April 2000

Latvia Master Report

The present government in Latvia was elected in July 1999. The most significant achievement of this government certainly was the nomination in December 1999 of Latvia as candidate country of the European Union. Latvia declared its readiness to open negotiations on 15 (out of 31) accession topics, including IT&T policy. Eight of the negotiation topics were recently opened. Delegations and expert teams are currently being established for the negotiations.

In July 1999 the new Prime Minister Andris Skele provided the following declaration of the Work of the Cabinet of Ministers. There are the expectations that the role of government in the IS issues will increase. There is a range of essential actions in the chapters "Communications" and "Informatics" of the Declaration on the Work of the Cabinet of Ministers http://www.mk.gov.lv/eng/primeminister/.

Extract from the Declaration

(unofficial translation)

The present Government is formed in order to:

1) overcome the national economy and financial crisis, achieving sustainable and balanced economic development of the state;

2) ensure conditions for maintenance and development of the Latvian language and culture;

3) create a competitive system of education;

4) ensure entrance of Latvia into the European Union and NATO, and create an efficient realisation of state foreign policy;

5) administer a decisive blow to corruption and criminality;

6) avert collapse and achieve stable functioning of pension system;

7) establish economical and efficient public and municipal administration;

8) establish clear agricultural policy and real competitiveness;

9) accomplish privatisation;

10) overcome demographic crisis and establish conditions for existence of healthy and sound family;

11) pass to total defence principle of the state in the military sphere;

12) ensure conditions for establishing a civil society.

Extract from the sections about Communications and Informatics

Communications

• by the end of the year 1999 shall elaborate and submit to the Saeima (the Parliament) new and modern draft law on telecommunications;
• by the year 2003 shall achieve decrease of the monopoly status of Lattelekom and emerging of competitiveness in the sector of telecommunications;
• shall immediately liberalise the market of mobile communications, determining distinct criteria for issuance of licenses and starting issuance of licenses for new operators.
• by the year 2003, shall ensure access to free emergency aid telephone services for every resident;
• shall ensure qualitative detection of public television and radio programmes in the whole country;

Informatics

• the prior trends for investments in informatics for the years 2000-2001 shall be education, introduction of integrated information system of state importance and its components, as well as elaboration of normative acts in the sphere of informatics;
• shall form an integrated information system and data transmission net that joins informative resources and is of public importance, by investing the finances in users' education.
• by the year 2001 shall elaborate and within the period of one year introduce an integrated transport information system for co-ordination and optimisation of all kinds of traffic and loading processing.
• shall promote the development of the Internet, combating unfair competitiveness among the Internet service providers.

I. General background

1. General telecom policy

The Government of Latvia is restructuring the telecommunications sector to better meet the needs of national economic and social development in an increasingly information-intensive regional and global economy. The government also strives to harmonise the telecommunications sector and align it with EU requirements, principles and practices. The reform of telecommunications sector and its realisation is declared and determined in the new telecommunications sector policy for Latvia, that was approved by the Cabinet of Ministers in 1998. The policy envisages:

• opening the telecommunications market to new providers and competition;
• establishing a National Regulatory Authority independent from the government and the operators;
• privatize the state ownership interests in Lattelekom.

In realising the telecommunications sector policy, it is vital that there is a sound climate for investment and business activity. Improved legislation and regulations, and development of an open and stable regulatory environment will fulfil this. Opening the provision of all networks and services to competition progressively will perform liberalisation of the telecommunications sector. The date when the telecommunications sector will be open to competition will be defined by the government.

2. Institutional structures in charge of the regulatory issues

2.1. Ministries in charge of the telecommunication issues

Ministry of Transport - Department of Communications – is responsible for development of all telecommunications services including management of certification of telecommunications means, management of the numbering, issuing operators licences, supervision of interconnection process.

Department of Informatics – organises creation of the information infrastructure and implementation of the National Programme "Informatics".

