ISSUE 1      VOLUME 1            MAY, 2011On The GC GrapevineIssue 1: Technology Media Telecommunications                 ...
ISSUE 1           VOLUME 1              MAY, 2011On The GC Grapevine                                                      ...
ISSUE 1            VOLUME 1            MAY, 2011On The GC Grapevine                          clients.                     ...
ISSUE 1           VOLUME 1              MAY, 2011On The GC Grapevine                                                      ...
ISSUE 1            VOLUME 1              MAY, 2011On The GC Grapevine                              The telecom industry is...
ISSUE 1          VOLUME 1             MAY, 2011On The GC Grapevine                                                        ...
ISSUE 1                VOLUME 1            MAY, 2011On The GC Grapevine  “Net Neutrality” in Hungary  by dr. Titusz Puskár...
We would like to thank those who contributed to this newsletter:    dr. Miklós Orbán    dr. Maria Dardai    dr. Mónika ...
Upcoming SlideShare
Loading in …5

On The Gc Grapevine Hungary Ed 1, Vol 1


Published on

Published in: Travel, Business
  • Be the first to comment

  • Be the first to like this

No Downloads
Total views
On SlideShare
From Embeds
Number of Embeds
Embeds 0
No embeds

No notes for slide

On The Gc Grapevine Hungary Ed 1, Vol 1

  1. 1. ISSUE 1 VOLUME 1 MAY, 2011On The GC GrapevineIssue 1: Technology Media Telecommunications Letter from the editor s Welcome to the first The Grapevine Pick will edition of a publication that has been in the minds of offer all our subscribers the opportunity to recommend In this edition: many for some time. A who should be interviewed concept brought about by for the next edition. The LETTER FROM THE popular demand from column will present the EDITORS……………………. 1leading lawyers yearning for sector- nominated GCs and details will bespecific information from their peers and offered on the voting system. The GCa forum where they can contribute some selected by popular vote will beknow-how themselves. Over the past included in the following edition.year, we have often received requestsfrom the in-house sector for a publication (My) Word On The Grapevine will  DR. MIKLOS ORBÁN,to share their experiences, triumphs, offer readers the opportunity to make HEAD OF REGULATORY AND their voices heard directly. Feedback, GOVERNMENT AFFAIRS, CEEbest practices and challenges, all within & RUSSIA/ CIS, BT…. ..... ... 2the General Counsel‟s world in Hungary. replies, comments and additional information that our readers wish toThus, as part of our commitment to share with the rest of the community canlistening to the market, we proudly be submitted to our editorial team andlaunch our exclusive newsletter “On The published.  THE GRAPEVINE PICK ... … 4GC Grapevine” dedicated to You, the TheGeneral Counsel. “On the GC We will offer more details into all of the grapevineGrapevine” will come to you 5 times a above in this first edition but we are pickyear spanning sectors such as TMT, always happy to hear from our readersEnergy, Pharmaceuticals, Banking & so, please, feel free to write to us atFinance and so on. In the midst of the or join the dedicatedexcitement around the creation of “On group here for more details.  DR. MARIA DARDAI, GENERAL COUNSEL UPC .. ... 4the GC Grapevine” we hope to reach For us, this has been a phenomenal fewnew milestones of information sharing weeks: conducting the interviews,paired with in-depth interviews with designing the lay out, and gathering allGeneral Counsels who are paving the the information provided by you, theroad of Hungary‟s in-house market. readers. We strive to make “On The GCAt the same time, we wish this to be a Grapevine” the most sought-after legal  FILM INDUSTRY TO TAKE Atruly interactive newsletter. We have specific publication in Hungary. Thank HIT DUE TO TAX LAW ...... ... 6asked top tier firms to contribute to this you for all the quality contributions andnewsletter with news as well as legal we look forward to bringing you furtheranalysis, and we will continue to do so. issues this year. Enjoy the read!We wish to take this even further and, Orsolya Endrefiwe would like to invite all our readers to Associate Director - Emerging Europemake their voices heard via either one of and Latin America  “ NET NEUTRALITY” IN Hudson Legal HUNGARY ...................... …7our three interactive columns: Radu CotarceaThe Private Practice Strip will offer Marketing Manager - Emerging Europefirms the chance to make brief announce- and Latin Americaments. Hudson Legal
