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Bridging the Digital Divide: Internet Access in Central and Eastern Europe |
Country Details
While Albania received its first Internet connection in the early 1990s, the country's backward telecommunications infrastructure, financial problems, lack of policy coordination and, until recently, monopolistic regulatory regime severely hampered Internet development. [ 4 ]
On host count surveys, Albania ranks lowest in the region. The actual number of Internet users is unknown, but is certainly quite small. [ 5 ]
1. Infrastructure
1.1 Telecommunications Infrastructure
As of 1996, there were approximately 63,900 telephone lines in Albania. At 1.74 lines per 100 people, this teledensity level was the lowest in Eastern Europe. Penetration ranged from 2.75% in urban areas to 0.22% in rural areas. [ 6 ] The nation's already limited telecommunications system was further set back in 1990-92, when, during a period of political turmoil, telephone connections to approximately 1,000 villages were severed. [ 7 ]
Meanwhile, there has been a steep increase in demand for telecommunications service, to the point where there was a long waiting list of 75,000 applications for basic telephone connection in 1996. A digital backbone has been completed, and digital switches are being deployed, [ 8 ] but local and international facilities remain seriously outmoded.
The dominant wireline operator, Albanian Telecom, is a 100% state-owned joint-stock company, created in 1992. While legally subject to competition, it has maintained a de facto monopoly in basic telephony.
The state-owned monopoly mobile operator, Albanian Mobile Communications (AMC), covers 25% of the country's territory, mostly the main cities, where 48% of the population lives. AMC's GSM system has a capacity of only 8,000 numbers, although the company has announced plans to expand its reach and capacity.
1.2 The Internet
In the early 1990s, Albania gained access to European academic networks, bringing email connectivity to a number of institutions.
At the same time, a number of projects were started on Internet access, and Internet centers were established in a few scientific institutions and non-governmental organizations. [ 9 ] A large percentage of Internet users were associated with the Albanian Academy of Sciences, mainly with the Albanian Institute of Informatics and Applied Mathematics (INIMA). [ 10 ]
At the end of 1995, as a result of cooperation between the UNDP and non-governmental organizations, including the Soros Foundation, an Internet center was established at the United Nations Development Programme (UNDP) office in Tirana. The center provided email service for NGOs as well as a limited connection to the Web and other services. [ 11 ]
In June 1997, the Soros Foundation founded the Open Internet Center (OIC) and offered connections to academic and scientific institutions, NGOs and some important state institutions. Additionally, a backbone was established for the Albanian academic network, ARDIANET, which connects UNDP with OIC, INIMA and the Electronics Department at the Polytechnic University of Tirana. [ 12 ]
As of 1998, the country had two ISPs: the Soros Foundation and Albanian Telecom. The latter operated at 622 Mbps on a fiber backbone linking four cities. There were three foreign links: 622 Mbps to Italy (under construction); 64k wireless to Italy; and satellite connectivity to the US. [ 13 ]
2. Government Policy
2.1 Telecommunications Law
The development of the Internet in Albania was hampered by the telecommunications law adopted at the end of 1995. Contrary to the liberalization tendencies prevailing in Europe and the rest of the world, the new law provided for the monopolization of commercial telecommunication services in Albania. As a result, during 1996, the first efforts to establish commercial Internet services failed. [ 14 ]
In December 1997, under the sponsorship of the project "@net," the first workshop on the Internet in Albania was organized with the participation of some 60 participants from different domestic institutions. After further lobbying by the NGO and Internet communities, among others, the telecommunications law was amended in February 1998, allowing competition in data communications and other services. [ 15 ] In July 1998, the government announced that it would allow competition for Internet services "as soon as possible." In October 1998, the 2K Company was granted a license by the government to provide Internet access to private and commercial users. [ 16 ]
2.2 Competition and Privatization
At the beginning of 1999, both the landline telephone company, Albanian Telecom (Telekomi Shqiptar), and the wireless monopoly, AMC, were commercial state-owned entities. Albanian Telecom had effective monopoly control over local, long distance and international services as well as leased lines for data transmission. However, the government had announced that it would license new operators to provide telephone service in rural areas in competition with Albanian Telecom.
In February 1999, the government announced plans to privatize both AMC, the wireless monopoly, and Albanian Telecom by the end of 1999. [ 17 ] In the meantime, Albanian Telecom moved closer to cost of service pricing, causing substantial increases in the cost of certain services. [ 18 ]
2.3 Promoting Infrastructure Development
In 1992, the Albanian Government developed a three-phase "Master Plan" for telecommunication development. The main goal of the plan was to expand the number of telephone lines and increase the teledensity rate. The modernization program also included the installation of local digital switching equipment and associated cabling, full digitization of the transmission backbone, installation of additional international exchanges, the extension of digital optical cable and digital radio links, and the establishment of additional international links to Italy and Greece as well as among the Balkan countries as part of the Trans-Balkan Line. The modernization program was concentrated on the major population centers, particularly the capital, Tirana. Infrastructure development has been financed by grants from the government of Switzerland, loans from the Italian government and the EBRD, revenue from Albanian Telecom, and allocations from the Albanian government budget. In January 1999, Albanian Telecom announced plans to double its line capacity. [ 19 ]
2.4 Other Initiatives
Several programs were undertaken to promote Albania's introduction and integration into the "information society." Albania was one of 11 participants in the Global Legal Information Network (GLIN). GLIN is an initiative led by the U.S. Library of Congress to build a worldwide law library on the Internet by scanning laws, treaties, and other legal documents into Portable Document Format (PDF) for uploading into a database. [ 20 ] Such a project is considered important to economic investment and infrastructure improvement, for the ready availability of legal and regulatory information makes a country more attractive for private investment.
An outdated infrastructure, especially outside Minsk, and, moreover, strict government regulations and a state monopoly on telecommunications are serious barriers to Internet growth in Belarus. [ 22 ] There are a number of commercial ISPs, but telecommunications service is monopolized by the state-owned Beltelecom.
1. Infrastructure
1.1 Telecommunications Infrastructure
As of 1996, Belarus had an estimated 2,128,000 main telephone lines, for a density rate of 21 per 100. Despite significant growth in recent years, telephone service remained inadequate to meet either business or residential demand. Exchanges are being digitized and new lines were being added at the rate of 180-200,000 per year, but over 573,000 applications for telephone service remained unsatisfied in 1996. [ 23 ] Wireless was being developed more slowly than elsewhere in the region, with fewer than 10,000 subscribers at the end of 1998. [ 24 ]
1.2 The Internet
Despite tight government controls, international Internet connectivity has progressed in Belarus, in large part as a result of a joint effort among the national telephone company, the UNDP and the OSI. In 1993, Belarus established a basic network among a number of government institutions and universities, through the provider EUNet/Relcom. By the end of 1994, Belarus got its first permanent Internet connection via a dedicated line from Minsk to Warsaw with the assistance of the Polish Academic and Research Network (NASK). [ 25 ] Since then, additional foreign links have been established by satellite and leased line. [ 26 ]
As of March 1999, however, Belarus had only approximately 1000 hosts, and by one estimate a mere 6000 users. [ 27 ] Considering the set-up charge, the monthly fee and charges for connection time, Internet access is very expensive even for those who can afford a computer. (The average monthly salary is approximately $60.) As a result, Internet use in Belarus is quite low compared to other East European countries.
As of 1998, several major ISPs existed in Belarus, [ 28 ] with different levels of service, prices and technical support:
2.1 Telecommunications Law
Strict government regulations and a state monopoly on all communication systems are hampering Belarus' progress towards Internet connectivity. ISPs must connect through Belpak, the Internet division of the state-owned enterprise Beltelecom. All ISPs in Belarus must obtain a license from the government. The license requires ISPs to allow unannounced "technical inspections" by the Ministry of Communications and annually give the Ministry of Communications a list of subscribers. Furthermore, the Ministry of Communications requires all modems to be certified by their lab at the user's cost, an unpredictable process that can take several days and cost approximately $20. [ 29 ]
2.2 Competition and Privatization
The Law on Communications went into force on January 1, 1995. Posts and telecommunications were not separated until 1996, leading to the establishment of Beltelecom as the 100% state-owned national telecommunications operator. In November 1998, the government announced its intent to privatize the monopoly, but it was not expected that the government would begin examining the details of privatization until mid-1999. Privatization may require amendments to the Communications Law.
Some competition has been introduced in data transmission, local trunking, and wireless. Beltelecom plays a significant role, however, in wireless, since it owns 50% of the analog carrier and is part of the consortium that was granted the GSM license in August 1998. And in terms of data, as noted above, all ISPs must connect through Beltelecom's Internet subsidiary.
2.3 Promoting Infrastructure Development
Belarus is experiencing a very difficult process of transformation, and its economy is weak. Not surprisingly, therefore, infrastructure development programs are limited. Networking activities are concentrated at universities, institutes of the Academy of Sciences, and government agencies. [ 30 ] Nonetheless, Beltelecom has been developing a national fiber-optic network. Expansion of the BELPAK data network was also planned in order to improve Internet access.
One of the largest and most important communications projects in Belarus has been the "Internet Project" supported by UNDP, the Open Society Institute and the government of Belarus. Under the project's first phase, an Internet backbone network was put in place in Minsk. A fiber optic network connects nodes including the Belarussian State University, Beltelecom headquarters, the Center of Information Security and the UNIBEL Network Operation Center. The backbone network is used by various Minsk NGOs. An Internet Training Center was established at Belarussian State University.
The second stage of the project was to create Internet backbone nodes in Belarussian regional towns and hook them up to the Minsk backbone. As a result of this stage, organizations from the Belarussian provinces, mainly university libraries and research institutes, gained Internet access.
The Institute of Engineering Cybernetics of the Belarussian Academy in 1994 initiated three projects to improve network nodes and LAN segments for upgrading the BASNET in Minsk. Partners included UNESCO, INTAS, the German Ministry of Research and Technology and the University of Mannheim.
GDP per capita: $600 [ 31 ]
Population: 3,365,727
Telephone lines: 326,000
Teledensity: 8.9
Internet Hosts: 615 [ 32 ]
The telecommunications and Internet situation in Bosnia-Herzegovina is dismal. An already substandard telephone system was further set back by the war that ravaged the country in 1992. Libraries and other public facilities were decimated. However, as the country faces the daunting task of reconstructing its infrastructure and economy, it has an opportunity to install advanced technology for government, educational, business, and residential users. Already, the Internet has become the best source of independent news and information.