Ministry of Economy - Latvian Privatisation Agency – holder of the State’s capital share (51%) in Lattelekom, responsible for privatisation of Lattelekom.

Ministry of Culture - is responsible for laws regarding intellectual property rights. Monitor operations among copyright agencies and the Patent Board.

National Radio and TV Council - is responsible for establishment of an efficient overall country system and to ensure that all state residents have possibilities to receive versatile and objective information.

Departments of Informatics (and communications) in ministries – is responsible for development of informatics and communications issues in the ministry.

2.2. National regulatory authorities

General tariff policy is fixed in the General Agreement between Government of Latvia, Tilts Communications and Lattelekom. At present, the independent Telecommunications Tariff Council of Latvia fixes customer’s payments for services. Tariffs are changed regularly in accordance with current inflation in Latvia; today's tariffs are valid from 1^st June 1999. Several imbalances in the tariff system still exist. Examples of such imbalances are regular subscription charge vs. time charge, local tariffs vs. international and long-distance tariffs and tariffs for analog customers vs. digital lines.

Tariffs for mobile communications (including paging) and data transmission services are determined by the market, i.e. they are fixed by providers.

The Telecommunications Tariffs Council controls the quality of telecommunications services. Criterions of quality and methods of estimation and services are worked out on the basis of recommendations of the ITU-T.

2.3. Frequencies allocation authorities

State Telecommunications Inspectorate (in the framework of Department of Communications) is responsible for management of the radiofrequency spectrum. The current Latvian national frequency table is drawn up in compliance with international ITU-R Radio Regulation for frequencies from 9 kHz up to 400 GHz. Currently there are over 500 000 radio stations in Latvia - in the terrestrial fixed and mobile radio service, radiophony and television, satellite, amateurs.

2.4. Office for the protection of economic competition

The fulfilment of requirements of competition legislation is controlled by the Council of Competition, which is under supervision of the Ministry of Economy.

2.5. Consultative councils

The Co-ordination Board of the national programme Informatics is important for the implementation of the IS in Latvia. The task of the board is to ensure implementation of the Programme in accordance with the defined and approved priorities. The priorities include discussions and approval of branch information technology concepts and strategies, assessment of bills and investment projects, the international co-operation programmes, and co-ordination of individual projects. The Informatics - programme also includes plans for deregulation and privatisation of the telecom sector.

Boards of Informatics have been organized in all ministries. Their task is to deal with informatics issues, representing the interests of their ministry and branch. These tasks include e.g. co-ordination and supervision of informatics issues in the corresponding ministry, development of informatics concepts for their branch, development of computer networks at the ministries and institutions under their supervision and preparation of the priority project investment programmes of the branch. Performing gradual informatization of state administration at all levels, it is envisaged to form Informatics Boards also in local governments. Their task is to investigate and solve the informatics problems in their regions.

2.6. Public telecommunication operators

An international call for tender was organised in 1993 in order to improve the telecommunications services radically. International Consortium TILTS Communications that was established by Cable & Wireless (UK, 73%) and Telecom Finland (Finland, 27%) became the winner of this tender. In 1995 International Finance Corporation (World Bank) purchased a 10% stake in TILTS Communications from Cable & Wireless portion. In 1998 Sonera (formerly Telecom Finland) purchased stake of the Cable & Wireless. Public telecommunications operator Lattelekom was founded in 1994 by TILTS Communications (49%) and government of Latvia (51%); its basic capital is USD 282 M.

The table below provides information of shareholders of all public telecommunications operators and the percentage owned.

3. International relationship and agreements

According to the General Agreement between Government of Latvia, Tilts Communications and Lattelekom and the Telecommunications Law, Lattelekom is the exclusive provider of all basic fixed (wire) public telecommunications services in Latvia until the year 2013. This exclusivity includes international calls, within the state, at local level, in cities and on the countryside. To liberalise telecommunications networks and services in Latvia, a governmental commission has been established for discussions with TILTS Communications. Its objective is to revise the mentioned clauses and to co-ordinate competition policy in near future. Negotiations are going on (Privatisation Agency with Lattelekom's strategic investor Sonera) about shortening monopoly status (until 2002-2003). An update of the Telecommunications Law is currently drafted.

