Corruption in Privatization in the Public Utility Sector and Growth in South-East Europe: Contracts and Regulations in Telecommunication
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| 51 The accounting rate is a wholesale rate agreed between calling parties with regard to transmitting each unit of traffic. 52 The settlement rate is the amount of money that the originating operator pays to the terminating operator and is usually 50 percent of the accounting rate. Usually those payments are made on net settlement basis as the traffic flows in both directions. 53 http://www.wto.org 54 See at http;www.wto.org/English/tratop_e/serv_e/12-tel_e.htm 56 Satellite operate as a radio rely station, receiving and transmitting signals on a specific frequency, through so-called “transponders” from and to receive and transmitters on earth. A satellite system can be geostationary based above the equator (around 36,000 kms) that revolves the same earth speed. Its advantage is that can provide wide earth transmission coverage with only three satellites, while disadvantage is that can only accommodate a limited number of systems and the transmission delay and other factors (voice telephony) diminish the communication quality. A non-geostationary satellite system operates in medium earth orbits (MEOs), such as ICO and low earth orbit such as GlOBASTAR. Those systems require a greater number of satellites to facilitate continuous coverage. 57 Communication Directive with regard to satellite communication, 94/46/EC of October 1994, Art. 3 58 The first submarine cable for telegraphy was laid between England and France in 1851 and in 1866 started to operate the first transatlantic telephone cable,. The first coaxial copper telephone cable (TAT-1) was laid down in 1956 while in 1988 the first transatlantic fiber optic cable. For facilities required to connect operators domestic network to the cable landing station see Hogan and Hartson, 1999, Submarine Cable Landing Rights and Existing Practices for the Provision of Transmission Capacity on International Routes, Report to the European Commission, August.
59 The Communication Act of 1934 was adopted during the Great Depression with a view to protect the American consumers against AT&T, which gained virtual monopoly over all telecommunication industry segments. It was the only company to offer long distance services and through Bell operating companies it provided most of the local exchange services in the country. With its subsidiary Western Electric Company ATt&T also dominated the manufacturing an distribution of telephone equipment as the Bell companies almost exclusively from the Western Electric. The Act created Federal Communication Commission (FCC) with a competence to regulate interstate telephone services such as entry, pricing (rate of return regulation), and telephone companies mergers and acquisitions. 60 Ingo Vogelsang, 2006, Privatization Experience in the European Union, The MIT Press, Seminer Series, p. 57. 61 According to the essential facilities doctrine a monopolist denying a competitor access to a critical input violates basic US antitrust legislation (Section 2, Sherman Act). 62 Sherman Act, Section 2 provides that “every person who shall monopolize, or attempt to monopolize, or combine with any other person or persons to monopolize any part of the trade or commerce among the several States, or with foreign nations, shall be deemed guilty of a felony.” 63 FCC, Trends in Telecom Service (March 2000) 64 See Motion of AT&T Corp to be Reclassified as a Non-Dominant Carrier 11 FCC Rcd 3271 (1995); Motion of AT&T to be Declared Non-Dominant for International Service 11 FCC Rcd 17963 (1996) 65 The market opening rules are the removal of all legal, economic and operational barriers to entry into the local telephone market: the authorization granted to the BOCs to enter into the long-distance telephone market upon satisfying fourteen competitive safeguards and certain conditions, and the elimination of ban imposed upon cable and telephone operators from entering each others market. 66 Wireless companies enjoy the same interconnection rates as the new competitive local access providers. The Act authorized FCC to start awarding new cellular licenses through competitive bidding. 67 With the urban to - rural subsidy high density (urban) areas where costs are lower subsidize low density urban areas. Business to- residential subsidy subsidized the residential consumers as the business people pay more per-line basis than do residential customers, while the costs of providing the services are the same. Long distance subsidies, a high charges from long distance carrier in compensation for the originating or terminating services subsidize local carriers.
