A Elementary Reform of the Israeli Telecommunications Licensing Regime

We want to replace you that the Israeli Parliament has handed a complete modification (“Modification no. 76” or the “Modification“) to the Communications Legislation (Telecommunications and Broadcasting) (the “Telecommunications Legislation“) which basically adjustments the present licensing regime and establishes a totally new regulatory framework.[1]  Based on a public announcement of the Ministry of Communications (“MOC“), the aim of the reform is to considerably cut back the regulatory burden within the discipline of telecommunications companies in Israel, and to implement what’s outlined as a ‘quick observe’ to ease the entry of small entities into the telecommunications market.
 
In accordance with the reform, upon the efficient date of the Modification, whoever needs to supply telecommunications companies to the general public in Israel, by way of a telecommunications community, can register to a devoted registry which can be maintained by the MOC (the “Registry“) and to the extent the minimal threshold and circumstances set out by the MOC are met, the registered particular person or entity can begin offering the companies topic to a Normal Authorization’s provisions as can be revealed by the MOC (“Normal Authorization“). Such registration course of for the availability of telecommunications companies could be in keeping with the Modification the default licensing format. This regulatory regime is just like the authorized regime below the European Directive from 2002 (as amended in 2018). [2]
 
Underneath the present primary authorized norm, previous to the efficient date of the Modification’s, acquiring a license is required upfront so as to perform any telecommunications operation and to supply any telecommunications service. Following the Modification, acquiring a license could be the exception to the Normal Authorization framework and it will solely apply to telecommunications companies which might be explicitly listed within the Telecommunications Legislation as being of particular significance, which justifies nearer supervision, reminiscent of regulation in market circumstances the place an operator has vital market energy or within the case of a license involving the usage of a scarce public useful resource.
 
Primarily based on the present definition of a ‘Telecommunications Service’, previous to the Modification, the principle think about figuring out whether or not a service is topic to the licensing requirement is the set up, operation or existence of a telecommunications facility. As a part of the Modification, this definition can be changed, and in accordance with the brand new definition the weather that characterize the availability of regulated telecommunications service would be the essence of the service and its provision to the general public by a telecommunications community for a enterprise objective.
 
Underneath the brand new format of regulation, performing a telecommunication operation (versus offering telecommunications companies to a 3rd occasion) will not require a license,[3] the scope of the telecommunications companies that require a license can be decreased, and the present distinction between the several types of licenses can be cancelled.[4] After the modification, the regulation can be based mostly solely on two frameworks: registering within the Normal Authorizations’ Registry or making use of for a license for particular telecommunications companies as set forth within the amended Telecommunications Legislation.
 
Since Modification 76 is a broad and complete modification to the Telecommunications Legislation, this evaluate will focus solely on the main adjustments within the format of the regulation – what are the companies which might be solely topic to registration; what are the companies that require a license; and, the place relevant, what are the exceptions to the applicability of the licensing obligation.
 
Telecommunication Companies which might be Topic to Registration within the Normal Authorizations’ Registry
The telecommunications companies which might be topic to the Normal Authorization registration course of are the three forms of companies listed beneath, to the extent that they’re supplied to the normal public, or a part of it (somewhat than to a selected entity), by a telecommunications’ community for the service supplier’s business-commercial functions:

1. Telephony companies – voice calls service solely, together with Voice over Broadband, if originating or receiving the calls contain numbering assets, in keeping with the nationwide numbering plan;
2. Web entry companies – ISP or Web infrastructure service, or each, if they’re supplied for consideration;
3. Information transmission companies – the service that’s at the moment referred to within the telecommunications laws  promulgated below the Telecommunications Legislation as “knowledge communication companies”, which aren’t supplied by the general public Web community, together with a service at the moment known as a “transmission service”, supplied between services of telecommunication operators, or multichannel TV platform licensees, or between terminal tools.

Different companies that will additionally fall inside the scope of the Normal Authorizations’ regulatory regime are companies that can be included within the First Schedule to the Communications Legislation, as decided by the Minister of Communications, and authorized by the Israeli Parliament’s Economics Committee, in the event that they discover that including a service to this regulatory regime’s scope is justified, based mostly on the issues which might be set forth in Part 58A of the Telecommunications Legislation.
 
The Modification additionally stipulates preconditions for registration within the Registry, together with a localization requirement of the telecommunications service supplier, who must be integrated and registered in Israel, or for an organization that’s integrated exterior Israel – a requirement to be registered in Israel as a international firm. As well as, the Minister of Communications is allowed to impose additional circumstances, restrictions and obligations, by the Normal Authorizations’ laws that may apply to these registered within the Registry.
 
