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November 2000

 ESIS II Regulatory Developments
Central and Eastern European Countries
Synthesis of Update Memos

I. Introduction

The rapid growth of the ‘information society’ (IS) has become a major challenge for the economic and social development of Central and Eastern European countries (CEECs). For several years, public and private players have become increasing interested in enabling the development of infrastructure networks, technologies and information society applications, in order to facilitate these countries’ integration with the global economy and society.

Since 1989, a significant part of the CEECs efforts have been concentrated on implementing major social and economic reforms. New information technologies such as multimedia and the Internet, are seen as key components of growth.

However, the level of economic development and the level of development of the information society (measured by primay indicators as the rate of penetration of basic telephony services, the level of deployment and digitalisation of public networks, or the number of computers per 100 inhabitants in a country) remain low across the region in comparison with the EU’s level.

Furthermore, national reports show that significant differences exist between the CEECs : it is clear that the very concept of the information society is extremely difficult to comprehend, particularly for countries such as Albania, Bosnia-Herzegovina, Romania, or the Republic of Macedonia which still have very low levels of technology penetration.

These disparities explain differences regarding countries’ priorities for reform and the Information society’s policies.

The national reports show some very clear differences in Information Society strategies between those countries which will join the EU as part of the "first wave" (Hungary, Poland, Czech Republic, Estonia, Slovenia), and those in the second wave (Bulgaria, Latvia, Lithuania, Romania, Slovakia) or Albania, Bosnia-Herzegovina and Republic of Macedonia.

The countries in the "first wave" are currently focussing their efforts on including the "Aquis communataire" into their national legislation. Some of them have already made significant progress in this respect: adoption of new laws on electronic signatures (Estonia- draft laws in Czech Republic and Hungaria), the protection of personal data (Czech Republic), telecommunications, etc.

Some countries in the second wave have also made great progress (enactment of the electronic signature act in Lithuania in the last three months, creation of a governmental work group dedicated to e-commerce in Latvia, etc). While in some countries, it appears that changes are being enacted more slowly.

There are, nevertheless, some significant developments taking place (i.e. in the Republic of Macedonia with an important project for the deployment of a national IP based telecommunications network, in Bosnia-Herzegovina with the adoption of a new IS plan, etc.). (see more details infra).

It is clear that the implementation of wide-scale public policies will be essential to help speed up the spread of new developments related to the Information Society.

The purpose of this document is to summarise regulatory developments related to the Information Society which have taken place between July and September 2000.

This document is based on the contributions of the national contractors to the ESIS II project. For more information, please see national reports.

II - Summary of new developments

1. Executive summary

A number of new developments relative to general policies for the Information Society have taken place in Estonia, Latvia, Czech Republic, Poland and Hungary.

These developments involve:

In Estonia, Latvia and Poland, Information Society priorities for 2001 have been or are to be adopted very soon. For example, the national IS programmes, which are "multi-year", have been updated over the last three months.

In several countries, new IS-focussed governmental entities and work groups have been created, reflecting the different national political priorities:

Regarding the applications sectors, the most significant progress over the last three months has involved the sectors of e-commerce and electronic signatures, education and telecommunications:

The E-commerce field is seen as a priority by many countries that do not want to "miss the boat" for the sector boom. The main events quoted by the national reports for the last three months are the current enactment of electronic signature acts and the creation of work groups dealing with all the aspects of e-commerce (technological, economic, legal – encryption, information security, consumer protection-, etc). For example,

Education and Research are also a priority because they have a crucial impact on the development of the Information Society and economic growth.

The main policy focuses in this area are the provision of good quality computers and other equipment to schools, universities and research centres, and policies to aid in the training of highly qualified personnel. The reports show that there is a considerable lack of specialised labour in IT sectors, which could slowdown development in many countries.

The effective implementation of these projects is often hindered by budgetary problems. For this reason, and also for practical reasons, one notices

In Lithuania, the government has continued its programme of funding computer equipment for universities and for the modernisation of equipment used by State research institutes. Another major project is the connection of the Lithuanian "Academic and Research Computer Network" Litnet to the European TEN network. In Poland, the IS plan for 2001 gives priority to the provision of schools with PCs. Another major project in Poland is the Pioneer project: the deployment of an optical fibre network dedicated to the scientific community. The Pioneer project will be operational from 2001 to 2005 and will cost about 180 million Euros.