  2. 2. ISSUE 1 VOLUME 1 MAY, 2011On The GC Grapevine Morley Allen & Overy Iroda The Pr ivate Practice Str ip dr. Miklós Orbán, Head of Regulatory and Gover nment Allen & Overy advises on Affair s, CEE & Russia/CIS, BT BorsodChem acquisition requires so many skills such as clients that I worked at the time got Allen & Overy consulted in the understanding people from into a lot of trouble. People in the restructuring and subsequent different backgrounds, get your late 90s believed that everything acquisition of Hungarian chemicals ideas across a huge and complex will be done on the internet, company BorsodChem by the organization, managing people and Tesco‟s and bookstores will disap- Chinese Wanhua Industrial Group projects, setting your priorities in pear, and the whole world would (Wanhua). The transaction, which line with the company‟s goals. It‟s become one big Facebook. It didn‟t was valued at EUR 1.2 billion, involved Hungarian, English and like licking your elbow: seems turn out that way and this hurt a lot Hong Kong corporate, banking and easy, but it is in fact very hard. of businesses betting on this idea. restructuring advice provided by HL: How did you become The second was around 2003-2005, Allen & Overy. The transaction took involved in the TMT sector? when the big players started from June 2009 to January 2011 and created the worlds third largest It started right after law school understanding that being mobile isocyanate manufacturer when I joined Allen & Overy. It was going to be the next big thing.HL: Many PP lawyers tend to was the days of the Internet boom Everything started being focused onthink that in-house lawyers – sorry, bubble. At the time I saw being small, mobile, wireless and so it as an opportunity. On day one I on. Kajtár Takács Hegymegi-drop their pens at 5pm and saw that the office was full of real Barakonyi Baker & Mckenziecall it a day. In reality, theGC’s life is certainly not like a estate, corporate and finance The third was the evolution from Baker Mckenzie advises Bank experts, but there was no Internet the web to web 2.0. With the move of China in acquisition ofHawaiian vacation.. lawyer. I knew I could become away from dial-up and other slow BorsodChemPeople are vain, especially “yet another” corporate or finance connections, pretty much anythinglawyers. People at PP like to lawyer and in 20-30 years could now be done online. We advised Bank of China on the become a partner, or I focus on Conference calls, part of the „skype EUR 1 billion financing of thebelieve that the world would stop TMT, which was a relatively acquisition of BorsodChem Zrt bywithout their “very important Wanhua, which also involved thecontributions”, and no-one works, refinancing of the existing senior debt “Good schools can even teach you how to argue or write a goodexcept for them. Okay, I must brief, but no-one can teach you how to become a good manager” of BorsodChem Zrt. This deal wasadmit: we, in-house guys, tend to the first of its kind in Hungary andsee ourselves the same way young practice, and become a revolution‟ for example, the first time that such a significantsometimes. But jokes aside, this is „guru‟ in a matter of years. amount of Chinese capital had been revolutionized businesses with the invested into a Central Easterna typical misconception lawyers at At the same time, I chose a internet no longer being something European country.PP have about the in-house life. regulated industry because I unreliable but something that can beBeing a GC or a legal director is no knew this would be an industry exploited to great effect.walk in the park. It is at least as where decisions heavily depend Now, we can see a stronger focus Horváth & Partners DLAstressful and challenging as PP. on the lawyer. If you work as the Piper GC of Nike, a lot of the decisions on internet protection and dataHL: The GC position has can be made without you and privacy. I actually expect a DLA Piper in Hungary advisingmany facets to it. What aspect you might not even be on the considerable focus in the near future CIG Pannonia Life Insurancedo you now find the most board. In a regulated industry on VPNs, highly secured networks Plc. on landmark IPOchallenging? however, a GC‟s input truly and even, perhaps closed/private matters. DLA Piper acted as exclusive legalThe manager. Reason: you are not networks, operating completely adviser to CIG Pannonia Insuranceprepared for this role. When you HL: Since you mentioned separate from the internet. This (CIG), an independent Hungarian lifego to law school, you learn many that you joined the industry issue has two sides to it. Firstly, insurance company on its landmarkthings: rules, laws, cases, jurispru- at its relative young stage, internet security is becoming a IPO on the Budapest Stockdence etc. Good schools can even you got the chance to grow growing concern for big companies Exchange, "The Budapest Stockteach you how to argue or write a as a lawyer along with it. and I will be interested to follow Exchange Transaction of 2010". Thegood brief, but no-one can teach What would you say were IPO is generally considered as a how companies lobby for strongeryou how to become a good manag- the landmarks of this devel- landmark transaction on theer at a Fortune 500 company. One regulations and enforcement to Hungarian capital market as it is the opment? offer such protection. The flipside isthing you learn in day one is that in first insurance company IPO on thesuch businesses there is no such The internet bubble was of to what purpose and how will these Budapest Stock Exchange since thething as a purely legal issue. It course a big one, with a lot of the companies use the data they hold on collapse of the socialist regime at the end of the 1980s.PAGE 2