4. Regulatory framework

4.1. Historical overview

First legislative initiatives, regarding development and operation of state-significant information systems and major intellectual property rights, started soon after Latvia's independence in the beginning of 1990-ies. The initiatives resulted in the government regulations on state-significant information systems in 1994, and laws on author's rights and neighbouring rights, patent rights, trademarks, industrial designs, in 1993. Latvia joined the Bern Convention, also in 1993. The next step was the European Agreement between Latvia and the EU, which was signed in 1997.

It must be said that work in the area of IT&T legislation in Latvia has largely been uncoordinated, and it has been based mostly on the government’s political desire to react to the European Union’s various directives. Nevertheless some of the common basic principles were kept:

• Each member of society has the right to be informed. Therefore, information from the state’s institutions of authority and governance must be generally available. The accessibility can be limited only by law.
• Information about individuals may not be disclosed if the information would cause any type of harm in respect to the individual. Information is allowed to be revealed and the order for disclosure is set out in the law.
• Intellectual work must be facilitated, ensuring people who are active in this area with sufficient and stimulating compensation.

4.2. Present general legislation

The Latvian government has joined the Bern Convention, World Trade Organisation and signed the TRIPS Agreement (in 1998), and still is planning to join a number of other international institutions (e.g., the WIPO Treaty, and the Convention for the Protection of Individuals with regard to Automatic Processing of Personal Data). All these agreements will have a serious impact on the IT&T sector and Latvia need to establish new laws and regulations in concert with the aforementioned agreements and make the necessary amendments to existing laws.

Presently (first quarter of 1999), the situation with IT&T legislation is the following:

• Major intellectual property protection legislation is in effect since 1993.
• The law On Publicity of Information is in effect. The law On National Secret, which limits overall accessibility, is already in force.
• The Criminal Code of Latvia contains several articles related to violation of information technology acts. Nevertheless, it is not easy to detect these violations of law and it is even more difficult to prove them. Amendments to the Criminal Code have been drafted envisaging considerable punishment for computer-related criminal acts; The Criminal Code already currently contains rather serious sanctions for infringement of copyright; corresponding additions should still be made to the Administrative Offence Code;
• A new draft of Telecommunication Law was submitted to the Cabinet of Ministers on December 1999.
• Development of draft Law On Electronic Data Base Protection has been suspended because the same task force is busy amending the Law on Authors Rights and Neighbouring Rights.
• The new Law on Authors Rights and Neighbouring Rights (harmonised with EU directives) is waiting for the final reading in the Parliament.
• Draft Government regulations regarding information systems security has been submitted to the Cabinet of Ministers on December 1999.
• The draft Law on Personal Data Protection has been adopted by the Parliament on March 23 2000 and is now waiting for the President’s approval and official announcement.
• Law on National Information Systems (responsibilities and competence of government bodies regarding collection and processing public information as well as provision of general access to public information) has been submitted to the Cabinet of Ministers on August 1999, and it is still being reconciliated by ministerial experts and officers.
• Draft Government regulation regarding protection of health of employees using computerised workplaces (implemented EU directives 89/391 EEC and 90/270 EEC) has been submitted to the Cabinet of Ministers. The draft regulation is expected to be in effect since January 2001.

• Government regulation regarding procedure of output of information from government and municipal institutions has been adopted August 1999. This regulation needs to implement the Information Freedom Law.

• Government regulation regarding output of data from the Population Register has been adopted in March 1999.
• Task force to develop legislation for electronic documents and electronic signature has been established within the Minister of Culture in 2000.

