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April 2000

Regulatory Developments
Lithuania
Master Report

I. General background

Newest history of the Lithuania telecommunications started in 1991, after the reestablishment of Lithuania independence. Development of the market economy and integration in to Europe Union (EU) were defined as Lithuania priorities. The transition from Monopoly State with one telecommunications operator to market driven economy with liberalised market required new laws and new regulators. The Ministry of Communications and Informatics had prepared the First State Development of Communications and Informatics Program in 1992-1993. The program laid out the State policy in Communications and Informatics sector. The Program was rectified by the Lithuania Government Decree N. 898 of 1993/02/02.

This program was modified in 1996 in order to be complied with the new Lithuania Government Program for the period 1997-2000 and approved latter by Lithuania Seimas (Parliament). This program is the Lithuania framework for Communications and Informatics development.

The basic law governing the telecommunications in Lithuania is the Law on Telecommunications (http://www.lrs.lt) that entered into force on 1st August 1998.

In 1999, the Ministry of Public Administration Reforms and Local Authorities drafted the Program on Information Society in Lithuania in line with EC Directives. This program has been submitted for inter-ministerial clearance and will be forwarded to the Government in March 2000.

1. General telecom policy

Lithuania Telekomas, the Lithuania telecom operator, was established as a stated-owned enterprise in 1992 after separation from Soviet Union’s telecommunications system. Since this date, the regulatory and operational functions were separated also. In 1997 the State enterprise Telekomas was transformed into a joint stock venture. The Ministry of Communications and Informatics fulfilled the regulatory functions until July 1998. The new phase of Lithuania Telekomas started in July 1998 after partially privatisation. 60% of total Telekomas shares were sold to the consortium Amber Teleholding equally owned by Telia (Sweden) and Sonera (Finland). 35% of shares belongs to the Lithuania Government and another 5% were sold to Telekomas employees.

Lithuania starts the accession processes in order to integrate the EU. This phase supported the adoption of priorities in telecommunications area as full liberalisation of telecommunication market, harmonisation and adaptation of the legal and regulatory frameworks in compliance with EU directives.

Presently, most of the telecommunications services, except fixed voice telephony, are liberalised which includes three alternative mobile communications operators that provide related services in Lithuania. A full liberalisation of the whole sector, including voice telephony services, should come on January 1st, 2003.

The most important developments recently noticed in the telecommunications sector are:

2. Institutional structures in charge of the regulatory issues

2.1 Department of Information and Informatics

Lithuania has reorganised its Ministry of Communication and Informatics, splitting it up into a Department of Information and Informatics (DII), that operates under Ministry of Public Administration Reforms and Local Authorities, and the Department of Telecommunications that is part of the Ministry of Transport. DII is responsible for development of Informatics and the Information Society in Lithuania. The main mission of this department is the co-ordination of Information Technology (IT) projects with strategic importance for the State, the development of strategies and their related implementation through various programs. More information can be obtained in the address http://www.iid.lt.

2.2 National Regulatory Authority

The basic law governing the telecommunications in Lithuania is the Law on Telecommunications (http://www.lrs.lt) entered into force on 1st August 1998. The National Regulatory Agency (NRA) is foreseen and described in that Law, however it was not yet established. NRA must be independent from operators and from the government. According to the Law, the Head of State, the Lithuania President appoints Director/Members of NRA for 5 years period. The Department of Communications under Ministry of Transport (http://www.transp.lt) is temporarily authorised by Government Decree to provide NRA functions prescribed in the Law until the NRA will be established.

2.3 State Radio Administration Authority

The State Radio Frequency Service (SRFS) is the executive part of the Radio Administration of Lithuania. It has the status of independent regulatory enterprise, founded and supervised by the Ministry of Transport. SRFS does not receive any governmental financing but recovers its expenses from the fees gathered from all kinds of Radio Station Licenses. The wide range of SRFS responsibilities includes such as the direct involvement at all levels of sophisticated radio spectrum management; spectrum monitoring; telecom equipment testing and type approval; control over the importation, installation and operation of radio stations, and many others related issues.