1. Infrastructure
1.1 Telecommunications Infrastructure
As a strategic target during the war, the telecommunications infrastructure in Bosnia and Herzegovina was crushed. Transmission and switching equipment, buildings, towers, and overhead cables were destroyed. As of 1996, there were only 260,000 main local telephone lines and 400 international lines, many in poor condition. This compared to about 375,000 local lines and 4,000 international lines before the war. Most of the backbone transmission network, which was largely reliant on microwave facilities located on hilltops, was also completely destroyed, meaning that many towns and villages that still had functional local networks could not communicate with the rest of the country or internationally. Poor service was compounded by lack of replacement parts, an exodus of skilled technicians, the loss or destruction of equipment documentation, and frequent power interruptions. In some areas, call completion rates dropped to 1-2% during busy periods, as compared to 35-38% prior to the war. [ 33 ]
Compounding the problems of the war-ravaged infrastructure, the development of a modern telecommunications system is hindered by the fact that a single Post, Telephone and Telegraph administration (PTT) for Yugoslavia ceased to exist. Instead, individual PTTs for Serbia, Croatia, Bosnia and Herzegovina were created. Each PTT's area overlaps and is not always congruent with shifting political boundaries. Cooperation between even the two PTT's for Bosnia and Herzegovina was so abysmal that a separate unit was created to monitor the situation in the Security Council's Office of the High Representative. [ 34 ]
Nonetheless, and despite the ongoing inter-entity tensions, the infrastructure has been improving with the infusion of international aid.
1.2 The Internet
Although Internet access is available sporadically in Sarajevo, it is almost non-existent in the countryside. The overburdened system routinely disconnects users when too many attempt to obtain an Internet connection.
As of early 1999, Bosnia-Herzegovina had a handful of ISPs. BiHNet was owned by the state-owned PTT; it was present only in Sarajevo and accessible via dial-up and ISDN. Its foreign links included a 2Mbps satellite link to the US via UUNet. INNECO was a commercial ISP present in the Serb Republic of Bosnia-Herzegovina only, connecting only a few cities. It had a 128k foreign link to Taide. BIHARNET was a non-profit, academic network. It connected five cities via leased lines and maintained three foreign links including a 2 Mbps leased line to Slovenia, and satellite links to Austria and Holland. The Soros Foundation operated its own backbone network connecting 4 cities via leased lines at 64k and an outside link of 128k. EKIS was another commercial ISP. [ 35 ]
Illustrating the inadequacy of the telecommunications infrastructure, the major international organizations responsible for reconstruction, including the Independent Media Commission established by the High Representative to license and regulate the Bosnian media, did not rely on the Bosnian PTT for telecommunications access. Instead, they used their own satellite and dedicated high-speed links, a solution clearly not available to the vast majority of Bosnian businesses or individuals.
2. Government Policy
2.1 Telecommunications Law
The High Representative imposed a telecommunications law in September 1998, while as of late 1999 the government and parliament continued to consider a draft. Until local political forces can come together to enact a law, it remains to be seen whether the framework imposed by the High Representative will result in a rationalization of the telecommunication structure for the country; in other instances where the international community has imposed a regulatory scheme, enforcement has been problematic at best.
2.2 Competition, Privatization and Deregulation
The lack of telecommunications market competition is a major cause for the lack of Internet access in Bosnia. As restructuring moves forward, the Bosnian PTT will be privatized and perhaps will attract competitive bids. Currently, however, the economy, while rebounding, is not strong enough to support outside interest.
2.3 Promoting Infrastructure Growth
The European Bank for Reconstruction and Development (EBRD) has coordinated international efforts to restore the telecommunications infrastructure. Immediate priorities were:
While the EBRD program has been a solid step in the right direction, it was not designed to promote democratic access to the Internet. A public space for Internet access is lacking; even making available to the public a small number of connected PCs would be an improvement.
One example of the type of program that could serve as a model is Project Bosnia, sponsored by the Chicago-Kent and Villanova University law schools. They, along with other U.S. universities and volunteers, using servers donated by Sun Microsystems, undertook to build Internet connectivity for journalists and the government's courts and human rights offices, providing electronic access to documents whose paper versions had been destroyed. [ 37 ] NGOs, schools and libraries need the same kind of assistance. The strategic placement of PC's and Internet connections in schools, universities, and libraries would generate both familiarity with and interest in the medium.
The Chamber of Commerce of Sarajevo Canton and the Center for Business Development introduced the first Intranet in Bosnia-Herzegovina in September 1997. The first phase of the project was intended to enable the exchange of business information among the members of the Chamber and other interested parties to promote business activities within Bosnia and Herzegovina. [ 38 ]
The potential of the Internet even in such devastated circumstances was demonstrated in 1998 when Physics without Borders, supported by CERN, held an extraordinary international conference in Sarajevo on the use of the Internet in scientific research and development. [ 39 ]
GDP per capita: $4,630
Population: 8,240,426
Phone lines: 2,647,500
Teledensity: 32
Internet Hosts: 14,009 [ 40 ]
Bulgaria at this point is a study in contrasts. Telephone penetration is among the highest in the region, but the technology of the country's infrastructure remains outdated: party lines still abound and local exchange digitization is very low. In 1998, to lay the groundwork for market liberalization, Bulgaria adopted a new Telecommunications Act, and began planning to privatize its monopoly telephone company. There was concern that regulations under the new law requiring the licensing of ISPs would stifle the development of the Internet, but in November 1999, regulators announced that ISPs would not be subject to licensing. [ 41 ]
1. Infrastructure
1.1 Telecommunications Infrastructure
Like the rest of Central and Eastern Europe, Bulgaria's telecom infrastructure lags far behind Western Europe's. However, Bulgaria has among the highest telephone penetration rates in the region: in 1996, there were more than 2.6 million main lines in Bulgaria, about 32 per 100 population. [ 42 ] Yet the waiting period for new telephone connections was still lengthy. Moreover, the quality of phone service was still substandard and elements of the telecommunications infrastructure were antiquated. Obsolete switching technology remained in place in many areas. [ 43 ] Digitization is low: in the local networks, it was expected to reach just 13% by the end of October 1998 (up from 5.5% in 1997). [ 44 ] Many users still had party lines. [ 45 ]
The Bulgarian Telecommunications Company (BTC), the state-owned monopoly with exclusive rights to provide access to local, long distance and international conventional basic services over a fixed network until December 31, 2002, was being privatized. [ 46 ]
In Bulgaria, as throughout Central and Eastern Europe, cellular phones are increasingly being used as a substitute for land-line phones, given the backlogged demand for land-line phones and their unsatisfactory quality. As of the beginning of 1999, Bulgaria had two cellular mobile operators (one analog and one digital) and the government was offering a second GSM license as part of the sale of BTC. However, despite the demand, and rapid growth, cellular usage accounts for a small percentage of telephone usage. Combined, the two current providers have about 115,000 subscribers, for a penetration rate of 1.3%. [ 47 ]
A digital overlay network (DON) is largely completed, and BTC is participating in international telecommunication projects in the region, including projects involving fiber optic, digital microwave, and submarine cables, expanding the country's international connections. [ 48 ]
1.2 The Internet
More than 10 ISPs with international connectivity provide Internet access. [ 49 ] The largest providers, which cover most of the country, are as follows:
In mid-1999, BTC charged about $80 for ISPs to add a new telephone line. The average dial-up Internet access price ranged from $10 per month for night-time only access to approximately $15 per month for unlimited access. While $15 per month is not high compared with costs in the West, the average wage in Bulgaria is about $120 per month, so the cost of an Internet account is beyond the average citizen. Still, ISPs cannot come close to meeting demand, making it hard to obtain service. [ 50 ]
Since December 1998, Bulgarian Internet users have had access to Internet telephony, allowing users to make international telephone calls over the Internet. [ 51 ]
One of the biggest obstacles to a greater Internet penetration in Bulgaria has been the lack of a VSAT Internet provider. There was no legal groundwork for the licensing of VSAT operators, the only one being GOCIS. This situation should change, as the VSAT market was due to be opened to competition after November 1999. [ 52 ]
2. Government Policy
2.1 Telecommunications Law
Bulgaria's March 1998 Accession Partnership Agreement with the EU, like the other similar agreements in the CEE region, requires Bulgaria to open its telecommunications market to competition. In order to comply with these conditions, Bulgaria in July 1998 adopted a new Telecommunications Act, which was intended to establish a clear regulatory framework and facilitate privatization. The law created a State Telecommunications Commission (STC), appointed by the government, with authority to issue licenses and regulate service providers.
In December 1998, the Committee for Posts and Telecommunications (CPT) issued a decree announcing that ISPs would be licensed by the state and would be subject to other requirements which, it was feared, would put them under bureaucratic control. Government officials soon disavowed any intent to regulate the Internet, and, in June 1999, acting upon a petition from the Internet Society of Bulgaria, the Supreme Administrative Court blocked the portions of the decree that would have regulated Internet access providers. [ 53 ] Concerns about the government's intentions continued, however. Notably, in the summer of 1999, the government used its official website to solicit public comments on the question of Internet licensing and information policy. [ 54 ] Then, in November 1999, the chairman of the CPT announced that ISPs would be moved from the licensed category to the un-licensed category. [ 55 ]
In 1998, the Bulgarian National Assembly adopted a Radio and Television Act, which would have regulated radio and television broadcasters regardless of the means of transmission, including Internet broadcasting. The President vetoed the measure, and thereafter the Assembly passed a new version of the law that satisfied the President's objections. However, the law was challenged in the constitutional court.
In November 1998, the European Commission noted with tentative approval Bulgaria's progress in harmonizing its telecommunications law with EU law. In March 1999, the EU and Bulgaria commenced a more detailed review of Bulgaria's telecommunications law and practice.
2.2 Competition and Privatization
Bulgarian Telecommunications Company (BTC), the state-owned monopoly, received the first license issued under the 1998 Telecommunications Act. The license included authorization to construct, operate and maintain telecommunications networks over the next 20 years. These networks include the country's fixed telephone network, national and regional radio and TV networks, radio communications, data transmission networks, satellite networks and land stations, as well as the national and regional cable network. The license granted BTC a monopoly over fixed-line local, long-distance and international voice telephony services for four years, through 2002, at which point competition would be permitted. The rights under the license will carry over to BTC after privatization. [ 56 ]
While the basic fixed network services remain under monopoly, cellular and data communications are open to competition. Satellite services were liberalized in 1996, although BTC's monopoly on voice services extends to satellite as well. There is also competition in wireless services.
