The Hungarian Communications Market Developments and ...

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The Hungarian Communications Market Developments and Regulation between 2004 and 2008 2.6 Market surveillance of electronic communications services Market surveillance is a special authority duty with the twofold goal of revealing violations of law, on the one hand, and of gathering information, facts and data, on the other hand, which the Authority may rely on for the purpose of efficiently intervening as a public authority in the market. NHH wishes to achieve that service providers comply with the provisions of legal regulations and subscriber contracts by voluntarily abiding by the pertaining law. As of 2007 the Authority has switched to a fundamentally new system of procedures in accordance with the new rules of the Act on public administration procedures 22 . Contrary to previous legislation, the new procedural model stipulates that if no violation of law can be established in a given case, the Authority will simply terminate the investigation, whereas in the case of violation of law it will call the attention of the service provider concerned to law-abiding conduct. Besides facilitating voluntary abiding by the law, this solution makes authority work easier, as it is demonstrated by the 2007 figures: the subsequent control of the 196 notices issued revealed that 86 percent of service providers eliminated the deficiencies. Regular authority duties The Authority shall ex officio investigate violations of law based upon the reports received, the experience gathered from previous controls, and the analyses carried out within the framework of market surveillance activity with a view to ensuring the protection of consumers (users, subscribers) at risk in accordance with predefined plans based on individual requests and reports, which may either involve an investigation covering the entire activity of a given service provider or an entire service area (market). The authority control model in operation since 2008 preclude cases that service providers fail to meet obligations imposed by the Authority. Authority control – a follow-up control system – is a market surveillance procedure based model that guarantees the enforcement of lawful conduct. The enforcement tool most frequently used by the Authority so far has been penalty. Contrary to previous years, in line with the new order of procedure, penalties have been imposed primarily as part of ex officio procedures. Figure 2.2: Changes in substantive market surveillance penalties imposed Thousand HUF 80,000 60,000 40,000 20,000 pcs 150 120 90 60 30 0 0 2004 On request Ex officio 2005 2006 Number of decisions imposing penalties Total sum of penalties 2004 2005 2006 2007 2007 10.09.2008 10.09.2008 Thousand HUF 75,000 60,000 45,000 30,000 15,000 0 Source: NHH As a result of the follow-up control of notices by the Authority, the number of decisions imposing a penalty has more than tripled as compared to previous years’ average, principally due to violations of law concerning individual subscriber contracts and modifications of the general terms of contract. In addition to penalties, the Authority may, however, resort to other tools, too. In accordance with Eht., it may also use other means to raise the attention of consumers and to develop conscious consumer behaviour.
22 23 There is the possibility of publicly disclosing information related to the obligations of an unlawful market player: the Authority may make public any information obtained during fact-finding investigations, may publish its decision in a national newspaper at the cost of the party violating the law, and obligate the service provider concerned to publish a correction. In 2008, some of the above instruments were occasionally resorted to and as of 2009 the Authority also intends to use these means in justifiable cases, by drawing on the experience gathered from imposing penalties in previous years. Figure 2.3: Changes in the number of consumer complaints lodged to service providers (per 1000 subscribers) pcs 300 200 100 0 2007 average: 118 38 Source: NHH 32 Mobile phone 347 141 Fixed telephone Internet 2006 2007 Broadcasting (cable tv) The Authority has used publicity as a kind of regulatory tool in other ways as well. Since 2007, based upon a Government Decree 23 giving authorization to do so, the Authority has published analyses as regards the quality indicators of subscriber