Vodafone Malta has opened a lawsuit against the Malta Communications Authority over payments the MCA is imposing for the operation of the legal interception system which telcos and internet operators have to supply.

The controversial interception system, used by the Malta Security Service (MSS) to tap land and phone lines as well as electronic communication, is the subject of another lawsuit against the MCA over an alleged breach of procurement rules.

Vodafone claims European Union directives prohibit the MCA from imposing payments which go beyond the actual expenditure for the operation of the system, and has asked the Courts to stop the MCA from imposing the interception charges.

The EUR2 million (Lm860,000) eavesdropping system has to be financed by all telecoms and internet providers, according to their total revenues. The contributions will be paid one year in advance, and the MCA will refund any overpayments once they assess the actual cost of operation for the year.

Telecoms companies and internet providers have already claimed the MCA is charging very high licence fees which are more than sufficient to cover its administration costs, and that they should not bear the cost of the legal interception system, saying this is the state’s responsibility.

Both Vodafone and GO, the two mobile phone operators, have claimed their refusal to pay is in line with EU law. They have also said they had no say in the decisions concerning the procurement of the system.

The European Commission is looking into the matter whether the award of the contract for the provision of interception equipment to the MSS could have infringed European procurement rules.

Italian firm RCS, which claims it presented the cheapest offer for the system, has sued the Malta Communications Authority for refusing it an appeal on its decision to award Israeli firm Verint Systems the contract back in December 2005.

The MCA, which led the tender procedures, has claimed the contract does not fall under normal procurement rules because it concerns equipment for the Security Service, which have a special dispensation from public procurement rules.