancewith theproceduresprescribedby law for nationalsecurityorcriminalinvestigationpurposes. Giventhattraditionaltelephonecalls,VoIPcalls,andemailscanallbeincludedwithinthemeaning of “telecommunication” under the TelecommunicationsRegulations, the aforesaid operators’ obligation of assistancewillcovertraditionaltelephonecalls,VoIPcalls,andemails.


ThewaysandtechnicalsolutionsthattheStatemayapplytointerceptcommunicationsforaparticularindividualarenotpubliclyknown.


To strengthen the administration of commercial encryption,and toensure the safeflowof informationover the internet andthroughothermedia, theStateCounciland theStateEncryptionAdministration Bureau (“SEAB”) promulgated a series ofinstruments concerning the regulation of scientific researchrelatingtotheproduction,sale,use,import/export,transfer,repairand even the destruction of commercial encryption products.The regulations include the Regulations on Administration ofCommercial Encryption (1999) (“Encryption Regulations”), theRegulationsonAdministrationofUseofCommercialEncryptionProducts(2007),andtheMeasuresonAdministrationfortheUseof Encryption Products by Foreign Entities and Individuals inChina(2007),whichspecificallyrelates to theuseofencryptionproductsbyforeignentitiesandindividualsinChina.When a foreign entity or individual applies to use commercialencryptionproductsinChina,thetypeofalgorithm(suchas“AES”)and length of the key, together with other information of suchcommercialencryptionproducts,mustbeprovidedtotherelevantprovincialSEABforapproval.ThePRCAnti-TerrorismLaw(2016)providesthattelecombusinessoperators and internet service providers who provide encryptionservices or solutions to their users should provide the relevantdecryptiontechnologyandothertechnicalassistancetothepublicsecurityorgansandthestatesecurityorgansforthepreventionandinvestigationofterroristactivities.


AccordingtotheNormsforTelecommunicationServices,telecomsserviceoperatorsarerequiredtoretainoriginalinformationonthe



ThePRCConstitutionLaw(lastrevisedin2004)providesthebasisforensuringthesecurityofprivateinformationandcommunications.ThePRCCyberSecurityLaw(2016)providesingeneralthatcybersecurityshouldbeguaranteedbythestateandrelevantauthoritiesinrespecttotheinternetestablishment,operation,servicedelivery,infrastructure and information, and defines the monitoring andalteringmechanism.TheManagementProvisionsontheComputerInformationNetworkandtheInternetSecurityProtection(lastrevisedin2011)providesthattheserviceprovidersandindividualshavethedutytoprotectinformationanddataontheInternet.TheProvisionsontheComputerInformationSystemSecurity(lastrevisedin2011)providestheprotectionmechanismforthecomputerinformationsystemandthepublicsecurityunitisresponsibleforthemonitoringduty.The PRC Consumer Protection Law deals with cyber securityand personal information issues arising out of consumer-operatorrelations.Certain provisions in the PRC Criminal Law provides thepunishmentforviolatingthecybersecuritylawsandregulations.


According to the PRC Constitution Law (last revised in 2004),the freedom and privacy of correspondences between citizensof the PRC are protected by law. No organisation or individualmay, on any grounds, infringe upon the freedom and privacy ofcitizens’correspondences,exceptfortheneedsofnationalsecurityor for investigations into criminal offences. In response to theseneeds, public security authorities, or the people’s procuratorates,are permitted to censor correspondences in accordance with procedures prescribedby law. In addition, theCounterespionageLaw of the People’s Republic of China (2014) further providesthat where counterespionage work requires, the national securityauthoritiesmayinspecttheelectroniccommunicationinstruments,appliances,othersimilarequipment,andinstallationsbelongingtoanyorganisationorindividual.Moreover,theTelecommunicationsRegulationsalsoprovidethatthepublicsecurityauthorities,nationalsecurityauthorities,orthepeople’sprocuratoratesmayconductanexamination of the content of telecommunications in accordancewiththelaw.In the newStateSecurityLawof thePRC (2015), it is providedthat the State must ensure the security and controllability ofnetwork and information core technologies, critical infrastructureandinformationsystemsanddatainkeyareas.Inordertodoso,the State has published theDraft Cyber Security Law for publiccomment, and provided regulations for comprehensive cybersecuritytherein.


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andTelevisionBroadcasting Institution Licence and aRadio andTelevision Channel Licence granted by GAPPRFT. Only films,televisiondramasoranimations,domesticallyproducedorimported,whichhaveobtainedGAPPRFTapprovalfordistributioninChina(e.g.,TelevisionDramaDistributionLicence)areallowed. Whendeliveringthecontent, thebroadcastermustalsoensurecopyrightissueshavebeenresolved.To engage in the distribution of audio-visual content via theinternet,anoperatormustat leastobtain three typesof licences,includingtheMIIT’sICPLicence(applicabletofor-profitaudio-visual content),GAPPRFT’sOperating Permit forTransmissionofAudio-Visual Programs via Information Networks (in whichthepermittedbusiness type, receiving terminaland transmissionnetworksarespeciallyprescribed),andMOC’s InternetCulturalOperatingLicence.Ifitinvolvescertainspecificbusinessactivities,additional licence(s) may be required. By way of example,for network publication activities, GAPPRFT’s Certificate forNetworkPublicationmust alsobe acquired. And for deliveringcontent involvinganypoliticalnewsor commentaries, a licencefromtheStateCouncilInformationOfficeisnecessary. Internetaudio-visual media operators must comply with self-censorshipobligations that are similar to those applying to broadcasters,in order to ensure the legality andmorality of the content theydeliver. If an operator notices that the content transmitted is“restrictedinformation”,itmustterminatethetransmissionoftheinformation,keeprecords,andreportittotherelevantregulatoryauthoritiesimmediately.To engage in the distribution of audio-visual content, throughVAN, IP/VPN, or certain oriented transmission channels oninternet in the form of IPTV, designated networkmobile phoneTV, internetTV, etc., an operatormust also obtainGAPPRFT’sOperating Permit for Transmission of Audio-Visual Programsvia Information Networks (in which the permitted businesstype, receiving terminaland transmissionnetworksarespeciallyprescribed).


Allthelicencesmentionedinquestion5.3areadministrativelicences,and Article 9 of the PRC Law on Administration of Licensing(2004)specificallyprovidesthatadministrativelicencesobtainedinaccordancewithlawsmustnotbetransferred,exceptwherelawsorregulationspermit such a transfer according to the conditions andprocedures prescribed by law. Therefore, the licencesmentionedin question 5.3 are not assignable, either because it is expresslyprohibited by certain regulations (e.g., the TelecommunicationsBusiness Licence Measures), or the relevant regulations do notprovidethatsuchatransferoflicencescouldbemade.Generally,whentheequitystructureofcertainlicenceholdersischanged,approvalfromthegovernmentauthoritiesissuingsuchlicences should be obtained prior to any equity changes (e.g.,for an ICP Licence), or the alteration formalities with relevantcompetent government authorities shall be fulfilled (e.g., forMOC’sInternetCulturalOperatingLicence).Moreimportantly,ifchangeofcontrolofthelicenseehappens,thevariousrestrictionsimposed on foreign investment in the telecoms, internet, andaudio-visualmedia sectorsmust be strictly compliedwith (seequestions1.1and1.4above).

fees charged for fixed, mobile, IP phone calls, peer-to-peer textmessaging services and internet information services for at leastfivemonths. On July 12, 2013, theMIIT issued the Norms forInternetAccessServices,whichstatethattheoriginalinformationon the fees charged for Internet access servicesmust be kept forat least five months. In addition, the Measures for Registeringthe True Identity of Phone Users requires that the identificationinformation and materials provided by subscribers when theysubscribetotelecomsservicesmustbekeptforat least twoyearsafterthesubscriptionsareterminated.OnMay19,2015,theMIITpublishedtheAdministrativeProvisionsonTextMessageServices,in which it is provided that textmessage service operatorsmustrecord the following information in their service systems for atleastfivemonths:sendingandreceiving time; telephonenumbersorcodesof thesendingandreceivingends;usersubscriptionandun-subscriptioninformation;andthecontentofmessages(forport-type messages). Under the ICP Measures, ICP operators mustkeeprecordsof thecontentandpublishingtimes. Internetaccessprovidersmustkeeprecordsofthelog-in/outtime,useraccount,IPaddressofusersandinitiatingnumbersforatleast60days.



Generally, in the context of electronic communications, thedistribution of audio-visual media is under strict control by theDepartmentofPropagandaoftheCommunistPartyandGAPPRFT.Depending on the nature of the carrier or platform used fortransmission, the distribution of audio-visual media is subjectto different licensing systems (see question 5.3 below), whichare primarily administered byGAPPRFT in accordancewith therelevant instruments concerning the distribution of audio-visualmedia(seequestion1.2).


Ingeneral,thesamecontentregulationprincipleswillapplytothedistributionofaudio-visualmedia.Forexample,illegalorimmoralcontent,suchasthatwhich“threatensnationalsecurity,honour,orinterest”, or that is otherwise restricted by law or administrativeregulations,shallnotbedistributedeitherviatraditionaldistributionplatforms(e.g.,TV,radioandfilm)orviatheinternet.Nomatterwhether transmitted via traditional platforms or the internet, thecontents of advertisements distributed must all satisfy the rulesprovidedintheAdvertisingLawofthePeople’sRepublicofChina(lastrevisedin2015).Inthemeantime,inordertodistributecontentviadifferentplatforms,adistributormayneedtoapplywithdifferentadministrativeauthoritiesfordifferentlicencesorpermits(asdiscussedinquestion5.3).


To distribute audio-visual content through radio and television,a broadcaster (radio or television station) must obtain a Radio


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of receiving notification from the content owner, ISPsmust dulyinform the person providing the content in question either byforwardingtheinfringementnoticeorbypublishingthenoticeontheinformationnetwork(wherethenetworkaddressoftheintendedrecipientcannotbeidentified).TheISPisalsoobligatedtodisclosetheidentityoftheinfringertotheaggrievedparty.


Generally, telecoms service operators are required to ensure“fairness” and equality when delivering services under theTelecommunicationsRegulations.Inaddition,thePRCPriceLaw(1998)doesnotpermitoperatorstoimplementpricediscriminationpolicies against other operators that provide similar services.Therefore,theoperatorsarelegallyunabletodifferentiallychargefordifferenttypesoftrafficovertheirnetworks.However,thereisnorequirementfortheoperatortorespect“netneutrality”inChina,and in practice occasionally operators charge differently certaintypesoftraffic.


If telecoms service operators discover that the content beingtransmittedisillegalorimmoral(e.g.,endangeringnationalsecurityor divulging state secrets), theymust cease the transmission andblockaccesstocertainsitesorcontentimmediately.The operation of VPN services requires either a Fixed NetworkDomestic Data Transmission Service Licence (a type of BTSLicence)oraDomestic InternetProtocolVirtualPrivateNetworkService Licence (a type of VATS Licence). Customers can usecertainVPNserviceswhich arepermittedby the respectiveVPNservicelicencesmentionedabove.



According to the Telecommunications Regulations, tele-communicationsusersareresponsibleforthecontenttheytransmitvia the use of a telecommunications network. The Provisionsof theSupremePeople’sCourt onSeveral IssuesConcerning theApplicationofLawonTrialofCivilDisputeCasesofInfringementof InformationNetworkTransmissionRight (2013) alsoprovidesthat an ISPwill not be jointly liablewith the infringer if it onlyprovidedautomaticaccessandautomatictransmissionservicesfortheinfringingcontent.ManyChinesecourtsappeartohaveadoptedthis rule and have applied the defence of “mere conduit” whendetermining the responsibilityof internetaccessserviceprovidersforcontentcarriedovertheirnetworks.ThebenefitsofsafeharbourrulesareavailabletoISPs,providedthattheycomplywithcertainstatutory requirements. However, generally, ISPsdonothaveanobligationtoactivelymonitorinfringingcontentontheirnetworks,withcertainexceptions.


AccordingtothePRCTortLaw(2010)andtheRegulationsontheProtectionof theRight toNetworkDisseminationof Information(last revised in2013), ISPsareobliged to takenecessaryactions,includingdeletingorblockinginfringingcontentordisconnectingthe links,when theyare fully awareof the infringement, or afterbeingdulyinformedbytheaggrievedcontentowner. In thecase


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Chen JinjinJingtian & Gongcheng 34/F, Tower 3, China Central Place77 Jianguo RoadBeijing 100025China

Tel: +86 1890 1390 221Email: [email protected]: www.jingtian.com

Hu KeJingtian & Gongcheng 34/F, Tower 3, China Central Place77 Jianguo RoadBeijing 100025China

Tel: +86 1370 1255 150Email: [email protected]: www.jingtian.com

Mr. Chen is a partner in our Corporate Group. He specialises in the areas of TMT, onshore and offshore IPO, private equity, reorganisation and refinancing of listed companies.

Mr. Chen has an LL.B. from Peking University Law School. Mr. Chen is qualified in China.

In the area of private equity, Mr. Chen has provided legal service to a number of RMB and U.S. funds, including Citic Capital, Legend Capital, Sequoia Capital, Hony Capital, Carlyle Group, IDG, Zero2IPO Venture, GX Capital, Zhong Ou fund, Jiuding Capital, Chunxin Capital, etc. Mr. Chen specialises in providing a full service to companies in the TMT industry, among over a hundred such companies, recent examples include Xiaomi, Toutiao, Baofeng, DCITS, Changba, Missfresh, Tongdaodashu, etc.

Mr. Chen’s expertise and contribution have been recognised internally by the firm and externally by well-known legal rankings, and were rewarded of Jingtian & Gongcheng Firm Brand Communication Contributor, CLECSS 2016 Ten Outstanding Young Lawyers Award, CLP 2016 M&A Deal of the Year, Legal Band Rising Star in TMT Area in 2016 and Third Tier Lawyer in 2017, and ALB 2017 Best Young Lawyer of the Year (Nomination).

Mr. Chen has contributed to various professional publications and he is a frequent speaker in events related to private equity and IPOs.

Founded in the early 1990s, Jingtian & Gongcheng is one of the first private and independent partnership law firms in China. Since its inception, the firm has been dedicated to providing clients with high-quality and efficient legal services and grown into one of the top full-service business law firms in China. The firm is active in a wide variety of practices and is recognised as an industry leader in Capital Markets, Mergers & Acquisitions, Outbound Investment, Dispute Resolution, PE/VC Investments, etc. The firm is headquartered in Beijing with offices strategically located in Shanghai, Shenzhen, Chengdu and Hong Kong, among which the Hong Kong office is formed in association with Mayer Brown JSM.

Jingtian & Gongcheng lawyers have had experience in leading domestic or international law firms, governmental departments, and leading enterprises. Continuing learning and training have enabled our lawyers to provide clients with stable and high-quality legal services.

With over 20 years of experience, Jingtian & Gongcheng has earned an outstanding reputation in the industry and is widely recognised by clients both in China and abroad as a top-tier law firm in China.

Mr. Hu is a partner in our dispute resolution group. He specialises in domestic and international litigation and arbitration, in commercial, IP-related and TMT-related sectors. Mr. Hu has represented or advised domestic and international clients in dozens of court proceedings in China and in arbitration proceedings under CIETAC, BAC, HKIAC, ICC, SIAC, and SCC rules.

He is recently recognised by Who’s Who Legal as a Future Leader in arbitration.

Mr. Hu has an LL.M. (with a specialisation in international law) from the University of California, Berkeley, and LL.B. from Peking University Law School. Mr. Hu is qualified in China and in the state of New York.

Mr. Hu is a member of the ICCA/Tsinghua Joint Working Group on Chinese Arbitration Practice, a member of the YSIAC Committee, and a co-organiser of China Young Arbitration Group. He also holds memberships in Young ICCA, ICCA, HK45, and IBA (Arbitration Committee and Litigation Committee).


Chapter 10

Kalema Legal & Associates

Fulgence Kalema Bwatunda

Gabson Mukendi Kabuya

Congo – D.R.

■ Intelevision:RTNC(government-ownedandoperatedradio-television station); Antenne A; Mirador TV;B-One;Molière TV; CNTV; CCTV; RTCE; CKTV;DigitalTV;andTNT.


(a) Telecomsandinternet1. Framework Law No. 013/2002 of October 16, 2002

organisingtelecomsinDRC. Since April 6, 2017, there is pending draft legislation

at the National Assembly to overhaul the business ofoperatingtelecomsandinternetinDRC.

2. Framework Law No. 014/2002 of October 16, 2002creating the Autorité de Régulation des Postes et Telecommunication au Congo (ARPTC). Thisauthorityregulates, manages, and coordinates frequencyavailability,andcontrolspostandtelecommunications.

3. Interministerial Decrees No. 004/CAB/MIN/PTT/2005and No. 105/CAB/MIN/FINANCES/2005 of July 28,2005, thatfix the tax rateof telecommunications,at theinitiativeofthenationaltelecomsregulatorinDRC.

4. Law No. 012/2002 of October 16, 2002 regulating thepostofficeinDRC.

(b) Audio-visualmediadistribution■ TheConstitutionofDRCofFebruary18,2006,asmodified

andcompleted in itsarticle212whichcreatedanationalagencyforaudio-visualmediadistributionnamedConseil Supérieur de l’audiovisuel et de la communication (CSAC).

■ LawNo.96/002ofJune22,1996fixingtheconditionsofexercisingthefreedomofthepressinDRC.Articles50to72guaranteetheprincipleoffreedomandmultiplicityofaudio-visualcommunications.

■ FrameworkLawNo.11/001ofJanuary2011organisingtheCSAC. Article9laysdownitsobjectives,withthemissiontopreservebalanceamongaudio-visualoperatorsin exercising freedom of the press, in accordancewithlawsandregulations.

■ Law No. 03/027 of September 16, 2003 fixing theconditionsofexercisingthefreedomofthepressinDRC.

■ LawNo. 014/2002 ofOctober 16, 2002 relating to thecreation of ARPTC. This agency’s role extended toaudio-visualcommunication.

1 Overview


(a) Telecomsandinternet Telecomsandinternetarethefastest-growingindustriesin

DRC.Theyhavecomealongwaysincetheirliberalisation,which started with the Framework Law No. 013/2002of October 16, 2002 related to telecoms in DRC. Thislegislationdefinesandorganisestheoperationoftelecomsin DRC; i.e., it opens the telecoms sector to private andforeigninvestors.(i) According to the 2017 figures from the Direction

Générale des Impôts (National Revenue Services), themonthy revenue for Vodacom DRC averages around1,300,000USD.(ThisinformationiscollectedfromthesourcesofDirection Générale des Impôts. Inpractice,the actual revenue information is kept secret from thegeneralpublic.)

(ii) Significant market participants are: Vodacom; Orange;Airtel; and Africell, the four leading players in themarket.

(b) Audio-visualmediadistribution The sector had echoed changes in the telecoms industry.

Severalradioandtelevisionoperatorshavebeenauthorisedtooperate in thecountry. Historically, from1965 to1994,there was only one major national audio-visual mediacompany controlled and run by the government (OfficeZaïrois de Radiodiffusion et de Télévision(OZRT),createdbyDecreeNo.81/050ofApril2,1981).Thereafter,OZRTwas transformed into a public service entity namedRadio Télévision Nationale Congolaise (RTNC) by Decree No.09/62ofDecember3,2009.(i) Asanexample,themonthlyrevenueforMiradorTVis

72,000USDpermonth (according to the informationfromtheaccountingdepartmentofMiradorTV).

(ii) There are807private andpublic radio stations and98television stations operating in DRC (according torecords collected from the CSAC (Conseil Supérieur de l’audiovisuel et de la communication, theinstitutionthat oversees audio-visualmedia). Significantmarketparticipantsare:■ Inradio:RTNC;FM;andRadioElykia.


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2 Telecoms

General


Yes, DRC has been a member of theWorld Trade OrganisationandGATSsinceMarch27,1997. DRCdidnotparticipateinthenegotiationsleadingtotheAgreementonBasicTelecommunicationnorisitasignatorytotheWTOReferencePaperonTelecoms.


ARPTC regulates, at the national level, telecoms networks andservices by decisions, and the Minister also can take regulatorymeasures.


■ TheMinistère des PT-NTICandARPTCarethemainauthoritiesthatpoliceandregulatecompetitionintelecomsandinternet.

■ ARPTC is a technical body under the supervision of theMinistère des PT-NTIC.

■ Their roles are differentiated. ARPTC is the technicalauthoritywithmorecontrolofday-to-daydecisionmaking.

■ The two institutions are government entities; they are notindependentfromthegovernment.


Yes,ARPTC’sdecisioncanbeappealedon thebasisofviolationof freedom of expression (article 45 of the Framework LawNo.13/2002ofOctober16,2002).Firstly,theoperatorcanappealforreviewof thedecisionbefore thesameauthority(ARPTC)whichmadethedecision(administrativeappeal);thenbeforetheMinistère des PT-NTIC, and finally before theCourt de cassation (highestlevelofappeal).



ARPTC grants a general authorisation (Régime de concession).Article 18 of Law No. 013/2002 of October 16, 2002 lists theactivitiesassociatedwithit:1. supply of telephone services to the general public from a

fixedpoint;2. establish and exploit audio signals, specifically cellular

signalstoservicethegeneralpublic;and3. establishnetworksof telecomsopen to thepublicbyusing

othermeansoftransmission.


(a) Telecomsandinternet■ Ministère des PT-NTIC conceives national policies on

telecoms and internet. It is the executive authority. Inpractice, several application measures in telecoms areissuedatthislevel.

■ ARPTC is the main authority regulating telecoms andinternet.TheApril2017draftlegislationontelecomsaddsanotheragencycalledtheNationalAgencyofTechnologyofInformationandCommunicationtooverseeandcontrolthe handling of personal information of their subscribers.ARPTCoversees telecomsoperations,approvesordeniestelecoms licences, manages national telecom frequency,arbitersconflictsoffrequency,instructstelecomsoperatorsontheirobligationsandrights,andadvisestheMinistère des PT-NTIConthetechnicalissuesoftelecomsandinternet.

(b) Audio-visualandmediadistribution■ Ministre de la Presse et des Médias.■ CSAC,independentagency.■ ARPTC: its role is extended to audio-visual media

distribution.■ Union Nationale de la Presse du Congo(UNPC)–aself-

regulatorybodywhichactsasadisciplinarycommissiontocontroltherespectofethicsgoverningjournalistsintheaudio-visualandwrittenpress.Italsoarbitratesconflictsintheaudio-visualandwrittenpress.

■ Observatoire des Médias Congolais (OMEC) – a self-regulatory body. In practice, it has no constrainingauthoritytosanctionaudio-visualplayers.


(a) Telecomsandinternet(i) Yes.From1965to1997,accesstotelecomsandinternetwas

strictlylimited.Onlyonenationaltelecomscompanywasoperating,OfficeNationaldePosteetTelecommunication.

(ii) Yes. They are open to foreign investment with somerestrictions.Article19oftheTelecomsFrameworkLawNo. 013/2002 stipulates that a telecoms and internetcompanymustcomplywiththefollowing:■ itmustbeincorporatedasajointstockcompany(S.A.)

(Société Anonyme);and■ 30%of thecompany’ssharecapitalmustbeheldby

Congolesephysicalpersonsor legalentities,and5%ofsuchshareisreservedforitsemployees.

(b) Audio-visualmediaanddistribution(i) Yes. The rule is: the space frequency for audio-visual

media and media distribution belongs to the State.It grants frequency to private operators and foreigninvestors in compliancewith the international treaty intelecommunications, signed by the DRC government(InternationalTreatyofCommunication–ITC).

(ii) The audio-visualmedia sector is also open for foreigninvestment;LawNo.96-002of June22,1996 relatingtothefreedomofpressinitsarticles4and115doesnotdiscriminate against foreign investment in audio-visualmediabusinesses.

Kalema Legal & Associates Congo – D.R.


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Yes, ARPTC Law No. 013/2002 of October 16, 2002, Title IVdescribes the right ofway or easement for entering private land toinstall telecoms infrastructure. Article 61 states that installation ofinfrastructures and equipment should be done in respect of zoningordinances not in violation of private land rights. The placementof poles, cables, antennae, and other telecoms equipment shouldbeagreedbetween the telecom licenseeand theprivate landowner(articles63to67ofabove-mentionedLaw).



With regards to the interconnection (of networks), ARPTC’sDecision No. 016/ARPTC/CLG/2006 of June 23, 2006 on thedefinition of interconnectivity principles provides some freedomregardinginterconnectionmatters.ThedisputesaresettledbetweentelecomsoperatorsorthearbitrationofARPTC.


Theoperator or telecoms service providerwishing to establish aninterconnectionmaymakearequesttoanotheroperator.The interconnection contract and prices are communicated toARPTC for review with signatures of the parties. ARPTCmayrequireoperatorstomakeamendmentstotheagreementtocomplywiththeregulationontelecoms.


Yes, Decision No. 006/ARPTC/CLG/2015 of February 27, 2015ofthePostandTelecommunicationsRegulatoryAuthority’sBoardrelating to the definition of telecommunications services’ tariffprinciplesintheDRC.Itonlyappliestovoiceservices,anddefinesthetariffsapplicabletotelecomsoperationsofpublicnetworks.DecisionNo.068/ARPTC/CLG/2013ofSeptember25,2013ofthePost and Telecommunications RegulatoryAuthority’s Board setsoutinterconnectionratesfrom2013to2017.


Theregulatordoesnotimposeanyaccountingseparation,functionalseparationor legal separation tofightdiscriminatorycompetition.TheCompetitionLawNo.018/020ofJuly9,2018introducesrulesthatregulatepotentialpublicrestraintsoncompetition,andsetsfourconditionsunderwhichpublicorstate-ownedentitiesareallowedtoconductbusinessactivitiesincompetitionwiththeprivatesector:

ARPTC can also grant an individual authorisation (Régime d’autorisation)withalimitedcapabilityofconnectionatamaximumof2.1MBps(article23oftheabove-mentionedLaw).ARPTCcangrantanothertypeofindividualauthorisation(Régime de declaration)whichisgrantedtoforeigninstitutionsworkinginDRC,toindividualswhoareusingagroundstation,andforradiocommunicationswithamaximumcapacityof10milliwatts(article27oftheabove-mentionedLaw).


■ Notaried articles of association of companies shouldhave a legal form of Joint StockCompany (S.A.) (Société Anonyme);30%ofthecompany’ssharecapitalmustbeheldbyaCongolesephysicalpersonorlegalentity,and5%mustbereservedforitsemployees.

■ WrittendemandissenttotheMinistère des PT-NTIC and a copytoARPTC.

■ ARPTC examines the demand and a copy is sent tothe National Security Agency (Agence Nationale de Renseignement–ANR)forverificationifthecompanyposesanationalsecuritythreat.

■ TheANRclearsthedemandandsendsitbacktoARPTC.■ ARPTC thenapproves thedemandand theMinistergrants

theauthorisationtooperate.■ ARPTC draws a “cahier de charge” (detailing what

the company should or should not do under the grantedauthorisation),whichissignedbytheMinistère des PT-NTIC andpublishedinthelocalofficialGazette.

■ Thecompanycannowoperate.■ Localenvironmentalordinancesshouldbeobeyedby(article

61).■ Respectofzoningordinancesonrightofway,encumbrances,

andrealestateingeneraltoinstall,exploit,andcommercialisetelecomsequipment.


Individual authorisation can be granted (Régime d’autorisation)withalimitedcapabilityofconnectionatamaximumof2.1MBps(article23ofLawNo.013/2002ofOctober16,2002).Itisforgrossdatawithoutanykindoftreatment.Theregimeisgrantedforthereceptionofcollectiveradioof300metresandcommunicationonshipsregisteredinDRC.Theauthorisationispersonalandcannotbe transferred(article42ofabove-mentionedLaw). It isgrantedfor10years.ARPTC can grant an individual authorisation (Régime de declaration)toindividualswhoareusingagroundstationandforradiocommunicationswithamaximumcapacityof10milliwatts(article27ofabove-mentionedLaw).Itsdurationis10yearsanditcannotbetransferred.The April 6, 2017 draft aforementioned legislation introducesfourtypesofauthorisations:authorisationofnetworkandservicestelecoms (a duration of 20 years); authorisation of networkinfrastructure(adurationof20years);authorisationofservicesandapplication(adurationof10years);andauthorisationofinstallingandoperatinganaudio-visualmediaservice (foradurationof10years).


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TheFrameworkLawNo.013/2002ofOctober16,2002ontelecomsdoes not require any obligations from the subscriber on the use oftelephonenumbers,excepttoshowhisidentificationtoapplyforone.Since 2016, telecoms operators have been required to identify thesubscriberandtoregisterhisnumber.ThedraftedlegislationofApril2017focusesonmandatoryregistrationofsubscribers includinghisname,physicaladdress,andhisIDnumber.


Thelawdoesnotrequireanyobligationfornumberportability.Theonly principle is that the numbermust be attached to a physicalpersonorlegalpersonforidentificationpurposes.

3 Radio Spectrum


ARPTC is the authority that regulates radio spectrum use. TheCSACcontrolsthecontentinradiospectrumuse.


TheoperatorsubmitsaprogramoutlinetotheCSACinconformitywiththeLawcreatingthebusinessofpress(article13oftheCSAC).The outlines must be in compliance with the cahier de charge approved by the CSAC. Each semester, the CSAC evaluates theprogramoutline.Thecahier de chargeobligestheradiooperatortoallocatethespectrumbetweencandidatesfairly.


Yes,thespectrumislicence-exempt.However,usersarerequiredtopayafee.Usersaregrantedageneralauthorisationtooperateinthebands,providedcertainguidelinesforpower,range,etc.


Yes,theauthorisationfeeispayabletouseradiofrequencyspectrum.DRCisasignatorytotheITUConvention,andhasaccededtotheRegionalAgreementsconcerningVHF-FMsoundbroadcastingandVHF/UHFtelevisionbroadcasting.DRCisobligedtoadheretotheprinciplesagreed to in theplanningconferencesorganisedby theITUtoplanthebroadcastingfrequencybands.


Licensees shall not transfer or assign in any manner the rights,interests, or obligations. In case of change of control, the newoperatorshallinformARPTCandtheCSAC.

marketfailure;theserviceinquestionrelatingtothelegalfunctionsor powers of the public entity; to satisfy their own needs; andimprovementofservicesupplyforthegreatergood.


There isno regulationonhigh-speedbroadbandnetworksandnotermsonpassiveinfrastructureavailability.



LawNo. 018/020 of July 9, 2018 regulating competition pricingapplies to the production and provision of goods and services inDRC.TheobjectiveofthisreformisthemodernisationofDRC’soutdatedlegislationonpricingandcompetition.Prices are not subject to prior approval, but after theyhave beenfixed, theyarecommunicatedwiththewholefile to theMinistère de l’Economie fora posteriori control.Theratesandfeesarefreelyfixedbytheoperatororretailer.ThepriceiscommunicatedtotheMinistère des PT-NTICandindicatestheperiodduringwhichratesandchargeswillbeapplied.ARPTC may require the operator/retailer to modify the rates itintendstoapplytoitsservicesifitappearsthatthesetariffchangesviolatefaircompetition.Pursuant to Decision No. 006/ARPTC/CLG/2015 of February27, 2015 relating to the definition of tariff principles fortelecommunications services, rates are freely set by operators incompliancewithcost-basedprinciples.


TheFrameworkLawNo.013/2002ofOctober16,2002ontelecomsdidnotprovidespecialrulesforelectroniccommunication,suchasemailservicestoconsumersanduniversalservice.

Numbering


Telephone numbers and network identifying codes are allocatedbyARPTC in a transparent and non-discriminatorymanner, afterpaymentofnumberingtaxandanannualfee.Article8f.ofLawNo.013/2002ofOctober16,2002stipulates thatARPTCcreatesandmanagesthenationalplanofnumbering.


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TheuseofencryptionisnotregulatedinDRC.Butinpractice,fornationalsecuritypurposes,theStatecanaskapplicationownerstoprovideit.


The Framework Law No. 013/2002 of October 16, 2002 ontelecommunicationsdoesnotmentionthetimesandthetypeofdatatheoperatorsshouldretain,andforhowlong.Inpractice,theANRobligesoperatorstokeeppersonaldata,suchasnamesandphysicaladdresses,fornationalsecuritypurposesandforaslongaspossible.Operatorsarealsoobligedtokeepotherdata,suchasfinancialdata,forfiveyearsincaseofagovernmentaudit.



The Ministre de la Presse et des Médiasmakesgeneralmeasuresonhowmediashouldbedistributed.ARPTCallocatesthedistributionofaudio-visualmediabygrantingfrequencytoaudio-visualmediaoperators.TheCSACcontrolstheusageofthefrequencydistributedtoaudio-visualmedia.


TheCSACregulatesthecontentoftraditionaldistributionplatformssuchasradio,TV,newspapers,andeditorial.Traditionaldistributionplatformsarerequiredtoprovideforthecontentoffourmaintypesofprogramme,asfollows:35%forinformation,newsandmagazines;25%foreducation,health,youthandwomen;20%forculture,sport,and entertainment; and 10% for economy and development. Thecurrentlegislationdoesnotcoverinternetregulation.


TheCSAC registration form grants four types of licence: audio-visualmedia(underthespectrumfrequencycontrolandsupervisionofARPTC); television distribution (also underARPTC control);productionagency(underthecontroloftheCSAC);andcommercialagency(undercontroloftheCSAC).


The concession licence and the authorisations issued by theapplication from the Law on Telecommunications in DRC


Thespectrumlicenceispersonaltothelicenseeandcannotbetradedwithout ARPTC’s prior express written consent to be operatedby any third party, whomsoever including but not limited to thelicensee’ssubsidiaryorassociatedcompanies.



Articles68to72oftheFrameworkLawNo.013/2002ofOctober16,2002ontelecomsmentionthecriminalregimeofdataretentionand cybersecurity. Articles 70 to 72 punish data retention andinterception of telecoms data fraud. The legislation does notparticularly detail cybersecurity fraud or violation. The pendingdraftofApril2017ismoreexplicitonthepunishmentofpersonaldatafraudinrelationtocybersecurity.


Courts can order access to private communications in criminalproceedings.TheANR(Agence Nationale de Renseignement)canaccess private communications for national security purposes byordering a “réquisition d’information” to a telecom operator. Inpractice, theagencyhasmorepower tocoerce theoperator todoso.Thepolicecanalso,forcriminalinvestigations,requestprivatecommunicationsfromthetelecomsbusinessoperator.


The rules of call interception apply to traditional phone linesunder the Office Nationale des Postes Communication. Withwireless technology, theNational Intelligence collaboratedwithprivatetelecomsoperatorstointerceptphonecallsandVoIPcalls.Interception of emails is not possible because the technologyis not available to theANR. Also,WhatsApp accounts are notaccessible to intercept. In 2012, after the publication of thepresidential election result, thegovernment shutdownaccess tothe internetwith the help of telecoms operators. DRCnationalsecurityintelligencedoesnothavethetechnicalcapacityinplacetointerceptcalls.


TheANRcaninterceptcommunicationswiththehelpoftelecomsbusinessoperators.Inpractice,everytelecomsoperatorhasanin-houseagentworkingfortheANR.


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the telecoms operator. There are no details onwhat specificallythe operator should do, because the law on telecoms does notspecificallyregulatetheinternetservice.Inpractice,ARPTCplaystheroleofthepoliceontelecoms(article8);itcanimposespecificmeasuresontheoperator.


ThereisnonetneutralityinDRC.Operatorsshouldabidebyruleswhich can request that operators block access to certain types ofsites.


Yes, the government can ask operators to block certain sites.Yes, to avoid the use of VPN, the government has lately askedoperators to totally block the internet. (See https://www.iafrikan.com/2018/01/22/internet-accesss-blocked-in-the-democratic-republic-of-congo-drc/,Democratic Republic of Congo blocks the Internet ahead of anti-Kabila protests,byNakirfaiTobor.)

are personal and not transferable (see article 42, paragraph 1of the Framework Law No. 013/2002 of October 16, 2002 ontelecommunications).Thenewoperatorwishingtoobtainalicenceshall apply for a new licence. In case of change of control oflicensee,theonlyrestrictionisthatthenewlicenseeshallupdateitsinformationwiththeCSACandARPTC.



DRClacksregulationconcerningthemanagementof theinternet.Framework Law No. 013/2002 of October 16, 2002 regulatestelecoms (telephone, telefax, etc.), but does not regulate theinternet. The court is still struggling on the subject of litigationovertelecommunicationsoperatorsand/orinternetserviceprovidersforlackofregulationandnationaljurisprudenceofthematter.Thedraftpendinglegislationtakesintoaccounttheinternet.


Yes, theoperator isunder theobligationsof thecahier de charge to avoid infringing the rights of others. ARPTC can discipline


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Fulgence Kalema BwatundaKalema Legal & Associates25 Avenue OUALocal 2C Place SocimatKinshasa/NgaliemaDemocratic Republic of Congo

Tel: +243 81 361 6845Email: [email protected]: www.kalegas.com

Gabson Mukendi KabuyaKalema Legal & Associates25 Avenue OUALocal 2C Place SocimatKinshasa/NgaliemaDemocratic Republic of Congo

Tel: +243 82 559 1153 / +243 85 276 2592Email: [email protected]: www.kalegas.com

Kalema Legal & Associates is an independent law firm in DRC, providing legal services to local, regional and international clients. It gives valuable advice on complex issues of international transactions to which DRC is party. Through correspondent law firms, we are present in the French-speaking African zone, particularly in the member countries of the Organization for the Harmonization of Business Law in Africa (OHADA).

The firm provides services in English and French. We are committed to providing quality work in compliance with the standards and ethical rules.

As a team, we assist our clients by analysing the risks in their transactions, and advise them on management strategies.

Areas of expertise: Telecommunication law; Business Law; Commercial Law; Infrastructure Law; Energy Law; Natural Resources Law; Judicial Law; and Dispute Resolution Law.

Mr. Kalema Bwatunda is admitted to the Bar of Matadi (2009). He is a Foreign Legal Consultant in Johannesburg (2010), an authorised Legal Consultant in the jurisdiction of Congo Brazzaville.

Mr. Kalema joined the law firm Emery Mukendi Wafwana & Associates in 2009 before setting up his own practice. He holds a law degree in private and procedural law from the University of Kinshasa and a postgraduate degree in law from Southbank University in London (2005). He further holds a postgraduate degree in law (Legal Practice Courses) from the College and University of Law in London in 2007. He is an active member of the International Bar Association.

His areas of practice are: mining and hydrocarbon law; commercial law; investment law; corporate law; OHADA law; telecommunications law; securities law; real estate law; employment law; intellectual property; business immigration; and project finance.

Mr. Kalema Bwatunda speaks English, French, Kikongo, and Lingala.

Mr. Mukendi Kabuya was admitted to the Bar of Kinshasa/Gombe in 1996. He has held a Master’s degree of Laws (LL.M.) from the University of Georgia in the USA since 2010, and an Associate in Paralegal Studies (ABA-approved programme) from Gainesville State College in 2008.

Mr. Mukendi is a registered real estate agent in the state of Georgia. He helped national and international clients close mortgage loan agreements with banks and lending institutions.

He also has advised foreign clients on establishing companies in DRC, relating to the implementation of the entire set-up process, and the preparation of all requisite documentation in respect to company compliance.

Mr. Mukendi Kabuya speaks English, French, Swahili and Lingala proficiently.


Chapter 11

Mazanti-Andersen Korsø Jensen Hans Abildstrøm

Denmark

ofModernTimesGroup(MTG))andDiscoveryNetworksNorthernEuropeLtd.The TDC-owned YouSee is the major distributor of television.AmongtheotherbiggerplayersareStofaandWaoo,whoseparentcompaniesmerged inOctober2018; themarketexpectsamergeroftheirservicesinthecomingyears.Themergermaybeseenasan attempt to increase market share in a market currently underpressure due to changed media consumption, including “cableshaving”,whichismovingconsumersfrombroadcasterstoonlineon-demandservices.


(a) Telecoms,includinginternet:■ the Consolidated Act on Electronic Communications and

NetworksandServices,ActNo.128dated7February2014(the “TelecomsAct”)– anEnglishversionof themain actfrom 2011 may be found here: https://ens.dk/sites/ens.dk/files/Tele/act_on_electronic_communications_networks_and_services.pdf;

■ the Executive Order on the Provision of CommunicationsNetworksandServices,ExecutiveOrderNo.715dated23June2011(the“ProvisionOrder”);

■ theActonRadioFrequencies,ActNo.1100dated10August2016(the“FrequencyAct”);

■ theActonCableLayingAccessandExpropriation,etc.forTelecommunications Purposes,Act No. 662 dated 10 July2003(the“CableLayingAct”);

■ theActontheEstablishmentandJointUtilizationofMastsforRadioCommunicationsPurposes,ActNo.681dated23June2004(the“MastAct”);

■ theExecutiveOrderNo.482dated20May2016,regardingUniversalServiceObligations(the“USOOrder”);

■ the Executive Order No. 988 dated 28 September 2006,regardingretentionofdata(the“RetentionOrder”),whichhassincebeenamendedbytheExecutiveOrderofAmendmentNo.660dated19June2014;

■ theActontheCenterforCyberSecurity,ActNo.713dated25June2014(the“CyberSecurityAct”);and

■ the Network and Information SecurityAct,Act No. 1567dated 15 December 2015 (the “Network and InformationSecurityAct”).

The internet sector is subject to telecoms regulation. However,telecomsregulationdoesnotcovercontent.Contentisregulatedin:■ the Danish E-CommerceAct,Act No. 227 dated 22April

2002(the“E-CommerceAct”);and

1 Overview


(a) Telecoms,includinginternetThe telecomsmarket is extremelycompetitivewith137 telecomsprovidersinthemarket,employingatotalof13,000persons.Theannualturnoveris5.1billionEUR,equivalentto1.9%oftheGDP.Theannualinvestmentintelecomsinfrastructureisestimatedat800millionEUR.Priceremainsadrivingfactorinthemarket,butinmostaspectspricesremain fairly stable compared to previous drastic price reductions.Recently, additional parameters such as download speeds, freeroaming outside theEU, and bundled services (including access toonlinemagazinesandcinematickets)havebeenusedinordertoattractcustomers.Theannualchurnrateofmobilesubscribersisaround12%.The Danish government has set a goal to enable 100 Mbit/sdownstream and 30Mbit/s upstream for the population by 2020.Thecurrentpenetrationofhigh-speedaccessis:■ 100Mbit/sdownstream–84%.■ Atleast10Mbit/s–95%.The2.4millionfixednetbroadbandsubscribersweredistributedasfollows(theremaining6%isnotaccountedforinthestatistics,butmaybethroughtheelectricitynetwork):■ Broadbandviafibre–19%.■ Broadbandviathecable-TVnetwork–29%.■ Copper-basedbroadbandaccountedfor–46%.Thetotalnumberofmobilesubscriberswas8.5millionbytheendof2015.Thisnumberismostprobablyhighertoday.The latest report on the Danish telecoms market was publishedbytheDanishEnergyAgencyinJune2016,andasit isbasedonnumbersfromthesecondhalfof2015,someofthefiguresabovemayhavechanged.ThemajortelecomsprovidersareTDCA/S(theformerincumbent),TelenorA/SandTeliaDenmark,filialafTeliaNettjänsterNordenAB, Sverige.(b) Audio-visualmediadistributionThe most important broadcasting companies are the state-ownedDR (Danish BroadCasting Corporation) and TV2. The privatebroadcasters are dominated byNordicEntertainmentGroup (part


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2 Telecoms

General


DenmarkhasbeenamemberoftheWTOsince1995.AspartoftheEU,DenmarkcommittedtothefourthprotocolofGATSregardingbasictelecommunicationsservicesin1998,includingthetelecomsreferencepaper.


TheregulationisbasedontheEUlegalframework.The Telecoms Act is the core of the framework in respect ofprovidersofcommunicationnetworksandservices.The Provision Order specifies the obligations of the telecomprovidersinrespectoftheirend-users.The Frequency Act regulates the administration of frequencylicences.TheMastAct and theCableLayingAct regulate theplanningofnetworkinfrastructure.


TheDEAand theDBAare themain regulatoryauthoritiesof thetelecomsector.The DEA is the primary authority responsible for the regulationof international roaming, spectrum, the Danish numbering plan,planningofinfrastructure,serviceobligationsoftelecomproviders,etc.TheDEAiscurrentlyorganisedundertheMinistryofIndustry,BusinessandFinancialAffairs.The DBA is the telecommunications regulator. It regulates thecompetitiononthetelecommunicationsmarket(SMP–SignificantMarket Position). The DBA also has the responsibility forregulatingcertainissuesconcerningtheinternet.TheDBAandtheDanishCompetitionandConsumerAgencycooperate toestablishthe relevant telecoms markets, including the classification oftelecom providers holding SMP status. TheDanishCompetitionand ConsumerAgency are currently organised under the DanishMinistryofEnergy,UtilitiesandClimate.Alloftheauthoritiesareorganisedunderthepublicadministration,and in principle they are subordinate to the relevant ministersappointedbythegovernment.


Decisionsmay be appealed to theTelecommunications Board ofAppeal(inDanish:Teleklagenævnet).DecisionsbytheBoardofAppealmaybeappealedtotheregularcourts.

■ theDanishConsumerAgreementsAct,ActNo.1457dated17December2013(the“ConsumerAgreementsAct”).

MattersrelatingtotheadministrationofdomainnamesareregulatedbyActNo.164dated26February2014(the“InternetDomainAct”).(b) Audio-visualmediadistributionThemostimportantDanishregulationsgoverningmedia,includingradioandTVbroadcasting,are:■ theConsolidatedActonRadioandTelevisionBroadcasting,

ActNo.444dated8May2018(the“RadioandTVAct”);and■ theActonCopyright,ActNo.1144dated23October2014

(the“CopyrightAct”).The rules on advertising in the Danish Radio and TV Act aresupplementedbythegeneralrulesintheDanishMarketingPracticesAct,ActNo.426dated3May2017(the“MarketingPracticesAct”),aswellasspecialsectorruleson,e.g.,theadvertisingofhealthcareandalcoholproductsontelevision.


(a) Telecoms,includinginternetThe Danish Energy Agency (“DEA”) (https://ens.dk/en/our-responsibilities/telecom/telecom-regulation) and the DanishBusiness Authority (“DBA”) (https://danishbusinessauthority.dk/telecom)aretheregulatorysupervisoryauthoritiesforthetelecomsandinternetsector.Otherrelevantauthoritiesare:■ the Danish Competition and Consumer Agency – merger

controlandestablishmentofsignificantmarketposition;■ theDataProtectionAgency–dataprotection;■ theCentreofCyberSecurityundertheMinistryofDefence

– supervision of network and information security in thetelecomssector;and

■ the Danish Consumer Ombudsman – supervision of somerequirements included in the Provision Order, includingsubscriptionterms.

TheDanishInternetForum(“DIFO”)hasoverallresponsibilityandmanagementofthetop-leveldomain“.dk”.The Telecom Industry Association – Denmark (in Danish:Teleindustrien“TI”)istheindustryassociationforthemajorityofcompaniesinthetelecomssector.TIpromotesthesector,includingtheuseofsectoragreementsinsteadoflegislation.Sofar,TIhasdevelopedanumberofsectoragreementsincluding:onjointdiggingof infrastructure, thereby reducingnetworkconstructioncosts;onproceduresonnetneutrality;andonrequestsforDNSblocking.(b) Audio-visualmediadistributionTheMinistry of Culture and theRadio andTelevisionBoard (inDanish:Radio- og tv-nævnet)aretherelevantregulators.TheRadioandTelevisionBoardconsistsof10membersappointedbytheMinistryofCulture.


Thesectorsarefullyliberalisedandopentoforeigninvestment.The sectors are undermerger control regulation, as in any otherindustry.

Mazanti-Andersen Korsø Jensen Denmark


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imposedon telecomsproviderscontrollingaccess tooneormoreend-users.TheDBAmaydecideoninterconnectionoraccessdisputes.Suchdecisionsmaybeappealed,asdescribedinquestion2.4.


OperatorswithSMPstatusonarelevantmarketmayberequiredtopublicisetheirstandardinterconnectioncontractsandbesubjecttopricecontrol.Currently,thefollowingrequirementsforstandardoffersandpricecontrolsexistonthesefourmarkets:■ Market 1: wholesale call termination on individual fixed

telecoms networks. Thirty-eight operators, includingTDC,haveSMPstatus. TDCis required topublicise itsstandardinterconnectionagreementandissubjecttopricecontrol.Alloftheremaining37operatorsarealsosubjecttopricecontrol.

■ Market 2: wholesale voice call termination on individualmobiletelecomsnetworks. Hi3G(3),Lycamobile,MundioMobile, TDC, Telenor and Telia have SMP status and aresubjecttopricecontrol.

■ Market3a:wholesalelocalaccessprovidedatafixedlocation.TDC is required to publicise its standard interconnectionagreementandissubjecttopricecontrol.

■ Market3b:wholesalelocalaccessprovidedatafixedlocationformass-marketproducts. TDCisrequiredtopubliciseitsstandard interconnection agreement and is subject to pricecontrol.

On 29 June 2018, the DBA decided that the specific obligationsimposedonTDCinrespectofMarket1and2shallbeterminated,witheffectfrom29June2019. TDCwillremainsubjecttopricecontrolalsoafter29June2019,aswilltheotheroperatorswithSMPstatus.


Ingeneral, charges for interconnectionand/ornetworkaccess aresubjecttonegotiationsbetweentheparties.TelecomsproviderswithSMPstatusmaybesubjecttopricecontrolregulation, and consequently are under an obligation to provideservices at cost-related prices, as described in question 2.10 inrespectoftheindividualmarkets.


No,notunderthecurrentmarketdecisions,asfurtherdescribedinquestion2.10.


As described in question 2.8, network operators are required toprovideotheroperatorsintendingtorollouthigh-speedbroadband



Operators can start the provision of electronic communicationsserviceswithout apreviousnotification to theDEA,DBAor anyotherDanishauthority.The undertaking shall only be registered at the Danish NationalPolice inorder toprovide a contactperson in respectof requestsforwire-tappingorprovisionofcommunicationinformationfromaspecificsubscriber,aspartofacriminalinvestigation.


Asdescribedinquestion2.5,noauthorisationisrequired.


Asdescribedinquestion2.5,noauthorisationorlicenceisrequired.Consequently,therearenorestrictionsonthechangeofcontrolofprovidersofcommunicationnetworksorservices.



The DEA may initiate expropriation of land for the purpose oflaying cables for public telecoms networks. Network operatorsshall provide access to their passive infrastructure, such as ductsandmanholes, tootheroperators intending to roll outhigh-speedbroadband networks. Such access shall be provided on fair andreasonableterms.ThisisfurtherspecifiedintheCableLayingAct.TheMastAct regulates access to existing or newmasts, antennapositions and buildings. The DEAmay initiate expropriation inorder to ensure establishment of masts and antenna systems andaccesstosuchfacilities.



Providersofpublicelectroniccommunicationsnetworksorserviceshave an obligation to negotiate agreements with each other oninterconnection, for the purpose of providing publicly availableelectronic communications services, in order to ensure provisionandinteroperabilityofsuchservicesthroughouttheEUandEEA.Telecoms providers with SMP status shall accommodate allreasonable requests for establishing ormodifying interconnectionagreementsfromothertelecomsproviders.TheDBAmaydecidethatcertainobligations,includinginjustifiedcases the obligation to interconnect individual networks, shall be


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Numbering


TheDEAmanagestheDanishnumberingplancomprisingnumbers,series of numbers and addresses to be used in the provision oftelecomsnetworksorservices.In general, numbers, series of numbers and addresses will beassignedtothetelecomsproviderwhorequestsassignmentof thenumberingresources.


TheTelecomsActregulatestheuseoftelephonenumbers.


Yes,thetelecomsprovidershallensureeffortlessandswiftnumberportability,freeofchargefortheend-user.Inaddition to this, the telecomsprovidershaveagreedonafixedcompensationtobepaidtoend-usersincaseofdelayedportability.

3 Radio Spectrum


TheDEAregulatesspectrumuse.


TheuseofradiospectrumrequiresalicencefromtheDEA.Licences are issued successively as applications are received. Incaseofscarcityofspectrum,theDEAmayholdapublictenderoranauctionoversuchfrequencies.Auctionshavebeenthepreferredmodelsofar,butinsomeinstancespriceshavebeentoohighforthehighestbiddertopresentaviablebusinesscase–thishasresultedindelayedroll-out.


Under specific circumstances, certain uses of spectrum may bepermittedlicence-exempt.The conditions for such use are regulated in a specific executiveorderontheuseofradiofrequencieswithoutalicence.


AnannuallicencefeeshallbepaidtotheDEA.Thefeeconsistsofafixedspectrumchargeandausagecharge.

networksaccesstotheirphysicalinfrastructure.Suchaccessshallbeprovidedonfairandreasonableterms.ThisisfurtherspecifiedintheCableLayingAct.There are no government-subsidised incentives or regulatoryholidays.



Asdescribedinquestion2.10above,operatorswithSMPstatusaresubjecttopricecontrolincertainmarkets.


Theprovisionofelectroniccommunicationsservicestoconsumersissubjecttospecificrules,describedindetailintheProvisionOrder.Allprovidersofservicestoend-usersmustcomplywithanumberofspecifiedconditions(Part2,ProvisionOrder).Themainconditionsincludeanobligationfortheproviderto:■ Ensurethatallusersconnectedtotheservicecanmakecalls

free of charge to the public emergency service (112) andmake calls to a universal service provider’s text telephoneserviceandemergencycallnumber.

■ Provideaccesstoadirectoryenquiryservice.■ Ensure that a contract ismadeasabasis for anycustomer

relationship, and that the contract contains at least theinformation listed inAnnex1 or 2 of theProvisionOrder,including:■ faultrepairservices;■ trafficprioritisation,ifthisoperates,anditsimpactonthe

end-user’suseoftheservice;■ optionsregardingpersonaldatainnumberdatabasesand

whichdataareincludedinthem;■ restrictionsontheuseofterminalequipmentdelivered;■ conditionsforrenewalofthecontract;and■ theprocedureforsettlingdisputes.

■ Handle complaints from end-users complying with theprocessanddeadlineofthreemonths(extendedtosixmonthsinsomecases)forresolvingsuchcomplaints.

■ Provideend-usersofvoicetelephonythefollowingservicesandfacilitiesfreeofcharge:■ stoppingcallforwardingfromathirdparty;■ barring;and■ barringofaccesstoinformationandcontentservices.

■ Provideend-usersaccesstotheircurrentbillingdata.■ Provideend-userbillingcontrol,ifusage-dependentcharging

isusedinprovidingtheservice.■ Provideend-usertariffed-groupedbillingoritemisedbilling

ifusage-dependentchargingisusedinprovidingtheservice.■ Provide facilities to eliminate presentation of calling line

identification.


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The requirements under the Retention Order apply to telecomsproviders and to end-users. Consequently, the Retention Orderappliesbothtoprovidersofinternetservices,aswellasprovidersofmobileorlandlineservices,andfornetwork,aswellascontentproviders, as long as the provision of electronic communicationservicesisforend-users,asopposedtosaleonaretailbasistootherproviders.


Only the Danish Police may obtain access to historic tele-communicationsdataorwiretapping.TheDanishPolicemayonlyobtainaccessthroughatelecomsproviderpriortoaspecificcourtorderapprovedbytherelevantDanishcourt.


There are no specific rules requiring encryption. However,telecoms providers are required under the GDPR to ensure anadequate level of protection of personal data by “appropriatetechnicalandorganisationalsecuritymeasures toprotectpersonaldata”.Consequently,ifencryptioniscustomaryforthetypeofdataprocessing, i.e. electronic communication, encryption would berequired.The data retention regulation does include rules on encryption.In relation to a court order for data, interception/wiretapping orretained historic telecommunications data, the telecoms providershallensurethatonlytherelevantdataareavailabletothepolice.Itis,however,thepolice’sownresponsibilitytoremoveencryptionfromtheprovideddata.Nevertheless,ifthetelecomsproviderhassystems which use encrypted data as an integrated part of suchsystems,thetelecomsprovidershallensurethatdataprovidedtothepoliceisaccessibletothepoliceinanon-encryptedform.


The telecommunications traffic data to be retained under theRetention Order consists of data on caller/user identity, and thetime and beginning of a communication. Furthermore, locationdata,providedthedataaregeneratedorprocessedinthetelecomsprovider’snetwork,mustberetained.TherequirementsundertheRetentionOrderdonotentailarequirementtoregisterthecontentoftheexchangedinformation.Theretaineddatashallonlyberetainedforoneyear,unlessthereareotherlegalreasonsforretainingthedatalonger,includingunderpersonaldataprotectionregulations.



Themost important regulationsgoverningmedia, including radioandTVbroadcasting,aresetoutintheRadioandTVActandtheCopyrightAct.


Thespectrumlicenceisnotaffectedbyachangeofcontrolofthelicensee.


Spectrum licences may be assigned, traded and sub-licensed inwhole or in part. The parties shall inform theDEAof any suchtransfer, etc. of the licence, and the identity of the new licenseeimmediatelyafterthetransferhastakenplace.



TelecomsprovidershaveanobligationtoretaintelecommunicationsdataasfurtherspecifiedintheTelecomsAct,theProvisionOrder,theRetentionOrderandtheNetworkandInformationSecurityAct,assupplementedwithanumberofExecutiveOrders.The Center for Cyber Security Act allows for the Center forCyberSecurity to interceptdatafromcompaniesorgovernmentalauthorities, which have been linked up to their security service,withoutobtainingawarrant,ifsuchinterceptioniscrucialinrespectofupholdinginformationsecurity.


TelecomsprovidershaveanobligationtoretaintelecommunicationsdataasfurtherspecifiedintheTelecomsAct, theProvisionOrderandtheRetentionOrder.This joint regulation describes the telecoms providers’ obligationtomaketelecommunicationsdataavailabletothepolice,aswellashowtomaintainrequiredsecuritylevels.In respect of criminal proceedings and investigations, the policemay obtain a court order to intercept or obtain retained historictelecommunicationsdata,assetoutintheAdministrationofJusticeAct.


According to theTelecomsAct, a telecomsprovider to end-usersshall ensure that the telecomsnetwork and services are set up insuch a way that the Danish Police can obtain access to historictelecommunicationstrafficandinterceptcurrentdata.TheprovisionsoftheTelecomsActinthisregardaretechnologyneutral,anddonotassuchsetoutwhethertheycoveranyoftheabovementionedtypesofcommunication.The more specific regulation on data retention is set out in theRetentionOrder,whichisfurtherexplainedinGuidelinesNo.74of28September2006(the“RetentionOrderGuidelines”).


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issueafrequencylicenceonthemerefactthatabroadcastinglicencehasbeenissuedundertheRadioandTVAct.

(3) KeyObligations: Somelicencescontainrequirementsinrelationto:minimum

hoursofnewsandmagazineprogrammesperyear,excludingadvertisements; theprovisionof news fromDenmark andabroad;thatthenewsbroadcastsshallbecarriedoutbyanindependent news desk; and that a certain percentage ofthe productionsmust be Scandinavian, etc. Additionally,licence holders must pay an annual concession fee andanannualvariable feedependingon their turnover. Suchconditionsvarydependingonthetypeofbroadcasting.


As a main rule, no prior approval is required from the RTB inconnectionwithatransferofthelicenceorachangeofcontroloverthelicensee,unlessotherwiseprovidedspecificallyinthelicence.Some licences contain terms with a prohibition on assignabilityor change of control, which could trigger a filing or approvalobligation.TheRadioandTVActdoesnotcontainadescriptionofthesubstantivetestwhichwillbeappliedbytheRTBinrelationtoanassignmentofthelicenceorachangeofcontrolofthelicensee.ThedecisionmadebytheRTBwillthusbediscretionaryandbasedonanoverallassessmentofseveralelements.Thisbeingsaid,thedecisionshallbecomplianttogeneraladministrativelawprinciplesand based on objective and fair arguments, such as changes infinancialcircumstances.Any changes inmatters stated by the licensee in the applicationfor a licence or a registration shall be notified to theRTB. Thisalso includes information of assignment and ownership changes,provided that theRTBhasbeen informedabout theownership inconnectionwiththeapplication/registration.



The“PirateBay”decisionoftheSupremeCourtin2010concludedthat telecom providers, including ISPs,may be required to DNSblock websites containing or providing access to copyright-infringingcontent.IfatelecomproviderdoesnotDNSblocksuchcontent, the provider may be liable for the infringement on thewebsite.TheDanishGamblingAuthoritymay order telecom providers toDNS block gambling providerswho offer gambling activities onthe Danish gambling market without a licence from the DanishGamblingAuthority.The Telecom Industry Association – Denmark has decided thattelecom providers will only respond to a court order for DNSblocking. Consequently, right holders will need to initiate legalproceedingswiththeDanishcourtsincaseofanyrequestforDNSblocking of allegedly infringing content. This has resulted in anincreasingnumberofcasesregardingDNSblockingbetweenrightholdersandtelecomproviders,astheownersofthewebsiteusuallydonotshowupincourtoracceptserviceofcourtdocuments.


The Radio andTVAct governs the transmission of audio-visualmediaovertraditionalplatforms,andvisualmediaovertheinternetorotherelectroniccommunicationsnetworks. The regulation forthese types of media is, therefore, the same, irrespective of thedistributionplatform. The same regulationapplies toon-demandaudio-visualmedia,eventhoughcontentregulationforon-demandvisual media differs in one aspect compared to the traditionalbroadcasting platforms. On-demand media may, in some cases,broadcast content that may result in a serious degree of damageto the physical, mental or moral development of minors, if thebroadcast content is sufficiently marked, while traditional audio-visualbroadcastersmaygenerallyneverdistributesuchcontent.Itshouldbeemphasisedthatthetransmissionofpureaudiomediaovernon-traditionalradionetworks,whetheraslinearoron-demandcontent,isnotgovernedbytheRadioandTVAct.Therefore,thespecificrulesregardingcontentandadvertisementarenotapplicableto pure audio media that is not broadcasted over traditionaldistributionplatforms,andsuchservicesareonlygovernedbythegeneralrulescontainedin,amongstothers,theMarketingPracticesActandthee-CommerceAct.


(1) TheStatutoryLicencetoProvideProgrammeServices: The Radio and TV Act provides the public service

undertakingsDRandTV2withastatutorylicencetoprovideprogramme services. The statutory licenceonly applies topublic service activities. Programme services which falloutsideofpublicserviceactivitiesrequireaseparatelicenceorregistration.

(2) Licence/Registration: In general, the provision of programme services for

enterprisesotherthanDRandTV2requireseitheralicenceor registration with the Radio and Television Board (the“RTB”). A licence is only required if the programmeservices require access to scarce spectrum resources;otherwiseregistrationissufficient. Licencesare issuedbytheRTBsubjecttoatender.

Alicence isnot requiredforprogrammeservicesprovidedvia satellite or cablenetworkwhereno frequency scarcityexists. Accordingly, enterprises that provide programmeservicesvia theseplatformsonlyhave to registerwith theRTB.

Provision of programme services on the digital platform(digital terrestrial network) require a licence from theRTB. However, the licence to administer thebroadcastingpossibilitiesonthedigitalplatformhas,subjecttoaprevioustender,beenawardedtoasingleenterprise,whichactsasadistributor (the so-called “Gatekeeper”). The Gatekeeperis an intermediary between the providers of programmeservices and the end-users. The individual programmeserviceprovidershereafterenterintocommercialagreementswiththeGatekeepertoprovidedigitalprogrammeservices.

In cases where a licence is required from the RTB, alicence must similarly be obtained from the DEA underthe FrequencyAct. However, with regard to frequenciesspeciallyreservedforbroadcastingpurposes,theDEAmay


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Hans AbildstrømMazanti-Andersen Korsø Jensen Amaliegade 101256 Copenhagen KDenmark

Tel: +45 2811 1740Email: [email protected]: www.mazanti.dk

Hans is a technology lawyer specialised in telecommunications and IT. He is a partner and the head of the IP and Technology Team.

Hans has advised the telecommunications sector since the liberalisation of the Danish market in 1997, and has covered almost all aspects of telecommunications, including network construction, regulatory issues, fibre agreements, agreements related to provision of services, establishment of MVNOs and MVNEs, marketing and end-user agreements, and litigation regarding damages to land and subsea cables. He also advises on IoT issues from regulatory and contractual perspectives.

Hans is accredited as a certified IT attorney under the certification arrangement launched in 2010 by the Association of Danish IT Attorneys.

Mazanti-Andersen Korsø Jensen is not only the oldest law firm in Denmark, but it is also one of the country’s leading full-service firms with an IP and Technology team that has developed its scope and expertise substantially over the last few years.

The IP and Technology team covers a wide range of practice areas of relevance to the TMT industry, among all aspects of telecommunications, and it has extensive experience within the sector.

Several members of the team have backgrounds in transactions and M&A, and this combination of telecoms expertise and M&A is unique compared to other firms, where the expertise is rooted in separate departments. This combination is also highly valued by telecoms clients, as we are able to include telecoms advice as an embedded service in transactions.


Therearenosuchobligations,unlessacourtorderconcludesthatacontentproviderisinfringingtherightsofarightholder.Theburdenofprooflieswiththerightholderinrespectofprovingallegedinformation.


TheEURegulation2015/2120onopen internetaccess isdirectlyapplicableinDenmark.TheTelecomsActincludesasectiononnetneutrality,authorisingthe DEA to regulate matters related to net neutrality in case thetelecomssectorcannotagreeonindustrystandards.TheTelecomIndustryAssociationhasestablishedanetneutralityforum, which has agreed on the following four principles – alldeemedtobeincompliancewiththeEUregulation:1. Theend-userhastherighttointernetaccesswithapredefined

capacityandquality.2. The end-user has the right to access legal content and use

applications and services of his choice, provided suchservicesdonotaffectnetintegrity.

3. Theend-usershallhaveaccesstotransparency,meaningthattheend-usershallbeabletoobtaininformationonrelevanttraffic control mechanisms used by an internet serviceprovider.

4. Internet providers shall not discriminate against certainprovidersofservices,contentorapplications.


Therearenosuchobligationsunlessacourtorderconcludes thatcertainsitesorcontentisinfringingtherightsofarightholder,orisinviolationofDanishlawinotherways.Consumer VPN services are not regulated under Danish law.However, if a consumerVPNservice isused to circumvent legalgeo-blocking of licensed content, such circumvention may bea violation of the consumer’s user agreement with the contentprovider;forexample,Netflix.


Chapter 12

Attorneys-at-Law TRUST

Jan Lindberg

Terhi Rekilä

Finland

contentandbroadcastingbusinesses,weexpect thatcybersecurityand internet of things (IoT) companies are in particular potentialM&AtargetsfortheseFinnishtelecomcompanies.


Themostimportantlegislationforthetelecomsandtheaudio-visualmediadistributionsectoristhefollowing:■ theActonElectronicCommunicationsServices(917/2014),

formerlyknownastheInformationSecurityCode;■ theAct onAudiovisual Programmes (710/2011) aswell as

theActon theExerciseofFreedomofExpression inMassMedia(460/2003)containingrulesconcerningbroadcastingprogrammes;and

■ theGeneralDataProtectionRegulation (GDPR)of theEU(2016/679).TheFinnishGovernmenthasproposedtorepealthe existing Personal Data Act (currently applied to theextentnotconflictingwiththeGDPR)andtoreplaceitwitha newDataProtectionAct to supplement theGDPR. TheGovernment’s bill regarding the newAct has already beenpublished and legislativemeasures regarding its enactmentareestimatedtotakeplaceduringthisfall2018.

Inaddition,applicable regulationsarealso included inotherActssuch as the Penal Code (39/1889), which contains applicableprovisionsoninformationsecurityintelecommunications.The EU is currently preparing directives concerning electroniccommunicationsandaudio-visualservices(2016/0288(COD)and2016/0151(COD))thatwillprobablyhaveaninfluenceontheActonElectronicCommunicationsServices aswell as other nationallaws.Amongotherthings,thedirectivesregulatetheuseofradiofrequenciesandtherightsofusersaswellasproductplacementinaudio-visualprogrammes.AnationalGovernmentdecree isalsocurrentlybeingprepared inthefieldoftelecommunications,amongotherthingsinrelationtothe5Gnetworks.Thedecreewouldallow5Gtechnologytobeusedinthe900,1,800and2,100MHzfrequencybands.


Themostimportantgovernmentalministriesandauthoritiesinboththetelecomsandaudio-visualsectoraretheMinistryofTransport

1 Overview


TherevenuefromthetelecommunicationssectorwasapproximatelyEUR3.5billionin2017.Thetelecomssector,includingtheinternet,isdominatedbythreebigcompanies,namelyDNAOyj,ElisaOyjandTeliaOyj.Combined,thesethreecompaniesholdmorethan90percentofthemarketshare.Therewasanauctionfor5GspectruminOctober2018,wherethreelicencesfordifferentspectrumrangesweregrantedtothesethreecompanies. It isprobablethatthe5Gmarketswillhaveanincreasingimportanceinthemarketinthenearfuture.Theaudio-visualmediasectorissmallerthanthetelecommunicationssectorinFinland.Therevenuefromtheaudio-visualmediasectorwasEUR354millionin2017.ThebiggestbroadcastingcompaniesarecurrentlyFinnishBroadcastingCompanyOy,SanomaOyjandBonnierBroadcasting.TVchannelsinterrestrialTVnetworksaredistributedinsevendifferentmultiplexes(MUX)withnationalornearlynationalcoverage. DigitaLtdandDNALtdhavenetworklicences to themultiplexes, or distribution networks. In additionto these national networks, there are also regional multiplexes.RegardingcableTV,DNA,ElisaandTeliaarethemostimportantfirmsbuttherearealsonumerousregionalcablecompanies.The Finnish market environment is currently very competitiveand there is convergence between the telecoms and audio-visualmedia distribution sectors. There are many drivers behind thisdevelopment, such as the need to seek new growth areas tocomplement the traditional telecom business, changing mediaconsumption habits and increased competition from large-scaleinternational players in the content sector. According to a study(publishedbyDNAin2018),some58percentofrespondentssaidtheystillhavetraditionalTVsets,butthattheirusageofon-demandvideo services such as Netflix, HBONordic and domestic-basedvideostreamingserviceslikeYleAreenaandViaplayisincreasing.Therefore,weestimate thatwewillcontinue toseedealssuchasonerecentlyannouncedbyTelia,inwhichtheyacquiredaFinnishcommercialtelevisionstation,MTV3,aswellasotherpartsofMTVLtdandMediahubHelsinkiOyfromBonnierAb,tostrengthenthecompany in the fast-growing area of video content consumption.The transaction issubject toregulatoryapprovalsand isexpectedtobecompletedduringthesecondhalfof2019.Inadditiontothe


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The Ministry of Transport and Communications is responsiblefor preparing legislation in the field of telecoms. The FinnishCommunicationsRegulatoryAuthority(FICORA)isanindependentsupervisory authority under the Ministry. FICORA supervisescompliance with the laws applicable in the telecommunicationsindustry, particularly the Act on Electronic CommunicationsServices.The Finnish Competition and Consumer Authority (FCCA)monitors themarkets for anti-competitive conduct andconsumerprotectioninallfields,includingtelecoms.TheCouncilforMassMedia,theCouncilofEthicsinAdvertisingand the Ethical Committee for Premium Rate Services interpretgoodprofessionalpracticeasself-regulatorybodiesandcan,inter alia, give notices and general recommendations. They do notexerciselegaljurisdictionandarecompletelyindependentfromtheGovernment.


ThedecisionsofFICORAareabletobeappealed.Dependingonthecase,thedecisionsareappealedeithertotheAdministrativeCourt,theSupremeAdministrativeCourt,or theMarketCourt. Inmostcases,theappropriatecourtistheregionalAdministrativeCourt.ThedecisionsoftheFCCAareappealabletotheMarketCourt.Bothmeritsandproceduralgroundscanbeusedasalegalbasisforappeals.



AnetworklicenceandanotificationtoFICORAisrequiredfortheprovisionsofcertaintelecommunicationsservicesinsituationslaidoutintheActonElectronicCommunicationsServices.Dependingonthecase,thenetworklicenceisgrantedbyeitherFICORAortheGovernment.Apart froma fewexceptions, a telecommunicationsoperatorwillhave to apply for a network licence for theprovisionof networkservices that use radio frequencies in a digital terrestrial masscommunicationsnetworkorinamobilenetworkpractisingpublictelecommunication.Anetworklicenceisalsorequiredforamobilenetworkthatfunctionsinapublicauthoritynetworkandoperatesinmorethanonemunicipality.Additionally,atelecommunicationsoperatormustusuallysubmitanelectronicnotification toFICORAbefore commencingoperationsif it engages in: 1) general telecommunications; 2) other thantelevisionbroadcastingsubjecttoalicence,iftheserviceproviderisestablishedinFinland;3)videoon-demandaudiovisualservices,if the service provider is established in Finland; and 4) linearpay-television services in terrestrial digitalmass communicationsnetworkusingaprotectiondecodingsystem.

andCommunicationsandtheFinnishCommunicationsRegulatoryAuthority(FICORA).Inaddition,theFinnishNationalAudiovisualInstitute(KAVI)monitorstheaudio-visualsector.TheFinnishCompetitionandConsumerAuthority(FCCA)monitorsbothmarketsforanti-competitiveconductandconsumerprotection.TheCouncilforMassMedia,theCouncilofEthicsinAdvertisingandtheEthicalCommitteeforPremiumRateServicesarerelevantself-regulatory bodies related to the telecoms and audio-visualmarkets.


Thetelecomsandaudio-visualmediadistributionsectorsarebothliberalisedandopentoforeigninvestment.However, foreign investments can be restricted under theAct onthe Monitoring of Foreign Corporate Acquisitions in Finland(172/2012) on the basis of key national interests. TheMinistryofEconomicAffairsandEmployment is themonitoringbody forforeignacquisitions.

2 Telecoms

General


FinlandhasbeenamemberoftheWTOsinceitsestablishmentin1995.TheEU,andFinlandasitsmember,havemadecommitmentsundertheGATSregardingtelecommunicationsandarecommittedtothetelecomsreferencepaper.


The telecoms markets are regulated by the Act on ElectronicCommunications Services (917/2014). Themost important rulesspecifictothefieldarelargelyincludedintheAct.Amongother things, the requirement to obtain a network licencefor the provision of telecommunications is set forth in theAct.TheAct also contains rules regarding, for example, the rights ofthe subscribers and users of services and the confidentiality ofcommunications.The telecoms market is also subject to privacy legislation thatregulatestheobligationsconcerningtheprocessingofthepersonaldataofnaturalpersons.TheGeneralDataProtectionRegulationoftheEU(2016/679) isapplied toprivacyandinformationsecurity.Inaddition,thenationalPersonalDataAct(523/1999)isapplicableuntilrepealedandreplacedbynewsupplementallegislationtotheGDPRasexplainedabove.TheEU is also preparing the e-PrivacyRegulation (ePR),whichwould set forth further rules relating to communications. If andwhentheePRwillbeenacted,itwillbedirectlyappliedinFinlandandwillmost likely require some changes to the currentAct onElectronicCommunicationsServices.

Attorneys-at-Law TRUST Finland


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FICORA may impose an obligation on a telecommunicationsoperator with significant market power to publish relevantinformation with regard to relinquishing access rights orinterconnection. Under circumstances set forth in the Act onElectronicCommunications Services, FICORAmay also imposesuchobligationsonotheroperators.


FICORAmayimposeanobligationonanoperatorwithsignificantmarketpowerregarding:1) cost-orientedpricing;2) pricingbasedonareductionoftheretailprice;or3) fairandreasonablepricing.FICORAmay also set a maximum price in advance for up to aperiodofthreeyears.


FICORAmay imposeaccountingand functional separationonanoperator with significant market power. FICORA has obligatedseveraloperatorstoemployaccountingseparation,includingDNA,ElisaandTelia(seequestion1.1).


AccesstopassiveinfrastructurecanbemandatedbyFICORA.IfFICORAdeterminesthatanoperatorhassignificantmarketpowerbasedonamarketanalysismadebyFICORA,FICORAcanimposeobligationsregardingaccesstotheinfrastructure.Currently, obligations to grant access to copper and fibre localloopsaswellasbitstreamserviceshavebeenimposedonnetworkoperatorswithsignificantmarketpower,includingDNA,ElisaandTelia(seequestion1.1).Inaddition,obligationsrelatingtoaccessto antenna sites and antenna capacity as well as their associatedfacilities, television transmission services and national radiotransmissionserviceshavebeenimposedonthekeyoperator,DigitaNetworksOy.AccesstocableTVnetworksisnotregulated.TheAct on Co-Building Network Infrastructure (276/2016) setsforthobligationsfortelecomsoperatorsconcerningthesharingandco-buildingofpassive infrastructure. The telecomsoperators arerequiredtocomplywiththeActunlesstheiroperationsaretargetedat a small user pool and are geographically and economicallyinsignificant.Therearenoregulatoryholidays.


ThenotificationthatmustbesubmittedtoFICORAisrequiredtocontain identification and contact information necessary for thepurposesofsupervisionandadescriptionof theoperationsof theoperator.FICORAmayissuefurtherregulationsontheinformationthat must be submitted as well as the form and delivery of thenotification.FICORAislegallyobligatedtoprovideconfirmationofreceiptofthenotificationwithinaweekofreceipt.Theconfirmationnoticewill indicate the requirements related to theoperator’soperationsinFinlandundertheActonElectronicCommunicationsServices.


Thenetworklicenceisgrantedforupto20years.Thelicencemayonlybetransferredwithinthesamegroupofcompanies.However,therighttousethefrequenciessetoutinanauctionedlicencemaybeleasedouttoathirdpartywiththepermissionoftheGovernment.TheGovernmentmaycancelthenetworklicenceinpartorinfullincertaincircumstancessuchaswhenthelicenceholderhasrepeatedlyand seriously violated the provisions of the Act on ElectronicCommunicationsServices.Alicenceholdermayalsorelinquishthelicencebeforetheendofthelicenceperiod,inwhichcasealicencefeewillnotbecollectedtotheextentthelicenceisrelinquished.



Provisions allowing the instalment of telecommunicationsinfrastructure are set forth in the Land Use and Building Act(132/1999)andtheActonElectronicCommunicationsServices.Ifnoagreementcanbereachedwiththeownerofthepropertyonthespecificlocation,theauthoritiesmaymakethedecisiontoallowtheinstallmentinalocationplannedbythetelecommunicationsoperator.



A network operator has an obligation to negotiate on inter-connectionwithanothernetworkoperator. FICORAmay imposean obligation on an operator with significant market power toconnect a communications network to the network of anothertelecommunications operator. Under special circumstances,FICORAmayalsoimposesuchanobligationonotheroperators.DisputesareresolvedbyFICORAprimarilythroughmediation,butifthepartiescannotreachanunderstanding,FICORAwillnormallymakeadecisionwithinfourmonthsfromthedatethecasebecamepending.


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FICORAhaspublishedanationalplanforthetypeandpurposeofnumbersandidentifiersusedintelecommunications.Amongotherthings,theplansetsforththemaximumandminimumlengthsofthephonenumbers.Therearealsorulesfortheportabilityofnumbers(seequestion2.18).A telecommunications operator is also legally obligated, for itspart,toensurethatcallscanbemadefromEEAstatestoanynon-geographicnumber inuse inFinlandwherever this is technicallyand economically possible. A telecommunications operator in atelephonenetworkmustalso,foritspart,ensurethatusersareableto make international calls using the general international prefix00.FICORAmayissuefurtherregulationsontechnicalmeasuresnecessarytomeettheseobligations.


Telecommunications operators are required to offer numberportability free of charge to the subscriber. The validity of afixed-term communications service agreement concerning thetelephonenumberwill not release a telecommunicationsoperatorfrom the number portability obligation. The telecommunicationsoperatormay, however, collect a one-off payment from the othertelecommunicationsoperatorifthetechnicalprocessofportingthenumbergeneratesone-offcosts.Theone-offpaymentmaynotbesohighastodetertheuseoftheservice.The telephonenumberportabilityobligationdoesnotapplywhenthe porting takes place between a fixed telephone network and amobilecommunicationsnetwork.

3 Radio Spectrum


TheMinistryofTransportandCommunicationsisresponsibleforthe regulation of the radio spectrums. As amain rule, FICORAmanagesspectrumuse.FICORA,orinsomecasestheGovernment,grantstherequiredlicencesforthedifferentkindsofradiospectrumuse.ThegeneralprinciplesontheuseofradiofrequenciesareconfirmedbyaGovernmentDecree.FICORAissuesregulationsontheuseofradiofrequenciesfordifferentpurposes,withconsiderationof theinternationalregulationsandrecommendationsonradiofrequencyandtheGovernmentDecree.


Thepossessionanduseofaradiotransmitterrequirearadiolicenceunlesscertainconditionsunderwhichalicenceisnotrequiredarefulfilled.Furthermore,asthedemandforfrequenciesallocatedtoradiobroadcastingandmobilecommunicationsexceedsthesupplyin Finland, radio broadcasting requires a separate broadcastinglicence.Anetworklicenceisrequiredfortheprovisionofnetworkservicesasdescribedinquestion2.5.Anapplicationmayalsobemadetoreservetheradiofrequenciesneeded for the use of a radio transmitter before applying for theradio licence if this is justified, for example, for the planning orimplementation of a radio system. The frequency reservation isgrantedforamaximumofoneyearatatime.



IncaseFICORAdeemsthatanoperatoroperatingintheretailmarkethassignificantmarketpower,FICORAmayorderthatsuchoperatorisnotallowedtochargeunreasonableprices,preventaccesstothemarketorrestrictcompetitionwithunjustifiablylowpricing.Noretailpricecontrolsarecurrentlyimposed.However,itismandatedthatuniversalservicesmustbeprovidedatreasonableprices.


The electronic communications services are subject to severalgeneral principles such as confidentiality and privacy,mandatoryrequirementsconcerningsubscriberagreementsinB-to-Crelations,netneutralityandtheuniversalservice.Amongotherthings,theseprinciplesimposethefollowingrules:Processingelectronicmessagesandtrafficdataareonlyallowedtotheextentnecessaryforthepurposeofsuchprocessing.Electronicmessagesandtrafficdatamayonlybedisclosedtopartiesentitledtoprocesstheminthegivensituation.Afterprocessing,electronicmessagesandtrafficdatamustbedestroyedorrenderedsuchthatthey cannot be associated with the subscriber or user involved,unlessotherwiseprovidedbylaw.A telecommunications operator has an obligation to draw upand use standard agreement terms for consumer agreements oncommunications services. Among other things, the agreementsmust not include any terms unfair to the consumer. An internetaccessserviceprovidermaynotrestrictasubscriber’sopportunitytouseaninternetaccessserviceapartfromexceptionalcases.A telecommunicationsoperator thatFICORAhasdesignated as auniversal serviceprovider inpublic telephoneservicesor internetaccessservicesmustprovide,atareasonablepriceandregardlessofthegeographicallocation,asubscriberconnectiontothepubliccommunications network at the subscriber’s permanent place ofresidenceorlocation.

Numbering


FICORA decides on the numbers and identifiers to be issued.FICORAisobligatedtodothisasfairlyaspossibleconsideringthenature and extent of operations. FICORA is legally obligated todecideontheissuingofanumberoridentifierwithinthree,orifanumberor identifier is of exceptional economicvalue,within sixweeksofthereceiptofanapplication.


In a numberingdecision, theholder of the right to use a numberor identifier may be required to start using the number within areasonabletime.FICORAmayalsoorderthenumbertobeusedtoofferaspecifiedserviceorimposeotherconditions.


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TheActonElectronicCommunicationsServices(917/2014)containsprovisions related to cybersecurity in electronic communicationsandinformationsecurityservices.TheEmergencyPowersAct(1552/2011), inparticular itsChapter9, contains regulation aimed at ensuring the availability ofelectronic communications and information security services inemergency situations. Under theAct, theMinistry of Transportand Communications may, for example, impose obligations ontelecommunicationscompaniesandcancelgrantedradiolicences.As amember of the EU, Finland has implemented theDirectiveonSecurityofNetworkandInformationSystems(1148/2016, the“NISDirective”)toitsnationallegislation.Applicableprovisionsareincludedintherelevantsector-specificregulationssuchastheActonElectronicCommunicationsServices.AsamemberoftheEU,theGeneralDataProtectionRegulationoftheEU(2016/679)(“GDPR”)isappliedinrelationtotheprocessingofpersonaldata.TheGDPRcontainsprovisionssuchasprocessingdatasecuritybreaches.


The police have the right to access communications andperform surveillance such as monitoring and interception oftelecommunicationsinaccordancewiththePoliceAct(872/2011)andtheCoerciveMeasuresAct(806/2011).Thesaidlegislationlistsrequirements,methodsandreportingobligationsfortheauthoritiesfortheaccess.Themeasuresthepolicecanuseandtheextenttowhich the police are allowed to access private communicationsrequire,forexample,thattheinvestigationbetargetedataspecifictypeofcrime.


The Act on Electronic Communications Services sets forthobligations for telecommunications operators in connectionwith interception capabilities. A telecommunications operator isobligated,withoutacharge, tosupplyapublicauthoritywithanyinformation in its possession that is, for example, necessary tomaintainpublicorderandsafety,investigate,uncoverandpreventcrimeormaintainrescueoperations.Under the Act, an operator is also legally obligated to installmeasuresthatenableinterceptiontobeperformedbytheauthorities.TherequirementsunderwhichtheauthoritiesareallowedtoperforminterceptionarelaidoutinthePoliceActandtheCoerciveMeasuresAct(seequestions4.2and4.4).

Asamainrule,radiolicencesandbroadcastinglicencesaregrantedintheordertheapplicationsarereceived. Ifonlyaproportionofapplicants can be granted a radio licence due to the scarcity ofradiofrequencies,thelicencewillbegrantedtoapplicantswhobestpromote the purposes of theAct on Electronic CommunicationsServices.Spectrum auctions can also be conducted by the authoritiesespeciallyinconnectionwiththecommercialuseofradiospectrum.Theoperatinglicencesforcommercialuseofthe5G3,410–3,800MHzfrequencybandwereauctionedinOctober2018byFICORAinaccordancewiththeannouncementoftheMinistryofTransportandCommunications.


The use of a spectrum can be made licence-exempt. FICORA’sRegulation15listsconditionsforuseofradiotransmittersthatdoesnotrequirealicence.Amongotherthings,theuseofGSMandUMTSmobilephonesandPMR446radiotelephonesdonotrequirealicence.


FICORA charges a fee for all radio licences and frequencyreservations.Theamountofthefrequencyfeeisbasedontheavailability,usabilityandnumberoffrequenciesincludedinthelicence.Forshort-termradiolicences,however,thefeeischargedbasedontheperiodofuse.Inlicenceauctions,thelicencefeeisthewinningbid.Applications for broadcasting licences are subject to a fixed fee(currentlyEUR1,500).


Ifthelicenceholdermergeswithanotherlimitedliabilitycompany,the radio licencewillbe transferred to the receivingparty. If thebusinessactivityperformedbythelicenceholdertowhichtheradiolicence pertains is given up completely, the radio licencewill betransferredtothereceivingparty.


Aradiolicenceforotherthannetworkorprogrammingoperationssubject to a licence may be transferred unless such transfer isprohibitedonacase-by-casebasisongroundslaidoutintheActonElectronicCommunicationsServices.Forexample,thetransfercanbeprohibitedifthelicencetransferwouldhaveasignificanteffectonthegeneraldevelopmentofthecommunicationsmarket.AtransfermustbenotifiedtoFICORA.The radio licence can be sub-licensed. Sub-licensing is notconsidered a transfer of a radio licence and the licence holderremainsresponsibleforensuringthattheradiotransmitterisusedinaccordancewiththelicenceterms.


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Contentregulationisthesameforthedifferentplatformsduetotheprincipleoftechnologicalneutrality.


Television broadcasting in a terrestrial mass communicationsnetwork, that is, an antenna network, requires a licence grantedby the Government. However, in case of a short-term activity,the network licences are granted by FICORA. In addition, aradio licence issued by FICORA is needed for each transmitter.Furthermore,aprogrammelicencegrantedbyFICORAisneededfortelevisionbroadcasting.FICORAmaysetforthobligationsinconnectionwiththegrantingofthelicences,suchasanorderthattheradiolicencebestoredinthevicinityoftheradiotransmitter.A notification must be submitted to FICORA of all televisionbroadcasting thatdoesnot requirea licence,suchasbroadcastingviaacabletelevisionnetwork.


Networkandradiolicencesareassignableasstatedintheprevioussectionsofthisarticle(seequestions2.7and3.6).Aprogramminglicencemayonlybetransferredwithinagroupofcompanies.SuchatransfermustimmediatelybenotifiedtoFICORA.Ifthecontrolinthelicenceholderchanges,suchachangemustbenotified immediately to the licensingauthority,whichwill decidewithin twomonths from the notificationwhether the licencewillbecancelled. Theprogramminglicenceholdermayrequest fromthelicensingauthoritytobeinformedinadvanceoftheeffectthechangeincontrolwillhaveonthelicence.Thelicensingauthorityhasalegalobligationtoissueadecisionwithintwomonthsoftheapplication’sarrival.



ThemereconduitprincipleisadoptedtotheFinnishlegislationonthebasisoftheElectronicCommerceDirectiveoftheEU(2000/31/EU)andthecourtsinterprettheprincipleinlinewiththeDirective.In 2010, the Finnish Supreme Court ruled in the case 2010:47(“Finnreactor”)thattheadministratorsofapeer-to-peerfilesharingnetworkcouldnotavoid liabilitybecause theadministratorswerecollaborators in the infringement with the users of the peer-to-peernetwork,insteadofjustprovidersoftechnicalaccesswithoutknowledgeofthetransmittedmaterial.


ThepolicemustevaluateiftherequirementssetoutinthePoliceActandtheCoerciveMeasuresActarefulfilled,ascommunicationscanonlybeinterceptedinspecificsituationsandunderlegallydefinedcircumstances.Thepolicecannot,however,makethefinaldecision.Instead, the applicable court decides on the telecommunicationsinterceptionontherequestofanofficialwiththepowerofarrest.


Therearenospecificrulesgoverningtheuseofencryption.Underthe CoerciveMeasuresAct, passwords that are needed to searchdatacontainedinadevicemayberequiredbytheauthoritiesinacriminalinvestigation.


Operatorsareobligatedtoretaindatarelatedto:1) atelephoneserviceorSMSserviceprovidedbytheoperator

includingcallsforwhichaconnectionhasbeenestablishedbutthecallremainsunansweredorispreventedfrombeingconnectedduetonetworkmanagementmeasures;

2) internettelephoneserviceprovidedbytheoperator,meaningserviceprovidedbyaserviceoperatorenablingcallsthatarebasedoninternetprotocolthroughtotheendcustomer;and

3) internetaccessserviceprovidedbytheoperator.Dependingonthecase,thedatamustberetainedfor12,nineorsixmonthsfromthetimeofthecommunication.Theretentionobligationdoesnotapplytothecontentsofamessageortrafficdatageneratedthroughthebrowsingofwebsites.



The Act on Electronic Communications Services (917/2014)governsthedistributionofaudio-visualmedia.Amongotherthings,it governs the licences required for the provision of audio-visualservices. The Ministry of Transport and Communications andFICORAactasthemainregulatorybodiesinthefield.Additionally, rules regarding the audiovisual programmeprovisionanditssupervisionaresetoutintheActonAudiovisualProgrammes(710/2011).TheActcontainsrulesespeciallyrelatingtoageclassificationsandindicationsontheprogrammescontainingmaterial detrimental to children. Compliance with the Act onAudiovisual Programmes is supervised by the Finnish NationalAudiovisual Institute (KAVI), which is a governmental bureauundertheFinnishMinistryofEducationandCulture.Additional obligations for broadcasters such as the obligation torecord and retain broadcast programmes are also included in theAct on the Exercise of Freedom of Expression in Mass Media(460/2003).


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Among other obligations under the Regulation, internet accessserviceprovidersmusttreatalltrafficequallywithoutdiscrimination,restrictionorinterference.Thetermsandconditionssuchaspriceordatavolumesandspeed,maynotlimittheexerciseoftherightsofend-users.However,thisisnotintendedtopreventinternetaccessserviceprovidersfromimplementingreasonabletrafficmanagementmeasuresaslongasthemeasuresarenon-discriminatory,transparentand proportionate and are based on different technical quality ofdifferenttrafficinsteadofcommercialconsiderations.Due to the increase of streaming and other similar contentdistribution models, we believe that the net neutrality principlewill become amore andmore debated topic in practice after theimplementationofthe5Gnetworks.


Ingeneral,operatorsandserviceproviderscanonlybeobligatedtoblockaccessinexceptionalcases.Thecourtmay,under theCopyrightAct,andupon the requestofthe owner of the copyright, order an operator as an intermediarytodiscontinue,onthethreatofafine,makingallegedlycopyright-infringing material available to the public. If the cause for theissuance of the discontinuation order ceases to exist, the courtshall,uponapplicationbyapartyconcerned,rulefor theorder tobecancelled.UndertheActontheExerciseofFreedomofExpressioninMassMedia(460/2003),acourtmayorderthedistributionofapublishednetworkmessage to be ceased if it is evident that providing thecontentofthemessagetothepublicisacriminaloffence.UndertheActonPreventiveMeasuresRelatingtotheDistributionofChildPornography(1068/2006),operatorshavetherightbutnottheobligationtoblockaccesstochildpornographysites.There is no VPN-specific regulation and VPN services are notblocked.

In 2017, there was also a case in the District Court of Helsinkiconcerning the online sharing platform “the Pirate Bay”. InaccordancewiththeCourt’sruling,thePirateBaywasobligatedtostopcommunicatingcopyright-protectedworkstothepublic.


UndertheCopyrightAct(404/1961),thecourtmayorderoperatorsto provide the copyright owners with the contact information ofsubscriberswhomakematerialprotectedbyacopyrightavailabletothepublicwithoutauthorisationundercertainconditions.TherehavebeenseveralcasessofarinFinlandwheretheMarketCourthasmadesuchorderswhich,ingeneral,haveresultedintheteleoperatorssurrenderingtheinformationofthousandsofsubscribers.However,in2017theMarketCourtrejectedarequesttosurrenderthe subscribers’ contact information that was substantially basedonthesamegroundsasthepreviousrequests.Thus,itseemsthatthe Market Court has now adopted a new interpretation of therequirements needed to fulfil the right under the CopyrightAct.Consequently,theMarketCourtisnowlesslikelytoorderoperatorstoprovidethecontactinformationofthesubscriberstothecopyrightowners.TherulingislargelybasedonthedecisionEU:C:2016:970oftheCourtofJusticeoftheEU.


TheEUhasimposednetneutralityrequirementsunderRegulation2015/2120whicharedirectlyapplicableinFinland.


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Jan LindbergAttorneys-at-Law TRUSTMikonkatu 17 A00100 HelsinkiFinland

Tel: +358 40 823 6031Email: [email protected]: www.thetrust.fi/en

Terhi RekiläAttorneys-at-Law TRUSTMikonkatu 17 A00100 HelsinkiFinland

Tel +358 44 287 1182Email: [email protected]: www.thetrust.fi/en

Jan is one of the leading Finnish experts in technology and IP-driven mergers & acquisitions, ICT outsourcings and agreements, and other technology law matters.

He works closely in business sectors such as telecoms, high-tech, clean-tech, wearables, energy and pharmaceutics, advising clients in different M&A deals and their financing, joint ventures, digitalisation and e-commerce matters, licensing, cooperation arrangements and outsourcing, as well as in other IP and technology law assignments. Among other things, Jan has negotiated numerous international technology arrangements and transactions with top industry players in various fields of technology and in various locations from the US to Japan.

Jan has been listed as one of Finland’s leading advisers in his field in several rankings and publications, including International Law Offices Client Choice Award in Mergers & Acquisitions 2016 in Finland, Best Lawyer, IAM 250 World’s Best Patent and Technology Lawyers, Chambers Europe and Chambers Global.

TRUST is a Finnish transaction law boutique focusing on the most demanding M&A, strategic investments, complex technology and IP transactions, the energy sector, financial regulation and banking assignments. Our objective is to provide exceptional value through innovative solutions, specialist knowledge, insight and maturity of judgment. We regularly deal with the most sensitive and business-critical matters of the most demanding foreign and Finnish corporate clients. We seldom handle routine assignments.

TRUST has been ranked as one of the leading firms in Finland in numerous independent surveys, including Chambers Global, Chambers Europe, IFLR1000, The Legal 500, Best Lawyer and Intellectual Asset Management – World’s Leading Patent and Technology Lawyers.

TRUST has strong links to prominent international law firms, which also enables us to assist our clients in all cross-border assignments.

Terhi has gained in-depth experience especially in IT contracts and privacy. Terhi has drafted and negotiated different kinds of contracts concerning, inter alia, outsourcing, licensing, SaaS services and software deliveries in addition to which she has advised clients on various privacy-related matters. Additionally, she has experience in other commercial contracts, IT disputes, intellectual property rights, mergers and acquisitions and public procurement/tendering. Terhi advised, for example, one of the biggest IT companies in Finland on a system delivery encompassing the project delivery, licences and maintenance and support services worth tens of millions of euros to a Finnish state-owned company.


Chapter 13

1 Overview


AccordingtotheFrenchFederationofTelecomOperators,in2016,thetelecommunicationssectorgenerated€40bn(i.e.,1.8%ofGDP)andtheaudio-visualmediadistributionsectorgenerated€9bn(i.e.,0.4%ofGDP).Thedigitaleconomyasawholeisestimatedtohavegenerated€75bn(i.e.,3.4%ofGDP).Based on the ARCEP’s (Electronic Communications and PostalRegulatoryAuthority,Autorité de Régulation des Communications Electroniques et des Postes) last annual report, the electroniccommunications services’ retail market generated a €36.2bnturnover in2017,and telecomoperatorsemployedabout112,700people at the end of the year. Without including the price ofspectrum acquisition, in 2017, investments made by telecomoperatorsreachedanhistoricalrecordof€9.6bnasaresultofa7.5%increasefromthepreviousyear.The main players in the telecom market are Orange (FranceTelecom),SFR(Altice),BouyguesTelecomandFree(Iliad).The Internet infrastructure sector is controlled by the above-mentionedtelecomoperators,butOVHhasdevelopedsuccessfullyasapureplayerinthissegment.The prevailing companies in the audio-visual media distributionsectorareFranceTelevisions,TF1,M6andCanal+.Itshouldbenotedthattheaudio-visualdistributionsectorisfacingthe emergence of new players, offering streaming and video on-demand services, such asNetflix orOCS (ownedbyOrange andCanal+). In the future, thesenewplayersmay competewith themostsignificantmarketparticipants.


The operation of electronic communications networks and theprovision of electronic communications services are governed bythePostalandElectronicCommunicationsCode(Code des Postes et des Communications Electroniques–CPCE),whichwasmainlybasedontheprovisionsofLawn°96-659of26July1996regulatingtelecommunications, and then amended and notably enriched by

Law n°2004-669 of 9 July 2004 on electronic communications,which transposed the new EU regulatory framework of 2002(“TelecomsPackage”)intoFrenchlaw.Morerecently,thetelecomsectorwasimpactedbytheadoptionofthefollowingtexts:■ Ordinance n°2014-329 of 12 March 2014 on the Digital

Economy which restored theARCEP’s power to sanctionfollowing the French Constitutional Council ruling, whichconsidered the previous provisions to be unconstitutional(ConstitutionalCouncil,Decisionn°2013-331QPCof5July2013).

■ Law n°2015-912 of 24 July 2015, relating to intelligenceserviceswhichorganisethecontroloftechnologiesusedbysaidservices.

■ Law n°2015-990 of 6 August 2015, to promote theeconomicgrowth,activityandequityeconomicopportunity(Loi Macron), includes provisions regarding electroniccommunicationsoperatorsandInternetplayers.

■ European Regulation 2015/2120 of 25 November 2015,layingdownmeasures concerningopen Internet access androamingonpublicmobilecommunicationnetworks,enteredintoforceon30April2016.

In 2016, France passedLawn°2016-1361 of 7October 2016 fora “Digital Republic”, which significantly impacted the Frenchdigitaleconomy.ThisLawaimstostrengthenconsumerconfidencein the Internet. It is alsomeant to increase competitionbetweenserviceprovidersbyloweringentrybarriers,notablybyorganisingdataportability.ItalsogivesthetelecomregulatortheauthoritytooverseenetneutralityandopenInternetaccess.Lawn°86-1067of30September1986onFreedomtoCommunicateforms the basis of audio-visualmedia distribution regulation. Itwas subsequently amended, notably by Law n°2004-669 of 9July 2004 relating to electronic communication and audio-visualcommunications services, which expanded the objectives andstrengthenedthepowersofthebroadcastingauthority,reviewedthebroadcasting licensing regimeand softened theanti-concentrationprovisions,andbyLawn°2013-1028of15November2013,relatingtotheindependenceofFrenchpublicservicebroadcasting.General privacy and data protection rules are set by Law n°78-17of6 January1978on InformationTechnology,DataFilesandCivilLiberties,assubsequentlyamendedbyLawn°2004-801of6August2004 to implement theEUDirectiveof24October1995,andmorerecentlybyLawn°2018-493of20June2018relatingtotheprotectionofpersonaldata. ThesaidLawis theresultof theimplementation of theGDPR. Decree n°2018-687 adopted on 1August2018 is the last step for thecomplete transpositionof theGDPRwithintheFrenchlegalsystem.

BEHRING Anne-Solène Gay

France


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audiencefortelevisionservices(eitherdigitaloranalogue)exceeds8%. Inaddition, it is forbiddenforanysingle individualor legalentity that already holds a national terrestrial television service,wheretheaverageaudienceforthisserviceexceeds8%,to,directlyorindirectly,holdmorethan33%ofthecapitalorvotingrightsofa company that has an authorisation to provide a local terrestrialtelevisionservice.Lawn°2004-1343of9December2004andDecreen°2005-1739of30December2005,whichintroducednewarticlesL.151-1et seq. andR.153-1et seq.intheMonetaryandFinancialCode,establishesthattherearenorestrictionsonforeignownershipandinvestmentinFrance.However, if all restrictions have in principle been lifted, foreigninvestment in business sectors considered to be “sensitive” stillrequirespriorauthorisation.InaccordancewitharticleL.151-1et seq.andarticleR.153-1et seq. oftheMonetaryandFinancialCode,theinvestormustsubmitaformalapplicationtotheFrenchMinistryofEconomyforpriorauthorisation.Thisauthorisationisprovidedwithin twomonths fromwhen the application is received by theFrenchMinistryofEconomy (a tacit agreement is assumed if noreplyisreceived).Theserestrictionsapplywhenaforeign(EUornon-EU)investmentismadeinastrategicsector.Decreen°2014-479of14May2014hasexpandedthelistofsectorsinwhichforeigninvestorsmustseekpriorauthorisationbytheFrenchMinistryofEconomy.Thelistisbroaderfornon-EU/EEAcountries’investorsthanforEUorEEAMember States’ investors, and now includes, for the latter type,activitiesdeemedcrucialtoFrance’snationalinterests(i.e.,relatingto public order, public security and national defence), encryptionanddecryption,communicationsinterceptionandactivitiesrelatingto integrity, security and continuity of electronic communicationservicesandnetworks.Any transaction concluded in violation of these rules is null andvoid,and the investor is subject tocriminal sanctions (fiveyears’imprisonment and a fine amounting to twice the amount of thetransaction).Further,regulationalsoprovidesforspecificrestrictionsonforeigninvestments in the media sector. Unless otherwise agreed ininternationalagreements,aforeigninvestormaynotacquiresharesinacompanyholdingalicenceforaradioortelevisionserviceinFranceandthatusesradiofrequencies,ifthisacquisitionhasdirectlyorindirectlytheeffectofraisingtheshareofcapitalorvotingrightsownedbyforeignnationalstomorethan20%.

2 Telecoms

General


FrancehasbeenaWorldTradeOrganisation(WTO)memberandamemberofGATTsince1January1995.ItisaMemberStateoftheEuropeanUnionandallEUMemberStatesareWTOmembers,asistheEUinitsownright.The EU has made commitments regarding telecommunicationsrelating tounfaircompetitivepractices, interconnection,universalservice,licencesandtheallocationofscarceresources(notablyinthedocumententitled“GATS/SC/31.Suppl3”).

The Internet is more specifically governed by Law n°2009-669of12June2009 favouring thediffusionandprotectionofartisticcreationontheInternet,whichadaptedfortheInternetthestandardlegalprotectionofcopyrightforliteraryandartisticworkssetintheIntellectualPropertyCode,andbyLawn°2004-575of21June2004regardingConfidenceintheDigitalEconomy(“LCEN”).


TheARCEP is the independentgovernment agency thatoverseestheelectroniccommunicationsandpostalservicessector.The BroadcastingAuthority (Conseil Supérieur de l’Audiovisuel – CSA) is thestateagencyresponsible for theaudio-visualmediadistributionsector.Thequestionofwhethertomergethesetwoauthoritieswasregularlydiscussed.However,thismergerprojecthasbeenruledoutfornowinfavourofclosercooperation.The National Frequencies Agency (Agence Nationale des Fréquences – ANFR) ensures the planning, management andcontroloftheuse,includingforprivateuse,ofthepublicdomainradio frequencies. As such, the agency is in chargeof allocatingfrequency bands to theARCEP and theCSA for their allocation,respectively,tothetelecomandbroadcastingoperators.The Data Protection Authority (Commission National de l’Informatique et des Libertés – CNIL)controlsautomaticpersonaldataprocessingandensurestheprotectionofpersonaldata.TheHighAuthorityfortheDistributionofWorksandtheProtectionofCopyrighton the Internet (Haute Autorité pour la diffusion des oeuvres et la protection des droits – HADOPI) isdedicated to theprotectionofintellectualpropertyrightsontheInternet.HADOPIhasbeenmuchchallengedsinceitwascreatedin2009.Itsdissolutionisregularlyunderdiscussion,butthedecisionkeepsbeingpostponed.TheCompetitionAuthority (Autorité de la Concurrence – AdlC )alsoplaysamajor role in theTMTsectors in theenforcementofgeneralcompetitionrules,and isnotably inchargeofsanctioninganticompetitivepracticesandcontrollingmergeroperations.The government also plays an active part in the telecom, mediaandInternetsectorsthroughtheMinistryofEconomyandFinance,notablytheGeneralDirectorateforCompetitionPolicy,ConsumerAffairsandFraudControl(Direction Générale de la Concurrence, de la Consommation et de la Répression des Fraudes – DGCCRF ),as well as through the Secrétaire d’Etat for the Digital Sectorunder theauthorityof theMinisterofEconomyandFinance,andthrough theMinistryofCultureandCommunication,andnotablythe Department of Media and of Cultural Industries (Direction Générale des Médias et des Industries Culturelles – DGMIC).


The telecoms and media distribution sectors are liberalised. Byexception,theaudio-visualmediadistributionmarketissubjecttospecificownershiprestrictionsdesignedtopreservemediapluralismandcompetition.Theserestrictionspreventanysingleindividualorlegalentityfromholding,directlyorindirectly,morethan49%ofthecapitalorthevotingrightsofacompanythathasanauthorisationtoprovideanationalterrestrialtelevisionservice,wheretheaverage


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competition litigationcancancel,confirmoramendtheARCEP’sarbitrationdecisions. ThedecisionoftheCourtofAppealcanbechallengedbeforetheJudicialSupremeCourt(Cour de cassation).



The French telecommunication sector is based on a generalauthorisation regime. According to article L.33-1 of the CPCE,theestablishmentandoperationofnetworksopentothepublicandtheprovisionof electroniccommunications services to thepublicarefree,subject topriornotificationto theARCEPbyfillinginaformavailableon itswebsite. Nonotification is required for theestablishmentandoperationof internalor independent (dedicatedClosedUserGroups)networks.BasedonLawn°2015-990of6August2015topromoteeconomicgrowth, activity and economic opportunity (Loi Macron), theARCEPisnowentitledtoforceanyactorwhichhasinfringedthenotificationobligationtocompulsorilydeclareitselftotheARCEP.By abrogating sectionVII of article 45 of Law n°86-1317 of 30December 1986 (Finance Law for year 1987), article 27 of Lawn°2015-1785of29December2015 (FinanceLaw foryear2016)withdrew provisions relating to the administrative tax owed byoperatorstotheARCEP.Operatorshavetocontributetothefinancingofuniversalservice.To this end, every year they have to declare their turnover ofthe previous year after deduction of access and interconnectionrevenues(articleL.35-3oftheCPCE)andafterdeductionof€100million(articleR.20-39oftheCPCE).Theuseofscarceresources(frequencyandnumbering)issubjecttoanindividualauthorisation,thenumberofwhichcanbelimitedbytheARCEPandwhichcanbegrantedthroughcompetitiveprocedures.A bill is currently under reviewby the Parliament to supress thepriornotificationrequirement.


Thegeneral authorisation to establish andoperate networks opento the public and to provide electronic communications to thepublic is subject to a prior notification to theARCEP, which isnow completed online. Following theARCEP’s receipt of suchnotification,theapplicantiseligibleforcertainrightsandisboundbyvariousobligations.Themainrequirementsassociatedwiththegeneralauthorisationareasfollows:■ compliancetostandardsandspecificationsforthenetworks

andservicesoffered;■ qualityandavailability;■ compliance with regulations in respect of health and the

environment,andoccupationofthepublicdomain;■ sharingofinfrastructureandlocalroaming;■ interconnectionandaccess;■ contributiontouniversalserviceandpaymentoftaxes;■ compliancewithpublicorderandnationaldefenceimperatives;■ confidentiality and neutrality in respect of transmitted

communications;and■ paymentofanannualadministrationfee.

The principles of theWTO telecoms reference paper have beenimplementedunderFrenchlaw.


TelecomsactivitiesareregulatedundertheCPCE.The operation of public networks and the provision of electroniccommunicationservicestothepublicaresubjecttopriornotificationtotheARCEP.However,theuseofradiofrequenciesandnumberingresourcesisbasedonanauthorisationregime,andthereforerequiresanindividuallicencetobegrantedbytheARCEP.


The telecom regulatorARCEP is in charge of the regulation ofthe postal and electronic communications sectors. It ensures theimplementationofauniversalservice,definesex ante regulationsapplicabletooperatorsthathaveasignificantmarketpoweroncertaindefinedmarkets,isinvolvedindefiningtheregulatoryframework,allocatesscareresources(radiospectrumandnumbering),imposessanctionsincaseofinfringementofthesector-specificregulations,andsettlesdisputesarisingbetweenoperators.The Competition Authority AdlC enforces general competitionrules.ItistheresultofLawn°2008-776of4August2008onthemodernisationof the economy (LME), passedon4August2008,which transformed the Conseil de la Concurrence into a new Autorité de la Concurrence. This reformcreatedasingleagencywithstrengthenedpowersandmeans.TheCompetitionAuthoritycarries out all activities of competition regulation (inquiries,antitrust activities, merger control, publication of opinions andrecommendations).Thetwoauthoritiesinteractfrequently,aseachcansolicittheother’sopinion on the subjects of its competence. For example, whenconducting market analysis to identify operators with significantmarket power in a relevant market, theARCEP must solicit theopinionoftheCompetitionAuthority.Also,bothauthoritiesprovideopinionstothegovernment.TheARCEPandtheCompetitionAuthorityarestateagencies,butareindependentfromthegovernment;thisindependenceisstatutory.Alongside the ARCEP and the AdlC, the ANFR is a specialisedregulatorybodydedicatedtospectrummanagement,asitisascarceresource. It especially interacts with the ARCEP for spectrummatters,suchas,for instance,450MHzPMRapplicationsorLTE.TheANFR is in charge of the national spectrumplan and has theabilitytonegotiateattheCEPTandITUlevelonbehalfoftheFrenchgovernment(seeinfraquestion3).


The ARCEP’s administrative decisions are enforceable but canbe appealed before the Administrative Supreme Court (Conseil d’Etat) fordecisionsmadeby theExecutiveBoard,orbefore theParisAdministrative Court (Tribunal Administratif de Paris) fordecisionsmadebytheChairmanunderhisownpowers.The ARCEP’s arbitration decisions relating to disputes can beappealed before the Court of Appeal of Paris (Cour d’appel de Paris). The chamber of Court specialised in regulation and


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Public network operators have the obligation to negotiatewith all other public network operators requesting access andinterconnection. Operators are free in their negotiation on thissubject.Accesscanonlyberefusedifjustified.TechnicalandfinancialconditionsofinterconnectionandaccessareagreeduponbetweenthetwooperatorsandformalisedbyaprivatelawagreementwhichmaybetransmittedtotheARCEP,uponrequest.In case of dispute, the ARCEP can impose interconnection andaccessconditionsonobjective,transparent,non-discriminatoryandproportionategrounds.In accordance with article L.36-8 of the CPCE, theARCEP hasthe competence to settle disputes in case of refusal of access orinterconnection,failureofcommercialnegotiations,ordisagreementon the conclusion or execution of an access or interconnectionagreementtoanelectroniccommunicationsnetwork.TheARCEP has to render its decisionwithin amaximumof sixmonthsfromthereferralbyadeclaredoperatoranddefinethefairtechnical and tariff conditions for access and interconnection. Incaseofemergency,theARCEPisentitledtoadoptinterimmeasures.TheARCEP’sdecisionscanbeappealedbeforetheParisCourtofAppeal.


Operators that are designated as having significantmarket power(SMP) in a specific market are required to publish a standardinterconnection offer. The ARCEP conducts rounds of marketanalysisandthendecidesforeachrelevantmarketwhichoperatorshaveSMP. Currently, the fifth round ofmarket analysis is validuntil2020.


Only the charges for interconnection or network access ofSMPoperators can be subject to a price or cost regulation. TheARCEPconductsanalysisof themarketsandcan imposevariousobligations on SMP operators, including cost-orientation of theirtariffs regarding selected relevant markets, based on a long-runincrementalcostmodel.


a) InFrance,thefirstaccountingseparationofFranceTelecomwassetupby the regulatoryauthority fromtheopeningofcompetition. It was broadened in 2006 by theARCEP’sDecision n°06-1007, further to the implementation of thenewregulatoryframework.

It requires France Telecom, now Orange, to distinguish,from an accounting point of view, its various activities in


Individual authorisations relate to the use of radio frequencies ornumbering resources. The allocation decision defines the usageconditions, in particular the authorisation’s duration. Accordingto article L.42-1 (for spectrum) and article L.44 (for numberingresources)oftheCPCE,theirdurationcannotexceed20years.GSMmobileoperators’licenceswereinitiallyawardedforaperiodof15years,andwererenewedin2006forthesameduration.InJune2010,UMTSlicencesweregrantedfor20yearsand,inDecember2015,700MHzspectrumwasallocatedfor15years.Individualauthorisationscanbetransferredsubjecttothetransferhaving received the ARCEP’s approval (for spectrum allocatedthrough a competitive procedure or used for a public servicemission), or if the transfer was declared to the ARCEP (forspectrumallocatedbasedontheruleof“firstcome,firstserved”).TheARCEPmusttakeadecisionwithinthreemonthsinthefirstcaseandwithinsixweeksinthesecondcase.Incaseofspectrumassignment, the benefiting operator has to fulfil all conditionsimposed on the operator initially holding the licence, and takeresponsibility for all the commitments contracted by the formeroperator.Bywayofderogation,certainfrequenciescanbeassignedon thesecondarymarket(seeinfraquestion3.6).



AccordingtoarticleL.45-9oftheCPCE,publicnetworkoperatorshavea rightofwayonpublic land roadsandonpublicnetworksthat are part of the public domain (for example, undergroundpipes), except for electronic and communications networks andinfrastructure. Thisright isgrantedbyaunilateraladministrativeauthorisation(permission de voirie)providedbythepublicauthorityinchargeofthepubliclandinquestion.Regardingotherpartsofpublicland,operatorshavetonegotiatearightofwayandtoenterintoacontract(convention d’occupation du domaine public)withthepublicauthorityinchargeofthepubliclandinquestion.Publiclandoccupationcangiverisetothepaymentoffeesthatarecappedbyadecree.Thecompetentauthoritywilltakeadecisionwithintwomonthsfromtherequest.Thecompetentauthorityistheauthorityinchargeofmanagingthepubliclandinquestion,i.e.,eithertheonewhichownssuchpubliclandortheonetowhichthemanagementofsuchpubliclandhasbeendelegated(i.e.,anotherpublicentityoraprivateentitysuchasaconcessionairefor,e.g.,highways).Regardingprivate landoccupation, operatorsof networksopenedtothepublicbenefitfromeasementsonprivateproperties,allowingnetworkinstallationandoperation.


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as a universal serviceprovider. Among specificobligations suchas quality of service, universal service is based on solidarity.Therefore, thedesignatedproviderofuniversalservicemustofferadaptedretailpricesasspecifiedinregulations.ThecurrentproviderofuniversalserviceisOrange,asperanorderof2017(Arrêté du 27 november 2017 portant designation de l’opérateur chargé de fournir les prestations “raccordement” et “service téléphonique” de la composante du service universel prévue au 1° de l’article L.35-1 du CPCE).


The Consumer Code sets a certain number of rules specific tothe provision of electronic communication services to consumers(including the information obligation, minimum commitmentperiod, reimbursement of advances and deposits) which werereinforcedovertime,notablybyLawn°2008-3of3January2008on competition and consumer protection (Loi Chatel), accordingto which technical assistance and customer care services cannotbepremium-rated and thewaiting time for connect-calls to thoseservices shouldbe free-of-charge, andwhichalso sets strict rulesregarding cancellation fees, notice periods for termination andmaximumcontractduration.TheCPCEalsoorganisesspecificprotectionsuchastherighttobelistedornotindirectories,andtherighttoadetailedinvoice.The Commission of Unfair Clauses regularly declares abusiveclausescontainedintheoperators’generalconditions.More recently,Lawn°2014-344of17March2014 (Loi Hamon)alsoaffectedthetelecomsector,bysettinglimitstophonemarketingand specific rules regarding portability, billing, information onvalue-addedservices,etc.

Numbering


TheoperatorsasktheARCEPtoawardthemnumberingresourcesbased on the National Numbering Plan (such as prefixes, shortnumbersandblocksofnumbers)accordingto theirneeds. Theseoperators can reserve such numbering resources, which are thengiven to each customer of the operator. In case of scarcity, theARCEPmaydecidetolimitthenumberoflicencesandtoimplementacallforthetenderprocedure.Incaseofabsenceofscarcity,the“firstcome,firstserved”ruleapplies.


TheARCEPdefines,managesandcontrolstheNationalNumberingPlan,whichawardsthevarioustypesofnumberstotheelectroniccommunications services (fixed-line, mobile, and value-addedservices). The National Numbering Plan was reviewed in 2018(decision n°2018-0881), which notably unified the existingregulations and set tighter restrictions on the use of numberingresources.

accordance with the segmentation of the relevant marketsandtomakesurethatitsretailactivitiesareconsistentwiththe wholesale offers it produces, in conditions equivalenttothosegrantedtoalternativeoperatorswhentheypositionthemselves in the retail markets. This supply leans inparticularontheformalisationofinternaltransferprotocolsonwhichtheregulatorcanexercisecontrol.

b) InMarch2011,theCompetitionAuthorityinvitedtheARCEPtobeginpreparatoryworkrelatedtothepossiblefunctionalunbundling of monopolistic activities of France Telecomfromcompetitiveactivities,buttheprojectwasputaside.

c) Nooperatorhasbeenrequiredtoseparatepartsofitsbusinessintoseparatelegalentities.


The regulatory framework considers high-speed and very high-speedbroadbandnetworksonadifferentbasis.■ High-speed broadband networks are copper-based and

thereforeregulatedthroughtheunbundlingofthelocalloopwhichbelongstoOrange,astheincumbentoperator.Ductsand related infrastructure are regulated by the ARCEP’sdecisionn°2017-1488,adoptedon14December2017.Also,decision n°2017-1570 of 21 December 2017 is currentlyregulatingtariffsuntil2020.

■ Very high-speed broadband networks are fibre-based, as theregulatoryframeworkespeciallyemphasisesFTTHtechnology.TheARCEPthereforeadoptedaseriesofdecisionssettingupanationwideroll-outplandividingtheterritoryintodenserareasandlessdenseareas(zonestrèsdenses–ZTD and zonesmoinsdenses – ZMD).Decisionn°2009-1106of22December2009isthemainregulationforbothareas.

The incumbentoperator is theonlyonewithacopper local loop,andissubjecttoanobligationtogiveaccesstoitslocalloopinthetechnicalandtariffconditionsdefinedinitsreferenceoffer,issuedannuallyunderthecontroloftheARCEP.Cableoperatorsarenotsubjecttoalocalloopaccessobligation.Regardingaccesstopassiveinfrastructureandforveryhigh-speedbroadband,theCPCEsetsforthspecificrules.AccordingtoarticleL.34-8-2-1, infrastructure managers should grant access to anyoperator of very high-speed broadband networks formulating areasonable request. Access conditions, especially financial,mustbefairandreasonable,astheinfrastructuremanagershallcoveritsexpenses.Ontheotherhand,theaccessrequestcanbedeniedonlyuponspecialmotives,suchaslackofcapacityornationalsecurity.Cable TV still has a hybrid regulatory status betweentelecommunicationsandmediaregulations.Therearenoregulatoryholidaysforinfrastructureaccess.However,whereprivateinitiativeisnotsustainable,thelocalgovernmentCode(Code Général des Collectivités Territoriales – CGCT )authoriseslocalpublicentitiestooperatenetworks,underarticleL.14215-1.



Universalservice is theonlyservice inwhichretailpricescanbecontrolled.CPCEprovisionsrequireanoperatortobedesignated


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Any change of controlmust be declared to theARCEP in ordertoallowit toverify that theconditionsunderwhich thespectrumlicencewasinitiallyawardedarestillrespected.


