ESIS Extension / Czech Republic / IS Promotional Activities / Update Memo 3

The last quarter of 1999 has brought an even wider range of activities of the state administration bodies, self-government bodies, professional and branch focused unions and associations, media, trade fair organisers and last but not least, of commercial entities from among providers of information and telecommunication technologies and services.

Despite the difficult political situation, a clear and growing convergence could be seen among the activities of the state administration and self-government and the activities of non-governmental organisations and the commercial sector.

2. The political situation and its consequences for creating the legislative framework of the IS

The repeated refusal by the Parliament to ratify the government’s draft of the budget of the Czech Republic for 2000 brings up questions, concerning the further development of the current governmental activities in the field of supporting the development of the Information society.

The political pressure on the current minority government, at centre of which is the pressure to reduce the planned budget deficit, is thus one of the likely reasons, why in both the original as well as in the revised governmental budget draft for 2000 there is a chapter missing, dealing with financing of the implementation of the Action plan of the State Information Policy. As can be seen from the Minutes from the 7^th meeting of the Governmental Council for the State Information Policy, held on September 23, 1999 (for details see http://www.vlada.cz/rady/sip/zasedani/rok1999/zas007.win.htm), the practical implementation of the Action plan was actually postponed until 2001. Therefore, preparatory and coordination work is to take place in 2000, which will to be financed from other budget chapters. Submitting the final version of the Action plan has also been postponed until February 29, 2000.

Even though substantial comments on the presented draft of the act on electronic signatures have been presented by several independent experts, the above mentioned governmental refusal of the draft, presented by the MPs, has turned this into a political issue, which very much lowered the chances of the draft being approved by the Parliament of the Czech Republic. Particularly, if the same government approves the alternative draft, prepared by the State Information System Office (see http://www.usiscr.cz) in the near future, further complicating as further delays on this issue can be expected in the current political climate.

The future of the governmental draft of the law on protection of personal data (http://www.usiscr.cz/cz/dokumenty/diskuse/ochrana_vladni_navrh.html) and on the changes of certain corresponding laws, which deal not only with harmonising the Czech legislature in the sphere of protection of personal data and adjusting this legislature to cover new uses for information and telecommunication technologies, but also with creating the legislative framework for establishing the independent Personal Data Protection Office, located in Prague.

3. Other governmental activities supporting the IS and reaction of the media and the public

The unfavourable reflection of the outlined reality in the media, unfortunately, degrades the way, in which the media and the public view (or ignore) other activities of the government in the field of Information society promotion.

One of the activities, which drew little response, was, e.g. the approval of the Concept of creation of the public administration information system (see http://www.info-forum.cz/ceske/doc/isvs/isvs.html), which has been elaborated by the above mentioned State Information System Office and which has been approved by the government in the Resolution of the Government of the Czech Republic No. 1059 from October 11, 1999 (see http://www.vlada.cz/cgi-bin/usnredir.win.cgi?8886). The aim of this concept, the content of which follows up the document of the Concept of Reform of the Public Administration and the document State Information Policy is, among other things, creating the conditions for a functioning and up-to-date public information service built upon a network of information centres, self-service kiosks or the Internet – i.e. information services to the general public, the development of which being a key conditions in the development of the Information society in the Czech Republic.

Preparation of further governmental resolutions, measures and activities, therefore, continues to take place out of sight of the wider professional and general public. A good example is preparation of the "Proposal of the basic measures for the support of electronic commerce in the Czech Republic", which took place completely without any wider discussion. This proposal was prepared for the government by the Information System Office as a document, which concretises and deals in further detail with the "Proposal of the basic measures for support of the electronic commerce in the Czech Republic", approved by the Czech government on June 16, 1999.

Even though the activity of the state in the field of promoting of the development of the Information society has been increasing in recent years, from the point of view of its consequences, its actual effects can hardly be compared to the activities of non-governmental organisations.

