January 2001

Estonia Master Report

This is the final Regulatory Developments report on Estonia as the ESIS project ended in January 2001. This Master Report covers the whole period of the ESIS project surveying the Countries of Central and Eastern Europe, March 1999 - January 2001 inclusive. 

Estonia regained its independence on 20 August 1991. 1940 – 1991 Estonia was a part of the Soviet Union and national policies were formed according to the guidelines of the Communist Party of USSR. Like in the rest of the post-II World War world, research and development were subjected to the military affairs. Planned economy and ineffective state enterprises, censorship, violation of privacy by security authorities and limited access to information were some keywords characterising the era. The national communications networks were part of the Soviet networks. As an extension of the USSR networks, the Estonian telecommunications network suffered from lack of direct international links and from low level of modernisation and digitisation. Another problem was the huge disparity in telephone distribution between urban and rural areas.

1. Introduction and summary

2. Information Society Policy

At present the term 'information policy' is used according to the 'Principles of the Estonian Information Policy', which defines information policy as 'an integral part of public policy. It reflects the principles of the actions of the state in the creation of an information society – areas of interest and regulation mechanisms - in an era of rapid technological change. Government information policy takes into account the goals set up in regulating different spheres of social life and introduces opportunities for presenting innovative solutions'.

Substantial factor making possible the IS development is the existence of infrastructure enabling modern telecommunication. Even though Estonian situation in the beginning of 1990 was better compared to other former Soviet Republics, it was low-tech compared to industrial countries. Therefore the national policy was concentrated on developing the infrastructure; one of most important steps was conclusion of the Concession Agreement.

The Concession Agreement was signed in 1992 by the Estonian Government and AS Eesti Telefon (Estonian Telephone Company), granting ET exclusive rights till 01.01.2001 for the provision of basic services (national and international switched fixed voice telephony services, telex and telegraphic services, their installation and interconnection to them). Non-basic telecommunication services (e.g. mobile and data communication, paging services, satellite communication or value-added services) can be offered freely although a licence is needed for building and operating networks and / or if there is interconnection to the PSTN. There is competition in all of these liberalised markets.

Estonian telecommunications market will be completely liberalised starting January 1, 2001, though to operate a communications network and to provide services a licence issued by the Estonian National Communications Board is required. The Parliament has adopted following Acts regulating the area:

• Cable Distribution Act (State Gazette [Riigi Teataja – RT], 1999 [year], 25 [number], 362 [article]), entered into force in June 1999;
• Telecommunications Act adopted at the beginning of 2000 (RT I 2000, 18, 116).

Next to legislative acts favouring infrastructure development acts favouring IT applications have been adopted and various projects ensuring IS development initiated by public sector are carried out (see also 2.4. and ESIS II Database of Promotional Activities).

Since the beginning of 1990s Estonian Informatics Council (established in 1989) has been responsible for formation of Estonian IS policy and strategies, Research and Development Council (est. 1994) participates in elaboration of long-term plans.

The first national informatics development program 'Estonian way to information society' was prepared in 1994 but since EU, OECD, G-7 and other organisations started to elaborate their action plans at the time, during the second half of 1990s new programs were compiled in Estonia considering recommendations from international organisations.

2.2.1. 'Principles of Estonian Information Policy'

Estonian Parliament (Riigikogu) approved the Principles of the Estonian Information Policy (State Gazette [Riigi Teataja], RT 1998, 47, 700) in 1998. The document determines the main principles of State actions in supporting the development of Estonian information society.

It states the 4 areas of concentration by national information policy action plans elaboration to be:

• Modernisation of legislation;
• Favouring private sector development;
• Forming intercourse between the State and the citizen;
• Realisation of IS related problems.

Promotion of democracy, information infrastructure, competitive economy, Estonian language and culture and national defence modernisation are set as goals.

2.2.2. 'Estonian Information Policy Action Plan'

The principles have been concretised in the Information Policy Action Plan approved by the Government of the Republic. Based on the action plan government agencies make their annual proposals for attainment of objectives set in the principles of the information policy.

The Government approved the last version of the plan and the changes proposed by the Estonian Informatics Council to that plan on June 1, 1999. Since several of the main objectives are achieved (for example all Estonian local governments are to be connected to Internet by 'Village Road' project by the end of 2000), it is suggested to set new goals and priorities for 2001. According to provisional plans special methods for favouring development of enterprises (especially IT-companies) and diminishing the gap between information-haves and have-nots are to be taken. Also promotion of IT application in education sector will be continued.

Estonian Government has set following priorities for 2000 and 2001:

• National data communication programme of counties: 'Village Road' ('Külatee');
• Document management programme of government agencies;
• Activities related to the creation of legislative acts, organisational structure and technological environment required for digital signature application;
• Programme for the informatisation of higher education: Tiger Leap in Institutions of Higher Education.