Thisdependsonthetypeoffrequencies.ThetransferofspectrumlicencesissubjecteithertonotificationtotheARCEP,whichmayopposeit,or,whenfrequenciesareusedforpublicservicemissionsorweregrantedwithintheframeworkofaselectionprocess,tothepriorapprovaloftheARCEP.Ordinance n°2011-1012 of 24August 2011 introduced a greaterflexibilityinspectrumassignmentbygivingtheoperatorstheabilityto trade frequency licenceson the secondarymarket. The list offrequency bands which can be traded was set by theMinisterialOrderof11August2006,pursuanttoarticleL.42-3oftheCPCEandDecreen°2006-116of11August2006.Thespectrumlicenceholdermaytransferallofitsrightsandobligationstoathirdpartyfortheentireremainderofthelicence(fulltransfer),oronlyaportionofitsrightsandobligations(geographicalregionorfrequencies).Spectrumlicencescanbesub-licensed,subjecttotheARCEP’spriorapproval.TheARCEPmustmakeadecisionwithintwomonths.



Thelegalframeworkforcybersecurityissetoutby:■ Law n°2013-1168 of 18 December 2013, stating legal

requirementsfortheprovidersofcriticalinfrastructure;■ Law n°2018-133 of 26 February 2018, implementing the

provisionsof theDirectiveconcerningmeasures forahighcommon level of Security of Network and InformationSystems(NISDirective),of6July2016;

■ Decree of theConseil d’Etat of 25May 2018, concerningthesecurityofnetworkandinformationsystemsapplicableto operators of essential services and to the digital serviceproviders;and

■ Decreeof13June2018establishingthetermsprovidedbyarticles8,11and20oftheabove-mentionedDecree.

Furthermore, specific requirements relating to cybersecurity arestatedbytheDataProtectionLaw(articles34and35)andbyarticleD98-5-IIIoftheCPCE.Inaddition,articleL.33-14oftheCPCE,createdbyLawn°2018-607of13July2018onmilitaryprogramming,states that, for thepurposesofsecurityanddefenceofinformationsystems,operatorsareauthorisedtoinstall,ontheirnetworks,attheirownexpenseandafterinformingtheFrenchNationalCybersecurityAgency(Agence Nationale de la Sécurité des Systèmes d’Information – ANSSI),devicesusingtechnicalmarkersinordertodetecteventsaffectingsecurity.Inthecaseofdetectionofsuchevents,operatorsarenotobligedtointerrupttheattackbutshallinformANSSIwithoutdelay.UponANSSI’srequest,operatorsshallalsoinformtheirsubscribersofthevulnerabilityoftheirinformationsystemsorthebreachestheyhavesuffered.


Eachoperatorhastoanswertoaportabilityrequestfromacustomerwishing to subscribe to an offer from another operator within amaximumofthreeworkingdaysformobilephoneoperators(exceptforoverseasterritories).Itisalsoamaximumofthreeworkingdaysforfixedoperators(sevenworkingdaysfortheB2Bsegment).

3 Radio Spectrum


Spectrum use is regulated by the ANFR which manages andprovidesspectrumresources forservices (broadcasting,electroniccommunicationsservices,defence,etc.).The frequency bands assigned to these services are respectivelyawardedtotheoperatorsbytheARCEPandtheCSA.


Frequency allocation depends on the nature of the frequencies.Pursuant to article L.42-2 of the CPCE, in case of scarcity,the ARCEP may decide to limit the number of licences and toimplementacallforthetenderprocedure(comparativesubmissionorauctioning).Incaseofabsenceofscarcity,the“firstcome,firstserved”ruleapplies.


In general, the use of frequencies requires an allocation decisionissued by the ARCEP. Nevertheless, certain frequencies areexemptedfromauthorisationofuse,buthavenoguaranteeagainstinterference. This is notably the case of spectrum used by lowpower and small-range systems such asRFID,WiFi frequencies,anti-intrusionalarms,medicaldevices,etc.The ARCEP can also decide, within the framework of anexperimentalprocedure,totemporarilyexemptcertaintechnologiesfromfrequenciesauthorisationofuse.The ARCEP also recently launched a regulatory “sandbox”whichhas thepurposeofallowingcompanies toexperimentwithinnovative services and applications in a lightened framework,particularlyforspectrumlicences.


Asspectrumispartofthepublicdomain,theuseofradiofrequencyspectrumgivesrisetothepaymentofafee,theamountofwhichissetbyaministerialdecree,orbytheallocationdecisionaccordingtothefrequencybandusedandtheoperator’sexpectedprofitabilityresultingfromthisuse.


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interceptions(Système de Transmission d’Interceptions Judiciaires – STIJ ),authorisedbyDecreen°2007-1145of30July2007,wasreplacedbyanewcentralisedmanagementplatform(Plate-forme Nationale des Interceptions Judiciaires – PNIJ ) instituted byDecreen°2014-1162of9October2014.Morerecently,Lawn°2016-731of3June2016reinforcingeffortstofightagainstorganisedcrimeandterrorismprovidedadditionalinvestigative powers to magistrates, notably by allowing the useof technicaldevices todirectlycaptureconnectiondatanecessaryfortheterminalequipmentortheusersubscriptionnumber(IMSIcatcher).Inaddition,dataaccessisnotlimitedtodatadisplayedonthescreenorthataresenttoorissuedfromperipheralaudio-visualdevices,butnowincludesdatastoredontheuserITsystem.Interception decisions are taken for amaximum duration of fourmonths,andcanberenewedwithoutexceedingoneyear(twoyearswheninrelationtomajorinfringements).b) Regulation of administrative interceptionsUsed without any legal basis before 1991, administrativeinterceptions–likejudicialones–wereregulatedbyLawn°91-646of10July1991,afterFrancewascondemnedbytheEuropeanCourtof Human Rights (CEDH, 24April 1990,Huvig and Kruslin c/ France),whichprovidedthattheycouldbeimplementedsubjecttoadecisionofthePrimeMinisterunderthecontrolofanindependentauthority(CNCIS).Lawn°2004-669of9July2004extendedthescope of these interceptions beyond telephony interceptions toincludeallelectroniccommunications.Law n°2006-64 of 23 January 2006 providing for anti-terrorismmeasuresallowedpoliceforcestoaccesselectroniccommunicationservices, the access to which was initially restricted to judicialauthorities. This data includes all data retained by electroniccommunicationsoperatorspursuanttoarticlesL.34-1andR.10-12toR.10-14oftheCPCE,andbyISPsandhostingserviceproviderspursuant to article 6-11 of LCEN and Decree n°2011-219 of 25February2011.Lawn°2013-1168of18December2013onmilitaryprogramming(LPM )gavevariousstateagenciestherighttoaccessInternetusers’communicationsdata,includingthedataissuer,datarecipient,timeofthecommunications,websitesvisitedandrealtimegeolocationoutsideofanyjudicialproceeding.Lawn°2015-912of24July2015,relatingtointelligence,reinforcedtheanti-terrorismlegalarsenalbylegalisingandprovidingalegalframework for practices implemented by intelligence services(namely,Direction Générale de la Sécurité Extérieure – DGSE,Direction de la Protection et de la Sécurité de la Défense – DPSD,Direction du Renseignement Militaire – DRM, Direction Générale de la Sécurité Intérieure – DGSI,Direction Nationale du Renseignement et des Enquêtes Douanières and Tracfin).The said law sets out the conditions of broad administrativesurveillancebygrantingintelligenceservicestherighttousevarioustechnologies, such as online correspondences’ administrativeinterceptions,IMSIcatchersanddevicegeolocation.Furthermore,thesaidlawenforcestheuseof“blackboxes”withinInternet service providers and telecoms operators’ networks,aimingat collecting suspiciousconnectiondata inorder todetecta terrorist threat (articleL.851-3of theDomesticSecurityCode).Although this text gave rise to strong reactions, these provisionswerevalidatedbytheConstitutionalCouncil(decisionn°2012-713DCof23July2015).As the implementation of black boxes may result in masssurveillance, thisprovisionwasverycontroversialandconsideredbynumerouscommentators as an infringementof theprivate liferightsofFrenchcitizens;“blackboxes”wouldanalysethemetadata


Theinterceptionofelectroniccommunicationswasinstitutedaspartoftheefforttofightseriouscrimeandterrorism.Inthecontextofanincreasedterrorismthreat,thissubjecthasbecomeamajorissue.Regulationregardingthetechnicalmeasuresforlawfulinterceptionis the result of various successive legal texts. Regulation variesdependingontheauthority(eitherjudicialoradministrative)fromwhichtheinterceptionoperationoriginates.See infra question 4.3 for the description of the administrativeinterceptionregulation.


a) Regulation of judicial interceptionsFirstly, the interception of electronic communications can beorderedbyjudicialauthoritiespursuanttoarticle100oftheCriminalProcedureCode,resultingfromarticle2ofLawn°91-646of10July1991regardingcorrespondencesecrecy.Electroniccommunicationswhichcanbeinterceptedincludevoice,videoconferencing,mobiledata (Short Message Service [SMS] and Multimedia MessagingService[MMS])aswellasInternetdata.Secondly, connection data can be required through judicialrequisitionsissuedbasedonarticlesn°60-2,77-1-2and99-4oftheCriminalProcedureCode.Connectiondatawhichcanbegatheredinclude data retained by electronic communications operatorspursuant to articlesL.34-1andR.10-12 toR.10-14of theCPCE,andbyhostingserviceprovidersandISPspursuanttoarticle6-11ofLCENandDecreen°2011-219of25February2011.SincetheenactmentofLawn°2011-267of14March2011relatingtodomesticsecurity(LOPPSI ),itisalsopossibletocaptureinreal-timekeyboardentrydata(viakeyloggers)anddatadisplayedonthescreenaspartofthefightagainstseriouscrimeandterrorism,uponauthorisationoftheexaminingmagistrate.However,theseprovisionsprovedtobelargelyinsufficientastheydidnotaddressVoIP.Law n°2014-1353 of 13 November 2014, strengthening anti-terrorismprovisions,addressedthisshortcomingbyintroducingtheright toalsocapturedatasent toor issuedfromperipheralaudio-visualdevices(article706-102-1oftheCriminalProcedureCode).ThisregulationwasdesignedtogivethepossibilityofmonitoringtheprivateconversationsofSkypeusers.However, article 226-3 of theCriminalCode prevented this newprovision from being implemented, as technologies allowing forsuchcapturewerestillbannedasaresultoftheMinisterialOrderof4July2012,whichhadnotbeenamendedtoconsiderthisnewprovision.ThenewregulationwascompletedwhentheMinisterialOrderof17July2015addedtothelistofauthorisedtechnologies–technologiesallowingforthecaptureofdatasenttoorissuedfromperipheralaudio-visualdevices.Asaresult,electroniccommunicationservicessuchasVoIPservicesare now subject to interceptions through the implementation ofspyware.In order to improve judicial interception capacity, responsivenessandsecurity,theinformationsystemforthemanagementofjudicial


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fromtheMinistryofIndustrythroughitsDual-UseItemsDepartment(Service des Biens à Double Usage – SBDU ).Byexception,exportis free forencryptionmeansused forconsumerpurposes that arecertifiedas“grand public”byANSSI,throughtheprocesssetoutbyDecreen°2007-663of2May2007(noANSSIexportauthorisationandnoSBDUlicence).These formalities are specified by the Ministerial Order of 29January 2015. They are incumbent upon the provider of theencryptionmeans.In addition, pursuant to article 230-1 of the Criminal ProcedureCode,certainmagistratescanrequestencryption/decryptionkeystobeprovidedifnecessaryfortheinvestigation.Infringementofthisobligationispunishablebyimprisonmentofuptothreeyearsanda€270,000fine(article434-15-2oftheCriminalCode);thissanctioncanbebroughtuptofiveyears’imprisonmentanda€450,000fine,if complying to the obligation could have avoided a crime beingcommittedorcouldhavemitigateditsconsequences.Theuseofencryptionmeanscanalsofallunderforeignownershiprestrictions(seesupraquestion1.4).


TheFrenchgovernmentinstitutedanobligationofretentionofdatarelating toelectroniccommunications (DailySafetyLawn°2001-1062of15November2001), codifiedunderarticleL.34-1of theCPCE. Onapurely exceptionalbasis, operatorswere authorisedtokeepthisdataforoneyearforbillingneedsandforthepurposesofresearchandinfringementsproceedings. AnewexceptionwascreatedbyLawn°2003-239of18March2003(Home Safety Law)whichmadetheseprovisionsperennial,whiletheyweresupposedtolastonlyuntilDecember2003.In 2006, the new FrenchAnti-TerrorAct (Law n°2006-64 of 23January 2006) extended the provisions concerning retention datain twoways. Firstly, not only the judicial authority but also thepoliceforcesmayaccesstheretaineddata.Secondly,dataretentionobligations now apply to Internet cafés, hotels, restaurants, andmore generally to any person or organisation providing Internetaccess,freeorforafee,asamainorsideactivity.TheseprovisionswerelastlycompletedbyLawn°2013-1168of18December2013onmilitaryprogramming(LPM ).Decree n°358-2006 of 26March 2006, on electronic communi-cationsdataretention,andDecreen°2012-436of30March2012specifiedtheretentionandanonymisationobligationsoftrafficdatawhichareincumbentuponoperators,pursuanttoarticlesL.34-1IIIandIVoftheCPCE.AccordingtoarticleR.10-13oftheCPCE,operatorsmustretainthefollowingdata:■ useridentificationdata;■ theterminalequipmentusedtomakethecommunication;■ thetechnicalcharacteristics,date,timeanddurationofeach

communication;■ anyassociatedservicesrequestedorusedbytheuser,andthe

suppliersofthoseservices;■ therecipientofthecommunication;and■ fortelephonyservices(inadditiontotheabove),geolocation

data.Retentionofcontent isstrictlyforbidden(articleL.34.1VIof theCPCE).The datamust be retained by the operator for 12months (articleR.10-13IIIoftheCPCE).

of all communications (the origin or recipient of a message, IPaddressofavisitedwebsite,andconnectionduration).To date, the government announced that “only data concerning suspicious people will be stored. All other data will be immediately destroyed”.Thereweremanyopponentsofthislaw,includingseveralassociationsas well as the French Data Protection Authority (Commission Nationale de l’Informatique et des Libertés – CNIL), and, morerecently, theOfficeof theUnitedNationsHighCommissioner forHumanRights(OHCHR),whichstatedthatitwas“worried about wide intrusive powers”grantedtointelligenceservices.Following censorship of the international surveillance provisionsby the Constitutional Council, the French Parliament adoptedcomplementary legal provisions by passing Law n°2015-1556 of30 November 2015, relating to the surveillance of internationalelectroniccommunications.c) Obligations incumbent upon operatorsTo complywith these interception obligations, operators have tofulfilthefollowingobligations:■ toretaincertaindatapursuanttoarticlesL.34-1andR.10-12

toR.10-14oftheCPCE(seeinfraquestion4.6);■ toputinplaceallnecessarymeanstoenforceinterceptions

requestedunderLawn°91-646of10July1991(articleD.98-7IIIoftheCPCE);and

■ to appoint qualified personnel to conduct interceptionoperationsincompliancewithDecreen°93-119of28January1993.

Theuseof technologies suchas spywareand IMSIcatchersdoesnotrequireanyactiontobetakenbytheoperators.Incontrast,theimplementationofblackboxesshouldbetheresponsibilityof theoperators.


Beforeresortingtosurveillancetechnologies,intelligenceservicesmustobtainthepriorauthorisationofthePrimeMinistergrantedaftertheopinionoftheNationalCommissionofControlofIntelligenceTechniques(Commission Nationale de Contrôle des Techniques de Renseignement – CNCTR)(thederogationfor“operationalurgency”tothisprinciplewascensoredbytheConstitutionalCouncil).Theuseofthesetechnologiesissubjecttoa“strictproportionalitytest”.See supra question 4.3 for the description of the administrativeinterceptionregulation.


Pursuanttoarticle30ofLawn°2004-575of21June2004,theuseofencryptionmeansontheFrenchterritoryisfree.However,unlessexemptedbasedonAppendixIofDecreen°2007-663of2May2007,andCategory5Part2ofAppendixIofCommissionDelegatedRegulation(EU)No1382/2014of22October2014, thesupply, importandexportofcryptologymeansinandfromFrancearesubjecttoapriordeclarationorapriorauthorisationoftheFrenchNationalCybersecurityAgency(ANSSI),dependingonthetechnicalfunctionalitiesandcommercialoperation(provisionorimport)whicharebasedonDecreen°2007-663of2May2007.Theexportofencryptionmeanscanalsofallundertheregulationofdual-useitems,andcanrequireincertaincasesapriorauthorisation


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Private companies are subject to the CSA’s prior authorisationto operate television or radio services. Key obligations are thenformalised in a contract entered into between the CSA and thecompanywhichhasbeengrantedtheauthorisationtooperate.Public sector companies (public TV channels, namely channelsof thegroupFranceTélévisions,Arte,LCP,AssembléeNationaleandPublicSénatandthethreepublicradiostations,namelyRadioFrance,RéseauFranceOutre-merandRadioFranceInternationale)are not subject to the CSA’s prior authorisation, but must draftspecificationrequirements(cahier des charges)takingintoaccounttheobligationsresultingfromthepublicmissionsassignedtothem,notably regarding education and culture, and submit them to theCSA. They are also bound by the terms of the contracts signedwiththegovernmentwithregardstotheirgoalsandmeans(contrats d’objectifs et de moyens).Distributors of audio-visual media services that do not usefrequenciesassignedbytheCSA(satellite,cable,Internet,ADSL)areonlysubjecttopriornotificationtotheCSA.


The CSA can withdraw any authorisation in case of substantialchanges to the conditions according to which the authorisationwas initially granted (share capital, executive bodies, financingarrangements,etc.).The CSA can agree to an assignment of the authorisation if theassignee is the legal person controlling or controlled by the initialholder.



Article L.32-3-3 of the CPCE protects telecommunicationsoperatorsandISPsfrombothcivilandcriminalliabilityforcontentcarriedovertheirnetworks,bystatingthattheycannotbeheldliablesaveif:(i)theyrequestedthecommunication;(ii)theyselectedtheaddresseeofthecommunication;or(iii)theyselectedormodifiedthetransmittedcontent.Thecourtshave,onseveraloccasions,exoneratedtelecomoperatorsand ISPs from all liability in respect of content. However, ISPscan,toacertainextent,beundertheobligationtorestrainaccesstocertainwebsites(seeinfraquestion6.4).


France was an early adopter of a graduated response approach,understandingitasawaytoprotectartisticcreation.In2007,theMinister of Culture ordered a report regarding online copyrightprotection,whichledtoanagreementsignedbycopyrightholdersaswellasnetworkoperators.ThisreportledtotheenactmentofLawn°2009-669of12June2009aimingtopromotebroadcastingandprotectionontheInternet(Loi

ThesedataretentionobligationsapplytoallECNoperatorsandallECSproviders.Costsincurredbyoperatorsarereimbursedbythestate.Failingtocomplywithdataretentionobligationsispunishablebyuptooneyears’imprisonmentanda€75,000fine(articleL.39-3oftheCPCE).



Thedistributionofaudio-visualmedia is regulatedbyLawn°86-1067of30September1986onCommunicationFreedomunderthesupervisionoftheCSA.Thisregulationappliestobothradioandtelevision,andprovidesasacoreprinciplethat“any communication to the public via electronic means is free”(article1ofLawn°86-1067).However, this communication freedom is restricted by variousobligations imposed on audio-visual media companies from thepublicandprivatesectors,suchas:■ childprotection(article15ofLawn°86-1067);■ advertising,teleshoppingandsponsorship(Decreen°92-280

of27March1992);■ productplacement(article14-1insertedbyLawn°2009-258

of5March2009);■ film works broadcasting quotas (Decree n°90-66 of 17

January1990);and■ Frenchsongsbroadcasting(Lawn°94-88of1February1994).Public audio-visual media dsitribution companies are subject toadditional rules, notably in terms of programmes to be broadcastandadvertising.


Pursuant to article 2 of Law n°86-1067 of 30 September 1986,modifiedbyLawn°2009-258of5March2009:■ “A television service or a communication service to the

public via electronic means, means a service intended to be simultaneously received by the whole public or by a category of the public and for which the program is comprised of emissions including sounds”; and

■ “An on-demand audio-visual media service means any communication service to the public via electronic means, allowing for programs viewing at the moment chosen by the user and upon its request […]”.

No differentiation is made between traditional broadcasting andbroadcastingovertheInternet(e.g.,on-demandvideoservices,on-demandaudio-visualservicesandcatch-upTV).


The formalities of audio-visual media broadcasting, usingfrequenciesassignedby theCSA,differaccording towhether theoperatorfallswithinthepublicorprivatesector.


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■ ReasonabletrafficmanagementbyISPsisacceptableinonlyalimitednumberofcircumstances,andmustnotbebasedoncommercialconsiderations.

■ ISPs are prohibited from degrading or blocking traffic (orcertain categories of traffic), except under clearly definedcircumstances. These practices are justifiable in only asmallnumberof instances: tocomplywithcourtorders; toprotecttheintegrityorsecurityofthenetwork;ortopreventimpendingnetwork congestion that occurs temporarily andunderexceptionalcircumstances.

■ In addition to providing Internet access, ISPs can offerservicesthatneedtobetransmittedinanoptimisedfashionto meet certain specific requirements, provided that thesepracticesdonothaveanegativeimpactontheavailabilityorgeneralqualityofInternetaccessservices.

■ ISPs’ commercial practices are now subject to scrutiny,notably their promotion of bundled online services. Thenational regulator has the right to monitor the features oftheseproducts.

■ Operators are subject to strengthened transparencyobligations. These pertain in particular to providingmoredetailed information in customers’ contracts: the possibleimpactoftrafficmanagementtechniquesusedbytheISPs;theconcreteimpactofthe(traffic,speed,etc.)capsorallowancesattachedtotheplan;andinformationonconnectionspeeds,etc.

WithinninemonthsoftheRegulationenteringintoforce,theBodyofEuropeanRegulatorsforElectronicCommunications(BEREC)must“issue guidelines for the implementation of the obligations of national regulatory authorities”underarticle5.3oftheRegulation,tosetouttheconcreteimplementingproceduresfortheRegulation.The guidelines will ensure that the principles contained in theRegulation are implemented in a harmonious way across theEuropeanUnion.TheARCEPactivelycontributedtotheworkdonebytheBERECtopreparetheseguidelines.On6June2016,theBEREClaunchedapublicconsultationondraftguidelineswhichaimtosupportthenationalregulatorinmonitoringnetneutrality.TheBEREC’sguidelinesarestilltobeadopted.Law n°2016-1321 of 7 October 2016 formally introduced netneutralityintheCPCE,givingtotheARCEPtheauthoritytoensurenetneutralityandoverseeopenInternetaccess.


Law n°2004-575 of 21 June 2004 (LCEN ) provides that ISPscannot be subject to any generalmonitoring obligation. Contentsuspensionandaccesscanonlybedecidedbycourtsunderspecificcircumstances. Asanexample,Orange,BouyguesTelecom,SFRandFreewererecentlyorderedtopreventaccessfromFrancetothemusicdownloadingwebsiteT411(TGIParis,2April2015).However,telecommunicationsoperatorsand/orISPsmaybeunderobligationstoblockaccesstocertainsitesorcontentunderspecificcircumstances,suchas:■ Terrorism:

■ Lawn°2014-1353of13November2014forstrengtheninganti-terrorism provisions increased criminal sanctionsfor apologyof terrorismon the Internet, andauthorisedthe blocking of Internet sites “encouraging or making apologist arguments for terrorism actions”.

Création et Internet),whichcreatedanindependentadministrativeauthority:theSupremeAuthorityfortheBroadcastingofWorksandtheProtectionofRightsontheInternet–HADOPI.In cooperation with ISPs, HADOPI is in charge of identifyingonlinecopyrightinfringersandtoimplementagraduatedresponse(codifiedunderL.331-12et seq.oftheIntellectualPropertyCode).Firstly,HADOPI requires ISPs to sendwarningnotices to onlinecopyrightinfringers.Secondly,ifthesameInternetusercontinuesits illegaldownloadingactivitiesafter sixmonths,HADOPIshallsendawarningemail anda registered letter. Incaseof repeatedinfringementafterthissecondwarning,HADOPIshalltransferthefilesofrepeatedinfringerstocriminalcourtsforprosecution.If the Internetuser isprosecutedbycriminalcourts forcopyrightinfringement, the judge will be empowered to pronounce acomplementarypenalty,whichmay lead to the suspensionof theinfringer’s Internetaccessaswellas the impositionofa rangeofcriminalpenalties.Article7ofLawn°2009-1311,regardingpenalprotection of intellectual property, foresees that the judge maypronouncethesuspensionoftheInternetaccessforamaximumofoneyear.Duringsuchsuspension,thesubscriberisstillundertheobligationtopaytheirInternetsubscription.Pursuanttothislaw,ISPsarealsoundertheobligationtoprovidetheir subscribers with customers’ contracts containing specificinformationonvarioussubjects,suchas:■ the obligation of vigilance which is incumbent upon the

subscriber;■ theexistenceoflegalcontentoffers;■ themeansofsecuringconnections;■ thecriminalandcivilpenaltiesincurredincaseofcopyright

violation;and■ thethreatposedbyunlawfulcopyingpracticestotheartistic

creationandtheculturalsector’seconomicsustainability.


Pursuant to articleL.32-1 of theCPCE, theARCEPmust ensure“that no discrimination exists, under analogous circumstances, in the relationship between the operators and providers of publicly availableonlineelectroniccommunicationservicesintrafficroutingand access to these services”and“end users’ ability to access and distribute information and to access the applications and services of their choice”.In the context of this mission, the ARCEP issued a series ofrecommendations for ISPs in 2010 and in 2012. In 2011, aParliamentary report concluded with concrete proposals forlegislativeprovisionsandrecommendedthatnetneutralitybecomea political objective in France, as did the Conseil National du Numérique.TheEuropeanRegulation(EU)2015/2120of25November2015,layingdownmeasuresconcerningopenInternetaccess,enteredintoforceon30April2016.The text introduces theguidingprinciplesofopenInternetaccessandnetneutralityintoEuropeanlegislation:ontheonehand,equalandnon-discriminatorytreatmentofInternettraffic;andontheotherhand,allendusers’(i.e.,consumersandcontentproviders)rightstodistributeandtoaccesstheinformationandcontentoftheirchoice.Thetextprovidesforthefollowingrules:


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Anne-Solène GayBEHRING 10, rue de Presbourg 75116 ParisFrance

Tel: +33 1 53 64 70 00Email: [email protected]: www.behring.fr

BEHRING is a law firm specialising in telecommunications, space activities, IT and IP.

The firm was founded by Anne-Solène Gay, a leading legal expert on these issues for 20 years.

Highly knowledgeable in the industrial sectors in which our clients are involved, BEHRING’s legal team provides crucial assistance for the many challenges our clients face during their business development.

BEHRING serves as regular counsel to French and foreign companies, start-ups, SMEs and large industrial groups. The firm helps various companies in both the service and manufacturing sectors, particularly in supporting technology and regulated activities. BEHRING also advises on issues related to innovation and intellectual property rights.

BEHRING supports its clients for contractual and regulatory matters, both in France and abroad, notably in Africa, Asia and North America.

Thanks to its expertise and global practice, BEHRING is regularly awarded in international rankings, such as The Legal 500 and Chambers & Partners.

Attorney at law of the Paris Bar since 1997, Anne-Solène Gay has developed expertise in telecommunications, space activities, IT and IP.

Anne-Solène advises governments and regulators as well as telecom operators on regulatory and transactional matters. Anne-Solène has notably provided legal assistance in liberalisation processes, the granting of licences, the privatisation of operators, the restructuring of incumbent operators and the adjustment of the regulatory framework applicable to the telecommunications and information technology sector. Anne-Solène also advises companies acting in emerging technologies sectors on regulatory and IT matters.

Prior to establishing BEHRING law firm, Anne-Solène practised law with various international law firms (Jeantet & Associés and Bird & Bird) in Paris and London. Anne-Solène worked on a wide range of projects.

International legal directories (Chambers & Partners and The Legal 500) name her every year as one of the leading lawyers in TMT (telecoms, media and technologies) in France.

fromthesearchengines’obligationtodelistmaybesupportedbythegovernment.Bycontrast,hostingserviceprovidersaresubjecttoabroaderliabilityif theywereactuallyawareof the illegalcharacterofcontent,anddidnotactpromptlytowithdrawthiscontentormakeaccesstoitimpossible(articleL.32-3-4oftheCPCEandarticle6ofLCEN).As for consumer VPN services, they are neither regulated norblockedforthetimebeing.

■ Law n°2016-731 of 3 June 2016 for strengthening thefightagainstorganisedcrime, terrorismand its funding,and improving theefficiencyandwarrantiesofcriminalprocedure,createsacriminaloffencefortheobstructionof blocking websites encouraging or making apologistargumentsforactsofterrorism.

■ Childpornography:■ Since the enactment of Law n°2011-267 of 14 March

2011 (LOPPSI ), websites obviously publishing childpornography can be blocked by ISPs upon requestof the administrative authority in charge, the CentralOffice ofAnti-CriminalityCommittedwith Informationand Communication Technologies (Office Central deLutte contre la Criminalité liée aux Technologies de l’Information et de la Communication – OCLCTIC).

■ Ifthepornographicnatureofthecontentisnot“obvious”,the administrative authority canbring thematter beforethejudicialauthority.

■ Onlinegambling:■ Law n°2004-575 of 21 June 2004 (LCEN ) provides

that ISPs cannot be subject to any general monitoringobligation.Temporarymonitoringobligationscanonlybedecidedbyjudicialcourtsunderspecificcircumstances.

■ However,allISPsmustpreventonlineaccesstogamblingservices that have not been granted an authorisation bytheOnlineGamblingAuthority (Autorité de Régulation des Jeux en Ligne – ARJEL),inordertopreventFrenchresidentsfromgamblingonblacklistedsites.

Decreen°2015-253of4March2015,forthedelistingofwebsitesencouraging acts of terrorism or broadcasting child pornography,provides for the delisting of illicit websites through a purelyadministrative procedure which does not require any judicialdecision.Inaccordancewiththesenewprovisions,theOCLCTICdirectlyaddressestosearchenginestheURLlinksofthewebsitestobedelisted.Searchenginecompaniesthenhave48hourstomakethesearchresultsdisappearandoperatethedelisting.TheDecreealso specifies the conditions under which expenditure resulting


Chapter 14

in the private broadcasting sectorwasEUR11.1 billion in2017(accordingtothewebsiteofVerband privater Rundfunk und Telemedien e.V.).Thepay-tvsectorgeneratedrevenuesofaboutEUR2.326billioninthesameyear. HomeVideoservices, including DVD sales and rentals, reached EUR3.017billion.Themarketforaudio-visualmediadistributionisdominatedbyProSiebenSat1Media,theRTLgroupandSkyDeutschland.


(a) OnaEuropeanlevel,theEUCommissionadoptedtheDigitalSingleMarketStrategy,whichwillbefollowedbythefuturerevision of certainEUdirectives. Furthermore, provisionssuch as EU Regulation 531/2012 on roaming fees are ofimportance.

The German telecommunications market is mainlygoverned by the TelecommunicationsAct (“Telekommuni-kationsgesetz”, abbr. TKG), which is partly based on EUdirectives.TheTelecommunicationsActprovidesforvariousregulatoryfields,includingregulationofmarket,access,feesandmarketabuse. Severalsub-statutoryordinancesfurtherspecifytherequirementsoftheTelecommunicationsAct;seequestion2.2fordetails.

(b) The audio-visualmedia distribution sectors are principallygoverned by the Interstate Broadcasting Agreement(“Rundfunkstaatsvertrag”), the Interstate Treaty on theProtection of Minors in Broadcasting and Telemedia(“Jugendmedienschutz-Staatsvertrag”) and the TelemediaAct (“Telemediengesetz”, abbr. TMG). Other InterstateAgreementscoverthefundingofpublicservicebroadcasting(“Rundfunkfinanzierungsstaatsvertrag”, “Rundfunkbeitrag-sstaatsvertrag”).


(a) The Federal Network Agency (“Bundesnetzagentur”) isthe competent regulatory authority for the telecoms sector,headquarteredinBonn.

TheFederalCartelOffice(“Bundeskartellamt”,abbr.BKartA)takescareofpossibleanti-competitivepracticesandmergercontrolproceduresandenforcestheActagainstRestraintsonCompetition (“Gesetz gegen Wettbewerbsbeschränkungen”,abbr.GWB). However, thisdoesnot includethecontrolof

1 Overview


(a) According to the annual report of the Bundesnetzagentur (German Federal Network Agency, “Bundesnetzagenturfür Elektrizität, Gas, Telekommunikation, Post undEisenbahnen”), the annual revenue of the telecoms sectorinGermany (including the internet)was EUR 56.7 billionin2017(ascitedbytheAnnualReport2017oftheGermanFederalNetworkAgency,MarketsintheDigitalRevolution).

Today,majorplayersincludeDeutscheTelekomwitha35.8%market share for mobile services, Vodafone Deutschlandwithashareof26.1%andTelefónicaGermanywith38.0%(Financial Statement of Télefonica 2017). DeutscheTelekomusedtobeastate-ownedmonopolycompanyuntilthetelecomsmarketwasliberalisedin1996,butsincethenit has been facing competition from operators with theirown networks. In 2014, Telefónica Germany acquired itscompetitorE-Plus(KPN’smobileunitinGermany),makingitthemarketleaderbyoverallnumberofcustomers.PriortotheE-Plusmerger,TelefónicaGermanywasonlyrepresentedby its brand o2 (which is nowTelefónica’smain brand inGermany), holding at the time the fourth-largest share ofmobilecustomersinGermany.

The costs to obtain the requiredmobile spectrum licencesare relatively high in Germany. Consequently, barriersofentry to themarketaresignificant,asshownby the factthatthereareonlythreecompaniesinthemarketwiththeirownnetworks.Yet,barrierstoenteringasaMobileVirtualNetworkOperator(MVNO)aremuchlower,asitisrelativelysimple and low-cost to rent capacity from the establishednetworkoperatorsandthensetupabusiness.

Concerning the broadband market, Deutsche Telekom(40.8%) still dominates, with more than double thenumber of customers subscribed to the company, with thenext biggest share of customers being Vodafone (19.8%,includingKabelDeutschland).1&1followswith13.7%andUnitymediawith10.5%ofcustomers.TelefónicaGermanyonlyoffersafixedlinethroughitso2brand,reaching6.5%ofcustomers(www.statista.com).However,fromitsmarketingactivities,itisclearthatTelefónicaGermanyisattemptingtocatchupwiththemarketleaders.

(b) Thedistributionofaudio-visualmediaaspartofbroadcastingisacomponentofthetelecomssectorwithrespecttosignaltransmission, e.g., cable, satellite, etc. The total revenue

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(a)(i) Historically, theGerman telecommunications industry hasbeen characterised by public servicemonopoly providers,run inconjunctionwithpostalservices. The liberalisationofthetelecomsmarketbeganinthefirsthalfofthe1980sandwas fully liberalised in 1998, leading to considerablereductions in some prices and a wider range of servicesbeingprovided.

(a)(ii) Concerninginvestment, therearenorestrictionstoforeigninvestmentinthetelecomsmarket.

(b)(i) Togetherwiththetelecomsmarket,theaudio-visualmediadistribution sectors were fully liberalised in 1998. Still,EU Directive 2010/13/EU concerning the provision ofaudio-visualmedia services (Audio-visualMediaServicesDirective)promotesEuropeanprogrammes.

(b)(ii)Therearenoforeigninvestmentrestrictionsintheaudio-visualmediadistributionsector.

2 Telecoms

General


GermanyisamemberoftheWTO,signedtheGATSin1994,and,furthermore,hasadoptedandimplementedtheTelecomsReferencePaper, initially signed by the European Communities, includingGermany.


As already mentioned in question 1.2, the telecoms market isprimarily governed by the German Telecommunications Act(“Telekommunikationsgesetz”,abbr.TKG).Yet, several ordinances further detail and specify theseprovisions, including the Telecommunications NumberingOrdinance (“Telekommunikationsnummerierungsverordnung”,abbr. TNV), Telecommunications Numbering Fees Ordinance(“Telekommunikationsnummerierungsgebührenverordnung”, abbr.TNGebV), Emergency Calls Ordinance (“Notrufverordnung”,abbr. NotrufV), Telecommunications Fees Ordinance (“Tele-kommunikationsgebührenverordnung”, abbr. TKGebV),TelecommunicationsMonitoringOrdinance(“Telekommunikations-Überwachungsverordnung”, abbr. TKÜV), Frequency FeesOrdinance(“Frequenzgebührenverordnung”,abbr.FGebV),or theFrequencyLevyOrdinance(“Frequenzschutzbeitragsverordnung”,abbr.FSBeitrV).Other statutes contain additional provisions that refer to theregulationof the telecommunicationsmarket. These acts includethe Telemedia Act (“Telemediengesetz”, abbr. TMG), FederalData Protection Act (“Bundesdatenschutzgesetz”, abbr. BDSG),theEuropeanGeneralDataProtectionRegulationandLocalDataProtectionActsoftheindividualFederalStates.TheFederalData

market abuse by companieswith significantmarket power,whichiscarriedoutbytheFederalNetworkAgencyaccordingtosections28and42oftheTelecommunicationsAct.

The individual Federal State competition authorities(“Landeskartellbehörden”) implement the Act againstRestraintsonCompetition.Theyenforcethebanoncartelsaccording to section 1 of the Act against Restraints onCompetition, controlling abuses by undertakings whichdominatethemarketorareinstrongmarketpositions.Theyalsokeepacheckonviolationsofthebanondiscriminationandimpediment.Theirjurisdictionislimitedtocartellaw-related actions which do not extend beyond the territoryof each Federal State (which is uncommonwith regard tocircumstances concerning internet and broadcasting). ThebodyresponsibleforissuesthatextendbeyondthebordersofoneFederalStateandforthecontrolofmergersistheFederalCartelOfficebasedinBonn.

Following section 14 of the Federal Data ProtectionAct (“Bundesdatenschutzgesetz”, abbr. BDSG), theFederal Data Protection Commissioner (“Bundesdaten-schutzbeauftragter”) is responsible for the applicationand proper implementation of provisions of the FederalData ProtectionAct andRegulation (EU) 2016/679 on theprotectionofnaturalpersons,withregard to theprocessingof personal data and on the free movement of such data(“GDPR”)andforadvisingfederalauthorities,otherpublicbodies on the federal level, telecommunications andpostalservice providers according to the TelecommunicationsAct and thePostalAct (“Postgesesetz”, abbr.PostG). TheCommissioner advises and monitors the implementationof security checks under the Security Screening Act(“Sicherheitsüberprüfungsgesetz”, abbr.SÜG) in respectofpublic authorities and private companies. Where personaldata is collected, processed or used for the commercialprovisionof telecommunicationsservices, theFederalDataProtection Commissioner is responsible for monitoringcompliance with data protection regulations and for theprovisionofanycomplaintstotheFederalNetworkAgency,accordingtosection115(4)oftheTelecommunicationsAct.

TheDataProtectionCommissionersoftherespectiveFederalStates(“Landesdatenschutzbeauftragter”)areresponsibleforcontrollingandadvisingpublicauthoritiesoftherespectivestatesonmattersofdataprotection.

The Centre for Protection against Unfair Competition(“Wettbewerbszentrale”) has a formal, i.e. judiciallyauthorised, right to initiate legal action against those whoinfringe the Act against Unfair Competition (“Gesetzgegen den unlauteren Wettbewerb”, abbr. UWG), and isa self-regulatory body in trade, industry and commercefor the purpose of theAct. This includes anymisleadingadvertisements(e.g.,showingcheaperpricesontheplatformofGoogle Shopping than actual prices in the online shop)andsolepositionadvertisements(e.g.,“cheapestflatrateinGermany”) inparticular. According tosection8 (3)of theActagainstUnfairCompetition,individualcompetitors,tradeorganisations, consumer organisations and the chamber ofcommercehavearightofactionagainstunfaircompetitors,which excludes individual consumers (although they mayhaveclaimsundercontractorgeneraltortlaw).

(b) The 14 Federal State media authorities in Germany(“Landesmedienanstalten”) are in charge of licensing,controlling, structuring and promoting commercial radioand television in Germany. Furthermore, there are self-regulatory bodies such as the German Association forTelecommunications and Media (“Deutscher Verband für Telekommunikation und Medien e.V.”,abbr.DVTM)andtheGerman Voluntary Self-Regulation of the Movie Industry(“Freiwillige Kontrolle der Filmwirtschaft GmbH”, abbr.FSK).

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Individual licences to provide telecommunications services areno longerrequiredunderGermanlaw. Instead, there isageneralauthorisationforcompaniestooffertelecommunicationsservicestothepublic.Thisentitlesthemto:■ negotiateinterconnectionwithotherprovidersintheEU;■ obtainaccesstoorinterconnectionwithotherproviders;and■ bedesignatedtoprovidecertainuniversalservicefunctions.However, the provider must notify the Federal NetworkAgency(“Bundesnetzagentur”).As there are no specific licences for the provision of generaltelecommunicationsservices,nolicencefeesarecharged.However,providersmustpayaFrequencyUsageFeeandaFrequencyLevyaccordingtotheFrequencyFeesOrdinanceandtheFrequencyLevyOrdinance,whicharecalculatedbytakingintoaccounttheturnoveroftheindividualcompanies.TheFederalNetworkAgencyprovidesannualinformationabouttheabovefeeandlevy.Thespectrumuseisassignedindividuallyonapplicationwithinasix-weekperiod. Wherethereisnotsufficientspectrumavailableforassignment,theFederalNetworkAgencyordersthatanawardprocedureintheformofanauctiontakesplace.Previously,therehavealwaysbeenmoreapplicantsforthefrequenciesthanavailablespectrum.Therefore,auctioningistheusualwayofallocation.


Only the allocation of frequency spectrum is subject to generalauthorisation. Section 52 of the Telecommunications Act(“Telekommunikationsgesetz”,abbr.TKG),theFrequencyOrdinance(“Frequenzverordnung”, abbr. FreqV) and the Federal NetworkFrequencyPlan(whichisupdatedeveryyear)specifytheallocation.


Individual authorisations mainly concern the use of certaintelephone numbers, the usage of individual spectrum allocationsandcertainrates.Regardingspectrum allocations,accordingtosection55(9)oftheTelecommunicationsAct, frequencies are typically assigned for alimited period, with the possibility of extension. The time limitshallbeappropriate to theserviceconcerned, thus the investmentmade. Theduration usually ranges between10 to 20years. Allotherindividualauthorisationsarealsolimitedintime.Spectrum can be transferred,assetout inouranswer toquestion3.6. Numbers may only be transferred to affiliates and/or legalsuccessors, requiring the Federal Network Agency’s consent.Rights of wayarehighlypersonal rightswhichcanbe transferredtoanundertakingonlyafterverificationthattheapplicantpossessestherequiredreliability,efficiencyandspecialisedknowledge.Suchrightsofusecanthereforeonlybeusedbytheholdersthemselves,andmay not be given or transferred to another undertaking, norpassedontoanotherundertakingbylegalsuccession(sections68et seq.oftheTelecommunicationsAct).

ProtectionActhasbeenamendedinordertoregulateaspectssuchasthesectoralregulations,thetransitionalrulesortheimplementationof additional requirements, where discretion is given by theEuropeanGeneralDataProtectionRegulation.


TheFederalNetworkAgency (“Bundesnetzagentur”), theFederalCartelOffice(“Bundeskartellamt”), thecompetitionauthoritiesofeach Federal State (“Landeskartellbehörden”), the Federal DataProtection Commissioner (“Bundesdatenschutzbeauftragter”), theData Protection Commissioners of the respective Federal States(“Landesdatenschutzbeauftragter”) and the Centre for ProtectionagainstUnfairCompetition (“Wettbewerbszentrale”) are themainregulatory bodies for the telecommunications market, which areindependentfromthegovernment.Regardingtheirdifferentroles,seequestion1.3.


ThedecisionsoftheFederalNetworkAgency(“Bundesnetzagentur”)canbeappealedaccordingtosection137oftheTelecommunicationsAct(“Telekommunikationsgesetz”,abbr.TKG).Thegroundsforanappeal are not specifically stated in theTelecommunicationsAct.The decisions can be appealed due to procedural or substantivereasons.Procedural reasons are thebreachof formal requirementsduringthedecisionmakingofapublicauthority(e.g.,theFederalNetworkAgency). These reasons include the lack of competence of thedeciding authority and a violation of proceduralmatters, such asa proper hearing of the concerned parties, the participation andcooperationofthirdparties,thepublicinformationandconsultation,the proper form of the decision (e.g.,written decisionwith validinformation about the possibilities of appeal), or the properstatementofgroundsofthedecision.Substantive reasonsarethewrongfulapplicationsofstatutorylaw,which include the wrongful application of the legal basis (e.g.,not acknowledging an exemption from general rules), thewrongsubjectof theFederalNetworkAgencyorder (e.g., impositionofaccessobligationsdespitethefactthattherecipientdoesnotpossesssignificantmarketpower),thelegalorfactualimpossibilityoftheexecutionof theorder,a lackofclarityof theimposedobligation(e.g.,priceregulationdecisionwithoutaclearandtransparentpricedefinition), or the lack of proportionality and reasonableness ofthedecision (e.g., clear and significantdisproportionbetween thepurposeandthemeansoftheorder).The Federal Network Agency’s order can be appealed to the Administrative Court of Cologne and the German FederalAdministrative Court (“Bundesverwaltungsgericht”, which isheadquartered in Leipzig), following theAdministrative ProcedureAct and Rules of the Administrative Courts (“Verwaltungs-verfahrensgesetz”,abbr.VwVfG,and“Verwaltungsgerichtsordnung”,abbr.VwGO), aswell as theGermanFederalConstitutionalCourt(“Bundesverfassungsgericht”,abbr.BVerfG,whichisheadquarteredin Karlsruhe) and the European Court of Justice in particularcircumstances.


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ofend-to-endcommunication,includingtheprovisionoffacilitiesforintelligentnetworkservicesandroaming(section21(2)no.4oftheTelecommunicationsAct).As mentioned, each operator of a telecommunications networkwhichservestoprovidetelecommunicationsservicestothegeneralpublicisunderanobligationtoenterintonegotiationsconcerningtheinterconnectionofitsnetworkwiththatofotheroperatorsuponrequest.Ifthepartiesdonotreachanagreementordonotagreeonthefeethatistobepaidfortheinterconnection,theycanappealtotheFederalNetworkAgency,whichcanhenceorderinterconnectionafterhearingthepartieswithinaperiodofnolongerthan10weeks(section25oftheTelecommunicationsAct).Intheeventofotherinterconnectiondisputes,therulingchamberoftheFederalNetworkAgencycanalsoissueabindingdecisiononrequestofeitherpartyand after hearing both of the parties within four months of therequest,accordingtosection133oftheTelecommunicationsAct.


TheFederalNetworkAgencyrequiresSMPoperatorstopublishareferenceoffer,which setsout the specificsof thegrantedaccess(section23oftheTelecommunicationsAct).


The German Telecommunications Act generally provides for anex ante price regulation (section 30), an ex ante rate regulation (section39)andanex post rate regulation(section38).The interconnection pricescanberegulatedbytheFederalNetworkAgency (section 30 et seq. of theTelecommunicationsAct) if theinterconnection is ordered in accordance with section 21 of theTelecommunicationsAct.However,suchanorderisonlypossibleforpublictelecommunicationsproviderswithsignificantmarketpower.Forproviderswithoutsignificantmarketpower,theFederalNetworkAgencycannotregulatetheinterconnectionprices.Theproviderscanonlymakeanoffertootherprovidersonrequest,accordingtosection16oftheTelecommunicationsAct.TheTelecommunicationsActdoesnotstateanydetailsaboutsuchanoffer(inparticular,thereare no details regarding pricing) and does not entitle the FederalNetworkAgencytoset theseprices. TheTeliaSoneradecisionoftheCourtofJusticeof theEUis importanthere,as theEuropeancourt ruled that if a company without significant market powermakes an interconnection offer on terms that are likely to hinderthe development of a competitive market at the retail level, thisconstitutesabreachofthenegotiationobligation.Therefore,eveniftheinterconnectionchargesarenotregulatedforproviderswithoutsignificantmarketpower,theproviderscannotissueoffersthatarecompletelycommerciallyunviableinrelationtocharges.


Operators are not subject to accounting, functional or legalseparation inGermany. In regard to access services, theFederalNetworkAgencymayimposeobligationsasfunctionalseparationundercertainconditions,e.g.,lackofcompetitionormarketfailure.



Since 2004, the German Telecommunications Act has includednew provisions on the rights of way (section 68 et seq. of theTelecommunications Act). The Federal Network Agencytransferstherightsofway,uponwrittenapplication,tothepublictelecommunicationsnetworkoperators.Ifsuchuseisnotpossible,orispossibleonlyatadisproportionatelyhighcost,theoperatorisgrantedashareduseofotherinstallationsthatalreadyexist,whereshared use is economically reasonable and no major additionalconstructionworkisneeded.According to section 76 of the TelecommunicationsAct, private propertyownershavetobearinstallation,operationorrenewaloftelecommunicationsinsofaras:(1) onhisproperty,alineorinstallationthatissecuredbyright

is used also for the installation, operation or renewal of atelecommunicationslineandtheusabilityofthepropertyisnottherebyadditionallyrestrictedonalastingbasis;or

(2) theproperty isnot,or isnot significantly,affectedbysuchuse.

A property owner having to acquiesce in actions may claimappropriate pecuniary compensation from the operator of thetelecommunications line or the owner of the network, underthe particular circumstances set out in section 76 (2) of theTelecommunicationsAct.Civiloradministrativecourtswouldhave todealwith theabove-mentionedissues.



Upon request, every public telecommunications networkoperatoris required to make an interconnection offer to other publictelecommunications network operators in order to secure usercommunication,theprovisionoftelecommunicationsservicesandserviceinteroperabilitythroughouttheEuropeanUnion(section16oftheTelecommunicationsAct).TheFederalNetworkAgencycanimposeobligations,uponrequest,onpublictelecommunicationsnetworkoperatorsthatcontrolaccesstoend-usersanddonothavesignificantmarketpowertointerconnecttheir networks with those of other public telecommunicationsnetworkoperators(section18(1)oftheTelecommunicationsAct).In order to promote sustainable competition in the retailmarket,the BNetzA can require public telecommunications networkoperators controlling access to end-users to not treat otherpublic telecommunications network operators differently,without objectively justifiable reasons (section 18 (2) of theTelecommunicationsAct).Furthermore, the BNetzA is able to require publictelecommunications network operators with significant marketpowertocreatethenecessaryprerequisitesfortheinteroperability


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“Universal services” are basic services regarded as indispensableto the public. Where there is insufficient supply, the tele-communicationsprovidersmustensuretheprovisionof“universalservices”,whichareaminimumsetofservicestothepublicwitha certain defined quality, and to which all end-users must haveaccessatanaffordablepriceregardlessoftheirplaceofresidenceorbusiness(section78et seq.oftheTelecommunicationsAct).The Telecommunications Act contains provisions for detailsregarding the price communication in advertisements and properinformationonthetermsandconditions(section43aet seq.oftheTelecommunicationsAct). Furthermore,ratesmustbeannouncedprior to the start of a telephone service; maximum charges canbe set and premium rates must be interrupted after 60 minutes(section66aet seq.oftheTelecommunicationsAct). Section47aoftheTelecommunicationsActprovidesforanarbitrationboardforconsumers.

Numbering


The Federal Network Agency allocates telephone numbers onrequest and provides these telephone numbers in accordancewith the Telecommunications Act (“Telekommunikationsgesetz”,abbr. TKG), the Telecommunications Numbering Ordinance(“Telekommuníkationsnummerierungsverordnung”, abbr.TNV) and the Telecommunications Numbering Fees Ordinance(“Telekommunikations-Nummerierungsgebührenverordnung”,abbr.TNGebV).Theallocationmethodforgeographicnumbersisdescribedindetailinanadministrativeinstructionthatisavailableon theFederalNetworkAgency’swebsite. TheFederalNetworkAgency aims at providing a non-discriminatory and technology-neutralsolutionwithsufficientavailabilityofgeographictelephonenumbers, while also protecting the interests of consumers. Itpublishes an annual numbering policy stating the currentdevelopment of the telecommunicationsmarket, and the possibleimplications of such current development on telephone numberallocation practice. The numbering policy for the year 2014 isavailableontheFederalNetworkAgency’swebsite.


Telecommunications service providers must provide a numberof different services. The most important of such services areemergency calls(section108oftheTelecommunicationsAct),grid interconnection (section 16 of the TelecommunicationsAct) anduniversal services (section 78 et seq. of theTelecommunicationsAct).Any person offering publicly available telephone services mustprovidealluserswithaccess to theemergencyservicesbyusing,freeofcharge, thesingleEuropeanemergencycallnumber“112”and the additional national emergency call numbers determinedin the respective ordinance (Emergency Calls Ordinance,“Notrufverordnung”, abbr. NotrufV). Any person operatingtelecommunicationsnetworksusedforpubliclyavailabletelephone


DuetothefederalstructureofGermany,theregulationapplicabletohigh-speedbroadbandnetworksishighlycomplex.On a federal level, the regulatory framework on next-generationaccess (“Next-Generation-Access-Rahmenregelung”) deals withpossible incentive measures for broadband expansion. Thisframework tries to ensure that state aid on broadband expansioncomplieswith the EU regulation on state aid, pursuant to article101 et seq.oftheTreatyoftheFunctioningoftheEuropeanUnion(English abbr. TFEU). In Germany, funding is granted for twomodelsonafederallevel:(1) the profitability gap model (“Wirtschaftlichkeitslücken-

modell”),wheretheprofitabilitygapiscoveredbythestate;and

(2) theoperatormodel(“Betreibermodell”),wheremunicipalitiesaresubsidised to rolloutpassive infrastructure thatwillbeleasedtonetworkoperators.

Around75%offundsgototheprofitabilitygapmodel(accordingto“Europe’sDigitalProgressReport2017”).Still,theregulatoryprovisionsofeach Federal State(economiclawfor communes, “kommunales Wirtschaftsrecht”) are applicable ifmunicipalitiesdecidetosupportbroadbandexpansion.Furthermore, theTelecommunicationsAct includes provisions onhigh-speed broadband networks, such as the regulatory objectivein section 2 (2) no. 5 of the TelecommunicationsAct, in orderto accelerate broadband network expansion. Also, investmentson high-speed broadband networks must be taken into accountby the Federal Network Agency, according to section 30 ofthe Telecommunications Act. According to section 15a of theTelecommunications Act, the Federal Network Agency has thepower to adopt administrative provisions in order to establish aregulatoryapproachforbroadbandnetworkexpansion.Asregardsdetailsonthesharing of passive infrastructure,seequestion2.8,andespeciallysection77aet seq.oftheTelecommunicationsAct.In2016,theNetworkAllianceforaDigitalGermany(“NetzallianzDigitales Deutschland”) and the Federal Ministry of Transportand Digital Infrastructure (“Bundesministerium für Verkehr und digitale Infrastruktur”,abbr.BMVI)setoutthefirstgigabitstrategyin the document entitled “Eckpunkte Zukunftsoffensive Gigabit-Deutschland”,whichstressestheneedtoinstallfibreinfrastructureonalargescale.Theroadmapenvisagesfourstagesandoutlinesthefollowinggoals:50Mbpsforallhouseholds(bytheendof2018);deployment of fibre infrastructure in underserved industrial areas(by the end of 2019); creating the preconditions for nationwide5G roll-out (by the end of 2020); and gigabit-capable convergedinfrastructure(by2025).



Asregardsretail price controls,theTelecommunicationsActdoesnotprovideforanyex antecontrolmeasures.However,accordingto section66dof theTelecomsAct,pricecapsapply topremiumservicesandsharedcostservicesaswellastoroaming,pursuanttoRegulation(EU)2015/2120.


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spectrumcanbeginattheendoftheyear2020.ItisexpectedthatthebidderswillincludenotonlytheexistingMNO,butalsovariouscompanieswhichinthepastactedasMVNOsonly.The use of 5G spectrum is highly anticipated in Germany as itincludesvarioustechnologyandapplications.Inadditiontofastermobileinternet,5GplaysanimportantroleintheInternetofThingsand industry. For example, companies can create networkedproduction processes and a higher level of automationwith theirown 5G infrastructure. 5G applications are also available fordigitisedwarehousemanagement.In this respect,and incontrast topreviousspectrumauctions, theGerman industry appears to have a serious interest in regional5G frequencies. Several DAX companies, such as Daimler,Volkswagen,SiemensandBASF,signalledinterest,andcoulduselocalandregionalrightsofspectrumusefortheirown5Gnetworksintheirfactories.Thus,suchcompanieswouldbeindependentoftheexpansionplansofthethreeexistingmobilenetworkoperatorsTelekom,VodafoneandTelefónicaandanynewoperatorswiththeirown5Glicences.


No,asalicenceisalwaysneeded.


A one-time fee is payable, as set forth in the Frequency FeeOrdinance (“Frequenzgebührenverordnung”), and an annual feeis calculated in accordance to the FrequencyUsageContributionOrdinance(“Frequenznutzungsbeitragsverordnung”).


Achangeofcontroldoesnotaffectthespectrumlicence,butmustbenotifiedtotheFederalNetworkAgency.


According to section 55 (5) of the Telecommunications Act,frequenciesshallbeassignedsubjectto:(1) their designation for the planned usage in the Frequency

UsagePlan;(2) theiravailability;(3) theircompatibilitywithotherfrequencyusages;and(4) theirefficientandinterference-freeusebeingsecuredforthe

applicant.Furthermore, applicants are not entitled to any one particularfrequency.In theory, spectrum bands can be released for trading, rent or communal use by the Federal Network Agency (“Bundesnetz-agentur”). Also, if a company were to restructure, they arepermittedtotransferfrequencyusagerightsbysingularoruniversalsuccession,althoughthisrequirestheconsentoftheFederalNetworkAgency, according to section 55 of theTelecommunicationsAct.Theconditionstotransferspectrumrightsaresetoutinsection55(8)oftheTelecommunicationsAct.Thesame rulesfortheinitial

services must transmit to the local emergency service centre,without undue delay, emergency calls, including the calling lineidentityor,wherethecallinglineidentityisnotavailable,thedatarequired to prosecute anymisuse of emergency calls as providedintheEmergencyCallsOrdinance,andtheinformationrequiredtoidentifythelocationfromwhichtheemergencycalloriginated.In case of insufficient supply, the telecommunications providersmustensuretheprovisionofthe“universalservices”,whichareaminimumsetofservicestothepublicwithacertaindefinedquality,andtowhichallend-usersmusthaveaccessatanaffordablepriceregardless of their place of residence or business. “Universalservices”arebasicservicesregardedasindispensabletothepublic.Additional services, such as ensuring access to their grid forthe benefit of other service providers, must be provided bytelecommunications service providers with significant marketpower,accordingtosection21oftheTelecommunicationsAct.


Allundertakingsthatprovidepubliclyavailabletelecommunicationsservicesandassign telephonenumbers toend-users (includingallfixed and mobile network operators and VoIP service providers)underlie obligations that require number portability. Porting toanother telecommunications service provider must be conductedwithoutinterruption(oneday)(section46oftheTelecommunicationsAct).

3 Radio Spectrum


The Federal Network Agency allocates frequency spectrum useaccordingtosection52et seq.oftheTelecommunicationsAct.


Frequencies are typically assigned ex officio by the FederalNetworkAgencyasgeneral assignments for theuseofparticularfrequencies by the general public or a group of persons definedby general characteristics, according to section 55 (2) of theTelecommunicationsAct.Wheregeneralassignmentisnotpossible,frequencies for particular usages areassigned individually by theFederalNetworkAgencyuponwrittenapplication.In case there is no sufficient spectrum available, the FederalNetworkAgencymayorderthatanassignmentbeprecededbyanaward procedure,whichisanauction,unlessanauctionisnotlikelytocomplywithregulatoryaims.Inthiscase,theFederalNetworkAgencyinvitestenders(inaso-called“beauty parade”).On 15 July 2016, the Federal Network Agency published the“Frequenz-Kompass”,which gives interested parties an overviewof forthcoming frequency regulation activities. This documentprepares the next spectrum assignment procedure for mobilebroadband,servesasaninitialorientationguideandidentifiessomeearlyregulatoryareasofaction,especiallytheprovisionof2GHzandadditionalspectrum.The next big step regarding the use of radio spectrum is the 5Gfrequency auction, which will take place in spring 2019. Theauctionshallensure thatawidercommercialoperationof the5G


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courtwithinthreeworkingdaysinordernottobecomeineffective(section100b(1)oftheCodeofCriminalProcedure).An ordermay only be granted in caseswhere certain facts giverise to the suspicion that a serious criminal offence, referredto in section 100a (2) of the Code of Criminal Procedure, hasbeencommitted (or, incaseswhere there iscriminal liability foran attempt to commit an offence, therewas an actual attempt tocommit such an offence, or such offence had been prepared bycommittingacriminaloffence),theoffenceisalsooneofparticulargravityintheindividualcase,andothermeansofestablishingthefacts or determining the accusedperson’swhereaboutswouldbesignificantlymoredifficult. Seesection100a (1)of theCodeofCriminalProcedure.The access to private communications is specified in theTelecommunicationsActand theTelecommunicationsMonitoringOrdinance(TKÜV).


All persons providing, or contributing to the provision of,telecommunications services on a commercial basis, arerequired to assist the particular law enforcement authorities toimplement thenecessarymeasures required for the interceptionand recording of communications, and to provide all necessaryinformation without delay (section 100b (3) of the Code ofCriminal Procedure). The measures that need to be taken arefurther specified in section 110 of theTelecommunicationsActandtheTelecommunicationsMonitoringOrdinance(TKÜV)anda technical directive. There are exceptions for operators withonlyasmallnumberofend-customers.Where the telecommunications service providers do not complywith interception and provision of information orders, regulatoryandcoerciveactionscanbetaken,generallymeaningcertainfinescanbeimposedonthetelecommunicationsserviceproviders.


In order to technically implement a judicial order, according tosection 5 of the Telecommunications Interception Ordinance(TKÜV),thetelecommunicationsserviceprovidersmustprovidethe state authoritieswith a full copy of the telecommunicationswhichareconductedviaitstelecommunicationssystemundertheidentification tobe intercepted. Indoingso, itmustensure thatthe data provided contain only the telecommunications referredto by the judicial order. Thus, only the telecommunicationsservice providers carry out wire-tapping in general. However,source telecommunications surveillance is implemented by thecompetentauthorities themselves,e.g., the installationof trojansoncomputers.


Therearenorulesgoverningtheuseofencryption.Section13(7)oftheTelemediaActstatesthatthereisnoobligationtousecertainencryptionkeys.

allocation also apply for transferring the spectrum rights, whichmakes it unusual that spectrum is sublicensed or transferred inGermanyaftertheinitialallocationbytheFederalNetworkAgency.Inparticular,manylicencesallocatedbytheFederalNetworkAgencyare providedunder certain obligations that have to be fulfilled bythetenderingparties(forexample,gridornetworkconstructionandputtingservicesphysicallyintooperation).ExamplesaretheGermancompaniesQuamandMobilcom,whichbothhadtoreturntheir3Gspectrumlicences(whichtheyacquiredforEUR8.5billionandEUR8.4 billion, respectively) to theFederalNetworkAgency in 2007.Thecompaniesfailedtofulfilthelicensingobligations(inparticular,settingupagridavailableto25%oftheGermanpopulation).



Germany’s strategy to ensure cybersecurity basically builds onits IT security law (“IT-Sicherheitsgesetz”), which was passedin 2015, and promotes cooperation between the German FederalOffice for Information Security (“Bundesamt für Sicherheit in der Informationstechnik”, abbr. BSI) and the industry inprotecting critical infrastructure. To enforce the IT security law,thepowersoftheGermanFederalOfficeforInformationSecuritywere increased by amending the Act on the Federal Office forInformationSecurity (“GesetzüberdasBundesamt fürSicherheitin der Informationstechnik”, abbr.BSI-Gesetz orBSIG). But theprotectionofinfrastructureisonlyonepartoftheattempttoachievecybersecurity.According to sections 91 (2) and 93 (2) AktG, section 43 (1)GmbHGandsection317(4)HGB,managersandchairmencanberesponsibleforensuringcybersecurityintheircompanies.Section203ofthePenalCode(“Strafgesetzbuch”,abbr.StGB)criminalisesthedisclosureofpersonalsecretslearnedbytheperpetratorinhisprofessionalfunction,e.g.,aslawyersorphysicians(evenincaseofhackerattacks).Otheraspectsoncybersecurityarespecified in theTelemediaAct(“Telemediengesetz”, abbr. TMG), the Telecommunications Act(“Telekommunikationsgesetz”,abbr.TKG),andtheCopyrightLaw(“Urheberrechtsgesetz”,abbr.UrhG).


The state authorities obtain access to private communications ondifferent legal grounds, such as sections 100a and b of theCodeof Criminal Procedure (“Strafprozessordnung”, abbr. StPO),sections3,5and8oftheActforLimitationoftheConfidentialityof Correspondence, Post and Telecommunications (“Gesetz zurBeschränkung des Brief-, Post- und Fernmeldegeheimnisses”,abbr. Artikel 10-Gesetz), sections 23a to c and e of theAct forthe Customs Investigation Services (“Zollfahnungsdienstgesetz”,abbr. ZFdG), section 20l of the Federal Criminal Office Act(“Bundeskriminalamtgesetz”, abbr. BKAG) and some additionalregulationsoftheindividualFederalStates.Themeasures pursuant to section 100a of the Code of CriminalProcedure require a prior court order, following an applicationby the public prosecutor’s office. In pressing circumstances, theprosecutormayalsoissueanorder,whichmustbeconfirmedbythe


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toitsintroductionintheyear2013;andarticle13,whichrequirescertainplatforms(e.g.,YouTube)tostopitsuserssharingunlicensedcopyrightedmaterial.


Thelawgenerallydistinguishesbetween“telemediaservices”and“broadcastingservices”.Broadcasting,asdefinedintheInterstateTreaty,meansalinearinformationandcommunicationsservicethatprovidesandtransmitsoffersforthegeneralpublicforsimultaneousreception,inaudioand/orvideosignals,pursuanttoaprogrammingschedule, using electromagnetic oscillations. Telemedia services aredefinedaselectronicinformationandcommunicationsservicesother than telecommunications services and broadcasting (e.g.,internetcontentservices).Accordingtosection20oftheInterstateBroadcastingAgreement,onlyprovidersofbroadcastingservicesmustobtainalicence.Yet,theterm“broadcasting”doesnotincludeofferswhich:(1) areofferedtofewerthan500potentialusersforsimultaneous

receptioninanycase;(2) are destined for immediate reproduction from reception

equipmentstoragemedia;(3) exclusivelyservepersonalorfamilypurposes;(4) arenotofferseditedbyjournalists;or(5) consist of programmes which are each activated against

individual payment (section 2 (3) of the InterstateBroadcastingAgreement).

The provider’s key obligations are set out in the provisionsmentionedinquestion1.2.


Licences are of a personal nature and cannot be assigned toothers. But, if the assignee himself meets the requirements ofthe Interstate BroadcastingAgreement, the state media authority(“Landesmedienanstalt”), as the competent regulatory authority,mustissuealicence.Apossiblechangeofcontrolmustbeannouncedtothecompetentregulatory authority, which is the Commission on Concentrationin theMedia (“Kommission zurErmittlung derKonzentration imMedienbereich”,abbr.KEK).TheCommissiononConcentrationintheMedia–asrepresentativeoftheFederalStatemediaauthorities–isresponsibleforreviewingissuesrelatedtosecuringdiversityinthemediaandforavoidingpredominantmediapower.



Following the recent judgment of the European Court of Justice(abbr. ECJ, C-484/14), operators of a public Wi-Fi hotspot aregenerally not liable for infringements committed by third partiesin Germany. However, the ECJ states that the operator can berequestedtosecurehisnetworkwithapasswordinordertopreventviolationsofthelaw.


The German legislator has adopted a new law on data retention(“Gesetz zur Vorratsdatenspeicherung”). The Federal NetworkAgency has stopped its enforcement after a ruling by theHigher Administrative Court of North Rhine-Westphalia(“Oberverwaltungsgericht Nordrheinwestphalen”) stating that thelawwouldnotbeconsistentwithEUlawondataprotection.From1July2017,allprovidersareformallyrequiredtosavetheircustomers’ telecommunications transaction data listed in section113b of the German Telecommunications Act for four weeks(concerninglocationdata)or10weeks.Breachesoftheretentionobligation are punishable by a fine. The precedent provision ondataretentionwasheldtobeunconstitutionalbyGermany’sFederalConstitutionalCourt.



Audio-visual media are governed by the Interstate BroadcastingAgreement (“Rundfunkstaatsvertrag”) and the Interstate Treatyon the Protection of Minors in Broadcasting and Telemedia(“Jugendmedienschutz-Staatsvertrag”). Furthermore, the Audio-visualMediaServiceDirective 2010/13/EU applies; see question1.2forfurtherdetails.Itisnotclearwhetheronline streaming servicesmustbequalifiedas broadcasting services that must be made subject to priorauthorisation,oriftheycanbequalifiedastelemedia services.Incontrast to radiobroadcastsover the internet,TVbroadcastsovertheinternetarenotexemptedfromtheobligationtoobtainalicence(section20boftheInterstateBroadcastingAgreement).“PietSmietTV”hasshutdown itsYouTubechannelasaconsequenceof theFederalStatemediaauthority’snotice,requestingPietSmietTVtoeither obtain a broadcasting licenceor to shut down the channel.Itisheavilydisputedifthispracticecomplieswitharticle5oftheGermanConstitution (“Grundgesetz”, abbr.GG),which prohibitscensorship.


Basically, the law is technology-neutral. German law, which isbased on the EU’sAudio-visualMedia Services Directive (abbr.AVMSD), governs EU-wide coordination of national legislationonallaudio-visualmedia,both traditionalTVbroadcastsandon-demandservices.ThenewAVMSDiscurrentlyopenforreview.AnewlegislativeproposalamendingtheAVMSDwasadoptedbytheEuropeanCommissionon25May2016.ThereisachancethatthenewAVMSDmightdistinguishbetweenonlinevideoplatformsingeneralandnewsplatformsusingvideos.Oneofthemostinterestingdevelopmentsinthenearfuturewillbethe implementation of the newEuropeanCopyrightDirective, inparticular:article11,which intends togivepublishersandpapersadditional revenue when internet companies link to their stories(a similar rule already exists under theGermanCopyrightAct inGermany),althoughithasbeenhighlyopposedanddiscussedprior


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theRegionalCourtofCologne thatdeclared the respective termsandconditionsofDeutscheTelekomnullandvoid.However,thisjudgmentdoesnotguaranteenetneutralityingeneral.Instead,netneutralityisguaranteedbythethirdlawamendingtheTelecommunicationsAct,whichsetsouttherulesonpenaltiesunderarticle6ofEURegulation2015/2120. Inparticular, it stipulatesadministrativefinesforcertaininfringementsofarticle3andarticle4ofEURegulation2015/2120,withapossiblemaximumfineof€500,000.The Federal NetworkAgency has received consumer complaintsabout alleged breaches of the open internet provisions of EURegulation2015/2120. It has already investigated someof thesecasesandisstillinvestigatingothers.However,noformaldecisionhas so far been taken to impose a penalty for violation of netneutralityprovisions.TheFederalNetworkAgencyhasfurthermorenot yet taken any decision to impose requirements on technicalcharacteristics,minimumqualityofservice,orotherappropriateandnecessarymeasuresunderarticle5(1)ofEURegulation2015/2120.


As already mentioned in question 6.1, Wi-Fi operators can beobliged to ensure that copyright infringements do not continue;this was recently approved by the Federal Court of Justice(“Bundesgerichtshof ”, abbr.BGH). ConsumerVPN services arenotregulatedorblocked.

Reacting to this judgment, the German legislator amendedthe German Telemedia Act, called the “Second Act amendingthe Telemedia Act” (“Zweites Gesetz zur Änderung desTelemediengesetzes”), and provider liabilitywas abolished. Thelawcameintoforceon27July2016andconcernscompensationfor damages incurred by content providers through illicit use ofinternetaccess,andliabilitytoceaseanddesist(“Störerhaftung”).However, theWLAN operator is still obliged to ensure that theillicitpracticesdonotcontinue.


Telecommunicationsoperatorsandinternetserviceprovidersarenotobligatedtodisconnectcustomerswhoinfringeacontentowner’sright. However, they have to provide information to contentowners according to section 101 of the German Copyright Law(“Urheberrechtsgesetz”,abbr.UrhG).Iftherequestedinformationconcerns trafficdatasuchas IPaddresses,copyrightownersmustobtainacourtorder.The new data retention law of 2017 prolongs the period duringwhichtelecommunicationsoperatorsandinternetserviceprovidershavetostoretrafficdatatoatleastfourweeks.


Originally, Deutsche Telekom had plans to impose speed limitsoninternetaccessviaDSL.Thesewereblockedbyajudgmentof


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Dr. Florian von BaumPinsent Masons Germany LLPOttostr. 2180333 MunichGermany

Tel: +49 892 030 435 00Email: [email protected]: www.pinsentmasons.com/de

Dr. Igor BarabashPinsent Masons Germany LLPOttostr. 2180333 MunichGermany

Tel: +49 892 030 435 00Email: [email protected]: www.pinsentmasons.com/de

Pinsent Masons Germany LLP is an international full-service law firm whose origins trace back to 1769. Today, the firm has a legal team of around 1,800 lawyers operating out of offices across Europe, the Middle East, Asia Pacific, Australia and South Africa.

Combining sector experience and legal expertise ensures our clients receive cutting-edge legal services in the Technology, Life Sciences, Energy and Real Estate sectors.

Florian is head of the TMT & Sourcing practice of Pinsent Masons in Germany. He specialises in advising German and international companies in the IT/software, telecommunications, automotive, biotech and life sciences sectors. He has represented companies in numerous technology transactions, including a wide range of outsourcing, development, cooperation and strategic alliance projects. He has been listed as a frequently recommended lawyer in the area of IT law in the German legal directory JUVE Handbuch, and in the Chambers and Partners legal directories for the practice area of TMT for years, most recently in their respective 2016/2017 edition.

Igor is a Senior Associate advising German and international clients on all aspects of outsourcing, commercial, competition and technology law-related matters, with a focus on companies in the life science, biotech, telecommunications and IT fields. Further, Igor has significant experience in advising Russian-speaking clients entering the German and European markets. He is a member of the Pinsent Masons “Russian and Ukraine Desk (RUD)”, the German Association for the Protection of Intellectual Property (GRUR) and the German-Russian Lawyers Association (DRJV). Igor has published various articles and frequently gives lectures and seminars on IT and commercial law- related topics.


Chapter 15

hand. InFebruary2014, theEETTawardedthefirst licenceforadigital televisionnetwork toDigeaDigitalProvider Inc (DIGEA).DIGEAprovidesnetworkingandmultiplexing,aswellasnetworkbroadcastingforanylegitimateTVstationthatusesitsservices.Inthepay-TVmarket,therearecurrentlytwomainplayers(“NOVA”and “COSMOTETV”). NOVA is affiliated with Forthnet (fixedcommunicationsoperator)andCOSMOTETVis thepay-tvbrandof the fixed incumbentOTE. There aremany free-to-air contentproviders currentlyoperating in theGreekmarket, including localoperators.AtenderperformedbytheMinistryin2016fortheawardoffourlicencesforfree-to-aircontentprovidershasbeenannulledbytheCouncilofState,andanewprocesshasbeeninitiatedbytheNationalRadio-TelevisionCouncilfortheawardofsevenlicencestoprovidersoffree,nationwide,generalinformation,terrestrialdigitaltelevisionbroadcastingcontentonNovember2017.Sixapplicationswere submitted for the aforementioned licences. Eachof thefiveofthempertainingtoSKAI,StarChannel,Alpha,AntennaTVΑ.Ε.(Ant1)and“E”TVacquiredonelicence,whereasthesixthapplicant“ΤΗΛΕΟΠΤΙΚΗΕΛΛΗΝΙΚΗΑΝΩΝΥΜΟΣΕΤΑΙΡΕΙΑ”wasfoundto be eligible on conditions relating to the proof of the financialcapacity of the company. These conditions were notmet by thecompany,resultingintherejectionofitsapplication,inJune2018.InJanuary2018,followingtheissuingofMinisterialDecisionsNo.169-171/2018,theEETTlaunchedanauctionfortheawardingofrightstouseradiofrequenciesofterrestrialdigitalradiofreebroadcasting(DAB) of national and regional coverage, with the procedure ofsealedtendersinwhicheachtendererpaysthepriceoffered.Throughthisprocess,aNationalCoverageRadioFrequencyUseRightwouldbegrantedfortheDAB+multiplexchannelsdescribedintherelevanttenderdocumentandseveralRegionalRadioFrequencyUseRightsfortheawardareasspecifiedinthesametenderdocument.Theauctionreceivedtwoapplicationsforawarding,whichwerebothfoundnon-eligiblebytheEETTinMay2018.AnalogueradioFMstationsinGreecestilloperateunderatemporarylicensingregime.


The most important legislation applicable to telecoms, includingto the internet and to the audio-visualmedia distribution sectors,consistsofthefollowingacts:■ Law4070/2012onelectroniccommunications.■ ΕΕΤΤDecision792/07/2016onthefourthroundofmarket

analysis of wholesale fixed local access market, and theintroductionofVDSLvectoringtechnologyfortheprovisionofNGAaccessinGreece.

1 Overview


Themostrecentofficialpubliclyavailablefinancialdatacoveringtheoveralltelecomssectorreferstothefiscalyear2016.2016mayturnouttobeaturningpointforthedomestictelecommunicationsmarket. The adoption and imminent implementation of thevectoringRegulationisexpectedtoleadtoafurthermulti-benefitincrease of investments. The three major telecommunicationsproviders announced a two billion euro investment plan for thenext four years. At the same time, competition among bundledoffers was further intensified based on high-speed broadbandaccess,mobilebroadbandandpay-tvservices.Thecontributionoftheindustry’sturnovertoGreece’sGrossDomesticProduct(GDP)rangedat2.8%in2016,almostatthesamelevelasin2015.Theturnoverofthetelecommunicationsindustrystabilisedattheleveloffivebillioneuros.Revenuesfromtelecommunicationsservicesrepresented thevastmajorityofall revenues (~90%),whilepay-tv revenueswereon the rise. The total investmentmadeby theelectronic communications providers increased spectacularly by69%(correspondingto22.6%ofthetotalindustry’sturnover),withapproximately 70% being carried out on fixed networks and theremaining30%onmobilenetworks.Thefocusofthisinvestmentwas mainly the telecommunications infrastructure as well asresearchanddevelopment(e.g.,software,newservices,etc.).TheEarningsbeforeInterest,Tax,DepreciationandAmortization(EBITDA) for the major fixed and mobile operators increasedby 2.8% compared to 2015, while their gross profit declinedfurther at about 415 million euros, mainly due to increaseddepreciationfigures.Themostsignificantparticipantsinthefixedcommunicationsmarketaretheincumbent(OTE),Vodafone,Wind,ForthnetandCYTAHellas.Inthemobilecommunicationsmarketthereare threeMNOs:Cosmote (subsidiaryof incumbentOTE);Vodafone;andWind. Furthermore,CYTAHellasofferedmobileservices as an MVNO, but has recently merged by acquisitionwithVodafone. Thenotifiedmergerwasapprovedby theEETT(National Commission for Telecommunications and Post) at theendofJune2018,afterenteringaphaseIIinvestigation,butwasclearedwithoutcommitments.In the media sector, there is a significant difference between thedevelopment and regulation of distribution platforms and pay-tvononehand, and free-to-airTVcontentproviderson theother

Nikolinakos – Lardas & Partners LLP

Dr. Nikos Th. Nikolinakos

Dina Th. Kouvelou

Greece


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serviceproviders.Theagenciesthatregulatethecommunicationsandmediasectorsarethefollowing:■ theEETT: thenational regulatory authority that supervises

and regulates the electronic communications and postalservicesmarket.Itisalsoresponsiblefortheapplicationofcompetitionlawintheelectroniccommunicationssectorandinthepostalservicessector;

■ the ESR: an independent administrative authority thatsupervisesandregulatestheradioandtelevisionmarket;

■ theCompetitionCommission:which is responsible for theapplicationofcompetition law inall sectors, excluding thetelecomssectorundertheEETT’sfieldofcompetence;

■ theADAE(AuthorityfortheAssuranceofCommunicationsPrivacy): an independent authority responsible for theprotectionofsecurityandprivacyofcommunications;and

■ theDPA(DataProtectionAuthority):anindependentauthorityresponsiblefortheprotectionofpersonaldatainallsectors.

1.4 In relation to the: (a) telecoms, including internet; and (b) audio-visual media distribution sectors: (i) have they been liberalised;? and (ii) are they open to foreign investment?

i. Liberalisation The telecommunications andmedia sectors have developed quiteseparatelyinGreece.Telecommunicationsdevelopedfollowingthedecisionofthegovernmentin1992toproceedwiththeestablishmentofacompetitivemarketformobiletelecommunications.Thatyear,twolicencesformobilenetworksweregrantedtotwosubsidiariesofforeignoperators,VodafoneandTelecomItalia,whichlaunchedtheirservices in1993. TheincumbentGreekoperator,OTE,wasthentotallyexcludedfromthetender.AlicenceformobilenetworkswasgrantedtoOTEin1995,whichlauncheditsservicesin1998.At the same time the government started the privatisation of theincumbent,aprocedurethatendedin2008,14yearslater.Thekeylawfortheliberalisationofcommunicationswasenactedin2000.TheEUFrameworkonelectroniccommunicationsnetworksandserviceswasinitiallytransposedintonationallegislationwithasignificantdelayin2006.TherevisedElectronicCommunicationsFrameworkwas transposed into national legislation throughLaw4070/2012.In the media sector, the liberalisation of the market in Greece,and the transition from state-controlled radio and television tothe regime of radio and television operated by privately-ownedcompanies, has been the result of a de facto development in themarket thatoccurredbefore theappropriate legal framework. Animmediate effect of this is that themarket developed in a totallyunregulated way. Few of the free-to-air television stations stilloperatewithatemporarylicence,andthemajorityofthefree-to-airradioandtelevisionstationsoperatelegallyundercertaintemporaryprovisions. InOctober 2015,Law4339/2015 entered into force,introducingtheprovisionsontheauthorisationofdigitalterrestrialtelevisionbroadcastingcontentproviders.Law4367/2016amendedLaw4339/2015byaddinganewArticle2A,whichgavethepowertotheMinistrytoperformthefirstauctionfortheprovisionoffree-to-airTVlicences.Thenumberoflicencestobeawardedthroughthisprocesswas set to four (4). Theauctionwasperformedandcompleted inSeptember2016,but theCouncilofState (SupremeAdministrative Court), following appeal of the participants andexistingTVoperators,foundthattheprocessfortheawardofthelicencesbytheMinistryviolatedtheConstitutionandannulledit.Article 2A, which awarded the relevant powers to the Minister,was abolished, and the process for the award of free-to-air TVlicencesisconductedbytheNationalRadio&TelevisionCouncil

■ EETT Decision 834/2/2017 on the regulation of GeneralAuthorisations,asamendedbyEETTDecision849/3/2018.

■ Law 3115/2003 on issues related to the protection ofcommunicationsprivacy.

■ GeneralDataProtectionRegulation(GDPR)(EU)2016/679,Laws2472/1997and3471/2006ontheprotectionofpersonaldata.

■ Law2121/1993ontheprotectionofintellectualproperty.■ PresidentialDecree 131/2003 on e-commerce, as amended

byLaw4403/2016,Article24.■ JointMinisterialDecisionNo.70330/2015onadjustmentsto

theGreek legislation in linewithDirective2013/11/EUonAlternativeConsumerDisputeResolution,andtheadoptionof additional national measures for the implementation ofRegulation 524/2013 on Online Dispute Resolution forConsumerDisputes.

■ Law 4411/2016 on the ratification of the Convention onCybercrime and transposition of Directive 2013/40/EU onattacks against information systems, and replacingCouncilFrameworkDecision2005/222/JHA.

■ Law2251/1994whichappliestoconsumerprotectionissues.■ EETTDecision843/2/2018ontheregulationofmanagement

andassignmentof[.gr]or[.ελ]domainnames,whichamendsandcodifiesΕΕΤΤDecision750/2/2015,asamendedbytheEETTDecisions760/3/2015and757/2/2015.

■ Law 3592/2007 on the licensing of media and otherprovisions.

■ Law 4339/2015 on the licensing of digital terrestrial TVcontentproviders, asamendedseveral times,most recentlywithLaw4530/2018.

■ Ministerial Decision No. 1830/2017 on the determinationof the number of tendered licences to providers of free,nationwide,generalinformation,terrestrialdigitaltelevisionbroadcastingcontent.

■ JointMinisterialDecisionNo.2178/2017onthedeterminationof thefirstbidpriceof eachoneof the seven (7) tenderedlicencestoprovidersoffree,nationwide,generalinformation,terrestrialdigitaltelevisionbroadcastingcontent.

■ ESRDecisionsNo.61,63/2018and65/2018.■ MinisterialDecisionNo.169/2018ontheTerrestrialDigital

BroadcastFrequencyMap.■ MinisterialDecisionNo. 170/2018 on the assignment of a

terrestrial digital radio broadcast spectrum to “HellenicRadio,TelevisionCompanyLimited”(ETRS.A.).

■ MinisterialDecisionNo. 171/2018on the limitationof thenumberofrightstouseradiofrequenciesofterrestrialdigitalradio broadcasting, national and regional coverage, anddeterminationofthetypeofcompetition.

■ Law4512/2018.■ Law 4463/2017 on the transposition of the cost reduction

Directive2014/61/EU.


The Ministry with the most direct involvement and key role inthe telecoms and media fields is the Ministry of Digital Policy,TelecommunicationsandInformation.However,themajorresponsibilitiesinthesesectorsareundertakenby regulatory agencies which are independent administrativeauthorities, with full independence from network operators and

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Electronic communications networks and services providers inGreece are required to obtain a General Authorisation from theEETT. The main law that governs the provision of electroniccommunications is Law 4070/2012. Secondary regulation isissued by the EETT. The law defines the responsibilities of thecompetent Ministries (currently the Ministry of Digital Policy,TelecommunicationsandInformation),whicharemainlyrelatedtodefiningthenationalstrategyinthesectorandtheresponsibilitiesof the EETT,which is the key entity responsible for the design,implementation and enforcement of electronic communicationsregulation.TheEETThasthepowertoissueregulatorydecisionsdefining regulatory obligations or authorised operators, authoriseoperators,provideRightsofUseofnumbersandspectrum,controlthemarketandmonitorcomplianceofauthorisedoperators,enforcerelevant obligations, impose sanctions and issue decisions ondisputeresolutionbetweenauthorisedoperators.Inadditiontotheelectroniccommunicationsregulatoryframework,the EETT is also the competent authority for the application ofcompetition law in the electronic communications sector, and isgrantedallthepowersoftheCompetitionCommissiontothisendandtotheextentrequiredforthesectorofelectroniccommunications.Privacy issues in the electronic communications sector fall undertheresponsibilityoftheADAE.


The intendent regulatory authority responsible for defining andimplementing any sector-specific regulation in the electroniccommunications sector is the EETT. The EETT is alsoresponsiblefortheapplicationofcompetitionlawintheelectroniccommunications sector. Issues related to data protection andprivacyofcommunicationsareregulatedbytheDPAandtheADAErespectively, both established by the Greek Constitution. TheCompetitionCommission is alsoan independent authority,but aswiththeEETT,itisnotestablishedbytheGreekConstitution.


DecisionsoftheregulatorscanbechallengedattheAdministrativeAppealCourtandthedecisionsofthecourtcanbechallengedattheCouncilofState.MajorregulatoryissuesarechallengeddirectlyattheCouncilofState.IncaseoftheEETT,allregulatorydecisions(regulatoryadministrativeacts)areappealedbeforetheCouncilofState with a Petition forAnnulment, whereas decisions with thecontentofanindividualadministrativeactareappealedbeforetheAdministrative Appeal Court. All regulatory decisions broughtbefore theCouncil of State and decisionswith the content of anindividualadministrativeact,notimposingpenalties,arechallengedonlywithregardtotheappropriateapplicationoflawandproceduralrules,andnotonthemerits(thefacts)ofthecase.Decisionsthatimposefines,etc.,canbechallengedbothintheirsubstanceandwithregardtotheappropriateapplicationoflawandproceduralrulesattheAdministrativeAppealCourt.DecisionsoftheAdministrativeAppealCourtcanbeappealedagainstonasecondgradebeforetheCouncilofStateonlywithregardtotheappropriateapplicationoflawandproceduralrules.

(ESR). InJuly2017, theESRissuedadecisiondefining that thenumber ofTV licences (to providers of free, nationwide, generalinformation, terrestrial digital television broadcasting content) tobeawardedthroughthetenderwillbeseven(7).Sixapplicationsweresubmittedfor theaforementionedlicences. Eachof thefiveofthempertainingtoSKAI,StarChannel,Alpha,AntennaTVΑ.Ε.(Ant1)and“E”TVacquiredonelicence,whereasthesixthapplicant“ΤΗΛΕΟΠΤΙΚΗΕΛΛΗΝΙΚΗΑΝΩΝΥΜΟΣΕΤΑΙΡΕΙΑ”wasfoundto be eligible on conditions relating to the proof of the financialcapacity of the company. These conditionswere notmet by thecompany,resultingintherejectionofitsapplicationinJune2018.In January 2018, following the issuing of Ministerial DecisionsNo.169-171/2018,theEETTlaunchedanauctionfortheawardingof rights to use radio frequencies of terrestrial digital radio freebroadcasting (DAB) of national and regional coverage, withthe procedure of sealed tenders in which each tenderer pays theprice offered. Through this process, a National Coverage RadioFrequencyUseRightwouldbegranted for theDAB+multiplexchannels described in the relevant tender document, and severalRegionalRadioFrequencyUseRightsfortheawardareasspecifiedinthesametenderdocument.Theauctionreceivedtwoapplicationsforawarding,whichwerebothfoundnon-eligiblebytheEETTinMay2018.AnalogueradioFMstationsinGreecestilloperateunderatemporarylicencingregime.ii. Foreign investmentBoth electronic communications and media sectors are open toforeign investment, subject to generally applicable restrictions.Specialconditionsrelatedtoownership(applicablebothtolocalandforeign shareholders) apply in themedia sector. Law3592/2007providesthatitisprohibitedtocontrolmorethanonelicenceinthetelevisionorradiosector.Participationinmorethanonelicenceisallowed to the extent thatonedoesnot exercise control, i.e.maynot substantially influence the decision-making process or doesnothavethepowertoappointatleastonememberoftheboardofdirectorsoranadministrator.Furthermore, Law 4339/2015 sets the following restrictions onshareholdersholdingmorethan1%ofshares,andboardmembersand legal representatives of entities that participate in tendersfor digital terrestrial TV content providers: i) non-convictionsby irrevocable court decisions for specific crimes; and ii) non-participation in anymanner in companies conducting research intheradioorTVmarketandinadvertisingcompanies.TheLawalsoprohibitsparticipation incompanies thatexecutepubliccontracts,and requires licence applicants to submit evidence proving thesourceofacquisitionofthefinancialmeansusedorintendedtobeusedfortheoperationofthecontentprovider.

2 Telecoms

General


GreeceisamemberoftheWorldTradeOrganisation.BeingalsoanEUMemberState,GreecealsoparticipatesinthatcapacitythroughtherepresentationoftheEuropeanUnion,whichcoversallMemberStates.



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andcompliancewiththeGeneralAuthorisationRegimeandtotherightstouseradiofrequenciesand/ornumbers.TheyderivefromaformulaincludedintheEETTDecisiononGeneralAuthorisations.Themainfactorstakenintoaccountforthecalculationofthefeesarethetotalturnoverfromelectroniccommunicationsnetworksorservices minus the wholesale interconnection and roaming costspaidtootheroperators.Thefeesarecalculatedasapercentageofthetotalgrossrevenuefromtheprovisionofpubliccommunicationsnetworksorpubliclyavailableelectroniccommunicationsservicesunder theGeneralAuthorisationRegime, according to a formulaincludedintheEETTDecisiononGeneralAuthorisations.The GeneralAuthorisation Regulation also provides inAnnex Ba list of specific obligations applicable per category of servicesprovidedbytheauthorisedoperator.Operators with General Authorisations are also allowed to usespectrum,exceptforthecasesinwhichtheuseofspectrumrequirestheallocationofaRightofUse.RightsofUseareallocatedwhenthey are required in order to: i) avoid harmful interference; ii)ensurethetechnicalqualityofservices;iii)ensureefficientuseofspectrum;andiv)forotherreasonspertainingtothepublicinterest,asdefinedintherelevantEuropeanFramework.


IndividualauthorisationsincludeRightsofUseofNumbers,Rightsof Use of Spectrum and licences concerning base stations andantennas.Rights of Use of Numbers are of indefinite duration. TransferbetweenuserstowhomnumbershavebeenallocatedatsecondarylevelisonlypermittedunderspecificcircumstancesdefinedintheEETTRegulationontheallocationanduseofnumbers.ForRightsofUseofFrequencies,thedurationandothertermsvarydepending on the decision-maker awarding the licences and thespectrumbandinquestion.RightsofUseofFrequenciesmaybetransferred.However,anyintendedtransferorchangeofcontrolofthelicenseehastobenotifiedtotheEETTandissubjecttorelevantreview and approval. The provisions on transfer notification/approval do not apply to Rights of Use of Spectrum that wereallocatedatnocost.



Law 4070/2012 and secondary administrative provisions coverthe issueofRightsofWay for installationof telecommunicationsinfrastructure inpublicproperty. Themainprovisions thatdefinethe framework for Rights of Way, co-location and installationof base stations and antennas are set byArticles 28–30 of Law4070/2012.However,thecompleteframeworkconsistsofmultiplespecialprovisionsvaryingfromcivilcodeprovisions,speciallawsonarchaeologicallocationsandresponsibilitiesoflocalauthorities,which often result in different interpretations by competentauthoritiesandrendertheirimplementationchallenging.Law 4463/2017 implemented the EU cost reduction Directive2014/61/EU.UntiltheoperationoftheInformationSystem,which



The Greek legal framework, in full accordance with the EUlegislation, provides for General Authorisations which aremandatory for any undertaking that wishes to offer electroniccommunications services. In order to obtain a GeneralAuthorisation,therequestingentityneedstosubmitaRegistrationDeclarationtotheEETT,usingthestandardformprovidedbytheEETT,alongwiththerelevantsupportingdocuments.ThisRegistrationDeclarationmustbesubmittedsolelythroughtheOnlineApplicationSystemforElectronicCommunicationsServicesProviders.Whensubmittingtheapplication,thepersonconcernedmust electronically send to the EETT all required supportingdocumentsattachedtothe“Administrator’sStatement”.InordertoaccesstheOnlineApplicationSystemforElectronicCommunicationProviders,theapplicantmustsubmitsuchStatement,accordingtotheprovisionsoftheEETTDecision586/006/2010asinforce.The person providing this Statement may perform the specificelectronic communications activity described in the RegistrationDeclaration, immediately upon filing a complete RegistrationDeclaration.FortheDeclarationtobedeemedcomplete,relevantadministrativefeesmustbepaid.The requestingoperator is included in theRegistryofAuthorisedOperators,andmayobtainarelevantcertificatebytheEETTuponrequestwithinseven(7)daysofreceiptofsuchrequest.InadditiontoGeneralAuthorisations,thelawprovidesforRightsof Use relating to the allocation of exclusive or non-exclusivefrequencies, numbers or satellite trajectories, which are assignedindividuallytooperatorsbydecisionoftheEETT.FurtheranalysisonRightsofUseofNumbersandSpectrumisprovidedbelowunderthesectionsonnumberingandspectrum,respectively.Asfaraslicencesforantennaeandbasestationsareconcerned,therelevantframeworkhasbeenreviewedtodealwiththebureaucracyandtheincompleteframeworkthatledtoseveredelaysintheissuanceoflicences.Themaintargetofthenewprocessistoacceleratetheprocessbyestablishingaone-stopshopforapplications.


Anynaturalpersonor legalentitycanapply toacquireaGeneralAuthorisation to provide electronic communications services ornetworks,bysubmittingaRegistrationDeclarationusingastandardform provided by the EETT. Only natural persons/legal entitiesproviding public communications networks or publicly availableelectronic communications services are required to submit aRegistrationDeclaration.The duration ofGeneralAuthorisations is indefinite. The EETTshall maintain a Registry of Electronic Communication NetworkandServiceProviders,whichincludesarecordoftheRegistrationDeclarationsinprintedand/orelectronicform.Any person required to submit a Registration Declaration shallnotify the EETT of the cessation of electronic communicationsactivities under theGeneralAuthorisation Regime,within fifteen(15) days prior to the actual cessation of such activities, using astandard form provided by the EETT. Operatorswith aGeneralAuthorisationarerequiredtosubmitreportswithrequesteddataonaregularbasisandpaylicensingfees.Licensingfeesarepaidonanannualbasisandcorrespondtothecostsofmanagement,monitoring



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alsoledtocostregulation.Forthatpurpose,OTEissubjecttoanannualauditingofitsregulatedservicescontactedbytheEETTviaanindependentauditor.Recently,theEETThaslaunchedaPublicConsultationonthethirdroundofmarketanalysisofthewholesaleleased lines markets, as specified in the European CommissionRecommendationofRelevantMarketsof2014.


There isanobligationfor thestructuralseparationofentities thatprovide services in the public telecommunications sector usingexclusive or special rights granted to them by the Greek state.Functional separation was introduced by Law 4070/2012 as aremedy thatmay be imposed by the regulator to SMP operators,under the conditions stipulated in law, which are in accordancewith the relevant EU directive. However, in practice the issuehasnotbeenraisedbytheEETTandnorelevantconsultationhasbeen undertaken. Apart from that, accounting separation couldbeimposedonoperatorswithanSMPinspecificmarketsandhasindeed been imposed on the incumbent in the markets where ithas been found to hold anSMP, aswell asMNOs in themobileterminationmarkets.


In the most recent (fourth) round of analysis of the Market forwholesale fixed local access, the incumbent OTE was found toholdanSMP.Inthiscontext,theEETTimposedonOTEthefullset of ex-ante obligations, including access, transparency, non-discrimination, price control, cost accounting and accountingseparation.Concerningparticularlyhigh-speedbroadbandnetworks,theEETTimposedadditionalobligationsonthedeploymentofNGANetworksthroughVDSLvectoring.Indicatively,OTEwasrequiredtoprovideinformationonitslocalaccessnetworkforthepurposeofassignmentofspecificlocalsitestootheroperators.TheEETTmanages the allocation process and operators who are allocatedthesesitesundertake todeployVDSLvectoring infrastructure (orother NGA infrastructure) and to provide high-speed wholesaleservicesunderspecifiedtermsdefinedorapprovedbytheEETT.



Themajority of retail price controls which were imposed in thefixedmarketshavebeenliftedbytheEETT,followingthemarketanalysisof retailfixedmarketswhichconcluded that themarketsshouldnotbesubjecttoex-anteregulation.Theonlyretailmarketstillsubjecttoex-anteregulationisthemarketforretailleasedlineswithacapacityofupto2Mbps,inwhichtheincumbentOTEhasbeenfoundtoholdanSMP,butnopricecontrolobligationhasbeenimposedinthatmarket.InthePublicConsultationlaunchedbytheEETT on the third round ofmarket analysis ofwholesale leasedlinesmarkets(seeanswertoquestion2.11),theEETTproposestoliftaltogetherregulationontheretailmarketforleasedlineswithacapacityofupto2Mbps.

willsupporttheone-stopprocedureforthegrantingoftheRightsofWay,theprocedureofArticle11ofAnnexXofLaw4070/2012,asamendedbyLaw4463/2017,applies.In July 2018, the EETT conducted a public consultation on themodification of the EETT regulation (528/075/2009) for thedeterminationoffeesforRightsofWay,RightsofUseofRightsofWayandtheamountofguaranteesofgoodperformanceofRightsofWayoperationsforGreecewiththeaimofsimplifyingtherelevantprocedures.Additionally,theEETTissuedinAugust2018itsnewRegulationonCo-locationandcommonuseoffacilities.



The interconnection market is regulated. Concerning the fixedmarket,OTEisdesignatedashavinganSMPinthefixedoriginationand terminationmarkets. All otherfixednetworkoperators havebeendesignatedashavinganSMPin themarketsfor terminationtotheirindividualnetworks.Interconnectionratesinthesemarketsareregulatedonthebasisofcost-orientation.Additionalobligationsfortransparency,pricecontrol,costaccountingseparation,accesstoanduseofspecificnetworkfacilitiesandnon-discriminationhavebeenimposed.In themobilemarket, allMNOs and CYTA have been found tohold an SMP in the markets for termination to their individualnetworks. Mobile termination rates are regulatedon thebasisofthe cost-orientation principle on a pure LRIC model basis andfurtherobligationsonaccess,transparency,non-discrimination,andaccountingseparationhavebeenimposedonSMPoperators.Incasesofinterconnection/accessdisputes,theEETTcanintervenethroughstandardspecificAccess/Interconnectiondisputeresolutionprocedure,providedforbytheLawonElectronicCommunicationsandintherelevantAccess/InterconnectionRegulation.


The fixed incumbent OTE and the three (3) MNOs (Cosmote,Vodafone, Wind) are required to publish their standardinterconnectioncontractsandprices.


Charges for interconnection (only call termination charges) aresubjecttopriceregulationasindicatedabove(seeanswertoquestion2.9). In addition to fixed and mobile call termination rates, theEETThasalsoregulatedthefixedwholesalelocalaccessmarket,aswellasthewholesalecentralaccessmarket,inwhichtheincumbentOTEwasfound toholdanSMP. In thiscontext,prices forLLUaccessandancillaryfacilitiessuchasco-locationareregulatedonthebasisofcost-orientation. Wholesalebroadbandaccess isalsoregulated, includingpriceandcost regulation. Accordingly,OTEwasfoundtoholdanSMPinthemarketfori)terminatingsegmentsofleasedlinesupto2Mbps,ii)terminatingsegmentsofleasedlinesabove 2Mbps, and iii) joint segments of leased lines,which has



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numbers (50); personal numbers (70); freephone numbers (800);sharedcost(801);numbersforserviceswithmaximumcharge(806,812,825,850,875);numbersusedforcallingcardsservices(807);numbersforaccesstodataservices(896,899);andpremiumchargenumbers(90).Portability requestsareaddressed to the recipientprovider,whichcommunicatestherequestthroughthenationalportabilitydatabasetothedonor-operator.Portabilityforbothfixedandmobilenumbersmustbecompletedwithinoneworkingdayfromthedateofacceptanceoftheportabilityrequestfromthedonor-operator.However,forfixednumbers,whenthe portability request is submitted jointly with an LLU transferrequest,thenumbersareportedonthedateoftransferandactivationofthelocalloop,whichtechnicallyextendsthedeadlineforfixednumbers.TheEETT’snewrulesonbothfixedandmobilenumberportabilityenteredintoforceinJune2018,withtheaimofresolvinginadequaciesoftheformerframework.Underthenewarrangements,asubscriberhastherighttowithdrawwithoutchargeandincaseofacontracteitherremotely(viatelephone,internetorfax)oroutoftheshop(forexample,througharepresentativeofthecompanyatthesubscriber’ssite)withoutexplanation.Therefore,theyhavethepossibilityofcancelling thenumberportability application that they submitted.Theaforementionedoptionsapplyforaperiodof14calendardaysfrom theconclusionof thecontract. Morespecifically,under thenewframework:■ Therequestforportabilityisforwardedtotheactualoperator

after14days,whentheimplementationprocessstarts.■ If the subscriberwishes the request tobeprocessedearlier

than 14 days, he/she must make a declaration to the newcompany. It isnoted that thecompanyhas the righteithertonotaccepttherequestortoaskthesubscriberforawrittenstatement that he accepts to lose the right of withdrawal.In this case, the subscriber has the option to apply forcancellation of portability until the service reaches a newcompanyandifthe14-daydeadlinehasnotpassed.

■ In order to cancel portability, the subscriber must send arequestonlytothecompanytowhichhehassubmittedtheportabilityrequestandbyoneofthemeansofcommunicationavailabletohimforthispurpose.

3 Radio Spectrum


TheEETT is the competent authority for spectrummanagement,frequencyassignment,andspectrummonitoring,subjecttocertainkey responsibilities maintained by theMinistry according to theprovisionsofLaw4070/2012.


SpectrumisallocatedbytheEETTthroughtheawardofRightsofUseofSpectrum.ApplicationsforRightsofUseofSpectrumareprocessedwithinsixweeksifthereisnolimitationofthenumberthereoforuptosixmonthsfromtheapplicationifsuchalimitationisimposed.With theexceptionof freespectrumbands, forallwirelessservicesan individual right to use spectrum is required, and is granted by


Theprovisionofelectroniccommunicationsservicestoconsumersis subject to general provisions on consumer protection, to thespecial obligations imposed for each category of services undertheGeneralAuthorisations Regulation, and to Codes of Conductforcertaincategoriesofservices(suchastheCodeofConductformultimediaservices).AnyoperatorwithaGeneralAuthorisationwithaturnoverexceeding15millioneurosisrequiredtocontributetothecostfortheprovisionofUniversalService.UniversalServiceobligationsinclude:a) accessatfixedlocationsandtelephonyservices;b) directoryservices;c) public pay-phones and other points of access to public

telephony;andd) specialprovisionsfordisabledusers.Anyoperatormayexpressinterestfortheprovisionforpartoralloftheservicesfallingunderuniversalservice.

Numbering


Number allocation includes primary and secondary allocation.Numbersandnetworkidentifyingcodesareprimarilyallocatedbythe EETT by awardingRights ofUse ofNumbers, following theapplicationofproviderswhichhaveobtainedGeneralAuthorisationscoveringservicesthatjustifytheuseoftherequestednumberrange.Providersmayproceedtosecondaryallocationofnumberstousers.No third-level allocation is permitted (allocation fromoneuser toanother).Thedecisionontheallocationofnumbersisissuedwithinthree(3)weeksfromthedateofsubmissionofacompleteapplication.Thefeesforallocationanduseofnumberingresources(forthefirstyear)must be paidwithin two (2)weeks from submission of theapplication.Incaseofrejectionoftheapplication,theallocationandusagefeesarereimbursedtotheapplicant. Theallocationisvaliduntiltheduedateofpaymentoftheannualusagefeesofthecomingyearandisreneweduponpaymentoftheannualfeeseveryyear.


Special rules applicable to each category/series of numbers aredefined in the EETT Regulation on Allocation and Usage ofNumbers.Theseincludedesignatinganumberseriesforaspecificuse,suchasfreephone,sharedcost,premium,adultcontent,specialcategoriesofshortcodes,etc.Operators to which numbers are allocated are expected to usenumbering resources efficiently. In caseof non-efficient use, theEETTmayrefuseassignmentofadditionalnumbersormayrevokeanallocationdecision.


Numberportabilityappliestofixedandmobilenumbersandtothefollowingspecialcategoriesofnumbers:corporateandVPNaccess



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The legal and regulatory framework that governs cybersecurityissuesmainly consists of Law 4070/2012 (particularlyArticle 37thereof) and ADAE Regulations 165/2011 and 205/2013 (as inforceamendedwithADAEDecision99/2017). According to theapplicable provisions of the above, operators offering internetaccess networks and/or services should maintain and implementsecuritypolicies,supportedbyrelevantanalyticalprocedures.In addition to the above, provisions of the Data Protection Lawapply which require data controllers and processors to ensure theimplementationofappropriateorganisationalandtechnicalmeasurestoensureprotectionofpersonaldata.AllofthisframeworkissubjecttoobligationsarisingfromtheGDPRinforce,applicablesinceMay25th2018.


The lift of communications privacy which allows the competentstate authorities to obtain access to private communications isstrictly regulated and limited to specific purposes, involving theinvestigationofseriouscrimes.TherightofcommunicationsprivacyisestablishedbyArticle19oftheConstitution.LiftofprivacyforspecificcrimesandsubjecttodefinedproceduresandconditionsisgovernedbyLaw2225/1994(asamendedbyLaw3115/2003andinforce)andbythePresidentialDecree47/2005.Specialprovisionsontheliftofprivacyarealsofound in Law 3471/2006 on Data Protection in the ElectronicCommunications Sector, Law 3674/2008 on the enhancement oftheframeworkonprivacyoftelephonyservices,Law3917/2011onDataRetentionandtheElectronicCommunicationsLaw4070/2012,aswellastheRegulationonGeneralAuthorisationsasinforce.Operatorsarerequiredtoassistthegovernmenttolawfullyintercepttelecommunicationsmessages after the intervention of the publicprosecutorby issuanceof awrittenorder,when amajor crime isinvestigatedandunderthesupervisionoftheADAE.TheADAEsets the rules that must be followed by all telecommunicationsoperators and service providers in safeguarding secrecy intelecommunications,beingaconstitutionallyprotectedright.


Regardingtherulesandlegislationapplicabletolegalinterceptionby State Authorities, please refer above to question 4.2. Therelevant provisions do not explicitly refer to specific types ofcalls or communications and aregenerally applicable to all typesof electronic communications, includingboth the content and theexternalcommunicationinformation(date,time,duration,location,etc.).

theEETT.Onlyifthespectrumavailableisnotenoughtocaterforexistingdemandfromexistingornewcompetitors,willa limitationon the number of individual licences be effected. Thiswill be theresultofapublicconsultationthattheEETTmustpreparefollowingaministerialdecisiontothateffect.If,asaresultofthatconsultation,thenumberofindividualrightshastobelimited,theEETTmustdecidehowthislimitednumberofindividualrightswillbegranted.Anykindoftendercanbeheldinaccordancewiththeprinciplesoftransparency,which are set byGreek law in accordancewith EU directives. Inpractice,incaseswheretherearealimitednumberofRightsofUseoffrequencies,theEETTusuallyawardsthemthroughauctions.


OperatorswithGeneralAuthorisationsareallowedtousespectrum,withoutobtainingaRightofUse,exceptforthecasesinwhichtheuseofspectrumrequirestheallocationofaRightofUse.RightsofUseareallocatedwhentheyarerequiredinorderto:i) avoidharmfulinterference;ii) ensurethetechnicalqualityofservices;iii) ensureefficientuseofspectrum;oriv) for any other reasons pertaining to the public interest, as

definedintherelevantEuropeanFramework.Other special cases of exemption for licensing requirements aredefinedbylawinarestrictivemannerandforspecificpurposes.


The law provides both for allocation fees and for usage fees.Allocationfeesarepaiduponallocationofthefrequencyandusagefeesarepaidannually.TherelevantcostisdefinedseparatelyforeachcategoryofRightsofUseofSpectrum.


TheElectronicCommunicationsLawprovides that incaseof thechange of control of the licensee, an approval is required by theEETTunderthesameprocessthatisfollowedincasesoftransferof a spectrum right. For further information on the review andapprovaloftheEETT,pleaserefertoquestion3.6below.


Thelawallowsforspectrumtradingunderspecificconditions.Inordertotransfer,leaseormakeanychangeinthecontroloftherightsholder,anapplicationmustbefiledtotheEETT,whichconsiderstherelevantapplicationanddecidesbasedonspecificcriteriadefinedbylaw.TheEETTneedstoensurethatanynewlicenseewillcontinuetofulfiltherequirementssetbylawandbyanytenderperformedfortheawardoflicences.Inadditiontothis,theEETTmustensurethatanytransferoflicenceorchangeofcontrolwillnotraiseconcernsonthebasisofcompetitionlaw.



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itselfverydifficult. ThisdoesnotallownecessarychangesinthelegalregimethatwouldleadtoamoreworkabledistributionoftheissuesthatfallwithinthejurisdictionoftheESRandtheEETT.TheexistingregimeisdrawnalongthelinesthatcontentisregulatedbytheESRandinfrastructureandfrequenciesbytheEETT.However,sometypesoflicensing,andinallcasesthelicencesfortransmittingcontent, are still to a great extent granted by the ESR. On theotherhand,whereas theEETTis responsible forapplying theex-ante rulesfortheliberalisationofthemarket, inall theelectroniccommunicationsmarkets,including,therefore,thatofbroadcasting,and also the ex-post competition law, the CC is responsible forapplyingtheex-postcompetition.In2014,theEETTawardedthefirstlicenceforadigitaltelevisionnetwork, which was awarded to Digea and defined the techno-economicmodeltobeusedinordertodefinethepricecapstobechargedbyDigeatooperators.According to the applicable legislation, it is relatively simple toobtainalicenceforpay-TVviacableorsatellite,asitrequiresanapplicationbya companyhaving the formof asociété anonyme.Thereisnolimitonthenumberoflicencesgranted,andthereisanobligatoryperiodwithinwhichthelicencemustbegrantedjointlybytheESRandtheMinister,orrefused.BreachofthisperiodwithoutaresponsefromtheESRisconsideredtobeasilentapproval.Thedecision isa jointdecisionof theESRandtheMinister,meaninginpracticethattheMinisterisboundtoissueaministerialdecisionin line with the proposal of the ESR. An application can bemade fromany company in theEUhaving the formof a société anonyme. Licensing for terrestrial pay-TV and free-to-air TV ismorecomplicated,basedonatender.Law4339/2015hasdefinedtheprocessandkeyconditionsfortheawardoflicencestodigitalterrestrialTVcontentproviders. Issues thatwillbeevaluatedarethe extent of the investment, financial reliability, experience andexistingpositionin themarket inorder toavoidconcentration,aswellasthekindofprogrammesthatwillbetransmitted.Seealsotheanswertoquestion5.3forfurtherdetailsonlicensingframework.


Broadcast media advertising is regulated in accordance withPresidential Decree 109/2010 and the Directives for TelevisionwithoutFrontiers, fully implemented,whicharenot applicable toonlineadvertising.Thelatterisregulatedbygeneralprovisionsinthe legislation concerning e-commerce and the protection of theconsumer.Furthermore,therecentlyestablishedElectronicMediaBusiness Register aims for the registration of all online media.The relevant Register and its members were published in April2017onthewebsiteoftheMinistryofDigitalPolicy.Onlyonlinemedia providerswhich are registered are eligible to receive stateadvertising.According to the applicable legislation (Law 3592/2007), newmedia content and its delivery are regulated in the sameway astraditionalbroadcastmedia.


According to the applicable legislation (Law 3592/2007, Law4070/2012 and Directives for Television without Frontiers),


Interceptionofcommunicationsforaparticular individual isonlypermitted when the conditions of Law 2225/1994 are fulfilled,whichmeansthatawrittenorderbythepublicprosecutormustbeissuedinthecontextofaninvestigationforseriouscriminaloffencesexplicitlydefinedinthelaworforreasonsofnationalsecurity.Forfurtherinformationpleaserefertoquestion4.2above.


Thereisnoexplicitprovisionontheprovisionofencryptionkeysto the state. Encryption is only required as a technicalmeasureto enhance theprotectionof electronic communicationsoperatorsagainstsecurityincidentsandviolationofcommunicationsprivacy.


Law3917/2011imposesonoperatorsanobligationtostoreinGreecealldataretainedincompliancewiththedataretentionobligationfor12months.TheinitialwordingoftheLawin2011requiredretaineddata to be “generated and stored” inGreece. Thiswas amendedin2013andthecurrentframeworkonlyreferstotheobligationto“store”suchdatainGreeceandretainitforaperiodof12months.Operators and service providers must destroy customer data 12months after the time of every communication unless otherwisespecifically requested by the public prosecutor. Operators andserviceprovidersarenotcompensatedfortheirefforts.FollowingtheannulmentoftheDataRetentionDirective(Directive2006/24/EC)bytheEuropeanCourtofJustice,thenationallegalframeworkondataretentionisunderreview,butremainsinforce.Accordingly,therelevantobligationincludesthefulllistofdatathatwasincludedin theDataRetentionDirective,whichwas fully transposed intonational legislation. Nevertheless, this framework is subject toobligationsarisingfromtheGDPRinforce,applicablesinceMay25th2018.



With respect to the conditions of liberalisation and the licensingregimeforaudio-visualmedia,pleasereferabovetoquestion1.4.Thedecision-makingprocedureinGreeceisdividedandfragmented.The basic framework is set out in the acts that are enacted byParliament.Thereis,however,anenormousquantityofsecondarylegislation that involves decisions that must be taken jointly bydifferent ministers and three independent authorities. These arethe regulators for telecommunications, the National CommissionforTelecommunicationsandPost(EETT),theNationalCouncilofRadioandTelevision(ESR)andtheCompetitionCommittee(CC).Thesituationgetsmorecomplicated,sincewhereastheESRisanindependentauthoritythatisestablishedbytheGreekConstitution,thisisnotthecaseforeithertheEETTortheCC.Therefore,thejurisdictionoftheESRisdescribedintheConstitutionandcannotchangeunlesstheConstitutionisamended,somethingwhichisin



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Licences are non-transferrable. The licenseemay be transferred,subject to the provisions of Article 1 paragraph 13 of Law2328/1995. The transferof the licenseeshouldbenotified to theGeneralSecretariatofInformationandCommunicationwithinten(10)days.



Greeklegislationcoverstheissueofproviders’liabilityinlinewiththeprovisionsofDirective2000/31/ECone-commerce. Articles11–14ofPD131/2003definetheobligationsandliabilityofonlineprovidersdependingonthetypeofservicestheyoffer.AccordingtoArticle14ofPresidentialDecree131/2003,providershave no general obligation to monitor information they transmitor store and no general obligation to actively seek for any factsor circumstances indicating any illegal action. However, subjectto applicable provisions on privacy and data protection, serviceproviders have to directly inform the competent state authoritiesof any suspected provision of illegal information or suspectedillegal activities attempted by their users, and to provide topublic authorities upon request any information facilitating theidentificationoftheusersoftheirservices.Restrictionsofliabilityofinformationsocietyprovidersdonotdepriveanyoffendedthirdparty from the right to impose judicially, or by administrativeorder, an obligation to cease or prevent any offence (Article 11,paragraph3;Article12,paragraph2;andArticle13,paragraph3ofPresidentialDecree131/2003). Additionally, followingapetitionbytheoffendedparties,thecourtsmayorderanyotherappropriateinjunctivemeasures.Insuchcase,apreliminaryorderisissuedinaccordancewithArticle 691, paragraph 2 of the Civil ProcedureCode(Article17ofPresidentialDecree131/2003,DecisionofCFI11339/2012).Administrators of websites and blogs bear no civil, criminal orregulatoryliabilityforthird-partycontenthostedontheirwebsite,exceptinthefollowingcases:whentheuseruploadsillegalcontentunder the authority or control of the website administrator; thewebsiteadministratorinfactknowsthatthecontentisillegaland,asfarascivilclaimsfordamagesareconcerned,isawareofthefactsand circumstances fromwhich the illegal content derives; or thewebsiteadministratordoesnotquicklywithdraworrestrictaccessto illegal content, once it becomes aware of the fact that illegalcontentishosted.


InJuly2017,Law4481/2017enteredintoforce. Theaimof thisLawisprimarilytoincorporateintonationallawtheprovisionsofDirective2014/26/EConcollectivemanagementofcopyrightand

analogue licences to transmit free-to-air radio programmes anddigitalterrestrialpay-TVandradioaregrantedthroughatender.ThedigitaltelevisionnetworklicencesweregrantedthroughanauctioninFebruary2014.Regardinglicensingofcontentprovidersforfree-to-air digital terrestrial television, the licensing requirements aredefinedinLaw4339/2015,asmentionedabove.ThelawprovidesfortheawardoflicencesthroughanauctionconductedbytheESR,followingtherelevantministerialdecision.SpecialconditionsshallbedefinedbytheESR,butthelawsetsrequirementswithrespecttothelegalform,theminimumcapital,therequirementtoidentifyshareholders,technicalinfrastructure,programmecontent,numberofemployedpersonnel,etc.Law4367/2016amendedLaw4339/2015byaddinganewArticle2Α, which gave the power to the Ministry to perform the firstauction for theprovisionof free-to-airTV licences. Thenumberoflicencestobeawardedthroughthisprocesswassettofour(4).TheauctionwasperformedandcompletedinSeptemberof2016,buttheCouncilofState(SupremeAdministrativeCourt),followingtheappealoftheparticipantsandexistingTVoperators,foundthattheprocess for theawardof the licencesby theMinisterviolatedtheConstitution and annulled it. Article 2A,which awarded therelevant powers to the Minister, was abolished, and the processfortheawardoffree-to-airTVlicencesshallbeconductedbytheNationalRadio&TelevisionCouncil(ESR).OnJuly6th 2017,theESRissuedadecisiondefiningthat thenumberofTVlicencestobeawarded,toprovidersoffree,nationwide,generalinformation,terrestrialdigitaltelevisionbroadcastingcontent,throughthetenderlaunchedinNovember2017,wouldbeseven(7).Sixapplicationsweresubmittedfor theaforementionedlicences. Eachof thefiveofthempertainingto SKAI,StarChannel,Alpha,AntennaTVΑ.Ε.(Ant1)and“E”TVacquiredonelicence,whereasthesixthapplicant“ΤΗΛΕΟΠΤΙΚΗΕΛΛΗΝΙΚΗΑΝΩΝΥΜΟΣΕΤΑΙΡΕΙΑ”wasfoundtobeeligibleonconditionsrelatingtotheproofoffinancialcapacityof thecompany. Theseconditionswerenotmetbythecompany,resultingintherejectionofitsapplicationinJune2018.InJanuary2018,followingthe issuingofMinisterialDecisionsNo.169-171/2018,theEETTlaunchedanauctionfortheawardingofrightstouse radio frequenciesof terrestrialdigital radio freebroadcasting(DAB)ofnationalandregionalcoverage,withtheprocedureofsealedtendersinwhicheachtendererpaysthepriceoffered.Through this process, aNationalCoverageRadioFrequencyUseRightwouldbegrantedfortheDAB+multiplexchannelsdescribedin the relevant tender document and several Regional RadioFrequencyUse Rights for the award areas specified in the sametenderdocument.Theauctionreceivedtwoapplicationsforawardingwhichwerebothfoundnon-eligiblebytheEETT,inMay2018.AnalogueradioFMstationsinGreecestilloperateunderatemporarylicensingregime.The general provisions on radio and television content apply,meaningthattheprogrammemustadheretothegeneralprinciplesof the Constitution and there are further obligations concerningminors,ratingoftheprogrammes,advertising,pluralismandnon-discrimination, etc. In fact, theDirectives forTelevisionwithoutFrontiers are implemented in Greek law by Presidential Decree109/2010, and apply to providers that are under the jurisdictionof Greece as defined therein. With a few exceptions, this alsoappliestotheprogrammesandprogrammeprovidersthatoriginateoutside the EU. In the case of pay-TV, the agreements betweenprogrammeadministratorsandtheholdersofalicence(theplatformoperator)mustbeapprovedbytheESR. Onlyanotification,andnotapproval,isneededinthecaseofanagreementwithprovidersconcerningaprogrammethathasalreadybeentransmittedinpublicfromalicensedfree-to-airstationinGreeceorinanothercountry.


