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ST in monopoly fracas again

A heated battle has again broken out between the Association of Private Internet providers (API) and telecoms monopoly Slovenské telekomunikácie (Slovak Telecom - ST). API has angrily accused ST of abusing its monopoly status by installing a "frequency filter" [limiting the speed at which data can be transferred] on the fixed line used by the Slovak Agriculture University in Nitra, prohibiting the school's Internet access.
"By installing the filter, ST reduced the capabilities of the line to less than 1% of its previous capacity in an effort to force the institution into ordering the new Analogue Plus [an Internet service provided by ST] - which costs three times as much as the original line - or an even more expensive digital network," wrote API chairman of the board Ján Vigaš in an official statement on September 12.


Internet service providers are up in arms at Slovak Telecom's decision to force users to pay higher rates.
photo: Spectator archives

A heated battle has again broken out between the Association of Private Internet providers (API) and telecoms monopoly Slovenské telekomunikácie (Slovak Telecom - ST). API has angrily accused ST of abusing its monopoly status by installing a "frequency filter" [limiting the speed at which data can be transferred] on the fixed line used by the Slovak Agriculture University in Nitra, prohibiting the school's Internet access.

"By installing the filter, ST reduced the capabilities of the line to less than 1% of its previous capacity in an effort to force the institution into ordering the new Analogue Plus [an Internet service provided by ST] - which costs three times as much as the original line - or an even more expensive digital network," wrote API chairman of the board Ján Vigaš in an official statement on September 12.

The API's outrage began after the university's Internet connection was interrupted on September 6. When the problem was reported to ST, the university was informed that a filter had been installed on the line and that it would stay there until the school paid ST for its new Analogue Plus service.

"We consider such an act a gross violation of the duties of a telecoms provider, and a further misuse of ST's monopoly position," Vigaš continued. "The local line had been operating without problems for several years until the moment when ST, by adding the filter, made it impossible to use it further."

Peter Domonkoš, ST's product manager for leased lines, said that the filter was necessary to prevent customers from "abusing" their analogue lines, which cost users 2,000 Slovak crowns per month. Analogue lines are out-dated, he said, and cost ST too much to allow them to be used by customers for Internet access. With the Analogue Plus service, customer fees rise to 6,000 crowns per month, while a digital connection costs 8,500 per month.

The amount customers pay for an analogue line, Domonkoš continued, only covered the cost of sending data with a frequency span of 300 to 3,400 hertz. Although the analogue lines can handle a higher frequency span required for Internet usage, he said, the 2,000 crown fee analogue customers now pay does not cover ST's costs.

"By setting limits for the frequency of the sent data, users can no longer abuse the analogue lines," he said. "The filter [at 6,500 crowns] gives the customer what they actually pay for - what it costs ST to transfer the data."

In response, the API - a union which was formed in the spring of 1999 to battle ST's alleged monopoly abuses - lashed out against ST. The API first butted heads with the telecoms giant last year when ST launched their OnLine Start Internet service, which allowed users to log on for the price of a local telephone call - a luxury private providers, who usually charge customers a monthly rate, could not afford.

"It's unbelievable what ST is doing," said Márian Djurkovič, a member of API's board of directors. "This is just an excuse to make more money. They're putting a filter on existing connections and saying they won't remove it until the customer pays three times the price.

"Analogue Plus is not a service, there is no difference in the line exept the price," Djurkovič continued. "[Analogue Plus and simple analogue line connections] use the same wires - they call it a service, but it's nothing more than an increased payment for not installing a filter. They are prohibiting the development of the Internet in Slovakia."

Dag Ole Storrosten, managing director of the Nextra Internet service provider, agreed that the filter was bad for the country's IT growth and said that it had been driven by ST's desire for increased profit. "What they want is to put in their own modems and increase the prices," he said. "This is about money, increasing the value of the [ST monopoly] cash cow. I absolutely agree that they are stunting Internet growth in Slovakia."

The API said that national Internet growth would be harmed because Internet connections for the country's financially-strapped schools and universities would also be fitted with the filter, forcing the impoverished edcuational institutions to either pay fees they couldn't afford or to drop Internet access altogether.

"ST will most likely start in the near future to install the filters en masse, which would then pose a serious threat to Slovak Internet connections in the majority of Slovak schools," Vigaš wrote. "This could destroy Project Infovek [which is designed to connect all Slovak schools to the Internet by the year 2002]."

Monoply abuse denied

ST denied any wrongdoing, and accused the API of launching a "negative campaign" against the firm. But when asked if the telecoms firm would, in fact, apply the filters to Slovak schools, ST's Domonkoš said: "We don't distinguish between customers. Everyone must have equal conditions for ST services."

ST spokesperson Gabriela Nemkyová defended the firm's move by saying that prices had had to be raised for ST to cover the costs of providing the lines for Internet connections. "ST completely rejects the API's claims," she said. "We had no choice but to install the filters because it is very expensive for ST if the customer uses an anologue line for Internet connections."

She added that customers had been forewarned that the filters would be installed unless they subscribed to Analogue Plus. "We sent out letters to our customers many months ago asking them to decide by August 31 whether to take the service or not," she said. "If we received no reply, we had no choice [but to install the filter]."

Domonkoš also said that the API's accusations of abusing their monopoly status were unfounded. "The API is misusing the situation," he said. "They know there are no technical specialists in the Anti-Monopoly Office who will understand the systems involved, so they are just fighting for their own interests."

The API filed an official complaint with the Anti-Monopoly Office last week. Djurkovič said that his group would await the decision before deciding on their next move. "We expect the Anti-Monopoly Office to issue their decision in two weeks," he said September 20. "We'll just have to wait and see what happens."

Additional reporting by Martina Pisárová

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