contracts, based upon data supplied by service providers. In the future the Authority intends 156 235 116 64 to regularly publish such important indicators for informational purposes. Service provider and authority data demonstrate that the complaints and problems are mostly related to fixed-location telephone services rather than to mobile services. (The diagram showing the distribution of complains submitted only feature those resulting in authority procedures.) The decrease in the number of reports submitted to the authority is attributable to the transformed procedural model, on the one hand and to the development of customer service, on the other hand. While earlier almost all consumer complains to the Authority brought about Authority procedures, today, a part of such complaints can be handled by means of proper information service, with individual infringements to be now handled in ex officio procedures. Between 1 January 2004 and 10 September 2008, the Authority issued more than 3,500 final decisions and over 300 notices. Experiences show that in the case of electronic communications services most problems arise in connection with the general terms of contract (modification, content and the publication thereof), the bills issued, the handling of complaints by service providers and individual subscriber contracts. Furthermore, typical infringement includes the non-performance of statutory data supply obligations. Although billing problems frequently occurred, the handling of a considerable part of such complaints does not fall within the competence of the Authority. The Authority had to make decisions in several issues over the past five years. In 2004 and 2005, penalties had to be imposed on several service providers for not complying with the reporting obligation towards the Authority as regards the general terms of contract and the rules of supplying information to subscribers. These are serious infringements as the general terms of contract are an obligatory system of contractual terms for the regulation of the legal relationship between service providers and subscribers, aiming at guaranteeing the enforcement of the statutory principles as regards the protection of consumer interests. Figure 2.4: Complains submitted broken down by service area pcs 1411 2004 1200 2005 936 919 2006 800 711 621 709 2007 2008 400 342 200 460 405 187 110 456 453 294 253 304 312 151 131 174 222 144 114 68 0 Fixed telephone Mobile Internet Broadcasting Post Source: NHH
Page 1 and 2: 1 1 The Hungarian Communications Ma
Page 3 and 4: CONTENTS Contents 1. NHH’s role i
Page 5 and 6: 02 03 years. This year one of NHH
Page 7 and 8: 04 05 NHH’s role in the regulatio
Page 9 and 10: 06 07 affected parties have failed
Page 11 and 12: 08 09 Figure 1.1: NHH’s regulator
Page 13 and 14: 10 11 Key areas of regulation for t
Page 15 and 16: 12 13 2.1 Changes in institutional
Page 17 and 18: 14 15 Market analysis decisions of
Page 19 and 20: 16 17 Decision Round 1 Year Round 2
Page 21 and 22: 18 19 purposes of WMAN, which was c
Page 23: 20 21 sional knowledge but also for
Page 27 and 28: 24 25 lution is well demonstrated b
Page 29 and 30: 26 27 surveillance activity. Servic
Page 31 and 32: 28 29 a member of the Council of Ad
Page 33 and 34: 30 31 Electronic communications is
Page 35 and 36: 32 33 Figure 3.5: Monthly average t
Page 37 and 38: 34 35 Fixed location services In Hu
Page 39 and 40: 36 37 Figure 3.11: Changes in the n
Page 41 and 42: 38 39 Figure 3.15: Changes in the n
Page 43 and 44: 40 41 Figure 3.18: Cable television
Page 45 and 46: 42 43 Results and influence of mark
Page 47 and 48: 44 45 hindered on the retail side,
Page 49 and 50: 46 47 Figure 4.2: Voice traffic sha
Page 51 and 52: 48 49 gated price index) above the
Page 53 and 54: 50 51 Figure 4.8: Monthly spending
Page 55 and 56: 52 53 the Board imposed the obligat
Page 57 and 58: 54 55 Figure 4.10: Sales of ADSL se
Page 59 and 60: 56 57 stimulation regarding the dev
Page 61 and 62: 58 59 Figure 4.14: Broadband penetr
Page 63 and 64: 60 61 The OECD study also contains
Page 65 and 66: 62 63 postponed to the distant futu
Page 67 and 68: 64 65 mately introduced EU level re
Page 69 and 70: 66 67 According to the obligation i
Page 71 and 72: 68 69 4.5 Regulatory means applied
Page 73 and 74: 70 71 The implementation of the reg
Page 75 and 76:
72 73 Epilogue Today, electronic co
Page 77 and 78:
74 75 28 The full unbundled access
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