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ThePresidentialDecree131/2003provides foranoticeand take-downprocedure,whichobligesISPstoremoveinfringingmaterialwithout court authorisation. The ISPs must be notified of theillicit nature of thematerial. The notificationmust respect strictrequirements and include specific elements such as the date anddescriptionoftheillicitmaterial.OnceISPsareawareoftheillicitnature of the material, they must remove or delete it promptly,or theycanbeheld liable for the infringingmaterial. Article14,paragraph2ofPresidentialDecree131/2003providesthat,subjecttotheprovisionsontheprotectionofcommunications’privacyandprotectionofpersonaldata, ISPsand InformationSociety serviceproviders should directly inform authorities on any suspicion forprovisionofillegalmaterialorillegalconductoftheirendusers.Asindicatedinquestion6.2,anoticeandtake-downprocedurewasalsorecentlyintroducedforcasesofviolationofIPrights.Finally,Law4002/2011onGamesofChanceimposesonISPsanobligationtoblockaccesstospecificsites.Tothisend,theHellenicGamingCommission(HGC)regularlyupdatesa“blacklist”whichincludesallunauthorisedgamblingproviders.ISPsarerequiredtocheckthislistforanyadditionsandensurethataccesstothesitesincluded in the black list is blocked. Non-compliance with thisobligationresultsinveryhighfinesandcriminalsanctions.The EETT General Authorisation Regulation obliges telecomoperators providing publicly available network and/or servicesto immediately disrupt access to the corresponding numbers orservicesinwhichfraudisdetected,andtofileacomplaintwiththeEETT,describing the incident and theactionswhich theoperatorhastakenorintendstotaketoprotectitscustomerbase.

related rights and multi-territorial licensing of rights in musicalworks for online use in the internalmarket. In addition to this,it introduces several amendments to the basic IP Rights Law(2121/1993). Law 4481/2017 provides, inter alia, sanctions foronlineviolationsofIPrightsandintroducesanoticeandtake-downproceduretoprotectagainstIPrightsviolations.


There areno relevant specific limits. TheEU legislation is fullyimplemented.Within that framework, on October 2017, the EETT launched apublic consultation on a draft decision for the implementation ofmeasures of Regulation (EU) 2015/2120, concerning access tothe open internet and published responses to comments receivedby the market in December 2017. The draft decision addressedissues such as: speed definitions; methodological framework forspeed assessment; user information; definition of continuous orrepeateddeviation;definitionof significantdeviation;andcontrolof subscribers’ complaints. Additionally, in the field control ofcommercial practices (regarding zero rating/subsidised access),services/information for purposes of subscribers’ support, aswellasapplicationsforspeedmeasurementincellphonesisacceptable,whereasthefollowingisnotpermitted:■ Provider pages that include the promotion of products and

services.■ Services (such as music, videos, e-books) favouring the

content of the provider itself against third-party contentproviders.

■ Discriminationafterexceedingthedatacap.


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Nikolinakos – Lardas & Partners is an Athens-based business law firm built upon a strong regulatory, transactional and litigation foundation. Our specialisation covers, inter alia, the following areas: Telecommunications, Media & Technology (TMT); Digital Business; Intellectual Property; Competition Law; and Data Privacy & Cyber Security.

Ranked #1 in Greece by The Legal 500 (for a sixth consecutive year) in TMT, Data Protection & IP.

Nikos Th. NikolinakosNikolinakos – Lardas & Partners LLP 342, Kifissias Avenue, Building B15451 N. PsychikoAthensGreece

Tel: +30 21300 20020Email: [email protected] URL: www.nllaw.gr

Dina Th. KouvelouNikolinakos – Lardas & Partners LLP342, Kifissias Avenue, Building B15451 N. PsychikoAthensGreece

Tel: +30 21300 20020Email: [email protected] URL: www.nllaw.gr

Managing Partner of Nikolinakos – Lardas & Partners LLP and co-head of the TMT, Data Protection and Competition Law practices. Featured prominently in the TMT, competition law and IP rankings of the leading bar publications such as Chambers & Partners and The Legal 500.

Nikos divides his specialised practice between regulatory and policy advice in the TMT sector, and in EU/national competition law and IP rights advocacy and compliance. Prior to founding the firm, Nikos held the post of general counsel – legal and regulatory affairs director for a major telecoms operator and internet provider in Greece. He also held the position of senior in-house adviser to the Telecommunications & Post Commission of Greece (EETT), responsible for competition law and regulatory policy/compliance. He has filled senior consulting roles in various international projects for governments, national regulatory authorities, market players and the European Commission.

Partner and co-head of the firm’s TMT, data protection and competition law practices.

Dina is recommended as a leading TMT and competition legal counsel by Chambers & Partners (“‘a true TMT expert’”, “‘a competition law expert who is extremely business oriented, proactive, and an effective strategist’”) and The Legal 500 (“‘an outstanding regulatory counsel’” who “‘provides a hard-to-find combination of technical and practical legal advice’”).

During the last 17 years, Dina’s professional career has spanned regulatory policy, competition law and corporate/commercial law experience in, amongst others, the following roles: General Counsel and Head of Legal & Regulatory Affairs in a leading alternative fixed telecoms operator and in a mobile operator in Greece; senior competition law and regulatory policy advisor in the Legal Department of the EETT; and legal consultant in regulatory, competition law and commercial law projects with Greek and international law firms and consultancies.



Chapter 16

programmeserviceprovidersinthelast30years.However,sincethat time, the broadcasting sector has been subject to significantchanges, including the expiration of the broadcasting licenceof Hong Kong’s oldest television programme service provider,AsiaTelevision,and the issuanceofnewbroadcasting licences toHK Television Entertainment Company Limited (“HKTVE”, asubsidiaryofPCCW)andFantasticTelevisionLimited(“Fantastic TV”,asubsidiaryofi-CABLECommunicationsLimited).There are 43 licensed television programme service providers.The three domestic free television broadcasters are TelevisionBroadcastsLimited,HKTVEandFantasticTV.Thetwodomesticpay television broadcasters are Hong Kong Cable TelevisionLimited and PCCW Media Limited. There are also 15 non-domestictelevisionbroadcastersand22otherlicensabletelevisionbroadcasters. There are 70 Satellite Master Antenna Televisionlicenseesprovidingover400freesatellitetelevisionchannels.Soundbroadcastingservicesareprovidedby:■ twolicensedcommercialanalogueradiobroadcasters–Hong

Kong Commercial Broadcasting Company Limited andMetroBroadcastCorporationLimited;and

■ one public service analogue radio broadcaster (fundedby theHongKonggovernment andnot subject to a soundbroadcastinglicence)–RadioTelevisionHongKong.

Intotal,HongKonghas13analogueradiochannels.DigitalaudiobroadcastingserviceswerediscontinuedinMarch2017,withfinalbroadcastingterminatedinSeptember2017.


The following is the key legislation applicable to telecommun-ications,internetandaudio-visualmediadistribution:■ Communications Authority Ordinance (Cap. 616),

pursuanttowhichtheCommunicationsAuthority(“CA”)wasestablished.

■ Telecommunications Ordinance (Cap. 106). Regulatesthe licensing and control of telecommunications,telecommunications services and telecommunicationsapparatusandequipment.

■ Broadcasting Ordinance (Cap. 562). Regulates theprovisionofbroadcastingservicesbylicensees.

■ Competition Ordinance (Cap. 619). Empowers the CAand the Competition Commission (which have concurrentjurisdiction) to investigate and bring enforcementproceedingsagainstprohibitedanti-competitivebehaviourinthebroadcastingsectorbeforetheCompetitionTribunal.

1 Overview


Ingeneral,theHongKonginformationandcommunicationssectorremainsakeydriverforandcomponentofHongKong’seconomy.In its 2017 Gross Domestic Productreport,theHongKongCensusandStatisticsDepartmentstatedthat(in2016)theinformationandcommunications sector contributed 3.5% to Hong Kong’s GDP,withatotalvalueofHKD84,120,000,000.Hong Kong also remains one of the most advanced tele-communications markets in the world. The InternationalTelecommunicationUnion,initsMeasuring the Information Society Report 2017,rankedHongKongsixthintheworld(andsecondinAsia,behindSouthKorea)initsInformationandCommunicationTechnologyDevelopmentIndex.Telecommunications (including internet) sectorThe Hong Kong telecommunications market is fully liberalisedandhasnoforeignownershiprestrictions.Therearecurrentlyfourmobilenetworkserviceoperators:■ ChinaMobileHongKongCompanyLimited;■ HongKongTelecommunicationsLimited;■ HutchisonTelephoneCompanyLimited;and■ SmarToneMobileCommunicationsLimited.According to the Office of the Communications Authority(“OFCA”), Hong Kong has (as of July 2018, unless otherwisestated):■ twenty-sevenlocalfixednetworkoperators;■ fourmobilenetworkoperators;■ 239externalfixedtelecommunicationsservicesproviders,of

which42werefacility-basedand197wereservice-based;■ aresidentialfixedlinepenetrationrateofHKD90.34(asof

April2018);and■ amobilesubscriberpenetrationrateof248.2%,with18.39

million mobile subscribers and 17.18 million mobilebroadbandsubscribers(asofMarch2018).

Audio-visual media distribution sectorLicensedbroadcastingservicescontributedanestimatedHKD7.6billiontotheeconomyin2015,representing0.32%ofGDPthatyear.Until2015,therehadonlybeentwodomesticfree-to-airtelevision

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Audio-visual media distribution sectorBycontrast,varyingownershiprestrictionsapplytodifferenttypesofbroadcasting(televisionandsound)licensees.Ofparticularnote–itisauniversalrequirementforthissectorthatalicenseemustbeacompanyformedandregisteredundertheCompaniesOrdinance(Cap.622)(i.e.thelicenseemustbeaHongKongcompany).A domestic free or pay television programme service licensee issubjecttothefollowingcontrolcriteria:■ Thecontrolandmanagementof the licenseemustbebona

fideexercisedinHongKong.■ The majority of directors must actively participate in the

directionofthelicensee.■ A quorum of every meeting of directors (which must be

at least two directors) has amajority of directorswho arepresently ordinarily resident in HongKong andwho havebeensoresidentforatleastonecontinuousperiodofnotlessthansevenyears.

■ The majority of both the directors and principal officersmustbeordinarilyresidentinHongKongandhavebeensoresident for at least one continuousperiodof not less thansevenyears,unlesspriorwrittenapprovalwasobtainedfromtheCA.

■ Withrespecttoadomesticfreetelevisionprogrammeservicelicensee:■ an“unqualified”votingcontroller,meaningapersonnot

ordinarily resident inHongKong,mustobtainapprovalfromtheCAbeforeheorshecanhold,acquire,orexercisemorethan2%“votingcontrol”;

■ he or shemust not exercise in aggregate 49% ormore“votingcontrol”inthelicensee.“Votingcontrol”meanstheabilitytodirectlyorindirectlyexercisevotingpowerinalicensee;and

■ no disqualified person (or their controlling entities) canexercisecontroloverthelicenceholder.

Fornon-domestictelevisionprogrammeserviceandotherlicensabletelevisionprogrammeservicelicensees,thecontrolcriterionisthatonedirectororprincipalofficeroftheselicenseesmustbeordinarilyresidentinHongKongandmusthavebeensoresidentforatleastonecontinuousperiodofnotlessthansevenyears.An“unqualified”votingcontrollerofasoundbroadcastinglicenseeisalsosubjecttothecontrolcriterionsetoutinquestion1.4(e)(ii)above.Furthermore, sound broadcasting and domestic free televisionprogrammeservicelicencesareprohibitedfrombeingheldbyanysubsidiary.Thisistopreventindirectownershipintheselicensees.Notethatrestrictionsarelessstringentfornon-domesticandotherlicensable television programme service licence holders,who areonly required to have at least one director/principal officer whosatisfiestheaboveresidencyrequirement.Competition law-related provisionsTheCompetitionOrdinanceisageneralcompetitionlaw,regulatingand prohibiting anticompetitive conduct across different industrysectors,withthreemaincompetitionrules:■ The First Conduct Rule, which relates to agreements/

concertedpractices/decisionsthatprevent,restrictordistortcompetitioninHongKong.

■ TheSecondConductRule,whichrelatestoabuseofmarketpower.

■ The Merger Rule, which relates to mergers involvingtelecommunications carrier licensees that have, or is likelytohave, theeffectofsubstantially lesseningcompetition inHongKong.Notethisthisruleonlyappliestoentitiesinthetelecommunicationssectorthatholdacarrierlicence.

■ Trade Descriptions Ordinance (Cap. 362). Prohibitsunfair trade practices in connection with trades of goodsandservices. AlsoempowerstheCAandtheCustomsandExcise Department (which have concurrent jurisdiction)to regulate commercial practices of licensees providingtelecommunicationsorbroadcastingservices.

■ Unsolicited Electronic Messages Ordinance (Cap. 593).Regulatesthesendingofunsolicitedelectronicmessages.

Therearealsovariouspiecesoflegislationthatmayhaveamaterialimpact on telecommunications, internet and audio-visual mediadistributioninHongKong,including:■ Personal Data (Privacy) Ordinance (Cap. 486), which

regulatestheprotectionofpersonaldatainHongKong.■ Various industry codes and regulations from the CA,

including:■ theIndustry Code of Practice for Telecommunications

Service Contracts in relation tominimumpractices forcustomer contracts,whichhasbeen implementedby allmajorfixedandmobilenetworkoperators;and

■ certain activities conducted by licensees; for example,product placement and indirect advertisements intelevisionprogrammes.


The Communications Authority Ordinance combined thefunctions and powers of the former BroadcastingAuthority andTelecommunicationsAuthoritywhenitwasformedin2012.The CAisanindependentstatutorybodywhichisresponsibleforregulating broadcasting and telecommunications affairs in HongKong.ItisalsoresponsibleforenforcingtheUnsolicitedElectronicMessages Ordinance, and shares concurrent jurisdiction with theCustomsandExciseDepartmentandtheCompetitionCommissiontoenforcetherelevantsectionsoftheTradeDescriptionOrdinanceandtheCompetitionOrdinance,respectively.Provisions of the Competition Ordinance relating to certainundertakings in the telecommunications and broadcasting sectorsareprimarilyenforcedbytheCA,whichisempoweredtoinvestigateandconductproceedingsbeforetheCompetitionTribunalandcangenerallymakeanydecisionsandtakeanyactionswithrespecttoanyrelevantmatteritdeemsnecessarytoenforcethoseprovisions.The CAexercisesitspowersthroughitsexecutivearm,theOFCA.MsWinnieTamSCbecamethenewchairpersonoftheCA in March 2018,replacingMrAlbertWong.


Telecommunications (including internet) sectorAll telecommunications sectors, including the internet, are fullyliberalised. There are no foreign ownership restrictions andgovernmentpolicyhasbeentotakealight-touchapproachinthissector.However, the CA has the power to impose any conditions onlicences issued under the Telecommunications Ordinance – e.g.validityperiod–andtosuspend/revokelicencesinaccordancewithrelevantlaws.

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Decisionsmadeby theCAwith regard toexploitativeconductofatelecommunicationslicenseemaybesubmittedforreviewbytheTelecommunications (Competition Provisions) Appeal Board, anindependentstatutorybody. TheAppealBoard’sdecision isfinalbutitmayreferanyquestionoflawtotheCourtofAppealandtotheCourtofFinalAppeal(ifleavetoappealisgranted).TheCompetitionTribunalhasjurisdictiontohearanddetermine:■ applicationsmade by the Competition Commission or CA

concerningallegedcontraventionsofcompetitionrules;■ applications for the review of reviewable determinations

madebytheCompetitionCommissionorCA(e.g.decisionsregardingblockexemptionsorvariationofacommitment);

■ private actions regarding contravention of the competitionrules;and

■ applicationsregardingtheenforcementofcommitments.TheTribunal’sdecisionsmaybeappealed to theCourtofAppealasofright.Moregenerally,decisionsmadebytheCompetitionAuthoritymaybesubjecttojudicialreviewbytheHighCourt.



Generally,public telecommunicationsservicesareprovidedeitherby facility-based operators (“FBOs”) or service-based operators(“SBOs”).FBOs are licensed under unified carrier licences (“UCLs”) toestablish, maintain and provide fixed, mobile and coveragetelecommunications services to thepublic. SBOsare required tobe licensed to provide public telecommunications services usingnetworks and facilities established by licensedFBOs and are notauthorisedtoestablishormaintaintelecommunications.TherearecurrentlythreedifferentclassesofservicesthatanSBOcanapplytoprovide.There are also other types of more specific telecommunicationslicences available, such as public radiocommunications servicelicences, aircraft station licences and hotel television (andtransmission)licences.


Licensing requirementsInordertoobtainaUCLorSBOlicence,anapplicantmust:■ be a company registered under the Companies Ordinance

(which includes a company incorporated overseas butregisteredundertheCompaniesOrdinance);and

■ payanapplicationfeeandanannuallicencefee.Currently,suchfeesareasfollows:■ UCLs–anannualfeeofHKD1,000,000reducedtoHKD

100,000 if the UCL is limited to providing external orradio communication services), an additional yearly feeofHKD700per100customerconnectionstothenetworkunderthelicence.

Inaddition, theTelecommunicationsOrdinance(Section7Q)alsosetsoutthatalicenseeinadominantpositioninatelecommunicationsmarketmustnotengageinconductthat,intheopinionoftheCA,isexploitative.

2 Telecoms

General


HongKonghasbeen(andremains)amemberoftheWorldTradeOrganisation(“WTO”)sinceitsfoundingon1January1995.HongKonghasmadespecificcommitmentsundertheGeneralAgreementonTradeinServicesregardingtelecommunicationsservicesbothintheUruguayRoundand thesubsequentFourthProtocolonBasicTelecommunications and has also adopted and implemented theWTO’sBasicTelecommunicationsReferencePaper.


The key pieces of legislation that regulate telecommunicationnetworks and services are set out at question 1.2. TheCA fromtime to time also issues various statements, decisions, policies,guidelines,consultationpapersandotherinformationtosupplementtheregulationsinthissector.


As discussed at question 1.3, the telecommunications regulatoris the CA,which is an independent statutorybodywhose role is,amongst other things, to facilitate the development of the HongKongtelecommunicationssectorbyadoptingalight-touchandpro-competitionregulatoryapproach.Under the Telecommunications Ordinance, the Secretary forCommerceandEconomicDevelopmentmay:■ issuepolicydirectionspursuanttowhichtheCAistocarry

outitsfunctionsandexerciseitspowers;■ prescribegeneralconditionsforacarrierlicence;and■ imposepricecontrolsonlicensednetworkoperatorswhoare

inadominantpositioninthetelecommunicationsmarket.The competition law authority is the Competition Commission,which is an independent statutory body whose role is, amongstotherthings,toinvestigateprohibitedanti-competitiveconductandenforcetheprovisionsoftheCompetitionOrdinance.TheCompetitionTribunal,aspartoftheHongKongjudiciary,hearsanddecideslegalproceedingsconcerningcompetitionmatters.The CA has concurrent jurisdictionwith theCompetitionCom-missiontohandlecompetitionmattersinthetelecommunicationssectorregulatedbytheCompetitionOrdinance.


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AUCLlicenseemayenterpublicand/orprivatelandtoinstallandmaintainin-buildingtelecommunicationssystems(includingcable,wire,supportstructure,ancillarytelecommunicationsequipmentandrelevantfacilities),providedthatappropriateconsentisobtained.According to the CA’s Code of Practice for the Installation andMaintenanceof In-BuildingTelecommunicationsSystemsandIn-building Access by Telecommunications Network Operators, noUCLlicenseeisrequiredtopayanymoneyorofferanadvantageto any landowner, his agent or lawful representative to allow theinstallation of any telecommunications system in common partsofabuilding.Inaddition,thebuildingmanagementofficeandtheincorporatedownersofthebuildingshouldnotimposeanychargesorfeesontheUCLlicenseeforsuchaccess.TheCAalsopermits aUCL licensee toplant andmaintain radiocommunication installations (including radio transmitter, receiver,aerial and ancillary equipment) over any land for the purpose ofprovidingradiocommunicationsservicestoapublicplace,withtheUCLlicenseepayingan interimfee to therelevant landownerforsuchinstallation.



UCL licensees and SBO licensees that provide local telephonyservices are required to achieve any-to-any (“A2A”) connectivity(i.e.anycustomerinanyonenetworkcanhaveaccesstoanyothercustomerinanyinterconnectingnetwork).Theselicenseesarealsorequired to provide interconnection promptly, efficiently and onreasonabletermsandconditions.TheA2Aconnectivityrequirementonlyappliesinrespectoftheprovisionofvoiceservices.TheTelecommunicationsOrdinanceprovidesthatwherealicenseewishestouseorshareafacilitywithanotherlicensee,thelatterwillendeavourtocommerciallyagreeontheconditionsofuse(includingfair compensation) with the requesting licensee who reasonablyrequeststheuseorsharingofthefacilityconcerned.Intercommunicationsandaccessdisputesarecommercialdisputesin nature between the relevant parties. However, if the partiescannot agree on the terms and conditions for the use or sharingofthefacilityconcerned,theCAhasthepowertodeterminesuchterms and conditions, including any compensation payable, on a“fairandreasonable”basis.


Thereisnorequirementonoperatorstopublishtheirinterconnectioncontracts.However, all UCL operators and SBOs are required to publishtheir tariffs, all relevant charges and service terms for thetelecommunications services operated under their licences. Alicensee is only required to publish the tariffs of those serviceswhichareintendedtobeofferedtomorethanonecustomer.

■ SBOs–(1)foranyclass1,class2orotherservices(otherthan class 3 services) – HKD 25,000; and (2) class 3services–HKD750foreachtypeofserviceauthorisedunderthelicence.

Notethatforotherclasslicences(e.g.in-buildingtelecommunicationsystems),noregistrationorapplicationforalicenceisrequired,buttheprovidermustcomplywiththelicensingconditionsofthelicence.TheCAdoesnot imposea limiton thenumberofUCLsorSBOlicencesthatmaybeissued.IftheCArefusesanapplication,itmustprovideitsreasonsfortherefusalinwriting.ForaUCLandeachclassofSBOlicence,thereareasetofgeneralconditionsandasetofspecificconditions.Thegeneralconditionsfor aUCL are prescribed under theTelecommunications (CarrierLicences)Regulation(Cap.106V),and thegeneralconditionsforSBOlicencesare regularlygazettedby thegovernment. TheCAmayalsoattachadditionalspecialconditionsforeachoftheabovelicencesasitmaydeemappropriate.Penalties for non-compliance or breachAny person who establishes or maintains any means oftelecommunications,orofferingatelecommunicationservicewithoutanappropriatelicence,maybesubjecttothefollowingpenalties:■ AfineofuptoHKD50,000andtwoyears’imprisonmenton

summaryconviction.■ AfineofuptoHKD100,000andfiveyears’imprisonmenton

convictiononindictment.Under the Telecommunications Ordinance (Section 36(C)), if alicensee breaches any licence condition, requirement or directionissuedbytheCAortheTelecommunicationsOrdinance,theycanbesubjecttothefollowing:■ Firstbreach–afineofuptoHKD200,000.■ Secondbreach–afineofHKD500,000.■ Anysubsequentbreach–afineofHKD1,000,000.Inaddition:■ If theCA believes that the above fines are insufficient for

the relevantbreachand thematter is subsequently referredtotheHighCourt,afinecanbeimposedbythatcourtofuptoamaximumof10%ofthelicensee’sturnoverduringthebreachperiodorHKD10million,whicheverishigher.

■ The CA also can require the relevant licensee to disclose(to the public or any particular classes of persons)informationrelatingtothebreach,andtopublishacorrectiveadvertisementinanynewspaper.


AUCLallowsthelicenseetoestablish,maintainandprovidelocalfixed internalandexternalservices,mobileandcoverageservicestothepublic.AUCLisvalidfor15yearsfromthedayofissuancewithnoautomaticrenewaluponexpiration.An SBO licence allows the licensee to provide local voicetelephonyservicesandothertypesoftelecommunicationsservices(includingmobile virtual network operator services, public radiocommunicationrelayservices,etc.)byusingnetworksandfacilitiesestablishedby licensedFBOs. ThevalidityofanSBOlicence isoneyearandmayberenewedforoneyearatatime,subjecttothediscretionoftheCAandtheproductionofsupportingdocumentsbytheSBOlicensee.UCL licensees and SBO licensees cannot transfer or trade theirlicenceswithouttheCA’sconsent.


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The CAcanrequireanyfixedUCLstobesubjecttoauniversalserviceobligationrequiringgood,efficientandcontinuousbasicservicetobemade reasonably available to all persons. Currently, PCCW-HKT Telephone Limited and Hong Kong Telecommunications(HKT)LimitedaretheonlyUCLsthataresubjecttosuchuniversalserviceobligations. ForotherUCLs,provisionof serviceand itscoverage is at their commercial discretion. The level of “basic”serviceissetoutinsection2oftheTelecommunicationsOrdinance,includingrequirementsinrelationtothepublictelephoneservice,publicpayphonesandemergencyservicewarnings.Theprovisionofelectroniccommunicationsservices issubject todata privacy laws under the Personal Data (Privacy) Ordinance,which regulates the collection, holding, processing or use ofpersonaldata.Consumers are further protected by the Code of Practicefor Telecommunications Service Contracts issued by theCommunicationsAssociation ofHongKong. The code includesclarifications on telecommunications service contract provisionsincluding contract renewal terms, termination of contract andvariationofcontacttermsandconditions.ServiceproviderssuchasChinaMobileHongKongCompanyLimited,CSLMobileLimitedandHutchisonTelephoneCompanyLimitedhaveadoptedthecode.Electronicmessages for furtheringabusinesspurpose (except fortelemarketingcallsorelectronicmessagesissuedinconnectionwithsoundbroadcastingortelevisionprogrammeservices)aresubjecttotheUnsolicitedElectronicMessagesOrdinance,whichrequiresthesenderofsuchmessagestoprovidetheirbasicinformation,honouranyunsubscriberequestsandadheretothedo-not-callregisters.

Numbering


Telephone numbers and network identifying codes are set outunder the Numbering Plan produced and managed by the CA.TheNumberingPlansetsouttheplanofnumbersandcodesusedor designed for use for or in connection with the establishment,operation and maintenance of any means of telecommunicationsunderalicenceoranordermadebytheChiefExecutiveinCouncil.The CAmadeavailablemobilephonenumbersstartingwith“4”,“7”and“8”inFebruary2018–addingtoexistingmobilephonenumbersstartingwith“5”,“6”and“9”.Thiswilladd15.72millionnumbersformobiles,andtheCAanticipatesthiswillmeetdemanduntil2029.


The Numbering Plan mentioned in question 2.16 sets outrequirementsinrelationto:■ theformatofparticulartypesoftelephonenumbers;and■ whichnumberscanbeusedbyparticulartypesoflicensees.TheCodeofPracticeRelatingtotheUseofNumbersandCodesintheHongKongNumberingPlan issuedand regularlyupdatedbythe CAprovidesguidancetotelecommunicationsnetworkoperatorsandserviceprovidersonhowtofollowtheNumberingPlan.


AnSBO licenseeproviding external telecommunications servicesmustpay the localaccesscharges(andassociated transitcharges)to the local network operators (both fixed and mobile carriers)for their conveyance of originating and terminating externaltelecommunications services traffic to and from end users. Thelevel of local access charge is subject to commercial agreementbetweentheconnectingparties.Operatorswhoareinadominantpositioninthetelecommunicationsmarket are subject to price or tariff control measures under theTelecommunicationsOrdinance.


The CArequiresadominantoperatortomaintainandreportaccountsfor different service segments of its licensed operations. Non-dominantoperatorsarerequiredtomaintainandreportaccountsfortheiroveralllicensedoperationsonly.


Broadband networks are regulated by the TelecommunicationsOrdinance.In line with the CA’s light-touch regulatory approach, networksharingarrangementscanbenegotiatedamongstnetworkoperatorswithoutrestrictions,unlessitisinthepublicinterestfortheCA to intervene.Generally,mobilenetworksharingtakesvariousforms,suchasantennasharing,sitesharing,radioaccessnetworksharing,domesticnetworkroamingandcapacityleasing.However,therearerestrictionsonspectrumassignmentorpooling,as mobile network operators should only transmit radio signalsusingtheassignedspectrumasspecifiedundertheircarrierlicences.There are no specific incentives or “regulatory holidays” inconnection with the sharing of or investment into passiveinfrastructure. In 2008, Hong Kong withdrew the Type IIinterconnection policy, which requires interconnection oftelecommunications operators’ networks at the customer accessnetworklevel.Theobjectiveofthewithdrawalwastoencouragenewinvestmentinadvancedtelecommunicationsinfrastructureandtoenhanceconsumerchoice.



Therearenoretailpricecontrolsimposedonanyoperatorcarryingfixed, mobile, or other services. However, the Secretary forCommerceandEconomicDevelopmentmay,ontheadviceoftheCA,imposemeasuresrelatingtopricecontrolonlicenseeswhomitdeemsareinadominantpositioninthetelecommunicationsmarket.


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services. This spectrum band is currently used by HongKong’s two satellite operators,AsiaSat andAPT Satellite.In March 2018, the CA proposed that telecommunicationlicensees can access this spectrum by April 2020, withexclusion zones around satellite earth station facilities.Consultationscontinueonthis topicbetweenmobilephonenetworkoperators,thesatelliteoperatorsandtheCA.

■ More generally, the Hong Kong government unveiled (inDecember2017)itsSmart City Blueprintwithinitiativesinsixareas:mobility;living;environment;people;government;and economy. A key part of the “government” pillar isensuring thatHongKong is ready to commercially launch5Gservicesandapplicationsin2020.Therewillthereforebecontinuingfocusontopicsrelatedto5G(includingspectrumallocationandauction)withthisinmind.


The CA regulates spectrum use and has the power to assignfrequencies (or bands of frequencies) in all parts of the radiospectrumusedinHongKongoronboardaship,aircraftorspaceobjectthatisregisteredorlicensedinHongKong,ortoauthorisetheuse of specified spectrumby a particular class of persons forparticularuses(e.g.WiFi).


Spectrum use is authorised by the CA. Spectrum is allocatedaccording to theCA’sTableofFrequencyAllocations,whichsetsouttheInternationalTelecommunicationUnion’sRadioRegulationsthatareapplicabletoHongKong,theallocationswhichhavebeenadoptedbyHongKongandthebandplansinuseinHongKong.Generally,theCAassignsspectrumthatisincompetitivedemandtoprovidersofnon-governmentservicesbywayoftender,auction,oracombinationofboth.Asmentionedinthisquestion(3.2)andinquestion3.4,spectrumthatisnotincompetitivedemandmaybeallocatedonano-costbasisorothermannerbytheCA.Spectrum for government services, non-government servicesrequired for public interests, or spectrumwithout congestion, arenormallyassignedonanadministrativebasisuponapplication.The CA annually publishes updates to its spectrum release planforunassignedspectrumavailable throughcompetitivebiddingortenderingoverthenextthreeyears.ApplicantsforaUCLarenotautomaticallygrantedspectrumrightsandmustseparatelyacquiresuchright.


Classlicencesmayauthorisetheuseandsharingofcertainspectrum(e.g.WiFi)bypersonscoveredbythatclasslicence,subjecttoitsconditions.


The CAmaydesignatethefrequencybandsforwhichaspectrumutilisation fee is payable. The following principles apply indeterminingtheapplicablespectrumutilisationfees:


Licenseesprovidingfixedormobileservicesarerequiredtofacilitateoperatingnumberportabilityandmobilenumberportabilityamongsttheirnetwork(asapplicable).Inorderforacustomertoretaintheirassigned numbers or access codes when changing subscriptionsfromonenetworkoperator toanothernetworkoperator, licenseesneedtoeitherbuildtheirowndatabaseorenterintoacommercialagreementwithotherlicenseesforaccesstothatlicensee’ssystem.If the licensee chooses to build their own database, theCAmaydirectsuchlicenseetoprovideanadministrationdatabase(includingservers,LANsandrouters)tootherlicenseesforfacilitatingnumberportability.Licensed operators should also safeguard the security of third-partydataobtainedfromanotherlicensee’sdatabase(whichwouldincludeoperatingnumbers)andmustnotdisclosesuchdata,orusethedataforanypromotionalactivities.

3 Radio Spectrum

IntroductionTherehavebeenanumberofsignificantdevelopmentsinrelationtospectrumuseandallocationinHongKonginrecentmonths,asboththe CAandkeyindustryplayersbegintofocusonthedevelopmentof 5Gmobile networks and associated value-added services (e.g.videoandaudiostreamingservices),whichrequiresignificantdatabandwidth,speedandcapacity:■ In July 2018, the CA proposed assigning 4,100 MHz of

spectrum in the 26 GHz and 28 GHz spectrum bands totelecommunication licensees, if demand for those bandsis below 75% of supply (as is anticipated following aconsultationprocesswithrelevantstakeholders).Thisiswiththeaimofensuringafasterroll-outof5GservicesinHongKong.ThisspectrumisanticipatedtobemadeavailableinApril 2019. Given thehigh frequencyof suchbands, it islikelythatanylicensees takingupsuchspectrumwillneedtoinstallsignificantnumbersofradiobasestationstoutilisesuchbands.

■ TheCAalsoannouncedinJuly2018thatitwillassign(viaanauction)anadditional200MHzofspectrumatthe4.9GHzand3.3GHzbands,forpublicmobileservices(including5Gservices). A consultationprocess for such assignmentwaslaunchedinAugust2018andclosedinSeptember2018.TheCA anticipates making further announcements/decisionsregardingsuchassignmentbeforetheendof2018,withtheauctionofsuchspectrumbeingplannedformid-2019.Thisfollows on from the consultations held by theCA and theSecretary for Commerce and Economic Development inFebruary2016andFebruary2017.

■ InSeptember2018,theCAopenedapplicationsforaplannedspectrumauction in the900MHzand1,800MHzbands–withthefourexistinglicenseeshavingarighttofirstrefusalfor20MHzoftheircurrentholdingsinthe1,800MHzband,andtheremainder(i.e.50MHzofspectruminthe900MHzbandand70MHzofspectruminthe1,800MHzband)beingassignedviaplannedauction. Applicationscloseon15–16November 2018,with the auction to be held inDecember2018.

■ InJune2018,theCAagreedtomakeavailable580MHzofthe5GHzspectrumforpublicmobileservices,forUCLsonasharedbasis–this isakeyspectrumbandfor5G-relatedtechnologiessuchasLicensedAssistedAccess.

■ There are ongoing discussions between the CA and keyindustry players in relation to the 3.4 GHz to 3.6 GHzspectrum, which is a key spectrum band for 5G mobile


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Furthermore,computercrimessuchas“accessingacomputerwithcriminal or dishonest intent” and “making a false entry in bankbooks(includingelectronicbooks)”areprohibitedundertheCrimesOrdinance(Cap.200).There are also a number of quasi-legalmechanisms and industryregulationsregardingcybersecurity,particularlyinrelationtocertainregulatedindustries(suchasfinancialservices). Forinstance,theSecuritiesandFuturesCommission,anindependentstatutorybodythatregulatesthesecuritiesandfuturesmarkets,hasissuedcircularsandcodesofconductthatrelatetocybersecurityvis-à-visregulatedinstitutions/persons.PleaseseeourHongKongChapterinThe ICLG to: Data Protection 2018 (https://iclg.com/practice-areas/data-protection-laws-and-regulations/hong-kong) for further information in relation tocybersecurityanddataprivacyrequirementsinHongKong.


The Interception ofCommunications and SurveillanceOrdinance(Cap.589)isthemainlegislationwhichgovernsthegovernment’sabilitytoaccessandinterceptprivatecommunications.Itregulatesthe interception of communications and the use of surveillancedevicesbyoronbehalfofpublicofficers. Subject to exceptionsunder the ordinance, communications interception and covertsurveillancebypublicofficersaregenerallyprohibited.The Commissioner on Interception of Communications andSurveillance is an independent authority which oversees thecompliance of this ordinance and the Secretary for Security hasalso issued a codeof practiceprovidingpractical guidanceon thisordinance.In addition, the Telecommunications Ordinance allows the ChiefExecutive toorder the interceptionofmessages for theexecutionof authorisations under the Interception of Communications andSurveillanceOrdinanceandforthedetectionoftelecommunicationsservices provided in contravention of the TelecommunicationsOrdinance.


There are currently no ruleswhich requiremarket participants tomaintaincallinterception(wire-tap)capabilities.


Before intercepting communications (or conducting covertsurveillance), a public officer ordinarily has to seek a prescribedauthorisation. The authorisation must be given by a designatedauthorising officer of the applicant’s department for less intrusiveinterceptions,orfromajudgeformoreintrusiveinterceptions.Theseauthorisationsareissuedforspecificdurationsofuptothreemonthsandmayberenewedforsuccessiveperiodsofuptothreemonthseach.In an emergency where an application for authorisation wouldordinarilyhavetobemadetoajudge,apublicofficermayinsteadapply to his head of department. The maximum duration of anemergencyauthorisationis48hours.

■ generally,aspectrumutilisationfeeisapplicabletoallnon-governmentuseofspectrum;

■ forspectrumallocatedbywayofacompetitiveprocess,thefeespayablewillbedeterminedinaccordancewiththetermsandconditionsofthatprocess;and

■ for spectrum allocated administratively, a fee may beapplicable if the frequencybandsmeetcertaincriteria (e.g.when the frequencyband is congested and thedemand forthe use of such band is expected to grow). TheSecretaryfor Commerce and Economic Development may prescribethe level of spectrum utilisation fees or the method fordetermining thespectrumutilisationfees. Thegovernmentplanstoimplementachargingschemebasedontheleast-costalternative approach by the end of 2017 or early 2018 forspectrumassignedadministratively.

In addition, UCL licensees are also required to pay an annualspectrummanagementfeewhichiscalculatedbasedontheamountofspectrumusedforprovidingtheirlicensedservices.


SpectrumlicenseesarenormallyrequiredbytheconditionsoftheirlicencestoobtainconsentfromtheCA beforeachangeofcontroloccurs.Furthermore,ifthechangeofcontrolinvolvesthemergerofcarrierlicenseesandhastheeffectofsubstantiallylesseningcompetitioninthemarket,theCAmayimposeconditionsonitsapprovalforthatchangeofcontrol, suchas requiring the relinquishmentofcertainspectrumbythelicensee.


Unless the licence expressly permits, a licensee must obtain thepriorwrittenconsentoftheCAtotransferorassignalicence.Inpractice,transferorassignmentisnotcommon.In deciding whether to give its consent, the CA may considermattersincludingthemarketeffectandthefinancialandtechnicalcompetenceandviabilityofthetransferee.In practice, while the CA has commissioned feasibility studiesonspectrumtradingandthisisalong-termobjective(pursuanttotheRadioSpectrumPolicyFramework), itdoesnotappear that itconsidersthistobeaprioritytobeaddressed,giventhecontinuingsignificantdemandforspectrum.



The Personal Data (Privacy) Ordinance is the main piece oflegislation which governs data security. All organisations thatcollect,hold,processorusepersonaldatamust complywith theordinance, which requires that all practicable steps be taken toensure that personal data are protected against “unauthorised oraccidental access, processing, erasure, loss, or use”. Failure totakesuchstepscouldleadtoanenforcementnoticeissuedbythePrivacyCommissionerforPersonalData,anindependentstatutorybody which oversees the enforcement of the Personal Data(Privacy)Ordinance. It isacriminaloffencetonotcomplywithanenforcementnotice.


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andrenewingnon-domesticandothertelevisionprogrammeservicelicences.The CA’sotherresponsibilitiesinthisareainclude:■ issuingcodesofpracticeonprogramme-setting,advertising

andtechnicalstandardsforbroadcasting;■ dealingwithcomplaintsaboutbroadcastinglicences;and■ imposingsanctionsonbroadcasters.


Traditional television and radio broadcasting must be licensedunder the Broadcasting Ordinance and the TelecommunicationsOrdinance, respectively, but there is no licensing requirement foronlinetelevisionorradio.Local newspapers (i.e. newspapers printed or produced in HongKong)mustberegisteredwiththeRegistrarofNewspapersundertheRegistrationofLocalNewspapersOrdinance(Cap.268).Theordinance does not distinguish between newspapers distributedonlineorthroughtraditionalplatforms.Advertisementsareprimarily regulatedby theTradeDescriptionsOrdinance,whichappliestobothtraditionalandonlinecontentandprohibitstheuseoffalseandmisleadingtradedescriptions.Both traditional and online content, whether in the form of text,sound recording, video or pictures, are regulated by the Controlof Obscene and Indecent Articles Ordinance (Cap. 390), whichregulatesthedistributionofobsceneandindecentcontent.Online content is also indirectly regulated through the criminaloffenceof“accessingacomputerwithcriminalordishonestintent”undertheCrimesOrdinance.


There are four types of television licences (all granted under theBroadcastingOrdinance):■ domesticfreetelevisionprogrammeservicelicence;■ domesticpaytelevisionprogrammeservicelicence;■ non-domestic television programme service licence (i.e.

servicesthatdonotprimarilytargetHongKong);and■ other licensable television programme service licence (e.g.

servicesinhotelrooms).AsoundbroadcastinglicenceistheonlytypeofradiobroadcastinglicenceandisgovernedbytheTelecommunicationsOrdinance.The obligations under these licences vary; key obligations willinclude:■ compliancewith:

■ relevantcodesofpractice;■ programmelanguagerequirements;■ investment-relatedobligations;and

■ providing:■ mandatoryprogrammes;and■ free television/testing equipment and assistance to the

regulatorforregulatorypurposeswhenrequested.Apart from the obligations contained in the licences, theBroadcasting Ordinance and the Telecommunications Ordinancealso regulate other aspects of television and radio services such

The Interception ofCommunications and SurveillanceOrdinancealsoprovidesforothercircumstancesinwhichapublicofficercaninterceptcommunicationswithoutaprescribedauthorisation.Thisincludeswheretheinterceptionispermittedbyanotherenactmentsuchasaninterceptioncarriedoutinthecourseoftheexecutionofa courtorder authorising the searchofpremisesor the seizureofevidence.


There is no legislation that governs the use of encryption orthe circumstances when encryption keys need to be providedto the government. However, the Import and Export (StrategicCommodities)Regulations(Cap.60G)requirestheimportorexportofcertainencryptionproductstobelicensed.


Under the Personal Data (Privacy) Ordinance, personal data canonlybekeptforaslongasitisnecessarytofulfilthepurposeforwhichthedataistobeused.Personaldatameansanydatarelatingtoa living individual fromwhich it ispracticable for the identityoftheindividualtobeascertainedandwhichisinaforminwhichaccesstoorprocessingofthedataispracticable.TheTelecommunicationsOrdinancefurtherprovidesthattheChiefExecutiveinCouncilmaymakeregulationsconcerningtheperiodforwhichandtheconditionssubjecttowhichmessagesandotherdocuments connectedwith a telecommunications service shall bepreserved.Therearenosuchregulationsatthetimeofwriting.Finally,theTelecommunicationsOrdinance(section27A)makesitanoffencefor:■ Atelecommunicationsofficerto:

■ wilfully destroy, secrete or alter anymessage that theyreceivefortransmissionordelivery;

■ forgeanymessage;■ utteranymessagethattheyknowtobefalse;■ wilfully refrain from transmitting any message, or

intercept,detainordelayanymessage;or■ copyanymessageordiscloseittoanyoneotherthanthe

persontowhomitwasaddressed.■ Any person (that is not a telecommunications officer) to

wilfullydestroy,detainordelayanymessagethatisintendedfordeliverytoanotherperson.

■ A person knowingly causing a computer to perform anyfunctiontoobtainunauthorisedaccesstoanyprogramordataheldinacomputer.



TelevisionandsoundbroadcastingservicesareregulatedbytheCA underalicensingregimedescribedintheresponsetoquestion5.3below.The Chief Executive in Council is responsible for granting andrenewing domestic television programme service licences on therecommendation of theCA. TheCA is responsible for granting


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An amendment bill to the Copyright Ordinance (Cap. 528)introduced in 2014 sought to, amongst other things, include safeharbourprovisionslimitingtheliabilityofinternetserviceprovidersforcopyrightinfringementprovidedthattheycomplywithcertainconditions,including:■ taking reasonable steps as set out in the code of practice

published by the Secretary for Commerce and EconomicDevelopment to limit or stop a copyright infringement assoon as practicable after receiving notice of any allegedinfringement;and

■ designating an agent to receive notices of allegedinfringements and providing the agent’s name and contactdetailsinapubliclyaccessiblelocation.

However, this amendmentbillwas laterwithdrawnand lapsed inJuly2016.


Therearecurrentlynonetneutralityrequirements.However,thereare legislation and policies that regulate certain anti-competitiveanddiscriminatoryconductsoftelecommunicationsoperatorsand/orinternetserviceproviders:■ TheOFACimplementsa“FairUsagePolicy”whichallows

serviceproviderstoreduceaccessspeedforcustomerswhosedatausagehasexceededaspecificthreshold.

■ TheCompetitionOrdinanceprohibitscertainprescribedanti-competitiveconduct.

■ The Telecommunications Ordinance prescribes licenceconditions relating to interconnection and connectivityaccess.


TheCopyrightOrdinanceandtheControlofObsceneandIndecentArticles Ordinance criminalises the distribution of unlicensedcopyrightedmaterialandobsceneorindecentmaterials,respectively.Inthesecases,operatorsand/orprovidersmaybeobligedtoblockaccesstothosematerials.ConsumerVPNservicesarenotregulatedorblocked.

as restrictions on cross-media ownership. The Chief Executivein Council’s approval is generally needed before a “disqualifiedperson” (as defined separately under theBroadcastingOrdinanceand theTelecommunicationsOrdinance)canexercisecontrolofasoundbroadcastinglicensee,adomesticfreetelevisionprogrammeservice licensee, or a domestic pay television programme servicelicensee.


Assignment of both television programme service licences andsoundbroadcastinglicencesaregenerallyprohibitedasaconditionofthoselicences.TheTelecommunicationsOrdinance further provides thatwithoutthe CA’s consent, within three years of the grant of a soundbroadcastinglicence,anyright,titleorinterestinsharesexceeding15%ofthetotalnumberofvotingsharesinthelicensee,asatthedateofthegrantofthelicence,maynotbetransferredoracquired.



“Mereconduits”ofmaterialsuchastelecommunicationsoperatorsthatprovideapassivemeansforcommunicationgenerallyarenotliablefordefamatorymaterialcarriedovertheirinfrastructure.Also, “subordinate publishers” of content such as internetserviceprovidersmaybeabletorelyonthedefenceof“innocentdissemination” if they can prove that they had no knowledge ofthe libel statement and that this lack of knowledge was not duetonegligence. To relyon thisdefence, internet serviceprovidersshouldpromptlyremoveanydefamatorymaterialaftertheybecomeawareofit.


HongKongcaselawsuggeststhatcourtsmayorderinternetserviceproviders to disclose information regarding the identity and IPaddressoftheallegedcopyrightinfringersuponapplicationbytheallegedcontentowner.


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Joshua ColeAshurst Hong Kong11/F Jardine House1 Connaught PlaceHong Kong

Tel: +852 2846 8989Email: [email protected]: www.ashurst.com

Hoi Tak LeungAshurst Hong Kong11/F Jardine House1 Connaught PlaceHong Kong

Tel: +852 2846 8982Email: [email protected]: www.ashurst.com

Joshua is Managing Partner of the Ashurst Hong Kong office and leads our Digital Economy practice in Asia.

Joshua has over 20 years of experience advising on TMT and related corporate and commercial matters, to clients in TMT and other sectors – including financial services, energy and resource, pharmaceutical and retail. He has advised on a number of high-profile international acquisitions, disposals and joint ventures involving Hong Kong, China, Japan, Myanmar, Korea, the Philippines and other South East Asian countries. He also advises telecommunications businesses on commercial and regulatory matters in Asia, including network build agreements and spectrum acquisitions/licensing.

Joshua has been named by Chambers Asia Pacific as a leading TMT lawyer, and is the author of various M&A and telecommunications law-related publications.

Ashurst is a leading international law firm with world class capability and a prestigious global client base. Our in-depth understanding of our clients and commitment to providing exceptional standards of service have seen us become a trusted adviser to local and global corporates, financial institutions and governments. Our people are our greatest asset and we bring together lawyers of the highest calibre who have the technical knowledge, industry experience and regional know-how to provide incisive advice.

We have an international network of 26 offices in 16 countries, allowing us to provide help and advice to clients across Asia, Australia, Europe, the Middle East and North America. With more than 1,600 partners and lawyers working across 10 different time zones, we are able to respond to our clients wherever and whenever they need us.

Hoi is Counsel in the Ashurst Hong Kong office.

Hoi brings a wealth of experience on technology and IP-related matters across Asia. He has advised a broad spectrum of clients from multinational corporations to start-ups, spanning from TMT to other sectors such as financial services, insurance, entertainment, education and retail. His practice includes advising on:

■ transaction structuring, contract drafting and negotiations – including: outsourcing, procurement, supply and distribution arrangements; technology and content licensing, use and development; launch/expansion of B2B and B2C technology services; cloud computing, data centre and telecommunications/network infrastructure projects; and BAU commercial agreements;

■ TMT/IP/data-focused corporate transactions – including: M&As; JVs; and restructurings; and

■ TMT-related issues – including: fintech; cryptocurrencies; cybersecurity; data privacy and big data arrangements; and emerging technologies and businesses (e.g. blockchain, smart contracts, artificial intelligence and e-sports) in various industry sectors.

Hoi works closely with the Ashurst Advance team – with a particular interest in legal service innovation through technology (including automation of legal tasks and smart contracts). He writes frequently, and is regularly quoted by the media on technology law-related topics.


Chapter 17

Harsh WaliaKhaitan & Co

India


(a) The following legislation mainly regulates the telecom(includinginternet)sectorinIndia:■ TheIndianTelegraphAct,1885(“Telegraph Act”)along

withrulesframedunderit.■ The Wireless Telegraphy Act, 1933 (“Wireless Act”)

alongwithrulesframedunderit.■ TelecomRegulatoryAuthorityofIndiaAct,1997(“TRAI

Act”).Additionally, guidelines, circulars and directions issued by theDepartment of Telecommunications (“DoT”) and regulations,ordersanddirectionsissuedbyTRAIplayakeyroleinregulation.(b) The following legislationmainly regulates theaudio-visual

distribution/broadcastingsectorinIndia:■ TheCableTelevisionNetworks (Regulation)Act, 1995

(“Cable TV Act”) along with the Cable TelevisionNetworkRules,1994.

■ The Cinematograph Act, 1952, along with theCinematographRules(Certification)Rules,1983.

Additionally, the Uplinking Guidelines (“UG”), DownlinkingGuidelines(“DG”)andGuidelinesfor‘DirecttoHome’(“DTH”),Internet Protocol Television (“IPTV”) and ‘Headend in the Sky’(“HITS”) services issued by the Ministry of Information andBroadcasting (“MIB”), alongwithTRAI’s regulations relating totariffs,interconnectionandqualityofservice,playakeyrole.(c) Some general lawswhichmay be applicable to both these

sectorsare:■ The InformationTechnologyAct, 2000 (“IT Act”) and

rulesframedunderit.■ TheIndianPenalCode,1860(“IPC”).■ TheIndianContractAct,1872.


(a) ThefollowingbodiesplayamajorroleintheregulationofthetelecomsectorinIndia:■ DoT.■ Wireless Planning and Coordination Wing of the DoT

(“WPC”).

1 Overview


Overtheyears,thedigitalcommunicationssectorhasbeenoneoftheleadingcontributorstoIndia’sgrossdomesticproductandhasbeenoneoftheprimefocusesoftheGovernment.According to a report relating to the telecomsector, published inMay2018bytheIndianBrandEquityFoundation(“IBEF”):■ India is currently the second largest telecommarket in the

worldwithroughly1.18billionsubscribers.■ With 445.96 million internet subscribers, as of December

2017, India also stands second-highest in terms of totalinternetusers.

Basedon reports publishedby theTelecomRegulatoryAuthorityofIndia(“TRAI”), thegrossrevenueofthetelecomsectorinthecalendar year 2017 was over USD 38 billion and approximatelyUSD9billioninthefirstquarterof2018.Major players in the telecom sector are Bharti Airtel Limited,RelianceJioInfocommLimited,VodafoneIdeaLimitedandBharatSancharNigamLimited.AccordingtoanotherreportpublishedbyIBEF,inrelationtomediaandentertainment:■ ThemarketsizeisapproximatelyUSD23billion,asof2017.■ TheindustryisexpectedtogrowataCompoundedAnnual

GrowthRate(“CAGR”)of13.9%from2016–2021.■ TheIndianadvertisingindustryisprojectedtobethesecond

fastest-growingadvertisingmarketinAsiaafterChina.■ As of June 2018, advertising revenue accounts for around

0.38%ofIndia’sgrossdomesticproduct.TheIndiandigitaladvertising industry is expected to grow at aCAGRof 32percenttoreachRs18,986crore(USD2.9billion)by2020,backedbyaffordabledataandrisingsmartphonepenetration.

Majorplayersintheaudio-visualdistributionindustryareStarIndia,Sony Entertainment, Disney India, Viacom18 and Network18.Platforms such as Netflix, Amazon Prime, Hotstar, etc. haveexperienced tremendousgrowth in theonline content distributionsectorinrecenttimes.


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2 Telecoms

General


IndiahasbeenamemberoftheWorldTradeOrganisation(“WTO”)since 1 January 1995. India has also adopted theWTO’s BasicTelecommunications Reference Paper on Regulatory Principles,subject to commitments made under the General Agreement onTradeinServices(“GATS”).IndiahasmadecommitmentsregardingtelecommunicationsundertheGATSinthe‘ScheduleofSpecificCommitments’andunderthe‘FourthProtocolonBasicTelecommunications’.Thecommitmentsmade by India are limited to the ‘commercial presence’mode ofsupply,whichisdescribedas‘mode3’undertheGATSscheduleofcommitments.Pursuanttomode3,aservicesupplierofamembernationmaysupplyservices inanothermember’s territory through‘commercialpresence’inthatterritory.Consequently, a service supplier of another member nation mayundertakeactivitiesinIndiaafterfulfillingtheconditionsstipulatedinrespectofFDI,andafterobtainingalicencebythe‘designatedauthority’,i.e.DoTinthepresentcase.


The telecommunications industry in India is subject to extensiveregulation.AccordingtotheTelegraphAct,theCentralGovernmenthastheexclusiveprivilegeofestablishing,maintainingandworkingtelegraphsinIndia.Thedefinitionof‘telegraph’undertheTelegraphActiswideenoughtoencompasstheprovisionoftelecomservicesanddeploymentofthetelecomnetwork.TheCentralGovernment,under Section 4 of the Telegraph Act, is empowered to grantlicencestoestablish,maintainorworkatelegraphinIndia,onsuchconditions and in consideration of such payments as it thinksfit.This licence is in theformofanagreement(“Licence”)executedbetweenDoTand a successful applicant entity (“Licensee”)whois a telecomserviceprovider (“TSP”). A similarLicence is alsograntedunder theWirelessAct in respectof “wireless telegraphyapparatus”.ThetermsandconditionssetoutintheLicence,alongwithguidelinesissuedfromtimetotime,predominantlyregulatetheprovisionoftelecomservices.Certain other services like the setting up of passive telecominfrastructure are relatively less regulated, and only requireregistration as Infrastructure Provider Category-I (“IP-I”) withDoT. Similarly, companies providing call centre, ITeS, networkoperations centre services, etc., are also required to registerwithDoT.Further,forprovisioningofonlyaudioconferencingservices,aseparatelicenceisgrantedbyDoT.


TRAIisastatutorybodyestablishedundertheTRAIAct,andistheregulator for the telecomandbroadcasting sectorswith extensive

■ TRAI.■ Telecom Disputes Settlement and Appellate Tribunal

(“TDSAT”).■ IndustrybodiessuchastheCellularOperatorsAssociation

of India, and the Tower and Infrastructure ProvidersAssociationalsoplayaroleinself-regulation.

(b) Thefollowingbodieshaveamajorroleintheregulationoftheaudio-visualmediadistributionsectorsinIndia:■ MIB.■ WPC.■ TRAI.■ CentralBoardofFilmCertification(“CBFC”).■ AdvertisingStandardsCouncilofIndia(“ASCI”).■ NewsBroadcastersAssociation(“NBA”).■ IndianBroadcastingFoundation(“IBF”).


(a) Yes, the Indian telecom sector has been liberalised. Witheffect from 2013, 100% FDI is permitted in the telecomsector. However,notably,governmentapproval is requiredtobeobtainedincaseFDIexceeds49%.

According to a fact sheet published by theDepartment ofInvestment Policy and Promotion (“DIPP”), the telecomsectoriscurrentlyrankedthirdamongallsectorsinIndia,intermsofFDIinflow.BasedoninformationavailableonthewebsiteofDoT, therehasbeenFDIofmore thanUSD30billioninthetelecomsectorsince2000.Oneofthegoalsoftherecently-releasedDraftNationalDigitalCommunicationsPolicy, 2018 (“Draft NDCP”) is to attract investments ofUSD100billioninthe‘DigitalCommunicationsSector’by2022.

(b) Overtheyears,theIndianbroadcastingsectorhasalsobeenliberalisedtosomeextent.Broadlyspeaking,theFDIregimebifurcatesthebroadcastingsectorinIndiaintwocategories,viz.carriageservicesandcontentservices.

Atpresent,FDIinbroadcastingcarriageservicesispermittedup to 100% via the automatic route, meaning that priorpermission of theGovernment is not required to be taken.ThisincludestheactivityofsettingupteleportsandprovidingDTH,cablenetworks,mobileTVandHITSservices.

Withrespecttobroadcastingcontentservices,thefollowingFDIlimitshavebeenprescribed:■ TerrestrialBroadcastingFM–49%,withpriorapproval

oftheGovernment.■ Uplinkingof‘NewsandCurrentAffairs’TVchannels–

49%,withpriorapprovaloftheGovernment.■ Uplinking of ‘Non-News and Current Affairs’ TV

channels/downlinking of TV channels – 100% via theautomaticroute.

According to a factsheet publishedbyDIPP, the Information andBroadcasting(includingprintmedia)sectoriscurrentlyranked14th

amongallsectorsinIndia,intermsofFDIinflow.ThecumulativeFDIinflow(fromApril2000toMarch2018)inthissectoramountedtoapproximatelyUSD7billion.

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installation,networkingoperationandcommissioningofnecessaryinfrastructure, equipment and systems. In case of UL VNO, aLicenseecanoperateevenwithoutinstallingitsownnetwork,andinsteadusethenetworkofitsparentnetworkserviceoperator(aULholder)toresellitsservices.BothULandULVNOprescribeconditionsrelatingtocommercial,financial,technical,operationalandsecurityaspects.Further,eachserviceauthorisationmayalsolaydownadditionalrequirements.


The termof aUL is 20 years. Renewal of theLicence is at thesolediscretionofDoT.ThevalidityoftheseLicencescommencesfromtheeffectivedateofthefirstauthorisation.Anyauthorisationgrantedsubsequentlyshallbeco-terminuswiththeLicense. ThisappliestoULVNOaswell,exceptthatitstermis10years.Unless expressly permitted byDoT,Licences cannot be assignedor transferred to a third party or subjected to any agreement forsub-licenceand/orpartnership. DoThaspermittedassignmentofLicencesinfavouroflenders,inwhichcaseatripartiteagreementisrequiredtobeexecutedbetweenDoT,Licenseeandlender. Asfaraschangeofcontrolisconcerned,pleasenotethatbothIndianand foreign shareholdings need to be disclosed by a Licensee toDoTeverysixmonths,butthereisnoabsoluterestrictionundertheLicenceforchangeofcontrol.Further,ifaLicenseehasacquiredaccessspectrum,eitheradministrativelyorbyauction,therecouldbe certain lock-in conditions as highlighted in our response toquestion3.5below.



In respect of public land, a Licensee or IP-I must seek priorpermission for installing telecommunications infrastructure inaccordancewith the IndianTelegraphRight ofWayRules 2016.These rules, inter alia, lay down the timelines for processing ofapplicationsandprovidethatapplicationsshallbedeemedacceptedupon expiryof the timelines. However, practically speaking, theefficacyofthisprovisionisyettobetested.Incaseofprivateland,theLicenseeorIP-Ientitytypicallyentersinto contractual arrangements with landlords/property owners.However, even in these cases, the entitiesmay have to approachauthoritiesforcertificatesregardingstructuralstability,firesafety,compliancewithelectromagneticfrequencyemissionstandards,etc.



Interconnection and access-related provisions for Licensees aremandated under UL. The UL requires Licensees to adhere toregulations and directions issued by TRAI in this regard, fromtime to time. However, the regimedoesnot distinguishbetween

powerstoregulatethesameinIndia. Someofitsmainfunctionsinclude fixing tariffs, prescribing rules for interconnection, andsettingstandardsforqualityofservices.Competition Commission of India (“CCI”) was established toensure that the interest of consumers is protected and practiceshavinganadverseeffectoncompetitionareeliminated.CCIservesas a regulator as well as adjudicatory authority for competition-relatedissuesinIndia.Both TRAI and CCI have been established under statute, andfunctionautonomously.AlthoughCCIandTRAIwork indifferent spheres, theremaybeapossibleoverlapincertaincases.Recently,bothTRAIandCCIexercised their respective jurisdiction in the telecomsector,whenitwasallegedbyan incumbentTSP thatoneof thenewentrantshad engaged in anti-competitive practices by introducing freecallingforitssubscribers. Consequently,TRAIalsoamendedtheTelecommunicationTariffOrder(“TTO”)toincorporateprinciplesrelated to predatory pricing, and elaborated on concepts such asnon-discriminationandtransparency.


TheCentralGovernment,StateGovernment,localauthorityoranyperson (including an entity holding a License) aggrieved by anydirection,decisionorordermadebyTRAImayfileanappealtotheTDSAT.TheappealmustbefiledwithinthetimelimitsprescribedundertheTRAIAct.However,regulationsissuedbyTRAIcanbechallengedbeforeHighCourts.



Atpresent,DoTgrantsLicencesundertheUnifiedLicence(“UL”)regime. Individual service authorisations for access services(“AS”), national long distance (“NLD”) and international longdistance(“ILD”),internetservicesetc.canbeobtainedbyadesirousapplicant.Incaseanapplicantwishestoprovideallservices,theymayobtainageneral‘allservices’authorisation.In2016,DoTintroducedthevirtualnetworkoperatormodelunderthe UL regime (“UL VNO”) to facilitate optimum utilisation ofexisting telecom infrastructure and resale of services.ALicenseewith aULVNOmayalsoopt for ageneral or individual serviceauthorisation,asthecasemaybe.Forprovisionof,inter alia,audio-conferencingservices,aseparateLicenceisgrantedbyDoTandiscurrentlynotundertheULregime.


TheprimaryconditiontoapplyforaUL(orULVNO,asthecasemay be) is that the applicant should be an entity incorporated inIndia and satisfy the FDI criteria. Additionally, the applicant isrequired to pay a non-refundable application processing fee andentryfee,maintainminimumequityandnetworth,andfurnishbankguaranteesofsuchamountsasmaybeprescribed.Under UL, the Licensee must make its own arrangements forall infrastructure involved in providing the service (includingspectrum, if applicable), and it shallbe solely responsible for the

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Asstatedinourresponsetoquestion2.8above,passiveinfrastructurelikeducts,poles,fibre,etc.canbesetupbyLicenseesorbyIP-Ientities.TheLicencescompriseprovisionsofthetermspertainingtopassiveandactiveinfrastructurethatmaybeinstalled.Otherthanthat,DoTissuesnormsfromtimetotimeapplicabletoIP-IentitiesinrelationtotheprovisioningofpassiveinfrastructuretoLicensees.ThebroadbandpolicywasissuedbytheGovernment towardstheproliferationofbroadbandaccessinIndia,andspecificallytoruralareas. Initially, internet service providers (“ISP”) were grantedcertain exemptions from paying licence fees under Licences.However, these benefits were redacted through subsequentamendments. The Draft NDCP speaks of the proliferation ofbroadband, Wi-Fi, and FTTH solutions, and has prescribed thatnecessaryincentivesmustbeprovidedtofacilitatetheirexpansion.



TRAI prescribes tariffs for telecommunication services in IndiathroughtheTTO.However,broadlyspeaking,exceptforthetariffsfornationalroaming,fixedruraltelephonyandleasedlines,tariffsfor other telecommunication service are under forbearance. ThismeansthatTRAIhasnotnotifiedanytarifffortheseservicesandthe Licensees are free to fix any tariff, depending on themarketdynamics. However, while fixing tariffs, TSPs must follow theprinciplesofnon-discrimination,non-predationandtransparency.


Consumer protection is one of the prime focus areas of telecomregulation. TheUL comprises of several provisions, such as thefollowing,thatareaimedatsecuringtheinterestsoftheconsumers:■ Obligationtoprovideservicesonanon-discriminatorybasis.■ Obligation to ensure continuity of service, in case of

cancellation/suspensionofaLicense.■ Obligationtoprovideitemisedbilling,whereverapplicable.■ Obligation to devise appropriate fraud management and

preventionsystems.■ Obligation to provide ample notice before discontinuing a

tariffplan.Inadditiontotheabove,TRAIhasalsotakenseveralstepsinthisdomainandissuedregulationsovertimethatensurethatsufficientinformation is provided to consumers about their tariff plans andusage,complaintsareresolvedinatimeboundandeffectivemanner,servicesprovidedbyTSPsmeetprescribedstandardsofquality,etc.TRAIalsoissuedaConsumers’HandbookonTelecommunications.ATelecomOmbudsmanwillsoonbearealityanditshallactasanindependentandexclusivebodyforredressaloftelecomconsumergrievances.

Numbering


In India, the management of numbering resources and networkidentifying codes is governed by the National Numbering Plan

interconnection required for wholesale (all services) and thatrequired for retail purposes (for individual services). TRAI hasrecently revamped interconnection-related regulations and issuedTelecommunication Interconnection Regulations 2018 (“TIR”).TIRcomprisesprovisionsthataimtoensurethatinterconnectionisfacilitatedbetweenLicenseesinastructuredandtimeboundmanner.Toresolvedisputesinrelationtointerconnectionandaccess,partiesmayapproachTRAIandTDSAT.


PostTIRcomingintoforcein2018,theLicenseeshavetoenterintoarrangementsinaprescribedtimeboundmanneronly.


TSPsarerequiredtopay“interconnectionusagecharges”or“IUC”tootherTSPsforaccessingandusingtheirnetwork.IUCarepaidinaccordancewithregulationsissuedbyTRAIin2003,whichhavebeenamendedonseveraloccasionssubsequently.Under these regulations, TRAI has prescribed rates (along withcorrespondingceilings,insomecases).Forinstance,zerochargesare payable if calls originate or terminate on afixed line (exceptin case of international incoming calls). However, terminationrateshavebeenprescribedincaseofmobilecallsandinternationalincomingcalls.Notably,theregulationsdonotspecificallygovernnetworkaccessatawholesalelevel.


The telecom regulatory regime in India does not subjectTSPs tofunctional or legal separation. However, practically speaking,consideringthatlicencefeesmaybeleviedoncertainnon-telecomactivitiesaswell,Licenseesoftenstructuretheirbusinessesinawaythatsuchactivitiesarecarriedoutbyanotherlegalentity.However,TRAIimposescertainaccountingseparationrequirements,pursuant towhich certain financial data and informationmust bereported by TSPs on a historical basis for regulatory purposes,such as analysing costs, revenues, capital employed in majorareasof anoperator’sbusiness,measuringfinancial performance,andprofitabilityofvariousproductsandservices. It alsohelps inidentifying anti-competitive behaviour of the TSPs. In a bid tosimplifyprocesses,TRAIrevampedrelevantregulationsin2016byintroducingnewformatsandclearlydefinedapplicabilitycriteria,whichwerepreviouslyambiguous.


The authorisations for AS and internet services under the ULpermit the provisioning of broadband services by Licensees. Asmentionedearlier,thetariffs,qualityofserviceandinterconnectionareregulatedbyTRAI.Incaseofbroadband,TRAIhasformulatedregulations notifying the quality of standards to be adhered to inprovisionofbroadbandservices.

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Asaresult,variousruleshavebeenframedundertheWirelessActintermsofwhichtherequirementtoobtainthelicenceisexemptedin certain conditions. Atpresent, this exemption ispermitted forfrequencybandssuchas(i)2.4GHzto2.4835GHz,(ii)5GHzforindooruseof lowpowerwirelessequipment,and(iii)5.150GHzto5.350GHzand5.725GHzto5.875GHzforindoorusage,etc.Evenincaseofexemptions,therearecertainadditionaladministrativerequirements,suchasobtainingapprovalsandcertifications,whichalsoneedtobecompliedwith.


Yes,certainfeesarepayablefortheuseofradiofrequencyspectruminIndia. Theseareknownas‘spectrumusagecharges’(“SUC”).At present, SUC is computed as a certain percentage of theAdjustedGrossRevenue (“AGR”),which in turn iscalculated inaccordancewith the relevant service authorisation under theUL.ThepercentagementionedabovevariesandiscomputedbasedonslabratesprescribedbyDoTfromtimetotime.Typically,theseslabratesaredeterminedinaccordancewiththecorrespondingNIA.


Generallyspeaking,thespectrumlicenceheldbyaLicenseeisnotimpacted by a change in control of the Licensee. However, theconditionsregardingFDIneedtobeadheredtobytheLicensee.Further,NIAsgenerallyprescribealock-inperiodinrespectoftheequityofthepersonwhosesharecapitalisofapredefinedlimitinthebiddingcompany(at the timeofmaking theapplication),andwhosenetworthhasbeentakenintoconsiderationfordeterminingtheeligibilityforbiddingforspectrum.In case of a compromise, arrangement or amalgamation betweentwoLicensees,theguidelinesissuedbyDoTin2014inrelationtothetransferandmergeroflicences/authorisationsundertheULmaybecomerelevant.Theseguidelinesstipulatecertainconditionswithrespecttospectrum.


AssignmentofspectrumlicencesaresubjecttotheconsentofDoT.The regulatory regime in India is silent on the sub-licensing ofspectrum,althoughtheleasingofspectrumbyoneentitytoanotherisexpresslyprohibited.TradingofspectrumwaspermittedbyDoTin2015,afteradoptingTRAI’srecommendationsinthisregard.Therelevantguidelines,whichwereissuedinOctober2014,prescribe,inter alia,thefollowing:■ TradingisonlypermittedbetweentwoTSPsinthelicensed

service area in respect of spectrum demarcated for accessservices. Atpresent, tradingisonlypermittedin800,900,1,800,2,100,2,300and2,500MHzbands.

■ Tradingcanonly takeplace twoyearsafter thedateof (a)acquisitionof spectrum(incase itwasacquiredbywayofauction), or (b) conversion to tradeable spectrum (in casespectrumwasadministrativelyassigned).

■ BothLicenseesarerequiredtonotifyDoTinadvanceandpayanon-refundableprocessingfeeforadministrativepurposes.

(“NNP”).TheNNPwasformulatedin2003andhasbeenamendedfrom time to time. DoT carries out the allocation of numberingresourcestoLicensees,inaccordancewiththeNNP.UndertheUL,LicenseesareobligatedtoadheretotheNNP.


TheNNPsetsoutdifferentnumberingschemesfordifferentkindofservices.Forinstance,mobilenumbersinIndianeedtobe10digitslong.Recently,DoThadreleasedanotificationallowingtheuseof13-digitnumbersforMachinetoMachineservices.


Yes, Licensees are obliged to providemobile number portabilitytotheirsubscribersundertheTelecommunicationMobileNumberPortabilityRegulations.

3 Radio Spectrum


InIndia,theuseofspectrumispredominantlyregulatedbyWPC,a body within DoT that is vested with the task of licensing andmanaging spectrum. To use the spectrum to provide telecomservices in India, an applicant may also be required to obtainclearance from the Standing Advisory Committee of FrequencyAllocation(“SACFA”),whichisabodywithinWPC.


Considering that radio spectrum is a limited resource, theGovernmentformulatedapolicyregardingitsusageandallocation.This policy, known as the National Frequency Allocation Plan(“NFAP”), is based on the standards issued by the InternationalTelecomUnion(“ITU”). NFAPwasfirst issued in2000andhasthereafterbeenamendedfromtimetotime.WPCallocates“accessspectrum”todesirousapplicants,onbehalfoftheGovernment.Earlier,insomeinstances,“accessspectrum”was allocated on a “first-come, first-served” basis. However,pursuanttoajudgmentoftheSupremeCourtofIndiain2012,now“accessspectrum”isallocatedbywayofauctionsonly.In order to participate in an auction, the applicant is requiredto comply with the terms and conditions of the relevant NoticeInvitingApplications(“NIA”)issuedbyDoTinrespectofdifferentfrequencybands.


Yes, the use of spectrum can bemade licence-exempt in certaincircumstancesaccordingtotheprovisionsoftheWirelessAct.TheWirelessAct requires a licence to be obtained for possession of“wirelesstelegraphyapparatus”.TheWirelessActalsoempowerstheCentralGovernmenttograntcertainexemptionsinthisregard.

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The framework for state interception of communication for aparticularindividualismainlylaiddownintheprovisionsoftheITAct,TelegraphActandUL.Intheinterestofbrevity,pleaserefertoourresponsetoquestion4.2above.


Atpresent,Indiadoesnothavearobustsetofrulesgoverningtheuseofencryption.TheITActprovidesthattheCentralGovernmentmay,for“secure use of electronic medium and for promotion of e-governance and e-commerce, prescribe the modes and methods of encryption”.However, notably, no such prescriptions have been made thusfar. The Central Government had issued a draft of theNationalEncryptionPolicy in 2015, but itwaswithdrawn shortly after itsreleaseonaccountofwide-scalecriticism.Withrespecttothetelecomsector, therewasarequirementundertheoldlicensingregime(priortotheUL)todepositthedecryptionkeywithDoT,incasethelevelofencryptionemployedexceededtheprescribedlimit.However,thisrequirementhasnotbeenimportedtotheUL.UndertheUL,LicenseesareunderanobligationtoensurethattheuseofencryptionbytheirsubscribersisinaccordancewiththeprovisionsoftheITAct.It is pertinent tomention that certain sectoral regulators such astheReserveBank of India (“RBI”) andSecurities andExchangeBoardofIndia(“SEBI”)haveprescribedstandardsandmethodsofencryptionpertainingtothesesectors.


ALicenseeisobligedtoretain,inter alia,thefollowingdata,asapartofitsobligationsundertheUL:■ Arecordofalltheoperationandmaintenancecommandlogs

inrespectofthenetwork,foraperiodof12months.■ A record of all commercial records/call detail records,

etc. with regard to the communications exchanged on thenetwork,foraperiodofatleastoneyear.

■ The complete audit trail of the remote access activitiespertaining to thenetworkoperated inIndia, foraperiodofsixmonths.

■ Arecordoflogin/logoutdetailsofallsubscribersforservicesprovidedsuchasinternetaccess,internettelephonyetc.,foraminimumperiodofoneyear.

■ Arecordofsupplychainoftheproducts(hardware/software).



InIndia,thedistributionofcontentisregulatedonthebasisoftheplatform used. The following platforms are relevant for audio-visualmedia:



Atpresent,thelegalframeworkforcybersecurityispredominantlyencapsulatedintheITAct.Theseprovisionsrelatetocompensationfor failure to protect data, computer-related offences (such asdamageandunauthorisedaccess),orpunishmentsforidentitytheft,cheatingbyimpersonationorcyber-terrorism. SomeoffencesarealsopunishableundertheIPC.Additionally,theITActlaysdownprovisionsfortheestablishmentoftheNationalCriticalInformationInfrastructureProtectionCentre,whichisdesignatedasthenationalnodalagencyforprotectionof“Critical Information Infrastructure” and the appointment of theIndiaComputerEmergencyResponseTeam(“CERT-IN”),whichperformsseveralfunctionsinthefieldofcybersecurity.


TheabilityoftheStatetoobtainaccesstoprivatecommunicationisasensitivetopicinIndia,muchlikeinmostothercountries.Broadlyspeaking, the right to obtain access to private communicationis subject to certain conditions and only available in certaincircumstances.Forinstance,undertheTelegraphAct,thegovernmentmayorderthatcertainmessagesberestrictedfrombeingtransmitted,orintercepted,detainedordisclosedifitisnecessaryintheinterestofpublicsafety,nationalsecurityorpreventionofcrime.Similarly,thegovernmenthas the power under the IT Act to intercept/monitor/decryptinformationwhichisgenerated,transmitted,receivedorstoredina“computerresource”forreasonssimilartothosementionedabove.Further,directionsmayalsobe issued toan intermediary toblockaccess toany information, forsuchreasons. Additionally,CentralGovernmentisempoweredtoauthoriseitsagenciestomonitorandcollecttrafficdataorinformationgenerated,transmitted,receivedorstored inanycomputer resource, for thepurposeof (a)enhancingcybersecurity,and(b)foridentification,analysisandpreventionofintrusionorspreadofcomputercontaminantsinIndia.Moreover,therearecertainobligationscastonLicenseesundertheULtoproviderequisitemonitoring/interceptionfacilitiesandblockaccesstocertaincontentthatis,inter alia,obscene,infringingandillegal,etc.


The requirement to maintain lawful interception and monitoringfacilities in respectof telecommunicationservicesstemsfromtheULand is therefore applicable toLicensees. Consequently, suchfacilities need to be provided in respect of all services governedby the UL, except as specifically stated otherwise. As a result,traditionalphonecalls,VoIPcallsusingpublicinternetandallotherservicesundertheULarecoveredbythisrequirement.Incaseofemail,interceptionmaybeindependentlysoughtunderprovisionsoftheITAct(refertoourresponsetoquestion4.2above).

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ThekeyobligationslaiddownunderDGare:■ Compliance with programme and advertising codes laid

downundertheCableTVAct.■ Maintenanceofarecordofcontentuplinked.■ Provisionoffacilitiestomonitorcontent.■ Prohibition from providing satellite TV signal reception

to entities other than registered cable operators or DTHoperators.

SuchentitiesmustalsocomplywiththetermsandconditionsoftheWirelessOperationalLicencetobeissuedbyWPC.Multi-system operators need to be registered withMIB pursuanttotheCableTVAct.MIBalsograntspermissionstoDTH,IPTVandHITSserviceproviders. Theguidelinesissuedin2001,2006and2009,respectively,laydown,inter alia, theeligibilitycriteria(whichincludesfinancialparameters)thatmustbemet.Someofthekeyobligationscommontoboththeseguidelinesare:■ Restriction on carrying any channel that is prohibited by

MIB.■ All channelsmustbeprovidedaccess to theplatformona

non-discriminatorybasis.■ Objectionablematerialshouldnotbecarriedonthechannel.IPTV services can be provided by a Licensee under certainauthorisations under the UL, in which case the obligationsthereunderneedtobecompliedwith.


Broadlyspeaking,alicence/permissionisnotassignablewithoutthepriorconsentofMIB.However,MIBpermitsassignmentinfavouroflenders, inwhichcaseatripartiteagreementmustbeexecuted.Also,therearenoabsoluterestrictionsonchangeofcontrolaslongasFDIandotherfinancialrequirementsarecompliedwith.



InIndia,TSPsfallwithintheambitofan“intermediary”undertheITAct,andarethereforeentitledtocertainstatutoryexemptionsfromliability forcontentcarriedover theirnetwork. This,however, issubjecttofulfilmentofcertainconditions.AccordingtotheITAct,an“intermediary”shallnotbeliableforanythird-partyinformation,data,orcommunicationlinkmadeavailableorhostedbyit,if:■ itsfunctionislimitedtoprovidingaccesstoacommunication

system over which information made available by thirdpartiesistransmittedortemporarilystored;or

■ it does not initiate transmission, select the receiver oftransmission,anddoesnotmodifyorselecttheinformationcontainedinthetransmission.

Further, toqualify for thisexemption, intermediariesare requiredtoobservecertainduediligence(asprescribedunderrulesframedunder the IT Act) while discharging their duties. However, anintermediarywouldbeheldliableincasetheyhadknowledgeofanunlawfulactandintentionallyomittedtoact.

TelevisionDistribution:At a consumer retail level, distributionover satellite television ispredominantlyregulatedbythefollowing:■ CableTVAct,alongwithrulesframedunderit.■ Guidelines issued by MIB in relation to DTH, HITS and

IPTV.IPTVcanalsobeprovidedbyaLicenseeundercertainauthorisationsintheUL.

TheUGandDGissuedbyMIBin2011arealsorelevant.TheUG,inter alia,regulatetheuplinkingoftelevisionchannelsfromIndia,whereas the DG regulate the downlinking of television channelsin India. Additionally, the Prasar Bharati Act, 1990 regulatesbroadcaststhroughDoordarshan(i.e.thenationalTVchannel).Cinematographic/theatricaldistribution:TheCinematographAct, 1952 and rules framedunder it regulatedistributionviacinematograph.However,theoperationoftheatresandmultiplexesarenotregulatedper se.Pleaserefertoourresponsetoquestion5.3belowformoredetailsonthisaspect.


Thepresent legalandregulatoryframeworkrelating to regulationof content (including advertising) predominantly encompassesbroadcast via traditional means, such as cable television, DTH,IPTVandtheatre. Regulationofcontent ismainlycarriedoutbyMIBandbyCBFC(incaseoffilms).Withrespecttoadvertising,theguidelinesprescribedbyASCIshouldbeconsidered.AtpresentthereisnodedicatedframeworkinIndiaforregulatingthedistributionofcontentusinginternetorothersimilarplatforms.However, general provisions of the IT Act and IPC prescribepenalties for distributing and publishing certain types of content,andsuchprovisionswouldbeapplicable.


Further to our response to question 5.1 above, wewill highlightthelicencesorpermissionsrequiredtobetakenfordistributionofaudio-visualmediaincaseoftelevision.TelevisionAn entity desirous of uplinking or downlinking a televisionchannel in India is required to obtain permission fromMIBundertheUGorDG,respectively.Todoso,theapplicantmustmeettheprescribedminimum eligibility criteria, which, inter alia, includesthe requirement tomeet a certainnetworth. Theentity shouldbeincorporatedinIndiaandbecompliantwithrelevantFDIconditions(refer to our response to question 1.4 above). It is also importantthatanytelevisionchannelthatisuplinkedordownlinkedinIndiaisregisteredwithMIB.ThekeyobligationslaiddownunderUGare:■ UplinkingisonlypermittedusingCorKuBand.Moreover,

uplinkingthroughKubandisonlypermittedthroughIndiansatellites.

■ Compliance with programme and advertising codes laiddownunderCableTVAct.

■ Maintenanceofarecordofcontentuplinked.■ Provisionoffacilitiesofmonitoringofcontent.


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Aspointedoutinourresponsetoquestion6.2above,obligationstoblockaccesstocertainsitesandcontentarecastonTSPsundertheULandITAct.Pleaserefertothesameintheinterestofbrevity.VPNservicesareregulatedinIndiaandcanbeprovidedbyLicenseesafterobtainingcertainauthorisationsundertheUL.Therefore,theobligations relating to blocking of content (as highlighted in ourresponsetoquestion6.2above)couldbeattractedforVPNservicesaswell.

AcknowledgmentThe author would like to acknowledge his colleagues ShobhitChandra, SeniorAssociate ([email protected]) andPiyushRanjan,Associate([email protected])fortheircontributioninthepreparationofthischapter.


To avail certain exemptions from liability in case of third-partycontent, TSP (an intermediary) must, inter alia, remove/disableaccesstoanycontentthatisnon-compliant,withinaprescribedtimeperiodafterbeingnotifiedbytheaggrievedparty.Theprovisionsof theULlaydownanexpressprohibitionon thecarriage of certain types of content (includingwithout limitation,messagesorcommunications infringingcopyrightand intellectualproperty right) in any form, on its network. If specific instancesof such infringement are reported to theTSPby the enforcementagencies/DoT, such operator shall take necessary measures topreventcarriageofsuchmessagesinitsnetworkimmediately.


Apart from certain provisions under theUL,which encumber allISPs to ensure that all subscribers have unrestricted access to allthecontentavailableontheinternet(exceptforexpresslyrestrictedcontent),netneutralityprincipleshavenotbeendirectlyinductedinthelegalandregulatoryframeworkinIndiaasofnow.InFebruary2016,TRAIissuedthe‘ProhibitionofDiscriminatoryTariffs for Data Services Regulations’. These regulations setout an express prohibition on service providers from chargingdiscriminatory tariffs for data services on the basis of content,or entering into contractual arrangements that have this effect.However,thisprohibitionissubjecttocertainexemptions.TRAIissueditsRecommendationsonNetNeutralityinNovember2017.ItstatesthatnoISPshallresorttoanyformofdiscrimination,restriction or interference in the treatment of content. However,exemptionshavebeenrecommendedinrespectofcertaincategoriesof services that are time-critical. Nevertheless, a concrete laworpolicy in this regard is yet tobe framed. According to recentreports,theserecommendationshavebeenadoptedbytheTelecomCommissionandshallbesentfortheapprovaloftheUnionCabinetshortly.

Harsh WaliaKhaitan & CoAshoka Estate, 12th Floor24 Barakhamba Road New Delhi 110001India

Tel: +91 11 4151 5454Email: [email protected] URL: www.khaitanco.com

Harsh is a Partner with the firm and specialises in laws related to Technology, Media and Telecoms (TMT). His practice focuses on dealing with regulatory, transactional and commercial contracting aspects in the TMT sector.

Harsh has previously worked in-house with large multinational companies and has hands-on experience in handling bespoke and complex contracts involving parties in different jurisdictions. Contracts related to the procurement and provision of software, hardware, managed services, sharing of passive and active infrastructure, interconnection of networks, roaming agreements, marketing & distribution agreements, and outsourcing are some of those he has been dealing with for his clients.

He is an Associate Member of the International Association for Contract & Commercial Management. Recently, he obtained a FAS certification from the GDPR Institute. Harsh has been a speaker at various events, authored several articles and has been quoted by many renowned publications in relation to his areas of expertise.

Founded in 1911, Khaitan & Co is one of the oldest and largest Indian law firms. Combining a rich heritage of over a hundred years with a modern and cutting-edge practice, the Firm offers full service legal solutions to its domestic and international clients. The Firm’s specialist practice areas include: technology, media and telecommunications (TMT); banking and finance; capital markets; corporate/M&A; dispute resolution; energy, infrastructure and resources (EIR); competition/antitrust; environment; hospitality; investment funds; intellectual property; labour and employment; private equity; private client; real estate; tax (both direct and indirect); and white-collar crime. The Firm has a strength of around 500+ fee earners including 128 partners, counsels and directors across its offices.


Chapter 18

Bagus Enrico & Partners

Enrico Iskandar

Bimo Harimahesa

Indonesia

Subscription-basedtelevisionservicesarealsopenetratingthemarketinnumerousmajorcitiesinIndonesia,alongwiththeirbundledISPservicesforresidentialcustomers.MNCGroup,FirstMediaGroup,andrecentlyTelkomare,amongothers,thebigplayersforbundledcable television-ISPservices in Indonesia. However,compared tothe annual revenue for the ISP service providers through mobileservices,thebundledcabletelevision-ISPserviceprovidersarestillfarbehind.Forinstance,thesubsidiariesofFirstMediaGroupandMNCgroupforthisparticularsector,respectivelyPTLinkNetTbkandPTMNCSkyVisionTbk,onlyreachedIDR3.3trillionandIDR2.6trillion,respectively,fortheir2017annualrevenues.


(a) Telecoms and Internet■ Law No. 36 of 1999 on Telecommunication (“Telecoms

Law”).■ Law No. 11 of 2008 on the Information and Electronic

Transaction,aslastlyamendedbyLawNo.19of2016(“EIT Law”).

■ GovernmentRegulationNo.24of2018ontheOnlineSingleSubmission(“GR 24/2018”).

■ Government Regulation No. 52 of 2000 on Telecom-municationsOperationsdated11July2000(“GR 52/2000”).

■ GovernmentRegulationNo.82of2012onElectronicSystemandTransactionOperations.

■ Ministry of Communications and Informatics (“MCI”)RegulationNo.7of2018onElectronicIntegratedBusinessLicensingServices in theCommunicationsandInformaticsSector(“MCI Regulation 7/2018”).

■ MCI Regulation No. 01/PER/M.Kominfo/01/2010 on theProvisionofTelecommunicationNetworks,aslastlyamendedby MCI Regulation No. 7 of 2015 (“MCI Regulation 01/2010”).

■ MCI Decree No. KM 21 of 2001 on the Provision ofTelecommunications Services as lastly amended by MCIRegulationNo.8of2015(“MCI Regulation 21/2001”).

■ MCI Regulation No. 8/PER/M.Kominfo/02/2006 onInterconnection(“MCI Regulation 8/2006”).

■ MCIRegulationNo.19of2014ontheHandlingofNegativeContents in the Internet Website (“MCI Regulation 19/2014”).

■ MCIRegulationNo.36of2014ontheRegistrationProcedureof Electronic System Operators (“MCI Regulation 36/2014”).

1 Overview


(a) Telecoms and InternetMobile cellular business remains the largest telecoms industry inIndonesia.ThetelecomssectorinIndonesiaisoneoftheworld’smost crowded cellular telecoms markets, due to the country’slarge population, the vast archipelago and the current affordableprice in the technology devices market. Nowadays, because ofthe geographic challenges, there is an increasing demand formobiledataservices rather thanfixed linesubscribers. Thereareapproximately278millionmobilesubscribersinIndonesia,leavingonly 11 million fixed line subscribers. Further, nearly 85% ofthe Indonesian population own mobile phones while 43% carrysmartphones.ThisleadstothedominationofmobileoperatorsintheInternetServiceProviders(“ISP”)sector,meaningthatmostoftheapproximately53millioninternetusersinIndonesiaareutilisingtheir mobile phones to gain internet access. Meanwhile, fixedline ISPs are aiming for corporate and residential customers, andapartmentbuildings.SaidISPsarecurrentlyfocusingonenhancingtheirinfrastructurebybuildingfibre-opticnetworksofvaryingsizesandcapacitiesinseveralofthelargestcitiesinIndonesia.Telkomsel,IndosatOoredooandXLAxiataarethreemajoroperatorsformobile subscribers in Indonesia,which dominate 80% of thetelecomsmarket.WhilstTelkomselisprimarilyownedbyapubliclisted state-owned telecomscompany,namelyPTTelekomunikasiIndonesia Tbk (Telkom), the other two major operators arecontrolled by foreign telecoms companies. Axiata (a Malaysia-basedtelecomscompany)owns66.4%ofXLAxiata’sshares,whilstOoredoo(aQatar-basedtelecomscompany)owns65%ofIndosatOoredoo’sshares.Inrespectofannualrevenue,Telkomselhasthelargestannualrevenueamongitscompetitors.In2017,TelkomselhadIDR93.2trillioninannualrevenue,whileIndosatOoredoohadIDR29.9trillionandXLAxiatahadIDR22.9trillion.(b) Audio-Visual Media DistributionThe rise of online digital advertising does not hold back thedomineeringcontrolofthetelevisionsectorinthemedialandscapeofIndonesia.Withatotalaudienceofalmost240millionpeople,the television sector is held bymany large and diversifiedmediagroups, themost significant ofwhich areMediaNusantara Citra(MNC)GroupandTransCorp.


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participateinthePBCandsubscriptionbroadcastersectorsbymeansofcapitalinjection,witha20%foreignsharesownershiprestriction.

2 Telecoms

General


Indonesia has been a member of the World Trade Organisation(“WTO”) since 1994 and entered the WTO Basic Tele-communicationAgreement in 1997. The Indonesian governmenthas opened up the telecommunications industry to even morethan the agreed 35% of foreign ownership. See question 1.4above for details on the foreign ownership restriction in thetelecommunicationsindustry.


By virtue of the Telecoms Law, GR 52/2000, MCI Regulation01/2010 and MCI Regulation 21/2001, the following are theclassifications of telecoms operations under the said laws andregulations:1. TheOperationofTelecomsNetworks,whichconsistof:

a. FixedTelecommunicationsNetworks,whichconsistof:(i) fixedlocalnetworks;(ii) fixedlong-distancenetworks;(iii)fixedinternationalnetworks;and(iv)fixedclosednetworks.

b. MobileTelecommunicationsNetworks,whichconsistof:(i) mobileterrestrialnetworks;(ii) mobilecellularnetworks;and(iii)mobilesatellitenetworks.

2. TheProvisionofTelecomsServices,which, amongothers,consistsof:a. BasicTelephonyServices,whichareprovidedby:

(i) fixed local network operators (telephone, facsimile,telex,telegraphanddata);

(ii) fixed long-distance network operators (telephone,facsimile,telex,telegraphanddata);

(iii)fixed international network operators (telephone,facsimile,telex,telegraphanddata);

(iv)mobile cellular network operators (telephone,facsimileanddata);

(v) mobilesatellitenetworkoperators;and(vi)radiotrunkingoperators(localtelephony).

b. ValueAddedTelephonyServices,which, amongothers,consistof:(i) premiumcalls;(ii) callingcards;(iii)virtualprivatephonenumbers;(iv)publictelephonerecordings;(v) storeandforwards;and(vi)callcentres.

■ MCIRegulationNo.20of2016onIndividualDataProtectioninElectronicSystem(“MCI Regulation 20/2016”).

■ MCI Circular Letter No. 3 of 2016 on the Provision ofApplicationand/orContentServicesthroughInternet(OvertheTop)(“MCI Circular Letter 3/2016”).

■ MCI Regulation No. 8 of 2017 on Provision of InternetTelephone Services for Public Purposes (VoIP) (“MCI Regulation 8/2017”).

(b) Audio-Visual Media Distribution■ LawNo.32of2002onBroadcasting(“Broadcasting Law”).■ GovernmentRegulationNo.24of2018ontheOnlineSingle

Submission(“GR 24/2018”).■ MCI Regulation No. 7 of 2018 on Electronic Integrated

Business Licensing Services in the Communications andInformaticsSector(“MCI Regulation 7/2018”).

■ MCI Regulation No. 18 of 2016 on the Procedures andRequirementsforBroadcastingLicenses(“MCI Regulation 18/2016”).

■ MCIRegulationNo.41of2012onProvisionofBroadcastingby Subscription Broadcasters through Satellite, Cable andTerrestrial(“MCI Regulation 41/2012”).

■ MCI Regulation No. 18 of 2016 on the Proceduresand Requirements for Broadcasting Operations (“MCI Regulation 18/2016”).

■ MCI Regulation No. 6 of 2017 on Provisions of InternetProtocolTelevision(“MCI Regulation 6/2017”).


(a) Telecoms■ Minister of Communication and Informatics (Kementerian

Komunikasi dan Informatika/“MCI”), Directorate GeneralforOperationofPostandTelecommunication.

■ MCI, Directorate General for Operation of Post andTelecommunication.

■ MCI,DirectorateGeneralforInformaticsApplication.■ IndonesianTelecommunicationRegulatoryAuthority(Badan

Regulasi Telekomunikasi Indonesia/“BRTI”).(b) Audio-Visual Media Distribution■ MCI, Directorate General for Operation of Post and

Telecommunication.■ Indonesian Broadcasting Committee (Komisi Penyiaran

Indonesia/“KPI”).


(a) Telecoms and InternetMost of the telecoms sectors, including fixed and mobiletelecommunications network providers, telecommunicationsservicesproviders,andISPprovidersarerestrictedto67%foreignownership.(b) Audio-Visual Media DistributionCompanies in the Private Broadcasting Channel (“PBC”) andsubscriptionbroadcastersectorscanonlybeinitiatedbylocalcitizensor Indonesian-owned legal entities. Foreign investors may only

Bagus Enrico & Partners Indonesia


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FollowingtheissuanceofGR24/2018andMCIRegulation7/2018, generally, all companies in Indonesia will requirean NIB in order to be able to obtain further business andoperational licences through theOnline Single Submission(“OSS”)system.TheOSSsystemisanonlinesystemwhichwill integrate all information and licensing processes fromvarious government institutions in Indonesia, includingseveral licences relevant to the postal, telecoms, andbroadcasting sectors, and the usage of radio frequencyspectrum.

Thegovernment developed this system in order to be abletoeliminatethecomplicatedlicensingprocedureandlengthytimelineusuallyexperiencedinthepreviousregime.

(ii) Business Licence The Business Licence is issued by the OSS system on

behalf of the ministry (i.e., Ministry of CommunicationsandInformatics)afterobtaininganNIB.TheissuanceofaBusinessLicenceisconductedonacommitmentbasis.

(iii) Fit and Proper Test Servingasoneofthecommitmentsrequiredfortheissuance

ofanOperational/CommercialLicence,thefitandpropertestisatechnicalinspectionconductedbyeitherateamcomposedbyMCI,oraccreditedassessmentinstitutions,whicheverisdeemedfit.

(iv) Operational/Commercial Licence TheTelecomsOperational Licence shall be in the form of

a contract between the relevant telecoms network/servicesprovider with MCI, consisting of operational rights,obligations, sanctions and a report. This contract will besubjecttoanevaluationeveryfiveyears.


Themainrequirementsforboththetelecomsnetworksandtelecomsservices sectors in obtaining telecommunication licences are asfollows:(i) obtaininganNIB;(ii) obtainingaBusinessLicence,and(iii) operating/obtainingaCommercialLicence,from the OSS system by committing to fulfil all of thecommitments, including providing a business plan that includesscopeofthedevelopmentarea,servicestobebuilt(roll-outplan),and commitment to not change the shareholding structure beforefulfillingatleast50%ofthedevelopmentresponsibilityofthetotalcommitmenttodevelopduringthe5(five)-yearperiod.Accordingly,thetimeframeforfulfilmentsofcommitmentsthroughtheOSSSystemfortelecomsaredifferentdependingontheserviceswhichareatthelatest:(i) 1 (one) year from the issuance of a Telecommunication

NetworkOperatorLicence.(ii) 6 (six) months from the issuance of a Telecommunication

ServiceOperatorLicence.(iii) 1(one)yearfromtheissuanceofaSpecialTelecommunication

OperatorforLegalEntityLicence.


Currently, there are no individual authorisations established inIndonesiawithregardtotelecomsbusinessactivities.

c. MultimediaServices,which,amongothers,consistof:(i) ISPs;(ii) internetinterconnectionservices(“NAP”);(iii)internetprotocoltelevision(“IPTV”);and(iv)datacommunicationsystemservices.

3. SpecialTelecomsOperations,whichconsistof:a. SpecialTelecommunicationsforInternalUse;b. SpecialTelecommunicationsforNationalDefence;andc. Broadcasting.


Generally,theregulatoryandcompetitionlawauthorityinIndonesiais the Commission for the Supervision of Business Competition(Komisi Pengawas Persaingan Usaha/“KPPU”). KPPU is anindependentgovernmentalbodyestablishedpursuanttoLawNo.5of1999,regardingProhibitiononMonopolisticPracticesandUnfairBusiness Competition (“Anti-Monopoly Law”). KPPU rulesoverbusinesscompetitioninanyfieldinIndonesia.Furthermore,KPPU’smembersareinauguratedbythePresident,withapprovalfromtheHouseofRepresentatives.Specifically for the telecoms sector, the competition supervisoryduty is conducted mutually by KPPU and BRTI (as mentionedin question 1.3 above). As a semi-independent regulatory body,BRTI runs its tasks and functions through the Committee ofTelecommunication Regulation, consisting of seven members.Publicparticipationismanifestedthroughtheappointmentoffivepublic figures as members of the committee, with two membersfromthegovernment.


In accordance with Law No. 5 of 1985 regarding the StateAdministrative Court as lastly amended by Law No. 9 of 2004(“State Administrative Court Law”),thedecisionofthenationalregulatory authority shall be considered as a state administrativedecision,thusisabletobeappealedattheStateAdministrativeCourt.AccordingtoArticle1No.3oftheStateAdministrativeCourtLaw,astateadministrativedecisionisdefinedasawrittendecisionissuedby a state administration agency, containing state administrationlegalactionsbasedontheapplicablelawsandregulations.Further,suchdecisionmustbeconcrete, individual,andfinal incharacter,and has legal consequences for a specific person or legal entity.Examplesofstateadministrativedecisionsare(i)licences/permits,and(ii)ministerialdecreesonlegalstatuses,rightsandobligationsforacertainlegalentity.



Ingeneral,telecomslicencesforcommercialuseareissuedinfourstages,whichare:(i) Business Identification Number(Nomor Induk Berusaha or

“NIB”)


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In calculating the interconnection tariff, references shall begiventothe:(i)costallocationandreportingmanual;and(ii)guidelinesand calculation formula software for interconnection tariffs, asdetermined by theDirectorateGeneral forOperation of Post andTelecommunication.


Inseverallinesoftelecomsbusiness,MCIrequirestheoperatorand/ortelecomsserviceprovidertoconductaccountingseparation,e.g.,interconnectionservices.However,theoperatorsarenotsubjecttoanysectoralregulationstoundertakeanyfunctionalseparationand/orlegalseparation.


There is no specific regulation regarding high-speed broadbandnetworks,noranyincentivesorregulatoryholidaysforthismatter.



Pursuant to the Telecoms Law, telecoms network operators havethe right to determine the tariff, and they are not subject to anypricecontrolorretailtariffs.Thegovernmentonlydeterminestheformulatocalculatethetariff.


TheTelecoms Law stipulates that in providing its services, eachtelecomsoperatorisrequiredtoprotectitscustomers’rights,amongothers, quality of services (“QoS”), tariffs and compensation. Inrelation thereto, MCI has set up several regulations on QoS forcertaintelecomsservices.Further,intheeventthattheprovisionofelectroniccommunicationsservices is considered as public services, the relevant electronicsystemoperator shall be subject to amandatory registrationwiththe MCI. Based on MCI Regulation 36/2014, provision of thefollowing services shall be considered as public services and aresubjecttoregistration:a. webportals,websites,oronlineapplicationsviatheinternet

thatareusedtofacilitatetheofferingand/ortradingofgoodsand/orservices;

b. electronicsystemsthatcontainpaymentfacilityand/orotherfinancial transactions online, by means of communicationdata or the internet;

c. electronicsystemsusedtoprocesselectronicinformationthatcontainorrequirethedepositoffundsorothersimilarformsoffunds;

d. electronicsystemsusedtoprocess,administer,orstoredatarelatedtofacilitiesthatareassociatedwithcustomerdataforpublic-servingoperational activityonfinancial transactionsandtradingactivity;and



Construction of telecommunication infrastructure in certainareas, particularly in less-developed cities,may be considered asa development for public interest, hence granting the Indonesiangovernment with the authority to acquire land by giving propercompensationtotherelevantlandowners.Therearetworegulationswhicharerelevantforpublicandprivatelandacquisitionforpublicinterest,namely:(i) LawNo.2of2012onLandProcurementforDevelopment

forPublicInterestanditsimplementingregulations.(ii) PresidentialRegulationNo.71of2012,aslastlyamendedby

PresidentialRegulationNo.148of2015.



UndertheTelecomsLaw,itisclearlymandatedthateverytelecomsnetworkoperatorshallprovideinterconnection,basedondemand,toanyotheroperator.TheinterconnectionisfurtherregulatedunderMCIRegulation8/2006,whichalsocontainstheprovisionregardinginterconnectiondispute settlement. Pursuant toAnnexVofMCIRegulation8/2006,disputes related to interconnection issuesmayberesolvedbymeansofmediationorarbitration,withoutprejudiceto the relevant parties’ rights in seeking a resolution through theIndonesianDistrictCourt.Inmediation,themediatorteamshallbeestablishedbyBRTI.Meanwhile,inarbitration,thearbitraltribunalmembersshallconsistofoneormorearbitratorsappointedbyBRTI.


Operatorsarerequiredtosubmitinterconnectiontariffsoffers,whichincludetheInterconnectionOfferDocument(Dokumen Penawaran Interkoneksi/“DPI”) tobe reviewedbyBRTI. Anoperator’sDPIwithanoperatingrevenueof25%ormorefromthetotalrevenueoftheentireoperatorsinitsparticularservicesectorisrequiredtobeapprovedbyBRTI.All operators are also required to publish their DPI and othersupporting documents from the interconnection contract for allinterestedparties,anditisadvisabletopublishthesedocumentsontheoperator’swebsite.


Interconnection tariffs are decided on a cost-based basis byconsideringtheeconomicvalue(supplyanddemand),andaresubjecttothestandardformulationprovidedbythegovernment.Thebasesofinterconnectiontariffcalculationsaretransparencyandfairness,asthecalculationresultshallbeincludedintheDPI.OperatorsarethenrequiredtosubmittheDPItobereviewedandapprovedbyBRTI.


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Theholderof theabove licences is required topay theRightsofFrequencyRadioSpectrumFee(Biaya Hak Penggunaan Frekuensi Radioor“BHP”).The procedure to determine the candidates entitled to use radiospectrum is based on the selection mechanism, evaluationmechanismandona“first-come,first-served”basis.


No,everyusageofspectrummustfirstobtaintherelatedlicences.


According toMCIRegulation 4/2015, only an IPFR and an ISRarepayablewithlicencefeesintheformofaRightofFrequencyRadioSpectrumFee–BHP.TheBHPmustbefullypaidinadvanceviabanktransferwithahost-to-hostpaymentgatewayonanannualbasis.The amount of BHP for an IPFR shall be determined by thefollowingmechanisms:■ selection process mechanism, by taking into account the

public’spurchasingpowerandreasonableness;■ adjustment of selection resultmechanism, for the usage of

radiofrequencyspectrumonthesameradiofrequencyband;or

■ calculation mechanism, in accordance with the formuladeterminedbyMCI.

Meanwhile,theamountofBHPforanISRshallonlybedeterminedby the calculation mechanism, in accordance with the formuladeterminedbyMCI.


In theevent that thechangeofcontrolof the licenseeresults in thechangeof(i)thenameofthelicensee,(ii)thepersoninchargeinthelegalentityholdingtheISR(onlyforISRs),and/or(iii)thedomicileofthelicensee,thenthelicenseemustsubmitthechangeoflicenseedata.ThechangeoflicenseedatashallbesubmittedtoMCIinthecaseofanIPFR,ortheDirectorateGeneralofResourcesandPostalandInformaticsDevicesinthecaseofanISR.


No, spectrum licencesarenot able tobeassigned, tradedor sub-licensed.



ThereisnospecificlaworregulationforcybersecurityinIndonesia.The main reference for cybersecurity in Indonesia still refers tothe EIT Law, which serves as the principal policy for electronicinformationinIndonesia.

e. electronic systems used for the delivery of payable digitalmaterialthroughdatanetworks,eitherbymeansofdownloadvia a web portal/website, email transmission, or otherapplicationtotheuserdevice.

Numbering


Telephone numbers and network identifying codes are allocatedbyMCIthroughtheDirectorateGeneralforOperationofPostandTelecommunication. Proceduresforallocationanddesignationofnumbers are stipulated underMCIDecreeNo. 4 of 2001 on theNational Fundamental Technical Plan 2000, as lastly amendedbyMCIRegulationNo.17of2014andMCIRegulation7/2018.Usageandarrangementofsuchnumbersshallbefurthercarriedoutbytherespectiveoperators.


Uponobtaining the allocated numbers, operators are obligated tosubmit a report on the usage of the telephone numbers every sixmonths.


Numberportability,includinglocalnumberportabilityandmobileportability, is not applicable for both individual and enterprisecustomersinIndonesia.

3 Radio Spectrum


MCI,DirectorateGeneralforResourcesandPostalandInformaticsDevices.


Based on MCI Regulation No. 4 of 2015 on the OperationalRequirements and Licensing Procedures for the Use of RadioFrequencySpectrum(“MCI Regulation 4/2015”),everyusageoftheradiospectruminIndonesiaisrequiredtoobtainausageofradiofrequencyspectrumlicence.Therearethreetypesoflicencefortheusageofradiofrequencyspectrum,namely:■ Radio Frequency Band Licence (Izin Penggunaan Pita

Radio/“IPFR”),fortheusageofradiospectrumintheformofradiofrequencyband;

■ Radio Station Licence (Izin StasiumRadio/“ISR”), for theusage of radio spectrum in the form of a radio frequencychannel;and

■ ClassLicence(IzinKelas),grantedtoindividualsand/orlegalentities to operate a telecoms devicewhich uses the radiofrequencyspectrum.


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The Telecoms Law and GR 52/2000 expressly state that anykind of information may be recorded and disclosed for criminalproceedings purposes. Accordingly, this interception covers alltypesofcommunicationsfacilitatedbytherelevanttelecomsserviceprovider.


Since the telecoms service provider must cooperate for criminalproceedingspurposes,thelawfulauthoritymaycooperatewiththenetwork operators or ISPs to intercept the communications for aparticularindividual.Lawfulinterceptionandtappingmaybeconductedbyanauthorisedlawenforcer for thepurposeof law supremacy,national security,andcriminalinvestigation,withawrittenrequestfromtheAttorneyGeneral and/or Head of the Indonesian Police Force for certaincriminal acts. The technical requirements for tapping and datainterceptionareregulatedunderMCIRegulation8/2014.


MCIRegulation 20/2016 requires all electronic system operatorsin Indonesia to store all personal data in their possession in anencryptedform.However,theRegulationdoesnotfurtherstipulatetheencryptionmechanismthatneedstobeimplemented.With theobligationof theserviceproviders tocooperatewith thestateundertheTelecomsLawandGR52/2000,thetelecomsserviceprovidermustcooperateduringcriminalproceedingsbyprovidingthestatewithanyencyptionkeysrequired,inordertoprovideanynecessaryinformationinanencryptedform.


Should there be no statute that specifically governs it, MCIRegulation20/2016setsout that the retentionperiod forpersonaldata shall be at least 5 (five) years. By the time a personal dataowner is no longer considered as a user, the electronic systemoperatorisobligedtostoretherelevantpersonaldatastartingfromthelastdateofthepersonaldataownerconsideredasauser.In particular for telecoms and internet operators, GR 52/2000requiresthemtomaintainandstoreacustomerdatarecord(“CDR”)ordetailsofthetelecommunicationusage.TheCDRshallbestoredforaperiodofatleastthreemonths.



Mediasectors, including thedistributionofaudio-visualmedia inIndonesiasuchasradioandtelevisionbroadcasts,areregulatedundertheBroadcastingLaw.TheBroadcastingLawdividesbroadcastersintopublicbroadcasters(“PubBC”),PBC,communitybroadcastersandsubscriptionbroadcasters.ThebroadcastingsectorisundertheauspicesoftheKPI,anindependentbodywhoseresponsibilityistoregulateandproviderecommendationsintheareaofbroadcasting.

Nevertheless,basedonthePresidentoftheRepublicofIndonesiaDecreeNo. 53 of 2017 onCyberBody andNational EncryptionAgency(Badan Siber dan Sandi Negara/“BSSN”),anon-ministerialagencywhichisdirectlyresponsibletothePresidentthroughMCIforcybersecurityissueswasestablished.ThemainroleoftheBSSNistoeffectivelyandefficientlyimplementcybersecurityinIndonesia,and it shall carry out the function of drafting and implementingtechnicalpolicyinthefieldsofidentification,detection,protection,countermeasures, control, monitoring, evaluation, control ofe-commerceprotection,coding,screening,cyberdiplomacy,cybercrisis management centres, cyber contact centres, informationcentres,mitigationsupport,vulenerabilityrecovery,incidentsand/orcyberattacks.Additionally,provisionsregardingdataprotectionarealsoscatteredthroughout several ministerial regulations. For instance, MCIRegulation 20/2016 requires all electronic system operators inIndonesiatostoreallpersonaldatainitspossessioninanencryptedform, although there is no further stipulation on the encryptionmechanism to be implemented. Further,MCIRegulation 4/2016requireselectronicsystemoperatorsforpublicservicesthatutilisestrategicorhigh-levelelectronicsystemstoemploySNIISO/IEC27001astheirstandardofinformationsafetymanagementsystem.


Lawful interception is permitted and applicable in Indonesia,providedthatsuchinterceptionisconductedbyanauthorisedlawenforcer for the purpose of law supremacy and national security.The legal bases for lawful interception are scattered throughoutseveral laws and regulations. Among others, the following areregulationswhichauthoriselawfulinterception:■ theEITLaw;■ Law No. 30 of 2002 on the Corruption Eradication

Commission;■ LawNo.35of2009onNarcotics;■ MCI Regulation 11/PER/M.Kominfo/020/2006 on Infor-

mationObtainedthroughConfidentialInterception;■ MCI Regulation 8/2014 on Technical Requirements for

LawfulTappingToolsandEquipmentforInternetProtocol-Based Information on Implementation of Cellular MobileNetworksandWirelessLocalFixedNetworkswithLimitedMobility;and

■ EradicationofTerrorismLawNo.5of2018.


TheTelecomsLaw andGR 52/2000 permit the telecoms serviceprovider, for the purpose of criminal proceedings, to record anyinformation delivered or received by it, aswell as providing anynecessaryinformationuponthefollowingconditions:■ Written request from theAttorneyGeneral and/orHead of

the Indonesian Police Force for certain criminal acts withfiveyearsormoreimprisonment,alifesentence,orthedeathpenalty.

■ Requestfromthelawfulinvestigatorforcertaincriminalactspursuanttotheprevailinglawsandregulations.


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Generally, thecontent shown in thesenetworksarenotunder theresponsibility of telecomsoperators and/or ISPs. However,MCIRegulation 19/2014 requires telecoms operators and/or ISPs toblock all of the IPs/URLs contained in the TRUST+Positif List,whichisalistcompiledbyMCI,DirectorateGeneralofInformaticsApplications of websites with negative content (pornography,racism,etc.).Accordingly,telecomsoperatorsand/orISPsareonlyliablefortheIPs/URLscontainedintheTRUST+PositifList.


Not without an instruction from theMCI, as telecoms operatorsand/orISPsareonlyunderobligationstoblockIPs/URLscontainedintheTRUST+PositifList. However,contentownersmayreporta domain or URL containing any rights infringement to theMCI, hence the relevant domain orURLmaybe included in theTRUST+PositifList.


No,currentlytherearenonetneutralityrequirementsapplicableinIndonesia.Telecomsoperatorsand/orISPsaregrantedtherightstoblockdifferenttypesoftrafficovertheirnetworks.


Yes,telecomsoperatorsand/orISPsareunderobligationstoblockaccesstocertainsitesasperthetheTRUST+PositifList.Currently,therearenoregulationsregardingcustomeraccesstoVPNservices.


In general, as provided in the Broadcasting Law as well as theEIT Law, both content broadcast via traditional media (e.g.,televisionandradio)anddigitalmedia(e.g.,internetorotherdigitalplatforms)shallnotviolatethelimitationsprovidedbylaws(e.g.,advertisementsforalcoholicbeveragesandcigarettes)orinconflictwith public order,morality, religion or the customs in Indonesia.However, in theareaofbroadcasting, thereareseveralprovisionsconcerning theminimum local content required to be aired. Forexample, broadcast content of PBC and PuBC television mustcontainat least60%domesticprogrammes. TheKPIalso issuedtheBroadcastingBehaviourGuidelinesandBroadcastingProgramsStandard(“P3SPS”)inordertoguidebroadcastingbehaviour.


MCI Regulation 18/2016 sets out that in order to conduct itsbroadcasting activities, a company must obtain a broadcastinglicence.Abroadcastinglicenceforradioshallbegrantedforfiveyears, while television broadcasting licences shall be granted for10years; both licences are extendable. Thebroadcasting licencewillbeissuedtothebroadcasterimmediatelyaftertheapplication.Nonetheless, the broadcaster must fulfil all of the commitments,includingreceivingworthinessrecommendationfromtheKPIandapprovalfromajointmeetingforumwiththeGovernmentandtheKPI.The fulfilment of commitments must be conducted within sixmonthsfollowingtheissuanceofabroadcastinglicenceforradio,and within one year following the issuance of a broadcastinglicencefortelevision.Failuretofulfilthecommitmentswithinthetimeperiodwillbe subject toanadministrative sanction, i.e., therevocationofabroadcastinglicence.


No,abroadcastinglicenceisnotassignable.ThechangeofcontrolonaPBCisrestrictedforamaximumof20%ofsharesofforeigncapital.Seequestion1.4abovefordetailsonPBCforeignownershiprestriction.


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Enrico IskandarBagus Enrico & PartnersDBS Bank Tower, 17th floor, Suite 1701Jl. Prof. Dr. Satrio Kav. 3–5Jakarta 12940Indonesia

Tel: +62 21 2988 5959Fax: +62 21 2988 5958Email: [email protected]: www.bepartners.co.id

Bimo HarimahesaBagus Enrico & PartnersDBS Bank Tower, 17th floor, Suite 1701Jl. Prof. Dr. Satrio Kav. 3–5Jakarta 12940Indonesia

Tel: +62 21 2988 5959Fax: +62 21 2988 5958Email: [email protected]: www.bepartners.co.id

Enrico Iskandar is a founding partner of Bagus Enrico & Partners, a firm which advises companies in corporate and commercial transactions, with an emphasis on mergers and acquisitions, corporate restructurings, property, hotels and real estate, technology, media and telecommunications.

In his technology, media and telecommunications (TMT) practice, Enrico has worked on a broad range of transactional, advisory and contentious matters, and regularly advises on regulatory issues in telecommunications, networks and satellite operations, data protection/privacy, encryption, outsourcing, IT contracts, and e-commerce (online securities, trading and advertising). Enrico’s considerable experience in relation to TMT has enabled him to steer investors through the inherent practical and regulatory hurdles.

As part of the recognition of his representation for multinational clients in information technology, telecommunications and media, Enrico’s team has been recognised by the Asia Pacific Legal 500 2017 and 2018 editions as Indonesia’s 1st Tier law firm in IT & Telecoms. He has also been selected in the 2013, 2014, 2015, 2016, 2017 and 2018 editions of Who’s Who Legal, as a leading individual in Information Technology, and in the 2014 and 2015 editions on the same publication, as a leading individual in Telecoms & Media.

Bagus Enrico & Partners (“BE Partners”) is one of Indonesia’s leading corporate and commercial law firms. Founded by professionals who are recognised for their experience in handling various notable transactions in Indonesia, BE Partners continues its growth with an equal commitment to its reputation as a “boutique practice [which] focuses on client service”, and provides its domestic and international clients with high-quality advice, which is commercially focused and personally delivered.

BE Partners has received recognition from the main legal market reviewers. Some of the most international and respected reviewers have placed BE Partners’ team as comprising Indonesia’s leading professionals in various practices. BE Partners’ reputation in diverse aspects of Indonesian law, especially in relation to corporate/commercial law, banking, finance and insurance, mergers and acquisitions, IT, media and telecommunications, energy and resources, property, hotels and real estate, as well as infrastructure, is outstanding.

Bimo Harimahesa is a principal associate of Bagus Enrico & Partners. Mainly focusing on technology, media and telecommunication areas, Bimo has been actively involved in advising on regulatory issues across TMT, including telecommunication and networks operation, data privacy protection, cloud services, and e-commerce industries.

Bimo also regularly advises the firm’s clients within a wide spectrum of corporate and commercial matters on various sectors, namely, mergers and acquisitions, property, hotels and real estate, and employment, as well as advising various mainstream corporate clients.

In the TMT sector, Bimo’s recent representations include advising a major US-based technology company in the preparation of a global unified warranty template for the sales of its hardware products, assisting a UK-based technology company in advising a global privacy policy for the potential roll-out of its intelligent household appliance, and regulatory requirements for the provision of IPVPN services licensing in Indonesia.


Chapter 19

Portolano Cavallo

Ernesto Apa

Eleonora Curreli

Italy

rules concerning the protection of personal data processedby operators in the context of the provision of electroniccommunications services, in addition to the provisionslaid down in the “General Data Protection Regulation” (Regulation2016/679);and

■ Legislative Decree No. 70/2003 (the “E-commerce Decree”),whichprovidesfortherulesgoverningliabilityofinternet serviceproviders (i.e., access, cachingandhostingproviders).

