UPC unlawfully provided premature cable services in Jászberény
Since UPC Magyarország Kft. launched its new cable television services planned for Jászberény without any official approval – and thus the National Media and Infocommunications Authority (NMHH) was unable to verify that the network is technically appropriate and its installation is legally adequate, the service provider is forced to pay a fine of HUF 30 million. Although UPC did not challenge the infringement, it questioned the amount of the fine, yet the court of second instance affirmed the designated amount and stated that UPC’s behaviour had a negative effect on the market and jeopardized subscribers’ interests.
At the end of 2015, UPC launched its cable television services in a part of Jászberény despite the fact that it failed to report the conclusion of the construction activities related to the service. Last year, as part of an official administrative procedure, the Authority ruled for a HUF 30 million fine of second instance due to the unlicensed use of the 96 kilometre-long, new “Jászberény deep fibre cable television network”. Although the service provider did not challenge the infringement, it took legal action since it felt the amount of the fine determined by the NMHH was not in accordance with the law. However, the Metropolitan Court of Public Administration and Labour of Budapest dismissed the action of UPC Magyarország Kft. and ruled that the fine imposed on the service provider by NMHH in October of last year was reasonable and proportionate to the circumstances of the incident and the considerations determined by the law.
The court stated that the failure of the service provider to make the notification and its official registration is not a mere formality, but rather it allows the Authority to verify that the network, as a communication structure is legally and technically adequate. If this fails to take place – as in the current case with UPC – the interests of the subscribers may be clearly compromised. The determination of the unlawfulness does not hinge on whether the compromise of interests truly takes place or not. The mere fact of the unlawfulness and the jeopardizing of subscribers’ interests, and thus the possibility of a conflict of interest, provides sufficient grounds. Furthermore, in response to the reasoning of the service provider, the court stated that in relation to prematurely making the service available, the service provider cannot cite the behaviour of other market operators and market competition since the market conditions do not exonerate any service providers from the obligation of observing existing legislation. According to the court, no claims can be made on the grounds that UPC has considerable experience in the field of electronic communication and, therefore, will only provide its users with safe and quality services; the Authority must have the opportunity to verify the completed construction work in accordance with the laws. The court agreed with the position of NMHH that only fines of appropriately significant amounts – which considerably exceed the benefits achieved through the infringement – are suitable for ensuring that neither UPC nor other service providers would neglect communication directives.
In September 2015, UPC made a preliminary announcement to the NMHH that it intends to build a new network in Jászberény. The launching of the services should have taken place subsequent to the conclusion of the construction work and notifying the NMHH of such. The laws on electronic communication clearly state that until the notification is registered by the Authority no communication services may be provided through the completed communication structure. In May of last year, the Authority levied a HUF 40 million fine of the first instance on UPC and obliged it to suspend services. UPC didn’t challenge the infringement at the time, only the amount of the fine, which was lowered to HUF 30 million as a result of the procedure of second instance, since the national economy importance of the investment was not listed as an aggravating circumstance when considering the circumstances of the fine.