Mega-problematic legislation

A decade or so ago, access to telecommunications services in residential and commercial buildings was regulated only to a limit extent, allowing almost any kind of contract to be signed. This state of affairs had both advantages and disadvantages, the latter certainly including the freedom to select any service provider that the property owner or manager wanted, even if the tenants or residents didn’t. On many occasions, this was a closed-shop, preventing other operators, no matter what price they offered for their services, from accessing the building. However, EU regulations and subsequent amendments to the domestic law gradually put paid to that state of affairs.

New order

The legislation that became the main regulatory factor for this market was the 2010 act on supporting telecommunications services and networks (also known colloquially as ‘Megaustawa’ – the ‘Mega-Act’), which put telecommunications servicesʼ access to buildings under an organisational and institutional framework. “One of the fundamental objectives of the Megaustawa was to create conditions in which all subscribers are able to obtain access to broadband internet. In other words, it was intended to ensure ‘internet under every roof’. One of the ways this objective was meant to be accomplished was through the establishment of legal structures ensuring healthy competition – of the broadest possible form – for the telecoms services market,” explains Robert Pawłowski, a legal counsel representing property owners and telecom businesses in cases related to the telecommunications law. “The Megaustawa obliged the building’s owner or manager to make the telecommunications infrastructure of the building available or allow the installation of such infrastructure to any telecoms business that wanted to provide such services to the building,” adds Robert Pawłowski.

It should be explained that this involves making existing installations and the property itself available for the installation of a new system without any charge; in other words, the building owner cannot charge any payment in return. Though this idea is in itself perfectly fair, subsequent amendments to the Megaustawa granted increasingly wide-ranging rights to the telecoms operators, at the expense of a gradual reduction in the property owners’ rights. In the opinion of the latter, this process has now gone too far – in practice, owners or perpetual users can no longer use or decide on what to do with their properties freely, while also having to incur the growing costs related to cooperating with all the telecoms companies interested in the building’s installations. “The problem is that the Megaustawa applies to all kinds of buildings – whether residential, office or retail – in the same way,” explains Robert Pawłowski. “It seems that the Megaustawa has achieved its goals when it comes to apartment blocks. And yet, in practice these regulations cannot be implemented so straightforwardly with commercial buildings, as this leads to severe and unjustified violations of the rights of those properties’ owners. And this is due to the functional differences between residential and commercial buildings, including the differences in the way telecommunications services can be installed in them,” he adds.

What specifically are the differences between these types of buildings? Well, it’s difficult to know where to start. One problem is that when it comes to apartment buildings the telecoms services subscribers are usually home owners who should really have the freedom to select the service provider they want. On the other hand, in the case of commercial buildings, the building owner is at the same time the owner of all the units, as these are leased by the tenants from the owner. The turnover is entirely different for commercial buildings – the users change very frequently, as does the spatial layout – and almost each time this happens the telecoms installations have to be reconfigured. In addition to this, commercial buildings have to guarantee their tenants (which can include embassies, banks and law firms) the highest possible levels of security and stability when it comes to the telecoms services. Connecting each external operator to the existing network requires a series of tests, the drafting of documentation and – in the case of the installation of a new network by the operator – its maintenance and breakdown service as well. And all such costs have to be covered by the building’s owner. It is worth noting that such organisational requirements and costs are usually not incurred for residential buildings – for these, bringing in another operator does not entail any costs for the owner (or the housing association or cooperative). Also, there are usually no more than just a handful of companies interested in providing telecommunications services for residential estates, whereas office building managers often receive hundreds (!) of access requests. Being connected to the building’s installations is an attractive proposition for both large corporations and much smaller companies, who can apply to do so without knowing if anyone will ever want to use their services after being linked up to it. According to the current regulations, a 30-day deadline is imposed on the owner to respond to such requests. The failure to respond to any of the applicants or the refusal to grant them access to the system almost certainly results in a complaint being submitted to the Office of Electronic Communications (UKE) – along with unpleasant consequences for the owner and manager of the building.

Educating the ministers

Over the last few months, a number of entities, including property owner associations, have been intensively lobbying the Office of Electronic Communications and the Ministry of Digitalisation to take more seriously the problems for property owners ensuing from the act in its current form. One of their fundamental positions is that the act should differentiate between residential and commercial buildings. Another is that building owners should be given the opportunity to claim full reimbursement of the costs of providing access and installing telecommunications services in a building from the operators. “The latest draft amendment of the Megaustawa, which was submitted for public consultation by the Ministry of Digitalisation in December 2018, introduced several organisational changes regarding the provisions concerned with the access of telecoms operators to buildings,” says Robert Pawłowski. “Unfortunately, the legislator has not amended the regulations in order to improve the property owners’ situation. Furthermore, the burdens imposed on building owners related to telecoms access have actually been significantly increased. Chief among these are the detailed requirements imposed by the Megaustawa on owners related to telecommunications access, which spell out that the violation of these involves substantial organisational and financial consequences,” he admits. Failure to enforce the provisions of the act can result in a penalty imposed by UKE of up to 3 pct of the company’s annual revenue, while the company’s president could be subject to a fine equal to 300 pct of that person’s monthly salary. It should be pointed out that the manager’s role in granting telecoms operators access to the property is not made abundantly clear in the act. Reservations regarding the draft act submitted by the Patrizia fund concerned its stipulation that due to nature of the agreements between the manager and the owner of the property. Therefore the property manager is authorised to undertake action related to the property only within the scope it is authorised to do so under the agreement with the owner. In fact, the relationship between the owner and the manager does not need to involve (and, in many such cases, does not involve) the authorisation to grant telecoms access to the property. Moreover, legal experts point to other, potentially problematic provisions of the amendment. “The draft act does not make it explicit that the telecoms operator’s access to the property should each time take place with the prior agreement of the owner (…) and at a previously agreed time,” writes Marek Wojnar, an attorney of the Bieniak Smoluch Wielhorski Wojnar i Wspólnicy law firm, which represents the Patrizia fund.

During the public consultations, many reservations over the draft act were also expressed by the Polish Council of Shopping Centres (PRCH). This body has concerns (among others) over the proposed provision that any new telecommunications system installed by a new entity should become a component of the property (at present, this remains the property of the company that installed it and therefore can be sold to another entity).

Competition is needed, but...

In the opinion of many legal experts, the amendment (whose main objective was, incidentally, to create better conditions for the development of 5G networks in Poland) will only place more burdens on property owners without creating any added value. The consensus has formed that the amendment will only serve to strengthen the already strong hand of the large telecoms corporations without in any way advancing that of the smaller players. “Competition on the telecommunications market is desirable and necessary, but cannot regarded as more important than removing the unfair burdens imposed on property owners,” believes Robert Pawłowski.

Public consultations concerning the proposed Megaustawa amendment came to an end at the beginning of February, with the final bill expected to be presented to parliamentary committees in the near future, after which the Polish parliament will determine the eventual form it takes.