Audio-visualmediasectorsaregovernedbyLegislativeDecreeNo.177/2005, i.e., the Consolidated Law on Radio andAudio-visualMedia Services (“Testo unico dei servizi di media audiovisivi eradiofonici”,“AVMS Code”),asamended,inter alia,byLegislativeDecree of 15 March 2010, No. 44, which has implemented theAudio-Visual Media Service Directive (Directive 2010/13/EU,“AVMS Directive”)inItaly,andbyLegislativeDecreeNo.204of7 December 2017 (“Franceschini Decree”), which amended theprovisionsconcerningpromotionofEuropeanworks.AGComresolutionsregulateseveralspecificmattersindetail.


Themainregulatorsthathavearoleintheregulationoftelecomsandaudio-visualmediadistributionarethefollowing:■ the Ministry of Economic Development (“Ministero

dello Sviluppo Economico” – “MiSE”), which deals withelectronic communications, including, among others,allocating frequencies, the monitoring and control of thenational radio spectrum, and managing the infrastructureprogramforbroadband.MiSEisalsoinchargeofthegeneralauthorisations for electronic communications networks andservices, and issues the authorisations to operate digitalterrestrialTVchannels;

■ AGComis,inter alia,theregulatorandwatchdoginchargeofaudio-visualmediaandelectroniccommunicationsservices.AGCom is also in charge of preventing online copyrightinfringements;

■ the Italian Data Protection Authority (“IDPA”), anindependentauthoritydealingwiththeprotectionofpersonaldataofindividuals;and

■ theMinistryofCulturalHeritageandActivitiesandTourism(“Ministero dei Beni e delle Attività Culturali”–“MiBAC”),whichalsoplaysaroleintheaudio-visualmediasector.

1 Overview


AccordingtothelastAnnualReportoftheItalianCommunicationsAuthority (“AGCom”), in 2017, the total revenue in the sectorsregulated byAGCom–which include telecoms and audio-visualmediaservices(seequestion1.2forin-depthdetails)–represented3.16%oftheItalianGDP.(a) Telecoms market In 2017, the revenues of suchmarket were equal to EUR

32.214billion. ThemainplayersinthetelecomsmarketareTelecomItalia,

WindTre,VodafoneandFastweb.(b) Media market In2017,therevenuesofthemediamarketwereequaltoEUR

14.618billion(0.9%lowerthanin2016),41%ofwhichcamefromadvertising,37.5%fromsalesof services, and21.6%fromfeesandpubliccontributions. Suchrevenuesrefer toradioandtelevision,thepublishingindustryandinternet.

Specifically, the audio-visual media sector is the mostinfluentialonesinceitsrevenuesareequaltoroughlyEUR8billion (60%of the total). Themainplayers are the21st

Century Fox group (Sky Italia and Fox Networks GroupItaly),MediasetandRAI.


The electronic communications sector is governed byLegislativeDecree No. 259/2003, i.e., the Electronic Communications Code(“Codice delle comnunicazioni elettroniche”, “ECC”),which hasimplementedtheEUregulatoryframework.Otherimportantpiecesoflegislationare:■ LawNo.249/1997,establishingtheItalianCommunication

Authority;■ Legislative Decree No. 206/2005 relating to consumer

protection(the“Consumer Code”);■ Legislative Decree No. 196/2003 (the “Data Protection

Code”), as recently amended, which provides specific


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Portolano Cavallo Italy

AGComandAGCMcooperatewith eachother. Both authoritiesprovideopinionstothegovernment,buttheyarefullyindependenttherefrom.On the other side, MiSE – a government ministry – plays animportant role in dealingwith electronic communications (pleaseseequestion1.3).


Any decision issued byAGCom andAGCM can be challengedby the interested parties before the administrative court of LazioRegion(“TARLazio”).TheTARLazio’srulingscanbeappealedinthesecond(andlast)instancebeforetheConsiglio di Stato.IDPA’sdecisionscanbechallengedbytheinterestedpartiesbeforethecompetentjudicialauthority,bylodgingacomplaintinthecourtoftheplacewherethedatasubjecthashis/herresidence.



TheprovisionofelectroniccommunicationsservicesandnetworksinItalyissubjecttoageneralauthorisation/notificationtoMiSE.Inthis respect,anyoperator is required tofileanad hocdeclarationwithMiSE,byprovidingthelatterwithasetofgeneralinformationaboutthecompanyaswellasatechnicaldescriptionoftheelectroniccommunicationsnetworksorservices.Once thedeclaration isfiled, theapplicantmay immediatelystarttheactivitiescoveredbythedeclarationitself.Incasethecompanydoesnotmeettherequirementsprovidedbythelaw,within60daysfromthenotification,MiSEmayservethecompanywithareasonedresolutionstatingthatthecompanymuststoptheactivities.OperatorsarerequiredtoenrolwiththeRegisterofCommunicationsOperators(“ROC”)heldbyAGCom.


Thenotification toMiSEmust includegeneral information aboutthe company (nationality, registered office,VAT number, contactinformation, details of the authorised representative, etc.), atechnical description of services/networks and a self-declarationwhichindicatesthatdirectorswholegallyrepresentthecompanyorthebusinessownerhavenotbeensentencedtomorethansixmonthsof imprisonment for premeditated crimes, and are not subject tosecurityandpreventionmeasures.Generalauthorisationisalsosubjectto:■ thepaymentoftheannualfeeprovidedforbythelaw(Annex

10oftheECC)andcalculatedbyMiSE;and■ thepaymentoftheannualcontributiontoAGCom,whichis

calculatedasapercentageoftheturnoveroftheoperator.Inaddition,thegeneralauthorisationisalsosubjecttocompliancewith the mandatory obligations provided for by the ECC (suchas, for instance, contributing to the financing of the universalservice, annually paying the fees calculated by MiSE, ensuringboth the interoperability and the networks’ interconnection,ensuringtheprotectionofpersonaldatawithspecificregardtothetelecommunicationssectorandcomplyingwithconsumerprotectionlegislation,etc.).


The telecoms sector has been liberalised; notification to MiSE issufficienttooperateanelectroniccommunicationsnetworkorprovideelectroniccommunicationservices(generalauthorisationregime).Theprovisionofaudio-visualmediaservicesissubjecttoindividualauthorisation in case of linear services, while it is subject tonotification (general authorisation regime) in case of non-linearservices(i.e.,on-demandservices).Under reciprocity conditions, authorisations and generalauthorisationscanalsobeheldbyoperatorsresidingoutsideoftheEU/EEA.Restrictionsmay, however, applywith regard to operators residingoutsidetheEU/EEAforpurposesofnationalsecurityanddefenceonly.

2 Telecoms

General


ItalyisamemberoftheWorldTradeOrganisation(“WTO”).ItisaMemberStateoftheEuropeanUnion,andtheEUisamemberoftheWTOinitsownright.ItalyhasmadeacommitmentundertheGATSwithnoexemptions,andhasalsoimplementedtheprinciplesreferredtointheWTO’stelecommunicationsreferencepaper.


ElectroniccommunicationsareregulatedundertheECC.The operation of electronic communications networks and theprovisionof electroniccommunications services to thepublicaresubjecttopriornotificationtoMiSE(generalauthorisationregime).MiSEalsograntsindividualauthorisationsfortheuseofnumbersandradiofrequencyspectrum.


AGCom is the Italian regulator and watchdog. It ensures theimplementationofauniversalserviceandisinvolvedindefiningtheregulatoryframework.AGComisalsodevotedtotheenforcementofintellectualpropertyrightsontheinternet.Asawatchdog,AGComisentitledtoimposesanctionsincaseofinfringementofthesector-specificregulation,andsettlesdisputesarisingbetweenoperators.TheCompetitionAuthority(“AutoritàGarantedellaConcorrenzaedel Mercato”–“AGCM”)istheItalianconsumerandcompetitionauthorityincharge,amongothers,ofsanctioninganti-competitivepracticesandunfaircommercialpractices,aswellasofcontrollingmergeroperations.


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TelecomItaliaS.p.A.,theformerincumbenttelecomoperatoralsodesignatedashavingsignificantmarketpower(“SMP”)incertainmarkets, is required to publish a standard interconnection offer(togetherwithtechnicalandeconomicfactors)inaccordancewithresolutionsissuedbyAGCom.SometransparencyrequirementsarealsoprovidedforotherSMPoperators.


Retail and wholesale price controls are only imposed on SMPoperators, irrespectiveof theserviceprovided. AGComconductsanalysisofthemarketsandcanprovidepriceandcostregulationtoSMPoperatorsforeachrelevantmarket,includingbyestablishingthecriteriaofthepricecalculation,throughad hocresolutions.


(a) Telecom Italia S.p.A. is subject to accounting separationrequirements,sinceithasbeendesignatedasanSMPoperatorin several markets. The accounting separation obligationisprovidedforbyArticle48oftheECCandAGComisincharge of imposing such an obligation on an operator bymeansofaspecificresolution.

(b) PursuanttoArticle50-bisoftheECC,AGCommayimposefunctionalseparationonoperators,onanexceptionalbasis,where it assesses that any other available remedies havefailed to achieve effective competition. In 2008,TelecomItaliaS.p.A.setupabusinessdivisionofthecompany–i.e.,“OpenAccess”–withtheaimofmanagingtheTelecomItaliafixed access network; subsequently,AGCom approved andmadebindingtheseparationbetweencorporatefunctionsinchargeononehandforthenetworkmanagementand,ontheotherhand,forthesaleofservices.

(c) Nooperatorhasbeenrequiredsofartoseparatepartoftheirownbusinessintodifferentandautonomouslegalentities.


PursuanttoArticle87oftheECC,operatorsmustobtainauthorisationfromlocalauthoritiesfortheinstallationofinfrastructureforradiocommunicationsequipment,includingpassiveinfrastructure.Tofacilitate the roll-outofhigh-speedelectroniccommunicationsnetworks, each network operator has the right to offer accessto its physical infrastructure elements of high-speed electroniccommunications networks; at the same time, where an operatorexpresslyrequestsinwritingtheinstallationofelementsofahigh-speed electronic communications networks, other operators havethe duty to allow the requesting operator to access their physicalinfrastructure.Incentives forhigh-speedbroadbandareprovided for inArticle6ofDecree-LawNo. 133/2014, and in the investment plan for the


Generalauthorisationshaveadurationof20yearsandarerenewable;theymaybe extended for a periodnot exceeding15years, uponpriorpresentationofatechnical/financialplanfromtheoperator.AccordingtotheECC,ageneralauthorisationistransferable–evenpartially – to third parties, provided that a prior communicationin this respect ismade towardsMiSEbyclearlypointingout theradio frequencies and numbers assigned. Within 60 days,MiSEmaycommunicateitsowndenial,basedonthetransferee’slackofcompliancewithitsrequirements.Asfarasindividualauthorisationisconcerned,pleaseseequestion3.6,whichdealswiththetransferofindividualrightsontheuseofradiofrequencies.



Yes. Operators may ask for to be granted the right to installtelecommunicationsinfrastructureon,overorunderpublicorprivateproperty.Tothatend,operatorsshallobtainaspecificauthorisation/concessionfromthecompetentlocalauthorityfortheuseofpublicspacesandtheexecutionofthenecessaryworks.Whenanoperatorhastherighttoinstalltelecommunicationsinfrastructure,AGComshallimpose,includingbymeansofspecificresolutions,thesharingofsuchfacilitiesorproperty,includingentriestobuildings,buildingwiring,masts,antennae,towersandothersupportingconstructions,ducts,conduits,manholesandcabinets.



InordertoensurethedeliveryandinteroperabilityoftheserviceswithintheEuropeanUnion,operatorsauthorisedfortheprovisionofpubliclyavailableelectroniccommunicationsservicesandnetworkshavetheright and, if expressly requested by other authorised operators, theobligationtonegotiateaninterconnectionagreementfortheprovisionofpubliclyavailableelectroniccommunicationsservices.In this respect, also by means of specific resolutions, AGComensures that no restrictions preventing operators to enter intointerconnectionandaccessagreementsapply.AGComisinchargeofadjudicatinganydisputesamongoperators.In more detail, pursuant to AGCom’s resolutions No. 226/15/CONSandNo.449/16/CONS,ifadisputearisesbetweenoperatorsauthorised for the provision of publicly available electroniccommunicationsservicesandnetworkswithregardtothemandatoryobligationprovidedforbytheECC,AGCom,uponrequestofoneoftheparties,issuesabindingdecisionaimedatresolvingthedisputebetweentherelevantoperatorsassoonaspossibleand,inanycase,by fourmonths. AGCom resolutions canbe appealedbefore theRegionalAdministrativeCourtofLazio,basedinRome.


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AGComis, instead, theauthority inchargeofdeterminingwhichnumbersmust refer to specific services. ThenationalnumberingplanissuedbyAGComresolutionNo.8/15/CIR(aslatermodifiedbyresolutionNo.17/17/CIR)identifiesnumbersandcodesthatmaybeusedbyoperatorsfortheprovisionofelectroniccommunicationsservices. Theplan isorganisedby services, and thefirstdigitofeachnumberdefinesthecategoryoftheserviceprovided.Theoriginalassigneeofnumbersmaysub-allocatethesamenumberstoanotherdulyauthorisedoperator.Tothisend,theassigneemustpreviouslycommunicate suchsub-allocation toMiSE, inorder toallowthelattertoverifycompliancewithAGCom’sresolutionNo.8/15/CIR.


Yes. Special rules and requirements are provided for by thenationalnumberingplanaswellasbyad hocAGComresolutions,in particular with regard to, e.g., the provision ofVoIP services,emergency numbers, toll-free services, shared cost services,premiumservices.


Fixed andmobile operatorsmust provide portability to customers.Pursuant toArticle 80of theECC,AGComensures that all users,irrespectiveoftheoperatorprovidingtheservice,areentitledtokeepnumbersbelongingtothenationalnumberingplanandthatpricingforportabilitybetweenoperatorsiscost-oriented.Bothmobileandfixednumber portability are expressly regulated byAGCom resolutions,establishing the terms of the entire portability process, includingduration,costsaswellasrolesandresponsibilitieswithintheprocess.

3 Radio Spectrum


PursuanttoArticle14oftheECC,AGComistheauthorityregulatingthespectrumuseandtheradiofrequencies’assignment,whileMiSEallocatesradiofrequenciesbasedonAGCom’sresolutions.


Article27of theECCestablishes that,whenpossible, theuseofradio frequencyspectrum isnot subject to thegrantof individualrightofuse;insuchacase,therighttouseradiofrequenciesdirectlyderivesfromthegeneralauthorisationheldbytheoperators.Sinceresourcesarescarceandefficiencyintheuseoffrequenciesis required, but spectrum using rights are granted on individualbasis, the latter are awarded towinners of public comparative orcompetitive procedures, requiring compliance with a generalobligation of transparency and objective non-discriminatorycriteria. Recently,theprocedureforthegrantingofuserightsfor5Gfrequencieshasbeencompleted.AGCom may impose limitations on the number of use rightsfor radio frequencies, in order to grant the efficient use of suchfrequencies.

developmentofhigh-speedbroadbandadoptedin2016.The2018BudgetLawpassedbytheItalianParliamentinDecember2017haslaiddown thenecessary actions to implementDecision2017/899forthe700MHzBandrepurposing.AGComandMiSEhavebeenvestedwiththepowertoadopttherelevantresolutionsfordefiningcriteriaandmodalitiesfortheimplementationofsuchprocess.



AccordingtothecombinationofArticles50and45ofECC,AGComisinchargeofimposingretailpricecontrolsontheundertakingsthathavebeendesignatedashavingSMP.AGComshallensurethatanycost recoverymechanismorpricingmethodology,whichmustbedeemedasmandatory,servestopromoteefficiencyandsustainablecompetition and to maximise consumer benefits. AGCom hasestablished, by a series of provisions, the maximum price forterminationservicessuppliedbySMPundertakings.


Yes,Italianlawprovidesrulesintendedtoguaranteecertainrightsto consumers. In this respect, the following conditions must beensured:■ Theavailabilityoftheuniversalservice:MiSEshallensure

thatelectroniccommunicationsservicesaremadeavailabletoallend-usersintheirterritory,regardlessofthegeographicallocation on national territory. AGCom shall establishthe most efficient approach for ensuring the provision ofthe above service at an affordable price, in particular inaccordancewith the principles of objectivity, transparency,non-discriminationandproportionality.

■ The right of consumers to enter into an agreement whichcontainscontractualtermsandconditions,clearlyspecifyingthetypeofservicesprovidedandalltheinformationregardingtheoperator,aswellasthewayinwhichtheseservicesareprovided.

■ The right of the consumer to obtain transparent andupdated information concerning the prices and the termsand conditions, in respect of access to and use of publiclyavailabletelephoneservices.

■ The quality of the service. Specifically, AGCom’sresolutionrequiresprovidersofpubliclyavailableelectroniccommunicationsservicestopublishadequateandup-to-dateinformationonthequalityoftheirservices.

■ The right to number portability: subscribers of publiclyavailabletelephoneserviceshavetherighttochangeoperatorwhilekeepingtheirnumbers.

Numbering


PursuanttotheECC,MiSEistheauthorityinchargeofassigningthenationalnumberingresourcesaswellasofmanagingthenationalnumberingplanofelectroniccommunicationsservices.


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of theCouncilofMinistersof17February2017,aprogrammaticdocumentaimedatimprovingthefurtherdevelopmentofnationalcyber architecture and by the recent implementation of the NISDirective (Directive 2016/1148) by means of the LegislativeDecreeof18May2018,No.65.Theseactsmainlydealwiththecybersecurityofcriticalinfrastructures.Inadditiontotheabove,severalprovisionsonsecuritymeasuresareprovidedforbytheDataProtectionCodeandtheGDPR.


Pursuant toArticle 15 of the Italian Constitution: “Freedom and confidentiality of correspondence and of every other form ofcommunication is inviolable. Limitations may only be imposed by judicial reasoned decision and in accordance with the guarantees provided for by the law.” In other words, the content of thecommunications is strictly protected by the Italian Constitution,unlessareasoneddecisioncomingfromthejudicialauthorityhasbeenissuedaswellasincompliancewiththeguaranteesexpresslyprovidedforbytheapplicablelaw.It is necessary to make a distinction between data retention andinterception.Data retentionAccordingtothecombinationofArticle132oftheDataProtectionCode and the general resolution issued by the IDPA on “Secure Retention of Telephone and Internet Traffic Data”, available athttp://garanteprivacy.it/web/guest/home/docweb/-/docweb-display/docweb/1542849(the“General Resolution”),operatorsprovidingelectronic communications services available to the public onpubliccommunicationnetworksarerequiredtokeepbothtelephoneand internet traffic data for justice-related purposes. The publicprosecutormayaccesssuchdatabymeansofareasoneddecreeincompliancewith the provisions of the ItalianCriminalProcedureCode. As expressly provided for by the Data Protection Code,trafficdatadoesnotincludethecontentofcommunications,whichcannotbetakenbytheoperators.ETNa system:theElencoTelefonicoNazionale(ETNa)isthesystemdevelopedbytheMISEwhichconsistsofaninformaticsinterface,allowing it to access end-user databases of telecommunicationoperatorsautonomously.AccordingtoSection55,paragraph7oftheEEC,eachcompanymustmakeavailabletotheDataProcessingCentre of theMiSE, for the purposes of justice andupon certainconditions,thelistsoftheirusersaccordingtotheETNasystem.In light of this, electronic communication service providers arerequested to interconnect their national databases, containingcustomer’s information, with a software application which willautomatically retrieve information upon MiSE’s request. Theframework entails a “de-centralised” database composed by alloperators’ databases. Operators will be responsible for keepingtheirdatabaseupdatedandforinterconnectittoETNa.EachtimeMiSEasksforinformation,ETNawillsendarequesttooperatorsanditwillretrievetheinformationfromthereplyingdatabase.Interception (wire-tap)PursuanttoArticle96oftheECC,anycompanyoperatingapubliccommunicationsnetworkorprovidinganelectroniccommunicationsservice is subject to interception obligations. This means thatoperatorsarerequiredtoallowthecompetentjudicialauthoritiestointerceptcommunicationswhichoriginatedorareservicedintheirnetworks,andtoacquireinformationaboutthose.Theinterceptionsincludetheacquisitionofcommunicationscontent.Pleaseseealso question4.4below.


According to the applicable law in Italy, a licence exemption ismadeonlyfortheuseoftheliberalisedfrequencieslistedinArticles105and99,paragraph5,oftheECC.Forinstance,theuseofradioLAN (WiFi) frequencies 2.4 and 5GHz for collective use is notsubjecttothegrantofanindividualrightofuse.Eveninthecaseoffreeuseoftheradiofrequencies,theotherrelevantECCprovisionsshallcontinuetobeapplicable.


Operators holding a general authorisation to install and providepublic communications networks and/or provide electroniccommunications services through the use of radio frequencyspectrumaresubjecttothepaymentofannualadministrativefees,calculated on the basis of the potential target population of theprovisionservice.Inaddition,operatorsarerequiredtopayfeesforrightsofuseonfrequenciestheyhavebeenassigned,dependingonthebandwidthextensionofthefrequencyband.


Pursuant to Article 2 of Law No. 21/2012, undertakings mustserve thePresidencyof theCouncilofMinisterswithanoticeofanymerger or transfer of ownershipwithin 10 days. The PrimeMinister,bymeansofadecreeadoptedbytheCouncilofMinisters,may exercise the veto power of the Government within 15 daysfromthenotification.Inaddition,accordingtoArticle16ofLawNo.287/1990,mergersshallbenotifiedtotheAGCM,onlyiftheconcernedundertakingspassedcertainturnoverthresholds.ChangeofcontrolimpliesthatinformationcommunicatedtotheROC(RegistryofCommunicationsOperators)alsoneedstobeupdated.


PursuanttoArticle14-teroftheECC,theundertakingcantradeona commercial basis and rent spectrum licences to other operatorsandholdersofthegeneralauthorisationorequivalentlicencefortheprovisionofnetworkthroughequivalenttechnology.The intention of an operator to transfer the rights of use of theradio frequenciesmustbenotified tobothMiSEandAGComforthe relevant approval. MiSE, after hearing from AGCom andconsulting theAntitrustAuthority,communicates,within90days,theauthorisationof the transferofrightsor thereasons justifyingtherefusal.ThesubcontractingcompanyisrequiredtonotifyMiSEwithin60daysfromtheoccurredtransferoftherights.



Cybersecurity ranks among the “hot topics” in Italy and theGovernmentisfocusedonit,asprovedbytheDecreeofthePresident


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technology – in particular, against the risk to be acquired and/oraccidentallyalteredincaseofmaintenanceoperationsperformedonITsystems,orelseinthecourseofstandardsystemadministrationoperations.Inparticular,propersolutionshavetobeputinplaceinordertoprotecttheinformation,whichislocatedinthedatabasesusedbytheITapplicationsdeployedfortheprocessinginquestion,frombeingintelligibletoanyentitythatdoesnothavetherighttoaccessand/orproperauthorisationprofiles.Tothatend,encryptionand/or obfuscation of database parts and/or indexes and/or otherencryption-basedtechnicalmeasurescanbeimplemented.OnlyincaseofareasoneddecreeissuedbythepublicprosecutorincompliancewiththeprovisionssetforthbytheItalianCriminalProcedureCodeareoperatorsrequiredtoprovidedata.


Operatorsprovidingelectroniccommunications servicesavailableto the public on public communication networks are required tokeep:■ telephonetrafficdatafor24months;and■ internettrafficdatafor12months(exceptforthecontentsof

the communications,which cannot be kept pursuant to theapplicablelaw).

However, despite the above, Article 24 of Law No. 167 of 20November 2017 introduced a general derogation from these timerestrictions, by extending to 72 months the retention period oftelephone and internet traffic data. This provision seems to bemanifestly in contrast with the ruling of the Court of Justice oftheEuropeanUnioninDigital Rights Ireland,andhascometotheattentionoftheEUinstitutions,whichmaynowstartaninfringementprocedureagainstItaly.



Thedistributionof audio-visualmedia is regulatedby theAVMSCodeandspecificAGComResolutionsonthematter.TheAVMSCodeappliestoallradioandaudio-visualmediaserviceproviders,subjecttoItalianjurisdiction.TheAVMSCodeprovidesobligationswhichapplyboth to linearandnon-linearaudio-visualmediaserviceproviderssuchas,amongothers:a) protectionofminors;b) banonthebroadcastingofcontentincitinghatredongrounds

ofrace,sex,religionornationality;c) advertisement-specificrules;andd) broadcastingandinvestmentquotastosupportEUworks.Thepublicbroadcastingserviceissubjecttoadditionalad hocrules.


Linearaudio-visualmediaservicesdistributedovertheinternetorotherplatformsaresubjecttothesamerulesaslinearaudio-visualmediaservicesbroadcastviatraditionaldistributionplatforms.


Operators must properly fulfil any request for interception orinformationbycompetentjudicialauthoritiesforanyjustice-relatedgrounds. Consequently, according to the applicable law in Italy,justice-cooperationmustbedeemedas amandatoryobligation tobefulfilledbyanyoperator.PursuanttoArticle96oftheECC,anycompanyoperatingapubliccommunicationsnetworkorprovidingan electronic communications service is subject to interceptionobligations;sofar,for instance, insuchadefinitionVoIPcallsdonotfalltout court,butonlyVoIPservicesinterconnectingwiththePSTN. The interception requirements cover traditional calls andSMS aswell as any other form of communicationwhich can bedeemedasanelectroniccommunicationsservice.Inaddition,pursuanttotheItalianCriminalProcedureCode,emailscanalsobesubjecttointerception.


Interceptionmust be ordered by a reasoned decree issued by theJudgeor,incaseofurgency,bythepublicprosecutor,incompliancewiththeprovisionssetforthbytheItalianCriminalProcedureCode.ThereasoneddecreeissuedbythepublicprosecutormustbethenvalidatedbytheJudge.AccordingtotheapplicablelawinItaly,thefollowingspecialrulesshall applywith regard to the interception of communications ofparticularindividuals:■ Article7ofLawNo.219/1989establishesthatthePresident

of the ItalianRepublicmaybe subject to interceptiononlyforthepurposesoftheinvestigationsconcerningtheoffencesset out inArticle 90 of the ItalianConstitution. In such acase, the Constitutional Court shall order the suspensionof the President of Republic from his office to permit theinterceptionofhiscommunications.

■ According to the combination ofArticle 68 of the ItalianConstitution and Law No. 140/2003, to intercept theconversations of the Italian Parliament’s members, theauthorisationoftheHousetowhichtheybelongtoisrequired.Regarding the interceptions ofMinisters’ communications,theprocedureisthesamebut,accordingtothecombinationofArticles10and5of theConstitutionalLawNo.1/1989,if the Ministers subject to investigation are members ofdifferentHousesor if theyarenotmembersofParliament,theHousewhichhastoissuetheauthorisationistheSenate.

■ According to the combination of Articles 271 and 200of the Italian Criminal Procedure Code, interceptions ofconversations or communications of persons subject toprofessional confidentiality (e.g., priests, lawyers, licensedprivate investigators, and healthcare professionals) maynot be used when they concern information protected byprofessionalconfidentiality,unlesstheyhavebeenpreviouslydisclosed.


PursuanttotheGeneralResolution,trafficdataprocessedforjustice-related purposes must be protected with the help of encryption


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Article14oftheE-CommerceDecree,whichhasimplementedinItalytheE-CommerceDirective(Directive2000/31/EC),setsforthalimitedliabilityregimeformereconduitproviders(aswellasforotherinternetserviceproviders)inconnectionwiththetransmissionof information on a communication network or the provision ofaccesstoacommunicationnetwork,providedthattheprovider:(i)doesnotinitiatethetransmission;(ii)doesnotselecttherecipientofthetransmission;and(iii)doesnotselectormodifythetransmittedinformation.Moreover,undertheE-CommerceDecreeandinaccordancewiththe E-Commerce Directive, internet service providers are boundneither by an obligation to monitor the information that theytransmit or host, nor by a general obligation to actively look forfactsorcircumstancesthatindicatethepresenceofillicitactivities.According to a trend of the Italian case law, internet serviceprovidershaveactualknowledgeoftheunlawfulnessofthecontentwhentheyareservedwithadetailednotice(e.g.,aceaseanddesistletter)fromaninterestedthirdparty;inthiscase:(a)iftheyaremereconduit providers, theymust provide PublicAuthorities with thedataallowingthemtoidentifypossibleviolationsofthethirdparty’srights;and(b)iftheyarehostingproviders,theymustremovetheunlawfulcontent(oranyhowmakeitinaccessible).


Therearenosuchgeneralobligationsformereconduitproviders.Astocaselawgoverningthismatter,pleaseseequestion6.1above.


EU Regulation 2015/2120 addressed the issue of net neutralityfor the first time by introducing some high-level rules on thismatter. Inparticular,Article3 states thatprovidersmust treatalltrafficequally,irrespectiveofthesenderandrecipient,thecontentaccessedordistributed,theapplicationsorservicesused/provided,or the terminal equipment used. Nevertheless, providers mayimplementreasonabletrafficmanagementmeasures.Anoteworthydevelopment is that, in August 2016, the BEREC – Body ofEuropeanRegulators for ElectronicCommunications – publishedtheGuidelinesontheimplementationofthenetneutralityprinciple,providingguidanceforNationalRegulatoryAuthoritiesinrelationtotheimplementationandenforcementofnetneutralityrules.

Instead, light regulation applies to non-linear audio-visualmediaservices (i.e., on-demand services). Please consider that in thisrespect,thelegalframeworkwilllikelybeamendedinthemediumtermasaconsequenceofthereformoftheAVMSDirective,whichspecificallyincludesprovisionsonvideo-sharingplatforms.


TheAVMSCodeprovides for an individual authorisation systemforlinearaudio-visualmediaservices,granted–dependingontheplatformandinaccordancewithregulationssetforthbytherelevantAGComresolutions–byMiSE(fordigitalterrestrialtelevisionandcoaxialcable)orAGCom(forsatellite,IPTV,mobile,internetandotherplatforms).AGCom is the competent authority for compliance monitoring,regardlessoftheplatform.Specificrulesandobligationsareprovideddependingonthetypeoflicence;however,similarobligationsaresetforthwithreferenceto:a) enrolmentwiththeROC;andb) compliance with rules provided by theAVMS Code (e.g.,

minors protection, broadcasting and investment quotas,advertisinglimits,productplacement,etc.).

Ageneralauthorisationregimeappliestoon-demandaudio-visualmediaservices;theprovidersmustsubmitanotificationtoAGCom.No authorisation is required for: (i) catch-upTV, i.e., non-linearservices with catalogues consisting exclusively of programspreviously broadcast in linear mode, to the extent that thebroadcaster’slinearservicehasbeenalreadyauthorised;and(ii)on-demand services and linear services on other platforms (differentfrom digital terrestrial television, satellite and coaxial cable) ofwhichtheannualrevenuesarelowerthanEUR100,000.ThepublicbroadcastingserviceproviderisRAI(Radiotelevisione Italiana S.p.a.), which has been granted a 10-year concession tobroadcastonallplatformsbyDecreeofthePresidentoftheCouncilofMinistersof28April2017.


Licencescanbe transferred toa thirdparty if the lattermeets therequirements provided by the AGCom’s resolution governingthe licence. The new licenseemust communicate the transfer ofthe licence to the competent authority (i.e., AGCom or MiSE,depending on the kind of licence), which either authorises theassignmentorcommunicatesitsowndenial,basedontheassignee’slackofcompliancewithrequirementsprovidedbythelaw(e.g.,ifthe assignee is based in a non-EU countrywhich does not applyreciprocity, i.e., where an Italian company could not hold anequivalentlicence).Inaddition,anychangeofcontrolofthelicenseeandanyassignmentoflicencemustbenotifiedtoAGCom.AGCom,beforeauthorisingthedeal,assesseswhetherthetransfermayleadtothecreationofadominant position on the relevantmarket,which could adverselyaffectpluralism.


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Ernesto ApaPortolano CavalloVia Rasella 155 00187 RomeItaly

Tel: +39 06 696 661Email: [email protected]: www.portolano.it

Eleonora CurreliPortolano CavalloPiazza Borromeo 12 20123 MilanItaly

Tel: +39 02 722 341Email: [email protected]: www.portolano.it

Ernesto is ranked by The Legal 500 as a leading individual in TMT and by Chambers Europe in Band 1, by Who’s Who Legal, Top Legal and Guide to the World’s Leading Technology, Media & Telecommunications Lawyers.

Ernesto is partner of Portolano Cavallo. He advises domestic and international clients on regulatory and contractual aspects within the digital/media and telecommunication sector. He also has extensive experience on the regulatory aspects of M&A transactions in the media/technology sector.

Ernesto is the author of a treatise on advertising, of the entry “Television” for legal encyclopedia “Diritto OnLine”, as well as many articles on media and constitutional law.

He co-edited the first “Code of digital communications – Internet, TV, Advertising, Privacy” and “The regulation of digital content” and “Rights and Liberties on the Internet”. He also authored “Modelling the liability of internet service providers. Google vs. Vivi down. A constitutional perspective”.

Ernesto is Adjunct Professor of Digital Media and Regulation of the LL.M. in Law of Internet Technology of Bocconi University.

He is a member of the Film Review Commission of the Ministry of Culture.

Portolano Cavallo provides legal advice to companies operating in complex and evolving sectors: it is a leader in the Digital, Media and Technology sectors, in addition to being recognised in the Life Sciences and Fashion/Luxury fields.

The firm’s practice areas range from litigation to M&A and venture capital, from emerging companies to the exploitation and protection of all forms of intellectual property, from employment to data protection, privacy and cybersecurity issues and from technology transactions to antitrust and regulatory issues.

In all these areas, Portolano Cavallo is recognised by multiple legal Italian and international rankings and awards.

Eleonora joined Portolano Cavallo in 2015, first as an intern, and later in the year, upon being awarded a Law degree by Bocconi University, as an attorney-at-law.

Her areas of expertise are telecommunications, media, privacy, fintech and advertising law, as well as consumer protection laws applied to e-commerce and new technologies. Eleonora counsels Italian and foreign clients operating in a variety of business sectors.

In the summer of 2014, she successfully completed a Campus Abroad course held at Beijing’s Tsinghua University. In 2016, she attended the Columbia Summer Program in American Law at Leiden University (NL).

Following the introduction of such net neutrality rules and inaccordance with the BEREC Guidelines, AGCom carried outmonitoring and enforcement activities aimed at ensuring thecompliance of Italian providers with the net neutrality rulesprovided inEURegulation2015/2120. Amongtothers, inMarch2017, AGCom issued the first decision against a provider fornon-compliance withArticle 3 of EU Regulation 2015/2120 (inparticular, the decision concerned discrimination of zero-ratedtrafficcomparedto“normal”traffic).


Therearenogeneralobligations in this respectunder Italian law,andnospecificrulesgovernconsumerVPNservices.

However,withspecificreferencetoonlinecopyrightinfringements,AGComissuedaregulation“[…] on the protection of copyright on electronic communications networks”,accordingtowhichAGCommay order internet service providers to remove online copyright-infringingcontent. Mereconduitproviders, inparticular,maybeordered to block the websites hosted on servers located outsideItalianterritory.In addition to the above, Italian law provides formechanisms toblock access to non-authorised gaming websites. In particular,accessprovidersmustblocknon-authorisedgamingwebsites thatareinsertedintheblacklistkeptbytheItalianAgencyofCustomsandMonopolies.Similar mechanisms are provided in relation to websites hostingchildabuse-relatedcontent.


Chapter 20

the regulation of telecommunications (tsushin) and broadcasting(housou) is that theconfidentialityof telecommunicationscontentisprotected;thus,theregulationoftelecommunicationscontentisavoided asmuch as possible. In contrast, broadcasting (housou)contentisregulatedinaccordancewithpublicwelfare.

Wire Wireless

Basic LawCableTelecommunicationsLaw

RadioWaveLaw

Telecommunications

TelecommunicationBusinessLaw(the“TBL”)LawconcerningNipponTelegraphandTelephoneCorporation(NihonDenshinDenwaK.K.)(“NTT”)(the“NTTLaw”)andothers

Broadcasting BroadcastLaw

Asnotedabove,theTBLappliesonlytotelecommunications,andtheBroadcastLawappliesonlytobroadcasting.TheTBLprimarilyregulates theprovisionofelectroniccommunicationsnetworksorservicesregardingtelecommunications(tsushin).TheTBLpermitscompetition in Japan, although several other laws restrict foreignownership.


MIAC and the relevant subordinated administrative agenciesregulate telecoms audio-visual media distribution through thebroadcastingandinternetsectors.Seealsoquestion2.3.


UndertheTBL,therearenorestrictionsondirectorindirectforeignownership;however,undertheNTTLaw,directorindirectforeignownershipof one-third ormoreofNTT is prohibited. There aregeneral foreign ownership restrictions on holding a radio stationlicence, although the restrictions on a radio station providingtelecommunicationsserviceswereabolished.UndertheBroadcastLaw,thefollowingentitiesorpartiesarebasicallynoteligibletoholdabroadcasterlicence:(a)apersonwhosenationalityisnotJapanese;(b)aforeigngovernmentoritsrepresentative;(c)aforeignentity;

1 Overview


According to the report of the results of the research issued bythe Ministry of Internal Affairs and Communications (Soumu Shou) (“MIAC”) in March 2017, the businesses relating totelecommunications and information, which include, amongothers, the telecoms and internet infrastructure sectors, generatedapproximately¥14,034billionof annual sales forFY2015. Theannual sales generated by the broadcasting business, whichincludes, among others, audio-visual media distribution throughbroadcasting,wereapproximately¥3,458billionforFY2015.There are several prominent operators in the various businessesrelating to telecommunicationsand information,suchas thegroupcompaniesofNTT(NihonDenshinDenwaK.K.),especiallyNTTEast Corporation (“NTT East”), NTT West Corporation (“NTTWest”) and NTT Docomo Corporation (“NTT Docomo”), KDDICorporationandSoftbankCorp.Intheareaofbroadcasting,severalmajorcompanies,suchasNipponTelevisionNetworkCorporationand Fuji TelevisionNetwork Inc., provide television programmesthrough terrestrial-based television broadcasting. Nihon HousouKyoukai,whichisuniqueinitsstatusasanationalpublicbroadcastingentity,isalsooneofthemajorprovidersoftelevisionprogrammes.Theprincipalmajorplayersintheareasofsatellite-basedtelevisionbroadcasting and cable TV broadcasting are Skyperfect JSATCorporationandJupiterTelecommunicationsCo.,Ltd.Regulatorymattersonliberalisationandforeigninvestmentswillbediscussedunderquestions1.2and1.4.


Unlike other countries, Japan has traditionally treated thetelecommunications business as two distinct categories froma regulatory point of view: telecommunications (tsushin); andbroadcasting(housou).Tsushinisdefinedassending,deliveringorreceivingcodes,soundsorpicturesbywire,wirelessmeansoranyotherelectromagneticmeans,which includes internet. Housou is generallydefinedassendingtelecommunicationsforthepurposeofbeingdirectlyreceivedbythepublic.Themajordifferencebetween

Mori Hamada & Matsumoto

Hiromi Hayashi

Akira Marumo

Japan


Japa

n

Mori Hamada & Matsumoto Japan

Theregistrationproceduretypicallytakesabout15days,dependingontheservicestobeprovidedandthecircumstancesunderwhichtheywill be provided. It is desirable also to unofficially consultwithMIAC (usually for an additional one to twomonths) beforefilinganapplicationforregistration.Ifonlynoticeisrequired,theprior unofficial consultationwithMIAC, if necessary,will take afewdaysifalltherelevantinformationisprovided.UndertheTBL,thefeeforregistrationwithMIACis¥150,000,butnofeeisnecessaryfornotificationtoMIAC.The TBL further requires other authorisations, which willbe explained in question 2.6; this question will also explainauthorisationsregardingbroadcasting.


(1) Telecommunications (tsushin) (see also question 2.5)(a) Approved carrier (nintei jigyousha) A carrier intending to conduct telecoms business by

installing telecommunications circuit facilities, andthose which intend to exercise a right-of-way to installtransmissionlines(suchconductorexerciseis,collectively,a“publicutilityprivilege”),may,separatelyfromtelecomsbusiness entryprocedures suchas registrationornotice,begrantedapublicutilityprivilege forallorpartof itstelecomsbusinessbyobtainingMIACapproval.

(b) Universal service carrier Any telecoms carrier which provides universal

telecommunications services (“Universal Services”)mustestablishtariffsandsubmitthesetoMIACpriortoimplementationoftheservices(seequestion2.16).TheTBLdefinesUniversalServices as telecommunicationsservices, the availability of which should be securedalloverJapanbecausetheyareessentialtothelivesofthepeople in Japan. Under aTBLordinance, servicesforpublic calls,home telephonecalls, andurgent callsto police or fire stations are included in UniversalServices. Universal Services are funded byNTTEastandNTTWestandotherserviceprovidersthatbenefitbyconnectingtothefacilitiesoftheseproviders.

(c) A carrier installing telecoms facilities With a few exceptions, any telecoms carrier installing

telecomsfacilitiesforusebyitstelecomsbusiness(certaintelecomsfacilitiesasstipulatedinArticle41oftheTBL)mustsubmitnoticestoMIACregardingitscompliancewithtechnicalandadministrationrulesandtheappointmentofa chief telecommunications engineer. See question 2.9forfurtherinformationregardingspecialregulationsforacarrierinstallingTypeIorTypeIIDesignatedFacilities.

(d) A carrier providing international services Any telecoms carrier which provides international

telecomsservicesisrequiredtoobtainpriorauthorisationfrom MIAC before making any arrangements with aforeigngovernment,entityorindividualwithrespecttoanytelecomsbusiness.

(2) Broadcasting (housou) Regulationofthetelevisionbroadcastingbusinessprimarily

consistsof(i)theBroadcastLaw(Housou Hou),and(ii)theRadioWaveLaw(Denpa Hou).(a) Broadcast Law TheBroadcastLawsetsforthgeneralprinciplestoregulate

broadcast content (i.e., TV programmes). For example,broadcasters, including (a) terrestrial-based televisionbroadcasters, (b) satellite-based television broadcasters,and(c)cableTVbroadcasters,mustnotharmpublicpeace

and (d) a companyor entity inwhich any of the aforementionedentities or persons is the executive director, or holds one-fifth ormoreofthevotingrights.

2 Telecoms

General


Yes,JapanhasbeenamemberoftheWorldTradeOrganisationsinceJanuary1,1995. Itadopted theWTOBasicTelecommunicationsAgreementin1997andthetelecomsreferencepaper.


TelecommunicationsnetworksorservicesaremainlyregulatedbytheTBL.Seealsoquestions1.2and2.6.


MIACis thegovernmentalbody thathas the regulatoryauthorityunder the TBL and other relevant laws to grant any permission,licenceorapprovalthatisrequiredforanytelecomsactivity.Thecompetitionlawauthorityis theFairTradeCommission(“FTC”),an independent administrative agency with the authority topreventunfairtradeormarketdominance.MIACandFTCjointlyissued the “guidelines for the promotion of competition in thetelecommunicationsbusinessfield”(originallyissuedinNovember2001,withthelatestrevisionbeingissuedinMay2016),andtheycollaboratetopromotefurthercompetitioninthetelecomsfield.


Yes,MIACdecisionsmaybeappealedtoJapanesecourtspursuanttotheAdministrativeCaseLitigationAct.Theappellantmayseek,forexample,therevocationofanMIACorderonthebasisthattheorderhaswrongfullyaffectedtheappellant’slegalinterest.



Itisdifficulttoclassifytheauthorisationsintogeneralauthorisationsandindividualauthorisations.Asfortelecommunicationsservices,theTBLgenerallyclassifiesatelecommunicationscarrieraseither(i)aregistrationcarrier,or(ii)anotificationcarrier,asfollows:Acarrierinstallingcablefacilities,suchas(i)terminalfacilitiesthatareinstalledinmultiplemunicipalities,or(ii)relayfacilitiesthatareinstalledinmultipleprefectures,isrequiredtoregisterwithMIAC.OthercarriersnotoperatingatsuchlevelsarerequiredonlytonotifyMIACpriortoprovidingtelecomsservices.


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Generally, a telecoms carrier installing telecoms facilities mustinterconnectitsfacilitieswithothertelecomscarriersifsorequestedbyothercarriersand there isno justifiable reasonunder theTBLto reject the request. A carrier providing Universal Services isrequired tosubmit forMIAC’sapproval the termsandconditions(includingtariffs)ofitsservices;itmustprovidetelecomsservicesinaccordancewithsuchtermsandconditions(seequestion2.14).AsNTTgroupcompanies(pleaseseequestion1.1)havelarge-scalefacilities(e.g.,cablesdirecttousers’homes),suchfacilitiescouldpotentiallypreventothercarriers fromprovidingservices. UndertheTBL, theNTT group companies’ facilities are categorised asType I or Type II designated facilities (“Designated Facilities”).Like other telecoms carriers holding Designated Facilities, NTTgroup companies are required to submit toMIAC, andgenerally,as in the case of a carrier installingType IDesignatedFacilities,theymust also obtainMIAC’s approval regarding the terms andconditions(includingtariffs)ofinterconnectionwithothercarriers,interconnecttheirtelecomsfacilitiesinaccordancewithsuchtermsandconditions,andprovideservicestoothercarriersequally(seequestion2.14).Thechartbelowdescribeshowdisputesareresolved.

Mediation Reconciliation Consultation Order Award

Object 1.Interconnectionoftelecomsfacilities

2.Shareduseoftelecomsfacilities

3.Provisionofwholesaletelecomsservices

4.Installation/maintenanceoftelecomsfacilitiesforinterconnection

5.Utilisationoflandandworksforinterconnection

6.Provisionofinformationforinterconnection

7.Entrustmentofwork8.Utilisationoffacilitiesforprovisionofservices

9.Operationoffacilitiesforprovisionofservices

10.Utilisationoroperationofradiowavefacilitiesoper-atedbynon-licensedparty

1.Interconnectionoftelecomsfacilities

2.Shareduseoftelecomsfacilities

3.Provisionofwholesaletelecomsservices

Acting Party

Eitherconsult-ationparty

Bothconsultationparties

Eitherconsultationparty

Neutral Party

TBDSCMediator

TBDSCArbitrators(3)

Minister(referringtoTBDSCfordeliberation)

Major Proced-ures

1.Interview2.Mediationoffer

1.Reply2.Hearing3.Factsinvestigation

4.Settlementoffer

5.Judicialdecision

1.Hearing2.Order

1.Reply2.Award

andmust take a neutral political position (Article 4). Abroadcasterisrequiredtodrawupstandardsforitstelevisionprogrammes and produce programmes that satisfy suchstandards (Article 5). Under the Broadcast Law, anypersonorentityplanningtobeaterrestrial-basedtelevisionbroadcaster or a satellite-based television broadcaster(kikan-housou-jigyousha)isgenerallyrequiredtoobtainanauthorisation fromMIAC. Further, anypersonor entityplanningtobeothertypesofbroadcasters,includingacableTVbroadcaster(ippan-housou-jigyousha),isrequiredtoberegisteredwithMIAC.

(b) Radio Wave Law TheRadioWaveLawregulates theuseof radiowaves

and thus may apply to both telecommunications andbroadcastingusingradiowaves.UndertheRadioWaveLaw,anypersonorentityplanning toestablisha radiostationisrequiredtoobtainalicencefromMIAC,exceptforcasesinvolvingcertainspecialisedradiostations.

Inordertoobtainaradiostationlicence,anapplicantmustsubmittoMIACastandardapplicationformcontaininginformationsuchas (i) thepurposeof the radio station, (ii) its facilities’ locations,and(iii)thetypeandfrequencyofradiowavestobeused.Iftheradio stationplans to providebroadcasting services, certainotherinformation,suchasabusinessplan,itemsforbroadcastingandtheareaforbroadcasting,mustalsobeprovided.MIAC’s review of the application will include consideration oftheexistenceofanadequatefinancialbasistooperatetheplannedbusiness and conformity with standards provided in the relevantMIACministerialordinance.NotethatMIACwillallocateavailableradiofrequency(see“FrequencyPlan”describedinquestion3.2);thus, approval of a radio station licence will be subject to suchplanning,andinthecaseoftheradiostationprovidingbroadcastingservices,broadcastcontentandbroadcastarearequirements.


Ingeneral,licencesmaynotbetransferredortraded,butexceptionsexist depending on the type of licence. A telecoms carrier’sregistration, for example, may be transferred to a third party ifits entire telecoms business is transferred (including by merger(gappei) or corporate split (kaisha bunkatsu), inwhich that thirdpartysucceedstotheentiretelecomsbusiness).OnMay22,2015,theTBLwasrevised(the“RevisedTBL”),andthe revisions took effect on May 21, 2016. Under the RevisedTBL,ifatelecomscarrierinstallingTypeIorTypeIIDesignatedFacilitiesplansamerger,acorporatesplitorabusinesstransfer,itmustapplyforarenewalofitsregistration,withcertainexceptions.Thedurationofalicencedependsuponitstypeorkind.Inthecaseofnoticeandregistrationfora telecomscarrier, thereisnostatedlicenceduration.Inthecaseofaradiostationlicence,thedurationisfiveyears,withcertainexceptions.



Yes,asstatedinquestion2.6,withMIACapproval,anapprovedcarrier(nintei jigyousha)mayhavecertainrightstouselandundertheTBL.


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(a) Asstatedinquestion2.9,chargesforUniversalServicesandinterconnection for a carrier installing Type I DesignatedFacilitiesaregenerallysubjecttoMIACapproval.

(b) Interconnection charges for a carrier installing Type IIDesignatedFacilitiesrequirenoticetoMIAC.

(c) MIAC may, under certain circumstances under the TBL,change the charges under items (a) and (b) above (seequestion2.14).

Charges forwholesale lease lines are not subject to price or costregulation,andprovidersmaydecidepricesattheirowndiscretion.Ifproviderscannotreachanagreementinordertoprovideservicesby usingwholesale lease lines, pursuant to theTBL,MIACmaygrantanaward.


UndertheTBL,theseparationofaccounting,functionalandlegaldutiesisnotexplicitlyrequired,butthefollowingrequirementsdoexist:■ TelecomscarriersprovidingUniversalServices andcertain

otherservices,andinstallingTypeIDesignatedFacilitiesandTypeIIDesignatedFacilities,arerequiredtoorganise theiraccounting pursuant to the relevant law (Article 24 of theTBL).

■ Telecomscarriers installingType I andType IIDesignatedFacilitiesarerequiredtodisclosetheiraccountingdocuments(e.g., balance sheets and profit and loss statements) to thepublic(Article30-6oftheTBL).

■ Telecomscarriers installingType I andType IIDesignatedFacilitiesmaynot,amongotherthings,(i)useanyinformationthattheyobtainfromaninterconnectionwithothertelecomscarriers for purposes other than interconnection, and (ii)prioritise certain telecoms carriers without good reason(Articles30-3and30-4oftheTBL).

■ Officersanddirectorsofa telecomcarrier installingTypeIDesignatedFacilitiesmaynotserveasofficersordirectorsofitsaffiliates(Article31-1oftheTBL).

In addition, NTT East and NTTWest may not operate telecomsbusinesses across certain prefectural boundaries, such as long-distance telecoms business, pursuant to the NTT Law. Further,consolidationbetweentelecomscarriersisregulatedundertheAnti-monopolyLaw.


Generally, a telecoms carrier installing telecoms facilities mustinterconnectitsfacilitieswithothertelecomscarriersifsorequestedbyothercarriersandthereisnojustifiablereasonundertheTBLtorejecttherequest.Ifthecopper/fibrenetworksorotherinfrastructureare Designated Facilities, a telecom carrier holding DesignatedFacilitiesisrequiredtosubmittoMIAC,andgenerallyasinthecaseofacarrierinstallingTypeIDesignatedFacilities,itmustalsoobtainMIAC’s approval regarding the terms and conditions (includingtariffs) of interconnection with other carriers, interconnect theirtelecomsfacilitiesinaccordancewithsuchtermsandconditions,andprovideservicestoothercarriersequally(seequestion2.9).

Mediation Reconciliation Consultation Order Award

Options to Challenge Proce-dural Result

Refusalto accept proposed mediation

None 1.Lodgingopposition (onlyforapartywhowasnotifiedbyanoticeposted on the notice board ofahearingand did not appear)2.Lawsuitto seek revocation(w/nsixmos.)

1.Civilaction to increase or decrease monetaryaward (w/nsixmos.)2.Lodgingopposition (exceptfortheabove)3.Lawsuitto seek revocation(w/nsixmos.)

(Source:MIAC,Fair Settlement of Disputes in the IT Era(8thed.,Nov.2008),Ch.1.)(a) MIAC Order MIAC may, under certain circumstances stipulated by the

TBL,orderatelecomscarrierinstallingtelecomsfacilitiestostartorreopennegotiations(ifsuspended)withanothercarrierregardinganagreementtointerconnecttheformer’stelecomsfacilities,iftheformerrefusestoenterintosuchanagreement.

(b) MIAC Award In the event carriers negotiating the interconnection of

telecoms facilities fail to agree on such items asmonetarypayments,acarrier(orcarriers)mayapplytoMIACforanaward(saitei)undertheTBL.Likewise,ifanMIACorderhasalreadybeenissued,therelevantcarrier(orcarriers)mayapply toMIAC for an award. IfMIAC grants an award,thepartiesaredeemedtohavecometoanagreement.Anycarrierdissatisfiedwiththefinancialconditionsofanawardmayseekanincreaseordecreasebyfilingalawsuitwithinsixmonthsofthedayonwhichthatcarrierisnotifiedoftheawardresult.

(c) Mediation (assen) and Reconciliation (chusai) by Commission

A carrier may choose to apply to the MIAC-run Tele-communications Business Dispute Settlement Commission(the“TBDSC”)formediationorreconciliationintheabovecases, but a carrier may not proceed with both an MIACawardandamediationorreconciliationatthesametime.


Operators providing Universal Services and services provided byTypeIDesignatedFacilitiesarerequiredtopubliclydisclosetariffswhichsetforthfeesandothertermsandconditions,andpostthemattheiroffices. Further,operatorsprovidingservicesusingTypeIDesignatedFacilitiesandTypeIIDesignatedFacilitiesarerequiredtopubliclydisclosethetariffswhichsetforthinterconnectioncharges.


Chargesforinterconnectionaregenerallydeterminedbythecarrierwhichprovidestheconnection,withsomeexceptions,suchasthefollowing:


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content of telecoms services by the number under the NumberRegulation. If a telecomsbusinessprovider fails to complywiththe Number Regulation, MIAC may invalidate the allocation ofnumbers.Inaddition,ifMIACchangestheNumberingPlan,MIACmaychangetheallocatednumbers.


Numberportabilityformobiletelephonesstartedin2006,withtheissuanceoftheRuleforNumbersforTelecommunications,whichsetsforththeobligationrequiringnumberportability.

3 Radio Spectrum


The Radio Wave Law gives MIAC the authority to allocatefrequency spectrum to private telecommunications operators forthe establishment of radio transmission stations. Unlike otherjurisdictions,whichallot frequencyspectrums throughanauctionsystem,theuseofradiofrequencyspectruminJapanisallocatedatthediscretionofMIACafterconsultationwiththeRadioRegulatoryCouncilandconsiderationoftheplanssubmittedbytheoperators.InMarch2011,theMIACestablisheda“PanelregardingSpectrumAuction” to consider the implementation of a spectrum auctionsystem.InDecember2011,thispanelreleasedareportsupportinganauctionsystemfor4Gmobile telecommunications. Followingthepublicationofthisreport,abilltoamendtheRadioWaveLawtointroduceanauctionsystemwassubmittedtotheDietin2011.However,duetotheshiftofpoliticalpowerinJapanin2012,theDietwas dissolvedwhile deliberations on the billwere ongoing.ThebillwasnotpassedandhasnotbeendiscussedbytheDietsince2012.InJanuary2013,MIACannouncedthatitdoesnothaveanyimmediateplanstorequesttheDiettoamendtheRadioWaveLawtoimplementanauctionsystem.


MIACgenerallyimplementstheFrequencyPlanbyconsideringthebusinessplanssubmittedbytelecomscarriers.


Yes.Certaintypesofradiostationsthatdischargeweakradiowaves(as designatedby the enforcement rule of theRadioWaveLaw),suchasphonehandsetsforhomeuseandwirelesscardsystems,areexemptfromlicensingundertheRadioWaveLaw.


Fees for applications for a licence to establish radio stationsundertheRadioWaveLawvaryfromlessthan¥10,000toaround¥150,000, depending on the power of the radio station emission.Thereisaregistrationfeeof¥30,000perstationgenerally,buttheregistration fee for a broadcasting station is ¥150,000. Further,



Providers of telecoms businesses, including fixed and mobileservicesthatareeitherregisteredwith,orhavesubmittednotificationto,MIACundertheTBLarenotrequiredtosubmitatarifforpricechart unless they provide Universal Services (see question 2.6)or haveDesignated Facilities (see question 2.9). Such providersmay decide the prices for their services at their own discretion.However, MIAC has the authority to order providers to corrector improve their business if, amongother things, fees or chargesarenotcalculatedfairlyandclearlyorservicesareprovidedinaninappropriatemanner,ineithercase,totheextentthattheyimpedeconsumers’benefits.Providers of Universal Services or those having DesignatedFacilitiesarerequiredtosubmittheirtariffstoMIACandtoprovidetheir services in accordance with such tariffs. MIAC has theauthoritytoorderproviderstocorrectoramendthetariffsif,amongotherthings,thetariffsfailtosetforthamethodforcalculatingfeesorchargesfairlyandclearly.


As described above, the TBL regulates the provision of electroniccommunications services. The TBL’s principal aim is to secureconsumer benefit by ensuring fair provision of services, especiallywithrespecttofundamentalpublicservices.Inthisregard,theTBLrequiresprovidersto:(i)givepriornoticetoconsumersifservicesaretobesuspendedordiscontinued;(ii)explaintheirtermsandconditionstoconsumers;and(iii)processcomplaintsandinquiriesfromconsumersproperlyandpromptly.Further,undertheRevisedTBL,inordertoprotect consumer interest, providers are required to deliver writtenmaterialtoconsumerswhoenterintoagreementswiththoseprovidersregardingtheservicesdesignatedbyMIAC.Inaddition,MIAChaspublishedguidelinesfortheprotectionofconsumers.AsforUniversalServices,pleaseseequestions2.6and2.14.

Numbering


Telephone numbers, including mobile telephone numbers, andthenetworkidentifyingcodesareallocatedbyMIACfollowingasuccessfulapplicationby the relevant telecomsbusinessprovider.Telecoms business providers are required to file an applicationidentifyingthenecessityfortelephonenumbersandotheritems.


MIACmustmaintainaTelecomsNumberingPlan(the“NumberingPlan”)inaccordancewiththeTBLandtheregulationregardingthetelecomsnumber(the“NumberRegulation”).Atelecomsbusinessprovider is required touse thenumbersonly for theprovisionoftelecoms business, treat users equally, and identify the type or


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AsthesecrecyoftelecommunicationsisprotectedundertheTBL,access to private communications is generally prohibited. TheMIACguidelinesregardingtheprotectionofpersonalinformation(thelatestrevisionwasissuedinApril2017)intelecomsbusinessesstatethattelecomscarriersmaynotprovidepersonalinformationtothirdpartieswithoutthepriorconsentoftheownerofthepersonalinformation.However,telecomscarriersmayprovidetherequestedinformationwithouttherequiredconsentif,amongothers,nationalormunicipalgovernmentsor authoritiesneed the information forthedueperformanceoftheirdutiespursuanttoapplicablelaws,andpriorconsentwillharmthatdueperformance.


Telecoms carriers are not required to maintain call interception(wire-tap)capabilities.


Iftheauthoritiesseekcallinterception,theyarerequiredtofollowtheproceduresset forth in theCriminalProcedureLawandotherrelevant laws. Qualified prosecutors and policemen may haveaccess to information pursuant to a court-issued warrant, whichshouldspecify,amongotherthings,thesuspect’sname,asummaryofthesuspectedcrime,whichcalltointercept,howandwhereaninterception is planned, the planned period for carrying out theinterception,andotherconditionsforinterception.Theinterceptionispermittedonlyregardingcertainsignificantcrimes,andtheperiodof the interception termmay not exceed 10 days, unless a courtextendstheterm,butonlyupto30days.


The “Standard for Security and Reliability of the InformationNetwork”issuedbyMIACsetsforthcertainrulestomaintainthesecurednetwork,whichincludetheobligationtouseencryptionforconfidential telecommunications. Telecoms carriers are generallynotrequiredtoprovideencryptionkeystothestate.


AstheconfidentialityoftelecommunicationsisprotectedundertheTBL,retentionoftelecommunicationsdataisgenerallyprohibited.The MIAC guidelines regarding the protection of personalinformationintelecomsbusinessesstatethattelecomscarriersareallowedtoobtaincertainlimitedpersonalinformationonlywhere

annual fees for usage of frequency spectrumvary from less than¥1,000toover¥100,000,000,dependingonthetypeofradiostation(suchasmobiles,satellitesorothers),thepoweroftheradiostationemissionandtheareaoftheradiostation.


Any person who intends to establish radio transmission stationstobeused for allocated spectrummustfirst obtain a licence fromMIAC.Incaseofalicenceforradiotransmissionstationsprovidingtelecommunicationsservices,achangeofcontrolofthelicenseeisnotacausetorescindthelicenceortorequireanotificationtoMIAC.


UndertheRadioWaveLaw,aspectrumlicencegenerallymaynotbe assigned, traded or sub-licensed; however, itmay be assignedinconjunctionwithaninheritance,amerger(gappei),acorporatesplit(kaisha bunkatsu),orabusinesstransferuponMIACapproval.



One of the basic principles, if not the most important principle,of the TBL is the secrecy of communications. The secrecy ofcommunicationsprotectsnotonlythecontentsofcommunicationsbut also any information thatwould enable someone to infer themeaning or the contents of communications. In this regard,access log and IP address data are protected under the secrecyof communications. TheTBLdoes not explicitly provide how atelecomscarriermaydealwithcyber-attackswithoutbreachingthesecrecyofcommunications. However,inlinewiththesignificantincreaseinmalwareandotherformsofcyberattack,MIACissuedthe“FirstReportfromtheStudyGrouponProperlyDealingwithTelecommunications Business Cyber-attacks” in April 2014, the“Second Report from Study Group for Properly Dealing withTelecommunications Business Cyber-attacks” in September 2015andthe“ThirdReportfromStudyGroupforProperlyDealingwithTelecommunicationsBusinessCyber-attacks” inSeptember2018.Allreportsaddresswhetheratelecomscarriermaydealwithcyber-attacksandtheissuesthatmayariseinconnectionwiththesecrecyofcommunications.ThefindingsoftheFirstandSecondReportsare included in the guidelines dealingwith cyber-attacks and thesecrecyofcommunicationsissuedbytheCouncilfortheStableUseoftheInternet,acouncilcomposedoffiveassociations,includingtheJapanInternetProvidersAssociation(“JAIPA”).IthasnotbeendeterminedwhetherandwhentheguidelineswillberevisedbasedontheThirdReport.Further,MIAC established,with internet service providers, cableTV service providers, software security service vendors, andothercompanies,theAdvancedCyberThreatsresponseInitiatiVE(“ACTIVE”) to assist internet users with preventing malwareinfectionandtoenhancecybersecurity.


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Incontrast,providersofcontentdeliveredovertheinternetwithoutany hardware such as a set-top box (e.g., over-the-top serviceproviders) are generally not regulated by theBroadcast Law andtheTBL.


Seequestion2.6.


Under theTBL, the status of a registration carrier or notificationcarrierisnotassignable,exceptinconjunctionwithaninheritance,amerger(gappei),oracorporatesplit(kaisha bunkatsu)inwhichallofthetelecomsbusinessistransferredtoanotherentity.Seealsoquestions2.7and3.6.



Internet service providers (“ISPs”) may have immunity againstcertainliabilitiesunlesscertainconditionssetforthundertherelevantlawaremet.AnISPmaynotenjoyimmunityforinfringementupona third party’s information if: (i) the ISPwas technically able topreventthedispatchofthatinformation,andtheISPkneworshouldreasonably have known of the infringement; or (ii) the ISP itselfdispatchedtheinformation.


ApartywhoserightisinfringedbyinformationontheinternetmayaskISPstodisclosethename,addressandotherinformationoftheinfringingpartyif(i)theinfringementisapparent,and(ii)pursuantto relevant law, the infringed party has a good reason for suchdisclosure.Further,JAIPAissuedguidelinesregardingrequestsforthedeletionof informationwith respect to infringement. If ISPsdonotrespondtosuchrequests,theymaylosetheirimmunity(seequestion6.1).


MIACreleasedareportregardingnetworkneutralityinSeptember2007 (the “Net Neutrality Report”). The Net Neutrality Reportidentifiedtwoissuesascriticaltonetworkneutrality–fairallocationof network development costs and fair access to the network by

such information is necessary to provide the services; however,the retaining or recording of telecommunications content is notallowed. Recordingof thedate and timeof telecommunications,whichdoesnotincluderecordingofthecontent,isallowedtotheextentthatitisnecessaryfortelecomscarriers’operations,suchasbilling.Accordingtotheguidelines,atelecomscarriermay,butisnotrequiredto,retainsuchinformationforaperiodnecessaryforthepurpose(suchasbilling),andmustdeletesuchinformationaftersuchperiod.



Audio-visual content is distributed through (a) terrestrial-basedtelevisionbroadcasting,(b)satellite-basedtelevisionbroadcasting,(c)cableTVbroadcasting,(d)gamesoftware,(e)moviecontent,(f)videocontent,and(g)internetcontent(originalvideo-basednetcontent).Audio-visualcontentisprotectedundertheCopyrightLaw.Inthisregard, inorder tomanage thecopyrightsofaudio-visual contentappropriately,theAudiovisualRightsManagementAssociationwasestablishedinJune2011.Thedistributionbywayofbroadcastingofaudio-visualmedia,suchas (a) terrestrial-based television broadcasting, (b) satellite-basedtelevisionbroadcasting, and (c) cableTVbroadcasting, ismainlyregulatedbytheBroadcastLaw.Seealsoquestions1.2and2.6.ThedistributionbywayofinternetismainlyregulatedbytheTBL.


Terrestrial-basedtelevisionbroadcastingbusinesseswhichprovidetraditional distribution platforms are regulated mainly by theBroadcastLaw.The Broadcast Law requires terrestrial television broadcasters toestablishandpubliclydisclosestandardsfortelevisionprogrammes.Itdoesnot,however,requiretheinclusionofspecificmattersinthosestandards.TheJapanCommercialBroadcastersAssociation(Nihon Minkan Housou Renmei)hasatemplateforthosestandards,whichcommercial broadcasting companies usually incorporate or refertointheirownstandards.Thosestandardsprovideforrestrictionsonadvertising,includingrequirementsforbroadcasterstomakeitclearthatadvertisingisforcommercialpurposes,toensureviewersdonot feeluncomfortableonaccountof thebroadcasting timeofthe advertisement, and to ensure that the volume of advertisingperweekis18%orlessofthetotalbroadcastinghours.NotethattheBroadcastLawprohibitsNihon Housou Kyoukai,asanationalpublic broadcasting entity, from broadcasting advertisements forcommercialpurposesonbehalfofthirdparties.Further,thosestandardsprovideforthegeneralprinciplesinmakingtelevisionprogrammes. Forexample,broadcastersshouldrespectlegalrequirementsandhumanrights,becarefulaboutthecontent(e.g., violence or unlawful behaviour) of programmes preparedforchildrenandyoungpeople,andconsiderbroadcastingtimesofprogrammes,bearinginmindthatchildrenandyoungpeoplemaybewatchingduringthosetimes.


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telecommunications operators, including content providers – and,given theneed toenable thenetwork toabsorbrapid increases intraffic, discussedwho shouldbear the costs of suchdevelopmentandwhethertelecommunicationsoperatorsmayengageinpacket-shaping(ortraffic-blocking)toensurethenetwork’sservicequality.In particular, MIAC discussed whether heavy users should berequiredtopayadditionalchargesbasedontheirpacketusage,andwhetherdistributorsofrichcontentshouldberequiredtopayISPsforadditionalcharges.Currently,thereisnospecificlawprohibitingthe requirement of such payment, and the Net Neutrality Reportessentiallyconcludedthatthesemattersshouldbelefttothemarket.As for packet-shaping, four associations comprising tele-communications operators issued a guideline for this in May2008, pursuant to the discussion in the Net Neutrality Report.Theguidelineprovides thatpacket-shapingmayviolate theTBL,becauseitviolatestheconfidentialityoftelecommunicationscontentwhich is protectedunder theTBL,but itmaybepermitted in anexceptionalsituation,suchasgeneralusersexperiencingdifficultyaccessing a network due to heavy users’ traffic or if a specific

application is excessively occupying the network. The guidelinealsostatesthattelecommunicationsoperatorsshouldletusersknow,inthetariffs,ofthepossibilityofpacket-shapingandhowandwhenitwouldoccur.


Under theAct onDevelopment of anEnvironment that ProvidesSafeandSecureInternetUseforYoungPeople,telecommunicationsoperators who are engaged in a business relating to providinginternetservicestoteenagersarerequiredtoadoptmeasurestolimitthe exposure of teenagers to harmful information – for example,information inducing them to commit a crime, information thatstimulates sexual drive, or information containing atrociousdescriptions such as of murder. No specific law regulates VPNservices.

Hiromi HayashiMori Hamada & MatsumotoMarunouchi Park Building2-6-1 Marunouchi Chiyoda-kuTokyo 100-8222Japan

Tel: +81 3 5220 1811Email: [email protected]: www.mhmjapan.com

Akira MarumoMori Hamada & MatsumotoMarunouchi Park Building2-6-1 Marunouchi Chiyoda-kuTokyo 100-8222Japan

Tel: +81 3 5225 7738Email: [email protected]: www.mhmjapan.com

Hiromi Hayashi is a Partner at Mori Hamada & Matsumoto, which she joined in 2001. She specialises in communications law and regulation, and authored the Japanese portion of Telecommunication in Asia in 2005. Her other areas of practice are international and domestic transactions, takeover bids and corporate restructuring. She was admitted to the Bar in 2001 in Japan and in 2007 in New York. She worked at Mizuho Corporate Bank from 1989 to 1994 and at Davis Polk & Wardwell in New York from 2006 to 2007.

Akira Marumo is a Partner at Mori Hamada & Matsumoto. He has a broad range of experience in telecoms regulations and corporate and finance matters. He co-authored Multimedia Business and Laws in 1995, Law Concerning Providers’ Liabilities in 2002 and the Japanese portion of Telecommunication in Asia in 2006. He received an LL.B. from the University of Tokyo in 1991 and an LL.M. from Columbia University School of Law in 1997. He was admitted to the Bar in 1993 in Japan and in 1998 in New York. He is a member of the Tokyo Bar Association and of the New York State Bar Association.

Mori Hamada & Matsumoto is a full-service international law firm based in Tokyo, with offices in Fukuoka, Nagoya, Osaka, Beijing, Shanghai, Singapore, Yangon Bangkok and Ho Chi Minh, and a Jakarta desk. The firm has over approximately 470 attorneys and a support staff of approximately 480, including legal assistants, translators and secretaries. The firm is one of the largest law firms in Japan and is particularly well-known in the areas of mergers and acquisitions, finance, litigation, insolvency, telecommunications, broadcasting and intellectual property, as well as domestic litigation, bankruptcy, restructuring and multi-jurisdictional litigation and arbitration. The firm regularly advises on some of the largest and most prominent cross-border transactions representing both Japanese and foreign clients. In particular, the firm has extensive practice in, exposure to and expertise on telecommunications, broadcasting, the internet, information technology and related areas, and provides legal advice and other legal services regarding the corporate, regulatory, financing and transactional requirements of clients in these areas.


Chapter 21

D’LIGHT Law Group

Won H. Cho

Hye In Lee

Korea

■ TheTelecommunicationBusinessAct(TBA).■ TheActonPromotionofInformationandCommunications

NetworkUtilizationandInformationProtection(ICNA).■ TheRadioWavesAct(RWA).The following is the key legislation applicable to audio-visualmediadistribution:■ TheBroadcastingAct(BA).■ TheAct on the Establishment andOperation of theKorea

CommunicationsCommission(AKCC).


The Minister of Science and ICT (MSIT) and the KoreaCommunicationsCommission(KCC)arethetwomajorgovernmentauthoritiesinrelationtothetelecommunicationsandbroadcastingindustry.MSITisanexecutiveministryundertheauthorityofthePrimeMinister. KCC isaministerial-levelcentraladministrativeorganisationundertheauthorityofthePresident.Telecommunicationsandinternetindustry:■ MSIT holds the majority of the rights and authorities in

relation to the telecommunications and internet industry,including the granting of licences and implementation ofplans, regulations and policies under the TBA, and theallocation and management of radio frequency resourcesundertheRWA.

■ Under the TBA, KCC is responsible for maintaining andencouragingfaircompetitionintheindustry.

Audio-visualmediadistribution:■ KCCisthemaingovernmentauthoritygoverningterrestrial

broadcasting.■ MSIT has the authority to issue licences for satellite and

CATVbroadcasting.


Telecommunicationsandinternetindustry:■ The Foreign Investment Promotion Act and its decrees

restrict foreign investment from exceeding 49% of total

1 Overview


TheKoreantelecommunicationsandinternetindustrygeneratedatotalrevenueof37.9trillionKRWintheyear2016.SKTelecom(SKT),KTandLGU+arethethreesignificantmarketparticipants.

Annual Revenue (trillion KRW/trillion USD)

Significant Market Participants

Wireless 25.1/22.3

SKT,KT,LGU+Fixed, including internet 10.6/9.4

Lease/Resale/Intermediate 2.2/2.0

Total 37.9/33.7 -

The Korean audio-visual media distribution industry generated atotalrevenueof17.0trillionKRWintheyear2016.Thetopthreesignificantmarketparticipantsdifferdependingonthemarketorthetypeofservices.

Annual Revenue (trillion KRW/billion USD)

Significant Market Participants

Terrestrial Broadcasting 4.0/3.6 KBS,MBC,SBS

Pay Channels 2.7/2.4 Tbroad,CJHello,Dlive

IPTV 2.4/2.1 KT,SKB,LGU+Programme Production, Programme Providers and Other

7.6/6.8 -

Total 17.0/15.1 -


The following is the key legislation applicable to thetelecommunicationsandinternetindustry:


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policies, and deliberates, decides, and handles competition andantitrustcasesundertheMonopolyRegulationandFairTradeAct.KFTC is a ministerial-level central administrative organisationunder theauthorityof thePrimeMinister,andalsofunctionsasaquasi-judicialbody.However,KCChas thepower to investigate,decide,andpenalisea list of activities prohibited under the TBA as harmful to faircompetition in the telecommunications and internet industry.KFTCcannotpenaliseactivitiesfortheviolationoftheMonopolyRegulationandFairTradeActwhichalreadyhavebeenpenalisedbyKCC.


Decisions made by either MSIT or KCC may be appealed tothe Central Administrative Appeals Commission based on theAdministrative Appeals Act. Decisions made by the CentralAdministrativeAppealsCommissioncanbefurtherappealedtotheSeoulAdministrationCourtbasedontheAdministrativeLitigationAct.RegardingKCC,decisionsmaybeappealedtoKCC’sinternalcommittee prior to appeal by theCentralAdministrativeAppealsCommission.



Thereisnogeneralauthorisationfortelecomsnetworksandservices,andeachentityhastoapplyforindividualauthorisationsaccordingtothetypeofservices.TheTBAclassifiestelecomsnetworksandservicesintothreecategoriesandregulatesdifferentlybasedonthenatureofservices.

Service Type Authorisation Type AuthorityCommon* Licence MSITSpecial-category** Registration MSITValue-added*** Report MSIT

*Businessesthatprovidecommontelecommunicationsservicesbyinstallingtelecommunicationslineequipmentandfacilities.** Businesses that 1) provide common telecommunicationsservices by using telecommunications line equipment andfacilitiesof common telecommunicationsbusinesses, or 2) installtelecommunicationsequipmentandfacilitiesinthepremisessuchasinabuildingoritssurroundingarea,asprescribedbythePresidentialDecree,andprovidetelecommunicationsservicesthereinbyusingsuchequipmentandfacilities.***Businessesrelatedtotelecommunicationsservices,otherthancommontelecommunicationsservices.


Asexplained inquestion2.5, there is nogeneral authorisation inKorea.MSITstatesthedetailedevaluationcriteriaorrequirementsforindividualauthorisations.Theirkeyaspectsareasfollows:

equity shares. In addition, a foreign shareholder cannotbe the largest shareholderofKT ifheholdsmore than5%of total equity shares. No restriction is placed on foreigninvestmentinthevalue-addedtelecommunicationsindustry.

Audio-visualmediadistributionindustry:■ The levelof foreign investment restrictiondiffersbasedon

thecategoryofbusiness,asfollows:■ Terrestrialbroadcastingbusiness:Noforeigninvestment

allowed.■ CATVbroadcastingbusiness:Maximum49%.■ CATVrelaybroadcastingbusiness:Maximum20%.■ Satellite broadcasting business: Maximum 20% for

internetmultimediabroadcastingcontentsproviders.■ Maximum49%forOthers.

■ Programme-providingbusiness:■ Maximum20%forGeneralProgramming.■ Maximum10%forNewsProgramming.■ Maximum49%forOthers.

Itisworthnotingthatcertainentitiesbasedinacountrywhichhaveentered into aFTAwithKoreamaynot be considered as foreignshareholders,eitherinthetelecommunicationsandinternetindustryortheaudio-visualmediadistributionindustry.

2 Telecoms

General


KoreabecameamemberoftheWorldTradeOrganisationin1995.KoreahasmadecommitmentsundertheGATSforspecial-categoryservices and value-added services, and has implemented thetelecomsreferencepaper.


The TBA and INCA are the main laws which regulate telecomsnetworksandservices.TheTBAstates the type,procedure,andrequirementsof licencesnecessary for telecoms networks and services providers, andprovidesrulesforthefairuseofrelevantfacilities.The ICNA regulates the facilitating utilisation of informationand communications networks, protecting personal informationof people using information and communications services, anddevelopinganenvironmentinwhichpeoplecanutiliseinformationandcommunicationsnetworksinahealthierandsaferway.


In Korea, the Korea Fair Trade Commission (KFTC) is thegovernmentauthoritywhichformulatesandadministerscompetition

D’LIGHT Law Group Korea


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■ Commontelecommunications(TBAArt.10)■ The licence is indefinitely effective unless revoked or

cancelledduetootherreasons.■ Thelicenceisnotsubjecttotransferortrade.■ The following changeof control occasions are required

to be reviewed and approved by MSIT, as to whetherpublicinterestssuchasnationalsecurity,publicsafetyandmaintenanceoforderareimpaired:1)Acquisitionofsharesequaltoorexceeding15%ofthe

totalnumberofoutstandingstocks.2)Changeofthelargeststockholder.3) Conclusion of a contract with a foreign party for

importantmanagerialmatters,suchastheappointmentanddismissalofexecutiveofficersandthetransferoracquisitionofbusiness.

4)Changeof thepersonwhohasde factomanagementrights.

■ Special-categoryandvalue-addedtelecommunications(TBAArt.24)■ Theregistrationor report is indefinitelyeffectiveunless

revokedorcancelledduetootherreasons.■ The registration or report is not subject to transfer or

trade.■ Acquisition,mergeror inheritanceofa special-category

or value-added telecommunications operator should befiledwithMSIT.



■ Long-termuse(TBAArt.72)■ Common telecommunications business operators

shall consult with the owner or possessor of land inadvance. Incasenoagreement is reached, thecommontelecommunications business operator can use theland in accordance with theAct onAcquisition of andCompensationforLand,Etc.forPublicWorks.

■ Temporaryuseofandaccesstoland(TBAArts73,74)■ Common telecommunications business operators

may temporary use land for inspection, installation ormaintenance to theextent theoriginaluseof land isnotevidentlydisturbed,subjecttopriornoticetothepossessor.Thedurationoftemporaryuseshallnotexceedsixmonths.

■ Common telecommunications business operators mayenterthelandforinspectionasisnecessaryforinstallationormaintenance. However,apriornotice to residents isrequiredincaseacommontelecommunicationsbusinessoperatorneedsaccesstoaresidentialbuilding.

■ Requestforremovalofobstacles(TBAArt.75)■ Common telecommunications business operators may

requestremovalofobstacleswhichhaveanadverseeffectoninstallationorontelecommunicationsfacilities.

Service Type Category Items to be Reviewed or Submitted

Common

MSIThasgeneraldiscretiontoevaluatethecapabilityandplanoftheapplicantforacommontelecommunicationsservicelicence.

Capabilityforstableandcontinuousprovisionofservice

■Marketanalysisandcompetitivenessofserviceprovisionplan.■Investmentplanfornetworkupgradabilityandnationwideservice.■Cooperationplanwithfacilitymanufacturers.■Estimationandinvestmentplanforrequiredfacility.■Expertexperienceintelecommunicationsservice.■Contributiontohealthydevelopmentoftelecommunicationsindustryandnationaleconomy.■Effectivenessofinvestmentplanincludingutilisationofpre-existingfixed/wirelesstelecommunicationsfacilities.

Financialcapability

■Financingplan.■Financialstructure,includingprofitability,stability,growth,andcredibility.■Consistencyandcompatibilityoffinancingplanandotherrequirements.

Technicalcapability

■Planandpastexperienceinskillandtechnologydevelopmentforservice.■Technicalcontributionofstrategicpartners.■Systemcompositionandservicequalitytargetlevel.■Compatibilityandmaintenanceplan,andemergencyplanforinterconnection.■Planforexpertprocurementandtraining.

Consumerprotectionplan

■Planforestablishmentandoperationofuserprotectioncommission.■Procedureforusercomplaints.■Planforprotectionofuserinformation.

Special-category

Positive

■Financialandtechnicalcapability.■Userprotectionplanandother.

Negative

■Defaultinrequisitedocumentssuchasarticlesofassociationortermsofuse.■Notinaformofcorporation.

Value-added -

■Networkblockdiagram.■Evidenceofconstructionofpersonalinformationprotectionmeasures.


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■ Accountingseparation(TBAArt.49)■ Accounting for telecommunications business should

be separated from non-telecommunications businessperformedbysuchtelecommunicationsbusinessoperators.In addition, common telecommunications business andvalue-added telecommunications business should beseparatelyaccounted.

■ Functionalseparationandlegalseparation(TBAArts50,52)■ MSITmayorderatelecommunicationsbusinessoperator

tofunctionallyorlegallyseparatebusiness,ifitfindsthata telecommunications business operator’s actions placeunfairordiscriminativeconditionsorrestrictionsontheprovision of equipment and facilities, joint utilisation,interconnectionorjoint-useservices,wholesaleservices,and/orprovisionofinformation.


Under the Framework Act on National Informatization, thegovernment shall devise policies necessary for the efficientexpansionandmanagementofsuchfacilitiesasconduits,commonutilityducts,electricalpoles,etc.,toensurethesmoothexpansionofbroadbandintegratedservicedigitalnetworks.MSITmayalsoestablish,manageandoperateabroadbandintegratedresearchanddevelopmentnetworkatthenation’sexpense,orentrustadedicatedinstitutionwithitsestablishment,managementandoperationforthepurposeoffacilitatingtheestablishmentofabroadbandintegratedservicedigitalnetwork.Key communications business entities such as commontelecommunications business operators, CATV broadcastingbusiness entities, and CATV relay broadcasting business entitiesmay request the constructionor leaseof conduits, etc., necessaryfor the installation of telecommunications cable facilities to thegovernment, on the condition that such key communicationsbusinessentitiesbeartheassociatedcosts.Thegovernmentandkeycommunicationsbusinessentitiesarefreetoagreeonthetermsandconditionsoftheconstructionorleaseofpassiveinfrastructure,andMSITmaymediateincasethepartiesfailtomakeamutualagreement.Therearenoincentivesorregulatoryholidays.



Retailpricecontrolsarenotimposedonoperators.


A telecommunications business operator shall perform his/herbusinessinafair,swiftandaccuratemanneratareasonablefee,andmaynotrefusetoprovideanytelecommunicationsservicewithoutjustifiablegrounds.

■ Reinstatementandcompensation(TBAArts76,77)■ Iflandusedforatelecommunicationsserviceisnolonger

necessary, the common telecommunications businessoperatorisrequiredtoreinstatesuchlandorcompensateforloss.

■ Anylosscausedbytemporaryuse,access,orremovalofobstaclesshouldbecompensated.



■ Wholesale(TBAArt.38)■ Commontelecommunicationsbusinessoperatorsarefree

toagreetoprovidewholesaleserviceandinterconnection,exceptthoseoperatorswhoaremandatedbyMSIT.Suchmandatedoperatorsaredecidedconsideringthescaleofthebusinessandmarketshare.

■ Whether mandated or not, the conditions, procedures,methodsandcalculationofpricesshouldbeinaccordancewiththeguidelinespublishedbyMSIT.

■ Interconnection(TBAArts39,40)■ In addition to those mandated by MSIT, those who

possess equipment and facilities indispensable for othertelecommunications business operators are required topermittheinterconnection.

■ Dispute(TBAArt.45)■ Disputesarisinginrelationtowholesaleorinterconnection

maybebroughttoKCCforresolution.


■ Provisionofinformation(TBAArt.42)■ Upon the request for technological information or

users’ personal information needed for the provision oftelecommunicationsbusinessbyothertelecommunicationsbusiness operators, the common telecommunicationsbusiness operators mandated by MSIT or who possessequipmentandfacilitiesindispensableforotheroperatorsareobligedtoprovidetherequestedinformation.

■ MSITwilldetermineandpubliclyannouncethescopeofand guidelines for conditions, procedures,methods andcalculationofpricesforprovidinginformation.

■ Publicannouncement(TBAArt.42.3)■ Such mandated operators are to publicly announce

technicalstandardsandrequirementsforinterconnectionoruseof facilities, andother standards required for thecreationofenvironmentsforfaircompetition.

■ Currently, MSIT has mandated KT in the wire phonemarketandSKTin themobilephonemarket toprovideinformation.


Pleaserefertoquestions2.9and2.10.


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■ MSITwilldecidetheuserofradiospectrumconsidering:1)theefficiencyoftheuseofspectrumresources;2)theapplicant’sfinancialcapability;3)theapplicant’stechnicalcapability;and4)characteristicsof radio frequencies tobeassignedorothermattersnecessaryfortheuseofradiofrequencies.

■ ThedurationofusewillbedeterminedbyMSIT,withamaximumperiodof10years.


■ Licence(RWAArt.19)■ Ingeneral,aradiostationrequiresalicencefromMSIT.

■ Filing(RWAArt.19-2.1)■ A radio station which does not have radio wave

interference between nations or regions, or that is notestablishedforthepurposeofemergencycommunication,canbeestablishedbyfilingtoMSIT.

■ Radio stations subject to filing are as follows: 1) radiostations thathaveweak radiowavesor thatdonotneedinstallation andmaintenance of radio facilities; 2) radiostationsforreceptionuseonly;3)radiostationsestablishedbya telecommunicationsbusinessoperator;and4)radiostationsestablishedfordigitalmultimediabroadcasting.

■ Exempted(RWAArt.19-2.2)■ Inaddition, thePresidentialDecreeallowscertain radio

stations,thosewithweaktransmissionpowerforexample,tobeestablishedwithoutfilingtoMSIT.

■ Indetail,radiostationsexemptedfromfilingobligationsare:1)aradiostationusingastandardfieldstrengthgenerator,heterodyne-radio frequency measuring instrument, andother small electric power generators for measurement;2) a citizen band radio station subject to a conformityassessment;3)a receive-onlyradiostationother thananundergroundterrestrialbroadcastingauxiliarystation;and4)aradiostationofspecificationslowerthandeterminedbyMSITasnotobstructivetootherradiocommunications,subjecttoaconformityassessment.


■ AllocationFee(RWAArts11,12)■ Inthecaseofanauction,theallocationfeewillbetheprice

offeredbythesuccessfulbidder.25%oftheallocationfeeshouldbepaidatallocationandtheremaining75%shouldbepaidinequalinstalmentsduringtheperiodofuse.

■ Inthecaseofabeautycontest,thepriceforassignmentofradiofrequenciesshallbethesumofvaluecalculatedbasedon expected turnover and actual turnover, respectively.50%ofthefeecalculatedbasedontheexpectedturnovershould be paid at allocation, and the remaining amountshouldbepaid in threeequal instalmentsfromthe thirdyear of the use of radio spectrum. The fee calculatedbasedontheactualturnovershouldbepaidannually.

■ SpectrumUseFee(RWAArts67,68)■ MSIT may collect spectrum fees for the use of radio

spectrum. Spectrum will be computed based on thefrequencyband,therangeofradiowavesandtheantennasupplypower,etc.,usedbytherelevantradiostation,orforkeytelecommunicationsbusinessentities,onthenumberof subscribers provided with such telecommunicationsservices.

Numbering


MSIThastheauthoritytoestablishandenforcerulesandguidelinesonthemanagementoftelephonenumbersandnetworkidentifyingcodes.Currently,therearetwoenforcementrulespromulgatedbytheMSIT;onewhichregulatesthetelephonenumbersandnetworkidentifying codes in general, and the other which regulates thetelephonenumbersformobilephonesspecifically.


Nopersonmay sell or purchase telecommunications numbers, astheyarealimitednationalresource.


MSIT established and implemented a plan for telephone numberportabilitytoenableuserstoretaintheirtelephonenumberswhenchangingfromonetelecommunicationsbusinessoperatortoanotherunderTBAArt.58.

3 Radio Spectrum


Under the RWA,MSIT has the general authority to allocate andimplementpoliciesfortheuseofspectrum.However,KCCshallberesponsibleforthemanagementofradiofrequenciesusedinthebroadcastingbusiness.


MSIT will allocate the radio spectrum used for the commontelecommunicationsbusinessor theCATVbroadcastingbusiness,pursuanttothefollowingprocedure.■ Publicnotice(RWAArt.10)

■ Firstly,MSITwillpubliclynotifytheradiofrequencytobereallocatedandrequestfortender.MSITisrequiredtoinform the requirementsandconditions for tender, suchastherangeofpersonswhomayapply, thepurposesofassignedradiofrequencies,technicalmodes,etc.

■ Pricecompetition(RWAArt.11)■ Absent exceptional circumstances such as the lack of

competitive demand for the relevant radio frequencies,MSIT will assign the publicly notified radio frequencythroughanauctionprocess.

■ MSITmaydetermineaminimumacceptableprice.■ ThedurationofusewillbedeterminedbyMSIT,witha

maximumperiodof20years.■ Beautycontest(RWAArt.12)

■ If MSIT considers that the auction process is notappropriate for the assignment of radio frequency dueto special circumstances, such radio frequency will beassignedbybeautycontest.


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TheProtectionofCommunicationsSecretsAct(PCSA)prohibitsapersonfromcensoringanymail,wiretappinganytelecommunications,providingcommunicationconfirmationdata,recordingor listeningtoconversationsbetweenothersthatarenottobemadepublicunlessthestatehasallowedotherwise(only inspecialcircumstances),asdescribedinquestion4.4.Anymaterialsunlawfullyobtainedcannotbeusedasevidenceincourtproceedings.


Although the PCSA obliges market participants, such astelecommunicationsbusinessoperators,tocooperatewithinterceptionincaseofimminentrisktothelifeorhealthofanindividual,suchasmurderorrobberywithhostages.Therearenorulesrequiringmarketparticipantstomaintaincallinterceptioncapabilities.


■ Occasionsforstateinterception■ Certain government entities may access private

communications if required in the ordinary course ofbusiness and allowed under the respective laws, such asthePostOfficehandlingaparcelsuspectedtobeexplosive,Customshandlingmailotherthanpersonalcorrespondence,communicationswithaprisoner,orcommunicationswithpersons declared bankrupt, and MSIT monitoring radiowavesfortheeliminationofinterference.

■ The prosecutor may access private communications fortheinvestigationofacrimewhen:1)thereisasubstantialreason to suspect that certain serious crimes related tomurder,robbery,rape,arson,drugs,nationalsecurityetc.,havebeencommitted;or2)thepreventionofsuchcrime,arrest of the criminal, or collection of the evidence isdifficult.Theperiodofinterceptionforcrimeinvestigationcannotexceedtwomonths,butmaybeextended.

■ Theheadsof the intelligenceand investigativeagenciesmayaccessprivatecommunicationsfortheprotectionofnational security, if there is a threat tonational securityandsuchaccess is required. Theperiodof interceptionfortheprotectionofnationalsecuritycannotexceedfourmonths,butmaybeextended.

■ Procedure■ Inprinciple,theprosecutorortheheadsoftheintelligence

and investigative agencies is/are to be approved by thecourt prior to the access of private communications.In case the heads of the intelligence and investigativeagenciesneedstointerceptprivatecommunicationsofaforeignentity,thePresident’spriorapprovalisrequired.

■ However,theprosecutorortheheadsoftheintelligenceand investigative agenciesmay begin accessing privatecommunicationswithoutpriorapproval,andthenrequestforapproval,incaseofanimmediatethreatoremergency.

■ Thespectrumusefeeisexemptedforgovernmentradio stations, non-profit broadcasting stations, terrestrialbroadcasting stations of the terrestrial broadcastingbusiness entity which pays contributions under theFramework Act on Broadcasting CommunicationsDevelopment,andradiostationsunderfilingobligationsforestablishment.

■ Inaddition,MSITmay reduce the spectrumuse fee forbroadcastingstationsofthesatellitebroadcastingbusinessentity or CATV broadcasting business entity that payscontributionsundertheFrameworkActonBroadcastingCommunicationsDevelopment, radio stations using theradiofrequenciesassignedbyauction,radiostationsthatare not-for-proft or promote public welfare, and radiostations established in regions declared to be specialdisasterareas.


Pleaserefertoquestion3.6.


Once assigned, the radio spectrum can be transferred or leasedfollowing three years from the date of assignment. In case ofinsolvency, a merger, assignment of business of such assignee,earliertransferorleaseisallowed(RWAArt.14).



■ A person who owns, controls, or manages a tele-communication, internet, or electronic system is obligedto take appropriate measures to protect the reliabilityof the information and security of the information andcommunications networks under various legislation. Aperson who fails to abide by his/her obligation may bepenalisedbyimprisonmentorwithafine,accordingtotheapplicablelegislation.■ TheICNAobligestelecommunicationsbusinessoperators

totakeappropriatemeasures.■ ThePersonalInformationProtectionActgovernsmatters

relatedtopersonalinformation.■ The Act on the Protection of Information and

Communications Infrastructure, Electronic GovernmentAct, and the National Cyber Security ManagementRegulation, include the provisions to protect keyor governmental information and communicationsinfrastructure.

■ Apersonwhoentered intoanelectronicor internet systemby unlawful means and/or damaged, changed, stole, ordistributed information from such systemwill be punishedunder various legislation, including those listed above.The crimes typically charged under the CriminalAct, forexample,willbeinterferencewithbusinessusingacomputer,falsificationoralterationofpublicorprivateelectromagneticrecords,fraudbyuseofacomputer,destructionanddamageetc.ofproperty,andmore.


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Therearedifferenttypesofauthorisation,dependingonthenatureofthebroadcastingservice(BAArt.9).■ Terrestrialbroadcastingbusiness

■ A licence from theKCC is required. In the evaluationfora licence, theresultofa technicalevaluationfor theestablishmentofradiostationsundertheRAbyMSITwillbetakenintoconsideration.

■ Satellitebroadcastingbusiness■ AlicencefromMSITundertheRAisrequired.MSITis

requiredtoobtainKCC’sconsentpriortotheissuanceofalicence.

■ CATV broadcasting business or CATV relay broadcastingbusiness■ AlicencefromMSITundertheBAisrequired.MSITis

requiredtoobtainKCC’sconsentpriortotheissuanceofalicence.

■ Programme-providingbusiness■ Basically,registrationwithMSITwouldbesufficientfor

aprogramme-providingbusiness,butadditionalapprovalmay be required for certain types of business. Withinsevendaysfromthedateofregistrationorsuchapproval,aprogramme-providingbusinessshouldreportonthevalue-addedtelecommunicationsbusinessundertheTBA.

■ KCC’s approval is required to engage in generalprogrammingorspecialisedprogrammingofnewsreports,andMSIT’sapprovalisrequiredtoengageinspecialisedprogrammingwhichfeaturesandmarketsproducts.


■ Assignability(BAArt.15)■ Incaseoftransferormodificationofbusiness,anoperator

should obtain a licence, approval or registration formodificationfromMSITorKICCasappropriate:amergeror division of the relevant corporation; conversion of thebusinessrunbyanindividualtothebusinessofacorporation;transferofthebusinessrunbyanindividual;amodificationofbroadcastfields;amodificationofthebroadcastingzone;orothermodificationsofimportantfacilities.

■ Changeofcontrol(BAArt.15-2)■ If the largest shareholder or holder of substantial

management power of an operator is to be changed,the new largest shareholder is required to obtainMSIT’sorKCC’sapproval,as thecasemaybe. MSITor KCC will examine the possibility of realising thepublic responsibility, impartiality and public interest ofbroadcasting, social confidence and financial capacity,protectionoftherightandinterestofviewers,andothermatters necessary for business performance, in order toapprovesuchchangeofcontrol.

■ Thevotingrightsofsharesormanagementpowerobtainedwithout appropriate approval should not be exercisable.Furthermore,MSITorKCCmayissueanordertodisposesuchstocksorequityshareswithoutapproval.

■ Aftertheinterceptioniscompleted,theprosecutorortheheads of the intelligence and investigative agencies is/are required tonotifyof the fact that the interception isexecuted, the institution that executes interception, andtheperiodthereofwithinthetimestatedinthePCSA.


Personal information, suchaspersonal ID, is required tobe storedand transmittedbyusingencryption technologyandothermethodsforsecurityundertheICNAandPersonalInformationProtectionAct.


Under thePCSA, telecomsor internet infrastructureoperatorsaretoretain:1)thedateofthetelecommunication,thecommencementtimeandendtimeofthetelecommunication,thecommunication’snumberofoutgoingandincomingcalls,thefrequencyofuse,andthelocationdatafor12months(sixmonthsincaseoflong-distancecallsandlocalcallservices);and2)thelogrecordsofusersandthelocationdataforthreemonths.



The BA is the main legislation which regulates the distributionofaudio-visualmedia.TheobjectiveoftheBAistopromotetheprotectionof the rights and interestsofviewers, the formationofthe democratic public opinion and the improvement of nationalculture, and to contribute to the development of broadcastingand advancementof publicwelfare, byguaranteeing the freedomand independence of broadcasting and by enhancing publicresponsibilitiesofbroadcasting.


The contents delivered over the internet aremainly regulated bytheICNA,whichprohibitsthecirculationofimproperinformation,suchasobscene,defamatory,violent,orapprehensiveinformation,andKCChasthepowertoinvestigateandordertherestrictionofthedeliveryofsuchunlawfulinformation.Inaddition,theActontheConsumerProtectioninElectronicCommerce,Etc.,whichgovernselectronic commerce transactions, contains provisions regulatingadvertisements. KFTC, the authority under the act, sets detailedrules and guidelines prohibiting the use of false or exaggeratedexpressionordeceptiveadvertisements.The contents of broadcast, including advertising via traditionaldistribution platforms, are regulated by the rules and guidelinesissuedbyKCC,inaccordancewiththeBA.TherulesandguidelinesofKCCandthoseofKFTCaregenerallysimilar.


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In a civil or criminal suit against a third party for infringement,OSPsmustprovideinformationrelatedtotheallegedinfringementin its possession. The court has found that it is lawful to searchandcollectevidencebyusingacomputerattheplaceofsearchandaccessingoutsidestorage.■ TheICNA(ICNAArts44.2,44.3)

■ The CNA requires internet service providers to deleteor temporarily limit access to infringing content andreport to the content owner, upon the content owner’srequest. Internet serviceprovidersalsohasdiscretion totaketemporarymeasuresoninformationsuspectedtobedefamatorytoorinfringinganintellectualpropertyrightofathirdparty.


MSIT issued a guideline for net neutrality and internet trafficmanagement in 2011, which was recently amended in 2018.MSIT issued a guideline for the propermanagement and use ofthenetworkandthetransparentmanagementoftrafficin2013,tosupplementtheformerguideline.Theguidelinesprohibitinternetserviceprovidersfromdiscriminatingbetweentrafficorchargingdifferentratesoffeesbasedoncontent,applications,servicetypeorprovider,unlessit isreasonablynecessaryforthesecurityandsafety of the network, protection of the majority of users fromtemporary overload, or execution of obligations under otherlegislation.However,theguidelinescontainthebasicprinciplesofnetneutralityatabasic levelonlyand lackdetailedrequirements,procedureorpenalties.MSITiscurrentlynotstrictlyapplyingorenforcingtheguidelines.


■ Servicestominors■ Under theTBA, telecommunications business operators

providingservicestominorsareobligedtoprovidemeanstoblockobsceneorharmfulcontent.

■ UndertheJuvenileProtectionAct,aproviderofaninternetgameshallnotprovidesuchgametominorsundertheageof16from12midnighttosixinthemorning.

■ Servicestoothers■ The Act on the Protection of Children and Juveniles

againstSexualAbuseobligesonlineserviceproviderstotakemeasurestodetectanddeletechildpornography.

■ UndertheAKCC,KCChastherighttodeterminewhethertheKoreaCommunicationsStandardsCommissionmayordersanctionsagainstsiteshandlingillegalorimproperinformationundertheICNA.

■ VPNserviceregulation■ ThereisnoregulationonVPNservice.



■ TheCopyrightAct(Art.102)■ Telecommunications operators and/or internet service

providers (Online Service Provider, OSP) are notresponsible for the infringementofcopyrightdue to thereproduction or interactive transmission of works byotherpartiesincertainconditions.Furthermore,OSPsareexemptedifitwastechnologicallyimpossiblefortheOSPtosuspendorstopsuchinfringement.Theaforementionedconditionsaredescribedbelow:■ In case of transmission ofworkswithoutmodifying

thecontents,theOSPisnotresponsibleforcopyrightinfringementifit1)didnotinitiatethetransmissionofworks,2)didnotselectworkstobetransmittedortherecipientsthereof,3)implementedapolicytopenaliseaccounts repeatedly infringing copyrights of others,and 4) did not interfere with the standard technicalprotectionusedontheworks.

■ In case of caching services which temporarily storeworks to allow efficient access by subsequent users,theOSPisnotresponsibleforcopyrightinfringementif 1) it did not modify such works, 2) access ispermitted to users in compliancewith conditions, ifany,3)itcompliedwithstandarddatacommunicationsprotocols,4)itdidnotinterferewithtechnologyappliedto track the use of the work, and 5) it immediatelysuspended reproduction or interactive transmissionofworks after actualknowledgeof the infringement6) in addition to the conditions listed above for thetransmissionofworkswithoutmodifyingthecontents.

■ In case of storage, hosting, or clouding serviceswhich store works in the OSP’s computer, the OSPis not responsible for copyright infringement if it 1)is capable of controlling the infringing activity butdidnotdirectlyprofitfromtheinfringingactivity,2)immediately suspended reproduction or interactivetransmission ofworks after actual knowledge of theinfringement,and3)notifiedapersonrelatingtosuchinfringing reproduction or interactive transmission4) in addition to the conditions listed above for thetransmissionofworkswithoutmodifyingthecontents.

■ In case of online search tool services, the OSP isnot responsible for copyright infringement if it 1)didnot initiate the transmissionofworks,2)didnotdirectly profit from such service if the provider hastherightandabilitytocontroltheinfringingactivity,3)immediatelysuspendedreproductionorinteractivetransmission ofworks after actual knowledge of theinfringement,and4)notifiedapersonrelatingtosuchinfringingreproductionorinteractivetransmission.

■ Thecourt■ ThecourtruledthatwhenanOSPfailstotakeadequate

measures to delete illegal information which the OSPshouldhavebeenawareof,theOSPmaybeanaccessorytocriminalcopyrightinfringementandresponsibleintort.

■ Itisthecourt’sinterpretationthatanOSPwillnotbefound‘technologicallypossible’becauseanOSPcouldshutdownallofitsservices.ItwouldbetechnologicallyimpossibleforanOSPif theOSPcannotselectivelysuspendorstopinfringingactivitywithoutkeepingthesystemonandactive.


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Won H. Cho D’LIGHT Law Group8th floor, 311Gangnam-daeroSeocho-guSeoul 06628Korea

Tel: +82 2 2051 1870Email: [email protected]: eng.dlightlaw.com

Hye In LeeD’LIGHT Law Group8th floor, 311Gangnam-daeroSeocho-guSeoul 06628Korea

Tel: +82 2 2051 1870Email: [email protected]: eng.dlightlaw.com

D’LIGHT is a premier specialty law firm offering more than just legal services – we offer a unique specialisation perspective for commercial thinking and legal problem-solving.

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At D’LIGHT, our unrivalled specialty knowledge and deep industry experience allow us to creatively improvise on and innovatively resolve even the most difficult commercial issues. Our experience is testament to our deep understanding, appreciation and proven capability to problem-solve (not simply “issue-spot”) on challenging and novel legal matters that are driving increasingly complex transactions today.

In our approach to work, we do not consider the practice of law a job, but rather a calling to serve our clients, the profession and the community. We take a genuine partnership approach in working with our clients, focusing not just on what they want, but on how they want it. Always pushing the boundaries of what can be achieved, we strive to reshape the legal market and challenge our clients to think differently about what a law firm can be.

Won H. Cho is a managing partner at D’LIGHT. As an experienced patent lawyer with extensive commercial transactional experience in various specialty industries including entertainment, ICT and healthcare, Won H. Cho is uniquely positioned to advise clients on a wide range of complex IP, corporate and regulatory matters. He started his career as an associate at Bae, Kim & Lee LLC (“BKL”) and went on to serve as a partner of the firm, leading BKL’s prominent intellectual property and technology transaction practices, spanning a total of 16 years. Mr. Cho also worked on secondment at Ropes & Gray (New York) in 2014 in the firm’s Intellectual Property division. He has earned a reputation at home and abroad as an exceptional multi-disciplinary lawyer with deep and extensive career experience, representing local corporations, multi-national companies, government agencies and non-profit organisations. Mr. Cho is now an adjunct professor at KAIST-MIP (Master of Intellectual Property) and serves in leadership roles at various local and state organisations, including the Korea Fair Trade Commission Advisory Committee, Korean Intellectual Property Office, US Korea Law Foundation, Korea Licensing Executive Society, and the Korea Association of Entertainment Law, among others. Mr. Cho holds a B.A. from Seoul National University and received an LL.M. from the University of Texas.

Hye In Lee is an associate at D’LIGHT, where she focuses on advising and assisting in litigation and legal issues in the ICT industry and FinTech business, including in the blockchain industry. Ms. Lee also has extensive field experience in both international legal cases, such as global investment, M&A and international arbitration, and local legal cases such as IP litigation, financing, investigation by the public prosecutor and/or the Korean Free Trade Commission, as she has served as corporate counsel at Samsung C&T Corporation and Netmarble Corporation.


Chapter 22

Rato, Ling, Lei & Cortés – Advogados

Pedro Cortés

José Filipe Salreta

Macau

whichconnectlocalfixedpointstoeachotherortotheoutsideoftheMSAR,andwhichsupportpublictelecommunicationsservices.Theinstallationandoperationofpublicfixedtelecommunicationsnetworksaresubjecttolicensing,inaccordancewiththetermsofthisAdministrativeRegulation.Furthermore, the Administrative Regulation no. 15/2002, ofAugust 12 (http://bo.io.gov.mo/bo/i/2002/32/regadm15.asp),establishes the regime for the management and allocation ofthe several telecommunications numbering resources, and theAdministrative Regulation no. 41/2004, of December 22 (http://bo.io.gov.mo/bo/i/2004/51/regadm41.asp), establishes the regimeof interconnectionofpublic telecommunicationsnetworks,whichshallbemadeinanenvironmentofequalconditionsofcompetition,inorder toensure that it iscarriedout ina timelyandreasonablemanner,ensuring inparticular the inviolabilityandconfidentialityof communications, the non-discrimination in the provision ofinterconnection,theinteroperabilityoftelecommunicationsservices,andtheintegrityoftelecommunicationsnetworks,installationsandequipmentassignedtotheinterconnection.Regarding the licensing of telecommunications services, theAdministrative Regulation 32/2000, of September 11 (http://bo.io.gov.mo/bo/i/2000/37/regadm32.asp), determines the legalregimeforprovisionallicensingoftheactivitiesofpublicnetworkoperators and the provision of telecommunications servicesfor public land mobile use, up to a maximum of three licences,operatingincertainfrequencybands,andwiththeadoptionoftheconceptsestablishedbytheInternationalTelecommunicationUnion(ITU).TheoperationofpublictelecommunicationsnetworksandtheprovisionoftelecommunicationsservicesforpubliclandmobileusearefurtherdefinedbytheAdministrativeRegulationno.7/2002,of April 15 (http://bo.io.gov.mo/bo/i/89/36/lei08.asp), whichestablishesthatsaidactivitiesaresubjecttolicensing,inaccordancewiththisAdministrativeRegulation.Radio and television broadcastingRadio broadcasting in theMSAR is framed by Law no. 8/89/M,of September 4 (http://bo.io.gov.mo/bo/i/89/36/lei08.asp), whichestablishesthelegalregimeforradioandtelevisionbroadcasting.Inaccordancewithsaidlegislation,thepurposesofradiobroadcastingare:a) tocontributetotheformationofcitizenswithrespecttothe

ethicalandculturalvaluesinforce;b) tocontributetotheinformationofcitizens,guaranteeingthem

therighttoinformandtobeinformed,withouthindranceordiscrimination; and

c) tocontributetothepromotionofsocialandculturalprogressandtothecivicandsocialawarenessofcitizens.

1 Overview


The telecommunications sector is framed by Law no. 14/2001,of August 20 (the Telecommunications Act (http://bo.io.gov.mo/bo/i/2001/34/lei14.asp)), which defines the basis ofthe telecommunications policy of the MSAR, as well as thegeneral framework for the establishment, management andoperation of telecommunications networks and the provision oftelecommunicationsservices,althoughtheprovisionsofsaidlawdonotapplytobroadcastingservices,terrestrialorsatellite,inparticulartotelevisionandsoundbroadcastingservices.Telecommunicationsshallhencebeunderstoodasthetransmission,emissionorreceptionof symbols, signs,writing, images, sounds or information of anynaturebywire,radio,electricityorotherelectromagneticsystems.Law no. 14/2001 also stipulates the objectives of such policy,which include: to gradually liberalise the installation ofpublic telecommunications networks and the provision ofpublic use telecommunications services; to ensure access totelecommunications, at reasonable tariffs and prices, in a non-discriminatorymannerand inconditionsofqualityandefficiencythatmeettheirneeds,tothewholepopulationandalsotoeconomicand social activities; to ensure the existence and availability ofthe universal telecommunications service; to ensure equalityand transparency of conditions of competition by promoting thediversification of services in order to increase their supply andqualitystandardstobecompatiblewiththerequirementsofusers;and to ensure the interoperability of public telecommunicationsnetworks,aswellastheportabilityofthecustomernumber,amongothers.It is incumbent upon the Government to oversee and supervisetelecommunications and the activities of telecommunicationsoperators, without prejudice to the specific competencies of theMacau Post Office (in Portuguese, “Direcção dos Serviços de Correios”),asweshallseebelow.Regarding thehardwarepartof the telecommunicationsequation,theAdministrativeRegulationno.41/2011,ofDecember30(http://bo.io.gov.mo/bo/i/2011/52/regadm41.asp), establishes the systemfortheinstallationandoperationoffixedpublictelecommunicationsnetworks, understood as telecommunications networks, based oncables,opticalfibres,radio-electricorotherelectromagneticsystems,


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(http://bo.io.gov.mo/bo/i/2000/40/regadm35.asp),whichestablishedtherequirementstobefulfilledbythoseinterestedintheprovisionoftheservicesdescribedtherein.PressThefreedomofpressintheMSARisguaranteedbyitsBasicLawand framed by Law no. 7/90/M, ofAugust 6 (the “Press Law”)(http://bo.io.gov.mo/bo/i/90/32/lei07.asp), which regulates theexerciseof freedomof thepress, the right to informationand theactivityofjournalistic,editorialandnewsorganisations. Namely,thelawguaranteesandregulatestherighttoinformation,freedomofthepress,freedomofaccesstosourcesofinformation,guaranteeofprofessionalsecrecyandindependenceofjournalists,freedomofpublicationanddissemination,andfreedomofenterprise.The law also regulates the organisation of publications and pressregistration,theexerciseoftherightofreply,denial,rectification,andtherighttoclarification,aswellastheregimeregardingliabilityforunlawfulactsnotprovidedforinthecommoncriminallegislation.Finally,thelawcreatedthePressCouncil,whosedutieswouldhavebeentoensure:i. theindependenceofthepress,inparticularvis-à-vispolitical

and economic power;ii. thepluralismandfreedomofexpressionandof thoughtby

the press; andiii. theprotectionofthepublic’srighttoinformation.However,thePressCouncilnevercameintoeffect,asitscompositionwasneverproperlyregulated.InregardstothepressregistryprovidedinthePressLaw,theDecreeno.11/91/M,ofJanuary28(http://bo.io.gov.mo/bo/i/91/04/port11.asp), regulates the way in which the press register is processed,throughitsownmedia,withtheMediaOffice,describedbelow.TheMediaOffice(inPortuguese,“Gabinete de Comunicação Social”)isdefinedbytheAdministrativeRegulationno.7/2012,ofMarch5(http://bo.io.gov.mo/bo/i/2012/10/regadm07.asp),whichregulatestheserviceofcoordination,studyandtechnicalsupporttotheGovernmentandservicesoftheAdministration,intheareaofsocialcommunicationbysaidOffice,aswellasitsrespectiveattributions.TheMediaOfficehasseveralresponsibilitieswhichwereassignedbytheAdministrativeRegulationno.7/2012,notably:a) to collaborate in the definition of the media policy of

the MSAR and to issue an opinion on matters of socialcommunicationofinteresttotheMSAR;

b) toensuretheimplementationofmediaactivitiesinmattersofofficialinformation;

c) to promote,within its scope or in collaborationwith otherservices of the Administration and companies with totalor partially public capital, the disclosure of facts thatmaycontributetoabetterknowledgeoftherealityoftheMSAR;

d) to promote and support initiatives to improve the officialinformationdisseminationsystem;

e) to give technical support to the Government and to theservicesoftheAdministrationinitsrelationswiththeorgansandagentsofthemedia;tosupportsuchorgansandagentsintheperformanceoftheirduties;

f) tostudyandproposeguidelinesforpoliticalactioninsupportofthemediaandensuretheirimplementationandmonitoring;

g) to promote and support initiatives aimed at improving thequalityofthemediasector;

h) to design, plan and execute, by its own means or incollaborationwith the other services of theAdministrationandcompanieswithtotalorpartiallypubliccapital,actionsofcollectiveinterestthataimtomotivateandsensitisepublicopinion;

Television broadcasting is defined as a public service and isexercisedunderaconcessioncontract,whereastheactivityofsoundbroadcastingissubjecttothelicensingregime,theexerciseofwhichdependsontheattributionofalicence.Bothawardsarenormallyprecededbyapublictender.Law no. 8/89/M also creates the Broadcasting Council, anindependent body that functions for administrative purposeswith theMediaOffice (which shall be analysed below),with theresponsibilitytoguarantee:i. the independence of the concessionaires and broadcasting

operators, especially in the face of political and economicpower;

ii. thesafeguardingofpluralismandfreedomofexpressionandofthought;

iii. theaccuracyandobjectivityoftheinformation;iv. thequalityoftheprogramming;andv. thedefenceoftherightsandtherespectoftheobligationsset

forthinthelaw.Furthermore,Lawno.8/89/Mstipulatesthattherightofexpressionof thoughtand the right to informationareexercisedwithoutanyform of censorship, impediment or discrimination, respectingindividualfreedomsandtherightofcitizenstotheirmoralintegrity,goodnameandreputation.Also,thebroadcastingactivityiscarriedoutindependentlyandautonomouslyinthefieldofprogramming,andnopublicorprivateentitycanpreventorimposethebroadcastingofprogrammes.However,broadcastingoperatorsmustrespectthevalues of detachment, impartiality and truth in the disseminationofinformationbyrefrainingfromdisseminatingfalseorunprovennewsorgivingjournalistictreatmenttothefactsthatmaydistortormisleadthepublic.Regarding the administrative procedures related to radiocommunication services,Decree-Law no. 48/86/M, ofNovember3 (http://bo.io.gov.mo/bo/i/86/44/declei48.asp), establishes therulesbywhichsaidadministrativeproceduresshallbegoverned,inparticularwithregardsto:a) the concession, installation and operation of radio

communicationsnetworksorstations;b) radiooperators;c) theapprovalofradiocommunicationsequipment;andd) thecommercialisationofradiocommunicationsequipment.Finally, regarding television broadcasts, the AdministrativeRegulationno.8/2014,ofApril8(http://bo.io.gov.mo/bo/i/2014/14/regadm08.asp), authorised the establishment of a commercialcompanybetweentheMSAR,theTeledifusãodeMacau,S.A.andtheMacauPostOffice,named“MacauBasicTelevisionChannels,Limited”(inChinese“澳門基本電視頻道股份有限公司”),withthepurposeofprovidingreceptionassistanceservicesforbasictelevisionchannelsforresidentsunderthetermsoftheconcessioncontract.InternetThe regime of access and exercise of the activity of provisionof Internet services is set out by the Administrative Regulationno. 24/2002, of November 4 (http://bo.io.gov.mo/bo/i/2002/44/regadm24.asp), which subjects such activity to licensing underthe terms of saidAdministrative Regulation and also establishesthe requirements and process for granting a licence, the processfor requesting a licence, as well as how to exercise the activityof providing Internet services and the corresponding sanctioningregime.PreviouslytotheentryintoforceoftheAdministrativeRegulationno. 24/2002, the provisional licensing of Internet services wasregulatedbytheAdministrativeRegulation35/2000,ofOctober3

Rato, Ling, Lei & Cortés – Advogados Macau


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Television/Radio■ TDM–TeledifusãodeMacau,S.A.(netprofitin2017:MOP

17,951,369 (http://portugues.tdm.com.mo/report/2017FIN_report_pt.pdf)).

■ TVCaboMacau,S.A.Press■ DiáriodeMacau–EmpresaJornalísticaeEditorial,Lda.■ EdiçõesVaKio,Limitada.


(a) Telecoms and Internet■ Law no. 14/2001, of August 20 (the Telecommunications

Act), which defines the basis of the telecommunicationspolicy of the MSAR, as well as the general frameworkfor the establishment, management and operation oftelecommunications networks and the provision oftelecommunicationsservices.Asstatedabove,theprovisionsofsaidlawdonotapplytobroadcastingservices,terrestrialorsatellite,inparticulartotelevisionandsoundbroadcastingservices.

■ Administrative Regulation no. 24/2002, of November4,which sets out the regime of access and exercise of theactivityofprovisionof Internetservices,andsubjectssuchactivity to licensingunder the termsof saidAdministrativeRegulation.

(b) Audio-visual media distribution■ Lawno.8/89/M,ofSeptember4,whichestablishesthelegal

regimeforradioandtelevisionbroadcastingandcreatestheBroadcastingCouncil,anindependentbodythatfunctionsforadministrativepurposeswiththeMediaOffice.

■ Law no. 7/90/M, of August 6 (the “Press Law”), whichregulates the exercise of freedomof the press, the right toinformation and the activity of journalistic, editorial andnewsorganisations.

■ Administrative Regulation no. 7/2012, of March 5, whichregulates the service of coordination, study and technicalsupporttotheGovernmentandservicesoftheAdministration,intheareaofsocialcommunicationbytheMediaOffice(inPortuguese,“Gabinete de Comunicação Social”),aswellasitsrespectiveattributions.

■ Decree-Lawno.2/89/M,ofJanuary9,whichfirstapprovedthe organic regulation of the Macau Post Office, a bodywith legal personality and administrative, financial andpatrimonialautonomy,withthepurposeofprovidingpublicpostalservicesandofregulating,supervising,promotingandcoordinatingallactivitiesrelatedtothetelecommunicationssectorintheMSAR,andalsoofservingasacreditinstitution.


(a) Telecoms and InternetThe Secretary for Transportation and Public Works is thegovernmentministryresponsibleforthetelecommunicationssectorwithintheMSARGovernment,aspertheAdministrativeRegulationno. 6/1999, of December 20 (http://bo.io.gov.mo/bo/i/1999/01/regadm06.asp), which determines the organisation, competenciesand functioning of public services and entities. Also, Law no.14/2001 stipulates that it is incumbent upon the Government to

i) tofostercooperationandexchangeactivitieswiththemediabasedoutsidetheMSAR;

j) topromotetheconclusionofcooperationprotocolsandliaisewith media bodies;

k) toensurethecollection,systematicanalysisandprocessingof written and audiovisual information material from themedia;

l) toensuretheeditorialactivityoftheMediaOffice;m) to register the entities that own news, editorial and news

organisationsoftheMSARanditscorrespondentsandotherforms of representation of the media located outside theMSAR;

n) toproceedwiththeregistrationofMSARperiodicals;ando) toperformallotherattributionslegallyassignedtoit.The Media Office is composed of the following Departments:Information Department; Department of Studies and Promotion;ComputerandArchiveDivision;andAdministrativeandFinancialDivision.Other legislationIn regards to entitieswhich are in contactwith ormaygenerallyinfluencethetelecommunicationssector,wewouldfirstunderlinetheMacauPostOffice,abodywithlegalpersonalityandadministrative,financialandpatrimonialautonomy,withthepurposeofprovidingpublicpostalservicesandofregulating,supervising,promotingandcoordinatingallactivitiesrelatedtothetelecommunicationssectorintheMSAR,andalsoofservingasacreditinstitution,ofwhichthe organic regulationwas first approved by theDecree-Law no.2/89/M,ofJanuary9(http://bo.io.gov.mo/bo/i/89/02/declei02.asp).TheMacauPostOfficeintegratesseveraldepartments,ofwhichwehighlight:■ thePostalOperationsDepartment,which is theoperational

sub-unit in the area of postal trafficwith origin, transit ordestination in theMSAR, aswell as postal relations of anoperationalnaturewithinternationalinstitutions;

■ theElectronicServicesDepartment,whichistheorganicsub-unit responsible for electronic certification services, secureelectronic postal services, development of CTT postal andcomputer technology systems, and electronic commerceservices;

■ the Telecommunications Management Department, whichis the sub-unit responsible for supporting the definition oftelecommunications policy, including telecommunicationsand broadcasting services, and for the management andmonitoringofitsactivities,withtheexceptionofbroadcastingcontent; and

■ the Department of Information Technology Developmentand Management of Resources, which is the sub-unitresponsible for supporting the definition of IT policies,promoting theapplicationof these technologies,promotingcooperation in this field with entities outside the MSAR,as well as for the planning and management of publictelecommunicationsresourcesandthecoordinationoftheuseoftelecommunicationsresourcesinMacauandabroad.

