DLA Piper Intelligence

Telecommunications
Laws of the World

Overview of legal landscape

Hungary
Hungary

The licensing of electronic communications services is harmonised with the relevant EU Directives. Accordingly, in line with the Authorisation Directive, anyone (natural or legal persons) may provide electronic communications services. Providers of electronic communications services shall only notify the National Media and Infocommunications Authority ("Authority") for the purposes of registering their intention to provide electronic communications services, indicating the proposed date of commencement. The provision of electronic communications services is not subject to prior approval by the Authority. After the notification is sent, the service provider may begin to provide the electronic communications services. However, the use of radio frequencies and identifiers is subject to individual licences.

The task of the Authority is to ensure the undisturbed operation of the media and the markets for electronic communications. The Authority is also responsible for the protection of the interests of consumers and users. Furthermore, it is also entrusted with establishing and maintaining fair conditions for an effective competitive environment, as well as with supervising the compliant behaviour of service providers.

Last modified 6 Mar 2017
Overview
Hungary

The licensing of electronic communications services is harmonised with the relevant EU Directives. Accordingly, in line with the Authorisation Directive, anyone (natural or legal persons) may provide electronic communications services. Providers of electronic communications services shall only notify the National Media and Infocommunications Authority ("Authority") for the purposes of registering their intention to provide electronic communications services, indicating the proposed date of commencement. The provision of electronic communications services is not subject to prior approval by the Authority. After the notification is sent, the service provider may begin to provide the electronic communications services. However, the use of radio frequencies and identifiers is subject to individual licences.

The task of the Authority is to ensure the undisturbed operation of the media and the markets for electronic communications. The Authority is also responsible for the protection of the interests of consumers and users. Furthermore, it is also entrusted with establishing and maintaining fair conditions for an effective competitive environment, as well as with supervising the compliant behaviour of service providers.

Last modified 6 Mar 2017
Laws and regulations

The primary legislation governing the telecommunications sector in Hungary is Act 100 of 2003 on Electronic Communications (official English translation is not available)which came into force on 1 January 2004. The Electronic CommunicationsAct implements the relevant EU Directives which form the regulatory framework for electronic communications in the European Union, among others, Directive 2002/19/EC (Access Directive), Directive 2002/20/EC (Authorisation Directive), Directive 2002/21/EC (Framework Directive) and Directive 2002/22/EC (Universal Service Directive).

Act 185 of 2010 on Media Services and on the Mass Media and Act 74 of 2007 on broadcasting and digital switchover also contain several provisions regarding the rights of the Authority, which are relevant for the telecoms sector as well.

The President of the Authority is authorised to make Decrees (laws) in various subjects such as:

  • the national frequency allocation;

  • the rules of the auction and tenders published for obtaining entitlement to frequency use rights;

  • the regulations for the use of frequency bands;

  • the qualifications required for authorisations to prepare the technical plans necessary, in certain cases, for spectrum assignment;

  • the obligation of data protection and confidentiality of electronic communications service providers, their employees, members or agents, detailed rules of data management, special conditions of secrecy, management of traffic and billing data, conditions for the indication of identifiers and call forwarding, and the essential obligations of electronic communications service providers relating to network security; and

  • the detailed regulations concerning the execution, amendment and termination of subscriber contracts, the conditions for the restriction of services, the detailed rules relating to individual subscriber contracts and the standard contract conditions of service providers, including the detailed regulations relating to directory inquiry services and directories, and to related obligations of service providers etc.

The Authority also maintains, for example, a register of media services, and electronic communications service providers, along with their services and general contracting terms.

Last modified 6 Mar 2017
Regulatory bodies

The National Media and Infocommunications Authority is an independent authority with supervisory and regulatory capacity, meaning that the President of the Authority is entitled to make Decrees regulating the electronic communications services.

Address of the Authority:

1015 Budapest,

Ostrom u. 23-25.

http://english.nmhh.hu/

Last modified 6 Mar 2017
Regulated activities

The following regulated activities are subject to registration (i.e. a notification to the Authority is required):

  • the operation of electronic communications networks; and

  • the provision of services through an electronic communications network.

According to the Electronic Communications Act, "electronic communications network" shall mean transmission systems and, where applicable, switching or routing equipment and other resources, including network elements which are not active, which permit the conveyance of signals between specific termination points by wire, radio, optical or other electromagnetic means, including satellite networks, fixed and mobile terrestrial networks, electricity cable systems, to the extent that they are used for the purpose of transmitting signals, networks used for radio and television broadcasting, and cable television networks, irrespective of the type of information conveyed.

"Electronic communications service" means a service normally provided for remuneration which consists wholly or mainly in the conveyance, and where applicable, the switching or routing of signals on electronic communications networks, including internet exchange services and public internet exchange services, but excluding services providing, or exercising editorial control over, content transmitted using electronic communications networks and electronic communications services; furthermore, it does not include 'information society services', as defined in specific other legislation, which do not consist wholly or mainly in the conveyance of signals on electronic communications networks.

The following regulated activities are subject to a permit from the Authority:

  • the use of radio frequencies (frequency allocation and radio permit) and identifiers; and

  • construction works on electronic communications structures.