In 1994, tariffs for telephone services increased by 44 percent for residential subscribers and 34 percent for business subscribers. In 1996, rates were increased again by 40 percent, in accordance with EBRD and World Bank requirements. [ 57 ]
In 1998, the government solicited bids for a 51% interest in BTC. [ 58 ]
2.3 Promoting Infrastructure Development
In 1991, the government declared that telecommunications development was a priority and in 1992 BTC issued a modernization plan. [ 59 ] The first step was the installation of a digital overlay network (DON). Thereafter, BTC undertook the construction of a national digital telecommunication network with integrated switching/transmission and the further development of integrated services. The second phase of development includes expanding the capacity of the international network in order to improve international connectivity and attract transit traffic and further digitization of the Sofia municipal telephone network and other larger local networks, with a goal of 25% digitization by 2000 and 90% by 2010.
Other important objectives include the development of feasible options for improvement of the access network using different technologies such as optical fiber, PCMs on copper cables and wireless connections. Modernization also includes a gradual transition to ATM switching and transmission. In March 1999, the government announced a strategy to support the development of high-tech companies through both direct financial support, tax preferences and loan guarantees. Further EBRD funding for telecomm was approved in January 1999, the amount to depend on the pace of telecomm privatization. [ 60 ] The sale of BTC is expected to attract foreign capital essential to upgrading the infrastructure.
Bulgaria has outlined a plan for the development of the information society. [ 61 ]
2.4 Universal Access
Bulgaria's March 1998 Accession Partnership Agreement with the EU requires Bulgaria to provide every citizen with telephone service at an affordable price. The new Telecommunications Act incorporates the basic requirements of the EU for universal service, referred to as "generally offered service." [ 62 ] As defined in the law, "the generally offered service is a service with a definite quality of provision, which is accessed by each user irrespective of his geographic location and is offered at an accessible price. The generally offered service is the usual telephone service provided through the fixed telephone network" (Art. 3). The State Commission on Telecommunications, in its role as regulatory body, monitors the improvement of the generally offered service and the degree of market availability.
All holders of licenses for construction and operation of public telecommunication networks and/or for the provision of public telecommunication services have the obligation to provide services to all users under conditions of equivalence as well as to guarantee, by specially adopted measures, the access to the services of disabled persons and individuals with specific social needs. The law provides that the prices of the universally offered service are to be determined based on methods developed by the State Commission on Telecommunications and adopted by the Council of Ministers.
GDP per capita: $4,300
Population: 4,671,584
Phone lines: 1,389,000
Teledensity: 31
Internet hosts: 7,924 [ 63 ] -- 12,000 [ 64 ]
As the Croatian economy has picked up, the demand for telecommunications services has risen and modernization has progressed, even though the country's infrastructure was heavily damaged by war. Furthermore, communications was not separated from posts until January 1999, but in February 1999 the government announced plans to partly privatize Croatian Telecommunications (HT), which has a monopoly on fixed-line telephony and a dominant share of the mobile business.
1. Infrastructure
1.1 Telecommunications Infrastructure
A significant proportion of Croatia's telecommunications infrastructure was damaged or destroyed during the 1992 war. Over 200,000 telephone subscribers were disconnected, and it was estimated that the damage to the telecommunications infrastructure amounted to about $500 million. Nevertheless, HT has rebuilt a moderately strong telecommunications infrastructure. [ 65 ]
Telephone density in the former Yugoslavia was higher than in other comparable socialist countries, yet still low by Western standards. Relative economic liberalization that commenced in the late 1970s was accompanied by an 8.4% average annual rate of increase in telecommunications capacity. During the following decade, the number of main lines in Croatia more than doubled from 396,000 in 1981 to 823,000 in 1991, reflecting Croatia's position as the economically strongest of the federal republics. In 1990, Croatia had a telephone density of 17.3%, which, in spite of the war, grew to 18.5% in 1992 and 20.2% by the end of 1993. Thereafter, the trend actually increased, and teledensity was estimated to be exceeding 30 lines per 100 inhabitants. Approximately 61% of local switches were digital by 1996. During the period of 1993 to 1995, HT's predecessor undertook intensive construction as a participant in a number of international fiber optic projects, including the Managed European Transmission Network. [ 66 ]
HT operates an analog cellular network and one of two digital GSM networks. [ 67 ]
International connections remain expensive, [ 68 ] posing a barrier to Internet development.
1.2 The Internet
At the beginning of 1999, Croatia had four major commercial ISPs. Hinet was a commercial ISP owned by HT, linking major cities. It had a 12 Mbps link to the US, a 2 Mbps link to Italy, a 2 Mbps link to Slovenia and a 128 Kbps link to EBONE in Germany. IBM Network Service Croatia was a commercial ISP with a 512 Kbps to Germany and a 256 Kbps to Austria. BBM and Iskon were the other two commercial ISPs. [ 69 ] HT charges a very high rate to ISPs who, in turn, pass that cost to customers.
CARNet is a non-commercial, academic ISP owned and funded by the government, and present in 23 cities. As of 1998, it had links to EBONE in Austria and a 2 Mbs link to MCI via Hinet. CARNet was based on lines leased from the national telecomm operator. Dial-up lines (50 access points nation-wide) were supported. The CARNet nation-wide backbone connected all academic and research institutions. Actual technical tasks and services were performed by the University Computing Center (SRCE) of Zagreb University.
2. Government Policy
2.1 Telecommunications Law
In 1994, Croatia's parliament passed a new telecommunications law, which confirmed the monopoly of the state-owned HT. [ 70 ]
The government was developing a broader Internet policy and in 1998 a draft Internet law was presented to the parliament. [ 71 ]
2.2 Competition, Monopolization, Privatization and Deregulation
Croatia Telecomm (HT) is a state-owned enterprise with a monopoly on fixed-line telephony and a dominant share in mobile service. HT also leases private lines (under the approval of Ministry of Transport and Telecommunications) to commercial and public entities and provides access to public networks for private, internal networks. [ 72 ]
The July 1994 legislation envisaged liberalization of those telecommunications sectors deemed important for the general economic activity, but not vital in strategic terms. Such sectors include mobile telephony, satellite services for mobile telephony, broadband data and video services, operation of Intelsat and Eutelsat earth stations, public pay phone service, value-added services and information and business services. Other services open to competition are the leasing or renting of telecommunications equipment, the sale of telecommunications equipment, and the maintenance of telephone equipment. [ 73 ]
In February 1999, the Croatian government announced plans to sell up to 25% of HT, [ 74 ] although there are several legislative hurdles that may need to be addressed first regarding privatization.
2.3 Promoting Infrastructure Growth
Upon the cessation of armed hostilities in 1992, HT's predecessor commenced a major infrastructure reconstruction program which has been financed mostly from the organization's own resources and through the structuring of the financial arrangements with the vendors. [ 75 ]
GDP per capita: $11,100
Population: 10,286,470
Phone lines: 2,817,200
Teledensity: 27
Internet hosts: 87,761
In the past decade, the telecommunications infrastructure in the Czech Republic has improved, due to investment attracted by the partial privatization of the PSTN monopoly, SPT Telecom. Although SPT Telecom neglected the development of the Internet, nevertheless the Internet has grown as other providers have built their own backbones independent of SPT. [ 76 ] The Internet is being used increasingly in the Czech Republic and is now considered a vital source of information for many Czech NGOs and businesses. Most users are based in Prague and the other main cities; smaller NGOs outside the capital city often have little access to the Internet and e-mail. [ 77 ] Price, particularly the per-minute local connection fee, is a serious impediment to widespread access; Internet users organized in the Fall of 1998 to protest telephone price increases proposed by SPT, which has monopoly control over local access.
1. Infrastructure
1.1 Telecommunications Infrastructure
In 1989, the telecommunications infrastructure in Czechoslovakia was sorely below that of most Western countries. The government recognized the need to improve the infrastructure, and developed extensive plans to upgrade. Private investment stemming from the privatization of the former state telephone entity was an important source of development capital. However, government spending on new infrastructure declined in 1997 and 1998, partially due to the need to repair the damage caused by severe flooding in 1997, which affected approximately 65,000 lines (2% of the network). [ 78 ]
The number of main telephone subscriber lines (without branch lines) increased by nearly 100% from 1980 to 1996. [ 79 ] SPT Telecom installed a total of 373,000 new lines during 1996. [ 80 ] There were approximately 27 main telephone lines per 100 people in 1996, and 47% of households had their own telephone. [ 81 ] At the end of 1996, the backlog of applications for new service was 577,000 and the average waiting time for installation of new lines was 2 years. Although this represented a considerable improvement, the company was still far from achieving its target of bringing demand and supply into balance by 1998.
As of early 1998, approximately two-thirds of all telephone lines were analog and one-third were digital. [ 82 ] It was expected that the main network trunk and about 80% of all lines will be digital by 2000. [ 83 ] ISDN services have been introduced. [ 84 ]
Mobile communications service was opened to competition in 1996. There are two GSM providers, one majority-owned by SPT. [ 85 ] Use of mobile telephone service has been rising rapidly. It was expected that 1 million people will be using commercial mobile services by the year 2000. Mobile telephony costs are moderate; prices of cellular services decreased by 30% between October 1995 and October 1996. In 1998, the GSM operator RadioMobil began offering international calls using IP, via GlobalOne's Prague gateway, but it was ordered to cease the service as a violation of SPT's long-distance monopoly. [ 86 ]
International links are based on satellites and fiber optics, with digital international switches. SPT participates in a number of international projects including the Trans-European Line (TEL), an international fiber optic telecommunications system that provides high-speed optical fiber links between countries in Central and Eastern Europe. Nevertheless, international communications still lag behind the performance levels of Western Europe. [ 87 ]
1.2 The Internet
The Internet is relatively expensive -- according to an OECD report, the price for residential Internet connection in the Czech Republic using off-peak prices is the most expensive for all OECD countries, based on purchasing power parity. [ 88 ] Nonetheless, the Internet is being widely used in the Czech Republic. Estimates of the number of Czechs with regular Internet access range from 270,000-400,000. [ 89 ] The number is expected to rise between 34 and 41% per year through 2002. [ 90 ]
The first commercial ISPs came online in 1996. [ 91 ] Since then, the number of ISPs has increased rapidly. By 1999, over 40 ISPs offered access through dial-up, leased lines, direct links and VSATs. About 16 ISPs operate their own backbones, typically at 8Mbps. The number of subscribers per ISP varies, but many are quite small. Econnect is the major non-commercial ISP. In April 1998, the SPT Telecom began operating its own ISP, Internet On-Line. [ 92 ] Its foreign connectivity included a cable to Amsterdam and a satellite link to Teleglobe at speeds up to 10Mbps. In Prague, two local networks have also been implemented. PragoNet, owned by the city of Prague, and MetroNet, owned by several private companies, offered LAN network communications, virtual private networks operations, e-mail, interactive services, and Internet access. [ 93 ]
CESNET (Czech Educational and Scientific Network) is a commercial network and ISP operated by the a consortium of Czech universities. CESNET has international connections to EBONE at 8Mbps and to TEN34 at 16Mbps. [ 94 ]
In February 1999, the Czech Republic's Deputy Vice-Chairman for the Economy said that telecommunications monopoly SPT was the biggest obstacle to Internet development in the Czech Republic. He urged adoption of legislation to ensure effective competition in telecommunications after SPT's monopoly rights expire in 2000. [ 95 ]
A second major impediment facing the Internet in the Czech Republic is the fact that the modernization of the network has not reached all of the country yet. Dialing in, especially from smaller villages, can be difficult. [ 96 ]
Increasing competition among ISPs and the privatization of telecommunications services may eventually bring costs down to a level that most Czechs can afford, but so far cost remains a major barrier to Internet access. [ 97 ] There were two components of Internet subscriber fees: 1) fees paid to the Internet provider, which include payments for international and domestic fixed lines used by ISPs, and 2) fees paid to the telephone company for connection time. The latter account for a majority of the cost of Internet usage. In mid-1997, the average price for 20 hours of Internet connection was $50-60.
