April 2000

Bulgaria Master Report

I. General background

The main priority in the Bulgarian government policy is the Euro-integration. To achieve this goal, Bulgaria should fulfil the requirements for membership according to the European Agreement established between the EU and their member states on the one hand, and Bulgaria, on the other.

In the light of this priority, 1998 and 1999 was a period of profound reforms in the Information sphere. The separation of state function from the economic ones occurred in the Telecommunications sector in 1991. After separating Telecommunications from Postal Services (1992) and the development of the legal framework in the field, in 1998, the Information Society (IS) turned into one of the most important issues on the political agenda of Bulgaria. Strategy and national program for IS development in Bulgaria were built and submitted at the end of September 1999 for adoption by the Council of Ministers. The Telecommunications Sector Policy was adopted (Resolution N 570 of the Council of Ministers, 29 October 1998) and entered into force. The Telecommunications Sector Policy will be periodically updated.

1. General telecom policy

The government carries out general telecom policy on basis of the Telecommunications Sector Policy of the Republic of Bulgaria (1998). This Act is an expression of the concepts, plans and objectives for development of market economy in the sector and the establishment of fair competition. During the transition period the following main issues are defined:

• modern legal and regulatory framework;
• alignment with acquis;
• liberalisation of the market of networks and services;
• Development of Information Society in Bulgaria.

2. Institutional structures in charge of the regulatory issues

2.1 Public Administration Units

According to the Art. 6 of the Law on Telecommunications (State Gazette, 93,1998), the telecommunications activities are managed by the Council of Ministers, the National Radio Frequency Spectrum Council and by the Committee on Posts and Telecommunications (CPT), according to their powers, as specified by this Law.

2.1.1 The Council of Ministers defines the state policy in the field of telecommunications by approving the sector policy statement. This statement determines the strategy, principles and stages of development of the telecommunications sector and shall contain the types of activities and services as well as the time schedule of their liberalisation. The Council of Ministers approves the granting of licenses for establishment of telecommunications networks and provision of telecommunications services that use the radio frequency spectrum.

2.1.2. The Ministry of Transport and Communications is the State central public administration unit that implements the telecommunication policy on the basis of the present law and the sector policy adopted by the Council of Ministers. The Minister of Transport and Communications should prepare the sector policy for the telecommunications sector and submit it for approval to the Council of Ministers. The Minister of Transport and Communications exercises the rights of the capital owner in the State-owned companies, as well as in those companies in telecommunications sector where the State is a share holder or a partner. He is carrying out activities related to: restructuring of the sector; research and development in telecommunications; development of the Information Society; Euro-integration; management of the budget funds for the professional educational institutions, professional training, etc. The Minister of Transport and Communications specifies the types of telecommunications activities that are subject to individual licensing, class licensing and free regime of operation.

2.1.3 The National Radio Frequency Spectrum Council at the Council of Ministers implements the state policy on the radio frequency spectrum. The Council prepares and periodically updates, and the Council of Ministers approves, a National Frequency Plan for the allocation of radio frequencies and radio frequency bands from the radio frequency spectrum for civil needs, for the needs of defence and security, and for shared use.

2.1.4 The Co-ordination Council on Information Society at the Council of Ministers was established in 1998 (Decree N. 40 of the Council of Ministers, 17 February 1998). Its main functions are to define strategies and aid the implementation of adopted policies related to the development of IS in the country, in close interaction with the different units of the central and local public administrations.

2.2 National regulatory authorities

According to the national legislation, there are two regulatory bodies in the field:

2.2.1 The State Telecommunications Commission is a State authority - a collective body consisting of five members, including a Chairman and his Deputy, all of them appointed by the Prime Minister with a seven-year term of office. The Committee has a full range of regulatory functions that are separated from telecommunications policy, as well as public ownership functions, and especially:

• Convey a preliminary study of the necessity and technical feasibility of the issue of a license for the establishment of telecommunications networks and for provision of public telecommunications services, using radio frequency spectrum;
• Grant, amend, supplement, suspend, terminate and revoke licenses for telecommunications activities;
• Grant, amend, supplement, suspend, terminate and revoke licenses for establishment of telecommunications networks and provision of telecommunications services, using radio frequency spectrum after Council of Ministries approval;
• Grant, amend, supplement, suspend, terminate and revoke licenses for radio and television activities upon decision of the National Council on Radio and Television (NCRT);
• Prepare the national numbering plan and allocate it among the operators in compliance with the adopted principles;
• Draft the secondary legislation referred to in this Law, etc.

