ESIS extension / Cyprus / Regulatory Developments / Update Memo 3

The following report outlines new developments in the past three months and the state of on-going developments.

Several steps have been taken by the Cyprus government towards harmonization with the European acquis in the realms of media and telecommunications over the past 3 months (October - December 1999). These are summarized below.

1. Media and Telecommunications Markets : foreign investments, merges and acquisitions

Iris Gateway Satellite Services started its operations with a promotional event held in Nicosia, in the presence of the president of Cyprus. The said company is a joint venture of Digimed (a subsidiary of CY.T.A.), and of the British "Merlin Communications International". Iris primarily offers services of interconnection of satellite systems based on digital technology DVB which allows the provision of audio-video services (voice and data transmission) and access to the Internet, and it is capable of covering Asia, Middle East and Europe. The promotion and sales of Iris’ services were undertaken by Merlin Communications, while the operation and maintenance of the equipment were undertaken by the Cyprus Telecommunications Authority.

Media : In addition to laws 7(1) of 1998 and 88(1) of 1998, the House of Parliament has passed the complementary law 13(1) of 1999 describing the requirements for the establishment and operation of a TV station : the responsibilities of the applicant with regards to the design of the necessary infrastructure ; the quality control of the TV programme contents ; the assessment of complaints and violations ; and the framework governing TV advertisements.

Media : All applications for the establishment of a radio or TV station need to be submitted to the Cyprus Authority of Radio-television. This application should contain information about the applicant, the suggested services to be offered, and the technical study and financial analysis of the envisioned station. The Authority is entitled to approve or to reject an application. Any radio or TV station must obtain the necessary certificates from the Cyprus Fire-fighting Department ; the City-planning Department of the ministry of Interior ; and the Department of Electromechanical Services of the Ministry of Communications & Works.

The Authority may, if deemed necessary, impose conditions as to the geographical coverage of the station ; the programs to be broadcasted ; the starting date and the fair and uniform treatment of all political parties.

Before the Authority issues a final certificate of suitability, the station is asked to broadcast for a test period, during which the Ministry of Communications and Works carries out measurements including a measurement of electromagnetic radiation.

Applicants must design their buildings, machinery and equipment in accordance to the regulations of the International Telecommunications Union (ITU).

Media : All radio and TV stations must submit to the Cyprus Authority of Radio-television a price list of their advertising and sponsorship rates every semester.

Telecommunications : The Cyprus Telecommunications Authority has prepared a tariff study, and has submitted a relevant proposal to the Ministry of Communications and Works. The proposal suggests the gradual adjustment of telecommunication service tariffs in order for the competitiveness of the Authority to be enhanced. Accordingly, CY.T.A. has already lowered its international rates (selected destinations), at the same time increasing its national charges.

Media : All TV stations to be established must comply with the regulations of the International Telecommunications Union (ITU) with regards to their "minimum field strengths for which protection may be sought in planning a television service".

The quality of reception in 50% of the geographical coverage at 50% of the broadcasting time should not be less than 4.5 in the relevant 5 point scale of the ITU.

The quality of the television picture and sound must comply with the recommendation ITU - RBT 500-7 and ITU-R BS 562-3 respectively.

The protection of reception against undesirable signals (noise) should be in accordance to ITU-R BS 655-4 (The radio frequency protection ratios for AM vestigial sideband terrestrial television systems).

If the application for the establishment of a station mentions that the station would supply stereophonic sound, then the station must transmit stereophonic sound.

Media : According to the regulations of article 51 of the Radio & TV Stations Laws of 1998 and 1999, the contents of all broadcasted programs are subject to certain rules which aim at securing : the respect towards any person appearing on the screen (or the voice of whom is broadcasted) ; all programs broadcasted would be announced prior to their broadcast and that any programs not suitable for persons under 15 years of age are broadcasted within a specific time zone ; viewers are warned about rated programs (not suitable for persons under a certain age) ; news programs do not show close shots of dead or injured persons, or any scenes which are unsuitable for minors or which may be insulting.

The public may submit a complaint to the Cyprus Authority of Radio-television for unjust treatment by radio / TV stations in informative / recreational programs ; for the violation of their personal life by broadcasting information about them in such programs ; for the broadcasting of scenes of sex or violence which are in contrast to the relevant laws and regulations.

The Cyprus Authority of Radio-television has the right (by profession) to examine possible violations of laws and regulations by a station, even if no complaint has been filed.

National Telephone Network : The Cyprus Telecommunications Authority has been placing particular emphasis on Network Development. To this end, the transmission network was fully digitalised prior to 1999. Since October 1999, the switched network was also fully digitalised following the removal of the last crossbar analogue telephone exchange. The public switched telephone network (PSTN) is operating in full (100%) digitalization. The total digitalization will allow CY.T.A. to introduce new intelligent services for all the PSTN customers.

ATM Network : For the introduction of new services, CY.T.A. is proceeding with the installation of intelligent network and ATM network equipment. The installation of the ATM network is expected to be completed early in January 2000. The network will be able to provide ATM and Frame Relay PVCs, ATM SVCs and IP/ATM services using the MPLS protocol.

National Transmission Network : The fourth phase of the SDH (Synchronous Digital Hierarchy) network was completed. With the implementation of high capacity SDH transmission systems in various topologies, a flexible infrastructure was created, enabling the fast provision of circuits and the restoration of links and circuits in case of faults. The existing SDH network will form the basis for the provision of new broadband services to CY.T.A.’s customers, based on ATM technology to be introduced early in 2000. In 1999, CY.T.A. also signed a new agreement for the provision of mini radio links in various applications (GSM network, business customers, remote areas, etc.).