In the Fall of 1998, SPT Telecom announced an increase in per minute local rates. [ 98 ] Because connection time is such a high percentage of the Internet subscriber fees, many users requested SPT to reassess how it bills data calls. The "Internet Against Monopoly Movement" called on Czech users and service providers to protest. On November 18, 1998, over 90,000 people and 900 IT companies boycotted the Internet for the day to protest the rate increases. ISPs temporarily shut down or featured a protest page. Organizers of the protest asked that special rates be applied to Internet users either through a flat rate fee for weekend and evening access or a two-rate system to distinguish between voice and data connections.
In response to the protests, SPT offered a reduced rate called Internet 99, applicable to data communications with ISPs, decreasing during the evening and late night. On top of this, there is a flat per call charge after the first 119 seconds. The Internet 99 rate was an improvement, but a small one. [ 99 ] Considerable controversy remained over whether the new tariff would lower prices or not. Users opposed the one-time connection fee, because they would be charged for the failed connections that are common due to SPT's aging local infrastructure. More fundamentally, the "Internet rate" left intact the basic concept of per-minute tariffing for local calls.
2. Government Policy
2.1 Telecommunications Law
The 1994 Telecommunications Act vests broad regulatory discretion in the government. The Czech Telecommunications Office is responsible for issuing licenses and setting tariff policy. In 1993, the Czech NGO Econnect advocated for a less restrictive regulatory regime, but its efforts were unsuccessful at the time.
As of mid-1999, a new telecommunications act was being reviewed in draft form by the government. [ 100 ] Increasing demand for services, the continuing need for investment in local networks, dissatisfaction with the tariff schedules, and, most importantly, the imperatives of EU accession will be the major factors influencing the new law. [ 101 ] In June 1999, the Government adopted a "State Information Policy."
2.2 Competition and Privatization
SPT Telecom is 51% government-owned; Telsource, a joint venture between the Dutch KPN and Swisscom, holds 27% and the remaining 22% consists of publicly traded shares. [ 102 ]
SPT has an exclusive license for long distance and international calls until January 1, 2001, although there is an ongoing discussion of ending the monopoly sooner. [ 103 ] A coalition of local operators and cable television companies, "Group 98," and the Social Democrats advocate introducing full competition sooner. One focus of criticism has been SPT's failure, despite its promise to invest $32 million in new technology, to meet the growing demand quickly enough. The government's course is unclear. One hint may have come in October 1998, when the Czech Telecommunications Office (CTU) decided that mobile telephone operator RadioMobil's Internet voice telephony service violated SPT's long-distance monopoly.
While SPT is legally subject to competition in the local loop, it currently has a near-monopoly. Due to increasing demands for service, the government has granted a few licenses to other companies to provide local data, telephony and cable TV in certain, limited regions. [ 104 ] As of October 1998, customers in Prague and Liberec had a choice of operators. However, elsewhere the effort to introduce competition in the local loop has not been particularly successful. [ 105 ]
Mobile communications were opened to competition in 1996. The competitive tendering process for new licenses enabled the Czech government to insist on low tariffs and wide coverage. [ 106 ]
2.3 Promoting Infrastructure Growth
The prospect of full competition in 2001 may be prompting SPT to increase its infrastructure investment in new telephone lines, optical cables, and high capacity transmission systems. Due to the underdeveloped communications network, SPT Telecom had concentrated in the initial stages of its network modernization program on digitizing the trunk network and addressing the waiting list for installation of telephone lines. But it may now be shifting its focus to the value-added services that are primarily intended for business users. [ 107 ]
Funding for telecommunications infrastructure projects has come from the European Bank for Reconstruction and Development (EBRD), [ 108 ] the European Investment Bank, and large local and foreign banks. Privatization (or the anticipation of privatization in the case of the local telephone carrier) has attracted foreign investment. [ 109 ]
Large sums are being invested in private data networks. By the end of 1996, the Czech Telecommunications Office (CTU) had issued 65 licenses for operation of private data networks. Since April 1997, five licenses for operation of leased lines have been issued by CTU. [ 110 ]
2.4 Universal Access
SPT's license includes universal service obligations and sets specific targets for line installation, waiting list reduction, and network performance indicators. [ 111 ]
2.5 Other Initiatives
To bring government information online, the Czech government is establishing a State Information System, a project intended to integrate national and regional government data and facilitate electronic communications. In addition, many government agencies are moving mandatory registries to on-line databases. [ 112 ]
There are Czech versions of Windows and Internet Explorer. In addition, a Czech firm has developed a Czech language modification for Netscape's Communicator, providing Czech language support for Netscape's Web browser, e-mail client, and news reader. [ 113 ] While local language capabilities are taken for granted in English and Romance language speaking countries, they represent an important step for a developing nation. Local language software expands the reach of information access beyond language barriers and begins to address the key issues of cultural preservation.
Econnect started a news publishing service for NGOs, and the Czech version of Virtual Foundation. [ 114 ]
GDP per capita: $1,350
Population: 5,108,527
Phone lines: 567,400
Teledensity: 10.5
Internet hosts: 842
Although progress has been made with the help of non-governmental organizations, development of the Internet in Georgia has been severely limited due to a number of deeply-embedded factors ranging from the archaic state of the country's telecommunications infrastructure, to the high cost of connectivity and of basic computer equipment in relation to average salaries, the lack of system administrators and qualified engineers, and the susceptibility of the nation's electrical supply to erratic interruptions.
1. Infrastructure
1.1 Telecommunications Infrastructure
Georgia, like most of the countries of the former Soviet Union, is seriously hampered in its connectivity efforts because of the poor state of its telecommunications infrastructure. As of 1996, there were 567,400 main telephone lines, for a density of 10.5 lines per 100 inhabitants. This represented an increase of less than 30,000 lines over 1990, a notably low growth rate. As of 1996, there were 230,000 unsatisfied applications for telephone service. [ 115 ] Most of the telephone lines in Georgia are analog, with few digital lines suitable for high-speed data transfer. As of 1996, only 10% of the country's switches were digital.
1.2 The Internet
Georgia established its first permanent Internet link in the summer of 1995, and since then progress has been made in expanding the Internet. However, until the nation's overall telecommunications infrastructure is improved, fast and reliable Internet connectivity in Georgia will not become a widespread reality. [ 116 ]
As of 1998, there were several ISPs in Georgia. The High Energy Physics Institute at Tbilisi State University, a non-commercial provider, provided Internet access to scientific organizations and universities. The Institute of Computational Mathematics at the Georgian Academy of Sciences provided access for all of the institutions within the Academy. SANET, a commercial provider, had perhaps the most advanced Internet equipment in Georgia, including a satellite link at 256k to the U.S. Other commercial providers were Caucasus Net and Global One. [ 117 ]
Although the cost of using the Internet in Georgia remains high, prices were falling due to competition. For a long time, SANET was the only reliable commercial Internet provider and was able to charge $150 per month for just two hours a day of Internet access. But after the appearance of new commercial providers in 1997, SANET reduced its fees to $15.38 per month for eight hours of Internet access to be in line with the rates of the new providers. However, a proposal by the Georgian Ministry of Communications to introduce a per minute fee for local telephone calls would certainly stifle Internet development.
2. Government Policy
2.1 Competition and Privatization
The government planned to seek international bids in 1999 for the privatization of the nation's telephone networks: Sakartvelos Telekom, which handles international communications, and Sakartvelos Elektrokavshir, which operates local and inter-municipal networks.
2.2 Promoting Infrastructure Growth
The Open Society Institute (OSI) has provided significant technical and financial support toward improving Internet connectivity in Georgia. In 1995, the Open Society Georgia Foundation (OSGF) and the OSI Regional Internet Program (OSI-RIP) began installing computer equipment, providing technical training and establishing Internet connections among schools, government agencies and private organizations throughout Georgia. OSGF and OSI-RIP also set up an email connectivity program, which distributed email starter kits containing a personal computer, a modem and access to email to a range of institutions, including universities, secondary schools, independent media, non-governmental agencies and libraries.
Other organizations have undertaken programs in Georgia to help improve connectivity and train people how to use the Internet. A grant from the United States Agency for International Development, administered by the Parliamentary Human Rights Foundation, initiated a project called "Supporting the Rule of Law in Georgia through Internet Connectivity." The project linked the Georgian parliament and other government organizations in Tbilisi to the Internet via a satellite link.
Also in 1995, INTAS , a program sponsored by the European Union, OSI and OSGF, provided funding to help the Georgian Academy of Sciences establish a permanent link to the Internet. That link was established in 1996 when a satellite earth station was installed at the High Energy Physics Institute.
In early 1997, the OSGF opened the Internet Center for Wide Open World, whose main purpose is to provide Internet grants to organizations across Georgia. Its projects have included grants to organizations working to create and popularize a Georgian character coding standard for the alphabet -- a main requirement for making Georgian information available through the Internet.