At the moment new development principles are looked for (for example proceedings of the Estonian R&D activities strategy Teadmistepõhine Eesti - 'Knowledge-based Estonia') and alteration of Estonian Information Policy Action Plan is planned. In stating new goals first of all respective initiatives (e-Europe) of the European Commission are considered since problems experienced in Estonia are similar to those of developed countries regardless of resources shortage and near past (see also ' WWW sites indicators'). One of basis in planning Estonian information policy is the conception that successful fast development is much based on the activities of public sector in both speeding the technological development (for example attracting foreign investors in telecommunications sector) and in general (modernisation program of education, introducing electronic services in operations with the State). On the level reached lack of competent IT specialists and integrated formation of information policy, R&D policy and education policy have turned out to be most critical problems.

'Estonian Information Policy Action Plan' states, IS can develop through grass-roots initiative and in order to promote it, the State has to create a legislative basis supporting interests of private sector. The need to modernise public sector using IT possibilities is stated as well.

2.4.1. Key legislative measures

By end of year 2000 following key legislative measures influencing the administrative development have been adopted:

Act	Adopted	Entry into force
Databases Act (RTI 1997, 28, 423)	12.03.97	19.04.97
Establishment of the National Registry Databases (Andmekogude riikliku registri asutamine (RT I 1998, 63, 997)	18.07.98	01.11.98
Archives Act (RTI 1998, 36, 552)	25.03.98	01.05.98
Freedom of Information Act (Avaliku teabe seadus)	16.11.00	01.01.01
Digital Signature Act (RTI 2000, 26, 150)	08.03.00	15.12.00
Personal Data Protection Act (RT1 1996, 48, 944)	12.06.96	19.07.96
Criminal Code (RTI 1999, 38, 485)	07.05.92	01.06.92

2.4.2. IS projects in public sector

Some projects of significance are (additional information can be found in ESIS II Database of Projects):

• National Data Communications Program for Regions;
• Information System of Riigikogu;
• Backbone Network for Estonian Governmental Institutions;
• Cabinet Meetings Information System;
• Single Point Entry for Government Information and Electronic Public Services .

Office of Public Administration (created in the State Chancellery in January 1999, actual work started in November 1999) has the task to co-ordinate the development of public administration in different governmental institutions and to analyse the development of public administration in Estonia. In December 1999 the Office released Starting Points of the Administrative Reform Program of the Government of the Republic (Vabariigi Valitsuse Haldusreformi Programmi lähtekohad), one of the priorities is improved application of information and communication technologies in public administration.

In the course of the year 2000 sizable measures have been taken to develop the application of document management programme of governmental institutions. The Department of State Information Systems and Management of the State Chancellery (responsible for national and local governments' archives) promotes application of electronic administration systems.

Measures have also been taken to apply Electronic Data Interchange (EDI) in public administration. EDI is seen as an opportunity to decrease the use of paper documents significantly, to increase the speed and quality of data exchange and to reduce illegal commercial activities. Action is taken in order to start exploiting the pilot project of digital signature. At the end of April four ministries signed a mutual apprehension memorandum about EDI application.

Next to successful projects some have failed as well. For example, during many years several attempts have been made to develop a national information system of accounting, but up to now hoped results are not attained. In autumn 1999 the commissions of Swedish organisation SIDA and Ministry of Finance attested the 3.2 MEUR project 'Agresso' for developing a national information system of bookkeeping as a failure. Security Police Board was addressed to determinate the guilty parties, but Security Police Board finished the investigation without determination referring vaguely to the contracts concluded.

At the moment telecommunications field in Estonia is regulated with:

• Telecommunications Act adopted in 2000 (RT I 2000, 18, 116).
• Cable Distribution Act (State Gazette, 1999, 25, 362), entered into force in June 1999.

Exclusive rights granted to AS Eesti Telefon by the Concession Agreement signed by the Estonian Government and AS Eesti Telefon in 1992 will expire on January 1, 2001. Exclusive rights concerned

provision of basic services (national and international switched fixed voice telephony services, telex and telegraphic services, their installation and interconnection to them).

2.5.1. Regulation of the telecommunications market

Telecommunications market is regulated by the State through respective activity licenses issuing and control conducted by the Estonian National Communications Board and Ministry of Transport and Communications.

