April 2000

Romania Master Report

I- General background

After December 1989, the Romanian regulatory environment is specific to a state of transition. The legislation has beens amended and completed for the last ten years. Romanian legislation has passed since 1991, has liberalised significant segments of the telecommunication system, and free competition for the telecommunication market will be opened in 2003.

The status of deregulation is described as it was at the end of March 2000. The main sources were official publications (e.g. Official Journal of Romania), Romanian legislation related to telecommunications, Phare Regulatory Observatory (www.ispo.cec.be/peco/phare) and information collected through other public sources.

1. General telecom policy

Prior to the December Revolution (1989), the telecommunication and the postal services in Romania were state-owned and Ministry of Communication controlled and managed together.

In 1991, the Romanian government made a major decision concerning the development of the whole telecommunication sector, launched a 15-year (1991-2005) program (Telecommunications Development Programme - Master Plan) to expand and modernise the country's telecommunications system. This programme was adopted by the Government Decree No. 500 in July 1991.

Targets for the year 2005 included:

• increase the average penetration rate from 11 to 30% (7.2 million lines for a population of 23 million);
• create a high-speed national data transmission network;
• develop the microwave network and encourage radio link solutions;
• improve basic services provided to rural areas;
• encourage the development of value-added services.

The estimated value of the program was set at $8 billion.

Quantitative objectives for the year 2005 are defined in the Tele-Communications Development Programme, like raising the line penetration to 30 lines per 100 inhabitants, 8 new national digitally transit centres inter-connected by fiber-optic cable and digital radio-relays.

The mobile telecommunication market was opened in 1992 for analog communication (NMT-450 Mhz, one operator-Telefonica Romania), GSM digital (900 Mhz, two operators-Connex and Dialog) and DCS 1800 (two operators- Cosmorom and the second licence is subject to public tender).

Romtelecom, history operator (partially privatised), retains exclusive rights until December 31, 2002 to provide local, long distance and international voice telephony services and networks.

2. Institutional structures in charges of the regulatory issues

According to Telecommunication Law (L74/1996), the role of state authority for developing policies and regulations in the communication sector was assigned to the Ministry of Communications (reorganised in 1997 by Decree No.129). In December 1998, this role was assigned to the newly created National Agency for Communication an Informatics (Agentia Nationalã pentru Comunicatii si Informaticã-ANCI).

2.1 Ministries in charge of the telecommunication issues

The National Agency for Communications and Informatics - NACI (since December 23, 1998, by Government Order nr.973; formerly organised as Ministry of Communications) is the legal authority for telecommunications, resulted from the fusion of the Ministry of Communications with the National Commission for Informatics (Comisia Nationalã pentru Informaticã).

The most important functions and responsibilities of the Agency are:

• Strategic function, which defines the strategies and tactic targets of Information Technology and Communications (IT&C) field in Romania, developing in the same time the schedules and implementations of these politics;
• Evaluation and control of all actions performed by Agency and others in the field of communication and informatics;
• Administration of resources, especially financial budgets;
• Defining the methodology and all functional and financial procedures of the IT&C in Romania;
• IT&C pursuit and control authority in Romania;
• Link with public administration, civil society, and the companies providing IT&C services;
• Representative in internal and international organisations.

The National Agency for Communications and Informatics encourages the creation of joint ventures between Romanian and foreign companies.

This method provides an easier way for a foreign company to enter the market, since the Romanian partner can bring into the venture a solid knowledge of the business environment and a good distribution network. Co-production arrangements are also encouraged whenever feasible.

2.2 National regulatory authorities

Telecommunications laws and regulations are enforced by the General Radiocommunications Inspectorate (a unit co-ordinated by the National Agency for Communications and Informatics) an entity which also monitors licenses and authorisations and controls / certifies compliance with technical standards.

The General Radiocommunications Inspectorate (organised by Government Order 129, April 15, 1997, and by orders of the President of the NACI) is mainly responsible for the following regulatory activities:

• allocation of radio spectrum
• monitoring of licenses and authorisations, technical agreements.

2.3 Frequencies allocation authorities

Licenses and type approvals are issued by the General Directorate for Regulations and Licenses in Communications of the National Agency for Communications and Informatics.

The regulations covered by this Directorate are:

• radio regulations;
• postal regulations;
• regulations in communication.

The foreign companies only through their local agents or locally registered companies can obtain licenses. Licenses are granted upon request, depending on the availability of frequencies.

2.4 Office for the protection of economic competition

The competition authority in Romania is the Council of Competition, an autonomous administrative authority, according to the Law of (Economic) Competition no. 21, April 10, 1996. The board of the Council is composed of ten members (one president, three vice-presidents, and six counsellors) with a mandate of 5 years and with the possibility to be re-assigned only twice.

