Telecom regulation in Austria and Peru

Nowadays, telecommunication is deeply involved in peoples’ daily life activities. That is why coping with the rapid growth of this technology represents a relevant issue for every government, especially in terms of regulations. The present document aims to compare the regulatory measures implemented by Peru and Austria in an effort to guide the telecommunication market and to deal with the expansion of new technologies.

A comparison of the recent regulatory measures developed by Austria and Peru to cope with technological challenges by Summy Farfan, FH JOANNEUM Kapfenberg, “IT Law & Management”, Telecommunication & Media Law, Summer Term 2022.

Prologue by Sabine Proßnegg

It is always an honor and a pleasure to welcome international students to a course. Usually, they have to work quite a lot on their own and they have to ensure more than others what kind of knowledge they really want to take with them when they leave. One of the students doing that particularly well was Summy Farfan from Peru. That is why Summy and I decided that we want to publish a short version of her term paper as a blog. Hopefully, this will inspire others – incomings as well as Austrian students – to follow her example, to discover new places and to compare countries and their legal instruments to broaden our view.

Introduction

Nowadays, telecommunication is deeply involved in peoples’ daily life activities. That is why coping with the rapid growth of this technology represents a relevant issue for every government, especially in terms of regulations. The present document aims to compare the regulatory measures implemented by Peru and Austria in an effort to guide the telecommunication market and to deal with the expansion of new technologies. In the following section the reader is going to find a description of the most relevant regulations and leading cases. It is important to highlight that the comparison between these two countries was made despite of their huge differences in terms of economy, politics and social systems, but with an eye on acquiring a greater understanding of the legal instruments and their role in technology implementation and development.

Austria

In 2021, Austria had a 96 % share of urban households with internet access.[1] Moreover, it was one of the leaders in terms of 5G rollout, having the fastest median 5G download speed at 183.04 Mbps, provided by Drei.[2] On the other hand, Peru still has important issues regarding nationwide internet access, that is why just 76 % of the population has access to Internet.[3]

As a result of the negative impact of COVID-19 on the Austrian economic development, the government designed the Recovery and Resilience Plan (RRF) to foster the green and digital transition, supported by € 3.46 billion in grants. 53 % of this budget will be destinated to stimulate digitalization.[4] One of the projects financed by this program is the Broadband strategy 2030, whose main goal is to foster the introduction of 5G technology and achieve a nationwide coverage by 2025. McKinsey & Company state that in the following years investments in 5G infrastructure will be necessary due to the requirements that high frequencies application demand.[5] To accelerate this process the sharing of infrastructure appears to be a good solution, a tendency widely spread all over Europe.

Accordingly, the 2003 TKG [6] states that owners should tolerate some sort of operations applied for communication purposes on their property while receiving compensation for that. Also, it indicates that nondiscriminatory joint use of telecommunications structures have to be accepted, when economically reasonable and technically feasible, while not having adverse effect on competition. The Telekomcontrol Kommission (TKK) indicates that passive sharing of up to 50 % is possible and not regulated, when exceeding this percentage, the regulatory authority would apply a case-by-case analysis.[7]

The 2012 merger between H3G and Orange of infrastructure sharing can be considered as an absolute passive and active sharing infrastructure model case. H3G affirmed that one of the main effects of the merger will be the 4G network rollout acceleration and a greater network capacity compared to two-standalone networks.[8] Two years after the merger, the coverage of H3G improved by more than 20 % and it achieved a download speed of 7 Mbps and an upload speed of 3 Mbps [9], which show the positive effects of infrastructure sharing.

