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The Warsaw Voice » Special Sections » June 17, 2010
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Less Market Regulation
June 17, 2010   
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Anna Streżyńska, head of the Office of Electronic Communications (UKE), talks to Andrzej Jonas and Andrzej Ratajczyk.

What is the target model for Poland’s telecommunications market? To what extent should this market be a regulated one?
I believe market models should stay the responsibility of economists, not public administration. The market will find its own optimal model. That is why we are phasing out regulatory measures as the market matures and works out its own mechanisms. Needless to say, we are not entirely satisfied with everything that has been going on, but that is because businesses operating on the free market are comparatively weak. So far no telecommunications giant has entered the Polish market with enough strength to turn the market around. By European standards, the companies operating in Poland are all mid-range players. Some of these companies have been doing just fine, while others need to merge to survive. The consolidation process is necessitated by the fact that the market is quite small, the demand is low, and in the long run it is impossible for a large number of companies to stay afloat all at the same time.

In the past couple of years, the Office of Electronic Communications has been making efforts to change the attitude of monopolies which went unpunished for a long time. You want to make them play fair in their dealings with the competition and consumers. These efforts have mostly focused on Telekomunikacja Polska. Have they have produced results?
I think they have. The managers of Telekomunikacja Polska have realized that if their company wants to remain a market leader in Poland and be what the shareholders and the public expect it to be, it has get to work rather than engage in pointless disputes with the regulatory authority. Telekomunikacja Polska made a deal with the Office of Electronic Communications in October last year that may finally put an end to the “regulatory war” which has been going on in Poland for years. Under the deal, Telekomunikacja Polska undertook to carry out the responsibilities which have been imposed on it by the regulator and refrain from any discriminatory practices against other telecommunications operators.

There is an investment angle to the deal as well because the corporation promised to create 1.2 million broadband connections over three years. If Telekomunikacja Polska [which is the dominant telecommunications operator in Poland] fails to deliver on its anti-discrimination commitments, it will face a split—its business could be divided into wholesale and retail parts.

The Office of Electronic communications is the regulatory authority for the telecommunications and postal services markets, and it also oversees radio frequency management and electromagnetic compatibility issues. Do your powers also extend to what can be called “green IT”—making sure that telecommunications infrastructure consumes less energy and is more environmentally friendly?
The only project that the Office of Electronic Communications deals with that could be classified as green IT are “intelligent” energy meters, but this project is being handled by the Energy Regulatory Office, while we are taking part in it only inasmuch as it applies to telecommunications. Other than that, we do not have any powers over things like certification or promotion of environmentally friendly telecommunications equipment.

Don’t you think that the powers of your office should include issues such as green IT?
We have already taken on many extra duties that do not come with any extra funds or jobs. On the other hand, Poland lacks a single authority to oversee such issues. In many other EU member states, Denmark for example, green IT issues are handled by the regulatory authority on the telecommunications market. But regulators in other countries have much broader powers than the Polish Office for Electronic Communications. Most European governments believe that the regulator’s powers should reflect the situation on the market. In other words, the regulatory authority should be interested in a number of new aspects, such as bringing together the media and telecommunications markets, and overseeing copyrights and multimedia content. The main reason why people use the internet, or even cell phones, these days is that they look for various kinds of multimedia content, such as news, information, educational materials and so on. It is this area that politicians and regulators are mostly focusing on nowadays.

What is the Polish telecommunications market still missing to be fully mature?
It’s all about money. On the one hand, the market lacks funds from sector investors and financial investors, while on the other, the market is characterized by low demand. Over 50 percent of the public still have no access to the internet and there are far fewer cell phone owners in Poland than in the most developed countries in Europe. Besides, telecommunications operators in Poland provide a smaller range of services; besides these services are still quite primitive. Since Poland has an outdated data transmission network, internet service providers offer slower data transfer. Cable TV networks are the only exception here. The growth of internet services is further hindered by the relatively poor quality of Polish online content and inadequate copyright regulations. For example, access to archival media resources is limited and new initiatives receive insufficient support and funding.
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