  3. 3. ISSUE 1 VOLUME 1 MAY, 2011On The GC Grapevine clients. me if I spend too much time with payers in the country. As a new “The trick is to my computer. If you are a geek, entrant, it is much harder for us to HL: When you talk about the pursue regulators to enforce rulesunderstand that rules TMT sector as an industry, then you feel the same way with on these strong companies. At the people. don‟t change as fast what really gets your blood same time, enforcement itself is flowing….what has kept you HL: As your responsibility more difficult here due to a lack of as technology. In in this industry for over 6 spans 24 countries, what mar- capacity since in Hungary or years? ket is most challenging? Romania there are only a fewreality what you need dozen people working on The constant fast-paced changes Definitely Russia. If you grow up enforcement in the field. I would to do is adapt new are one of the biggest aspects. At in Hungary, you can easily say that, for a new entrant, developments to the the same time, the truly understand how business is done in enforcement will always represent international side of my role keeps Czech or Poland, and even if you a major difficulty in this industry. existing regulations.” me engaged. Most international are surprised by many things, you HL: What do you look for law firms are international only in can get along in the Balkan. But when you chose a law firm to names. Most operate under a form Russia is like another planet. And work with? of a quasi-franchise form with before you say it: I do not only First and foremost, I want to see if perhaps a foreigner as a managing think of corruption here. Russia is they understand our company: partner. My role on the other hand peculiar from every perspective. what we do, our goals and what involves a meeting with a They do not care about how things drives us. Then telecoms experi- Hungarian decision-maker in the are done elsewhere. Strange from ence. And I mean “real” experi- morning, a conference call with a someone in CEE, London, Brus- ence: I don‟t think that knowing a “Another aspect to Russian counterpart, a few issues sels or New York is no reference few buzzwords, like MVNO or consider is that the coming in from the US when they point in any discussion in Moscow. triple-play, would qualify as tele- wake up at 3 PM my time. coms experience. Same with track HL: How would you say your „black letter law‟ is HL: The TMT sector as we role in regulatory is different records: acting for a telecoms operator in HR matters is hardly a pretty much the well know is fast paced, ever here in the CEE region to telecoms experience in our world. changing with new what a counterpart does in And these were real examples. But same across the EU innovation reaching us every Western Europe? What differ- I want to be fair with my entiates the industries be- colleagues at PP: many lawyers in telecoms.The day. What are the direct tween regions? now work very hard on under- implications of this for a GC? main difference lies I think one differentiating factor is standing their clients‟ needs, and The trick is to understand that that these countries are smaller. In the quality of bids are getting in enforcement.” rules don‟t change as fast as the UK or US there is always at better and better every year. technology. In reality what you least one regulatory expert in HL: What would be the num- need to do is adapt new develop- anything whereas, in the CEE, this ber one advice for any lawyer ments to the existing regulations. does not always happen. On one considering going in-house? Also, because of the ever-growing hand, this means that I can bring my experts to make their life Don‟t forget what you‟ve learned, complexity of the technologies we easier. On the other, trying to deal but forget how you worked so far. use and the legal implications they Working in-house is not like a law with government regulatory com- give rise to, I find myself having to firm within a company. No, you plex issues is sometimes difficult spend a considerable amount of because it can happen that they do are part of a company: you work “And I mean “real” time actually explaining to regula- not understand the issue itself, not with them, smile and cry with tors what we do and the precise them. Forget about disclaimers, experience: I don‟t nature of the services we offer. to mention the importance of it. “cover your back” paragraphs and Another aspect to consider is that think that knowing HL: Have you ever contem- the „black letter law‟ is pretty long memos in legal language. You can also forget about PP privileges,a few buzzwords, like plated going for a technical much the same across the EU in telecoms. The main difference lies like spacious offices, PAs and degree? trainees. It is a different environ- MVNO or triple- in enforcement. For example, in ment which requires a different No, never. I am amused by new the CEE, going against the local attitude and work style. Best if you play, would qualify technologies and love the techy incumbent is much more difficult stop considering yourself as a law- side of law and business, but than in the west. The reason for yer: you are a director, manager as telecoms would not become a tech guy. I this is that most of these firms here or advisor with legal background. represent some of the largest tax experience.“ am a people-person; it depresses PAGE 3