Last modified 6 Mar 2017
Registration / licensing

Providers of electronic communications services have general authorisation to operate in Hungary and do not require a licence, permit, consent etc. This concept of general authorisation is derived from the Authorisation Directive which has been implemented in Hungary. A prior notification is required to the Authority of the intention to provide electronic communications services, indicating the proposed date of commencement. After the notification is sent, the provider may start providing electronic communications services.

However, the use of radio frequencies and identifiers, and also the construction of electronic communications structures, do require a permit from the Authority.

Last modified 6 Mar 2017
Establishment

From a telecoms regulatory perspective, there are no requirements for a provider of electronic communications services to be domiciled in Hungary prior to or during the provision of services.

Last modified 6 Mar 2017
Interconnection/roaming

Both ex-ante and ex-post regulations exist.

In respect of significant market power service providers, the Authority - inter alia - may impose the following obligations:

  • transparency;

  • non-discrimination in respect of interconnection and access providing;

  • accounting separation;

  • access and interconnection;

  • collocation and infrastructure sharing; and

  • functional separation.

In addition, the Authority has the power to impose access, interconnection, collocation and infrastructure sharing obligations in the absence of significant market power in order to promote efficiency and sustainable competition and to encourage and foster investments, and to maximise consumer benefits. In this respect, the Authority may also impose the obligation of non-discrimination in relation to interconnection and access.

Network agreements between operators must be submitted to the Authority for information purposes.

Last modified 6 Mar 2017
Consumer protection

The Electronic Communication Act protects consumers' interests in their relations with other parties in the electronic telecommunication market. A 'consumer' is defined as any natural person who uses or requests a publicly available electronic communications service for purposes which are outside his or her business or profession.

The Authority cooperates with the general Consumer Protection Authority in telecommunication cases affecting consumers. In the event of a violation of certain provisions of the Electronic Communication Act (e.g. regarding customer service, invoice complaint procedure, content of the invoice etc.) the general Consumer Protection Authority is the competent authority.

In the case of subscriber contracts with consumers, the Electronic Communication Act only sets out as a specific rule that any clause of an individual subscriber contract stating that it contains the subscriber’s entire understanding with respect to the general terms and conditions, shall be null and void.

In addition to the above mentioned rule, however, general consumer protection laws also apply (such as rules concerning distant contracts and unfair commercial practices).

The Electronic Communication Act and the Decree 2/2015. (III.30.) NMHH on the detailed rules of subscription agreements for electronic telecommunication services both contain strict mandatory provisions that should be included or which are applicable to subscription agreements. These include, among others, rules on the conclusion, modification, term and termination of the subscription agreement, quality of services, availability of number portability, information and notification obligations etc. Decree 2/2015 expressly sets out that the provisions of the Decree shall prevail over the Government Decree on the detailed rules of contracts between businesses and consumers. Accordingly, the general consumer protection rules in respect of consumers shall only apply if the Decree does not regulate otherwise.

In respect of business subscribers with more than 50 employees and a yearly net turnover of EUR 10 million, it is possible to deviate from the statutory rules, and in the case of other businesses it is also possible to deviate from certain statutory rules in respect of subscriber contracts. It is always possible to deviate from the statutory rules to the benefit of the subscriber.

Last modified 6 Mar 2017
Taxes and fees
  • An administrative service charge is payable for certain procedures of the Authority.

  • An administrative fee is payable after the use and reservation of frequencies.

  • All providers of electronic communications services must also pay a monitoring charge currently set at 0.212% of the net turnover of their previous business year. For universal electronic communication service providers, the charge is 0.2%.

  • Telecommunication tax: A special telecommunication tax is payable for providers of public telephone services. The basis of the tax is the duration of telephone calls and the number of sent messages of the service provider's subscriber. The rate of the tax is HUF 2 for every minute commenced in a call, HUF 2 for every message sent in the case of private individual subscribers and HUF 3 for businesses.

Last modified 6 Mar 2017
Enforcement

The Authority may impose the following sanctions in the case of breach/ contravention of telecommunication laws:

  • establishing the violation of law and notifying the relevant provider to cease and desist from the unlawful activity;

  • imposing a fine, and in the case of repeated breaches, a fine may be imposed on the executive officer of the relevant provider;

  • the Authority may terminate with immediate effect the agreement concluded by and between the relevant provider and the Authority;

  • the Authority may oblige the relevant provider to publish the decision establishing the breach on its website or in the press;

  • in the event of material and repeated breaches, the Authority may suspend the relevant provider's right to carry out electronic telecommunication services or the permission to use radio frequency for 10 to 90 days; and

  • in the most serious cases the Authority may prohibit the electronic telecommunication activities and withdraw the permission to use radio frequency.

In the event that the payment of a fee is two months late, the Authority will send a request for payment within 15 days. Should the relevant provider fail to comply with this, the Authority may withdraw the permissions.

In addition, the Authority may impose preliminary injunctions in order to prevent imminent threats affecting life, health, environment, etc. Likewise, the Authority may prohibit the provision of services, the use of radio frequencies, and the application of certain contractual clauses and fees.

In the event of unauthorised radio frequency use, the Authority may, as an administrative measure, seal and transfer the tools used for the unauthorised activity.

The Authority is also entitled to impose fines in connection with the construction of electronic telecommunication buildings.

Last modified 6 Mar 2017
Contacts
Zoltan Kozma
Zoltan Kozma
Senior Associate
T Senior Associate
Last modified 6 Mar 2017