4.3. Key legislative measures

Key legislative measures to be implemented are the following:

4.4. Issues

4.4.1 Liberalisation

4.4.2. Licensing

The Umbrella Agreement gives Lattelekom the exclusive licence right to provide public voice telephony and public network infrastructure to the fixed lines for 20 years (until 2013). A state institution can create a specialised state telecommunications networks without any authorisation but in co-ordination with the Ministry of Transport (see article 15). Telecommunications services can be provided by private telecommunications networks without any authorisation but only for own needs and without any transmission to Lattelekom network or from any foreign telecommunications network (article 13 & 18).

Under article 16 of the Telecommunications Law, an individual licence from the Ministry of Transport is needed for the establishment of a public mobile radio telecommunications network. Two GSM licences are already accorded as of today. However it is most probable that the 3^rd GSM licence will not be given in the foreseeable future. As for satellite communications, an individual licence is required.

Legal entities may provide value-added services by using Lattelekom’s basic telecommunications services (see under article 14 of the Telecommunications Law, enhanced telecommunications services). As for the other telecommunications services, they can be offered without a licence from the Ministry of Transport, under a regime of general authorisation.

4.4.3. Universal Service

Under article 7 of the Telecommunications Law, Lattelekom is obliged to develop the public network as to guarantee the provision of quality of basic telecommunications services, to ensure accessibility of these services to all residents. Lattelekom is also obliged to develop the right for users of telecommunications services to connect to the public network on a non-discriminatory basis.

4.4.4. Tariff policies

The Telecommunications Tariff Council is an independent body composed of seven experts appointed by the Government. The Council sets tariffs and rates for basic telecommunications services, review complaints from users and submit recommendations to Lattelekom on the application of tariffs for basis services. As provided by article 11(3) of the Telecommunications Law, tariffs for basic telecommunications services will be rebalanced according to cost-orientation. Expressed in net-costs, with consideration taken to the level of income etc, the Latvian telecommunications tariffs are two to three times higher than elsewhere in Europe.

Under article 16, interconnection conditions, including tariffs, have to be the same for all operators of public mobile radio telecommunications network.

4.4.5. Quality of Service

Network operators have the duty to ensure that the telecommunications users’ rights are protected in accordance with the 1992 law On the Protection of Consumer Rights. They are responsible for ensuring the quality of services in accordance with the standards, technical regulations and stipulations in the contracts for the provision of services.

4.4.6. Interconnection

Under article 16 of the Telecommunications Law, the conditions that shall be observed by a public mobile radio telecommunication network when interconnecting to the public telecommunications network shall be set by Lattelekom. Under article 15 (2) it is stated that Lattelekom is also responsible observation of the requirements for the implementation between the specialised state telecommunications networks and the public telecommunications network. Interconnection prices are not made publicly available. The Department of Communications of the Ministry of Transport should supervise the interconnection process.

5. Freedom and protection

5.1. Copyright and intellectual property rights

• The law On Author’s Rights and Neighbouring Rights is in effect as of May 1993.
• The Patent Law is in effect as of March 1993.
• The law On Trademarks is in effect as in March 1993.
• The law On Industrial Design Protection is in effect as of May 1993.

• Development of draft Law On Electronic Data Base Protection has been suspended because the same task force is busy amending the Law on Authors Rights and Neighboring Rights.
• The new Law on Authors Rights and Neighboring Rights (harmonised with EU directives) is waiting for the final reading in the Parliament.

5.2 Privacy, data protection, consumer protection

• The law On Consumer Protection is in effect as of March 1999.

• The draft Law on Personal Data Protection is waiting for the final reading in the Parliament.
• Draft Government regulations regarding information systems security has been submitted to the Cabinet of Ministers in December 1999.

5.3. Electronic protection, legal protection and security (encryption, electronic commerce)

No legislative acts so far. Respective Task Force has been set up in 2000.