More detail about SRFS service, procedures of licensing and testing, fees and registration of wireless equipment can be obtained at http://www.radio.lt.

2.4 State Competition and Consumer Protection Office

Seimas adopted the Law on Competition (http://www.lrs.lt) in 1999. This Law covers the main competition principles applied in EU member states. This would be considered as one of the prerogatives favouring integration into the EU. On July 1999, the Government approved the Regulations of the Competition Council. On 18 October 1999 the President appointed the Chairman and four members of the Competition Council. The main function of the State Competition and Consumer Protection Office is the to monitor the enforcement of the Law on Competitions against the abuse of a dominant position, the agreement restricting or hindering competition, the competition restricting actions, the concentration of market structures and the consumer protection.

2.5 Permanent Information Society Commission under Government

The Permanent Information Society Commission as top-level advisory body was established by Government Decree N. 635 in 1998/05/25. The main functions of this Commission are the research on the Information Society development problems and to prepare proposals for related solutions. The Commission members are representatives of President Office, Government, Seimas, experts and key persons working in the Information Society fields.

2.6 State Information Policy Development Advisory Commission

The Lithuanian High-Level (inter-ministerial) State Information Policy Development Advisory Commission was formed by the Government decree in March 1999. The head of the Commission is the Vice-Minister and Head of Department of Information and Informatics at Ministry of Public Administration Reforms and Local Authorities. The Commission was formed at vice-ministers level and the main goals are:

2.6 Public telecommunication operators

The main public telecommunication operator - the incumbent - is Lithuania Telekomas (LT) with monopoly for fixed lines local and domestic long distance services until 31st December 2002. The owners of Telekomas are Amber Teleholding (Sweden and Finland) with 60% shares; Lithuania Government detains 35% and employees 5% of shares. LT was one of the major investors in Lithuania in 1999. 500 M. Lt (125 MEURO) were invested for installing new lines, network digitalisation and the establishment of a billing system. LT plans to build optical fibre network around the country. Telephone network digitalisation will serve as a basic infrastructure for better-developed services like ISDN. LT has plans for IP telephony implementation.

Lithuania Government announced plans to sell 35% shares of LT before 1st July 2000.

2.7 Mobile communications operators:

New mobile communications operator Tele-2 Network, started at 14 December 1999 in Vilnius area. The owner of this network is NetCom, Sweden.

Levi & Kuto have licence for DSC 1800 network and has plans to obtain licence for GSM 900, earlier owned by Lithuania Telekomas. Tele-2 Network, according requirements of licence in 1999, must establish DSC 1800 network in Vilnius and other main cities until 1st January 2001. Tele-2 has plans to take up at least 10% of mobile communication market.

The persistent competition between two other GSM operators, Omnitel and Bite GSM took place in Lithuania in 1999. The prices of services of both operators are quite similar. Both operators in 4th Quarter 1999 announced new services.

Omnitel offered integrated mobile, Internet and computer services, named Mozaika. More information can be found at http://www.omnitel.lt.

Bite GSM offered two new services named Namu zona (Home area) and GSM-Pro. Namu zona service allows cheapest calls for users in registered small area (home) and few square km areas. The picture located below was prepared by Telecommunications Regulatory Division of the State Radio Frequency Service and shows status of Lithuania Telecommunication market at the end of 1999

2.8 International relationship

The European Council held in Helsinki on 10 and 11 December 1999 has invited the six candidate countries: Romania, Slovakia, Latvia, Lithuania, Bulgaria and Malta to begin the accession negotiations. The Lithuania Government has adopted measures to complete the process of administrative preparation for membership negotiations and drafting of negotiating positions with the view of starting negotiations in February 2000. On 23 December 1999, the Government adopted a Resolution on the establishment of the Delegation for the EU Accession Negotiations. The main functions of the Delegation are to conduct EU membership negotiations and facilitate preparation of negotiating positions.