68 According to Sherman Act Section 2 unlawful monopolization exists when a firms has become the only supplier not because its product or service is superior to others, but by suppressing competition through anti-competitive behavior. The Clayton act states a number of business practices where the effect of practice might be to reduce competition substantially or create a monopoly. 69Section 2 of the Clayton Act has prices discrimination provision, Section 3 exclusive dealings contracts, and section 7 mergers and joint ventures. 70 See MCI Communications v AT&T case, at 708 2nd 1081, 1132 (7th Cir, 1982).\ The Court of Appeal of the Seventh Circle ruled that AT&T refusal to grant MCI access to its local telecommunication network constituted an “ act of monopolization”. The Seventh Circuit set the following test of essential facilities:
71 See at http://www.ftc.gov/bc/abafy96thru00.pdf. 72 Colin D. Long, 1995, Telecommunication Law and Practice (2nd edition, London, Sweet and Maxwell , &2 -03. 73 For instance the special condition would apply if the licensee provides international telecommunication access, if DGT determines that the licensee has a significant market power (SMP) in a particular market in the telecom sector (a 25 percent share or more market share raises a presumption of SMP and if he is a universal service provider. 74 See the EU regulatory framework at http://europa.eu.int/information_society/topics/telecoms/regulatory/new_rf/index 75 European Commission Directive (90/388/EEC) of June 28, 1990 on competition in the markets for telecommunication services 76 The creation for an operator to have a SMP is having 25% market share or more in a few broadly defined areas of activity such as public fixed telephony and services. 77 Directive 2002/21/EC, Framework Directive of the European Parliament and of the Council of 7 march 2002 on a common regulatory framework for electronic networks and services See at http://europa.eu/scadplus/leg/en/lub/124216a.htm 78 The EU competent telecommunications bodies are: European Commission (EC), European Parliament, EC Directorate General for Information Society, Information Society promotion Office (ISPO), European Telecommunication Office (ETO), European Telecommunications Platform, European Telecommunications Standard Institute (ETSI), EC Directorate General for Competition. 79 http://europa.eu.int/en/record/mt/top/html 80 The Regulation is adopted when agreed among European Commission, the Council and the Parliament and it immediately becomes applicable at the national level as opposed to Directives for which it usually takes a year or two for the state to adopt them. 81 Regulation (EC, 2000, No 2887) of the European Parliament and of the Council, December, 18 82 Art. 9.4. of the Access Directive (2002/19/EC) Official Journal 83 2002/19/EC, Official Journal L 108 of 24.04.2002 84L 108 of 24.04.2002 European Electronic Regulation and Markets 2005 (11th Report), SEC(2006)193, Commission of the European Communities, Brussels, 20.02.2006, COM(2006)68, page 11 85 Directive 2002/22/EC (OJ L 108/7, 24 April 2002) 86 European Electronic Regulation and Markets 2005 (11th Report), SEC(2006)193, Commission of the European Communities, Brussels, 20.02.2006, COM(2006)68, page 12. 87 2002/20/EC, Official Journal L 108.24.04.2002 88 2002/58/EC States my withdraw from the obligation to protect the data in the following circumstances: to protect national and public security, for defense purpose or to enable the state authorities to conduct a particular criminal investigation. 89 The main amendments of the Directive were: Allowing operators to use traffic information to provide value –added services with the consent of the subscriber or user; Ensuring that location data will be available to mobile operators may only be used with the consent of the subscriber on an opt-in basis; Prohibiting spam (uncolicited commercial emails) except if subscribers have opted out. In July 2002 the EU Commission established the European Data Protection Supervisor with a budget of 1.272 million euro and a staff of 15 people. The Directive was in force since October 2003. In December 2003 the EC opened infringement proceedings against Belgium, Germany Greece, France, Netherlands, Portugal, Finland and Sweden for failing to implement the Directive provision into their legislation. Belgium was the only country that did not enforced the Directive up to the end of 2004.
90 The regulator has a choice of remedies concerning competition law in a form of special obligation if the operator has SMP. 91 European Electronic Regulation and Markets 2005 (11th Report), SEC(2006)193, Commission of the European Communities, Brussels, 20.02.2006, COM(2006)68, page 2.. 92 Geradin, Damien and Kerf, Michael, 2003, Controlling Market Power in Telecommunication, Antitrust vs Sector specific Regulation, pp. 261-309, Oxford University Press. 93 Ibid, pp. 119-163 94On unbundled access to the local loop. Bosnia and Herzegovina includes two administrative divisions: The Federation of Bosnia and Herzegovina and Republika Srpska, in addition there is a district Brcko which is under international administration. There are three incumbent operators in each region. Montenegro is a separate state. Kosovo is a territory under interim international administration and has its own telecommunication ministry and regulations. Under UN Resolution UNSCR 1244, the actual administration of Kosovo is carried out by the UN without the involvement of the government of Serbia.