5.4. Freedom of expression and information

Freedom of expression is granted by the Satversme (Constitution of Latvia).

The Law On Publicity of Information is in effect as of October 1998. The Law requires information of Government bodies and local governments to be freely accessible unless it is forbidden by some other law, e.g. the law On National Secret that is limiting the general access to confidential information.

6. Information Society Policies

6.1. Umbrella Policies

The National program "Informatics" is a complex target program for the time period 1999 - 2005, consisting of 13 subprograms.

The programme is more carefully described in the IS promotional activities report.

6.2. IS Application Areas

6.2.1 Government (national, regional and local)

Qualitative reorganisation and integration of the National Information Systems has begun in the framework of the National Program Informatics for radical enhancement of information quality and formation of a user-friendly access.

With this conception, it is emphasised the necessity for the country to first of all, put in order its main objects registration. This will go ahead of other systems elaboration: private persons (population), legal persons (enterprises, establishments, organisations), real estate (land, buildings, owners) and movable property (transport vehicles, owners), as well as state finances (taxes).

The following registers follows the principles:

• Population Register;
• Enterprise Register ;
• Real Property Register
• State Vehicles Register;
• State Revenue Service information system.

Presently, 30 branch information systems are in operation, e.g. Forest Inventory database, Legal Acts IS, Integrated Data Processing System of Residential Buildings, Environment Data IS, etc.).

Because of necessity of close interoperability between different information systems, "A megasystem" will soon be established, using common data fields as well as unified user’s interface, access principles and authorisation procedures. The use of this megasystem will avoid duplication of records and coincidence of records in documents and databases. T will also provide united and user-friendly access to information.

The unified megasystem will be spread to all regional and rural administrative centers and to number of cities, border checkpoints, ports, etc., to all interested institutions. It will allow moving basic data entry and usage procedures to places where information is originated or used and to provide direct on-line access to information for everyone who has the proper authorisation. All end-systems irrespective of their functions or ownership – various IS, users of information, remote data entry and access points will be joined by means of the high speed Government Data Communications Network.

In order to realize all plans and to achieve the aforementioned goals on both state and municipal levels, elaboration and implementation of information systems for local authorities have been started on qualitative new advanced level and connected to the megasystem in order to

• conduct direct data entry into all National Information Systems;
• use information collected in all components of the megasystem for satisfaction of local needs;
• provide electronic document exchange throughout the country;
• envisage general access to public information and electronic contacts of population with State and local authorities.

6.2.2 Education

A certain progress has been achieved in solving various issues of implementation of information technologies in the field of education by the Latvian Education Informatization System. The system was, on a tender basis, assigned to the University of Latvia.

Priority within the implementation of the project is given to the methodological tasks, development of study materials and teacher training programmes. This supports efficient use of hardware and software and the invested financial resources. Development of infrastructure should not be treated as an end in itself; it should be provided an immediate return - modernisation of the process of education, possibilities for all members of society to receive a sufficient computer literacy.

Implementation of information technologies in the educational system is performed consistently. First stage of implementation of the administration informatization software is already accomplished. Main databases administration and scientific and methodological structures for the information system have been developed. In 1998, the developed products were gradually being introduced in other institutions. New products were being developed depending on the available funding including those being developed for distribution via CD-ROM technology: CD-ROM library, CD-ROM study books, CD-ROM Plus-1 (information technology), Plus-2 (Internet), Plus-3 (Physics & History) which are educational tools with courses and tests. Finally, one could mention the CD-ROM for teaching history at schools developed by the private company Tilde. It uses the multimedia opportunities presenting historical facts and events.

6.2.3 Transport

Several projects have recently been launched, the most successful one is creation of the vessel traffic information system realised by the Maritime Administration of Latvia. Security of navigation, sailing directions, movement the vessels in ports, documentation of the vessels, hazardous freight are the basic data objects of the IS.