The Eurasia Foundation, a private US-based grant making organization, made Internet-related grants to Georgian organizations to support the development of email and Internet training programs, to establish an electronic communications and information center to serve the region of Guria in western Georgia, and to support web site creation. The International Research and Exchanges Board, a U.S.-based non-profit organization, created the Internet Access and Training Program, which established Internet centers providing free public Internet access and training. [ 118 ]
In October 1994, Georgia joined the Central and Eastern European Networking Association (CEENet), an organization formed in 1993 to establish and promote academic and research networking. This was a significant move for Georgia, which previously had not been involved in many international networking programs. By joining CEENet, Georgia was able to begin sharing operational and technical information with other nations in the region and be a part of CEENet's proposals to international organizations for funding to promote network developments.
The Georgian Ministry of Communications has undertaken efforts to modernize the telecommunications infrastructure in Georgia. However, a heavy dependence on international funding makes long-range planning difficult.
GDP per capita: $7,500
Population: 10,208,127
Phone lines: 2,661,600
Teledensity: 28
Internet hosts: 101,540
Hungary has one of the most developed telecommunications networks in Central and Eastern Europe, well advanced in some respects even by the standards of the EU. Given this infrastructure, the main barrier to Internet access in Hungary has been price. Matav, the privatized former national telephone company, maintains a 100% monopoly on long distance and international calls, as well as a monopoly on local service for 77% of the population.
1. Infrastructure
1.1 Telecommunications Infrastructure
In the mid-1980s, after the national network had been neglected for decades, the Hungarian government identified the modernization of the communications infrastructure as a prerequisite of economic development. This relatively early commitment to modernization gave the Hungarian telecommunications system a head start over its counterparts in other Central and Eastern European states, where planning for infrastructure modernization did not begin until after the fall of the communist regimes in 1989. [ 119 ] Matav, Hungary's main telecommunications provider, was required by the government to increase the number of main exchange lines in its service areas at a minimum rate of 15.5% per year, with the goal of achieving a telephone density ratio of 30 lines per 100 inhabitants by year-end 1997.
By 1996, Matav had achieved a national telephone density of 28%, compared with a level of less than 9% in 1989. [ 120 ] In Budapest, as of 1997, 43% of the population had telephone service. Matav plans to install 200,000 lines per year through 1999, a rate that actually represents a decrease from the 302,000 lines installed in 1996, as the company's focus has shifted towards business communications. The average waiting time for installation of a telephone line was approximately 7 months in 1996.
Meanwhile, call-completion rates were improved, and digitalization proceeded rapidly. Matav made replacing analog lines with digital lines a priority. As of December 1996, 64% of its exchanges were digital. During 1992-1995, the Hungarian Digital Backbone Network was installed, consisting of an optical fiber network of approximately 3,000 km and a digital microwave network of approximately 1,800 km, connecting all major towns and the international gateways and transmission routes. Matav also began installing synchronous digital hierarchy (SDH) in Budapest and in the national digital backbone network. Matav has introduced optical fiber into the local access network. In November 1996, the first optical fiber network went into service in Budapest.
Mobile telephone usage in Hungary is among the highest in the region. The number of mobile subscribers was 705,000 at the end of 1997 and 864,000 by July 1998 and was estimated to grow to 2.5 million by 2000. There are two GSM operators and one small analog system.
Matav is using wireless local loop (WLL) technology to install additional network capacity in chronically under-served rural areas and in Budapest. By the end of 1996, it had connected 73,000 new lines via WLL systems, mostly in sparsely populated rural areas.
At least one high speed fiber optic connection is available from Hungary to each of its 7 neighboring countries.
1.2 The Internet
Hungary has a large number of commercial on-line providers and Internet use is relatively high. The Council of Internet Service Providers in Hungary has 33 member ISPs. [ 121 ] All of them are commercial, except for two (Hungarnet and the Soros Foundation Hungary). The monthly price for service varies widely. Generally, ISPs offer both fixed and flat packages. As of early 1999, prices started from about $9/month for an account with a mailbox and 10 hours, to about $45/month for unlimited access. [ 122 ] As elsewhere in the region, users pay a per minute fee for connection time, which constitutes a major part of the cost of using the Internet. For nighttime service (10 pm to 5 am), Matav offered a special rate: the consumer pays for only the first 53 minutes of each call. [ 123 ] Most of the smaller ISPs depend on lines leased from Matav.
In January 1999, Matav raised daytime rates for local telephone calls by 29.5%, but announced that it would maintain lower evening rates in response to concerns of Internet users. The Hungarian Net Community, an informal association of ISPs, began offering access at a flat monthly rate of approximately $41, or about a third of the average monthly salary. [ 124 ]
As of mid-1999, Hungary had an estimated 200,000 Internet users, representing 2% of the population. [ 125 ] Approximately 50,000 subscribed through commercial ISPs, while the majority had access through educational and non-profit institutions. Only 0.7% of Hungarian households subscribed to the Internet; however, 300,000 households had computers and thus were potential users if telecommunications carriers were to offer affordable rates. [ 126 ] News agencies, the government and NGOs have moved rapidly to make content available on the Net.
MatavNet is the largest ISP. In 1995, Matav became the first telecommunications operator in Central and Eastern European to introduce standard Euro-ISDN services. By 1996, there were 11,128 ISDN lines in operation. Matav began offering a public electronic data interchange, EDInet, in November 1996. In December 1998, Matav began a 3 month trial providing Internet telephony. Tvnet provides IP through its cable in Budapest. [ 127 ]
2. Government Policy
2.1 Telecommunications Law
The framework for telecommunications policy in Hungary flows from Law Number LXXII on Telecommunications, passed in November 1992, and amended in 1997, together with ministerial decrees. [ 128 ] The Law on Telecommunications specifies that all public switched telecommunication activities are to be performed exclusively by licensed companies. The law allows for competition in local telephone service, but Matav retains a monopoly over long distance and international public switched services until 2002. Other service providers must interconnect with Matav for those services. (In December 1998, the government announced its desire to end Matav's monopolies in 2001, one year early. [ 129 ] ) While potential competitors were lined up, they were oriented to the business market.
In May 1998, the government issued its telecommunications policy outline for the period 1998-2005, which, among other objectives, is intended to follow EU guidelines on telecommunications reform. [ 130 ] At the beginning of 1999, preparations were underway for the adoption of a new telecommunications law, to be presented to the Parliament in 2000. Before the new law was even proposed, EU Commissioner Martin Bangemann said in April 1998 that Hungary had made sufficient progress liberalizing its laws to qualify for accession.
2.2 Competition, Privatization and Deregulation
Prior to 1989, the state-owned Post, Telegraph & Telephone (PTT) was responsible for the provision of all telecom, broadcasting and postal services in Hungary. In 1989, the government split up the PTT and created three new companies: Matav (telecom), the Hungarian Broadcasting Co. (or Antenna Hungaria) and the Hungarian Post Office. In 1991, Matav was transformed into a shareholding company, and between 1993 and 1997 93.5% of its shares were offered for sale. A majority interest in Matav went to Magyracom, a consortium of Ameritech International and Deutsche telecom.
Matav remains the largest service provider. As noted, it has the national monopoly rights for long distance and international services until the year 2002. It also controls local service in 41 of 54 districts (accounting for 77% of access lines). Small local operating companies, owned by international consortia and typically acting in partnership with minority Hungarian partners, operate as regional monopolies in the remaining districts. These companies have franchise-like or "concession" agreements with the government, which require the signatories to commit to a series of quantitative and qualitative targets for expanding and modernizing the national telecommunications network. [ 131 ] The ultimate end of Matav's monopoly is expected to bring down prices overall, although this may be a false hope.
Cellular telecommunications have been partially liberalized by the government, which has issued licenses to one analog and two GSM networks. [ 132 ]
2.3 Promoting Infrastructure Development
Reversing years of neglect, the Hungarian government has made improvement of the telecommunications infrastructure a major priority. By a combination of privatization, regulatory mandates, and government spending, Hungary has achieved improvement in its voice and data capabilities.
Although Matav is predominately privately owned, its infrastructure improvement efforts have largely been dictated by government conditions on its concession, which center on expanding public access to basic telephony services and establishing the country as a regional telecommunications hub. However, as the network modernization program neared completion, Matav shifted the focus of its investment program away from public infrastructure to business communications and internal restructuring, which may bode ill for the development of affordable Internet and other services. [ 133 ]
2.4 Universal Access and Other Initiatives
Universal service obligations are defined in the concession agreements and the Act on Telecommunications allocates several obligations of this type to the PSTN operator. While Hungary has had some proposals for expanding and clarifying its universal access policies, none were in place by mid-1999. [ 134 ]
In the early 1990s, the Hungarian government launched a program to bring Internet access to all institutes of higher education. In the mid-1990s, the program, known as Sulinet (Schoolnet), was extended to the nation's high schools, with the goal of connecting all high schools to the Internet by the end of 1998. In 1999, the program was extended to elementary schools. [ 135 ]
In 1997, the Center for Culture and Communication (C3) of the Hungarian Soros Foundation started a free email service with Web access. As of June 1999, the service had over 130,000 users. The limited dial-up access is based on a local tariff available across Hungary through Matav. In a trial starting at the end of 1998, and again with the assistance of Matav, C3 established public access Web terminals with ADSL access, connecting 40 city libraries with leased lines and donating 5 PCs to each. [ 136 ]
GDP per capita: $960
Population: 2,009,387
Phone lines: 367,300
Teledenisty:17
Internet hosts: 1105 [ 137 ]
The Macedonian PTT was divided into two separate state-owned companies -- Macedonian Posts and Macedonian Telecommunications -- in early 1997. [ 138 ] Because Macedonia has undertaken the difficult process of establishing itself as an independent country in the last few years, it has confronted a long list of priorities, of which the national communications network is just one. Even though a number of ISPs exist, the Internet is available to less than 1% of the population.
1. Infrastructure
1.1 Telecommunications Infrastructure
The Macedonian Packet Switched Public Data Network (MAKPAK) was put into service in 1995. The network covers the entire territory of the Republic and theoretically, at least, offers customers fast, high-quality data transmission. MAKPAK has direct connections to Germany and Turkey, and the network enables the establishment of links to all countries with similar networks.
The construction of a basic cellular telephone network began in 1996. A GSM network was put into commercial service in October 1997, with a capacity of 25,000 subscribers and a switching subsystem designed to be extended to support up to 50,000 subscribers.
A connection to the international network via fiber optical cables to all four neighboring countries was to be completed by the end of 1997. The Trans Balkan Line (TBL), part of Macedonia's backbone network, connects the telecommunications networks of Turkey, Bulgaria, Macedonia, Albania and Italy. Other international links include the International Digital Gateway in Skopje, two satellite stations built after the breakdown of the SFR Yugoslavia, one using EUTELSAT to connect to Switzerland and Germany, the other using INTELSAT AOR to connect with USA and Canada.