The attributes of the Council regard mainly the application of the Law of (Economic) Competition, the violation of anti-trust decisions, the constitution of economic monopolies, advise the decisions of the Government on the anti-trust policies, represent Romania in relation with corresponding international institutions and organisations.

The same Law of (Economic) Competition provides for the existence of the Office of Competition, a Government co-ordinated authority. The Office has a Bucharest (assimilated with a county) and county inspectorates.

According to the Law of (Economic) Competition, the Council and the Office are co-operating on all the competition aspects of the law.

2.5 Consultative councils

The Telecommunications Consultative Council (created according to the provisions of Telecommunications Law No. 74, July 12, 1996 (Chapter IV, Art. 50) by the Ministry of Communications Order no. 134/1997) consists of representatives from users, telecommunication equipment producers, telecommunication license holders, authorised network communication operators.

The Council will establish (on its own initiative or at the request of the regulation authority):

• the development and regulation telecommunication policies;
• license content;
• resolution of complaints of users and operators (Law 74/1996, Art.50 – 2c).

2.6 Public telecommunication operators

2.6.1 The main public operator RomTelecom has a status defined by the Government Decision no. 448, June 27, 1991.

A free 5-year valid license for, for the operation of fixed services, was issued on September 5, 1997, to RomTelecom. This licence grants exclusive right to RomTelecom until December 31, 2002, to provide fixed telephony services and allows the company to offer value-added services.

Because privatisation occurred earlier, NACI issued a new licence.

The status of RomTelecom was changed by the Government Order 673, October 25, 1997, to that of an autonomous joint stock company with 19,580,029 shares of 100,000 ROL each.

The property rights were exercised by the state through the Ministry of Communications, until the company was privatised.

Greece's OTE Telecom paid 675 million USD December 1998 for the 35% stake of Romania's telephone operator RomTelecom.

According to OTE' s head of foreign investments Panagiotis Nikakis, the money should have been paid on December 30, when representatives of the Greek Company were attending the first meeting of the new RomTelecom board.

Half the amount will go to Romania's state budget and the rest will be used to upgrade RomTelecom's infrastructure.

Mr. Nikakis underlined that OTE had signed a management contract for RomTelecom with US company GTE, which should buy part of OTE's RomTelecom stake over the next five years.

For the moment, there are no further details regarding the full privatisation of the historic operator.

RomTelecom operator (fully privatized), being in a monopolist position, increased the tariffs on October 1^st with almost 8%.

As a result of a wide criticism in media, the Romanian Senate established, by the Decision no. 21, October 11, 1999, a commission for investigation of the privatization of RomTelecom and the economic and national safety consequences.

This led to a new position of the company, announced at mid-December. Mr. Vassilios Tsakoniatis, general director of RomTelecom, sustains that there will be no new increase at the beginning of 2000. This position will be justified by the necessity to increase the utilisation level of the network. If the measures will prove successful, the next increases will be lower than expected.

On the same occasion, new measures, such as a cut of 50% for the connection taxes and providing the first 200m of line for free (in the case of new connections) were announced.

All these measures are part of a plan to increase the phone traffic.

The main priority of the company is to increase the degree of digitalization of the lines. During 1999, 350,000 digital lines were installed and 150,000 analog lines were converted to digital. The total amount of investments is 545 millions USD. Until 2003, the Company plans to invest 2.7 billion USD, leading to a yearly rate of 500 millions USD.

2.6.2 Mobile service providers

Two consortia were awarded a 10-year GSM licence in November/December, 1996:

Mobifon and MobilRom

2.6.2.1 Mobifon's shareholders

Principal place of business:

• Mobifon S.A./Connex GSM
  City Business Center
  3, Nerva Traian St., Complex
  M101, Sector 3
  Bucharest 7428, Romania
  Tel: (401) 3021000
  Fax: (401) 3021001

Short description of the shareholders:

• Telesystem International Wireless (TIW) Corporation NV

Telesystem International Wireless Inc. is a Canadian public company, being one of about twenty affiliated companies belonging to the Telesystem "family" of companies.

TIW was created by this corporate family with the mandate to build and operate wireless ventures in expanding emerging markets. TIW currently owns and operates wireless telecommunications networks in Asia, Latin America and Eastern Europe as well as several countries in Western Europe.

• ROMGSM Holdings Limited

ROMGSM Holdings Limited represents a group of financial investors led by Chase Capital Partners, based in London, and five other European investment funds . Chase Capital Partners has strategic investments throughout Central and Eastern Europe.

