The key statute for the communications sector is Federal Law No. 126-FZ On Communications of 7 July 2003 (the Communications Law). It provides a regulatory framework for communications services in Russia, outlines communications operators’ and users’ rights and obligations, the powers of regulators and other matters. A significant amount of regulation is implemented through subordinate legislation adopted by the Russian government and other authorities. The key licensing and communication services rules include:
- Russian Government Decree No. 87 On Approval of the List of Names of Communications Services Included in Licences, and of the List of Licensing Requirements of 18 February 2005 (Decree No. 87);
- Russian Government Decree No. 575 On Approval of Rules on Providing Telematics Communications Services of 10 September 2007; and
- Russian Government Decree No. 785 On Approval of Rules on Providing Communications Services for Television and (or) Radio Broadcasting of 22 December 2006.
The Russian Government (http://government.ru) is the main Russian executive body. The Government issues key regulations in the communications sector and supervises the activities of subordinate bodies.
The Russian Ministry of Digital Development, Communications and Mass Media (Minkomsvyaz) (https://digital.gov.ru/ru/) is the principal regulatory body for the communications sector. It develops and implements state policy in the telecommunications sector, including in relation to the use of the radio-frequency spectrum, and adopts various regulations in these spheres.
The Russian Federal Service for Supervision of Communications, Information Technology and Mass Media (Roskomnadzor) (https://rkn.gov.ru) is responsible for state control and supervision in the sphere of communications. Among other things, it issues communications licences and holds tenders for granting such licences (where required), registers radio-electronic and high-frequency devices, participates in import control of such devices, issues permits for the use of communications networks and telecom-designated constructions and maintains relevant state registers. It is authorised to conduct inspections and to impose sanctions (eg, fines, suspension of licences) for discovered violations.
The Federal Communications Agency (Rossvyaz) (www.rossvyaz.ru/) manages state property and renders certain public services in the sphere of communications, including those related to creation, development and use of communication networks and satellite communication systems. Rossvyaz allocates numbering resources, registers declarations of compliance of communications means and maintains the register of such declarations.
The State Radio Frequencies Commission (Radio Frequencies Commission) (https://digital.gov.ru/ru/activity/advisories/7/) regulates the radio frequency spectrum. The commission decides which part of the radio frequency spectrum would be available for the provision of which communications services and determines plans and programmes for the allocation of radio frequency bands. In certain cases, it can also suspend or terminate frequency allocation.
The Russian Federal Antimonopoly Service (the FAS) (http://fas.gov.ru/) is a federal executive body in the field of competition, state procurement and advertising in all industry sectors including telecommunications. It also regulates prices for communications services offered by the natural monopolies (eg, the Russian Post) and ‘significant operators’ and participates in price-related disputes. It is entitled to adopt regulations, enforce laws and impose fines and other sanctions in areas of concern.
Foreign ownership restrictions
Russian law does not have a general rule restricting foreign ownership in the communications sector. However, as a matter of practice, only Russian-registered entities can apply for and obtain licences to provide communications services. These entities may have foreign ownership or other control. At the same time, certain restrictions apply in related areas such as the mass media sector (see question 18).
Further, certain Russian companies carrying out communications activities may be deemed as ‘having strategic importance for ensuring the country’s defence and state security’ (‘strategic companies’) and are subject to Federal Law No. 57-FZ On the Procedure for Making Foreign Investments in Business Companies Having Strategic Importance to the National Defence and State Security of 29 April 2008 (the Foreign Strategic Investments Law). These include companies acting as communications operators and having a dominant market position (generally, over 35 per cent share) with respect to the national communications market, fixed telephone services to no fewer than five Russian regions, fixed telephone services in Moscow, St Petersburg or Sevastopol, or in certain Russian ports.
To acquire direct or indirect control of such entities (or to acquire fixed assets of such companies exceeding 25 per cent of the aggregate book value), foreign investors may need to obtain the consent of the government’s foreign investment control commission (the government commission) headed by the Russian Prime Minister, subject to certain thresholds, exemptions, specific regimes for state-owned and offshore foreign investments and other requirements provided in the law. In addition, under Federal Law No. 160-FZ On Foreign Investments in the Russian Federation of 9 July 1997 and the Foreign Strategic Investments Law, the head of the government commission has the authority and discretion to order that any foreign investment with respect to any Russian company (ie, not necessarily a strategic company) should be cleared by the government commission.
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