1.2 The Internet
In 1995, the Macedonian PTT, Makedonski Telekomunikacii (MT), began offering its customers access to the Internet. Dial-up access was offered for residential and small business users and leased lines were available for business users.
By late 1998, there were five major commercial ISP's: MT, Macedonia Online (MOL), Unet, Medis Informatika, and TEAS-MacPetrol. Macedonia also has two non-commercial ISPs: Macedonian Academic and Research Network (MARNet) and the Open Society Institute Macedonia (OSI -- Macedonia).
Three of these ISPs operated their own backbone networks. MARNet linked major cities with leased lines and had two foreign links: a satellite connection to EBONE (Vienna, Austria) and a link through MT. OSI-Macedonia linked major cities with leased lines and provided foreign connectivity, also through MT. MT's Internet service was available in Skopje, and through dial-up from the whole country. It had various foreign connections: a 128k satellite connection to MCI, a 256k connection to Teleglobe, a 2M leased line connection to British Telecom and a 2M leased line connection to Deutsche Telekom.
MARNet was planning to use a part of the bandwidth of the Trans-Balkan communication highway as another point of connection (with a speed of 2.4 Gbps). MARNet was also improving internal connectivity of its members and other affiliated institutions up to 2 Mbps.
2. Government Policy
Until the end of 1996, the Macedonian PTT functioned as a state-owned company providing national and international telecommunications and postal services. At the beginning of 1997, it was divided into two new state-owned companies, Macedonian Posts and Macedonian Telecommunications (MT).
The Telecommunication Law and other regulations define MT as the monopoly operator for the provision of basic services, and set |out the conditions for involvement of new operators to participate in the provision of all other value-added services. MT provides all public telecommunications services in national and international traffic. It handles landline and cellular communication services, data transmission, satellite communication services, cable TV and broadcasting.
2.1 Promoting Infrastructure Growth
MT has issued a plan for upgrading and expanding its telecommunications network and services. This Investment Plan, covering the period through 2000, set out a number of objectives:
2.2 Universal Access
Bringing Internet to the secondary level educational institutions and increasing the number of hosts to 2000 and users to 10,000 were priorities. However, we could find no information indicating that Macedonia has a defined universal access policy or initiative beyond that reflected in the Investment Plan described above.
GDP per capita: $2,400
Population: 4,457,729
Phone lines: 593,300
Teledensity: 14
Internet Hosts: 458 [ 139 ]
The Internet in Moldova is making slow but steady progress, largely with help from foreign organizations but also with the commitment of government officials, scientists, scholars and non-governmental agencies. [ 140 ] However, the telecommunications system in Moldova remains woefully underdeveloped. The dominant carrier remains 100% state-owned, as efforts to sell a 40% interest in the company had been unsuccessful as of the beginning of 1999.
1. Infrastructure
1.1 Telecommunications Infrastructure
Teledensity in Moldova was 14% in 1996. The waiting list in 1996 was 201,000 and the waiting time for installation of a new phone line was 8.7 years. [ 141 ] Digitization is ongoing, but had reached only around 10% by 1997. Moldova has a fiber optic backbone. Moldtelecom offers Internet services, and was planning wireless local loop. [ 142 ]
1.2 The Internet
Moldova established permanent Internet access in 1995 via a leased line to Bucharest. As of 1998, there were seven ISPs in the capital, Chisinau (the only city with full Internet access). These providers had fiber optic and satellite access channels to backbones in Norway, German and the U.S., with the maximum capacity of some expanded to 1Mbps. Connections are made via dial-up lines (analog), leased lines, leased copper and fiber optic lines, and wireless modems. ISDN lines were introduced at the end of 1998. Demand is high. People in Chisinau (especially businesses) have come to understand that they need Internet access. NGOs connect via dial-up accounts to an ISP called Moldnet, which was launched as a Soros Foundation subsidiary, and which was transitioning itself into an independent non-profit organization, capable of financially maintaining itself. The relative inexperience of ISPs in Chisinau, such as MegaDat and Moldnet, leaves them vulnerable to unpleasant, if not disastrous, incidents. One such incident took place on July 14, 1998, when a hacker cracked into the Moldnet server. [ 143 ]
A major impediment to wider access is high telephone tariffs. [ 144 ] Access to e-mail and other Internet services remains very limited even at the institutes of the National Academy. Universities and secondary schools have limited access, if any. [ 145 ]
The major commercial ISP's are MoldTelecom, MegaDat (Moldova OnLine), Dynamic Network Technologies (DNT), Relsoft and Riscom. DNT is a non-commercial ISP with some commercial activities. It has a 512Kbps connection to NetSat Express. MoldTelecom connects all four major cities at 2 Mbps. It has a 2 Mbps fiber-optic connection to Teleglobe. MegaDat (Moldova OnLine) operates only in Chisinau. Its foreign link is a 128k satellite connection to Deutsche Telekom. Relsoft is also only present in Chisinau. It includes a wireless satellite international link of 512Kbps. [ 146 ]
2. Government Policy
2.1 Promoting Infrastructure Development
Since 1995, efforts have been undertaken, including joint ventures, to establish additional satellite and fiber optic links within the country and internationally.
In October 1995, Moldova joined the Central and Eastern European Networking Association (CEENet), an organization of representatives of seven countries in the region devoted to the promotion of academic and research networking. It was an important step for Moldova which, until that time, had not been involved in many international networking programs and had encountered difficulties in establishing contacts abroad. By joining the network, Moldova was able to effectively begin exchanging operational, directory and technical information with other nations and be involved in CEENet's proposals to international and European organizations for funding to promote network developments. [ 147 ]
The government of Moldova has stated its support for improving the telecommunications system in the country and building a strong networking infrastructure. In October of 1993, the Moldovan Ministry of Informatics, Information and Communications created the Republican Center of Informatics (RCI), as the main node of the national network and as the focal point for research and design in the field of information technologies.
Private Western organizations have also been active in helping Moldova improve e-mail capability, network infrastructure and Internet connectivity. The Open Society Institute (OSI) has provided significant technical and financial support through its Regional Internet Program (OSI-RIP), which sponsored the first high-speed local Internet connection to universities in Moldova, connecting five campuses -- including the State University, the Technical University, and the Academy of Economical Studies -- to the State Academy of Sciences, the Soros Foundation Information Center, and RCI. In 1996, OSI-RIP provided funding to permit these organizations to connect to the Internet via satellite. In 1996-97, OSI-RIP funded Internet connectivity for universities, secondary schools, and non-governmental organizations by providing modems, e-mail and Internet services to those institutions accessing the satellite connection.
Another U.S.-based non-profit organization, ISAR (formerly known as the Institute on Soviet-American Relations) also provided assistance to improve e-mail capability, to train users, and to provide technical assistance to Moldova. Recently joining the other organizations in Moldova is the International Research and Exchanges Board (IREX), a U.S.-based non-profit organization. Through a program called the U.S.-Eurasia Internet Access and Training Program (IATP), the organization is working to provide Internet access and training to thousands of users across the former Soviet Union. In 1996, IATP began a project to provide training and communications assistance in Moldova.
Currently the main Internet and e-mail providers in Moldova are RCI, the Soros Foundation, Relsoft, and Apriori. Apriori, founded in 1997, provides satellite access to the Internet for its customers, and signed up 70 percent of Moldovan banks -- including the largest one, the National Bank of Moldova.
There are still several major obstacles in the way of improved Internet connectivity in Moldova:
GDP per capita: $6,400
Population: 38,606,922
Phone lines: 6,532,400
Teledensity: 17
Internet Hosts: 147,869
Despite considerable development in recent years, Poland's telecommunications infrastructure lags behind other European nations. The state telephone system, Telekomunikacja Polska S.A. (TPSA), is being privatized and legally is subject to competition, but it retains a near-total monopoly, controlling over 95% of telecommunications services. As of mid-1999, the Internet was available to approximately 2.5 million Poles, who could choose from among a number of ISPs; estimates of active users ranged from 700,000 to over 1,000,000. In addition to TPSA's inability to satisfy demand for telephone service and the poor quality of the local networks, price remained a major barrier to Internet use. In December 1998, Polish Internet users organized a boycott to protest rate increases for local calls and Internet connection. In 1999, TPSA began offering "free" Internet access, but users are still billed for connection time.
1. Infrastructure
1.1 Telecommunications Infrastructure
As a result of investment in recent years, Poland now has a modern long distance and backbone network as well as almost exclusively digital switching equipment. However, in some respects the local infrastructure is underdeveloped and outmoded.
