STANDARD TWINNING PROJECT FICHE 1 Basic information twgf_approved_ for publication.pdfEU and Ukraine (Section “Telecommunications Services”). Furthermore, the Twinning project

Standard Twinning Project Fiche for the Institutional Twinning of the National Commission for Communications Regulation, Ukraine

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STANDARD TWINNING PROJECT FICHE

1 Basic information 1.1 Programme: ENPI 1.2 Twinning number: UA 10/ENP-PCA/TE/22 1.3 Title: Supporting enhancement of the Regulatory and Legal Competence of

the National Commission for Communications Regulation of Ukraine regarding Telecommunications Sector Regulation

1.4 Sector: Information Society 1.5 Beneficiary country: Ukraine

2 Objectives

2.1 Overall objective The overall objective of this project is to support development of the telecommunications regulation in Ukraine in line with the EU relevant acquis, experience and best practice.

2.2 Project purpose The purpose of this project is strengthening of the independence and administrative capacity of the National Commission for Communications Regulation of Ukraine in the field of communications in order to ensure its ability to take appropriate regulatory measures and enforce its own decisions and all applicable regulations and to guarantee fair competition in the markets.

2.3. Contribution to National Development Plan/Cooperation Agreement and Association Agenda

The EU attaches particular importance to the development of the electronic communications sector in Ukraine. The EU-Ukraine Partnership and Cooperation Agreement (article 66 “Postal and Electronic Communications”) and the EU-Ukraine Action Plan (Section 13 “Acceleration of Progress Achievement in the Area of Policy and Regulation of Electronic Communications Facilities”) have provided the legal and practical framework for EU-Ukraine cooperation in the areas of communications and information society.

Since the adoption in February 2005, the parties to the EU-Ukraine Action Plan, have made considerable progress in electronic communications policy and regulations. In particular,


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according to the Government decision, the powers concerning management and regulation in the area of telecommunications were separated between different public bodies. According to the Action Plan, a number of legislative and regulatory acts on the issues of licensing regulation and exercising activities in the area of telecommunications, numbering and radio frequency resources allocation, tariff regulation, interaction between operators on networks interconnection issues, supervision and control over quality of services etc. were elaborated and implemented in the sector.

Having implemented the commitments taken on the “Information Society” sector under the EU-Ukraine Action Plan, the Government of Ukraine has expressed its willingness to move towards implementing the relevant EU acquis in relation to the national electronic communications sector. This aspiration has been reflected in the provisions of the EU-Ukraine Association Agenda1(approved by written procedure on 24 November 2009). The Association Agenda replaces the EU-Ukraine Action Plan and aims at preparing for and facilitating of the early implementation of the new EU-Ukraine Association Agreement, currently under negotiation, through agreement on concrete steps towards attainment of its objectives.

This Twinning project will assist Ukraine in realizing the provisions of the Association Agenda related to the strengthening of the national regulator's independence and administrative capacity and the approximation of national legislation pertaining to the electronic communications sector with that of the relevant EU acquis. In addition, the Twinning will facilitate the implementation of the provisions of the future Association Agreement (Section “Information Society”) and the creation of the free trade area between EU and Ukraine (Section “Telecommunications Services”).

Furthermore, the Twinning project will support implementation of the Concept of Telecommunications Development in Ukraine (“Concept”), approved by the Decree of the Cabinet of Ministers of Ukraine (No. 316 of 7 June 2006), designed to realize an efficient regulatory policy and to improve the legislative and regulatory framework in the area of electronic communications.

Finally, the Twining project will assist to put into effect a number of the “Concept” provisions, e.g. facilitation of tariff policy improvement, cooperation between operators on interconnection issues, and enhancement of NCCR organizational capacity.

3 Description of the Twinning Project

3.1 Background and justification: Ukrainian telecommunications market is regulated by the Law on Telecommunications 2003. NCCR was founded in April 2005 in accordance with the Law on Telecommunications. Regulatory authority was established on the basis of the separation of power with the sector Ministry and the assigned new tasks.

1 http://ec.europa.eu/delegations/ukraine/documents/eu_uk_chronology/association_agenda_en.pdf


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The major stakeholders in the telecommunications industry and their relative functions are: Ministry of Transport and Communications of Ukraine, via its subordinate, State

Administration of Communications, which implements state policy in the area of communications, elaborates legislative and regulatory proposals, manages communications undertakings and use of radio frequency spectrum, forecasts telecommunications networks and services development;

National Commission for Communications Regulation of Ukraine (NCCR), which provides licensing and registration functions for the provision of electronic communications networks and services, radio frequency resource allocation, numbering resource allocation, tariff regulation, interconnection, pre-trial dispute resolution, services quality control;

State Inspection of Communications: supervision of communications markets; Antimonopoly Committee of Ukraine: assuring of fair competition in the market; Market players: service provisioning.

In terms of Market development, the Ukraine telecommunications sector has emerged from a long slumber. Specifically, sector revenues have grown from 27.5 billion UAH in 2005 to 42.9 billion UAH in 2009, although down slightly from 2008, it represents an impressive growth trajectory indeed. The principal features of the Ukraine telecommunications sector at the end of 2009 were the following:

Mobile revenues were 28.5 billion UAH, while the subscribers totalled approximately 55.3 million, and the penetration rate in the mobile market in Ukraine remains steady at 120 percent.2

Fixed line revenues totalled 8.8 billion UAH, with the number of subscribers amounting to about 12.4 million, and a density of 28.3 percent per 100 inhabitants.3

Broadband revenues reached 3.4 billion UAH, with Internet subscribers totalling approximately 15.3 million, of which 2.1 million were broadband subscribers.4

Average annual per capita expenditures on telecommunications amount to approximately 330 UAH, or about 1.5 percent of per capita GDP.5

At the end of 2009, NCCR had issued 571 licenses and 1,775 entities were included to the Register of Telecommunications Operators and Providers.

The largest operator in fixed telephony market in Ukraine is Ukrtelecom with a market share of 75 percent. The leaders in the mobile market are MTS (MTS Russia) and Kyivstar (Telenor, Norway/Vimpelcom, Russia), as well as Astelit (Turkcell, Turkey) whose market shares collectively exceed 90 percent.

Since the Law on Telecommunications was adopted in 2003, the market has changed significantly: mobile communications have overtaken fixed line communications, new service providers have entered the sector, new service have been introduced, service prices have declined. Therefore in order to exercise new regulatory tasks in an extended regulatory environment and facilitate efficient competition in communications market, the NCCR needs additional powers. This requirement has been proven by the analysis of the Law on Telecommunications for compliance with the 2002 EU framework in the area of

2 Source: ITU, World Bank and NCCR 3 Source: ITU, World Bank and NCCR 4 Source: ITU, World Bank and NCCR 5 Source: World Bank and NCCR


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electronic communications which had recently been carried out by the Directorate General on Human Rights and Legal Issues within the joint EU – Council of Europe project (hereafter “EU-CoE project”) “Promotion of European standards in the Ukrainian Media Environment”. The analysis of the current Ukraine Law on Telecommunications was done from the perspective of its compliance with the existing EU electronic communications regulatory framework which is based on the provisions of the EU Directives of 2002. However, provision of other legislative acts, in particular, concerning competition, radio frequency resource usage, activity licensing exercising etc. were not taken into account within this analysis. Moreover, this analysis revealed a number of gaps between the Law on Telecommunications and the European regulatory framework concerning tasks and functions needed by an efficient regulatory authority. Therefore, the Twinning between the NCCR and the MS regulator(s) is considered to be an efficient tool to address the issue on enhancement of regulatory and legal capacity of the NCCR in telecommunications sector regulation, notably carrying out of the comprehensive assessment of the current legislative and regulatory framework in the area of Ukrainian telecommunications sector regulation and preparation of recommendation on amending legislation; implementation of promotional regulation by means of markets analysis, improvement of interaction between the NCCR and market players on the issues of interconnection, revenues/expenses accounting separation, as well as improvement of NCCR organisational aspects and human resources development. This fully supports the aims of the “Information Society” Sector of the EU-Ukraine Association Agenda.