As for the market’s most significant players, kindly note thefollowing:Telephone/Internet■ Companhia de Telecomunicações de Macau S.A.R.L. (net

profit in 2017:MOP 880,983,598 (https://bo.io.gov.mo/bo/ii/2018/14/anotariais.asp#267)).

■ HutchisonTelephone,Macao.■ SmartoneMobileCommunications(Macao)Ltd.■ ChinaTelecom(Macau)Cl.Ltd.■ MTEL–TelecommunicationCompanyLimited.


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services is incumbent upon the Government. The same Lawfurther stipulates that the operationof public telecommunicationsservicesrequires theestablishment,managementandoperationofthe infrastructures that constitute the basic telecommunicationsnetwork and theprovisionoffixed telephone services, aswell asotherservicesconsideredfundamental,undertheconditionsdefinedintheapplicablelegislationorinconcessioncontracts.Thelegalregimefortheinstallationandoperationoffixedpublictelecommunications networks (Administrative Regulation no.41/2011)statesthatonlyentitieswhicharecommercialcompaniesregularlyincorporatedintheMSAR,andwhosecorporatepurposesincludestheexerciseoftheactivitytobelicensed,canbelicensed.The same is to be said for the legal regime for the provision ofinternetserviceproviders(AdministrativeRegulationno.24/2002),which requires applicants to be commercial companies regularlyincorporatedintheMSAR,andwhosecorporatepurposeincludestheprovisionofInternetservicestobelicensed.Regarding radio and television broadcasts, Law no. 8/89/Mdetermines that the television broadcast activity is subject to aconcessioncontractandmaybegrantedtoanylegalpersonthatisincorporatedassuch,hasitsheadofficeinMacau,whosepurposeistheexerciseoftheactivitytobegrantedandoffersguaranteesofsuitability,technicalqualificationandfinancialcapacity.Similarly,theactivityofradiobroadcastingissubjecttoapermitandmaybeexercisedbyanylegalpersonhavingitsheadofficeinMacauandoffersguaranteesofsuitability,technicalqualificationandfinancialstanding.UnderthePressLaw(Lawno.7/90/M),theconstitutionofnewspapercompanies, editorial companies and news organisations is free,in accordancewith the applicable law. However, the registrationof entities that own news, editorial and news organisations,indicatingtheirnameorcompanyname,permanentestablishments,composition of the corporate bodies and distribution of sharecapital,aswellastheregistrationofcorrespondentsandotherformsofrepresentationofmediaoutletslocatedoutsidetheMSAR,withthe indicationof theircomplete identificationand the informationbodyforwhichtheyperformtheirfunctions,mustbemadewiththeMediaOfficepriortothebeginningofanysuchactivities.Hence, the sectors indicated above are generally open to foreigninvestment;however,theyarestillsubjecttolicensing/authorisationundertheapplicablelegislation.

2 Telecoms

General


TheMSAR has been aWTOmember since 1 January 1995 anda member of GATT since 11 January 1991. Furthermore, theMSARBasicLawalsodetermines thatMacaushall continuouslyeffectuate its free trade policywith freedom in themovement ofgoods,intangibleassetsandcapital(http://bo.io.gov.mo/bo/I/1999/leibasica/index.asp).The MSAR has not made commitments under GATS regardingtelecommunications.ThetelecommunicationsreferencepaperhasnotbeenadoptednorimplementedintheMSAR.

oversee and supervise telecommunications and the activity oftelecommunicationsoperators.As stated above, theMacau Post Office is the entity responsiblefor providing public postal services and for regulating,supervising,promotingandcoordinatingallactivitiesrelatedtothetelecommunicationssector in theMSAR. Within theMacauPostOffice, thefollowingdepartmentshavea role in theregulationoftelecommunicationsandInternet:■ the Telecommunications Management Department, which

is the sub-unit responsible for supporting the definition oftelecommunications policy, including telecommunicationsand broadcasting services, and for the management andmonitoringofitsactivities,withtheexceptionofbroadcastingcontent;

■ theElectronicServicesDepartment,whichistheorganicsub-unit responsible for electronic certification services, secureelectronic postal services, development of CTT postal andcomputer technology systems, and electronic commerceservices;and

■ the Department of Information Technology Developmentand Management of Resources, which is the sub-unitresponsible for supporting the definition of IT policies,promoting theapplicationof these technologies,promotingcooperation in this field with entities outside the MSAR,as well as for the planning and management of publictelecommunicationsresourcesandthecoordinationoftheuseoftelecommunicationsresourcesinMacauandabroad.

(b) Audio-visual media distribution sectorsAs indicated above, the Media Office is defined by theAdministrative Regulation no. 7/2012, of March 5 (http://bo.io.gov.mo/bo/i/2012/10/regadm07.asp),whichregulatestheserviceofcoordination, study and technical support to theGovernment andservicesoftheAdministration,intheareaofsocialcommunicationbysaidOffice,aswellasitsrespectiveattributions.SuchOfficeisin thehierarchicalor tutelarydependenceof theChiefExecutive,in accordance with theAdministrative Regulation no. 6/1999, ofDecember20.Lawno.8/89/M,ofSeptember4,establishedthelegalregimeforradio and television broadcasting and created the BroadcastingCouncil, an independent body that functions for administrativepurposeswiththeMediaOffice,withtheresponsibilitytoguarantee:i. the independence of the concessionaires and broadcasting

operators,especiallyinfaceofpoliticalandeconomicpower;ii. thesafeguardingofpluralismandfreedomofexpressionand

ofthought;iii. theaccuracyandobjectivityoftheinformation;iv. thequalityofprogramming;andv. thedefenceoftherightsandtherespectoftheobligationsset

forthinthelaw.


Asarule,inaccordancewiththeMSARBasicLaw(http://bo.io.gov.mo/bo/I/1999/leibasica/index.asp), the capitalist system inMacaushallremainunchangedfor50yearsafterthereturnofMacautothePeople’sRepublicofChina.Also,theBasicLawexpresslystatesthattherighttopropertyofcompaniesandinvestmentsfromoutsidetheMSARareprotectedbylaw.In regards to the telecommunications sector, Law no. 14/2001providesthattheconcessionandlicensingoftheestablishmentandoperation of networks and the provision of telecommunications


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TheprocedureforappealshallfollowtheregimesetoutintheCodeofAdministrative Procedure Litigation, approved by the Decree-Lawno.110/99/M,ofDecember13(http://bo.io.gov.mo/bo/i/99/50/codpacpt/declei110.asp).Regardingcompetitionlaw,aspreviouslystated,nosuchregulatoryentities exist in the MSAR – neither the international tradeobligationsofMacauunder theWTOframework,nor itsbilateraltraderelationswithChinaandtheEuropeanUnion,havepromptedtheadoptionofaspecificcompetitionlawregime.There are, nonetheless, certain provisions in the CommercialCode(article156et seq.),approvedbyDecree-Lawno.40/99/M,of August 3 (http://bo.io.gov.mo/bo/i/99/31/codcompt/declei40.asp), which provide for the indemnity of damages caused byanti-competition practices. Article 170 of the Commercial Codeprovidesthatthelegalactionbyunlawfulcompetitionmustbefiledbeforeacourtwithinoneyear from thedate inwhich thepersonsustaining the damagewas aware, or could necessarily have hadknowledge,ofthepersonwhoprovokedthem,butneverafterthreeyearsfromthedateinwhichtheyoccurred.Also,article172oftheCommercialCodeprovidesthatdamagessufferedbyviolationsofthecompetitionlegislationinMacauareindemnifiable.



Theoperationofpublictelecommunicationsnetworksandofpublictelecommunications services can be carried out by duly licensedtelecommunications enterprises, under regulations tobe approvedby the Government regarding the access to a specific activity.The licence to exercise such activities shall define the terms andconditionsunderwhichtheyareauthorisedtocarryouttheactivity,inter alia, universal service obligations and the infrastructureowned by authorised telecommunications companies, whichthey can install for the operation and the connection to the basictelecommunicationsnetwork.Under theAdministrativeRegulationno.41/2011, the installationand operation of public fixed telecommunications networksare subject to licensing, in accordance with the terms of thisAdministrative Regulation. The same applies to the operationof public telecommunications networks and to the provision oftelecommunicationsservices forpublic landmobileuse,which isalso subject to licensing, in accordance with the AdministrativeRegulation no. 7/2002, and to the access and exercise of theactivityofprovisionofInternetservices,undertheAdministrativeRegulationno.24/2002.Hence, these various applicable legislations do not differentiatebetween general and individual authorisations for the purpose ofprovidingtelecommunicationsservices.


Thisisnotapplicable.


As indicated above, Law no. 14/2001 defines the foundations ofthetelecommunicationspolicyoftheMSAR,aswellasthegeneralframework which regulates the establishment, management andexplorationof telecommunicationsnetworks and theprovisionoftelecommunicationsservicesrendered.Theaforesaidlawstipulatesthat it is the competence of the Government to superintend andsupervisethetelecommunicationssector,aswellastheactivityoftelecommunicationsoperators.Also,theobjectivesofsuchpolicyinclude:tograduallyliberalisethe installation of public telecommunications networks and theprovision of public use telecommunications services; to ensureaccess to telecommunications, at reasonable tariffs and prices,in a non-discriminatorymanner and in conditions of quality andefficiency that meet their needs, to the whole population andto economic and social activities; to ensure the existence andavailabilityoftheuniversaltelecommunicationsservice;toensureequalityandtransparencyofconditionsofcompetitionbypromotingthediversificationofservices,inordertoincreasetheirsupplyandqualitystandardscompatiblewiththerequirementsofusers;andtoensuretheinteroperabilityofpublictelecommunicationsnetworks,aswellastheportabilityofcustomers’numbers,amongothers.


As indicated above, the Government of the MSAR has theresponsibilitytooverseeandsupervisetelecommunicationsandtheactivityoftelecommunicationsoperators.Furthermore,theMacauPostOfficeistheentitywhosepurposeistoprovidepublicpostalservicesandalsotoregulate,supervise,promoteandcoordinateallactivities related to the telecommunications sector in theMSAR,aspertheDecree-Lawno.2/89/M.WithintheMacauPostOffice,theTelecommunicationsManagementDepartment is the sub-unitresponsible for supporting the definition of telecommunicationspolicy, including telecommunications and broadcasting services,and for themanagementandmonitoringof itsactivities,with theexceptionofbroadcastingcontent.AlthoughtheMacauPostOfficeisabodywithlegalpersonalityandadministrative,financialandpatrimonialautonomy,underDecree-Lawno.2/89/M,itisunderthehierarchicalortutelarydependenceof the Secretary for Transport and PublicWorks, in accordancewiththeAdministrativeRegulationno.6/1999,andthereforeisnotindependentfromtheGovernmentoftheMSAR.TherearenoMSARregulatoryauthoritiesforcompetitionlaw.


Under Law no. 9/1999, of December 20 (http://bo.io.gov.mo/bo/i/1999/01/lei09.asp),whichapprovedtheBasicLawonJudicialOrganization,theappealsofdecisionsoftheMacauPostOfficeshallbemadewiththeAdministrativeCourtsofMacau.If,however,thedecisioncomesfromtheChiefExecutiveorfromtheSecretaryofTransportationandPublicWorks(namely,regardingtheimpositionoffines),theappealshallbelodgedwiththeSecondInstanceCourt,underthesamelegislation.


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MacauRato, Ling, Lei & Cortés – Advogados

Theentities towhich licencesare issuedareobliged toprovideadeposit ofMOP 2,000,000 (twomillion Patacas) within 30 daysofthepublicationoftheallocationorder,inordertoguaranteetheobligationsassumedandthefinesor indemnities thatmaybeduewithinthescopeofthelicence.Thelicensedentityisalsosubjecttothepaymentoflicencefeesandrenewalfees,aswellastoapecuniaryfeefortheoperationofthelicensedactivities,theamountsandpaymentdeadlinesofwhicharesetbyorderoftheChiefExecutive.Licencesaregrantedforamaximumperiodof15years,andmayberenewedforperiodsnotexceedingthelicensedperiod;however,the duration of the licence is not defined by theAdministrativeRegulation no. 41/2011 and, therefore, it is decided by theChiefExecutiveonacase-by-casebasis.The licence is transferable, whether for a consideration or freeof charge, subject to prior authorisation by the Chief Executive.However,theentitytowhomthelicenceistransmittedshall,underpenaltyofnullityofthetransfer,fulfiltherequirementsreferredtoabove.Internet services licence (Administrative Regulation no. 24/2002)The request for the granting of a licence is formulated throughanapplicationaddressed to theChiefExecutive,andonlyentitiesfulfilling the following requirementsmay be licensed as Internetserviceproviders:i. thosewithpossessionofthenatureofacommercialcompany

regularlyincorporatedintheMSAR,whosecorporateobjectincludestheprovisionofInternetservices;

ii. thosewithpossessionofthetechnicalcapacityandappropriateexperiencetofulfiltheobligationsandotherspecificationsofthelicencethattheywishtoobtain,having,inparticular,staffqualifiedtocarryoutsaidactivity;

iii. those with possession of adequate economic and financialcapacity;and

iv. thosewith possession of updated and adequate accountingfor theanalyses required for theproject that they intend todevelop.

The request for the granting of a licence is made through anapplication addressed to theChiefExecutive, signed by a personwithpowers tobind theapplicant,with thesignaturenotarised inthatcapacity,andaccompaniedbythefollowingdocuments:■ proofofcompliancewiththerequirementsreferredtoabove;■ detailedproposalontheoperationoftheservices,embodied

inatechnicalplantobedeveloped,including,inparticular,the configuration of the technological systems to be used,with reference to the access methods and the necessaryequipment, as well as the development planning of thesystemsandservices;

■ economicandfinancialplan,includingthepricesystemtobeadopted;

■ organisational structure of the applicant, including theidentification and curriculum of its principal officials, and,wherepossible,financialstatementsandauditreportsontheaccountsforthelastthreefinancialyears;and

■ anyotherinformationwhichtheapplicantconsidersrelevantfortheassessmentofhisapplication.

TheTelecommunicationsManagementDepartment is responsibleforanalysingandissuinganopiniononthelicenceapplication,andmay request from the applicants any clarifications and additionalelementsthatmayprovenecessaryfortheircompleteanalysis.Thelicenceisvalidforamaximumperiodoffiveyears,andmayberenewedforperiodsnotexceedingfiveyears,uponrequestoftheprovider,andatleast90daysbeforetheendoftheperiodofvalidity.


Public telecommunications networks and public land mobile telecommunications licence (Administrative Regulation no. 7/2002)The allocation of licences under Administrative Regulation no.7/2002issubjecttoapublictender,andonlyentitiesthatmeetthefollowingrequirementscanbelicensed:i. thosewithpossessionofthenatureofacommercialcompany

regularly incorporated in the MSAR, whose corporatepurposeincludestheexerciseof theactivitytobelicensed,with a capital stock of no less thanMOP 10,000,000 (tenmillionPatacas);

ii. thosewithpossessionofthetechnicalcapacityandappropriateexperiencetofulfiltheobligationsandotherspecificationsofthelicencethattheyproposetoobtain,having,inparticular,staffqualifiedtocarryouttheactivity;

iii. those with possession of adequate economic and financialcapacity;and

iv. thosewithpossessionofupdatedandadequateaccountingfortheanalysesrequiredfortheprojectthattheyseektodevelop.

Theentitiestowhichlicencesaregrantedareobligedtoreinforcethedeposittotheamountsetinthepublictenderregulations,within30daysafterthepublicationofthedispatchorderingtheallocationofthelicence,inordertoguaranteetheobligationsassumedandthefinesordamagesthatmaybedueunderthelicensedactivities.Thelicensedentityissubjecttothepaymentofthefollowingfees,ofwhichtheamountsandpaymentdeadlinesaresetbyorderoftheChiefExecutive:a) emissionandrenewalfees;andb) anannualoperatingfee,correspondingtoapercentageofthe

gross revenues fromoperating the services provided underthelicensedactivities.

Licences are granted for a maximum period of eight years, andmayberenewedforthesameperiod–however,thedurationofthelicenceisnotdefinedbytheAdministrativeRegulationno.7/2002and, therefore, it isdecidedby theChiefExecutiveonacase-by-casebasis.The licence is transferable, whether for a consideration or free ofcharge,subjecttopriorauthorisationbytheChiefExecutive.However,theentitytowhomthelicenceistransmittedshall,underpenaltyofnullityofthetransfer,fulfiltherequirementsreferredtoabove.Public fixed telecommunications networks licence (Administrative Regulation no. 41/2011)Regarding the operation of public fixed telecommunicationsnetworks,theallocationoflicencesissubjecttoapublictender,andonlyentitiesthatfulfilthefollowingrequirementscanbelicensed:i. possess the nature of a commercial company regularly

incorporatedintheMSAR,whosecorporatepurposeincludestheexerciseoftheactivitytobelicensed;

ii. areendowedwithafullypaidupcapitalofnolessthanMOP50,000,000(fiftymillionPatacas);

iii. have the technical capacity and appropriate experience tofulfil theobligationsandother specificationsof the licencethat they propose to obtain, having, in particular, staffqualifiedtocarryouttheactivity;

iv. haveadequateeconomicandfinancialcapacity;andv. have up-to-date financial information appropriate to the

analysisoftheproposeddevelopmentproject.


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■ interoperabilityoftelecommunicationsservices;■ integrity of telecommunications networks, as well as

installationsandequipmentconnectedtointerconnection;and■ accounting separation for legally provided interconnection

entities.ItistheresponsibilityoftheGovernment,attherequestofeitherpartyinadispute,toresolvetheconflictsarisingfromtheinterconnectionoperation. The interventionof theGovernmentmustberequestedwithinamaximumof30days from thedateofverificationof theeventthatgaverisetotheconflict,andthedecisionoftheGovernmentisgivenwithinamaximumperiodof60daysfromthedateofthefullinvestigationofthecasewiththeelementsnecessaryforitsanalysis.ThedecisionoftheGovernmentcanbeappealed,underthetermsofthegenerallaw.


Administrative Regulation no. 41/2004 provides that theoperatorsofbasic telecommunicationsnetworksshalldrawupaninterconnection reference documentwhich shall include, at least,thefollowingelements:1) Definitionsofconceptsused.2) Principlesofinterconnection.3) Descriptionoftheinterconnectionservice.4) Technicalstandards.5) Interconnectionpoints.6) Qualityofservicestandards.7) Interconnectionprices.8) Billingprocessesandconditionsofpayment.9) Management,operation,maintenanceandrepair.10) Confidentialityofcommunications.11) Suspensionandterminationofservice.12) Conflictresolution.13) Applicablelegislation.TheinterconnectionreferencedocumentsandtheiramendmentsaresubjecttoGovernmentapproval,afterwhichthetenderingoperatormustensurethattheyareproperlyadvertised.


In accordance with Administrative Regulation no. 41/2004,interconnectionpricesshouldbesetinatransparent,economicallyviable and cost-oriented manner, and all components ofinterconnectionpricesshouldbeappropriatelydisaggregatedsothatoperatorsarenotburdenedwithinfrastructure,equipmentorservicechargesthatarenotnecessaryfortherequiredinterconnection.Furthermore, the law determines that the Government shallperiodically assess interconnection prices, taking into accountthe public interest, market evolution, cost of capital and costdevelopments as a result of technological development. For thispurpose,theGovernmentmayrequestinterconnectionproviderstojustifytheirpricesandshowthattheyarecalculatedbasedonactualcostsoftheservice,includingareasonablerateofcostofcapital,andcandetermineitscostadjustment,basedonseparateaccountinginformation.

The licence is transferable,whether foraconsiderationor freeofcharge,subjecttopriorauthorisationbytheSecretaryforTransportand PublicWorks. However, the entity to whom the licence istransmittedshall,underpenaltyofnullityofthetransfer,fulfiltherequirementsreferredtoabove.



In accordance with Law no. 14/2001, the expropriation andconstitution of administrative easements necessary for theconstructionandradio-electricprotectionofthefacilitiesnecessaryforthesupervisionoftheuseoftheradio-electricspectrum,aswellasfortheinstallation,protectionandconservationoftheinfrastructureofpublictelecommunicationsnetworks,isallowedunderthetermsofthelaw.The regime for expropriation and constitution of administrativeeasements isgovernedbyLawno.12/92/M,ofAugust17(http://bo.io.gov.mo/bo/i/92/33/lei12.asp), which defines the rulesregarding the regimeofexpropriations forpublicutility, andalsobyDecree-Law no. 43/97/M, ofOctober 20 (http://bo.io.gov.mo/bo/i/97/42/declei43.asp),whichfurtherdevelopssaidlegalregime.Also,theAdministrativeRegulationno.41/2011stipulatesthat,withoutprejudicetocompliancewiththelegislationandotherregulationsinforceintheMSARandafterobtainingtheappropriateadministrativeauthorisations,thelicensedentitiesareentitled,inter alia,to:■ perform works of installation, repair and maintenance of

telecommunications networks and conduits, surface andunderground, as well as in public and private buildings,includinginstallationofuserterminalequipment;

■ installtelecommunicationsnetworksonlandinthepublicorprivatedomainoftheMSARorotherlegalpersonsgovernedbypubliclaw;and

■ accessprivatelandsandbuildings,withtheconsentoftheirowners,aswellaspublicplaces,throughagentsandvehicles,provided that they are properly identified, whenever thenatureoftheworksorequires.

Itshouldbenotedthattheexecutionofthecivilconstructionworks,orof the alterationof the installations inherent to the exerciseoftherightsindicatedabove,requiresprioropinionontheissuanceoflicencesundertheresponsibilityoftheDepartmentofSoil,PublicWorksandTransportServicestobeissuedbyDSRT.



AdministrativeRegulationno. 41/2004establishes the regime forinterconnection of public telecommunications networks, whichshallbemadeinanenvironmentofequalconditionsofcompetition,inorder toensure that it iscarriedout ina timelyandreasonablemanner.TheAdministrativeRegulationno.41/2004establishesthefollowingessentialprinciplesandrequirementsofinterconnection:■ inviolabilityandconfidentialityofcommunications;■ non-discriminationintheconnectionoffer;


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prices,inanon-discriminatorymanner,andinconditionsofqualityandefficiencythatcorrespondtoitsneedsandensuretheexistenceandavailabilityoftheuniversaltelecommunicationsservice.Inaccordancewithsaid law, thesetofobligations inherent to theuniversal service of telecommunications shall be determined inan evolutionary way, in accordance with technological progress,marketdevelopmentandchanges indemandbyusers, takingintoaccount the requirements of harmonious and balanced economicandsocialdevelopment.Asregardstheoperationofpublictelecommunicationsnetworksandtelecommunicationsservicesforpublicuse,theLawprovidesthatthelicencetitlesfortheexerciseoftheaboveactivitiesdefinethetermsandconditionsunderwhichtheyareauthorisedtocarryouttheactivity,namelytheobligationsofuniversalservice.Hence,therespective licencemaystipulatestricter rules/objectives regardinguniversalservice.

Numbering


Telephone numbers and network identifying codes are allocatedunder theAdministrative Regulation no. 15/2002; this regulationfurther stipulates that the numbering resources are part of thepublic domain and their use is subject to prior assignment, inaccordancewiththisAdministrativeRegulationandtheNumberingPlan, approved by Dispatch of the Secretary for Transport andPublic Works no. 43/2016, of October 17 (http://bo.io.gov.mo/bo/i/2016/42/despstop.asp#43).


The management and allocation of numbering resources shallcomply with the principles of non-discrimination, fairness,transparencyandeffectiveandefficientuse,andshallnotprejudicethefreedomofchoiceof theoperator/provideror impedenumberportability,thefunctionalitythroughwhichuserswhorequestitcankeeptheirnumber(s),regardlessoftheoperatororserviceproviderofferingtherespectiveservice.WithregardtotheNumberingPlan,itmusthavenumberingcapacityandmanagementflexibility inorder toensure thedevelopmentoftelecommunications,andbecapableofadaptingtonewtechnologiesandservices.


As stated above, the Administrative Regulation no. 15/2002determines that the management and allocation of numberingresourcesshallnotprejudicethefreedomofchoiceoftheoperatororproviderorimpedenumberportability.

3 Radio Spectrum


InaccordancewithLawno.8/89/M,radiospectrumbelongstothepublicdomainoftheMSAR;theChiefExecutivemayallocateother


Asindicatedabove,thefollowingentitiesmustpossessaccountingseparation:a) entitieswho are operators of thebasic telecommunications

network; andb) entities who simultaneously provide competing tele-

communicationsservicesforpublicuse.Also, without prejudice to the directives of principle issued bythe Government, in accordance with actual requirements and inaccordance with internationally accepted standards, the separateaccounting system for interconnection activity shall include thefollowingelements:1) thecostmodelused,includingthecalculationbasis;2) theidentificationofallindividualcomponentsofcostswhich

together constitute the interconnection price, including thecostofcapitalinvested;

3) themethodofcalculatingthecostofcapital;4) costobjects;and5) theaccountingconventionsandprinciplesused.Nospecificprovisionsexistregardingfunctionalorlegalseparation.


Without prejudice to the legislation described above, no specificregulationexistsregardinghigh-speedbroadbandnetworks.



UndertheAdministrativeRegulationno.7/2002,licencesshalllaydown the terms and conditions for, inter alia, supply conditions,includingnon-discriminatorypricingsystems.Also, the same regulation determines that the prices of servicesprovidedbythelicensedentitiesareapprovedbytheGovernment,whichmaydetermine their totalorpartial liberalisation,byorderof the Chief Executive. The prices should be fixed as close aspossibletothecostofservicesrendered,andtheGovernmentmaysetceilings,takingintoaccounttheneedforacommercialincomeontheinvestmentmade.Therefore,pricesarenotimposedbutaresubjecttothecontroloftheGovernment.


Thereisnospecificstipulationregardingtheprovisionofelectroniccommunicationsservicestoconsumers,suchasuniversalservice.Law no. 14/2001 determines that the telecommunications policyaimstoensuretothewholepopulationandtoeconomicandsocialactivitiestheaccesstotelecommunications,atreasonableratesand


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in its possession transmitting, receiving or radio communicationtransmittingequipment,nortoestablishoruseastationoraradiocommunicationnetwork,withoutpriorgovernmentalauthorisation.However, said Decree-Law exempts radio equipment fromgovernmental authorisation, namely the radio communicationsequipment used by the Security Forces and the Judicial Police,which are needed for the collective needs of security and publicorder,aswellasthefollowingequipment:a) equipment of reduced power and small scope, included in

categoriestobefixedbygovernmentalorder;andb) receiversofradioandtelevisionbroadcastingservices.Regardingtheactivityoftelevisionandradiobroadcasting,Lawno.8/89/M stipulates that the granting of concessions (for televisionbroadcasting) and the award of permits (for radio broadcasting)shallbeprecededbyacallfortenders,exceptwheredulymotivatedandreasonedadvicedirectsadjustment.


ThefeesandfinesapplicabletoradioserviceswereapprovedbytheAdministrativeRegulationno.16/2010,ofJuly12(http://bo.io.gov.mo/bo/i/2010/28/regadm16.asp),whichsetsoutthe“GeneralTableofFeesandFinesApplicabletoRadioServices”.


UnderLawno.8/89/M,forbothtelevisionandradiobroadcastingconcessions/permits, the transmission, by any title, of rights orsocialparticipationinthebroadcastingcompanies,isdependentonpreviousauthorisationbytheChiefExecutive.Furthermore,anysuchtransmission,byanytitle,ofrightsorsocialparticipationagainsttheprovisionsofthislawisnullandvoid.


Under Law no. 8/89/M, the conveyance of the concession isallowed as long as it is duly substantiated and authorised by thegrantor. Regarding radio broadcast permits, the same may betransmitted, free of charge or not, togetherwith the broadcastingstationconcernedtothelicensedwavetype,afterthreeyearsofitsattributionorrenewal.However,thetransmissionissubjecttopriorauthorisationbytheChiefExecutive.



Lawno.16/92/M,ofSeptember28(http://bo.io.gov.mo/bo/i/92/39/lei16.asp),establishesandregulatestheinviolabilityandprotectionof the secrecy of postal communications, telecommunicationsand other private communications. It also prohibits anyinterference by public authorities in postal communications andtelecommunications,exceptincasesprovidedforinthislawandotherapplicablelegislation.Under the terms of Law no. 16/92/M, the duty of secrecy incommunicationscoversthesecrecyofpostalcommunications(which

frequency bands of the broadcasting service already available orwhich,asaconsequenceoftechnologicaldevelopment,havebeenaddedtotheInternationalFrequencyAllocationPlan.Furthermore,Decree-Law no. 18/83/M, ofMarch 12, determinesthat the Chief Executive is responsible for all activities relatedto the management, general administration and policy of radiocommunications, and that such administration shall be exercisedthroughtheMacauPostOffice,whichshallberesponsiblefor:a) managementoftheradioelectricspectrum;b) supporttotheGovernmentinthecoordination,tutelageand

planningoftheradiocommunicationssector;andc) representationofsaidsector.Intheareaofmanagementoftheradiospectrummanagement,theMacauPostOfficeisresponsiblefor:i. theassignmentoffrequencies;ii. thesettingandmonitoringofconditionsofuse;iii. the supervision of radio electric installations, with the

exceptionofthoserelatedtotheSecurityForces;iv. thecontrolandmonitoringofradiointerference;andv. theapplicationofsanctions,whenapplicable.As previously indicated, the Telecommunications ManagementDepartment is the sub-unit with theMacau Post Officewhich isresponsible for supporting the definition of telecommunicationspolicy, including telecommunications and broadcasting services,and for themanagementandmonitoringof itsactivities,with theexception of broadcasting content. The TelecommunicationsManagementDepartmentisresponsible,inter alia,forstandardisingandmanaging telecommunications and broadcasting activities, inparticulartomonitorcompliancewiththeprovisionsoflegislation,regulations, licences, contracts or regulatory directives applicabletonetworkoperatorsandserviceproviders,with theexceptionofbroadcastingcontent.


Asindicatedabove,Lawno.8/89/Mdeterminesthatthetelevisionbroadcast activity is subject to a concession contract andmaybegranted to any legal person that is incorporated as such, has itsheadofficeinMacau,whosepurposeistheexerciseoftheactivityto be granted, and that offers guarantees of suitability, technicalqualificationandfinancialcapacity.Similarly,theactivityofradiobroadcasting is subject to a permit andmay be exercised by anylegalpersonwith itsheadoffice inMacau,offeringguaranteesofsuitability,technicalqualificationandfinancialstanding.Theinstallationandoperationoftelevisionandsoundbroadcastingequipment is subject to compliance with the legal provisions onradiocommunications in force in theMSAR(namely,Decreeno.185/93/M,ofJune28,andDecree-Lawno.48/86/M,ofNovember3)andmustberequestedfromtheMacauPostOffice.Furthermore,asalready referred toabove, theMacauPostOfficeis responsible for the assignment of frequencies and the settingandmonitoringofconditionsofuse (amongothers). Nospecificproceduresarepresentedtoallocatespectrumbetweencandidates.


Asarule,accordingtoDecree-Lawno.18/83/M,nopersonintheMSARoronboardashiporaircraftsubjecttoitslawsmayhold


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byadutyofsecrecyinrelationtowhathehas learnedandisnotconsideredtobeofinterestforevidentiarypurposes.Further,inthecourseoftheinvestigation,itisthesoleresponsibilityof the investigative judge to order or authorise seizures ofcorrespondence(asdescribedabove),orinterceptionsorrecordingsoftelephoneconversationsorcommunications,inaccordancewiththeCriminalProcedureCode,andanyotheractsthelawexpresslysubjectstoanorderorauthorisationoftheinvestigativejudge.Therefore,onlyajudgemayaccessprivatecommunicationswithinthescopeofacriminalprocedure.However, inwhat pertains to the use of telecommunications, theCommissionAgainst Corruption, an independent body that onlyresponds to the Chief Executive (created by Law no. 10/2000,of August 14 (http://bo.io.gov.mo/bo/i/2000/33/lei10.asp)) –whose mission is to promote actions to prevent and investigatecrimes of corruption and related crimes of fraud within theframework of public and private sector activities, as well as toserveasOmbudsman,promoting thedefenceof rights, freedoms,guarantees and legitimate interests of persons, in accordancewith theirattributions–shallhaveaccess, inany form, includingcomputerisedform,totheinformationcontainedinthefilesoftheAdministration and of public and autonomous entities, necessaryfor theperformanceof itsduties, and for thepurposeofcriminalinvestigations,toinformationcontainedinthefilesoftheoperatorsoftelecommunicationsservicesregardingtheidentityoftheownersoftelecommunicationsmeans.Finally, Law no. 11/2009, of July 6 (http://bo.io.gov.mo/bo/i/2009/27/lei11.asp),establishesthecriminalisationofcomputercrimes and also determines a regime for collecting evidence inelectronic format (including telecommunications). Under thislegislation, the access toprivate communications shall follow therulesoftheCriminalProcedureCode(namelyregardingtheaccesstoprivatecorrespondence).


No such rules exist – as per the Criminal Procedure Code,the interception or recording of telephone conversations orcommunications can only be ordered or authorised by order of ajudge, if there is reason to believe that such diligencewill be ofgreatinterestforthediscoveryofthetruthorfortheproofofcrimes:a) punishablebyimprisonmentwithamaximumlimitofmore

thanthreeyears;b) relatingtothetraffickingofnarcoticdrugs;c) in relation to prohibited weapons, to explosive devices or

materialsorsimilar;d) ofsmuggling;ore) of injuries, threats, coercion and intrusion in private life,

whencommittedbytelephone.


Withoutprejudicetothestipulationsregardingcriminalproceduresand the powers of the CommissionAgainst Corruption, no suchtermsexist.

includes a prohibition on reading any correspondence, even if notcontainedinaclosedenvelope,andonopeningclosedcorrespondence)and the secrecy of telecommunications (which consists of theprohibition of learning the content of anymessage or information,excepttotheextentthattheexecutionoftheservicesorequires).Thesecrecyofpostalcommunicationsandtelecommunicationsalsocoverstheprohibitionondisclosuretothirdpartiesofthecontentofanymessageorinformation,whichhasbeendulyorundulyknown,and of the relationship between senders and recipients and theiraddresses.Furthermore, the Chief Executive Dispatch no. 186/2013, ofJune24, created thePublicRegisteredPostalE-mailService andapproved the respective regulation; said Service consists of theacceptanceby thePublicOperatorofelectronicmessagessentbycomputermeansbyanauthenticatedsenderinordertobedelivered,alsobycomputermeans,totherecipientorauthenticatedrecipients,indicatedbythesender.Also,Lawno.11/2009,ofJuly6(http://bo.io.gov.mo/bo/i/2009/27/lei11.asp), establishes the criminalisationof computer crimes andalso determines a regime for collecting evidence in electronicformat(includingtelecommunications).Finally, the treatment of personal data is regulated by Law no.8/2005, ofAugust 22 (http://bo.io.gov.mo/bo/i/2005/34/lei08.asp),whichestablishesthelegalregimefortheprocessingandprotectionofpersonaldata.


Asindicatedabove,Lawno.16/92/Mestablishesandregulatestheinviolabilityandprotectionofthesecrecyofsaidcommunications.It also prohibits any interference by public authorities in postalcommunicationsandtelecommunications,exceptincasesprovidedforinthislawandotherapplicablelegislation.Also, the Administrative Regulation no. 41/2004 establishesthe regime of interconnection of public telecommunicationsnetworks, which shall be made in an environment of equalconditions of competition, in order to ensure that it is carriedout in a timely and reasonable manner, ensuring in particularthe inviolability and confidentiality of communications, thenon-discrimination in the provision of interconnection, theinteroperabilityoftelecommunicationsservices,andtheintegrityoftelecommunicationsnetworks,installationsandequipmentassignedtointerconnection.TheMacauCriminalProcedureCode(Lawno.17/96/M,ofAugust12) stipulates that the seizure of letters, packages, valuables,telegrams or any other correspondence can only bemade, underpenaltyofnullity,whenauthorisedororderedbyjudicialorderandprovidedtherearereasonablegroundstobelievethat:a) thecorrespondencewas issuedby thesuspectoraddressed

tohim,evenifunderadifferentnameorthroughadifferentperson;

b) acrimepunishablebyaprisonsentenceofamaximumlimitofmorethanthreeyearsisatstake;and

c) theinquirywillbeofgreatinterestforthediscoveryofthetruthorfortheproofofcrimes.

Also, the judgewhoauthorisedorordered theproceedings is thefirstpersontotakenoteofthecontentoftheseizedcorrespondence;if he/she considers it relevant to the proof, itwill be attached totheprocedure;ifnot,itshallbereturnedtotherelevantpersonandit cannot beused as ameansof proof. Also, the judge is bound


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Wehavenoknowledgeofanydecisiononthismatter.


Under theAdministrativeRegulationno.24/2002, theproviderofInternet services shall, inter alia, take the necessarymeasures toensure the inviolability and confidentiality of communications oftheservicesprovided,aswellasfortheprotectionofpersonaldataand privacy, to ensure the integrity and inviolability of computernetworks and systems, and to observe the laws in force in theMSAR, aswell as the orders, injunctions, commands, directives,recommendationsandinstructionsthat,underlegalterms,areissuedbythecompetentauthorities.Similarly, Law no. 14/2001 determines that the users oftelecommunicationsservicesareguaranteed,inparticular,therighttoinviolabilityandtheconfidentialityoftheircommunications,inaccordancewiththelaw.Therefore,ifthereisaninjunctionorcourtorderinagivenprocedureregardingtheinfringementofrights,telecommunicationsoperatorsmustprovidetherequestedassistance.


Law no. 14/2001 determines that operators of the public tele-communicationsservicemustguaranteetheuseoftheirnetworksbyalltelecommunicationsoperatorsonanequalfooting,byallowingtheinterconnectionoftelecommunicationsnetworksusedbyotheroperators,inordertoguaranteeaccessandcommunicationsamongusersoftheservicesprovidedbydifferentoperators.Itfurtherprohibitstelecommunicationsoperatorsfromengaginginanypracticewhichdistortsalevelplayingfieldorwhichleadstoanabuseofadominantposition,inparticular:a) discriminatorypracticesinthecontextofrelationswithother

telecommunicationsoperatorsandwiththegeneralpublic;b) agreements or concerted practices between telecommun-

icationsoperatorsorassociationsofundertakings,irrespectiveoftheirform,whichhavetheeffectofdistorting,restrictingorimpedingcompetition;and


Without prejudice to thePublicRegisteredPostalE-mail Service(regardingtheencryptionofelectronicmessagesbysuchentity),nospecificrulesexistregardingencryption.


Nominimumdeadlineforretainingdataexists.



Regarding the press, as indicated above, the main legislation isthe Law no. 7/90/M,which regulates the exercise of freedom ofthepress, the right to informationand theactivityof journalistic,editorialandnewsorganisations.The law also regulates the organisation of publications and pressregistration,theexerciseoftherightofreply,denial,rectification,and clarification, as well as the regime regarding liability forunlawfulactsnotprovidedforinthecommoncriminallegislation.Asstatedabove,theDecreeno.11/91/M,ofJanuary28(http://bo.io.gov.mo/bo/i/91/04/port11.asp),regulatesthewayinwhichthepressregisterisprocessed,throughitsownmedia,withtheMediaOffice.Without prejudice to the stipulations of the Decree-Law no.43/99/M, of August 16 (http://bo.io.gov.mo/bo/i/99/33/declei43.asp), regarding the regime of copyright and related rights, nospecificstipulationsregardingthedistributionofaudio-visualmediaexistinMacau.


Withoutprejudicetospecificstipulationsregardingthejournalisticactivity and journalistic content under the Law no. 7/90/M,no differences exist between content broadcast via traditionaldistribution platforms as opposed to content delivered over theInternetorotherplatforms.As for advertisement, Law no. 7/89/M, of September 4 (http://bo.io.gov.mo/bo/i/89/36/lei07.asp), establishes the legal regimeofadvertising;however,itdoesnotdiscriminatebetweentheplatformsbeing used for such advertising and, therefore, is applicableregardlessofthemedium.




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c) all forms of cross-subsidisation or other practices whichunderminecompetitionorfreedomofchoiceforusers,suchasunfaircustomerattraction.

Also, as indicated above, the Administrative Regulation no.41/2004 establishes the regime of interconnection of publictelecommunications networks, which shall be made in anenvironment of equal conditions of competition, ensuring (inter alia)non-discriminationintheprovisionofinterconnection.Finally, the Administrative Regulation no. 41/2011 stipulatesthat the licence for the installation and operation of fixed publictelecommunications networksmay be suspended by order of theChiefExecutivewhen thereareacts thatdistort theconditionsofcompetition,orthatleadtoanabuseofadominantposition.Inanyevent,regardingthisparticularsubject,pleasenotethattheprices of the services to be provided to the users by the entitieslicensed are approved by dispatch of the Secretary forTransport

and PublicWorks and, although the total or partial liberalisationofthepricesreferredtointhepreviousnumbercanbedeterminedbyanorderoftheChiefExecutive,theAdministrativeRegulationno.41/2011stipulatesthatthepricesreferredtoabovemustbesetas close aspossible to the costof services, andmaximumand/orminimumlimitsmaybeset,takingintoaccountcommercialincomeandfreecompetition.


WithoutprejudicetothecompetenciesoftheTelecommunicationsManagementDepartment(asindicatedabove),nospecificregulationexistsregardingsuchmatters.

Pedro CortésRato, Ling, Lei & Cortés – Advogados Avenida da Amizade, 555 – Macau Landmark Office Tower 23rd Floor Macau SAR

Tel: +853 2856 2322 Email: [email protected]: www.lektou.com

José Filipe SalretaRato, Ling, Lei & Cortés – Advogados Avenida da Amizade, 555 – Macau Landmark Office Tower 23rd Floor Macau SAR

Tel: +853 2856 2322Email: [email protected]: www.lektou.com

Pedro Cortés has been a lawyer at Rato, Ling, Lei & Cortés since 2003 and a partner since 2006, with extensive experience in Gaming, Corporate, Finance and IP Law.

Pedro has professional membership in the Macau Lawyers Association, the Portuguese Bar Association, Brazilian Bar Association (São Paulo), the Hong Kong Institute of Directors, the International Association of Gaming Advisors (IAGA), the International Bar Association (IBA), the Chartered Institute of Arbitrators (CIArb) and the Hong Kong Institute of Arbitrators (HKIA). He is also qualified to work as a lawyer in East Timor and recognised as a cross-border Macau lawyer by the Justice Department of Guangdong.

Pedro has been a contributor for several legal and non-legal publications.

Rato, Ling, Lei & Cortés – Lawyers is a Macau SAR-based law firm with more than 30 years’ experience of legal practice in Macau. Services regularly provided by the firm include issuing legal opinions and advising on Macau law, helping international companies to start their businesses in Macau and assisting in the reorganisation of economic groups with connections to Macau.

In 2016, Rato, Ling, Lei & Cortés partnered with Zhong Yin Law Firm, in the People’s Republic of China, and Fongs, in Hong Kong, to open a new office on Hengqin Island, Zhuhai, PRC: ZLF Law Firm. This is the first law office that unites firms from the two Special Administrative Regions and Mainland China.

The firm also recently opened an office in Lisbon.

The academic and professional backgrounds, the update and specialisation, together with the experience of the lawyers of Rato, Ling, Lei & Cortés, are the key to answering the increasing demand of the firm’s worldwide clients.

José Filipe Salreta has been a lawyer with Rato, Ling, Lei & Cortés since 2011. Previous to that, he was a trainee lawyer in the Portuguese law firm SPS Advogados between 2007 and 2009.

José is a member of the Macau Lawyers Association, the Portuguese Bar Association and recognised as a cross-border Macau lawyer by the Justice Department of Guangdong. He works in Commercial and Corporate, Labour, Insurance, Banking, Tax and Litigation Law.

He has a Master’s in European Studies from Sorbonne University, in France, and a Postgraduate degree in International Business Law from the University of Macau.

José also contributes to several legal and non-legal publications.


Chapter 23

with over 2.35 million of the 2.5 million broadbandsubscribersasattheendofAugust2017.TMcontinuestomonopolisethefixedbroadbandmarketwithapproximately95%ofthemarketshare.ThebiggestcompetitorsofTMareTimedotComBhdandMaxisBerhad.

Mobile companies such as Maxis Berhad, CelcomAxiataBhd, andDigi.comBhdplay amajor role in theprovisionofcellularormobilebroadbandservices inMalaysia. Theinternet industry in Malaysia is liberalised and open toforeigninvestment.


(a) Telecoms,includinginternet■ Communications andMultimediaAct 1998 (hereinafter

referredtoasthe“CMA”). ThepurposeoftheCMAistoprovideforandtoregulate

theconvergingcommunicationsandmultimediaindustry.The CMA forms the core legislation governing thecommunications and multimedia industry in Malaysia.The CMA provides for the Communications andMultimedia Content Forum to prepare and draw up aContent Code after appropriate consultations, and toenforce the Code containing governing standards andpracticesinthecommunicationsandmultimediaindustry.

The Content Code, which the Communications andMultimediaContentForumofMalaysiahasadoptedforthepurposeofstatutoryduty,setsouttheguidelinesandprocedures for good practice and standards of contentdisseminated to audiences by service providers in thecommunicationsandmultimediaindustryinMalaysia.

■ PersonalDataProtectionAct2010.■ CompaniesAct1965.■ PenalCode.■ FinancialServicesAct2013.■ ComputerCrimesAct1997.■ ConsumerProtectionAct1999.■ Consumer Protection (Electronic Trade Transactions)

Regulation2012.■ CopyrightAct1987.■ DigitalSignatureAct1997.■ ElectronicCommerceAct2006.■ ElectronicGovernmentActivitiesAct2007.■ CapitalMarketsandServicesAct2007.■ SeditionAct1948.

1 Overview


(a) The telecommunications sector in Malaysia has seensignificantgrowthinrecentdecades.Theprimaryregulatorof telecommunications in Malaysia is the MalaysianCommunications and Multimedia Commission (“theCommission”/“MCMC”). Though market liberalisationhas played a big role in ensuring the growth of theindustry, regulatory reforms have been a contributingfactor too. TelekomMalaysia(“TM”)is thelargestplayer,providing fixed-line services in the retail and wholesaletelecommunicationssectorinMalaysia,whileCelcom,Digi,Maxis and UMobile are the larger players in the mobilesector.

Malaysiahadarationalfour-playertelcomarketrightupto2016, when UMobile started to become more aggressivewithunlimiteddataplans,whileTM’swebe(nowknownas“Unifi”)enteredas thefifthmobileplayer. Another recentoperatortohaveemergedonthesceneisLTE-onlyoperatorYes.Intermsofrevenuemarketshare,Maxisistheleaderwithamarketshareof35%in2017.Meanwhile,Celcom’srevenue market was 27% in 2017, whilst Digi’s revenuemarketshareaveragedat26%.

(b) Audio-visualMediaDistribution The broadcasting industry in Malaysia has been growing

rapidly in recent yearswith the introduction of theDigitalTerrestrialTelevisionBroadcasting(“DTTB”)infrastructure,whichallowsforfree-to-air(“FTA”)broadcasterstomigratefromanaloguetothedigitalplatformfrom2016.MalaysiaPay TV service providers are met with an increasinglydemanding and competitive market by providing morechannels as well as services. Although competition isbeginningtoemergeinMalaysia’sPayTVmarket,AstroAllAsiaNetworks(“ASTRO”)stilldominatesdespitetherapidmovetowardsdigitalisation,ashigh-speedinternetremainsunderpenetratedinruralareas.

ASTRO, with approximately 75% market penetration ofMalaysianTVhouseholds in2017,ventured into the IPTVservicein2010.ASTROisreportedtohaverevenuesofRM5.5 billion in January 2018. The broadcasting industry inMalaysiaisopentocompetitionandforeigninvestment.

(c) Internet TMis thedominantfixedbroadbandplayer in thecountry,

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However, only 70% foreign participation is allowed fornetworkfacilitiesprovidersandnetworkserviceproviders.

(b) Audio-visualMediaDistribution Therearenorulesrestrictingforeignownershiporinvestment

intheindustry.

2 Telecoms

General


MalaysiahasbeenamemberoftheWorldTradeOrganisationsince1January1995andisamemberoftheGATT.Malaysiahas,undertheGATS,madeseveralcommitmentsonlimitationonmarketaccess,andhasadoptedandimplementedthetelecomsreferencepaper.


TheCMAprovidesaregulatoryframeworkforthecommunicationsand multimedia industry. The CMA has an expansive scope,ranging from spectrum allocation and consumer protection tocontentregulationandinvestigatorypowers.Themainsubjectsofregulation under the CMA are applications services and networkservices.TheCMAfurtherpertainstocontentapplicationsservices,whichappeartoincludeonlineintermediaries.The Ministry of Communications and Multimedia has primaryresponsibility for determining policies and regulations. Thegovernmentalactors involved in theadministrationof theActare“the Minister charged with responsibility for communicationsandmedia” and theMalaysian Communications andMultimediaCommission, which was established under the MalaysianCommunicationsandMultimediaCommissionAct1998,andwhichregulatesnetworkedinformation technologyindustryservicesandoperationalandadministrativeaspectsoftheregulatoryframework.TheMinisterofCommunicationsandMultimedia(“Minister”),towhom the Commission is answerable, has primary responsibilityfor determining policies and regulations in the communicationsandmultimedia, broadcasting, information technology and postalsectors.TheMinistercangivetheCommissiongeneraldirectionsrelatingtoperformanceoftheCommission’sfunctionsandtheCommissionmust comply with them. Certain policy decisions affectingcompetitionintheindustry,suchaslicensingandtheprinciplesforspectrumuseandrateregulation,arereservedfortheMinister.TheCommission’sprimaryfunctionsinclude:■ AdvisingtheMinisteronallmattersconcerningnationalpolicy

objectivesforcommunicationsandmultimediaactivities.■ MakingrecommendationstotheMinisteronvariousmatters,

including thegrantof individual licences,cancellationofaperson’sregistrationunderaclasslicence,andvariationsoflicenceconditions.

■ ImplementingandenforcingtheCMA.■ Issuing directions in writing to any person regarding

compliance with licence conditions, including remedy ofa breachof a licence condition, theCMAor its subsidiarylegislation.

■ StrategicTradeAct2010.■ PostalServicesAct1999.■ FilmCensorshipAct2002.■ CompaniesAct2016.■ FinancialServicesAct2013.■ DirectSalesAct1993.■ CommonGamingHousesAct1953.■ BettingAct1953.■ PoolBettingAct1967.

(b) The above legislation is also relevant to the audio-visualsectorastheCMAunifiedtheregulations.


(a) Telecoms■ MinistryofCommunicationsandMultimedia–Malaysian

Communications and Multimedia Commission. TheMinistryofCommunicationsandMultimediahasprimaryresponsibilityfordeterminingpoliciesandregulations.TheMalaysianCommunicationsandMultimediaCommissionwasestablishedundertheMalaysianCommunicationsandMultimediaCommissionAct1998asaregulatorforthecommunicationsandmultimediaindustryinMalaysia;itregulatesthenetworkedinformationtechnologyindustryservicesandtheoperationalandadministrativeaspectsoftheregulatoryframework.

■ SecuritiesCommissionMalaysia.■ PersonalDataProtectionCommission/Department.■ MinisterofInformation,CommunicationsandCulture.■ MinisterofDomesticTradeandConsumerAffairs.■ CompaniesCommissionofMalaysia.

(b) Audio-visualMediaDistribution■ MinistryofCommunicationsandMultimediaMalaysia.■ The Malaysian Communications and Multimedia

Commission.■ DepartmentofPersonalDataProtection.■ FilmCensorshipBoardMalaysia–AdvertisingStandards

Advisory.


(a) ThecommunicationsandmultimediasectorinMalaysiahasgonethroughmajortransformationoverthelasttwodecades.It has evolved from the timeof themonopoly incumbentoperator to the subsequent privatisation of TelekomMalaysia and liberalisation of the telecommunicationssector, to the convergence regime under theCMA. Thisexercise changed the telecommunications sector, whichwas monopolistic in structure, to one that was highlycompetitiveandservice-oriented.

There has been effort by the government to liberalisethe market and it has allowed for the injection of foreigninvestment.In2012,thegovernmentliberalisedtheservicessector by allowing 100% equity participation in phases.The Commission began allowing 100% foreign equityparticipation for Applications Service Providers (“ASP”)licenseesinApril2012.

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Thedecisionof theCommission isappealablebywayof judicialreview.Section18oftheCMAprovidesthattheAppealTribunalmayreviewanymatteronappeal,includingadecisionordirectionof the Commission, but not a determination of the Commission.Section 18 also provides that any decision made by theAppealTribunalisfinalandbindingonthepartiestotheappeal,andisnotsubjecttofurtherappeal.Section23AoftheCMAfurtherprovidesthatanydecisiongivenbytheAppealTribunalmaybeenforcedinthesamemannerasajudgmentoranorderoftheHighCourt.Section 120 of the CMA provides that an aggrieved person orperson whose interest is adversely affected by a decision ordirection (but not a determination) of theMCMCmay appeal totheAppealTribunal fora reviewof themeritsand theprocessofcertaindecisionsordirectionsof theMCMC,unless thematter isnotsubjecttoanappealtotheAppealTribunal.Further,section121oftheCMAprovidesthatapersonaffectedbyadecisionorotheractionoftheMinisterortheCommissionmayapplytothecourtforajudicialreviewofsuchdecisionorotheraction.



TheCMAprovides for an activity-based licensing regime that istechnology neutral. Within the activity categories, there are twokeytypesoflicences.Section126oftheCMAprohibitsanypersonfrom:(a)owningorprovidinganynetworkfacilities;(b)providinganynetworkservices;or(c)anyapplicationsservicesexceptwithavalidindividuallicenceoraclasslicence,bothofwhicharegrantedundertheCMA.ThefourcategoriesoflicensableactivitiesareaNetworkFacilitiesProvider,NetworkServicesProvider,ApplicationsServiceProviderandaContentApplicationsServiceProvider,whicharesummarisedasfollows:(a) NetworkFacilitiesProvider’s(“NFP”)licence NFPsaretheowners/providersofnetworkfacilities,namely

infrastructuresuchascables,towers,satelliteearthstations,broadbandfibreopticcables, telecommunications linesandexchanges, radiocommunications transmission equipment,mobile communications base stations and broadcastingtransmissiontowersandequipment.

(b) NetworkServiceProvider’s(“NSP”)licence NSP licences aregiven for thepurposeof theprovisionof

basic connectivity and bandwidth to support a variety ofapplications. NSPswouldusuallydeploy thesaidnetworkfacilities.ExamplesofNSPservicesarebandwidthservices,broadcasting distributions services, and access applicationservices.

(c) ApplicationsServiceProvider’s(“ASP”)licence ASP licences are given to those who provide for specific

particular functions. This would include electroniccommerce, internet access, voice services, and messagingservices. Application Services are defined as “servicesprovided bymeans of, but not solely bymeans of, one ormorenetworkservices”intheCMA.

■ Holdingpublic inquiries in relation toproposedchanges toregulation.

■ Issuing determinations onmandatory standards formatterssubject to a voluntary industry code, if theCommission issatisfiedthatthevoluntaryindustrycodehasfailedandwillcontinuetofail.

With its creation, the Commission set forth 10 national policyobjectivesto:■ establish Malaysia as a major global centre and hub for

communications and multimedia information and contentservices;

■ promoteacivilsocietywhereinformation-basedserviceswillprovide thebasisof continuingenhancements toqualityofworkandlife;

■ grow and nurture local information resources and culturalrepresentation that facilitate national identity and globaldiversity;

■ regulateforthelong-termbenefitoftheenduser;■ promote a high level of consumer confidence in service

deliveryfromtheindustry;■ ensure an equitable provision of affordable services over

ubiquitousnationalinfrastructure;■ createarobustapplicationsenvironmentforendusers;■ facilitatetheefficientallocationofresourcessuchasskilled

labour,capital,knowledgeandnationalassets;■ promote the development of capabilities and skills within

Malaysia’sconvergenceindustries;and■ ensure information security and network reliability and

integrity.TheCommissioniscommittednotonlytothelicenseesundertheCMA,butalsototheconsumersandtotheeconomicandtechnicalregulation of the communications and multimedia industry. Inaddition, the Commission provides for the framework of thelicensing requirements of the communications and multimediaindustry. Pursuant to section 81 of the CMA, the Commissionmaintains a register, in both physical and electronic form, of allmatterswhicharerequiredtoberegisteredundertheCMAanditssubsidiarylegislation.


Malaysia saw its regulator, the Malaysian CommunicationsandMultimedia Commission, set up in 1999, one year after theintroductionoftheconvergedtelecomslegislation,theCMA.TheCMA contains competition provisions which prohibit a licenseefromengaging in conductwhichhas the purpose of substantiallylessening competition in a communications market. TheCommissionisnotindependentfromthegovernment.The Commission, however, works separately from the MalaysiaCompetitionCommission (“MyCC”),whichwasestablishedon1April2011withthepurposeofenforcingtheCompetitionAct2010.MyCC’skeyroleistoimplementandenforcetheprovisionsoftheCompetitionAct2010, to functionasanadvocateoncompetitionmatters, to conduct studies on competition-related activities andto enhancepublic awarenessof the impact of competitionon theeconomyofMalaysia.TheCompetitionAct2010doesnotapplytocommercialactivitiesundertheCMAwhich,asmentionedabove,hasitsowncompetitionregulationswiththeCommissionastheregulatingbody.


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(b) the licensee shall take reasonable steps to ensure that thecharging mechanism used in connection with any of itsnetwork facilities and/ornetwork services are accurate andreliableinallmaterialaspects.


Therearefour,namelyanetworkfacilitiesprovider,networkserviceprovider, applications service provider or a content applicationsserviceprovider.TheScheduleundertheCMAdoesprovidethataclasslicencereplacesanyotherlicencegrantedbytheMinister,andshallbethesolelicenceheldbythelicenseeinrespectofthenetwork facilitiesauthorisedunder the licence,asprovidedundersection126ofthe1998Act.Anindividuallicenceisrequiredbythefollowingproviders:■ NetworkFacilitiesProviders:

■ earthstations;■ fixedlinksandcables;■ radiocommunicationstransmittersandlinks;■ satellitehubs;■ satellitecontrolstations;■ spacestations;■ submarinecablelandingcentres;■ towers, poles, ducts and pits used in conjunction with

othernetworkfacilities;or■ suchothernetworkfacilitieswhicharenotexemptunder

theCMAorarenotsubjecttoaclasslicenceunderPartIV of the Communication and Multimedia (Licensing)Regulations2000,orarenotlistedinthissubparagraph.

■ NetworkServiceProviders:■ bandwidthservices;■ broadcastingdistributionservices;■ cellularmobileservices;■ accessapplicationsservices;■ spaceservices;■ switchingservices;■ gatewayservices;or■ suchothernetworkserviceswhicharenotexemptunder

theCMAorarenotsubjecttoaclasslicenceunderPartIVoftheLicensingRegulations,orarenotlistedinthissubparagraph.

■ ApplicationsServiceProviders:■ satellitebroadcasting;■ subscriptionbroadcasting;■ terrestrialfree-to-airTV;■ terrestrialradiobroadcasting;or■ such other content applications services which are not

exempt under the CMA or are not subject to a classlicenceunderPartIVoftheLicensingRegulations,orarenotlistedinthissubparagraph.

Individual licencesmaybe transferredby theapplicant,whowillhavetoprovidethefollowingtotheCommission:(a) aformalletter(detailsoftransfer)andanapplicationfeeof

RM5,000perlicence;and(b) additionalinformationordocumentsasmayberequestedby

theCommission.

(d) ContentApplicationServiceProvider’s(“CASP”)licence ThiscategoryoflicenceisgrantedtoaspecialsubsetofASPs

who provide content to end users. This includes satellitebroadcasting, terrestrial free-to-air TV, limited contentapplicationservicesandinternetcontentapplicationservices.

Foreachoftheabovefourcategoriesoflicence,thelicencemaybeanIndividualorClassLicenceandthetypeoflicencerequiredwilllargelydependonthelicensableactivity.Asummaryofthetypesoflicencesisasfollows:(a) Individuallicence An individual licence is a licence granted for a specified

persontoconductaspecifiedactivity,andthismaybesubjectto conditions imposed upon such a licence. An individuallicence requires a higher degree of control and thus mayincludeadditionaland/orspecialconditions.

(b) Classlicence Aclass licence refers toa licence foranyorallpersons to

conductaspecifiedactivity. It isa“light-handed” formofregulationtopromoteindustrygrowthanddevelopmentwitheasymarketaccess.

(c) Exempt/unlicensed PursuanttotheCommunicationsandMultimedia(Licensing)

(Exemption)Order2000,certainactivitiesareexemptedfromtherequirementofobtainingalicence.Theseincludeinternetcontentapplicationservicesandweb-hostingservices.


StandardlicenceconditionsforanindividualandclasslicenceareprovidedintheScheduleoftheCMA.Individual licenceThe followingpersonsorclassesofpersons shallbe ineligible toapplyforanindividuallicence:(a) aforeigncompanyasdefinedundertheCompaniesAct2016;(b) anindividualorasoleproprietorship;(c) apartnership;and(d) suchotherpersonsorclassesofpersonsasmaybedecidedby

theMinisterfromtimetotime.Class licenceForaclasslicence,thelicenseemustcomplywiththenumberingandelectronicaddressingplanissuedundertheCMA,andtheymustalsocomplywiththespectrumplanandanyconsumercoderegistered,aswellasotherstandardconditionsdeclaredbytheMinisteroranyother subsidiary legislation. The following persons or classes ofpersonsarenoteligibletoberegisteredasclasslicensees:(a) aforeignindividualwhoisnotapermanentresident;and(b) aforeigncompanyasdefinedundertheCompaniesAct2016.Regulation3of theCommunicationsandMultimedia (Licensing)Regulations2000providesthatanindividualoraclasslicenceshall,inadditiontothestandardconditionssetoutintheScheduletotheCMA,includethefollowingstandardconditions:(a) thelicenseeshall,inrespectofallapparatus,equipmentand

installationspossessed, operated,maintainedor usedunderthe licence, take all proper and adequate safety measuresto safeguard life or property, including exposure to anyelectricalemissionorradiationemanatingfromtheapparatus,equipmentorinstallationssoused;and


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Pricing,thelatestbeingDeterminationNo.1of2017,whichsetsthepricesfrom2018to2020,andwhichcameintoeffecton1January2018. Hence, thepricesofall the facilitiesandservices listed intheDetermination apply toAccess Providers andAccess Seekersbeginningfrom1January2018.


Operators are required to have account separation. The revisedGuidelines on Implementation of Accounting Separation inMalaysiawerepublishedbytheCommissionon1November2016.TheCommissionrequiresseparateaccountsfor,namely,operatorswithrevenueandtotalassetsinMalaysiaexceedingRM3billionandbelowRM3billion.Thereis,however,norequirementoffunctionalorlegalseparation.


High-speed broadband networks which are no different to othercommunicationandmultimediaactivitiesareregulated,andarealsosubject to theAccessList. Malaysiahas theNationalBroadbandImplementation Strategy or better known as National BroadbandInitiative (“NBI”) which puts in place a national strategy thatbrings broadband to thewhole nation. Malaysia has invested innationalpublic-privatepartnershipprogrammessuchasHighSpeedBroadbandandBroadbandforGeneralPopulation,prioritisingthegrowth of internet coverage over other parameters. Since 2008,the government had signed a Public-Private Partnership (“PPP”)agreementwithTelekomMalaysiaBerhad(“TM”)torollouthigh-speedbroadbandinfrastructureinselectedareas.ThisprojectiscalledtheHighSpeedBroadband(“HSBB”)Projectfor the deployment of a network with speeds greater than 10Mbps in strategicareaswithhigheconomic impact. Since2014,theCommissionhas implementedan initiative calledFiberOpticNetwork Expansion, in which the existing core networks thatconnectthecommunicationstowerswillbeupgradedtofibreoptics.Theupgradingofcorenetworkswillenable3Gand4Gbroadbandservices tobeprovided. This is toaccommodate thedemand forhigh-speedbroadband.InJanuary2018,TMandTenagaNasionalBerhad(“TNB”)signedaMemorandumofUnderstanding (“MoU”) to jointly develop animplementation plan to deliver on the government’s NationwideFiberisationPlan(“NFP”).TheCommissionhaspublishedTechnicalCodesforthetestingandcertificationofbothfixedandwirelesscommunicationsequipment.These documents deal primarily with the technical requirementsfor safety, frequency bands, interoperability, electromagneticcompatibilityandnon-interference.



Currently, onlyfixed phone lines (“PSTN2”) and internet dial-upratesareregulated.TheCommunicationsandMultimedia(Rates)



TheCMAprovidesfortheinspectionoflandinordertodetermineifthelandissuitableforinstallingorobtainingaccesstonetworkfacilities. Section 214 of the CMA allows a network facilitiesprovider to, in the purpose of determining whether any land issuitableforthepurposeofinstalling,orobtainingaccessto,enteron, inspect the land and do anything desirable for that purpose.Thisincludesmakingsurveys,takinglevels,sinkingbores,takingsamples,diggingpitsandexaminingthesoil.Naturally,theinstallationofnetworkfacilitiesneedstobeauthorisedwithanetworkfacilitiesinstallationpermit,issuedbytheCommissionundersection226oftheAct.IfanNFPisauthorisedtocarryouttheinstallationofnetworkfacilities,theNFPmayenterandoccupyanylandanddoanythingthatisnecessaryordesirableforthosepurposes.



There is an obligation under Part X of the CMA, specificallyundersection228oftheCMA,foranetworkfacilitiesprovidertoprovide non-discriminatory access to any post, network facilitiesorright-of-way.Accessmaybedeniedwherethereisinsufficientcapacityorforreasonsofsafety,security,reliability,ordifficultyofa technical or engineeringnature, of anon-discriminatorynature.TheCommission provides for theCommissionDetermination onAccessListNo.1of2015,whichsetsoutthefacilitiesorserviceswithaccessobligationsundertheCMA.


EachAccessProvideroroperatorhastoprepareaReferenceAccessOfferAgreement for each facility listed in theAccess List. TheAccess Provider has disclosure, negotiation, content and serviceobligationsundertheCommissionDeterminationontheMandatoryStandard onAccess 2009 (“MSA”) or under any determinationsof the Commission. An Access Reference Document (“ARD”)containstermsandconditionsofaccess,includingratesoffacilitiesandservicesontheAccessList.Allthosewiththeobligationstoprovidethefacilitiesandserviceson theAccess List (Access Providers) are obliged to prepare anARD,settingoutdetailedtermsandconditionsofaccess.AccessSeekersarethentonegotiateanAccessAgreementwiththeAccessProviderbasedon,andalignedwith,theMSAandARD.


TheCommission regulates the pricing and cost in relation to theservicesand/orfacilitiesprovided.TheCommissionhasissuedtheCommissionDeterminationontheMandatoryStandardonAccess


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telephone numbers and network identifying codes in accordancewith the Numbering and ElectronicAddressing Plan (“NEAP”),issuedonJanuary2006.


Pursuanttosection179(1)oftheCMA,theCommissionisvestedwith the control, planning, administration, management andassignmentofthenumberingandelectronicaddressingofnetworkservicesandapplicationsservices. TheNEAPgovernstheuseoftelephonenumbers.ThefollowingpersonsarerequiredtocomplywiththeNEAP:(i) alllicensees;(ii) allregistrars;and(iii) anyotherpartiesspecifiedbytheCommission.The NEAP provides that the Commission may reserve anyunassignednumberforplanningpurposesortorealisethevalueofcherishednumbers.


Mobile Number Portability (“MNP”) was implemented by theCommissiontoallowconsumerstoswitchmobileserviceproviderswithouttheneedtochangetheirmobilenumbers,inlinewiththeaim of ensuring effective competition in the market. This is toenablefreedomofchoiceandtoenhancecompetitioninthemarket.Alllicenseesprovidingapplicationservicesforthedeliveryofvoiceanddatacommunicationsshall:(a) perform all acts necessary to prepare and/or facilitate the

implementationofMNP;and(b) ensurethatallcallsanddataaredeliveredtotheappropriate

recipientmobilenetwork,inaccordancewiththeprovisionsoftheNEAP.

3 Radio Spectrum


In Malaysia, the Commission manages spectrum allocation fortelecommunicationuse,andregulatesaswellasensuresthatuseofspectrumisinaccordancewiththeCMAandtheCommunicationsandMultimedia(Spectrum)Regulations2000.


TherearethreetypesofassignmentsinMalaysia,namelySpectrumAssignment,ApparatusAssignment,andClassAssignment:(a) SpectrumAssignmentconfersrightsonapersontouseoneor

morespecifiedfrequency(ies)foranypurposeconsistentwiththeassignmentconditions.Thisissubjecttospecifiedfees.

(b) ApparatusAssignmentconfersonaperson the right touseoneormorespecifiedfrequenciestooperateanapparatusforaspecifiedpurpose.Thisissubjecttospecifiedfees.

(c) ClassAssignment allows theMCMC to issue and imposeconditionsontheclassassignmenttoallowanypersontousethefrequencyforalistofdevices,andthereisnoneedtopayasumoffees.

Rules 2002 (“Rates Rules”) came into operation on 1 March2002, revoking the Telephone Regulations 1996 (“TelephoneRegulations”).TheRatesRulesregulatetheretailpricesforPublicSwitched Telephone Network (“PSTN”) services, which includerentalon:exchangelines,localandnationalcallcharges,connectionand reconnection fees; emergency services; operator assistanceservices; directory assistance services; and payphone servicesfor local calls, national calls and national calls through operatorassistance,internetaccessservicesandaudiotexthostingservices.NFPs,NSPs,ASPs, andCASPs are generally allowed to set theretailpriceaccordingtomarketrates.RetailrateregulationissetoutinChapter4ofPartVIIIoftheCMA.Sections197and198relate to rate setting by service providers, wherein section 198provides the principles that service providers should follow insettingtheirrates.Section197oftheCMAprovidesthatprovidersmay set rules in accordance with the market rates, and furtherpublishtherateschargedtocustomersforoneormoreservices.Section198oftheCMAprovidesthattheprovidershallsetthepricebasedonthefollowingprinciples:(a) rates must be fair and, for similarly situated persons, not

unreasonablydiscriminatory;(b) rates should be oriented towards costs, and cross-subsidies

shouldbeeliminated;(c) ratesshouldnotcontaindiscountsthatunreasonablyprejudice

thecompetitiveopportunitiesofotherproviders;(d) ratesshouldbestructuredwithlevelssettoattractinvestment

intothecommunicationsandmultimediaindustry;and(e) rates should take account of the regulations and

recommendationsoftheinternationalorganisationsofwhichMalaysiaisamember.

Sections199to201relatetothepowersoftheMinisterinrelationto setting rates; for example, theMinistermaymake rules undersection 201, i.e., the current Rates Rules, or the Minister maydetermineaspecialrateregulationregimeundersection200.


Section2oftheCMAprovidesthatoneofthe10policyobjectivesis to promote a high level of consumer confidence in servicedeliveryfromtheindustry,whichisfurtherreflectedinsection188oftheCMA,whichsetsoutthatprovidersmustdealreasonablywithconsumersandadequatelyaddressconsumercomplaints.Toensureenforcementoftheprovision,operatorscanbefinednomorethanRM20,000,orimprisonmentforatermnotexceedingsixmonthsorboth.TheCMAprovidesforconsumerprotection,suchasrateregulationsandconsumerdisputeresolutions.The Commission’s General Consumer Code of Practice setsout the mechanism for the handling and resolution of consumerdisputes.TheCommissionmonitorsandregulatestheperformanceofNetwork Service andApplication Service providers by settingQualityofServiceStandards.

Numbering


TheCommissionisempoweredtocontrol,plan,administer,manageand assign the numbering and electronic addressing of networkservices and application services. The Commission allocates


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(b) transferorotherwisedealingispermittediftheassignmentistransferredorotherwisedealtwithinitsentirety;

(c) transfer or otherwise dealing is permitted for a geographicareainmultiplesofthestatedgeographicunit;or

(d) transferorotherwisedealingispermittedinmultiplesofthestatedspectrumunit.


Pleaserefertotheanswertoquestion3.5.



The relevant legislation that governs cyber security is theCMA,theComputerCrimesAct1997, thePersonalDataProtectionAct2010, the DefamationAct 1957, the SeditionAct 1948 and theDigitalSignatureAct1997.MalaysiawasoneofthefirstnationsinSoutheastAsiatodesignaNationalCyberSecurityPolicy.ItseffortstosecurecyberspacehaveincludedthecreationofCyberSecurityMalaysiaandtheNationalCyberSecurityPolicy.CyberSecurity Malaysia is the national cyber security specialistagencyunderthepurviewoftheMinistryofScience,TechnologyandInnovation(“MOSTI”).TheroleofCyberSecurityMalaysiaistoprovidespecialisedcybersecurityservicesand tocontinuouslyidentifypossibleareasthatmaybedetrimentaltonationalsecurityandpublicsafety, including:CyberSecurityEmergencyServices;SecurityQualityManagementServices; InfoSecurityProfessionalDevelopment and Outreach; and Cyber Security StrategicEngagementandResearch.


Section252oftheCMAprovidesthatthePublicProsecutormay,ontheapplicationofanauthorisedofficerorapoliceofficeroforabovetherankofSuperintendent,authorisetheofficertointerceptor to listen toanycommunication transmittedor receivedbyanycommunications,ifheconsidersthatanycommunicationsislikelyto contain any information which is relevant for the purpose ofany investigation into an offence under thisAct or its subsidiarylegislation.TheCMAdefinesan“authorisedofficer”asanypublicofficer or officer appointed by the Commission and authorisedin writing by the Minister, charged with the responsibility forcommunications andmultimedia. “Intercept”, on theother hand,isdefinedas“theauralorotheracquisitionofthecontentsofanycommunicationsthroughtheuseofanyelectronic,mechanical,orother equipment, device or apparatus”,whilst “Communications”is defined as “any communication,whether between persons andpersons, things and things, or persons and things, in the form ofsound,data, text,visual images, signalsoranyother formoranycombinationofthoseforms”.In regard to themodernmeansof evidence collection, subsections116band116coftheCriminalProcedureCode(hereinafterreferredto as “this Code”) were introduced in the 2012 amendment tothis Code, in order to deal with searches and seizures involvingcomputers and other storage devices and information contained in

Section 177 of the CMA provides the procedures for spectrumassignment and apparatus assignment which are included in theSpectrum Plan (latest edition of 2014). The Spectrum Plan is adocumentdevelopedbytheCommission,pursuanttosection172oftheCMA.ItcontainsinformationonfrequencyallocationforvariouswirelessservicesinMalaysia,internationalallocationofspectrumasagreedby the InternationalTelecommunicationUnion (“ITU”) forallthreeITUregions,proceduresforassignmentandreassignmentofspectrumandgeneralinformationonspectrumusageinMalaysia.The Spectrum Plan provides for several methods of assignment,whichincludethefollowing:(a) FixedPrice–wheretheassignmentisofferedonafixedprice

setbytheMinisterforspectrumassignment,ortheMCMCforapparatusassignment.

(b) Auction–wheretheassignmentismadebasedonthehighestbidprice.Thisrequiresamarketingplanwherethepresentoptionsand/orproposalshallbelaidout.

(c) Tender–wherethereiscompetitionforaparticularspectrumband. There aremainly two types of tender, i.e., “beautycontest”and“comparativetenderwithprice”.


Thereisnospectrumthatcanbemadelicence-exempt.TheMinistermay,however,exemptapersonfromrequiringanassignmentviaanExemptionOrderasprovidedundersection157oftheCMA.


The relevant instrument is the Communications and Multimedia(Spectrum)Regulations2000.TheFirstandSecondScheduleprovidealistofappropriatefeesdependingonthenatureoftheservices.TheFirstScheduleof theCommunicationsandMultimedia (Spectrum)Regulations2000(“theRegulations”)providesforfixedfeesaswellasvariablefeesfortheassignmentofanapparatusorspectrum.TheSecondScheduleintheRegulationsprovidesfortheapplicationfeesthathavetobepaid.


Regulation19oftheCommunicationsandMultimedia(Spectrum)Regulations2000provides,insub-regulation(1),fortheconditionswhichaspectrumassignmentholdermaytransferorotherwisedealwiththespectrumassignment,subjectto:(a) theconditionsofthespectrumassignment;(b) the eligibility requirements applicable when the spectrum

assignmentwasissued;(c) thespectrumassignmentnothavingbeenoriginallyissuedin

thepublicornationalinterest;(d) therulesmadebytheMinisterundersection163oftheAct;

and(e) suchotherconditionsthattheCommissionmayimpose.The conditions which a spectrum assignment holder may besubjectedtoundersub-regulation(1)abovemayresultintherightofthespectrumassignmentholdertotransferorotherwisedealwiththespectrumassignmentinthefollowingways:(a) transferorotherwisedealingwiththeassignmentisabsolutely

prohibited;


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(ii) any person having charge of or otherwise concerned with the operation of, the computer, apparatus or material, to provide him with such reasonable assistance as he may require for the purposes of paragraph (a); and

(c) require any information contained in a computer and accessible from the premises to be produced in a form in which it can be taken away and in which it is visible and legible.”

Section 115 of the Personal Data Protection Act 2010 providesthatanauthorisedofficerconductingasearchshallbegivenaccessto computeriseddata,whether stored in a computerorotherwise.Theaccess includesbeingprovidedwith thenecessarypassword,encryption code, decryption code, software or hardware and anyother means required to enable comprehension of computeriseddata. This is consistent with the provision in section 79 of theDigitalSignatureAct1997.


Section265of theCMAprovides theMinisterwith thepower todetermine that a licensee or a class of licensees shall implementthecapabilitytoallowauthorisedinterceptionofcommunications.Communicationisdefinedundersection6ofthe1998Act,whichcoverstraditionaltelephonecalls,VoIPcalls,emailsandanyotherformsofcommunication.


Pleaserefertoquestion4.2.


The CMA provides that where an authorised officer or a policeofficerconductsasearchundersections247or248, theyshallbegivenaccesstocomputeriseddatawhetherstoredinthecomputeror not. Section 249 of theCMA allows an authorised officer tobe provided with the necessary password, encryption code, anddecryption code to enable comprehension of computerised dataduringasearchwithorwithoutawarrant.


The Personal Data Protection Act 2010 (“PDPA”) regulates thecollection of personal data in relation to commercial transactionsinMalaysia. Section 10 of the PDPA for the retention principlestatesthatdatashallnotbekeptlongerthanisnecessary,anditisthedatauser’sdutytoensurethatallpersonaldataisdestroyedorpermanentlydeletedif it isnolongerrequiredforthepurposeforwhichitwastobeprocessed.



TheCMAregulatestheactivitiesofaudio-visualmedia.TheContent

communications.Section116b(1)ofthisCodeprovidesthatapoliceofficer,notbelowtherankofInspector,conductingasearchunderthisCodeshallbegivenaccesstocomputeriseddata,whetherstoredinacomputerorotherwise.Section116b(3)ofthisCodefurtherprovidesthat“access”includesbeingprovidedwiththenecessarypassword,encryptioncode,decryptioncode,softwareorhardwareandanyothermeansrequiredtoenablecomprehensionofthecomputeriseddata.Section116cofthisCodealsoprovidesthatthePublicProsecutormay authorise a police officer to intercept communications if heconsidersthatitislikelytocontainanyinformationrelatingtothecommissionofanoffence.Section 6 of the Security Offences (SpecialMeasures)Act 2012(“SOSM”) allows the Public Prosecutor (the Attorney General)andpoliceofficerstointerceptallcommunicationslikelytocontainany information relating to thecommissionof a securityoffence.A“securityoffence” is anoffence stated inChapterVI (offencesagainstthestate)orChapterVIA(offencesrelatingtoterrorism)ofthe Penal Code;forexample,activitydetrimentaltoparliamentarydemocracy,sabotage,wagingwaragainsttheYangdi-PertuanAgong(theKingofMalaysia)andcommittingterroristacts.Section6(1)statesthatthePublicProsecutormayauthoriseanypoliceofficer:■ tointercept,detainandopenanypostalarticleinthecourseof

transmissionbypost;■ to intercept any message transmitted or received by any

communication;or■ to intercept or listen to any conversation by any

communication,ifheconsidersthatitislikelytocontainanyinformationrelatingtothecommissionofasecurityoffence.Under section 6(2) SOSM, a police officer not below the rankof Superintendent of Police may do any of the above withoutauthorisationof thePublicProsecutor inurgentandsuddencaseswhere immediate action is required, leaving no moment fordeliberation.Inpractice,thismaygivepolicethepowertointerceptcommunications in a wide range of circumstances, includingelectroniccommunications.The Copyright (Amendment)Act 2012 has extended the right ofthepolice togainaccess tocomputerisedordigitaliseddatawhencarryingoutinvestigations.Undersection50BoftheCopyrightAct1987,thePublicProsecutor(theAttorneyGeneral)mayauthoriseanAssistantControllerorapoliceofficernotbelowtherankofInspectorOfficer to intercept or to listen to any communications for thepurposeofanyinvestigationintoanoffenceundertheCopyrightActoritssubsidiarylegislation,ifheconsidersthatthecommunicationislikelytocontaininformationrelevanttotheinvestigation.TheComputerCrimesAct1997(“CCA”)generallyprotectsagainstthemisuse of computers, for example, hacking. Section 10 (1) oftheCCAprovidesthatwhenever itappears toanyMagistrate,uponinformationandaftersuchinquiryashethinksnecessary,thatthereisreasonablecausetobelievethatinanypremisesthereisevidenceofthecommissionofanoffenceundertheCCA,hemay,bywarrantdirectedtoanypoliceofficeroforabovetherankofInspector,empowertheofficertoenterthepremises,byforceifnecessary,andtheretosearchfor,seizeanddetainanysuchevidence,andheshallbeentitledto:“(a) have access to any program or data held in any computer,

or have access to, inspect or check the operation of, any computer and any associated apparatus or material which he has reasonable cause to suspect is or has been in use in connection with any offence under this Act;

(b) Require—(i)thepersonbywhomoronwhosebehalfthepoliceofficer

has reasonable cause to suspect the computer is or has been so used; or


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section264furtherprovidesthat:“Any network facilities provider, network service provider, applications service provider or content applications service provider or any of his employees, shall not be liable in any criminal proceedings of any nature for any damage (including punitive damages), loss, cost, or expenditure suffered or to be suffered (whether directly or indirectly) for any act or omission done in good faith in the performance of the duty imposed under section 263.” Further, section98(2) of theCMAprovidesthat“compliance with a registered voluntary industry code shall be defence against any prosecution, action or proceeding of any nature whether in court or otherwise regarding a matter dealt with in the Code”.Therefore, telecommunications operators and/or internet serviceproviderswouldbeabletorelyontheContentCodeasadefenceagainstanyprosecution,actionorproceedingofanynaturewhetherinacourtorotherwise. Under theContentCode, theconceptofan“InnocentCarrier” isone thatneitherhasanycontrolover thecompositionofsuchContentnoranyknowledgeofsuchContent.AninnocentcarrierisnotresponsiblefortheContentprovided.Section43C(1)oftheCopyrightAct1987ontheotherhandexemptsa serviceprovider from liability for copyright infringement if theinfringementbyitsuseroccursbyreasonofanyofthefollowing:■ thetransmission,routingorprovisionofconnectionsbythe

serviceproviderofanelectroniccopyoftheworkthroughitsnetwork; or

■ anytransientstoragebytheserviceproviderofanelectroniccopyoftheworkinthecourseofsuchtransmission,routingorprovisionofconnections.

Theexemptionis,however,limitedtothefollowingsituations:■ theserviceproviderdidnotinitiateordirectthetransmission

oftheelectroniccopyofthework;■ theserviceproviderdidnotselecttheelectroniccopyofthe

work,butthetransmission,routingorprovisionofconnectionswascarriedoutthroughanautomatictechnicalprocess;

■ the service provider did not select the recipient of theelectroniccopyoftheworkexceptasanautomaticresponsetotherequestofanotherperson;or

■ theserviceproviderdidnotmodifytheelectroniccopyoftheworkotherthanaspartofatechnicalprocess.

Section43D(1)of theCopyrightAct1987providesthataserviceprovider shall not be held liable for infringement of copyrightfor themakingofanyelectroniccopyof theworkon itsprimarynetwork,ifitis:■ froman electronic copyof theworkmade availableon an

originatingnetwork;■ throughanautomaticprocess;■ inresponsetoanactionbyauserofitsprimarynetwork;or■ inordertofacilitateefficientaccesstotheworkbyauser,provided that the serviceproviderdoesnotmakeany substantivemodification to the contents of the electronic copy, other than amodificationmadeaspartofatechnicalprocess.Section43EoftheCopyrightAct1987exemptsaserviceproviderfromliabilityinthefollowingsituations:■ whenstoringanelectroniccopyofaworkwherethisisdone

atthedirectionofitsuser;and■ whenreferringorprovidingalinkoraninformationlocation

servicetoitsuserswhereanelectroniccopyoftheworkisavailableatanonlinelocationofanothernetwork,

providedthattheserviceproviderdoesnothaveknowledgeoftheinfringing activity, does not receive any financial benefit directlyattributable to the infringement and has responded promptly to anotificationtotakedowntheinfringingcopy.

Codewhich theCommunications andMultimediaContent ForumofMalaysiahasadopted for thepurposeof thestatutorydutysetsout theguidelinesandproceduresforgoodpractice,andstandardsof content disseminated to audiences by service providers in thecommunicationsandmultimedia industry inMalaysia. Content isdefined under the CMA as “any sound, text, still picture, moving picture or other audio-visual representation, tactile representation or any combination of the preceding which is capable of being created, manipulated, stored, retrieved or communicated electronically”.


The law has recognised the differences in distribution. Fortraditional distribution, a licence will be required as providedundertheCMA.Order6oftheCommunicationsandMultimedia(Licensing)ExemptionOrder2000exemptsapersonwhoprovidesinternetcontentapplicationservicesfromrequiringalicencefromtheMCMC.


The CMA provides for two types of licences, namely individualand class licences. The rights and obligations attached to anindividuallicencearespeltoutinsection43oftheCMA,ofwhichoneof theobligationsallowstheMinister tomakeregulationsonmatters thatmay be included in an undertaking by a prospectivelicensee.Individuallicencesareapplicabletosatellitebroadcasting,subscriptionbroadcasting,andterrestrialfree-to-airTV,whileclasslicenceswillbeapplicabletolimitedcontentapplicationsservices.Please refer to question 2.5. Individual licensees are required tounderstandthetermsandconditionsofthelicenceandadheretotheprovisionsoftheCMA.


Section 36 of the CMA provides that the grant of an individuallicenceshallbepersonaltothelicences,andtheindividuallicenseeshall not be assigned or transferred to any other party unless thepriorwrittenapprovaloftheMinisterhasbeengranted.



Section263of theCMA1998provides that a licenseeunder theCMAhas a duty to prevent the network facilities that it ownsorprovides, or the network service, applications service or contentapplications service that it provides, from being used in, or inrelation to, the commission of any offence under any law ofMalaysia.Section109oftheCMAprovidesthatcompliancewithamandatorystandardshallbeadefenceagainstprosecution,whilst


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Janet TohShearn Delamore & Co.7th Floor, Wisma Hamzah-Kwong HingNo. 1 Leboh Ampang50100 Kuala LumpurMalaysia

Tel: +603 2027 2978Email: [email protected]: www.shearndelamore.com

Shearn Delamore & Co. is a full-service firm and is one of the oldest law firms in Malaysia. Shearn Delamore has evolved over the last 10 decades into one of the largest firms providing a comprehensive range of legal services to a broad scope of clients, comprising multinational conglomerates, public-listed companies, industrial and commercial corporations, professional firms and organisations, multilateral agencies, domestic and international institutions, governments and individuals, and social and welfare entities. We are also frequently appointed as counsel and consulted by other legal firms.

Today, Shearn Delamore & Co. is one of the largest award-winning full-service law firms in the country with over 100 lawyers and 300 support staff. Further, our Technology & Communications team is able to tackle legal issues relating to the new technology and communication channels, by offering comprehensive legal solutions to clients operating in today’s constantly changing technological landscape.

Janet focuses on intellectual property and technology issues in a wide variety of transactions, and has worked on a wide range of agreements, including distributorship, licensing, outsourcing, service and consultancy agreements. She has advised clients on intellectual property protection and ownership issues, advertising issues, consumer protection, copyright, domain names, e-commerce, franchise, gaming, regulatory approvals for food and drugs, and telecommunications issues. Janet has also conducted due diligence for various acquisition projects, IT-related contracts, e-commerce and telecommunications, and has advised leading multinational companies in the pharmaceutical, tobacco and internet-related services industries on IP protection.

content applications service provider shall provide contentwhichisindecent,obscene,false,menacingoroffensiveincharacterwithintenttoannoy,abuse,threatenorharassanyperson.ThisimpliesthatnetneutralityisaqualifiedrightinMalaysia.


Section263of the1998Actprovides that a licensee shall act, tothebestofhisability,topreventthenetworkfacilitiesthatheownsorprovidesfrombeingusedinrelationto thecommissionofanyoffence. A licensee would be obligated to, as far as reasonablynecessary, prevent the commission of an offence, upon writtenrequestbytheCommissionoranyotherauthority.


Section 43H of the CopyrightAct 1987 provides that where anelectroniccopyofanyworkaccessible inanetwork infringes thecopyright of awork, the owner of the copyrightwhich has beeninfringedmaynotify the service provider of the network of suchinfringement,byissuingtotheserviceprovideranotificationinthemannerasdeterminedbytheMinister.Thecopyrightownermustcompensatetheserviceproviderforanydamages,lossorliabilityarisingfromthecompliancebytheproviderwithin48hoursfromthereceiptofthenotification.Aserviceproviderwhohasremovedtheinfringingcopyoftheworkshallnotifythepersonwhomadesaidcopyavailableoftheactiontakenbytheserviceprovider.Thepersonwhoseworkwasremovedortowhichaccesshasbeendisabledmay send a counter-notice to the service provider. Theserviceprovidershall,uponreceiptofthecounter-notice,promptlyprovidetheissuerofthefirstnotificationwithacopyofthecounter-notice and inform the issuer that the removedwork or access totheworkwill be restored in 10 business days, unless the serviceprovider has received another notification from the issuer of thefirstnotification,informingitthathehasfiledanactionseekingacourtordertorestraintheissuerofthecounter-noticefromengagingin any infringing activity relating to the material on the serviceprovider’snetwork.


There is, as of now, no legislation in Malaysia regulating “netneutrality”. Generally, section 3(3) of the CMA provides thatnothinginthisActshallbeconstruedaspermittingthecensorshipoftheinternet.Section211oftheCMA,however,providesthatno


Chapter 24

Bello, Gallardo, Bonequi y Garcia, S.C.

Carlos Arturo Bello Hernández

Bernardo Martínez García

Mexico

to telecommunications services, because they are located in ruralareas that are unattractive to operators from the point of viewofinvestmentandreturnonprofits.In order to help increase coverage, a wholesale network project(hereinafter“RedCompartida”)wasimplementedinthe700MHzspectrum.TheRedCompartidahastheobligationtoofferservicestoalllicenceholdersonawholesalebasis.Thisnetworkissupposedto serve as an alternative for telecommunication companies tohaveaccesstospectrumandprovidecoveragetoupto92%oftheMexicanterritory,interconnectingitsinhabitants.


Thefollowingisalistofthemostimportantlegislationapplicabletothesesectors:■ FederalTelecommunicationsandBroadcastingLaw.■ MeasuresimposedbytheIFTtothepreponderanteconomic

agentinthetelecommunicationsandbroadcastingmarkets.■ MustCarry–MustOfferGuidelines.■ NumberPortabilityRules.■ Federal Economic Competition Law Regulations for the

TelecommunicationandBroadcastingSectors.■ NumberingPlan.■ SignallingPlan.■ ProcedurefortheElectronicRegistryofTariffs.■ MethodologyforCalculatingInterconnectionCosts.■ MinimumTechnicalConditionsforInterconnectionbetween

Networks.■ GeneralGuidelinesforMulticastingAccess.■ GeneralGuidelinesfortheFilingofConcessions.■ GeneralRulesfortheFilingofAuthorisations.■ Agreement for the use of federal property for installing

infrastructure.■ SeveralTechnicalStandards.■ GuidelinesforCollaborationwithJustice.■ QualityofServiceGuidelinesformobileoperators.■ FederalConsumerProtectionLaw.For Broadcasting:■ FederalTelecommunicationsandBroadcastingLaw.■ MeasuresimposedbytheIFTtothepreponderanteconomic

agentinthetelecommunicationsandbroadcastingmarkets.■ MustCarry–MustOfferGuidelines.

1 Overview


Mexico’stelecommunicationsandbroadcastingmarkethasbeenanimportantfactoroftheMexicaneconomysinceitwasliberalisedin1995. Better coverage,more services and increasedcompetition,amongothers,havecontributedtothisgrowth.However,thereisstillmuchtobedonetoclosethedigitalgapbetweenMexicaninhabitants.An important constitutional reform on telecommunications wascarriedout in 2013, creating a fully independent regulatorybodynamed the Federal Telecommunications Institute (hereinafter“IFT”), and subsequently, the Federal Telecommunications andBroadcastingLaw(hereinafter“FTBL”)wasenactedin2014.The convergence of telecommunications and broadcasting hasallowed the IFT to carry out thefirst ever auctions for televisionandradiostationsinMexicanhistory.Morespectrumisavailableformobileservices,consumerprotectionhastakennewdimensions,and asymmetric regulation has stepped up to next level. One ofthemost significant and important changes of the FTBLwas thecreationofthelegalfigureofthe“preponderanteconomicagent”,whichwasusedbytheIFTinMarch2014todeterminethatGrupoCarso,S.A.B.deC.V.,ownersofTelmexandAméricaMóvil(thelatter formedbyTelcel,ClaroandCTIMóvil,amongothers)andGrupoTelevisa,S.A.B.(formedbyBestel,Cablevisión,Cablemásamong others), were preponderant economic agents in thetelecommunicationsandbroadcastingsectorsaccordingly.Now, after more than four years after having implementedthese changes, according to The CIU (https://www.theciu.com/publicaciones-2/2018/1/22/telecomunicaciones-en-mxico-2017-y-pronsticos-2018),theannualrevenuefor2017perserviceisthefollowing(theseareconsideringanexchangerateof19.5MXNper1USD):■ Thewholetelecommunicationsindustry:24,000,000,000.00

USD.■ Fixedservicesrevenue:6,170,000,000.00USD.■ Mobileservicesrevenue:13,360,000,000.00USD.■ PayTVservicesrevenue:4,470,000,000.00USD.Therehasbeenanimportantincreaseintherevenueoftheoperatorsin the last few years, but such an increase has not brought anequitablebenefittothepopulationinMexico;thereisstillalargepercentage of inhabitants in the countrywho do not have access


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2 Telecoms

General


Mexico has been a WTO member since 1 January 1995 and amemberofGATTsince24August1986.MexicoadoptedtheWTOBasic Telecommunications Agreement (GATS/SC/56/Suppl.2,dated11April1997).ItisalsoimportanttonotethatMexicoispartoftheInternationalTelecommunication Union and has subscribed to all its treatiessince1906,themostrelevantbeingtheRadioRegulationsandtheConstitutionandConvention.


The provision of telecommunications services is regulated bythe FTBL, which sets the rules for the use and exploitation ofradio spectrum, public telecommunications networks, accessto active and passive infrastructure, orbital resources, satellitecommunication,theprovisionofpublicservicesofgeneralinterestin telecommunications and broadcasting, and the convergencebetweenthese,therightsofusersandaudiences,andtheprocessofcompetitionandfreecompetitionoftheseindustries.


TheIFTistheregulatoryandcompetitionlawauthorityinMexico,whose purpose is to ensure the efficient development of thebroadcastingandtelecommunicationssectors.ItisimportanttonoticethattheIFTisanautonomousconstitutionalbody,with legalpersonalityand itsownpatrimony inaccordancewith the political constitution. TheMinistry ofCommunicationsandTransportation(“SCT”)isinchargeofpoliciesrelatingtothetelecommunications and broadcasting sectors. It also has someminor interventions in satellite licensing, universal coverage, andsatellitecoordination,amongothers.


The general rules, acts or omissions considered as definitive thatareissuedbytheIFT,whichisthenationalregulatoryauthorityinMexico, can only be appealed through an indirect constitutionalappeal (lawfully called “amparo”), before the District Courtsand Collegiate Courts specialised in Economic Competition,Telecommunications and Broadcasting, in accordance with theprovisionsofArticle312oftheFTBL.

■ MexicanStatePublicBroadcastingSystemLaw.■ PolicyfortheTransitiontoDigitalTerrestrialTelevision.■ Agreement that adopts the technical standard for terrestrial

digitaltelevisionanditstransition.■ Agreement for the adoption of a terrestrial digital radio

standard.■ SeveralTechnicalStandards.■ Guidelines for the classification of audio-visual content of

broadcasttransmissionsoftherestrictedtelevisionandaudioservice.

For Internet services:■ FederalTelecommunicationsandBroadcastingLaw.■ The Federal Law for the Protection of Personal Data in

PossessionofPrivatePersons.■ TheCopyrightFederalLaw.■ TheConsumerProtectionLaw.■ AdvancedElectronicSignatureLaw.■ CybercrimeisregulatedintheCriminalCode.■ Guidelinesthatsetoutthetermsunderwhichthedominant

economicoperatorinthetelecommunicationssectororwithsubstantialpowermusthaveaphysicalpresenceatInternettrafficexchangepointswithotheroperators.


1. FederalTelecommunicationsInstitute(“IFT”).2. ConsumerProtectionAgency(hereinafter“PROFECO”).3. National Electoral Institute (“INE” as per its Spanish

acronym).4. Institute for theAdministration andAppraisal of National

Assets(“INDAABIN”asperitsSpanishacronym).5. MinistryofCommunicationsandTransport(“SCT”asperits

Spanishacronym).6. MinistryofInterior.7. Ministry of Finance and Public Credit (“SHCP” as per its

Spanishacronym).8. MinistryofHealth.


Mexico’sConstitution,theFTBLandForeignInvestmentLawallowanyMexicanindividualorcompanytohavealicence(concessionsand authorisations) for the provision of telecommunication andbroadcastingservices.Mexicoallowsforeigninvestmentofupto100%fortelecommunicationsandsatellitecommunications,andupto 49% in the broadcasting sector subject to reciprocity from thecountryof theultimate investor. Both sectors are liberalisedandthereisacompetitionregime.

Bello, Gallardo, Bonequi y Garcia, S.C. Mexico


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6. Demonstrate the administrative capacity for theprovisionoftheservicestobeprovidedbytheproject,pointingouttheadministrativeprocessesofattentiontousers.

7. Specifythelocalityorgeographicalareainwhichtheservicesareintendedtobeprovidedatthebeginning.

8. Usetheofficialformats.9. Paymentoffeesfortheapplication.

1.2.RadioSpectrumConcession Concessions for the use and exploitation of the radio

spectrumforcommercialorprivateuseshallbegrantedonlythroughapublicbidprocedureagainstthepaymentoffees.

Inthisregard,thepetitionermustcomplywiththebasesofthepublicbidding,whichshallincludethefrequencybandsthataretheobjectofthebid,theirmodeofuseandgeographicalareasinwhichtheymaybeused,andpowerinthecaseofbroadcasting.

Concessions on the radioelectric spectrum for public orsocial use shall be granted through direct assignmentfor up to 15years andmaybe extended for up to equalterms.Thepetitionerfortheseconcessionsmustjustifythepublicorsocialuseoftheconcession,submitthetechnicalspecifications of the project, and the documentationaccreditingitstechnical,economic,legalandadministrativecapacity,aswellasthesourceoffinancialresourcesforthedevelopmentandoperationoftheproject.

When the exploitation of the services derived from theradio spectrum concession requires a Sole Concession,such Sole Concession shall be granted in the sameadministrativeact,unlesstheconcessionairealreadyhasanexistingconcession.

1.3.Concessionsfortheoccupationandexploitationoforbitalresources

As with spectrum concessions, concessions for theoccupation and exploitation of orbital resources forcommercialorprivateuseshallbegrantedonlythroughapublicbidprocedureagainstthepaymentoffees.

However,concessionsfortheoccupationandexploitationof orbital resources may be obtained at the request ofan interestedparty,expressing its interest to theFederalGovernment toobtainorbital resources in favourof theMexicanState.Inordertocarryoutthisprocess,itwillbenecessarytosubmitanapplicationwiththeexpressionofinterest,supportedbyaninvestmentproject,aswellastoprovidetechnicalinformationonthefrequencybands,the geostationary orbital position to be occupied, theservicestobeoffered,thedocumentationaccreditingthetechnical,financial, legal andadministrativecapacityoftheapplicant,andtheletterofcommitmenttoparticipateandcooperatewiththeFederalGovernmenttoobtainorregisterorbitalresourcesinfavouroftheMexicanState.

The petitioner shall cover, without reimbursement,all expenses incurred before the InternationalTelecommunication Union. If priority is obtained infavour of the Mexican State before the InternationalTelecommunicationUniontooccupytheorbitalresources,whicharetheobjectoftherequest,theIFTshallgranttherespectiveconcessiondirectlytothepetitioner,subjecttopaymentoftheconsideration.

2. Authorisations Authorisations are granted to Mexican individuals or

companies and there is no restriction at allwith respect toforeign investment. The overall information that must besubmittedtoobtainanauthorisationisasfollows:1. Generalinformationandcorporatedocuments.2. Useoftheofficialformats.



According to the FTBL, the following types of licence grantedby the IFT are contemplated to provide telecommunications andbroadcastingservices.1. Sole Concession: this type of licence allows its holder to

provide any kind of telecommunication and broadcastingservices (for broadcasting services, a spectrum concessionisalsorequired).Dependingonthepurposeforwhichitisintendedtobeused,thesoleconcessionshallbe:a) Forcommercialuse:profit-oriented.b) For public use: for public entities, municipalities, con-

stitutionalbodiesandinstitutionsofhighereducationforthefulfillmentoftheirassignmentsandduties.

c) For private use: for private communication, experimen-tation,verificationoftechnicalandeconomicfeasibilityoftechnologies indevelopment,orfor temporarytestingofnon-operationalcommercialequipment.

d) For social use: confers the right to providetelecommunicationandbroadcastingservicesforcultural,scientific,educationalorcommunitypurposesonanon-profitbasis.

2. SpectrumConcession:thesametypesofusage(commercial,public,privateandsocial)applytothisconcession.

3. Orbital Resources Exploitation andUsageConcession: thesametypesofusage(commercial,public,privateandsocial)applytothisconcession.

4. Authorisation:therearefivetypesofauthorisations:a) To establish, operate and exploit telecommunications

serviceswithouthavingthecharacterofaconcessionaire.b) To install, operate and exploit earth stations to transmit

satellitesignals.c) Toinstalltelecommunicationequipmentandtransmission

meansthatcrossthebordersofthecountry.d) Toexploittherightsofemissionandreceptionofsignals

and frequency bands associated with foreign satellitesystemsthatcoverandcanprovideservicesinthenationalterritory.

e) Totemporarilyusefrequencybandsfordiplomaticvisits.


1. Concessions1.1SoleConcession The Sole Concession shall be granted to Mexican

individuals or companies. The requirements forsubmittingtheapplicationaredescribedbelow:1. Providegeneralinformationandcorporatedocuments.2. Specifythemodeofuse,whethercommercial,public,

privateorsocial.3. Provide a description of the project, including the

main listofequipmentand transmissionmeans thatwillbeusedtobuildthenetworkorsystemdesignedtostartoperations.

4. Demonstrate technical capacity to carry out thenecessaryfacilitiesandtheprovisionofservices.

5. Demonstrate theeconomiccapacityof theapplicantfor the implementation and development of theproject.


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2. Radio Spectrum and Orbital Resources Concessions The concessions for the use and for the exploitation of

radiospectrumfrequencybands,andfortheoccupationandexploitationoforbitalresources,maybegrantedbytheIFTforatermofupto20years,andmaybeextendedforuptoequalterms.

Theradiospectrumconcessionsforpublicorsocialuseshallbegranted throughdirectallocation forup to15yearsandmaybeextendedforuptoequalterms.

Onlytheconcessionsforcommercialorprivateuse,thelatterwith purposes of private communication,may be assignedwithpriorauthorisationoftheIFT,andonlyafterthreeyearsfromthedateitwasgranted.

Change of control for concessions requires prior approvalfromtheIFT.Thesameappliesforchangesintheshareholdersthatrepresentmorethan10%.Theremaybespecificcasesin which there is a case of concentration, pursuant witheconomiccompetitionregulation,andaspecificprocessshallapply.

3. Authorisations The authorisations granted by the IFTwill be valid for up

to10years, renewable forup to thesameperiod,providedthe renewal is requested by the authorised reseller withinthe year prior to the start of the last fifth part of theauthorisation, in compliance with the obligations and inacceptanceof the conditions establishedby the IFT. Theycanbeeasilytransferred,requiringtheIFT’sapproval.Therearenorestrictionswithrespect to thechangeofcontrolforauthorisations.



According to the FTBL, the Federal Executive, states andmunicipalities as well as the local government of Mexico City,within the scope of their powers, shall collaborate and grantfacilities for the installation and deployment of infrastructure,and for the provision of public services of general interest intelecommunicationsandbroadcasting.Also,thesoleconcessiongrantedbytheIFTforeseesthepossibilityfor its holder to carry out the installation and exploitation of theinfrastructureassociatedwiththeseservices.Nevertheless, it is very important to keep in mind that it willbe necessary to obtain a permit from the competent authority,dependingonthelocationofthepubliclandwhichisplannedtobeacquiredbeforeinstallinginfrastructure.In the case of private land, no contributions or other economicconsiderations may be imposed in addition to those that theconcessionairehasagreedtocoverwiththeownerofthepropertytoinstallitsinfrastructure.



Concessionaires thatoperatepublic telecommunicationsnetworksmust interconnect their networks and grant access, in accordance

3. Paymentoffeesfortheapplication. Toobtainanauthorisationtoinstalloroperateearthstations

totransmitsatellitesignals, thefollowinginformationmustbeprovidedinadditiontotheabove:1. Technical characteristics (name of the concessionaire,

commercial name of the satellite, orbital position,frequencybands).

2. Listofearthstations.3. Locationofearthstations.4. Technicalinformationoftheantennas.5. Transmitterinformation.6. Signalinformation.

Toobtainanauthorisationtoexploitemissionandreceptionrights,thefollowinginformationmustbeprovidedinadditiontotherequirementsstatedatthebeginning:1. General information and characteristics of the foreign

satellite(s).2. Documentsthatprovethetechnicalcapacity.3. PositiveopinionfromtheSCT,regardingthecoordination

statusofthesatellitenetwork.4. Agreementwhichproves the legal relationshipbetween

the foreign satellite operator and the applicant of theauthorisation.

5. CopyoftheregistrationofthesatellitesbeforetheITU,andtheirstatus.

To obtain an authorisation to install telecommunicationsequipmentthatcrossesthecountry’sborderswithoutusingtheradiospectrum,thefollowinginformationmustbeprovidedinadditiontotherequirementsstatedatthebeginning:1. Technical information of the cross-border connection,

includingtheuseorpurposetobegiventotheconnection.2. Detailed description of the project, including technical

characteristicsoftheequipmentormeansoftransmissioncrossing the borders of the country, diagram of theconnection, the points of intercalation or origin andterminationofthemeansoftransmission,anditslocationinthenationalterritoryaswellasabroad.

3. Agreementsignedwiththeforeignoperator. To obtain an authorisation to install telecommunications

equipmentthatcrossesthecountry’sbordersusingtheradiospectrum, the following information must be provided inadditiontotherequirementsstatedatthebeginning:1. Date of grant of the concession or permit through

which the interestedparty is authorised touse and takeadvantageoftheradioelectricspectrumtowhichthelinkorthefrequencychannelstobeusedarecontracted.

2. Characteristicsofthecross-borderconnections,includingtheelectromagneticcompatibilitystudy.

3. Technical information of the cross-border connection,includingtheuseorpurposetobegiventotheconnection.

4. Agreementsignedwiththeforeignoperator.5. List indicating which cross-border connections are

expectedtobeauthorised. ItisimportanttomentionthattheIFThasa30-business-day

termtogranttheauthorisation,andifthereisnoresponse,itshallbeconsideredasgranted.


1. Sole Concessions ThesoleconcessionshallbegrantedbytheIFTforatermof

upto30yearsandmaybeextendedforuptoequalterms.


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GrupoCarso,aspartofanasymmetricregulationimposedonthepredominant economic agent in the telecommunications sector.On27February2017, the IFTPlenary issued thefinal functionalseparationplanbetweenTelmexandTelnor.Throughthisfunctionalseparationplan,thepreponderanteconomicagentmustcreatetwocompanies, from Telmex and Telnor, which will provide accessservices to the localnetwork,aswellas localdedicatedlinksandpassiveinfrastructureassociatedtothisnetwork,tootheroperatorsunder non-discriminatory conditions. It is important to point outthat the functional separation ordered by the IFT does not implyastructuralseparation,nordisincorporationof thecompaniesthatcompose the predominant economic agent, for which reason thelatterwillberesponsibleforthetechnical,economicandfinancialviabilityof thenewwholesale companies, and forwhich the IFTwillhavetoprovidesaidagentwiththenecessaryresourcessothattheyfulfiltheirsocialpurpose,contemplatingatalltimestherespectoftheworkers’labourrights.


High-speedbroadbandnetworksareregulatedundertheFTBLandareconsideredasactiveinfrastructure.Infrastructure sharing is considered as an interconnection servicebytheFTBL;inthatsense,theIFTisresponsibleforencouragingthe execution of agreements between concessionaires forcollocationandshareduseofinfrastructure.Itismandatoryforthepreponderanteconomicagent,andfortherestoftheconcessionairesitisonlymandatoryinsomespecificcases,whenitisessentialfortheprovisionofservicesandtherearenoothersubstitutes.In case the concessionaires do not reach an agreement, the IFTwill resolve any interconnection disagreements according to theprocedure established in the law, exceptwhat is foreseen for theresolutionperiod,whichwillbeupto30businessdays.Economic preponderant agents in the telecommunications andbroadcastingsectorsareobligedtosharetheirpassiveinfrastructure.For such purposes, a Reference Passive Infrastructure Use andAccess Offer for the Preponderant Economic Agents shall beapprovedbytheIFTandproperlypublished.



The general principle is that retail prices are freely establishedbut must be registered. The IFT authorises retail prices of thepreponderant economic agent, and in case there is an agentwithsubstantialmarketpower,itwouldalsobesubjecttoauthorisationofretailprices.In the telecommunications sector, the IFT may impose on thedominanteconomicagenttheobligationtopresentforauthorisationthe tariffs it applies to the services it provides to the public, andtheintermediateservicesitprovidestootherconcessionairesandtoitsoperationinadisaggregatedandindividualmanner,inordertopreventcross-subsidiesbetweenservicesorschemesthatdisplacecompetition.

withtheMinimumTechnicalConditionsforInterconnection,whicharepublishedannuallybytheIFT.In this regard, concessionaries shall sign an agreement within aperiodofnomore than60calendardays from thedateonwhichany of them so requests. The negotiation process is carried outthrough the Electronic Interconnection System (named “SESI”as per its acronym in Spanish) of the IFT. If no agreement isreachedwithin60calendardays, the interestedpartymayrequesttheIFT’s intervention tosolve thedispute. Thedispute issolvedapproximatelywithin90calendardays.


All operators must submit for registration their interconnectionagreements within 30 business days following their execution.In addition, all the concessionaires and authorised resellersmustpublish their prices in the IFT’s Telecommunications PublicRegistry,whichisavailabletothepublic.ThepreponderantoperatorshallobtainapprovalfromtheIFTandmakeavailabletothepublicitsinterconnectionagreement,roamingagreement,infrastructuresharingagreement,localloopunbundlingagreement,accessagreementandwholesale resaleagreement. Inaddition,theRedCompartidahastheobligationtomakepublicitseconomicoffering.


Concessionairesarefreetosettheirinterconnectionrate;however,thesemust be based on costs that allow the recovery of at leastthe long-run incremental cost and the common attributable cost.Previously, the preponderant economic agent was obliged not tochargeinterconnectionfees;however,itcannowdosobasedonthetariffsestablishedbytheIFT.It is important to mention that the IFT publishes annually the“MinimumTechnicalConditions for the Interconnection betweenConcessionaires ofPublicTelecommunicationsNetworks and theTariffsresultingfromtheCostMethodologies”thatwillbeinforcefor the corresponding year,which are precisely the ones that areusedtoresolvedisputes.Inthissense,anyinterconnectiondisputeoverrateswillbesettledpursuanttotheratesestablishedbytheIFTinthementionedMinimalTechnicalConditions.


According to theFTBL,accountingand functional separationarepart of the asymmetric regulatorymeasures that the IFT imposeson the preponderant economic agents in the broadcasting andtelecommunicationssectors.In this regard, the preponderant economic agent subject to theaccounting separation measure in the telecommunications sectoris the economic interest group composed by Telmex, Telnor,Telcel,AméricaMóvil, Grupo Carso andGrupo Inbursa. In thebroadcastingsector,thepreponderanteconomicagentistheinterestgroup composed by Grupo Televisa S.A.B. and several relatedcompanies,whicharesubjecttotheaccountingseparationmeasure.Regardingfunctionalorlegalseparation,theIFTrecentlyorderedthe functional separation of Telmex, a company that belongs to


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terminationthat,ifany,theyhaveagreedtointhecontractwiththetelecommunicationsserviceprovider fromwhich theycarry theirnumber.

3 Radio Spectrum


TheradioelectricspectrumispublicpropertyoftheNation,whoseownershipandadministrationbelongs to theMexicanState. TheIFTistheauthoritythatregulatesitsuse.


Radio spectrum for commercial purposes may only be obtainedthroughapublicbid,whichmaybeanauction,beautycontestoranyotherschemethattheIFTmaycomeupwith.Thereisnospecificobligationontheprocesstobeused.However,inthecaseofaconcessionontheradioelectricspectrumforpublicorsocialuse,itshallbegrantedthroughdirectassignmentforupto15yearsandmaybeextendeduptoequalterms.Thereisapossibilitytoobtainspectrumforsecondaryuse.Thisisrequestedanddoesnotgothroughanypublicbid.However,suchspectrum does not receive any kind of protection from harmfulinterferencefromservicesprovidedunderprimaryuse.


Itispossibletouseunlicensedspectrum.However,itisimportanttonoticethatunlicensedspectrummustbedeclaredassuchbytheIFT. Theuseofunlicensedspectrumisregulatedbyits technicalspecificationsandguidelines.


The IFT is responsible for calculating the fees for the use ofspectrum. To do so, it requests a non-binding opinion from theMinistryofFinanceandPublicCredit.Also,theIFTshallconsiderthe frequency band to be used, amount of spectrum, coverage ofthe frequencyband, termof the concession, and thenational andinternationalreferencesofthefrequencybandmarketvalue.Once this has been done, the rights are set out in the FederalGovernmentFeesLaw,whichestablishesthepaymentoffeesfortheuseandexploitationoffrequencybandsoftheradioelectricspectrumofdetermineduse.Somefeesarealsoestablishedinthelicencesormaybealreadyincludedinthetermsofthespectrumauctions.


ThevalidityoftheradioelectricspectrumconcessionwillcontinueifthechangeofcontrolhasbeencarriedoutinaccordancewiththeprocedureestablishedintheFTBL.Pleasenotethatthereasarule,changeofcontrolofconcessionsrequirespriorauthorisationfromtheIFT.


There are no universal service regulations for the provision ofelectronic communication services. The FTBL establishes netneutralityprinciples,whichstillhavetobedevelopedbytheregulator.Theprovisionofelectroniccommunicationservices toconsumersisalsoregulatedbytheConsumerProtectionAgency(Profeco),andtheenduseragreementhastoberegistered.Themainrightsofendusersareasfollows:1. Tofreelychoosetheirserviceprovider.2. Tocontractandknowthecommercialconditionsestablished

in the end user agreement models registered before theConsumer Protection Agency, through electronic media,including the electronic page of the concessionaire orauthorised without prejudice of receiving them by othermeans.

3. To freechoiceandnon-discrimination inaccess to Internetservices.

4. To be provided with telecommunications services inaccordancewithqualityparameters.

5. To demand the compulsory performance of the end useragreementwhentheserviceprovidermodifiestheoriginallystipulated terms and conditions, and in the event that theserviceproviderdoesnotcomplywith them, torescindtheagreement.

6. Whenanenduseragreementhasbeensubscribed,itisonlypossible to change to another by agreement of the parties.Consentshallbegivenbyelectronicmeans.

Numbering


Telephone numbers and network identifying codes are allocatedby the IFT through the Numbering Plan to concessionaires andauthorisationholders(authorisationfortheresaleofservices).Bothshall guarantee that subscribers with numbers from the nationaltelephonenumberingplanwillkeep,uponrequest,thenumbersthattheywereassigned,regardlessoftheconcessionaireprovidingtheservice.


Mexican legislation contemplates the Numbering Plan and theNumber Portability Rules. There are also Technical Plans onnumberingandsignalling.


Number portability is an obligation for all fixed and mobileconcessionaires that provide telephone services; in this regard,serviceprovidersmustcomplywiththisobligationwhenrequiredtodosobytheircustomer.For users, number portability will not exempt them fromcomplying with their contractual obligations, including, but notlimited to: the return of equipment not owned by them; and thepayment of outstanding charges and penalties arising from early


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the date of submission of such request, taking into considerationthe efficient planning and management of the spectrum, orbitalresources,advances,andothermatters,aswellasthepublicinterest.Without prejudice to its rescue spectrum faculties, the IFT maypropose the exchange ex officio, for which it must notify theconcessionaire of its determination and the respective conditions.Thelicenseeshallhavetheopportunitytorespond.Theconcessionairesmayexchangeamongthemselvesafrequency,asetoffrequencies,acompletebandorseveralfrequencybandsororbitalresourcesforwhichtheyhaveconcessions,uponrequestandauthorisationoftheIFT.TheIFTshallresolvethematterwithin45workingdaysfromthedateonwhichtherequestissubmitted.



By law,everyconcessionaire,authorised reseller, andproviderofapplicationsandcontentmustcomplywithanyorderofauthoritythatthisisdulyfoundedandmotivated,includingthoserelatedtocybersecurity.Currently,thereareguidelinesinforceforcollaborationwithjustice,aimedatobtaininggeographiclocationinrealtimeanddeliveryofretaineddata fromfixed andmobile lines,which seeks to reducecrimemarginsinMexico.


The applicable legal framework is the FTBL and the GuidelinesforCollaborationwithJustice,whichallowonly thoseauthoritiesthat are designated or empowered to require concessionaires andauthorisedprovidersoftelecommunicationsservicestocollaboratewith security, prosecution and justice authorities in a timely andeffectivemanner.In accordance with such regulation, telecommunicationconcessionairesand,whereapplicable,authorisationholdersmust:1. Collaboratewith the instances of security, procuration and

administrationofjustice,inthegeographicallocation,inrealtime, of mobile communication equipment, whenever it isdulyrequiredbythecompetentauthorities.

2. Preserve a record and control of communications thataremade fromany typeof line thatuses itsownor leasednumbering,underanymodality.

3. Providetherecordofthesecommunicationstotheauthoritiesempoweredbylawtodoso.

4. Have a Responsible Area available 24/7 to meet therequirements of information, location and intervention ofprivatecommunications.

5. Immediatelyblockmobilecommunicationlinesthatoperateunderanymodalityreportedbycustomers,usinganymeans,such as stolen or lost; aswell as immediately suspend thetelephone service when so instructed by the competentauthority to stop the commission of crimes, in accordancewiththeprovisionsofapplicablelaw,amongothers.