There have been a great many developments in the fields of Telecommunications and the Internet because of the continuing liberalisation of the sector. Among these developments:

The other major events over the last three months have been the enactment of a new Act on personal data in the Czech Republic, privatisation projects for energy companies in Lithuania and for Railways in Estonia.

Below, we summarise the new developments which have taken place during the past three months in each country:

Further details and analysis can be found in the national reports, the ESIS II database and the master summary.

2. Summary description for each country

2.1 Umbrella policies and national IS strategy

In the Czech Republic, the most important IS event is a significant advance in the IS strategy marked by the desire of the government to form a partnership with the private sector to define and implement the national IS strategy. At the end of August, Mr Karel Brezina, the minister responsible for IS, issued a proposal to that effect: "PPP" (Public Private Partnership). Detailed proposals should be issued shortly.

In Estonia, the principles of the policy have been formalised by the "Estonian Information Policy Action Plan", drawn up by the governmental agencies and revised each year. The latest version of the plan, which was adopted in June 1999, will shortly be revised to include new priorities for 2001 (these priorities are, in particular, development aids for businesses, creation of a legal framework for electronic signatures, various educational measures).

Two main elements have happened in Latvia : firstly, the government declared its readiness to open negotiations with European Union on 20 (out of 31) accession topics. Secondly, the publication of the national IS priorities for 2001 in the national programme "Informatics" program, yearly up dated. The new priorities are going in particular to Education with the objectives of training more IT specialists.

In Lithuania, the government has announced the national priorities for 2001, they include in particular the development of Information Society and the development of E-Commerce. Dedicated measures have been taken (cf infra E-commerce).

In Poland, the parliament has adopted a resolution that outlines the IS prioritary axes for 2001 : universal access to Internet, computer related training in schools, computarisation of administrations.

2.2 Government and the public sector

Following the eEurope initiative launched by the European Commission, the Lithuanian government announced the e-government project. The working group is headed by Mr Jonas Milerius, head of Seimas Information Technologies Department.

2.3 Telecommunications and the Internet

In Albania, the major event has been the adoption of the new law on telecommunications by the parliament in June 2000. Another important development is the ratification by the Parliament of the privatisation of the mobile operator, AMC, the new private owner of 85% shares of AMC being the Greek-Norwegian consortium Cosmote Telenor. Concerning the ISP sector : since last year, 12 ISPs were set up. Internet Cafés, Internet Centres are also being created to increase access to Information. Telecommunication Regulatory entity is implementing a policy that allows Internet cafés to exercise their activity for free (not paying any taxes). ISPs that are already operating in Albania provide both limited and unlimited service 24 hours a day. Because of the short supply of the ISPs, costs are relatively high. Nevertheless, with the increasing competition in the ISP business and lower rates, more private subjects and NGOs will be attracted to using private ISPs. Up to now there are 4600 Internet users in Albania. The number of Internet users is expected to increase because of the access to ISDN lines. The effect of the ISDN lines will be obvious within the next months.

In Bulgaria, the negotiations for selling 51% stakes of BTC to the Greek-Dutch consortium OTE/KPN finished without success. One can notice that the State Telecommunications Commission is preparing a call for tender for the second GSM operator.

In the Czech Republic, two main events that reflect the dynamism of the sector have occurred: firstly, the new telecommunications law was adopted in July, preparing the full liberalisation of the sector beginning 1 January 2001. Several alternative operators are already known to be future applicants for a telephony licence (Aliatel, Contactel, GTS, etc.). Secondly, three national fixed wireless network licenses were issued in September, in line with similar projects in most EU countries. Current fixed and mobile operators were excluded from the tender. The three preferred bidders were Broadnet Czech, GiTy Star One and Nextra Wireless, some of which (Broadnet) were already operators in other EU countries. The government is currently preparing the conditions for UMTS licence grants, which will take place in 2002.

In Estonia, the full liberalisation of the sector will take place on January 1st 2001, in competition with the incumbent, the 2 main operators at the beginning will be Levicom Broadband and Uninet Andmeside. Another main event is the running privatisation process of the Estonian Broadcasting Transmission Centre, teracom AB and the French company TDF are the main important bidders. This privatisation is scheduled in the framework of the future development of the digital television.