Since with Telecommunications Act enforcement the decrees of the Government and the Ministry of Transportation and Communications and paragraphs of the Communications Act regulating the field were annulled, more than 30 regulative acts of lower level have been approved or are in preparation, incl. radio frequency allocation plan, numbering plan, etc. Among others following regulative acts have been approved:

• Estonian radio allocation plan (Eesti raadiosageduste plaan, RTL 2000, 45, 671; 90, 1389);
• Estonian allocation plan and technical requirements for using allocations of number series, codes and calls (Eesti numeratsiooniplaan ja tehnilised nõuded numeratsioonivahemiku, tunnuskoodi ja lühinumbri kasutamisele, RTL 2000, 67, 1030);
• Order of technical licence issue (Tehnilise loa väljastamise kord, RTL 2000, 81, 1189);
• Approval of activity licence and its application form (Tegevusloa ja selle taotluse vormi kinnitamine, RTL 2000, 85, 1242)
• Order of reserving and using allocations of number series, codes and calls (Numeratsioonivahemiku, tunnuskoodi ja lühinumbri reserveerimise ja kasutamise kord, RTL 2000, 90, 1391);
• National registry of telecommunications networks (Telekommunikatsioonisüsteemide riiklik register, RT I 2000, 81, 523);
• Leased line provision requirements (Püsiliiniteenuse osutamise nõuded, RTL 2000, 120, 1880)
• Order of presenting accounts to the National Communications Board for public telecommunications network operators with significant market power (Olulise turujõuga ettevõtjast üldkasutatava telekommunikatsioonivõrgu operaatori aruannete Sideametile esitamise kord, RTL 2000, 122, 1929)

To operate a public telecommunications network or a telecommunications network connected with it or with a telecommunications network located in a foreign country or to provide a telecommunication service, the person has to notify the Estonian National Communications Board in writing. The information needed in the notices is stipulated in § 9 and the persons may commence after the notice has been registered in the Communications Board (§ 10).

Besides notification in certain cases the person has to obtain the license that is non-transferable and issued for a term of ten years unless the licence applicant requests a shorter term (§ 12):

(2) A licence is required for the operation of a public telecommunications network if the operation is based on:

1) Use of allocations of radio frequency channels from the Estonian radio frequency allocation plan, or
2) Use of allocations of number series from the Estonian numbering plan.

(3) A licence is also required if a telecommunications network is interconnected with a public telecommunications network or a telecommunications network located on the territory of a foreign country.

The license will be issued not later than within six weeks after the receipt of an application according to the requirements at the Communications Board.

Besides the licence there is also the non-transferable technical authorisation licence that is granted for a specified time for the use of the limited resource of telecommunications (§ 18).

(2) The types of technical authorisation are:

1) Permits for the installation of radio transmission equipment together with the reservation of corresponding radio frequency channels;
2) Permits for the use of radio transmission equipment;
3) Permits for the use of number series, identification codes or short codes together with the reservation of corresponding number series, identification codes or short codes.

(3) The following conditions shall be established by a technical authorisation the purpose of which is:

1) To use radio frequencies efficiently and to ensure control thereof;
2) To use number series, identification codes or short codes;
3) To comply with the requirements for environment, health protection and planning;
4) To ensure the quality, availability and reliability of telecommunications network.

The Communication Board decides the issue or refusal of the technical authorisation licence within six weeks.

Organisations with significant market power are regulated with other laws as well. These enterprises are determined by the Communication Board, taking into account the concrete market of telecommunication services and the area. These are enterprises enjoying the exclusive right granted by the state or local government to operate in the (local) communications market and / or whose market share together with the parent undertaking or subsidiary is at least 25 per cent of the turnover of the concrete public telecommunication service market or at least 25 per cent of the traffic in the case of the interconnection service market and who do not prove that the holding of such market share does not endanger free competition. (§ 8).

As an exception, the Estonian National Communications Board can also deem an entrepreneur whose market share accounts for less than 25 % of the turnover of the particular market to be an entrepreneur with significant market power (§ 8). The decision on entrepreneurs with significant market power is adopted for each year by December 1 of the previous year. In case the market share of an entrepreneur accounts for at least 40% of the turnover of the market, the activities of such a company as an entrepreneur with significant market power are regulated by the Competition Act (RT I 1998, 30, 410; 1999, 89, 813) in addition to the Telecommunications Act.

Entrepreneurs with significant market power are among other things obliged:

• To provide a leased line service through its telecommunications network (§ 33);
• To make an interconnection contract and interconnect its telecommunications network with another telecommunications network in a connection point applied for, within two months from the reception of the respective application. In case no agreement is reached concerning the connection conditions, the National Communications Board will settle the dispute (§ 41);
• To enable other operators to use the disengaged capacity of the line facility (§ 91).

The system for registering notifications and issuing activity licenses was started on August 1, 2000. The entrepreneurs operating in the telecommunications market before the entry of this law into force had to submit a notice and an application for activity license to the National Communications Board by September 1, 2000. After that they had the right to continue their earlier activities till the decision of the National Communications Board. Applications for operating fixed voice telephony networks were submitted by 9 enterprises, altogether 26 registration applications were received. The activities of 52 enterprises are registered.

From 2001, the most important companies in the market will probably be AS Eesti Telefon, Levicom BroadBand OÜ (TELE2) and Uninet AS.

2.5.2. Regulations conserning AS Eesti Telefon

The relations of Estonian Republic and AS Eesti Telefon are stipulated by the Concession Agreement.

