Third reading of so-called Huawei bill postponed over technical error
The third reading of the Electronic Communications Act bill scheduled for this Wednesday was postponed over what would have been a retroactive entry into force date. [Mobile communications operator] Elisa, the network of which relies on Huawei technology, maintains that changing the entry into force date is a fundamental rather than a technical change and one that will affect its business.
The Riigikogu was on course to pass the amendment before summer, with July 15 marked as its entry into force date. However, when the bill was first meant to come up for its third reading in June, the parliament was grappling with obstruction tactics by the opposition Conservative People's Party (EKRE) that caused the bill to be postponed until fall.
The Electronic Communications Act would make it possible to pass the communication networks security regulation aimed at banning the use of Huawei network devices. The 5G frequency band competition has also been stuck behind the bill.
The third reading of the bill was scheduled for Wednesday this week. However, the Riigikogu Rules and Procedures Act states that fundamental changes cannot be introduced between the second and third readings of bills, with only nuances of language and technical details still open.
The Riigikogu Economic Affairs Committee met to go over the final details of the bill earlier in the week and found it necessary to postpone the third reading by another week. The reason was the bill's entry into force date now in the past, with legal analysis required as to what should be done in such a situation.
Member of the committee Kalvi Kõva (SDE) said in a Riigikogu press release that while it is is an unfortunate precedent, there is no better solution than to add an annex to the bill.
He now says that it would concern changing the entry into force date of the act as the legal team found it impossible to pass the bill in its current form.
The bill could have been passed with an extraordinary Riigikogu sitting before going on summer vacation. Was it ever considered?
"The idea for an extraordinary sitting was on the table, but there are as many opinions as there are lawyers," Kõva says.
Chairman of the committee Kristen Michal (Reform) adds that a precedent was not in fact created, and that the Collective Agreements Act went through the same procedure and stalled for the same reason back in spring. Because changing the entry into force date between the second and third readings did not spark a public protest, the parliament decided to go down the same path with the Electronic Communications Act.
CEO of Elisa Sami Seppänen disagrees in terms of the entry into force date changing being a technical issue. For his company that uses Huawei technology, it is a matter of tens of millions of euros of investments that depend on when the law takes effect.
"The date, even a change of one month, not to mention three, determines our network infrastructure investments for a very long time. A month's difference is a big deal for us and has far-reaching consequences," Seppänen explained.
He described as incomprehensible the Riigikogu heading to its summer break with work outstanding.
The CEO said that changing the entry into force date between the second and third readings is absolutely contrary to the Riigikogu Rules and Procedures Act. "If they even fail to observe that, what are we left with? They had three months to sort it out but have done nothing," he said.
Kalvi Kõva said he does not understand how the entry into force date of a law can change a company's business decisions.
"Market participants knew that it would take effect roughly a month after the bill is passed. The latter process was postponed due to events in spring, while the text of the law has not changed, which is why the date is a technical detail. Their rights have not been violated in any way."
Seppänen points out that 5G frequency bands will be distributed early next year and says that for Elisa, the law entering into force immediately before the competition will translate into expenses.
"Our technology caters to the country 24/7 and it cannot be replaced by switching one device off and another on. Difference of a month is like day and night on the eve of the frequency bands competition. We stand to lose millions over what someone describes as a technical detail," Seppänen says, adding that a Ministry of Economic Affairs and Communications effects analysis also points out Elisa stands to lose tens of millions by being forced to replace Huawei devices.
Kristen Michal points out that what matters is the fact Seppänen is fighting the law because he represents Elisa that uses Huawei technology.
"The security-related choice of the previous government of Jüri Ratas and now Kaja Kallas' cabinet and agreement with our biggest ally (USA – ed.) does not favor them. Specifying the date of entry into force avoids an unspecified and therefore retroactively effective law creating a situation where desired rights and obligations would change to the prejudice of subjects in legislative proceedings. The technical specifications to be made by the committee will make sure entry into force will take place after the bill is passed as it would have before obstruction and summer, effectively retaining the status quo," Michal says.
Elisa's competitors Telia and Tele 2 have described the law as less than perfect but are rather eager to see it passed that would allow the 5G competition to move ahead. They also have fewer jeopardized investments as their networks are not based on Huawei hardware. The Ministry of Economic Affairs and Communications has not greenlit compensation for telecoms forced to replace technology to be banned.
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Editor: Marcus Turovski