INTERNET FORUM STANDS FOR DIVISION OF FUNCTIONS OF THE MINISTRY OF COMMUNICATION

BAKU/17.03.09/TURAN: On February 27 the Azerbaijan Ministry of Communication and Information Technologies interrupted work of the satellite terminal of British-Azerbaijani JV AzEuroTel and this fact shows that the country should refuse of state monopoly in the telecommunication industry.
    The Azerbaijan Internet Forum has already proposed to divide functions of the Ministry of Communication and IT.
  
  President of the Azerbaijan Internet Forum Osman Gunduz said for Turan News Agency: ďThe reason of the conflict between the Azerbaijan Ministry of Communication and Information Technologies and AzEuroTel JV, as a result of which satellite communication of 30 banks and other corporate clients has been disconnected, is the Ministryís monopoly in the communication industry. The Ministry is responsible for three important functions - state management, regulation and commercial activities. Situation is the same in Russia, Belarus and Turkmenistan.
    At the same time situation at the communication and IT market, including high prices and low quality of internet prices, situation at the mobile communication market, growing number of disputes between the operators and problems with development of free competition, is caused by the fact that the Ministry of Communication and IT has rather wide powers.
    Only in Russia, Belarus and Turkmenistan the Ministry has monopoly and fulfills all three important functions - state management, regulation and commercial activities.
    All European countries have divided these three functions in 1998-2000 and created a free competitive environment. These measures have led to reduction of prices and users have been offered new services, particularly, IP telephony. After these reforms by 2000-2001 prices for cellular communication in the EU totaled 2.05 Euro for 10 minutes. In Georgia prices were even lower - 1.05 Euro per 10 minutes. As a result of that number of mobile and fixed phones has sharply grown in the European countries. 70-80 mobile phones fell to each 100 people. Prices for IP telephony also dropped. We are proud that 14-15 stationary phones fall to each 100 people in Azerbaijan.
    At present Moldova has 22 long-distance communication operators, while our republic has only Aztelecom company. Moldova has 15 IP operators, while we donít have any. EU member-states already use only high-speed internet, while we use mainly dial-up. At present Estonia has 135 internet service providers (ISPs), Latvia 130 and Lithuania 100.
    Baltic countries (till 2000), Georgia (till 2002), Ukraine (in 2004-2005) and Moldova (till 2003) followed the EU path and created an independent regulating agency. Even Armenia has made a choice towards limitation of functions of state monopoly.
    According to the law on telecommunication adopted in Azerbaijan in 2004, all functions are concentrated in the hands of the Ministry.
    We offer to create the National Telecommunication Council to deprive the Ministry of its commercial functions and amend the law.

    - Which functions must be handed over to the National Telecommunication Council as the regulating agency?
    - Licensing of the telecommunication services; protection of consumersí rights; control over telecommunication market (prevention of interference of state agencies into activities of the operators); proposing the tariffs for the communication services and regulation of mutual connection of telecommunication networks; settlement of disputes between operators and providers concerning interaction of the networks and distribution of the number resources and etc.

    - Which functions must the Ministry of Communication and IT preserve as the regulating agency?
    - Pursuing the state policy in the telecommunication industry; control over use of radio frequencies, drafting of laws and forecast of development of the telecommunication networks and services.

    - Will form of property of the enterprises of the Ministry of Communication and IT be changed?
    - Many of them have been handed over to the State Committee of State Property and from March 2001 they have been put up for privatization. But they have not been turned into joint stock companies till now.
    You, probably, mean the main subjects, as Aztelecom, Azteleradio, BTRIB and other companies. Of course, at the first stage they must be turned into joint stock companies and then privatized. Even state holding of stock of AZERIN LLC, AzEuroTel JV and AdaNet have not been privatized till now. Slowing down of this process hinders development of free competition.

    - What will be the status of the National Telecommunication Council and who it will be accountable to?
    - I think here we would better use the world experience. Various countries offered different variants, but their essence is to separate the functions of management from the function of regulation of relations between the operators at the market.
    The Council must be an independent agency. It is necessary to ensure its financial independence. For instance, in several countries this agency is finance at the expense of the operatorsí allocations.

   - What will be the composition of the Council and how its members will be appointed?
    - As the Azerbaijani market is not big, the National Telecommunication Council must be comprised of 9-13 members, IT and telecommunication professionals. I think that their candidatures must be nominated by president and approved by parliament.

    - When can members of the National Telecommunication Council be dismissed?
    - I think this can be done only by court decision.

    - Can members of the National Telecommunication Council be owners of corporate rights of communication operators, makers of telecommunication equipment and receive financial reward from them or occupy any position?
    - No way! Only the National Telecommunication Council can receive a financial reward. It can be financed from the budget in the beginning. But in the future it must be financed at the expense of allocations of subjects of the telecommunication market to ensure its independence.

    - Can the Cabinet of Ministers cancel decisions of the National Telecommunication Council?
    - There must be the mechanism of cancellation of decisions of the National Telecommunication Council, but independence of this agency must not be limited.

    - Must be the National Telecommunication Council authorized to apply the law by force?
    - Certainly.
 
   - Which are mechanisms to ensure transparency of the National Telecommunication Councilís activities?
    - Periodical accountability, collective leadership and open holding of sessions, distribution of numbers, licenses and etc. only on the competitive basis.-0-