Concessions for commercial or private use, the latter for thepurposesofprivatecommunication,maybeassignedwiththepriorauthorisationoftheIFTunderthetermssetforthintheFTBL.Thespectrumconcessionforprivateuseforpurposesofexperimentation,verification of technical and economic feasibility of developmenttechnologies, temporary equipment tests, amateur radio, and theoneforcommunicationneedsforembassiesordiplomaticmissionsvisitingthecountry,shallnotbeassignedforanyreason.SpectrumforpublicusemaybeassignedwithpreviousauthorisationfromtheIFT.TheIFTmayauthorise,withinaperiodof90calendardaysfromthefilingoftheapplication,thepartialortotalassignmentoftherightsand obligations established in the concessions, provided that theassigneeundertakestocomplywiththeobligationsthatarependingandassumestheconditionsestablishedforthispurposebytheIFT.Thepriorauthorisationof the transfer referred to in thisquestionmayberequested,providedthataperiodofthreeyearshaselapsedfollowingthegrantingoftheconcession.AuthorisationbytheIFTshallnotberequiredincasesofassignmentof theconcessionbymergerofcompanies,divisionsorcorporaterestructurings,providedthatsuchactsarewithinthesameperiod,control group or economic operator. To this end, the operationshallbenotifiedtotheIFTwithin30calendardaysfollowingsuchtransfer.Spectrumcanalsobeleasedorsub-leased;however,itisimportantto consider that concessionaires may only lease or sub-leasefrequencybandsgrantedforcommercialorprivateuse.In the case of spectrum lease, the following procedure shall beobserved:I. that the lessee has a sole concession for the sameuse (for

commercialorprivateuse)orthatithasrequesteditfromtheIFT;

II. thelesseeisjointlyandseverallyliabletotheconcessionairefortheobligationsarisingfromtheconcessionoftheleasedfrequencyband;

III. thecontinuityofserviceprovisionisnotaffected;andIV. nophenomenaofconcentration,hoardingorcrossownership

isgenerated.Iftheforegoingismet,theIFTwillhave45businessdaystodecideontherequestforthespectrumleaseauthorisation.Furthermore, it is important to mention that the IFT publishedthe guidelines for the granting of the authorisation certificate fortheuseandexploitationoffrequencybandsoftheradiospectrumforsecondaryuse.Thepurposeoftheseguidelinesistoregulate,under the authorisation regime, the secondary use of frequencybandsoftheradiospectrum,whichareintendedtomeetthespecifictelecommunicationsneedsofpersonsengagedinspecificactivitieswhicharenotintendedtoprovidetelecommunicationsservicesforcommercial purposes, as well as to enable duly approved short-rangeradiodevicestomakesecondaryuseoffrequencybandsoftheradiospectrum.Finally, frequency band or orbital resource exchanges may bemade exofficioorattherequestofaninterestedparty.Whentheconcessionaire requests the exchange referred to in this question,theIFTshallresolvethematterwithin90workingdaysfollowing


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InMexico,theuseofencryptioniscontemplatedwiththeAdvancedElectronicSignatureLaw,whichregulatestheuseofanadvancedelectronic signature tobeused inelectronicdocumentsand in itsdatamessages.Inthisregard,theuseofadvancedelectronicsignaturesissubjecttotherequirementsestablishedbysuchlaw.Encryptionisnotmandatoryfortelecommunicationservices.Therearesomespecificregulationsthatrequireencryption,suchastheGuidelinesforCollaborationwithJustice,butthereisnotmuchregulationfurtherthanthat.


Inaccordancewiththesecurityandjusticeobligationsestablishedin the FTBL, telecommunications concessionaires and, whereapplicable, authorised resellers shall keep a register and controlofcommunicationsmadefromanytypeoflineusingtheirownorleased numbering, under anymodality, that allows the followingdatatobeaccuratelyidentified:■ Nameorbusinessnameandaddressofthesubscriber.■ Type of communication (voice, voicemail, conferencing,

anddata),supplementaryservices(includingcallforwardingandcall transfer)ormessagingormultimedia serviceused(includingshortmessage,multimediaandadvancedservices).

■ Datanecessarytotraceandidentifythesourceanddestinationofmobilecommunications:destinationnumber;typeoflineswithacontract;ortariffplan,suchasintheformofprepaidlines.

■ Data necessary to identify the date, time and duration ofcommunicationandmessagingormultimediaservice.

■ Thedateandtimeoftheinitialactivationoftheserviceandthelocationlabel(cellID)fromwhichtheserviceisactivated.

■ Identification and technical characteristics of the devices,including,amongothers,internationalmanufacturingidentitycodesofequipmentandsubscribers.

■ Digitallocationofthegeographicpositioningofthetelephonelines.

Suchinformationshallbekeptfora12-monthperiodallowingreal-time consultation and delivery, and for 12 additional months fordeliveryofinformationwithin48hoursafteritisrequestedbytheauthorities.



Audio-visual content is regulated in the FTBL as a right toinformation,expressionandreceptionofcontentthroughthepublicbroadcastingserviceandrestrictedtelevisionandaudio.Thelatteris of free expression, so it will not be subject to any judicial oradministrativeprosecutionorinvestigationoranylimitationorpriorcensorship,andwillbeexercisedunder the termsof theMexicanConstitution,internationaltreatiesandapplicablelaws.Theauthoritieswithintheirsphereofcompetenceshallpromoteinaudio-visualcontent:respectforhumanrights;theprincipleofthebest interestsof thechild; tofullyguaranteechildren’srights; theprotectionofchildren’srights;andgenderperspective.


Telecommunications concessionaires and, where applicable,authorisedresellersshallcomplywiththefollowing:■ Collaboratewith the instances of security, procuration and

administrationofjustice,inthegeographiclocation,inrealtime,ofthemobilecommunicationequipment.

■ Keepa register andcontrolof communicationsmade fromany type of line that uses its own numbering or leasednumbering,underanymodality,thatallowthefollowingdatatobeidentifiedwithprecision.Thisshallapplytoanytypeofcommunication(includingvoicetransmission,voicemail,conferencing, and data), supplementary services (includingcall forwarding or transfer) or messaging or multimediaservice used (including short message, multimedia andadvancedservices).

■ Takethenecessary technicalmeasuresregardingdata tobekept,toensureitsconservation,protection,non-manipulationor unlawful access, destruction, alteration or cancellation,andtheauthorisedpersonnelforitsmanagementandcontrol,withoutprejudicetotheprovisionsoftheFederalLawontheProtectionofPersonalDatainPossessionofIndividuals.

■ HaveaResponsibleAreaavailable24/7and365daysayearto attend to the requirements of information, geographicallocationandinterventionofprivatecommunications.

■ Suspendtheserviceofmobileequipmentorterminaldevicesreportedasstolenorlost,attherequestoftheholder.

■ Immediately block mobile communication lines that workunderanymodalityreportedbycustomers,usinganymeans,such as stolen or lost; aswell as immediately suspend thetelephoneservicewheninstructedbythecompetentauthority,to cease the commission of crimes. This shall only applyto thosecommunicationsmade throughadeviceormobileterminalequipment,whichshouldbeunderstoodasanythingutilisedbytheusertoconnectbeyondtheterminalconnectionpointofapublicnetworkforaccessingand/orreceivingoneormoremobiletelecommunicationsservices.

■ Collaboratewith thecompetentauthorities toblockmobilephone, radio, data or image transmission signals withinthe perimeter of social rehabilitation centres, penitentiaryestablishmentsorinternmentcentres.


The interceptionof communications canonlybemade if there isawritten order,which is founded andmotivated by a competentauthorityunderthetermsestablishedbylaw.Tothispurpose,intheguidelinesforcollaborationwiththejusticesystem,itisforeseenthattheconcessionairesandauthorisedpartiesmust use an electronic platform to comply with the electronicrequirements of real-time geographical location of the mobilecommunication equipment, as well as the delivery of conserveddata. Real-timegeographical locationmust complywith specifictechnicalrequirementsandprecisionparameters,dependingonthelocation.Asfortheinterceptionofcommunications,therearenospecificationsonhow it shouldbedone. Everyconcessionaireprovidesall thetechnicalhelptheycanandcooperateswithauthority.


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In Mexico, a specific defence available to protect tele-communicationsoperatorsand/orinternetserviceprovidersfromliabilityforcontentcarriedovertheirnetworksisnotforeseenintheregulation.However,withthenewtradeagreementnamedUSMCAwhichhasbeen negotiated betweenMexico, the United States and Canada,it is expected that due to the growing importance of the digitalenvironmentanditscloselinkagewithintellectualpropertyrights,the chapter on telecommunications will foresee a safe-harbourprovision– that is, a schemeof limitationof liability for Internetservice providers for copyright and related rights violations thatoccuronline. This new trade agreement is currentlyunder studyandreviewbytheSenate.


OperatorsandInternetserviceprovidersareobligedtoassistcontentownerswhoserightmaybeinfringed;however,suchobligationisenforceableonlyifitcomesfromacourtorder.However,inthenewtradeagreement,theintellectualpropertychapterforeseesaschemeoflimitationofliabilityforInternetserviceprovidersforviolationsofcopyrightandrelatedrightsoccurringonline.Thisschemewillprotectintermediarieswhodonotcontroltheinfringingcontent,butdoesnot exempt from liability thosewhohave receivedabenefitbyenablingsuchcontentonline.Inthatsense,telecommunicationoperatorsand/orInternetproviderswillprobablybeempoweredtoassistauthorsofintellectualpropertywhoserightsareinfringedbyillegalactivities.Regulationwillhavetochange,andsuchprocessmaynotrequireacourtorder;itisyettobeseenhowtheUSMCAagreementwillinfluenceMexicanlaw.


TheFTBLestablishesthegeneralprinciplesofnetworkneutrality.In that sense, the concessionaires and authorised resellers thatprovidetheserviceofaccesstotheInternetmustcomplywiththeseprinciples,aswellaswiththeguidelinesthatwillbeissuedbytheIFT.Under these principles concessionaires and authorised resellerscannotobstruct,interferewith,inspect,filterordiscriminatecontent,applicationsorservices.GuidelinesfornetneutralityareyettobedevelopedbytheIFT.

TheprovisionofbroadcastingservicesrequiresaSoleConcessionand a Spectrum Concession, and it has restrictions on foreigninvestment, as has beenmentioned previously. Pay television isconsidered as a telecommunications service, and OTT (over-the-top)services(videoon-demand)arenotyetregulated.


Contentregulationisdifferent,astheIFThasdeterminedthatOTTservicesarenotapublictelecommunicationservice.Inthisregard,Internet television is practically unregulated, and broadcasting isregulateddifferentlytorestrictedaudioandtelevision.Broadcastinghas stricter regulation in termsof official times, electoralmattersand advertising times, in comparison to paid television. Ratingregulationsaswellasadvertisingofalcohol,tobaccoandmedicinesisapplicableforboth.


According to the FTBL, the distribution of restricted audio andtelevisionrequiresaSoleConcessionandtheSpectrumConcessiongranted by the IFT. Also, the IFT will grant authorisations foraccess to multiprogramming to concessionaires that request it.Multiprogrammingisthedistributionofmorethanoneprogrammingchannelonthesametransmissionchannel.For broadcasting operators, itwill be necessary to obtain a radiospectrum concession, unlike restricted television and audioconcessionaries,whowouldonlyneedtoobtainasoleconcessionoranauthorisation,consideringthatthelatterallowstheresellingofalltypesoftelecommunicationsandbroadcastingserviceswithouthavingthestatusofaconcessionaire.Inaddition,itisimportanttomentionthattherearemust-offerandmust-carry obligations by which restricted audio and televisionconcessionaries are compelled to retransmit the broadcast signal,free of charge and without discrimination, within the samegeographical coverage area, in full, simultaneously and withoutmodification,includingadvertisingandwiththesamequalityofthesignalbeingbroadcast,andtoincludeitwithoutadditionalcostintheservicescontractedbysubscribersandusers.In the case of broadcasting concessionaires, they are obliged toallow the retransmission of their signal, free of charge and non-discriminatory,withinthesamegeographicalcoveragearea,infull,simultaneously and without modifications, including advertisingandwiththesamequalityofthesignalbeingbroadcast.There are certain obligations for state times for broadcastingconcessionaires,and theprovisionofchannels for thestate in thecaseofPayTVconcessionaires.


Spectrum and sole concessions granted by the IFT to providebroadcasting and restricted audio and televisionmay be assignedaccordingtotherulesestablishedintheFTBL,whichrequirestheIFT’sauthorisation.


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Carlos Arturo Bello HernándezBello, Gallardo, Bonequi y Garcia, S.C.Agustín Manuel Chávez No. 1 – 101 Col. Centro de Ciudad Santa FeMexico City, C.P. 01210Mexico

Tel: +52 55 5292 5232Email: [email protected]: www.bgbg.mx

Bernardo Martínez GarcíaBello, Gallardo, Bonequi y Garcia, S.C.Agustín Manuel Chávez No. 1 – 101 Col. Centro de Ciudad Santa FeMexico City, C.P. 01210Mexico

Tel: +52 55 5292 5232Email: [email protected]: www.bgbg.mx

The members of BGBG have more than 20 years’ experience supporting national and international clients to participate in telecommunications, communication media and new technologies market. Our legal advisory covers matters related to satellites, radio spectrum, frequency bands, broadcasting, MVNOs, Internet, technology contracts, content and government relations.

BGBG has represented sovereign governments and companies before international organisations such as the International Telecommunications Union (ITU). BGBG has also participated in several international satellite coordination meetings and satellite treaty negotiation meetings between Mexico and the United States of America.

BGBG continuously advises important national and international companies in regulatory matters regarding the granting of concessions and authorisations, the establishment of their operations, as well as permanent compliance with the inherent obligations of such concessions and permits.

Part of the advice we give is to help clients in participating in national and international public tenders, and in the execution of any type of governmental contracts related to the area of telecommunications, broadcasting, media, Internet and technology matters.

BGBG has been recognised by various publications such as Chambers and Partners, The Legal 500 and Leaders League as one of the best firms in the field of Technology, Media and Telecommunications for its extensive experience and knowledge, as well as for having the best lawyers specialising in the sector.

Carlos Bello is a Founding Partner of BGBG with over 21 years of experience in the areas of telecommunications, broadcasting, Internet, media, technology, space law, public tenders, governmental contracts and international negotiations. He leads the Telecommunications, Media and Technology practice area in the firm, providing legal counsel telecommunication regulatory matters for Mexican and international companies in different markets, such as satellite, Internet, mobile, value-added services, including the preparation and filing of concessions and authorisations for the provision of telecommunications services, among others. His work at BGBG has positioned the firm as the leading firm in MVNO filings and one of the top firms in telecommunications, being one of the very few Mexican firms that actively participates in international organisations (International Telecommunications Union) representing private companies and sovereign governments.

From 2015 to 2017, he served as an honorary member of the IFT’s Advisory Board and has been part of Directory Boards at several industry associations, combining his professional activity with the academy, where he has taught several law courses at different universities.

Bernardo Martínez is a Junior Associate of the law firm BGBG; he has three years of experience in the telecommunications and broadcasting sector, assisting clients with the implementation of their business to provide telecommunications services in Mexico. He also has experience in the regulatory field of the obligations that must be fulfilled by the concessionaires and/or authorised in accordance with the applicable legal framework in Mexico. He maintains constant communication with the authorities of the sector and is part of associations focused on these sectors. He also possesses a diploma in Information and Communication Technologies Law from the Instituto Tecnológico Autónomo de México (ITAM).


Concessionairesandauthorisedentitiesareobligedtoblockcontent,applications or services uponwritten request from the consumer.PayTVserviceprovidersshallallowconsumerstoblockchannelsandprogramsthattheydonotwanttoreceive.


Chapter 25

Pakistan Electronic Media Regulatory Authority (“PEMRA”)has the mandate to regulate and issue channel licences for theestablishmentofelectronicmediabroadcaststations.

Top 5 channels currently viewed

Tuesday 24 July 2018, 3.40pm

The information in relation to annual revenues of the entitiesmentionedinthepictorialrepresentationaboveisunavailable.


(a) The most important laws which apply to the telecom sector are as follows:1. Pakistan Telecommunication (Re-Organization) Act,

1996(with2006amendments)(the“PTA Act”);2. AJKAdaptationofthePakistanTelecommunication(Re-

Organization)Act,2005;3. GilgitBaltistanAdaptationOrder,2006;4. PakistanTelecomRules,2000(the“PTA Rules”);5. PakistanElectronicMediaRegulatoryAuthority(Council

ofComplaints)Rules,2010;6. AccessPromotionContributionRules,2004(the“Access

Promotion Contribution Rules”);7. USFRules,2006;8. R&DFundRules,2006;9. Pakistan Telecommunication Authority (Functions &

Power)Regulations,2006;

NoteThis chapter will quote from and discuss the relevant laws andlegislationinthecontextofeachquestion.

1 Overview


The Pakistan Telecommunication Authority (“PTA”) has themandatetoregulatetheestablishment,operationandmaintenanceoftelecommunicationsystemsandtheprovisionoftelecommunicationservicesinPakistan.AccordingtothefiguresavailableonthewebsiteofthePTA(updatedasofMay2018),thereare150millioncellularsubscribers(73.28%tele-density),55million3G/LTEsubscribers(27.04%penetration),3millionbasictelephonysubscribers(1.30%tele-density),and58millionbroadbandusers.Jazz Mobile (formerly “Mobilink”) has maintained its leadingpositionwithapprox.14.4million3G/4GLTEsubscriberswiththeacquisition ofWarid in January 2017. Even thoughTelenor hadthesecond-highestnumberofsubscriberssincethelaunchofNextGenerationMobileServices(“NGMS”),itwassurpassedbyZongin January2017. Zonghas the largest4Gsubscriberbaseand isgainingmarketshare.The3G/4GmarketshareofZongwas30%for NGMS subscribers inAugust 2017. To remain competitive,Telenor had also acquired a 4G licence in June 2016, while its3G/4Gmarketsharestoodat26%inAugust2017.Unlikeitspeers,Ufonehasexperiencedconsiderableattritioninmarketshare.

TELECOM REVENUES (Rs. million)

Types of Service 2013–14 (R)

2014–15 (R)

2015–16 (R)

2016–17 (E)

Cellular 322.683 317.016 345.537 369.118Local Loop 88.952 81.914 76.344 72.937Long-Distance International 43.901 40.890 32.554 23.083

Class Value Added Services (E) 4.123 2.468 2.499 2.53

Total 459.632 442.287 457.024 467.642

Legend: (R) = Revised; (E) = Estimated.

RIAA Barker Gillette

Mustafa Munir Ahmed

Shahrukh Iftikhar

Pakistan


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RIAA Barker Gillette Pakistan

3. Television Broadcast Station Operations Regulation,2012;

4. RadioBroadcastStationOperationsRegulations,2012;and

5. DistributionServiceOperationsRegulations,2012.


The Government ministries, regulators, other agencies and majorindustryself-regulatorybodieswhichhavearoleintheregulationoftelecomand/oraudio-visualmediadistributionsectorsareasfollows:1. thePTA;2. PEMRA;3. theMinistryofInformation&Technology(“MOIT”);4. theNationalTelecommunicationCorporation(“NTC”);5. theInformationTechnology&TelecomDivision;6. theElectronicGovernmentDirectorate;7. theTradeDevelopmentAuthorityofPakistan(“TDAP”);8. thePrivatisationCommissionofPakistan;9. theSecuritiesandExchangeCommission(“SECP”);10. theCompetitionCommissionofPakistan(“CCP”);11. thePakistanSoftwareExportBoard(“PSEB”);12. theFederalBoardofRevenue;and13. theBoardofInvestment.


(a)(i) Subject to the passing of the Telecommunication De-Regulation Policy for the Telecom Sector, 2003 (“De-Regulation Policy”),theGovernment’scoreobjectivewastode-regulateandliberalisevarioussectorsoftheeconomy.

(a)(ii) The InvestmentPolicy,2013,provides thatall sectorsandactivitiesareopenforforeigninvestmentunlessspecificallyprohibitedorrestrictedforreasonsofnationalsecurityandpublic safety; there is no minimum requirement for theamountofforeignequityinvestment.

(b)(i) The audio-visual media distribution sector is regulatedby PEMRA, which is responsible for regulating theestablishment and operation of all broadcast media anddistributionservicesinPakistanestablishedforthepurposeofinternational,national,provincial,district,localorspecialtargetaudiences.ThedistributionsectorwasliberalisedbythecomingintoforceofthePEMRAOrdinance.

(b)(ii)Subject toSection25of thePEMRAOrdinance,a licenceshallnotbegrantedtothefollowing:(i) apersonwhoisnotacitizenoforresidentinPakistan;(ii) a foreign company organised under the laws of any

foreigngovernment;(iii) acompany,themajorityofwhosesharesareownedor

controlled by foreign nationals, or companies whosemanagementorcontrolisvestedinforeignnationalsorcompanies; or

(iv) any person funded or sponsored by a foreigngovernmentororganisation.

10. ClassValueAddedServicesLicensingandRegistrationRegulations,2007;

11. TypeApprovalRegulations,2004;12. Fixed Line Tariff Regulations, 2004 (the “Tariff

Regulations”);13. Interconnection Dispute Resolution Regulations,

2004 (the “Interconnection Dispute Resolution Regulations”);

14.Mobile Number Portability Regulations, 2005 (the“Mobile Number Portability Regulations”);

15. Number Allocation and Administration Regulations,2005;

16. AccessPromotionRegulations,2005;17. AccountingSeparationRegulations;18.Monitoring and Reconciliation of International

TelephonyTrafficRegulations, 2008 (the “Monitoring and Reconciliation of International Telephony Traffic Regulations”);

19. Protection fromHealth Related Effects of Radio BaseStationAntennaRegulations,2008;

20. TelecomConsumerProtectionRegulations,2009;21. Protection from SPAM, Unsolicited Fraudulent and

ObnoxiousCommunicationRegulations,2009;22.Monitoring and Reconciliation of Telephony Traffic

Regulations,2010;23. PRS/EDGE Service Quality of Service Standards

Regulations,2010;24. Subscribers Antecedents Verification Regulations,

2010 (the “Subscriber Antecedents Verification Regulations”);

25. GPRS/EDGE Service Quality of Service StandardsRegulation,2010(the“GPRS / EDGE Service Quality of Service Standards Regulation”);

26. CellularMobileQualityofServiceRegulations,2011;27. NumberingAllocation andAdministration Regulations,

2011;28.Mobile Virtual Network Operation (“MVNO”)

Regulations,2012;29. Subscribers Antecedents Verification (Amendment)

Regulations,2012;30. Telecommunication and Terminal Equipment Installer

Regulations,2012;31. BroadbandQualityofServiceRegulations,2014;32. Regulations for Technical Implementation of Mobile

Banking,2016;33.Mobile Device Identification, Registration&Blocking

Regulations,2017;34. TypeApprovalTechnicalStandardsRegulations,2017;35. SubscribersAntecedentsVerificationRegulations,2015;36. ThePreventionofElectronicCrimesAct2016(ActNo.

XLof2016)(the“PECA”);37. ElectronicTransactionOrdinance,2002;38. TelegraphAct,1885;39. TheWirelessTelegraphyAct,1933;and40. TheTelecommunicationsSystemsClock.

(b) The most important laws in the audio-visual media distribution sector are as follows:1. Pakistan Electronic Media Regulatory Authority

Ordinance,2002(the“PEMRA Ordinance”);2. PakistanElectronicMediaRegulatoryAuthorityRules,

2009;


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inasignificant lesseningofcompetition,orwhichcouldhavetheeffectofalteringmarketconditionsartificially.


Yes,subjecttoSection6ofthePTAAct,anypersonaggrievedbyanydecisionororderofthePTAonthegroundthatitiscontrarytotheprovisionsof thePTAAct,may,within30daysof thereceiptofsuchdecisionororder,appealtotheHighCourtortoanyotherTribunalestablishedbytheFederalGovernmentforthatpurpose,inthemannerprescribedbytheHighCourtforfilingthefirstappealbeforethatCourt(ortheTribunal);theCourtortheTribunalshalldecidesuchappealwithin90days.Please note that no Tribunal has of yet been established by theFederalGovernmentforthispurpose;hence,allappealsaremadebeforetherelevantHighCourt.



In accordance with applicable telecom laws, no licensee shallestablish, maintain or operate any telecommunication system orprovide any telecommunication service which is not authorisedunder the licence, andneither is anypersonpermitted to connectterminal equipment to a telecommunication system other than apublicswitchednetworkwithouttypeapprovalfromthePTA.


Themainrequirementsforgeneralauthorisationsare:(a) thefinancialandeconomicviabilityoftheapplicant;(b) theapplicant’sexperienceintelecommunicationandrelevant

pasthistory;(c) the technical competenceandexperienceof the applicant’s

managementandkeymembersofstaffandlocalparticipationinthebusiness;and

(d) thenatureof the servicesproposedand theviabilityof theapplicant’s business plan, including its contribution to thedevelopmentofthetelecommunicationsector.

Pleasealsonotethatnoterminalequipmentcanbedirectlyand/orindirectly connected to apublic switchednetwork,unless a type-approvalforsuchequipmenthasbeengrantedbythePTA.


SubjecttoSection21ofthePTAAct,everylicencegrantedundertheActmay,inter alia,contain:(a) conditionsrequiringthelicenseetoadheretotheprovisions

ofthisActandtherulesandregulationsmadethereunder;(b) conditionsrequiringthelicenseetopaythefeesforgrantor

renewalofthelicence;(c) conditions requiring the licensee to allow inspection by

thePTAof anypremisesor telecommunicationequipment,

2 Telecoms

General


Yes.PakistanhasbeenamemberoftheWorldTradeOrganization(the “WTO”) since 1 January, 1995 andmember ofGATT since30 July, 1948. Further, Pakistan has adopted the WTO BasicTelecommunications Agreement and is in compliance with theobligations,whichincludetheprovisionofnormalvoicetelephoneservices, cellular mobile services, data transmission, satelliteservicesandprivate-leasedlinedevices,amongstothers.


ThePTAistheregulatorybodyforthetelecomsectorinPakistanand was established under the Pakistan Telecommunication (Re-organisation)Act,1996.No person, unless he has obtained a licence from the PTA, shallestablish,maintainoroperate any telecommunication system (i.e.,anyelectrical,electro-magnetic,electronic,opticaloroptio-electronicsystemfortheemission,conveyance,switchingorreceptionofanyintelligence (i.e., any speech, sound, data, signal, writing, imageor video) within, or into, or from, Pakistan, whether or not thatintelligence is subjected to re-arrangement, computation or anyotherprocessinthecourseofoperationofthesystem,andincludesacabletransmissionsystem,acabletelevisiontransmissionsystem,andswitches,equipment,wires,cables,apparatus,poles,structures,ducts, man-holes and other tangible property, software and data,other than terminalequipment,comprisingany telecommunicationsystemorusedinconnectionwithanytelecommunicationservice)orprovideanytelecommunicationservice(i.e.,aserviceconsistingintheemission,conveyance,switchingorreceptionofanyintelligencewithin,orinto,orfrom,Pakistanbyanyelectrical,electro-magnetic,electronic, optical or optio-electronic system, whether or not theintelligenceissubjectedtore-arrangement,computationoranyotherprocessinthecourseoftheservice).


The PTA and Ministry of Information Technology and Tele-communicationcontrolandregulatetelecomsandITaswellastherelatedministries.Asmentionedabove,thePTAisresponsibleforensuring fair competition in the telecommunication sector. ThePTA promotes investment, encourages fair competition, protectsconsumerinterestandensureshighqualityICTservices.Anti-competitivepracticesarealsosubject togeneralcompetitionlaw. TheCompetitionCommissionofPakistanisanindependentregulatory, quasi-judicial body that helps to ensure healthycompetitionbetweenundertakingsfor thebenefitof theeconomy.TheCCPprohibitstheabuseofadominantpositioninthemarket,certaintypesofanti-competitiveagreements,anddeceptivemarketpractices.Italsoreviewsmergersofundertakingsthatcouldresult


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The Telecommunication Infrastructure Provider (“TIP”) licencesareissuedunderSection21ofthePTAAct,wherebythelicenseehasthenon-exclusivelicencetoestablish,maintain,lease,rentand/orselltelecompassiveinfrastructurefacilitiesinPakistan,subjecttothetermsandconditionscontainedinthelicence.Suchlicenseeshallnotprovideanytelecommunication/broadcastingservice.All infrastructure/Telecommunication Tower Providers shall beresponsible for the safety of public and Government propertynear or around the area inwhich its equipmentmaybe installed.Infrastructure/Telecommunication Tower Providers shall enterinto a formal lease/rental agreement covering all aspects of thetransactionoflease,rent,etc.Subject to Section 27A of the PTAAct, for the purpose of theinstallationormaintenanceofitstelecommunicationequipmentorforthepurposeofestablishingormaintainingitstelecommunicationsystem,everylicenseeshall,subject to theconditionsprovidedinSection27AofthePTAActandthepolicydirectiveissuedbytheFederalGovernmentunderSection8ofthePTAAct,havetherighttoshareanyPublicRightofWayorPrivateRightofWay.InordertoenjoytherightsgrantedbySection27AofthePTAAct,thelicenseeshallrequesttheownerofsuchRightofWaytoapprovethemodeofexecutionoftheworksitproposestoundertake.IftheownerofsuchRightofWaydoesnotrespondtosuchrequestwithina period of 30 days, such request shall be deemed to have beengranted. While granting such request, the owner of theRight ofWaymayimposeconditionsrelatingtothepaymentoffeesandthemodeortimingoftheexecutionofsuchworkasmaybereasonableinthecircumstances:ProvidedthatanyrightgrantedunderSection27AofthePTAActisexercisedequitably,ensuringpropercompensationtotheowneroftheRightofWayandtheaccesstoprovidetothelicenseewillnotadverselyaffecttheowneroftheRightofWay.ThelicenseeshallexercisethepowersconferredinsuchamannerastocauseminimalinterferenceoftheenjoymentoftheRightofWayby theownerorotherusers thereof,and ifnofeesare tobepaidbythelicenseetotheowneroftheRightofWay,thelicenseeshallmakereasonablereparationtotheownerofsuchRightofWay.ThefeepayablebyalicenseetoaPublicAuthorityfortheuseofaPublicRightofWayshallbeareasonableamountassessedbythePublicAuthorityaftertakingallrelevantfactorsintoconsideration,including the laws applicable to the Public Authority and therelevantlawsapplicableinthedistrictinwhichsuchRightofWayissituated.



Inexerciseof thepowersconferredunderSection5(2) (h)of thePTAAct,thePTAhasissuedtheInterconnectionGuidelines,2004(“Interconnection Guidelines”). Pursuant thereto, all operatorsareobligedtoprovideinterconnectiontootheroperatorsdesiringto

wherever situated, and to furnish the PTA with suchinformationastheymayrequire;

(d) restrictions as to the types of telecommunication systemor telecommunication service to be provided by thelicensee, the area andperiodof operation and the types oftelecommunication equipment that may be included in itstelecommunicationsystem;

(e) theobligationtoensurethatonlyterminalequipmentwhichisapprovedforconnectiontothetelecommunicationsysteminquestionissoconnected;

(f) the obligation tomonitor use of the licensed telecommun-ication service or telecommunication system and todisconnect the telecommunication service from any userwho,afterwrittennotice,misusesit;

(g) obligations to provide the telecommunication service toparticular persons or areas tomeetminimumstandards forqualityandgradeofservicesrequirements;

(h) theobligationnottointerruptserviceexceptforfailureofthecustomertocomplywithhiscontractualobligationsoroutofgenuinetechnicalnecessity,orbyreasonofcircumstancestowhichSection54applies;

(i) restrictions on the licensee giving undue preference to, orunfairlydiscriminatingagainst,anyperson;

(j) restrictions or limitations on transfer or assignment of thelicence;

(k) conditions relating to the preservation or the transfer ordispositionoftelecommunicationequipmentandotherassetsusedinconnectionwithanypublicswitchednetwork;

(l) obligationsfortheprotectionofconsumers’interests;(m) conditionsrequiringthelicenseetocontributetotheResearch

andDevelopmentFundandUniversalServiceFund;and(n) conditionsastothesecurityprovidedbyalicenseetosupport

thefulfilmentofthelicensee’sobligationsinthelicence,andtherealisationofsuchsecuritybythePTA.

SubjecttoRule8ofthePTARules,alicenceshallbegrantedforan initial termofnot less than25years. Subject toSub-rule (2)andRule9,aftertheexpiryoftheinitialterm,thelicenceshallberenewedontermsandconditionsconsistentwiththepolicyoftheFederalGovernmentattherelevanttime.Rule11ofthePTARulesstatesthatalicencegrantedunderthePTAActandtheserulesshallbepersonaltothelicenseeandshallnotbeassigned,sub-licensedto,orheldontrustforanyperson,withoutthepriorwrittenconsentofthePTA.Further,ifasubstantialownershipinterestin,orcontrolof,alicenseeisproposedtobechanged,thelicenseeshallgivethePTAnoticeofsuchfactinwriting.Thatwrittennoticeshallincludeallrelevantdetailsof theproposedchange. If thePTA isof theopinion thatchangeshalladverselyaffecttheabilityofthelicenseetoprovideitslicensedtelecommunicationservices,itmayimposesuchadditionalconditionsinthelicenceasshallbereasonableanddirectlyrelevanttotheproposedchange.For the purpose of understanding, the terms “control” and“substantialownership interest”used in the response to this shallbearthefollowingmeanings:(i) “control”means the ability to direct the exercise,whether

directly or indirectly and whether through one or moreentities,ofmorethan50%ofthevotingrightsexercisableatanygeneralmeetingoftheshareholdersofthelicensee;and

(ii) “substantial ownership interest”meansmorethan10%oftheissuedsharecapitalofthelicensee.

Additionally, telecom services cannot be resoldwithout the priorwrittenconsentofthePTA.Nodistinctionhasbeenmadevis-à-vis foreignorlocalcompaniesinthisregard.


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TheGovernmentofPakistanaimstoincreasebroadbandpenetrationin thecountry. TheBroadbandPolicy,2004delineatesanumberofcost-cuttingmeasures,which include, inter alia,a reduction ininternationalIPanddomesticbandwidthprices. Provisionisalsomadeforthereductionoftheprimaryrateinterface(“PRI”)charges,toalevelwherethegapcreatedinthedial-upinfrastructureusagebythedial-upusersswitchingovertobroadbandserviceswouldnotmake theoperationalandcapitalexpenditure in thePRIservicealiabilityfortheinternetserviceproviders.Withrespecttoacquiringalicencetoestablish,maintain,lease,rentand sell Telecom Infrastructure Facilities, if the PTA determinesthat a licensee possesses SMP in a relevantmarket, the licenseeshallcomplywithordersof thePTAthatare intendedtopromotecompetitioninrespectofthatrelevantmarketormarketsancillarythereto,includingwithoutlimitationorderstoprovideaccesstoitsducts,poles, towers,orothersimilar facilities foruseby licensedtelecomInfrastructureFacilityProviders.Pleasealsorefertoourresponsetoquestion2.8above.



TheTariffRegulationsprovide,inter alia,thatnon-SMPoperatorsarefreetosetandrevisetheirtariffsatanytimeandinanymannertheylike.ProvidedthattheyinformthePTAabouttheirproposedtariffsthirty(30)daysbeforetheapplicabilityofnewtariffs.ThePTAmaymake amendments to the tariffs of non-SMP operatorswherethetariffsareconsideredtobeunfairandburdensome.With respect to local loop and long-distance and internationaltelephony operators which have been determined to have SMPstatus,theyshallsetatariffsubjecttoaformulaprovidedforintheapplicabletelecomlaws.Further, the tariff for leased lines services is contingent ondeterminationbycalculationsofcosts.


Subject to Section 33A of the PTAAct, the FederalGovernmentcreated a Universal Services fund, whereby person(s) who havebeen issued a licence to provide telecommunication services arerequired to pay aUSFCharge limited to 1.5%of gross revenue,minus inter-operatorandrelatedPTA/FABmandatedpaymentsasdeterminedbytheGovernment.Further, the Federal Government also created a Research andDevelopment Fund whereby person(s) who have been issued alicence to provide telecommunication services have to contribute0.5%ofgrossrevenue,minusinter-operatorandrelatedPTA/FABmandatedpayments,totheResearchandDevelopmentFund.

interconnect.Interconnectionshallbepermittedatanytechnicallyand economically feasible point. Where an operator submits itsrequest for interconnection with another, the former is requiredtoaresponseinwriting. Itmayaccept therequestcompletelyorpartially.Itcanonlydenytherequestinitsentiretybasedonreasonswhichhavebeengivenfairly.Further, the operator with SignificantMarket Power (“SMP”) isobliged to prepare and submit its Reference Interconnect Offer(“ROI”) to thePTAwithin onemonthof its determination as anSMPoperatorbythePTA.TheSMPoperatorshallmaketheROIpubliclyavailablewithinseven(7)daysafterapprovalbythePTA.After the receipt of an interconnection request, both parties shallmutuallynegotiate interconnection termsandconditions,oradopttheRIO,as thecasemaybe; thenegotiations shallbecompletedassoonaspossiblebutnotlaterthan90daysfromthedateoftheinterconnectionrequest.SubjecttotheInterconnectionDisputesResolutionRegulations,anoperatormayfileaclaimwiththePTAintheformatsetoutintheAnnex to these regulations, if that operator is unable to reach anagreementwiththeRespondent:(a) onaninterconnectionarrangement;or(b) on a dispute arising out of a subsisting interconnection

agreement,and such failure to agree continues for 60 days after the requestfor the interconnectionarrangementwasmadeor thedisputewasraised;providedthat,inrelationtosub-paragraph(b),thePTAmayentertainaclaimbeforetheendof60days.


Subject toArticle 14 of the InterconnectionGuidelines, the PTAshallpublishallinterconnectionagreementssubmittedtoitinsuchamannerasitmaydeemappropriate.However,theoperatorsmayrequestthePTAtokeepconfidentialanyinformationoranysectionof an interconnection agreement, the disclosure of which wouldhavethepotentialtoseriouslyandprejudiciallyaffecttheoperators.ThedecisiontokeepanysuchinformationconfidentialwillbeatthesolediscretionofthePTA.


The Interconnection Guidelines provide, inter alia, that the PTAshallapprovethelevelandstructureofinterconnectioncharges.Thestructureofinterconnectionchargesshouldbebasedonthenatureofservicesandfacilitiesprovidedbytheoperatorsandtheoperatorshallchargetheseservicesaccordingly.Subjecttotheforegoing,anoperatorisentitledtodetermineitsratesforinterconnectionservicesprovidedthatthesamecanbeobjectivelyjustifiedonthebasisofcostsincurredinprovidingsuchservices.Suchtariff(s)arerequiredtobeapprovedbythePTAfromtimetotime.


Yes,operatorsaresubjecttoalloftheaforementionedseparations.


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(a) the blocks of numbers and short codes allocated to thelicensee,andtheindividualnumbersallocatedbythelicenseetoitscustomers,areanationalresource;and

(b) theallocationofanumberdoesnotconferownershipofthenumbertothecustomer.

However, an allocation conveys an ongoing right of use and anexpectation of at least a three-month notice period, should it benecessarytowithdraworchangeallocatednumbers.


Pleaserefertoourresponsetoquestion2.16above.


Subject to Regulation 3 of the Mobile Number PortabilityRegulations, all operators shallmakeMobileNumber PortabilityavailabletotheirsubscribersaspertheseRegulations.However, the local loop licensee shall not be required to makeavailable number portability to its customers or other operatorsunlessthePTAsorequires.

3 Radio Spectrum


The FrequencyAllocation Board (“FAB”) was established underSection42ofthePTAAct,andhasexclusiveauthoritytoallocateandassignportionsoftheradiofrequencyspectrumtotheGovernment,providers of telecommunication services and telecommunicationsystems, radio and television broadcasting operations, public andprivatewirelessoperators,andothers.EveryapplicationforallocationandassignmentofradiofrequencyspectrumhastobemadetothePTA.ThePTAisrequiredtorefertheapplicationtotheFABwithin30daysfromthereceiptofsuchapplication.On receipt of the application, the FAB classifies the tele-communication services and may allocate or assign the specificfrequencies to the applicant. The FAB is required to notify theapplicantofthestatusoftheapplicationwithinthreemonths.


Subject to Section 43 (5) of the PTAAct, every application forallocationandassignmentofradiofrequencyspectrumshall,inthefirstinstance,bemadetothePTA,whichshall,aftersuchinquiryasitmaydeemappropriate,refertheapplicationtotheFABwithin30daysfromreceiptofsuchapplication.OnreceiptofapplicationunderSection43(5)ofthePTAAct,theFABshallclassifythetelecommunicationservicesandmayallocateorassignspecificfrequenciestotheapplicant.ItmayalsobenotedthattheFABauctionsspectrum/frequencyforusebycellular/mobilenetworkoperators.Pleasealsorefertoourresponsetoquestion3.4below.

Numbering


LicenseesofthePTAareeligibletoapplyforallocationofnumbercapacity, as per the Number Allocation And AdministrationRegulation,2005.Numbering is a finite national resource and therefore must bemanaged prudently to ensure that the numbering resource isadequate to support existing telecommunication services, andhasenoughcapacityfortheintroductionofnewnetworksandservicesasthesebecomeavailable.Section5(2)(k)ofthePTAActmandatesthePTAtodevelopandmanageanationalnumberingplanfortheprovisionofawiderangeofefficienttelecommunicationservicesinPakistan.Undertheplan,theleadingdigitdefinestheservice/networkfortheuseofaparticularnumberingrange.Thestructureofthenationalnumbering plan complies, as far as possible, with the ITU-TRecommendationsE.164.The plan defines number ranges and their assignment to varioustelecommunication services, including PSTN and WirelessNetworks, international direct dialling, emergency and specialservices such as voicemail, carrier identification/selection codes,andIntelligentNetwork(IN)-basedservices.Numbersbeginningwith thedigit“0”are reservedfornationalandinternationalservices.Level“0”isusedasanescapecodeforlong-distance (national) dialling and for access to other networks, i.e.,mobile,IP-basedservices,while“00”isassignedtointernationaldirectdiallingforalltelecommunicationusersinthecountry,irrespectiveoftheirserviceproviderandassuchsharedbyallserviceproviders.Numbersstartingwiththeleadingdigit“1”arereservedforshortcodesandaccesstointelligentnetwork-basedservices.Shortcodesforemergencyservices,customerservicesandcarrierselectionalsostartwiththedigit“1”.Someshortcodesarethreedigitslongwhileothersarefourdigitslong,dependingontheiruse.Thecountryisdividedintotwogeographicareas,andtheleadingdigits“02”and“04”areassignedtothesegeographicareas,wherethe second, third or fourth digit leads to the complete nationaldestinationcode.Thesubscribernumberconsistsofsix,sevenoreightdigits.ANationalSignificantNumberis10digitslonginallcases.The leading digits “01” and “03” are assigned to cellularmobileoperations with a two-digit network access code and eight-digitsubscriber number. Twenty mobile operators can launch theirservices while each operator can hold a theoretical base of 100millioncustomers.Theleadingdigits“05”and“06”arereservedforfutureservices.Theleadingdigit“07”isreservedforIP-basedservices,whiletheleadingdigit“08”isassignedtofreephoneandnewnon-geographicservices.Theleadingdigit“09”isassignedtopremiumrateservicesandnewnon-geographicservices.Alocallooplicenseemayrequestgeographicandnon-geographicnumbersfromthePTA,aswellasshortcodes,inaccordancewiththenationalnumberingplandevelopedbythePTA,foruseintheprovisionoflicensedservicesintheareasconcerned.ThelicenseecanallocateindividualnumberstocustomersfromtheblocksallocatedtoitbythePTA,andshallmaintainsuitablerecordsof its utilisation of numbering capacity, subject to the followingconditions:


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A licence granted under thePTAAct and thePTARules shall bepersonal to thelicenseeandshallnotbeassigned,sub-licensedto,orheldontrustforanyperson,withoutthepriorwrittenconsentofthePTA.Aframeworkforspectrumtradingisalsoinplace,butisnotyetinforce.Pleasealsorefertoourresponsetoquestion2.7above.



The current legal framework for cybersecurity is governed bythePECA. Thepurposeof thePECAis tocontrol the increasing“cybercrimes in Pakistan” and to control the offences related toinformationsystems.Itprovidesmechanismsfortheinvestigation,prosecutionandtrialofelectroniccrimes.Therearemanyclausesinthislegislationwhichareconsideredasrestrictionsonthefreedomofpeople,especiallyfreedomofexpressionandfreedomofspeech.Activities such as sending text messages without the receiver’sconsent or criticising Government actions on social media aresubject to penalty with heavy fines and imprisonment in jail.Similarly,onlinecriticismofreligion,country,courtsofPakistan,armedforcesofPakistanandotherinstitutionsofPakistanarealsopunishablewithfinesandimprisonment.The PECA has also come under fire for including data retentionprovisions that make it mandatory for service providers to holdtrafficdataforaminimum90-dayperiodoras“authorisedofficers”seefit.ThePECAdoesnot,however,explicitlylistanyprovisionsfordataprivacyorprotection,outsideofconditionsthatofficersofthelawmustprovideanyone“withalegalrighttothedata”alistofsaiddata,andcopiesofsaiddata,althoughthiscanberefusedbyan“investigatingofficer”ifthereare“reasonablegrounds”.Subject to certain provisions of the PECA, “International Cooperation” can be tenderedwhereby the FederalGovernmentmay,uponreceiptofarequest,throughthedesignatedagencyunderthePECA,extendsuchcooperationtoanyforeigngovernment,24×7network,anyforeignagencyoranyinternationalorganisationoragency,forthepurposesofinvestigationsorproceedingsconcerningoffencesrelatedtoinformationsystems,electroniccommunicationordataorforthecollectionofevidenceinelectronicformrelatingtoanoffence,orobtainingexpeditiouspreservationanddisclosureofdatabymeansofaninformationsystem,orreal-timecollectionofdataassociatedwithspecifiedcommunicationsorinterceptionofdataunderthePECA.Theprovisionsof thePECAarenotonlyspecific to the licensees(includingMNOs)of thePTA; thescopeof thePECAextends toeverycitizenofPakistan,whereverhemaybe, andalso to everyotherpersonforthetimebeinginPakistan.Thesamealsoappliesto any act committed outside Pakistan by any person if the actconstitutesanoffenceunderthePECAandaffectsa(i)person,(ii)property,(iii)informationsystem(“electronic system for creating, generating, sending, receiving, storing, reproducing, displaying, recording or processing any information”), or (iv) data (“any representation of fact, information or concept for processing in an information system including source code or a program suitable to cause an electronic system for creating, generating, sending,


The Pakistan Table of Frequency Allocations is the broadesttechnicaldocumentshowingtheallocationofbandstovarioustypesofservices.ThePakistanTableofFrequencyAllocationsisdrawnfrom, and kept current with, the ITU Radio Regulations, whichare revised every few years at theWorld Radio CommunicationConferences.


Subject to Article 4.4 of the Mobile Cellular Policy, 2004 (the“Mobile Cellular Policy”)forMobileCellularLicences,wheretheassignmentofspectrumislinkedtoasetoflicenceconditions,theassociatedfeeswillconsistoftwoparts:Cellular Spectrum PriceThe Spectrum Price for nationalmobile cellular licences will bedeterminedthroughauction.TheSpectrumPriceresultingfromtheauctionwillalsobeusedasabenchmarktodeterminepriceperMHzper annumfortheexistingoperators,oncetheycomeunderthepurviewofthispolicy.ThemobilelicenseeswillpaythePTA,inadditiontotheSpectrumAdministration fee and the Spectrum Price, an annual licenceAdministrationfee(“Regulatory fee”),toreasonablycoverthecostofregulation.TheannualRegulatoryfeeshallnotexceed0.5%oflastyear’sgrossrevenue,minusinter-operatorandrelatedPTA/FABmandatedpayments.Administrative fees for radio spectrumwill be set to recover thecostofadministrationofthatspectrum.ThetotalincomegeneratedfromadministrativefeesforthewholespectrumshouldrecoverthereasonableoperationalcostsbytheFABincurredwhilstmanaging,licensingandpolicingthatspectrum.Spectrum price for line of site links will be limited to theAdministrationfees.Pleasealsorefertoourresponsestoquestions3.1and3.2above.


SubjecttoRule11(5)ofthePTARules,ifasubstantialownershipinterestin,orcontrolof,alicenseeisproposedtobechanged,thelicenseeshallgivethePTAnoticeofsuchfactinwriting.Thatwrittennoticeshallincludeallrelevantdetailsoftheproposedchange.IfthePTAisoftheopinionthatthechangeshalladverselyaffecttheability of the licensee to provide its licensed telecommunicationservices, itmay impose such additional conditions in the licenceasshallbereasonableanddirectlyrelevanttotheproposedchange.For the purpose of understanding, the terms “control” and“substantialownershipinterest”usedintheresponseshallbearthefollowingmeanings:(i) “control”meanstheabilitytodirect theexercise,whether

directly or indirectly and whether through one or moreentities,ofmorethan50%ofthevotingrightsexercisableatanygeneralmeetingoftheshareholdersofthelicensee;and

(ii) “substantial ownership interest”meansmorethan10%oftheissuedsharecapitalofthelicensee.

Pleasealsorefertoourresponsetoquestion2.7above.


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(c) interception or recording or obtaining of any electronictransactionincluding,butnotlimitedto,emails,SMS,etc.;

(d) interception and taking over of any equipment used in thecommunication in respect of which the warrant is issued,including,butnotlimitedto,telephones,cellphones,mobileSIM cards, electronic databases; demonstrating the linkingofelectroniccommunicationwiththedatabasebelongingtothepersoninrespectofwhomthewarranthasbeenissued,provided that the judge authorises take-over of equipmentonlywherethematerialorstatementoftheauthorisedofficerdisclosesasubstantial threatorpossibilityofanattempt tocommitascheduledoffence;

(e) collection of evidence through any modern devices inadditiontotheonesmentionedabove;

(f) useofhumanintelligence;(g) covertsurveillanceandpropertyinterference;(h) access to any information or data in any form related to a

transaction,communicationoritscontent;and(i) anyotherformofsurveillanceorinterceptionthattheFederal

Governmentmaynotifyfrominthisbehalf.


Inadditiontotheresponsetoquestion4.2above,Regulation4oftheMonitoringandReconciliationofTelephonyTrafficRegulationsstates that eachLDI licensee andAccess Provider shall establishthesystematitsowncostinaccordancewiththeseregulations,asdeterminedandrequiredbythePTAfromtimetotimeatthePTAdesignatedpremises.AnymonitoringsystemorothersystemdevelopedunderRegulation4 of the Monitoring and Reconciliation of Telephony TrafficRegulations shall comprise themandatory features ofmonitoringlinksandcontrollinggreytrafficwiththeminimumofthefollowingfeatures,andshallensurecompatibilitytoprovidesuchinformationasrequiredbythePTA,whereapplicable:(a) capabilitytomonitor,control,measureandrecordtrafficin

realtime;(b) capabilityforacompletesignallingrecord,includingbutnot

limitedtobilling;(c) capabilitytoaccuratelymeasurethequalityofservice;(d) acompletelistofPakistanicustomersandtheirdetails;and(e) completedetailsofcapacityleasedbythelicensee(s)totheir

customers.Further, Regulation 8 states that LDI licensees shall ensure fullaccountingofinternationaltrafficonallAccessProviders’networks.Themonitoringsystem(s)andothersystem(s)shouldbecapableofidentifying,analysingandreconcilingalldataandvoice-signallinginformationinaclearandtransparentmannerforidentificationofthe total traffic, irrespectiveof thepath taken in such format andwithsuchfeaturesasrequiredbythePTA.ForthepurposesoftheMonitoringandReconciliationofTelephonyTraffic Regulations, the term “system(s)” has been defined as asystem which includes but is not limited to hardware, software,firmware,peripherals,cables,connectorsandinternalandexternalinterfaces to be installed and deployed for the monitoring,aggregating,measuringand reconcilingof traffic,monitoringandcontrollingofgreytraffic,removalofasymmetry,billingandqualityofthelicensedservice.

receiving, storing, reproducing, displaying, recording or processing any text, message, data, voice, sound, database, video, signals, software, computer programs, any forms of speech, sound, data, signal, writing, image or video, to perform a function or data relating to a communication indicating its origin, destination, route, time,size,durationortypeofservice”).The PECA also provides that the unauthorised access or theunauthorised copying or transmission of data or an informationsystemwiththeintentofinjury,wrongfulgainorwrongfullossorharmtoanypersonshallbetreatedasapunishableoffence.Further, the PECA provides that, a service provider shall,withinits existing or required technical capability, retain its specifiedtrafficdata(datarelatingtoacommunicationindicatingitsorigin,destination, route, time, size, duration or type of service) for aminimumperiodofoneyearorsuchperiodasthePTAmaynotifyfromtimetotimeand,subjecttotheproductionofawarrantissuedby the court, provide that data to the investigation agency or theauthorisedofficerwheneversorequired.For the purpose hereof, a “service provider”means to include apersonwho:(a) acts as a serviceprovider in relation to sending, receiving,

storing, processing or distributing any electroniccommunication,ortheprovisionofotherservicesinrelationtoelectroniccommunicationthroughaninformationsystem;

(b) owns, possesses, operates, manages or controls a publicswitchednetworkorprovidestelecommunicationservices;or

(c) processes or stores data on behalf of such electroniccommunicationserviceorusersofsuchservice.

Service providers are required to retain traffic data by fulfillingall requirements of data retention and its originality, as per theprovisionsofthePECA.


Section54ofthePTAActprovidesthatnotwithstandinganythingcontainedinanylawcurrently inforce, in the interestofnationalsecurity or in the apprehension of any offence, the FederalGovernmentmayauthoriseanypersonorpersonstointerceptcallsand messages or to trace calls through any telecommunicationsystem. ThePTAAct also includes other provisions that restricttheabilityofusers tobeable tocommunicateprivately,or tousesystems to access the internet and other ICT services withoutinterferenceandsurveillance.Section 32 of the PTAAct gives courts the power to authorisesearchesfor“unapprovedcryptoapparatus”orother“unapprovedterminalequipment”.Further, Article 6.13 of the Mobile Cellular Policy states thatlicensees shall meet the requirements of authorised securityagenciesforlegalinterceptionofcallsandmessages.Further,theGovernmentofPakistanhastherighttoeithersuspendtheserviceorcancelanylicencetosafeguardnationalsecurity.WithrespecttotheInvestigationforFairTrialAct,2013,theHighCourtmayissueawarrantofsurveillanceorinterceptiontoallowthelawfuldoingofanyorallofthefollowingacts,namely:(a) interception and recordingof telephonic communicationof

thesuspectwithanyperson;(b) videorecordingofanyperson(s),premises,event,situation,

etc.;


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Subscriber Antecedents Verification RegulationsAll operators shall ensure the maintenance of updated record ofall SIM(s) to subscribers, and every operator shall ensure theconfidentiality of all the information disclosed by the subscriberundertheprovisionsoftheseRegulations.Alloperatorsshallensurethecleaningofolddataforverificationofallsubscribers’dataasandwhenrequiredbythePTA.AlthoughthereisnospecifictimeperiodprovidedforthePTAtocallforsuchsubscriberdataverification,itisclearthatsuchdatacanberetainedinelectronicformasperSection6oftheETO.Mobile Number Portability RegulationsEvery recipient operator shall keep and maintain records of theapplicationformsofthosesubscriberswhohaverequestedportingforatleastsixmonths,forinquirybyconcerneddonoroperatorsorexaminationbythePTA.Theoperatorsarerequiredtomaintainusagerecordsincluding,whereavailable, called and calling numbers, date, duration, time and thecallednumbercell,withregardstousagemadeonitscentraldatabasesforarolling12months,forscrutinyby,orasdirectedby,thePTA,orasrequiredbyanylawenforcementorintelligenceagency.GPRS/EDGE Service Quality of Service Standards RegulationEvery licensee is required to carry out “Quality of Service” ondifferentfactors,andretainandmaintaintherecordofthesameinitsownsafecustodyforaperiodofthreeyears.The PECAAserviceproviderisrequiredtoretainitsspecifiedtrafficdataforaminimumperiodofoneyear,orsuchperiodasthePTAmayspecifyfromtimetotime.Further,ifanauthorisedofficerissatisfiedthat:(a) specificdatastoredinanyinformationsystemorbymeansof

aninformationsystemisreasonablyrequiredforthepurposesofacriminalinvestigation;and

(b) thereisariskorvulnerabilitythatthedatamaybemodified,lost,destroyedorrenderedinaccessible,

theauthorisedofficermay,bywrittennoticegiventothepersonincontroloftheinformationsystem,requirethatpersontoprovidethedataortoensurethatthedataspecifiedinthenoticebepreserved,and for the integrity thereof to be maintained for a period notexceeding90days,asspecifiedinthenotice.



PEMRA,createdpursuanttothePEMRAOrdinance,istherelevantregulatorwhich,inter alia,issueslicencestoestablishandoperateabroadcaststationand/ordistributeprogrammesthroughcableortelevisionnetworks.Any person desirous of operating broadcast media (such mediawhichoriginateandpropagatebroadcastandpre-recordedsignalsby terrestrial means, or through satellite for radio or television,and include teleporting, provision of access to broadcast signalsbychannelprovidersandsuchother formsofbroadcastmediaasPEMRAmaystate,withtheapprovaloftheFederalGovernment,bynotificationintheofficialgazette)oradistributionservice(aservicewhich receives broadcast and pre-recorded signals from differentchannelsanddistributesthemtosubscribersthroughcable,wirelessorsatelliteoptions,and includescableTV,LMDS,MMDS,DTHandsuchothersimilartechnologies),shallberequiredtoprocurealicencefromPEMRA.


Subject to Section 54 of the PTAAct, in the interest of nationalsecurity or in the apprehension of any offence, the FederalGovernment may authorise any person(s) to intercept calls andmessagesortotracecallsthroughanytelecommunicationsystem.Duringawar,aperiodofhostilitytowardsPakistanbyanyforeignpower, internal aggression, or for the defence or security ofPakistan,theFederalGovernmentshallhavepreferenceandpriorityintelecommunicationsystemsoveranylicensee.Pleasealsorefertoourresponsestoquestions4.2and4.3above.


AspartoftheobligationsplacedonalicenseeundertheMonitoringandReconciliationofTelephonyTrafficRegulations,thelicensee(s)andAccess Providers shall ensure that signalling information isuncompressed,unencrypted,andnotformattedinamannerwhichtheinstalledmonitoringsystemisunabletodecipherusinginstalledcapacities.Further, the licensee(s) and Access Provider(s) shall provideaccess to the authorised representatives of the PTA for obtaininginformationdirectlythroughthesystemofanytrafficroutedthroughtheirnetwork,asandwhenrequiredbythePTA.


PursuanttotheElectronicTransactionsOrdinance,2002(“ETO”),the requirement under any law for any document, record,information, communication or transaction to be in written formshallbedeemedsatisfiedwherethedocument,record,information,communicationor transactionis inelectronicform, if thesameisaccessiblesoastobeusableforsubsequentreference.However,inlightofSection16oftheETO,documentsarerequiredtobe retainedpursuant to specific laws (asdiscussedherein) andpreserved inhard form if theoriginaldocumentwasproduced inhard form, e.g., instruments which require stamping, registrationand/or signatures as in terms of the Stamp Act, 1899, and theRegistrationAct,1908,and/orasmayberequiredbythecompetentauthority in accordance with its respective laws. Therefore, inorder to appropriately use and rely upon documents/instruments(originallyproducedinhardform)whichmayneedtobepresentedasevidence,intermsofChapterVoftheQanun-e-ShahadatOrder,1984,mustberetained inhardformirrespectiveof theelectronicformsupra.PTA RulesEvery licensee is required each month, or at such intervals asdesignated,tofurnishtheresultsofqualitytestsandsurveystothePTA.Thelicenseeisrequiredtokeeparecordofthesaidqualitytestsandsurveysforthreeyears,andsuchrecordshallatalltimesbeopentoinspectionandauditbythePTA.The Access Promotion Contribution RulesEvery licensee shall keep all books and accounts pertaining topayments made or received pursuant to the Access PromotionContributionRules, and the telecommunication services towhichsuch payments relate, including call detail records and itemisedbillingdata,foraperiodofatleastthreeyears.


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Pursuant to Section 19 of the PEMRAOrdinance, PEMRA shallhave the exclusive right to issue licences for the establishmentand operation of all broadcast media and distribution services,provided that this exclusive right shall be used by PEMRA inconformitywiththeprinciplesoffairnessandequityappliedtoallpotentialapplicantsforlicences,whoseeligibilityshallbebasedonprescribedcriterianotifiedinadvance.Incaseofradio,televisionandMMDSbroadcast station licences, this shallbedone throughanopen,transparentbiddingprocessifthenumberofapplicationsexceedsthenumberoflicencestobeissuedbyPEMRA.NopersonorentitycanengageinbroadcastingorCTVoperationexceptafterprocuringalicenceissuedbyPEMRA.


Subject to the terms and conditions of the licence granted byPEMRA, a licensee shall not sell, transfer or assign any of therightsconferredbythelicencewithoutpriorwrittenpermissionofPEMRA.



Section 21 of the PTA Act places an obligation on licensee(s)to monitor use of the licensed telecommunication service ortelecommunicationsystem,andtodisconnectthetelecommunicationservicefromanyuserwho,afterwrittennotice,misusesit.Therefore, if any of the terms and conditions of the licence arebreached,thePTAcancancelthelicenceoftherelevantoperator.


Ifanycontentowner isof theopinion thathis right(s)havebeeninfringed, such content ownermay approach the relevant judicialforumforremedy.


Currently therearenospecific lawsrelating to“netneutrality” inPakistan.


ItistobenotedthatthePTA,beingthecountry’stelecomregulator,will implement policies to blockwebsiteswith blasphemous, un-


PEMRA regulates the traditional distribution platforms, whereasthe PTA, in addition to PEMRA, jointly regulates internet-basedplatforms.ItisalsotobenotedthatthePTA,asthecountry’stelecomregulator,will implement policies to blockwebsiteswith blasphemous, un-Islamic,offensive,objectionable,unethical,andimmoralmaterial.In this regard, the PTA, as and when directed by the FederalGovernment, directs/requires its licensees to implement IP/URLblocking/filteringprotocols.


Subject to Section 18 of the PEMRA Ordinance, PEMRA shallissuelicencesforbroadcastmediaanddistributionservices in thefollowingcategories,namely:(a) internationalandnationalscalestations;(b) provincial-scalebroadcasts;(c) localareaorcommunity-basedradioandTVbroadcasts;(d) specificandspecialisedsubjects;(e) distributionservices;and(f) up-linkingfacilities,includingteleportingandDSNG.Further,PEMRAmaysub-categorisethecategoriesspecifiedinanyoftheaforementionedsub-sections.ApersonwhoisissuedalicenceunderthePEMRAOrdinanceshall:(a) ensure the preservation of the sovereignty, security and

integrityoftheIslamicRepublicofPakistan;(b) ensure the preservation of the national, cultural, social

and religious values and the principles of public policy asenshrined in the Constitution of the Islamic Republic ofPakistan;

(c) ensurethatallprogrammesandadvertisementsdonotcontainor encourageviolence, terrorism, racial, ethnicor religiousdiscrimination, sectarianism, extremism, militancy, hatred,pornography,obscenity,vulgarityorothermaterialoffensivetocommonlyacceptedstandardsofdecency;

(d) complywithrulesmadeunderthePEMRAOrdinance;(e) broadcast, if permissible under the terms of its licence,

programmes in the public interest specified by the FederalGovernment or PEMRA in the manner indicated by theGovernment,or,asthecasemaybe,PEMRA,providedthatthedurationofsuchmandatoryprogrammesdoesnotexceed10%ofthetotaldurationofthebroadcastoroperationbyastation in24hours,except if,by itsownvolition,astationchoosestobroadcastsuchcontentforalongerduration;

(f) complywith the codes of programmes and advertisementsapproved by PEMRA and appoint an in-house monitoringcommittee, under intimation to PEMRA, to ensurecompliancewiththeCode;

(g) notbroadcastordistributeanyprogrammeoradvertisementinviolationofcopyrightoranyotherpropertyright;

(h) obtain NOC from PEMRA before the import of anytransmitting apparatus for broadcasting, distribution orteleportingoperation46;and

(i) notsell,transferorassignanyoftherightsconferredbythelicencewithoutpriorwrittenpermissionofPEMRA.


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Mustafa Munir AhmedRIAA Barker Gillette 3rd Floor, 65-W, Executive HeightsBlock-HFazal-e-Haq RoadBlue Area, IslamabadPakistan

Tel: +92 51 111 529 937Email: [email protected] URL: www.riaabarkergillette.com/pk

Shahrukh IftikharRIAA Barker Gillette 3rd Floor, 65-W, Executive HeightsBlock-HFazal-e-Haq RoadBlue Area, IslamabadPakistan

Tel: +92 51 111 529 937Email: [email protected] URL: www.riaabarkergillette.com/pk

Mustafa Munir Ahmed is a partner based in Islamabad. He handles a full range of corporate and commercial matters, representing multinational corporations, financial institutions, non-profit organisations, local companies and Government entities.

He advises a range of private and public corporations on corporate matters, including the registration of branch offices of foreign companies in Pakistan, and regulatory issues. Mustafa is involved in major corporate restructurings, corporate finance, and mergers and acquisitions (including pre-merger approvals and filings). He has particular expertise in the telecommunication sector, advising national and international telecom companies operating in Pakistan, and has been involved in a number of major telecom projects and agreements.

He also has notable experience in the energy and power sector, advising on security and finance documents relating to various independent power projects. He has also assisted with a range of exploration, development, production, transmission and distribution projects in Pakistan.

With over 35 years of history globally, RIAA Barker Gillette has grown to become a leading international group of firms. Our team of professionals is well-versed in advising domestic and multinational clients, and has extensive experience of complex, cross-border work, more specifically in the Information and Technology Sector of Pakistan.

Our expertise includes major telecoms and internet projects, including advising a number of new entrants into the reorganised telecoms sectors, major telephone line projects and privatisations. Our media practice is regularly involved in the incorporation, licensing and operational issues relating to corporate entities involved in the television, satellite broadcasting and print media, as well as digital radio. Our advice blends a commercial perspective regarding foreign direct investment and licensing matters involving applications, presentations and representations to relevant regulatory authorities.

Our practice also includes advising on a range of matters affecting innovative sectors, including media and new technology law, outsourcing agreements, and assists major clients in the sector with their IP portfolios.

For further information, please visit RIAABG’s website: www.riaabarkergillette.com.

Shahrukh is based in Islamabad and advises multinational corporations and local companies on various complex commercial transactions.

Shahrukh assists with a range of matters, including: cross-border international trade remedy laws; drafting amendment laws for regulatory bodies; corporate governance and compliance relating to the registration and incorporation of companies in Pakistan; intellectual property; labour law; power purchase agreements; implementation agreements; off-shore and on-shore engineering; procurement and construction contracts for project companies setting up power plants in Pakistan; concession documents pertaining to oil and gas companies; property law; construction law; corporate restructuring for privatisation transactions; and proceedings before the Competition Commission.

While it ismandatory for such serviceproviders toprovide localenforcementagencieswithdecryptionandinterceptionabilitiesforsuchencryptedservices,wenotethatmessagingandVoIPregulationishighlytopical.Platformsofferingend-to-endencryption,similartoWhatsApp, are not currently regulated. However, we cannotconfirm whether the same will be brought in the ambit of theregulatoryregime.

AcknowledgmentTheauthorswouldliketothankMissSairaKhalidforherassistanceinthewritingofthischapter.MissKhalid is based in the Islamabad office and advises variouslocal and foreign clients on all aspects of corporate/commercial,regulatory and transactionalmatters, including telecommunicationlaws.Tel:+9251111529937/Email:[email protected]

Islamic,offensive,objectionable,unethical,andimmoralmaterial.In this regard, the PTA, as and when directed by the FederalGovernment, directs/requires its licensees to implement IP/URLblocking/filteringprotocols.WithregardstoconsumerVirtualPrivateNetworks(VPN)services,pleasenote that transmissionofencrypteddataon thenetworkastraffic is not permitted under the applicable laws. Non-standardprotocols of communication, including encryption, cannot beundertakenwithout thepriorapprovalof thePTA. Operatorsarerequired to obtain prior approval of the PTA if they use a non-standardmodeofcommunication,includingVPNandnon-standardprotocols,whichincludeencryptedmessages.Further, theuseofanynon-standardofcommunication, includingallmechanismsbymeansofwhichcommunicationsbecomehiddenormodifiedtotheextentthattheycannotbemonitored,isaviolationofthePTARules.


Chapter 26

Drew & Napier LLC

Lim Chong Kin

Shawn Ting

Singapore


IMDA is the converged regulator for info-communications(including telecoms and IT) and media in Singapore, and isresponsible for thedevelopment,promotionand regulationof theinfo-communicationsandmediasectors.IMDA is under the direct authority of MCI, the governmentministryinchargeofthedevelopmentoftheinfo-communicationstechnology,cybersecurity,mediaanddesignsectorsinSingapore.


TelecomsThe Singapore telecom sector was fully liberalised from 1April2000. Since then, there have been no direct or indirect foreignequity limits imposed on persons holding a licence to providetelecomservices.IMDA’s current practice is to issue facilities-based operations(“FBO”) licences only to companies incorporated in Singapore,which can be wholly owned by a foreign entity. In the case ofservices-based operations (“SBO”) (individual) licences, IMDAwould also issue licences to local registered branches of foreigncompanies,whileSBO(class)licencesmayalsobeheldbylimitedliabilitypartnershipsorlimitedpartnerships.Merger and acquisition control regulations exist under theTelecommunicationsCompetitionCode (“TCC”) and PartVA oftheTA.Formoredetails,pleaseseetheresponsetoquestion2.7.Audio-visualmediadistributionsectorPartXof theBAregulatesforeignparticipationinabroadcastingcompany,whichisacompanyincorporatedorregisteredundertheCompaniesActwhichholdsafree-to-airlicence,oranybroadcastinglicence under which a subscription broadcasting service may beprovided, that permits a broadcast capable of being received in50,000 dwelling houses or more. The following requirementsunderPartXoftheBAapplytoallbroadcastingcompaniesunlessexempted by the Minister for Communications and Information(“Minister”).

1 Overview


According to the latest Annual Survey on Infocomm Industrypublished by the Info-communications and Media DevelopmentAuthority (“IMDA”), the total info-communications industryrevenue for 2016 was S$175.8 billion. According to InfocommMedia2025(SupplementaryInformationAnnex),publishedbytheMinistry of Communication and Information (“MCI”), the totalrevenueofthemediasectorin2013wasS$33.1billion.The three main local telecom service providers in Singaporecurrently are:Singtel;StarHub; andM1. In2016,TPGTelecomwontheNewEntrantSpectrumAuctionandisexpectedtobecomeSingapore’s fourth telco offering 4G services when its networkrolloutiscomplete.In themedia sector,Mediacorp is the sole licensee broadcastingnationwidefree-to-airtelevision(“FTA TV”)channelsinSingapore,whileStarHubandSingTelarethemainserviceprovidersofferingnationwide subscription pay-TV services. The current free-to-airradio broadcasters areMediaCorp, SoDrama!Entertainment andSPHRadio.


The Telecommunications Act (“TA”) is the primary legislationgoverning the telecom sector in Singapore. It sets out the broadlicensingandregulatoryframeworkfor thetelecomsector. Otherrelevant legislation includes the Info-communications MediaDevelopmentAuthorityAct2016 (“IMDAA”), thePersonalDataProtectionAct2012(“PDPA”),andtheCybersecurityAct.TheBroadcastingAct(“BA”)istheprimarylegislationgoverningthebroadcastingsectorwhilethedistributionandexhibitionoffilmsisprimarilygovernedbytheFilmsAct.Specific issues and subject matters are dealt with under variousregulations,codesofpractice,standardsofperformance,guidelinesandotherregulatoryinstrumentsissuedpursuanttothesestatutes.


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the Telecommunications (Radio-Communications) Regulations(“Radio-Communications Regulations”).Regulatory obligationsmay be imposed on licensed operators bywayoflicenceconditionsandotherregulatoryinstruments.


IMDA, as the telecom regulator, is responsible for administeringandenforcingcompetitionrulesinthetelecomsector.Tothisend,IMDAhasissuedtheTCC,whichsetsoutadetailedsector-specificcompetitionframeworkgoverningthe telecomsector. IMDAisastatutoryboardundertheoversightofMCI.Competitionmatters fallingunder IMDA’s jurisdictionarecarvedoutofthepurviewoftheCompetitionandConsumerCommissionofSingapore(“CCCS”),whichadministersthegeneralcompetitionlawpursuanttotheCompetitionAct.


TelecomlicenseesaggrievedbyanydecisionofIMDAundertheTA,oranythingcontainedinacodeofpractice,standardofperformanceordirectionissuedundertheTA,mayrequestIMDAtoreconsiderthematterorappealtotheMinister.Non-licenseesmayalsorequest IMDAtoreconsider,orappeal totheMinisteragainstcertaintypesofdecisions,directionsorcodesofpracticeissuedbyIMDA.IMDAmaydeterminea reconsideration request, and theMinistermaydetermineanappeal,byconfirming,varyingorreversingthedecision/directionoramendingthecodeofpracticeorstandardofperformance.Upon the conclusion of an appeal to the Minister, further legalchallenges may be mounted by aggrieved persons by way of anactionforjudicialreviewinthecourts.



Persons operating andproviding telecom systems and services inSingaporemustgenerallybe licensed. IMDAhasadopteda two-prongedlicensingapproachthatdistinguishesbetweenFBOs(whichrequireanFBOlicence)andSBOs(whichrequireanSBOlicence).FBOsrefertothedeploymentand/oroperationoftelecomnetworks,systems and/or facilities (including telecom infrastructure for thecarriage of telecom or broadcast traffic) by any person for thepurposeofprovidingtelecomand/orbroadcastingservicesoutsideofhisownpropertyboundaries to thirdparties,whomay includeotherlicensedtelecomoperators,businesscustomersorthegeneralpublic.AlthoughthegeneralconditionsofanFBOlicencearestandardisedacrossallFBOlicensees,additionalspecificconditionsmayapplytoeachindividualFBOlicenseedependingontheservicesthatthelicenseemayprovide.SBOlicencesaregrantedtooperatorsthatdonotintendtodeploytelecom infrastructure, and that instead lease telecom network

Unless IMDA approves otherwise, the CEO of a broadcastingcompanyandatleasthalfofitsdirectorsmustbeSingaporecitizens.Nopersonmayacquire5%shareholding in,or (aloneorwithhisassociates)acquire12%ormoreshareholdingorvotingpowerin,orotherwisebecomeanindirectcontroller(asdefinedundertheBA)of, a broadcasting companywithoutfirst obtaining theMinister’sapproval.IMDA’s prior approval must be obtained if a person wishes toreceive funds from a foreign source to finance any broadcastingserviceownedoroperatedbyabroadcastingcompany.Inaddition,no company (unless the Minister approves otherwise) may begranted or hold a relevant licence (as defined in the BA) if theMinisterissatisfiedthat:(a) any foreign source(s) either holds no less than 49%of the

shares in the company or its holding company, or controlsvoting power of no less than 49% in the company or itsholdingcompany;or

(b) alloramajorityofthepersonshavingthedirection,controlormanagementofthecompanyoritsholdingcompanyareappointedby,oraccustomedorunderanobligationtoactinaccordancewiththedirections,instructionsorwishesof,anyforeignsource(s).

Personsspecifiedtoberegulatedpersonspursuant to theIMDAAaresubjecttofurthermergerandconsolidationregulationsassetoutintheIMDAAandtheMediaMarketConductCode(“MMCC”).UndertheMMCC,aregulatedpersonisrequiredtoobtainIMDA’spriorwrittenapprovalbeforeenteringintoaconsolidation(includingamerger)withanotherregulatedpersonorwithanyancillarymediaserviceprovider(asdefinedundertheMMCC).

2 Telecoms

General


Singapore became a member of the World Trade Organisation(“WTO”)on1January1995.SingaporeisasignatorytotheGATSprotocolson telecommunications (FourthProtocol) andhasmadecommitmentsthereunder.Singaporehasalsoadoptedthetelecomreferencepaperonregulatoryprinciples.


The operation and provision of telecommunication systems andservicesinSingaporegenerallyrequirealicencetobegrantedundertheTA,whichcanbeeitheranFBOorSBOlicence.Under the TA, “telecommunications” is defined broadly as: “a transmission, emission or reception of signs, signals, writing, images, sounds or intelligence of any nature by wire, radio, optical or other electro-magnetic systems whether or not such signs, signals, writing, images, sounds or intelligence have been subjected to rearrangement, computation or other processes by any means in the course of their transmission, emission or reception.”Whereradiofrequency(“RF”)spectrumisrequiredfortheprovisionof wireless services, additional licensing may be required under

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control requirements. Generally, where the transaction wouldresult in a party and its associates holding or controllingmorethan12%,ormorethan30%,ofthevotingpowerinaDTL,DBTorDT,IMDA’spriorapprovalmustbesoughtforthetransaction.Inaddition,IMDAmustbenotifiedifatransactionwouldresultinapersonholdingorcontrolling5%ormorebutlessthan12%ofthevotingpowerinaDTL,DBTorDT.Otherlicenseesmay,undertheconditionsoftheirlicence,berequiredtonotifyIMDAuponachangeofcontrol.



Under the TA, licensees designated as public telecommunicationlicensees (“PTL”) by IMDA may, subject to certain conditionsand safeguards, exercise certain statutory rights to facilitate thedeploymentof telecom infrastructure, including the right to enterstateandprivatepropertytolaytelecominfrastructure.UnderIMDA’sCodeofPracticeforInfo-communicationFacilitiesinBuildings(“COPIF”),buildingdevelopersandownersarerequiredtoprovidecertainspaceandfacilitiestoenablethedeploymentandoperationof telecominstallations,plantsorsystems. TheCOPIFalso sets out various duties that developers, owners and telecomlicensees are required to observe in relation to the provision,maintenanceandutilisationofrelevantspaceandfacilities.



InterconnectionandaccessissuesareprimarilyregulatedbyIMDApursuanttotheTCC.TheTCCprovidesthatFBOlicenseesandSBOlicenseesusingswitchingorroutingequipmenttoprovideservicesto the public are under a general duty to interconnect with oneanother.InterconnectionagreementsmustbesubmittedtoIMDA.While IMDAgenerally does not involve itself in interconnectionnegotiations between non-dominant licensees, an interconnectionagreementbetweennon-dominantlicenseesmustneverthelessfulfilcertainminimum interconnection duties as specified in theTCC,andIMDAreservestherighttorejectaninterconnectionagreementbetweennon-dominantlicenseesthatdoesnotfulfilitsrequirements.Licensees have a duty to co-operate in good faith and in acommercially reasonable manner in implementing the terms oftheir interconnection agreements, avoiding unnecessary disputesand resolvinganydisputespromptly and fairly. IMDAgenerallyrecognises that interconnection agreements are private contractsbetween licensees, and will not involve itself in disputes arisingfrom interconnection agreements where both parties are non-dominantlicensees.Licensees who wish to interconnect with dominant licenseesmaygenerallydosounderoneof threeoptions:(1)pursuant toareferenceinterconnectionoffer(“RIO”)approvedbyIMDA;(2)onthesameprices,termsandconditionsthatadominantlicenseehasagreedtowithanothersimilarlysituatedlicensee;or(3)pursuanttotheprices,termsandconditionsofanindividualisedinterconnectionagreementbetweenthetwoparties.

elementsfromFBOlicenseestoprovidetelecomservices,ortoresellthe telecom services of other licensees. SBO licences fall undertwocategories:SBO(Individual)licencesorSBO(Class)licences,dependingonthescopeofoperationsandnatureofservicesoffered.Ingeneral,operatorswholeaseinternational transmissioncapacityfortheprovisionofserviceswillbelicensedindividually.Formoredetails as toSBO (Class) licences, please refer to the response toquestion2.6.FBOlicencesareonahigherhierarchicallevelthanSBOlicences.FBOlicenseeswhowishtooffertelecomservicesthatontheirownwouldrequireanSBOlicencedonotneedtoobtainaseparateSBOlicence.However,theconverseisnottrue.AnSBOlicenseewhowishestoundertaketelecomactivitiesthatrequireanFBOlicencewillneedtoapplytobelicensedasanFBO.TheFBOlicencewillthenreplacetheSBOlicence.Other typesof telecom licencesmaybe required for the carryingonofotheractivities.Forexample,dealersoftelecommunicationequipmentmayrequireatelecomdealer’slicence.Theoperationofradio-communication stationsor networksmay also require otherlicencestobeobtained.


Parties that provide telecom services falling within the scope ofanSBO(Class)licencearerequiredtoregisterwithIMDAbeforecommencing services. There is no renewal required for SBO(Class)licences.ServicesthatrequireanSBO(Class)licenceinclude:(a) call-back/callre-originationservices;(b) internet-basedvoiceanddataservices;(c) internationalcallingcardservices;(d) resaleofpublicswitchedtelecommunicationservices;(e) store-and-retrievevalue-addednetworkservices;(f) audiotexservices;(g) publicchainpayphoneservices;and(h) store-and-forwardvalue-addednetworkservices.The standard terms and conditions that apply to SBO (Class)licensees are published in a Gazette for compliance. OperatorsprovidingtheserviceswithinthescopeoftheSBO(Class)licencewillbedeemedtohavereadandagreedtotheprescribedtermsandconditions.


TheoperationorprovisionofanytelecommunicationsystemsandserviceswouldrequireanFBOlicenceorSBOlicence,dependingon the intended scope of activities (see the response to question2.5).Eachlicenseewillbeauthorisedtoundertaketheactivitiesforwhichitisgranteditslicence.FBOlicencesaretypicallygrantedfor15yearsandmayberenewedas IMDA deems fit. SBO (Individual) licences are valid for aninitialperiodoffiveyearsandmayberenewedforfurtherfive-yearperiods.AllsuchlicencesmaynotbetransferredortradedwithoutIMDA’spriorapproval.Under Part VA of the TA, all designated telecommunicationlicensees (“DTLs”), designated business trusts (“DBTs”) anddesignated trusts (“DTs”) are required to comply with merger


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AccountingSeparationCertain licensees are subject to IMDA’s Accounting SeparationGuidelines,whichprovidefortwolevelsofaccountingseparation:detailedsegmentreportingandsimplifiedsegmentreporting.Detailed segment reporting generally applies to dominant FBOlicensees,andFBOsandSBOscontrolledbyadominantlicensee.It involvesseparatereportingofkeyservicesegmentsandcertainindividual retail services. The requirements include a specifiedcost allocation process and prescribed allocation methodologiesfor certain cost and revenue items. Reports includeboth incomestatementsandmeancapitalemployedstatements.Simplifiedsegmentreportingappliestocertainentitiesasspecifiedin theAccounting SeparationGuidelines, such as FBO and SBOlicensees that control a dominant FBO licensee. It requires lessdisaggregation of operations and a less rigorous cost allocationprocess.Onlyincomestatementreportingisrequired.FunctionalandLegalSeparationGenerally, IMDA does not require functional or legal separationbetweenanoperator’snetworkandserviceactivitiesinSingapore.However,withintheNGNBN,IMDAhasestablishedamulti-layeredindustrystructureconsistingof:theNetCo;severalOpCosincludingtheappointedOpCo;andnumerousretailserviceproviders.At thefirst layer, theappointedNetCo is responsible forbuildingand operating the passive infrastructure,which includes the darkfibrenetwork. OpenNetPteLtdwas the initialNetCoappointedbyIMDA.TheassetsandoperationsofOpenNethavesincebeentakenoverbyNetLinkTrust,followingNetLinkTrust’sacquisitionofOpenNet effective1October2014. In July2017, theunits inNetLinkTrustwerefullyacquiredbyNetLinkNBNTrust.Underthe conditions of the FBO licence held jointly byNetLinkNBNManagementPteLtd (as trustee-managerofNetLinkNBNTrust)andNetLinkManagementPteLtd(astrusteeofNetLinkTrust),theNetCo is required toensurestructuralseparation,which involves,amongotherthings,ensuring:thatithasnoeffectivecontroloveranyothertelecomlicenseeorbroadcastinglicensee;itisnotundertheeffectivecontrolofanyothertelecomlicenseeorbroadcastinglicensee; and it is not under the effective control of the samecontrolling entity as any other telecom licensee or broadcastinglicensee.At the second layer, Nucleus Connect, the appointed OpCo, isresponsible for building and operating the active infrastructure,comprising switches and transmission equipment, to providewholesalenetworkservices.WhileNucleusConnectmaybeownedby its downstream operating units, it is nevertheless subject to arangeofdetailedoperationalseparationrequirementsunderitsFBOlicenceconditions.Suchrequirementsareintendedtoensure,amongotherthings,thatdownstreamoperatorsaretreatedinanon-discriminatorymanner,andthattheNetCoorOpCoindependentlyformulatesandmakesitsowncommercialdecisions.The TA also empowers the Minister to, subject to certainprerequisitesincludingbeingsatisfiedthatitisinthepublicinteresttodoso,issueaseparationorderrequiringthetransferofatelecomlicensee’sbusinessorassetstoaseparateorindependententity.

The TCC sets out certain procedures governing voluntarynegotiationsforanindividualisedinterconnectionagreementwithadominantlicensee.Wherelicenseesareunabletoreachavoluntaryagreement, IMDAmay resolve thedispute inaccordancewith itsDisputeResolutionGuidelines.Inthecontextofthenext-generationnationwidebroadbandnetwork(“NGNBN”), IMDA has also imposed similar obligations on theappointed network company (“NetCo”) and operating company(“OpCo”),setoutindetailintheNetCoInterconnectionCodeandtheOpCoInterconnectionCode(seetheresponsetoquestion2.13),tomakeavailablecertainmandatedservicestoqualifyingpersonsunderthetermsofstandardisedinterconnectionoffers(“ICOs”).


Licensees classifiedby IMDAasdominant licensees are requiredto publish RIOs, under which they offer interconnection-relatedservices and mandated wholesale services on prices, terms andconditions that are pre-approved by IMDA, unless specificallyexempted by IMDA. A licensee will be classified by IMDA asdominantif:(a) it is licensedtooperatefacilities thataresufficientlycostly

ordifficulttoreplicate,suchthatrequiringnewentrantstodosowouldcreateasignificantbarriertorapidandsuccessfulentryintothetelecommunicationmarketinSingaporebyanefficientcompetitor;or

(b) ithastheabilitytoexercisesignificantmarketpowerinanymarketinSingaporeinwhichitprovidestelecommunicationservices.

Licensees currently classified as dominant licensees include:Singtel; StarHub Cable Vision; NetLink NBN Management PteLtd (as trustee-manager of NetLink NBN Trust); and NetLinkManagementPteLtd(astrusteeofNetLinkTrust).Presently, Singtel (which is the incumbent fixed-line networkoperator andalsooperates anumberof telecom facilities suchassubmarinecablelandingstations)andNetLinkTrust(whoseassetsincludecentraloffices,ductsandmanholes)havepublishedRIOspursuanttotheTCC.In the context of the NGNBN, NetLink Trust (as the appointedNetCo)andNucleusConnectPteLtd(“Nucleus Connect”)(astheappointed OpCo) have published standardised ICOs pursuant totheNetCoInterconnectionCodeandOpCoInterconnectionCode,respectively.


Dominant licensees are required to submit RIOs to IMDA forapproval, setting out the prices, terms and conditions on whichtheyofferinterconnection-relatedservicesandmandatedwholesaleservices(seetheresponsestoquestions2.9and2.10).Thepricingofinterconnection-relatedservicesandmandatedwholesaleservicesarereviewedbyIMDAinlinewithpricingmethodologiessetoutintheTCC.In relation to theNGNBN, theNetCo andOpCo InterconnectionCodes set out certain price review processes underwhich IMDAregularly reviews,modifies and approves the prices ofmandatedservicesundertherespectiveNetCoandOpCoICOs.Thepricingmethodologies used by IMDAwill be specified by IMDA at thepointofeachpricereview.


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andrequiresittoprovideitsfibreservicestoallphysicaladdressesinSingaporeuponrequestbyqualifyingpersons.Correspondingly,the OpCo is required under its USO to provide services to allphysicaladdressesinSingaporeuponrequestbyqualifyingpersons.

Numbering


IMDAadministers thenumber allocation scheme inSingapore inaccordancewith itsNationalNumbering Plan (“NNP”). Amongotherthings,theNNPsetsoutrulesandguidelinesfortheuseandassignment of numbers to telecommunication services deliveredover the public switched telephone network (“PSTN”), the radionetworkandtheinternetorotherIP-basednetworks,anddescribestheassignmentofnumberstointernationalservices,trunkservices,emergency services and special services such as voicemail andintelligentnetwork(“IN”)services.There is only one numbering area in Singapore, and area or trunkcodesarenotused.ThePSTN,radionetwork,andIPtelephonysharethe same numbering plan – a uniform eight-digit numbering plan.Numbersarecategorisedinvariousservicesaccordingtothefirstdigit.


UndertheNNP,theallocationofnumbersissuchthatthefirstdigitofthenumberindicatesthetypeofservicesofferedbythatnumber:(a) ‘0’forinternationalservices,suchastheInternationalDirect

Dialservice;(b) ‘1’ for special services which includes calls for operator

assistance, service enquiry, machine-to-machine, internetdial-up, voice information, IN services and access codeinternationaldirectdialtypeofservices;

(c) ‘3’fortheIPtelephonyservice;(d) ‘6’forthePSTNandIPtelephonyservice;(e) ‘8’and‘9’foreight-digitradionetworknumbers;and(f) ‘99’forthree-digitemergencyservices.


SingaporehashadfullnumberportabilitysinceJune2008.Numberportability across mobile networks and fixed-line services isobligatory.Fixed-lineandmobiletelephonyoperatorsarerequiredtoallowconsumerstoretainfulluseoftheirexistingphonenumberswhenswitchingserviceproviders.Syniverse Technologies is the centralised database administratorappointed to operate the centralised number portability databasesystem.IMDAhaspublishedadocumententitled‘FixedNumberPortability Guidelines’ to set out the technical approach to fixednumberportabilitybyFBOsofferingafixed-linevoiceservice.

3 Radio Spectrum


IMDA, as the telecom regulator, regulates spectrum use and isthe authority responsible for planning, allocating and assigningfrequencies.


Atpresent,NGNBNentitiesare regulatedunderexisting telecomandmedia legislation, aswell as regulations, directions, licences,codesofpracticeandotherregulatoryinstrumentsissuedbyIMDA.Inparticular,therespectiveICOsofNetLinkTrust(whichownsandoperates the passive infrastructure of the NGNBN) and NucleusConnectsetout theprices, termsandconditionsuponwhichtheywouldprovidecertainmandatedNGNBNservices.TheICOsareofferedpursuanttotheNetCoInterconnectionCodeandtheOpCoInterconnectionCode respectively, both ofwhichwere issued byIMDAin2009andupdatedin2017.Recognising the importance of a pervasive and ultra-high speedbroadband network to Singapore’s economic development andpositionasaninfo-communicationshub,theSingaporeGovernmenthadin2008announcedthatitwouldprovidegrantsofS$1billiontofundthedevelopmentoftheNGNBN.Ofthisfigure,S$750millionwasallocatedtotheappointedNetCotodesign,buildandoperatethepassiveinfrastructurelayerofthenetwork,andS$250millionwasallocatedtotheappointedOpCotodesign,buildandoperatetheactiveinfrastructure.



Except where exempted by IMDA, dominant licensees mustfile tariffswith IMDAfor services they intend tooffer, includingservicesprovidedtoend-users,whetheronatrialbasisornot,andmustobtainIMDA’spriorapprovalbeforeofferingtheservices.Theproposedtarifffilingmustincludecertainspecifiedinformation,including: a description of the service; the relevant prices; termsandconditions;anydiscountsorspecialconsiderationsthatwillbeoffered; and theminimum timeperiod forwhich the servicewillbeavailable.IMDAwillassesswhethertheproposedtariffisjustand reasonable, which in relation to end-user services includesan assessment as towhether the prices, terms and conditions areexcessiveorinadequate.


IMDA has imposed universal service obligations (“USOs”) inrelation to certain basic services provided by PTLs under theirlicenceconditions.For example, Singtel is required under its licence conditions toprovide a basic telephone service to any person in Singaporewho requests such service. A similar requirement to provide abasic telephone service upon request can be found in the licenceconditionsofStarHub.InrelationtotheNGNBN,whichisintendedtodeliverhigh-speedbroadbandaccessthroughoutSingapore,IMDAhasimposedUSOsonboth theappointedNetCoandOpCofollowingthecreationoftheNGNBN.TheNetCo’sUSOtookeffectfrom1January2013


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Inadditiontotheforegoing,otherchargessuchaslicencefees(asprescribed in the Radio-Communication Regulations) or chargesfor spectrum rights (e.g., spectrum lot fees in accordance withsuccessfulspectrumauctionbids)maybepayable.


IMDA is empowered to grant spectrum rights subject to suchconditionsasitconsidersappropriate,includingconditionsrequiringIMDA’spriorapproval forachangeofcontrol. Inaddition,otherregulatory requirements pertaining to changes of control, such asunderPartVAoftheTA(seetheresponsetoquestion2.7)mayapply.


TheRadio-CommunicationRegulationsprovidethatspectrumrightgranteesmayassignorotherwisedealwiththewholeoranypartoftherightsandprivilegesgrantedunderthespectrumright,subjecttoIMDA’swrittenapprovalandsubjecttosuchconditionsasIMDAmayimpose.



The key Singapore legislation on cybersecurity issues are theCybersecurityAct2018andtheComputerMisuseAct(“CMA”).TheCybersecurityAct2018,whichcameintooperation(inpart)inAugust2018,establishesa legal framework for theoversightandmaintenance of national cybersecurity in Singapore. It provides,inter alia,forthefollowing:(a) powersfortheCommissionerofCybersecuritytodesignate

computersorcomputersystemsin11keysectorsascriticalinformation infrastructure (“CII”), including in the info-communicationsandmediasectors.OwnersofCIIaresubjectto certain duties including to provide information, reportcybersecurity incidents, complywith codes and directions,andconductcybersecurityauditsandriskassessments;

(b) powersfortheCommissionerofCybersecuritytoinvestigatecybersecuritythreatsandincidents;and

(c) a framework for the regulation and licensing of serviceprovidersinvolvedinproviding:■ penetrationtestingservices;and■ managedsecurityoperationscentremonitoringservices.

TheCMAcriminalisesactivitiessuchastheunauthorisedaccesstoormodificationofcomputermaterial,usingacomputer toaccessanycomputerprogramordatatocommitanoffence,unauthoriseduseorinterceptionofcomputerservicesandunauthoriseddisclosureofaccesscodes.Otherlawsorregulationswhichmayberelevantinclude:(a) thePDPA,whichestablishesabaselinestandardofprotection

for personal data across the private sector, including theobligation for organisations to make reasonable securityarrangementstoprotectpersonaldataundertheirpossessionorcontrol;and

(b) sector-specific requirements, such as the technology riskmanagementguidelinesissuedbytheMonetaryAuthorityofSingapore.

Detailedprovisionsgoverningthegrantofspectrumrights,spectrumsharing and trading, aswell as licensing of radio-communicationstations and networks are set out in the Radio-CommunicationRegulations.IMDAhasalsoissuedtheSpectrumManagementHandbookwhichdescribes, inter alia, the various spectrummanagement activitiescarriedoutby IMDA, includingspectrumallocations,assignmentcriteria and application procedures for various services includingpublicmobile,privatelandmobile,terrestrialfixedandbroadcastingservices.


The use of radio spectrum is authorised by IMDA by way of acombinationofvariousregulatoryinstruments includingthegrantofspectrumrights,licencesandexemptions.IMDAhasdiscretioninrelationtotheprocedureforallocationofspectrumrights.WithoutlimitationtothemethodsthatIMDAmayuse, spectrum rightsmaybegrantedviaoneor a combinationofthefollowingmethods:(i)auction;(ii)tender;or(iii)allocationinexchangeforapre-determinedornegotiatedfee.Currently, IMDA allocates spectrum through a combinationof administrative allocation and market-based (i.e. auction)approaches. Spectrum required for the provision of 2G, 3G and4Gmobileserviceshavebeengrantedasspectrumrights throughanauctionprocess.Asforotherservicessuchastrunkedradioandfixed links, IMDAgenerally applies an administrative allocation-basedapproach.Personsmayalsoapplyfortheuseofcertainprescribedfrequenciesonatemporaryandoccasionaluseforaperiodrangingfromafewhourstoamaximumof90days.Suchusageisonashared-use,non-protectionandnon-interferencebasis,amongstotherconditions.


IMDAhas exempted the operation of certain short-range devices(“SRDs”) from licensing requirements, provided they fall withincertain specified parameters relating to RF bands and maximumfieldstrengthorpower.IMDAhasalsopublishedguidelinesontheoperationofunmannedaircraftsystems(“UAS”),underwhichusersofUASwillbeexemptedfromIMDA’s licensingrequirements ifthesedevicesareoperatedwithincertainprescribedparameters.


Thefeespayableforthelong-termuseofradiospectrumtypicallycomprise:(a) a one-time Application & Processing Fee payable upon

approvaloffrequency(s)assignment;and(b) anannualFrequencyManagementFee,whichisarecurrent

fee payable annually to cover the cost of the activitiesperformedtosafeguardtheuseofthefrequency(s).

Generally,thefeepayableforthetemporaryuseofradiospectrumdependson theperiodofusage, thebandwidthand thefrequencybandused.


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Governmentauthoritiesmayrelyoncertainstatutoryprovisionstorequiretheprovisionofencryptionkeys,forexample:(a) undertheCPC,thePublicProsecutormay,forthepurposes

of investigating an arrestable offence, authorise a policeofficer or an authorised person to access any decryptioninformation,andrequireanypersonreasonablysuspectedtobeinpossessionofanydecryptioninformationtogranthimaccesstosuchdecryptioninformation;and

(b) undertheCybersecurityAct2018,theMinistermay,forthepurposesofpreventing,detectingorcounteringseriousandimminent threats to essential services andnational security(amongst other things), authorise or direct any person ororganisationtosimilarlyaccessanydecryptioninformation,and require any person reasonably suspected to be inpossessionofanydecryptioninformationtogranthimaccesstosuchdecryptioninformation.


Telecom licences granted to operators may contain conditionsrequiringcertainrecordstobekept.Theprecisescopeofrecordstobekept,andtheretentionperiod,willdependonthelicenceissuedand the type of telecom services provided by an operator. Suchrecordsmayinclude,forinstance:(a) subscriber particulars (such as: name; address; NRIC/

passport/business registration number; billing/serviceaddress;contactinformation–e.g.,phoneandemail;dateofactivationofaccount;servicetypesandperiod;andassigneduserIDandequipmentID,whereapplicable);

(b) data retention records (suchas: assigned source/destinationIP address and/or port; time stamps; bytes/packets counts;protocolanddomainname)and/orcalldetailrecords;and

(c) retailerparticulars(suchas:name;businessaddress;NRIC/passport/businessregistrationnumberandcontactnumber).

Atypicalretentionperiodforsuchrecordstobekeptistwelve(12)calendarmonths.IMDAgenerallyreservestherighttorequireitslicenseestoretainsuchotherrecordsasitmaydeemnecessary.TotheextentthattheserecordsarepersonaldataunderthePDPA,the retention limitationobligationapplies,and theorganisation inquestionwouldberequiredtoceasetoretainthepersonaldataassoonasitisreasonabletoassumethattheretentionofsuchpersonaldatanolongerservesthepurposeforwhichitwascollected,andisnolongernecessaryforlegalorbusinesspurposes.



IMDA is the statutory body responsible for regulating themedia(includingbroadcastingandfilm)sectors.TheBA regulates, inter alia, thedealing in, theoperationof andownership in broadcasting services and broadcasting apparatus.Theprovisionoflicensablebroadcastingservices(asdefinedundertheBA)inorfromSingaporerequiresalicencetobegrantedundertheBA.The Films Act regulates, inter alia, the distribution, exhibitionand possession of films in Singapore. Under the FilmsAct, anypersoncarryingonthebusinessofdistributingorexhibitingfilmsisrequiredtoobtainalicence.Withtheexceptionofcertaincategories


There exist certain broadly worded statutory provisions undervarious laws and regulations which may be relied upon by theSingapore Government authorities to obtain access to privatecommunications,someexamplesofwhichareasfollows:(a) undertheCriminalProcedureAct(“CPC”),apoliceofficer

ofsergeantrankorabovemayissueawrittenordertoapersontorequireproductionof,orgiveaccessto,anydocumentorthing,ifnecessaryordesirableforanyinvestigation,inquiry,trialorothercriminalproceeding;

(b) under the Kidnapping Act, the Public Prosecutor may, incertainprescribedcircumstances,authoriseanypoliceofficerto intercept and read any conversation by phone, or anymessagetransmittedorreceivedbytelecommunication;

(c) under the Corruption, Drug Trafficking and Other SeriousCrimes (Confiscation of Benefits)Act, for the purpose ofinvestigatingdrugdealingorcriminalconduct,anauthorisedofficer may apply to court for an order requiring theproductionofparticularmaterial;

(d) undertheElectronicTransactionAct(“ETA”),thecontrolleris empowered to access and inspect and check the operation ofanycomputersystemreasonablysuspectedofhavingbeenusedinconnectionwithanyoffenceundertheETA;

(e) undertheOfficialSecretsAct,theMinistermay,wheresuchacourseisexpedientinthepublicinterest,requireanypersonwhoownsorcontrolsany telecommunicationsystem,usedforthesendingorreceiptofmessagestoorfromanyplaceout of Singapore, to produce the originals and transcriptsof messages sent or received to or from any place out ofSingaporebymeansofanysuchtelecommunicationsystem;and

(f) undertheTA,IMDAisempoweredtorequireanypersontoproduceanydocumentorinformationwhichIMDAconsiderstoberelatedtoanymatterrelevanttoaninvestigationundertheTA,orfordischargingIMDA’sregulatoryfunctionsundertheTA. Telecom licenseesmay also be required pursuantto theconditionsof their licencetoprovidedocumentsandinformationwhenrequestedbyIMDA.


Telecomlicencesgrantedtooperatorstypicallycontainconditionsgenerallyrequiringlicenseestoco-operatewithrelevantgovernmentagencies to support national security, public safety and security,and toparticipate in emergencyactivitiesorpreparations thereof.Specificinterceptionrequirementsarenotpubliclypromulgated.


Seetheresponsestoquestions4.2and4.3.


Thereisnooverarchingframeworkregulatingtheuseofencryption.


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tomakepaymentofapplicablelicencefees,aswellascomplywithapplicablecontentstandards,ownershiprestrictions,andreportingobligations.Certain broadcasting services, such as audio-text services andcomputer online services provided by ICPs and ISPs, are subjecttotheBroadcastingClassLicenceScheme.AllBroadcastingClassLicensees must comply with the licence conditions published intheBroadcasting(ClassLicence)Notification(“BCLN”).CertaincategoriesofClassLicenseesarealsorequiredtoregisterthemselvesformally with IMDA, typically within 14 days of commencingservices.At present, the only category of broadcasting apparatus licenceissuedbyIMDAisthetelevisionreceive-only(“TVRO”)satellitesystemlicence,whichisrequiredfortheinstallationandoperationofaTVROsatellitesystem.IMDA also issues Film Distribution Licences to companies ororganisations wishing to conduct any business of distributingvideos,andFilmExhibitionLicencestocompaniesororganisationswishingtoexhibitfilmsclassifiedasNC16,M18orR21.


Under theBA, transfers of broadcasting licences or broadcastingapparatuslicencesrequirethepriorwrittenconsentofIMDA,andanypurportedtransfersaredeemedvoid.Changesofcontrolofbroadcastingcompaniesandconsolidationsinvolving regulated persons may be subject to prior approvalrequirements.Formoredetails,seetheresponsetoquestion1.4.



The ETA contains a general defence for network service providers(“NSPs”)fromliabilityforthird-partymaterial.Undersection26(1)oftheETA,anNSPshallnotbesubjecttoanycivilorcriminalliabilityunderanyruleoflawinrespectofthird-partymaterialintheformofelectronicrecordstowhichhemerelyprovidesaccessifsuchliabilityisfoundedon:(a)themaking,publication,disseminationordistributionofsuchmaterialoranystatementmade insuchmaterial;or (b) theinfringementofanyrightssubsistinginorinrelationtosuchmaterial.However,thegeneraldefenceundertheETAdoesnotapplyto:(a) anyobligationfoundedoncontract;(b) theobligationofanNSPassuchunderalicensingorother

regulatoryregimeestablishedunderanywrittenlaw;(c) anyobligationimposedunderanywrittenlaworbyacourtto

remove,blockordenyaccesstoanymaterial;or(d) anyliabilityofanNSPrelatedtocopyrightinfringement.In relation to copyright infringement, Part IXA of the CopyrightAct contains several safe harbour provisions that allow NSPs toenjoyimmunityfromcopyrightinfringementinrespectofactivitiesundertakenbyNSPs, such as transmission, routing andprovisionofconnections, systemcaching, storageand information location.NSPs must satisfy certain prescribed conditions under the safeharbourprovisionsintheCopyrightAct,inordertobeabletoenjoyimmunityunderthoseprovisions.

ofvideos,allfilmsandvideosdistributedandexhibitedinSingaporehave to be submitted to IMDA for classification and certificationundertheFilmsAct.


IMDA’s approach to content regulation generally recognises theprinciple that services with higher reach and impact should besubjectedtomorestringentcontentregulatoryrequirements.Tothisend, IMDAhas issuedvariousmedium-specific codesof practiceestablishingcontentstandardsfordifferentplatforms.For example, the Content Code for Nationwide ManagedTransmissionLinearTelevisionServicesoutlinesgeneralstandardsforFTATVservicesandlinearchannelsofnationwidesubscriptiontelevision (“Subscription TV”) services. FTA TV services aresubjecttostricterstandards.Forexample,programmesratedPG13can only be broadcast on FTA TV channels between 10pm and6am,while programmes rated higher than PG13 are not allowedforbroadcast.Incontrast,SubscriptionTVchannelsmaybroadcastprogrammesratedM18between10pmand6am,whileprogrammesratedR21arenotallowedforbroadcast.TheContentCode forOver-the-Top (“OTT”),Video-on-Demand(“VOD”)andNicheServicesoutlinesgeneral standards for thoseservices.Exceptforservicestargetingchildren,suchservicesmayoffer content rated NC16 or higher, provided that parental locksare available, and R21 content can only be offered with an ageverificationmechanismandmustbelockedbydefaultwithaPIN.The Television and Radio Advertising and Sponsorship Codeoutlines general standards for advertisements and sponsoredprogrammesonFTATV,FTAradioandSubscriptionTVservices.IMDAgenerallyadoptsalight-touchapproachtowardsregulatinginternet content, and seeks to strike a balance between ensuringminimum standards for the responsible use of the internet andoffering flexibility to industry operators. The Internet Code ofPractice requires internet service providers (“ISPs”) and internetcontent providers (“ICPs”) to use best efforts to ensure thatprohibited material is not broadcast via the internet to users inSingapore. Prohibitedmaterial is generallydefined as: “material that is objectionable on the grounds of public interest, public morality, public order, public security, national harmony, or is otherwise prohibited by applicable Singapore laws.”


Under the BA, IMDA may grant broadcasting licences andbroadcastingapparatuslicences.IMDA has established different categories of licences forbroadcasting services, depending on the type of service to beoffered. The licences issued by IMDA include: free-to-airnationwidetelevisionservicelicences;free-to-airnationwideradioservicelicences;nationwidesubscriptionTVservicelicences;nichetelevisionservicelicences;andsubscriptioninternationaltelevisionservicelicences.The conditions to be observed under each licence may bedetermined by IMDA in its discretion, andwith the exception oftheconditionsofBroadcastingClassLicences,havenotbeenmadepubliclyavailable. Without limitation, licenseesmaybe required


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(d) ISPsmustmeet theminimumbroadbandqualityof servicestandards prescribed by IMDA. Reasonable networkmanagement practices are allowed, provided that theminimum broadband quality of service requirements areadheredto,andthatsuchpracticeswillnotrenderlegitimateinternetcontentunusable;and

(e) nicheordifferentiatedservicesthatmeetIMDA’sinformationtransparency,minimumqualityofserviceandfaircompetitionrequirementsmaybeoffered.


ISPs and other Broadcasting Class Licensees are required tocomplywiththeconditionsoftheClassLicence,whichincludethefollowingrequirements:(a) alicenseeshallremoveorprohibitthebroadcastofthewhole

oranypartofaprogrammeincludedinitsserviceifIMDAinformsthelicenseethatthebroadcastiscontrarytoacodeofpractice(e.g.,theInternetCodeofPractice),isagainstthepublicinterest,publicorderornationalharmony,oroffendsagainstgoodtasteordecency.Inpractice,IMDAmayissuedirectionstoISPstorequireend-useraccesstobeblockedtospecifiedwebsites;and

(b) ISPs offering residential ormobile internet access servicesare required to offer optional internet filtering services totheir subscribers. In this regard, IMDAmay require ISPstomodifytheircontentfilters topreventend-useraccess tointernetcontentthatIMDAissatisfiedisundesirable,harmfulorobscene.

Under the Remote Gambling Act 2014, authorised officers (asdefined under the Remote Gambling Act 2014) are empoweredto direct IMDA to order ISPs to disable access to online remotegamblingservices.Apart from the Broadcasting Class Licence framework, whichgenerallyempowers IMDAto issueblockingdirections, thereareno specific regulations relating to theblockingofconsumerVPNservices. Providers of VPN services may be subject to generallicensingrequirementsfortheprovisionoftelecomservices.

ThescopeandapplicationoftheforegoingdefencesdonotappeartohavebeenconsideredextensivelybytheSingaporecourts.Inonecase,theSingaporeHighCourtheldthatanonlineserviceproviderthatalloweduserstorecordfree-to-airbroadcastsforlaterviewingwasnotanNSPfor thepurposeof theCopyrightAct. Thecourtin thatcasenoted thata“networkserviceprovider” iscommonlyunderstoodtomeana“business or organisation that sells bandwidth or network access by providing direct access to the Internet. In other words, a network service provider provides the service of enabling a person to connect to a network”.


Content ownersmay lodge a take-down noticewithNSPs in theform prescribed under theCopyright (Network Service Provider)Regulations, to request the removal or disablement of access tomaterial on their networks. Compliance with such take-downnoticesisoneoftheconditionswhichNSPsmustfulfilinordertobeabletorelyonthesafeharbourprovisionsundertheCopyrightAct.Inaddition,theownerorexclusivelicenseeofcopyrightedmaterialmayapplytoacourtforanorderrequiringanNSPtodisableaccesstoonlinelocationsthatflagrantlyinfringescopyright.


IMDA’spolicyframeworkonnetneutralityissetoutinadecisiondated16June2011,andsetsoutfivemainrequirementsforISPsandtelecomnetworkoperators:(a) no blocking of legitimate internet content or imposing

of discriminatory practices, restrictions, charges or othermeasuresthatwouldeffectivelyrenderanylegitimateinternetcontentinaccessibleorunusable;

(b) ISPs and telecom network operators must comply withIMDA’scompetitionandinterconnectionrulesintheTCC;

(c) ISPs and telecom network operators must comply withIMDA’s requirements as to information transparency anddisclosuretoend-usersofnetworkmanagementpracticesandtypicalinternetbroadbanddownloadspeeds;


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Lim Chong KinDrew & Napier LLC10 Collyer Quay10th Floor Ocean Financial CentreSingapore 049315

Tel: +65 6531 4110Email: [email protected]: www.drewnapier.com

Shawn TingDrew & Napier LLC10 Collyer Quay10th Floor Ocean Financial CentreSingapore 049315

Tel: +65 6531 2226Email: [email protected]: www.drewnapier.com

Lim Chong Kin is a Director with Drew & Napier LLC. He heads both the Competition and Regulatory (Contentious and Non-Contentious) and the Telecommunications, Media and Technology (“TMT”) Practice Groups.

Chong Kin has experience in advising the drafting, implementing and enforcing of the competition law framework for the telecom, media and postal sectors, as well as advising general competition and regulatory matters under the Competition Act.

He continues to advise both regulators and industry on competition and TMT matters and is widely acknowledged by peers, clients and rivals as a leading lawyer in Singapore for both competition and TMT.

Chambers 2018 lists him as a band 1 TMT lawyer, noting, “[Chong Kin] thoroughly understands the requirements of an international company seeking to do business in Singapore and provides excellent practical, pithy and timely advice”.

Drew & Napier’s Competition and Regulatory Practice Group, established in 1999, is the oldest and largest dedicated competition law practice in Singapore. Established six years before the enactment of the Competition Act (Cap. 50B) in 2005, our experience has grown in tandem with the development of both national and sectoral competition laws in Singapore.

Drew & Napier’s Telecommunications, Media and Technology Practice Group is consistently ranked as the leading IT, telecommunications, broadcasting and multimedia legal practice in Singapore. The firm possesses unparalleled transactional, licensing and regulatory experience in the areas of telecommunications, technology, media, and data protection.

We are the preferred counsel of many regional companies, multinational corporations, associations, government bodies and industry regulators, and regularly assist them on a wide range of matters in Singapore and ASEAN member countries.

Shawn Ting is an Associate Director in the Telecommunications, Media & Technology (“TMT”) and Corporate & Finance Practice Groups of Drew & Napier LLC.

Shawn’s principal area of practice has been in TMT, with notable emphasis in commercial, regulatory, data protection and administrative law. He has advised a range of clients including statutory boards, MNCs, listed companies, telecommunication and media providers, and technology start-ups on commercial and regulatory issues.

Shawn is recognised by the Asia Pacific Legal 500 as a Next Generation Lawyer in TMT.


Chapter 27

Monereo Meyer Abogados

Consuelo Álvarez

Christian Krause

Spain

inside buildings, and the equipment installation andtelecommunicationssystemsbusiness.

■ Ministerial Order ITC/658/2011, of 18 March, modifyingOrderITC/332/2010,of12February,approvingtheNationalFrequencyAllocationTable.

Administrative regulations■ RoyalDecree1152/2011,of29July,modifyingRoyalDecree

1226/2010, of 1 October, developing the basic organicstructureoftheMinistryofIndustry,TourismandCommerce.

■ Decisionof21June2011,oftheTelecommunicationsMarketCommission, creating the electronic headquarters of theTelecommunicationsMarketCommission.

■ OrderPRE/1483/2011,of3June,publishingtheAgreementof theCouncilofMinistersof3 June2011 topromote theeffective constitution of the State Council ofAudio-visualMedia.

■ RoyalDecree351/2011,of11March,modifyingtheStatuteofthebusinesspublicentityRed.es,approvedbytheRoyalDecree164/2002,of8February.

Universal service■ Royal Decree 424/2005, of 15 April, approving the

Regulation concerning the conditions for the supply ofservices of electronic communications, universal servicesandtheprotectionofusers.

Quality of Service■ OrderIET/1090/2014,of16June,regulatingtheconditions

concerning the quality of service in the electroniccommunicationservicessupply.

User rights■ Charter of rights of the users of electronic communication

services,approvedbyRoyalDecree899/2009,of22May.


Thegovernmentministryinchargeoftheregulationofthetelecomand audio-visual media distribution sectors is the Ministry ofEnergy,TourismandDigitalAgenda; inparticular, thecompetentdivisionoftheMinistryistheStateSecretariatoftheInformationSocietyandDigitalAgenda.The competent regulatory authority for the telecoms and audio-visualmediadistributionsectors inSpain is theNationalMarketsandCompetitionCommission,whichhas theaimofensuring thecorrectfunctioningoftheelectroniccommunicationmarketthrough

1 Overview


TelecomsanddigitalcontentareattheforefrontofthedevelopmentofthedigitaleconomyofSpain.Thesesectorshavehadverypositiveoutcomestheselastyears;therehasbeenasignificantgrowthinthenumberofcompanies,turnover,employment,investmentandgrossaddedvalue.Accordingtothe2017annualreportoftheNationalObservatoryofTelecommunicationsandtheInformationSociety,theturnoveroftheITanddigitalcontentsectorsin2016was105,868millioneuros, meaning an increase in turnover for the third year in arow, confirming the previous year’s positive trends. For the ITsector, the turnoverwas88,334millioneuros,with thebranchesof computing activities,wholesale trade and ICTmanufacturingexperiencing a considerable growth. With regard to the digitalcontentsector,theturnoverwas17,534millioneuros.Thesectorexperienced, in general, a growth of 7.3% in comparison to thepreviousyear.Themostsignificantmarketparticipants,accordingtotherankingof the National Markets and Competition Commission, areVodafoneEspañaS.A.U.,TelefónicaSolucionesde InformáticayComunicaciones deEspaña S.A.U. andBTEspañaCompañía deServiciosGlobalesdeTelecomunicacionesS.A.U.


Basic regulations■ Law9/2014,of9May,ofGeneralTelecommunications.■ Law7/2010,of31March,ofAudio-visualCommunications.■ Royal Decree 726/2011, of 20 May, modifying the

Regulation concerning the conditions for the supply ofelectroniccommunicationservices,theuniversalserviceandtheprotectionofusers.

■ Royal Decree 458/2011, of 1 April, concerning radiospectrummattersforthedevelopmentofthedigitalsociety.

■ Royal Decree 346/2011, of 11 March, approving theRegulation regulating the common telecommunicationsinfrastructure for access to telecommunications services


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Thesystemofcontrolandmonitoringoftheobligationsconcerninguniversalservice iscarriedoutby theMinistryofEnergy,TourismandDigitalAgenda.Furthermore,thecomplaintsofuserscanbefiledwithintheTelecommunicationsUserSupportOffice.ThenetcostandfinancefixingcorrespondstotheNationalMarketsandCompetitionCommission.Withregardtothequalityoftheprovisionoftelecomsnetworksandservices, thebody inchargeof the regulations is theMinistryofEnergy,TourismandDigitalAgenda.Radio spectrum is mainly regulated in the National FrequencyAllocation Table, a basic piece of spectrum regulation in Spain,duetotheregulatoryandhighlytechnicalcontentofitsinformationregardingtheuseofradio-electricspectrum.Thetableindicatestheattributionstotheradio-electricservicesandtheusesofthedifferentfrequencybandsinSpain.Regarding technical standardisation, article 7 of Royal Decree188/2016,of6May,whichapprovestheRegulationestablishingtherequirementsforplacingonthemarket,puttingintoserviceandtheuseofradioequipment,andregulatingtheprocedureforevaluationcompliance, market surveillance and the sanctioning regime oftelecommunicationsequipment,indicatesthattheSecretariatofStatefor the InformationSocietyand theDigitalAgendawillpublish inthe Official Gazette, through resolutions, the interfaces of radioequipmentthatcanbeusedinSpain.Inaddition,anyradioequipmentintendedtobeplacedonthemarketusingfrequencybandswhoseuseisnotharmonisedthroughouttheEuropeanUnionshallbesubjecttothereportingprocedureslaiddowninDirective2015/1535/EU.


The regulatory and competition law authorities in Spain are theNationalMarketsandCompetitionCommissionandthecompetitionauthoritiesofthedifferentSpanishautonomouscommunities.TheNationalMarketsandCompetitionCommission,whichbeganitsoperationsinOctober2013,isanentitythatpromotesanddefendstheproperfunctioningofallmarkets,intheinterestofconsumersand businesses. It is a public entity with its own autonomouslegal status. It is independent fromSpain’s centralGovernment,althoughitissubjecttoparliamentarycontrol.Themainfunctionsof theNationalMarketsandCompetitionCommissionare:(i) theapplication of Spanish and EU competition regulations; (ii) thepromotionofcompetitionandgoodpractices;(iii)marketunity;(iv)disputeresolutionbetweeneconomicoperators;and(v)monitoringandcontroloveralloftheeconomicsectors.


The resolutions on anticompetitive practices in the area ofcompetition, of the Council of the National Markets andCompetition Commission, may not be appealed by theadministrative procedure; however, judicial appeals may belodged in the terms foreseen in theAdministrative JurisdictionLaw29/1998,of13 July,before theNationalHighCourt. TheJudgment of the National High Court can be consequentlyappealedtotheSupremeCourtwhentheamountofthesanctionishigherthan600,000euros.

theestablishmentofobligationsandthesupervisionofthefulfilmentof such obligations by operators, aswell as the resolution of theconflictsbetweenmarketagents.


The telecom and audio-visual media distribution sectors weregraduallyliberalisedduringthe’90s.Atthatpoint,theliberalisationofthenetworkindustry,theendofstatemonopoliesandtheneedtoadapttotheEuropeanregulationsresultedinthecreationofmanyorganisations,suchastheTelecomsMarketCommission.In2013,the National Markets and Competition Commission was formedby theunificationof six commissionscreatedduring the industryliberalisation.In Spain, there is no restriction on the foreign ownership or theinvestmentinthetelecoms,audio-visualmediadistributionandtheinternetsectorsinSpain.

2 Telecoms

General


SpainhasbeenaWTOmembersince1January1995andamemberofGATT since 29August 1963, togetherwith the otherMemberStatesoftheEuropeanCommunity.


InSpain, thedevelopmentof the telecomssectorhasexperiencedconsiderableprogressinrecenttimes.Thetechnologicalprogresshas led to a parallel growth of the regulations that shape thesector. The liberalisationof the telecomssector inSpainand thecommitments made with the European Union in relation to thismatterhave led to theemergenceofabroadand innovativebodyoflegislation,whichisinitselfasolidframeworkforthedynamismandagilityrequiredbythissector.Wecouldstructurethelegislationofthissectorindifferentbranches,such as basic telecommunications regulations, administrativeregulations,universalservice,thequalityoftheservice,therightsof users,mobile communications, radio spectrum, amateur radio,technical standardisation, fees, rates, numbering policies andspecificregulationsforradioandtelevision.Thebasictelecommunicationsaspectsconcerningtheprovisionoftelecoms networks and services, the administrative aspects, someaspects of the universal service, the rights of the users, mobilecommunications,amateurradio,feesandratesaremainlyregulatedthrough Royal Decrees and orders of the Ministry of Industry,TourismandCommerce.

Monereo Meyer Abogados Spain


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In Spain, the specific legal provisions dealingwith infrastructuremattersare:■ Law 38/1999, of 5November, on building regulation: this

Lawamendsarticle2,sectiona)ofRoyalDecreeLaw1/1998,of February 27, on common infrastructure in buildings foraccesstotelecommunicationsservices.