As the exclusive rights granted to AS Eesti Telefon will expire on January 1, 2001 but the Concession Agreement will remain in force till 2017, both the Ministry of Transport and Communications and AS Eesti Telefon see the necessity to alternate the Concession Agreement. In December 2000 delegations of AS Eesti Telefon and Ministry of Transportation and Communications agreed on the text of the contract, which is going to replace the Concession Agreement. It is planned to sign the contract during 2000.

2.5.3. Regulation of the cable distribution market

Similarly to the telecommunications market the cable distribution is regulated by the State through respective activity licenses issuing and supervision.

Estonian National Communications Board issues the non-transferable activity licenses for duration of 10 years, stipulated by the law, for construction and operating cable television networks:

(1) "Cable television network licence" means an activity licence issued by the Communications Board which entitles the person indicated therein to construct, own and use a cable television network under the conditions specified in the licence.

Pursuant to the Cable Distribution Act the National Communications Board arranges public tenders carried out by municipalities for the issue of cable television network licenses.

Since the Cable Distribution Act came into effect (1.6.1999) 76 cable television network licences (Cable Distribution Act § 41,1) have been issued, most of which are temporal activity licenses permitting operation of networks becoming invalid when the cable network is given to be operated by the winner of the public competition.

According to the cable distribution operators there is a confusion caused by incomplete legislative acts. Experts claim the Telecommunications Act and the Cable Distribution Act to be contradictory. At the moment activities of the National Communications Board are limited by these legal confusions as well, since based on the Cable Distribution Act the Communications Board has issued regulations, which later have been declared unlawful by courts.

For example, in November 1999 Starman Cable Television Ltd. (Starman Kaabeltelevisiooni AS) filed a complaint disputing the issue of a cable distribution activity licence allowing the creation of a cable television network covering entire Tallinn to Tallinn Cable Television (Tallinna Kaabeltelevisioon AS, trademark TELE2). In August 2000 Supreme Court Appeals Selection Committee did not approve the appeal of TELE2 and therefore stopped the extension of TELE2 cable network in Tallinn. So the situation in the Tallinn's cable distribution market previous to the issue of a 10-year activity licence to Tallinn Cable Television in October 1999 is restored.

The Legal Chancellor has drawn attention to these imperfections as well. According to the Legal Chancellor the Cable Distribution Act contains aspects that favour monopoly and restrict actions.

As a vital problem the Legal Chancellor sees possibilities to establish a monopoly for it remains unclear on what grounds the decision to issue one or more cable television network licenses in a region is made. Therefore he sent an inquiry to the Parliament to alter the Act in June 2000.

Additional information about cable distribution market and services offered can is found in the report 'Existing major telecommunications networks in public utilities. December 2000.'

2.5.4. Regulations of Internet usage

In Estonia there have been adopted no specific legislative acts regulating cryptography, intellectual property protection, taxation of e-commerce, consumer protection or similar. However, existing legislative acts have been complemented to guarantee their extension to the Internet.

Starting September 2000 new set of rules is in force, based on which EENet registers any Estonian sub-domains still not used in the Internet. Previously, EENet rules had a restriction of generic terms, now annulled. At the same time the restriction to grant one domain name per company remained in force, as an exception very large companies are granted several domain names.

When giving an overview of the e-commerce development, application of New Economy mechanisms should be analysed for both product markets (traditionally more resistant to new models) as well as for service markets (traditionally more open for innovation). When the development concerning the first area has been slow in Estonia, in public administration and financial services it has been fast and successful.

Concerning the legislation about e-commerce the State has taken a wait-and-see attitude, though principal legislation is partially adopted. The State has supported the development of the domain by promoting the spread of the Public Key Infrastructure. Digital Signature Act entered into force on December 15, 2000. It enables wide use of electronic documents and digital signatures as well as several new electronic services.

The private sector has taken the initiative in speeding up these developments: Hansapank, Ühispank, AS Eesti Telefon and AS Eesti Mobiiltelefon signed a contract concerning co-operation in developing the Public Key Infrastructure in May 2000. In March 2000 AS Eesti Telefon, AS Eesti Mobiiltelefon and Privador AS announced of the intention to elaborate a Public Key Infrastructure together. It would enable ordering and using services of AS Eesti Telefon and AS Eesti Mobiiltelefon safely via Internet.

Despite of the rapid spread of Internet connections, relatively high percentage of users and extensive investments into Internet stores the turnover of electronic commerce is insignificant. Even the turnover of largest Internet stores does not exceed one 60 kEUR per month by the end of year 2000. The total annual turnover of Estonian B2C e-commerce lies between 1-2 MEUR.