3.2 Linked activities: The European Bank for Reconstruction and Development (EBRD) carried out “Comparative assessment of the telecommunications sector in the transition economies” in December 2008. The purpose of this assessment was to examine whether the legal and regulatory framework for communications in the Bank’s countries of operation is sufficiently extensive to secure fundamental sector transition and reform objectives. It therefore measures the state of play in the communications sector (i.e. status, progress, level of approximation of local laws/regulations to international standards, future needs, etc). Assessment concluded that “Ukraine is deemed to have “Medium compliance”. To date, NCCR has participated in the following TAIEX events: 10/2007 (Belgrade, Serbia): Workshop on Application of EU Regulatory Framework in

the Electronic Communications Area (market analysis procedures) (INT MARKT24002)

5/2009 (Kyiv, Ukraine): Workshop on Access and Interconnection, in particular Sharing of Electronic Communications Infrastructure Facilities (INT MARKT 32021)

6/2009 (Podgorica, Montenegro): Workshop on Carrying out Relevant Markets Analysis following new EC Recommendation (INT MARKT 32355)


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2/2010 (Vienna, Austria): Study Visit on experience studying of organization of quality control of services provision on EU telecommunications market of Austria (IND/STUD 33054)

9/2010 (Kyiv, Ukraine): Workshop on the EU Regulatory Framework for Electronic Communications and its Impact on the Economy

Materials and information obtained by the NCCR representatives who participated in the above listed TAIEX events were used for elaboration and further approval of a number of the NCCR regulatory decisions; namely: - A list of Ukrainian telecommunications services markets which have been approved for

analysis relating to ex-ante regulation; - Provisions for accounting in telecommunications market; - Procedures for regulation of tariffs related to public electronic communications services; - Procedures for access to electronic communications cable duct infrastructure; - Changes to the rules of public telecommunications network interconnection; - Procedures for mutual settlements between telecommunications operators for access

services to public telecommunications networks; - Provisions related to the quality of telecommunications services; - Provisions for pre-trial expert examination related to dispute resolution procedures

between telecommunications operators etc.

Moreover, the information obtained was used within elaboration of the new Law “On Amending the Law of Ukraine “On Telecommunications” on the extension of the list of services. The new Law was approved on 1 July 2010 (No. 2392VI) and it also foresees the service of number portability.

The NCCR elaborated the draft Law of Ukraine “On Amending Certain Legislative Acts of Ukraine concerning definition of the powers of the National Commission for Communications Regulation of Ukraine”.

The EU-Council of Europe Joint Project “Promotion of the European standards in the Ukrainian media environment” (September 2008 – December 2010) related activity see paragraph 3.1.

The new EU-CoE joint media programme, planned to be started in January 2011, would encompass the analysis6 of the two main draft telecoms laws, which have been discussed in the national Parliament since 2008, regarding their conformity with EU acquis communautaire. The main partner with whom the CoE-EU project plans to work with on this analysis will be Verkhovna Rada.

3.3 Results: The mandatory results as defined below are based on discussions with the beneficiary regulator and they reflect adequately the desired harmonisation with referenced EU electronic communications regulatory framework.

The mandatory results to be achieved by this Twinning project are being structured according to the components as follow:

6 If available for the time of Twinning project implementation, to be taken into account


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Component 1: Legal approximation Comprehensive assessment carried out on the existing Ukraine legislative and regulatory framework, including relevant secondary legislations related to telecommunications sector regulation and their compliance with the EU regulatory framework assessed. Based on this assessment the NCCR is capable to prepare proposals for amending existing legislation and regulations reflecting the current telecommunications market environment in Ukraine.

Component 2: Adoption of Incentive Based Regulation Regulations and practical guidelines drafted to empower NCCR and to entrust it with the means to carry out market definition, market assessment and to define operators with significant market power. Regulations drafted to empower NCCR to set rules for interconnection cost calculations in approximation with relevant EU regulatory framework and EU member states best practice. Calculation models defined.

Regulations drafted to give NCCR power and means to implement accounting separation. NCCR guidelines for accounting separation in accordance with the European regulatory framework are in place.

Component 3: Organisation & Human Resource Development NCCR’s organisation has been updated to enable NCCR carry out its expanded tasks in evolving telecommunications environment and to increase its efficiency in the field of cooperation with other state organisations.

3.4 Activities Based on the objectives outlined in Section 2 and the assessment of the telecommunications market and institutional framework in the Ukraine, the Twinning Project has been formulated in terms of three principal components, aiming at the strengthening of NCCR capabilities in the following areas:

Component Title

1. Legal approximation

2. Adoption of Incentive Based Regulation

3. Organisation & Human Resource Development

3.4.1 Component 1: Legal Approximation The aims of this component are: 1) to carry out a comprehensive analysis of the legislative environment in the area of electronic communications in Ukraine, taking into account analysis of the Law on Telecommunications provided by the EU-CoE project (hereafter the EU-CoU project's analysis) 2) and assisting the NCCR in the preparation of proposals for


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amending current legislation and regulations taking into account the state of development of telecommunications market of Ukraine in conformity with the EU acquis communautaire.

Within the EU-CoU project's analysis some gaps were identified between the EU and Ukrainian regulatory framework in the following areas: in appropriate separation of tasks and goals of administration and regulation, regulator independence, including HR and budgetary provision and appropriate level of regulator powers to define markets, obtain market information, market analysis, define SMP operators and impose relevant regulatory obligations on them, telecommunications networks access and interconnection obligations, licensing regime, tariff regulation, users rights and universal service provision, including issue related to its financing, telecommunications infrastructure sharing, number portability.

European experts, while carrying out the analysis of the current Law on Telecommunications, arrived at a conclusion that the regulatory act does not have all the required provisions regarding the EU regulatory framework in the area of electronic communications. Therefore, it does not fully comply with the requirements of the current EU 2002 regulatory framework.

In order to arrive at final conclusions regarding the compliance of the Ukraine regulatory framework with the EU regulatory framework related to sector liberalization, there is a need for a comprehensive analysis of Ukraine legislative and regulatory environment in the area of telecommunications, including existing drafts laws in this area.

Taking into account the length of the process for the adoption of new legislation, special attention should be paid to the structuring of the legal framework related to the division of regulations between primary legislation (adopted by the Parliament) and secondary legislation (adopted by the Government).

Two main draft telecoms laws have been discussed in the national Parliament since 2008.

These two drafts have been considered by the Parliamentary Committee for transport and communications, who suggested their further elaboration (18 June 2010).

Since recently, activities towards development and approval of a new legislation in Ukraine have been intensified, including activities in the area of electronic communication.

The new Law "On Amendments to the Law of Ukraine "On Telecommunications" as regards the extension of the list of services" (Ref. 2392VI, 1 July 2010)) foresees the introduction of number portability service in Ukraine. The National Commission for Communications Regulation (NCCR) has been entrusted with the functions of establishment of numbers portability and national roaming services procedures.

Within the Work Plan of Implementation of the National Program of Approximation of the Ukrainian Legislation to that of the EU in 2010 and Progressive Plan of Legislation Adaptation the NCCR has elaborated the draft Law of Ukraine “On Amending Certain Legislative Acts of Ukraine as regards Extension of the NCCR Power”. This draft Law foresees improvement of organizational basis of the regulator’s work, consolidation of the principle of the NCCR independence from entities in the area of telecommunications, improvement of radio frequency and numbering resource usage. To date, according to the set procedure the draft law is on the stage of approval with the public authorities involved.


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Furthermore, the new Law “On Amending the Law of Ukraine “On Telecommunications” concerning the market of telecommunications services for traffic passing” (No. 2751-VI) has been adopted by the President of Ukraine on 2 December 2010.

The new Law “On Amending the Law of Ukraine “On Telecommunications” concerning ensuring access to electronic communications cable duct (No. 2752-VI) was adopted by the President of Ukraine on 2 December 2010.

The draft Law “On amending Certain Legislative Acts of Ukraine (concerning simplification conditions for access to telecommunications services market (registration number 7031 of 12 August 2010) was framed in the line Committee of the Parliament and has been submitted for consideration in the first hearing procedure. The aim of this draft Law is to abolish licenses for local fixed, wireless fixed and mobile communication, for technical maintenance and exploitation of the networks and for lease of local electronic communications circuits with the aim of improving the registration mechanism and to introduce the principle of technology neutrality for universal access.

However, the current state of art is following:

Regulatory Independence Although the tasks of the NCCR, as defined in the Telecommunications Law 2003, seem to fulfil the EU requirements on regulatory independence, state ownership of Ukraine Telecom, strong control by the State over telecommunications policy, some regulatory control over numbering and frequency planning and the appointment of the NCCR chairperson raise questions as to regulatory independence. More importantly, NCCR is financed entirely by the state budget appropriations; therefore, the NCCR is fully dependent on the State for financial support thus compromising its independence.