• AirTouch Europe BV

AirTouch Communications is one of the largest wireless company in the world, with global ventures serving over 31 million total customers (15.1 million based on the company’s ownership interests). AirTouch offers a full range of wireless services- cellular, paging, personal communications services (PCS) and in the future, global satellite communications.

Including the Media One Group transaction in April 1998, the company has 7.3 million proportionate cellular customers world-wide.

• Posta Romana R. A.

Posta Romana is an autonomous Romanian concern organized by the Ministry of Communications, whose main activity is the administration and development of public mail services.

• Societatea de Instalatii de Semnalizari si Automatizari Feroviare S.A (ISAF)

ISAF is a railway signaling and automation company. Its main activity is to perform construction-mounting works inland and abroad for any type of installation, including automation, signaling tele- and radio communications, electrical traction for railway and urban transport.

• ANA Electronic S.R.L and ANA IMEP S.A

The two companies are part of the ANA Group, one of the most powerful private capital companies in Romania. ANA Electronic manages a distribution system of a broad range of products from a single supplier, its own dealer network strictly controls product circulation and price and a post-sales service.

2.6.2.2 MobilRom's shareholders

Principal place of business:

• MOBIL ROM
  Calea Dorobantilor 135-145,
  Sector 1, Bucuresti, ROMÂNIA
  Telefon: (40-1) 2033000
  Fax: (40-1) 2033599

Short profile:

In response to the Romanian government's Request for Proposal (RFP) in June 1996 for two GSM licences, France Telecom Mobiles International (FTMI) formed the Mobil Rom consortium - in which it holds a 51-percent stake. The Mobil Rom consortium includes Romanian partners, Media Pro and Computer Land as well as investors, Tomen Telecom Romania and Alcatel Network Systems Romania.

France Telecom created France Telecom Mobiles International (FTMI) in 1991 to develop its international mobile and wireless communications activities.FTMI pursues three core missions:

• Identify opportunities in markets with promising growth potential
• Win licences awarded within the scope of international bids and acquire equity interests in local cellular service companies
• Manage and support international subsidiaries created to build and operate high-performance cellular networks matched to market demand.

In December 1998 RomTelecom acquired the licence to provide DCS-1800 mobile telephony services using 1800 Mhz frequency band and CosmoROM was established as a mobile telephony, 100 per cent owned by RomTelecom. The initial phase of network installation will cover the cities of Bucharest, Brasov and Constanta. CosmoRom has delayed its promised December launch for the first quarter of 2000 year. "The reasons of this postponement are confidential," said marketing manager Marcela Tasci.

Principal place of business:

• CosmoROM
  B-dul Libertatii, 14-16,
  Sector 5, Bucuresti, ROMÂNIA
  Telefon: (40-1) 4003034
  Fax: (40-1) 4105581

2.6.3 Cable operators

Having the advantage of a relatively simple legislative background, which has appeared at the right time, without much bureaucracy, this industry has known an exceptional evolution.

Today there are on the market over 500 companies involved and over 1,250 networks out of which 4 have over 50,000 subscribers (from one head-end).

The cable operators are represented by the Romanian Cable Communication Professionals Association (APRCC)

3. International relationships and agreements

The Europe Agreement, that came into force on February 1, 1995, was signed by Romania on February 1, 1993. According to the Agreement, Romania has had to abide by the principles of the European Union (EU) Treaty. With regard to telecommunications, the agreement promotes the alignment of current standards and practices in telecommunications with those valid in the EU.

Romania has been a candidate for EU membership since June 22, 1995.

Romania joined the World Trade Organisation's (WTO) Basic Telecommunications Services Agreement in February 1997. As a result of this action, two main measures must be taken at the legislative level:

• competitive regulatory principles were set by January 1, 1998;
• the internal market will be opened to international competition starting with January 1, 2003.

3.1 Regional co-operation

Romania is an active partner in several international telecomunications networks both inside and outside Europe such as:

• KAFOS: in services since 1997, this submarine cable system links Romania (Mangalia) with Bulgaria (Varna) and Turkey (istanbul). KAFOS offers connection opportunities to other regional networks: TEL, TAE, ITUR, etc. RomTelecom owns 17.9 per cent of this partnership.
• BALTICAi s a hight reliability alternative extending towards the Nordic countries.
• TEL is an optical bridge, 14000 Km long, between Eastern and Western Europe.
• TAE is a 27000 long optical fiber network connecting 29 European and Asian countries from Frankfurt to Shanghai.

4. Regulatory framework

4.1 Historical overview

After 1990, the new Romanian political regime has realised the true size of the task of modernisation of the country's infrastructure, and has come to the inevitable conclusion that the task could not be accomplished without financial and managerial help. To do this, Romania's legislative program has had to be adapted accordingly, with the result that privatisation and market liberalisation must take place.

