Law on Provision of Universal Service and Amendments to Certain Laws No.5369

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Law on Provision of Universal Service and Amendments to Certain Laws

Law No. 5369
Date of Adoption: June 16, 2005

CHAPTER ONE
Purpose and Definitions
Purpose
ARTICLE 1.- The purpose of this Law is to lay down the rules and procedures to govern
the provision and implementation, and fulfillment in the electronic communications
sector, of the universal service which has the qualities of a public service, but is
financially challenging for operators to provide.
Definitions
ARTICLE 2.- For the purposes of this law,
'the Ministry' means the Ministry of Transport,
'the Authority' means the Telecommunication Authority,
'Electronic communications' means transmission, emission and reception through cable,
wireless, optical, electric, magnetic, electro magnetic, electro chemical, electro mechanic
and other transmission systems of all kinds of signs, symbols, voice and images and all
kinds of data which can be converted into electric signals,
'the universal service' means the electronic communications services, including access to
Internet, which is accessible to anyone within the territory of Republic of Turkey
regardless of the geographical position, and which is to be offered with a predefined level
of quality and minimum standards in return for reasonable prices affordable to anybody,
'the incumbent universal service provider' means the operator incumbent and authorized
to provide the services hereunder in accordance with the authorization and concession
agreements as well as licenses and general authorizations within the electronic
communications sector,
'net cost of the universal service' means the net cost difference between the situation
ensured by a given operator in order to fulfill the requirements of his obligation to
provide universal service and the situation in which such operator would be if it never
undertook the obligation,
'the operator' means a capital company providing electronic communications services
and/or operating electronic communications infrastructure under an authorization
agreement or a concession agreement concluded with, and/or a license or a general
authorization obtained from, the Authority,
CHAPTER TWO
Principles, Obligations and Service Types
Principles
ARTICLE 3.- Provision of the universal service and regulations to be made in this regards
shall consider the principles that:
a) Anybody living in the territory of Republic of Turkey, without any discrimination on the
basis of region and place of residence, shall avail himself/herself of the universal service.
b) The universal service may be fulfilled also with consideration to the gross domestic
product per capita and shall be offered at reasonable prices.
c) Measures as to pricing and feasibility of technology options shall be taken with a view
to ensuring that those with lower incomes, the disabled and the groups in need of social
assistance can also benefit the universal service.
d) The universal service shall be offered to predefined service quality standards.
e) Continuity is essential to the provision and access to the universal service.
The operator's obligation
ARTICLE 4.- Operators shall have the obligation to provide the universal service specified
herein. Concession and authorization agreements, or licenses and general authorizations
may not include provisions contrary to the principles set out in Article 3 above, under
whatever name.
Scope of the universal service
ARTICLE 5.- The universal service is inclusive of:
a) Fixed telephony services,
a) Payphone services,
c) Telephone directory services to be provided in the printed or electronic media,
d) Emergency calls services,
e) Basic Internet services,
f) Passenger transportation services for settlements to which maritime lines is the single
option of access as well as communications services as regards distress and safety at
sea.
The scope of the universal service may be redefined by the Council of Ministers upon a
proposal of the Ministry in consultation with the Authority and operators at certain
intervals not more than three years, with due consideration being paid to country's
social, cultural, economic and technologic conditions.
CHAPTER THREE
Universal Service Revenues and the Net Cost
Universal service revenues
ARTICLE 6. – a) The Authority shall declare to the Ministry 2 % of the authorization and
concession agreement as well as license and general authorization amount by the end of
the month following the date of authorization,
b) Operators other than GSM operators, and Turk Telekom, shall declare to the Ministry 1
% of their annual net sales proceeds by the end of April of the following year,
c) GSM operators shall declare to the Ministry 10 % of the share they are to pay the
Treasury within the month of payment,
d) The Authority shall declare to the Ministry 20 % of the administrative penalties it has
applied under the Wireless Law No. 2813 dated 5.4.1983 and the Telegram and
Telephone Law No. 406 dated 4.2.1924 by the end of the month following the month of
collection,
e) The Authority shall declare to the Ministry 20 % of the amount remaining after all
expenditure is met at the end of the fiscal year by the end of January every year.
This amount shall be transferred to the Ministry's Central Audit Office account within the
same period of time and entered in the budget under "Universal service revenues" title.
Contributions not paid within such period shall be pursued and collected in accordance
with the provisions of the Law No. 6183 on the Procedure for the Collection of Public
Receivables upon an application of the Ministry to be filed with the relevant tax office.
Collections by tax offices shall be remitted to the Ministry's Audit Office account by the
end of the ensuing month. Delay penalty shall be applied to outstanding contributions not
paid within such period in consideration of the time between the due date and the date of
payment, under Article 51 of the Law No. 6183.