Telecommunications Companies which might be Topic to a Particular Licensing Requirement
The legislation enumerates a listing of 4 telecommunications companies and one telecommunication operation that are supplied for the service supplier’s business-commercial functions, which can be topic to a license, as follows:

1. Telecommunications companies by a mobile methods (mobile companies) – if the availability of the companies includes utilization of radio frequencies, inside the frequency vary specified within the Second Schedule to the Telecommunications Legislation. That is a vital service to the general public and the variety of rivals is restricted as a result of required use of frequencies which might be a scarce useful resource;
2. Telecommunications companies supplied in a big scale by a telecommunication community – the place the variety of customers subscribed to the community, the community’s endpoints, or the terminal endpoints exceeds the edge decided by the Minister of Communications. This doesn’t embody telecommunications companies supplied through the use of such community of one other telecommunications service supplier (for instance MVNOs);
3. Telecommunications companies supplied by an Israeli satellite tv for pc communications community – if one of many following applies: (1) the community features a fastened or cellular floor station in Israel for communication with a satellite tv for pc; or (2) the community features a satellite tv for pc that has an affinity to the State of Israel as a result of registration location of the satellite tv for pc – with respect to a set location (Geostationary), it’s registered within the Worldwide Telecommunications Union (“ITU“) below the identify of the State of Israel, or in case that the community will not be in a set location (Non- geostationary) – the satellite tv for pc is situated in an orbit that’s registered within the ITU below the identify of the State of Israel;
4. Any telecommunications service supplied by a neighborhood authority;
5. A telecommunications operation in a floor telecommunication facility that connects between some extent in Israel and some extent exterior Israel – such because the underwater cable.

The Minister of Communications is allowed so as to add different companies to this class of particular licensing necessities, topic to the approval of the Israeli Parliament’s Economics Committee, if their regulation by registration within the Registry is deemed inadequate, based mostly on the issues specified within the Telecommunications Legislation.
 
Exceptions to the Licensing Requirement’s Applicability
The Modification replaces the present provision stipulating the exceptions to the licensing requirement and, as an alternative, mandates a listing of three forms of companies whose provision is completely exempted from the licensing or Normal Authorization necessities, as follows:

1. A telecommunications service that’s ancillary to a essential service which isn’t a telecommunications service – these are companies which might be based mostly on communication parts and knowledge transmission, however the service the shopper receives is not a telecommunications service. Such companies could embody, for instance, withdrawing money from an ATM, touring in an autonomous car, or offering Web content material filtering service, the place this service is ancillary to the Web entry service.
2. Information switch companies or a service that’s listed within the First Schedule to the Telecommunications Legislation, the place the service supplier doesn’t decide the standard of service that’s supplied to the subscribers nor the specs of the telecommunications community by which the service is supplied – this appears to solely embody knowledge companies supplied over the Web, often known as OTT (Over the Prime) companies, supplied on a greatest effort foundation.
3. A telecommunications service supplied by a world satellite tv for pc system – if the MOC has confirmed that each of the next circumstances are met: (1) the system has no affinity to the State Israel and (b) the system is topic to regulation in a rustic that’s listed within the Second Schedule (at the moment the US and Member States of the European Union).  A worldwide satellite tv for pc system is taken into account to have an affinity to the State of Israel if the companies that are supplied by it are primarily supplied in Israel, if it features a floor satellite tv for pc station inside the territory of Israel, or if its satellites are situated in areas or make use of orbits which might be registered within the ITU below the State of Israel’s identify.

Transitional Provisions – Implications on Current Licensees and Allow Holders
Numerous transitional provisions have been set forth within the Modification to regulate the present licensing panorama to the brand new regulatory framework. The transitional provisions apply to the next: (1) an entity who had a normal or particular license and the availability of the service for which it obtained the license requires registration within the Registry or a license below the Modification; (2) a licensee who’s topic to a common service obligation; (3) an entity who has been granted a normal allow for the availability of telecommunications companies below the present Telecommunications Legislation (“Outdated Normal Allow“) and the availability of the service in respect of which it was granted the Outdated Normal Allow requires, in keeping with the Modification, both registration within the Registry or acquiring a license in accordance with the brand new framework; and (4) an entity which offers companies that at the moment don’t fall inside the scope of an Outdated Normal Allow or any license, and pursuant to the Modification such companies would require Normal Authorization or a selected license.  
 
The Modification’s Date of Graduation
The Modification will come into drive on October 2^nd, 2022 (the “Efficient Date“). Nevertheless, if the laws relating to the Normal Authorization framework haven’t been enacted by then or if the MOC failed to finish by this level the preparations for sustaining the Registry, the Minister of Communications is allowed, topic to the approval of the Israeli Parliament’s Economics Committee, to postpone the Efficient Date for a further interval not exceeding 6 months.
 
We estimate that the laws below the Modification, and the adjustments that may apply to the present laws can be out there for public listening to in the end.