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New tool to fight digital exclusion

The Act on Support for Development of Telecommunications Services and Networks should help bring low-cost, high-speed Internet to rural areas of eastern Poland.

The act going into effect on 17 July 2010 is designed to implement the Polish government programmes “Plan for Stability and Growth” and “Digital Poland.” The goal of the programmes is to increase availability of broadband services in Poland, speed up investments co-financed from EU funds, and eliminate barriers to investments in IT infrastructure.

Poland ranks next to last in the European Union in terms of penetration of broadband services, and the speed of growth of these services is well below the EU average. Particularly striking are disparities in access in rural areas, which exacerbates the phenomenon of “digital exclusion”—lack of access to digital educational and cultural content.

Fibre optics in the sticks

“The purpose of the act is to support the development of telecommunications infrastructure in rural areas, particularly in Poland’s eastern borderlands,” explained radca prawny Grzegorz Warzocha from the Bankruptcy and Restructuring practice group at Wardyński & Partners. “To this end, measures are being introduced to expedite investment projects and simplify procedures governed by the Construction Law and the Zoning Act. The drawn-out, multi-stage investment process has been a particular barrier, lasting at least a year regardless of the type of site where a project would be located and regardless of the position of the landowners and their neighbours.”

The act also addresses rules for shared use of existing technical infrastructure. Water, sewer and power channels have not been used before for public telecommunications purposes, because utility companies protected access to their infrastructure.

“Utilities will no longer be able to refuse access,” said Warzocha. “Shared use of infrastructure is to be governed by contract, but if the parties fail to reach agreement, the president of the Polish Office of Electronic Communications will be able to override this by issuing a decision to take the place of the contract between the parties. The act thus carries over regulatory mechanisms in the Telecommunications Law which give the regulator authority to intervene in contractual relations. Internet access is thus deemed to be a public purpose justifying restriction of the constitutional principle of economic liberty.”

Communes to provide low-cost services

Another new feature will allow territorial governmental units to provide telecommunications services based on the infrastructure to be developed. Local governments will be able to form commercial organisations and provide telecom services to meet collective needs. Under the act, providing Internet access will thus become a public service, and local governmental units will become telecom companies, authorised to join with other businesses under the Telecommunications Law to provide a full range of telecommunications services.

“In some instances local governments will be able to provide these services free of charge, or at prices lower than commercial rates,” Warzocha said. “In a certain sense the act may thus conflict with the interests of some telecoms by setting up competitors enjoying certain privileges. As a rule, the whole network is supposed to be built using EU funds, but the telecom operators bear their own investment costs. It should be borne in mind, however, that we are talking about clearly defined rural areas. This concerns several provinces along the eastern border, where commercial telecoms have shown little interest in expanding their networks because it was not economically feasible, leaving blank spots without coverage. Since we are trying to build an information society, the state must shoulder the burden of providing these services, at least up to a basic level. The act clearly provides that the new approach cannot violate principles of competition, and may be implemented only where it will not upset the balance between competitors. Nonetheless, there is an obvious conflict of interest.”

The act also introduces a specific legal institution of separate ownership of infrastructure elements. Fibre optics inside a cable that is part of the network may constitute a separate asset subject to ownership and other tangible property rights for purposes of the Civil Code. The act also amends many other laws, such as the Construction Law, the Zoning Act, the Real Estate Administration Act, the Public-Private Partnership Act and the Public Roads Act. It remains to be seen if the act will be effective in achieving low-cost, high-speed Internet access at EU levels throughout Poland.