  4. 4. ISSUE 1 VOLUME 1 MAY, 2011On The GC Grapevine The Pr ivate Practice Str ip The Grapevine Pic k DLA Piper in Hungary advising The Each edition we will invite our will cover pharmaceuticals. In the GLL on portfolio financing Grapevine readers to recommend a GC that next issue, we will announce the DLA Piper advising a syndicate of they would enjoy learning more pharmaceutical nominees and invite banks, led by Deutsche Pick about. While we have chosen the our readers to vote for the GC to be Pfandbriefbank AG in relation to the GCs for the second issue (Energy), interviewed as the Grapevine Pick. Hungarian aspects of the refinancing of a CEE real estate portfolio we would like to extend this To nominate someone, please write consisting of a total number of 17 invitation for our third edition which to us at office buildings in Poland, Czech Republic, Hungary and Romania. Our advice included the pursuit of a dr. Mar ia Dardai, General Counsel, UPC corporate and real estate limited due diligence and the bankability review of the material lease agreements. Lastly, it pays to have a lot of We are facing a completely new law patience. In my department, for in the Hungarian context, especially example, there are a couple of as a result of the European require- Gide Loyrette Nouel - small issues, but who handles them ments, which will affect every small feels as the most important. I aspect of the operations. Add to D’Ornano Iroda would sometimes find myself that the constant new technology Lego project at Nyíregyháza pondering on a big M&A developments and you have a very transaction and they would be in dynamic and exciting industry. The Danish toy maker LEGO has front of me talking about an issue On the other hand, this constant begun investigating the possibility of involving about 50.000 HUF. The evolution poses its challenges. In developing a new production site in owner of this issue is so keen to my line of work, nothing is obvious Nyíregyháza. Gide Loyrette Nouel explain all the details of the issue as everything I learn one second is acts as general legal adviser to the even in situations where a good questioned in the next and I find LEGO Group in Hungary. Beside lawyer, and I like to believe I am myself constantly asking whether various projects related matters, one, can figure out the outcome what I am trying to implement is general corporate, dispute from the first he/she hears of still valid and/or relevant. We do resolution, litigation and it. I do understand however that try to be proactive in this sense andHL: What would be the top employment law related counselling, I need to be patient as this always make sure that we followcharacteristics a person needs GLN is proud to have been is very important for them. what is happening in the regulatingto have to be a good GC? instructed on this landmark bodies to be able to adapt as swiftly transaction in Eastern-Hungary.I think it depends on the size of the as possible. HL: How do you communi-department. For a relatively large cate effectively with non-team, management skills are legal colleagues?crucial. The ever dense minefield of data Andrékó Kinstellar Well, most of my peers are privacy and copyrights issues managers who expect me to tailor is also one aspect that I am sure will Kinstellar advised TürkBeing able to think off your complex legal issues in a simple, impact my work more and more. Telekomünikasyon A.S.feet is also important. For executive brief manner. They Lastly, convergence needs to beexample, in a managerial meeting, The largest telecoms acquisition of quite simply don‟t care for more taken into account. The IT sector, 2010 Kinstellar advised TürkI need to give answers almost on and would hate if I tried to run media sector and telecommunica-the spot on whether or not a Telekomünikasyon A.Ş. (in Hungary, them through all the articles tions and their specific regulations; Romania, Czech Republic, Slovakiacertain risk is worth taking. involved from the law. It is of all need to be considered as a whole and Serbia) on the EUR 221 million course difficult in cases when a as the technologies involved become acquisition of the wholesale businessIt is also important to be able to very complex issue needs to be more and more integrated. Add of Invitel (including the purchase ofmove away from a purely presented, but I believe this is one to this the business/marketing Invitel Kft.) to get access to 27legal perspective. Most managers of the first things you learn to do considerations and you end up with thousand km of optical fiber networkjust don‟t want to receive answers when you start working as an an equation with a lot of variables. in 16 countries in Central andalong the lines of “based on the in-house lawyer. Southeast Europe. The deallaw, these are the following represents the largest acquisition of HL: What do you see as the HL: What about the EU Regu- wholesale telecoms facility in 2010 inrisks: a), b), c) etc.”. They main trends influencing your lations? Europe, and by far the largest TMTprefer business minded and work? deal of 2010 in Hungary (closed incompany-focused answers. October 2010).PAGE 4