Factors impeding the development are sustainability of buying habits, limited product range in Internet stores, inconveniences in paying for goods and deliveries and security risks when using bankcards. Forming a new electronic commerce culture is a worldwide problem and in this light Estonian developments are in line with the most successful European countries. One of the strongest Estonian advantages in these developments is the widespread Internet banking (favours the rise of positive attitude towards e-commerce); the most important discouraging factors are smallness of the potential market and conventional shopping habits.

Main law regulating the field is Organisation of Research and Development Act (Teadus- ja arendustegevuse korralduse seadus, RTI 1997, 30, 471) which stipulates the basis R&D organisation assures preservation of research and technology creation as part of Estonian culture and economy and legal means of further development.

In addition Government's decrees Framework for State aid for research and development (Teadus- ja arendustegevusele suunatud riigiabi andmise tingimused, RTI 2000, 75, 472) and Principles of research and development institutions evaluation and criteria approval (Teadus- ja arendusasutuste evalveerimise põhimõtete ja kriteeriumide kinnitamine, RTI 1998, 38, 569) and separate laws regulating actions of important education and research institutions: Estonian Academy of Sciences Act (Eesti Teaduste Akadeemia seadus, RTI 1997, 35, 539) and University of Tartu Act (Tartu Ülikooli seadus, RT1 1995, 23, 333) exist.

Of acts regulating the educational system Education Act (Haridusseadus, RT 1992, 12, 192) and Universities Act (Ülikooliseadus, RT1 1995, 12, 119) are most important.

There is an on-going public discussion concerning the strategic document 'Knowledge-based Estonia' ('Teadmistepõhine Eesti') compiled by Ministry of Education and Ministry of Economic Affairs. As perspective key domains user-friendly IS technologies, bio and gene technologies and their applications and innovative industrial and environmental technologies are pointed out.

Other important developments in 1999 and 2000 were:

• Establishment of the Estonian Information Technology Foundation. The establishers of the Foundation were University of Tartu, Tallinn Technical University, AS Eesti Telekom and Association of Estonian Computer Companies. The goal of the Foundation was organising the establishment of the Information Technology College, which started work in autumn 2000 with about 200 students. Studies in the ICT last for three years.
• Continuation of activities of the national programme Tiger Leap launched by the State. Main goal of the programme is to develop Estonian basic and secondary education through application of information and communication technologies. The programme is mainly directed to schools of general education, but comprises also basic and vocational education.

In 1999 the Government of the Republic approved of the Development plan of transportation for 1999-2006 (Transpordi arengukava aastateks 1999-2006).

In connection with the enforcement of the Digital Signature Act at the end of year 2000 the Ministry of Transportation and Communications has announced of an electronic data interchange system application pilot project. The Estonian Infrastructure and Transit Development Foundation (a sub-division of the Ministry of Transportation and Communications) have mainly developed the system.

In August the Parliament started proceeding the legislative draft of the Human Gene Research Act (Inimgeeniuuringute seaduse eelnõu), passing of which enables to start the Estonian Genome Project.

Purpose of the Act is guaranteeing the development of gene research for the benefit of mankind's health considering human rights and generally approved ethical principles. For realisation of the objectives Estonian gene bank will be established, in which DNA samples from voluntaries and electronic descriptions, genetic information, data characterising person's health and family connections and personal data will be collected. According to the law one’s participation in gene research is voluntary, the law also forbids advertising the research. The Act was adopted already on December 13, 2000.

In May the public was informed of the Estonian Genome Project. In the course of realisation of the project an unique information base will be established, the use of which gives an opportunity to diagnose diseases, determine the risks to the health and to enhance the treatment more accurately and efficiently than before. For the durability of the project five years (most of the work should be completed with the first 3-4 years) and for the costs 100 MEUR are planned. Project has two wider operating areas - to gather information about the health of the population and the process of genetic typification, also a set of supporting actions is foreseen what could be done in for example data protection or forming a database.

At the moment draft of law regulating working hours (Töö- ja puhkeaja seadus) is in proceedings in the Parliament, it stipulates the duration of working hours and rest periods for employees and civil servants. Among others it is stated, including hours worked overtime a working week may not exceed 48 hours.

The ways of raising employment, avoiding long unemployment and preventing expulsion of people belonging to high-risk groups from labour are dealt with in National Development Plan (Rahvuslik Arengukava).

Key legislative measures to guarantee competition are:

• Competition Act (RTI 1998, 30, 410);
• Trade Marks Act (RTI 1998, 15, 231);
• Advertising Act (RTI 1997, 52, 835);
• Public Procurement Act (RTI 1997, 9, 79);
• Prices Act (Hinnaseadus).

A more detailed list is available from a corresponding web site of the National Competition Board.

The most important issue in IS developments has been the validity of the Concession Agreement and restrictions to other entrepreneurs it contains. For example AS Ritabell argued the Concession Agreement signed in 1992 between the Government of the Republic and AS Eesti Telefon contains aspects of forbidden agreement stipulated in the Competition Act. In September 2000 the Supreme Court Appeals Selection Committee interdicted the leave to appeal Ritabell's appeal in cassation, leaving in force ruling of the lower court about absence of forbidden aspects in the Concession Agreement.