It was originally forecast the RomTelecom would be privatised by the year 2000. However, this was done during 1998, and RomTelecom was transformed into a joint stock company. This inevitably led towards the presence of a major foreign investor (OTE Telecommunications - Greece)

Romanian legislation has passed since 1991 and has liberalised significant segments of the country's telecommunications system, including terminal equipment (subject to type approval and fair competition on the market), data transmission, broadcasting (except for the operation of the national radio and TV networks), mobile communications (subject to frequency spectrum availability), and the use of VSAT's. The largest segment which has not been liberalised yet is that of wired telephony, which is still the monopoly of the public operator RomTelecom which would be privatised by the year 2003.

4.2 Present general legislation

The legal framework specific for the telecomm sector has two main references:

A) the Telecommunications Law issued in 1996 (L74/1996), which defines:

• the categories of telecomm services;
• the general obligations of operators and services suppliers;
• the telecommunications regulation authority and its role.

B) the law for the ratification of engagements related to WTO Basic Telecommunications Services Agreement, according to which, the market for telecomm services was liberalised in 1998, except voice telephony and lines leasing, where free competition will be opened in 2003.

According to the Telecommunications Law, the role of state authority for developing policies and regulations in the communication sector was assigned to the Ministry of Communications.

The function of making policies and regulations was further assigned to the new National Agency for Communications and Informatics, resulted from the fusion of the Ministry of Communications with the National Commission for Informatics.

The control and monitoring function, including authorisation and licensing is covered by the General Inspectorate for Communications.

Further developments have in view the establishment of an independent Telecommunications Regulation Authority, with the function of market supervision for the telecomm sector.

4.3 Keys legislative measures

4.4 Issues

4.4.1 Liberalisation

The local, long distance and international voice telephony services and networks are granted to RomTelecom, until December 31, 2002. Other services are fully liberalised. The state of liberalisation of the infrastructures, voice telephony, mobile communication, data transmissions, value added services, Internet services provision and equipment provision is shown in the table below:

4.4.2 Licensing

The 1997 Government Order 129/1997 delegated General Radiocommunications Inspectorate to monitors licences and authorisations and controls and certifies compliance with technical standards.

Responsible for licences of radio broadcasting and television stations is the National Council of Audio-Visual.

4.4.3 Universal Service

The Telecommunications Law (no.74, July 12, 1996) transposed the main EC Directives in force at that time and drafted a framework for the telecommunications liberalisation that proved to be functional. However, since the enactment of the Telecommunications Law, the accompanying secondary legislation did not show up.

As a consequence, a number of provisions - the Mobile Communications, Cable TV, Full Competition, Licensing – even if they are somehow regulated, still need to be transposed into Romanian law. It must be noted that the lack of strong regulation allowed for an explosive development of Cable TV and Mobile communications on a market with two or more competitors in each area.

4.4.4 Tariffs policies

As a rule, RomTelecom is setting the tariffs according to the local currency (ROL) / USD rate variation. However, the last increases tend to be higher than these values. The tariffs tend to be aligned to those in EC countries, but without the same quality and discounts available.

4.4.5 Quality of Service

As regards the public telephone operator (RomTelecom): There are no standards defined by an independent organisation, nor the technical means to determine such a quality.

The contract between the individual user and RomTelecom provides very few rights to the user.

The lack of an alternative (as opposed to the mobile communications operators) does not force RomTelecom to improve the quality of the services (in terms of price, variety of services and technically).

4.4.6 Interconnection

A good interconnection agreement has been developed between RomTelecom and the mobile operators. With a few modifications, this could form the basis for interconnection between fixed operators.

5. Freedom and protection

5.1 Copyright and intellectual property rights

The effective law regarding copyright is Law 8/1996 (published on 26 March 1996) on "Copyright and Neighbouring Rights". A special chapter, which refers to the legal protection of software, is included (chapter IX). The copyright law is a special law and will prevail over the general regulations of the civil law.

Other laws, covering only some aspects of the intellectual creation are:

• The Law regarding the patents (L64/1991);
• The Law concerning the taxes for patent requests (L120/1992);
• The Law regarding the protection of industrial patterns and layouts (L129/1992).

The rights of software producers are protected both by civil and criminal means.

The copyright law provides a satisfactory legal protection system (although the law might be improved). The real difficulties originate in the economic malfunctions which affect the country (E. g.: the Romanian Copyright Office being the national agency to supervise and control the law enforcement across the country, should perform a multitude of raids against software pirates; in fact, due to economic difficulties, just one person performs raids in the name of the agency).