From an institutional perspective, NCCR is the central executive authority having a special status in the Ukrainian legal framework. This constitutional status ties the NCCR to the state budget. Hence, changing the mechanism for financing the NCCR would entail changing the certain legislative acts, or alternatively changing the status of the NCCR.

Licensing regime The licensing regime is defined by the Law on Telecommunications 2003. A complete list of organizational, qualifying, technological and other special requirements which are obligatory for any activity undertaken in the area of telecommunication which is subject to licensing contains in the regulatory licensing terms and conditions, with the act itself having been compiled with due consideration of the requirements of the Law. The licensing terms and conditions, and the procedure of compliance therewith is established by the NCCR. The NCCR has the authority to include special conditions into the licenses for the purpose of managing activities in the telecommunication sector for certain operators and/or service providers. Although having the appearance of being bureaucratic, the Ukraine licensing regimes are not considered to be a barrier to market entry. This is evidenced by the number of licenses granted, which at this juncture exceed 1,700. However, moving from the existing individual licensing regime towards general authorisation and notification procedures, as mandated by the EU regulatory framework, would further ease the threshold for market entry; hence, decreasing the work load for the NCCR. The transition from the current licensing regime to general authorisation and notification procedures needs careful consideration as to its impact on customer protection and quality of service.


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Regulatory powers to obtain market information According to the Law on Telecommunications 2003, NCCR is entitled to receive all necessary information, explanations and related documentation from the service providers in the telecommunications sector and to obtain statistical reports from telecommunications operators and providers free of charge in accordance with the procedures and the timeframe stipulated by the legislation. NCCR requests on detailed market information has however been challenged by some operators.

For the definition and assessment of the electronic communications market, a comprehensive set of data, including confidential data, should be available to the Regulator. The existing Law on Telecommunications unfortunately does not support this requirement; as a result a detailed market assessment cannot be carried out by the NCCR.

Regulatory powers to define markets, access to market data and define operators with SMP In the current Law on Telecommunications 2003, regulatory powers to define market, assess the market, designation of SMP operators has not been defined. The NCCR has defined markets on its own initiative, but because it lacks the power to obtain detailed market data from operators, an appropriate assessment of markets is difficult. Further, under the current law, NCCR cannot designate operators as SMP. At this juncture it is the Antimonopoly Committee, which has defined monopoly operators in Ukraine.

Access regulation No access regulation is in place. Hence, the incumbent fixed network operator is not obliged to lease local loop or duct facilities, and neither is regulation in place for co-location and facility sharing.

Privacy and Data Security Privacy and data security regulations do not comply with the European regulatory framework.

The key activities foreseen under this component include: 1. Reviewing the existing Ukrainian telecommunications legal framework, decrees

and regulations given on the basis of the Law, and the NCCR guidelines, focusing on, but not limited to: regulatory separation and independence of the NCCR, regulations on the provision of information, ex-ante regulations, Authorisation/Notification/Licensing regulations, access regulations, data protection and security, Rights of Way and transparency. Particular attention shall be attached to the powers of the NCCR to obtain market data and obligations of operators to provide this data: review the current NCCR procedures to define the markets: to assess the markets and obligations imposed to operators defined as monopoly operators by the Antimonopoly Committee of Ukraine, as well as to develop the procedures and skills concerning setting to assess the veracity, accuracy and reasonableness of the interconnection prices and the relevant internal accounting processes. Upon the completion of the review, prepare a report containing a comparative table on the conformity with the EU regulatory framework.


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2. Evaluating, together with the NCCR experts, all identified gaps between the Ukrainian and EU legal frameworks and assessing the impact of legal approximation to the Ukrainian market. Upon the completion of the assessment, to prepare a report, including a comparison of the assessments related to the impact of the legal approximation in accordance with the current EU regulatory framework on EU and Ukrainian markets.

3. Assisting the NCCR in preparation of proposals on amending current legislation, regulations taking into account the state of development of telecommunications market of Ukraine in conformity with the EU acquis communautaire.

4. Study visit pre-activity phase to an EU Member State NRA to review that country’s national and EU regulatory regime harmonization process.

5. Study visit post-activity phase to the EU Member State in question to verify the actual versus the theoretical harmonization process for the national and EU regulatory frameworks.

The work needs also input from other components.

For the purpose of this component implementation the Work Group 1 will be established within the NCCR.

3.4.2 Component 2: Adoption of Incentive Based Regulation This component includes 3 interrelated sub-components, namely Market Analysis, Interconnection Cost Calculations and Accounting Separation.

Market Analysis The aim of this sub-component is to develop a methodology for organizing and carrying out the telecommunications markets analysis in Ukraine. The NCCR has at this juncture no regulatory power to obtain market information for defining markets, market assessment and designating operators as SMPs. More specifically, NCCR has little market data available for a market-based ruling since operators are not required to furnish such information, while the agency has no legal remedy to compel operators to do so. The Antimonopoly Committee has the legal power to compel operators to furnish information, but its rulings are ex-post. Assessment of the market needs detailed market statistics, ranging from annual investments in the ICT sector to operator specific statistics such as ownership and shareholding information, revenues, costs, call minutes or other usage measures of individual services, and details of facilities and infrastructure. The key activities foreseen under this sub-component include:

1. Reviewing the current framework and procedures for collection of market information, the quality of information and its applicability for the proper market assessment.

2. Providing case studies and lessons learned on the practical implementation of market definition and market assessment procedures applied in EU countries.


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3. Carrying out a study tour (with interpretation provision) to become acquainted with the practical aspects of carrying out of telecommunications markets analysis, including assessing of the markets competitiveness, defining SMP operators and other related issues.

4. Preparing proposals for the updating of regulations on market assessment procedures in alignment with the EU framework.

5. Preparing proposals for updating the current procedures for market definition and market assessment for the Ukraine market. This should include proposals on collection, storage, analysis, access and presentation of market data for the purposes of market assessment, reporting of indicators for national and international use, and for managing the NCCR’s relations with its principal clients including Operators and Service Providers.

6. Reviewing, together with the NCCR experts, relevant markets, including the NCCR list of telecommunications services markets for the Ukraine, that correspond with the Ukrainian competitive environment in different geographical areas or nationally.

7. Analysing retail and wholesale telecommunications services market, defining markets with insufficient competition and proposing guidelines for the designation of operators with SMP.

8. Defining regulatory obligations for SMP operators and drafting regulatory decisions on imposing obligations on operators with SMP.

9. Elaborating of the guidelines for the NCCR to indicate activities that should be undertaken after analysing the market competitiveness referred to above (maintaining, changing or withdrawing regulatory obligations). In case of withdrawal or a change of obligations the presentation of evidences that the obligations in force have reached or have not reached their goal needs to be provided.

10. Assessing the influence of the proposed solutions on the market. 11. Holding a seminar (with interpretation provision) in order to extend the practical

knowledge on procedures, standards and methods applied by telecommunications regulators in EU countries especially in the field of examining competitiveness and designation of operators with SMP

Interconnection cost calculations The aim of this sub-component revolves around the development of a methodology for determining the interconnection cost-price for telecommunications networks. NCCR is faced with a predicament in interconnection costing due to the absence of relevant data to either determine the price of interconnection, or to verify the price submitted by operators. Furthermore, NCCR cannot verify operator cost methodologies because operators do not disaggregate interconnection rates, nor do they provide information on the methodology employed. As a matter of fact, in force legislation permits the operators to submit bundled price information. This means that operator pricing of interconnection lacks not only transparency but also verifiability from NCCR side. Given the fact that NCCR has very little market or cost information and that in force legislation permits operators to withhold relevant data from NCCR, a crucial first step would be to empower the authority to compel operators to furnish such information. If this


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does not happen, then a transparent, fair and fact based cost analysis of interconnection pricing and tariffs cannot be undertaken. The key activities foreseen under this sub-component include:

Review of the Interconnection Pricing Framework 1. Assessing the existing pricing framework for interconnection, the cost data

provided therefore and the procedures for their collection, quality and applicability for determining the price of interconnection.

2. Assisting NCCR in developing a costing methodology and model for calculation of interconnection rates, ensuring its operability and sustainability.

3. Proposing the updating the existing procedures for collecting data, including the collection, storage, access, retrieval and presentation of data for the purpose of pricing interconnection, reporting on cost information and managing the relations of NCCR with the operators.

4. Carrying out a study tour (with interpretation provision) to obtain practical skills in the field of interconnection pricing.

