THE COMPETITION Commissioner has fined state telecommunications provider CyTA £25,000 for refusing to cooperate in a probe on a business deal with subscriber channel LTV, after its chief executive refused investigators access to his email.
Citing confidentiality rights and the constitution, CyTA’s general manager Nicos Timotheou has denied regulators access to his electronic correspondence. But the Competition Commission (CC) contends that the emails are not personal data and that failure to disclose this information hinders the completion of the investigation.
Reports say the CC wanted to go a step further by initiating criminal proceedings against Timotheou, but was dissuaded by the Attorney-general.
The penalty must be paid by CyTA and not Timotheou personally. Each additional day of non-compliance will cost the organisation a further £5,000.
In its rationale, the Commission noted: “If all the employees of semi-governmental organisations, private businesses and state corporations and government departments were to refuse access to their desk or computer, then the Commission’s work would be crippled.”
Assuming CyTA remains defiant and refuses to pay up, the CC is – in theory at least – empowered to appropriate its assets.
But if history is anything to go by, the state monopoly is sure to appeal with the Supreme Court. Last year CyTA got away with disobeying an interim court order to raise mobile prices after private operators Areeba charged the state corporation of muscling them out of the market.
Moreover, the independence of regulatory authorities in Cyprus should not be taken for granted, a fact highlighted in a recent report by the European Commission on the state of the telecom industry.
The report drew attention to overlapping jurisdictions. It said: “The legislation transposing the regulatory framework in Cyprus has conferred regulatory tasks on the Department of Electronic Communications (DEC) of the Ministry of Communications and Works, the Minister of Communications and Works, the Office of the Commissioner for Electronic Communications and Postal Regulation (OCECPR) and the Council of Ministers.
“However, the Minister of Communications and Works coordinates the ownership rights of the 100 per cent state-owned incumbent within the Council of Ministers as well as retaining some regulatory functions. This raises questions concerning the independence of the regulatory bodies…”
The local competition watchdog seems to think that Timotheou’s email contains some interesting correspondence with LTV executives with whom CyTA was negotiating a mammoth deal.
Under the agreement, the semi-governmental organisation is expected to rake in over £300 over a 15-year-period, during which its miVision platform will be gradually upgraded to triple play – broadband internet, telephony and digital television in one package.
The main criticism hovering over the deal is that it kills competition in the broadband market, since the exclusive arrangement between LTV and CyTA will scoop up almost all potential customers as both companies have a virtual monopoly in their respective trades.
Earlier this week, following an extraordinary session to discuss the contentious agreement, the Cabinet advised CyTA to postpone implementation. Under the law, CyTA needs the green light from the top government body.
Observers said yesterday the government was probably buying time, in the hopes that the uproar over the deal would subside, at which time it would formally give CyTA the go-ahead. According to commentators, in private the government – including President Tassos Papadopoulos – is keen for the agreement to go through.
The next crucial rendezvous for CyTA comes tomorrow, when at the House plenum opposition DISY will propose that £2.5 million of CyTA’s budget be frozen until the Competition Commission wraps up its probe.
But DISY will find it hard to garner support for its proposal, given that EDEK, DIKO and AKEL are favourably inclined towards the deal. The combined votes of the three parties are more than enough to secure a majority approving CyTA’s budget for 2006.
Short of spelling out the word kickbacks, DISY’s main line of attack is that the pro-government coalition is waiting to line its pockets with the dividends of the deal. One of the rumours doing the rounds – likely originating from DISY – is that LTV will be making a “donation” to the ruling DIKO party ahead of the legislative elections.
Yet the main opposition party will have a hard time making its allegations stick, as its charges of graft are sure to be dismissed as electioneering by its adversaries.
During the Cabinet meeting on Monday, the ministers and the President were said to be very impressed with a live demonstration of CyTA’s new technology. Reportedly, Justice Minister Doros Theodorou was so fascinated with the presentation he could not stop asking questions of CyTA officials.
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