Satellite communications : CY.T.A. is a member of the International Telecommunications Satellite Organization (INTELSAT), the European Telecommunications Satellite Organization (EUTELSAT), and the International Mobile Communications Satellite Organization (INMARSAT), while it also uses other satellite systems such as SIRIUS II and the Russian GORIZONT system.

The installation of a satellite system for the operation monitoring and maintenance of EUTELSAT’s DAMA system which CY.T.A. undertook after an international competition, was completed in 1999. The system will provide VSAT satellite communications to Europe, Russia, and the Middle East.

Finally, CY.T.A. has created a company called Iris through its subsidiary DIGIMED in collaboration with the British "Merlin Communications" to explore links between Europe and Asia for the turnaround of television and radio programs between the two continents. Iris is already offering interconnections from Intelsat Hotbird and Arabsat 2A to AsiaSat 2.

Submarine Fiber optic Cable Systems : Regarding the international network, it was previously mentioned (July 1999 report) that the LEV submarine fiber optic cable system which links Cyprus, Israel and Italy was completed, and that the SEA-ME-WE3 intercontinental submarine fiber optic cable system was scheduled to be operational within 1999. The latter was delayed, and it will not be operational this year, even though it is nearing completion.

The contract for the Black Sea Fiber Optic Cable System (BSFOCS) which will link the countries of the Black Sea (Bulgaria, Ukraine, Russia) was signed in 1999, and the system is expected to be ready for services in September 2000. As mentioned in the July report, the Greek and the Cypriot Telecommunication Authorities were the main participants in the preparation of the specifications, the evaluation of tenders for the project, and the execution of the various negotiations.

International connections : Cyprus has increased its direct telephone circuits with telecommunications organizations from 60 to 61, now covering 53 countries as compared to 51 registered during the Summer of 1999. Its direct signaling links have increased from 42 to 47. These serve 228 destination point codes (as against 154) for the purposes of fixed telephony and international roaming for mobile telephony.

At the end of 1999, the total number of telephone circuits stood at 4876, registering an annual increase of 11% (the said number in 1998 stood at 4386, showing an annual increase of 10% as compared to 1997), while the corresponding figure for ISDN circuits rose by 500% from the 1998 figure of 21 to 131.

At the same time, 4 new 2Mbps transit connections were established, taking the total to 148 (an increase of 2.8% compared to 1998). In addition, two VC3 (45 Mbps) transit connections were established between Israel and the USA.

The number of international leased circuits increased by 18.2% in 1999, from 137 to 162. It must also be noted that many existing IPLCs have been upgraded to higher speeds and the new IPLCs are typically of much higher speeds than those of previous years.

CYTAGSM : With the recent introduction of the 1800 MHz band in the major cities of the island, the CYTAGSM network, which since 1995 operated under the 900 MHz band alone, can claim a tremendous boost in its network capacity.

The CYTAGSM service, through a digital GSM system, provides almost global coverage (currently to 74 countries) and a wide range of additional facilities. SYMPHONY, the recently launched prepaid version of the service, along with planned network enhancements and new marketing plans, are expected to increase the market penetration for mobile phones considerably.

Overview of the Existing IT Infrastructure : The Authority maintains a company-wide high speed computer network comprising two Data Centres and about sixty NT based Local Areas Networks with more than 1500 user workstations.

The computer network provides the necessary IT infrastructure for the production platform for mainstream business information systems as well as the platform for generic office support systems and end-user computing tools.

The mainstream business information systems, being operated on a central system and exhibiting a high degree of integration, support and automate major business activities and respective data stores such as Network Development and Operation, Customer Services and Customer Care, Network Resource Management Billing and Payment Collections, Personnel Management, Stores and Inventory Management etc.

Generic office support systems and end user tools, alongside a state-of-the-art intranet, provide the Authority’s professionals an integrated and rich in facilities environment allowing them to exploit IT technology to increase efficiency and improve quality in performing their job. The facilities include major standard packages for Sharing Information Electronic Mail, Calendar and Time Management, Project Management, Word Processing, Spreadsheet, Preparation of Presentation etc.

Packet Switching Public Data Network (PSPDN) : The total capacity of the 8 switching nodes of the data network installed has increased from 634 ports in Summer 1999 to 751 ports presently. These serve a total of 585 direct subscribers (as against 326).

Telecommunications : The Cyprus government has decided to take the necessary measures for the drafting of a new telecommunications law, and a law for the set up and operation of an independent Regulatory Authority. Towards this end, it has asked the management of the Cyprus Telecommunications Authority to submit a legislation draft pertaining to the legal and operational status of the Authority in view of the discussed liberalization of the telecommunications sector. CY.T.A. has submitted the said draft, which is currently being evaluated.

In the area of media, Cyprus has moved towards harmonization with the European Union acquis through a law draft prepared on September 27, 1999 by the Cabinet of Ministers through the Ministry of Interior and submitted to the Houses of Parliament for approval.

The said draft (Radio & TV Stations Law 2 of 1999) aims at modifying the existing relevant legislation in accordance with the corresponding European legislation and more specifically, with the Direction 89/552/EEC and 97/36/EC, thus harmonizing the existing legislation to the relevant EU legislation in the audio-visual field. Reportedly, the harmonization is to be completed by 31 / 12 / 1999.

The suggested modifications relate to the definition of the terms "advertisement", "station", and "sponsorship" ; the modification of the proportion of cultural programs broadcasted ; the proportion of the European programs broadcasted ; the exclusivity in the broadcasting of certain events ; and the total time spent on advertising and on telemarketing.

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.