2.2.2 The National Council on Radio and Television is a specialised independent body composed of nine members, of whom five are elected by the National Assembly and four are appointed by the President of the Republic, with six years term. The composition of the National Council for Radio and Television from each quota will be renewed every 2 years. The National Council on Radio and Television has the following main functions:

• Supervise the activities of radio and television broadcasters in view of the observance of the Law on radio and television;
• Elect and remove the managing directors of Bulgarian National Radio and Bulgarian National Television;
• Approve, on a proposal from the managing directors, the members of the managing boards of Bulgarian National Radio and Bulgarian National Television;
• Give opinions during the drafting of legislative instruments and in case of concluding international agreements relating to radio and television;
• Make decisions concerning the granting, modification and termination of a license for radio and television activities;
• Refer to the competent authorities the violations of legislative instruments in the course of carrying on radio and television activities, etc.

2.3 The Committee on Protection of the Competition is an independent State-specialised body for protection of the fair competition, for the implementation of the existing competition legislation and antimonopoly legislation. Eleven members, seven of them lawyers and four economists are elected by the Parliament for five-year term, form the Committee.

2.4 Public telecommunication operators

The incumbent operator - Bulgarian Telecommunications Company - (BTC) is a State-owned public limited liability company, set on 1st of January 1993. BTC has the exclusive rights for establishment, operation and maintenance of the National Public Telecommunications Networks on the territory of the Republic of Bulgaria and for provisioning of International and Domestic telecommunications services until 31 December 2002.

The negotiations for selling a 51 per cent stake in the Bulgarian Telecommunications Company to Greek/Dutch consortium OTE/KPN are still in progress. One of the main disputable points is the request for some changes in the operative telecommunications Law. It was officially stated in March 2000 that the talks are in the final stage and will end either with a deal or with a new tender. The Council of Ministers would consult Parliament if the finalisation of the deal requires broader political support.

3. International relationship and agreements

Bulgaria has intensive international contacts on bilateral and multilateral basis. The state institutions, trade organisations, educational units and non-governmental organisations actively participate in joint programs and projects in the information and communications areas.

A primary importance is the fulfilment of the criteria for the membership in EU, which have been reflected in the European Agreement for association between EU and their member states and Bulgaria. Art. 83 of the Agreement treat the development of Bulgarian telecommunications.

Bulgaria takes part in the work of the Council of Europe structures in the field of media, having ratified the European Convention on Trans-boarding Television to engaged further elaboration and adoption of legal instruments of the Council of Europe.

Commitments on liberalisation of telecommunications are arising from the membership of the Republic of Bulgaria in the World Trade Organisation (WTO). Within the framework of negotiations with WTO, was reported by representatives of both EU and other member states that the Lists of Commitments of Bulgaria on liberalisation of the telecommunications network and services are well balanced. In this way providing both the openness of the Bulgarian telecommunications market to competition and the necessary protection of the national interests.

Concerning Intellectual Property protection, Bulgaria is in alignment with the Acts of the World Organisation of Intellectual Property WIPO. Amendments of the national legislation have been adopted according to the TRIP’s agreement.

4. Regulatory framework

4.1 Historical overview

The former audio-visual legal framework determined by the Law on Telecommunications (1975), the Law on Concessions (1995) and the Law on Radio and Television (1996) has entered for a procedure of radical transformation. The Law on Radio and Television was proclaimed unconstitutional in its main parts and it was impossible for the reformatory parliamentary majority elected in 1977 to start on a legal basis the liberalisation of the information sphere.

4.2 Present general legislation

In compliance with the National Program for the adoption of the acquis (1998), the National Strategy for IS Development envisaged legislative measures for transition to IS. Amendments to the Intellectual Property legislation reflecting new information technologies’ developments have been adopted. National strategy for hi-tech development and respectively hi-tech legislation are in consideration. Fully harmonised with acquis, National Post Strategy and the Law on Post Services are submitted for adoption. The draft of Access to Information Law is broadly discussed now. Data protection legislation is on the agenda of the Government.

After the Government of Bulgaria adopted a National Telecommunications Sector Policy based on EU recommendations and Directives in this area, the next step of the reform was the elaboration of the legal framework of the telecommunications sector. The new Telecommunications Law was enacted on 27th of July 1998. The legislation includes the establishment of an independent National Regulatory Authority and the State Telecommunication Commission, appointed by the Government. In addition, a liberalised regime for all activities in the Bulgarian telecommunications sector has been introduced, with the exception of provision of voice telephony and its underlying infrastructure for which BTC has exclusive rights until December 31, 2002. Liberalisation is to be implemented in stages by issuing general authorisations in compliance with an annual government policy document.

The Law on Telecommunications provides conditions for:

• liberalisation of telecommunications activities and services, establishment of a free market and loyal competition;
• fair and non-discriminatory treatment of the operators;
• provision of Universal Service on the territory of the entire country at affordable prices;
• protection of the national security interests.