At the end of 2000 when telecommunication operators are getting ready for the liberalisation of the market, the main problem is service charges demanded by the AS Eesti Telefon for interconnecting networks. In December 2000 the National Communications Board has made injunctions to AS Eesti Telefon regarding the matter.

Similar issues have been raised before - a petition was made by Radiolinja Eesti and Ritabell (Q-GSM) to the National Competition Board in January 2000 to investigate the actions of AS Eesti Telefon. AS ET was accused of posing discriminating conditions to other operators for interconnection of networks and accessing the network. The reason for the accusation is the fact AS Eesti Telefon refused to interconnect the networks of Ritabell and Radiolinja for the fixed connection price claiming that in these cases it is not a regular fixed connection. The Competition Board could find no evidence of violating the law.

When several enterprises are preparing to enter the Estonian telecommunications market, AS Eesti Telefon is preparing for competition. It was wished to stop cross-subsidising different services by fixing new tariffs (effective since October 1).

Although the obligation to provide a universal service has not been explicitly expressed in the Concession Agreement, it stipulates the obligation of the concession holder to provide basic services, assist the subscriber and compile the telephone directory. According to the Concession Agreement, AS Eesti Telefon has to present to the Estonian Government annual updated development plans on the developments in rural areas. In order to put an end to the current cross-subsidisation between different services and customer groups and to prepare for the expiry of exclusive rights, AS Eesti Telefon raised the rates for private customers and lowered those for business customers and lowered the rates of long-distance and international calls at the end of 2000.

The Telecommunications Act contain several important provisions concerning universal services, but considering the exclusive rights granted to AS ET, the obligation to provide the universal service of a public telephone network operator shall be applied from January 1, 2001 (§ 108).

The Act (§ 5) provides that the universal service is a set of telecommunication services that secures an access to the public telephone network at the same reasonable rate for all consumers in the area defined in the activity licence of the public telephone network operator.

Such a set of telecommunication services consists of a telephone service (1), Internet service (2), public pay telephone service (3) and the possibility to get a free connection with the short numbers of the police, emergency medical aid and rescue service (4).

In case of certain conditions the National Communications Board can relieve the operator of the public telephone network on the basis of its request from the obligation to provide universal service.

The Telecommunications Act regulates the pricing mechanism of the following services:

• Provision of an universal service;
• Interconnection of telecommunication networks;
• Access to the public telecommunication network;
• Provision of the leased line service.

According to the Telecommunications Act (§ 49 - 54) the changes in rates have to proceed from the expenses made for the provision of the service. A telecommunication operator accounting for at least 40% of the turnover of a specific public telecommunication service market (e.g. AS Eesti Telefon) and providing dedicated line service, enabling access to the telecommunication network or connecting its telecommunication network with another telecommunication network has to bring the accounting of charges for the above-mentioned telecommunication services and the respective cost accounting system into conformity with this Act by October 1, 2000.

Most important acts regulating the field are:

• Copyright Act (RTI 2000, 16, 109);
• Patents Act (RT1 1994, 25, 406);
• Utility Models Act (RT1 1994, 25, 407);
• Trade Marks Act (RTI 1998, 15, 231).
• Layout Designs of Integrated Circuits Act (RTI 1998, 108, 1783);
• Industrial Design Protection Act (RTI 1997, 87, 1466);
• Geographical Indication Protection Act (Geograafilise tähise kaitse seadus RTI 1999, 102).

In 1999 and 2000 the Parliament has altered the Copyright Act. Amounts of penalties were raised and application of the Act made simplified.

On December 9, 1999 the Parliament adopted:

• Act on Accession to the International Convention on the Protection of the Performer, Producer of Phonograms and Broadcasting Organisation ;
• Act on Accession to the Convention on the Protection of the Phonogram Producer against Unauthorised Copying of Phonograms;
• Act on the Ratification of the European Convention on Cross-Border Television and the Protocol Amending the Convention.

In 1993 Estonia (RT II 1993, 25) ratified the Convention on the Establishment of the World Intellectual Property Organisation (WIPO) signed on 14 July 1967 in Stockholm.

During the second half-year of 1999 and the first one of 2000 the large-scale fight against software piracy was continued under the lead of the non-profit organisation Business Software Alliance (BSA). Next to the extensive awareness campaign companies have been inspected in co-operation with the police and the first victories in court over traders of pirated copies and companies that have used pirated software attained. According to BSA Estonian Committee and software company Microsoft as the result the rate of software piracy in Estonia dropped form 86 per cent in 1998 to 72 per cent in January 2000.

