The Hungarian Communications Market Developments and ...

The Hungarian Communications Market Developments and Regulation between 2004 and 2008
1.1 The establishment and main activities
of NHH
In 2002, the European Union adopted a New Regulatory Framework
(NRF) for electronic communications, which was transposed by
Member States in July 2003. In Hungary, the requirements of regulatory
harmonisation were attained by the adoption and implementation
of Act C of 2003 on Electronic Communication (Eht.) and its
implementation decrees.
Eht. defines the multi-player system of institutions in charge of state
responsibilities associated with electronic communications: the Government,
the Minister responsible for communications, the National
Communications Authority of Hungary (NHH), the Hungarian Competition
Authority, and the Hungarian Authority for Consumer Protection.
The legal predecessor of the National Communications Authority,
Communications Supervision was set up in 1993 through the
merger of the Postal and Telecommunications Supervision (PTF) and
the Institute for Frequency Management (FGI). PTF and FGI were
founded in 1989 transforming the Hungarian Post into companies
and separating authority and administrative functions from service
provider activities. The Communications Supervision (HíF) performed
authorisation and supervisory functions as prescribed by law, however,
market regulation was beyond the scope of this authority. In
the case of authorization activities, HíF examined itemized compliance
with the applicable regulations and it verified compliance with
subscriber contracts in the scope of its so-called market surveillance
activities prompted by individual consumer complaints.
According to the new organisational model established by Eht.,
NHH has been operating as a unified public administration body
under the control of a board since 1 January 2004. The Board is in
charge of regulatory tasks significantly influencing market operation
as well as the management of the administration body, while classical
authority functions are managed by the Office.
The Board is comprised of seven members and is presided by its
Chairman. The work of the Chairman is assisted by organisational
units under his direct control, such as the Presidential Cabinet, the
Strategic and International Directorate, the Directorate of Communications,
the Directorate of Security Affairs, the Directorate of Human
Resources and the Department of Internal Control.
Through the implementation of the European Community regulatory
framework, Eht. provides for a set of tools NHH may use to
intervene in market relations. This means that, owing to its considerably
extended scope of authority, the national regulator, as
opposed to its former role of law enforcement agency with limited
decision-making power, has become a legislator making laws in key
areas fundamentally affecting market operation by its decisions. With
regard to the utmost importance of such decisions, the associated
powers have been conferred to a separate organisational unit, the
Board of the National Communications Authority. In addition to
specific decisions concerning market regulation, the Board is also in
charge of the strategic management of the Authority.
The office of the National Communications Authority, managed by
the General Director, has an extensive scope of activity including the
following areas.
The most important tasks of the economics-related administrative
activities are to support the market analysis process and to professionally
prepare the Board’s decisions and resolutions concerning
market analysis. In addition, the Authority performs methodology and
research activities including the operation of the market monitoring
system; reporting activities; management, operation and development
of international data supply; organisation of market research related to
major areas of the electronic communications market; analysis of the
research results and the development of new methodologies.
In addition to the assessment of the technical content of reference offers
incorporated in the Authority’s decisions, the technical activities of
the Office also play an important role in the support of market analysis
processes. The technical activities include a number of other activities:
regulatory and authority duties related to identifiers, the preparation
of decisions concerning spectrum policy and management, the
development of national and international frequency plans, international
frequency coordination, and measurement service activities.
Legal activities extend to preparing legislation concerning the
scope of NHH, providing support to the Board in making resolutions
and decisions concerning legal disputes between service providers,
and representing the Authority in court procedures.
The administrative and surveillance activities of the Office incorporate
several professional areas. The Authority’s services related
to electronic signature extend to activities such as registration of
services, management of records, surveillance of services related to
electronic signature, and the supervision of notified bodies certifying
the compliance of electronic signature products.
In the framework of its authority tasks related to postal regulation,
the Authority is in charge of handling user reports and complaints,
preparing the necessary expert opinions and market surveillance
plans including the methodology of the investigations laid down in
such plans, carrying out such investigations, supervising market
operation, and formulating opinions on professional issues that may
arise concerning the market.
In the framework of its authority tasks related to market surveillance,
the Authority is in charge of monitoring the operation of the
electronic communications market and compliance with the provisions
laid down in applicable regulations, Authority decisions and subscriber
contracts, and making analyses thereof. Authority tasks also extend
to activities such as the supervision of the use of assigned identifiers,
investigations related to subscriber contracts and general terms of
contract, and the control of the sale of telecommunications terminal
equipment, radio equipment, and equipment generating high-frequency
signals or side-effects. Should the Authority determine that the