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Telecommunications license. Inconsistencies of applicable Law

Conflict of Laws

Pursuant to the current legislation, certain types of economic activities in Ukraine may be carried out only after the business entity has obtained the relevant license. In particular, a specific list of such types of activities is set forth  in the Law No. 222-VIII “On Licensing of Types of Economic Activity” adopted on March 2, 2015 (hereinafter - the Law No. 222-VIII).

According to Article 7 of the Law No. 222-VIII, the types of economic activities subject to licensing include also activities in the field of telecommunications, taking into account the peculiarities defined by the Law of Ukraine “On Telecommunications”. At the same time, the provisions of the part two of Article 21 of the said Law (On Licensing of Types of Economic Activity) came into force on January 01, 2018, according to which the requirements for licensing of telecommunications activities, in Article 7 of the Law, lose force.

However, the issue of licensing of economic activities of entities exercising or wishing to exercise activities in the telecommunications sphere is not that simple. Unfortunately, as practice shows, the provisions of the part two of Article 21 of the Law No. 222-VIII is not a sufficient ground to cancel the licensing of this type of activities. Provisions of another legislative act in the sphere of telecommunications are still in force, namely the Law No. 1280-IV “On Telecommunications” adopted on November 18, 2003 (hereinafter - Law No. 1280-IV).

The abovementioned Law No. 1280-IV contains norms stipulating that any economic subject wishing to carry out activities in the sphere of telecommunications is subject to obtaining the license. In particular, part seven of Article 42 of the Law clearly stipulates that the following types of activities in the field of telecommunications are subject to licensing:

  • telephone communications services (fixed) with the right to operate and maintain telecommunication networks, as well as to lease local, long-distance and international telecommunication channels;
  • wireless telephone communications services (fixed) with the right to lease local, long-distance and international telecommunications channels, as well as to maintain telecommunication networks;
  • mobile telephone communications services with the right to lease the telecommunications channels, as well as to operate and maintain telecommunication networks;
  • services related to operation of telecommunication networks, television networks, wire radio broadcasting, as well as broadcasting and radio broadcasting networks, and their maintenance services on operation of telecommunication networks, television networks, wire radio broadcasting, as well as broadcasting and radio broadcasting networks, and their technical maintenance.

Thus, at present, the legislation of Ukraine has conflict of two regulatory acts, which are directly contradictory to each other. That’s why business entities that conduct or plan to conduct activities in the sphere of telecommunications have quite a logical question: Is it necessary to obtain the Telecommunications License in 2018? 

Position of state authorities

It should be noted that the licensing authorities don’t have a clear and unified position on this issue.

The State Regulatory Service of Ukraine (SRS), which is the central executive authority aimed at ensuring the implementation of the state policy, including in the field of licensing of economic activities, based on a detailed analysis of existing legislation, issued a letter No. 11559/0 / 20-17 on 21.12.2017 concluding that since 1 January 2018, there are no legal grounds for licensing of telecommunications activities, including those listed in part seven of Article 42 of the Law No. 1280-IV.

The State Regulatory Service justifies its position first of all by the fact that according to Article 3 of the Law No. 222-VIII, the state policy in the field of licensing should be based on the principle of legality, including the fact that the types of economic activity not listed in Article 7 of this Law are not subject to licensing. Moreover, as the SRS points out, pursuant to the law of Ukraine, it is expressly prohibited to license types of economic activities that do not comply with the principles of the state policy.

In its turn, the National Commission for the State Regulation of Communications and Informatization (NCRCI), an authority of state regulation in the field of telecommunications, published a bulletin on its official website for all entities exercising or wishing to exercise activities in the field of telecommunications. As the NCRCI states in its bulletin, the provisions of the Law “On Telecommunications”, which contain special rules, including those on licensing, should guide the economic entities, when it comes to licensing of telecommunications activity.

At the same time, the NCCRI assures that it will take all possible measures to resolve this conflict of laws, in particular by assisting in the adoption of the relevant legislative provisions that will fully address all issues related to the abolition of licensing and relevant license regulations in the field of telecommunications, and the introduction of a new notifying rules for entities operating in the telecommunications sector.

In addition, the analysis of the activity of the NCCRI and its decisions in 2018 shows that this authority, despite the fact that according to the Law No. 222-VIII, licensing of the telecommunications activities has been abolished, still issues new Telecommunications Licenses, as  well as extend and renew the previously issued Telecommunications Licenses in accordance with the Law No. 1280-IV.

Conclusion

Thus, taking into account the position of the NCCRI, a licensing authority in the field of telecommunications, as well as the lack of sufficient positive practice of appealing against penal fines imposed by regulatory authorities for conducting unlicensed activities in this area, we recommend to obtain the Telecommunications License, until the relevant provisions of the Law No. 1280-IV are repealed.

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