The software producers and other companies offering services related to the information technologies are able to protect their rights by other legal means than copyright: trademark law, design law, competition law, etc.

In 1998 several statutes renewed the legal regime regarding intellectual property issues: Law 4/1998 for the Ratification of the Trademark Law Treaty, Law 5/1998 for the Ratification of the Protocol Relating to the Madrid Agreement Concerning the International Registration of Marks, Law 77/1998 for the Ratification of the Bern Convention (the amended form), Law 84/1998 concerning marks and geographical appellations of origin. Romania is now a part of all the major treaties related to intellectual property: from the Bern Convention to Geneva Trademark Law Treaty.

In spite of these laws and regulations, the software piracy is at a high level.

5.1.2 Other information society regulations

Other government’s and state agencies’ small decisions have also no real importance for the development of the Information Society. In 1999, only one government ordinance was issued with reference to this development. Emergency Ordinance 29/1999 relates to the Year 2000 problem and compels public agencies and private companies to solve the above-mentioned problem. The ordinance also enables companies to import merchandise with exemption of taxes if they are destined to be used for the solution of the Year 2000 problem. The practical importance of the ordinance is reduced because it lacks the technical (from a legal point of view) means to achieve the declared objective.

5.1.3 Software piracy

Romania ranks 15th in the world with regards to the software piracy rate, which has been assessed at 86% for 1998, reads a recent study on the losses caused by this form of theft mentioned by the nine o'clock Journal (No. 1933 - June 9, 1999).

Because of software piracy, software companies registered an overall loss volume of $ 21.5 million in Romania last year, pointed out the study drawn up by the International Planning and Research Corporation for the Business software Alliance and the Software & Information Industry Association.

According to the study published on the web page of the Business Software Alliance, the software piracy rate in Romania was 93% in 1994 and it caused losses of $ 19 million. In 1995, the piracy rate was the same but caused losses of $ 20.2 million. In 1996, the piracy rate decreased to 86% and the losses to $ 8.4 million. However, the piracy rate decreased to 84% in 1997 but caused losses of $ 15.3 million.

5.1.4 Cable TV piracy

For more than a year, the first Pay-TV broadcast programme has been added to the basic service. The system used offers only a relative protection. The piracy degree of this programme is estimated today at 100%.

Under the conditions when technology does not offer enough protection, the Romanian Cable Communication Professionals Association (APRCC) has been sensitising the competent authorities to obtain a legal protection of these services. Thus, together with HBO Romania, APRCC have organised two working sessions under the patronage of the Ministry of Justice, where representative state institutions have been invited. The discussions were based on the international project (now in a final stage) of a Judicial Convention of Protecting the Conditioned Access Services drawn up by the Group of Experts (MMCA) belonging to the Media Director Committee (CDMM), within the European Council.

5.2 Privacy, data protection, consumer protection

There are no important regulations specially issued to ensure the privacy and the protection of the computer-stored data or the consumer protection in this area. The conflicts, which may appear in connection with the above subjects, will be ruled by the appropriate general regulations of the Romanian law.

However, the responsible public bodies are aware of this situation. As a result, the National Commission for Informatics (included at the end of 1998 in the newly formed National Agency for Communications and Informatics) finalised in 1998 a draft law for Information technology (IT): the "Code for InformationTechnologies Development and Use".

The draft was submitted to the European Commission – DG XIII, and observations were received in March 1998.

The revised Code was approved by the Government and forwarded to Parliament in March 1998.

Recently, a last version of the Code for Information Technologies Development and Use law draft has been introduced to debate in the Chamber of Deputies, and, according to NACI's President Prof. Sergiu ILIESCU: "...this law will be approved".

The goal of the Code is the informatization of Romanian society towards an information-based society, in concordance with all provisions in the international and Community rules.

The Code also provides the establishment of the Romanian Authority for Informatics, witch will check on the lawful personal data processing also in public and private sectors

The Code establishes the legal framework within the information technologies which shall be developed and used, sets the principles and measures which guarantee the freedom of information and the protection of the individuals with regard to the processing of personal data.

The proposed Code has in view to establish the legal framework within which information technologies shall be developed and used, respectively:

a) principles and measures to guarantee:

• the freedom of information use
• data protection and security, including protection of personal data;
• sound use of electronic documents

b) duties and rights of natural and legal persons who carry out activities in the IT field

c) the corresponding institutional framework (as new components to be put in place, possibly by reorganising some of the existing ones), formed of:

• the State Secretariat for the Information Society, as a specialised body of the Government, representing the state authority for the information society development in Romania, with the mission to set out, supervise and evaluate IT policies and strategies and to co-ordinate their implementation;
• the Romanian Authority for Informatics, as an independent legal authority, formed out as a group of top level professionals of the civil society, with the mission to supervise the lawful character and the security of ICT activities in the public and private sectors, including market activities for ICT products and services and personal data processing.