Training 5. Assisting the NCCR in enhancing its expertise and competence with regards to

cost models and the implementation and supervision of such models provided. 6. Conducting a workshop on the practical aspects of cost models, including top-

down, bottom-up and hybrid LRIC models and elaborate on the advantages of the LRIC bottom up model, its implementation and data sources required and populating the model with appropriate data.

7. Assessing, together with the NCCR experts, the NCCR knowledge base of cost accounting rules, allocation processes for the calculation of interconnection prices.

8. Enhancing the NCCR skill sets for ascertaining cost causation, whether pertaining to specific fixed assets, equipment or labour necessary to supply a service, whether costs of such a resource are joint/common or direct attributable, whether cost of such a resource are fixed or volume variable and who should bear the costs.

9. Providing case studies and lessons learned on practical implementation of interconnection costing procedures applied in EU countries.

10. Assisting the NCCR in providing a tutorial on the calculation of Weighted Average Cost of Capital and the rationale for its inclusion in determining the price of interconnection.

Accounting Separation The aim of this sub-component is the introduction of accounting separation for operators/providers, determined by NCCR to have SMP in the relevant telecommunications markets based on a market analysis. The findings related to accounting separation in the Ukraine telecommunications sector are vague. The fixed-line operator, classified as a monopoly, is a state enterprise that lacks transparency when it comes to accounting systems. Simply put, NCCR has no information on the incumbent operator’s accounting system and cannot compel operator to provide it. The same holds true for the mobile operators. In fact, at this juncture the operators do not


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need to employ accounting separation for the simple reason that they are not compelled to separate costs. The key activities foreseen under this sub-component include:

Defining the Rationale for Accounting Separation 1. Providing case studies and lessons learned on the practical implementation of

accounting separation procedures applied in EU countries. 2. Carrying out a study visit with an EU Member State NRA to obtain hand-on

experience in the implementation and use of accounting separation for the analysis of SMP operator performance and allocation of service cost and revenues.

3. Drafting guidelines, together with NCCR experts, on the rationale for imposing accounting separation obligations on SMP operators and the reason for obtaining a higher level of detail information than can be obtained from the statutory financial statements.

4. Providing the rationale for the engagement of an auditor and the importance of receiving an independent opinion and the need for the auditor to document the methodology and processes employed.

5. Assisting NCCR in the development of regulatory accounting procedures applied in the preparation of separate accounts, the method for attributing costs, revenues, assets and liabilities and to elaborate on accounting policies for preparing cost information. Carrying out a Comparative analysis on accounting separation in EU countries.

6. Assisting NCCR in the implementation of account separation that will obligate SMP operators to provide full financial disclosure of their accounts in line with accounting separation.

Methodology for the Implementation of Accounting Separation 7. Reviewing and updating the existing methodology for collecting, storing,

analyzing, accessing and interpreting statistical data for the purpose of market assessment, reporting of indicators and managing relations with operators/service providers. Carrying out a comparative analysis of methodologies applied in EU countries.

8. Verifying, together with the NCCR experts, the existing accounting separation guidelines and prepare a methodology for deriving the relevant benefits from applying account separation procedures.

9. Developing a consultation process for stakeholders regarding the concept of accounting separation and the rationale for implementing the same.

10. Developing procedures, together with the NCCR experts, for notifying operators to furnish their accounting statements in accordance with the accounting separation requirement set by the NCCR and what should be contained therein, as well as the documents that need to be submitted and the attribution methodology documenting costing models and allocation procedures.

12. Proposing updates to regulations on accounting separation. For the purpose of this component implementation the Work Group 2 will be established within the NCCR.


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3.4.3 Component 3. Organisation&Human Resource Development The aim of this component is to carry out an analysis of the organisational structure, the human and financial resources and the mechanisms for cooperation in place between the NCCR with the other public administrations and draft proposals for an organizational recalibration plan.

NCCR is a highly motivated organisation functioning in a collaborative environment. Further, the NCCR staff comprises well qualified professionals in the respective regulatory disciplines. The use of human resources is regulated by the Ukrainian Law on Civil Servants. At this juncture, no specific career development plan exists. Financial resources limit recruitment and training opportunities. NCCR aims to implement a Quality Management System aligned with ISO.

The key actions foreseen under this component include:

Organisational Plan 1. Assessing NCCR’s existing organizational structure, division of

functions/responsibilities, and processes for possible enhancement and comparing it to those of EU Member State NRAs.

2. Analysing, in coordination with the NCCR’s management the functional requirements and optimal grouping of functions/tasks for implementation of the NCCR’s overall strategy and in the light of EU Regulatory practice. This should include additional and modified functions that are identified during the course of the Twinning Project, and assessment and analysis of required processes for principal functions.

3. Carrying out a study visit with an EU Member State NRA to obtain hand-on experience on organization matters and their success in meeting the demands of the competitive telecommunications sector

4. Developing, together with the NCCR management, a high level statement of the NCCR’s long term strategy and vision, and key objectives.

5. Drafting the NCCR’s Organisational Plan over a three-year period. This Plan should encompass:

A revised organisational structure; Identification of functional units and their mapping to regulatory tasks; Definition of the goals/objectives and principal functions of each

functional unit; Definition/documentation of the principal work flows and

communication processes of each unit, including decision making authority and key interfaces;

Definition of key performance indicators (KPIs) of each functional unit;

Definition of the human resource requirements including staff numbers and qualification/expertise level and associated operating and capital costs.

Where relevant, distinction should be made between functions to be performed within traditional hierarchical structures and those adopting non-permanent task force approaches.


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HR & Career Development 6. Assessing together with the NCCR experts the processes and procedures for HR

recruitment and development. Upon completion, prepare a report on the results, containing a comparative table on EU countries and recommendations for the NCCR.

7. Holding a seminar/training (with interpretation provision) in order to extend practical knowledge on procedures, standards and methods applied by EU countries in this area.

8. Preparing a one year Training & Development Plan. 9. Enhancing the work plan for human resources in accordance with the NCCR

strategic objectives. 10. Assessing the current mechanisms of cooperation with public authorities,

organisations, market players and consumers. 11. Preparing proposals to increase efficiency in the field of cooperation.

3.5 Means/Input from the MS Partner Administration The implementation of activities mentioned above requires 1 Project Leader (PL), 1 Resident Twinning Advisor (RTA), 2 RTA’s assistants and perhaps 14 Short Term Experts (STE).

3.5.1 Profile and tasks of the Project Leader A Project Leader (PL). The Project Leader will direct, co-ordinate, and control the overall thrust of the project. He/she will lead the activities of the project, ensure the achievements of the mandatory results, and be responsible for the implementation of the activities. The PL is expected to devote a minimum of 3 days per month to the project in his home administration, not in Ukraine. In addition he/she should coordinate, from the MS side, the Project Steering Committee (PSC), which will meet in Ukraine every three months.

PL qualifications and skills: University Master Degree Academic level in law/or equivalent relevant to the

mission; Good English language skills, both spoken and written. Command of

Russian/Ukrainian language would be a strong asset; Strong analytical skills; Good inter-personal skills.

General professional experience: Long-term civil servant or equivalent from a MS administration; At least 15 years of professional experience; Experienced project manager, demonstrating good record in organisational

leadership, staff motivation, and communication.

Special professional experience: At least 10 years experience in the field of telecommunications on implementing

strategies, policies and regulations;


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Sound knowledge and experience of EU NRA legislative and operational issues related to the various components of the project, including NRA institutional capacity building and strengthening;

3.5.2 Profile and Tasks of the Resident Twinning Adviser (RTA) The RTA, under the guidance of the PL, will lead the work of the team and will work on a daily basis with BC staff to implement the project, to support and co-ordinate the activities in the BC and to ensure continuity of implementation.

The RTA is expected to ensure, together with the NCCR counterparts, the achievement of the general and specific objectives, the expected results and the indicative performance indicators of Twinning. The RTA will provide 21 months' input on site (including leave) and will be based in the premises of the NCCR.

RTA tasks (list is not exhaustive):

Overall direction and supervision of the project implementation and coordination of all activities according to the agreed work plan;

Management of the project administration; Permanent contact with the national Project Director; Coordinate and supervise Short-Term experts; Advising on management and organisation of NCCR; Act as contact part and liaison with the PAO and the EU Delegation; Prepare reports; Ensure the quality of manuals and printed outputs; Ensure effective and optimal utilization of available resources.