  5. 5. ISSUE 1 VOLUME 1 MAY, 2011On The GC Grapevine The telecom industry is a heavily especially because we have a The Pr ivate Practice Str ip “this constant regulated industry. All regulations strong in-house department. We Kinstellar advise on FN Cable evolution poses its must be in line with the EU law. do have preferred law firms but on aquisition The new regulatory framework for a case by case basis I might need achallenges. In my line our industry was accepted in specific private practice firm. In The second largest telecoms December, 2009. Hungary is now making my choice I only really acquisition of 2010 Kinstellar advised of work, nothing is facing to the implementation phas- care about the expertise. I don‟t FN Cable Holdings B.V. (inobvious as everything es of this NRF. look at the international brand Hungary) on the EUR 46 million especially since by now I know the disposal of its Hungarian subsidiaries Therefore by now, EU trends are I learn one second is felt on a daily basis and it is clear market and have a good sense of (active under the FiberNet brand in who is strong in what practice the provision of cable television, questioned in the that we can no longer purely think about Hungary but look at the EU areas. internet and telephonic services) to Magyar Telecom B.V. (an affiliate of next” regulators even before the norms Invitel). The deal represents the start being applied here. We are second largest TMT deal of 2010 in lucky because we have excellent HL: What would you recom- Hungary (closed in February 2011). colleagues all over Europe within mend to any PP not to do LGI Group. We can always seek when making a proposal to a out advice from them when we GC? Réczicza White & Case have some problem. Honestly, when I see ten pages of a Overall, I feel the EU legislations legal review, I don‟t even feel like Falcon Group’s €574 million have had a positive influence on reading it. My advice is keep it auction sale of Èeské the industry. So far they have been accurate and to the point. I do not Radiokomunikace, a.s. stable requirements and we almost need to see extracts from the text of the law. My peers expect me to In the second-largest exit of 2010 in always feel that they are something give them a legal analysis this way, the CEE region, we advised Falcon desirable to investigate and adopt. and I‟d hope a law firm would do Group, a consortium of investors the same for me. 75% controlled by funds managed or advised by Mid Europa Partners, HL: How do you stay up to in its auction sale of 100% of Èeské date – since you mention the fast pace? HL: What advice would you Radiokomunikace, a.s. (“CRa”) to “Honestly, when I see give to any PP lawyer consid- three funds managed by Macquarie I actually have excellent colleagues ering going in-house? for total consideration of ten pages of a legal and we regularly have a sit-down First of all understand that you are approximately €574, I don‟t even feel where I am briefed on the most part of a team. This does not only recent developments and trends like reading it. My on technical and business side. I mean a team of lawyers but also of learn a lot from them. I don‟t marketing, engineering, and hu- advice is keep it man resources professionals. If you think I could be nearly as effective Invitel Holdings A/S’ accurate and to the in my job without a good team. enjoy sitting by yourself in front of acquisition of FiberNet Zrt. and a computer and working a legal point. I do not need to asset sale to UPC analysis you are better off in HL: What do you usually look private practice. If you want to In one of the most complex see extracts from the for when choosing what move in-house you need to under- transactions undertaken by our text of the law.“ private practice firm to work stand that your internal clients will Budapest office, we represented with? be people who, unlike you, do not Invitel Holdings A/S, the holding have a legal background and you company for one of Hungary‟s Considering our relatively large need to adjust your professional leading telecommunications service team, my general approach is message accordingly. This is the providers, in the bolt-on acquisition not to outsource unless we are real job of a successful in-house of Hungarian cable company looking at a very large deal, counsel. FiberNet Zrt., and Invitel‟s especially for an M&A transaction. simultaneous sale of 35% of FiberNet‟s assets to UPC. We also HL: And if you make the advised on all competition, debt decision to take that step and restructuring, regulatory and tax outsource? matters. I always discuss using any external sources with my superiors, PAGE 5