Main acts regulating the field are:

• Telephone regulation (Abonenttelefoni eeskiri; Vabariigi Valitsuse määrus 281/1995);
• Databases Act (RTI 1997, 28, 423);
• Digital Signature Act (RTI 2000, 26, 150);
• Personal Data Protection Act (RT1 1996, 48, 944);
• Surveillance Act (RT1 1994, 16, 290);
• Criminal Code (RTI 1999, 38, 485);
• State Secrets Act (RTI 1999, 16, 271);
• Consumer Protection Act (RTI 1999, 35, 450).

Besides the Telecommunications Act contains consumer protection elements: operator of a telecommunications network in public use is obliged to repair any defects in course of business day after learning about the defect (§ 32) and to guarantee protection of transmitted or recorded information (§ 7, 36).

Many new services will be available after the application of ID cards. In May the Government sanctioned the plan for the introduction of ID cards. In June the tender for manufacturing cards and purchasing personalisation service was proclaimed. TRÜB AB (Switzerland) won the tender.

Through Public Key Infrastructure which by the Digital Signature Act (entered into force on December 15, 2000) was given legal power several new electronic services will be made available as well wide usage of electronic documents and digital signatures.

Hansapank, Ühispank, AS Eesti Telefon and AS Eesti Mobiiltelefon signed a contract concerning co-operation in developing the Public Key Infrastructure in May 2000. The goal is to create a PKI base infrastructure enabling application of electronic administration in all realms.

In March 2000 AS Eesti Telefon, AS Eesti Mobiiltelefon and Privador AS announced of the intention to elaborate a Public Key Infrastructure together. It would enable ordering and using services of AS Eesti Telefon and AS Eesti Mobiiltelefon safely via Internet. AS Privador will provide the technical solutions.

3. Institutions and organisations in charge of IS regulation

Pursuant to the Government of the Republic Act, Offices and Inspections act as governmental institutions next to Ministries. Both Offices and Inspections execute state overview and enforcement powers of the to laws, but Offices (§ 70) unlike Inspections (§ 71) have a directing function as well.

The Ministry responsible for IS infrastructure and public sector IT development is the Ministry of Transport and Communications (until September 2000 the State Chancellery co-ordinated public sector IT development). The area of government of the Ministry of Transport and Communications includes co-ordination of national information systems, elaboration of state IT policies; compilation of transportation infrastructure and IT development plans and organisation of telecommunication and postal services (Government of the Republic Act, RT1 1995, 94, 1628).

Ministry of Economic Affairs creates a favourable business environment: analyses and supports investments into Estonian economy and directs national innovation policy in business, elaborates economic and industrial policies.

Ministry of Education is among other responsible for organising education and research related matters.

The Copyright Committee set up at the Ministry of Culture that monitors the situation concerning copyright and other rights related to copyright, makes proposals for the amendment of copyright acts, etc.

3.2.1. Organisations

In the area of government of the Ministry of Transport and Communications operates the Estonian National Communications Board (established in 1998 on the basis of National Telecommunications Inspection). The Board is responsible for co-ordination and surveillance in fields of telecommunication, cable distribution and broadcasting.

In the governance of the Ministry of Economic Affairs is the Patent Office that is operating in the field of legal protection of industrial property protection: it participates in elaboration of the respective draft legislation, registers objects of legal protection of industrial property and maintains the respective national registers.

Consumer Protection Board stands for consumer's legal interests and rights in enterprises who in relation to the consumer are purchasers, manufacturers or mediators of a product or of a service.

Inspection of Data Protection is a sub-unit of the Ministry of Internal Affairs. Its sphere is surveillance over legitimacy of private data processing and tenure of databanks.

3.2.2. Important changes over 1999 and 2000

In July 2000 the supervisory control concerning the sub-unit of the State Chancellery, Government Department of Communications, exercised by the State Chancellery was completed. In December 2000 the Government decided to establish a National Information Communications Foundation with the purpose to regulate the national information communications system.

An important change was made in co-ordination of state information systems - starting September 1, the co-ordination of state information systems was transferred into the governance of Ministry of Transport and Communications. Up to then corresponding functions were carried out by the Department of State Information Systems of the State Chancellery.

By the end of 2000 reorganisation of foundations subjected to different Ministries is almost completed.

Two new foundations (Ettevõtluse ja Elamumajanduse Laenude Tagamise Sihtasutus and Ettevõtluse Arendamise Sihtasutus) will be established in place of existing 9 foundations. The aim of the action is to stop duplicating the work of private sector and to increase the transparency of business support schemes. The availability of information about business support schemes should also increase and management structure of the development of private enterprises should become simpler. Changes concerned foundations subjected to the Ministries of Economic Affairs, of Agriculture and of Transportation and Communications.

Estonian Competition Board, a subdivision of the Ministry of Financial Affairs, is responsible for the sphere.