■ Royal Decree-Law 1/1998, of 27 February: the mainobjective of thisRoyalDecree is to guarantee the right ofall citizens to access different telecommunications servicesthroughtheauthorisedoperatoroftheirchoice,providingtheappropriateinfrastructuretoenablethem;withtheshareduseofthisinfrastructure,theDecreealsoaimstoensurethatthelevelofqualityisadequate,andregulatestheactivityoftheinstallerssector;and, inaddition, itensures thatall serviceoperators have equitable rights to use such infrastructure,whichallowthemtohaveaccesstotheirpotentialclients.

■ Law 10/2005, of June 14, on urgent measures for thepromotion of digital terrestrial television, liberalisationof cable television and promotion of pluralism: this Lawmodifies the content of the sixth additional provision ofLaw31/1987,ofDecember18,ontheTelecommunicationsOrdinance; introduces a series of amendments to Law41/1995, of December 22, on the regulation of digitaltelevisionbyterrestrialwaves;addressestheamendmentofthe 10thtransitionalprovisionofLaw32/2003,ofNovember3, onGeneral ofTelecommunications; and amends certainarticles of the Royal Decree-Law 1/1998, of February27, on common infrastructure in buildings for access totelecommunicationsservices.

■ Royal Decree 401/2003, of April 4, which approves theRegulationofthecommontelecommunicationsinfrastructurefor access to telecommunications services insidebuildings,and of the installation activity of telecommunicationsequipmentandsystems.

■ OrderCTE/1296/2003,ofMay14:thisOrderestablishesthecontent and structure of technical projects, describing thecommon telecommunications infrastructure to be includedinsidethebuildings.TheOrderalsoapprovestheCertificateand Bulletin end-of-building models which guarantee, forthebenefitofusers,thattheinstallationhasbeencarriedoutinaccordancewiththetechnicalproject,anddeterminesthetestprotocol towhich the installationmustbe subjected inorder toguaranteeitsquality. Inaddition, thequalificationandthenecessarytechnicalmeansareestablishedforthosewho wish to take on the status of telecommunicationsinstaller, by means of their registration in the Registry ofTelecommunication Installers that exists in theMinistry ofTelecommunicationsandtheSocietyofTelecommunicationsInformation (currentSecretaryofState for the InformationSocietyandDigitalAgenda).

■ OrderITC/1077/2006,of6April:thisOrdermodifiescertainaspectsofRoyalDecree401/2003,ofApril4,andofOrderCTE/1296/2003, of May 14. Simply put, it contemplatesthe aspects to take into account in ICT projects for theincorporationofterrestrialdigitaltelevision,atthesametimethat it provides the procedure to follow for the adaptationof existent infrastructure, in buildings that currently havethe collective installation of terrestrial analogue televisionreception,toterrestrialdigitaltelevisionreception.



The current Law on Telecommunications reflects the principlesestablished by European regulations (Directive 97/13/EC). Theauthorisations include enabling titles, general authorisations andindividual licences, which are administrative acts that enableand serve as a legal basis for the provision of services, and theestablishmentandoperationoftelecommunicationsnetworks;thus,ithasbeensaidthatthenewregulationleavesthetraditionalsystemofadministrativeconcession. Thegeneralauthorisationsareusedforrealservices,datatransmissionservicesorprivatenetworks.Ontheotherhand,individualauthorisationsareusedforcasessuchas: the allocation of limited resources; guarantees to the operatorof rights of easement, to recognise the beneficiary of the forcedexpropriation;ortheimpositionofpublicserviceobligations.


InSpain,thegeneralauthorisationisusefulwhenindividuallicencesarenotjustified,butthereareimportantregulatoryobjectivesthatcanbeachievedbyestablishinggeneralconditions.Besidesthese,provisionsonconsumerprotectionandotheressentialrequirementsmustbetakenintoconsideration.Generalauthorisationsareusuallygrantedregardlessoftheopenselectionprocedure;alldulyqualifiedentitiesareauthorisedtopromoteservicesoroperatefacilities.


The legal regime applicable to individual licences establishes aset of general conditions or obligations that must be fulfilled byall holders of such licences, among which the following shouldbe highlighted: to forward the information requested by theadministration; to guarantee the rights of subscribers and users;transparencyinthepricesoftheservices;compliancewithstandardsand technical specifications that are applicable; confidentiality;secret of communications; protection of personal data; ensuringinteroperabilityofservices;effectiveandefficientuseofnumberingresources;tocontributetothefinancingoftheuniversalservice;andtoensurethefreeroutingofcallstotheemergencyservices.In thecaseof individual licences, limited innumber toensureaneffectiveuseofradiospectrum,theawardwillbemadethroughatenderingprocedure,establishingwiththeMinistryofPublicWorksthe listofbasescontaining the requirementsandconditions tobemetbythepotentialcontractorsandtheserviceprovisionregime.ThecategoriesoflicencesaresetoutintheMinisterialOrderof22September1998andconsistofindividuallicencesclassifiedasA,BandC.The licencesshallbegranted foraperiodof20years, renewableforperiodsof10years.Thetotaldurationofthelicence,includingextensions,maynotexceed50years.The transfer of individual licences shall be permitted under theprovisions of article 115 of the Law on Public AdministrationContracts,inwhatisapplicabletothecontractforthemanagementofpublicservices.


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Operatorswithsignificantmarketpowerinamarketofreferencearesubjecttoaccountingseparationandfunctionalseparation.Withregardtothesupplyofservicesorexploitationofelectroniccommunication networks, public or private entities that, inaccordancewithcurrentlegislation,havespecialorexclusiverightsfor the provision of services in another economic sector and thatoperate public networks or provide electronic communicationsservices available to the public, shall carry separate and auditedaccounts for their activities, or establish a structural separationfor theactivitiesassociatedwith theoperationofnetworksor theprovisionof electronic communications services. Bymeansof aRoyalDecree,exemptionfromthisobligationmaybeestablishedfor entitieswhose annual gross operating revenue from activitiesassociatedwithelectroniccommunicationsnetworksorservicesislessthan50millioneuros.Theinstallationandoperationofpublicnetworksortheprovisionof electronic communications services, under the provision ofservicestothirdpartiesbyoperatorscontrolleddirectlyorindirectlybypublicadministrations,shallbecarriedoutincompliancewiththe “private investor principle”,with due separation of accounts,inaccordancewith theprinciplesofneutrality, transparency,non-distortionofcompetitionandnon-discrimination,andincompliancewiththerulesonStateaidreferredtoinarticles107and108oftheTreatyontheFunctioningoftheEuropeanUnion.


There is no specific regulation at a national level for broadbandinternetaccessservicesofferedtoend-users,thusitisofferedinfreecompetitionbetweenoperators,whichsettheirpricesandcoverageareasfreely.Theprovidersofbroadbandinternetaccessservicesaresubjecttothegeneralrulesthatapplytoalloperatorsofelectroniccommunicationsservices,inareassuchasthedefenceofconsumeranduserrights,orqualityofservice.At a wholesale level, the National Markets and CompetitionCommission determines the conditions under which operatorscan use the operator’s network, or the conditions under whichdesignatedoperatorswithsignificantmarketpowercanoffertheirownbroadband services in competitionwith thoseofferedby theoperatororoperatorsofsuchnetworks.Also,inordertopromotecompetition, the Commission can impose symmetric obligationsthatapplyequallytoalloperators.Inparticular,inordertoensurecompetition, the NationalMarkets and Competition Commissionmayregulatecertainconditionsfortheprovisionofservicesinthebroadband internetaccessmarket. Following the relevantmarketanalysis, theNationalMarkets andCompetitionCommission hasconsidereditnecessarytointerveneattheso-calledwholesalelevel.This means that, despite not intervening in offers for end-users(retail level), theNationalMarkets andCompetitionCommissionsets the conditions under which the operator with significantmarketpower,inthiscaseTelefónica,mustmakeavailabletootheroperatorscertainelementsandservicesofthenetwork,sothattheycanformtheirownbroadbandservicesattheretaillevel.

■ RoyalDecree 346/2011, of 11March,which approves theRegulation concerning the common telecommunicationsinfrastructurefortheaccesstotelecommunicationsservicesinsidebuildings.

■ Order ITC/1644/2011, of 10 June, which develops theRegulationofcommontelecommunicationsinfrastructurefortheaccess to telecommunications services insidebuildings,approvedbytheRoyalDecree346/2011,ofMarch11.

Furthermore, there is also specific regulation concerningthe procedure to install the Common Infrastructure ofTelecommunications in a newly-constructed building, or one thatisgoing toundergoacomprehensive rehabilitation. Thedraftingof a technical project shall be entrusted to a competent engineeror technical engineer who, in harmony with the architecturalproject, foresees thecharacteristicsof theCommon Infrastructureof Telecommunications in accordance with current regulationsandwiththeneedsofeachcase(article3.1ofRoyalDecree-Law1/1998). ThecontentandstructureoftheCommonInfrastructureof Telecommunications technical project shall comply with theprovisionsofAnnexIofOrderITC/1644/2011,of10June.



WholesaleinterconnectionandaccessismonitoredbytheNationalMarketsandCompetitionCommission.Withinthecontextofmarketregulation,certainspecificobligationsareimposeduponoperatorsdesignated as having significant market power in the market ofreference.Theseobligationsinclude,amongothers:obligationstoprovide other operatorswith access to their network; obligationsregardingpricecontrolandcostaccounting;andobligationsrelatedtotransparencyandnon-discrimination.Disputes regardingwholesale interconnection and access shall beresolvedwithintheNationalMarketsandCompetitionCommission.


Operatorswithsignificantmarketpowerinthemarketofreferencearerequiredtopublishtheirstandardinterconnectioncontractsandpricesasaconsequenceoftheobligationoftransparencyestablishedin Law 9/2014, of 9 May, of General Telecommunications, andmonitoredbytheNationalsMarketandCompetitionCommission.


According to Law 9/2014, of 9 May, of Telecommunications,such charges for interconnection and network access are subjectto cost regulations. In particular, the aim of the charges is tocover the administrative costs of regulatory work relating to thepreparationandimplementationofsecondaryCommunitylawandadministrative acts, such as those relating to interconnection andaccess.ThesefeesaremanagedbythegeneralStateAdministrationandaresetoutinAnnexIoftheabove-mentionedLaw.


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■ Order ETU/1972/2016, of 23 December, which designatesTelefónica de España, S.A.U., as the company responsiblefor the provision of the universal telecommunicationsserviceelementrelatedtothepreparationanddeliverytothesubscribersofthetelephoneserviceavailabletothepublicofthetelephonedirectory.

■ OrderETU/1973/2016,ofDecember23,bywhichTelefónicadeEspaña,S.A.U.isdesignatedastheoperatorresponsiblefor the provision of universal telecommunications serviceelements related to the provision of the connection to thepublicelectroniccommunicationsnetworkandtheprovisionofapubliclyavailabletelephoneservice.

■ Order ETU/1974/2016, of December 23, which designatesTelefónica Telecomunicaciones Públicas, S.A.U., as theoperator responsible for the provision of the universaltelecommunicationsserviceelementrelatedtotheprovisionofasufficientsupplyofpublicpaytelephones.

Numbering


The Spanish legal framework of numbering, addressing anddenominationisdesignedinChapterVofTitleIIofLaw9/2014,of May 9, of General Telecommunications, in Title IV of theRegulation on electronic communications markets, access tonetworksandnumbering,andintheNationalTelephoneNumberingPlan,ofwhichthelattertwohavebeenapprovedbyRoyalDecree2296/2004,ofDecember10.AccordingtotheNationalNumberingTelephonePlan, telephonesare allocated by territorial criteria. The Spanish territory isdesignatedintoprovincialnumberingareasandtelephonedistricts.From the year 2013, there has been a single telephone districtfor each of the 50 provincial numbering areas. In this way, theboundaries of each of the telephone districts coincidewith thoseof the corresponding provincial numbering area, which roughlycoincides with the administrative provinces. All provincialnumbering areas have at least two three-digit codes, one startingwith nine and another beginningwith eight. The number of callsignsassigned toeachprovincialzonedependsexclusivelyon itspopulationand itsnumberingneeds. Thecall signs for the sameprovincialareahavethesameobjective:toidentifythezone.TheNationalNumberingPlanassignsthetelephonenumbers.


Seequestion2.16above.


According to article 21 of Law 9/2014, of May 9, of GeneralTelecommunications, reservation of numbering (portability) is anessentialrightofsubscriberstothetelephoneserviceavailabletothepublic. TheRegulationestablishes thatoperatorswillensure thatsubscriberscankeeptheirtelephonenumber,priortotheirrequest,regardlessoftheoperatorprovidingtheservice.The National Markets and Competition Commission can set, bycircular, thecharacteristicsandconditions for theconservationofnumbers.

AmongthewholesaleservicesthatTelefónicaareobligedtoprovideare:(i)unbundledaccesstothesubscriberloop;(ii)indirectaccessorwholesalebroadbandaccess;and(iii)accesstopassiveductsandinfrastructure.TheseservicesareregulatedintheOfferofAccesstotheSubscriberLoop(OBA),intheReferenceOfferoftheNewBroadbandEthernet Service (NEBA) and in theWholesaleOfferofAccess toRegisters andDuctsofTelefónica (MARCo),whichareapprovedbytheNationalMarketsandCompetitionCommissionregularly.On the other hand, the European Commission also regulates thewholesalepricesforroamingservices,establishing theprices thattheoperatorspayeachotherforusingtheirrespectivenetworks.



Operatorswith significantmarketpower in amarketof referencehavetheobligationtosetthepriceonthebasisofcost-orientation.


In Spain, universal service consists of a set of basic electroniccommunications serviceswhose provision is ensured to all userswho request it, regardless of their geographic location, with aspecifiedqualityandatanaffordableprice.Theseservicesare:(i)provisionoftheconnectiontothepublicelectroniccommunicationsnetworkfromafixedlocationwithbroadbandcapacityat1Mbps;(ii)provisionofthetelephoneserviceavailabletothepublicfromafixedlocation;(iii)provisionofthetelephoneserviceofpaymentwith coins or cards through the terminals located in the publicthoroughfare (telephone booths); (iv) preparation and delivery ofthe guide of subscriber numbers; and (v) phone number enquiryserviceforsubscribernumbers.Therearespecificmeasuresforuserswithdisabilities.Theapplicableprovisionsregulatingthismatterare:■ Law9/2014,of9May,onGeneralTelecommunications.■ Royal Decree 424/2005, of 15April, which approves the

Regulationontheconditionsfortheprovisionofelectroniccommunications services, the universal service and theprotectionoftheusers.

■ Royal Decree 726/2011, of 20 May, which modifies theRegulationontheconditionsfortheprovisionofelectroniccommunications services, universal service and userprotection,approvedbyRoyalDecree424/2005,of15April.

■ Order IET/1090/2014, of June 16, which regulates theconditionsrelatedtothequalityofserviceintheprovisionofelectroniccommunicationsservices.

■ Order PRE/531/2007, of March 5, which publishes theAgreementoftheDelegatedCommissionoftheGovernmentfor EconomicAffairs of 25 January 2007,which approvesthe conditions to guarantee the affordability of the offersapplicabletotheservicesincludedintheuniversalservice.

■ Order PRE/1619/2010, of 14 June, which publishes theAgreementoftheDelegatedCommissionoftheGovernmentforEconomicAffairsof13May2010,whichmodifies thethreshold of family income that gives access to the socialpayment.


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reservationunit(V)arethoseestablishedinAnnexIoftheGeneralLawonTelecommunications,consideringthequantificationofthecoefficientsinforceineachmomentaccordingtotheannualupdatesoftheLawofGeneralStateBudgets.TheratewillbetheresultofdividingthevalueoftheproductbyN×V,usingtheconversionratecontemplatedinLaw46/1998.Asforthefeeforthereservationofthepublicradio-electricdomainforspecialuse,theamountofthefeeshallbetheonedeductedfromtheprovisionsoftheGeneralTelecommunicationsLaw.


Royal Decree 123/2017, of 24 February, which approves theRegulationconcerningtheuseoftheradiospectrumpublicdomain,providestheconsequencesofachangeofcontrolofthelicensee.In the transfer of qualifying titles for the exclusive use of theradio-electricpublicdomain,theownershipoftheenablingtitleistransmitted and, consequently, all the rights of private use of theradio-electricpublicdomainderivedfromthetitlearetransmittedfortheremainingperiodoftimevalidandthroughoutthegeographicalscopeofthetitle.Thenewownerwillbesubrogatedinalltherightsandobligationsofthepreviousowner,derivedfromthetitletobetransferred.Inparticular,inthecaseofconcessionsgrantedunderthetenderingprocedure,thenewholderwillbesubrogatedinalltheconditionsspecifiedinthebasesheetgoverningthatprocedure,aswellasinallthecommitmentsassumedbytheholderintheofferthatservedasthebasisfortheaward.Theapprovedtechnicalprojectsand the authorisations for the commissioning, corresponding tostationsassociatedwiththequalifyingtitlefortheuseoftheradio-electricpublicdomainobjectoftransfer,willmaintaintheirvalidityfor thenewholder. For thesepurposes,withinonemonthof thedateofauthorisationof the transfer, thenewholdermust send totheSecretariatofStatefortheInformationSocietyandtheDigitalAgendathelistofstationsthathewillcontinuetouse.Afterthisperiod,theSecretariatofStatefortheInformationSocietyandtheDigitalAgendawillautomaticallycanceltherestofthestations.Entitlementsfortheprivateuseofthepublicradiodomainthathavebeentransferredmaybesubjecttofurthertransfers.Notwithstandingtheforegoing,ifthequalifyingtitlesfortheuseofthepublicradiodomainweregrantedbymeansof a tenderprocedure, and in theregulatorybasesheetofthesameaminimumperiodwasestablishedinwhichsuchqualifyingtitlescouldnotbetransferred,successivetransfersmaynotbemadeuntilsuchperiodhaselapsedfromthedateonwhichtheprevioustransferwasauthorised.


Seequestion3.5above.



CybersecurityisapriorityobjectiveoftheSpanishGovernmentandisunderthejurisdictionofNationalSecurity.TheGovernmentofSpainhaspreparedaplanthatisbasedontheNationalCybersecurityStrategy approved in December 2013 by the National SecurityCouncil.Legislationwithincybersecurityhastwomainobjectives:

3 Radio Spectrum


InSpain,theauthoritywhichregulatesspectrumuseistheNationalTableofFrequencyAllocation.


InSpain,radiospectrumisapublicdomainpropertyofwhichtheownership, management, planning, administration and controlcorresponds to the State. Such management shall be carriedout in accordance with the provisions of the Law of GeneralTelecommunicationsandtheinternationaltreatiesandagreementstowhichSpainisaparty,inaccordancewiththerulesapplicableintheEuropeanUnion, and the resolutions and recommendations of theInternationalTelecommunicationUnionandotherbodies’countries.ThroughanOrderoftheMinistryofIndustry,EnergyandTourism,theNationalFrequencyAllocationTable isapprovedfordifferenttypes of radiocommunication services, defining the allocationof frequencybands to their respective serviceswith the technicalcharacteristics that may be necessary. Likewise, the NationalFrequencyAllocationTable, in accordancewith the internationalregulation on allocation and allocation of frequency bands andassignments,thenationalandinternationalavailabilityoftheradiofrequencyspectrumandsocialdemand,mayestablishthefollowingaspects: a) reserving part of the spectrum for certain services; b)preferencesofusebecauseofthesocialpurposeoftheservicetobeprovided;c)delimitationof thefrequencybandsthatarereservedto thePublicAdministrationsorpublicentitiesofwhich theyaredependent for the direct management of their services; and d)forecastingthefutureexploitationofthedifferentfrequencybands,promotingtechnologicalandserviceneutrality.Inordertoensureefficientandeffectiveuseofradiospectrum,theMinistryofIndustry,EnergyandTourismmaylimitthenumberofofficialconcessionstobegrantedonthatdomainfortheoperationofpublicnetworksandtheprovisionofelectroniccommunicationsservices.Whenthishappens,abiddingprocedurewillbeprocessedforthegrantingofthesame.Tothisend,theconvocationandthelistofbasesforthebiddingwillbeapproved,byorderoftheMinisterofIndustry,EnergyandTourism.ThebiddingproceduremustberesolvedbyorderoftheMinisterofIndustry,EnergyandTourismwithinamaximumperiodofeightmonthsfromthecallfortenders.


Operators exploiting the electronic communications networks, orservices thatmakeuseof thepublic radiodomain,musthave thecorrespondingtitleauthorisingsuchuse.


Regarding the fee for the reservation of the public radio-electricdomainforprivateuse,theproceduresforcalculatingtheamountofradio-electricpublicdomain(N)andthevalueoftheradio-electric


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TheprincipalrulegoverningtheuseofencryptionistheOrganicAct15/1999,regardingpersonaldataprotection.ThemainobjectiveofthisAct is toensureandprotect,with regard to theprocessingofpersonaldata,publicfreedomandfundamentalrightsofindividuals,especiallytheirhonourandpersonalandfamilyprivacy.Thecorerequirementforatransferofdataistheexistenceofavalidjudicial resolution which needs it. This resolutionmust providewhichretaineddatamustbetransferred,andthetimeframeinwhichitmustbetransferred.Incasenotimeframehasbeenindicated,thedatashouldbe transferred in thenext72hourscountingfromthenextdayofdelivery.


Operators are obliged to retain data relating to web traffic,geographiclocationanduseridentification.Thisinformationwillberetainednormallyfor12months,butthetime framecanbeexpanded foramaximumof twoyears,orcutdowntosixmonthspriortoconsultationwiththeoperators.



Themainnorms regulating thedistributionofaudio-visualmediainSpainare:■ Law9/2014,of9May,onGeneralTelecommunications.■ Law 3/2013, of 4 June, on the creation of the National

MarketsandCompetitionCommission.■ Law8/2009,of28August,on thefinancingof theSpanish

RadioandTelevisionCorporation.■ Law 7/2010, of 31 March, on General Audio-visual

Communication.■ Law17/2006,of5June,onthestateownershipofradioand

television.■ Law55/1999,of29December,onFiscal,Administrativeand

SocialOrder.TheNationalMarkets andCompetitionCommissionoversees theproper functioning of the audio-visual communication market,includingthedistributionofaudio-visualmedia.


InSpain,themaindifferenceregardingcontentregulationbetweencontentbroadcastviatraditionaldistributionplatforms,andcontentdeliveredovertheinternetorotherplatforms,isthatonlythecontentbroadcastvia traditionaldistributionplatformsconsidering thisasaudio-visualcommunication, isoverseenby theNationalMarkets

(1) secure cyberspace (information system and people); and (2)provide effective legal instruments to the authorities and securityagenciesfortheinvestigationandprosecutionofcriminalactivitiesandterrorism.


Communication intervention has a double nature in a criminalproceeding: (1) it serves as a source of criminal investigation,directingpoliceactions;and(2)itcanbeusedasmeansofevidence.In both cases, this intervention requires compliance with theessentialrequirementswhichensurethatinterference,inthescopeofprivacy,isconductedrespectingconstitutionalrights.Relevantlegislation:■ Article579oftheCodeofCriminalProcedure.■ OrganicLaw2/2002,of6May,regardingjudicialcontrolof

theNationalIntelligenceCenter.■ Law25/2007,of18October,ondatapreservationconcerning

electronic communications and public communicationsnetworks.

■ Law 32/2003, of 3 November, on General Tele-communications.

■ Law 34/2002, of 11 July, regarding Services of theInformationSocietyandelectroniccommerce.

■ Organic Law 4/1981, of 1 June, regarding states of alert,emergencyandsiege.

■ In themilitary field, the OrganicAct 2/1989, of 13April,regardingmilitaryprocedure.


The rules which require market participants to maintain callinterception capabilities are mainly regulated in the MinisterialOrder IET/2530/2012,ofNovember19. Someof theobligationsof the obligated subjects include providing legal interceptionof communications as described in the Order, maintaining amaximum number of active interceptions simultaneously, and/or providing information on the location of the terminal of thesubject to the interceptionorof its interlocutors. Therulescovertraditionaltelephonecalls,VoIPcalls,emailsandanyotherformsofcommunication.


Thiscouldbedefinedasadiligence investigation,grantedby thecompetent judicial authority in the pre-trial phase, carried outunder thesupervisionandcontrolof thecompetent judicialbody;the investigation has the purpose of gathering content relatingto the communications of the suspect,with an immediate end toinvestigateacrime,thecircumstancesandtheperpetrators,andtoprovideevidenceforthetrial.


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orstore,nordotheyhaveanobligationtoactivelylookforpossibleillicitconductofusersmadethroughthemeansoftheservicesoftheinternetserviceprovider.Asaconsequence,thegeneralruleistheexemptionofliability.However,theinternetservicemaybefoundresponsibleiftheinternetserviceprovideristheownerofthecontentoriftherehasbeenalackofdiligencewitheffectiveknowledge.


According to Spanish case law, internet service providers areobligedtoassistcontentownerswhoserightsmaybeinfringedbymeansoffile-sharingorotheractivities.


The State Secretariat for the Information Society and theDigitalAgendaoftheMinistryofEnergy,TourismandDigitalAgendaisresponsibleformonitoringnetneutralityinSpain.Netneutralityismonitoredandsafeguardedandnospecificrequirementshavebeenestablished.


Asaconsequenceofnetneutrality,thetelecommunicationsoperatorswillnotbeabletoblock,discriminateorslowdowninternettrafficregardless of the contents that go through their networks or theirproviders.However,anexceptiontothismaybeappliedbycourtorder,toensuresecurity,orwhenitisconsideredthatthereisdangerofcongestionintheirnetworks.

andCompetitionCommission.Thisimplieshigherlevelsofcontrolconcerningthecontrolofcontent,sinceoneofthemaindutiesoftheCommissionistoensurethataudio-visualcontentcomplieswithlegislationon thesubjectofprotectionofminors,advertisingandaccessibility.


The licences for the distribution of audio-visual media aredifferentdependingon themeansof theprovision. In thissense,the licencecanbe for theprovisionof radio, televisionor relatedcommunication services. Such provision of services requiresreliablecommunicationwith thecompetentaudio-visualauthoritypriortothecommencementoftheactivity.Furthermore,dependingon the territorialscopeof thecoverage, the licencemaybeeithernationalorlocal.Inthescopeofstatecoverage,thecompetitionforthegrantingoflicences,includingdigitalterrestrialbroadcastingandmediumwave,corresponds to theGovernment,withoutprejudicetotheparticipationoftheAutonomousCommunities.Tothisend,theGovernmentwillestablish,inagreementwiththeAutonomousCommunities,themechanismsofcollaborationandcooperationthatwillensuretheparticipationoftheAutonomousCommunitiesintheplanningofaudio-visuallicencesatthestatelevel.For the provision of the television communication service, locallicences may provide coverage to one or more neighbouringmunicipalitiesand,whereappropriate,toacompleteinsulardomain.


Thelicencesmaybesubjecttotransmissionandrent.



According to Spanish case law, internet service providers do nothaveageneralobligationtomonitor theinformationtheytransmit


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Consuelo ÁlvarezMonereo Meyer AbogadosAv. Diagonal, 463 bis. 08036 Barcelona Spain

Tel: +34 93 487 58 94Email: [email protected]: www.mmmm.es/en

Christian KrauseMonereo Meyer AbogadosAlfonso XII, 30 28014 MadridSpain

Tel: +34 91 319 96 86Email [email protected]: www.mmmm.es/en

Monereo Meyer Abogados is a Spanish law firm founded in 1989 with a multidisciplinary, intercultural and international approach, and a unique specialisation in advising foreign companies with activities in Spain as well as Spanish companies operating abroad. With three offices – Madrid, Barcelona and Palma de Mallorca – and around 40 lawyers, Monereo Meyer Abogados takes a leading position, offering legal advice in different legal areas such as litigation and arbitration, urban real estate law, competition, consumption and trade, labour and tax law, renewable energies, and restructuring and insolvency, among others.

The firm has 30 years of experience in cross-border work, and offers personal commitment and intercultural competence for each and every mandate: this is the approach that justifies the trust the firm’s clients place in its professionals.

The work method of Monereo Meyer Abogados aims to provide clients with excellent and professional service. Each client has a lawyer as a fixed contact person at their side. This person can revert to different experts in various legal areas and legal systems, so the clients can make the right decisions thanks to support offered by the firm.

Consultant – Lawyer. Consuelo Álvarez has a Degree in Law from the University of Valencia and a Master of Laws (LL.M.) in Intellectual Property from the Heinrich Heine University of Düsseldorf. She was admitted to the Valencia Bar in 2013 and the Barcelona Bar in 2015. She is specialised in Intellectual & Industrial Property Law, Litigation, Consumer Law, Data Protection and e-Commerce Law.

She has published various articles and participated in conferences and research sessions on Intellectual & Industrial Property.

Consuelo Álvarez speaks Spanish, English and German.

Partner. Christian Krause practised law with Monereo Meyer Abogados between 2008 and 2014, and joined the firm again as a partner in 2018. He specialises in corporate, M&A, commercial contracting, foreign investments in Spain and Latin America (especially Costa Rica), the hotel sector, tourism, industry and trade, financial institutions and private estates.

Christian Krause studied at the University of Deusto (Spain), the University of Hamburg (Germany) and the University of Costa Rica. He is authorised to practise in Spain and Costa Rica, and is a member of the Madrid Bar Association and the Costa Rica Bar Association.

He speaks Spanish, German and English.


Chapter 28

Arioli Law

Martina Arioli

Antonio Bernasconi

Switzerland

Withapproximately11.4millionsubscriptionsforatotalpopulationof8.48millioninhabitants,thepenetrationrateofmobiletelephonyinSwitzerlandwasalmost135%at theendof2017. Thisrate isslightlyhigherthantheaverageforthecountriesofEurope,whichwasapproximately130%forthesameperiod.Attheendof2017,inthedigital TV marketSwisscomheldamarketshare of 36.2%, increasing its share by almost 3.5%, andUPC amarketshareof29.6%,losingalmost4%ofitsshare.Thecableoperators are continuing to losecustomers,witha lossofmore than 62,000TV customers in 2017 – down 2.5%. Themarketshareofallcableoperators,atalmost2.4millioncustomersfordigitaltelevision,droppedbelow60%forthefirsttime.Overthe same period, the number of digital television subscribers onthe fixed telephony network continued to increase, and the DSLprovidersarenowseriouslycompetingwiththecableoperatorsinthismarketsegment.


(a) Telecoms The main law governing the transmission of information

by means of telecommunications techniques is theTelecommunicationsAct (TCA), which is currently underpartialrevision.

The aim of the TCA is to ensure that a range of cost-effective, high quality, and nationally and internationallycompetitive telecommunications services is available toprivate individualsand thebusinesscommunity. TheTCAshall,inparticular:a)ensurethatareliableuniversalserviceisprovidedataffordableprices for theentirepopulation inall parts of the country; b) ensure that telecommunicationstraffic is free from interference and respects personal andintellectualpropertyrights;c)alloweffectivecompetitionintheprovisionoftelecommunicationsservices;andd)protectusers of telecommunications services from unfair massadvertising and from abuse associated with value-addedservices.

On the basis of the TCA, several Ordinances have beenenacted: Ordinance on Telecommunications Services;Ordinance onTelecommunications Installations;Ordinanceon the Addressing Resources of TelecommunicationsServices; and Ordinance on Frequency Management andRadioLicences.

Further, the Federal Act on Surveillance of Post andTelecommunications (SPTA) and the respective Ordinanceapplytocommunicationsservices.

1 Overview


Switzerland has very high-performance, high-speed tele-communicationsinfrastructure. Theeconomyasawholebenefitsfromcompetitionininfrastructureandservices.The fixedbroadbandcommunicationsmarket– including internetanddigitalTV–involvestelecommunicationsoperatorsaswellascable(CATV)operators.At the end of 2016, the total operating revenue was CHF 6,497Mio(Var.15–16:-1.8%)forservicesonfixednetworks,andCHF189Mio(Var.15–16:+12.4%)foradded-valueservices(includinginternetaccessservices).At the end of 2017, DSL/FTTx telecommunications serviceproviders(TSPs)werestillwayinfrontofcableTVprovidersforinternet access:■ justover69%ofsurfersoptedforanofferingfromatelecoms

operator(2,806,000connections):Swisscom,asthemarketleader,heldamarketshareof49.7%;andtheshareofallthealternativeTSPswas 19.5%, 10.4%ofwhichwas held bySunrise;and

■ almost31%foranofferingfromacable operator(1,245,500connections):UPCholdsamarketshareof18.5%;and theotherCATVproviders12.2%.

Withalmost46%ofthepopulationhavingbroadbandaccessasoftheendofJune2017,SwitzerlandisconsolidatingitspositionatthetopoftherankingofOECDcountries.In the mobile market,attheendof2016,thetotaloperatingrevenueforservicesonmobilenetworkswasCHF4,367Mio(Var.15–16:+4.5%).Attheendof2017,Swisscomheldapproximately58%ofthemarketshare,withSunriseat25%andSaltat17%.ThepercentagesincludetheconnectionsofvirtualoperatorsorresellersofservicesusingthenetworksofSwisscom(M-Budget),Sunrise(Yallo,Lebara,Ortel)andSalt(CoopMobile).It should be noted that, in the same period, cable operators had150,000mobile customers (ofwhich 115,000 customers arewithUPC) and may potentially become serious competitors in thismarket. Atthepresenttime,themarketshareofCATVoperatorsisjustabove1%.


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Arioli Law Switzerland

adoptedthereferencepaperonregulatoryprinciplesandhasmadecommitmentsregardingtelecommunicationsundertheGATS.


TheTCA regulates the transmission of information bymeans oftelecommunicationstechniques.Specific Ordinances contain more detailed regulation on topicssuch as the use of radio spectrum, internet domain names ortelecommunicationsinstallations.TheTCA is currently undergoing partial revision, with themainaims being further liberalisation of the use of radio frequencies,increased consumer protection andmarket access conditions, andtheremovalofnotificationdutiesforTSPs.


The regulatory authority for telecommunications is theComCom(cf.question1.3).The competition law authority is the Competition Commission(COMCO), subdivided into the Commission and the Secretariatof theCommission. TheCommissionmonitors competition, hasdecisionpower,providesitsopiniononfederalbillsthatinfluencecompetition, makes recommendations to other authorities, andprovides them with expert reports. The Secretariat prepares theCommission’s business, conducts investigations and advisesgovernmental offices and undertakings on competition matters.Formally part of the Federal Department of Economic Affairs,Education andResearch (EAER), theCOMCO is independent oftheadministrativeauthorities.Inthefieldoftelecommunications,bothauthoritieshaveconcurrentjurisdictionasregardstheirspecifictasks.


Decisions of the ComCom can be appealed to the FederalAdministrativeTribunal based on, inter alia, violation of federallawincludingtheexceedingorabuseofdiscretionarypowers,andthe incorrect or incomplete determination of the legally relevantfactsofthecase.Decisions of theAdministrativeTribunal can be further appealedtotheFederalSupremeCourtbasedon,inter alia,theviolationoffederal law andmanifestly incorrect determination of the legallyrelevantfactsofthecase.DecisionsoftheFederalAdministrativeTribunal regarding licences granted by means of public tenderproceedings,anddisputesregardingaccesstofacilitiesandservicesof providerswith a dominant position, cannot be deferred to theFederalSupremeCourt.



No general authorisation is required for the provision oftelecommunication services as such. Currently, there is merely

TheonlyspecificlegislationpertainingtotheinternetistheOrdinanceonInternetDomains.

(b) Audio-visualmediadistribution Audio-visualmediadistributionisgovernedbytheFederalAct

onRadioandTelevision(RTVA)anditsrespectiveOrdinance,whichshallbereplacedbyanewActonElectronicMedia.

Further, general statutes such as the FederalAct on DataProtection, the Unfair CompetitionAct, the Ordinance onPriceDisclosure, theCodeofObligationsandtheCriminalCodeapplytoallsectors.


The Federal Communications Commission (ComCom), anindependentcommissionwithdecision-makingpowers,isinchargeoftheregulationofthetelecommunicationsmarketandawardingtheuniversalservicelicence,aswellasradiocommunicationlicencesfortheuseofthefrequencyspectrum,ofdeterminingaccessconditionsandpriceswhenTSPcannotreachagreement,oftheapprovalofthenationalnumberingplans,andof the regulationof themethodsofapplicationofnumberportabilityandcarrierselection.The Federal Office of Communications (OFCOM) is part ofthe Federal Department of the Environment, Transport, Energyand Communications (DETEC), and acts as the supervisoryauthorityinthecommunicationssector.Itisresponsiblefortasksrelating to regulation and is thenational authority in the areasoftelecommunications,broadcastingandpost, inparticular ensuringthequalityoftheuniversalserviceandthepublicservice.Disputes between customers and TSPs are reconciled by theOmbudscom, while the Independent Complaints Authority forRadioandTelevision (UBI)assessescomplaintsconcerning radioandtelevisionprogrammes.


Themarket for telecommunications services has been liberalisedforalmost20years,withformermonopolysituationshavingbeenreplacedbya systemof licencesandnotificationduties. ForeignTSPsarefreetoentertheSwissmarket.Moreover,thedevelopmenttowardsanIP-basednetworkofferedbynewand/orforeignTSPsfuels competition. In general, there are no barriers; however, inthe absence of any international obligations to the contrary, theComCommayprohibitundertakingsincorporatedunderforeignlawfromprovidingtelecommunicationsservicesinSwitzerland,unlessreciprocalrightsaregranted.

2 Telecoms

General


Switzerland joined the WTO on 1 July 1995. Switzerland has


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The TCA requires providers with a dominant market positionto provide access to other providers in a transparent and non-discriminatorymanner, at cost-orientedprices. The sameappliesto universal services providers. The access requiredby theTCAcurrentlycoversinterconnectionaswellasfullyunbundledaccesstothelocalloop,rebillingforfixednetworklocalloops,leasedlinesandaccesstocableducts,providedthesehavesufficientcapacity.If the providers in question are unable to negotiate an amicablesettlementwithregardtoaccessconditionswithinthreemonths,thedisputemaybebroughtbeforetheComCom,whichdecidesbasedonaproposalmadebytheOFCOM.Disputesrelatingtoaccesscontractsordecisionsaresubjecttothejurisdictionofthecivilcourts.


Onlyproviderswithadominantmarketposition,i.e.,theincumbentproviderSwisscom,areobligedtodisclosetheconditionsandpricesfor theiraccess servicesandprovide theOFCOMwithacopyoftheiraccesscontracts.Thereisnopublishingobligation;however,the contracts may be accessed by the public unless there is anoverridingpublicorprivateinterest.


Providerswithamarket-dominatingpositionareobligedtochargecost-orientedpricesforinterconnectionandaccessonthebasisofthefunctionalequivalent.Bycontrasttootherjurisdictions,accesschargesarenotsetbytheauthoritiesbutratherwithinproceedingsinitiatedbyotherproviders.Overthepastyears,chargeshavebeenloweredconsiderably.


Providers are not subject to any obligation regarding accountingseparation,functionalseparationand/orlegalseparation.


The TCA is essentially technologically neutral and, accordingly,appliestohigh-speedbroadbandnetworks.However, only owners of existing copper local loop accessinfrastructurewith a dominant position in themarket are obliged

anotificationdutywhichrequiresallTSPs tonotify theOFCOMof the type of services provided, description of interfaces andinfrastructure,aswellascorporateinformation.TheOFCOMkeepsaregisteroftheproviders.The current revision of theTCA shall limit the registration dutyto TSPs using radiocommunications frequency spectrum andaddressingresourcestoprovidetheirservices.Basic telecommunication servicesmust be available to the entireSwisspopulationinallregions.Toensurethattheseareaffordable,reliable, and of good quality, the ComCom grants a licence forprovidinguniversalservicewithinatenderprocess.TheuniversalserviceshavebeenawardedtoSwisscom,theincumbentprovider,foratermoffiveyears,beginningfrom2018.MobileradiofrequenciesaresubjecttolicenceswhichareallocatedbytheComCom(cf.question2.7and3.2).


Beyond the notification requirement, cf. question 2.5, there is nogeneral authorisation for the provision of telecommunicationservicesinSwitzerland.


TheTCAprovidesforalicencerequirementtousetheradiocom-municationsfrequencyspectrum.TheTCAitselfdoesnotimposeasetdurationforlicencesregardingtheuseofradiofrequencies,butleavesthistothelicensingauthority.Themobilephonefrequenciescurrentlyinusearecoveredby16-year licences. Anauction isplanned for2018/2019, inparticularfortheallocationofnewfrequencybandsfortheintroductionofa5Gnetwork.Licencesmaybetransferredinwholeorinparttoathirdpartyonlywiththeconsentofthelicensingauthority.Thesameappliestoaneconomictransferduetotakeoverofthelicensee.Thecurrent revisionof theTCAaimsat aparadigmshifton thissubject as the frequency spectrum shall, in principle, henceforthnotbesubject toa licenceunlessaspecificOrdinanceofFederalCouncilprovidesforthecontrary.



TheTCArequiresownersoflandinpublicusetoallowTSPstousethat land to install and operate lines, provided those installationsdonotinterferewiththepublicuseoftheland.Theauthorisationprocedureissimpleandrapid.Compensationfortheauthorisationislimitedtoanadministrativechargecoveringthecosts;additionalland use charges are prohibited. Under certain conditions,providersmaybegrantedexpropriationrights.Asregardspassiveinfrastructure–cf.question2.13.


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withinthe“.ch”domainmayberequestedfromregistrarswhohaveconcludedacontractwithSWITCH.SWITCHitselfisnotallowedtoallocatedomainnames.Sinceautumn2015,theregistrationof“.swiss”domainnameshasbeenpossibleuponvalidationofeveryapplicationtotheOFCOM,in accordance with the principles laid out in the Ordinance onInternetDomains.


Thenationalnumberingplansapply.Furthermore,providersmustensurenumberportabilityandfreedomofchoiceofproviders–cf. question2.18.


TSPs must ensure number portability and freedom of choice ofproviders regarding national and international connections. TheComComfixesthedetailedrulesforimplementationinthelightoftechnicaldevelopmentsandinternationalharmonisation.In order to speed up number porting, the ComCom has reducedthe deadlines for the originalTSP to arrange the number portingapplication for mobile numbers to the new provider within oneworkingday,andforallotherphonenumberswithintwoworkingdaysatthelatest.Further,theoriginalTSPisobligedtoagreetotheportingevenintheeventofdisputeswiththecustomer.

3 Radio Spectrum


TheTCAregulatestheuseoftheradiocommunicationsfrequencyspectrumandtheComComgrantslicencesforitsuse.


Theuseoftheradiocommunicationsfrequencyspectrumiscurrentlysubject to a licence granted by ComCom. Radiocommunicationlicences shall, as a rule, be granted on the basis of a publicinvitationtotenderifitisintendedtoprovidetelecommunicationsservicesusingtherequestedfrequencies,andtherearenotenoughfrequencies available to meet all applicants’ present and futureneeds.TheComComdetermineswhetherthecontractisawardedwithinacompetitiveprocessoranauction.Theapplicationprocessshallbeconductedinaccordancewiththeprinciplesofobjectivity,non-discriminationandtransparency,andguaranteetheconfidentialcharacterofallinformationprovidedbyapplicants.Thecurrent revisionof theTCAaimsat aparadigmshifton thissubject as the frequency spectrum shall, in principle, henceforthnotbesubject toa licenceunlessaspecificOrdinanceofFederalCouncilprovidesforthecontrary.

to fully unbundle access to the local loop in a transparent andnon-discriminatory manner, at cost-oriented prices (cf. question2.9).Broadcastingofradioandtelevisionprogrammeservicesareexplicitlyexemptedfromthisobligation.RegulationsonFTTHarecurrentlybeingdiscussedwithintheTCArevision.ThebillprovidesforadelegationofcompetencestotheFederalCouncil,whichmayprovidefortechnology-neutralaccesstothelocalloop,whichcanbealsovirtual.However,thisregulationwasrecentlyrejectedbytheNationalCouncilinSeptember2018.Atpresent,therearenoincentivesorregulatoryholidaysinforce.



In principle, providers are free to determine the prices for fixed,mobile,orotherservices,includinginparticularroamingcharges,whicharerelativelyhighinSwitzerland.Maximum charges apply, however, to certain telephony servicesprovidedby theuniversal servicesproviderSwisscom,aswell asvalue-addedservices.With regard to international roaming, the current revision of theTCAshallempowertheFederalCounciltoissuespecificregulationstoavoiddisproportionatelyhighretailtariffsandtotakemeasurestopromotecompetition.Lastly,theFederalPriceSupervisormonitorspricedevelopmentsandpreventsoreliminates theabusive increaseand retentionofpricesbased upon the Federal Price SupervisionAct, and the COMCOtakes measures against unlawful restraints of competition whereretailpricesareaffected,basedupontheCartelActoftheCOMCO.


“BasictelecommunicationservicesmustbeavailabletotheentireSwisspopulationinallregions.Toensurethattheseareaffordable,reliable, and of good quality, the ComCom grants a licence forprovidinguniversal servicewithin a tender process” (cf. question2.5).Providersareessentiallyfreetodeterminethegeneraltermsand conditions applicable to consumers. However, such generalterms and conditions need to comply with data protection lawand are subject to the limitations under unfair competition law.Further, providers must comply with the principle of secrecy oftelecommunicationsaswellasthedataretentionobligations.AccordingtotheTCA,TSPsmustblocktheaccesstotelephoneandinternetservicesforpersonsonlyincircumstanceswheretheyhaveprovidedfalsedataorfailedtoprovidethenecessarydocumentation.

Numbering


TheOFCOMassignsnumbering,namingandaddressingresources.Technicalmanagement of the “.ch” domain is currently providedby SWITCH (the registry). The registration of a domain name


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The strategy encompasses new standardisation and regulationsobjectives,andlaysthegroundfordiscussionsonminimalstandardsforcybersecurityandnewnotificationdutiesforcyber-incidents.Anew Information SecurityAct applying to federal authorities andacompetencecentreforcybersecurityarecurrentlyindiscussion.


TheFederalActonSurveillanceofPostandTelecommunications(SPTA) and the correspondingOrdinances form the basis for thesurveillanceofprivatecommunicationsbyestablishingthePostandTelecommunication Surveillance Service (PTSS), an independentservice administratively affiliated to the Federal Department ofJusticeandPolice,whichconductsinquiriesuponrequestbySwissenforcement authorities andhas the authority to give instructionstoTSPs.The scope of application of the SPTA is limited to surveillancemeasuresorderedandexecuted:(i)withincriminalproceedings;(ii)fortheenforcementofinternationaljudicialassistancerequests;(iii)forthesearchofmissingpersonsorcriminalfugitives;and(iv)fortheenforcementoftheFederalIntelligenceServiceAct(ISA).Requirements and procedures for ordering surveillance measuresare set out in (i) the Federal Code ofCriminal Procedure (CCP)andtheMilitaryCriminalProcedure(MCP),(ii)theFederalActonInternationalMutualAssistanceinCriminalMatters(IMAC),(iii)theSPTA,and(iv)theFederalIntelligenceServiceAct(ISA).TheSPTAfurtherprovidesforamultitudeofchallengestoprovidersregarding data retention (cf. question 4.6), interfaces in order forthesurveillanceauthorities toaccessusercommunications in realtime,aswellasinformationoftheauthoritiesonnewservicesandproducts prior to the go-to-market. The SPTA is complementedwithprovisionsonthedeploymentofGovWareandIMSI-catcherspursuanttotheCCPandtheMCP.


AccordingtotheSPTA,TSPsshallatanytimebeabletomonitorthe telecommunications services they provide if the surveillanceis standardised. The surveillance types the TSPs are obligedto perform are set out in the Ordinance on Surveillance of Postand Telecommunications (OSPT), further standardised in theOrdinance on Implementation of the Surveillance of Post andTelecommunications(OI-SPT).Theseregulationsprovidedetailedrules on traditional telephone calls, VoIP calls, emails, text andinstantmessenger,andallotherformsofelectroniccommunicationssuchaschattingplatforms.If the surveillance is not standardised,TSPsmust cooperatewiththe PTSS according to its instructions, and take all appropriatemeasurestoensuretheirimplementation.ThePTSScanrequestTSPstoprovethattheyareabletoimplementthe standardised surveillance in accordance with applicable lawat their own expense, and instruct them to take technical andorganisationalmeasurestoremedydeficiencies.


Inaccordancewith theTCA, theFederalCounciland theOFCOMhaveprovidedexceptionsfortechnicalmeansoflimitedimportanceinspecificOrdinancesonfrequencymanagementandfrequencylicences.Thearmedforcesandcivildefencedonotrequirealicence.


Theamountofthefeesforthelicenceshallbecalculatedonthebasisof:thefrequencyrangeallocated,theclassoffrequencyandthevalueofthefrequencies;thebandwidthallocated;theterritorialscope;andthe temporal scope. TheOrdinanceonTelecommunicationsFeesprovides for different fees depending on the radiocommunicationtype (directional radio,wirelessbroadband, satellite transmission,etc.).However,accordingtotheTCA,nolicencefeesarechargedfor broadcasting licensed radio or television programme servicesandtheFederalCouncilmayexemptspecificinstitutionsandprivatebodies,i.e.,toperformdutiesofpublicinterest.In addition to the licence fees, administrative charges andreimbursementofexpensesneed tobepaid to theCOMCOMforthegrantoramendmentof the licence,pursuant to theOrdinanceontheAdministrativeChargesintheTelecommunicationsSector.Iftheradiocommunicationlicenceisgrantedbyauction(cf.question3.2),thelicencefeeshallcorrespondtotheamountofthebid,minusadministrativechargesfortheinvitationtotenderandthegrantingofthelicence.


Thetransferduetochangeofcontrolissubjecttotheapprovalbythelicensingauthority,cf.question2.7.


Subjecttotheapprovalbythelicensingauthority,thelicencemaybe transferred. Todate, themereusecannotbe tradedorshared;however,therevisionoftheTCAaimsatamoreflexibleregime.



Switzerland does not have a specific regulation on cybersecurity.Provisions of general statutes apply, such as the Swiss CriminalCode,theFederalActonDataProtection(FADP),theTCA,etc.On 19 April 2018, the Federal Council adopted the “NationalStrategy for the Protection of Switzerland against Cyber-risks(NCS)”fortheperiod2018–2022.Thestrategybuildsontheresultsof thepreviousNCSadoptedearlier in2012, andaimsat furtherdevelopingit.Theobjectiveistominimisecyber-risks.


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There are additional rules that apply to content broadcast viatelevision and radio, such as clear separation of advertising andeditorialcontent,split-screen,interactiveanddigitaladvertising,adbreaks, limitation/prohibition of advertising for tobacco, alcohol,therapeuticproducts,politicalandreligiouscontent,etc.Only licensed broadcasters as well as broadcasters broadcastingabroad are obliged to limit advertising time in line with EUDirectives.SpecialprovisionsapplytoSRGSSRTVprogrammes,andradioprogrammesofSRGSSRarenotpermittedtobroadcastadvertising.


TheSRGSSRholdsalicencefromtheFederalCouncilandhasaconstitutionalprogrammeservicemandate,andmustthereforefulfilcertain obligations regarding quality, content and diversity of itsprogrammesdetailedinthelicenceandinlegislation.Further,thereare regional licensed broadcasters with a performance mandate.Finally, broadcasters without a performance mandate mustonly notify the OFCOM and have, in comparison, more limitedobligations.


LicencesmaybeassigneduponpriorapprovalbytheDETEC.Thesame applies in the event that 20% of the share capital changesownership.IftheDETECdeemsthattheconditionsforthelicencemaynolongerbefulfilledaftertheassignmentorchangeofcontrol,theDETECwillnotgrantapproval.



General principles of accessorial liability apply, and thejurisprudencehasnotestablishedclearrequirementsonaccessorialliabilityforprovidersyet.Todate,TSPshavenotbeenheldliableforanycontentcarriedovertheirnetworks.In a leading case, which has been widely criticised, the FederalSupreme Court decided that a publisher of a newspaper had toremoveillegalcontentuploadedbyathirdpartytothebloghostedby the publisher, stating that the publisherwas accessorily liablewithout even being aware of the content (Decision of the SwissFederalSupremeCourt5A_792/2011).


Asageneralrule,enforcementauthoritiesorderthesurveillanceofpostandtelecommunicationsandnotifytheordertothePTSS,whichthenimplementstheorder.TSPsmustcooperatewithandprovideinformation to the PTSS, which in turn grants the enforcementauthoritiesaccess tocommunicationsand information. Theorderneedstobeapprovedbythesupervisoryauthority.Dependingontheprocedure, theapprovalneeds tobe issuedbeforeorafter theimplementationof theorder. Theapproval isof limiteddurationandneedstoberenewed.Informationcollectedwithoutapprovalcannotbeusedinaproceedingandhastobedestroyed.Other measures, such as GovWare and IMSI-catchers, are notimplementedbythePTSS.


According to the TCA, TSPs must comply with securityrequirements. The specific regulations provide for details onencryption.BasedontheSPTA,onceasurveillanceorderhasbeenissued,TSPshavethedutytodisclosetheirencryptionkeystothePTSS.


Pursuant to the SPTA, providers are obliged to retain the dataprovided by the customer at the beginning of the customerrelationship, including identification data, date of birth andprofession,addressingresources,andservicesprovided.Suchdatamustberetainedfortheentiredurationofthecustomerrelationshipaswellas forsixmonthsafter termination.Further,providersareobliged to maintain all peripheral communication data for sixmonths.TheOSPTlaysdownthedetails.



Thebroadcasting,processing, transmissionandreceptionof radioandtelevisionprogrammeservicesareregulatedbytheFederalActonRadioandTelevision(RTVA)and,unlesstheRTVAprovidestothecontrary,bytheTCA(cf.question1.2).TheRTVAistechnologicallyneutral,meaningthat,inprinciple,itappliestoanytypeofbroadcasting,transmission,etc.In principle, Swiss broadcasters must register with the OFCOMprior to any transmission. The national public broadcaster SRGSSR, as well as other broadcasters with a performance mandate(with orwithout fee-splitting), require a licence. This applies inparticular to those broadcastersmaking use ofVHF frequencies.Inorder topreventmedia concentration, abroadcastingcompanymay,asarule,obtainalicencefortwoTVchannelsandtworadiochannelsatmost.


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Martina Arioli Arioli Law Napfgasse 48001 Zurich Switzerland

Tel: +41 44 201 66 11Email: [email protected]: www.arioli-law.ch

Antonio BernasconiArioli Law Napfgasse 48001 Zurich Switzerland

Tel: +41 44 201 66 11Email: [email protected]: www.arioli-law.ch

Martina Arioli studied law, philosophy and political science at the University of Bern where she graduated in 1996 (magna cum laude), passing the bar in 1999 with excellence, and receiving an LL.M. from the London School of Economics and Political Science (LSE) in IP in 2001. She is registered with the Zurich Bar Registry and admitted to practise in all of Switzerland. Martina Arioli has consistently been recognised as one of Switzerland’s leading TMT lawyers since 2016 by Who’s Who Legal. Arioli Law is considered as one of the top law firms in Switzerland in the ranking by Bilanz in 2017 and 2018.

Arioli Law provides legal expertise with a straightforward, hands-on approach. Martina Arioli established her law firm Arioli Law in 2013 in Zurich, after having worked for one of Switzerland’s leading law firms as well as for a major Swiss bank and a major Swiss insurance company. Martina Arioli combines in-depth knowledge on complex contractual matters in outsourcing, information technology and telecoms projects with the experience of implementing such global projects as an in-house lawyer. Further, she provides comprehensive advice to companies in the IT industry on software development, licensing, technology-related transactions, IP protection, data protection and compliance as well as employment law. She also regularly advises clients in the entertainment industry, mainly film and music. For almost a decade, she has chaired a prestigious annual conference on data protection in Switzerland.

Antonio Bernasconi, MLaw, is a trainee at Arioli Law specialising in intellectual property and contract law. Before joining Arioli Law, he worked as a trainee at a law firm based in Lugano focusing on domestic and international litigation as well as criminal investigations. He graduated from the University of Bern (MLaw) in 2017.


There are no statutory provisions in force obliging ISPs to blockaccesstocertainsitesorremovecontent,unlesstheyarethemselvesheldliable.Currently, theSwissCoordinationUnitforCybercrimeControlattheFederalOffice of Police keeps a list of illegal content that isblockedbyISPsonavoluntarybasis.NewobligationsforTSPstoblock access to internet offers containingprohibited pornographyarediscussedwithinthecurrentrevisionoftheTCA.With the entry into force of the new Federal Act on Gambling(GamblingAct)inthenearfuture,statutoryprovisionswillobligeTSPs to block access to online gambling offers mentioned on alistprovidedbytheFederalGamingBoardandSwissLotteryandBettingBoard.WithintherevisionoftheCopyrightAct,a“staydown”obligationfor hosting providers as regards copyright-infringing content iscurrentlybeingdiscussed.ConsumerVPNservicesassuchareneitherregulatednorblocked.


Therearenostatutoryprovisionsobliginginternetserviceproviders(ISPs)toprovideinformation,toinformcustomers,etc.The self-regulatory “Code of Conduct Hosting” of the SwissInternetIndustryAssociation(simsa)contains“noticeandnotice”and“noticeandtakedown”procedures.


The TCA does not guarantee net neutrality, but such a statutoryprovisioniscurrentlybeingdiscussedwithintheTCArevisionandwasacceptedbytheNationalCouncilinSeptember2018.So far, the main network operators have concluded a “Code ofConductonnetneutrality”andestablishedaconciliationboardfordisputesonnetneutrality.


Chapter 29

Tilleke & Gibbins David Duncan

Thailand


Telecommunications is primarily subject to regulation by theNBTCandtheMinistryofDigitalEconomyandSociety(MDES),includingtheNationalInformationTechnologyCommitteeandtheNational Electronics and Computer Technology Centre. Audio-visualmediadistributionisprimarilyregulatedbytheNBTC,andtheCensorshipBoard,whichisaunitoftheMinistryofCulture.


In the telecommunications and internet space, Type 2 and Type3 licences are unavailable to applicants considered “foreign”, asdetermined according to the provisions of the Foreign BusinessAct.Inaddition,theselicenseesareobligatedtoobservetheNBTCNotificationonPreventionofForeignDominance.Incontrast,Type1licencesareavailableregardlessofthelevelofforeignownershipin theapplicant; theNBTCNotificationonPreventionofForeignDominanceisnotapplicabletothem.Thus,foreignownershipandcontrol is effectively limited to less than50% for facilities-basedtelecommunicationsoperators.Telecommunicationsoperatorsthatwould operate on a non-facilities basis, however, can be whollyforeign-owned,provided theydonot requireaType2 licence fortheintendedservices.As for media, foreign ownership and control of a broadcastinglicenseeareeachlimitedto25%.

2 Telecoms

General


ThailandhasbeenamemberoftheWorldTradeOrganizationsince1January1995,andhasmadecommitmentsunderGATSregardingbothvalue-addedservicesandbasictelecommunications.

1 Overview


Thailand’s two major state telecommunications operators – CATand TOT – formerly held monopolies on telecommunicationsservices inThailand. Traditionally, they provided some servicesthemselves,andtheyeachgrantedconcessionstoprivateoperators.Thelawhasmadeadistinctshiftawayfromtheconcessionsregime,andreplaceditwithalicensingregimeadministeredbytheNationalBroadcasting and Telecommunications Commission (NBTC).However,someconcessionsstillremain.There are currently three major private mobile carriers – AIS,DTAC andTrue, all ofwhich are competitors. In addition, bothCATandTOThost a numberofMVNOs. Landline services areprovidedprimarilybyTOTandTrue,butVoIPservicesareasourceofgrowingcompetition.Terrestrial broadcast television has largely transitioned to digital,though some analogue broadcasters remain. As for cable andsatellitetelevision,thereareseveraloperatorsintheKingdom,buttheprimaryoperatorisTrueVisions.Therearenumerous internetserviceproviders,butnetwork infra-structureisownedbyasmallnumberofmajortelecommunicationsoperators(bothstateandprivate).


Theprimarylegislationrelevanttotelecommunicationsandaudio-visualmediadistributionare:■ theRadioCommunicationsActB.E.2498(asamended);■ the Telecommunications Business Act B.E. 2544 (as

amended);■ theBroadcastingBusinessActB.E.2551;■ theFrequencyAllocationActB.E.2553(asamended);■ theComputerCrimesActB.E.2550(asamended);and■ theFilmandVideoActB.E.2551(asamended).There is a considerable body of administrative regulations andnotificationspromulgatedundertheselaws.


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Tilleke & Gibbins Thailand

Type1licencesarevalidforfiveyears,Type2licencesarevalidfor15to25yearsforoperatorswiththeirownnetworksorfiveyearsforthosewithouttheirownnetworks,andType3licencesaregrantedforperiodsof15 to25years. Licencesare renewable,subject tocompliancewithregulatoryrequirements.Telecommunicationslicencesarenottransferable.



The NBTC administers regulations concerning rights of way forerectingpoles, layingconduitsorcablesand installingequipmentforprovidingtelecommunicationsservices.Dependingonthetypeof easement required, a notice may be sufficient – otherwise, itmaybenecessarytonegotiateanagreement.Theregulationtakesthegeneralapproach thatsuchagreementsshouldbereflectiveofequality,fairnessandimpartiality.



Thereareseveralregulationsonnetworkinterconnectionandaccess.Essentially, licensees operating their own telecommunicationsnetworksmust:1. permitotherlicenseestointerconnectwiththeirnetworks;2. permit other licensees to access their telecommunications

networks as a means to access their networks;3. provide transit services to other licensees through their

telecommunicationsnetworks;4. provide roaming services to other telecommunications

serviceproviders;5. offerandprovideunbundlednetworkservicesandessential

facilities of their own networks to permit other licenseesaccess or interconnection with their networks; and

6. permit other licensees to access and employ technicalspecifications on their telecommunications network access,interfaces and protocols, or necessary technology forinteroperability,inordertofacilitateaccessorinterconnectionwiththeirnetworks.

Licenseeswith theirown telecommunicationsnetworks,however,may refuse to permit other licensees access to their networks iftheir existing telecommunications networks are insufficient toaccommodate other licensees. In addition, access may also berefused if there are technical difficulties which may, as a result,causeinterferencein,orotherwiseobstruct,thetelecommunicationsbusiness.Inthecaseofadispute,partiesmayapplytotheDisputeResolutionCommittee of the NBTC. Detailed procedures are set out inregulationsforthispurpose.


LicenseeswiththeirowntelecommunicationsnetworksarerequiredtoprovideReferenceAccessOffersandReferenceInterconnectionOffers,withrespecttoaccessorinterconnectionbyotherlicensees.


The provision of telecommunications/electronic communicationsnetworksandservicesissubjecttotheaforementionedlaws,whichprovideforregulationprimarilybytheNBTC.TheMDESalsohasasignificantroleinregulation.


TheTradeCompetitionCommissionandtheCommitteeonPricesofGoodsandServicesarecompetitionandfair tradingregulatorsof general jurisdiction. These bodies are nominally independent,buttheirmembersareappointedbythegovernment.Itshouldalsobe noted that the NBTC has also issued competition regulationsspecifictotelecommunications,aswellasspecifictobroadcasting.


Decisions of the NBTC can be appealed within the organisationitself, subject to theAdministrative ProcedureAct. Accordingly,furtherappealtotheAdministrativeCourtwouldalsobepossible,dependingonthecircumstances.



Primary authorisations take the form of TelecommunicationsLicences, which are categorised as Type 1, Type 2, and Type3. Each Telecommunications Licence specifies the type(s) oftelecommunicationsbusinessinwhichitsholdercanengage,anditalsotypicallyhasarangeofdifferentconditionsandendorsements.1. Type 1 Licence:Type1licencesarefortelecommunications

operatorsthatprovideserviceswithouttheirownnetworks.2. Type 2 Licence:Type2licencesarefortelecommunications

operators that provide services eitherwith orwithout theirownnetworks,forusebyalimitedgroupofpeople,orthathave no significant impact on competition, public interest,andconsumers.

3. Type 3 Licence:Type3licencesarefortelecommunicationsoperatorsthatprovideserviceswiththeirownnetworks,forusebythegeneralpublicorwhichmayimpactcompetition,publicinterest,orconsumers.


Subjecttocertainnarrowexceptions,individualauthorisations–intheformofthelicencesdescribedintheresponsetoquestion2.5–arerequiredtolawfullyengageinanytelecommunicationsbusiness.


The subject matter of each form of individual authorisation isdescribedintheresponsetoquestion2.5.


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Numbering


TelephonenumbersandspecialcodesareallocatedbytheNBTC,inaccordancewithregulationswhichsetout,inter alia,anumberingplan.


Telephone numbers can only be allocated to telecommunicationslicenseesforuseintheirprovisionoftelecommunicationsservice,and there are extensive regulations governing such allocation.Generally, telephone numbers can only be used in providing aserviceconsistentwiththenumberingplan.


Mobileserviceusershavetherighttomobilenumberportability,andserviceprovidersaregenerallyprohibitedfromactingtoobstructorimpede theportingofmobilenumbers toother serviceproviders,though there are exceptions to accommodate technical and otherissues. Therelevantnotificationssetoutconsiderabledetailas tothemechanicsofporting.

3 Radio Spectrum


TheNBTCistheprimaryregulatorofspectrumuse.


Radio frequency spectrum is allocatedpursuant to theFrequencyAllocationAct.Forcommercialspectrumusageforbroadcasting,theActprovidesfortheNBTCtoconsiderandgrantpermitsforuseofspectrumbyauction,accordingtoproceduresandconditionstheNBTCmayset. As for telecommunicationsspectrum, theNBTCcan use other methods, but auctions remain required for mostcommercialapplications.


Certain categories of spectrum use are licence-exempt; theconditionsdependontheapplicableuse.


For commercial broadcasting use, spectrum is allocated byauction, with pricing determined by the auction process. As fortelecommunications,pricingcanbedeterminedbyothermethods,butauctionsremainrequiredformostcommercialapplications.

Licenseesmustalsoprepareinformationonthecalculationofchargesfor network access, interconnection, and unbundled components.Thisinformationistobesubmittedatthetimeofalicenceapplicationandperiodically,anditissubjecttoconsiderationbytheNBTC.


Standards and pricing methodologies are set in regulationsadministered by the NBTC. In principle, the approach is thatreasonable access or interconnection charges are to be calculatedonlyforeachnetworkelementusedinprovidingthegivenservice.Otherexpensesnotdirectlyrelatingtheretoarenottobeincludedinthecalculation.TheNBTChastheauthoritytoorderlicenseestorestructuretheirpricing,andtosubmititforNBTCapproval.TheNBTCalsohastheauthoritytoregulateeachstepoftheprocedurefor access/interconnection and/or to determine network access orinterconnectionchargesthatitdeemsappropriate.


Seetheresponsetoquestion2.11.


Asageneralmatter,operatorsofbroadbandnetworksaresubjecttoregulationinthesamewayasoperatorsofothertelecommunicationsservices,andsuchoperatorslikewisegenerallyhavethesamesortsofrights.



RegulationsadministeredbytheNBTCimposemaximumpricingforcertainservices.


Regulations impose requirements in relation to service contracts,tariffs,andservicecharges,aswellasprotectionofconsumerrightsintheareasofpersonaldata,privacy,andfreedomofcommunicationvia telecommunicationsnetworks. Licensees are also required toestablish separate call centres to receive complaints, to establishprocedures for receiving and considering user complaints, andto comply with regulatory requirements in relation to handlingcomplaints, includinganescalationprocess inwhichresolution ispursuedwithinparticulardeadlines.Licensees must also meet Universal Service obligations (i.e., bymakingspecifiedcontributionstotheUniversalServiceFund).


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ofcybersecurity.However,theBillalsoprovidesthattheCouncilofMinisterswouldpromulgaterulesforofficialstofollowinaccessingsuchinformation,presumablyforthepurposeofaddressingprivacyconcerns. The Bill also contains provisions bywhich to protectsuch informationand toprevent itsdisclosure, except in casesofprosecutionunder theBill (onceenacted), abusesofpower,orasotherwiseauthorisedbythecourt.


In principle, Thai law protects communications from access,interception and disclosure, but it provides certain exceptions forgovernment authorities, particularly in cases that have nationalsecurity implications, or cases that concern public order or goodmorals of Thailand. The Constitution contains provisions onprivacy,whichtranslate: “A person shall enjoy the rights of privacy, dignity, reputation,

and family. An act violating or affecting the rights of a person under

Paragraph One, or the use of personal information for benefitbyanymeansshallnotbepermitted,exceptbyvirtueof theprovisionsof the lawspecificallyenactedasdeemednecessary for the public interest.”

Inanycase,inthenormalcourse,accessisavailabletogovernmentalauthoritiesthroughregulatoryframeworkapplicabletoinformationtechnologyserviceproviders (through theComputerCrimesAct),and the regulatory framework applicable to telecommunicationsoperators (through the Telecommunications Business Act). Inaddition,specialpowersareavailabletocertaingovernmentofficialshandlingcertaintypesofcasesundertheSpecialInvestigationAct,andinemergencysituations,undertheEmergencyDecreeonPublicAdministrationinaStateofEmergency.Eachisexplainedbelow.Computer Crimes ActThe Computer Crimes Act empowers competent officers of theMDES to send enquiry letters, summon concerned persons forinterrogation, and request statements, documents, computer data,computer traffic data, and evidence from service providers (asdefinedintheAct).Theseofficerscanalsoorderserviceproviderstohandovercertaindatapertainingtousers,whichserviceprovidersareobligatedtokeep,underthelaw.In addition, the officers can take further actions, but onlywith acourt order. These include copying computer data or computertraffic data, ordering a service provider to hand over computerdata, computer traffic data, or devices, examining and accessingcomputer systems, computer data, computer traffic data, ordevices,decryptingcommunications,orderingaserviceprovidertodecryptcommunications,orderingaserviceprovidertoassistwithdecryption,andseizing/attachingacomputersystem,asnecessary.Ministerial regulations promulgated under the Computer CrimesActsetout thespecificrequirements thateachserviceprovider isrequiredtomeet,intermsofdataretention.ItisimportanttobeawarethattheComputerCrimesActdistinguishesbetweencontentdataandnon-contentdata.Asageneralmatter,acourtorderisnotrequiredtoaccessorobtainnon-contentdata–acompetent officer is already authorised to request suchdata fromserviceprovidersor other relevantpersons. While theComputerCrimesAct does not specifically use the term “intercept” whendescribingtheauthoritiesoftheMDESwithrespecttotheseissues,such activities could be regarded as included within an officer’sauthoritytoexamineandaccesscomputersystems,computerdata,


Alicenseemustmaintainconformitywithitslicenceconditionsinorder for the licence to remainvalid. In this regard, a change incontrolcouldresultinbreachofsaidconditions(e.g.,iftheforeignshareholdingratiowasbreached).Generally,alicenseemustnotifytheNBTC inwritingof a change in control, and theNBTCmayinstructthelicenseetotakeparticularactionsastheNBTCdeemsappropriate.


PursuanttotheFrequencyAllocationAct,apermittousefrequencywavesfora telecommunicationsbusiness is theexclusiverightofthepermitholderand isnot transferable. Theholderofapermitto use particular frequencies for a telecommunications businessmustoperate thebusiness itself. Itcannotassignmanagementofthebusiness,inwholeorinpart,tosomeoneelse,orauthoriseotherpersonstooperatethebusinessonitsbehalf.



TheCybersecurityBill,whichhas been approvedby theCabinetbut remains pending, would establish a National CybersecurityCommittee and a new state agency, the Office of the NationalCybersecurity Committee. The Committee would have theresponsibilitytodeterminehowtorespondtoseriouscyberthreatsand to be the centre of operation in such IT calamities (save formatters of military security), and to cooperate with other statebodies and private entities for this purpose, among other relatedresponsibilities. The Office of the National CybersecurityCommitteewouldberesponsibleforimplementingtheCommittee’spolicies,aswellasrelatedresponsibilitiesspecifiedintheBill.As written, the Bill would compel state agencies to follow theCommittee’s plans and policies, and it sets out mechanisms forachieving that. It also features a reportingmechanismbywhichstateagenciesand/ordesignatedpersonswithineachstateagencywouldfeedinformationbacktotheSecretaryoftheCommittee,sothattheCommitteecoulddeterminewhatfurtheractionstotakeinresponsetoparticularcyberthreats.Further,whereitisnecessaryfor the purpose of maintaining cybersecurity, in a circumstancewheretheremaybeaneffectonfinancialandcommercialstabilityor national security, the Bill would empower the Committee toorderastateagencytotakeparticularactionsandtoreportastheCommitteemayinstruct.ItisenvisagedthattheMinisterwouldappointofficialstoperformundertheAct,andthattheymaybeauthorisedbytheSecretaryoftheOfficetoissueletterstoaskquestionsortorequestastateagencyor anyperson togive testimony, submit awritten explanation,orsubmitmaterialsforinspectionorinformation,allwithinthescopeoftheBill,ortorequeststateagenciesorprivateentitiestofacilitatetheCommittee’sperformanceofitsduties.The Bill also provides for officials to be empowered to accesscommunications information, whether in the form of post,telegram,telephone,fax,computer,oranymechanismordeviceforelectroniccommunicationor telecommunications, for thepurpose


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Telecommunicationslicenseesarenotunderageneralrequirementtomaintainorenableinterceptioncapability.Nevertheless,regulatoryframeworkwould accommodate the imposition of such technicalrequirements, if such a policy decision were made. Moreover,currentlawenablesofficialstoorderatelecommunicationslicensee(oranyotherperson)tocarryoutortocooperatewithinterceptionsoordered. Suchordercouldbeissuedinrespectofanyformofcommunications.


In normal circumstances, with probable cause, the state mayapply to the Chief Justice of the Criminal Court for an orderpermitting interception of communications of any individuals,whether through wiretapping or monitoring of written and/orelectronic communications. Such requirements, however, maybe circumvented through special procedures under some of thelawsdescribedinourresponse toquestion4.2above,suchas theEmergencyDecreeorNCPOOrder3/2558.


Encryptioncanberegulatedundermultiplelaws.With respect to telecommunications applications, the RadioCommunications Act provides for the regulation of activitiesrelatingtoradiocommunicationinThailand.TheActprohibitsanyperson from producing, possessing, using, importing, exporting,or trading in any radio communication equipment, unless suchperson is granted a licence by the NBTC. It provides authorityfor theNBTC to issuenotifications to exemptparticular typesofradiocommunicationequipment,orthoseusedincertainactivities,ineithercase,asaclassoronan individualbasis. To theextentanyitemconstitutesradiocommunicationequipment,ifencryptioncapabilitiesexistinsuchdevices,theywouldbesubjecttoregulationas part of the device. To date,we are unaware of any denial ofapprovalofadeviceonthebasisofencryptionfunctionality.With respect tomilitaryapplications, theArmamentsControlActB.E.2530(asamended)providesforregulationoftheimportation,bringing in, manufacturing, and/or possession of any armament.It provides that noperson shall import, bring in,manufacture, orpossessarmaments,exceptwherealicencehasbeenobtainedfromthe Secretary of Defence, or where an exemption is applicable.The definition of armaments can be construed quite broadly, anditevenincludesseveralroutineitemsthathappentohavemilitaryapplications (dual-use). As such, to the extent that encryptiontechnology, or equipment or software which includes encryptiontechnologyisconsideredan“armament”,alicencewouldberequiredtoimportitorotherwisebringitintoThailand.Weare,however,notawareofthislaweverbeingusedtodenytheimporting/bringinginorpossessionofroutineequipmentorsoftwareusedforcomputernetworkingand/ortelecommunicationsapplications.Also, theComputerCrimesActauthorisesofficialsof theMDESto access computer systems to decrypt encrypted computer data,orderconcernedpersonstodecryptsuchdata,andorderconcerned

computertrafficdata,ordevices,asreferencedabove.Whilethereisnocourtdecisiontoofferguidanceonthispoint, it isourviewthatacompetentofficer’sauthorityextendstobothstoreddataandthoseintransmission.Asnotedabove,theComputerCrimesActauthorisesacompetentofficer to decrypt encrypted computer data, to order concernedpersonstodecryptit,and/ortoorderconcernedpersonstocooperatewith a competent officer in decrypting it, for the purposes ofinvestigating an offence under theAct. Moreover, theComputerCrimesActpurportstoapplybothdomesticallyandoverseas,andcomplianceobligationsarenotonlyapplicabletocertainlicensees.Rather, a competent officer has the authoritymentioned above toorder any concerned person to decrypt data or allow access to acomputersystem,amongotherauthoritiesundertheAct.Telecommunications Business ActTheTelecommunicationsBusinessActimposescertainobligationson telecommunications licensees. Through this regulatoryframework,telecommunicationslicenseesareobligatedtocomplywithrulessetbytheNBTC.PursuanttoregulationsunderthisAct,telecommunicationslicenseesareobligatedtoretaincertaindataonserviceusers,tostoreitaccordingtoregulationsforcertainperiodsof time, and to provide suchdata to theOfficeof theNBTC, onrequest, for thepurposeofsupervisionof the telecommunicationsbusinessby theNBTCand theOfficeof theNBTC. While thereare presently no regulations explicitly requiring standing “backdoors”foreasygovernmentaccesstocommunications(whetherintransit or stored), regulatory frameworkwould accommodate theimpositionofsucharequirement.Special Investigation ActTheSpecialInvestigationActgenerallyappliestoallegedcriminalviolationsofcertainlaws,whichareunusuallycomplex,relevanttonationalinterests,involveinfluentialpeopleorcertainofficials,orcasesotherwiseselectedbytheSpecialCaseBoard.Withrespecttodatainterceptionoraccess,theSpecialInvestigationActrequiresSpecialCaseInquiryOfficialstoobtainacourtorderpriortoaccessor acquisition of any documents or information in transmissionthroughvariousmeansofcommunicationswhichhavebeenormaybeusedtocommitaSpecialCaseOffence(asdefinedintheAct).UnderthisAct,thecompetentofficerwouldneedtofileapetitionrequesting the court to issue an order authorising such access oracquisitionofdata.Emergency Decree on Public Administration in a State of EmergencyThe Emergency Decree, inter alia, provides for expandedinvestigative powers usable in the event of an emergencydeclarationmadebythePrimeMinister.ThisDecreegivesbroadpowerstothePrimeMinistertoactinvirtuallyanywaynecessarytomaintainpublicorderorotherwisemaintaincontrolinemergencysituations. In such event, the Prime Minister can, among otheractions,authoriseacompetentofficial toissueanordertoinspectanymeansofcommunicationorissueanotificationprohibitinganyactor instructingthedoingofanythingnecessaryformaintainingthesecurityofthestate,thesafetyofthecountryorthesafetyofthepeople(thisissufficientlybroadtoincludeinterceptionoforaccesstodata,asdeemednecessary).Order 3/2558 of the National Council for Peace and OrderGovernmental access can also be authorised pursuant to broadauthoritiesexistingunderOrder3/2558oftheNationalCouncilforPeaceandOrder(NCPO).Non-compliance under any of the foregoing can result in fines,imprisonment, and/or seizure of equipment, depending on theviolation.


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(including advertising) vary between terrestrial broadcastingand non-frequency broadcasting (e.g., cable or IPTV), aswell asbetweendifferentcategoriesofchannels.Inaddition, theFilmandVideoActprovides forcontentcontrolsinrespectofmovies,commercials,televisionprogrammes,videos,certainvideogames,karaoke,andothersimilarcontent.AcommitteeconstitutedunderthatActhastheauthoritytocensorsuchcontent,requiringchangesbeforetheirrelease.For some years, OTT services accessible via the public internethavegenerallyoperatedwithoutregulation,giventhatmostoftheprovidersareabroadandgivenenforcementchallenges in respectofforeignentities.However,therehavebeenrecentmovestobringtheseoperators into the regulatory framework,eitherbyassertingthat they operatewithin the regulated space, or on the basis of anewregulatoryregimespecifictothem.Furtherdevelopmentsareexpectedverysoon.Itshouldalsobenotedthattherehavebeeninstancesofblockingwebsites and/orpartsofwebsites. TheComputerCrimesAct, aswellastheEmergencyDecree,NCPOOrder3/2558,andtheInterimConstitutioneachprovidemechanismsforsuchblocking.


The Broadcasting Business Act and regulations promulgatedthereunder establish the framework for: (i) broadcasting networklicences; (ii) broadcasting service licences; (iii) broadcastingfacilitieslicences;and(iv)broadcastingapplicationservicelicences.Broadcasting service licences are issued for broadcasts usingfrequencies(e.g.,free-to-air)andnotusingfrequencies(e.g.,cable).For broadcasts using frequencies, there are multiple categoriesof licences for public and communitybroadcasting, but these areavailable only to government entities and certain associations,foundations, charities, and educational institutions. With respectto commercial services, these can be licensed at the national,regional,orlocallevels.Non-frequencybroadcastingservicesarelicensedseparately. Withrespecttofrequencyandnon-frequencycommercialbroadcastinglicences,foreignownershipinthelicenseeislimitedto25%.Other regulatory requirements deal with the directorship ofcompaniesholdingthelicences(i.e.,thatatleast75%ofthedirectorsbeThainationals). Analogousownershipandcontrol restrictionsapplytolicenseesthatexistaspartnerships.Broadcastinglicenseesaresubjecttoseveralotherregulatoryrequirements,someofwhichexist in lawand regulations, andothers that are imposed throughlicenceconditions.


Licenses are not transferable. However, a licenseemay allocatetimeslotsforprogrammingofothers,subjecttofurtherregulatoryrequirements.Alicenseemustmaintainconformitywithitslicenceconditionsinorder for the licence to remain valid. In this regard, a change incontrolcouldresultinbreachofsaidconditions(e.g.,iftheforeignshareholdingratiowasbreached).Generally,alicenseemustnotifytheNBTC inwritingof a changeof control, and theNBTCmayinstructthelicenseetotakeparticularactionsastheNBTCdeemsappropriate.

persons tocooperatewithacompetentofficial indecryptingsuchdata, for the purposes of investigating an offence relevant to theComputerCrimesAct.


Pursuant to regulations issued under the TelecommunicationsBusiness Act, telecommunications licensees must retain certainpersonaldataof telecommunicationsusers, includingthefactsanddetailsconcerningeachserviceuserbywhichtheserviceusercanbeidentified,serviceusagedata,telecommunicationsnumbers,anddescriptions of individual usage. Licensees must keep personaldataof their serviceusers for the last threemonths (counted fromthedayfollowingthecurrentday),andintheeventthattheserviceis terminated,retainsuchdatafor threemonthsfollowingthedateof terminationof theservice. In thecaseofnecessity, theserviceprovidermay be required to retain the data for longer than threemonthsafterterminationofservice,butnotforlongerthantwoyears.TheRegulationsissuedundertheComputerCrimesActalsocontainsimilar obligations that are applicable to service providers (asdefinedinsaidAct).Serviceprovidersincludetelecommunicationslicensees and some operators that are not telecommunicationslicensees. TheAct requires service providers to retain necessaryinformation on each service user, as well as specified computertraffic data; the type of computer traffic data varies by type ofprovider and/or service. The required computer trafficdatamustbestoredforatleast90daysfromthedatethedataisenteredintothecomputer system,unlessextendedbyacompetentofficial. Acompetentofficialmayextendthisbeyond90days,butfornomorethan twoyears, inparticularcases. Inaddition,serviceprovidersmust keepuser identificationdata so that the serviceuser canbeidentifiedfromthebeginningofuseoftheservice,andtheserviceprovidermustkeepthisdataforatleast90daysafterterminationoftheservice.



Distributionof television ishandledpursuant to theBroadcastingBusinessAct,withtheNBTCastheprimaryregulator.Otherformsof audio-visual media, such as DVDs and computer games, areoutsidethescopeofthatAct,butotherlawsarerelevanttothem.Notably,theFilmandVideoActprovidesregulatoryframeworkforcinemaandDVDs.TheNBTChasbeenparticularlyactive inexercising itsauthoritywithrespecttocontentandcompetitionissues.Inmultiplecases,the NBTC has fined operators for the broadcast of what wasregarded as inappropriate content. It has also intervened in themarket toprovideforfreebroadcastofcertainsportingevents, toaddresscompetitionconcerns.


TheBroadcastingBusinessActprovidesforregulationofthecontentoftelevisionprogrammesthatarebroadcast.Contentrequirements


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David DuncanTilleke & GibbinsSupalai Grand Tower, 26th Floor1011 Rama 3 RoadChongnonsi, YannawaBangkok 10120Thailand

Tel: +66 2056 5555Email: [email protected]: www.tilleke.com

David Duncan is a consultant in the Tilleke & Gibbins corporate and commercial group, specialising in technology, media, and telecommunications, antitrust/competition law, and projects. In the TMT space, which comprises the largest part of his practice, David has extensive experience in structuring and negotiating IT outsourcing transactions, developing structures by which to offer new telecommunications and/or IT services in Thailand, handling TMT-related M&A transactions, advising on IT infrastructure projects, and advising on regulatory implications of all the foregoing. He also has particular expertise in government contracting. His client base is foreign and domestic, and he advises new entrants to the market, as well as established operators. David is ranked in the TMT category by Chambers Asia-Pacific and The Legal 500, and he has also been recognised by Chambers and other publications for projects expertise.

Tilleke & Gibbins is a leading regional law firm in Southeast Asia with over 150 lawyers and consultants practising in Bangkok, Hanoi, Ho Chi Minh City, Jakarta, Phnom Penh, Vientiane, and Yangon. Our firm represents the top investors and the high-growth companies that drive economic expansion in Asia in the key areas of commercial transactions and M&A, dispute resolution and litigation, and intellectual property.

Our TMT practice handles all aspects of work in this field and enjoys an international reputation. Our success on our clients’ behalf has led to global recognition as a leading TMT practice by such publications as Chambers Asia-Pacific, The Legal 500 Asia Pacific, Asialaw Profiles, and others.


services to service users and interconnection users on a non-discriminatorybasis.However,theydonotgosofarastoexplicitlyrequirenetneutrality.


PursuanttotheComputerCrimesAct,followingtheissuanceofacourt order, a competent official under theComputerCrimesActmay block particular websites or other content, or order ISPs todoso. Blockingofwebsitesorcontent isalsopossibleunder theEmergencyDecreeandNCPOOrder3/2558.AsforVPNservices,theproviderthereofwouldberegulatedasaserviceproviderunderthe Computer Crimes Act which, as noted above, requires theretentionofspecifieduserdata.AccesstoVPNserviceshasbeenblockedonoccasion,buttheyaregenerallyavailable.



Accordingto theComputerCrimesAct,anyserviceprovider thatcooperates, agrees, or conspires in relation to a specified offenceinvolvingacomputersystemunderitscontrolissubjecttothesamepenalty as that imposedupon the person committing the offence,provided that where the service provider has complied with theregulatory notification setting out something largely analogous toa“mereconduit”defence,theserviceprovidershallnotbesubjecttopenalty. It is likely thatstrictcompliancewith thenotificationwouldbenecessaryinorderforaserviceprovidertoavailitselfofthedefence.


TheCopyrightActB.E.2537(asamended)addressesobligationsofinternetserviceprovidersinrelationtoinfringingcontent,providingamechanismbywhich one can petition the court to request thatinfringingcontentbetakendown.Also,pursuanttotheComputerCrimesAct,serviceproviderscouldbeheldliableinrespectofillegalcontentontheirnetworks,unlesstheyhaveactedinconformitywiththe“mereconduit”regulation.Amongtherequirementsofthatregulation,aserviceprovidermusthave a mechanism for receiving complaints/take-down notices,andforactingon them. TheComputerCrimesActalsoprovidesamechanismbywhichserviceproviderscanbeorderedtoblock/removeillegalcontent.


Regulations provide that licensees are under general obligationstooperate their telecommunicationsnetworkservicesandprovide


Chapter 30

reached7billionTRY(approx.1.2billionUSD).Inthefirsthalfof2018,totalservicerevenuesreachedapproximately3.8billionTRY(approx.675millionUSD).TTNET,SuperonlineandVodafoneNetarethecompanieswiththelargestshareinthemarketintermsofthenumberofsubscribersandrevenue.(b) Audio-VisualMediaDistributionTurkishRadioandTelevisionCorporation(“TRT”)wasdefinedasimpartialwith theconstitutional amendment in1972andwas thesinglebroadcaster inTurkey for54years,untilStarTV (thefirstprivateTVbroadcasterinTurkey)wasfoundedin1990.TRThas14TVchannels,16radiostations,twoonlinenewssitesandthreemagazines.TRTisstillanimportantplayerintheTurkishaudio-visualmediadistributionsector.InTurkey,therearenow108TVchannels(including14national,11regionaland83local)and83radio-TVbroadcasters.Additionally,there are 1,091 radio broadcasters including 36 national, 102regionaland953local.In2017,theannualcommercialrevenueoftheTurkishmediasectorwasrecordedas3,870,700,722.88TRY(approx.686millionUSD).The significant participants with the largest shares in the mediasectorareDemirörenHolding(whichhastakenoverDoğanMediaGroup),DoğuşHolding,CinerHoldingandKalyonHolding.


■ Electronic Communications Law No. 5809, dated 5November2008.

■ RegulationontheNetworkandInformationSecurityintheElectronicCommunicationSectorNo.29059,dated13July2014.

■ RegulationonProcessingandProtectionofPersonalDataintheElectronicCommunicationSector,dated24July2012.

■ Regulation on Market Analysis No. 28480, dated 27November2012.

■ Law on Establishment and Broadcast Services of RadioandTelevisionNo.6112,dated3March2011(“theTurkishBroadcastingLaw”).

■ Regulation on Consumer Rights for ElectronicCommunicationSectorNo.30224,dated28October2017.

■ AuthorisationRegulationontheElectronicCommunicationSector No. 27241, dated 28 May 2009 (“AuthorisationRegulation”).

■ RegulationonNumberingNo.27276,dated2July2009.■ RegulationonAccessandInterconnectionNo.27343,dated

8September2009.

1 Overview


(a) Telecoms&InternetIn 2017, the net sales revenue ofmobile operators in the telecomsectorincreasedby11.7%comparedtothepreviousyearandreached39.45billionTurkishLira(“TRY”)(approx.7billionUSD;1USDamountsto5.63TRYasofthedatethisarticlewaswritten).Thenetsalesrevenuesofthemobileoperatorsinthetelecomsectorinthefirsthalfof2018exceeded21.5billionTRY(approx.3.817billionUSD).Thedistributionoftotalrevenuein2017amongtheoperatorsisasfollows:■ Turkcell–23.8%.■ Vodafone–21.4%.■ TürkTelekom–18.9%.■ TTMobil–13%.■ Others–22.9%.Compared to the previous year, total investments of mobileoperators in the telecom sector increased by 2.6% in 2017. Atthe company level, Türk Telekom’s, Turkcell’s and Vodafone’sinvestments increased, respectively,by26.9%,10.4%and15.9%,whereasTTMobil’sinvestmentsdecreasedby20.2%.Ingeneral,total investment in 2017 amounted to 5.87 billion TRY (approx.1,042millionUSD). In thefirsthalfof2018, approximately2.6billionTRY(approx.461millionUSD)wasinvestedinthissector.As of the second quarter of 2018, there were 11,491,629 fixedtelephonesubscribersinTurkey.Accordingly,thepenetrationrateisabout14.2%.Giventhisnumericdata,itispossibletosaythatfixedtelephoneserviceshavereachedasignificantlevelinTurkey.In terms of fixed/landline telephone services, themost importantcompanies in the sector based on theirmarket share areTTNET,TurksatandSuperonline.Asofthesecondquarterof2018,thenumberofinternetsubscribersincreased by 2.5% compared to the previous quarter and by 8%compared to last year. We expect that internet subscribers willincreaseduetotheincreasingavailabilityofaccessmeanssuchasfibre,mobileandxDSL.AsofJune2018,thenumberofinternetsubscribersreached71.8million.In2017, theannualservice revenuesof internetserviceproviders(“ISPs”) increased by 15.2% compared to the previous year and

Ünsal Gündüz Attorneys at Law

Burçak Ünsal

Dr. Okan Gündüz

Turkey


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Ünsal Gündüz Attorneys at Law Turkey


Please refer to our response to question 1.2. The electroniccommunications sector is also regulated by other codes orregulationssuchastheCompetitionLaw.


BTK is the autonomous regulatory authority overseeing thecommunicationandtelecomindustries.The Competition Authority is the autonomous regulatory andsupervisoryauthoritythatregulatesandsupervisescompetitionandantitrustmattersinTurkey.PursuanttoArticle6oftheElectronicCommunications Law, BTK is also authorised to protect faircompetitionamongtheindustryactors.


Decisions of BTK are regarded as administrative acts. RelevantpartiesmayobjecttosuchadministrativeactsbeforeBTK.IfBTKdismisses such objections, the relevant partiesmay challenge therelevantactsbeforeadministrativecourts.ThemaingroundstochallengeBTK’sactscanbediscrepancywithorviolationoftherelevantlegislation.



■ Provision of electronic communication services andinstallation and operation of electronic communicationinfrastructureornetworks is subject to theauthorisationofBTK.

■ Fixed/landline telephone services are subject to theauthorisationofBTK.

■ Radio and television broadcasts via terrestrial, digitalsatellite, cable and IPTV technologies and platforms aresubjecttolicensingbyRTÜK.

■ Registered electronic mail service providers must beauthorisedbyBTK.

■ Provision of electronic certificate services is subject to theauthorisationofBTK.

■ InternetserviceprovidersmustbeauthorisedbyBTK.


The Authorisation Regulation covers the main requirements forauthorisation in Turkey. According to Article 7, the followingconditionsmustbemetbytheapplicantcompany:■ Thecompanymustbeestablishedasajointstockorlimited

liability partnership (the corporate form requirement mayvarydependingonthetypeofservicetoberendered).

■ Therelevantfieldsofactivitysubjecttoauthorisationmustbestipulatedinthecompany’sarticlesofassociation.

■ RegulationonTariffNo.27404,dated12November2009.■ Lawon theRegulationof thePublicationsMadeAvailable

ontheInternetandtheFightAgainsttheCrimesCommittedThroughThosePublicationsNo.5651,dated23May2007(“LawNo.5651”).


(a) Telecoms&InternetTherelevantministryistheMinistryofTransportandInfrastructure.The main autonomous regulatory authority in the telecom andinternetsectorsistheInformationTechnologiesandCommunicationAuthority(“BTK”).BTKgrantslicences,issuesrelevantregulations,monitorstheindustry,andsetsthestandardfortelecommunicationequipment.Policymaking, regulation and operation functions are set byLawNo.4502.The Access Providers Association (“APA”) was established inaccordancewithLawNo.5651torestrict/blockaccesstounlawfulcontents.APAisaprivatelawlegalentitylocatedinAnkara.(b) Audio-VisualMediaDistributionTherelevantministryinthissectoristheMinistryofCultureandTourism.TheRadioandTelevisionSupremeCouncil(“RTÜK”)istheregulatorybodyintheaudio-visualmediasector.RTÜKisanautonomousandimpartialpublicentitythatisresponsibleforregulating,supervisingand licensing radio and television broadcasts via terrestrial, digitalsatellite,cableandIPTVtechnologiesandplatforms.


There is no restriction on foreign investment in the internetinfrastructure and telecommarkets inTurkey, since suchmarketsareliberalised.The foreign investment cap for media distribution companies is50%andaforeigninvestormayholdsharesinamaximumoftwoTurkishmediadistributioncompanies.Relevant competition regulation under the supervision of theCompetitionAuthorityisapplicable.

2 Telecoms

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Turkey has been a World Trade Organisation member since26March 1995 and amember ofGATT since 17October 1951.TurkeyhasalsomadecommitmentsundertheGATSregardingthetelecommunicationsandpostalservices.


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Operators shall freely determine access tariffs, including forinterconnection. However, BTK may impose obligations onoperatorstodeterminetariffsonacostbasis.IfrequestedbyBTK,the operators have to prove that the access tariffs are determinedbased on cost. BTK is entitled to determine the tariffs if theoperatorshavenotdeterminedthetariffsonacostbasis.


BTKhastheauthoritytoimposeaccountingseparationobligationsonoperatorswithsignificantmarketpowerintherelevantmarket.In addition, under the Authorisation Regulation, operators mustkeepseparateaccountsforeachtypeofservicetheyprovide.Iftheoperatorprovidesbothmobileandfixedlineservicesunderasingleauthorisation,itmustkeepseparateaccountsfortheseservices.


Provision of electronic communication services, installation andoperationofelectroniccommunicationinfrastructureandnetworksandallkindsofelectroniccommunicationdevicesandsystemsareregulatedundertheElectronicCommunicationsLaw.It is among the duties and powers of BTK to determine, applyand supervise the compliance of the execution of electroniccommunication services, networks and/or infrastructurewith law.TheauthorisationrequiredtoestablishandoperateinfrastructureinthissectorisgrantedbyBTK.The National Broadband Strategy Action Plan, published on 11December 2017, projects that broadband internet service will beavailableeverywhereforeveryoneby2023.In Turkey, installing fibre infrastructure is incentivised. Hence,Türk Telekom has laid more than 262,000 kilometres of fibreinfrastructureinthelast10years.



Operatorsmaydeterminetheirownpricesprovidedthatsuchpricesarereasonablefromtheperspectiveofcostsandtelecommunicationpoliciesasapublicservice.Accordingly,thepricesshouldconformtotherequirementsundertheTariffRegulation.OperatorsmustnotifyBTKof their tariffsat least15daysbeforethey enter into force. BTK is authorised to consistentlymonitorthetariffs.

■ Shareholderswithmorethan10%equityinthecompanyandexecutives authorised to represent the companymust havecleancriminalrecords.

■ Thecompanymustsatisfythecapitalthresholdrequirements.


Inprinciple,BTKmayauthoriseacompanyforupto25years.Thelicenceistransferable,subjecttoparticularrequirements.Transfersofmorethan10%oftheequityinanauthorisedcompanyaresubjecttoBTK’sapproval.



Private telecom companiesmay enter into contractswith ownersof immovable properties to obtain rights of access or installinfrastructure on such immovable properties. Such contracts aresubjecttotheprovisionsofgeneralprivatelawsuchastheTurkishCode ofObligations. Private telecom companiesmay also enterintoagreementswithpublicentitiestoutiliseimmovableproperty.TheMinistryofTransportationandInfrastructurehasthejurisdictionto secureorenforceexpropriationofprivatepropertypursuant totherelevantlegislation,andtheMinistryofTreasuryandFinanceisentitledtoallocaterelevantimmovablepropertyforthepurposesoftelecommunicationinvestments.



The Electronic Communications Law has vested BTK with thepowertoresolvedisputesbetweenoperators.Incaseofadisputebetweentwooperators,thepartiesmustfirstextendtheirbesteffortstoresolvethedisputewithintwomonths.Ifsucheffortsfail,eitherpartymaydemandBTKtoresolvethedisputebythepowervestedinBTKbytheElectronicsCommunicationsLaw.


BTKmayrequirealloperatorstopublishstandardinterconnectioncontractsandprices.Unlessotherwisestated,pricesaredeterminedannually.All operators are obliged to perform interconnection negotiationswith each other upon request. In case of a failure of the partiesto agree, BTK may impose obligations on operators to provideinterconnection; operators are then obliged to submit theirinterconnectionandaccessagreementstoBTKwithin15days.


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may regulate radio frequencies for military purposes within thefrequencybandsallocatedbyBTK.RTÜKregulatesandlicencesTVchannelsandradiofrequenciesforterrestrialradioandtelevisionbroadcastingwithinthefrequencybandsallocatedbyBTK.BTKmayretrievefrequencybandswhichitallocatestoRTÜKandtheTurkishArmedForces.


First,theoperatormustapplytoBTKforthespectrumallocationinaccordancewith theRegulationonSpectrumManagement. AfterBTKapprovesthisapplication,theoperatorisallocatedaspectrumlicence. Then, the operator has to register its allocated spectrumwiththeregistryestablishedbyBTK.Ifanaturalorlegalperson,which is not an operator, wishes to install a device requiring aspectrumallocationbyBTK,suchpersonmustalsoapplytoBTKforallocationofspectrum.BTKmaydeterminethatcertainwirelessequipmentandsystemsdonotrequirespectrumallocationandregistration.PursuanttoRegulationNo.22223,RTÜKlicensestheradiospectrumwithinthefrequencybandsallocatedbyBTK.Insuchcase,tendersaremadetoallocateradiofrequencyormultiplexcapacitytomediaserviceproviders.Inordertoparticipateintenders,mediaservicesproviders need to (i) be established as a radio broadcasting jointstockcompany,(ii)operateintheareaofradiobroadcastingforatleastoneyear,(iii)meetthepreliminaryrequirementsinthetenderspecification,and(iv)obtainacompetencecertificatefromRTÜK.


Asmentioned inquestion3.2,BTKmayexempt certainwirelessequipment and systems from spectrumallocation and registrationforamaximumtermoffiveyears.Under theTurkishBroadcastingLaw, use of spectrum cannot bemade licence-exempt. Media service providers need to obtainseparatelicencesfromRTÜKtobroadcastthroughcable,satellite,terrestrial,andsimilarmeanspursuanttoArticle27oftheTurkishBroadcastingLaw.


RTÜK determines television and radio frequency usage fees foreachyear,accordingtoArticle37/1(d)oftheTurkishBroadcastingLaw. Such fees are calculated based on the formula specified intheRegulationonTelevisionChannelandRadioFrequencyAnnualUsageFees. Feestobeappliedin2018areavailableonRTÜK’swebsite.


In case of a change of control of the licensee, the parties mustapply toBTK for approval of the transaction causing the changeofcontrol.RegardlessoftheBTKapplication,clearancefromtheCompetitionAuthoritymaybenecessarydependingontheglobalandlocalmarketsharesandrevenuesoftheparties.


The Regulation on Consumer Rights for the ElectronicCommunication Sector entered into force on 28 April 2018.PursuanttoArticle7oftheRegulation,subscriptionagreementscanbeenteredintoelectronically.Invoicesunderacertainamountcanbecarriedovertothenextinvoiceperiod.TheRegulationrequiresoperatorstobefullytransparentandlaysthe burden of proof on the operator with respect to subscriberrequestandapprovals.Iftheoperatorsuspendsitsservicesduetodefaultofthesubscriber,nofurtherservicefeeshallaccruefromthedateofsuspension.Theregulationindicatestheprovisionswhichshouldbestipulatedinaconsumertelecommunicationcontract.

Numbering


OperatorsoroperatorcandidatesmayapplyfornumberallocationtoBTK.ApplicantsmustalsofillintherelevantapplicationformattachedtotheNumberingRegulation.The number allocation request specified in the application mustcomplywiththenationalnumberingplan.Requestednumbersmustbeconsistentwith thedescriptionandgeographiccoverageof theservice. The Regulation demands the operator to have adequatetechnical instructors tomanage theallocationofnumbercapacityandmakethenecessarymarketestimationsandinvestmentplanstobeabletosupportitssubscribers.


NumberallocationandusageprinciplesarestipulatedinNumberingRegulation No. 27271 and Number Portability Regulation No.27276. The purpose of these Regulations is to ensure that thenumbers used in the electronic communication networks areplannedinanationalcontextandthattheyareusedeffectivelyandefficientlyinaccordancewiththeplan.


TheNumber Portability Regulation allows subscribers to changetheiroperatorandalltheservicestheyreceivewithoutanychangetotheirphonenumbers.BTKtakesallnecessarymeasurestoprotectconsumerswithinthescopeofoperatornumberportability.

3 Radio Spectrum


BTKallocates radio frequencies andmanages the radio spectrum(wireless radio telecommunication). The TurkishArmed Forces


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Inprinciple,thedecisiononsuchmeasuremayonlybegivenforamaximumtermoftwomonths,whichcanbeextendedforanothermonth.Furthermore,thelocationofasuspectmaybeobtainedbyusingthelocationdata signalledby the suspect’sphone inorder tobeabletoapprehendthesuspect.Thedecisionrelatedtothismattershallconsider thenumberof themobilephoneand thedurationof theinterception.Theinterceptionshallbeconductedforamaximumoftwomonths;thisperiodmaybeextendedforonemonth.Finally, it shouldbenoted thatBTK is also entitled todecideonwiretapping and the processes as regards communication viatelecommunicationservicespursuant toDecreeswith theforceoflawissuedinastateofemergency.


BTKisauthorisedtointercept/wire-tapanytypeofcommunicationincluding electronic and digital communication pursuant to theDecreewiththeforceofLawNo.671issuedsubjecttoastateofemergency.Accordingly, BTK can orderAPA, telecommunication operators,ISPs andothermarket participantswhichprovidehosting, accessand/orotherservicestoprovidenecessaryinformationtorespondtothedemandsandordersofBTKorsubpoenasofthecourts.


The state can intercept communications pursuant to relevantlegislationasexplainedunderquestions4.2and4.3above.


Coded and cryptographic communications are regulated underArticle39oftheElectronicCommunicationLaw,dated5November2008.AccordingtoArticle39,theTurkishArmedForces,GeneralCommand of Gendarmerie, Coast Guard Command, NationalIntelligence Organisation, Security General Directorate andMinistryofForeignAffairs are authorised tomake cryptographiccommunicationsbyradiocommunicationssystems.Proceduresandprinciplesformakingcodedandcryptographiccommunicationsinelectronic communications services of other public institutions,naturaland/orlegalpersonsshallbedeterminedbytheAuthority.The Regulation on the Procedure and Principles of Coded andCryptographicCommunicationsamongthePublicInstitutionsandNaturalorLegalEntities(“RegulationonCodedandCryptographicCommunications”) entered into force on 23 November 2010.ProvidingencryptedtelecommunicationsservicesissubjecttothepermissionofBTK.Pursuanttotheamendment,dated12January2018,oftheRegulationon Coded and Cryptographic Communications, BTK keeps thecodes or the encryption algorithms and their keys provided bythedevelopersandencrypteddeviceproducersatitsCriticalDataCenter, access towhich is logged and physicallymonitoredwithclosedcircuitcameras.


The Authorisation Regulation allows the trading of spectrumlicences.Totransferspectrumfrequency,operatorsmustapplytoBTKforapproval.BTKevaluatesthisapplicationbyconsideringthemarketandcompetitionconditionsofthetransfereeoperatorandotherrelatedissues.AfterBTKapprovessuchtransfer,aright-of-useauthorisationwillbegranted to the transfereeoperatorwithinonemonthofthedateonwhichtheapprovalisgranted.Thereisnospecificprovisionorregulationonthesub-licensingofspectrumlicences.



Inordertocombatcybercrime,increaseresilienceandcybersecurityawareness and provide secure and safe utilisation of electronicand digital means telecommunication, various legislative andadministrativemeasureshavebeentakenoverthepastdecade. ArecentexampleofsuchmeasuresistheCouncilofMinistersDecisiononConducting,ManagingandCoordinatingNationalCybersecurityActivities,whichenteredintoforceon20October2012.Moreover,theMinistryofTransportandInfrastructurepublishedthenationalcybersecurity strategy and action plan 2013–2014, aswell as thenationalcybersecuritystrategyandactionplan2016–2019.The same Resolution of the Council of Ministers established aCybersecurity Board to determine the government’s precautionsregarding cybersecurity, approve the national cybersecuritystrategies and procedures and principles, and coordinate nationalcybersecurityefforts.PursuanttoArticle19,amendedon29September2018,ofRegulationonAdministrativeSanctionsNo.28914issuedbyBTK,anynaturalor legalentitywhofails tocomplywith theobligationsrelated tonetworkandinformationsecurityandcybersecuritymeasurestobedeterminedbyBTKshallbeimposedwithanadministrativefineof1,000to1,000,000TRY.


Interception of correspondence via electronic surveillance andwiretapping telecommunication is regulated underArticle 135 oftheTurkishCriminalProcedureCodeandotherrelevantlegislation.Article135stipulatestheconditionsthatmustbemettogainaccessto private communications over telecommunication services andthe internet within the course of an investigation or prosecutionconductedinrelationtoacrime.Insuchcases,judges,orwhereextremelyurgent,thepublicprosecutor,may order the interception and/or wiretapping of electronic anddigitalcommunicationsbetween thesuspectand thirdparties. Thedecisionshallconsiderthenatureofthechargedcrime,theidentityoftheindividual,thephonenumberorthecodethatmakesitpossibletoidentifytheconnectionofthecommunication,thetypeofmeasure,itsextentanditsduration.Theprovisionsrelatedtolistening,recordingand evaluating the signal information shall only be applicable for“seriouscrimes”aslistedunderArticle135/6.


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via the internet, andmedia serviceproviderswilling tobroadcasttheir radio, television and on-demand broadcast services via theinternetareobligedtoobtainabroadcastinglicencefromRTÜK.


MediaserviceprovidersandinternetbroadcastplatformoperatorsshallbesubjecttoRTÜK’scontentregimeandsupervision.Under the Turkish Broadcasting Law, media service providersareentitled to freedeterminationofcontentand transmission. Inotherwords,theyshallnotbesubjecttoapriorinterventionandthecontentof themedia services shallnotbe supervised in advance.However,therearequiteafewDecreeswiththeforceoflawissuedwithinthescopeofastateofemergency.OneoftheseisDecreeLawNo.690banningthefollowingcontentfrom radio and TV broadcasting services: (i) dating shows; (ii)the sale, marketing and advertisement of any product claimingto be healthy in contradiction to the relevant legislation; (iii) thepromotion of chat lines, dating sites and services; and (iv) radioandTVprogrammesthatgrantprizesorrewardaudiencemembersthrough,inter alia,acontest,sweepstakeorlotterythatdeceptivelyorunfairlyusesfixedandmobilenumberssubjecttoextracharges.


Media service providers have to obtain separate licences fromRTÜKforbroadcastingoncable,satelliteandterrestrialplatforms.Thelicencesspecificallyindicatethetypeofbroadcastingtechniqueand platform. Therefore, providerswhowish to broadcast usingdifferent broadcasting techniques and from different platformssimultaneously have to obtain a separate licence for eachbroadcastingtechniqueandplatform.Itshallbeclearlyindicatedinthelicencedocumentwhichbroadcastingtechniqueandnetworkthelicencegrants.Thetermofabroadcastlicenceis10years.According to the Draft Regulation, which is explained underquestion5.1,dependingontheservicetype,mediaserviceprovidersmaybeprovidedwiththefollowinglicences:(i)anINTERNET-RDlicenceforradiobroadcastingviatheinternet;(ii)anINTERNET-TV licence for television broadcasting via the internet; and (iii)anINTERNET-IBYHlicenceforon-demandbroadcastingvia theinternet.The same company may obtain a licence for only one radiobroadcasting service, one television broadcasting service and oneon-demandmediaservice.


Broadcastinglicencesarenotassignable.However,alicencemaybeacquiredasaresultofanacquisitionofacompanywithsuchalicence.


TheRegulationontheProcessandtheProtectionofPersonalDatain the Telecommunication Sector (“TelecomRegulation”), whichenteredintoforceon24July2012,regulatesobligationsoftelecomsandinfrastructureoperatorsregardingdataretention.Inaccordancewith Article 13 of the Telecom Regulation, the following datacategorieshavetobestored:■ theoriginoftelecommunications;■ theconclusionofcommunications;■ thedate,timeanddurationofcommunications;and■ thecharacterofcommunications.Theabovementioneddatacategoriesarekeptforatermofoneyearfrom thedate of communication and logs of failed calls are keptforatermofthreemonths.Inallcases,personalinformationandrecordsregardingaccesstopersonaldataandrelevantsystemsshallbe stored for four years. Operators shall not process traffic dataforpurposesbeyondthescopeoftheservicetheyoffer.Likewise,locationdatashallonlybeprocessedintheeventofforce majeure stipulated in the Regulation and only for value-added servicespurposes.Inaddition,theLawonProtectionofPersonalDataNo.6698(“LawNo.6698”)determinestheprincipleswhichshallbecompliedwithwhen processing personal data. Accordingly, data may only beretainedfortheperiodoftimestipulatedbytherelevantlegislationorforthepurposeforwhichtheyareprocessed.LawNo.6698andtheRegulationshouldbeconsideredtogetherwhendeterminingtheretentionperiod.



TheTurkish Broadcasting Law is themain legislation regulatingtelevision broadcasting services, on-demand media services, andcommercialcommunicationandradiobroadcastingservices.Otherimportantregulationsonbroadcastingviacablenetworksorsatelliteareaddressedinvariousdifferentpiecesoflegislation,setseparatelybyregulationsbasedontheTurkishBroadcastingLaw.As explained under question 1.3, RTÜK is authorised to grantlicencestomediaserviceprovidersthatbroadcastterrestrial,digital,satellite, cable and IPTV media in Turkey. Moreover, RTÜKsupervises the radio and TV programmes broadcast by nationaland regional broadcasters and ensures their compliance with theapplicablelaws.On28March2018,Turkeyenactedanamendmentwhichintroducesan additional article to theTurkishBroadcastingLawconcerningthe radio, television and on-demand broadcasts provided via theinternet.A Draft Regulation was disclosed for public opinion on 27September 2018 onRTÜK’swebsite. RelevantDraftRegulationwill introduce procedures and principles in relation to obtaininga licence for the radio, television and on-demand broadcastingservices via the internet. According to the Draft Regulation,individualcommunicationservices,platformsforservicesprovided


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However, Article 4(1)/j of the Electronic Communications Lawspecifies that competent authorities must establish “neutrality”in terms of the provision of electronic communication servicesand regulationsmade in this regard. It isnot clearwhether suchprovision refers to “net neutrality”; however, we believe thatestablishing neutrality in electronic communication services mayservethenetneutralityconcept.In 2012, BTK issued an administrative fine against the Turkishinternet service providerTTNETdue to the latter blocking somewebsitesincludingYouTube,Vimeo,Rapidshare,etc.onitsnetworkwithoutanycourtorcompetentauthority’sdecision.ThisdecisionbyBTKcanberegardedasinfavourofnetneutrality.


Asmentionedinquestion6.1,ISPsarenotobligedtomakeaself-assessment and block and/or limit access to websites containingunlawful content. However, if the court decides to block certaincontent,ISPshavetoapplysuchdecisionbyblockingaccesstotherelevantcontent.LawNo.5651alsocontainsaprovisionthatenablestheblockingofconsumerVPNservices.AccordingtoArticle6/6(ç),ISPsshouldalso block alternative access services such asVPNswhichmakeunlawful publications/contents accessible. So far, more than 20VPNservices includingTorProject,VPNMaster,ZenmateVPN,TunnelBear have been blocked in Turkey. In addition to theseVPNservices,ISPshavealsoblockedaccesstoProtonMail,whichprovidesencryptede-mailservices.On 24 March 2018, the president of BTK made a publicannouncementonthisissue,statingthatBTKwillcontinuetotakenecessarymeasuresagainstVPNservicesinordertopreventillegalaccessviaVPNservicestounlawfulcontent.



LawNo.5651limitstheresponsibilityofISPs(LawNo.5651usestheterm“accessproviders”)regardingunlawfullycreatedcontent.Sinceaccessprovidersonlyprovideaccesstosuchcontent,theyarenotobligedtomonitororapprovesuchcontenttobelawful.However, ISPs shall only comply with access restriction ordersissuedbythecompetentauthorities.


TherearenoobligationsfortelecommunicationsoperatorsandISPstoassistcontentownerswhoserightsmaybeinfringedbycustomeractivities.However, access providers have to store traffic information ofvisitorsforatermofoneyear,assistBTKintrackinginternettrafficandprovideanytrafficinformationtoBTKuponitsrequest,asperArticle15/1oftheRegulationonthePrinciplesandProceduresofRegulatingthePublicationsontheInternet(“RegulationonInternetPublications”). Incaseofany infringementofacontentowner’sright,thecontentownermayapplytoBTKtofindouttheidentityoftheinfringingpartybyexaminingthetrafficinformationstoredandsharedbyaccessproviders.


ThereisnospecificregulationorstrategicactionplanregardingthenetneutralityrequirementinTurkey.


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Burçak ÜnsalÜnsal Gündüz Attorneys at LawEbulula Mardin Cad.Maya Meridyen Plaza, No: 16Kat: 14, 34335, AkatlarIstanbulTurkey

Tel: +90 212 380 2485Email: [email protected]: www.unsalgunduz.av.tr

Dr. Okan GündüzÜnsal Gündüz Attorneys at LawEbulula Mardin Cad.Maya Meridyen Plaza, No: 16Kat: 14, 34335, AkatlarIstanbulTurkey

Tel: +90 212 380 2485Email: [email protected]: www.unsalgunduz.av.tr

Ünsal Gündüz Attorneys at Law focuses on particular fields of law and truly understands your business, your priorities and the necessities of your industry. Ünsal Gündüz is uniquely capable of transactional, regulatory and dispute resolution aspects of the fields that fall within its scope of practice.

Ünsal Gündüz quantifiably maximises your efficiency, and protects and advances your interests with proactive and genuine commitment.

Ünsal Gündüz not only cultivates the most reliable attorney-client relationship but also maintains the highest professional quality with its distinctively sophisticated team.

Ünsal Gündüz has an innovative, positive and solution-oriented approach and skilfully navigates investors and entrepreneurs through complex legal, commercial/corporate and regulatory procedures.

Ünsal Gündüz provides services to leading international and local private and listed companies, investors, entrepreneurs as well as government institutions.

Mr. Burçak Ünsal is admitted to practise in New York State and in Turkey. With a multi-disciplinary educational background, Mr. Ünsal is also qualified as a patent and trade-mark attorney before the European Patent Institute and the Turkish Patent Institute.

Prior to establishing Ünsal Gündüz, Mr. Ünsal was the regional counsel of Google and YouTube for almost three years. Mr. Ünsal has more than 12 years of experience at major international law firms such as Baker Botts LLP, DLA Piper and Kobayashi Todo in the US, Japan and Turkey.

Other than his unique experience and knowledge in transactional, regulatory and dispute resolution aspects of Technology Media & Telecommunications Law, Mr. Ünsal also has distinct experience in M&A, corporate law, cyberlaw, international business transactions, IP and infrastructure in different jurisdictions such as the US, Japan, the EU and Turkey.

Mr. Ünsal teaches cyberlaw at the Bosphorus University, Department of Management and Information Systems and is a member of the Bosphorus University Information Systems Research and Implementation Center.

Dr. Okan Gündüz is one of the two founding partners of Ünsal Gündüz Attorneys at Law.

Prior to establishing Ünsal Gündüz, for more than 15 years Gündüz conducted his own legal practice and worked at major Istanbul law firms, where he headed the Dispute Resolution and Corporate Practice Groups.

Dr. Gündüz has extensive knowledge and experience in complex commercial litigation, arbitration, alternative dispute resolution, corporate law, M&A, commercial law, real estate, employment law and competition law.

In addition to his distinguished law practice, Dr. Gündüz also teaches civil procedure law and enforcement & bankruptcy law at universities and maintains a strong connection with jurisprudence.

Dr. Gündüz is the author of the book Case Management in Civil Procedure Law.


Chapter 31


As set out in the answer to question 1.1, the UAE’stelecommunications sector is currently served by two fullyintegratedtelecommunicationsoperators:Etisalatanddu.

2 Telecoms

General


TheUnitedArabEmirates has been amember ofWTO since 10April1996.


The provision of telecoms networks is regulated by the TRA inaccordancewiththeUAETelecommunicationsLaw.


TheTRAregulatesthetelecommunicationssectorintheUAEandisalso involvedincybersecurity,andhosts theUAE’sComputerEmergency Response Team. Its main purpose is to developsustainablecompetitionintheUAE’stelecommunicationssector.The UAE adopted a competition law framework in 2012 underFederal Law No. 4 of 2012 concerning the Regulation ofCompetition (the“Competition Law”);however,key regulationsand instruments such as the executive regulations (Council ofMinisters’ResolutionNo.37of2014)andtworelevantresolutionssettingoutcoreelementsfordetermininganti-competitivepractices,

1 Overview


The UAE’s telecommunications sector is currently served bytwo fully integrated telecommunications operators: EmiratesTelecommunicationsCorporation(Etisalat)andEmiratesIntegratedTelecommunications Company (du). Etisalat and du providemultipleservicesacrossbothfixedlineandmobilenetworks.In October 2015, the UAE Telecommunications RegulatoryAuthority (“TRA”) announced fixed network sharing across theUAE, enabling bothEtisalat and du to utilisefixed infrastructureandmarketservicesacrossalllocations.In January 2017, du acquired a licence from the Virgin Groupto operate Virgin Mobile-branded services in the UAE. Thelicencetermisforfiveyears,grantingdufullrightstoownership,managementandoperationofthebrandintheUAE.


■ Federal Law by Decree No. 3 of 2002 Regarding theOrganisationoftheTelecommunicationsSector(asamended)(the“UAE Telecommunications Law”).

■ Decisionof theSupremeCommitteefor theSupervisionoftheTelecommunicationsSectorNo.(3)of2004.

■ Federal Decree Law No. 5 of 2012 on combattingCybercrimes.


TheregulatoristheTRA.Inaddition,theNationalMediaCouncil(“NMC”)regulatesthecontentofaudio-visualmedia.

CMS (UAE) LLP

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Rachel Armstrong

United Arab Emirates


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such asmarket share thresholds,were not passed until 2014 and2016respectively,meaningthatcompetitionregulationintheUAEisstillinitsveryearlystages.TheCompetitionLawalsoprovidedforaCompetitionRegulationCommittee(the“Committee”)tobeestablishedtooverseegeneralcompetitionlawpolicyintheUAE.Day-to-dayenforcementoftheCompetitionLawistheresponsibilityoftheMinistryofEconomy,actingthroughitsCompetitionDepartment.The telecommunications sector is currently excluded from theremit of the Competition Law. The TRA includes terms in thelicencesissuedtooperatorsrequiringthemnottoparticipateinanti-competitivepractices.