The Code is currently under debate by the Parliament, where further improvements are in view, especially concerning activities in the field of communications technologies. In March 2000, the Code was approved by the Chamber of Deputies and forwarded to Senate of Romania for debates.

The National Strategy for the Implementation of the Information Society, the related Action Program, as well as the draft IT Code, can be found on Internet, at http://info.cni.ro.

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

Because Romania is just beginning to develop the infrastructure and network no regulations have been issued in connection with the encryption or electronic commerce. The economic mechanisms, requiring the use of encryption, electronic commerce or security systems have developed on a de facto basis.

5.4 Freedom of expression and information

The lack of special regulation related to the Information Society is not an impediment for the freedom of expression and information. The private companies are free to use and communicate information and the only limit is the protection of the public order (e.g.: racial discrimination, violence, etc). They are also free to develop techniques and means, which can improve the communication and information process.

As a conclusion, Romanian authorities have not taken large steps to improve the information network and infrastructure but at least they do not obstruct the private initiative

6. Information Society Policies

6.1 Umbrella Policies

By questioning the discrepancy between the trends in international politics in science and the local realities, the President of National Agency for Science, Technology and Innovation, Prof. Dr. Eng. Lanyi Szabolcs said that "it is certainly shocking", but obviously we must ask about the causes that have induced this phenomenon and the approached or approachable strategy to pass beyond this situation.

Among the NASTI's policies under implementation, there are a few trends specific to the field.

The main political instrument to direct scientific research still remains financing, which will be achieved in the future by the following variants:

1. Participation in the Fifth Framework Programme of the European Union, for researches aiming at the common objectives of the European Community. The acceptance of Romania as a full right member in this programme assures the access of every Romanian research entity to the common research fund (also comprising the contribution from Romania's national budget).

2. The National RDI plan under promotion, operational beginning with the third quarter/trimester 1999 aims at, on the one hand,

• partial co-financing of the Romanian researchers' projects accepted in the Fifth Framework Programme of EU;
• co-financing the national projects being intended to attract beneficiaries for attaining our own objectives.

3. The National RDI Programme "Orizont 2000" is a sequel of the institutional support programme started off 4 years ago, with a prioritary access for public system institutes (R-D National Institutes, Universities, Research Institutes and Centres of the Academy etc).

4. The grant programme by which fundamental research in the field is further on financed.

5. Other programmes of stimulating the promotion of the research results (by organising scientific events, subsidising the specialised publications etc).

While all these programmes may be characterised from the point of view of the "Information Society" as "active", the R&D field also being a user of produced effects, the promoting of "passive" programmes for stimulating the applications in the field is also expected.

In The National Strategy for Romania’s Economic Development (http://www.guv.ro) (presented at Brussels by the Prime Minister of Romania) the policies for research and development are presented in the 4^th chapter, section D:

The medium-term priority objectives aim at:

1.The development of skills and capabilities for scientific and technological know-how generation through

2.The increase in the quality and efficiency of research and development units;

3. The microeconomic potential for research development and innovation shall be developed through projects with specialised institutes and centres, and implementation of attractive co-financing schemes.

4. Starting 2001, the share of resources earmarked for scientific research and technological development in GDP will gradually increase so as to bring them in line with those existing in the EU member states.

The Information Society is not presented in a separate chapter, in The National Strategy for Romania’s Economic Development (http://www.guv.ro). The Information Society is reflected in various chapters:

• he modernisation of the tax collection system by using information and communication technologies (Chapter III- Macroeconomic Policies, 1.4. e);
• Development of a country-wide IT network by promoting actions aimed at developing information technology and communications, linking Romania to information flows, especially to those of the EU member states. (Chapter IV-Structural Adjustment And Economic Development Policies, B. Sectoral policies, 6);
• endowment of education units with information technology and communication means (Chapter V-Human Resources And Social Policies, 1, d);
• the development of an integrated system of monitoring the environment, an environment information system, a state-of-environment reporting system, in an attempt to implement environmental protection decisions and assess the achievement of the targets of environmental policy and informing the population on environment-related issues (Chapter VI-Environmental Protection, Territorial Planning and Regional Development, A. Environmental protection, 3.a);
• equal opportunities in terms of access to information, technological research and development, continuous education and training (Chapter VI-Environmental Protection, Territorial Planning and Regional Development, B.Territorial planning and regional development, 3.1.e).

According to the president of ANCI, Prof. Sergiu ILIESCU, the informatization is the IT utilisation in all sectors of the economic and social life. It is not an objective but a condition of any development plan.