Peru

Peru is also searching for new measures to reduce the technological gap between its regions and achieve a nationwide coverage. The Ministry of Transport and communications (MTC) [10] mentioned that the approval of the norm that regulates active infrastructure sharing is going to reduce costs for mobile companies and the environmental impact of 5G expansion, which according to Diario Gestión [11] would require 200.000 antennas to cope with the increasing demand, leading to a huge increment in companies’ investment, as much as 300 %.[10] The norm indicates that an active sharing is not possible when it is through national roaming or when radioelectric spectrum is involved in the agreement. Other articles of the norm indicate that the arrangement must respect free and loyal competence.
As an example of the above said, two of the most important companies in Perú, Entel Perú S.A. and Telefónica del Perú S.A.A, wrote an agreement for active sharing, which was accepted in 2019 by the MTC. This agreement enabled them to share their mobile service antennas.[12] The arrangement was done with the aim to achieve coverage expansion and offer a better-quality service as affirmed by the companies in.[13] However, no evidence or analysis of the effects of this collaboration was given, so that it is not possible to determine the success of the 4G rollout.

In terms of passive sharing, the law N° 28295 is one of the main regulations. Public infrastructure owners are obligated to share their property with every operator that requires it.[14] Furthermore, the operator should offer a non-discriminatory treatment to every guest operator. It is important to indicate that the tariff of payment, conditions and the possibility of passive sharing will be assessed by the Supervisory Agency for Private Investment in Telecommunications (OSIPTEL) with the intention to avoid access barriers and to promote competence. The objectives of this law are to promote the organized growth of public infrastructure and its efficient use, with the aim to reduce social and economic costs.

Expansion aims

Back to Austria, the frequency allocation results for the Austrian companies were delivered along with the obligation to provide full coverage to underserved communities until 2025.[15] Similarly, Peru introduced a norm that regulates the radioelectric frequencies leasing for telecommunications public services, which presents an obligation to carry out the infrastructure expansion task.[16] Another measure implemented by the Peruvian government, through the supreme Decree N° 004-2021-mtc, is a modification in the payment calculation for radioelectric spectrum leasing, in such a manner that the capital used to extend the Internet coverage is discounted from the total expected amount. This new term is called CEI (coefficient of infrastructure expansion), which depending on the improvements developed by the operator and the version of the technology upgraded can be up to 40 % of the estimated collection, according to El Peruano.[17] Thanks to this last measure thirty-eight thousand people will be able to enjoy the advantages of this technology, as the official website of the Peruvian government [18] reported.

On the other hand, as a result of the European Broadband Awards 2022, the nöGIG project was selected and already started its implementation. This project is supplied by private and public investment, it aims to deploy open fibre access (FTTH) to rural areas of Lower Austria [19], so that it encourages private investments in unprofitable areas and ensures suitable broadband coverage. In Peru, PRONATEL is an entity that has similar objectives, as it was created by the MTC to promote the development of broadband nationwide and to reduce the technological gap, especially in rural areas. The website of the Peruvian government [20] mentioned that the projects developed by PRONATEL during the period among January and May 2021 achieved an execution rate of 9.4 % above recent years, which accelerated optic fiber deployment in the country.

Because of the rapid spread of the 5G technology, the EU proposed strategic and technical measures to mitigate possible risks, as it represents new challenges for the current infrastructure and regulatory framework. Austria’s position regarding this matter is tech-neutral [21], however, the implementation of the minimum-security standards of the EU toolbox already took place through the Telekom Network Security Ordinance 2020. Furthermore, the lack of competence within the country drove the legislator to refrain from taking regulatory measures against high-risk vendors, as the EU strategic measure SM03 suggested, nevertheless “Sec 45 TKG 2021 allows the Ministry of Agriculture, Regions and Tourism to classify manufacturers of electronic network components as high-risk vendors in case of deficiencies in quality or safeguarding data protection”[21]. Thanks to this policy Austria avoids geo-political discussions and achieves its goal to cooperate with inter alia Asian countries in order to deploy 5G nationwide networks.