  6. 6. ISSUE 1 VOLUME 1 MAY, 2011On The GC Grapevine The Pr ivate Practice Str ip Film Industry To Take A Hit Due To Tax Law Faludi Wolf Theiss by dr. Mónika Hor v áth - DLA Piper UniCredit Bank – Waberer’s Hungarian Film Tax Relief What are the common finance, advised by Faludi Wolf System contractual structures? Theiss The Hungarian tax relief system Foreign productions can qualify Faludi Wolf Theiss advised a bank was introduced by the Motion their productions for tax relief if consortium consisting of five banks, Pictures Act in 2004. In 2008, as a contracting through any of the including UniCredit Bank acting as an result of a revision by the EU, following structures: arranger, agent and lender and certa in cha ng es (s uch a s Volksbank, Citibank, ING Bank and application of a cultural test) have 1) Work for hire structure K&H Bank acting as lenders, in been introduced whereby the main relation to the EUR 46,000,000 Hungarian producer provides financing of the operation of concept remained unchanged. services under a Production Waberer‟s Holding, the market- With the help of the tax benefit Services Agreement. leading logistics service provider in system, the refunds (supports) Hungary and Central and Eastern 2) Co-production Europe. available are 20% of the film production costs incurred in The parties shall enter into of a film industry governor to take Hungary and partly outside of a bipartite or multipartite over the managing and controlling Hungary. co-production agreement with the functions of the MMKA together participation of a Hungarian with the right to share direct state The source for the refunds is theRecent trends producer. Hungary has entered into funds. Mr. Andrew Vajna has profit before taxation of Hungarian film co-production treaties with been appointed as film industry enterprises, which intend to France, Germany, Italy, Canada andSince 2004 the Hungarian film governor in January 2011. reduce their corporate taxindustry sector has developed partly to the European Convention According to the latest news the payable. Experience of the lastmaterially: New modern studios on Cinematographic Co- MMKA will be terminated years has proved that a sufficienthave been built and opened (Stern Production. Even if there is no without legal successor and amount of private resources can bein 2006, Korda in 2007, Astra in investigation of the financial2008 and Raleigh studio in 2010). “Some of the film sponsors might turn to sport support instead management shall be commenced. which might also decrease the funds available for film support”Several Hungarian production Future tendenciescompanies, mostly independent mobilized in order to support co-production treaty with the Crisis taxes introduced in 2010 inbut some belonging to major film productions through the tax country of origin of the foreignstudios, offer high level film the energy, telecommunication, benefit system. producer the co-productionproduction services. Hungarian financial and retail sectors have structure can qualify for Hungarian limited the profit of potential bigfilm laboratories provide labora- Why could a company be tax rebate. taxpayers and thus the potentialtory services on international interested in investing in the filmstandards. industry? Such company may 3) Sale of copyright structure funds available for film support. reduce its (1) corporate tax base A new system of sport support in aThe source of this development is The Hungarian producer produces and (2) corporate tax payable bythe indirect state subsidy available the film or certain scenes of it and structure very similar to that of the the amount of the support,for film production. In the last 3 assigns or licenses it for the foreign film tax relief is under thereby achieving significant tax development. According to theyears the total amount of indirect producer. savings. initial idea 5 team sports football,film subsidy paid out has been inthe range of HUF 45-48 billion. Foreign producers can benefit Changes on the level of basketball, handball, water poloI.e. the total cost of production from the indirect state subsidy if controlling bodies and ice hockey will be entitled tos p e n t th r o u g h H u n g a ri a n producing films with the indirect state subsidy. Theproduction entities were about Until recently the Hungarian Film proposed law is currently under involvement of HungarianHUF 180-190 billion in each of the Fund (MMKA) was the body to investigation by the EU and production companies. The taxlast 3 years. Interestingly the decide upon direct state subsidies subject to certain changes rebate has attracted majorparticipation of Hungarian only for film productions (only for expected to receive green light foreign producers includingfilm productions in the total cost Hungarian productions with no early summer. Hollywood studios (e.g. Warnerof production has decreased from foreign participation) and manage Bros recently shot "The Rite" in Some of the film sponsors might42,7% to 16,2% during this state owned film assets. Due to Hungary with Sir Anthony turn to sport support insteadperiod, which means that foreign huge amount of losses accrued in Hopkins, Universal Studios isinterest has developed and keeps the last couple of years the Gov- which might also decrease the actually shooting "47 Ronin"the film industry busy. ernment has created a new position funds available for film support. with Keanu Reeves).PAGE 6