The branch association, which has been one of the most active during the last quarter of 1999, was the Information Society Association (see http://www.spis.cz). This association continued to organise the so called Club evenings during the last quarter of 1999, which included debates with top representatives of the state administration and legislative bodies, in which, dozens of representatives of the information and communication technologies suppliers took part as well as representatives of the media. Another activity, which has been initiated by the Information Society Association in the last quarter of 1999, has been the preparation of the above mentioned MPs’ draft of the Electronic signature Act (see http://www.spis.cz/ZEP/zep_navrh.htm), which will be submitted for approval by the Czech parliament at the beginning of 2000, despite the negative standpoint of the minority government.

It was also the Center for Electronic Commerce (CEO – see http://www.e-commerce.cz), which carried out its activities in the last quarter of 1999. This Centre organised an annual meeting of its members, drawn from those within the state administration who are interested in the issue of Information society, on November 18, 1999. The agenda of the meeting included lectures about the aims and the first outcomes of the ESIS II project. Apart from implementation of the ESIS II project, the representatives of the Centre for Electronic Commerce have also joined the admonition proceedings for the MPs’ draft of the law on electronic signatures and they have played an active part in the preparation of the "Proposal of the basic measures for support of electronic commerce in the Czech Republic" for the Czech government. Apart from all these activities, the Electronic Commerce Centre has also been carrying out activities, aimed at finding potential sources of financing for projects supporting the Information society and making them accessible. One of these activities is co-operation with the Czech centre of FEMIRC-CZ (Fellow Member to Innovation Relay Centres for the Czech Republic – see http://www.femirc.cas.cz) in propagation of information about the possibilities of financing of projects, supporting the Information society, from the 5^th framework program of the EU (see http://www.park.cz/fp5) or in taking the professional patronage over the regular meetings of the Czech "netbusinessmen" with the potential private investors within the framework of the First Tuesday project (see http://www.park.cz/firsttuesday), which have been taking place every first Tuesday of each month since October 1999, and which are regularly attended by more than 150 guests.

Other partial activities, supporting the development of the Information society in the last quarter of 1999, have also been carried out by the Association of Providers of the Internet Network Content (APO – see http://www.apo.cz), which has organised the conference "The Future of The Internet in the Czech Republic" on November 5, 1999, within the framework of the Media99 fair (see http://www.apo.cz/zpravy/media99_progr.html). As a signal that increased activity of the Association of Providers of the Internet Network Content can be expected in 2000, among other fields of activities, supporting the development of the Information society, the general meeting of this organisation has decided that their own administration and offices shall be established. The headquarters of the organisation will probably be located at the same address as the BMI civil association, which has taken over the preparation of the March, the Internet month campaign (see http://www.brezen.cz), which will encompass a wide variety of projects, supporting the development of the Information society in the Czech Republic, in March 2000.

As far as the field of online media is concerned, the online news service of the Czech Press Agency (see http://www.ceskenoviny.cz) retained its strong position as well as the "Internet broadcasting" of the state controlled Czech Radio (see http://www.cro.cz), the online version of the most popular Czech daily iDnes (see http://www.idnes.cz) and the recently introduced electronic form of the Czech economic weekly Hospodárské noviny (Economic papers), called iHned (see http://www.ihned.cz).

One of the popular online media is the independent "political, family and dog daily www-paper" The Invisible Dog (http://pes.eunet.cz), which has become the very first regularly updated Czech online daily in 1996. Among the services, which make researching of the requested content on the Czech Internet easier, the Centrum search engine (http://www.centrum.cz) has been founded and it has been competing with the well established services of the Atlas (see http://www.atlas.cz) and the Seznam (see http://www.seznam.cz).

The above mentioned trio of www-services is becoming more and more the so called Internet portals, which, apart from services of a search engine, provide also up-to-date news service and some other services. The information services, provided by other companies, such as the Mobil Server (see http://www.mobil.cz) and the M.I.A. (see http://www.mia.cz) are following a similar path.