RTA Profile: Qualifications and skills:

University Master Degree Academic level in law/economics, or equivalent relevant to the mission, preferably in telecommunication regulations;

Excellent English language skills, both spoken and written. Command of Russian/Ukrainian language would be a strong asset;

PC literacy; Good interpersonal skills; Excellent team-working skills; Strong analytical skills

General professional experience: Civil servant or equivalent seconded to work by EU MS Administration; At least 15 years of professional experience; Experienced project manager, demonstrating good record in organisational

leadership, staff motivation and communication; Good consultancy and training skills and experience.

Specific professional experience: At least 10 years experience in the field of telecommunications on implementing

strategies, policies and regulations;


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Comprehensive theoretical knowledge and practical experience of work on high level management position in MS NRA;

Sound knowledge of EU NRA legislative and operational issues related to the various components of the project;

Knowledge of, and experience in, modern practice in the field of human resources development;

Good knowledge of capacity building and strengthening of NRAs; Experience in implementation of new methodological and organisational solutions; Previous experience as project coordinator/project manager in projects of similar

importance and size would be an asset;

The RTA should have two assistants. One assistant should be a full time project assistant for the purpose of daily exercising of general duties on the project at the RTA disposal.

The other assistant should be a part time project assistant for the purpose of translation/interpretation of documentation and reports on the project and should provide interpretation within the events foreseen by the project.

These RTA’s assistants will be recruited before the start of the Twinning project and will be remunerated under the budget of the project. The profile of the RTA assistants will be specified by the RTA in agreement with the NCCR who will proceed to their recruitment following the provisions of the Common Twinning Manual (revision 2009).

3.5.3 Profile and Tasks of the Short - term experts A team of Short-Term Experts (STE) from the MS will be required in each component.

The number of STEs required in any particular component will depend on the nature of the detailed methodology being followed. The indications given below are purely indicative.

It is emphasised that each member of the MS team will have an appropriate counterpart in the NCCR, and the responsibility for attainment of the project results will be shared between them. The overall approach to the project places a high value on action-learning, and a key task of each and every member of the MS team will be to make their contribution to this capacity-building process.

One STE with specialised knowledge will lead the implementation of one of the 3 specific project components. STEs will work in close co-operation with the NCCR counterparts and staff in order to meet the specific objectives as set out.

Detailed Terms of Reference for STEs will be elaborated by the selected MS in cooperation with the NCCR.

Qualifications and skills of STEs: University Degree or equivalent level in law/economics or equivalent relevant to the

mission; Excellent English language skills, both spoken and written. Command of

Russian/Ukrainian language would be a strong asset; PC Computer literacy; Good interpersonal skills; Excellent team-working skills;


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Strong analytical skills.

General professional experience: Civil servant or equivalent seconded to work by EU MS Administration; Solid knowledge of state of the art NRA working methods and procedures, gained

through “hands on” practical experience; At least 10 years of professional experience; Experienced project manager, Staff motivation and communication; Good consultancy and training skills and experience.

Specific professional experience defined for each STE below.

STE 1 – Leading EU legal expert specialising in analysis of telecommunications laws and in formulation of new legal texts (estimated number of working days: 60)

Role:

Reviewing the existing Ukrainian legal framework for telecommunications and NCCR’s regulations, evaluating identified gaps and preparation of draft proposals for the changes in the Ukrainian legal framework, laws and related regulations. Coordination of the activities of STEs of other components on legal matters.

Specific professional experience

Proven professional background in drafting telecommunications legislation.

STE 2 – Leading EU Market Expert specialising in analysis of economic aspects and in formulation of new legal texts (estimated number of working days: 30)

Role:

Assessment of current telecommunications legal framework as regards regulations related to market assessment and ex-ante regulations and preparation of amendments to the current legislation, Coordination of the activities of STEs 3 -10.

Specific professional experience:

Proven professional background in the field of market analysis, market definition and designation of operators with Significant Market Power; as well as regulating Interconnection and Accounting Separation.

STE 3 – EU Market Analysis Expert, specialising in procedures for market analysis. (estimated number of working days: 40)

Role:

Defining procedures for collection of market information, assessing the quality of information and its applicability for market analysis.



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Proven professional background in the field of market definition and market assessment.

STE 4 – EU Market Analysis Expert specialising in designation of SMP (estimated number of working days: 40)

Role:

Reviewing the current Ukrainian legal framework for telecommunications and NCCR’s guidelines as regards SMP regulations and preparation of draft proposals for the changes in the Ukrainian legal framework, laws and related regulations.


Proven professional background in the field of SMP designations and setting obligations to SMP operators.

STE 5 – EU Market Analysis Expert specialising in imposing, maintaining, changing or withdrawing regulatory obligations (estimated number of working days: 30)

Role:

Preparation of the practical guidelines for NCCR to indicate activities that should be undertaken after analysing the market competitiveness (maintaining, changing or withdrawing regulatory obligations).

Specific professional experience Proven professional background in the field of telecommunications market analysis.

STE 6 – EU Interconnection Expert specialising in costing or interconnect services (estimated number of working days: 40) Role:

Reviewing the current Ukrainian legal framework for telecommunications and NCCR’s guidelines. Updating the existing procedures for collecting cost data and cost calculation practises.


Proven professional background in the field of costing of interconnection services.

STE 7 – EU Interconnection Expert specialising in LRIC models (estimated number of working days: 40)

Role: Developing procedures for LRIC cost calculation practises and preparing practical tutorials on cost accounting principles.



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Proven professional background in the field of LRIC modelling.

STE 8 – EU Accounting Expert specialising in accounting separation procedures. (estimated number of working days: 40)

Role:

Determining the requirements and drafting guidelines for implementing the appropriate procedures for accounting separation and ascertaining the NCCR power to compel operators to comply therewith.


Proven professional background in the field of accounting separation.

STE 9 – EU Accounting Expert specialising in accounting separation consultation process (estimated number of working days: 40)

Role:

Developing a consultation process for stakeholders regarding the concept of accounting separation and the rationale for implementing the same.



STE 10 – EU Accounting Expert specialising in accounting separation financial statements (estimated number of working days: 40)

Role:

Assist in reviewing the financial/accounting statements furnished by the operators as to their compliance and completeness with NCCR requirements.



STE 11 – Leading EU Organisational Expert specialising development of organisation of the NRA (estimated number of working days: 40)

Role: Analysing the functional requirements and optimal grouping of functions/tasks for implementation of the NCCR’s overall strategy and in the light of EU Regulatory practice. This should include additional and modified functions that are identified during the course of the Twinning Project, and assessment and analysis of required processes for principal functions. Developing, together with the NCCR management, a high level statement of the NCCR’s long term strategy and vision, and key objectives. Coordination of the activities of STE 12, STE 13 and STE 14.



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Proven professional background in the field of organisational development.

STE 12 – EU Organisational Expert specialising in organisational development (estimated number of working days: 20)

Role:

Drafting NCCR’s Organisational Plan over a three-year period.


Proven professional background in the field of organisational planning.

STE 13 – EU HR Expert specialising in career development (estimated number of working days: 20)

Role:

Assessing together with the NCCR experts the processes and procedures for HR recruitment and development. Upon completion, prepare a report on the results, containing a comparative table on EU countries and recommendations for NCCR. Assist in preparing a one year Training & Development Plan.


Proven professional background in the field of Human Resource and Career Development.

STE 14 – EU HR Expert specialising in career development (estimated number of working days: 20) Role:

Assessing together with the NCCR experts the processes and procedures for cooperation with other stakeholders and preparation of proposals to increase efficiency in the field of cooperation.


Proven professional background in the field of Human Resource and Career Development and issues related to cooperation with other organisations.


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4 Institutional Framework The beneficiary institution is the National Commission for Communications Regulation in Ukraine. The National Commission for Communications Regulation of Ukraine is a central collegiate executive authority with a special status, reporting directly to the President of Ukraine. It came into force in April 2005. The NCCR consists of a Chairperson and 7 Members, to be appointed to and dismissed from their positions by the President of Ukraine upon proposal of the Prime-Minister of Ukraine. The NCCR has the following primary parts to its mission:

- To exercise the state regulation and supervise the area of telecommunications, radiofrequency usage and postal services provision;

- To create an attractive environment for investments to telecommunications networks; - To develop, update telecommunication networks and increase the scope and quality

of telecommunications services; - To ensure the efficient use of radio frequency resource and operation of

telecommunications services and postal communications market; - To promote competition and entrepreneurship, providing equal opportunities for

activity of different property forms market players. The current staff number of the NCCR is 160 persons. Staffing level is 87.5% (as of 1st July 2009).

