In July 2020, Hungary amended its statute on electronic communications, thereby becoming one of the first European Union states to transpose the European Electronic Communications Code into national law. Apart from the statutory rules, further arrangements at the level of implementing regulations had to be established by the end of December 2020 in order to complete the transposition. The NMHH reviewed and established twenty-two decrees to meet its commitments by the time limit. The most important changes are as follows:

Renewed rules on subscription contracts

One of the most important national regulations implementing the Code is NMHH Decree 22/2020 of 21 December 2020 on the detailed rules of subscription contracts for electronic communications, which completely revised the regulation established five years earlier. In addition to the introduction of the Code’s new concepts, the new legislation sets out regulations that apply to all subscribers and regulations which apply only to consumers, and micro and small companies as well as non-profit organisations enjoying the same protection as consumers. The decree regulates the conclusion, amendment and termination of subscription contracts, the obligatory contents of general terms and conditions and of individual subscription contracts, and the scope of information that providers are required to publish in order to inform current and future subscribers. Furthermore, the decree includes detailed rules on, inter alia, the restriction, cessation and transfer of services, and, on the expiry of the contract, unlocking network-locked devices sold at a discount together with the contract.

The amendments of NMHH Decree 13/2011 of 27 December 2011 on the quality of service requirements for electronic communications related to the protection of subscribers and users and on the authenticity of tariffs apply to the full range of subscribers as well. This decree lays down how providers must define, measure and publish the quality characteristics of their services offered to subscribers and report information about these to the NMHH. The new rules address the manner in which providers must state their obligations undertaken with regard to internet access services concerning the download and upload speed, latency and packet loss, and contain the requirements for billing systems based on measuring traffic.

NMHH Decree 13/2020 of 15 December 2020 on the conditions for providing premium rate services regulates how subscribers may be informed about premium rate services and how providers should protect subscribers from the inadvertent use of such services and thus unexpected, high bills. NMHH Decree 23/2020 of 21 December 2020 on the rules of number portability and switching providers lays down the conditions and method of transferring phone numbers from one provider to another for subscribers of telephone services (number-based interpersonal communications services according to the definition given in the Code). The decree also set outs the rules for switching between internet access providers, wherever possible without interruption of service, as well as rules on the licensing of civil engineering, on digital television equipment, and on car radios appearing on the market which were installed at the time of manufacture in new vehicles.

Transformation of the system of universal services

Under the Code, the system of universal services has been completely revised. By 21 December 2021, member states must review the justification for maintaining the elements of the service hitherto (the provision of a telephone line, national directory enquiry service, telephone directory and telephone boxes) and decide whether to continue providing them or to withdraw them. Instead of the service elements until now, an affordable broadband internet service has been placed at the centre of the universal service regulation, and the particulars of the provision of this service are given in NMHH Decree 19/2020 of 18 December 2020 on the detailed rules of the provision of the universal electronic communications service. The decree specifies the criteria for the examination of the availability of the universal broadband internet service in Hungary and its affordability, the rules for designating the universal service provider, the obligations of the universal service providers, and the conditions of recompensing any potential financial burden on providers originating from the provision of the service.

The Code introduces as an entirely new provision the possibility for the conclusion of co-investment agreements and the related voluntary commitments of providers which facilitate the deployment of very high capacity networks, and sharing the financial and other burdens among the providers. If the contents of these co-investment agreements comply with the Code and the providers undertake voluntary commitments in them in accordance with the Code, the regulatory authorities may approve these agreements and thus exempt providers having significant market power from other obligations incumbent on them. Accordingly, NMHH Decree 16/2020 of 17 December 2020 on the rules related to market analysis and the voluntary commitments of providers having significant market power regulates, in accordance with the Code, the requirements for the contents of co-investment agreements and requests for their approval by the authority, the criteria for regulatory approval, and the conditions and contents of other agreements of providers in addition to the co-investment agreement.

The Code obliges full geographical surveys to be conducted in member states from 2023 in order to establish whether there are areas without coverage where a communications network with a download speed of at least 100 Mbit/second is not available in a particular member state. NMHH Decree 9/2020 of 10 December 2020 on the detailed rules of surveying high-speed electronic communications networks regulates in detail the content of the information reported by the providers required for the geographical survey of Hungary, and sets out the rules for the geographical survey to be conducted by the NMHH on the basis of the information provided and for the list of uncovered areas compiled by the NMHH as a result of the survey.

Background, history

The Code brings about significant changes in the electronic communications market, specifies the tasks of the national authorities, and regulates, inter alia, market analysis, radio spectrum management, end-users’ rights, universal service obligations and numbering issues. One of the objectives of the Code is to promote the deployment of very high capacity networks and thus increase connectivity. Further objectives are to create balanced conditions in the competition between the market participants in a way that does not diminish the protection of consumers and to promote the spread of new technologies, in particular 5G. A new aspect is that the Code distinguishes between number-based and number-independent interpersonal communications services, in other words regulations are set out for over-the-top providers, which hitherto did not fall within the ambit of communications regulation.

Twenty years ago, on 23 August 2000, the European Commission published its package of proposals for regulating the electronic communications market (Framework Directive, Authorisation Directive, Access Directive, Universal Service Directive, Directive on Privacy and Electronic Communications), which the co-legislators eventually adopted in 2002. The first major review took place at the end of a five-year period, and the European Parliament and the Council of the European Union adopted the updated directives in 2009. Thereafter, the European Commission prepared the European Electronic Communications Code whose declared objective was for the sources of law to appear uniformly in a legislative proposal. After numerous rounds of negotiations over two years, the European Parliament and the Council published the new directive regulating the communications sector, the European Electronic Communications Code, on 12 October 2016. The proposal was adopted by the European Parliament and the Council of the European Union in November 2018, and it was published in the Official Journal of the European Union on 17 December 2018. The Code entered into force on 20 December 2018, allowing member states two years to transpose the provisions of the Code into national law.

In order to achieve the objectives of the Code in full, both the European Commission and the Body of European Regulators for Electronic Communications (BEREC) had to adopt further implementing acts. By December 2020, BEREC had prepared 11 guidelines to support market participants and authorities in the application of the new rules: simultaneously with the Code, the BEREC Regulation was adopted, which, in addition to defining the operation of BEREC, amended the Roaming Regulation in order to enable the regulation of calls to another member state within the European Union. In Hungary, the Code was transposed into statutory rules by the amendment of the Electronic Communications Act (Act LXXXV of 2020 amending Act C of 2003 on electronic communications as regards the obligation to transpose the directive establishing the European Electronic Communications Code), which was published in the Hungarian official journal Magyar Közlöny on 14 July 2020. Under the Act, implementing regulations were required in order to complete the transposition, which the NMHH introduced within the time limit.