The promotion of the Information society by the state controlled media is represented particularly by a specialised Czech Television weekly called Zavin@c (http://www.zavinac.com) and a radio weekly of the Czech Radio, called Megabajt.

From among the latest researches, dealing with the state of development of the Information society in the Czech Republic, the greatest attention has been drawn to the results of the research of the development of utilisation of the Internet in the Central Europe. The results of this research have been published on November 10, 1999, by the multinational IDC company (http://www.idccentraleurope.com). The argument of the IDC company, according to which, there were 292 000 users of the Internet in the Czech Republic as of July 1, 1999, was challenged by the President of the Association of Providers of the Internet Network Content and two operators of some of the above mentioned important Czech Internet information services and their „Declaration of operators of the leading Internet servers about the number of users of the Czech Internet" (see http://www.lupa.cz/komentare/ukaz.php3?k_id=623) on November 24. According to this declaration, which was using information following up from information about number of visitors of their www-servers and from information from a representative Market & Media & Lifestyle research, organised by the Median agency, the number of Internet users in the Czech Republic is around 600 000.

The trade fair, extent and importance of which has very much exceeded the importance of any other similar event, is the information and communication technologies fair INVEX COMPUTER (see http://www.invex.cz), held in Brno for the fourth time between October 4 and 8. However, compared to the previous years, Invex 1999 has suffered not only a minor decrease in number of visitors but, what is more acute, a substantial decrease in number of exhibitors, particularly from among the providers of complex solutions for the business sphere and the state administration. This fact could be considered a signal that this event has been transforming from the original professional fair to a computer "hubbub".

Even though the organisers of INVEX COMPUTER are trying to reverse this trend for obvious reasons by organising accompanying events, such as the "managerial" conference „Information for the 21^st century" (see http://konference.cpress.cz), organised within the framework of INVEX COMPUTER 1999, or providing of above standard services for representatives of the large companies and the state administration, these efforts are jeopardised not only by the decreasing interest of the key participants, but also by the unsuitability or insufficient infrastructure of the trade fair organiser.

It comes as no surprise then that the potential exhibitors, who’s focus is on the clientele from the company sphere, prefer to take part in events with less mass character and they opt for smaller and more focused events. Several events of that sort took place in the last quarter of 1999 and several more are announced for the first half of 2000.

The third Enterprise Information Strategy Forum 2000 conference (EISF’2000 – see http://www.eisf.cz/konference) will be held between February 29 and March 2, 2000. Participants of this conference traditionally come from the sphere of management of Czech companies and Czech offices of foreign companies.

The third combined exhibition and conference, known as the Prague Internet World will take place between April 18 and 20, 2000. This event is organised within the framework of the worldwide Internet World cycle.

Information about the technologies, helping the development of the Information society, and about the possibilities and the consequences of their utilisation in the state administration as well as in the commercial sphere, will be available in the second half of 2000, during the eighth trade fair of communication and network technologies ComNet (see http://www.comnet.cz), held between May 23 and 25, 2000, or during the eighth conference System integration (see http://si.vse.cz), held on June 6 – June 13, 2000.

4.4 Partial activities, effect of which very much exceeds their commercial framework

The effects of the above mentioned activities, which have contributed to the promotion of the Information society in the Czech Republic, have been further amplified by the side effects of several partial commercial and non-commercial activities in the last quarter of 1999, the total effect of which significantly exceeded their originally planned extent.

The commercial entities, which contribute to the promotion of the development of the Information society in the Czech Republic the most are an extraordinarily keen and media-active Expandia Banka (see http://www.ebanka.com), which has contributed in the last quarter of 1999 to the practical promotion of the development of the Information society, by transferring the eCity virtual city project (see http://www.ecity.cz) from the first, totally virtual stage (when virtual products were purchased with virtual money in the shopping zone of the virtual city), to the second "real" stage.

