2013 Annual Report Of

COMMUNICATIONS REGULATORY AUTHORITY OF THE REPUBLIC OF LITHUANIA

ANNUAL REPORT 2013

Communications Regulatory Authority of the Republic of Lithuania Annual Report 2013 FOREWORD BY THE DIRECTOR OF THE COMMUNICATIONS REGULATORY AUTHORITY OF THE REPUBLIC OF LITHUANIA

I am glad having this opportunity to present the twelfth report of the Communications Regulatory Authority of the Republic of Lithuania (RRT). Compared to the previous year, the year 2013 was different, exceptional. Sometimes we had to take urgent action, to look for new solutions, new possibilities after we encountered certain challenges. As a public administration authority we sought both to contribute to the implementation of the priorities of the Government of the Republic of Lithuania for 2013 and to implement our own goals and priorities. One of RRT’s priorities in 2013 was ensuring conditions for efficient competition in the sector of electronic communications. Competition among service providers and regulation of wholesale services of electronic communications implemented by RRT created conditions for efficient competition in the retail market without a specific intervention by RRT. In 2013 RRT finished analysis of four public fixed telephone services markets, which demonstrated that these markets had characteristics favourable for development of competition without the necessity to apply ex ante regulation. Referring to this, RRT withdrew the obligations that had been previously imposed on undertakings in the public fixed telephone services markets. Looking forward, we are optimistic because, in spite of the revenues in the sector of electronic communications that are decreasing every year, the market players continue investing into the electronic communications infrastructure. In 2013, compared to 2012, investments into the electronic communications infrastructure increased by 16 per cent. Operators mostly invested into the development of 3G, 4G and optical fibre networks, modernisation of core networks. These investments will ensure further geographic accessibility of new services to consumers. As the digital literacy of the Lithuanian society is improving and the number of consumers using smart devices is increasing, the need for data transmission services, their variety and quality, is increasing, too. We make efforts towards further development of the infrastructure of modern electronic communications networks, giving possibilities to benefit from most advanced technologies, to create cloud computing, e- commerce, e-government and other services. In 2013 the obligations imposed on TEO LT, AB in the wholesale broadband communication access market became effective. These obligations will create favourable conditions for other providers of electronic communications services to make use of the infrastructure of TEO LT, AB and to provide a variety of electronic communications services. Development of the infrastructure of electronic communications networks and use of new technologies are also facilitated by effective management of radio frequencies. That is an integral area of RRT’s activities and one of the most important priorities of RRT in 2013. I would like to mention a public auction for radio frequencies (channels), which was organised for the first time in the history of RRT, as an extraordinary event in the resource management area. During the auction, at the end of 2013, RRT issued permits to three auction winners to use radio frequencies (channels) from the 800 MHz radio frequency band, intended for further development of 4G LTE networks and provision of electronic communications 1

Communications Regulatory Authority of the Republic of Lithuania Annual Report 2013 services in Lithuania in such networks. It is expected that due to physical propagation properties of these radio frequencies, 4G networks will also reach rural locations in Lithuania, in this way ensuring even greater broadband communication penetration and accessibility of electronic communications services in the whole territory of the country. The year 2013 was marked by extraordinary events in the postal market, too, to which RRT paid particular attention. At the beginning of the year, the Lithuanian postal sector underwent essential changes – the postal services market was liberalised, the reserved area was removed, which means that all postal services providers can compete without any restrictions. Competition will encourage all participants of the postal services market to develop their activities more effectively, to improve the quality of the postal services and the range of offered services. Thus, the immediate and important task for RRT will be ensuring and encouraging transparent and effective competition in the postal market. During the lastdecades, the importance of cyberspace and Internet in the life of the society and for economic development has been constantly increasing, use of electronic services has been getting more and more active. In performance of the functions of supervision over the electronic signature, in 2013 we noticed a significant increase in the demand for valid qualified certificates – the total number of qualified certificates issued by certification service providers in Lithuania increased by 27.6 per cent and reached almost 1 million. Looking ahead, it is planned that the Regulation of the European Parliament and of the Council on electronic identification and trust services for electronic transactions in the internal market will be approved in 2014. It is expected that the proposed new legal regulation will create a cross-border and cross- sector framework on the European Union level for ensuring secure, trustworthy and easy-to-use electronic transactions that encompasses electronic identification, electronic signatures, electronic seals, electronic time stamping, electronic documents, electronic delivery services and website authentication. Ensuring security of electronic communications is an activity, which is integrally related to the electronic communications market regulation activities, as only secure electronic environment increases consumers’ trust. It is obvious that the increasing importance of cyberspace urges immediate attention to the Internet reliability, interoperability and security problems. In 2013, the European Commission announced the communication “Cybersecurity Strategy of the European Union: An Open, Safe and Secure Cyberspace” and tabled a proposal for the Directive of the European Parliament and of the Council concerning measures to ensure a high common level of network and information security across the Union. Implementation of the said Strategy and the proposed Directive concerning network and information security should improve prevention of and response to cyber incidents. As regards CERT-LT activities and prevention of cyber-attacks performed by RRT, it is noteworthy that in 2013 CERT-LT investigated 25,337 cybersecurity incidents in the Lithuanian cyberspace. Compared to 2012, we investigated 18 per cent more incidents (21,416 incidents in 2012). Also, in 2013 CERT-LT detected and neutralised a botnet control server operating in Lithuania, which could control 5,400 computers in the world. CERT-LT is consistently improving the system developed by it, which has no analogues in Europe, which helps RRT to analyse the infrastructure of the Lithuanian web (Internet address spaces, routes, autonomous systems, etc.), to evaluate integrity of the web in the country, to monitor the web elements, reliability of operation of infrastructure elements, to identify elements of critical infrastructure and to perform monitoring of such objects. CERT-LT is consistently improving measures intended for efficient management and solving of incidents, for analysis of malicious code, searching for gaps in websites and network equipment. Also, CERT-LT created tools freely accessible to Internet service providers and Internet

Communications Regulatory Authority of the Republic of Lithuania Annual Report 2013 users, which help to assess and solve security problems in the network and equipment. It should also be mentioned that from the last year CERT-LT is ready for uninterrupted work 24 hours per day. Having joined the Safer Internet project, RRT continues to ensure functioning of the Internet hotline, the purpose of which is to give the society a possibility to anonymously inform about illegal or harmful content on the Internet. The Safer Internet Day conference “Connect with respect and responsibility!” was organised as usual at the beginning of the year. About 700 pupils from various regions of Lithuania,.participated in the conference, including those connected via teleconference. At the beginning of 2013 we were already ready for the Lithuanian Presidency of the EU Council. Preparatory work was well appreciated because, under RRT representative’s chairmanship the Council Working Party on Technical Harmonisation (Radio Equipment) managed to achieve a significant progress regarding the Directive of the European Parliament and of the Council on the harmonisation of the laws of the Member States relating to the making available on the market of radio equipment. We are glad that the maximum result was attained – a compromise text of the directive was approved and a political consensus on provisions of the directive was achieved. During the Lithuanian Presidency of the EU Council, the Eastern Partnership was one of the priority areas of Lithuania. Our wish, even duty, to pay tribute and to share our experience encourages us to actively participate in the activities of the Group of Electronic Communications Regulatory Authorities of the Eastern Partnership Countries for a number of years. In 2013, RRT’s representative was the Vice-Chairman of the Eastern Partnership group. Recognition of RRT’s competences is demonstrated by the fact that RRT’s representative was elected to this office for the second term of office. We continued paying a lot of attention to integration into the international regulatory area and actively participated in the international cooperation activities. Two RRT’s representatives served as chairmen of international cooperation organisations, some other representatives served as deputy chairmen in several international working groups. We face future challenges in creating the single postal market, oriented towards high quality postal services. These challenges will be dealt with when RRT’s representative will act as Chair of the European Regulators Group for Postal Services in 2015 and during his vice-chairmanship in 2014. Increasing consumers’ awareness and providing them with quality services remains an important target for RRT. In 2013, free of charge helpline 8 800 20030 was offered by RRT. Consumers call this number in order to get advice on any issues within RRT’s competence: telephone, Internet, radio or television services, radio interference, networks and information security, post, e-signature and other issues. The helpline registred 8,577 calls in 2013. In 2014, Lithuania celebrates a decade of its membership in the European Union. What should we expect from this year? It kind of obliges to reinforce, complete, improve everything that was being developed in the course of the year. RRT will further seek to ensure competition in electronic communications and postal markets, investments into next generation broadband wireless communication networks, their development, a variety of advanced technologies and services, protection of consumer rights and legitimate interests. We plan to pay most attention to the issues of quality of broadband wireless communication services, problems in data transmission by mobile telephone networks. One of the most important priorities in RRT’s activities in 2014 is ensuring security of electronic communications networks and information and prevention of cyber-attacks (performed by CERT-LT). The Law of the Republic of Lithuania on Cybersecurity is planned to be adopted in 2014. After this law is passed, RRT, within the limits of its competence, will have to draft and adopt relevant implementing legal acts. We think that as new radio communication technologies 3

Communications Regulatory Authority of the Republic of Lithuania Annual Report 2013 appear and operators intensively develop and use next-generation public mobile radio communication systems, we will further have to deal with electromagnetic compatibility problems, challenges of compatibility of new technologies with the existing networks of digital terrestrial television, UMTS, GSM networks. “The only value on Earth is a person’s relationship with another person” (Antoine de Saint-Exupéry). Therefore, let’s cooperate. In order to achieve maximum results, we need sincere, straight, competent cooperation, which starts in a small cell – in a family, at work, and extends to institutions, beyond our native land. Only by cooperation will we adopt and share good practices. Only by cooperation will we find best solutions with service providers and consumers.

Sincerely yours,

Feliksas Dobrovolskis

Communications Regulatory Authority of the Republic of Lithuania Annual Report 2013

TABLE OF CONTENTS

MISSION, OBJECTIVES, TASKS ...... 8 FUNCTIONAL AREAS OF ACTIVITIES ...... 9 ACTIVITY CHARACTERISTICS OF RRT ...... 9 Management of RRT ...... 9 Planning and organization of RRT’s activities ...... 11 RRT human resources and organizational structure ...... 12 RRT activity guidelines for 2014 ...... 15 BRIEF OVERVIEW OF DEVELOPMENT OF THE COMMUNICATIONS SECTOR ...... 19 SUPERVISION OF ACTIVITIES OF UNDERTAKINGS ...... 26 General principles of market supervision ...... 26 Supervision of undertakings engaged in electronic communications activities ...... 26 Supervision of the postal services market ...... 28 Surveillance of radio equipment and telecommunications terminal equipment market ...... 30 Surveillance of compliance of equipment and devices with electromagnetic compatibility and other requirements ...... 31 Supervision of electronic signatures ...... 32 PROTECTION OF CONSUMER RIGHTS AND LEGITIMATE INTERESTS ...... 34 Measures for improvement of quality of consumer information and service ...... 34 Protection of consumer rights and legitimate interests in the electronic communications sector ...... 38 Supervision of the universal electronic communications services ...... 38 Public fixed telephone communication services ...... 40 The quality of wireless Internet access services ...... 40 The quality of public mobile telephone communication services ...... 41 Cable television networks ...... 42 Investigation of consumers’ disputes and complaints ...... 43 The activities of RRT in the area of ensuring network and information security ...... 45 Activities of the national CERT-LT team ...... 45 Reliability study of the Internet network infrastructure in Lithuania ...... 48 CERT-LT website is accessible also over the IPv6 protocol ...... 48 Inter-institutional cyber training X1306, organized by CERT-LT ...... 49 Implementation of the Safer Internet Project ...... 50 Protection of consumer rights and legitimate interests in the postal sector ...... 52 Supervision of universal postal services ...... 52

Establishment of service points for provision of universal postal services ...... 54