Lithuania is member of:

Lithuania international collaboration in the development of IT is going in:

More information on this subject can be obtained in the site: http://www.iid.lt/vripp/.

4. Regulatory framework

4.1 Historical overview

First regulations in telecommunication area started after regaining of independence in 1990. The former Ministry of Communications and Informatics (until 1998) provided government regulations and co-ordination of telecommunications developments as state-significant infrastructure. The present Law on Telecommunications is the regulatory framework for the sector following the Europe Union Directives.

4.2 Present general legislation

The Law on Telecommunications regulates the relations between the telecommunications operators and the users of their services. This Law also regulates the management, the use and control of radio communications, as well as the import, manufacturing, use and maintenance of equipment radiating electromagnetic waves, ensuring an effective use of the radio frequencies and set forth conditions for promoting competition in the telecommunications sector.

This Law did not regulate licensing activities of radio and television program broadcasters. Therefore, this Law regulates the requirement to submit to the Radio and Television Commission the basic terms and conditions of the activity of co-ordinated radio and television stations frequencies (channels) and of telecommunications networks intended for broadcasting radio and television programs (Article 1. Purpose and Application of the Law).

4.3 Key legislative measures

Key measures

Objective

Date

Law on Enterprises Regulation of establishment of new enterprises, provision on licensed activities

1990

Law on Mass Media Regulates provision of information to public.

1996

Law on legal protection of computer programs and databases Protection of copyrights.

1996

Law on Telecommunications Liberalisation of telecommunications market.

1998

Amendments to the Law of Enterprises The possibility for foreign companies to establish subsidiary in Lithuania.

1999

Law on Competition Protection of users rights, anti-trust regulations.

1999

4.4 Issues

4.4.1 Liberalisation

Liberalisation of Telecommunication sector started in 1991 after regaining of independence.

The first mobile communications operator Omnitel, joint USA and Lithuania private company, started in 1992. Today 3 GSM operators cover all Lithuania territory. Most of telecommunications services are liberalised except fixed voice telephony. The liberalisation status is presented below.

 

Liberalisation status

Comments

(number of operators and licences, name of major operators, types of licences, etc.)

Infrastructures    

Public telecommunication network

Monopoly Lithuania Telekomas until 2002/12/31

Local networks for voice telephony

Monopoly Lithuania Telekomas until 2002/12/31

Leased lines

Fully liberalised market  

Alternative infrastructure (Highway, railways, electricity utilities …)

Partially liberalised, market with very few operators Lithuania Railways, Lithuania Power

Broadcasting and cable TV

Fully liberalised market More 50 providers
Voice telephony    

Local communication

Monopoly Lithuania Telekomas until 2002/12/31

Domestic long-distance

Monopoly Lithuania Telekomas until 2002/12/31

International communication

Fully liberalised market 4 operators

Provision of voice services to closed user groups

Partially liberalised, market with very few operators Lithuania Railways, Lithuania Power
Mobile communication    

Analogue

Monopoly Until 2002/12/31

GSM digital

Fully liberalised market 3 operators, Omnitel, Bite GSM and Tele-2

DCS 1800 digital

   

Paging

Partially liberalised, market with very few operators 2 operators, Nelte and Omnitel

Satellite communications

Fully liberalised market 3 operators, Omnitel, Ship’s Radio Service Bureau (both Iridium) and Muliena (Inmarsat)
Data transmissions    
  Fully liberalised market 8 operators
Value Added Services    
  Partially liberalised market with very few operators Omnitel and Telekomas
Internet services provision    
  Fully liberalised market (no subject to licensing) 30 operators
Equipment provision    
  Fully liberalised market  

4.4.2 Licensing

The Article N.10 of Law on Telecommunications (http://www.lrs.lt) describes the general principles for licensing the telecommunications activities and the issue of licenses to radio and TV broadcasters and transmission services providers. Only such telecommunications activities, for which limited resources, radio frequencies and telephone numbers are available, shall be licensable. Article 9 of this Law describes general principles of Licensing of Telecommunications Activities. The main principles are:

The Ministry of Transport and Communications is authorised by Government Decree to provide licensing services prescribed in the Law until the National Regulatory Agency will be established.

