July 2000

Malta Update Memo

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

1. Introduction and Summary

In April and May 2000 the Maltese Government published two very important policy documents which will eventually lead to a substantial change in legislation pertaining to the liberalisation and governance of the Telecommunications Sector, e-commerce, data protection and computer misuse.

On the 29th of April 2000 the Government published its Policy for the Liberalisation for the Telecommunications Sector as part of a draft bill that will set up the Malta Communications Authority. The bill, the Malta Communications Authority Act, 2000, is currently being discussed in Parliament and should be approved in early July.

For the full text of the bill go to: http://www.magnet.mt/gazette/notices/billno71.htm

Then in May the Government published the Information Practices Legislative Framework, drawn up and proposed to Government by a Working Group that encompassed three aspects of information practices. The Bills in the framework are: Electronic Commerce Bill, Data Protection Bill and Computer Misuse Bill.

This framework was published as a White Paper and a public call for comments was made, with the deadline being the 30th of June 2000. It is expected that the bills would be discussed in Parliament before the summer recess at the end of July.

The Central Management Information Unit (CIMU) has overall responsibility for the publication of the Framework. http://cimu.magnet.mt

2. Information Society Policy

2.1 Umbrella Policies and national IS strategy

The setting-up of the Malta Communications Authority, the publication of the policy for the liberalisation of the telecommunications sector and the Information Practices Legislative Framework will provide the definite guidelines for the development of the Maltese Information Society in the immediate future. Once the Authority and the legislation are approved by Parliament it will regulate all the developments, which until now could not refer to specific points of reference.

As a result of the Malta Communications Authority Act, The Internet and Other Data Networks (Service Providers) Regulations, 1999, published on Friday 8th October will be amended. The Telecommunications (Regulation) Act 1997, which grants Maltacom, Malta’s monopoly telecommuncations company, a monopoly until 2010, is also being amended to reflect the government’s liberalisation policy.

2.2 Telecommunications and Internet

The current scenario of telecommunications in Malta (June 2000), reads as follows: -

2.3 Electronic Commerce

The Electronic Commerce Bill in the Information Practises Legislative Framework proposes a secure legal basis for the conduct of electronic commerce on a technology neutral basis. It is intended to be sufficiently flexible to meet new technological developments.

This Bill conforms to EC Directive 1999/93 on a Community framework for electronic signatures. It has also taken into consideration the proposed Directive of the European Parliament and of the Council on certain legal aspects of electronic commerce in the Internal Market. This Directive is due to come into force shortly and no substantial changes to the proposed draft are anticipated.

The Bill draws on a variety of sources, including the United Nations Commission on International Trade Law (UNCITRAL) Model Law on E-Commerce of 1996, the European Union directives mentioned above, as well as from the legislation of other jurisdictions, primarily Australia and Eire. The Irish law, which is due to be enacted shortly, was selected as the principal model insofar as:

• Ireland is seeking to promote financial services and e-commerce
• It is technology neutral and flexible
• It complies with both EU directives
• It is among the most recent of European legislation

While the Bill provides a homogenous legal framework it is not prescriptive and it allows flexibility in its development through the issuing of regulations by the Minister for Communications. This flexibility for development is important both in terms of advances in technology and possible changes to the EU directives.

2.4 Privacy, data protection, consumer protection

The purpose of data protection legislation in the Information Practises Legislative Framework is to safeguard the individual's right to privacy.

The Data Protection Bill conforms to the requirements of EC Directive 95/46 on the protection of individuals with regard to the processing of personal data and on the free movement of such data.

This Bill draws from a number of sources; namely the Data Protection Directive (95/46/EC), as well as from the legislation of other jurisdictions, primarily Sweden. Sweden was chosen as the prime legislative model for the following reasons:

• A longstanding tradition of data protection - with Sweden being the first European country to introduce legislation (1973)
• As in Malta, a culture of information sharing within the Swedish public administration
• As in Malta, the use of an identity card within the Swedish polity
• The simplicity of the drafting style and the logical structure of the Swedish Act

The Bill also borrows from the Italian Data Protection Act 1997, in relation to the functions of the Regulator and to journalistic freedom; and the Portuguese Protection of Personal Data Act 1998, with regard to the provisions relating to the transfer of personal data to third countries.

2.5 Security

The Computer Misuse Bill as part of the Information Practices Legislative Framework proposes to introduce a number of criminal offences that deal with the unauthorised use of and access to computers and their paraphernalia (such as storage media and supporting documentation). This is intended to keep our criminal law up-to-date with technological developments and new forms of crime.

The Bill is based on:

• The OECD report on Computer Crimes of 1986
• The Council of Europe recommendations on computer crimes of 1989
• Recommendation R(95)13 of the Council of Europe on problems of criminal procedure law connected with information technology

Other legislation reviewed includes that of other jurisdictions, including the UK, Malaysia and of a number of US states. However, the Bill is not based on a single model but seeks to draw on a number of sources.

