Sunday, October 09, 2005

Courthouse battles shape the market

After what has been going on, I suggested jokingly to a news editor at the paper where I work that we could merge the telecoms beat and the courthouse beat (beat is US journalist slang for an area that a reporter regularlty covers). The big operators have all taken to the Administrative Court to carry on their battle with the Public Utilities Regulatory Commission regarding a ceiling the regulator put on interconnect charges. It represented a very sharp cut in interconnect for both Lattelekom's fixed network and the mobile networks of both majors -- Latvian Mobile Telephone and Tele2. Both Lattelekom and Tele2 appealed the ruling and then asked the court to suspend the ruling coming into force on October 1 as planned. The lower court found in favor of Tele2 and Lattelekom in two separate cases, but now on appeal, the suspension of the ceiling has been overruled for Tele2. It would seen natural that Lattelekom will also lose on appeal, but we must wait and see.
In terms of administrative law, it is a tough case as it asks for a kind of injunctive relief (suspending the disputed ruling) pending a hearing on the merits (whether the ruling was legal or not). On the one hand, it makes sense not to make a party suffer until a ruling that will cause it some economic loss is judged legal or not. On the other hand, there is a certain presumption of legality of the rulings of a regulatory authority which also bring certain economic benefit (lower interconnect charges) to others. It is difficult decision to make without showing one's thinking on the case on the merits. Any Latvian lawyers out there to comment on this?

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