UPDATE2: Russian upper house to revise data bill if firms prove price growth

(Adds comments from Internet ombudsman in last three paragraphs)

MOSCOW, Jun 30 (PRIME) -- Russia’s Federation Council, the parliament’s upper house, can revise a bill obliging mobile operators and Internet companies to store data on users’ activities and exchanged content, if the companies prove that it will force them to boost tariffs, Viktor Ozerov, head of the security committee at the house, said Thursday.

“The Federation Council will follow the issue closely, and if the operators prove that users of mobile connection and the Internet could face a dramatic growth in tariffs, the Federation Council will again return to the document and amend it in case of necessity,” Ozerov, one of the bill’s authors, told PRIME.

So far, operators’ claims that tariffs would spike if the initiative is adopted are “emotional and lack calculation grounds,” the senator said.

If signed into law by President Vladimir Putin, the initiative will come into force on July 1, 2018, and until then “there is no legal basis” to speak about an increase in tariffs. Mobile operators can set the deadlines, order and volume of information to store together with the government, he said.

Several mobile operators said that they may be forced to double or triple tariffs because of extra expenses they would bear under the move.

The document says operators must store information on calls, text messages, photos, sounds and video exchange on the country’s territory for three years and content of talks and correspondence for up to six months. Internet companies must keep this information for one year.

Mobile operators said are ready to submit calculations of their costs on storage of content of subscribers’ talks and correspondence to the Federation Council.

“MegaFon presented its estimations at a meeting of the Federation Council’s committee on the development of information society. Of course, the company can submit them again,” Yulia Dorokhina, head of the operator’s press office, said.

If the bill is adopted, the costs will exceed investment and network maintenance costs by several times. “That is why the price of connection services will multiply that will naturally draw an increase in prices of services. At the current stage it’s difficult to predict the scope of growth, but it’s evident that expenses could be offset only through prices since there are no other sources,” Dorokhina said.

T2 RTK Holding, known as Tele2, is also ready to unveil its calculations. “If needed, we are ready to explain doubling or tripling of mobile connection prices,” spokesman Konstantin Prokshin said.

Ozerov said expenses of the country’s four biggest operators – MTS, MegaFon, VimpelCom and T2 RTK Holding – to comply with the new initiative would amount to 42.2 billion rubles in the Moscow Region alone.

“Taking into account the figures mentioned by Ozerov, even under modest estimations, expenses across the whole country for the operators would go beyond 1 trillion rubles. It couldn’t help but impact connection services prices,” Dorokhina at MegaFon said.

Internet ombudsman Dmitry Marinichev said later on Thursday he hopes Putin would hear the opinion of the industry’s representatives.

Creation of the infrastructure to keep records of data would consume some 5 trillion rubles, which will double or quadruple prices for users of the Internet and connection, the official said at a news conference.

“Let’s stay in touch with the industry when inventing laws. We also want to fight against terrorism, and if you ask the industry, we will tell you how to do it legally and effectively, so that it would pay off and not turn into total surveillance. I hope the president would take into account all reasons and wouldn’t sign the bill,” Marinichev said.

(64.2575 rubles – U.S. $1)

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