The number of telephone lines in Poland increased from 3.3 million in 1990 to 6.5 million in 1996. [ 148 ] Nonetheless, the reach of Poland's telecommunications network is well behind other European countries, with a density of 17 telephone lines per 100 inhabitants. Only 35 percent of Polish households have direct access to telephone service, while the European average is 70%. With Poland's large land mass, wiring and rewiring remote areas is a daunting task. Indeed, the inability to provide telephone lines to urban and rural end-users alike is a major problem. [ 149 ] The backlog of applications for telephone service was 2,327,400 in 1996 and the average waiting time for installation was 3.3 years. [ 150 ]
The weakness of the traditional fixed telecommunications infrastructure at a local level has generated a demand for mobile telephones. Accordingly, mobile usage is expanding rapidly and is expected to total 3 million subscribers by the year 2000. Poland has three cellular networks (one analog and 2 GSM), and a total of 1.27 million users. Wireless local loop technology is being deployed and may offer an effective means of increasing access to telecommunications services. [ 151 ]
1.2 The Internet
The availability of the Internet in Poland depends, first, on the overall performance of the telephone network, as most access is through modems. The main impediments to Internet use and development are lack of access to basic telephone service and high prices: the cost of access is very high, the second highest in Europe. Users pay an initial set-up fee and a monthly fee to their ISP. The largest cost, however, comes from the fact that Poles, like others in the region, pay for local phone calls. One can expect to pay just under $3 per hour for the connection to an ISP. The national telephone company, TPSA, has experimented with an "IP dial tone," a single dial-in number offering direct Internet connection. [ 152 ]
Despite cost barriers, Internet usage in Poland has grown rapidly, benefiting from the digitization of central office switches and increased ISDN availability in major cities, as well as from the general increase in the number of installed lines. Traffic increased 12 times during 1995 alone. [ 153 ] The Public Opinion Research Center estimated that approximately 2.5 million Poles have "access" to the Internet, with about half of those considered "active" users. Nua estimated that there are 700,000 users. About 38% of users obtain access through a university or other educational institution, 36% at work, and about 26% at home. Internet usage is concentrated in large metropolitan areas, with less than 9% of Internet users in smaller cities and rural areas. [ 154 ]
There are numerous ISPs. The most important non-commercial provider is probably NASK, the Scientific and Academic Computer Network, which has a network of regional, interregional and international leased telephone lines. [ 155 ] Beginning in 1990, NASK underwent rapid development. The Government State Committee for Scientific Research (KBN) finances and manages the network, but most of the physical lines are maintained by the TPSA while some are supported by the Banking Telecommunications Enterprise (TELBANK S.A.). The main node of NASK is located at Warsaw University. NASK interconnects several older internal networks, and provides access to the Internet, which now accounts for about 80-90 % of the total NASK traffic. [ 156 ] MOST, which is associated with APC, is an Internet provider for environmental NGOs and activists. [ 157 ]
Poland has several other ISPs. TPSA is present all over the country and has a fiber backbone at speeds ranging up to 155 Mbps as well as 20 Mbps satellite links to Canada and the U.S. (In 1999, TPSA began a further upgrade of its backbone, connecting directly to the main German and U.S. backbones.) Telbank serves the banking sector as a commercial ISP with a fiber backbone between major cities at 34 Mbps, and other connections to smaller cities at 1-8 Mbps. It also has a satellite connection to MCI. POL34 is an academic network connecting 14 major university centers that buys bandwidth (34Mbps links) from TelEnergo. It also has a 3 Mbps link to Sweden via satellite. IdS is a non-commercial ISP that acts as an Internet-for-schools network; it receives its Internet connectivity through TPSA. Other ISPs include ATOM, Polska Online, CNT, TOPNETl, MediaNet and Internet Technologies. [ 158 ]
Poland also has a few bandwidth and leased line companies that are not necessarily ISPs.
TelEnergo, a network connecting all major cities and built around the power network grid, has a fiber backbone operating at speeds up to 622 Mbps. Kolpak, the Polish Rail Network, connects all rail stations, and is thus present all other the country. It has fiber connections to major cities at speeds up to 155M, as well as copper lines. [ 159 ]
Outside of major cities, dial-up or switched service remains a problem due to line quality, which sometimes results in transmission speeds as low as 300/1,200 bps. Within the major cities, ISDN availability is increasing, and standard dial-up intra-city communications are possible at 64 Kbps. International leased line transmission is readily available. Some providers have been offering voice telephony over the Internet. [ 160 ]
2. Government Policy
2.1 Telecommunications Law
The Telecommunications Law was adopted in 1990 and amended in 1995, but was being further revised to conform to EU norms for telecommunications competition. In October 1998, the Vice-Minister for Communications indicated that, unlike existing law, the revised Act would not require licensing of ISPs. [ 161 ] In November 1998, after criticism earlier in the year about Poland's timetable, the European Commission, in its annual review of Poland's progress towards accession, said that Poland had made progress in reforming its telecommunications law to conform to EU standards.
2.2 Competition, Privatization and Pricing
Telekomunikacja Polska S.A. (TPSA) is the national operator, providing over 95% of the telecommunications services in Poland. TPSA was established in 1992 by splitting the former PTT into separate postal and telecommunications companies. Privatization of TPSA began at the end of 1998, when shares representing a partial interest in the company were sold on the Polish and foreign stock markets. A further percentage of the ownership is likely to be sold in 1999.
The 1995 amendments to the Telecommunications Act allowed local telephone operators to be licensed in competition with TPSA. By the end of 1998, over 100 licenses had been granted to alternative operators, although far fewer were in operation and in practice most of the active operators serve single towns or villages. Nonetheless, in September 1998, the Ministry of Telecommunications said it intends to have one competitive service provider in each of the 49 regions. In April 1998, the Anti-Monopolies Court ruled that TPSA had engaged in monopolistic practices in providing services below cost to undermine local competition in the region of Lomza, and in July the anti-monopoly office ruled that TPSA should reduce its long-distance charges. TPSA's monopoly on long distance calls ended on January 1, 1999. It retains a monopoly on international voice communications, which lasts until January 1, 2003. Mobile service is open to competition. [ 162 ]
In December 1998, Polish Internet users protested high interconnection rates. According to protest organizers, 15% of Polish Internet users participated in the boycott. Although TPSA claimed that it already offered the lowest Internet connection prices in Europe, it announced that it plans to reduce prices for local evening calls.
2.3 Promoting Infrastructure Growth
Given the low penetration rate and outmoded equipment, the Polish infrastructure requires a great deal of investment. In the past, TPSA focused on providing more telephone lines to increase the overall access to telecommunications services. However, more recently the company has focused more on value added services, such as call waiting, ISDN lines and data transmission services in order to earn more revenue per line. Investments seem to be oriented toward new digital, wide-band technologies, which are expected to generate more revenue. Wireless local loop solutions are seen mainly as a way to make services available before permanent lines are established. [ 163 ]
The government was aiming to have 10 million phones in service by the year 2000, increasing the density of fixed lines per 100 inhabitants from 17 in 1996 to 26. [ 164 ]
2.4 Universal Access
Poland asserts that it complies with EU requirements on universal service. The licensing process offers an opportunity to review an applicant's commitments to universal access.
GDP per capita: $5,200
Population: 22,395,848
Phones: 3,161,200
Teledensity: 14
Internet hosts: 20,356
Even though there are over a dozen ISPs in Romania, private Internet use is still limited due to the high price of access.
1. Infrastructure
1.1 Telecommunications Infrastructure
In 1996, teledensity was 14%, compared to 10% in 1990. The Ministry of Communications estimates the penetration ratio to be only 3% in the rural areas; as of 1997, some 2,000 villages had no telephone service at all. This is of particular significance as a majority of the Romanian population lives outside urban areas. [ 165 ] In 1996, 193,300 new lines were installed, but this was not enough to keep pace with increasing demand. The waiting list in 1996 for installation of a telephone line was 1,299,000 applications long, up from 1990, and the average waiting time according to the ITU was 7 years. [ 166 ]
In 1992, modernization of the infrastructure commenced when a 7.5-km fiber optic loop was installed in Bucharest. The EBRD financed the building of the first 1,800 km of Romania's national Digital Overlay Network and the collateral digital systems. The full 7000 km backbone was completed in 1998. [ 167 ] Although the network is automated, nearly 88% of switching capacity was still electronic as of 1996. [ 168 ] The modernization program of the monopoly operator, Rom Telecom, includes installation of CCSS7 signaling, which could support ISDN, but as of 1997 ISDN had not been introduced.
Mobile telephony grown rapidly but has predominantly been used by business professionals and by the social and political elite who can afford to pay premium rates for the service.
1.2 The Internet
As of 1999, Romania had at least 11 major commercial ISPs, about half with their own backbone networks. The main service providers were Rom Telecom (the former state-owned monopoly), ROMPAC, LOGICnet, Sprint and the Academic data network. PC-NET, present in 3 major cities, had VSAT links and a 2M satellite connection to NetSat (US). DNT had points-of-presence in 4 major cities and has independent satellite links: a 4M link to NetSat (US) and a 2M link to Taide. RDS was present in 6 major cities. Each POP connection had a satellite link. Global One was present in all 15 main cities, with an international fiber optic connection to the Global One network. The non-commercial, academic ISP, RoEduNet, linked 6 major university centers via leased lines and had international connectivity by satellite at 2M. [ 169 ] Deployment of the Internet through the cable television delivery system had been launched. [ 170 ]
2. Government Policy
2.1 Telecommunications Law
In 1996, Romania adopted legislation to conform its telecommunications law to EU requirements. In March 1998, the EU accession agreement was presented to the Romanian government by the European Commission. The agreement requires further legislative and regulatory changes, to transpose the more recent EU Directives, including the Voice and Interconnection Directives. [ 171 ] In April 1998, the World Bank approved a $30 million project to reform and privatize Romanian telecommunications, including development of a policy, regulatory, and legal framework. In 1999, the EU began a bilateral screening of Romania's telecommunications law for accession purposes.
2.2 Competition and Privatization
Romania's dominant, formerly state-owned telephone service provider, Rom Telecom, was partially privatized in November 1998 when a 35% share in the company was sold to Greece's incumbent operator.
Under its license, Rom Telecom has a monopoly over local wireline, long distance and international voice telephony services and network infrastructure until December 31, 2002. Mobile, data transmission, and satellite services were opened to competition in 1991. Some of the country's cable companies were authorized to carry out trials of high-speed data transmission over their networks beginning in April 1997. [ 172 ]
2.3 Promoting Infrastructure Development
In 1991, the Romanian government devised a long-term development plan for Rom Telecom. The plan's objectives are: reducing the waiting list and time required to obtain telephone service, improving quality, introducing and expanding digital technology, implementing a high-speed data transmission network, and providing advanced telecommunications services to the business community. Specific targets for the period 1995 to 1998 were completion of the SDH fiber optic overlay and an annual installation rate of 300,000. [ 173 ] The fiber optic overlay was completed, but annual installation has been closer to 200,000. [ 174 ] Overall, the telecommunications development program estimated that by the year 2005, 7.2 million lines would have to be installed, both new and replacement lines. The plan also includes the target of increasing digital switching capacity from 10% to 30% by the year 2005.
Rom Telecom has undertaken modernization not only of its backbone but also of the high-bit rate metropolitan area network (MAN) in the capital, Bucharest. [ 175 ]
2.4 Universal Service
Consistent with EC Directives in force at the time the Telecommunications Law was adopted in 1996, Romanian law includes a universal service obligation. As a result of revisions to the Voice Telephony and other Directives, Romanian law must be further amended to define specifically the scope of universal service (as a quality telephone service at an affordable price), how it will be funded, and who should contribute to such funding. [ 176 ]
GDP per capita: $5,200
Population: 146,861,022
Phone lines: 25,914,500
Teledensity: 17.5
Internet hosts: 180,721
Although ISPs are numerous, Internet use in Russia has been significantly hindered by a poor but expensive telecommunications system, one of the worst in Eastern Europe. The government has done little to promote future growth, and is unlikely to do so while the economic and political crisis persists. Nonetheless, according to one estimate, 1.3 million Russian households have Internet access, [ 177 ] and the Internet is widely used by NGOs, academics and businesses. Ominously, however, the government has openly proposed imposing surveillance requirements on ISPs and is suspected of already receiving the cooperation of many ISPs in unregulated interception.