A clear example of Austria’s position is its partnership with Huawei to expand a 5G network around the country, as opposed to other EU countries that banned the company due to supposed risks for their national security.[22] It is worth recalling that the origin of Huawei’s ban is the accusations of USA to the Chinese government of spying their users through Huawei’s devices and the American government has been pressing its allies to follow the same path.[23]

By contrast, Peru has not yet implemented obligations for the mobile operators concerning the specific case of 5G cybersecurity, nevertheless there are specific obligations regarding the protection of the user in terms of data privacy. These conditions are laid down in detail in the law for data protection, the obligations and rights of both users and operators are widely explained there.[24] It is important to mention that the Peruvian government has focused its effort on protecting data and operations of public institutions, so that it deployed the Law N° 30999, law for cyberdefense.

Conclusion

As a result of the presented investigation, it was palpable that the Peruvian government has deployed multiple measures in order to reduce the technological gap between its regions, which is a consequence of the slow advance of the technology and the isolation of rural areas. Meanwhile the Austrian government focused its efforts on offering better quality service. Both countries are applying similar regulations, however, the difference lies on the final intended goal, which is a result of the prior technological development in both countries.

Furthermore, Austria is managing quite efficiently the deployment of 5G networks while mitigating possible risks by taking into account the recommendations of the EU regarding security, as the EU has an important role as a regulator and promotor of technological development. Whereas Peru is still fighting against the technological gap, for this reason it is still lacking measures to mitigate possible risks, like cybersecurity.

Finally, the present paper demonstrated that the instrument of regulations has an important role in promoting technology, therefore it should suit the particular conditions of every country and must be assessed with the purpose of determining its effectiveness in the end.

References

[1] Statista Research Department . (2022, February 18). www.statista.com. Retrieved from https://www.statista.com/statistics/1235758/internet-access-urban-households-austria/.

[2] Oliver, D. (2021, September 08). Austrian MNO Drei tops country’s 5G speeds according to Ookla report. Retrieved from www.5gradar.com.

[3] Institute of Statistics (INEI). (2021, December 28). m.inei.gob.pe. Retrieved from https://m.inei.gob.pe/prensa/noticias/el-550-de-los-hogares-del-pais-accedieron-a-internet-en-el-tercer-trimestre-del-2021-13269/#:~:text=En%20el%20trimestre%20de%20estudio,2020%20(70%2C4%25.

[4] European Comission website. (s.f.). ec.europa.eu. Retrieved June 10, 2022 from https://ec.europa.eu/info/business-economy-euro/recovery-coronavirus/recovery-and-resilience-facility/austrias-recovery-and-resilience-plan_en#digital-transition.

[5] Grijpink, F., Ménard, A., Sigurdsson, H., & Vucevic, a. N. (2018, February 28). The road to 5G: The inevitable growth of infrastructure cost. McKinsey & Company. Retreived June 07, 2022 from https://www.mckinsey.com/industries/technology-media-and-telecommunications/our-insights/the-road-to-5g-the-inevitable-growth-of-infrastructure-cost.

[6] Telecommunication Act, Rundfunk und Telekom Regulierungs-GmbH (RTR-GmbH). (s.f.). www.qcert.org. Retrieved from https://www.qcert.org/sites/default/files/public/documents/Austria-Telecom-Telecommunications%20Act%202003-Eng-2003.pdf.

[7] Telekom-Control Kommission (TKK). (2018, November 19). www.rtr.at. Retrieved June 10, 2022 from https://www.rtr.at/TKP/aktuelles/veroeffentlichungen/veroeffentlichungen/TKKPositionInfrShare2018.en.html.

[8] HUTCHISON 3G AUSTRIA/ ORANGE AUSTRIA, COMP/M.6497 (2012, December 12). Retrieved from https://ec.europa.eu/competition/mergers/cases/decisions/m6497_20121212_20600_3210969_EN.pdf.

[9] Pedrós, X., Bahia, K., Castells, P., & Abate, S. (s.f.). Assessing the impact of mobile consolidation on innovation and quality. GSMA.

[10] Ministery of Transport and Communications (MTC). (2021, February 06). www.gob.pe. Retrieved from https://cdn.www.gob.pe/uploads/document/file/1689656/RM%20N%C2%B0%20136-2021-MTC/01.pdf.