A package of secondary legislation has already been prepared.

The Law on Radio and Television (State Gazette, 134,1998) regulates the radio and television activity. The Law regulates from the establishment of a broadcasters to the supervision of its functioning at a national or local level and sets out general rules for all broadcasters - public and commercial, irrespective of the way of transmitting their programs - by wire, by satellite or over the air. The law transposes the main standards of the EC Television Without Frontiers Directive concerning:

• the freedom of reception and retransmission;
• the promotion of European audio-visual works and independent European producers;
• the advertising, teleshopping and sponsorship;
• the protection of minors and public order;
• the right of reply, etc.

Licensing procedures for telecom operators and for radio and television operators have begun.

4.3 Key legislative measures

4.4 Issues

4.4.1 Licensing

The State Telecommunications Commission carries out licensing of the telecommunication operators. According Art. 8 of Law on Telecommunications, the Council of Ministers shall approve the granting of licenses for telecommunications networks establishment and telecommunications services provision using radio frequency spectrum. The regime - individual or general licenses - is specified in the Law on Telecommunications.

The National Council on Radio and Television carries out licensing of the radio and television operators. NCRT makes decision and provides to the State Telecommunications Committee drafts of the individual licenses.

Presently, the operative licensing framework is as follows:

• individual licensing for: television and radio broadcasting (country wide and local); cable distribution networks for radio and TV signals and other services; mobile cellular networks (analogue NMT and GSM); paging networks and services; analogue and digital mobile TRUNK radio networks with local and national coverage; VSAT networks with control stations on the territory of the Republic of Bulgaria; earth fixed satellite stations; public data transmission networks, etc;
• general licensing for: private data communications networks; mobile satellite terminals; installation and operation of public telephones; value-added services (services supplementary to the basic service for the relevant network), etc;
• free regime: Internet access providers; short-range devices; fixed and mobile cellular network terminal devices.

A relevant number of licenses were issued in Bulgaria: 33 telecom licenses to regional terrestrial radio-operators, 20 programming licenses to regional terrestrial radio-operators, over 100 programming licenses to Cable TV distributors. Recently, the Balkan News Corporation, financed by Rupert Murdoch has received an individual license to develop, maintain and operate Bulgaria’s first private national television network.

4.4.2 Universal Service

The issue of defining the scope of and parameters of the Universal Service in Bulgaria is under elaboration. The Telecommunications Sector Policy defines the main principles consistent with EU documents. The Universal Service in Bulgaria will comprise the following minimum package of services:

• basic telephone service (local, long-distance and international) provided through the fixed telecommunications network;
• free use of the national emergency services;
• access to operator for long-distance and international telephone services;
• inquiries on phone numbers of fixed telephone network subscribers, telephone directories inclusive;
• access to the basic telephone service through public coin-operated or card-operated telephones, including free access to the national emergency services;
• services under special conditions for users with specific social needs and for disabled subscribers;
• users access to published information as regards the service prices, the services quality etc.

For the present, the obligation to provide Universal Service is imposed on the main telecom operator - Bulgarian Telecommunications Company. The geographic coverage of the basic telephone service for the country is good in comparison with some European countries - 80.75% of the households have telephones, the density of public telephones is 1.49 per 1000 inhabitants.

4.4.3 Quality of Service

The following objectives are pursued according to the Telecommunications Sector Policy:

• reduction of the number of faults per line;
• increased number of successful calls in the country;
• ensuring capacity for installation of new lines.

The enforcement of the mechanism for control of the quality of the normal telephone services, recommended in Directive 98/10/EC is mandatory.

4.4.4 Interconnection of Networks

The interconnection of networks is a requirement of the Framework Directive of the EU for securing the openness and effective access to the existing and newly constructed networks both by the providers and by the users. The interconnection is realised on a contractual basis between the operators. In case no agreement is reached, the national regulator is obliged to settle the dispute.

4.5 Degree of liberalisation in Telecommunications

Liberalised:

• Data networks
• Public telephones
• Dedicated networks
• Value-added services

Exclusive rights of the Bulgarian Telecommunications Company till 31.12.2002

• Telephone service over the fixed network
• Leased lines
• Local access

4.6 On going changes in the regulatory framework

Serious structural reforms in the central public administration have been announced at the end of 1999 (21 December) and after Bulgaria has been invited to negotiations with EU. The former Committee on Posts and Telecommunications was closed and its functions adopted by the new Ministry of Transport and Communications.

There are several drafts for Laws amending and supplementing, defining legal framework of the information sphere, such as Telecommunications Act, Radio and Television Act and Copyright and Neighboring Rights Act.