To date, there have been no publicised cases of enforcement oftheCompetitionLaw,althoughweareawarethattheCompetitionDepartmenthasbeenestablished.TheCompetitionLawstipulatesthatitsprovisionsshallbeenforcedonallbusinessesinrelationtotheireconomicactivitiesortheeffectof their economic activities in theUAE (evenwhere the conducttakesplaceoutsideoftheUAE).Itis,asyet,unclearhowthecourtswillreacttoanyjurisdictionaldisputes.The telecommunications sector is currently specifically excludedfromtheremitoftheCompetitionLaw.TheTelecomsLawstipulatesthattheTRAhasthesoleabilitytoissueregulations,instructions,decisions and rules regulating and ensuring competition in thetelecommunicationssector.



The TRA is the statutory body that issues licences or licenceexemptionsinaccordancewiththeTelecommunicationsLaw.According to the Telecommunications Law, any sale, provisionor operation of a Telecommunication Service requires aTelecommunications Licence. In some cases, such servicesmaybeprovidedthroughanagreementwithanexistingUAE-licensedoperator.All licences are issued individually to judicial persons (entities)meeting the requirements of the Telecommunications Law andpursuanttoadecisionmadebytheTRABoard.A licence can be categorised as either a “Class Licence” or an“Individual Licence”. The two categories refer only to whetherscarce resources are requested (spectrum/frequencies and/ornumbers)anddoesnotrefertoanopenclassofavailablelicences.


AnentityshallbeeligibleforaClassLicenceifitiseither:■ a company incorporatedunder theCommercialCompanies

Law (Federal LawNo. 8 of 1984) and pursuant toArticle28oftheFederalLawbyDecreeNo.3of2003,RegardingtheOrganisation of theTelecommunicationsSector and itsamendmentsorany legalpersonapprovedby theBoardoftheAuthority;or

■ acompanywhoseshareholdingcomplieswiththeresolutioninwhichtheparticularRegulatedActivityhasbeenapprovedtobelicensed.

TheTRArequiresallapplicantsforClassLicencestoprovideitwithrelevant information. This includes information regarding: theirmanagementandshareholdingstructures;theirbusinessoperations,includingthetypeofnetworksandservicestheyintendtoprovide;andfundingsourcesforthesebusinessoperations.


AnentityshallbeeligibleforanIndividualLicenceifitiseither:■ a company incorporatedunder theCommercialCompanies

Law (Federal LawNo. 8 of 1984) and pursuant toArticle28oftheFederalLawbyDecreeNo.3of2003,RegardingtheOrganisation of theTelecommunicationsSector and itsamendmentsorany legalpersonapprovedby theBoardoftheAuthority;or

■ acompanywhoseshareholdingcomplieswiththeresolutioninwhichtheparticularRegulatedActivityhasbeenapprovedtobelicensed.

TheTRArequiresallapplicantsforIndividualLicencestoprovideitwithrelevantinformation.Thisincludesinformationregarding:their management and shareholding structures; their businessoperations,includingthetypeofnetworksandservicestheyintendtoprovide;andfundingsourcesforthesebusinessoperations.IndividualLicenceswill be issued for serviceswhich require theusage of scarce resources of spectrum and numbers. IndividualLicenceswillbeissuedforaperiodof10years.



Thisanswerisnotavailable.








CMS (UAE) LLP United Arab Emirates


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duwhilstretainingthesamenumber.Thechangewasintroducedtopromotecompetitionbetweenthetwoproviders.

3 Radio Spectrum


TheTRAisresponsibleformanagingandregulatingradiospectrumintheUAE.


TheTRAmanagestheallocationandassignmentofallradioservicesin theUAE. TheTRAmanages a national frequencies database,which includes information related to the use of the frequencyspectrumbyUAEauthorisedusers.TheTRAallocatesfrequenciestoallentities,governmentalandnon-governmental,civilormilitary,aswell as individuals, in accordancewith theNationalSpectrumPlan.


No. Any use of the radio spectrum without authorisation fromtheTRAisprohibited.Temporaryauthorisationsareavailableforperiodsofbetweenoneand90days.


TheTRAsetsthefeesandmanagesthepayment.Toalargedegree,thisinformationisconfidential.


The authorised entity is required to follow the process set out inits authorisation. In the event that the authorised entitybreachestheconditionsofitsauthorisation,theTRAmaysuspendorrevokeitsauthorisation.Priortosuchrevocationorsuspension,theTRAwill provide notification of the pending revocation or suspensionandsetoutastipulatedperiod(setbytheTRAinitsdiscretion)fortheauthorisedentitytoremedythebreach.


Authorisationcanonlybetransferredorassignedtoathirdpartyif(1)theauthorisationissuedbytheTRAincludesaprovisionforthetransferorassignmenttoathirdparty,and(2)thepriorconsentoftheBoardofDirectorsoftheTRAapprovesthetransferorassignment.Anytransferthatfailstosatisfytheserequirementsisvoid.









Yes. TheTRA actively regulates consumer protection through aspecificConsumerProtectionRegulation.

Numbering


TheTRAlicensestelephonenumbersandnetworkidentifyingcodestotelecomoperatorswhoarelicensedtoprovidetelecommunicationservices in theUAE,i.e.Etisalatanddu. TelephonenumbersareregardedaspartofanationalresourcewhichisadministeredbytheTRAandtherefore,nolicenseeshallbeentitledtoownershipofanynumberornumbersallocatedtothatlicenseeortoanycustomerofthelicensee.LicenseesshallnotuseanynumbersotherthanthoseallocatedbytheTRA.Initially,allallocationsfortherightstousenumberresourceswillbemadebytheTRAtolicensees,whowillthenassigntherightstousetheindividualnumberstoitssubscribers.


Ifa licenseefails touse theallocatednumberresourcewithinsixmonths of the allocation, the TRA will withdraw the allocation.Similarly,ifalicenseefailstoachievetheutilisationlevelsetbytheTRA,theTRAmaywithdrawtheallocationoftheunusednumbers.When the rights to use have been withdrawn, the TRA will notnormallyreallocatetherightstouseofthatnumberingresourceforaperiodofonemonthtominimisetherisktoendusers.


MobilenumberportabilitywasannouncedinDecember2013,andsincethistime,usershavebeenabletoswitchbetweenEtisalatand


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The relevant legislation is Cabinet Resolution No. 23 of 2017ConcerningMediaContent,whichcameintoforceinJuly2017.Thissetsanumberofstandardsonallmediacontent.ThesetendtoreflectstandardsalreadycontemplatedbytheUAEPenalCode,CybercrimesLawandPressLaw. Thekeydistinction is that thecabinetresolutionhasusheredamedia-specificregimethatexpresslyapplies these standards on a UAE federal level to both printedand digital content. Key provisions include: respecting Islamicand religious beliefs, cultural heritage, symbols and institutions;anything that harms national unity or security; and not causingharmtovulnerablemembersofsociety.Theresolutionalsoensuresprotectionofintellectualpropertyrightsandprivacyofindividuals.


InaccordancewiththeNMCChairman’sDecisionNo.35of2013,alladvertisementsthatareproduced,placedordistributedwithintheUAEorimportedintotheUAEmustabidebythenationalstandardsformediacontentsetoutinFederalLawNo.15of1980ConcerningthePressandPublications.Inregardtotheinternetandotherplatforms,theTRAimplementstheInternetAccessManagement(“IAM”)policyin theUAEandco-ordinateswiththeNMC,EtisalatanddutoimplementtheIAMpolicy.Thesameregulationofcontentappliesacrossallplatformsand,intheUAE,OTTprovidersmustcomplybythesamestandards;anycontentwhichiscontrarytosuchstandardsisprohibited.


Applicationsforamedialicencearerequiredforaudio-visualworksand are to be filed with the NMC. A licence from the NMC isrequiredforanyentitythatcarriesoutmediaactivitiesrelatedtotheproduction, transmission,distributionand transmissionofprinted,digital, audio and visual information through the media, both inprintandonline.


This is dependent upon any restrictions set out in the licenceagreement. To the extent that assignment to a third party is notexpressly provided for in the licence agreement, such actionwillbeprohibited.



Atafederallevel,themainlegalframeworkaroundcybersecurityis Federal LawNo. 5 of 2012 (as amended by Federal LawNo.12/2016) concerningCombatting InformationTechnologyCrimes(the“UAECybercrimesLaw”)andtheUAEPenalCode.The UAE Penal Code contains general provisions prohibitingcrimes thatwill apply to cybercrime; for example, themisuse ofconfidential information and the Cybercrimes Law specificallytargetsthosecrimesinvolvingcomputers,networksandelectronicinformation.


Cabinet Resolution No. 21 of 2013 concerning InformationSecurity Regulations in the Federal Authorities and ExecutiveCouncilResolutionNo.13of2012regardingInformationSecurityin theGovernmentofDubaisetout theestablishmentofapublicprosecutionbodyfortheinvestigationofcybercrime.


Voice over internet protocol (“VoIP”) services are considered aRegulatedActivityandmustbelicensedbytheTRA.However,theTRAhasindicatedthatthirdpartiesmayworkwithlicenseessuchasEtisalatanddutolegallyprovideVoIPservicesintheUAE.TheTRA’spositionisthatsuchrestrictiontolocallicenseesisrequiredtoprotect telecomcustomers, as theTRAcanonly interveneandassistwithissuesiftheproviderofsuchservicesisalicensee.








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There are no specific regulations requiring net neutrality in theUAE.BandwidththrottlingbyISPsisquitecommonintheUAE,and network traffic that relates to VoIP services are sometimesblockedorcanhaveitscapacityreduced.


Content is regulated by the TRA and access to websites andwebpagesthatcontainprohibitedcontentisblockedbytheTRA.

TheTRAdefines prohibited content as “any content that offendsagainst,isobjectionableto,oriscontrarytothepublicinterest,publicmorality,publicorder,publicandnationalsecurity,IslammoralityorisotherwiseprohibitedbyanyapplicableUAElaw,regulation,procedure,orderorrequirement”.Examplesofprohibitedcontentinclude,butarenotlimitedto:■ Internetcontentthatallowsuserstohaveaccesstoprohibited

contentincludingproxyserversandVPNs.■ Pornographyandnuditycontent.■ Impersonation,fraudandphishing.■ Insult,slanderanddefamation.■ Invasionofprivacy.■ OffencesagainsttheUAEandpublicorder.■ Drugs.■ Infringementofintellectualpropertyrights.■ Discrimination.■ Racismandcontemptofreligion.■ Gambling.■ Terrorism.TheuseofVPNsisgovernedbytheUAECybercrimesLaw.WhilsttheuseofVPNsfor legitimatepurposesispermittedintheUAE,itisacriminaloffencetouseafraudulentVPNaddressbyusingafalseor third-partyaddressor tocommitanycrimeorpreventingitsdiscovery.TheTRAhas clarified that companies, institutions and banks arefree to lawfullyuseVPNs togainaccess to internalnetworksviatheinternet.However,abusinesscanstillbeheldaccountableformisuseofitsVPN.


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Rob FlawsCMS (UAE) LLPLevel 15, Burj DamanDubai International Financial CentreDubai, 506873 United Arab Emirates

Tel: +971 4 374 2808Email: [email protected]: www.cms.law

Rachel ArmstrongCMS (UAE) LLP Level 15, Burj DamanDubai International Financial CentreDubai, 506873United Arab Emirates

Tel: +971 4 374 2808Email: [email protected]: www.cms.law

Robert is a technology and communications sector specialist with over 10 years of international experience supporting the delivery of private and public sector technology and communications projects.

Since relocating to the Middle East in 2011, Robert has been engaged on numerous projects, including mobile network procurements and rollouts, managed services outsourcing for mobile operators, business process outsourcings and tower sale and lease-back initiatives. Most recently, Robert spent time on secondment working with one of the largest mobile, telecoms and media services providers in the UAE, as a key part of their technology and procurement legal team. Robert is a regular participant at industry events and enjoys sharing trends, experiences and best practices with participants in MENA’s vibrant and ever-changing telecoms industry.

Ranked as the world’s sixth-largest law firm by lawyer headcount and sixth-largest in the UK by revenue, CMS can work for you in 42 countries from 74 offices worldwide. Globally, 4,500 lawyers offer business-focused advice tailored to our clients’ needs, whether in your local market or across multiple jurisdictions.

With the coming together of CMS, Nabarro and Olswang on 1 May 2017, we have created a new future-facing firm, one that is well equipped to help our clients face the future with confidence. We are driven by technology and readily embrace the possibilities it opens up for developing new and better ways of delivering legal services.

For the past two decades, our team of over 100 specialist TMC partners has been exposed to virtually every risk and challenge you face in the TMC sector, such as regulatory issues, licensing matters, IP infringements, data protection and anti-trust issues, as well as small, medium and large-scale M&A matters, JVs, MVNOs and similar. This means we understand the industries in which you transact, including telecommunications, technology, sourcing, sports and media, and are able to develop innovative solutions for you.

Rachel is a UK-qualified solicitor, who has been practising in the UAE since 2013. Rachel heads up the CMS Middle East IP practice and specialises in intellectual property protection, enforcement and commercialisation. In addition to her intellectual property practice, Rachel advises media clients on a broad range of matters in the UAE market, including advertising and regulatory issues.


Chapter 32

Arnold & Porter Rob Bratby

United Kingdom

■ DigitalEconomyAct2017(“DEA2017”).■ RegulationofInvestigatoryPowersAct2000(“RIPA”).■ InvestigatoryPowersAct2016(“IPA”).■ Telecommunications (Lawful Business Practices

(InterceptionofCommunications))Regulations2000.■ GeneralDataProtectionRegulation.■ DataProtectionAct2018.■ Privacy andElectronicCommunications (ECDirective)

Regulations2003asamendedin2011.■ Radio Equipment and Telecommunications Terminal

EquipmentRegulations2000.■ NetworkandInformationSystemsRegulations2018.

(b) Audio-visual media distribution■ BroadcastingAct1990.■ BroadcastingAct1996.■ CA2003.■ WirelessTelegraphyAct2006.■ DigitalEconomyAct2010.■ DigitalEconomyAct2017.■ TheAudiovisualMediaServicesDirective2010/13/EU.


(a) Telecoms and internet■ TheUKGovernmentDepartmentforCulture,Mediaand

Sport.■ Ofcom.■ TheCompetitionandMarketsAuthority(“CMA”).■ TheCompetitionAppealTribunal(“CAT”).■ Phone-paidServicesAuthority.■ TheInformationCommissioner.■ Nominet.

(b) Audio-visual media distribution■ TheUKGovernmentDepartmentforCulture,Mediaand

Sport.■ Ofcom.■ The Advertising Standards Authority (self-regulatory

bodyforadvertising).

1 Overview


The UK has open and competitive telecoms, internet andbroadcastingmarkets.TheOfficeofCommunications’(“Ofcom”)‘2018 Communications Market Report’ reported a total UKcommunicationsrevenueof£54.7bnin2017,ofwhich£35.6bnwasattributabletotelecoms(includinginternet)and£13.6bntoTVwiththebalanceaccountedforbyradioandpost.KeyparticipantsintheUKmarketinclude:■ the ex-incumbentBT plc,which in addition to its position

inthefixedandbroadbandmarkets,competesinthemobilemarketthroughitsmobilesubsidiaryEE and has entered the pay-TVmarket;

■ national cable TV infrastructure operator Virgin Media,whichoffersmobiletelephonythroughanMVNOinadditiontobundledcableTV,broadbandandfixedtelephonyservices;

■ satellitebroadcasterSky,whichnowalsoprovidesbroadband,fixedandmobileservices;

■ ‘infrastructure-light’bundledserviceproviderTalk Talk;■ ‘mainlymobile’(butwithbundledoffers)Vodafone,O2 and

Threemobileinfrastructureoperators;■ the licence-fee funded BBC which competes with state-

ownedbutad-fundedChannel 4andprivately-ownedITV and Channel 5 aspublicservicebroadcasters,aswellasawidervarietyofotherbroadcastchannels;and

■ over-the-topprovidersofbothcontent (suchasNetflix and Amazon Prime)andservices(suchasWhatsApp)aswellasinternetcompaniesincludingGoogle,Apple and Facebook.


(a) Telecoms and internet■ CommunicationsAct2003(“CA2003”).■WirelessTelegraphyAct2006.■ Electronic Communications and Wireless Telegraphy

Regulations2011.


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OfcomistheUK’snationalregulatoryauthorityforcommunications,andregulatestelecoms,theuseofradiospectrum,theTVandradiosectorsandpost.OfcomisindependentfromtheGovernment.TheCMAistheUK’sconsumerandcompetitionauthority(thoughOfcomalsohasconcurrentpowerstoapplyandenforcecompetitionlaw in the telecoms sector). The CMA is a non-ministerialgovernmentdepartmentindependentfromtheGovernment.Rules are in place to co-ordinate the regulators’ exercise ofconcurrentcompetitionlawjurisdictionundertheCompetitionAct1998 and the Competition Act 1998 (Concurrency Regulations)2014. These rules are primarily designed to ensure that onlyone competent authority may launch a formal Competition Actinvestigation into the same conduct. Further, information on theoperationofconcurrencyproceduresisprovidedintheCMA’sfirst‘AnnualReportonConcurrency’,publishedinApril2015.Agreementsorconductrelatingtothesectorcoveredbyaconcurrentregulatorwillgenerallybedealtwithbythatregulator.


Yes,Ofcom’sdecisionscanbeappealed.Non-pricecontrolmattersareappealedtotheCAT,andpricecontrolmatterstotheCMA.Since 31 July 2017, appeals are reviewed on a ‘judicial review’basisratherthanan‘ontheirmerits’basis.ThischangehasmadeitsignificantlyhardertoappealOfcom’sdecisions.



No licence or other authorisation is required to install or operateelectroniccommunicationsnetworksor servicesunless theuseofradiofrequencyspectrumisinvolvedorthecommunicationsrequirepowerstoaccesspublicorprivateland.In order to use radio frequency spectrum, a CommunicationsProvider must have a licence under the WTA, although Ofcomalsohasthepowertoauthorisespectrumuseonaclasslicenceoralicence-exemptbasis.


OfcomsignificantlyrevisedtheUK’sGeneralConditionsofentitlementwiththechangestakingeffecton1October2018.ThenewGeneralConditionsaresplitintothreesections,summarisedbelow:Part A – Network functioning conditions■ Generalnetworkaccessandinterconnectionobligations.■ Standardsandspecifications.■ AvailabilityofServicesandaccesstoemergencyservices.■ Emergencyplanning.■ “MustCarry”obligations.


(a) Telecoms and internet(i)Yes.(ii)Yes.

(b) Audio-visual media distribution(i)Yes.(ii)Yes.

2 Telecoms

General


The UK has been a WTO member since 1 January 1995. Itmade commitments under the GATS/GATT in relation to thetelecommunications market and has adopted the WTO basictelecommunications agreement. The UK has also adopted andimplementedthetelecomsreferencepaper,whichitjointlysponsoredalongsidetheUSintheUruguayroundofWTOnegotiations.


TheprovisionofelectroniccommunicationsnetworksandservicesandtheuseofradiospectrumareregulatedbyOfcom.Inparticular,Ofcomisresponsiblefor:■ settingandenforcingtheGeneralConditionsofEntitlement

(“GeneralConditions”);■ undertaking market reviews, setting and enforcing SMP

conditions(e.g.accessandinterconnection);■ settinguniversalserviceobligations inaccordancewith the

SecretaryofState’sspecificationofservices;■ setting consumer protection requirements and dealingwith

complaints;■ managingnumbering;■ issuingandenforcingspectrumlicences;■ regulating conditional access and electronic programme

guides;and■ resolvingdisputes.Theday-to-dayobligationsimposedonelectroniccommunicationsnetwork and serviceproviders (“CommunicationsProviders”) aresetoutintheGeneralConditions.Theseweresubstantiallyrevisedon1October2018.Additionalobligationsapplytooperatorswithsignificantmarketpower(“SMP”),anddesignateduniversalserviceproviders.Ofcom also has concurrent jurisdictionwith theCMA to enforcecompetitionlawinrespectofelectroniccommunicationsmatters.ThePhone-paidServicesAuthorityregulatesthecontentandmarketingofpremiumrateservices,includingdirectoryenquiryservices.The InformationCommissioner is responsible for data protectionandfreedomofinformationmatters.

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operators)toprovidevariousinterconnectionand/oraccessservicesandtopublishthereferencetermsandconditions.DisputesbetweendifferentCommunicationsProvidersconcerningnetworkaccessandtherelevanttermsandconditionsforsuchaccessmaybereferredtoOfcomforresolution.Ofcommust,otherthaninexceptionalcircumstances,makeabindingdeterminationresolvingthedisputewithinfourmonthsofthedateofitsdecisiontohandlethedispute,althoughthistimescaleisoftenmissedinpractice.


Following market reviews, publication obligations have beenimposed onCommunications Providers includingBT for variousproducts,andonEverythingEverywhere,T-MobileandVodafoneforvoicecalltermination.


Interconnectionandnetworkaccessissubjecttopriceregulationinanumberofdifferentmarkets.Ingeneral,wherewholesalepricingobligationshavebeenimposed,pricesarerequiredtobebasedonforward-looking long-run incremental costs plus a mark-up forcommon costs including return on capital employed. In certainmarketsRPI-Xpricecapshavebeenimposed.ApureLRICbasisisusedforsettingmobileterminationrates.


(a) Both BT and KCom are subject to accounting separationrequirements pursuant to their SMP obligations on certainmarkets, including cost accounting rules and accountingseparationobligations.

(b) In2005,BTgaveUndertakingstoOfcominordertoavoida reference to the former Competition Commission undertheEnterpriseAct 2002. Among these obligationswas anUndertakingtosetupOpenreachasafunctionallyseparatebusinessunitofBTtooperateBT’slocalaccessnetwork.

(c) Following a review by Ofcom, in 2017 BT offered newUndertakings to Ofcom which will replace the 2005Undertakingswhenimplemented.TheseincludeestablishingOpenreachLimitedasawholly-owned,butlegallyseparate,subsidiary of BT plc, with independent responsibility forthe strategy, management and operation of Openreachand the employment of 32,000 employees; Openreach tohave amajority independent board; andOpenreach havingdutiestotreatallcustomersequally.TheUndertakingsalsorequire Openreach control over assets and customer dataconfidentialitywalls.


BT is the only operator with regulatory obligations to provideaccess to its high-speed broadband networks, and there are noaccessobligationsimposedonthenationalcableTVoperatorVirginMedia,orotherfibrenetworkinfrastructureoperators.

Part B – Numbering and technical conditions■ Allocation,adoptionanduseoftelephonenumbers.■ Directoryinformation.■ Numberportability.■ Accesstonumbersandservices.Part C – Consumer protection conditions■ Contractrequirements.■ Informationpublicationandtransparencyrequirements.■ Billingrequirements.■ Complaintshandlinganddisputeresolution.■ Measures to meet the needs of vulnerable consumers and

end-userswithdisabilities.■ Callinglineidentificationfacilities.■ Switching.■ Salesandmarketingofmobilecommunications.


For many activities, individual licences are not required, so thequestiondoesnotarise.Whilst therearenohardandfastrulesconcerningthedurationofspectrum licences, typically they are granted for an initial fixedperiod,withanoption to renewonpaymentofadditional licencefees.Whereapplicableregulationshavebeenpassed,thelicencesmaybetradedortransferred.



The DEA 2017 significantly updated and improved the UK’sregimeenablingaccesstoland–so-called“CodePowers”–fromDecember2017.Thenewschemeenablesprovidersofelectroniccommunications networks to construct infrastructure on publicland(streets),and to takerightsoverprivate land,eitherwith theagreementofthelandownerorbyapplyingtocourt.Inaddition,therearealsocertainexceptionstoplanninglegislationavailable to Communications Providers. For example, underplanningregulations(e.g. theTown&CountryPlanning(GeneralPermittedDevelopment)(England)Order2015,asamended),landmay be developed by Communications Providers to whom theCode applies for thepurposesof their networks, inparticular theinstallation,alterationorreplacementofapparatus.



General ConditionA1 requires all Communications Providers tonegotiateinterconnectiononrequest.VariousSMPconditionsalsorequirevariousUKCommunicationsProviders (most notably BT and, for call termination, mobile


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3 Radio Spectrum


Ofcomregulatesspectrumuse.


Spectrumusemaybeauthorisedonthebasisofindividuallicences,class licencesor licence-exemptuse. Ingeneral,Ofcomwilluseauctionstoallocatescarcespectrum.


Yes,pursuanttotheWirelessTelegraphy(Exemption)Regulations2003,asamended.


For commercially exploitable wireless telegraphy licences, feeswill normallybepayable, eitherpursuant topricesbid at auctionorunderadministrativeincentivepricing(“AIP”)setunderspecificregulationsaccordingtothetypeofserviceinvolved.AIPseekstosetfeestomimicthemarketvalueofthespectrum.


Ifthelegalentitythathasthebenefitofthespectrumlicencedoesnot change, the change of control would not usually result in achange to the spectrum licence. However, in a certain spectrum(notably thatused formobile services), a competitionassessmentmaybetriggered.


Yes.Theregimeforcontrollingthetradingandleasingofspectrumlicences is set out in the WTA and the Wireless Telegraphy(Spectrum Trading) Regulations 2012 (“Trading Regulations”)which,from13September2012,replacedandrevokedtheearliertradingregulations.Ofcom’sconsentisnolongerneededformostspectrumtrades.TheTradingRegulationsallowspectrumlicenceholdersincertainclassestotransferalloftheirlicencerightsandobligations.



TheComputerMisuseAct1990specifiesvarioushackingoffencesandtheOfficialSecretsAct1989dealswithnationalsecurity.

BTisobligedtoprovideaccesstoitspassiveinfrastructure,coppernetworksanda“virtualunbundledlocalaccess”productonitsnextgenerationnetwork.Some(butnotall)ofBT’shigh-speedaccessproductsaresubjecttopriceregulation.



Mobile operators are subject to the EU-level Mobile RoamingRegulation (Regulation 531/2012), which imposes caps onwholesaleandretailchargesformobilecalls,SMSanddataserviceswhileroamingbetweenEUMemberStates.


PartCof theGeneralConditions includesanumberofconsumerprotection obligations and requirements which apply over andabovegeneralconsumerprotectionlaw.Inaddition,thereareUniversalServiceobligationsonBT.

Numbering


TelephonenumbersandnetworkidentifyingcodesareallocatedandmanagedbyOfcom.


CommunicationsProvidersare requiredbyGeneralConditionB1(Allocation,adoptionanduseoftelephonenumbers)tocomplywiththeNationalTelephoneNumberingPlan.Numbersareallocatedforspecificuses,e.g.geographic,mobile,etc.,andmaybegrantedforalimitedperiodoftime.In addition, the services offered behind particular number rangesmaybesubjecttoregulationbythePhone-paidServicesAuthority,forexample,premiumrateor09numbers,08anddirectoryenquiryservicesandpremiumrateSMS.Communications Providers are required to unbundle charges forcallsmadetonon-geographicnumbers,suchas0845or03numbers.


AllCommunicationsProvidersarerequiredbyGeneralConditionB3 (Number portability) to facilitate the porting of numbers,includingmobilenumbers.Thismeansthatnumbersmustbeportedonacustomer’srequest,subjecttoareasonablenessrequirement,andCommunications Providers must enter into porting arrangementswhenrequestedbyanotheroperator.Portingmusttakeplacewithinonebusinessday. Thecross-industryportingprocedurehasbeendefinedindetail.


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UndertheIPA,operatorsmayberequiredtoretaincommunicationsdatawhichmaybeusedtoidentify,orassistinidentifying,anyofthefollowing:(a) thesenderorrecipientofacommunication(whetherornota

person);(b) thetimeordurationofacommunication;(c) thetype,methodorpattern,orfact,ofacommunication;(d) thetelecommunicationssystem(oranypartofit)from,toor

throughwhich,orbymeansofwhich,acommunicationisormaybetransmitted;or

(e) thelocationofanysuchsystem,andthisexpressionthereforeincludes,inparticular,internetconnectionrecords.

Operatorsmayberequiredtoretaindataforamaximumof12months.The law relating to data retention is contentious and subject toongoingchallenges,notablyattheECJ.



Broadcasters of linear and non-linear content are regulateddifferently (see question 5.2 below). The provision of theinfrastructureoverwhichcontentisdeliveredisregulatedunderthetelecommunicationsregulationregimedescribedabove.


■ Linear content, whether delivered over the internet or viatraditional distribution platforms, is regulated under alicensingregimeadministeredbyOfcom.

■ AllUKlinearTVchannelsrequirealicence(seequestion5.3below).

■ Since2009,pursuanttotheAVMSDirective,UK-basednon-linearserviceshavebeensubjecttoasetofminimumstandardsoverseenbyOfcominrespectofeditorialandadministrativeregulation.OfcomhasdesignatedtheAdvertisingStandardsAuthorityastheco-regulatorforadvertisingcontentonnon-linearservices.

■ Non-linear services donot require a licence, but there is acompulsory pre-notification requirement to Ofcom beforemakingsuch‘on-demand’servicesavailable.

■ There is an additional layer of obligations (and benefits)applying to thepublicservicebroadcasters (“PSBs”) in theUK, which include BBC, ITV, Channel 4, Channel 5 andS4C.ThePSBsareunderanobligationtomaketheircorechannelsavailabletomajorplatforms;however,thisdoesnotapply toon-demand services. In addition, thereare “MustCarry”obligationsonplatformstocarryPSBlinearchannels,whichdonotapplytoon-demandcontent.

■ BroadcastersoflinearcontentaresubjecttotheBroadcastingCommitteeonAdvertisingPractice(BCAP)Code,whereasnon-linear content falls under the remit of the GeneralCommitteeonAdvertisingPractice(CAP)Code.Asaresult,non-linearcontentprovidersarenotsubjecttocertainrules,suchasthoseregardingthewatershed.

EachoftheCommunicationsAct2003,theGeneralDataProtectionRegulation, the Data Protection Act 2018 and the Privacy andElectronic Communications (ECDirective) Regulations 2003 (SI2003/2426)containobligationsonCommunicationsProviders(andothers) to take appropriate technical and organisational securitymeasures.TheNetworkandInformationSecurityRegulations2018implementtheEUNetworkandInformationSecurityDirectionintheUKandimposeobligationsonoperatorsofessentialservicesinthedigitalinformation sector, including top-level domain name registries,domain name system service providers and internet exchangeoperatorsthatmeetcertainthresholds.


RIPA and the IPA govern interception of the content ofcommunications and acquisition of data associated with thatcommunication. BothRIPAand theIPAsetout therequirementsandprocessforaccesstoprivatecommunicationsbythestateandprovideanoversightmechanism.


The Government can require a Communications Provider tomaintaininterceptcapacitybyissuingaspecifiednotice,precededbyconsultation.RIPA sections 12–14 and theRegulation of InvestigatoryPowers(Maintenance of Interception Capability) Order 2002 set out theframework. Traditional telephone calls, VoIP calls, emails andotherformsofelectroniccommunicationareallwithinthescopeofinterceptioncapability.


Under bothRIPA and the IPA, awarrant is required to interceptcommunications.


UnderRIPA, theGovernmenthas thepower to serveanotice: torequiredisclosureofprotectedinformationinanintelligibleform;torequiredisclosureofthemeanstoaccessprotectedinformation;andtorequiredisclosureofthemeansofputtingprotectedinformationintoanintelligibleform.Notice to disclose encryption keys may only be served wherenecessary for: national security; preventing or detecting seriouscrime;safeguardingtheeconomicwellbeingoftheUK;or“effectiveexerciseorproperperformance”byapublicauthorityofstatutorypowersorduties.Necessityandproportionalitytestsmustbemet.


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where the service consists of the providing access to a particularcommunication network (for example, an ISP), then the serviceproviderwillnotbeliablefordamages,anyotherfinancialremedyoranycriminalsanctionif:■ itdidnotinitiatethetransmission;■ itdidnotselectthereceiverofthetransmission;and■ itdidnotselectormodifytheinformationinthetransmission.There is no general obligation on service providers to monitorcontent, but once a service provider gains “actual knowledge”ofany unlawfulmaterial or the removal from its original source ofany cached material, it must act “expeditiously” to ensure thatsuchmaterial is taken down. This has been construed relativelyrestrictively,meaning that if a service provider has taken on anyeditorialrole,itcannotrelyonthisdefence.Section1oftheDefamationAct1996alsoprovidesforadefenceforaserviceproviderwhichhaspublishedadefamatorystatementwhere it: (a) isnot theauthor,editororpublisherof thematerial;(b) takes reasonable care in relation to the publication; and (c)doesnotknoworhasnoreasontobelievethatwhatitdidcausedor contributed to thepublicationof adefamatory statement. TheleadingcaseofGodfrey v Demon Internetestablishedthatitisnotnecessary for an ISP to remove defamatorymaterial instantly onnotification,butthatthismustbedonewithinareasonabletime(inthiscaseadelayof10daysdefeatedthedefence).


Under the voluntary scheme, Creative Content UK, large ISPshaveagreedtocollaboratewithcontentownersinaprocesswhereinfringersarenotifiedandwarnedoftheirconduct.Inaddition,ISPsmustprovidealistofinfringerstotherelevantcontentprovider.InjunctionsareavailablefromtheUKcourtstoallowcontentownersto force ISPs to block access to copyright infringingwebsites orstreamingservers.


Subject togeneralcompetitionlaw,CommunicationProvidersareabletodifferentiallycharge.However,CommunicationsProviderswithSMP(includingBT)maybesubject tounduediscriminationrules.The Connected Continent Regulation (EU) 2015/2120 sets outhigh-levelrulesinrelationtonetneutralityandBEREChasissuedguidelinesonitsapplication.


Therearenogeneralobligationstoblockaccess.However,UKcopyrightlawcontainsaprocess,undersection97AoftheCopyright,DesignsandPatentsAct1988,underwhichcontentownershavesuccessfullysoughtinjunctionsagainstspecificISPsinconnectionwithsiteswhichareknowntobeconsistentinfringersof


TheBBCoperatespursuanttoasui generisRoyalCharter.AsidefromtheBBC,thekeylicencetypesareasfollows:■ DRL–licenceinforceforpublicservicebroadcastersasthe

successortotheanaloguebroadcastlicence.■ DPSL – digital programme service licence; for services

distributedviaUKdigitalterrestrialtelevision.■ TLCS licence – for linear services distributed via other

platformsforreceptionbymembersofthepublic.DRL licencescontaincertainpublic serviceobligations regardingthe types of programming to be broadcast, but beyond these, alllicencetypescontainbroadlysimilarobligationstocomplywith:■ Ofcomprogrammingstandards(includingstandardsoftaste

anddecency,protectionofminorsandeditorialintegrity);■ advertising standards (including truth and accuracy in

advertising, control over the timing and scheduling ofadvertisements);and

■ minimum requirements for European content and contentfromindependentproducers.

ForPSBlicences,therearelimitsontherightswhichmaybeacquiredunderacommissioningarrangementwithanindependentproducer.


LicencesareassignablewiththepriorapprovalofOfcomandaresubjecttothepaymentofasmallfeetoOfcom(currently£1,000).Other than in respect of the public service broadcasting licences,Ofcomwillonlydeclinetoapprovealicenceassignmentwheretheassigneewouldhavebeenineligibletoapplyforthelicenceinthefirstplaceorisnota“fitandproper”persontoholdalicence.Therearenorestrictionsonchangeofcontrol inOfcomlicences,althoughanycompanythatacquirescontrolofanOfcomlicenseeisrequiredtobea“fitandproper”personandtonotbelongtothecategoryof entities ineligible tohold anOfcom licence (politicalandreligiousbodies, localgovernmentauthoritiesandadvertisingagentsandthose“connected”withthem,aswellasthoseconvictedofcertain“piratebroadcaster”offences).NotificationmustbegiventoOfcomwithin30daysafteranychangeofcontroltakesplace.



Under theElectronicCommerceRegulations 2002, provided thataserviceprovideractingasanISP,networkoperatororwebhostcomplieswiththeRegulations,itwillgenerallynotbeliableforanymaterialwhereit:■ actsasamereconduit;■ cachesthematerial;or■ hoststhematerial.Whereaserviceconsistsofeithertransmittinginacommunicationnetwork of information which has been provided by a recipientof the service (e.g. an ISP transmitting a customer’s email) or


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Rob BratbyArnold & Porter 25 Old Broad StreetLondon EC2N 1HQUnited Kingdom

Tel: +44 77 3831 2629 Email: [email protected]: www.arnoldporter.com

With more than 1,000 lawyers practising across nine US and four international offices, Arnold & Porter is built on a foundation of history and experience. We bring renowned regulatory expertise, a powerful cross-border litigation bench, and a sophisticated transactional practice, together with leading multidisciplinary practices in the telecoms, life sciences and financial services industries. We hold true to our core values of: excellence in the practice of law; adherence to the highest standards of ethics and professionalism; appreciation and respect for diversity among our colleagues; and a deep commitment to public service and pro bono.

Rob provides regulatory and transactional advice to companies in the telecoms, media, and technology sectors in Europe and Asia.

Rob advises on regulatory issues in the telecoms, media and technology sectors and on data privacy and cyber security issues more widely.

Rob advises clients on mergers, acquisitions, disposals, joint ventures, and equity and debt investments, and provides strategic counsel to companies and their boards.

Rob advises on complex commercial transactions including sourcing, cloud, mobile services and applications, digital and mobile money, e-commerce and m-commerce, telecoms networks roll-out, network sharing, commercialisation and exploitation of intellectual property (IP), procurement, interconnection, MVNOs, roaming, broadcast and transmission, construction, maintenance and operation of sub-sea cable systems, satellite as well as customer, resale distribution and partnering arrangements.

Rob has extensive experience in structuring foreign investment into emerging markets.

Rob has a B.A. (Hons) and M.A. (Cantab) from Cambridge University and is a solicitor of the Supreme Court of England and Wales. He has an MBA from Henley and has completed the INSEAD International Directors Programme. His work experience includes OFTEL, the UK telecoms regulator, and senior commercial roles at a European telecoms operator. Now again working in London, he spent over four years working across Asia from Singapore.

Rob has been recommended as a leading telecoms, media, technology and e-commerce lawyer in both London and Singapore by independent guides including Chambers & Partners, The Legal 500, and the IBA’s Who’s Who of Lawyers.

Rob blogs as The Digital Watcher at www.thedigitalwatcher.com.

IP.SuchordershavetodatebeenmaderequiringmostofthemajorISPstoblockcontentfrom,e.g.,PirateBay,Newzbinandanumberofotherserviceswhichofferpeer-to-peerorlivestreamingservices.The InternetWatchFoundation is avoluntaryorganisationwhichhelpsoperatorsandISPsidentifyandblockaccesstocertainillegalcontent.Whilst there is no regulation of consumer VPN services in theUK,streamingservicesbasedintheUKhavestartedtointroducemeasurestopreventusersfromusingVPNtobypassgeoblocking.


Chapter 33

Wilkinson Barker Knauer, LLP

Brian W. Murray

Rachel S. Wolkowitz

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service, most notably from local or state franchising authorities.There are no significant barriers to foreign investment for cableoperators.Forsatellite,broadcastTV,andradiocompanies,specialregulatoryrequirementsapplyforforeignentitiesseekingagreaterthan25%interest.Inearly2017,theFCClooseneditspolicyunderwhichbroadcastTVandradiocompaniescouldnotbemore than25%foreign-owned.


TheCommunicationsActof1934, asamended (CommunicationsAct),codifiedasTitle47of theU.S.Code, is theprimarystatutegoverning regulation of the telecommunications and mediaindustries,includinggovernanceoftheFCC,anindependent(i.e.,non-executive) federal agency. Most new telecommunicationsand media laws are adopted by Congress as amendments to theCommunications Act, including the Cable Act of 1992 and theTelecommunicationsActof1996.


Traditional intrastate wireline telecommunications providersprimarilyareregulatedbyapublicutilitycommission(PUC)ineachstate,andsomePUCsalsolightlyregulatewirelesscompaniesand/or interconnectedVoice Over Internet Protocol (VoIP) providers.Cable operators are licensed and regulated by local or state-levelcablefranchisingauthorities.In addition to any state or local regulation, interstatetelecommunicationsproviders,wirelesscompanies,interconnectedVoIP providers, Internet service providers (ISPs, which may betelephonecompanies,cablecompanies,orothertypesofproviders),radioandTVbroadcasters,cableproviders,andsatellitecompaniesprimarily are regulatedby theFCC. TheFCC is an independentagency that isdirectedbyfiveCommissionerswhoareappointedbytheU.S.PresidentandconfirmedbytheSenate.NomorethanthreeoftheCommissionerscanbefromthesamepoliticalparty,andoneoftheCommissionersofthemajoritypartyisappointedbythePresidenttoserveasChairman.Federal government use of radio spectrum is supervised andcoordinatedby theNationalTelecommunicationsandInformationAdministration (NTIA), an executive branch agency within the

1 Overview


Telecommunications is the largest communications sector in theUnitedStates,withatotalrevenueofover$600billion.AT&TandVerizon are the largest and most diversified telecommunicationscompanies in theUnitedStates. Eachprovides to residentialandbusiness customers local, long-distance, and international voiceanddataservices,wirelessservices,broadbandandInternetaccess,andmultichannelvideoprogramming.Althoughwirelineservicescontinue to experience contraction, the rapid growth of wirelessservices,andinparticularwirelessdataservices,haveensuredthatthe aggregate telecommunications sector continues to grow. Thetelecommunications sector is not subject to significant regulatorybarrierstoentryandgenerallyisopentoforeigninvestment.Wireline providers generated nearly $86 billion in revenue fromInternet access services in 2016. Comcast, the largest Internetaccessprovider,reportedover26.5millionbroadbandsubscribers,whileAT&Tclaimed14.5million.CharterCommunicationsservesapproximately23.1million,andVerizonaround6.9million.Thewireless telecommunicationssubsectorhasa total revenueofover$260billion.Oneindustryreportestimatesthattherearenowmore than 400millionwireless connections in theUnitedStates,equal to 1.2 wireless devices for every person in the country.Accordingtothemostrecentreportonwirelesscompetitionissuedby the Federal Communications Commission (FCC), the largestwirelesscarriersareVerizonWireless(145.9millionconnections),AT&T (134.9million), T-MobileUSA (71.4million), and Sprint(59.5million). In2018,T-MobileandSprintproposed tomerge.These figures represent 2016 data, the most recent data thenavailabletotheFCC.TheFCC’sreportisavailableathttps://docs.fcc.gov/public/attachments/FCC-17-126A1.pdf.The audio-visual media distribution sector includes traditionalmultichannel video programming distributors (MVPDs), such ascable and telephonecompanies,broadcast television stations, andonline video distributors. The sector generated around $138.4billion in revenue in 2016. AT&T is the largest provider in thissector(over25.4millionsubscribers,whichincludessubscribersofits satellite television subsidiaryDirecTV), followed byComcast(22.1 million subscribers) and Charter Communications (16.2million subscribers). MVPDs must obtain authority to provide


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undertheGATStoprovidemarketaccessandnationaltreatmentforabroadrangeoftelecommunicationsservices,withcertainlimitedexceptions,aswellasadditionalcommitmentstotheprocompetitiveregulatory principles set forth in the “Reference Paper”. TheUnited States implemented these commitments through twocompanion orders issued by theFCC inNovember 1997. Theseorders collectively established a framework for facilitating entryintotheU.S.marketbyforeign(orforeign-licensed)entitiesfortheprovisionoftelecommunicationsservices.


Theregulatoryframeworkapplicabletocommunicationsnetworksand services varies greatly depending on the technology utilisedby the service provider, the type of service, and the regulatoryclassification of the provider. Historically, wireline commoncarriershavebeensubjecttothehighestlevelofregulation,althoughthetrendprimarilyisderegulatory.Nevertheless,incumbentlocalexchange carriers (ILECs), which enjoyed localmonopoly statuspriortothederegulationoflocalmarkets,remainhighlyregulatedatthefederalandstatelevels. Competitivecarriersaresubjecttolighter regulatory requirements at the federal level and varyingdegreesofregulationbytheindividualstates.WirelesscarriersareprimarilyregulatedbytheFCC.Thestatesareprecludedfromregulatingtheentryof,orrateschargedby,wirelesscarriers, although they frequently impose consumer protectionrequirementsonwirelesscarriers.VoIP providers are subject to substantially less regulation thantraditionalwirelinecarriers. However, federal regulationofVoIPproviders has increased as they have gained market share. Inaddition,althoughstate regulationofVoIPproviderswas initiallylargelypreemptedbytheFCC,theFCChasrecentlybeenpermittingincreasedstateregulation.


The FCC has broad “public interest” authority to regulate thetelecommunications marketplaces. The DOJ and the FTChold more limited jurisdiction over antitrust, competition, andconsumer protection issues, and, in addition to the FCC, one oftheseentities typically reviews largermergersandacquisitionsoftelecommunications carriers to determinewhether the effect of aproposedtransactionwouldsubstantially lessencompetition. TheFTCalsocanexercisecontinuedoversightovervariousparticipantsin the communications marketplace. Finally, state PUCs playa significant role in regulating intrastate telecommunications,includingthereviewofmergersofintrastateproviders.


FCCstaff-leveldecisionsmaybeappealedtotheFCCCommissioners,anddecisionsof theFCCCommissionersmaybe appealed to thefederalcourts.TheU.S.courtsofappealshaveexclusivejurisdictiontoenjoin,setaside,suspend,ordeterminethevalidityoffinalordersand decisions of the FCC. Generally, parties that appeal FCCdecisionsassertthatthedecisionsarearbitraryandcapriciousunderthe standards set forth in theAdministrative ProceduresAct, areinconsistentwith underlying federal statutes or outside the FCC’sstatutoryauthority,orarecontrarytotheU.S.Constitution.

Department of Commerce. The head of the NTIA, the NTIAAdministrator,isnominatedbytheU.S.PresidentandapprovedbytheSenate.In addition, the Federal Trade Commission (FTC), anotherindependent agency, has jurisdiction over certain consumerprotection laws thatareapplicable to telecommunications,media,and internetcompanies. Inaddition toFCCreview, theFTCandtheDepartmentofJustice(DOJ)haveauthoritytoreviewproposedmergersandacquisitionsofsuchentitiesundertheantitrustlaws.


Pursuant toSection 310(b) of theCommunicationsAct, commoncarrier wireless licensees and radio and television broadcastlicenseesmayhavedirectforeignownershipofnomorethan20%andindirectforeignownershipofnomore25%withoutpriorFCCapproval,whichgenerallyisgranteduponapplication.Inaddition,pursuant toSection310(a), commoncarrierwireless licencesandradioandtelevisionbroadcastlicencesmaynotbedirectlyheldbyaforeigngovernmentor itsrepresentatives. Non-commoncarrierwireless licensees, wireline providers (including Internet accessproviders),televisioncablecompanies,andmostsatellitelicenseesarenotsubjecttostatutoryforeignownershipcaps.Notwithstandingtheforegoing,ifatransferofcontrol,assignment,orcommoncarrierwirelineapplicationfiledwiththeFCCproposesa10%orgreaterdirectorindirectforeignowner,theFCCgenerallysubmits the application to Team Telecom for review of any lawenforcement or national security concerns raised by such foreignownership.TeamTelecomisanad hocinteragencyworkinggroupcomprisedofmembersoftheDepartmentsofJustice,Defense,andHomelandSecurity.TeamTelecomconductsanindependentreviewoftheproposedforeignownership,andtheFCCwillnotapprovetheunderlyingapplicationuntilTeamTelecomcompletesitsreview.TeamTelecomoftenwill require theparties to sucha transactiontoenterintoanationalsecurityagreementwiththeDepartmentofJusticetomitigateanyconcernsraisedbythetransaction.In addition, the Committee on Foreign Investment in the UnitedStates (CFIUS), which is an interagency committee led by theDepartment ofTreasury and authorised by the 1988 Exon-FlorioAmendment, reviewswhethercertain foreign investments inU.S.businesses pose risks to national security. CFIUS may imposeconditionsonatransactionorreferthetransactiontothePresident,who may block the foreign investment. The scope of CFIUS’sauthorityandthetypesoftransactionssubjecttomandatoryCFIUSreviewweresignificantlyexpandedbytheForeignInvestmentRiskReviewModernizationActof2018,whichwasadoptedintolawinAugust2018.

2 Telecoms

General


The United States has been a WTO member since the WTO’sinception.TheUnitedStateshasundertakenspecificcommitments

Wilkinson Barker Knauer, LLP USA


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The ability to site telecommunications facilities historically hasbeengovernedprimarilyby state and local landuse law. Today,theCommunicationsActlargelypreservesstateandlocalauthorityoverthesitingoftelecommunicationsfacilities,butsetslimitationson that authority. Specifically, state and local governmentsmaynot unreasonably discriminate among providers of functionallyequivalent services, or adopt regulations that have the effect ofprohibitingtheprovisionofservice. Theymustalsoactonsitingrequestswithinareasonableperiodoftime.Pursuant to the Communications Act, the FCC has undertakenseveral efforts aimed at expediting siting timeframes andstreamlining the deployment of services. It has initiated severalrecentrulemakings,anditseffortstostreamlinethesitingprocessesareongoing.Congressandinter-agencyworkinggroupsalsohaveongoingeffortstostreamlinethesitingofinfrastructure,includingsuchsitingonfederallands.



All telecommunications carriers are required to interconnectwitheach other, either directly or through other carriers’ facilities.The CommunicationsAct places more stringent requirements onILECs,whichmustprovideinterconnectiontoothercarriersatanytechnically feasiblepointon theirnetworkandat regulated rates.ILECs also are required to offer other carriers access to networkelementsonanunbundledbasisatcost-basedrates,althoughtheFCChasdiscretiontorefrainfromapplyingthisrequirementinmarketsdeemed to be competitive. Disputes regarding interconnectionareresolvedatthestatelevelbythePUC,whosedecisionisthenreviewableintherelevantfederaldistrictcourt.


StatePUCsmustapproveinterconnectionagreementsenteredintoby ILECs and certain other carriers. These agreementsmust bemadepubliclyavailable,andothersimilarlysituatedcarriershavetherightto“optin”toanycurrentinterconnectionagreement.


Historically, charges for the exchange of telecommunicationstraffichavevariedbasedonthetypeoftraffic(e.g.,localorlong-distance,intrastateorinterstate)andthetypesofcarriersinvolved(e.g.,wirelineorwireless). LECsarepermitted tochargecertaincarriersregulatedratesfortrafficoriginatedandterminatedonlocalexchangenetworks.StatePUCsestablishtheratesassociatedwiththeoriginationandterminationoflocalandintrastatetraffic,andthe



U.S.telecommunicationsserviceprovidersmayberequiredtoobtainregulatoryauthorisationsdependingonthenatureoftheservicesthatthey provide. Carriers providing only domestic interstate servicesgenerallyneednotseekanindividualisedauthorisation. Toprovideinternationalcommoncarrierservices,U.S.carriersmustapplyforandreceiveindividualisedauthorisationsundertheCommunicationsAct.Theauthorisationsrequiredtoprovidelocalexchangeandintrastatelong-distanceservicesareestablishedbystatePUCsandvarybystate.PartiesseekingtouseradiospectrumtoprovideservicearegenerallyrequiredtoobtainaradiospectrumlicencefromtheFCC,andmostsuch licences are awarded by auction. However, no licence isrequiredfortheuseofcertain“unlicensed”spectrumbands.VoIP providers generally are not required to seek federalauthorisation to provide service, although they are required toseek federalpermission todiscontinueservice. Inother respects,FCCregulationofinterconnectedVoIPserviceshasincreased. Inaddition, some states require VoIP providers to register as localexchange carriers (LECs) in order to offer interconnected VoIPservicestothepublic,andsomeVoIPproviderselecttoobtainstateauthorisationsinlightofparticularregulatoryconsiderations.


The United States does not issue a general telecommunicationsauthorisation. Instead, specific state and federal authorisationsare required to be obtained to provide certain types oftelecommunications.(Seequestions2.5and2.7.)


RadiospectrumlicencesareissuedbytheFCCtocoverparticularradio spectrum frequencies andgeographic areas. Although theirtermvariesdependingon the typeof licence,many last foreightto 10 years and are subject to a renewal expectancy. Satelliteauthorisations(coveringspectrumaccessandlaunchandoperationofsatellites)aregrantedbytheFCCforaperiodof15yearsandalso,generally,aresubjecttoarenewalexpectancy.The transferof the foregoingauthorisations isgenerallypermitteduponthepriorapprovaloftheFCCand/ortherelevantstatePUC,and the process for securing these approvals varies significantlydepending on the type of licence and the type of transfer. (Seequestion3.5.)Certaintransfersofsimplewirelesslicencesaresubjecttoimmediateapproval,whileapprovaloflargewirelesstransactionscantakesixmonthsorconsiderablylongerifopposed.Forwirelesslicences,theFCCpermitscarrierstoengageinthesecondarymarket,withopportunitiestosublease,partition,ordisaggregatespectrum.IntrastatewirelineservicesgenerallyarelicensedbyindividualstatePUCs,andtherulesforobtainingsuchlicences,aswellastherulestowhich the licensees are subject, varywidely among the states.Interstatewireline services generally fall under a blanket licenceissued by the FCC that does not expire. Individual Section 214licencesareissuedbytheFCCtoprovidersofinternationalservicesandalsodonotexpire.


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Wireline ILECs generally are subject to retail rate regulation.Rates charged by competitive wireline and wireless carriers arenot regulated, but are subject to requirements that they be just,reasonable,andnon-discriminatory. ISPs’ratesarenotregulated.The FCC recently eliminated pricing regulation for certain high-capacityofferingsthataregenerallytargetedtobusinesscustomersand government institutions, known as business data services(BDS),althoughsuchservicesmaystillbesubjecttoregulationinareasdeemednon-competitive.


In addition to widely applicable federal and state consumerprotectionlaws,communicationsservicesaresubjecttosubstantialstateandfederalregulation.Asaninitialmatter,commoncarriersmustprovidetelecommunicationsservicesonanon-discriminatorybasisat justandreasonableratesandterms. Inaddition,wirelineand wireless common carriers are subject to the FCC’s truth-in-billing requirements that loosely govern the presentation andthe level of disclosure required in invoices. Further, wireline,wireless,andVoIPprovidersarerequiredtoestablishsophisticatedprotectionsofcustomerinformationknownascustomerproprietarynetworkinformation(CPNI).Theyarerestrictedwithrespecttothepurposesforwhichtheycanusesuchinformationwithoutcustomerconsent.TheFCCandFTCalsoadministeravarietyofmarketingregulations, such as theDoNot Call list, which limit the use ofcertaintelecommunicationsforsolicitationswithoutpriorconsumerconsent. The FCC reached a voluntary accord with wirelessproviders,pursuanttowhichtheyagreedtoprovidecertainbillingandusagealerts.ManystatePUCsalsoapplysimilarstateconsumertelecommunications protections to intrastate telecommunicationsproviders.

Numbering


The FCC has plenary jurisdiction over U.S. telephone numbersin Country Code 1, and has delegated day-to-day administrativeduties to neutral third-party administrators pursuant to fourcontracts (two for theassignmentof standard telephonenumbers,one for the administration of toll-free telephone numbers, andone for the administration of number portability), subject to theFCC’sextensivenumberingrulesandoversight.In2015,theFCCreassignedthenumberportabilitycontractfromNeustar,Inc.(whichhadheldthatpositionsince1997)toTelcordiaTechnologiesInc.In2018,theFCCannouncedthatthetwostandardtelephonenumberadministrationcontracts,whichhadalsobeenheldbyNeustar,Inc.sincethelate1990s,wouldbere-bid,andawardedone-yearbridgecontracts to Somos, Inc., which also holds the toll-free numberadministrationcontract.

FCCestablishestheratesassociatedwithinterstatetraffic.Wirelesscarrierslacktheabilitytorequirelong-distancecarrierstopaythemfortheoriginationandterminationoftrafficontheirnetworks,andthus most such traffic is settled pursuant to privately negotiatedagreements.TheFCCis transitioning,onaphased-inbasisendingin2020, toa “bill and keep” framework, pursuant to which all carriers willrecover their costsdirectly from their customers rather than fromothercarriers.In addition, ILECs are required to provide interconnection andnetwork access to other carriers at rates, terms, and conditionsthat are just, reasonable, andnon-discriminatory. ILECsare alsorequired to offer other carriers access to network elements on anunbundledbasisatcost-basedrates,althoughtheFCChasdiscretiontorefrainfromapplyingthisrequirementinmarketsdeemedtobecompetitive.


Dueatleastinparttoexistingandexpiredregulatoryrequirements,theBellOperatingCompanies(BOCs)oftenutiliseseparatebusinessentitiesfortheprovisionofdifferentservices,withsuchseparationsmaintainedthroughacombinationofstructural, transactional,andaccounting safeguards. In addition, other ILECs subject to rateregulation are also subject to accounting rules to allocate costsbetweenlocal,intrastate,andinterstateservices,andtherebyenabletherelevantregulatoryauthoritiestoestablishjust,reasonable,andnon-discriminatoryrates.


Broadband facilities generally are not required to be unbundled.Although theFCC in2015 ruled thatbroadbandproviderswouldberegulatedlikepublicutilities,theagencymorerecentlyreverseditself and eliminated most of the rules, except for requirementsgoverning thedisclosureof ISPs’networkmanagementpractices.(Seequestion6.3.)TheFCCalsohasestablishednoticeandotherrequirements relating to copper retirement, in order to facilitatecarriers’ transition from legacy technologies to next-generationnetworksthatuseInternetProtocol-basedtechnologies.OneoftheFCC’sprimaryobjectiveshasbeentospurthedeploymentofadditionalbroadbandfacilities,usingavarietyofmethods thatinclude regulatory streamlining and the provision of grants andfinancing. The FCC is currently pursuing a series of initiativestopromote thedeploymentofbroadband infrastructure, includingby launchingseparaterulemakingproceedingsgoverningwirelineandwireless infrastructure. Thus far, theFCChas takenvariousstepsinthoseproceedingsthatareintendedtopromotebroadbanddeployment, such as the adoption of new rules to facilitate andexpeditepoleattachments.TheFCC’spoleattachmentrulesgoverninapproximately30states;theremainingstateshaveexercisedtheirrightunder theCommunicationsAct to regulatepoleattachmentsthemselves.


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TheFCCreservescertainspectrumbandsforunlicenseduses,suchasWiFi. Any entity may utilise unlicensed spectrum, providedthat theuser’sequipment is certifiedby theFCCandoperated inconformity with the FCC’s rules. Users of unlicensed spectrumare not afforded the typesof interferenceprotections available toholdersoflicensedspectrum,althoughtheFCC’srulesaredesignedtominimisethepotentialforinterference.


The FCC awards most commercial spectrum licences throughcompetitivebidding. Oncea licence isawarded, it isnot subjecttoongoingspectrumuserfees,thoughfederallegislationhasbeenconsideredforthispurpose.LicenceesinmanyFCCradioservicesare required to pay annual regulatory fees, which typically arecalculatedbasedonthenumberoflicencesheld,orthenumberofendusersbeingserved.


Transfersofcontrolofspectrumlicenseesgenerallyaretreatedthesameasassignmentsofspectrumlicences,andbotharepermittedwith prior FCC approval (in some cases, pro forma transactions requireapost-closingnotificationonly).TheFCChasestablishedprocedures that provide for immediate processing of most non-controversialtransactions–thosethatinvolveinsignificantforeignownership, require no rule waivers, and raise no competitive orotherpublicpolicyconcerns.Conversely,applicationsthatdonotmeet these streamlining criteria are subject to the FCC’s generalapprovalprocedures,which includeapubliccommentperiodandgreaterscrutinybytheFCC.The FCC uses a “spectrum screen”, or aggregate per-marketthreshold,totriggeritsreviewofpotentialcompetitiveharmfromtransfers of most bands of commercial wireless spectrum. Thescreenissetatapproximatelyone-thirdofspectrumthatissuitableandavailableformobiletelephony/mobilebroadbandservices,andisperiodicallyupdatedwhentheFCCallocatesadditionalspectrumfortheseservices.The FCC does not consider the screen to be a cap on spectrumacquisitions,andhasapprovedtransactionswhichresultingrantingonelicenseecontrolofmorethanone-thirdoftheavailablespectruminamarket.Conversely,theFCCmayfindthatcompetitiveharmfromatransactionislikelyeventhoughthespectrumscreenwouldnot be exceeded, andmay in that case impose licencedivestiturerequirementsorotherconditionsonitsapproval,whichareintendedtopreventsuchcompetitiveharm.


In general, theFCChas encouraged the development of a robustsecondarymarketforspectrumleasing,includingfor“partitioned”and “disaggregated” portions of spectrum licences. In addition,spectrumlicencetransfersandassignmentsarepermittedwithpriorFCC approval, and subject to a spectrum screen, as discussed inquestion3.5above.


Only regulated telecommunications carriers and interconnectedVoIP providers are allowed to obtain telephone numbers fromthe numbering administrator, and only based on needs showings.Providersholdingnumbersmustreportsemi-annuallyontheiruse.Unusednumbersinproviderinventoriesaresubjecttoreclamation.


All wireline carriers, mobile carriers, and interconnected VoIPproviders that hold telephone numbers are required to allowcustomerstoporttheirnumberstoanotherprovider.Thisincludesportingbetweenandamongthethreetypesofproviders.Therearecurrentlygeographicrestrictionsonporting,basedonthephysicallimitationsofproviders’networkinfrastructure.TheFCChasdevelopedspecificprocessesandtimelinesforvarioustypesofintramodalandintermodalporting.

3 Radio Spectrum


Radiospectrumlicensedtoprivate/commercialentitiesandtostateandlocalgovernmentsisregulatedbytheFCC,andtheuseofradiospectrumbythefederalgovernment,includingallfederalagencies,iscoordinatedbytheNTIA.


Congressfirstauthorisedtheawardofcommercialspectrumlicencesthroughacompetitivebidding(i.e.,auction)processin1993,basedontheconceptthatawardinglicencestothebidderswhovaluethemmosthighlywillresultinspectrumbeingputtoitsmostefficientuseinthemarketplace.Sincethattime,theFCChasusedauctionstoassignmostsuchlicences.Asaninitialmatter,theFCCmustdeterminethetypeofuseforwhichit isallocatingaparticularbandofspectrum. For instance, in thebroadcastincentiveauction,theFCCsoughttoreallocateportionsofthecurrentTVbandforusebycommercialwirelessservices.Onceaparticularfrequencybandisallocatedforaparticularuse,the FCC adopts technical and service rules to govern the use ofthat band, including a “band plan”, that sets forth the bandwidthof each licence and the geographic area it will cover, which, inturn, determines howmany licenceswill be awarded. The FCCthen schedules an auction and settles on the auction procedurestobeemployed,whichcanvaryamongauctions. TheFCCmayapplycertainbiddingoreligibilityrestrictionsonpotentialauctionparticipants.FCCspectrumauctionsusually involvemultiple roundsofbiddingandcantakeweeks(andsometimesmonths)tocomplete.Inordertoencourageentrybysmallerbusinesses,theFCCtypicallyenablesbidders below a certain size to take advantage of bidding credits,makingiteasierforthemtooutbidlargerentities.Relatedly,theFCChasadoptedanewruralbusinessbiddingcreditforthatpurpose.


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Under ECPA and FISA (defined above in question 4.2),telecommunications carriers, providers of wire and electroniccommunication services, and remote computing services arerequiredtocooperatewithwiretaprequestsandrequestsforaccesstostoredcalldataandsubscriberinformation.Inordertofacilitatecooperation with such requests, the Communications AssistanceforLawEnforcementAct (CALEA) requires telecommunicationscarriers to ensure that their equipment, facilities, or servicesare capable of expeditiously isolating and delivering wire andelectroniccommunicationsandcall-identifying information to thegovernment,pursuanttolawfulauthorisation.CALEArequirementsdo not apply to information services or to private networks andinterconnectionservicesandfacilities.However,theFCChasfoundthatinterconnectedVoIPservices,andtheunderlyingswitchingandtransportcomponentsoffacilities-basedbroadbandInternetaccessservices,arenotinformationservicesforpurposesofCALEA,andthereforearesubjecttoCALEArequirements.Email and other over-the-top messaging services continue to beclassifiedasinformationservicesnotsubjecttoCALEAassistancecapability requirements, but providers of such services generallyare electronic communication service providers, and are requiredtocomplywithsubpoenasandotherprocessesrequestingaccesstotheircustomers’emailmessagesunderECPA.


Law enforcement agencies obtain compelled, real-time access toindividuals’ communications by serving wiretap orders or otherlegal process on their service providers. The technical methodsby which interception is accomplished vary: for a wiretap on avoice telephone line, the law enforcement agency may arrangewith the service provider for a physical access line, attached tothe individual subscriber’s telephone line, that effectively makesthe law enforcement agency a party to the individual’s telephoneconversations. For emails and other non-voice electroniccommunications,interceptioncapabilitiesmaybeimplementedbyroutinganindividual’scommunicationstoaserverthatiscontrolledbyoraccessibletothelawenforcementagency.


Individuals are permitted to encrypt their communications, andservice providers are permitted to make encryption available totheir customers. CALEA does not require telecommunicationscarriers to facilitate decryption of customers’ communicationsfor thebenefitof lawenforcementunless the telecommunicationscarrierprovidedtheencryptioncapability.Thelegalobligationofnon-telecommunicationscarrierstoprovideencryptionkeystothegovernmentiscurrentlyasubjectofsomeuncertaintyanddebate.Likewise,thereissomedebateabouttheabilityoflawenforcement,under theFifthAmendment to theUnitedStatesConstitutionandits prohibition against compelled self-incrimination, to requireindividuals to decrypt their communications or provide lawenforcementwiththemeanstodoso.



Currently, theU.S.hasnobaseline federal cybersecurity law thatimposesspecificrequirementsoncompanies. Therearenarrowerlawsfocusedonenhancingsecurityandsharinginformationaboutcyberthreats,andpresidential-levelExecutiveOrdershavedictatedthedirectionofsomecybersecuritypolicyinitiatives.EnforcementagenciessuchastheFTCandstateattorneysgeneralcanbringactionsagainstcompaniesthatdeceiveconsumersabouttheirsecuritypractices,orcauseharmtoconsumersthroughsecuritypracticesthatrisetothelevelofbeingunfair.Separately,theFCCimposesinformationsecurityandbreachnotificationrequirementson telecommunicationscarrierswithrespect tocertainproprietaryinformation they obtain about their customers. Finally, the U.S.Securities and Exchange Commission increasingly has sought tohold public companies accountable for cybersecurity practicesthroughdisclosurerequirements.Meanwhile,numerousstateshaveadoptedinformationsecuritylaws,andeverystatenowhasadatabreachlaw.Todate,muchoftheframeworkforcybersecurityhasbeendrivenbythedevelopmentofbestpracticesandguidancebyindustry,oftenincollaborationwithagenciessuchas theNTIAandtheNationalInstitute of Standards and Technology (NIST), both under theDepartmentofCommerce.ThevoluntaryCybersecurityFramework,developedbyNISTinconjunctionwiththeprivatesector,suppliesthe preeminent framework for the development of standards,guidelines, and best practices to manage cybersecurity-relatedrisk. Industry also is active in publishing its own cybersecuritybest practices, including through the Communications Security,ReliabilityandInteroperabilityCouncil(anadvisorycommitteetotheFCCthatincludespublicandprivatesectorrepresentatives),andinresponsetoarecentAdministrationinitiativetopromoteactionagainstbotnetsandotherautomatedthreats.


Compelledgovernmentalaccesstoprivatecommunications,whetherin the course of transmission of those communications or fromelectronicstorage,isgovernedatthefederallevelbytheElectronicCommunicationsPrivacyAct(ECPA)andtheForeignIntelligenceSurveillanceAct(FISA).Thosestatutesalsodefinethecircumstancesandmeansbywhichfederallawenforcementagenciesmaycompelaccess to subscriber information and information concerning thetime, place, and addressing and routing of communications. In2018,theUnitedStatesenactedtheClarifyingLawfulOverseasUseofDataAct(orCLOUDAct),whichprimarilyamendedECPAtoallowlawenforcementtocompelU.S.-basedcompaniestoprovidedata stored even if on foreign servers. Separately, constitutionalprotectionsunder theFourthAmendmentapply, and theSupremeCourtrecentlyheldthatawarrantisrequiredforcell-sitelocationrecords. Moststatesalsohavelawsthatdefinethecircumstancesunderwhichstatelawenforcementagenciesmayrequireaccesstoprivatecommunications.


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broadcasters are subject to greater content regulation than otherplatforms(e.g.,cableoperatorsandDBSoperators).Forinstance,only broadcasters are subject to FCC guidelines concerningeducational/informational children’s programming. Similarly, theFCC’s sponsorship identification rules apply to broadcasters andcableoperators(atleasttoalimitedextent)butnottoDBSoperatorsand online video providers. However, the FTC has guidelinesfor endorsements and testimonials that apply to any service.Broadcasters, cable operators, and DBS operators are all subjecttothesamecommerciallimitsinchildren’sprogramming.Onlinevideoprovidersgenerallyarenotsubjecttocontentregulation(orotherrules),althoughtheFCCiscurrentlyexaminingtheextenttowhichsuchprovidersshouldberegulated.


Therearethreedifferentsetsofregulatoryandlicensingrequirementsimposedonprovidersofvideoprogramming.First,TVbroadcastersarelicensedbytheFCCwiththerighttouseaparticularfrequencyinaspecificcommunitytotransmitafree,over-the-airvideoservice,subjecttovarioustechnicalrequirements.TVbroadcastersfacethemostregulatoryobligationsofanytypeofFCClicensee,includingrequirements to air political candidate advertising, educationalprogrammingforchildren,emergencyalerts,andprogrammingthatserves the “needs and interests” of the broadcasters’ community.TheFCCalso has adopted a variety of restrictions on the abilityofTVlicenseestoownmultiplemediaoutlets(i.e.,TVandradiostationsanddailylocalnewspapers)inamarket.Second, although cable operators hold some FCC licences andare subject to FCC regulations, their authorisations come fromstate and local cable franchising authorities. These franchisingauthoritiesgenerallyimposecertainterritorialcoverageobligations,aswell as require the cable operators to reserve certain channelsforpublic,educationalorgovernmentalprogrammingand/orlocalprogrammers.TheFCCrequirescableoperatorstocarryeverylocalTVstation’smainprogrammingsignalifthestationhasoptedforguaranteedcarriage.Inaddition,federalregulationsrequirecableoperators thatalsoowncableprogrammingnetworks to sell theirprogrammingtorivalMVPDsonnon-discriminatoryterms,andtoavoid favouring their own programme networks over unaffiliatednetworksseekingcarriage.Third,DBSoperatorsarelicensedbytheFCCwiththerightstouseparticularsatellitefrequenciestotransmitvideoprogrammingonanationwidebasis.DBSlicenseesmustdevote4%oftheircapacityto non-commercial “educational or informational” programming.They also are required to use their spot-beam capabilities toretransmitlocalTVsignalsintothebroadcasters’localmarkets.


Transfers of control of spectrum licensees, aswell as assignmentofspectrumlicences,arepermittedwithpriorFCCapproval.Thisincludes over-the-air broadcast licences, satellite licences, andwireless licences utilised by cable providers and other MVPDs.The FCC has established procedures that provide for immediateprocessing of most non-controversial transactions – those thatinvolveinsignificantforeignownership,requirenorulewaivers,andraisenocompetitiveorotherpublicpolicyconcerns.Conversely,applicationsthatdonotmeetthesestreamliningcriteriaaresubjecttotheFCC’sgeneralapprovalprocedures,whichincludeapubliccommentperiodandgreaterscrutinybytheFCC.


Obligations to retain call data and other subscriber informationapply to telecommunications carriers, providers of wire orelectronic communication services, and providers of remotecomputing services. These categories encompass wireline andwireless telephone companies, ISPs, and providers of email andotherInternet-basedservices.Carriersthatprovidetollservicesarerequiredtoretaincertainbilling-relatedrecordsfor18months.Inaddition,various statePUCs require carriers to retain certain callrecordsforuptothreeyears.Under ECPA, a governmental entity may require a provider ofwireorelectroniccommunicationservice topreserve recordsandother evidence in its possession for up to 180 days, pending theissuanceofacourtorderorotherprocessrequiringdisclosuretothegovernmentalentity. Also,pursuant toacourtorderorsubpoenaobtained in accordance with ECPA, a service provider may berequired to retain a back-up copy of the contents of electroniccommunicationsinordertopreservethosecommunications.Finally, under the FCC’s CPNI rules, telecommunicationscarriersmustmaintain records of certain disclosures of customerinformation,andofcustomers’permissionsforsuchdisclosures,foraminimumofoneyear.



The basic regulatory framework rests on the identity of theprogramming provider’s technology, rather than on the contentitself.TelevisionbroadcastersoperateunderlicencesissuedbytheFCCpursuanttoTitleIIIoftheCommunicationsAct,andaresubjecttofairlyextensiveregulatoryobligationsatthefederallevel.CableoperatorsareregulatedunderTitleVIoftheCommunicationsAct,andfaceadifferentarrayofFCCobligations.Cableoperatorsalsoareregulatedbylocalcommunityorstateregulatorsviafranchises(i.e.,agreementssettingforthcertainrightsandobligations).Likebroadcasters, satellite TV providers, also called direct broadcastsatellite (DBS) providers, operate pursuant to FCC licencesunderTitleIIIof theAct,butDBSlicencesdifferfrombroadcastlicences in that they are subject to certain obligations applicableto all “multichannel video programming distributors” (MVPDs),including cable providers, as well as a few mandates unique toDBS. Wireline telephony providers that provide a subscriptionmultichannelvideoserviceviafibreorhybridfibre/coppernetworksaregenerallysubjecttomostTitleVIregulationsapplicabletocableoperators.Finally,althoughtheFCChassoughtpubliccommentonwhetheronlinevideoproviders(includingfacilities-basedprovidersthat seek to offer separate online offerings) should be treated asMVPDs, it has taken no further action, leaving these providersgenerallyunregulated.


Contentregulationcandifferdependingonthetypeofdistributiontechnologyand the typeofcontentat issue. Asageneralmatter,


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Theadoptionof“netneutrality”or“openInternet”ruleshasbeenahighlycontroversialtopicintheUnitedStates.Inlate2017,theFCC adopted an order reversing its 2015 decision to reclassifyISPs as common carriers under Title II of the CommunicationsAct. Because the FCC’s 2015 rules were grounded in authorityconferredbythatparticularregulatoryclassification,thenew2017rulesundidand/orreplacedcertainpartsofthe2015regime.The2017 Restoring Internet Freedom Orderspecificallyundidthe2015Open Internet Order’s: (i) bright-lineprohibitionsonblockingorthrottling(i.e.,impairingordegrading)lawfulonlinetraffic;(ii)banon“paidprioritisation”arrangements(i.e., thosefavouringcertaintraffic in exchange for compensation or some other benefit); and(iii) general “internet conduct standard” (under which the FCCinvestigated, on a case-by-case basis, certain ISP practices forunreasonableinterferenceand/orthedisadvantagingofconsumers/edgeproviders). TheFCC’snew2017rulesaffirmativelyimposea transparency requirement on ISPs,mandating public disclosureof practices including blocking, throttling, affiliate prioritisation,paid prioritisation, congestion management, application-specificbehaviour,deviceattachmentrules,securitypractices,performancecharacteristics,andcommercialterms.The2017Restoring Internet Freedom Order is currently pending review by a federal appealscourt. Meanwhile, the U.S. Supreme Court has been asked tovacate a prior judicial decision that affirmed the now-superseded2015Open Internet Order.Inaddition,thestateofCaliforniahasnowenactednetneutralityrulesthatareconsideredtobemorestrictthanthosepreviouslyissuedbytheFCC.Thoserulesarealsobeingappealedincourt.


No.However,giventherepealoftheFCC’s2015rules,asdiscussedabove, telecommunicationscarriersareno longerprohibited fromblockinglawfultrafficinmostinstances.



Telecommunications common carriers and ISPs are generallyimmunefromliabilityarisingfromthecontentofthecommunicationsthattheytransportonbehalfoftheircustomers.However,ISPsmayberequiredtocomplywithcertainsafeharbourprovisionssetforthin theDigitalMillenniumCopyrightAct (DMCA) toensuresuchimmunityagainstcopyrightinfringementbytheircustomers.


Telecommunications operators and/or ISPs are not under anygeneralobligationtoassistcontentownersinprosecutingcopyrightorotherintellectualpropertyclaims.However,contentownersmayseekacourtorderundertheDMCAfor theidentityofanallegedinfringer.Ifthecourtgrantssuchanorder,theallegedinfringer’sISPmustdisclosetherequestedinformationtothecopyrightownerorpersonauthorisedbythecopyrightowner.ThisprocessmayonlybeusedtoobtaintheidentityofallegedinfringerswhopostcontentonanISP-hostedserverforaccessbyothers.The DMCA also provides several safe harbours for ISPs, whichinsulate ISPs from liability for the infringing activities of theirsubscribers. Under theDMCA, ISPsmust implement reasonablepoliciestoterminatetheaccountsofrepeatcopyrightinfringersandmustinformallusersofthispolicy.FailuretoexecuteandenforcesuchpoliciescouldremovesafeharbourprotectionsandexposeanISPtosecondaryliabilityforcopyrightinfringement.ISPsarenotliable for the automatic transmission, routing, connecting, or fortemporarilystoringinfringingcontentatthedirectionofusers.


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Brian W. MurrayWilkinson Barker Knauer, LLP 1800 M Street, NWSuite 800NWashington, DC 20036USA

Tel: +1 202 783 4141 Fax: +1 202 783 5851Email: [email protected]: www.wbklaw.com

Rachel S. WolkowitzWilkinson Barker Knauer, LLP 1800 M Street, NWSuite 800NWashington, DC 20036USA

Tel: +1 202 783 4141Fax: +1 202 783 5851Email: [email protected]: www.wbklaw.com

Brian Murray has been a partner at WBK since joining the firm in 2014. He has experience with a range of issues in communications law, including the regulatory treatment of broadband-based services, cybersecurity, and the regulation of video services. Mr. Murray’s practice includes participation in rulemaking and adjudicatory proceedings before the FCC, and counselling on transactions and regulatory compliance. He has also represented clients at all levels of the federal courts and before a number of state public service commissions. Prior to joining the firm, Mr. Murray was a partner in the communications group of a global, Am Law 100 law firm. Following law school, he clerked for Judge Frank Mays Hull in the United States Court of Appeals for the Eleventh Circuit, and for Judge Louis Oberdorfer in the United States District Court for the District of Columbia.

Wilkinson Barker Knauer, LLP, one of the largest law firms in the nation dedicated primarily to the practice of communications and energy law, is ranked as a “first tier” firm by Chambers USA (Telecom, Broadcast, and Satellite: Regulatory), and The Legal 500 (Telecoms and Broadcast: Regulatory), and is the only firm to be named “Law Firm of the Year” in communications law multiple times by U.S. News – Best Lawyers (2012, 2014, and 2018). The firm, with offices in Washington, D.C. and Denver, Colorado, advises clients ranging from global Fortune 100 companies to small start-ups in regulatory, transactional, privacy, consumer protection, intellectual property, corporate and litigation matters involving all aspects of communications and energy law, at both the state and federal levels.

Rachel Wolkowitz’s practice spans a variety of policy, regulatory, and compliance matters for communications and technology companies. Ms. Wolkowitz has experience representing clients in rulemaking, waiver, and enforcement proceedings before various federal agencies. She advises media companies, carriers, and manufacturers on FCC regulations including accessibility, hearing aid compatibility, equipment authorisation, and marketing requirements. Ms. Wolkowitz also has assisted clients that are incorporating unmanned aircraft systems (UAS/drones) into their operations to navigate the changing federal, state, and local legal landscape. Prior to joining the firm in 2014, Ms. Wolkowitz was the Assistant General Counsel for the Technology Association of America and a Legal Fellow at Microsoft Corporation.


Chapter 34

Tilleke & Gibbins

Tu Ngoc Trinh

Waewpen Piemwichai

Vietnam

only12.5millionsubscribers in2016. Thedecreasewasblamedon a pricewar among television channel providers,which beganin2014.SCTV,VTVcabandK+arestillthethreebiggestplayersinthepayTV market, with high revenues and many subscribers, and greatadvantages in content production. However, like other televisionserviceproviders,theyalsofacedadeclineinrevenue.Forexample,in2014,SCTVhad2.8millionsubscribersandgeneratedVND3.6trillion(approx.USD155million)inrevenue. However, in2017,thoughthenumberofSCTV’ssubscribersincreasedto4.5million,itsrevenuedecreasedtoVND3.42trillion(approx.USD148million).


Themostimportantlegislationwhichappliestothetelecoms,audio-visualmediadistribution,andinternetsectorsincludes:■ LawonTelecommunicationsNo.41/2009/QH12adoptedby

the NationalAssembly ofVietnam on 23 November 2009(“Law on Telecommunications”);

■ LawonRadioFrequencyNo.42/2009/QH12adoptedbytheNationalAssemblyofVietnamon23November2009(“Law on Radio Frequency”);

■ LawonInformationTechnologyNo.67/2006/QH11adoptedbytheNationalAssemblyofVietnamon29June2006(“IT Law”);

■ LawonPressNo.103/2016/QH13adoptedbytheNationalAssemblyofVietnamon5April2016(“Law on Press”);

■ LawonCinematographyNo.62/2006/QH11adoptedbytheNationalAssemblyofVietnamon29June2006asamendedby Law No. 31/2009/QH12 on 18 June 2009 (“Law on Cinematography”);

■ Law on Cybersecurity No. 24/2018/QH14 adopted by theNationalAssemblyofVietnamon12June2018 (“Law on Cybersecurity”);

■ Decree No. 25/2011/ND-CP of the Government dated6 April 2011 on the implementation of the Law onTelecommunications,whichwasfurtheramendedbyDecreeNo. 81/2016/ND-CP dated 1 July 2016, and Decree No.49/2017/ND-CPdated24April2017(“Decree 25”);

■ Decree No. 06/2016/ND-CP of the Government dated 18January2016onthemanagement,provisionanduseofradioandtelevisionservices(“Decree 06”);

■ Decree No. 72/2013/ND-CP of the Government dated 15July2013onthemanagement,provisionanduseofinternetservicesandonlineinformation,asamendedbyDecreeNo.27/2018/ND-CP(“Decree 72”);and

1 Overview


TelecomsandinternetVietnam’s telecoms sector continues to have significant growthpotential and is still one of the country’s key economic sectors.However,inthefirstquarterof2018,therevenueofthetelecomsindustry,ingeneral,didnotgrowasplanned.OneofthereasonswaslikelytheissuanceofthenewCircularNo.47/2017/TT-BTTTT,dated 29 December 2017, by the Ministry of Information andCommunications (“MIC”) regarding promotion rates for mobileinformation services. The new Circular reduced the maximumfortop-uppromotionsforpre-paidsubscribersfrom50%to20%,whichcausedasignificantdeclineinvoiceandtextingrevenues.ThekeyplayersinthetelecomssectorarestillVNPT,Viettel,andMobiFone.In2017,ViettelgeneratedVND250.8trillion(approx.USD 11.08 billion) in revenue, and VND 44 trillion (approx.USD 1.89 billion) in profit, signifying increases of 9.4% and12%, respectively. Revenue from the domestic telecomsmarketcontributed 65.5% ofViettel’s total revenue,while the rest camefrom foreignmarkets. (The company has operations around theglobe,fromSoutheastAsiatoasfarawayasPeruandBurundi.)AsforVNPTGroup,theirtotalconsolidatedprofitin2017reachedVND 5 trillion (approx. USD 215 million), an increase of 21%compared to the year 2016. Through the first quarter of 2018,VNPT’sconsolidatedrevenueswereequivalenttothesameperiodof2017,whileitsprofitincreasedby5.6%.Meanwhile,theMobiFoneCorporationreportedanincreaseof6.3%inrevenueinthefirstquarterof2018.However,likeothermobileoperators,MobiFone’svoiceandtextingrevenueswerereduced.Audio-visualmediadistributionVietnam has three main nationwide broadcasters under statemanagement at the central level, namely the Voice of Vietnam(“VOV”) radio station,VietnamTelevision (“VTV”) and DigitalTelevision(“VTC”),and67localradioandtelevisionstations.ForthepayTVmarket,areportfromtheMinistryofInformationandCommunicationsshowsthatwith14millionTVsubscribersin2017,thetotalrevenueofthepayTVmarketwasVND7.5trillion(approx. USD 324 million), a sharp decrease from the VND 12trillion(approx.USD518million)in2016,eventhoughtherewere


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Audio-visual media distributionInrespectofmotionpictureproduction,distribution,andprojectionservices, all films must have their content censored by theVietnameseauthorities.Formotionpicturedistribution(withcertainexceptions),investmentisallowedthroughbusinesscooperationcontractsorjointventureswith Vietnamese partners who are authorised to provide theseservicesinVietnam.Foreigncapitalcontributionmaynotexceed51%ofthelegalcapitalofthejointventure.InrespectofpayTVserviceprovision,foreigninvestmentissubjecttoapprovalinprinciplebythePrimeMinister.

2 Telecoms

General


Yes,VietnamhasbeenamemberoftheWorldTradeOrganizationsince11January2007andhasmadecommitmentsundertheGATSregardingtelecommunications,andhasalsomadecommitmentstocomplywiththetelecomsreferencepaper.


Undertelecomslegislation,theprovisionofpublictelecomnetworksand services requires a licence. There are two types of licences,namely: (i) a licence for the establishment of a public telecomnetworkissuedtoenterpriseswithnetworkinfrastructureprovidingtelecomservices,validforamaximumof15years;and(ii)alicencefortheprovisionoftelecomservicesissuedtoenterpriseswithoutnetwork infrastructure providing telecom services, valid for amaximumof10years.After themaximumtermssetoutabove,both licencescanbe re-appliedfor.


Themain competition law authority is theVietnam CompetitionAuthority(“VCA”)under theMOIT. TheVCAisestablishedbytheGovernmentwithintheorganisationalsystemoftheMOITandhaslegalstatus,aswellasaseparatesealandaccount.ThemainfunctionsoftheVCAareto:monitoractswhichmaybedeemedanti-competitiveorwhichmaypromoteunfaircompetition;protect the interests of businesses and consumers from antitrustbehaviour;protectconsumer rights;createahealthiercompetitiveenvironmentforthedomesticmanufacturingindustry;andsupportdomesticindustriestopreventlawsuitsrelatedtodumping,subsidiesandsafeguardingmeasures. TheVCA is thegeneralcompetitionregulatorinVietnamandhasauthoritytoenforceanti-competitionregulationsacrossdifferentindustries,includingthetelecomssector.

■ DecreeNo. 174/2013/ND-CP of theGovernment dated 13November 2013 on penalties for administrative violationsagainst regulations on post and telecommunications,information technology and radio frequency, which wasfurther amended by Decree No. 49/2017/ND-CP dated 24April2017(“Decree 174”).

There are also a considerable number of decrees and circulars toimplementthekeylegislationmentionedabove.


TheGovernmentministries, regulators, other agencies andmajorindustryself-regulatorybodieswhichhavearoleintheregulationofthe:(a)telecoms,includinginternet;and(b)audio-visualmediadistributionsectors,include:■ theMIC;■ VietnamTelecomAuthority(“VNTA”)undertheMIC;■ Authority of Radio Frequency Management (“ARFM”)

undertheMIC;■ Authority for Broadcasting and Electronic Information

(“ABEI”)undertheMIC;and■ VietnamE-CommerceandInformationTechnologyAgency

(“VECITA”) under the Ministry of Industry and Trade(“MOIT”).


Telecoms and internet (internet services are considered a type of telecoms service)Therearetwotypesofinvestmentintelecoms,namelyfacilities-basedservicesornon-facilities-basedservices.Inthetelecommunicationssector,foreigninvestorsinbusinesscooperationcontractswillhavethepossibilitytorenewcurrentarrangementsortoconvertthemintoanotherformofestablishment,withconditionsno lessfavourablethanthosetheycurrentlyenjoy.Investment in facilities-based basic telecom services is allowedthrough joint ventures with licensed telecom service providers.Foreigncapitalcontributionmaynotexceed49%oflegalcapitalofthejointventures.Forinvestmentinnon-facilities-basedbasictelecomservices,jointventures are allowedwithout limitation on the choice of partner.Foreigncapitalcontributionmaynotexceed65%ofthelegalcapitalofthejointventures.Forvirtualprivatenetwork(VPN)services,foreigncapitalcontributionmaynotexceed70%ofthelegalcapital.Investment in facilities-based value-added telecom services isallowed through business cooperation contracts or joint ventureswithlicensedtelecomserviceprovidersinVietnam.Foreigncapitalcontributionmaynotexceed50%of the legalcapitalof the jointventures.Forinvestmentinnon-facilities-basedvalue-addedtelecomservices(except internet access services), business cooperation contractsor joint ventures are allowedwithout limitation on the choice ofpartner. Foreigncapital contributionmaynot exceed65%of thelegalcapitalofthejointventures.

Tilleke & Gibbins Vietnam


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■ Businessandtechnicalconditions:musthavetechnicalandbusinessplans.

■ Telecom infrastructure safety and information securityconditions:mustprovideaplanforensuringthesafetyofthetelecominfrastructureandinformationsecurityinconformitywiththebusinessandtechnicalplans.


More details of different types of individual telecom licences inVietnamareasfollows:■ Licenceforestablishmentofpublictelecomnetworks:valid

foramaximumof15years.■ Licence for provision of telecom services: valid for a

maximumof10years.■ Licencefortelecom-specialisedoperations:

■ Licencefor installationofundersea telecomcable lines:validforamaximumof25years.

■ Licenceforestablishmentofaprivate telecomnetwork:validforamaximumof10years.

■ Licencefortrialoftelecomnetworksandservices:validforamaximumofoneyear.

Undertelecomslegislation,telecomnumberingorinternetresourcescanbetransferredorassignedsubjecttocertainconditions.Thetelecomslawdoesnotexpresslyprohibitthetransferorassignmentof telecomlicences. Atransferorassignmentofamobilenetworkmust be conducted via specific auction and bidding procedures.Thetransferororassignormustreturnthelicence,negotiatewithallpartners,and,mostimportantly,ensuretherightsoftheirusers.Therearealsospecificqualificationsatransfereeorassigneemustmeet.Ingeneral,thereisnoexpressrequirementonthechangeofcontrolofthelicensee,exceptthecasewherethelicenseeislistedasanenterpriseinwhich the State is the controlling shareholder. Currently, thereare five such telecom enterprises listed,which include: i)VietnamPost andTelecommunicationsGroup (“VNPT”); ii)ViettelGroup;iii) Vietnam Maritime Communication and Electronics Company(“VISHIPEL”); iv) Global Telecommunications Corporation(“GTEL”);andv)IndochinaTelecomJointStockCompany.Thismeans,ingeneral,thelicenseemayliberallychangeitscontrol.However,thechangemustbecompliantwiththerequirementsonforeignownership restriction, asbrieflydiscussed inquestion1.4above.



LandownershipanduseinVietnamdiffersfrommanyjurisdictions.Generally, land isownedcollectivelyby thepeopleandmanagedbytheState.Underthetelecomslaw,publictelecomworksaregrantedpriorityuseof space, land surfaces,undergroundareas, riverbedsand seafloors. Locations for providing public telecom services will begranted priority at railway stations, car parks, seaports, airports,bordergatesandotherpublicplacesservingtheneedsof telecomserviceusers.

However, theVCAwould coordinatewith a specialised telecomsregulator(forexample,theVNTA)foropinionswhendealingwithanti-competitivepracticesinthetelecomssector.TheVNTAandtheVCAcouldbeconsideredasquasi-independentregulators.From1July2019,thebodyinchargeofcompetitionissueswillbetheNationalCompetitionCommission,asub-unitof theMinistryofIndustryandTradeformedbytheconsolidationof theexistingVietnamCompetitionCouncilandtheVCA.


Yes, decisions of a national regulatory authority (for example,theVNTAor theVCA)canbeappealed. Thecomplainantcouldappealwithintheorganisation(i.e.,firstappealtotheDirectoroftheVNTA,thenappealtotheMinisteroftheMIC)inaccordancewiththeLawonComplaints,orinstituteanadministrativeclaimincourtinaccordancewiththeLawonAdministrativeProcedures.



IndividuallicencesareusedinVietnamfortheprovisionofpublictelecomservices. Asdiscussedunderquestion2.2, thereare twotypesofpublictelecomlicences:(i)alicencefortheestablishmentofpublictelecomnetworks;and(ii)alicencefortheprovisionoftelecomservices.


Themainrequirementsforalicencefortheestablishmentofpublictelecomnetworksinclude:Legal capital and commitment to investment: depending on thetypeofnetwork (e.g., terrestrialfixednetworkor terrestrialmobilenetwork);networkcoverage(i.e.,howmanyprovincesthenetworkcovers);andwhetherthereisaneedtousethefrequencyspectrum,therequiredlegalcapitalvariesfromVND5billiontoVND500billion(USD224,000toUSD22.4million).Theinvestors’commitmenttoinvestmentalsovariesfromVND15billion(USD673,000)forthefirstthreeyears,toVND7,500billion(USD340million)for15years.Themain requirements fora licence for theprovisionof telecomservicesinclude:Anenterprisethatappliesforalicencetoprovideterrestrialmobileservices,ifitownsmorethan20%ofchartercapitalorsharesinatelecommunicationsenterprise,isnotallowedtopossessmorethan20%of the charter capital or shares of other telecommunicationsenterprisesdoingbusinessinthesamemarket.Otherkeyrequirementsapplicabletobothlicencesdiscussedaboveinclude:■ Businesslines:musthavetelecombusinesslines.■ Financialconditions:financiallycapableofimplementingthe

licenceinaccordancewithbusinessandtechnicalplans.■ Organisational structure and personnel conditions:must be

suitableforthebusinessplan,technicalplan,andtheplanforensuringthesafetyoftelecominfrastructureandinformationsecurity.


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Telecom enterprises holding “essential facilities” must preparea standard-form interconnection agreement, register it with thespecialisedbranchadministrativebody for telecoms,andpubliclyannounceit.An essential facility is understood as an important component oftelecom infrastructure wholly or largely under the monopolisedpossession of one or more telecom enterprises, for which theformation of a new replacement would not be economically andtechnicallyfeasible.


Yes,interconnectionchargesaresubjecttopriceandcostregulation.Telecomlegislationrequiresthattariffsfortelecominterconnectionbeformulatedonthebasisofcostpriceanddividedinareasonableway between segmentsmaking up the network or service stageswithoutdiscriminationbetweenthedifferenttypesofservices.


Yes, telecom enterprises or groups of telecom enterprises in adominantmarketposition,andtelecomenterprisesholdingessentialfacilities, must implement a separate statistics and accountingregime for the telecom services in which they hold a dominantmarketshare,inordertofixtheprimecostofsuchdominantmarketsharetelecomservices;theycannotcross-subsidisetelecomservicesforthepurposeofunfaircompetition.


High-speed broadband networks are subject to regulation in thesamewayasothertelecommunicationsservices.Underthetelecomslaw,therearerequirementstosharepassiveinfrastructuresuchasductsorpoles.Thetelecomauthoritywillissueadecisiononthecommonuseofpassive telecom infrastructure, inorder to ensuretherequirementsoncompetition,environmentandurbanplanning.Intermsofinvestmentincentives,high-speedbroadbandnetworkscouldqualifyas“high-techactivities”or“investmentindevelopmentandoperation,andmanagementofinfrastructurefacilities”;thus,intheory,theycouldapplyforinvestmentincentivesinthefollowingforms:(i)alowerrateofcorporateincometaxforadefiniteperiodor for the whole duration of implementation of the investmentproject;andexemptionfromorreductionofcorporateincometax;(ii) exemption from import duty in respect of goods imported toformfixed assets, or rawmaterials, supplies and components forimplementationofaninvestmentproject;and(iii)exemptionfromorreductionoflandrent,landusefeesandlandusetax.

Themaster planning for the construction of traffic works, urbanzones, residential zones, industrial zones, economic zones andhigh-techzonesmustcontainmasterplanningonpassive telecomtechnical infrastructure to ensure uniformity and completenessduring investment and construction, and must facilitate theestablishment of telecom infrastructure and provision and use oftelecomservices.The master planning on passive telecom technical infrastructurein localities must comply with the national master plan for thedevelopment of telecoms and with local master plans on socio-economic development, and is a compulsory item of regionalconstructionmasterplanning,ofurbanconstructionmasterplanningandofruralresidentialconstructionmasterplanning.Basedonmasterplanningonpassivetelecomtechnicalinfrastructureandplansonlanduseasapprovedbytheauthorities,therelevant-levelpeople’scommitteeisresponsibleforallocatinglandfor theconstructionofimportanttelecomworksrelatedtonationalsecurity,orforusinglocationsfortheprovisionofpublictelecomserviceswithin the locality. Any investorpreparingan investmentprojectfor important telecomworks related tonational security,orusinga location to provide public telecom services, must specificallydeterminetheareaof landrequiredtobeused,prepareaplanforland compensation and site clearance, and implement the projectaftertherelevantauthorityhasapprovedtheprojectandallocatedland.



Interconnection is a right as well as an obligation of telecomenterprises. Under the telecoms law, telecom enterprises havethe right to interconnect their telecomnetworkswith the telecomnetworksorservicesofothertelecomenterprises,andareobligatedtopermitothertelecomenterprisestointerconnectwiththeirowntelecomnetworksorservices.The key principles for interconnecting telecom networks andservicesinclude:■ negotiationsonthebasisofensuringfairness,reasonableness

and compliance with the rights and interests of theparticipatingparties;

■ the effective use of telecom resources and telecominfrastructure;

■ ensuring technical requirements on interconnection, andsafetyandintegrityoftelecomnetworks;and

■ ensuring the lawful rights and interests of telecom serviceusersandofrelatedorganisationsandindividuals.

Parties to a disputemay submit their dispute to theVNTAunderthe MIC for resolving their dispute in accordance with certainenumeratedprocedures.TheVNTAwillfacilitatenegotiationsbetweentherelevantpartieswithaviewtomediation.If,afterthenegotiationprocess,thepartiesareabletoreachanagreementonthedisputedcontent,thedisputewillbesettledaccordingtotheiragreement. If thepartiescannotreachanagreement,theVNTAwillissueadecisiononresolvingthedispute. ThepartieshavetherighttolodgecomplaintsorinitiateclaimsagainsttheVNTAresolution,butwouldinthemeantimestillneedtoimplementtheVNTAresolution.


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tousetelecomnumbers)fornumberswithhighcommercialvalue(such as numbers that canbe easily remembered), and forwhichthenumberofapplicantsexceedstheallocatingcapacity,orcanbedirectlyallocatedaccordingtoaplanontheprinciplethatthefirstregisteredapplicantwillbeconsideredforthefirstissuanceorrightto use, or othermethods of allocation asmay be set out by law.TelephonenumbersandnetworkidentifyingcodesareallocatedbytheMIC.


The use of telephone numbers is regulated under the telecomslaw,and indetailunderCircularNo.25/2015/TT-BTTTTdated9September2015onthemanagementanduseoftelecomnumbering,whichwas further amended byCircularNo. 40/2017/TT-BTTTTdated15December2017.


Followinginternationalpractices,VietnampromulgatedDecisionNo.1178/QD-BTTTTdated23September2013onnumberportability,asamendedbyDecisionNo.2447/QD-BTTTTdated29December2017providingaroadmaptoimplementnumberportability.

3 Radio Spectrum


TheMICistheauthorityregulatingspectrumuse.


Organisations and individuals that wish to use radio frequenciesmustobtaintherelevantradiofrequencyuselicences.Radio frequency use licences include radio frequency andequipmentuselicences,frequencybanduselicencesandfrequencyandsatelliteorbituselicences.Licences can be issued through the followingmethods: (i) directlicensing; (ii) licensing through examinations to select entitieseligible for the right to use a radio frequency; and (iii) licensingthroughanauctionoftherighttousearadiofrequency.Licensingthroughauctionorexaminationtoselectentitieseligiblefortherighttousearadiofrequencywillbeappliedtofrequencybands or channels of high commercial value, for which thedemands for use exceed the allocation capacity indicated in theradio frequency master plan. The radio frequency master plansareapprovedbythePrimeMinisterortheMinisteroftheMIC.Inaddition,participantsinauctionsorexaminationsmustbeeligibleorganisationsfortelecomnetworkestablishmentlicences.


The current Law on Radio Frequency has some licensingexemptionsforradioequipment.Accordingly,thefollowingradioequipment is exempted from the radio frequency use licensing:



TheMIC determines telecom charges and tariffs of public-utilitytelecomservicesandinterconnection.Telecom enterprises in a dominantmarket position, prior to theirissuance and application of telecomcharges formarket-dominanttelecom services, must register their telecom charges with thetelecomauthority.Telecom enterprises can determine charges for other telecomservicesoutsideof theabove-mentionedservices,butmustnotifythetelecomauthority.Telecomenterprisesarenotallowedtoprovidetelecomservicesataratewhichismuchlowerthanaverageratesinthetelecommarket,assetoutbytheMIC.Telecomenterprisesholdingessential facilitiesarenotallowed toapplytelecomservicerateslowerthantheircosts.The MIC may intervene in determining and managing telecomchargesandtariffswhentelecomservicechargesincreaseordecreaseunreasonablycomparedwithcosts,orincreaseordecreaseabnormallycomparedwithaverage rates, resulting in instability in the telecommarket,orcausingharmtothelegalrightsandinterestsoftelecomserviceusers,othertelecommunicationsenterprises,andtheState.


Theprovisionofelectroniccommunicationservicestoconsumersissubjecttomandatoryqualitycontrolforcertaintypesofservices(forexample,telephoneservicesviaterrestrialfixedtelecomnetworks,telephone services via terrestrial mobile telecom networks, andterrestrial fixed broadband internet access services using xDSL,amongothers).Inaddition,theconfidentialityofpersonalinformationtransmittedviaapublictelecomnetworkmustbeprotected.Telecomenterprisesmaynotdisclosepersonalinformationaboutatelecomserviceuser(including the user’s name and address, the number and locationof the transmitting or receiving server, times of calls and otherpersonal information supplied by the userwhen contractingwithsuchenterprise).There are certain exceptions to the above, such as: (i)where thetelecomserviceuserconsents to theprovisionof theinformation;(ii) the provision of information is for the purpose of calculationoftariffcharges,preparationofinvoicesorpreventingtheevasionofcontractualobligations;or (iii)where there isa request fromacompetentauthoritymadeinaccordancewiththelaw.Universaltelecomservices(i.e.,publictelecomservicesprovidedtoallcitizensinaccordancewiththelistannouncedbytheState)mustbeprovidedaccordingtotheconditions,withthequalityandatthetariffsstipulatedbytheState.

Numbering


Telephonenumbersandnetworkidentifyingcodescanbeallocatedvia auction or a “beauty contest” (a competition towin the right


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■ thetransfermustbeapprovedinwritingbytheMIC;and■ thepartiesinvolvedinthetransfermustfulfiltaxobligations

undertaxlaws.Underverylimitedinstances,leasingorlendingradiofrequenciesmaybepossible.



Vietnam’s Law on Cyber-Information Security (“LCIS”) waspassedon19November2015,andtookeffecton1July2016.TheLCISisthefirstcomprehensivelaweverissuedinVietnamonthesecurityof“cyber-information”,whichisinformationexchangedinatelecommunicationsorcomputernetworkenvironment.Previousregulationson thesubjecthadbeenscattered throughoutdifferentpiecesoflegislation,suchas:theLawonInformationTechnology;the Law on Telecommunications; the Law on E-Transactions;Decree 72 on the management, provision, and use of internetservicesandonline information; thePenalCode;and informationsecurityregulationsforspecificsectorssuchasbankingandfinance.ThekeyaspectsoftheLCISinclude:assurancesforthesafetyandsecurity of cyber-information; protection of personal informationin the network environment; protection of information systemsand infrastructure; production, trading, and use of civil ciphers;standards and technical regulations on information security;provision of information security services; prevention of spam,computerviruses,andharmfulsoftware;andemergencyresponses.AnewCybersecurityLaw,separatefromtheLCIS,wasadoptedbytheNationalAssemblyon12June2018,andwillcomeintoeffecton1January2019.ThecompaniessubjecttothisCybersecurityLawaredomesticandforeigncompaniesprovidingservicestocustomersinVietnam over telecomnetworks or the internet, such as socialnetworks, search engines, online advertising, online streaming/broadcasting, e-commerce websites/marketplaces, internet-basedvoice/text services (OTT services), cloud services, online games,andonlineapplications.Inparticular,thenewLawsetsoutthefollowingrequirements:■ Owners ofwebsites, portals, and social networksmust not

provide,postortransmitinformationagainsttheVietnameseGovernment or inciting/prejudicing riots, security, publicorder,humiliation,slander,oruntruthfulinformation.

Thismeanswebsitesandsocialnetworkoperatorsmustnotpost or allow their users to post “anti-state”, “offensive”or “inciting” content on their websites/social networks,and must develop mechanisms for monitoring, verifying,and taking down prohibited content posted by their users.This requirementmay diminish thewebsite/social networkoperators’ “safe harbor” under other valid legislation thatprotectsthemfromtheresponsibilitytomonitororsupervisedigitalinformationoftheirusers,orinvestigatebreachesofthe law arising from the process of transmitting or storingdigitalinformationoftheirusers.

■ Domestic and foreign companies providing services overtelecomnetworksortheinternet,orvalue-addedservicesincyberspaceinVietnammust:(i) authenticateusers’informationuponregistration;(ii) keepuserinformationconfidential;(iii) cooperatewithVietnameseauthoritiestoprovideinform-

ationontheiruserswhensuchusersareinvestigatedordeemedtohavebreachedlawsoncybersecurity;

(i)short-rangeradioequipmentbeingused inshort-range, limitedcapacityandunlikelytocauseharmfulinterference,whichisonthelistofradioequipmentexemptfromradiofrequencyuselicensing;and(ii)radioequipmentinstalledonboardforeignseagoingshipsorairplanestravellingthroughVietnameseterritory,whichareexemptfromlicensingunderinternationalagreementsortreatiestowhichVietnamisacontractingparty.


Thefeesforgrantinglicencesdependonthetypeofradiofrequencyuse licenses and must be in Vietnamese dong. Under currentregulations, the fees range fromVND50,000 toVND10million(approx.USD2toUSD440,atthetimeofthiswriting).Inaddition,feesforradiofrequencyusearechargedannually.Thesechargesaredeterminedbyseveralfactors,including:(i)thebasisoftheeconomicvalueoftheradiofrequencyused;(ii)thepurposeofuse;(iii)thelevelofradiofrequencyspectrumoccupancy;(iv)theservicecoverage;(v)thedemandforandlevelofuseoffrequencychannelsinthefrequencyband;(vi)thegeographicareainwhichtheradiofrequencyisused;(vii)expensesforthemanagementofradiofrequencies;and(viii)therealisationofrelevantstatepoliciesin each period. There are multiple types of applicable fees forradiofrequencyuseandsuchfeeswilldependonthefrequencyorequipmentused.


Inmostcases,therearenochangestospectrumlicencesifthereisachangeofcontrolofthelicensee.InVietnam,a localcompanywillhaveanEnterpriseRegistrationCertificate (“ERC”) for business registration,which is issued bythecompanyregistrationauthority(i.e.,theDepartmentofPlanningandInvestment). AnERCisveryroughlyakin toacertificateofincorporationincertainotherjurisdictions.AfterobtainingtheERC,tohavetheradiofrequency,thecompanymustobtainasub-licencewhichistheradiofrequencyuselicence.Thecompanywouldneedtonotifytheradiofrequencymanagementlicensing authority of any changes to the content of the radiofrequencyuselicence.However,theradiofrequencyuselicencesdo not contain information on the founding shareholders or theequitymembersofthelicensees.Thus,achangeofcontrolofthelicenseetypicallywouldhavenoeffectonthatlicence.


Under theLawonRadioFrequency, radiofrequencyuse licencescanbeassignedtootherentitiesunderspecificconditions,suchas:■ only organisations licensed to use a frequency band or

channelthroughauction,andalsohavingexploitedandusedsuch bands or frequency channels for at least three years,may transfer the rightofuseofa radio frequency tootherorganisations;

■ thelicencefortransfermustbeavalidlicence;■ organisations receiving the right to use a radio frequency

must meet the conditions for participants in an auction orexaminationtoselectentitieseligiblefortherighttouseradiofrequenciesspecifiedbythelaw;


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With their statutorily provided powers in inspections andinvestigationsasdiscussedinquestion4.2above,theinspectorateand the investigation agencies,with proper searchwarrants,mayaccesssystemsoftelecomenterprisestointerceptcommunicationsforaparticularindividual.


Theuseof encryptionproducts and services in theprivate sectoris regulated under the LCIS. The LCIS provides, among othermatters, that individuals/organisations using encryption are undertheobligationsof:(i) complying with provisions as agreed with the enterprise

providing encryption products, regarding the use ofencryption keys, transfer, repair, maintenance, cancellationor destroying of encryption products and other relevantcontents;

(ii) providingnecessaryinformationrelatingtoencryptionkeysfortheauthoritiesifrequested;

(iii) coordinating with and facilitating the authorities to carryout actions to prevent criminals from stealing informationor encryption and using encryption products for illegalpurposes;and

(iv) reporting to the Government Cipher Committee if theyare using encryption products which are not provided bypermitted enterprises, except for foreign diplomatic andconsulate organisations and international organisationrepresentativeofficesinVietnam.

Under item (ii) above, the Government authorities can requestindividualsororganisationsusingencryptiontoprovideencryptionkeys. However, the LCIS and its guiding decree do not furtherclarifyinwhichcircumstancesaGovernmentrequestcanbemade.However,underthelegislationcitedinquestion4.1above,especiallyunder the InspectionLaw and the Law onNational Security, theauthoritiesmightbeabletobasetheirrequesttoprovideencryptionkeysonotherlegislation,dependingonthematterathand.


Internet service providers are to retain posted and transmittedinformationfor15days,andinternetagentsaretostorepostedandtransmittedinformationforatleast30daysontheirservers.



Audio-visual media distribution activities are “conditional”businesseswhich require organisations to be licensed in order toengageintheseactivities.For our discussion, we classify audio-visual media into twocategories:(i) radio and television broadcasting; and (ii) motion pictures.

(iv) preventanddelete“anti-state”,“offensive”or“inciting”contents from their platforms within 24 hours ofreceivingarequestfromcompetentauthorities;

(v) storeinVietnamforcertainperiodsoftime(whichareto be further prescribed in detail by theGovernment)users’ personal information, data on service users’relationships, and data generated by service users inVietnam(definitionsandscopesofallsuchuser-relateddataarenotclearlyprovidedunderthelaw);and

(vi) for foreign service providers in particular, establishbranchesorrepresentativeofficesinVietnam.

Currently, there are various issues that are unclear under theCybersecurityLaw,suchasthepenaltiesfornon-compliancewiththese requirements, and measures for the Vietnamese authoritiestoenforceoffshoreserviceproviders.TimewillbeneededfortheVietnameseGovernmenttopreparetoimplementtheCybersecurityLaw. The expectation is that subordinate legislation will soonbe issued to clarify the details on the implementation of theCybersecurityLaw.


Vietnamese laws empower certain Government authorities ininspections and investigationswhichwould allow them to obtainaccess to private communication. The authorities in Vietnam,such as the Inspectorate of the Ministry of Information andCommunications and the investigation agencies of the People’sPolice,areempoweredwithwideauthoritytorequestthesupplyofinformationfromorganisationsand individuals. Inparticular, theGovernmentauthoritiesmayhavethepowertoaccessandexamineinformation,equipmentorsystemsoftherelevantpartiesifthereisasuspectedviolationofrelevantlawsandregulations.Thesepowersaresetoutinvariouslawsandregulations,including:(i) LawonInformationTechnologyNo.67/2006/QH11adopted

bytheNationalAssemblyofVietnamon29June2006;(ii) LawonTelecommunicationsNo.41/2009/QH12adoptedby

theNationalAssemblyofVietnamon23November2009;(iii) LCISNo.86/2015/QH13adoptedbytheNationalAssembly

ofVietnamon19November2015;(iv) Law on Inspection No. 56/2010/QH12 adopted by the

National Assembly of Vietnam on 15 November 2010(“Inspection Law”);

(v) LawonNationalSecurityNo.32/2004/QH11adoptedbytheNationalAssemblyofVietnamon3December2004(“Law on National Security”);and

(vi) Law on Cybersecurity No. 24/2018/QH14 adopted by theNationalAssemblyofVietnamon12June2018.


There is no provision under Vietnamese laws requiring marketparticipantstomaintaincallinterceptcapacities.


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Pleaseseetheresponsetoquestion5.1.


Thelawissilentonwhetherthelicencesareassignable.Therearenorulesorrestrictionsonthechangeofcontrolofthelicensee.



Wearenotawareofanycourt’sinterpretationorapplicationofanydefences (e.g., “mere conduit” or “common carrier”) available toprotecttelecommunicationsoperatorsorinternetserviceprovidersfromliabilityforcontentcarriedovertheirnetworks.Under the ITLaw, ingeneral, intermediariesor serviceprovidersforhosting, storingor transmittingcontentof thirdpartieshavea“safeharbour”,inthattheywillnotbeliableforthecontentofthirdpartiesiftheyareonlyintermediaries.However,theywillneedtotakedownthecontentincertaininstances.


Thereisnoprovisionunderthelawsrequiringtelecommunicationsoperators or internet service providers to assist content ownerswhose rightsmay be infringed bymeans of file sharing or otheractivities.Thatsaid,telecommunicationsoperatorsorinternetserviceproviderswouldneedtocomplywithcourtordersoradministrativedecisionsin, for example, the intellectual property space, if such orders ordecisions mandate take-down actions where intellectual propertyownershavesuccessfullycontendedthattheirintellectualpropertyrightshavebeeninfringedby,forexample,ahostedwebsite.


Under the Law on Telecommunications, the key principles fordetermining telecommunications charge rates are keeping themanagement and stipulation of telecommunications chargerates non-discriminatory (except where necessary to encouragenew businesses to participate in the market) and ensuring a faircompetitionenvironment.

(i) Radio and television broadcastingUnderVietnameselaw,theprovisionofradioandtelevisionservicescanbeofferedasbothfreebroadcastingservices(“freeTV”)andfee-based broadcasting services (“pay TV”). An organisationwishing to provide radio and television services would need toobtainalicencetooperateinthebroadcastingindustry.■ FreeTVmayonlybroadcastVietnamesechannels (defined

as radio or television channels lawfully produced or co-producedbyVietnamesenewsagencieslicensedtooperateinthebroadcastingindustry).

■ PayTVmaybroadcastbothVietnameseandforeignchannels(defined as radio or television channels lawfully producedby foreign broadcasters and made in foreign languages).ThenumberofforeignchannelsbroadcastingonpayTVislimitedto30%ofthetotalnumberofchannels. ApayTVprovidermustregisteralistofprogrammestobebroadcastinallofitsVietnameseandforeignchannels.

■ AforeignchannelmustobtainacertificateofregistrationfortheprovisionofsubscriptionservicesinVietnam.Aforeignchannel providermust also have aVietnamese agent (whoisauthorisedtoprovideforeignchannelsonpayTV)applyforsuchcertificateandfulfil itsfinancialobligations to theStateofVietnam.Thebroadcastcontentsofforeignchannelsmust complywithVietnamese laws, andneed to be editedand translatedbyanagency that is licensed toedit foreignchannels.Theeditingagencyisresponsibleforthecontentoftheirtranslationsandediting.

The conditions for operating in radio and television services aremainlygovernedbytheLawonPressNo.103/2016/QH13adoptedby the National Assembly on 5 April 2016 (“Law on Press”),and Decree 06 (No. 06/2016/ND-CP of the Government dated18 January 2016 onmanagement provision and use of radio andtelevisionservices).(ii) Motion picturesMotion picture distribution is regulated under the Law onCinematography (No. 62/2006/QH11, passed by the NationalAssemblyon29June2006,asamendedbyLawNo.31/2009/QH12on18June2009)anditsguidinglegislation.Allmotionpicturesproduced,distributedandprojectedinVietnamneed to have their content censored by Vietnam’s competentauthorities.Motionpicturesmayonlybedistributed(i.e.,theprocessofcirculatingfilmsintheformsofsale,rental,exportandimport)anddisseminated(i.e.,theintroductionoffilmstothepublicbymeansofprojection,broadcastingontelevision,orpostingontheinternetandotheraudio-visualmedia)whentheyhavetheproperpermitsgrantedbytherelevantcinematographystatemanagementagency.


Generally,no.Vietnameselawsdonotdistinguishbetweencontentbroadcastviatraditionaldistributionplatformsandcontentdeliveredovertheinternetorotherplatformsforcontentregulationpurposes.Thelawsgenerallyprohibittheprovisionandspreadingofcontentwhich is considered to constitute “social evils”, such as, amongothers:contentrelatedtopornography;incitingviolence,obscenity,depravity, or crime; undermining national security, social order,safety and fine traditions and customs; violating requirementsof protecting children against negative impacts; defamation; IPinfringement of trademarks or copyrights; and spreading virusesandharmfulsoftware.


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Tu Ngoc TrinhTilleke & GibbinsHAREC Building, 4th Floor4A Lang Ha StreetBa Dinh District, HanoiVietnam

Tel: +84 24 3772 5556Email: [email protected]: www.tilleke.com

Waewpen PiemwichaiTilleke & GibbinsHAREC Building, 4th Floor4A Lang Ha StreetBa Dinh District, HanoiVietnam

Tel: +84 24 3772 5618Email: [email protected]: www.tilleke.com

Tu Ngoc Trinh is a licensed attorney in Vietnam and a member of the Tilleke & Gibbins corporate and commercial group in the firm’s Hanoi office. Her practice focuses on TMT and franchising, as well as general corporate matters including company formation, commercial transactions, and mergers and acquisitions. Tu is committed to helping her clients achieve sustainable success in Vietnam. She obtained an LL.B. with a focus on commercial law from the Hanoi University of Law and a Certificate in French Law from the Vietnam-France House of Law, winning competitive scholarships at both institutions in recognition of her scholastic excellence. Tu is a member of the Hanoi Bar Association and the Vietnam Bar Federation.

Established in Thailand in 1890, Tilleke & Gibbins now has over 160 lawyers and consultants across Southeast Asia, with offices in Thailand, Vietnam, Indonesia, Myanmar, Laos, and Cambodia. In Vietnam, as the first foreign law firm licensed to operate, we have had an ongoing presence in Ho Chi Minh City since 1992, and in Hanoi since 1994. With more than 100 team members in our two offices, we are among the largest law firms in the country.

Our Technology, Media, and Telecommunications (TMT) practice group acts on behalf of leading multinational content developers and distributors in the broadcasting, entertainment, multimedia, satellite, and high-technology industries, and has been recognised as a leading practice in Vietnam by Chambers Asia-Pacific and The Legal 500 Asia Pacific. Our services include M&A, joint ventures, licensing, and regulatory compliance. Additionally, our team works in tandem with our top-rated intellectual property group to protect innovation and ensure the clearance and licensing of IP as it relates to film, television, radio, and internet content.

Waewpen Piemwichai is a registered foreign attorney with the Tilleke & Gibbins corporate and commercial group in Hanoi. A native of Thailand, Waewpen advises domestic and multinational clients to establish and operate businesses in Thailand and Vietnam. She specialises in foreign direct investment and TMT and has expertise in practice areas including company incorporation, joint ventures, M&A, investment promotion, foreign business licences, specific business permits and licences, labour, and immigration. Waewpen graduated with an LL.B. from Thammasat University, Thailand. She is a licensed attorney-at-law registered with the Lawyers Council of Thailand and is a member of Thai Bar Association. Waewpen is the firm’s Vietnam contact person for Thai-speaking clients, as well as one of the firm’s representatives to the Thai Business Association in Vietnam.

The Law on Telecommunications generally prohibits: (i) thedisclosure of state secrets, military, security, economic or otherconfidential information specified by law; (ii) underminingnational security, social order, safety and fine traditions andcustoms; (iii) stealthily retrieving, eavesdroppingon or accessingwithoutpermission informationon telecommunicationsnetworks;(iv) hacking and using without permission telecommunicationsresources, passwords, keywords and private information of otherorganisationsandindividuals;(v)spreadinginformationtodistort,slanderorbringdowntheprestigeoforganisationsorhonouranddignity of individuals; (vi) advertising, propagating or trading inillegalgoodsorservices;and(vii)illegallyobstructing,disruptingor undermining the establishment of the telecommunicationsinfrastructureorthelawfulprovisionanduseoftelecommunicationsservices.Telecom service agents have the right to refuse to providetelecommunications services to userswho are in violation of theabove.


Telecommunicationsoperatorsand internet serviceprovidersmaybeunderobligationstoblockaccesstocertainsitesorcontentiftheauthoritiesproperlyrequestthemtodoso.The Law on Telecommunications provides that the Governmentauthorities can request telecommunications enterprises to takeemergency preventive action and suspend the provision oftelecommunications services in cases of riot, violence or use oftelecom services to infringe uponnational security or oppose theSocialistRepublicofVietnam.Moreover, under the IT Law, individuals or organisationstransmitting or storing digital information are liable for takingnecessaryactionstopreventaccesstodigitalinformationthattheythemselvesdiscoverisillegal,orasmaybeproperlyrequestedbytheauthorities.VPNservicesareclassifiedas telecommunicationsservicesunderVietnam’sWTOcommitmentsonservices.Thus,theyareregulatedorblockedinthesamewayasothertelecommunicationsservices,asdescribedabove.


NOTES


NOTES

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