4.4.3 Universal Services

The Law on Telecommunications describes that Government approves a list of Universal Services (US), rules for providing them and the procedure of compensation to the US provision working at a loss. The concept of US is not clearly defined. In 1999, two drafts of governmental resolutions (on rules for licensing of telecommunications activities, rules for provision and list of US Telecommunications Services) were prepared.

4.4.4 Tariffs policy

Article N. 11 of the Law on Telecommunications describes regulation of prices for telecommunication services. The prices for services established by all providers shall be monitored by the State Agency of Competition and Consumer Rights. The maximum price for telecommunication services may be specified in the licenses and authorisation issued to all providers of this service.

4.4.5 Quality of Service

The quality of telecommunications services is monitored by the State Agency of Competition and Consumer Rights within the limits of its competence. In 1999 the amendments to the Law on Consumer Protection providing for the establishment of the National Consumer Protection Council has been submitted to the Government. The Council will be responsible for the consumer protection, for the implementation of the Law on Product Safety, as well as for co-ordinating activities of food and non-food inspections. The establishment of this Council is scheduled to take place in the first half of 2000. Until the Council is established, a division of the new Competition Council is in charge as the authority to carry out all functions related to consumer protection.

4.4.6 Interconnection of Telecommunication services

Article N. 12 of the Law on Telecommunications declared operators of public communications networks must comply with the requests of other licensed telecommunications operators to Interconnect public and Internal telecommunications network. According the Law, telecommunications networks must be interconnected not later than within 3 months after the day of receiving the request. In other cases Communication Regulatory Authority shall consider the international rule, within two months, and shall make a decision.

5. Freedom and protection

5.1 Access to information networks

Access to the information networks is regulate under the following Laws:

The State Register Service (SRS) at the Department of Information and Informatics (Ministry of Public Administration Reforms and Local Authorities) was established in 1999. SRS is in charge of consolidation of the integral system of State registers and the provision of information about them (in line with EC Directives).

5.2 Copyright and intellectual property rights

Pursuant to the Law on Copyright and Related Rights (in force from 9 June 1999) a Council of Copyright and Related Rights was established on 12 January 2000. This Council includes the representatives from various producer associations. This Council will serve as a consultative and expertise body to the Ministry of Culture (which by the Government’s resolution of 19 November 1999 is the main co-ordinating and implementing institution in the area of intellectual property rights).

The Law on the Legal Protection of Computer Programs and Databases, adopted on 30 January 1996, creates the legal basis enabling all the authors and program or database co-authors to protect under copyrights their production.

5.3 Privacy, data protection, consumer protection

The Law on Legal Protection of Personal Data, adopted on 11 June 1996 regulates legal protection of personal data stored in information systems. On 12 March 1998 Law N. VIII-662, partly amending and supplementing the Law on Legal Protection of Personal Data, was adopted. The State Data Protection Inspectorate drafted during 1999 amendments to the Law on Legal Protection of Personal Data (fully harmonised with Directive 95/46/EC) and submitted them to the Government. The Inspection Directorate carried out 10 inspection actions, of which seven by correspondence, about processing of personal data in both public and private sectors. It registered 29 new entities processing and providing personal data and provided over 100 consultations involving personal data. The draft Law on Standardisation was submitted to the Seimas for adoption on 1 July 1999. The law is expected to be approved in the spring 2000 session of the Seimas. The draft of this law contains all essential legislative elements involving standardisation.

5.4 Electronic protection, legal protection and security

In November 1999, the Ministry of Public Administration Reforms and Local Authorities drafted a Law on Electronic Signature (in line with the EU requirements) and in January 2000 forwarded it for the Government’s approval. The Law shall legalise the electronic document and electronic mail, as well as creates preconditions for the use of electronic documents that have a legal force.