Quality control of universal postal services ...... 55

Investigation of user complaints ...... 56

Protection of consumer rights and legitimate interests in the equipment sector ...... 58 The activities of RRT in ensuring free movement and provision of equipment to the EU market ...... 58

Elimination of radio interference ...... 59

Supervision of electronic communications infrastructure ...... 61

Encouragement of usage of electronic signatures and infrastructure development ...... 61

PROMOTION OF COMPETITION IN ELECTRONIC COMMUNICATIONS AND POSTAL SECTORS ...... 63 Competition in electronic communications sector ...... 63 Market tendencies and participants ...... 63

Market analysis ...... 64

Communications Regulatory Authority of the Republic of Lithuania Annual Report 2013 Supervision of execution of the obligations imposed on the undertakings having significant market power ...... 66

Supervision of wholesale and retail fixed telecommunication services ...... 67

Supervision of wholesale mobile telecommunication services ...... 68

Supervision of broadcasting transmission services ...... 70

Supervision of roaming services ...... 70

Promotion of competition based on infrastructure ...... 71

Number portability service ...... 72

Selection of a service provider ...... 72

Resolution of disputes between undertakings ...... 72

Competition in the postal services sector ...... 74 Participants and tendencies of the postal services market ...... 74

Tariffs and cost accounting of universal postal services ...... 76

CREATING PRECONDITIONS FOR TECHNOLOGICAL DEVELOPMENT OF ELECTRONIC COMMUNICATIONS MARKET ...... 78 Promotion of investments and development of advanced ICT technologies ...... 78 Radio frequency management and implementation of modern technologies ...... 79 Digital TV and radio ...... 81 Fixed radiocommunication and satellite communication ...... 86 Fixed radiocommunication...... 86

Satellite communication ...... 87

Radio amateur activities ...... 89

Radio spectrum monitoring...... 90

Inspection of radiocommunication networks and stations ...... 91

Radiocommunication equipment ...... 92

Management of other resources ...... 93 Management of telephone numbers ...... 93

Management of network identifiers ...... 94

Internet addresses ...... 94

INTEGRATION INTO DECISION MAKING SYSTEM IN THE EU AND INTERNATIONAL REGULATORY SPACE ...... 96 PRESIDENCY OF THE COUNCIL OF THE EU ...... 96 The Body of European Regulators for Electronic Communications (BEREC) ...... 100 European Regulators Group for Post (ERGP) ...... 102 Cooperation with national regulatory authorities ...... 103 The Nordic-Baltic dimension of cooperation...... 103

The Eastern Partnership Programme ...... 104

Cooperation of Baltic regulators ...... 104

Bilateral institutional cooperation ...... 104

Administrative cooperation of EU supervision institutions ...... 105

The European Conference of Postal and Telecommunications Administrations (CEPT) ...... 106 6

Communications Regulatory Authority of the Republic of Lithuania Annual Report 2013 The International Telecommunication Union (ITU) ...... 108 The Universal Postal Union (UPU) ...... 109 The Forum of European Supervisory Authorities for Electronic Signatures (FESA) ...... 109 The International Association of Internet Hotlines INHOPE ...... 110 The Internet Corporation for Assigned Names and Numbers (ICANN) and the Governmental Advisory Committee (GAC) ...... 110 Negotiations with communication administrations of neighbour countries ...... 111 FINANCIAL STATEMENT ...... 113 Utilization of funds, allocated for Communications Management and Control Programme, executed by RRT in 2013 ...... 114 Annex 1. The results of market analysis, performed by RRT ...... 116 Annex 2. The orders of the Director of RRT ...... 119 Annex 3. Annual report on strategic activity plan ...... 121

Communications Regulatory Authority of the Republic of Lithuania Annual Report 2013 MISSION, OBJECTIVES, TASKS

MISSION To ensure a wide range of technologically advanced, high-quality, secure and affordable ICT and postal services (products) for each and every resident of the Republic of Lithuania; to create possibilities for development of information and communications technologies and postal business, thus accelerating the development of information and knowledge society.

THE MAIN OBJECTIVE

To ensure a wide range of technologically advanced, high-quality, secure and affordable ICT and postal services (products) for each and every resident of the Republic of Lithuania, to create possibilities for development of ICT and postal business, influencing the supply of the services on the market on the basis of a flexible regulatory framework harmoniously functioning in the single EU market.

OBJECTIVE 1 OBJECTIVE 2 OBJECTIVE 3 OBJECTIVE 4 OBJECTIVE 5 Ensuring efficient and Ensuring the protection Creation of conditions Integration into the EU Ensuring performance of transparent competition of rights and legitimate for long-term and international obligations that may be on the ICT and postal interests of the users of investments into regulatory space and imposed on operators and services markets the ICT and postal electronic efficient activities of providers of electronic services according to communications RRT communications services the competence of RRT infrastructure and in the interests of national development of defence, national security innovative ICT and maintenance of public order as well as in cases of

extraordinary circumstances TASKS

1.1. To ensure 2.1. To reinforce security of 3.1. To perform radio 4.1. Efficient integration into 5.1. To ensure that operators that there are no electronic communications frequency (channel) the EU decision making and providers of electronic distortions and networks and information, management, supervision process communications services limitations of and reliability and strength of their usage, including perform their obligations that competition in of electronic monitoring, management of may be imposed on them in the electronic communications other electronic interests of national defence, communications networks communications resources national security and and postal maintenance of public order as sectors well as in cases of extraordinary circumstances 1.2. To perform 2.2. Supervision of provision 4.2. Efficient organization, surveillance of the ICT and postal publicity and control of of electronic services, including the activities of RRT communications universal services and postal activities 2.3. Ensuring and performed by supervision of compliance of undertakings, radio equipment and while ensuring telecommunications efficiency terminal equipment, existing of activities on the market of the Republic of Lithuania, with the obligatory requirements and the electromagnetic compatibility requirements

2.4. To perform functions of electronic signature supervision institution

Communications Regulatory Authority of the Republic of Lithuania Annual Report 2013 FUNCTIONAL AREAS OF ACTIVITIES

Regulation of the postal Regulation of the sector electronic communications sector

Management and supervision of the Supervision of equipment

radio spectrum and devices

Management and

Network and information supervision of electronic security communications resources

Electronic signature

ACTIVITY CHARACTERISTICS OF RRT

Management of RRT

Communications Regulatory Authority of the Republic of Lithuania Annual Report 2013 RRT is an independent state institution, acting according to the Law on Electronic Communications, the Postal Law, the Law on Electronic Signature, the Law on the Protection of Minors against the Detrimental Effect of Public Information and other laws and its own Regulations. From the perspective of the EU legislation, regulating social relations, pertaining to electronic communications and postal activities, RRT is a national regulatory institution of the Republic of Lithuania. Feliksas Dobrovolskis1 is the Director of RRT since 2011. The Director of RRT has been appointed by the President of the Republic of Lithuania, upon an offer of the Prime Minister, for a term of 5 years. The Director of RRT represents RRT in the Republic of Lithuania and abroad, confirms the strategic activity plan of RRT, issues orders, approves legal acts by his orders, exercises other powers given to him by laws and other legal acts (Article 7(6) of the Law on Electronic Communications). The Council of RRT (hereinafter referred to as the Council) is a collegial body of RRT, comprised of seven members, who are also appointed for the time period of five years by the President of the Republic of Lithuania following an offer of the Prime Minister. The working procedure of the Council and the procedure of holding the meetings and adoption of resolutions is established by the Rules of Procedure of the Council approved by the Council. The Council members are representatives of public administration institutions and academic society, no remuneration is paid for their activity. In 2013, the Council was comprised of the following members:

Feliksas DOBROVOLSKIS, Chairman of the Council, Director of RRT

Eduardas BAREIŠA, Dean of the Faculty of Informatics of Kaunas University of Technology

Algirdas BLOZNELIS, Head of the Communication and Information Supply Board of the State Security Department of the Republic of Lithuania

Vytautas BUTRIMAS, Senior Advisor on the Issues of Cyber Security to the Ministry of National Defence of the Republic of Lithuania

Gintaras ČIURLIONIS, Director of Information and Communications Department under the Ministry of Interior of the Republic of Lithuania

EDMUNDAS KAZAKEVIČIUS, Head of the Information Society Unit of the Public Administration and Social Environment Department of the Office of the Government of the Republic of Lithuania – since 18 December 2013.2

Ieva ŽILIONIENĖ, Deputy Director of Information Society Development Committee under the Ministry of Transport and Communications of the Republic of Lithuania

1 Decree No. 1K-751 of the President of the Republic of Lithuania of 8 July 2011 on appointment of the Director of RRT. 2 E. KAZAKEVIČIUS was appointed by Decree No. 1K-1679 of the President of the Republic of Lithuania of 18 December 2013 on appointment of a member of the Council of the Communications Regulatory Authority. He replaced Council member L. ŽONGOLAVIČIŪTĖ.

Communications Regulatory Authority of the Republic of Lithuania Annual Report 2013 The Council approves draft legal acts prepared by RRT (in cases determined in the Law on Electronic Communications), the estimates of revenues and expenditure, internal RRT Rules of Procedure, hears the reports of the Director of RRT on the activiy of RRT, considers drafts of RRT’s strategic activity plans, the issues of imposition of economic sanctions on undertakings, which fail to observe the Law on Electronic Communications, and sanctions on providers of postal service, which fail to follow requirements of the Postal Law, etc. All the functions of the Council are defined in Article 7 (8) of the Law on Electronic Communications. In 2013, 9 Council meetings were held, in which changes to the expense estimate of RRT’s programme “Communications management and control” for 2013, changes in RRT’s structure and regulations of organisational units, changes in the Rules of Procedure of RRT, also drafts of relevant orders of the Director of RRT were approved3. In 2013, the Council discussed and approved the Plan of Radio Communication Development in 792–862 MHz Radio Frequencies Band and its amendment, the draft Strategic Plan of RRT for 2014–2016, also listened to RRT’s Annual Report 2012 and approved of its submission to the Parliament of the Republic of Lithuania and the Government of the Republic of Lithuania. In 2013, the Council, having discussed the issues of imposition of economic sanctions on 2 undertakings that did not comply with the requirements of the Law on Electronic Communications and subordinate legal acts implementing it and on 1 postal service provider that did not comply with the requirements of the Postal Law and subordinate legal acts implementing it, adopted 2 resolutions to propose imposition of an economic sanction and 1 proposal not to impose an economic sanction.

Planning and organization of RRT’s activities

RRT implements its mission in observance of the strategic plans, approved by order of the Director of RRT, establishing the main activity objectives for three years, as well as tasks and measures for implementation of these objectives. The strategic plans of RRT are prepared referring to the programme and priorities of the Government, the State Long-Term Development Strategy, the strategy for development of the corresponding management area, the Strategy for Assignment of Radio Frequencies for Radio and Television Programme Broadcasting, other strategic planning documents, which are implemented with participation of RRT, and to the functions to be performed by RRT. For the purpose of implementation of strategic targets, in 2013 RRT executed a special continuing Telecommunications Management and Control Programme (code 01 81), financed from the income of RRT, received for the provided services and performed works, paid according to the tariffs agreed upon with the Council of RRT and contributed into the state budget. The aims and objectives of the Telecommunications Management and Control Programme are in line with the aims raised for national regulatory authorities by the EU legal acts in the area of regulation of electronic communications and ensure meeting of RRT financing principles. The Programme is aimed at harmonious development of the information and communications technologies (ICT) and postal sector of the country, in order to create favourable conditions for the development of the ICT and postal business and services, competition and innovations in these areas, to increase security of electronic communications

3 On charges for services provided and works performed by RRT, on the Description of the General Conditions for Engaging in Electronic Communications Activities, on the Rules for Examination of Disputes among Undertakings, also Disputes of End-users with Providers of Electronic Communications Services and Disputes between Providers and Users of Postal Services, on the Rules for Announcement of Information in Relation to Implementation of the Law on Electronic Communications, the Postal Law and Other Laws, on the Market Research Rules. 11

Communications Regulatory Authority of the Republic of Lithuania Annual Report 2013 networks and information, to raise the knowledge level of the society and culture in this area, to draw attention of the society to harmful content in public computer networks. The Telecommunications Management and Control Programme conforms to provisions of Section “Information and Knowledge Society” of Chapter VIII “Education and Science” of the Programme of the Government of the Republic of Lithuania 2012-2016 – we will seek that the Lithuanian society would actively use information and communications technologies, will ensure that the broadband network would be developed well in the whole country, will implement the electronic signature programme. It also conforms to paragraphs 143, 144, 145, 146 of the priority measures for implementation of the Programme of the Government of the Republic of Lithuania 2012–2016. Every quarter the activities of RRT divisions are controlled by analysing the execution of the division activity plans. The summarized information on the performance of the activity plans is prepared and provided to the management of RRT. Each year RRT prepares and submits the annual RRT activity and financial report for the previous calendar year to the Parliament of the Republic of Lithuania and the Government of the Republic of Lithuania and announces the report publicly. Detailed information regarding implementation of the programme measures of the strategic activity plan for 2013 and the results of meeting evaluation criteria is presented in Annex 3 “The annual report on strategic activity plan” to the report.

RRT human resources and organizational structure

On 12 June 2013, 162 positions of civil servants and employees working under employment contracts in RRT were approved (plus 1, as the Director of RRT is a state official). The average age of RRT’s staff is 44 years. 100 men and 63 women work in RRT. 156 employees have a university degree, 7 of them are doctors of science. 73 employees have a degree in engineering or technical sciences, 21 – in economics, 10 – in public administration, 18 – in physics, 17 – in law, 10 – in mathematics and informatics, 14 – in other areas (see Figure 1). RRT has a functional structure. The following structure of RRT was approved by Order No 1V-1051 of the Director of RRT of 9 July 2013 “On the Approval of the Structure of the Communications Regulatory Authority of the Republic of Lithuania”: the Director, 3 Deputy Directors, Advisor to the Director, Administrative Department, Electronic Communications Department, Infrastructure and Device Control Department, Postal Department, Radiocommunication Department, Radio Spectrum Control Department (which has control divisions in Vilnius, Klaipėda, Kaunas, Šiauliai and the Panevėžys subdivision of the Šiauliai control division), Strategy Department, Legal Department, Network and Information Security Department, Finance and Accounting Division, Inspection Division and EU Support Project Administration Division.

Communications Regulatory Authority of the Republic of Lithuania Annual Report 2013 Other areas 14 Law 17

Women Engineering 63 Physics or technical Mathematics 18 73 Men and 100 informatics 10

Public administration Economics 10 21

Figure 1. Composition and education of RRT’s staff in 2013

Table 1 shows changes in the number of positions of RRT civil servants and employees working under employment contracts from 2008 to 2013. In order to improve staff skills related to implementation of the strategic goals of the Authority and development of their special knowledge of RRT regulation sphere, 151 RRT employees participated in training events organised in 2013. In order to develop the staff’s competence in ICT, the training “Prospects of development of radio communication systems and technical-economic analysis of telecommunications networks and services” was organised, which was attended by 53 employees. In order to improve staff’s general competences in the area of regulation and supervision over the market of the communications sector, a seminar “Public procurements in RRT: legal concept and entirety of actions of persons involved” was organised, which was attended by 27 employees. In order to improve capabilities and skills of the staff providing services to individuals, trainings “RRT’s mission, vision” (attended by 97 employees), “Emotion and stress management, prevention of conflicts” (attended by 18 employees) were organised. In order to develop civil servants’ knowledge in the area of professional ethics and prevention of corruption, a seminar “Prevention of corruption in Lithuania” was organised, which was attended by 49 employees. 2 civil servants listened to the Introductory Training Program for Civil Servants, 5 employees participated in trainings on improving managerial capabilities and trainings in the area of strengthening leadership, political and governance competences, 70 civil servants improved their knowledge of the EU working languages, 124 civil servants participated in other qualification raising programs. In 2013, all employees willing to be trained according to the internal RRT programme “RRT employees to RRT Employees” participated in 2 trainings: “Supervision over compliance with the Electromagnetic Compatibility (EMC) Regulation, harmonised standards, EMC tests”, “Presentation of Studies of the Economic Analysis Division of the Strategy Department”. Other trainings were individual, according to the needs provided for in RRT’s personnel training plan for 2013. In 2013, while getting ready for the Lithuanian Presidency of the EU Council, RRT actively participated in trainings arranged by the Ministry of Foreign Affairs together with partners in order to implement the project “Improvement of qualification of Lithuanian civil servants, representing the interests of Lithuania in the European Union” (No. VP1–4.1–VRM–02–V–01–002).

Communications Regulatory Authority of the Republic of Lithuania Annual Report 2013 Table 1. The change in the number of job positions of civil servants and employees working under employment contracts in RRT during 2008-2013 2008 2009 2010 2011 2012 2013

165 165/156* 156 155** 159*** 163****

Source: RRT * According to Resolution No. 394 of the Government of the Republic of Lithuania of 6 May 2009, the number of positions of civil servants and employees working under employment contracts in RRT was reduced to 156. ** According to Resolution No. 226 of 23 February 2011 of the Government of the Republic of Lithuania, the number of positions of civil servants and employees working under employment contracts in RRT was reduced to 155. *** According to Resolution No. 209 of the Government of the Republic of Lithuania of 29 February 2012, the number of positions of civil servants and employees working under employment contracts in RRT was increased to 158, not including the position of the Director of RRT (the Director of RRT is a state official). **** According to Resolution No. 535 of the Government of the Republic of Lithuania of 12 June 2013, the number of positions of civil servants and employees working under employment contracts in RRT was increased from 158 to 162, not including the position of the Director of RRT (the Director of RRT is a state official).

Communications Regulatory Authority of the Republic of Lithuania Annual Report 2013 RRT activity guidelines for 2014

RRT priorities for 2014 are as follows:  protection of rights and legitimate interests of consumers using electronic communications and postal services;  ensuring security of electronic communications networks and information, and prevention of cyber-attacks;  promoting investments into broadband wireless communication networks of next generation, development of advanced technologies and services. ______

The purpose of all actions of RRT is to seek that a wide selection of technologically advanced, high quality, secure, affordable electronic communications and postal services (products) would be ensured for residents of Lithuania. The measures provided for in RRT’s Strategic Plan 2013 continue the work started in previous years, consistently implementing the system of promoting competition in the sector of electronic communications regulated both by Lithuanian and EU legal acts, the public policy in the sectors of electronic communications and postal services.

In order to ensure the possibility for end users of electronic communication services, including consumers, and users of postal services to use different electronic communications and postal services under favourable conditions, taking in consideration technological developments in the market and change of needs of users and business, the priority of RRT in 2014, equally as in 2013, is protection of rights and legitimate interests of end users of electronic communication services and users of postal services. The protection of the rights and legitimate interests of end users, including consumers, is one of the essential tasks of RRT, relating to investigation of service users’ complaints, supervision of provision of universal services, etc. In order to ensure the right of service users, including consumers, to receive services of the appropriate quality, RRT also performs quality control of public electronic communications services. Project “Creation of consumers’ complaints information system” (classifier of consumers’ complaints and enquiries) was started in 2013 and is going to be completed in 2014. On 1 January 2013, the Lithuanian postal sector underwent essential changes – the market of the postal services was liberalised, the reserved area was cancelled, all providers of the postal services can compete without any restrictions. The competition will encourage all participants of the postal services market to develop their activities more efficiently, to improve the quality of the postal services and the variety of offered services. An important field of RRT’s activities in the nearest time will be encouragement of transparent and effective competition in the postal services market, forming the postal services market regulation practices under the liberal market conditions, in order to ensure provision of good quality postal services to users for an affordable price and protection of users’ interests and rights. In order to ensure effective functioning of the postal infrastructure, RRT will pay more attention to permanent supervision related to access to the postal network, in this way creating possibilities for postal services providers to use the postal network of AB Lietuvos Paštas under transparent and non-discriminatory conditions.

Another priority of RRT for 2014 is ensuring security of electronic communications networks and information and prevention of cyber-attacks. Electronic services may be developed only after the security of networks and information is ensured. In 2014, RRT will devote much attention to the Cybersecurity Strategy established by the European Commission and to the Commission proposal for a Directive on Network and Information Security, and will also participate in analysing the aforementioned document and preparing Lithuania’s position. The Cybersecurity Strategy: An Open, Safe and Secure Cyberspace is a comprehensive EU vision how to prevent threats in cyberspace and what counter-measures to take. The concrete actions are aimed at protecting information systems from electronic crimes and at ensuring secure development of the digital economy. RRT performs CERT-LT (Computer Emergency Response Team) activities and must ensure security and integrity of public communication networks and public electronic communications services, prevent spreading of security incidents, must seek that damage that public communication networks and/or providers of public electronic communications services and users of public electronic communications services may incur due to security incidents would be as little as possible. One of major tasks is to perform prevention of cyber-attacks. The system of monitoring of the infrastructure of the Lithuanian Internet network (LITIS) is being improved. It enables to establish the topology of the Lithuanian Internet network and critical elements of the infrastructure of the Lithuanian Internet network, to analyse their accessibility, load on the networks and other parameters. It is planned that 60 per cent of the elements of the Lithuanian Internet network infrastructure will be identified in 2014. In 2015, after improvement of working methods and accuracy in collecting information, the system should identify about 95 per cent of elements of the Lithuanian Internet network infrastructure.

Taking in consideration fast changes in technologies, decisions made during the World Radiocommunication Conference WRC-12 and Decision No. 243/2012/EU of the European Parliament and of the Council, that are directly linked to the Lithuanian communications market and that will affect the plans of RRT till 2015, another priority of RRT in 2014 is promoting investments into broadband wireless communication networks of next generation, development of advanced technologies and services. As new

Communications Regulatory Authority of the Republic of Lithuania Annual Report 2013 radio communication technologies appear, operators intensively develop public mobile radio communication systems of new generation and, when these systems operate, electromagnetic compatibility problems regularly arise, also there are problems of compatibility of new technologies with existing digital terrestrial television networks, UMTS, GSM networks, which need to be urgently addressed. In 2014, RRT is going to announce a public tender for the right to use radio frequencies (channels) from 2300–2400 MHz radio frequency band and to issue permits granting the right to use radio frequencies (channels) from this band. It is also planned to give the right to use radio frequencies (channels) from 2560– 2570 MHz and 2680–2690 MHz coupled radio frequency band and 2570–2620 MHz radio frequency band by way of an auction. It is expected that in 2014 broadband wireless access mobile radiocommunication (UMTS, WIMAX, LTE) networks will cover about 92 per cent of the territory of the Republic of Lithuania, the penetration of broadband communication will reach 38 per cent and about 38 per cent of Lithuanian residents will use 30 Mbps and faster Internet. In order to achieve efficient and harmonized management and use of radio frequencies (channels) on international and EU level, in 2014–2016 relevant legal acts will be drafted and adopted, which will be aimed at implementing: 1. Decision No. 243/2012/EU of the European Parliament and the Council of 14 March 2012 establishing a multiannual radio spectrum policy programme (OJ 2012 L 81, p. 7): 1.1. Draft order of the Director of RRT “On the Amendment of Order No. 1V-1160 of the Director of the Communications Regulatory Authority of the Republic of Lithuania “On the Approval of the Plan for Use of Radio Frequencies”, dated 24 December 2008” (to be implemented till 15 February 2015); 1.2. Draft order of the Director of RRT “On the Amendment of Order No. 1V-854 of the Director of the Communications Regulatory Authority of the Republic of Lithuania “On the Approval of the Rules for Allocation and Use of Radio Frequencies (Channels)”, dated 6 October 2005” (to be implemented till 15 February 2015); 2. Commission Implementing Decision 2012/688/EU of 5 November 2012 on the harmonisation of the frequency bands 1920-1980 MHz and 2110-2170 MHz for terrestrial systems capable of providing electronic communications services in the Union (OJ 2012 L 307, p. 84): 2.1. Draft order of the Director of RRT “On the Amendment of Order No. 1V-1160 of the Director of the Communications Regulatory Authority of the Republic of Lithuania “On the Approval of the Plan for Use of Radio Frequencies”, dated 24 December 2008” (to be implemented till 31 May 2014). RRT, referring to EC Recommendation 2007/879/EC of 17 December 2007 on relevant product and service markets within the electronic communications sector susceptible to ex ante regulation in accordance with Directive 2002/21/EC of the European Parliament and of the Council on a common regulatory framework for electronic communications networks and services (the Framework Directive), is planning to finish in 2014 the analysis of the following markets started in 2013: – Market analysis of broadcasting transmission services to deliver broadcast content to end users. The analysis is divided into two independent analyses: the market of broadcasting transmission services and the market of services of providing broadcasting transmission means; – Market analysis of call termination on individual public telephone networks at a fixed location; – Market analysis of voice call termination on individual public mobile telephone networks; 17