The organisational structure of the NCCR is based on the tasks and functions of the NCCR and is agreed by the Cabinet of Ministers of Ukraine. There are 12 departments in the NCCR: licensing and radio frequencies, telecommunications; activity support, economical, financial, legal, human resources, international cooperation and European integration, documents support and control, work with consumers, secure and confidential work, corruption prevention and reaction.

These departments are subordinated to the Chairperson of the NCCR and interact between themselves within entrusted tasks.

Within the structure of the NCCR the State Inspection of Communications has been established. The State Inspection is a public body in charge of state supervision on the telecommunications and postal services market, use of radio frequency resource of Ukraine within public radio frequency bandwidth.

Responsible Institution in the Beneficiary country:

National Commission for Communication Regulations, 22 Khreschtyk Street, Kyiv, Ukraine 01001 Tel:+380 (44) 278 97 93 Fax: +380 (44) 278 97 93 E-mail: [email protected] Вебсайт: www.nkrz.gov.ua


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5 Budget The maximum estimated budget for this twinning project is EUR 1 300 000.

6 Implementation arrangements 6.1 Implementing Agency The Implementing Agency responsible for tendering, contracting and accounting is the European Commission represented by the Delegation of the European Union to Ukraine. The person in charge of this project at the Delegation of the European Union to Ukraine is:

Vira Rybak Sector Manager Education, Science and Information Society Delegation of the European Union to Ukraine 10 Kruhlouniversytetska Street, Kyiv, 01024, Ukraine Tel.:+380 (44) 390 80 10 Fax: +380 (44) 253 45 47 E-mail: [email protected] Website address: www.delukr.ec.europa.eu

PAO will support the Twinning project implementation process together with the Delegation of the European Union to Ukraine.

Ms Nadiia Kyzytska Senior Consultant, Unit for Coordination of Twinning and SIGMA Instruments Twinning Programme Administration Office 15, Prorizna str., Kyiv, 01601 Tel. +38 044 278-36-44; +38 044 279-29-26; Fax: +380 (44) 278 36 22 e-mail: [email protected] PAO is designated to assist the Delegation of the European Union to Ukraine with the overall management of twinning projects. In Ukraine the role of PASO is carried out by the Main Department of Civil Service. According to the Government Decree of 01/10/2008 n 868, the monitoring of twinning project implementation should be carried out by MDCS. This includes participation in steering committee meetings, coordination of quarterly and summary reports, etc.


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6.2 Main counterpart in the BC The beneficiary of the project is the National Commission for Communications Regulation of Ukraine (NCCR). Persons in charge at NCCR are:

Project Leader: (MS Project Leader Counterpart) Name: Mr Volodymyr Paschuk Title: NCCR Member Address: 3, Solomianska Street, Kyiv, 03110, Ukraine Tel: +380 (44) 278 97 95 Fax: +380 (44) 278 97 93 e-mail: [email protected]

Project Director (and RTA counterpart) Name: Tetiana Farmahei Title: Head of International Cooperation and European Integration Division Address: 3, Solomianska Street, Kyiv, 03110, Ukraine Tel: +380 (44) 569 71 14 Fax: +380 (44) 569 71 15 E-mail: [email protected]

6.3 Contracts Only one Twinning contract is foreseen for this project.

7 Indicative Implementation Schedule 7.1 Launching of the call for proposals: February 2011 7.2 Start of project activities: November 2011 7.3 Project completion: September 2013 7.4 Implementation period duration: The legal duration of the project is 24 months. The period includes the activities implementation period (21 months), plus three months for start-up and completion activities.

8 Sustainability The assistance required under this Twinning project is meant to expose the Ukrainian administration and more specifically the National Commission for Communications Regulation in the aquis communitaire, via the provision of the EU best experience in communications regulation issues.


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The previous will be achieved by the development of Guidelines and Manuals, under the present project, based on the EU experience and methodologies to be used as supporting material for the training of the NCCR staff.

The development of a specific approach of the Twinning project will be a joint responsibility of the MS partner and the BI, which will be laid down in the Twinning contract.

The dissemination of project results and institutionalising obtained knowledge will be integrated into all levels of the project. Effective mechanisms are put in place by the BI to disseminate and consolidate the results of the project in order to ensure the sustaining the benefits of the project after the completion date.

9 Crosscutting issues Equal opportunity:

The dimension of equal opportunity and gender equality will be integrated into all levels of the project. This will establish a suitable foundation for mainstream gender equality in the future. It will be included in the Twinning contract as a joint responsibility of the MS partner and the BI.

Environment: n/a

10 Conditionality and sequencing The following contributions expected from the beneficiary institution are regarded as important preconditions of the successful implementation of the project:

The Twinning project receives high level political and professional support by the leaders of the NCCR;

Strong involvement/commitment of the NCCR staff at all levels;

Assigning/employing the necessary personnel to activities connected with the project;

Ensuring the BI is assigning an operational PSC to monitor that all components of the Twinning project are executed within the time schedule of implementation;

Ensuring coordination between institutions connected with the project;

Ensuring access to the all necessary information and documents in accordance with legislation in force;

Supply of office accommodation, equipped with computer, telephone, internet access, printer to MS in-country staff and visiting experts;

Providing suitable venues and equipment for training sessions and seminars that will held under the project.


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Annexes to Project Fiche

1. Logical framework matrix in standards format 2. Indicative Implementation Timetable for the Project

3. List of Relevant Laws and Regulations

4. List of Relevant plans and studies

5. NCCR Organisation Chart October 2010


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ANNEX 1: Logical framework matrix in standard format LOGFRAME PLANNING MATRIX FOR Project Fiche Programme name and number

NCCR Twinning Program

Twinning Fiche Supporting Enhancement of Regulatory and Legal Competence of the National Commission for Communications Regulation of Ukraine for

telecommunications sector regulation

Contracting period expires Disbursement period expires

Total budget:

€ 1300000 :

Overall objective Objectively verifiable indicators Sources of Verification

Support development of the telecommunications regulation in Ukraine in line with the EU relevant acquis, experience and best practice

1. Qualitative improvements in NCCR’s implementation of telecommunications regulation

2. Quantitative changes (people, procedures) by NCCR to implement its regulation of the telecommunication sector

1. NCCR Regulations issued

2. Regular meetings between PAO, BC PL and MS –PL to discuss ongoing incremental progress towards achieving the Overall Objective

Project purpose Objectively verifiable indicators Sources of Verification Assumptions

Strengthening of the independence and administrative capacity of the NCCR of Ukraine in the field of communications in order to ensure its ability to take appropriate regulatory measures and enforce its own decisions and all applicable regulations and to guarantee fair competition in the markets

1. Members of the Work Group 1 (WG1) have learned requirements of the EU legislation.

2. Members of the Work Group (WG2) have learned issues on implementation of incentive based regulation.

1. Completion of all Components and Activities within each Component based upon the implementation schedule timeline

2. Attendance at all WG1 and WG2 meetings

1. Effective MS PL engagement

2. Effective BC PL and BC RTA participation and cooperation


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Project purpose Objectively verifiable indicators Sources of Verification Assumptions

3. Number of the NCCR representatives who took part in workshops, trainings and study visits.

4. Number of comparative reports prepared. 5. Number of the NCCR regulations

elaborated within the project

3. All Technical Deliverables produced by STEs supported by WG1 and WG2 Participants

4. All WG1 and WG2 minutes of meetings

5. All PSC meeting minutes and guidance

6. All Workshops/Trainings/Study visits Evaluation sheets suggest effective learning and knowledge building

3. An effective and efficient MS RTA with capable project management and coordination skills

4. Sufficient time, effort and resources committed by WG1 and WG2 to assisting and working closely with the MS STEs

5. Timely disbursement 6. Effective professional implementation 7. Good quality outputs

delivered on time 8. Continued involvement

of the MS RTA.


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Purpose Objectively verifiable indicators Sources of Verification Assumptions

Component 1: Legal approximation

Comprehensive assessment carried out on the existing Ukraine legislative and regulatory framework, including relevant secondary legislations related to telecommunications sector regulation and their compliance with the EU regulatory framework assessed. Based on this assessment the NCCR is capable to prepare proposals for amending existing legislation and regulations reflecting the current telecommunications market environment in the Ukraine.