The concept on development of the integrated transport information system has been elaborated. In addition to development of separate projects the action plan to the concept contains:

• implementation of the electronic data interchange standards in transport information systems;
• creation of integrated information system for Latvian Railways;
• creation of information system for insurance of transport means.

Creation of the integrated transport information system will develop various transport services; multi-modal and international approach will promote development of transit freight operations that are vital for the national economy of Latvia.

6.2.4 Medicine

Healthcare information systems have been developed by the Latvian Center of Health Statistics, Informatics and Medical Technology. Medical statistics, hospitals, registers of physicians, patients and diseases, health insurance are the components of the integrated system. Introduction of International Statistical Classification of Diseases and Related Health Problems (version ICD-10) will provide achievement of full compatibility with World Health Organisation IS (WHOSIS).

Drugs and drug addiction are the subjects of the Drug Information System developed by the Drug Abuse Prevention and Healthcare Center. The next activities to come are connected with further development of the Drug Information System, preparation of full future connection with the European Monitoring Centre on Drug and Drug Addiction (EMCDDA), convergence to European drug monitoring system REITOX.

II On-going developments

1. On-going changes in the institutional structures

• Creation of the National Regulator of all monopoly services is still in a discussion process.
• Independent Data Inspection (to be in charge of Personal Data Protection) is scheduled to be established on January 2001.

2. On going changes in the regulatory framework

2.1. Telecommunications liberalisation

The Government’s working group still is dealing with the privatisation of the state segment of shares in Lattelekom. The group was set up through a decision taken by the Cabinet of Ministers. The Minister of Finance is nominated as a chairman. The working group’s terms of reference cover:

• negotiations between Privatisation Agency and the "Lattelekom" foreign investor "Sonera Ltd" on the alteration of Umbrella Agreement;
• compensation for the reduction in the term (2003 instead of agreed 2013) during which "Lattelekom" enjoys monopoly rights;
• terms for privatisation of the state share in "Lattelekom";
• transformation of "Lattelekom" into a public stock company, floating for public purchase the state segment of shares.

2.2 New laws/measures under preparation:

• New draft Telecommunications Law was submitted to the Cabinet of Ministers on December 1999.
• Development of draft Law On Electronic Data Base Protection has been suspended because the same task force is busy amending the Law on Authors Rights and Neighboring Rights.
• The new Law on Authors Rights and Neighboring Rights (harmonised with EU directives) is waiting for the final reading in the Parliament.
• Draft Government regulations regarding information systems security has been submitted to the Cabinet of Ministers in December 1999.
• Law on National Information Systems (responsibilities and competence of government bodies regarding collection and processing public information as well as provision of general access to public information) has been submitted to the Cabinet of Ministers in August 1999, and is being reconciliated by ministerial experts and officers.
• Draft Government regulation regarding protection of health of employees using computerised workplaces (implemented EU directives 89/391 EEC and 90/270 EEC) has been submitted to the Cabinet of Ministers but is not yet adopted. The draft regulation is expected to be in effect since January 2001.
• Government regulation regarding security of state information systems has been submitted to the Cabinet of Ministers.
• Task Force to develop legislation for electronic documents and electronic signature has been established within the Minister of Culture in the beginning of 2000.

2.3. New concepts for future legislative developments

Several concepts for future legislative work have been developed and submitted to the Government:

• unified registration of judicial persons;
• registration of punishments;
• declaration of residence address by natural persons.

3. On-going changes in IS policies

Latvian Information Technology and Telecommunications Association, a professional non-government not-for-profit organisation, together with major software production companies DATI and SWH-Technology has developed a 20 year long vision for Latvia (as well as Estonia and Lithuania) to become a world-known center of software service competence. The vision is becoming a fundament for state-wide project comprising major changes in IT&T education and training, and other government-supported actions.

A concerted actions is started November 1999 to establish a system of higher vocational IT&T education in Latvia aiming to increase annual output of IT engineers up to 6 times.