Based on this truth, a National IT Strategy and a proper Action Plan for Development and utilisation of the IT in Romania were approved by the Government Decision no.58 / 1998. This Strategy provides short term objectives (up to year 2000) and middle-long term objectives (up to year 2005). This Action Plan was updated in March 2000. For short terms (up to year 2003) and middle terms (up to year 2008) the following objectives are (excerpt):

Short terms objectives

a. National IT infrastructure support for public administration informatization (municipalities level);

b. National products and services IT&C industry development, software industry especially;

c. The proper context creation, leading to the large-scale utilization of the IT&C in all economical and social branches. The harmonization of the Romanian legislation with the EC Directives in the field;

Middle terms objectives

a. The national IT infrastructure extension (the counties level);

b. The achieving of the right degree of informatization in Romanian society, permitting the integration in the European information society.

The above objectives must be carried out, as the Government Decision says, by:

1. Extending and modernization of the national infrastructure
2. Human resources preparing for information society
3. IT&C product and services development, especially software for export
4. IT&C utilization – support of the reform in public administration

Referring to the above mentioned actions, NACI undertakes the following priorities:

• Realization of the national informational infrastructure;
• Stimulate conditions for the development of the IT&C products and services, especially software;
• IT&C projects supporting reform in the public administration and public services improvement;
• Active participation to the European programs for information society and EC acquits implementation;
• IT&C high competence assistance;
• Education of the active population for the information society.

6.2 IS Application Areas

6.2.1 Government (national, regional and local)

• IT&C utilization – support of the reform in public administration
• Coordination of the informatization of the public institutions in view of the public services improvement and procedures simplification;
• Communication and data flow simplification;
• Eelectronic document interchange generalization;
• Access to the public information using the IT&C (information centers, unique desks, electronic kiosks etc);
• Compatibility and operatively of the information systems improvement, in accordance with the similar European and international systems (adopting new methods, standards or revising the existing norms);
• Coordination of the public procurement of the IT&C products and services;
• Monitoring of the funds supporting the informatization based on international assistance and cooperation;

6.2.2 Education

The National Computer Network for research (NCN) representing one of the instruments of attaining this objective, was started in 1993 as a PHARE programme and it has been supported further on by the Government (through the Ministry of Research and Technology). At present, more than 90 R-D organisations, about 1300 individual stations respectively, benefit of the NCN services. Our main objective was and still is to the scientific community data transfer services and connection to Internet at the lowest possible prices.

A 1999 study of NCN extension supported by interested organisations was drawn up, a study which will substantiate further on the development and investment politics.

II- On-going developments

As part of the ongoing restructuring process, the Romanian Government and Parliament are continuing to adopt new legislation that impacts the telecommunication sector

Accession Partnership

An Accession Partnership was adopted in March 1998.

In June, 1999 Romania presented a revised National Programme for the Adoption of the Acquis (NPAA), in which it outlines its strategy for accession including how to achieve the priorities contained in the Accession Partnerships.

In March 17, 2000, Romania presented at Brussels The National Medium-term Development Strategy of the Romanian Economy.

" The National Strategy for Romania’s Economic Development represents the outcome of a free, in-depth and opinion-generating debate among the participants in the Commission for Designing the National Strategy consisting of Government officials, experts appointed by ruling-coalition parties, opposition parties, trade unions, employers’ federations, non-government organisations and professional associations, other panels of experts and public figures, as well as of the panel for economic appraisal of the Romanian Academy.

This strategy focuses on the creation of a smoothly functioning market economy, in consistence with EU principles, norms, mechanisms, institutions and policies. The convergence of opinions regarding this issue relies on the appraisal of resources and opportunities, of the domestic and international environment. It responds to the double imperative that Romania complete the transition to a market economy and prepare its accession to the European Union."

"The major conclusion stemming from the Strategy is that by ensuring the necessary financial and legal support, through perseverance and real social solidarity, the prerequisites are created for Romania to meet the essential requirements for accession in 2007."

In March 2000, National Agency for Communications and Informatics propose National Strategy for Information Society and Communications, can be found on Internet (in romanian), at http://www.pcmagazine.ro/pcmag2-3/anci09032000.html or at http://www.esis2.imt.ro.

The strategy establishes the global objectives for short terms (2003), and middle terms (2008) and this Strategy updates the Action Plan approved by the Government Decision no.58 / 1998.