1. Number of meetings/participants at WG1

2. Number of meetings on Reviews of acquis communaitaure

3. Number of revised regulatory acts of current legislation.

4. Number of regulatory acts which are recommended to be amended.

5. Number of proposals which were approved by the NCCR and included to the current plans of regulatory work.

6. Number of the NCCR representatives who took part in the study visit.

1. NCCR Regulations 2. WG1 Meeting minutes

3. Guidelines with proposals concerning amending the national legislation

4. Interim Reports of PL

5. PSC Meeting minutes 6. Reports on study visits

1. NCCR remains committed to strengthening NCCR’s Regulations

2. WG1 members are able to carry out the assessment of the regulatory framework.

3. Participants able to obtain knowledge within study visits.

4. Time & Resources commitments are properly managed

5. Participants shows active interest in improving adaptive & business management skills & knowledge

Component 2: Adoption of Incentive Based Regulation

Sub-component: Market Analysis Regulations and practical guidelines drafted to empower NCCR and to entrust it with the means to carry out market definition, market assessment and to define operators with significant market power

1. Number of meetings/participants at WG2 on market analysis issues

2. Number of case studies and lessons on practical implementation of market definition and market assessment.

1.NCCR Regulations

2.WG2 meeting minutes 3. Report containing a

comparative table on the conformity with EU acquis

1. NCCR remains committed to adopting the EU best practice in telecommunications regulation within and after the project timeline


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3. Number of proposals for the updating of relative regulations, procedures for market definition and market assessment.

4. Number of markets which were analyzed. 5. Number of prepared

recommendations on designation of operators with significant market power..

6. Publication of recommendations on NCCR’s website 7. Number of the NCCR

representatives who took part in the study visit and the workshop.

4. Materials with case studies and lessons on implementation of procedures for market definition and market assessment

5. Recommendations on designation of operators with significant market power

6. Recommendations for NCCR on regulatory obligations

7. Interim Reports of PL

8. PSC meeting minutes 9. Report on study visit

10. Training Certificates

2. Staff able to attend Workshop and Study visit


4. Staff shows active interest in improving adaptive & business management skills & knowledge

Sub-component: Interconnection cost calculations Regulations drafted to empower NCCR to set rules for interconnection cost calculations in approximation with relevant EU directives and EU member states best practice. Calculation models defined.

1. Number of meetings/participants at WG2 on interconnection cost calculations

2. Number of proposals with regard to improve relevant regulatory framework.

3. Number of case studies obtained. 4. Number of lessons.

5. Publication of recommendations on NCCR’s website

1. NCCR regulations 2. WG2 meeting minutes

3. Report containing a comparative table on the conformity with EU acquis.

4. Report on study visit.

5. Materials with case studies, from seminar and workshops.

6. Interim Reports of PL 7. PSC meeting minutes


2. Staff able to attend Workshop and Study visit



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6. Number of the NCCR representatives who took part in study visit, workshops and seminars.

8. Training Certificates


Sub-component: Accounting separation Regulations drafted to give NCCR power and means to implement accounting separation. NCCR guidelines for accounting separation in accordance with the European regulatory framework are in place.

1. Number of meetings/participants at WG2 on accounting separation

2. Number of proposals with regard to improve relevant regulatory framework.

3. Number of obtained case studies and lessons.

4. Number of drafted recommendations on imposing accounting separation obligations.

5. Publication of recommendations on NCCR’s website

6. Number of the NCCR representatives who took part in the study visit.

1. NCCR regulations 2. WG2 meeting minutes

3. Report containing the comparative analysis on the conformity with EU acquis

4. Materials with case studies and lessons

5. Recommendations on imposing regulatory obligations of accounting separation

6. Forms of regulatory accounting.

7. Comparative analysis of methodologies.

8. Report on study visit 9. Interim Reports of PL

10. PSC meeting minutes


2. Staff able to attend Study visit




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Component 3: Organisation&Human Resource Development NCCR’s organisation has been updated to enable NCCR carry out its expanded tasks in evolving telecommunications environment and to increase its efficiency in the field of cooperation with other state organisations.

1. Number of the NCCR main functions/responsibilities analyzed

2. Number of defined functional units, goals/objectives

3. Number of defined key performance indices of each functional unit.

4. Number of the NCCR representatives who took part in study visit and seminar/workshop.

5. Number of drafted plans 6. Number of organizations

whom established cooperation with.

1. NCCR regulations 2. Assessmentofexistingorganizatio

nalstructurewithcomparativeanalysis

3. Report on analysis of main functions/responsibilities

4. Report on NCCR long term strategy

5. Organisational plan over three-year period

6. Report with comparative table and recommendations on human resource recruitment and development.

7. A one year Training & Development Plan

8. Work plan for human resources 9. Report on study visit

10. Materials of seminar/workshop and training certificates

11. Interim Reports of PL 12. PSC meeting minutes

1. Staff able to attend Training/Workshop



Pre conditions


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ANNEX 2: Indicative Implementation Timetable for the Project Institutional Strengthening of the National Commission for Communications Regulation in Ukraine

Year 2011 2012 2013

Month J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J J A S

Launch/Selection x x x x

Contracting x x x x x x

Implementation x x x x x x x x x x x x x x x x x x x x x x x x

Legal approximation x x x x x x x x x x x x x x x x x x x x x

Adoption of

Incentive Based Regulation

Market Analysis x x x x x x x x x x x x x x x x x x x x x

Interconn. Cost x x x x x x x x x

Account Separ x x x x x x x x x x x x

Organisation & Human Resource Regulation

x

x

x

x

x

x

x

x

x

x

x

x

x

x

x

x

x

x

x

x

x


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ANNEX 3 Lists of Relevant Laws and Regulations

Ukraine´s Legislation related to telecommunication

1. Constitution of Ukraine

2. Civil Code of Ukraine

3. Commercial Code of Ukraine

4. Code of Ukraine on Administrative Offences 5. Economic and Procedural Code of Ukraine

6. Code of Administrative Proceedings of Ukraine

7. Law of Ukraine “On Telecommunications”

8. Law of Ukraine “On Radio Frequency Resource of Ukraine”

9. Law of Ukraine “On Postal Services”

10. Law of Ukraine “On Main Principles for the State Supervision (Control) in the Field of Economic Activity”

11. Law of Ukraine “On Economic Competition Protection” 12. Law of Ukraine “On Protection Against Unfair Competition”

13. Law of Ukraine “On Antimonopoly Committee of Ukraine”

14. Decree of the Cabinet of Ministries of Ukraine of 27.12.2008 № 1147 “On Approval the Amount of Fee for Numbering Resource Assignment and Procedure of Payment”

15. Decree of the Cabinet of Ministers of Ukraine of 27.12.2008 № 1150 “On Approval the Amount of Monthly Fees for Use the Radio Frequency Resource of Ukraine”

16. Decree of the Cabinet of Ministers of Ukraine of 22.02.2006 № 200 “On Amounts of Fees for Issuing, Extension the Term of Validity, Re-issuance, Issuing License Duplicates for Use the Radio Frequency Resource of Ukraine”

17. Decree of the Cabinet of Ministries of Ukraine of 15.12.2005 № 1208 “On Approval of the National Radio Frequency Allocation Table of Ukraine”

18. Decree of the Cabinet of Ministries of Ukraine of 09.06.2006 № 815 “On Approval of the Plan for the Use of Radio Frequency Resource of Ukraine”

19. Decree of the Cabinet of Ministries of Ukraine of 09.08.2005 № 720 “On Approval of the Rules for Provision and Obtaining Telecommunications Services”

20. Decree of the Cabinet of Ministries of Ukraine of 05.03.2009 № 270 “On Approval of the Rules for Postal Services Provision”

21. Decree of the Cabinet of Ministries of Ukraine of 01.07.2009 № 672 “On Approval of the State Target Economic Programme for Development of Postal Services for 2009-2013”


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22. Ordinance of the Cabinet of Ministries of Ukraine of 07.06.2006 № 316 “On Approval of the Concept for Development of Telecommunications in Ukraine”

23. NCCR Decision of 01.06.2007 № 769 “On Approval of the Regulation on the State Regulation of Numbering Resource of Public Switched Telecommunications Networks of Ukraine” (with amendments).

24. NCCR Decision of 04.12.2008 № 1244 “On Approval of Cap Tariffs for Universal Postal Services” (with amendments).

25. NCCR Decisionof 23.07.2009 № 1607 “On Approval of the Order for Access to Electronic Communications Cable Ducts”

26. NCCR Decision of 16.07.2009 № 1599 “On Approval of the Provision on Radio Frequencies Monitoring within Public Radio Frequency Bandwidth”

27. NCCR Decision of 09.07.2009 № 1586 “On Approval of the Procedure for Mutual Settlements between Telecommunications Networks Operators for the Services of Access to Public Switched Telecommunications Networks”

28. NCCR Decision of 11.12.2008 № 1256 “On Approval of Tariffs for Services of the State Enterprise “Ukrainian State Centre of Radio Frequencies” concerningtheUseofRadioFrequencyofUkraineandNumberingResourceAssignment” (with amendments).