Since October 4, 1999, the registered "inhabitants" of the eCity have had the opportunity to buy real products for real money in the virtual shops of the eCity. This real money can be deposited either on current accounts in the Expandia Banka or on special "eCity accounts", to which the funds can be transferred from current accounts in other banks through the so called "intelligent payment" at the moment, when an order is placed (these "eCity accounts" can be used only as a superstructure to accounts in other banks thanks to very favourable terms for opening and management of these accounts).

The combination of this principle with other security features, such as very strict terms for dealers, who intend to sell their goods in the eCity, or standard use of the so called e-letter of credit (using which the amount due is transferred to the seller only after delivery of his goods), makes the commercial transactions, carried out within the framework of the eCity, transparent and safe in the best available way. This way, the most of the key risks, which have jeopardised any faster development of the on-line sales to the end users in the Czech Republic, have been eliminated.

One of the other activities, which contributed significantly to the promotion of the development of the Information society in the Czech Republic in the last quarter of 1999, is the increasingly harsh competition of Internet providers, combined with the approaching full liberalising of the telecommunication market as of 1.1.2001.

When one of the most important Czech Internet providers – the Czech OnLine company (see http://www.volny.cz) started offering connection to the Internet through a dial-up connection free of charge at the end of August 1999, another important Internet connection provider – the Internet OnLine company (see http://www.iol.cz) – rushed to the market with a similarly favourable offer of Internet access. This offer of a dial-up connection to the Internet also applies for the users, who subscribe to the most read domestic daily MF Dnes (the Internet version of which, iDnes, is one of the most read Czech online media), or to those users, who purchase or lease a PC from the AutoCont company (see http://www.autocont.cz), one of the most important Czech producer and retailer of personal computers, offering its products also through its on-line shop.

The above outlined events were probably initiated by an information leak, concerning the background of a massive anonymous advertising campaign of the CONTACTEL company (see http://www.contactel.cz), which in no way hides its ambition to become a direct competitor to the monopoly Cesky Telecom after the full liberalisation of the Czech telecommunication market in 2001. The above mentioned anonymous introductory campaign, which was supposed to prepare the grounds for the CONTACTEL company through the leasing of personal computers with Internet access through a dial-up connection and with installation at the customer "included", did not, probably, bring the expected results due to the counter steps of the competitors. The CONTACTEL company was thus forced to very quickly extend its offer of different PCs from domestic and international producers and to come up with another massive campaign in the press and television.

In view of the above mentioned facts and events, the Czech public has been overwhelmed by a number of very concrete offers of how to get an access to the Internet through dial-up connection completely free of charge or how to get all the necessities for the Internet access with monthly instalments from only CZK 1000 (i.e. approx. EURO or US$ 30). The main reason for this was, obviously, the plan of the monopoly operator of the fixed telephony services networks - the Czech Telecom (see http://www.telecom.cz). This company has announced at the end of 1999 that, unlike in the previous years, when the charges were continuously increased, the charges for using of the dial-up lines for the Internet access will not only be lowered slightly as of 1.1.2000, but also that the company is willing to negotiate with the internet connection providers about the commission from the revenues, gained this way.

Based on all the above mentioned facts, it is very likely that the year 2000 will finally bring a turning point in the growing imbalance between the impetuous development in utilisation of the Internet in the Czech business sphere, which is not so sensitive to the prices of the dial-up connection due to using of the regular connection to the Internet through rented fixed lines, and the much less dynamic development in utilisation of the Internet by home users.

It is the home users, who have since the fourth quarter of 1999 been motivated to mass utilisation of the Internet, not only by the increasing possibilities of access to the information through on-line media or the ever growing offer of secured on-line purchases at certified dealers, but also by the increasingly transparent structure of the Internet access cost. The advantages of the increasingly transparent cost structure (which will grow as the Czech telecommunications market gets liberalised as of 1.1.2001) are being promoted through media campaigns in mass media.

Please note that this report has been prepared under the sole responsibility of the ESIS II contractors.
It does not necessarily reflect the views of the Commission, nor does the Commission accept responsibility for the accuracy or completeness of information contained herein.
The ESIS Team of contractors welcomes any additional information or corrections.