Internet providers began to form cooperatives in order not to spend money on the purchase of SORM equipment and not to store user traffic. This significantly reduces their costs, and subscribers avoid surveillance by the security services. The members of the cooperative are confident that they are acting within the framework of Russian legislation, but the Ministry of Digital Development categorically disagrees with their position.
Co-ops are back
Regional telecom operators have figured out how to legally refuse to integrate systems of operational search activities (SORM) into their networks and not store user traffic, Vedomosti writes. In other words, companies have found ways to protect their subscribers from surveillance. What’s more, they found it possible to work without license checks, and also within the law.
To implement all this, providers began to literally unite in cooperatives, called “consumer Internet cooperatives” (CIC). These organizations provide Internet access to their customers, for which they purchase traffic from other, larger operators.
When exactly the providers began to unite in PIKs, at the time of publication of the material, it was not known. But, according to the publication, this idea is at least five years old – in 2017, PIK “PZH-19” appeared in Taganrog. This means that this movement appeared at least a year before the entry into force of the Yarovaya Law, which obliges telecom operators to store subscriber traffic and bear the cost of purchasing the equipment necessary for this.
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But it is possible that it was this law that caused the appearance of PIKs – it was adopted in 2016. The Yarovaya Law, prepared by the deputy Irina Yarovaya and which is a set of amendments to the law “On Communications”, forces operators to store user traffic for six months and at the same time increase storage capacity by 15% annually.
The innovation gained popularity
The exact number of PIKs in Russia has not been established. In 2020 and 2021 At least five such organizations have been registered across the country, two of which operate in the capitals – “Internet Buyer” in Moscow and “Kootv” in St. Petersburg. The list also includes Mercury from Anapa, Elit-TV from Rostov-on-Don and Expertcom, registered in Belgorod.
PIK “PZh-19” from Taganrog currently serves about 55 thousand subscribers, the founder of the cooperative told Vedomosti Mikhail Mayorov. Head of the Belgorod “Orderkom” Dmitry Galushko stressed that officially PIKs do not carry out commercial activities. According to him, the organization’s members pay membership fees, but all of it goes to PIK’s operating expenses, which include the purchase of traffic along with network maintenance. Dmitry Galushko added that with all this, PIK provides subscribers connected to the networks of cooperative members with Internet access.
Benefits for everyone except the state
The head of PJ-19, Mikhail Mayorov, told the publication that the merger of Internet providers into PIKs is beneficial primarily to subscribers, since, by uniting, they can provide their customers with a “more convenient service” in comparison with federal telecom operators. He explained this by the fact that after the merger, the companies can “solve problems with the Internet connection more quickly.”
Mayorov does not exclude benefits for the providers themselves. He stated in plain text that the obligation to install SORM equipment on PIKs in their networks, in accordance with the current legislation, does not apply.
According to Mayorov, the regular tightening of requirements for telecom operators will cause an increase in the number of PIKs throughout Russia. Such organizations are not under the control of supervisory authorities, plus, under the current rules, they do not need to pass a license check.
Changes in legislation
Speaking about tightening laws, Mikhail Mayorov probably had in mind, among other things, the new initiative of the Russian Ministry of Digital Development. On June 8, 2022, the department prepared amendments to the Tax Code, the Code of Administrative Offenses and the law “On Communications”.
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The changes proposed by the Ministry to the Tax Code imply a multiple increase in the state duty for nine types of licenses for communication services. If they are accepted, the fee will increase from the current 7,500 rubles. up to 1 million rubles
The Ministry of Digital Transformation also wants to toughen the punishment for telecom operators for the absence of SORM equipment in their networks. We are also talking about turnover fines. Their size will be in the range from 0.01% to 0.05% of the operator’s annual revenue for communication services, but not more than 0.02% of the annual revenue from the sale of all goods (works, services).
The proposed amendments indicate the minimum amount of such a fine – 1 million rubles. For comparison, at present, the lack of SORM equipment leads to a fine of 100 thousand rubles. up to 200 thousand rubles.
The head of PIK “Orderkom” Dmitry Galushko told the publication that the adoption of the amendments proposed by the Ministry of Digital Transformation would force regional telecom operators to go into the “gray” zone, since they would not be able to pay the required amounts. This will lead to a reduction in their tax deductions to the state treasury. Galushko also drew attention to the fact that the acquisition of “hardware” for SORM translates into significant expenses for regional operators, since this “event” costs them at least 20 million rubles.
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Representatives of the Mintsifra told the publication that the activity of PIKs is illegal, since “legal entities and individual entrepreneurs that provide paid communication services must have a license in the field of providing communication services.” The ministry added that law enforcement agencies should stop their activities, and that punishments are provided for in the Code of Administrative Offenses and the Criminal Code of the Russian Federation.
One of Vedomosti’s sources believes that PIK operate according to a “non-transparent” scheme. “According to PIKs, they don’t owe anything because they are the ‘last mile’, they buy traffic, etc., but I’m not sure that Roskomnadzor shares this point of view,” he said, adding that if the proposed Mintsifra amendments authorities will begin to monitor such organizations more closely.