29. NCCR Decision of 06.09.2007 № 914 “On Approval of the List of Radio Electronic Facilities and Emitters that do not require Permissions for its Operation” (with amendments).

30. NCCR Decision of 04.02.2010 № 51 “On approval of the List of radio electronic facilities and emitters to import of which do not require permissions including its movement in the international postal items and express items”

31. NCCR Decision of 27.10.2006 № 427 “On Approval of the Procedure for Procedure of Exercising of State Supervision on Use of Radio Frequency Resource of Ukraine within Public Radio Frequency Bandwidth” (with amendments).

32. NCCR Decision of 28.04.2009 № 1491 “On Approval of Cap Tariffs for Public Telecommunications Services”

33. NCCR Decision of 02.04.2009 № 1438 “On Approval of the Order for Regulation of Tariffs for Public Telecommunications Services”

34. NCCR Decision of 26.03.2009 № 1420 “On Approval of the Main Requirements to the Agreement on the Provision of Telecommunications Services”

35. NCCR Decision of 08.12.2005 № 155 “On Approval of the Rules for Interconnection of Public Switched Telecommunications Networks” (with amendments).

36. NCCR Decision of 26.01.2006 № 179 “On approval of licensing conditions for exercising activity in Telecommunications Area on provision of mobile services with the right for technical maintenance and operation of telecommunications networks and provision of electronic communications circuits renting services” (with amendments).

37. NCCR Decision of 19.02.2009 № 1366 “On approval of the list of telecommunications markets in Ukraine that appropriate for the analysis with purpose of ex-ante regulation”


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38. NCCR Decision of 05.02.2009 № 1338 “On Approval of the Provisions on Granting Permissions for Radio Electronic Facilities and Emitters Importing to Ukraine”

39. NCCR Decision of 05.02.2009 № 1339 “On Approval of the Procedure of Radio Electronic Facilities and Emitters Realization” (with amendments).

40. NCCR Decision of 20.01.2009 № 1301 “On Approval of the Order for Regulation of Tariffs for Universal Postal Services”

41. NCCR Decision of 10.12.2009 № 1789 “On approval of licensing conditions for exercising activity in telecommunications area on provision of fixed telephone services with the right for technical maintenance and operation of telecommunications networks and provision of electronic communications circuits: local, national, international”.

42. NCCR Decision of 19.08.2005 № 53 “On Approval of Licensing Conditions of Use of Radio Frequency Resource” (with amendments).

43. Order of the State Communications Committee of 17.06.2004 № 132 “On approval of licensing conditions for exercising activity in telecommunications area on provision of the following fixed telephone services: local, trunk- international, with the right for technical maintenance and telecommunications networks operation and provision of electronic communications circuits for use”

44. NCCR Decision of 07.12.2007 № 1018 “On approval of the licensing conditions for exercising activity in telecommunications area on provision services with the right for technical maintenance and operation of telecommunications networks, networks of on-air TV and radio broadcasting, wired radio broadcasting and TV-networks”

45. NCCR Decision of 07.12.2007 № 1017 “On approval of the licensing conditions for exercising activity in telecommunications area on electronic communications circuits ’provision for use”

46. NCCR Decision of 04.11.2008 № 1189 “On Approval of the Provisions on Accounting of Telecommunications Markets”

47. NCCR Decision of 25.12.2008 № 1283 “On Approval of Accounting Forms and Instructions on its Completion”

48. NCCR Decision of 21.02.2006 № 202 “On Approval of cap tariffs for provision for use electronic communications circuits of telecommunications operators who have monopolistic (dominant) position in these markets”

49. NCCR Decision of 02.08.2007 № 875 “Regulation on the State Inspection of Communications”

50. NCCR Decision of 27.10.2006 № 426 “On Approval of the Procedure for Exercising of the State Supervision over Telecommunications Markets”

51. NCCR Decision of 27.10.2006 № 427 “On Approval of the Procedure for Exercising o f the State Supervision over Use of Radio Frequency Resource of Ukraine within Public Radio Frequency Bandwidth”

52. Order of the State Committee of Ukraine for Regulatory Policy and Entrepreneurship and the State Committee of Communications 29.10.2003 № 116/202 “On Approval of Licensing Conditions for Exercising of Economic Activity on forwarding of money orders, letters, registered letters, postcards, parcels and packages up to 30 kg”


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53. Order of the Ministry of Transport and Communications of Ukraine of 23.11.2006 № 1105 “On Approval of the National Numbering Plan of Ukraine” (with amendments).

List of EU Directives, Regulations, Decisions

DIRECTIVE OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL 1. Directive 2009/136/EC of 25 November 2009 amending Directive 2002/22/EC on

universal service and users’ rights relating to electronic communications networks and services, Directive 2002/58/EC concerning the processing of personal data and the protection of privacy in the electronic communications sector and Regulation (EC) No 2006/2004 on cooperation between national authorities responsible for the enforcement of consumer protection laws,

2. Directive 2009/140/EC of 25 November 2009 amending Directives 2002/21/EC on a common regulatory framework for electronic communications networks and services, 2002/19/EC on access to, and interconnection of, electronic communications networks and associated facilities, and 2002/20/EC on the authorisation of electronic communications networks and services,

3. Directive (2002/21/EC) on a Common Regulatory Framework, OJ L 108, 24.4.2002,

4. Directive (2002/19/EC) on Access and Interconnection, OJ L 108, 24.4.2002,

5. Directive (2002/20/EC) on Authorisation, OJ L 108, 24.4.2002,

6. Directive (2002/22/EC) on Universal service and users rights, OJ L 108, 24.4.2002,

7. Directive (2002/58/EC) on Privacy and electronic communications, OJ L 201, 31.7.2002,

8. Directive (2002/77/EC) on Competition in the markets for electronic communications services, OJ L 249, 17.9.2002,

9. Regulation (2000/288/ED) on Unbundled access to the Local Loop, OJ L 336, 30.12.2000,

10. Decision (2002/676/EC) on a regulatory framework for radio spectrum policy in the European Community (Radio Spectrum Decision), OJ L 108, 24.4.2002,

11. Commission Guidelines on market analysis and assessment of significant market power under the Community regulatory framework for electronic communications networks and services, OJ C 165, 11.7.2002,

12. Regulation (EC) No 1211/2009 of the European Parliament and of the Council of 25 November 2009 establishing the Body of European Regulators for Electronic Communications (BEREC) and the Office


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ANNEX 4: List of Relevant plans and studies: NCCR Annual Report 2009 (http://www.nkrz.gov.ua/img/zstored/File/NKRZ2009.pdf)

Analysis on the Law on Telecommunications of Ukraine from the point of view of the European Electronic Communications Regulatory Framework (available in the NCCR and the EU Delegation)

Comparative assessment of the telecommunications sector in the transition economies (Project of the European Bank for Reconstruction and Development in the framework of the Legal transition programme “Telecommunications Regulatory Development” (December 2008)(http://www.ebrd.com/downloads/legal/telecomms/ukraine.pdf)


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Annex 5. NCCR Organisation Chart October 2010


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List of abbreviations and acronyms BC - Beneficiary Country

BI - Beneficiary Institution

CoE - Council of Europe

EC - European Commission

ENP - European Neighbourhood Policy

EU - European Union

EUD - European Union Delegation GDP - Gross Domestic Product

HR - Human Resource

KPI - Key Performance Indicator

LRIC - Long Run Incremental Cost

MDCS - Main Department of Civil Service of Ukraine

MTS - Mobile TeleSystem

MS - Member State

NCCR - National Commission for Communications Regulation of Ukraine

NRA - National Regulatory Authority

PAO - Program Administration Office PCA - Partnership and Cooperation Agreement

PL - Project Leader

PSC - Project Steering Committee

RTA - Resident Twinning Advisor

SIGMA – Support for Improvement in Governance and Management

SMP - Significant Market Power

STE - Short Term Expert

TAIEX – EU Technical Assistance Information Exchange Instrument

UAH - Ukrainian Hrivna

US - Universal Service USO - Universal Service Obligation

Documents

STANDARD TWINNING PROJECT FICHE 1 Basic information twgf_approved_ for publication.pdfEU and Ukraine (Section “Telecommunications Services”). Furthermore, the Twinning project