95 Unlike in other communist countries, enterprises in the previous socio-economic system were not state owned. The equity belonged to “everybody and nobody,” that is, to all society, and was called “social capital.” The enterprises were ruled by the workers’ councils, which served as owners, and management had authority to act independently in the business environment. Therefore, the market was not restricted, as it was in centrally planned economies, from central planning contributing to managerial skills and entrepreneurial spirit. State ownership existed as a kind of ownership in a different nature as the capital unlike the central planning in other communist countries was considered as a State equity. 96 Jose A. Gomez-Ibanez and John R. Meyer, 1993, Going Private, The International Experience with Transport Privatization, The Brookings Institution, Washington, D.C., p.3. 97 Boles de Boer, David and Lewis Evans, 1996, The Economic Efficiency of Telecommunications in a Deregulated Market: The Case of New Zealand, Economic Record, vol. 72, pp. 24-35. 98 Report 2- Country Comparative Report, Supply of services in monitoring of South East Europe – telecommunications services sector and related aspects, June 26, 2006, page 12. 99 Id., page 14. 100 Broadband penetration is measured by the number of subscriptions for access solutions that provide Internet access at speeds equal to or higher than 144 Kbit/s. 101 In Albania there are telephony licenses defined for national operators (Class I) and rural operators (Class II), but no license category for urban areas. In Kosovo the incumbent will maintain exclusive control over access to international gateway facilities until December 2007. 102 See Country Comparative Report, 2006, 103 RIO was approved in April 2006. 104 The local loop is a telephone network that connects individual subscribers with the nearest switch. The state has interest in having ownership of this network because of security reason as well as generating revenue as it often represent half of the investment in the telephony networks and despite of technological convergence this line is hard to duplicate. For this reason the local loop is considered as an essential facility that must be shared by alternative operators in order to enable effective competition. 105 Commission Directive 88/301/EEC of May 1988 on competition in the markets of telecommunications terminal equipment. OJ L13, 27 May 1988, at Article 6. 106 Commission Directive 90/388/EEC of 28 June 1990 on competition in the markets for telecommunication services, OJ L192/10, 24 July 1990, at Article 7. 107 On the other hand the EU Directive on a common regulatory framework for electronic communications network and service is a slightly more restrictive by requiring member states to establish an independent regulatory authority in the telecommunication sector being functionally and legally separated from all telecommunication providers. 108 In the past in SEE countries the ministry of telecommunication had a power to regulate the telecom sector and had a role to formulate the sector policy, oversight liberalization and privatization initiatives and other issues with relation to the sector. 109 Regulatory Authorities in South-East Europe –OECD 2003, page 21 111 See “ Method for Tariff Setting – Price Cap at www.sprk.gov.lv/index/php?id=605&sadala=133 112 Under the Authorization Directive all electronic networks and services should be licensed using a mechanism that requires no explicit decision or administrative act by national regulatory authority meaning that new entrants must at most be required to notify the regulatory authority of their intentions to operate a network or provide services. 113 Directive 2002/20/EC on the authorization of electronic communication networks and services Directory: docs docs -> Application for acem docs -> Observational Assessment of Teaching Practices Teaching Assessment Initiative Proposal Submitted to The Teachers for a New Era project docs -> Traditional British values docs -> From Warfighters to Crimefighters: The Origins of Domestic Police Militarization docs -> Borzoi Club of America Register of Merit Program I. What is a Register Of Merit docs -> Protecting the rights of the child in the context of migration docs -> United Nations E/C. 12/Esp/5 docs -> 9th May 1950 the schuman declaration docs -> Getting To Outcomes® in Services for Homeless Veterans 10 Steps for Achieving Accountability Download 352.78 Kb. Share with your friends:
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