[11] Diario Gestión . (2022, January 22). Escasez de antenas retrasaría llegada de tecnología 5G al Perú, advierten. Gestión.

[12] Ministery of Transport and communications(MTC). (2020, April 03). www.gob.pe. Retrieved from https://www.gob.pe/institucion/mtc/noticias/111796-comparticion-de-infraestructura-de-telecomunicaciones-mejora-el-aprovechamiento-de-recursos-y-los-servicios.

[13] Telefónica del Perú S.A.A. (2019, May 10). https://www.osiptel.gob.pe. Retrieved from https://www.osiptel.gob.pe/media/4pqpbw20/entel-tdp-infra-activa.pdf.

[14] Ministry of Transport and Communications (MTC). (2015, April 29). www.gob.pe. Retrieved from https://cdn.www.gob.pe/uploads/document/file/19060/1_0_3556.pdf.

[15] RUNDFUNK UND TELEKOM REGULIERUNGS-GMBH(RTR). (s.f.). www.rtr.at. Retrieved from https://www.rtr.at/TKP/was_wir_tun/telekommunikation/spectrum/procedures/Multibandauktion_700-1500-2100MHz_2020/advanced_coverage_obligations/Communities.en.html.

[16] El Peruano. (2019, May 28). As stated by the MTC. Decreto Supremo que aprueba la Norma que regula el arrendamiento de bandas de frecuencias de espectro radioeléctrico para la prestación de servicios públicos de telecomunicaciones. El Peruano: Diario Oficial del Bicentenario, pp. 25-39.

[17] El Peruano. (2021, January 31). Decreto Supremo que modifica el literal a) del numeral 2 del Artículo 231 y los Anexos II y III del Texto único ordenado del Reglamento General de la Ley de Telecomunicacione, aprobado por Decreto Supremo Nro. 020-2007-MTC y el Artículo 3 del Decreto Supr. El Peruano: Diario oficial del Bicentenario, pp. 23-27.

[18] www.gob.pe. (2021, May 08). www.gob.pe. Retrieved from https://www.gob.pe/institucion/mtc/noticias/491903-mas-de-38-mil-personas-se-beneficiaran-con-internet-movil-4g-gracias-a-nueva-metodologia-del-canon-movil/.

[19] Directorate-General for Communications Networks, Content and Technology. (2022, February 23). digital-strategy.ec.europa.eu. Retrieved June 10, 2022 from https://digital-5
strategy.ec.europa.eu/en/news/lower-austria-holistic-solution-supply-entire-rural-area-sustainable-ftth-austria.

[20] www.gob.pe. (2021, June 03). www.gob.pe. Retrieved June 6, 2022 de https://www.gob.pe/institucion/mtc/noticias/498499-pronatel-ejecuto-mas-del-70-de-su-presupuesto-en-proyectos-de-banda-ancha-en-el-periodo-enero-mayo-2021.

[21] Anderl, A. (2022, February 24). www.dorda.at. Retrieved from https://www.dorda.at/en/publications/austrian-path-5g-cybersecurity?utm_source=Mondaq&utm_medium=syndication&utm_campaign=LinkedIn-integration.

[22] Noyan, O. (2021, October 29). www.euractiv.com. Retrieved from https://www.euractiv.com/section/5g/news/austria-to-also-rely-on-huawei-in-5g-rollout/.

[23] Murphy, A., & Parrock, J. (2021, July 28). www.euronews.com. Retrieved from https://www.euronews.com/next/2021/07/28/huawei-eyes-a-place-within-europe-s-digital-future-despite-5g-bans-in-some-countries.

[24] El Peruano. (s.f.). Normas legales actualizadas. El Peruano. Retrieved June 13, 2022 from https://cdn.www.gob.pe/uploads/document/file/272360/Ley%20N%C2%BA%2029733.pdf.