The Council of Ministers shall be free to raise or lower the abovementioned percentages
by up to 20 %.
Every year, appropriations as much as the universal service revenues estimate shall be
appropriated to the Ministry budget to cover the net cost of the universal service incurred
due to operators' obligation to provide the universal service and to meet other spending
to be made under this Law. If the appropriation requirement for universal services is
more than such service revenues estimate, then the adequate appropriations to the
Ministry budget shall be envisaged. The appropriation made to this end shall exclusively
be used for the Ministry's fulfillment of its duties entrusted through this Law. Rules and
procedures to govern the collection of revenues and making of expenditure for the
universal service shall be set out in a regulation to be drafted jointly by the Ministry and
the Ministry of Finance.
Net cost of the universal service
ARTICLE 7. – Net cost of the universal service shall be calculated on the basis of the
difference between the net cost when the incumbent operator does not provide services
within the scope of universal services and when it provides such service as an incumbent
universal service provider. However, the calculation of the net cost of the universal
service shall also take into consideration the benefits to be obtained by operators due to
their incumbency to provide the universal service. This calculation to suggest the
additional cost load brought about by the obligation to universal service shall be
conducted on net costs.
CHAPTER FOUR
Provisional and Final Articles
ARTICLE 8. – The following item (l) shall be incorporated in Article 2 of the Law No. 3348
on the Organization and Duties of the Ministry of Transport dated 9.4.1987:
l) Formulating universal service policies under the applicable laws with due consideration
to the country's social, cultural, economic and technologic circumstances; taking
measures aimed at implementing the general policy of the Government; laying down the
rules to ensure the conduct of the universal service; monitoring their implementation;
and approving the calculations related to their net cost.
ARTICLE 9. – Following items shall be annexed to the Law No. 3348 to follow item (g) of
Article 13, and the former item (h) shall be changed as item (o).
h) Setting out, and monitoring the implementation of, rules to ensure the conduct of the
universal service to the legislative provisions pertinent to the provision of the universal
service; and ensuring that operators' net costs are met,
i) Selecting the incumbent universal service provider on the regional and national level
from among operators requesting to provide services coming under the scope of the
universal service,
j) Making payments to incumbent universal service providers,
k) Monitoring and auditing the incumbent operator to find the net cost of the universal
service and whether it is within the set out rules and procedures or causing the same to
be supervised by independent auditors, in which case expenses shall be met through
universal service revenues,
l) Prescribing rules and procedures to ensure that the people in need of social protection
such as those with lower incomes and the disabled benefit the universal service on the
basis of equality and impartiality and on affordable pricing terms.
m) Designating temporary incumbent universal service providers, where required, in
order that services are made available to high-cost areas including places distant to the
center and rural areas under the terms and conditions to be established,
n) Prescribing the method to be used for the calculation of net costs of operators
incumbent to provide the universal service,
ARTICLE 10. - Following item (n) shall be annexed to the Wireless Law No. 2813 dated
5.4.1983 to follow item (m) of Article 7, and the former item (n) shall be changed as
item (o):
n) Auditing the quality and standards of the universal service in accordance with the
applicable laws; laying down the rules and procedures in regulations to this effect; and
taking the appropriate measures,
ARTICLE 11. – The last sentence of paragraph eight of Article 1 of the Telegram and
Telephone Law No. 406 dated 4.2.1924, providing that "Turk Telekom shall be obliged to
provide the minimum services required in the authorization agreements", and the
definition of "Minimum service" included in the same article shall be taken out of the
article text; the word "Minimum" in item (d) of paragraph one of the Article 4 shall be
replaced by "universal"; item (a) of paragraph one of Article 29 shall be amended as
"cases where Turk Telekom or another operator has to meet the cost of some services,
which it is incumbent to provide, including the universal service, from the fees of other
services"; and the following provisional article shall be annexed to this Law.
Provisional Article 11. – From the readily available assets (including tangible assets) of
Turk Telecommunications, Inc., an amount up to maximum YTL 2.5 billion, exclusive of
YTL 350 million to remain with the Corporation as an amount in cash, excluding NATO
and TAFICS projects advance payments, and of YTL 600 million to be deposited with the
Internal Payments Office of the Undersecretariat of Treasury as a dividends advance
payment until January 16, 2006 upon a dividends distribution resolution to be taken in
the routine Plenary Session of 2005, which is to be deducted from the distributable
profits, shall be transferred to the account of the Internal Payments Office of the
Undersecretariat of Treasury by January 16, 2006 and be entered in chart (B) of the
budget as an income item. Part of this amount to be entered in the budget as an income
item, as foreseen in the Investment Program and the State-Owned Enterprises
Investment and Financing Program, shall be established in a Higher Board of Planning
decision, which amount is to be used by the Turkish State Railways Authority (TCDD) for
the construction of new railways, maintenance, repair or improvement of a number of
railway lines and supply of railway vehicles as well as investment projects and activities
regarding drinking water supply for villages and village roads.