There are changes in the list of telecom services licensed according to the Law. With the amendment of the Ordinance 09-235/98, requiring inter alia that Internet service providers (ISPs) offering Internet connectivity to the public have to be licensed, this regime was changed and in fact licensing of ISPs will not start. More active ISPs self-regulation is expected.

Recently, the Council of Ministers approved recommendations from the working group for reduction and deregulation of several licensing procedures, included in different national legal documents. Now, these recommendations are subject of public discussion. Concerning the telecommunication sector some of the main recommendations under discussions are:

• To define criteria in the Telecommunications Law for separation of the telecommunication activities, subject to individual and general licences. These criteria is in accordance with EU Directive 96/13;
• The relevant amendments to be made in the sector policy for Telecommunications, especially in its parts concerning liberalised services and licensing procedures;

• Private data transmission networks for own use, installation and operation of public telephones and value-added services (services supplementary to the basic service for the relevant network) to be excluded from the activities subject to general licensing.

5. Freedom and protection

5.1 Access to information networks

Access for all citizens and organisations is among the main goals of the now elaborated National Strategy for IS Development in Bulgaria. From the point of view of universal access, the main priorities in the development and modernisation of the national telecommunications infrastructure should be the development and improvement of the quality of the traditional services. Other priorities are also the integration of the networks for data transmission with the global networks, mass transition to integrated services digital networks (ISDN), introduction of new distributive, interactive and multimedia services based on new high-speed or alternative transmission media to the subscribers. Examples are: cable television and gradual transition to ATM networks on the basis of optical transmission systems from synchronous digital hierarchy using satellite telecommunications - VSAT systems, low and medium orbit satellites, mastering the position on a geo-stationary orbit which Bulgaria possesses for building national multifunctional satellite system).

5.2 Copyright and intellectual property rights

According to the comparative-legal expert analyses, the Bulgarian legislation in this field (see Paragraph 4.3.) is very advanced in a European context. The effectiveness of combating piracy is rising.

5.3 Privacy, data protection, consumer protection

There are provisions in the Constitution, Law on Telecommunication and Law on Radio and Television guaranteeing personal privacy, the freedom and confidentiality of telecommunications. A Consumer Protection Law was adopted recently (see Paragraph 4.3.).

The Data Protection Law in accordance with EC Data Protection Directive is on agenda as a necessary regulatory basis for:

a) Guaranteeing the inviolability of private life, the rights and obligations from the point of view of information, via:

• specifying the public portion of information;
• laying down the ways to collect, manage and use of personal data;
• control on the part of the individual of the trustworthiness of information relating to him.

b) Setting up of a supervisory authority entrusted with exercising strict protection of the rights of citizens in accordance with sections 32 and 41 of the Constitution and the international arrangements to which the Republic of Bulgaria has acceded.

c) Free movement of data in a developed Information Society ensured through:

• Research for the encoding of information and protection of databases;
• Implementation of additional instruments in application of the Law on the Protection of Personal Information in the case of distance transmission.

5.4 Freedom of expression and information

On the basis of Art. 39, 40 and 41 of the Constitution, Access to Information Law is submitted to the Parliament.

6. Information Society Policies

The National strategy for IS development, submitted to the Council of Ministers for adoption, specifies the main aims, priorities and actions for building IS in our country combining the national interests with the IS conception worked out by the European Union. This strategy is developed in accordance with the Programme of the Bulgarian Government "Bulgaria 2001" and its execution encompasses the period until 2006. In accordance with the national strategy a program is under way under the following conditions specific for our country:

• consolidation of the democratic system;
• European and Euro- Atlantic integration;
• development of market economy;
• currency board.

Main national priorities in building of IS in Bulgaria will be:

• building of a national universally available information and communication infrastructure;
• introduction of modern ICT in the management, economy, education, culture, health care, national security system and environment;
• development of ICT industry as a leading branch;
• approximation of the IS legislation to the respective EU legislation;
• creation of high qualification specialists for IS;
• preparation of the society for adequate realisation in IS.

On a national level the IS activities are co-ordinated, organised and controlled by the Co-ordination Council on IS problems from the Council of Ministers. The information policy is accomplished through reciprocal actions of different institutions and through interaction with the EU, Central and Eastern European Countries, etc. The National Strategy for IS development is an act upon which information strategies are developed outlining the aims, priorities and actions for the particular sectors.

Despite the leading role of the State in the IS establishment so far, it should not dominate entirely over the other participants. The strategy treats the main national priorities in the following areas:

• open management;
• technological basis of IS;
• new economy;
• investment in the future;
• citizens above all;
• standardisation and IS;
• IS law;
• Incorporation of people to the IS principles.