  7. 7. ISSUE 1 VOLUME 1 MAY, 2011On The GC Grapevine “Net Neutrality” in Hungary by dr. Titusz Puskár - Simándi Bird & Bird The attitude of the European quality requirements the ISPs have must be interpreted together in Commission to comply with. The purpose of service quality related issues. The these provisions is to ensure the USD has already been implement- On the 30th of June, 2010 the protection of the end-users/ ed, while the implementation of Commission launched a public consumers. Generally, the ISPs Directive 2009/136 is currently in consultation on the key questions have to publish the minimum prog res s , a nd s h oul d be arising from the issue (such as service quality they guarantee. implemented in a couple of weeks. internet traffic management prac- tices, prioritising one kind of Directive 2009/136 amending the Annex 1 of the Decree provides internet traffic over another, USD inserted new provisions into detailed rules on the obligations transparency, quality of service the USD affecting the abovemen- relating to service quality. Among and competition matters). On the tioned Articles as well. The general obligations, which are 9th of November, 2010 the amended provisions, inter alia, applicable to all electronic Commission published its report oblige the Member States to communications services, special on the results of this public ensure that national regulatory rules apply to Internet service. consultation. It revealed that there According to the Decree, ISPs “It revealed that is a near consensus on the “there is nothing to have to specify the minimum up- importance of net neutrality and download speed (kbit/s), there is a near among the stakeholders, who prevent ISPs from which they undertake to provide consensus on the expect additional guidance in the prioritizing traffic as long to their customers in 80 % of the near future from the legislative cases. Complying with these importance of net bodies of the EU. As a result of as the published minimum obligations is to be verified, from these steps, on the 19th of April, bandwidth figures[..] are time to time, by the National neutrality” 2011 the Commission, the Media and Communications European Parliament and the complied with” Authority. The ISPs are obliged to Council published a communica- publish these thresholds in their tion on “The open Internet and net authorities have the power to General Terms and Conditions andThe debates over net neutrality neutrality in Europe”. Although determine minimum service separately on their website. Fromhave started years ago in the the Communication does not quality requirements for undertak- the perspective of net neutrality itUnited States but the issue has include any binding rules (it ings providing public communica- means that ISPs are obliged togained more traction recently as summarises only the previous tions services, however, these determine the minimumone of the hot topics of the global findings of the Commission), the requirements must previously be guaranteed upload and downloadtelecommunications sector. name of the “authors” shows that examined by the Commission. The bandwidth in relation to allGeneral introduction the EU takes this issue seriously. implementation deadline for the subscription packages and tiers, Member States is the 25th of May, but there is no minimumAlthough there is no specific Net neutrality in the EU 2011. bandwidth provided by law.definition, the term “net neutrali- Although net neutrality is neither Therefore, according to the cur-ty” (which is also known as Net neutrality in Hungary regulated nor required expressly rent regulation there is nothing to“internet neutrality” or “network by any EU legislative act, certain In Hungary the legislation regard- prevent ISPs from prioritisingneutrality”) covers the idea of elements thereof (as transparency ing electronic communication traffic as long as the publishedcreating a neutral or “equal” and minimum service quality) may services including ISPs is quite minimum bandwidth figures –internet. Specifically, internet be found in the amended Universal complex as Act C of 2003 on determined and undertaken by thetraffics cannot be influenced or Service Directive (Directive No. Electronic Communications and ISP itself – are complied with. Theprioritised by either governments 2002/22 of the European Government Decree no. implementation of Directiveor Internet Service Providers Parliament and of the Council, 229/2008 on the obligations 2009/136 will most probably(“ISPs”) with the goal of protecting “USD”). regarding the quality of the slightly change the current status,consumer interests. el ectronic comm unications however, traffic prioritising will Article 21 of the USD determines services in connection with likely still remain possible. the transparency, while Article 22 consumer protection (“Decree”) of the USD determines the service The information herein does not constitute legal advice or opinion. Hudson Legal will not be held responsible for any liability arising from the use of any information provided in this publication. PAGE 7
  8. 8. We would like to thank those who contributed to this newsletter: dr. Miklós Orbán dr. Maria Dardai dr. Mónika Horváth dr. Titusz PuskárIf you would like to subscribe and receive a hard copy to thisnewsletter please write to us at with“subscribe” in the subject line.OrFollow-us in this GC only linkedin group: The editors: Orsolya Endrefi Associate Director - Emerging Europe and Latin America Hudson Legal m: +36 20 916 2252 @: Radu Cotarcea Marketing Manager - Emerging Europe and Latin America Hudson Legal m: +36 20 969 6410 @: