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INITIATIVE on INTERNET for ECONOMIC DEVELOPMENT INITIAL SURVEY of BULGARIA September 19 – 30, 1999

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INITIATIVE on INTERNET for ECONOMIC DEVELOPMENT INITIAL SURVEY of BULGARIA September 19 – 30, 1999 Center for Economic Growth Office of Emerging Markets INITIATIVE ON INTERNET FOR ECONOMIC DEVELOPMENT INITIAL SURVEY OF BULGARIA September 19 – 30, 1999 Center for Economic Growth and Agricultural Development Bureau for Global Affairs, Field Support and Research U. S. Agency for International Development Washington, DC 20523-0228 The Office of Emerging Markets working documents are internal publications financed by the United States Agency for International Development (USAID), undertaken by independent consultants and disseminated by USAID to interested members of the development community. Information contained in this document reflects the opinions of the independent scientific expertise involved and is not the official policy of USAID or any other component of the U.S. Government. Information contained herein is the sole property of the U.S. Government. No part of this document can be published or reproduced without the written permission of USAID. INITIATIVE ON INTERNET FOR ECONOMIC DEVELOPMENT: BULGARIA SURVEY EXECUTIVE SUMMARY At the invitation of the USAID mission in Bulgaria, a team of information technology professionals conducted a preliminary assessment from September 19th to the 30th, 1999. The visit was occasioned by the creation of the Presidential Initiative on Internet for Economic Development by President Clinton in November of 1998. The purpose of the Initiative is to speed the adoption and application of new technologies in development, particularly by expanding access to the Internet and its applications such as electronic commerce. The team's visit had the objective of conducting an initial survey of the situation in Bulgaria, in order to identify potential opportunities for action under the Initiative. In a series of more than 30 meetings, the team met with representatives of various government agencies, the business community, the education sector, NGOs, and the telecommunications sector. This broad exposure enabled the team to develop an analysis of the status and potential of the situation in Bulgaria. The team was impressed by the advanced state of readiness in the country to accelerate the national involvement in information technology and connectivity for economic growth. While there are many constraints in the situation, it was clear that there is a strong base and considerable momentum in the country. The government is clearly committed to an electronic future for Bulgaria's economy; it is currently deeply involved in the preparation of legislation to provide the context for the growth, and in the development of infrastructure and applications to enhance the role played by the government. The private sector is also quite cognizant of the urgent needs and direct benefits that will accrue to them from a deeper involvement with information technology. They are eager to participate in what they see as electronic future, partly because they think it is essential for their participation in the economic and business activity of the European Union, and partly because it offers a direct economic benefit in the more immediate national context. The NGOs and the education sector have a clear vision of the importance of information technology and connectivity, not merely for economic growth but also for establishing a basis for citizen participation in a rapidly evolving civil society. The telecommunications sector could hardly be more intensely aware of the salience of information technology and communications. Parts of the telecom sector are caught up in the worldwide movement toward privatization, liberalization, and deregulation of telecommunications entities. Other parts are more taken with the idea of seizing the opportunity that the entrance of competition provides, and are engaging with entirely new markets such as Internet service provision as well. The telecommunications sector does not represent a simple element in the Bulgarian equation, but it is strongly focused on the environment of rapid change and opportunity in which it finds itself. The team's assessment looked at the governmental and legislative aspects of the situation. The Republic of Bulgaria is developing a national strategy for its emergence into an information society. It is consciously planning to develop the institutions, the infrastructure, and the mindset to step forward as a modern economy. They are engaged in a participatory process of the development of legislation as a part of the initial groundwork. There is a surprisingly broad awareness across different elements of PAGE i INITIATIVE ON INTERNET FOR ECONOMIC DEVELOPMENT: BULGARIA SURVEY the government structure of the importance of these events. This report covers in detail many of the things being undertaken by the government. While there is active criticism from some quarters, and an energetic debate about the best path, these features should be seen as a healthy part of the process by which a civil society determines its future. The team also examined the evolution of the telecommunications sector and the availability of existing infrastructure that might meet the technological needs for this new era. The country is in the throes of privatization of its national monopoly carrier. This has introduced elements of uncertainty and has delayed an otherwise aggressive investment strategy in new capacity. The flux in the system has both stimulated the emergence of new suppliers and new products, such as in the arenas of wireless telephony and Internet service provision, and has also led to confusion and stasis while the government negotiates with potential foreign investors in the telecom sector. The existing infrastructure is not ideal for widespread access to networked digital communications. That situation is changing fast as new infrastructure is built, or alternative techniques (such as wireless communication) emerge. Nonetheless, both areas are fairly advanced in telecommunications infrastructure relative to other impoverished nations. The availability of good Internet connectivity will be a declining constraint over the next two decades as technology advances and infrastructure is built. For the moment, relatively good connectivity can be had in places that are well served by the current infrastructure, but otherwise connectivity remains a problem for more rural applications. The team was very positively impressed about the situation in Bulgaria. During the extensive meetings (detailed elsewhere in this report) they identified the number of potential areas as opportunities for activity that would be appropriate under the Initiative. This list, which is presented in detail in the report, should be taken as an initial and illustrative scan of the environment, rather than as an exhaustive compendium. There was a rich set of possible activities, which the team has identified for the mission to consider with its development partners before choosing specific activities for integration into its development portfolio. The team conducting the survey was composed of six experts: Kenneth Lanza, Team Leader, USAID/Washington, G/EGAD/EM; Blair Cooper, ENI Bureau Representative, USAID/Washington, ENI/OIM/ID; Randy Hartnett, E-commerce Development Specialist, President, Broadband; Andrew Kinnear, Regulatory Specialist, Independent Consultant; Dennis Foote, Human Resource and Development Information Technology Specialist, Vice President, Academy for Educational Development; Nora Ovcharova, Program Specialist, USAID/Sofia. PAGE ii INITIATIVE ON INTERNET FOR ECONOMIC DEVELOPMENT: BULGARIA SURVEY TABLE OF CONTENTS EXECUTIVE SUMMARY ................................ ................................ ................................ i TABLE OF CONTENTS ................................ ................................ ................................ iii INTRODUCTION................................ ................................ ................................ ............. 1 BACKGROUND OF THE INITIATIVE ON INTERNET FOR ECONOMIC DEVELOPMENT ..... 1 PURPOSE AND METHODOLOGY OF BULGARIA’S SURVEY .............................................. 1 INTERNET ENVIRONMENT FOR ECONOMIC DEVELOPMENT ................................ ..2 GOVERNMENT......................................................................................................................2 STRUCTURE OF THE BULGARIAN TELECOMMUNICATIONS SECTOR AND THE INTERNET ......................................................................................................................... 2 LEGISLATIVE FRAMEWORKS .......................................................................................... 5 STRATEGY AND NATIONAL PROGRAM FOR DEVELOPMENT OF THE INFORMATION SOCIETY IN THE REPUBLIC OF BULGARIA..................................................................... 8 General........................................................................................................................................ 8 Objectives and Funding ................................................................................................................8 Legal And Regulatory Framework ................................................................................................. 9 Communication Infrastructure and Services ..................................................................................9 National Priorities by Areas......................................................................................................... 10 Management..........................................................................................................................10
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