However, if more than 51 % of the shares of the Turk Telecommunications, Inc. is
privatized and transferred prior to January 16, 2006, the provisions of the paragraph one
above regarding the transfer and income entries shall not be applied; and NATO and
TAFICS project advance payments, YTL 350 million to remain with the Corporation as an
amount in cash, and if YTL 600 million to be transferred to the Undersecretariat of
Treasury as a dividends advance payment until January 16, 2006 is not transferred, the
readily available assets apart from this amount shall be transferred, on the date of
assignment of shares, to a separate account to be opened by the Corporation before the
assignment of shares. The amount maintained with this account and any returns thereof
(with taxes payable in connection with such returns deducted) shall be transferred to the
account of the Internal Payments Office of the Undersecretariat of Treasury on January
16, 2006 and be entered in chart (B) of the budget as an income item. Part of this
amount to be entered in the budget as an income item, as foreseen in the Investment
Program and the State-Owned Enterprises Investment and Financing Program, to be
used for investment projects and activities set out in paragraph one above, shall be
established in a Higher Board of Planning decision.
If more than 51 % of the shares of the Turk Telecommunications, Inc. is privatized and
transferred after January 16, 2006, readily available assets of the Corporation exclusive
of YTL 350 million to remain with the Corporation as an amount in cash and NATO and
TAFICS project advance payments shall be transferred to the Internal Payments Office of
the Undersecretariat of Treasury on the date of assignment of shares and entered in
chart (B) of the budget as an income item. This amount to be transferred shall not be
used in the abovementioned investment projects and activities.
Furthermore, within one month of the entry into force of this article, an amount of YTL
100 million shall be transferred from Turk Telecommunications, Inc. to Turksat, Inc. as
the capital share of the Treasury, in consideration of the capital requirement arising from
Cable TV services transferred within the framework of Article 1 of the Law No. 5335
dated 21.4.2005.
Amounts to be transferred under this article (save dividends advance payment) shall,
first, be offset by legal contingency funds of Turk Telecommunications, Inc. set aside
from past years' profits, and then by the inflation correction profits. Transfers to be made
shall not be treated as profit distribution or decommissioning in view of Corporation Tax
Law and Income Tax Law practices. Transfers under this article shall in no way be made
a subject of discount in the determination of the Corporation Tax base and distributable
commercial profits, in either the period of transfer or the ensuing taxation periods.
Provisions for participation value drops, as may be observed in the value of the
participations included in financial assets line of the assets in Turk Telecommunications,
Inc.'s balance sheet, shall not be taken as expenditure in the calculation of the financial
and commercial profit. With no regard to the activity year, such amounts shall be
utilized, by deduction from, primarily, inflation correction profits, and they are not
sufficient, from capital reserves as such reserves are created or by way of reducing the
Corporation's capital without applying provisions of the Turkish Commercial Code.
After transfers under this article are effected, no financial liability may be imposed upon
the Corporation as regards such transactions.
Papers to be issued due to cash amounts transferred under this article and any
connected transactions shall be immune and exempt from any taxes, levies and charges.
Rules and procedures for the implementation of this article shall be jointly laid down by
the State Ministry to which the Undersecretariat of Treasury is attached and the Ministry
of Finance.
ARTICLE 12. – The staff positions in the annexed list (1) have been established, and
appended to the Ministry of Transport section of the list (I) annexed to the Decree No.
190 on General Staffing and Pertinent Procedures.
PROVISIONAL ARTICLE 1. – Regulatory provisions inconsistent with the principles laid
down in Article 3, which are included in the existing concession and authorization
agreements as well as licenses and general authorizations of the operators incumbent to
provide the universal service specified in this Law, shall be harmonized with this Law
within one year at the latest. Rules and procedures for the implementation of this article
shall be set out by the Authority.
PROVISIONAL ARTICLE 2. – Staff changes required in the year 2005 for the fulfillment of
the duties assigned to the Ministry of Transport under this Law shall be made in
accordance with the provisions of the said Decree, without applying the last paragraph of
Article 9 of the Decree No. 190 on General Staffing and Pertinent Procedures.
Entry into Force
ARTICLE 13. – This Law shall enter into force on the date of its publication.
Enforcement
ARTICLE 14.—Provisions of this Law shall be enforced by the Council of Ministers.