3. Institutions and organisations in charge of IS regulation

3.1 National regulatory authorities

The Maltese Communications Authority being set-up will take a regulatory and supervisory role in the development of the Maltese Information and Communications Technology sector. Some of the functions, as listed in the bill, are:

(a) Ensure freedom of communication and that communications shall not be limited except when this is necessary for any of the following reasons:

(i) the protection of the right to privacy;
(ii) the defence of national security, territorial integrity or public safety;
(iii) the prevention of disorder or crime;
(iv) the protection of public health;
(v) the protection of morals and respect for the dignity of the human person;
(vi) the protection of the rights and freedoms of others;
(vii) the prevention of the disclosure of information received in confidence;
(viii) the maintenance of the authority and impartiality of the judiciary;
(ix) the technical constraints inherent in the means of communication;

(b) regulate, monitor and keep under review all practices, operations and activities relating to any matter regulated by or under this Act;
(c) grant any licence, permit or other authorisation, for the carrying out of any operation or activity relating to any matter regulated by or under this Act;
(d) regulate and secure interconnectivity for the production, transmission and distribution of the services, products, operations or activities relating to any matter regulated by or under this Act;
(e) ensure fair competition in all such services, products, operations and activities;
(f) establish minimum quality and security standards for any of the said services, products, operations and activities and to regulate such measures as may be necessary to ensure public and private safety;
(g) carry out studies, research or investigation relating to any matter regulated by or under this Act;
(h) provide information and issue guidelines to the public and to commercial entities relating to any matter regulated by or under this Act;
(i) regulate the price structure for any activity regulated by or under this Act and where appropriate to establish the mechanisms whereby the price to be charged for the services, products, operations or activities is determined;
(j) establish measures for the protection of the environment in the provision of the services, products, operations or activities relating to any matter regulated by or under this Act;
(k) advise the Minister for Communication on the formulation of policy in relation to matters regulated by or under this Act, and in particular in relation to such international obligations;
(l) formulate and implement the policies and strategies with short-term and long-term objectives in relation to the matters connected with its functions under this or any other Act;
(m) encourage the provision of communications services in Malta and enable persons providing communications services in Malta to compete effectively in the provision of such services outside Malta;
(n) encourage users of communications services to establish places of business in Malta.

4. International relationships and agreements

Malta has closed the negotiations on eight chapters of the Acquis Communautaire in its bid to join the European Union. One these chapters is telecommunications. The Maltese Government has published the position papers adopted by Malta for the areas dealt with in the first round of membership talks with the European Union. Malta declared it would be able to adhere to the EU acquis communautaire (body of laws) as of January 1, 2003. No transitional period or derogation was requested.

The main requirements of the telecommunications acquis are the separation of regulatory from operational functions, the availability of permission to enter markets, the cost orientation of tariffs, the right to interconnect networks on reasonable terms, the availability of numbering capacity, the availability of leased lines, the provision of universal service, less regulation for non-dominant companies and the protection of personal data.

Draft subsidiary legislation has been prepared to meet the requirements of the acquis on the regulatory framework, including transparency obligations, interconnection, universal service obligations, data protection, tariff rebalancing, numbering and number portability and carrier pre-selection.

A draft bill to amend the Telecommunications (Regulation) Act (Cap. 399) is being prepared to bring the Act in line with the acquis. This bill is expected to be approved by parliament by the fourth quarter of 2000.

As a full member of European Telecommunications Standard Institute (ETSI), Malta has adopted ETSI standards with regard to ONP, mobile voice telephony and satellite services.

The Telecommunications (Regulation) Act provides for interconnection, although this is not completely in line with the acquis. The main point of divergence is related to the costing method. The draft subsidiary legislation provides for full implementation, including aspects related to interconnection charges, the obligation to negotiate interconnection agreements, the nature of interconnection contracts, the accounting system, forecasts and routing. Compliance with the acquis will take place by the third quarter of 2001.

The regulator has taken the necessary action to reserve the appropriate frequency bands for the UMTS service, in accordance with the acquis.

The present legislation caters for universal service obligations (USO) and establishes a Universal Service Fund. The draft subsidiary legislation will introduce more flexibility, thereby granting the regulator more freedom to decide whether a funding mechanism is justified or not.

Tariff rebalancing as required by the acquis will be implemented by the second quarter of 2002. The draft subsidiary legislation will introduce cost-oriented tariffs.

The common European emergency number service (112) will be in place by the fourth quarter of 2001.

The European Radio Message System (ERMES) concerns terminal equipment intended to be connected to the pan-European land-based public radiopaging system. Malta's existing system is based on POCSAG. The frequency bands outlined in the Commission Decision 98/522/EC have been reserved.

A revised numbering plan is currently being drawn up. Compliance with the acquis in the other issues relating to numbering will be achieved by the third quarter of 2001.

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

In its Budget for the year 2000, the Government had announced its intention to further privatise Maltacom, Malta’s monopoly packet-switched telephone network company. The Government, who owns 60% of the company’s shareholding, has confirmed his intention and in the light of the liberalisation of the sector and the fact that Maltacom will lose its monopoly 7 years ahead of time, the Government is making the necessary amendments in the Maltese legislation and the will compensate the company to the tune of several million Maltese Liri. The figure has yet to be confirmed.