FAS Found Ministry of Communications Violated Law
OREANDA-NEWS. September 12, 2011. The Federal Antimonopoly Service (FAS Russia) found that the Ministry of Communications of the Russian Federation violated Part 1 Article 15 of the Federal Law “On Protection of Competition”, reported the press-centre of FAS Russia.
The case was initiated in April 2011 upon petitions of some regional providers – “MetroTelKazan” CJSC, “Nizhegorodsky Sotovy Telephon”, “Kododel” CJSC and “Svyazinfomr” Ltd. – that until 2011 provided radiotelephony services in the 790-862 MHz band using CDMA and AMPS/D-AMPS technologies.
In 2000, the State Radio Frequency Commission limited the duration of such providers to 31st December 2010. In 2002 the antimonopoly authority found that decision unlawful; Arbitration Courts pronounced legitimacy and reasonableness of the position taken by the Ministry for Antimonopoly Policy.
On numerous occasions during several years the petitioners asked the Ministry of Communications to prolong their frequency permits and filed proposals to move them to other frequency bands or use other technologies, but their petitions were either remained unanswered or the Ministry refused.
On 28th December 2010, the State Radio Frequency Commission, of the Ministry of Communications, made a decision to look into possibilities of developing LTE networks, including 790-862 MHz. Regional providers, particularly who petitioned to FAS Russia, repeatedly proposed to the Ministry of Communications to take part in the work on assessing possibilities to use 790-862 MHz radio frequencies for developing LTE networks.
The Ministry of Communications failed to properly consider these petitions. On the contrary, on 28th December 2010 the State Radio Frequency Commission authorised the four largest federal providers – “Rostelecom” OJSC, “MTS” OJSC, “VympelCom” OJSC and “MegaPhon” OJSC – to carry out research in this field.
In October 2010, FAS informed the Ministry of Communications that regional providers must take part in allocating radio frequencies for developing LTE networks in order to increase competitive pressure on the federal providers of mobile communications services. The highest rates for mobile services are observed in the regions where only federal providers render such services, for instance, in Moscow and the Moscow region.
Therefore, actions / omissions of the Ministry of Communications to consider petitions from the regional providers, failure to forward them for consideration to the State Radio Frequency Commission according to the established procedures have created preferential conditions for certain economic entities, which has resulted in restricting competition on the market of mobile services.
FAS finds it unacceptable that the State Radio Frequency Commission at the Ministry of Communications considered developing LTE networks based only on the proposals made by “Rostelecom” OJSC, “MTS” OJSC, “VympelCom” OJSC and “MegaPhon” OJSC and not taking into account proposals of other economic entities. Market division is prohibited by the antimonopoly law. The oligopolistic market structure with only a few large players does not generate the necessary competition conditions enabling to protect consumer interests for receiving high-quality modern mobile communications services at affordable prices.
The Ministry of Communications will be issued a determination to ensure that the State Radio Frequency Commission at the Ministry of Communications simultaneously consider all filed proposals for prospective use of radio-frequency spectrum for LTE radioelectronic facilities, including 790-862 MHz band and other prospective frequency bands, and to prevent preferential conditions for certain market participants.
FAS will also approach the Government of the Russian Federation with proposals to adopt a package of measures to ensure pro-competitive development of the market mobile communications services.
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