Communications Regulatory Authority of the Republic of Lithuania Annual Report 2013 – Market analysis of transit services provided on public telephone networks at a fixed location (national and international call transit). The following market analyses are going to be started in 2014: – Leased lines market analysis, which would include analyses of the market of a minimal set of leased lines, the market of leased lines terminating segments, the market of leased lines trunk segments; – Market analysis of wholesale leased lines terminating segments, disregarding the technology used to provide guaranteed (allocated) transmission capacities. The Regulation of the European Parliament and of the Council on electronic identification and trust services for electronic transactions in the internal market is going to be approved in 2014, at the same time updating related technical standards. With regard to this, in 2014–2016 the legal regulation of electronic signature will be improved and the following will be prepared: – Draft resolution of the Government of the Republic of Lithuania “On the Amendment of Resolution No. 2108 of the Government of the Republic of Lithuania “On the Approval of the Requirements for the Certification Services Providers Issuing Qualified Certificates, Requirements for the Electronic Signature Equipment, the Procedure for Registration of Certification Services Providers Issuing Qualified Certificates, and the Electronic Signature Supervision Regulations”, dated 31 December 2002”; – Draft order of the Director of RRT “On the Amendment of Order No. 1V-406 of the Director of the Communications Regulatory Authority of the Republic of Lithuania “On the Approval of the Description of the Procedure for Registering Persons for Obtaining Certificates and Provision of Consultation Services”, dated 19 April 2011”. When drafting legal acts in 2014–2016, a lot of attention will be paid to efficient management and use of electronic communications resources, creation of favourable technological conditions, harmonisation of legal acts with the EU regulatory legal framework.

Communications Regulatory Authority of the Republic of Lithuania Annual Report 2013 BRIEF OVERVIEW OF DEVELOPMENT OF THE COMMUNICATIONS SECTOR

Electronic communications sector. In 2013, total revenues from the electronic communications sector amounted to LTL 2.145 billion. The largest part of these revenues (38.69 per cent) was revenues from mobile telephone services. The Internet access sector in terms of revenues was the second and accounted for 19.67 per cent of all the revenues earned in the electronic communications sector. Network connection revenues amounted to 14.54 per cent of all the revenues in the electronic communications sector. Revenues from other electronic communications services accounted for the following shares of the total revenues from the electronic communications sector: revenues from fixed telephone services – 10.03 per cent, revenues from pay TV services – 10.04 per cent, revenues from data transmission services – 4.14 per cent, revenues from leased lines services – 1.05 per cent, revenues from optical fibre leased line services – 1.11 per cent and revenues from radio and television transmission services – 0.73 per cent. In 2013, the trend of reduction of revenues in the electronic communications sector remained. This tendency continues already for the fifth year in sequence. In 2013, compared to 2012, the revenues from the electronic communications sector decreased by 5.62 per cent (see Figure 2) or by LTL 128 million. 16 10,3 12 11,9 7,1 9,8 5,1 8 7,4 7,8 7,8 6,0 3,7 3,3 4 5,3 2,9 1,3 0

-4 -7,7 -6,5 -10,7 -8 -5,2 -5,6 -12 -14,8 -16 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Change in GDP Change in revenues from the sector

Figure 2. Changes in Lithuanian GDP and the electronic communications sector, 2004–2013, per cent Source: Lithuanian Department of Statistics, RRT

In 2013, compared to 2012, there was an increase in revenues only from two groups of electronic communications services: revenues from retail Internet access services increased by LTL 3 million or 0.73 per cent, whereas revenues from pay TV increased by LTL 18.6 million or 9.82 per cent. The biggest drop in 2013, compared to 2012, was in revenues from mobile telephone services (LTL 76.0 million), network connection revenues (LTL 30.1 million), revenues from fixed telephone services (LTL 25.8 million). Reduction in the revenues from mobile telephone services can be explained by strong competition among service providers and a still existing possibility to reduce service prices. Network connection revenues decreased due to RRT’s regulation of call termination services. Revenues from fixed telephone services decreased due to the falling demand, competition among service providers and competitive pressure from providers of mobile telephone services. Changes in revenues from public and mobile telephone services are given in Figure 3.

Communications Regulatory Authority of the Republic of Lithuania Annual Report 2013

1389 1355 1236 1174 1126,4 1087,4 984 967 916 840,1

462,5 443,7 424,6 412,7 399,7 354,9 302,6 270,9 245,6 219,7

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Revenues from mobile telephone services Revenues from fixed telephone services

Figure 3. Revenues from provision of fixed and mobile telephone services, in millions of LTL, 2004–2013 Source: RRT

With regard to relative indicators, in 2013, compared to 2012, the biggest drop was in revenues from broadcasting transmission services (reduction by 42.6 per cent or LTL 11.5 million), revenues from leased line services (reduction by 17.0 per cent or LTL 4.6 million). Speaking about use of electronic communications services, similar tendencies prevailed in 2013 as in 2012. In 2013, the duration of calls originated in the fixed telephone network, compared to the total duration of calls originated in 2012, decreased by 10.61 per cent or 135.6 million minutes. The duration of calls originated in the mobile telephone networks in 2013 was longer by 2.19 per cent or 165.2 million minutes than in 2012 (see Figure 4).

2013 7699,9 1142,0 2012 7534,7 1277,6 2011 7290,2 1422,8 2010 6855,8 1533,9 2009 5926,8 1592,7 2008 5408,9 1662,2 2007 4628,6 1667,2 2006 3795,6 1728,4 2005 2981,9 1797,6 2004 2399,5 1738,2 2003 1844,4 1486,4

The traffic of voice calls originated in mobile networks The traffic of voice calls originated in fixed networks

Figure 4. Duration of calls in 2003–2013, millions of minutes Source: RRT

In 2013, the number of fixed telephone users, compared to 2012, decreased from 675,394 to 624,779 or by 7.5 per cent. The number of mobile telephone subscribers in 2013, compared to 2012, decreased by 431,289 subscribers or by 8.6 per cent. It is noteworthy that the reduction was not in the number of users themselves but in the number of SIM cards, which were admitted to be inactive. 20

Communications Regulatory Authority of the Republic of Lithuania Annual Report 2013 One of the indicators showing the scope of use of electronic communications is the number of users and penetration of Internet access services. In Lithuania the number of Internet access users increased by 80,300 subscribers or 7.6 per cent, there are 38.5 Internet access users per 100 residents. The number of subscribers using Internet access services has been constantly increasing since 2005 (see Figure 5).

1000 38,5 45 35,4 40 800 30,9 35 27,1 23,9 30 600 21,2 25 17,3 20 400 12,3 15 7,6 200 10 257 418 582 710 796 880 989 1054 1134 5 0 0 2005 2006 2007 2008 2009 2010 2011 2012 2013 Number of Internet access subscribers Number of Internet access subscribers per 100 residents Figure 5. The number of Internet access service subscribers in thousands and the number of Internet access service subscribers per 100 residents, 2005–2013 Source: RRT

In 2013, compared to 2012, revenues from Internet access services increased but the recorded increase was below 0.8 per cent (see Figure 6). Revenues from Internet access come from two service groups: retail Internet access services and wholesale Internet access services. It should be noted that in 2013, compared to 2012, revenues from retail Internet access services increased by 1.9 per cent, which is 1.7 percentage points more than the total increase recorded in 2012. Revenues from wholesale Internet access services market decreased in 2013, as in previous periods, and this decrease was 11.1 per cent. However, it is noteworthy that in 2013 revenues from wholesale Internet access services decreased slower than in 2012, i.e. in 2013 the drop in revenues from wholesale Internet access services was 7.5 percentage points less than in 2012.

213 265 313 384 413 406 414 407 410

2005 2006 2007 2008 2009 2010 2011 2012 2013

Revenues from Internet access services

Figure 6. Revenues from Internet access services, in millions of LTL, 2005–2013 Source: RRT

In 2013 participants of the market of electronic communications invested more into the infrastructure of the electronic communications network than in 2012. In 2013, compared to the previous year, such investments increased by LTL 43 million or 16.2 per cent (see Figure 7).

Communications Regulatory Authority of the Republic of Lithuania Annual Report 2013 500 3125 3500 2974 2884 3000 2695 2574 2516 461 2402 400 2271 2500 2029 2137 2144 2000 375 360 300 310 350 1500 299 311 309 273 277 266 200 1000 500 100 0 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Total revenues from the electronic communications market Investments into the electronic communications infrastructure

Figure 7. Dynamics of revenues from the electronic communications sector and investments into the electronic communications infrastructure in 2003–2013, in millions of LTL Source: RRT

Providers of Internet access services have been directing most of their investments into the electronic communications infrastructure for laying the Next Generation Network for several years already. This is also reflected by the distribution of Internet access subscribers: more than one third (38.6 per cent) of all Internet access subscribers had their Internet access by optical fibre lines. In 2013 the second most popular way of having Internet access was mobile communication (26.1 per cent), the third was xDSL technology (15.5 per cent). Wireless communication technologies maintained stable growth rates, too – 15.2 per cent of subscribers accessed the Internet by use of wireless communication in 2013. The subscriber’s choice to have Internet access by mobile and wireless communication was determined not only by functionality of these services giving additional advantages, but also by increasing penetration of Internet services to remote locations, where provision of Internet access services by use of a fixed network is not economically justified. In 2013, the share of subscribers that accessed the Internet by mobile communication technologies in the total number of users of Internet access services decreased (by 0.6 percentage point), which was for the first time during the monitored period of 2006 – 2013. Such a change was determined by the fact that the number of subscribers that accessed the Internet by mobile communication technologies increased by 5.1 per cent during the year, whereas the number of subscribers that accessed the Internet by fixed communication technologies increased by 8.5 per cent (see Figure 8).

2013 26,1% 73,9% 2012 26,7% 73,3% 2011 26,0% 74,0% 2010 22,0% 78,0% 2009 20,1% 79,9% 2008 16,3% 83,7% 2007 11,8% 88,2% 2006 9,0% 91,0% Mobile communication technologies Fixed communication technologies

Communications Regulatory Authority of the Republic of Lithuania Annual Report 2013 Figure 8. Distribution of users of Internet access services according to technologies, 2006–2013, per cent Source: RRT

Optical fibre communication lines (FTTx) remain the main technology of providing broadband communication services (see Figure 9) in Lithuania for the fourth year already. According to data for 2013, Lithuania had 437,800 optical fibre communication (FTTx) lines. From 2005 to 2013, the number of FTTx lines increased for 33.8 times and solely in 2013 the number of these lines increased by 8.7 per cent.

268 215 252 705 232 479 216 653 202 847 169 615 148 013 149 952 127 430 94 700 091 037 52 664 051 703 12 937 015 126

2005 2006 2007 2008 2009 2010 2011 2012 2013

FTTH FTTB FTTH and FTTB Figure 9. Dynamics of the number of local optical fibre lines in 2005–2013, in units Source: RRT

In 2013, 41.1 per cent of all the subscribers, connected to the Internet over fibre lines, were subscribers of TEO LT, AB (see Figure 10). Statistical information shows that the market share of other Internet access service providers continued to decrease in 2013, compared to 2012, while the market share of TEO LT, AB increased by 1 percentage point. During the period of 2007–2013, when TEO LT, AB commenced the provision of the fibre network, the number of TEO LT, AB subscribers who connected to the Internet over fibre lines, grew by 178,300, while the number of subscribers of other service providers grew by 164,600 during the same period.

100% 402,6 420 359,9 437,8 360 305,7 58,9% 61,0% 300 99,4% 99,9% 98,1% 85,2% 254,5 66,1% 59,8% 240 75,4% 159,5 180

94,7 120 41,1% 52,6 33,9% 39,0% 40,2% 12,9 24,6% 60 14,8% 0,1% 1,9% 0% 0,6% 0 2005 2006 2007 2008 2009 2010 2011 2012 2013 .

TEO LT, AB Other providers Number of subscribers

Figure 10. The market shares of TEO LT, AB and other Internet access service providers according to the number of subscribers connected to the Internet over optical fibre lines, in per cent, and the dynamics of the total number of subscribers, in thousands, in 2005–2013 Source: RRT

The next generation broadband communication networks, which have been successfully developed in Lithuania, determine the uptake of rebroadcasting of the television programmes by use of IPTV (Internet 23

Communications Regulatory Authority of the Republic of Lithuania Annual Report 2013 Protocol Television) technologies. At the end of 2013 the IPTV services were provided by 15 companies, 119,000 subscribers viewed television programmes in the said way and, compared to the data for 2012, the number of subscribers grew by 16.9 per cent. Though the number of IPTV service subscribers grew fastest, but television services provided by cable television networks remained the most popular pay TV service. In 2013, 58.5 per cent of all pay TV subscribers viewed this television, i.e. 0.3 percentage point more than in 2012 (see Figure 11).

2013 58,5% 9,3% 16,4% 2,0% 13,8% 2012 58,2% 10,7% 14,4% 2,5% 14,2% 2011 61,2% 10,8% 12,6% 2,8% 12,6% 2010 63,5% 10,0% 11,1% 3,1% 12,4% 2009 66,6% 7,8% 9,7% 3,5% 12,4% Cable TV DVB-T IPTV MDTV Satellite TV

Figure 11. Distribution of pay TV subscribers according to ways of providing televisions services, 2009–2013, in per cent Source: RRT

On 28 October 2012 analogue terrestrial television was switched off in Lithuania and this determined revenues from television broadcasting transmission services. In 2013 revenues from television broadcasting transmission decreased by LTL 11.3 million, i.e. 47.5 per cent (see Figure 12).

5,5 10 10,7 12,3 10,8

18,1 16,7 15,1 15,4 13,0 11,5 1,0 2008 2009 2010 2011 2012 2013

Digital television broadcasting transmission services Analogue television broadcasting transmission services

Figure 12. Dynamics of revenues from analogue and digital television broadcasting transmission services, 2008– 2013, in millions of LTL Source: RRT

Postal sector. When a new version of the Postal Law of the Republic of Lithuania came into effect on 1 January 2013, services of this sector are no longer divided into postal services and courier services. Taking this into account, all undertakings operating in the postal sector are called postal service providers and their services are called postal services. At the end of 2013, 76 natural and legal persons had the right to provide postal services. According to preliminary data, in 2013 revenues for postal services, compared to total revenues from postal and courier services in 2012, increased by 13.4 per cent and amounted to LTL 351.1 million (see Figure 13).

Communications Regulatory Authority of the Republic of Lithuania Annual Report 2013

121,0 98,4 112,2 90,2 97,7 103,0 351,1 91,6 69,8 188,9 160,2 159,9 129,9 128,4 134,8 78,3 104,6

2005 2006 2007 2008 2009 2010 2011 2012 2013 Revenues from courier services Revenues from postal services

Figure 13. Revenues from postal and courier services, in millions of LTL, 2005–2013 Source: RRT

Speaking about postal services in terms of physical units of services, it is noteworthy that the number of items of postal correspondence further decreased in 2013. 74.9 million of such items were sent in 2012, whereas in 2013 – only 69.9 million, i.e. 6.7 per cent less. The number of postal parcels sent in 2013, compared to 2012, increased by 5.3 per cent and amounted to 7.9 million (see Figure 14).

3,9 4,1 7,5 5,1 6,0 7,9

87,0 83,9 74,2 75,0 74,9 69,9

2008 2009 2010 2011 2012 2013

Postal parcels Items of postal correspondence

Figure 14. Dynamics of the number of postal parcels and items of postal correspondence, in millions, 2008–2013 Source: RRT

Communications Regulatory Authority of the Republic of Lithuania Annual Report 2013 SUPERVISION OF ACTIVITIES OF UNDERTAKINGS

General principles of market supervision

In 2013, RRT, following the principle that a supervisory authority must be a consultant, not a punisher, for business and implementing an administrative burden reduction measure, gave priority to providing consultations and methodological assistance to undertakings. Market participants were advised on legal acts applicable to their activities, market regulation and filling in of statistical reports, interconnection of Internet networks, quality of universal services, problems related to improper delivery of postal items and other issues. After changing subordination of certain structural units by an order of the Director of RRT (the Inspection Division became directly subordinate to the Deputy Director of RRT), it is possible to coordinate inspections of undertakings, giving good quality consultations to them more effectively. In 2013, RRT carried out and continued the following activities:  Following the Rules for Inspecting Undertakings’ Activities approved by the Director of RRT4, the plan of undertakings’ inspections and checklists of planned inspections were approved and published (on the website of RRT) in 2013.  In the section “Undertakings” of the website of RRT, information about legal acts regulating supervision over undertakings is published and regularly updated, summary results of inspections performed in each quarter are announced.  Consultations and necessary information are provided by calling the free of charge helpline 8 800 20030.  Undertakings may also make an enquiry at the “Questions” section of the website of RRT. The website columns, describing individual areas of activities of RRT, contain sections “Frequently asked questions”, where summarized consultations on questions received by RRT are provided. According to the Law of the Republic of Lithuania on Public Administration, all the replies by RRT are given the status of a public consultation.  Notifications and questions regarding the inspection are sent to all the undertakings 10 days before the inspection. Unfortunately, we had to impose 2 economic sanctions on providers of electronic communications services.  In 2013 RRT complied with its obligations provided for in the Declaration concerning the first year in business, to which it acceded in 2011.

Supervision of undertakings engaged in electronic communications activities

RRT advises market players on the issues of provision of wholesale and retail electronic communications services, interconnection of electronic communications networks and provision of access in

4 According to Order No. 1V-853 of the Director of RRT of 27 August 2010 “On the approval of the Rules for Inspecting Undertakings’ Activities”, the plan of inspections of undertaking’s activities planned to be performed must be prepared by 20 January each year.

Communications Regulatory Authority of the Republic of Lithuania Annual Report 2013 order to ensure that the legal acts, regulating electronic communications activities, are not violated and that the undertakings, having a significant market power, perform their obligations.

In 2013, according to the plan approved by the Director of RRT5, 25 undertakings providing electronic communications services were inspected (27 undertakings in 2012) (see Figure 15). During the planned inspections violations were identified in 19 undertakings. Most frequent violations were non-conformity of the standards terms and conditions of typical agreements with users of the services to requirements of legal acts. After relevant warnings, all the remarks made by authorised officials of RRT were taken into account and all the violations were corrected by the end of the relevant inspections.

In 2013, RRT provided replies to 22 enquiries of undertakings regarding electronic communications activities. When providing replies to undertakings’ enquiries, RRT most frequently had to explain the general conditions for engaging in electronic communications activities, the prices for the provided electronic communication services and the main provisions for interconnection of electronic communications networks. In 2013, 6 complaints of service providers or interested persons regarding dangerous, poor quality or illegal electronic communications infrastructure were examined. The inspection proved that none of the complaints were justified. 101 undertakings were admonished for the failure to provide activity reports in due time (see Figure 16). After verbal warning by phone, 80 reports were delivered. As for the remaining 21 undelivered reports, companies possibly performing the activities were searched for, but RRT was not able to find them according to the addresses or contacts known. Some of these companies were withdrawn from the list of service providers after stating that such companies declared the intention to perform electronic communications activities but failed to do so or stopped their activity. RRT, for the purpose of easing the undertakings’ burden as regards the provision of periodical reports on the executed electronic communications activities, cooperates with the Lithuanian Department of Statistics and provides it with the available statistical data. In 2013, RRT also inspected how the telecommunications operators or public telecommunications service providers approve and publish technical specifications of interfaces used for provision of their services. It was found that some links to technical specifications were inactive. The undertakings were warned about this orally, the shortcomings were eliminated. There was one case when technical specifications of an interface were not published. After the warning, the technical specifications were published. 2 economic sanctions were imposed in 2013 (see Figure 17).

5 Order No. 1V-90 of the Director of RRT of 18 January 2013 “On the approval of the plan of inspections of activities carried out by persons providing postal services and persons engaged in electronic communications activities, which are planned to be performed by the Communications Regulatory Authority of the Republic of Lithuania in 2013” 27

Communications Regulatory Authority of the Republic of Lithuania Annual Report 2013

25 27 25 20 15 15 15 10 5 9 4 0 0 0 2010 2011 2012 2013

Number of planned inspections Number of inspections not planned

Figure 15. Number of inspections of providers of electronic communications services in 2010–2013 Source: RRT

155 2 2 2 2 117 97 101

2010 m. 2011 m. 2012 m. 2013 m. 2010 2011 2012 2013

Reikia nuimti “m.” Figure 17. The number of sanctions imposed for Figure 16. The change of the number of notifications to electronic communications activity violations in providers of electronic communications services as 2010−2013 regards failure to provide reports in 2010−2013 Source: RRT Source: RRT

Supervision of the postal services market

In 2013, according to the plan approved by the Director of RRT6, in performing supervision of the postal services market, RRT performed 30 (in 2012 –, 44) planned inspections of undertakings’ activities (see Figure 18).

5 violations (the character of violations was failure to comply with requirements for marking postal items, absence of rules for provision of services, failure to comply with requirements of the Postal Service Provision Rules in the agreements of the postal service provider) were identified during planned inspections in 2013. After methodological assistance, all the said violations were corrected by the end of the planned inspections. In order to have precise information on the providers of postal services, during the planned inspections RRT inspected the companies which were included into the list of postal service providers

6 Order No. 1V-90 of the Director of RRT of 18 January 2013 “On the approval of the plan of inspections of activities carried out by persons providing postal services and persons engaged in electronic communications activities, which are planned to be performed by the Communications Regulatory Authority of the Republic of Lithuania in 2013” 28

Communications Regulatory Authority of the Republic of Lithuania Annual Report 2013 published by RRT and which, however, periodically notified RRT that they did not perform such activities or provided no information on the performed activities. One of the main problems was failure to announce information (e.g. on the website of the undertaking, in the location of providing services: in a file, leaflets, on a bulletin board) that undertakings providing postal services must announce according to requirements of applicable legal acts. The main problems faced when supervising the postal market are the following: failure to provide obligatory quarterly and annual activity reports in due time, failure to announce the start or the end of postal activities, the changed point of service providing, avoiding communicating or cooperating with officers performing the inspections. 3 unplanned inspections (in 2012, 1 unplanned inspection) of undertakings were initiated and performed on the basis of users’ complaints and other information received: regarding failure to deliver postal items to the addressee, regarding late delivery (RRT warned the relevant undertaking that it should observe the postal items delivery terms set in its rules) and application of tariffs which were not announced in public. One violation was identified during the unplanned inspections (failure to announce information which had to be announced), the undertaking corrected the violation before a meeting of the Council of RRT and no economic sanction was imposed on it (see Figure 19).

60 50 51 40 44 44 30 30 20 10 5 7 1 3 0 2010 2011 2012 2013

Number of planned inspections Number of inspections not planned

Figure 18. Number of inspections of postal service providers in 2010–2013 Source: RRT

110 undertaking were warned that they had not provided mandatory quarterly and annual activity reports (see Figure 20). After warning by phone or at points of providing services, postal service providers submitted 79 reports. The remaining undertakings that did not submit reports were not found at any addresses that RRT knew or it was determined that they were not performing activities.

110 2 90 93 84

0 0

2010 2011 2012 2013 2010 2011 2012 2013

Figure 19. Number of sanctions imposed for violations Figure 20. Change of the number of warnings given to in postal activities in 2010–2013 postal service providers regarding undelivered activity 29

Communications Regulatory Authority of the Republic of Lithuania Annual Report 2013 Source: RRT reports in 2010−2013 Source: RRT

Surveillance of radio equipment and telecommunications terminal equipment market

When performing the surveillance of the market of radio equipment and telecommunications terminal equipment, RRT7 cooperates with the Customs Department. In 2013, according to the data received from the Customs Department, data about 7,140 (see Figure 21) types of radio equipment and telecommunications terminal equipment, brought from third countries, were analysed. Compared to 2012, the number of types of equipment imported in 2013 increased, that was caused by import of premises security systems and mobile communications equipment.

8000 7 140

6000 4 585 4 752 4 731 4 085 4000

2000

0 2009 2010 2011 2012 2013

Figure 21. Number of types of equipment imported from third countries in 2009–2013, in units Source: RRT

Table 2 shows the results of surveillance of radio equipment and telecommunications terminal equipment market in 2011–2013. 77 types of radio equipment and telecommunications terminal equipment were examined for compliance with the administrative requirements of the Technical Regulation of Radio Equipment and Telecommunications Terminal Equipment (hereinafter referred to as the Regulation) in 2013. 30 types of equipment failed to comply with the administrative requirements of the Regulation, 9 of them did not have the CE marking and declarations of conformity. The placement of such equipment on the market of Lithuania was suspended by importers themselves. 18 types of the equipment did not have declarations of conformity during the inspection. Importers delivered all declarations of conformity of all types of equipment. It is noteworthy that, compared to 2012, the number of equipment that did not have CE declarations of conformity, as required by the Regulation, remained almost unchanged, though manufacturers have the declarations of conformity and present them promptly on demand.

7 For the purpose of ensuring availability of high-quality and safe radio equipment and telecommunications terminal equipment, compliant with the EU requirements, on the market of the Republic of Lithuania, RRT performs surveillance of the market of such equipment referring to the Technical Regulation of Radio Equipment and Telecommunications Terminal Equipment, establishing the conditions for free movement, placement on the market and use of radio equipment and telecommunications terminal equipment, as well as the essential requirements and obligations relating to the information on the interface specifications, etc. The Regulation implements Directive 1999/5/EC of the European Parliament and the Council of 9 March 1999 on radio equipment and telecommunications terminal equipment and the mutual recognition of their conformity (OJ 2004 special edition, section13, 23 volume, p. 254) in Lithuania.

Communications Regulatory Authority of the Republic of Lithuania Annual Report 2013 Placement of 5 types of equipment on the market without a prior notification to RRT in due time, as prescribed by the Regulation, was established. All the importers provided their notifications after the demand to do so.

Table 2. The results of surveillance of radio equipment and telecommunications terminal equipment market in 2011–2013

Results of inspections Number Number Number in 2011 in 2012 in 2013

Total number of inspected equipment types 136 125 77 Incompliant with requirements 47 49 30 CE marking and declaration of conformity missing 5 6 9 Only declaration of conformity missing 42 19 18 Placement on the market suspended 12 13 9 Notification is obligatory 50 44 35 Notifications presented 19 18 30 Notifications not presented 31 26 5 Source: RRT In 2013, control and inspections of online trade were continued. In case any incompliance of the declared parameters of the equipment, advertised and offered to consumers, with the technical and/or administrative requirements provided by the Regulation was established during the control process, RRT contacted the shop and suggested to discontinue advertising such equipment in the shop. After such notifications, advertising of 2 types of mobile phones was stopped. 35 units of equipment of 25 types were taken from the market for laboratory testing in 2013. Incompliance of 6 types of equipment with the essential requirements of the Regulation was detected. 2 types of them were PMR (Personal Mobile Radio) stations and 4 of them were short-range devices (wireless calls, wireless sensors for security of premises, wireless systems for childcare). The main reason for incompliance was incompliance of the spurious emission of the transmitter with the requirements provided by the standards. 4 types of equipment were recalled from the market by importers themselves. A dialogue with importers and/or manufacturers is taking place regarding 2 types of equipment. The placement of this equipment on the market is suspended until the determined unconformities are eliminated. In case the unconformities are not eliminated, the placement of the equipment on the market will be banned and the European Commission will be notified.

Surveillance of compliance of equipment and devices with electromagnetic compatibility and other requirements

When performing the surveillance of the market with regard to compliance of equipment and devices with the Technical Regulation of Electromagnetic Compatibility (hereinafter, the EMC Regulation) implementing the EU Electromagnetic Compatibility Directive 2004/108/EC, 30 types of equipment were examined (see Figure 22). 15 types of equipment were taken for laboratory testing, 6 did not comply with the EMC Regulation.

Communications Regulatory Authority of the Republic of Lithuania Annual Report 2013 In 2013, RRT continued the market surveillance campaign started in the European Union Member States in 2012 regarding the compliance of power supply sources of computers with the EMC Regulation. A lot of cases of incompliance were identified. The main reason for incompliance with the EMC Regulation was disturbances in power supply access. Placement of all such equipment, incompliant with the EMC Regulation, on the market was suspended till elimination of defects.

70 61 60 50 44 44 40 30 30 20 10 0 2010 2011 2012 2013

Figure 22. Number of types of devices checked for compliance with administrative requirements of the EMC Regulation in 2010–2013 Source: RRT

In 2013 compliance of marking of computer games with the Law of the Republic of Lithuania on the Protection of Minors against the Detrimental Effect of Public Information was checked. All major shopping chains and the biggest online shop of computer games were inspected. It was determined during the inspections that some of computer games were not marked as required by legal acts. During the inspections the responsible employees were given consultations regarding requirements of legal acts applicable to marking of computer games. Incompliance was eliminated in all the inspected points of sale.

Supervision of electronic signatures

Supervision of electronic signatures is procedures applied for controlling how certification service providers follow the established requirements. It also aims at compatibility of electronic signature equipment in Lithuania and on the international level and at recognition at the international level of certification service providers accredited in Lithuania. In order to ensure smooth performance of the electronic signature supervision functions, in 2013 RRT examined documents provided by certification service providers issuing qualified certificates relating to the certification activities (rules for certification, regulations on certification activities, civil liability insurance policies etc.), and found no violations. Referring to the Law of the Republic of Lithuania on Electronic Signature8 (hereinafter referred to as the Law on Electronic Signature), RRT prepared the annual report 2013 on implementation of the Law of the Republic of Lithuania on Electronic Signature and delivered it to the Information Society Development Committee of the Parliament of the Republic of Lithuania and to the Government of the Republic of Lithuania. The report is available on the website of RRT. RRT provided certification service providers with the information and methodological guidance. In 2013, meetings with interested persons and market participants were organised in order to discuss electronic

8 Article 14(2)(11) of the Law on Electronic Signature. 32

Communications Regulatory Authority of the Republic of Lithuania Annual Report 2013 signature issues: a meeting with participants of the electronic signature market on issues of the draft Regulation of the European Parliament and of the Council on electronic identification and trust services for electronic transactions in the internal market (hereinafter, eIDAS Regulation); a meeting with participants of the electronic signature market in order to discuss the draft Description of the Procedure of Provision of Time Labelling Services. RRT prepares, manages and publishes the trusted list (hereinafter referred to as the Trusted List) of services of certification service providers accredited and/or supervised by the Republic of Lithuania. In order to allow updating of the Trusted List more quickly and reduce the possibility of human errors, RRT performs the investment project “Development of the Software Tool for Handling Lists of Trusted Certification Services”. The main task of this investment project is to develop, install and test software intended for establishing, maintaining and signing the Trusted List. In 2013 the second stage of this investment project was performed, which included improvement of software enabling to form the Trusted List according to the requirements of Commission Implementing Decision 2013/662/EU of 14 October 2013 amending Decision 2009/767/EC as regards the establishment, maintenance and publication of trusted lists of certification service providers supervised/accredited by Member States and ETSI standard TS 119 612 Electronic Signatures and Infrastructures (ESI); Trusted Lists. This software not only has the function of creation and maintenance, signing with electronic signature of computer readable form (XML format) and form understandable to humans (PDF format), it can also find and check whether the institution that issued a qualified certificate to a natural person is in the common trusted list of European countries. On 18 December 2013, after approvals by state authorities and public consultations, the Director of RRT issued Order “On the Amendment of Order No. 1V-407 of the Director of the Communications Regulatory Authority of the Republic of Lithuania of 19 April 2011 “On the Approval of the Description of the Procedure of Provision of Time-Stamping Services”.

Communications Regulatory Authority of the Republic of Lithuania Annual Report 2013 PROTECTION OF CONSUMER RIGHTS AND LEGITIMATE INTERESTS

Measures for improvement of quality of consumer information and service

Taking into account technological changes in the markets, as well as changes in consumers’ and business’ needs, and seeking that users of electronic communications services, including consumers, and users of postal services would have a possibility to use various electronic communications and postal services at favourable terms, the priority of RRT in 2013 was protection of consumer rights and legitimate interests. The free of charge helpline 8 800 20030 offered by RRT in 2013 ensured better quality of providing information to and service to consumers. The free of charge helpline was offered by implementing the concept of helpline installation and use prepared in 2012. Consumers can call the helpline 8 800 20030 in order to consult on all issues in the areas attributable to RRT: telephone communication, Internet, radio or television services, radio disturbances, networks and information security, post, electronic signature and other issues (the number above was previously used only for notifying about radio disturbances). After calling 8 800 20030 and choosing a topic (by pressing one of 7 suggested buttons), consumers can get a consultation of an RRT specialist on the relevant issue. 8,577 calls were received in 2013. Currently, specialists from 17 structural units are appointed for giving consultations in their fields of competence. Persons, who call this number, are also given a possibility to give their opinion how RRT’s employees perform their functions. RRT intensively continued consultations by phone started in 2012 regarding compatibility of digital terrestrial television receivers. When at the beginning of 2013 broadcasters started changing frequencies of digital terrestrial television transmitters in Lithuanian regions, RRT advised people by free of charge helpline 8 800 20030 how to properly set television receivers and regarding the possibilities of receiving television programmes in various geographical locations of the country. As the flow of calls regarding digital television was big, RRT organised a team of 25 competent employees, who gave assistance by the said number 8 800 20030 not only during working hours but also after them and on weekends, too. In order to increase awareness of consumers, RRT’s free of charge advice number was made public during a television campaign about the change of frequencies of digital terrestrial television transmitters, also notices were given in other mass media. 6,180 calls were registered in 2013 regarding digital television. Their distribution according to topics is given in Figure 23. Analysis of presented data shows that people contacted RRT not only asking for help to solve specific problems but also in order to get ready for planned changes better: 181 calls were from consumers who called in advance to ask about future possible difficulties; unfortunately, there were even 413 malicious calls.

Communications Regulatory Authority of the Republic of Lithuania Annual Report 2013 Išankstinė konsultacija apie kanalų keitimą Kita 181 931 Piktybiniai 413 Konsultacija apie įvykusį kanalų TV keitimą priėmimo 2 416 nutrūkimas arba trukdžiai 1 222 Konsultacija apie TV priėmimo įrangos suderinimą 1 017

Early consultations about change of channels Consultations about performed change of channels Consultations about making TV receivers compatible Interruption of or disturbances in TV reception Malicious calls Other Figure 23. Distribution of calls received in 2013 regarding digital television Source: RRT

In case of a failure to solve a problem by phone, RRT specialists went to residents, checked installed equipment on site, performed relevant measurements, if necessary, advised on improvement of the receiving system possessed by them. Taking into account repeated enquires by phone, 39 questions and detailed answers to them were added to the frequently asked questions (FAQ) section of RRT’s website www.rrt.lt. Having evaluated importance of enquiries and in order to reach the whole target audience, press releases were also prepared. RRT, in order to inform users, to ensure better quality of electronic communications services and bigger and more transparent competition in the market, ipso facto indirectly promoting business self- regulation, created the following websites, which it continues to administer in 2013: www.skaiciuok.lt – This is a website for comparison of prices of telephone services, helping consumers to choose the service providers’ offers which suit their needs best in terms of the most favourable prices of telephone services. Taking in consideration changes in the electronic communications market, when service providers are more and more frequently offering new payment plans to consumers, in 2013 RRT supplemented the price calculator database with new payment plans offered by service providers and with the reduced tariffs for international roaming services which changed as of 1 July 2013. Approximately 32,000 users visited the website in 2013 (in 2012, approx. 30,000). www.elektroninisparasas.lt – It is RRT’s electronic signature remote training system, which was updated after the implementation of the e-signature and e-document remote training system modernisation project. Starting from 17 December 2013 it can be visited by everyone willing to learn how to use or already using the electronic signature. The remote training system gives exhaustive information about the electronic signature, areas of its use, enterprises issuing qualified certificates. There are detailed instructions with explanations how to sign with the electronic signature. If any issues arise or there is a need to share information with other users of the training system, there is an open group created within the system, where users can take part in discussions on important e-signature related issues. Discussions in the group are monitored by competent RRT specialists, who actively join them by replying to some questions. Registered users of the system can also take a test containing theoretical and practical questions about e-signature. 35

Communications Regulatory Authority of the Republic of Lithuania Annual Report 2013 Everyone, who passed the test, is issued a certificate evidencing that a person has taken the e-signature course.

www.epaslaugos.rrt.lt/matavimai website was created in order to properly evaluate and improve the quality of services provided by use of the latest modern technologies and to inform end users about it and in this way to promote transparent competition. In this website people can get familiar with the results of measurements performed by the Internet access monitoring system (IPSS) – in 2013 RRT performed over 83,000 data transmission tests in various Lithuanian towns. The residents, visiting the website, can themselves evaluate the quality of the wireless Internet access services provided over the networks of Lietuvos Radijo ir Televizijos Centras AB, Bitė Lietuva UAB, Omnitel UAB and TELE2 UAB in different regions of Lithuania. In 2013, the website was visited by approximately 1,500 users with different IP addresses. In the website www.matuok.lt Internet users can themselves measure the speed of Internet services provided to them, by use of available hardware and software. After the upgrade of the measuring system in 2012, it can also be used by many smart phone users, whose telephones are compatible with Flash software environment, by using the main system address www.matuok.lt or address www.matuok.lt/matuok.swf. In both the cases, measurement results are stored in the system database and are available to users in the Archive. In 2013 the website www.matuok.lt was visited by over 110,000 visitors (about 50,000 of which were from unique IP addresses) who performed measurements with the help of this Internet speed measuring system. http://www.esaugumas.lt is a specialized RRT website where detailed information regarding security in cyberspace is provided. In this website people can find information about computer and mobile 36

Communications Regulatory Authority of the Republic of Lithuania Annual Report 2013 phone viruses, spyware, spam, learn about most frequent fraudulent activities on the Internet, gaps in security. Recommendations and advice how to avoid possible incidents are provided on the website. The webpage includes the main rules how to avoid threats when using e-banking services, advice how to choose passwords, etc. The website www.cert.lt advises Internet users how to behave in case of an incident in electronic communications networks and an information security incident, provides the relevant information and legal acts pertaining to electronic communications networks and information security as well as the statistics of incidents. In addition, a user, by filling in a special form at www.cert.lt/pranesti.html, can report malware, DoS attacks, unauthorised access, and manipulation with electronic data. A received report will be registered in RRT’s incidents management system which will be followed by an investigation, results of which will be presented to the user by e-mail. RRT has been administering the website www.e-infrastruktura.lt.for the second year. It is a common project of RRT and Lithuanian municipalities. In this website, undertakings designing, providing and/or planning to provide electronic communication networks and/or services may access spatial data systems of the infrastructure administered by municipalities. Information about engineering lines (communication cable ducts) is stored in these systems. In 2013 Kaunas city municipality joined the spatial data system of the infrastructure of Vilnius city and Klaipėda city municipalities. Information to the website www.draugiskasInternetas.lt was provided by RRT in 2013, this website is administered by the Centre of Information Technologies in Education (hereinafter referred to as the ITC) in performing Safer Internet project SIC LT II. The website contains information for children and parents about online safety. It provides recommendations, advice on harmful content on the Internet, having negative effect on minors. There are five descriptions of Internet content filtering programs, the website gives links to websites from where one can download content filtering programs, it also contains program descriptions and instructions for their installation and administration. RRT is responsible for performance of the Internet hot line functions. The RRT website has electronic document system e.RRT, used for provision of notifications on commencement of activities, various requests, complaints, etc. RRT, implementing the provisions of Resolution No. 480 of the Government of the Republic of Lithuania of 18 April 2003 “On the Approval of the Description of the General Requirements to Websites of State and Municipal Institutions and Authorities” and applying the principle of publicity, publishes relevant, regularly updated information on the website www.rrt.lt. In order to improve the quality of providing information to users, information on the RRT’s website was constantly updated and supplemented in 2013. 46 news and 58 press releases were published. The FAQ section was supplemented with new questions and answers. On 13 December 2013, RRT organised a meeting on consumer rights protection improvement issues, which was attended by providers of electronic communications services, consumer rights protection authorities and public organisations. The main purpose of this meeting was to discuss practical matters arising when RRT examines users’ requests and solves disputes of end users with providers of electronic communications services. The meeting participants also discussed main aspects of contracts on electronic communications services (conclusion, performance of contracts, changing of their terms, termination and consequences of termination). For the sake of more efficient work with users’ enquiries and complaints, RRT is performing a project of developing an information system for managing and analysing the examination of users’ enquiries and 37

Communications Regulatory Authority of the Republic of Lithuania Annual Report 2013 complaints. After the creation of this information system, a classifier of enquiries and complaints of users of electronic communications services and users of postal services will be installed.

Protection of consumer rights and legitimate interests in the electronic communications sector

Supervision of the universal electronic communications services

Referring to the Rules for Provision of Universal Electronic Communications Services (hereinafter referred to as the Rules)9, provision of universal services must be ensured to all the electronic communications service (hereinafter referred to as Services) users on the entire territory of the Republic of Lithuania. TEO LT, AB, the undertaking having significant power on the public fixed telecommunication networks and services market, is obliged to provide the universal services10. The provider of universal services must ensure that one is able to send and receive local, national long-distance and international telephone calls, fax messages and data over a public telecommunications network, provided at a fixed location at the capacity, able to ensure an efficient Internet access taking into consideration the technologies, used by the majority of subscribers, and the technological possibilities and ensure no less than 144 kbps upstream and downstream speed rate. In observance of the Rules, in 2013 RRT announced the proposal for the Providers to express their wish to provide universal services, however, no undertakings wishing to provide universal services without any compensation were present. In 2013, there were no breaches of the requirements set in the Rules (including the requirements for the price cap set for the universal electronic communications services) by TEO LT, AB, the provider of universal services. In 2013 RRT announced a Report on the Provision of Universal Electronic Communications Services and the Price Changes Observed in 2012. The changes which occurred in 2013 are to be published by 1 May 2014. By commission of RRT, in 2013 a representative survey of residents of the Republic of Lithuania was performed for the purpose of establishing the needs of the users of universal electronic communications services. The main results of the survey are the following:  A third (33 per cent) of the survey participants stated that at home they used the public fixed telecommunication services, provided by TEO LT AB, (in 2011 – 36 per cent). The majority of respondents (76 per cent) stated that the services were satisfactory.  About half (48 per cent) of fixed telephone communication service users stated that they also used the Internet over communication lines of TEO LT, AB (in 2011 – 53 per cent).

9 The Rules for Provision of Universal Electronic Communications Services were approved by the Order No. 1V-889 of the Director of RRT of 20 September 2011 (Official Gazette Valstybės Žinios No. 116-5495) 10 Connection to a public telecommunications network provided at a fixed location and public telecommunication services; public telecommunication services provided by public payphones; services of information provision about the subscribers to public telecommunication services; possibility for the persons with disability or special needs to use electronic communication services.

Communications Regulatory Authority of the Republic of Lithuania Annual Report 2013  44 per cent of respondents, who used the Internet over a fixed telephone line, stated that the Internet data upstream and downstream speed rate was up to 10 Mbps: 11 per cent – up to 144 Kbps, 10 per cent – from 144 Kbps up to 512 Kbps, 11 per cent – from 144 Kbps up to Mbps, 12 per cent – from 2 Mbps up to 10 Mbps. Almost 13 per cent of respondents could use the speed rate over 10 Mbps. About half (44 per cent) of the surveyed respondents could not indicate the Internet speed rate.  Only 1 per cent of respondents, who did not have a fixed telephone line at home, stated that in 2012 they applied to TEO LT, AB regarding installation of the line. The main reasons for not applying were the following: they used a mobile telephone at home (38 per cent), they already had a fixed telephone communication line installed at home (32 per cent), and they simply did not need a telephone at home (27 per cent).  The majority of respondents (62 per cent), who had applied to TEO LT, AB for installation of a line, stated that the line had been installed within the time period shorter than one month.  The absolute majority of the survey participants (98 per cent) did not use public payphones during 2012 (see Figure 24). 10 out of the 17 respondents, who used public payphones, were of the opinion that the number of payphones was completely sufficient.  If the functional potential of public payphones were expanded (if there was a possibility to write e- mails, have Internet access), 4 per cent of respondents would use them more often. The possibility to use payphones for payments with credit or debit cards, or cash would encourage 5 per cent of respondents to use payphones more often.  37 per cent of respondents stated that they searched for information on telephone numbers: 3 per cent – quite frequently, 9 per cent – sometimes, 25 per cent – rarely.  65 per cent of respondents stated that they searched for information on subscriber telephone numbers most frequently by calling 118 and 49 per cent – on the websites of directory inquiry services.

2012 m. 1

2011 m. 1,5

2010 m. 2,5

2009 m. 5

2008 m. 8

0 2 4 6 8 10

Reikia nuimti “m.” Figure 24. Respondents that use public payphones at least several times per year, per cent Source: RRT

To summarize the results of the survey, the conclusion can be made that in 2012 universal electronic communications services were accessible to consumers and satisfied their needs, and public telecommunication services, provided at a fixed location, were provided on the entire territory of the Republic of Lithuania.

Communications Regulatory Authority of the Republic of Lithuania Annual Report 2013 Public fixed telephone communication services

RRT, executing the monitoring of providing universal electronic communications services and obligations to obey the rules of providing universal electronic communications services, performed control measurements of call quality in the network of the provider obligated to provide universal services in the first and third quarters of 2013. In the first quarter of 2013 RRT performed more than 12 thousand test calls in the fixed telephone communication network of TEO LT, AB. The unsuccessful national call ratio (0.47 per cent) and the average national setup time (0.85 s) did not exceed the threshold values of service quality indicators imposed on providers of universal services (no more than 5 per cent and no more than 10 s). In the fourth quarter of 2013 RRT performed more than 11 thousand test calls in the fixed telephone communication network of TEO LT, AB and established that the values measured also did not exceed the threshold values of service quality indicators imposed on providers of universal services.

