Controversial surveillance legislation signed into law Thursday by Russian President Vladimir Putin would compel the country’s telecommunications provider to spend billions of dollars more than they can afford, critics claim.
Included within a package of so-called anti-terror laws approved by Mr. Putin this week are rules requiring “organizers of information distribution” to save and store each and every one of their customers’ communications for a period of six months. Effective July 20, the law also calls on entities including telephone companies and internet service providers to keep user records on hand for upwards of three years.
The head of Megafon, Russia’s second-largest telecommunications company, told the Kommersant newspaper Thursday that he’d rather pay the government higher taxes than spend an estimated $3 billion annually on infrastructure upgrades.
“We will be unable to fulfill the requirements of law in the way that it exists at present,” explained Megafon CEO Sergey Soldatenkov, who said his company only generates a comparably meager annual profit of $780 million.
Telecoms already pay a 1.2 percent revenue tax to authorities, Mr. Soldatenkov said. When the latest proposal was drafted earlier this year, however, he told the newspaper that he met with politicians and offered to give even more to the government instead of acquiring a way of recording and storing data on millions of Russian customers.
Those funds could be collected by the government and used to construct their own processing centers for logging and saving customer data, he said.
“Any tax should be economically beneficial for both the state and the operator,” Mr. Soldatenkov said. “An additional tax will not affect the industry. … If you make it 20 percent, than it is a different story.”
“When we saw the provisions of the bill, we really hoped that it will not be accepted,” he added. “I believe we have done everything possible to inform deputies, Federation Council [and] the government that the bill in this form is impossible.”
A representative for Tele2, another telecom, said it may have to raise prices threefold or more in order to accommodate the new law, The Wall Street Journal reported.
“It just will not work in that part,” Russian business ombudsman Boris Titov told attendees at a Friday meeting in Stavropol, TASS reported. “The law does not come into effect immediately so there is a certain period which is enough to make amendments to its or to abolish it.”
Former National Security Agency contractor Edward Snowden suggested this week that forcing telecoms to meet the Mr. Putin’s demands would amount to a “$33 billion tax on Russia’s internet,” and that the legislation authorizes “a repressive new law that violates not only human rights, but common sense.”
When Mr. Putin’s signature was announced Thursday, Kremlin spokesman Dmitry Peskov said that the president will monitor the law’s implementation and may take action if any unpleasant consequences arise for Russia’s economy. According to The Moscow Times, however, he reportedly dismissed such concerns as groundless.