State Enterprise Infostruktūra is implementing a project on institutional building in this area. This company has already drafted regulations for the supervision authority of electronic signature and the providers of electronic signature certification services.

5.5 Freedom of expression and information

Seimas adopted a new wording of Public Information Law in December. The main change is the exclusion of upper fine limit for moral damages of persons. There are no currently methods or rules for calculation of fines and courts practice for moral damages. The President didn't sign this law which returned for revising to Seimas. A public enquiry showed that more 85% of respondents are opposite to this release of the Law.

Legal act on distribution of illegal information containing harmful contents through computer network of public use is planned to be adopted in 2000.

6. Information Society Policy

6.1 Umbrella Policies

The main policy initiative for the IS development in Lithuania was the implementation of the European Council Decision of 30 March 1998. This Decision that adopts the multiannual Community programme to stimulate the establishment of the Information Society in Europe (98/253/EC - more details can be found at http://europe.eu.int/eur-lex/en/lif/reg/en_register_132060.html) was addressed to the Member States. The Article 1 (Programmes objectives) and Article 2 (Categories of actions in order to obtain the objectives) of this document were used as guidance to originate the Programme on Information Society development in Lithuania. The Ministry of Public Administration Reforms and Local Authorities drafted a Programme on Information Society in Lithuania (in line with the mentioned Directive 98/253/EC) in the 4th quarter 99. The main points of the IS Lithuania Programme are:

The Programme also describes the actions in the following sectors:

The Programme has been submitted for inter-ministerial clearance and review in the specialised commissions and was forwarded to the Government in March 2000 (more details can be found at http://www.iid.lt/eng/activities.htm).

6.2 IS Application Areas

6.2.1 Government

One of the constituent parts of creating the Information Society is the implementation and development of the administration information system of the Government of the Republic of Lithuania. Seeking to create an integral system of the state records, classificatory and registers which is necessary to form a uniform state information system; the Government of the Republic of Lithuania on 21 July 1997 adopted the following Resolutions:

The procedure for the exchange of information between the state registers and state information systems and the provision and use of the data, methodological documents of preparing projects of State registers, as well as the draft law on Land Cadastre were approved by Order N. 148 of the Minister of the former Ministry of Communications and Informatics on 11 November 1997.

The Minister of Administration Reforms and Local Authorities signed order No. 7 "Concerning the Procedure for Legalising the State and Municipal Information Systems" on 25 January 1999.

In 1999, a State Register Service (SRS) at the Department of Information and Informatics (Ministry of Public Administration Reforms and Local Authorities) was established. SRS is in charged of consolidation of integral system of state registers and the provision of information about them (in line with Directives 98/253/EC, 96/339/EC and Council Resolution 399Y0128(01).

6.2.2 Education

The new government announced at the end of 1999 the following actions for science and education areas:

Remarkable state investments were planned for the period 1998-2001 to renew the infrastructure and to develop advanced Information Technologies in Universities and State institutes. The main application area is education including distance education. The development of distance education in Lithuania, under the Support State Science and Studies Fund and State investments, is co-ordinated by Kaunas University of Technology, KTU (http://www.ktu.lt). The projects aims at:

6.2.3 OSF programs

The Open Society Fund in Lithuania (OSFL), http://www.osf.lt, is one of the network of over the thirty foundations established since 1985 in Central and Eastern Europe and Asia by George Soros. During the seven years of its existence, OSFL support for different projects has amounted to over 90 million litas (22 MEURO), with an emphasis on education, science, civil society, culture, communications and publishing.

Medical INTERNET is a project with OSF participation. This project is aiming at promotion and support for the medical information network including the development of national databases, provision of conditions for hospitals, medical libraries and other medical establishments to get access to the Internet, and participate in distance learning and medical education projects.

