preventing alternative operators from developing the market

Yesterday, the office of the Federal Antimonopoly Service of Russia (UFAS) for the Nizhny Novgorod region refused to satisfy the complaint of VolgaTelecom OJSC and left unchanged the decision to bring the company to administrative liability in the form of a fine. Fine in the amount of 400 thousand rubles. was imposed on the operator in December 2004 for failure to comply with a previously issued order, according to which VolgaTelecom OJSC must resume providing alternative operators with its lines to provide subscribers with Internet access using ADSL technology. The Deputy General Director of VolgaTelecom does not rule out that the company will appeal the FAS decision in an arbitration court. Alternative operators believe that in this way VolgaTelecom is delaying the entry into force of the FAS order, while developing new markets at this time and depriving them of this opportunity. At the end of 2003, the Volga Telecommunication Association (PAE) contacted the OFAS. The basis for contacting the antimonopoly authority was the fact that VolgaTelecom OJSC stopped providing its lines to alternative operators so that they could provide subscribers with Internet access using ADSL technology.
Thus, with reference to the new law “On Communications,” the company deprived alternative telecom operators of the opportunity to provide their subscribers with high-speed Internet access service. According to members of the association, in this way the VolgaTelecom company violated the rights not only of alternative telecom operators, but also the rights of its own clients, depriving them of the right to choose an Internet provider.
Having considered the case, on February 25, 2004, the Federal Antimonopoly Service recognized the actions of VolgaTelecom as violating the law “On Competition and Restriction of Monopolistic Activities in Product Markets” and ordered the company to restore the service to its price list from April 1, 2004.
In turn, VolgaTelecom OJSC attempted to challenge the decision in several courts, reaching the Supreme Arbitration Court, where it was denied consideration of the complaint. Between court hearings, the company tried to comply with the order by restoring the service in the price list. However, alternative operators, and after them the Federal Antimonopoly Service, recognized the implementation of the antimonopoly authority’s order as only theoretical. As a result, in December 2004, VolgaTelecom OJSC was brought to administrative responsibility for failure to comply with the decision of the Federal Antimonopoly Service and was fined 400 thousand rubles. Now the company is trying to appeal the fine, arguing that the antimonopoly authority's order has been complied with.
Yesterday, the head of the Federal Antimonopoly Service Gennady Gudkov considered the corresponding complaint. Representatives of VolgaTelecom tried to appeal to the new rules defining the relationship between telephone and data network operators, approved by government decree on March 28, 2005.
Gennady Gudkov recalled that the subject of consideration is not today, but the period from the moment the OFAS made the decision. According to the head of the Federal Antimonopoly Service, the results of the audit showed that the current connection procedure does not provide subscribers with the ability to connect to the Internet through other operators.
Summarizing that VolgaTelecom OJSC could not provide new arguments to substantiate its position, and the violations were not eliminated, Gennady Gudkov left the FAS resolution of December 29, 2004 unchanged, and VolgaTelecom’s complaint without satisfaction.
The company's deputy technical director, Andrei Zakharov, did not rule out that VolgaTelecom will again appeal the decision of the antimonopoly service.
According to alternative operators, through lengthy proceedings in arbitration courts of various instances, VolgaTelecom is simply delaying the entry into force of the FAS order, while developing new markets. As Alexey Klyuev, executive director of the Volga Telecommunication Association, explained to Kommersant, the consideration of the case in the arbitration court is delayed due to the technical subtleties that representatives of VolgaTelecom OJSC operate with, which are quite difficult for a non-specialist to understand.
According to a PAE representative, as a result of VolgaTelecom’s violation of antimonopoly legislation, other business entities suffered losses for a long time. Therefore, in the near future, members of the Volga Telecommunications Association intend to file claims with the Arbitration Court of the Nizhny Novgorod Region. Now they are calculating the amount of losses.
IRINA NIKITINA

Kommersant (N. Novgorod) No. 67 from 04/15/2005

VolgaTelecom is stalling for time