1. On going changes in institutional structures

According to the draft law for IT, the "Code for InformationTechnologies Development and Use" a better institutional framework (as new components to be put in place, possibly by reorganising some of the existing ones) must be formed:

• the State Secretariat for the Information Society, as a specialised body of the Government, representing the state authority for the information society development in Romania, with the mission to set out, supervise and evaluate IT policies and strategies and to co-ordinate their implementation;
• the Romanian Authority for Informatics, as an independent legal authority, formed out as a group of top level professionals of the civil society, with the mission to supervise the lawful character and the security of ICT activities in the public and private sectors, including market activities for ICT products and services and personal data processing.

The Telecommunication and Information Technology institutional reform is mainly focused on the elaboration of the draft Law regarding the setting-up of the independent National Regulatory Autority (NRA), by transforming of the specialised departments of National Agency for Communication and Informatics and General Inspectorate for Communication (GIC).

An other institutional objective is enhancing the institutional and administrative capacity of the National Council of Audio-visual (NAC) reorganising the NAC by: setting up a Directorate for control and Territorial Inspection, including a Monitoring Office; setting-up the Relations Directorate, including a Department for European Integration and a relations Department; setting-up of the Regulations Directorate.

2. On going changes in the regulatory framework

2.1 The public telecommunication network, including local networks for voice telephony, commercial provision of voice services to closed user groups are under monopoly of RomTelecom until December 31, 2002.

Expansion of digital wireless local loop (WLL) systems. This project aims at increasing telephone density in rural areas and in busy urban environments. Of the approximately 500,000 lines/year to be installed by Romtelecom, about one third are expected to use WLLsystems. Pilot projects by private companies are encouraged in order to help select the most adequate technologies.

2.2 New laws/measures under preparation

"The National Strategy for Informatisation and Fast Implementation of the Information Society in Romania", was approved by Government in 1998 (Government Decision 58/ 1998). The same decision included the related "Action Program Regarding the Development and Large Scale Use of Information Technologies in Romania", backing up the strategy with detailed measures and responsibilities for implementation.

In the same action line, the 1999 up-dated version of the "National Plan for Romania’s Accession to EU" will include a special component on informatisation.

The Plan includes the necessary actions that Romania has to undertake, in view of fulfilling the requirements for future EU membership. The initial version of the Plan was submitted by the Government to the European Commission in 1998.

The informatisation component is a programme for 1999-2001, called "Infrastructure Elements for the Information Society in Romania". It is being proposed for EU- PHARE co-financing and aims at accelerating the implementation of the strategy-related "Action Program".

The NACI has also finalised in a draft law for IT - the "Code for Information Technologies Development and Use".

The draft was submitted to the European Commission – DG XIII, and observations were received in March 1998.

The second revised Code (including the observations from European Commission-DG Information Society) was approved by the Government and forwarded to Parliament in 1999. In March 2000, the Code passed by the Deputies Chamber and waits to be debated in Senate of Romania.

In March 2000, the National Agency for Communications and Informatics proposes the National Strategy for Information Society and Communications, which can be found on Internet (in Romanian), at http://www.pcmagazine.ro/pcmag2-3/anci09032000.html or at http://www.esis2.imt.ro.

2.3 Allocation of resources (frequencies, numbering, access rights, licensing …)

According to Law 163/1997, October 22, 1997, two DCS 1800 licences will be awarded:

• one of the licences will be awarded to Rom Telecom directly, as permitted by Article 10 of the Telecommunications Law;
• the other licence will be the subject of a public tender.

The fee of US$25 million for each licence has been promised to the Ministry of Defence no later than the first quarter of 1998, in return for releasing the 1800 MHz band 18 months later.

3. Media and telecommunication markets: privatisations, foreign investments, mergers and acquisitions, etc…

The total amount of OTE investments is 545 millions USD. Until 2003, RomTelecom plans to invest 2.7 billion USD, leading to a yearly rate of 500 millions USD.

Among the projects for 2000 there are the extension of the services provided and the launch of the Cosmorom DCS 1800 mobile phone system. The network will be operational at the end of February and will benefit by investments of 200 miilion USD. Until 2002 the service will have national coverage. CosmoRom has not confirmed yet which handsets it will use. Intrarom SA, the local subsidiary of the Greek company Intracom, claimed to have invested at least 9 million USD in this project.

A major telecom deal was set with Alcatel, Ericsson and Siemens. According to Vassilios Tsakoniatis, general director of RomTelecom, the agreement with the three firms could eventually reach more than 500 million USD. The participation of the three providers (Alcatel/Ericsson/Siemens) will be distributed 26%/43%/30%.

The privatisation of the National Radio-Telecommunications Company is envisaged, as well as setting up an agency for data protection.

The consultants to prepare the company for privatisation will be contracted only after the first quarter of 2000. This will make the sell-off of the radio-communications to take longer.

4. On-going changes on IS policies

See "6.1 Umbrella Policies"