Estonian Informatics Council advises the Government of the Republic in matters concerning IS. Its main areas are strategic planning, giving expert opinions on legislative acts in the area of informatics, and reviewing the development plans of State information systems.

The body in charge for regulation of broadcasting is the Broadcasting Council constituent of nine members appointed by the Cultural Affairs Committee of the Parliament. The Broadcasting Council supervises the activities of Estonian Radio and Estonian Television. Broadcasting is regulated with the Broadcasting Act (RT1 1994, 42, 680).

Pursuant to the Organisation Of Research and Development Act research and development belong to the competence of the Ministry of Education and innovation to that of the Ministry of Economic Affairs. The advisory body Research and Development Council is operating at the Government. Estonian Science Foundation finances research by assigning grants. Scientific Competence Council advises the Minister of Education concerning research and development institutions purpose-oriented granting. Academy of Sciences is an organisation uniting eminent scientists.

Reorganisation of the Research and Development Council is in progress and in December 2000 the draft of altering the Research and Development Act was taken into the proceedings of the Parliament.

In May 2000 the Ministry of Economic Affairs announced of founding the national technology agency aimed at improved expediting and financing of development activities and innovation. Establishment of the agency is part of the reform of Estonian R&D system. The Technology Agency will be subordinated to the Enterprise Development Foundation (Ettevõtluse Arendamise Sihtasutus) and will be concerned with supporting technological projects and distributing information about information technology, and product and technology development.

Estonian Informatics Centre promotes the IS development by the means of telecommunication. It provides services to Ministries and other governmental institutions and one line of work is development of public administration data communications networks.

4. International relationships and agreements

On October 8, 1999, Estonia presented its application to join the Wassenaar Arrangement that regulates the export, import and transit of high technology and strategic goods.

5. Market: Privatisation, foreign investment, mergers, acquisitions, call for tenders ...

The most influential enterprise in the Estonian telecommunications market AS Eesti Telekom was restructured in 1991-93; in 1997 the state enterprise Eesti Telekom was formed into AS Eesti Telekom and the decision was adopted to organise an IPO to sell up to 49% of the shares. The IPO took place at the beginning of 1999. Institutional and private investors purchased 49% of the shares owned previously by the Republic of Estonia. At the moment AS Eesti Telekom has 100% ownerships in AS Eesti Telefon (Estonian Telephone Company) and in AS Eesti Mobiiltelefon (Estonian Mobile Telephone Company). The shares of AS Eesti Telekom are owned as follows: Telia AB (Sweden) and Sonera Holding B.V. (Finland) – 49%, the Government of Estonian Republic – 27.3%, other investors – 23.7%.

Telia AB sold its 60% ownership in Starman Kaabeltelevisiooni AS (largest cable distributing company in Estonia) due to the Cable Distribution Act that entered into force in June 1999 and according to which the owner of a cable TV network cannot be a company that controls more than 40% of telephony services provided in Estonia or is related with such a company through economic interests. Shares of Starman Kaabeltelevisiooni AS were purchased by the investment fund EECI for 10.6 MEUR. EECI is specialised on the countries of Central Europe.

6. Standards

6.1. Standardisation bodies dealing with IS issues

Starting April 1, 2000 the non-profit organisation Estonian Centre for Standardisation as the national standardisation organisation started functioning. The Centre will be carrying out the functions concerning standardisation which up to now belonged into the domain of the Estonian Standards Board. According to international principles and those of the European Union standardisation is an unconstrained activity based on the consensus of the parties concerned. Therefore a national standardisation organisation can not act as a governmental office.

The office responsible for standardisation of IT is the Estonian Informatics Centre, which participates in preparing standard analysis of the public sector and produces suggestions. Based on Estonian Informatics Centre the technical committee of IT standardisation EVS TK4 was set up. The committee co-operates mainly in the field of official standardisation with the International Standardisation Organisation (ISO), the Assembly Committee JTC1 established by the International Electrotechnical Committee (IEC) and the information technology association CEN/ISSS of the European Standardisation Organisation CEN.

From other organisations most significant are Küberneetika AS (terminology, information security, ID cards), Estonian Language Institute (terminology, language), OÜ Imprimaatur (terminology), ID Süsteemide AS (ID cards), The Union of Estonian IS Auditors (audit of information systems), AS Regio (GIS), EAN ESTONIA (stripe code) and IT Meedia (Internet technologies).

A complete list can be found from the WWW site of the Estonian Informatics Centre.

Estonia has adopted a number of:

• Standards adopted by translating (EVS-ISO/IEC 2382-1, EVS-ISO/IEC 12207, EVS-ISO/IEC TR 15271, EVS-ISO/IEC TR 13335, ISO 9001, etc.);
• Standards adopted from English by declaring them effective (EVS-EN ISO/IEC 11172, EVS-EN ISO/IEC 13818, EVS-EN 27779, EVS-EN ISO 9241 etc.).