1. Infrastructure
1.1 Telecommunications Infrastructure
The greatest obstacle to the widespread use of the Internet in Russia is the nation's inadequate telecommunications infrastructure, which is not expected to meet Western standards for many years. While significant advances have been made, there are currently not enough telephone lines, and existing lines, which are predominantly analog, are slow and poor in quality. [ 178 ] Digital switching is slowly being introduced but is not widespread. The intercity fiber optic cable infrastructure remains limited. Heavy demand on this limited infrastructure makes it difficult to obtain a connection, especially outside of Moscow. [ 179 ]
In 1996, teledensity in Russia was 17.5%. In 1996, 895,000 new lines were installed in Russia; given Russia's size, this amounts to a growth rate of 3.6%, down slightly from the compound average growth rate of 3.8% between 1990 and 1996. In 1996, the number of unsatisfied applications for telephone service was 8.8 million and the waiting period for installation of a line was estimated as more than 10 years. [ 180 ]
As of 1996, there were approximately 223,000 mobile service subscribers, mainly in Moscow and St. Petersburg. Wireless usage is growing rapidly, as service providers are extending networks across the country. In addition, fixed wireless phones have the potential to become both temporary and permanent substitutes for unavailable or low-quality local land lines. [ 181 ]
1.2 The Internet
Internet service in Russia is still limited by Western standards. In March 1999, Russia, with a population of 150 million people, had only 180,721 host computers (units linked to the global network). By comparison, Finland, with a population of only 5 million, had 467,954 hosts. [ 182 ] Similarly, Internet usage, while steadily growing, has been well below that of other countries in the region. The number of Russians on the Internet in October 1997 was estimated at 600,000, only 0.4% of the population. By July 1998, the number had grown to 1,000,000 or 0.67%, but still this was lower than Poland (1.8% in November 1997) or the Slovak Republic (9.5% in September 1998). [ 183 ] Most recently, survey results announced in March 1999 showed that 1.3 million households had Internet access.
While demand for Internet access in Russia is growing, there are not enough lines to meet demands for telephones, let alone for Internet usage. The Russian government is encouraging development, but economic and political problems threaten to paralyze the effort. The technological problems are centered primarily on the inadequate and technologically substandard telephone system in Russia. [ 184 ]
Russia has over 17 commercial ISPs and 7 non-commercial ISPs. Fourteen of these have their own backbone network. [ 185 ] Of Russia's three major Internet service providers -- Relcom, Demos, and Russia On-Line (Rossiya-on-layn) -- Relcom is the largest, due in part to its government-owned, near-monopoly position. Relcom's Moscow hub alone has 10,000 subscribers, of which about 3,000-6,000 use the network on any given day. Relcom has another 150 hubs across Russia, each with an average of between 500-1,000 subscribers. [ 186 ] In all, Relcom provides networking facilities to about 100,000 users, the R&D community, governmental and municipal agencies and commercial enterprises. [ 187 ] The scientific network, RELARN (Kurschatov Institute), is using Relcom as its physical network. [ 188 ]
Pricing structures can result in very large bills for on-line time. An on-line connection to the Internet through regular public telephone lines is priced from $1.50 to $3 per hour. A user can also lease a separate phone line from an ISP for connection to the Internet. In this case, the bill may vary from $400 to $1,500 per month in addition to a one-time registration/ installation fee. Plus, a 20 percent value-added tax per month is charged for a 64 Kbps leased line, so even the lowest cost Internet connection is well beyond the average monthly salary. [ 189 ]
Since the telephone lines in Russia are almost all analog, and not digital, Internet users face long and expensive transmission delays. As a result, those people who do have Internet access, including institutions of higher learning, severely restrict their online time, fearing astronomically high telephone bills. [ 190 ]
2. Government Policy
2.1 Telecommunications Law
The unsettled nature of Russia's political situation makes it difficult to determine what government policy is. On the one hand, the laws being considered by the Duma reflect a traditional propensity to state control of communications infrastructures and a deep-seated skepticism of the free flow of information. On the other hand, government policy purports to give a priority to telecommunications investment, and other government policies promote foreign investment in regional telecom companies. [ 191 ]
The so-called SORM-2 proposal will give the secret police the means to intercept any Internet communications. Enforcement of such a requirement could slow Internet expansion. [ 192 ]
In October 1998, a member of the Lower Chamber's Communication and Information Policy Committee announced that a package of five bills on Internet regulation was being prepared. Reportedly, the package would include legislation on the "right to information," commercial secrets, bank secrets, state secrets, and electronic signatures. [ 193 ]
2.2 Competition, Privatization and Deregulation
Given Russia's huge size and its tortured economic reform process, it is not surprising that the telecommunications market is complicated. Nearly 90 regional and metropolitan networks provide local exchange service. Nearly all have been partially privatized, but the government retains at least 51% ownership in each one. The government's stakes in these regional and metropolitan operators are held by Svyazinvest, a state-controlled holding company created in 1995. A separate joint-stock company, Rostelecom, handles international and domestic long-distance calls on a near-exclusive basis. The government's 35% stake in Rostelecom is held by Svyazinvest.
Svyazinvest is partially privatized: an interest of 25% plus one share was sold in 1997. Early in 1999, the government announced plans to sell a second 25% minus two shares, so that it would retain majority control. [ 194 ]
2.3 Promoting Infrastructure Growth
There seem to be no major government initiatives or coherent national plans for the development of a National Information Infrastructure in Russia. [ 195 ] Generally, the Russian government has not looked favorably upon Internet infrastructure expansion within its borders. It is likely that universities, military R&D centers and local development initiatives will represent the focus of activity for the near future.
There are several projects underway to bring the Internet to Russia's higher education institutions. One of the largest, the Soros Foundation Project, is creating Internet information centers at various educational institutions, while the Russian government is providing the telecommunication links among the universities and to the Internet.
However, the government has attempted to attract foreign investment to speed up the modernization of the telecommunications system. In particular, Rostelecom has been profitable and has invested its annual profits back into its network. As a result, Russia now has a modern international telecommunications infrastructure. However, with Russia's continuing economic crisis, investment in telecommunications is expected to drop by 35-40% in 1999, slowing the pace of installation of new lines. [ 196 ]
The Ministry of Communication is making efforts to improve and upgrade the current telecommunications systems, but given its budget constraints and the fact that the country is so large, the improvements underway will have only a marginal effect. The report determines that overall, despite the country's best efforts, the telecommunications infrastructure in Russia is simply unsuitable for modern computer communication needs and is not expected to reach Western standards for many years to come.
GDP per capita: $8,000
Population: 5,392,982
Phone lines: 1,246,500
Teledensity: 23
Internet hosts: 23,572
The Slovak telecommunications infrastructure entered the Information Age hampered by the general lack of investment that characterized much of the region prior to 1989 and by the former Czechoslovakia's disproportionately greater allocation of resources to the Czech regions. [ 197 ] Despite the poor infrastructure, Internet usage is spreading among the minority of the population with access to a telephone line and a computer. As elsewhere in the region, price remains a barrier to Internet usage.
1. Infrastructure
1.1 Telecommunications Infrastructure
In 1993, the state-owned monopoly PSTN, Slovak telecom, began an infrastructure improvement program. As a result, the country's traditional analog backbone is being supplemented by a new digital overlay network based on fiber optics capable of 2.5 Gbps transmission. Digital switches are being installed to interconnect with the existing analog system. The percentage of main lines connected to digital switches in the network increased from 0% in 1991 to 38% in 1996. [ 198 ]
In 1990, there were 711,000 main lines (compared with only 470 in 1980!), and by 1996, there were over 1.2 million. As of 1996, the country's ratio of telephones per 100 people had increased to 23%. The waiting time for connection was slowly decreasing, to 1.2 years: nonetheless, in 1996, the number of outstanding applications for telephone line installation stood at 144,900. [ 199 ]
Slovakia has two GSM operators, one of which, a joint venture between the government-owned PSTN and private partners, also runs the analog wireless system. [ 200 ]
Slovakia participates in a number of international networks, including:
Estimates as to the number of Internet users in Slovakia range from 230,000 to 510,000. [ 202 ] Either end of the range is quite high compared to other Eastern European countries, especially in light of the still underdeveloped nature of Slovakia's infrastructure and the lack of access to a computer for the majority of the population. A survey in the Fall of 1997 found that 70% of Slovaks 18 and over had never worked with a computer. Only 16% were daily computer users. [ 203 ] But in most commercial and many government offices, email is now common.
The number of digital switches being installed in the country is having a significant impact on the growth the Internet. Basic-rate ISDN lines are available on an individual basis, and 56Kbps transmission is possible for telephones connected to the digital exchanges and many crossbar switches. Additionally, the build-out of the national fiber optic network is improving dial-up use. [ 204 ]
The Slovak Republic has more than 17 ISPs, including the state-owned telecommunications company, 12 of which have their own backbone networks. [ 205 ] Generally, ISPs charge a flat rate for a limited number of minutes. As elsewhere in the region, price is one of the most significant barriers to Internet usage. In 1998, the tax for telephone use was raised to 23% and local call rates were raised. For example, monthly costs for unlimited Internet access are SKK 550 to SKK 1,500 (US$15-$45), plus phone costs of SKK 0.5 to SKK 1 per minute depending on time of day. So the price for the average user is SKK 1 to SKK 2 per minute. The average monthly income is about SKK 10,000 (approximately US$300). [ 206 ]
SANET (Slovak Academic multi-protocol NETwork) is a private network founded in 1991 by Slovak universities, the Slovak Academy of Sciences and other research institutes. It is funded by the Ministry of Education and provides free Internet access to academic and research institutions. It operates its own backbone and reaches 17 cities with leased lines up to 512 Kbps. All lines are leased from Slovak Telecom (partly optical fiber). Its international connectivity is based on a 2Mbps satellite link. SANET has about 160 member institutions (30 of them private) including R&D institutions; cultural institutions, the national library (in Martin), museums, hospitals, commercial organizations, government ministries, and a number of secondary schools. [ 207 ]
EuroTel is perhaps the major commercial ISP, reaching all major cities using leased lines of Slovak Telecom, which is a part owner of EuroTel, along with US companies. EuroTel customers are mainly commercial users. [ 208 ]
A connection has been established to the EBONE network from the capital, Bratislava. However, the Slovak Republic has not yet connected to the European academic project of TEN. [ 209 ]
2. Government Policy
2.1 Telecommunications