INTERNET Programme, other OSF funding project, creates the provision of Internet services to education and science institutions, non-governmental organisations and individuals, in supporting projects on providing interesting and useful materials on Internet and organising of training sessions.

II. On-going developments

1. On-going changes in institutional structures

The main on-going developments on State level were announced in the State Program for 1999-2000. In October 1999, Mr. Andrius Kubilius Vice-Chairman of Lithuania Seimas, was appointed as Prime Minister. The new Prime Minister office announced the Program for 1999-2000, as the reforms and prevention of the crisis program. The urgent measures announced in this Program include:

More details can be found at http://www.lrvk.lt

Regarding the energy sector, the Government Resolution approved on 6 December 1999 the establishment of a joint inter-ministerial committee task to work out the detailed restructuring plans and to co-ordinate this process. Separation of the management and accounting in the energy market (both electricity and gas sectors) is foreseen as a priority action.

The restructuring of AB Lietuvos energija in line with the EU competition rules is expected to be completed by the end of 2000. Afterwards, it will be privatised.

1.1 Accession process

Taking into account the decisions of the Helsinki European Council, the Government has adopted measures to complete the process of administrative preparation for membership negotiations and drafting of negotiating positions with the view of starting negotiations with EU.

On 23 December 1999, the Government adopted a Resolution on the establishment of the Delegation for the EU Accession Negotiations. The main functions of the Delegation are to conduct EU membership negotiations and facilitate the preparation of negotiating positions. On 20 January 2000, following the nomination by the Government, the President of Lithuania appointed deputy minister of Foreign Affairs Mr. Vygaudas Ušackas to the position of Lithuania’s chief negotiator with the EU. The position of chief negotiator is immune from the electoral cycle and changes in the Government. On 7 February 2000, seven draft negotiating positions in the fields of education and training, research and technological development, small and medium size enterprises, culture and audio-visual policy, common foreign and security policy, statistics as well as telecommunications and information technology will be discussed. More details see at http://www.euro.lt.

2. On going changes in regulatory framework

The following laws are in preparation:

On December 1999 Seimas adopted new wording of Public Information Law. The main change is excluding of upper fine limit for moral damages of persons. There are no currently methods or rules for calculation of fines and courts practice for moral damages. Mass media representatives are opposite to this release of Law. Lithuania President didn't sign the law and returned back for revision to Seimas.

Two new Law projects in Information Technology area were presented to Lithuania Seimas. One project prepared by Ministry of Justice, second by special group. The special chapter 33 "Crimes in Informatics", Articles 349 and 350 describes responsibilities and penalties for crimes. Destroying of information, changes, depending on damages, will cause possible imprisonment up to 3 years or fines. In case of public disclosure up to 4 year of prison can be allotted by court.

A Law project on Electronic Signature (in line with the EU requirements) was forwarded in January 2000 for the Government’s approval.

A legal act on distribution of illegal information containing harmful contents in computer network of public use is planned to be adopted during 2000.

3. On-going developments in business sector

Lithuania Government established the Sunrise Committee to draft proposals, the implementation of which will improve the business environment. According the Minister of Economy Mr. V.Milaknis opinion the business people will feel the results of the Sunrise Committee's work in the first half of this year.

Last year, two investment funds institutions invested in IT companies, more five fund intend to invest during 2000 in this rapidly developing sector. In 2000 the number of Lithuanian IT companies with foreign capital component should increase, as more and more funds organisation have expressed their intention of buying shares of IT companies. Financial brokers are convinced that all major Lithuania software and hardware companies are intensively negotiating with potential investors.

4. On-going changes in IS policy

The Ministry of Public Administration Reforms and Local Authorities drafted a Programme in 1999 on Information Society in Lithuania (in line with Directives 98/253/EC and 96/339/EC). The Programme has been submitted for inter-ministerial clearance and revision by Commissions. This Program will be forwarded to the Government in March 2000.

Main information sources:


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.

 

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