In Macedonia, the 2 main developments are the large running project of Makedonski Telekomunikacii consisting in the deployment of a national IP backbone network and the fact that potential investors in the operator are finishing their evaluation of the operation. The government is to sell 51% of the incumbent operator.

In Poland, the new developments have been focused on the acceleration of the harmonisation of the national legislation with European directives do to the very closed full liberalisation of the market (January 2001 the 1st) : the new telecommunications law, fully harmonised with the aquis communautaire has been enacted on July 2000 and will be effective starting from 2001. The strategic investor in the incumbent Telekomunikacja Polska S.A., France Telecom (FT), and Kulczyk Holdings consortium signed an agreement on 25 July of 2000 after completing negotiations to buy 35% of TPSA’s shares from the owner, the Ministry of Treasury. Concerning UMTS licences, Polkomtel, Polska Telefonia Cyfrowa PTC, Netia and Centertel/TP S.A will take part in the tender for five UMTS licences, which could be finalised the end of year 2000.

2.4 E-commerce

In Bulgaria, the Council of Ministers approved the National Strategy on Electronic Commerce. This one defines the meaning of "Electronic Commerce", the basic goals that should be achieved: preparation and adoption of the relevant standards and legal framework, rules and procedures; preparation of technological base; preparation of the relevant human resources.

In Czech Republic, the main events during the last three months have been the enactement of a new law on telecommunications in July 2000, preparing the full liberalisation from January 1st, 2001, and the issue on September of 3 nation-wild wireless local loop licences to Broadnet Czech, Gity/Star One and Nextra Wireless. In another part, 4 UMTS licenses should be issued in 2002. The Electronic Signature Act will enter into force in Estonia on December the 15th.

In Latvia, a working group in charge of elaborating the legislative and economic framework dealing with e-commerce has been appointed by the Prime Minister. The group is headed by the State secretary of Ministry of Economics.

In Poland, the draft law on electronic signature has been accepted by the government and will be soon sent to the parliament. The act could be effective by the second half of 2001.

In Lithuania, in July, the Lithuanian Seimas has adopted the law on digital signature. This is one of the elements necessary to develop e-commerce, the promotion of e-commerce beeing a priority for 2001 quoted by the government. A working group dealing with e-commerce issues has been created. It is headed by Mr. Edmundas Zvirblis, vice-minister of public administration reforms and local authorities.

2.5 Education and research

In Hungary, the Soros Foundation in cooperation with the Sulinet Klub Association will provide five hundred teachers with home computers and IT training.

One can notice that in Lithuania, amounts allocated by the government for the renovation of computers and equipments in universities and other State research institutes was equal to 2,5 M Euros for 2000. The Lithuanian Schools Computerisation Project initiated by the government is an important project.

One can remind in Poland the continuation of the Pioner project, consisting in the deployment of a national optical fiber network dedicated to the scientific community.

In Republic of Macedonia, UNDP development program financed the establishment of an information technology education centre in the city of Kriva Palanka, that opened on July 2000.

2.6 Privacy, data protection, consumer protection

In Bulgaria, the government is preparing a draft law on the Protection of Personal Information in conformity to the European directives.

In Czech Republic, a new act on protection of personal data was enacted on June 1st 2000. In the framework of this law, an independant Office for Personal Data Protection has been established. The act on digital signature gives the Office relevant competencies in the digital signature field.

2.7 International relationships and agreements

In June, during the meeting of Baltic Sea Countries’ Ministers of Foreign Affairs the Estonian Minister, Toomas Hendrik Ilves suggested the formation of a development plan regarding information technologies in the Baltic Sea region. A group composed of Estonian and Finnish experts should work on this plan.

2.8 The competitive market: privatisation, foreign investment, mergers, acquisitions, invitations to tender, etc

The Estonian Privatisation Agency has opened the privatisation of 66% shares of the Estonian Railway Company.

In Lithuania, the government approved in August the Lithuanian Power Company "Lietuvos Energija" project of future privatisation.


Please note that this report has been prepared under the sole responsibility of the ESIS II contractors.
It does not necessarily reflect the views of the Commission, nor does the Commission accept responsibility for the accuracy or completeness of information contained herein.
The ESIS Team of contractors welcomes any additional information or corrections.