The quality of wireless Internet access services

In 2013 RRT continued the monitoring of the quality of wireless Internet access services on the territory of the Republic of Lithuania. For the said purpose, RRT used the testing equipment and methodology developed in 2011 in cooperation with the service providers Bitė Lietuva UAB, Omnitel UAB, TELE2 UAB and Lietuvos Radijo ir Televizijos Centras AB. The measuring equipment was placed in the selected divisions of Lietuvos Paštas AB on the entire territory of Lithuania. In 2013, more than 83 thousand tests of the quality of data transmission services were executed in various cities and towns of Lithuania. Figures 25 and 26 show the values of the Internet access quality indicators – the average data receipt speed rate and the average browsing speed rate – collected through the monitoring system in 2013.

Bitė 3758 Lietuva 3869

LRTC 6071 6159

Omnitel 6282 11885

Tele2 4515 6070

0 2000 4000 6000 8000 10000 12000 14000 2012 2013

Figure 25. The average data receipt speed rate in 2012 and 2013, kbps Source: RRT

Communications Regulatory Authority of the Republic of Lithuania Annual Report 2013

Bitė 285 Lietuva 268

LRTC 314 318

Omnitel 425 701

Tele2 238 270

0 100 200 300 400 500 600 700 800 2012 2013

Figure 26. The average browsing speed rate in 2012 and 2013, kbps Source: RRT

In 2013 RRT investigated 26 complaints received from consumers regarding the quality of Internet access services. All consumers can themselves at any time evaluate and compare the quality of Internet access services provided by different operators according to the selected criteria on the RRT administered website at http://epaslaugos.rrt.lt/matavimai.

The quality of public mobile telephone communication services

During 2013, measurements of the quality indicators of voice telephony and SMS services were assessed in the networks of public mobile telephone communication operators, operating in the Republic of Lithuania. In 2013, more than 2,500 voice telephony calls were made and more than 3,200 SMS text messages were sent by using mobile telephone communication services provided by Bitė Lietuva UAB, Omnitel UAB and Tele2 UAB. Figures 27, 28 and 29 show the comparison of the quality indicators (voice telephony call setup time, voice transmission quality of voice telephony, and SMS delivery time) with the results registered last year11.

Bitė Lietuva Omnitel Tele2

11 10 9 8 7 6 5 4 2008 2009 2011 2012 2013

11 The quality indicators of public mobile telephone communication services were measured in accordance with the technical specifications ETSI TS 102 250-2 V1.6.2 (2008-09) of the European Telecommunications Standards Institute (ETSI) and the Methodology for Measurement of the Indicators of Quality of Public Mobile Telephone Communication Services, approved by Order No. 1V-260 of the Director of RRT of 3 March 2009.

Communications Regulatory Authority of the Republic of Lithuania Annual Report 2013 Figure 27. The comparison of the average values of voice telephony call setup time, s Source: RRT

Bitė Lietuva Omnitel Tele2

3,6 3,4 3,2 3 2,8 2,6 2,4 2008 2009 2011 2012 2013

Figure 28. Comparison of the average values of voice transmission quality of voice telephony, MOS-LQO score Source: RRT Note: The higher the MOS-LQO score, the better the voice transmission quality. The highest value of voice transmission quality, registered during a test call in 2013 was 3.84 MOS-LQO. The results of the measurements did not take into account the fact that at the end of 2013 Bitė Lietuva started to use high-definition voice transmission technology (HD Voice) in its network.

Bitė Lietuva Omnitel Tele2

11 10 9 8 7 6 5 4 2008 2009 2011 2012 2013

Figure 29. Comparison of the average values of SMS delivery time, s Source: RRT

Cable television networks

In order to ensure that the users of the services, provided over cable television (hereinafter referred to as CTV) networks, receive high quality services, RRT performs planned examinations of the technical parameters of CTV networks, which show whether the main technical parameters of CTV networks, determining the quality of radio and television signal transmission, are compliant with the mandatory requirements, provided in the Specification of the Requirements for Technical Parameters of Radio and Television Signals in Wire Distribution Networks (hereinafter referred to as the Specification). In 2013 RRT performed 20 examinations of technical parameters of CTV networks (in 2012 – 19). All technical parameters of radio and television signals in wire distribution networks of the examined CTV networks satisfied the mandatory requirements, provided in the Specification. The main technical parameters of 3 CTV networks were examined when investigating the complaints received from consumers of CTV network services. The investigation showed that the technical parameters of all of the examined CTV networks were found compliant with the mandatory requirements, provided in the Specification.

Communications Regulatory Authority of the Republic of Lithuania Annual Report 2013 Investigation of consumers’ disputes and complaints

In 2013 RRT investigated, according to the preliminary out-of-court procedure12, 47613 requests from end users to solve disputes. The majority of requests (459 requests) came from natural persons – consumers, using electronic communications services for personal, family or household needs. The distribution of the requests, received and investigated by RRT in 2013, by type of services is shown in Figure 30. The decisions of RRT are reflected in Figure 3114.

300 250 281 200 150 100 50 84 65 58 0 Telephone Television services Internet access Line radio services communication services services

Figure 30. The distribution of the requests, received and investigated by RRT in 2013, by type of services Source: RRT

200

181 150 144 100 92 93 50

0 In favour of the In favour of the The dispute was Other consumer service provider settled peacefully

Figure 31. RRT decisions with regard to the disputes investigated in 2013 Source: RRT

Investigation of 25 requests to resolve disputes, received in 2013, is continued in 2014 (this is not reflected in the statistics). In 2013, most of the requests to resolve disputes (see Figure 32) were related to termination of the agreement prior to the expiry of the minimum period of use of electronic communications services, stipulated in the agreement, and the penalties charged as well as the discounts requested to be repaid by the service

12 Article 36 of the Law on Electronic Communications provides for the right for the end user to apply to RRT for resolving the dispute with the provider of electronic communications services through a preliminary out-of-court procedure. 13 The data may be at variance with the number of resolved disputes, because in some cases applications were submitted with regard to several services, e.g., the agreement concluded on provision of each telephone communication, television and Internet access service individually or all of the aforementioned services collectively. 14 The data is at variance with the number of the requests accepted for investigation, because the investigation of part of the requests is continued in 2014 and also because several decisions could be adopted regarding one request, e.g. the investigation regarding one part of the request was terminated, while regarding the other – left uninvestigated, etc.

Communications Regulatory Authority of the Republic of Lithuania Annual Report 2013 provider, etc. It should be noted that RRT can only recognize the subscriber’s right to terminate the agreement without penalties, if it determines that the provider of electronic communication services has committed a substantial breach of its contractual obligations or changed the terms and conditions of the agreement, including the increase of the prices specified in the agreement without complying with the procedure laid down in the Rules for Provision of Electronic Communications Services. However, in cases of disputes concerning the amount of penalties and the procedure for their calculation, taking into consideration that, according to the competence granted by the Civil Code of the Republic of Lithuania, only the court shall be entitled to recognize penalties to be unreasonable or excessive and reduce them, RRT terminated investigation of the requests concerning the disputed amounts of penalties and informed the relevant applicants that they may contest the amount of penalties in court.

300

250 257 200

150 181

100

50 22 21 38 0 With regard to With regard to With regard to With regard to Other termination of invoices and quality of credit limits of agreements billing, tariffs services services

Figure 32. The nature (the reasons for applying) of the disputes investigated by RRT in 2013 Source: RRT

Service users also frequently applied to RRT with regard to improperly performed portability of fixed telephone numbers, inappropriate informing of the terms and conditions for provision of selected electronic communication services, inadequate quality of mobile Internet access services. As in 2012, the issue of charging fees for non-provided wire radio services still remained relevant. In order to improve the quality of the provision of electronic communications services to consumers, during meetings with electronic communication service providers RRT provided information about the most frequent reasons for applying to RRT, drew attention to the he most relevant requirements of the legal acts, heard the opinion of the representatives of electronic communication service providers and consumer rights protection institutions, repeatedly provided methodological assistance in writing to electronic communication service providers, as well as provided information to the State Consumer Rights Protection Authority about potentially unfair activities of some electronic communication service providers, participated in the investigation of the cases of infringement of the Law on Prohibition of Unfair Business-to-Consumer Commercial Practices of the Republic of Lithuania by the aforementioned Authority. On 11 October 2013 the Supreme Court of Lithuania investigated civil case No. 3K-3-477/2013, where the Court made a statement regarding the procedural status of RRT in cases when parties to a dispute apply to court because they disagree with the decision made by RRT after investigating their dispute in accordance with the pre-trial procedure. In such cases, RRT was often the defendant, although it was not related to disputing parties by any legal relationship. In the aforementioned case, the Supreme Court of 44

Communications Regulatory Authority of the Republic of Lithuania Annual Report 2013 Lithuania made it clear that the procedural status of RRT as the defendant was inappropriate and in such cases it could be only an institution providing its conclusions. In 2013, RRT received 170 (see Table 3) complaints from end users regarding the acts or omissions of electronic communication service providers and answered them in accordance with the procedure established in the Rules for Examination of Applications Submitted by Individuals and Services Provided to Them in Public Administration Institutions, Agencies and Other Public Administration Entities. End service users complained about discrimination, safety of services, prices and tariffs, terms and conditions of agreements, etc. In 24 cases, providers of electronic communication services proposed solving the dispute peacefully.

Table 3. The reasons for complaints of end service users and RRT decisions in 2013

Requests from natural persons 2013 Requests from legal 2013 (consumers) persons Number of received complaints 150 Number of complaints and 20 and enquiries in total: enquiries received in total: The reasons for requests: The reasons for requests:

With regard to quality of services 15 With regard to quality of services 4 With regard to prices and tariffs 26 With regard to prices and tariffs 7 With regard to issuance of VAT 17 2 With regard to billing invoices and billing With regard to agreements 24 With regard to agreements 2 With regard to changing the service 3 With regard to changing the 1 provider service provider With regard to other issues With regard to other issues (discrimination, safety of services, (discrimination, safety of services, etc.) 61 4 etc.) With regard to service credit limits 4 Decisions: 150 Decisions: 20 Peacefully settled disputes 19 Peacefully settled disputes 5 131 Answered according to the 15 Answered according to the procedure, procedure, established by the established by the legal acts, or legal acts, or forwarded to other forwarded to other institutions for institutions for investigation within investigation within their competence their competence Source: RRT

In 2013 RRT provided replies to 475 inquiries from service users received by email, most of which were with regard to prices and tariffs, non-compliance of the terms and conditions of agreements with the Rules for Provision of Electronic Communications Services.

The activities of RRT in the area of ensuring network and information security

Activities of the national CERT-LT team

The mission of the CERT-LT team of RRT is to ensure the investigation of incidents of public electronic communications networks and information security incidents, coordinate the actions for the purpose of stopping the spread of incidents and prevent incidents. CERT-LT coordinates activities for solving the incidents, related to security of networks and information, performs the preventive activities, investigations, and provides the information on new threats to computer users. The information is published 45

Communications Regulatory Authority of the Republic of Lithuania Annual Report 2013 on special websites www.cert.lt and www.esaugumas.lt, which also provide the users with recommendations and advice on how to avoid larger dangers and eliminate the consequences of the incidents. In 2013 CERT-LT, in cooperation with the German national CERT unit (CERT-Bund), found and neutralized a botnet control server functioning in Lithuania that was used to control and manage compromised computers (bots). After the investigation, it was found that since May 2013 this botnet control centre could control 5400 computers around the world. At closing time, the HTTP-based controller controlled more than 600 active compromised devices, among them – 75 in Lithuania. CERT-LT informed the Lithuanian and foreign Internet service providers and international partners supervising the IP addresses of the compromised computer devices. The user, who suspects that his/her computed might be involved into botnet activities, can check this on the website of CERT-LT at https://www.cert.lt/tikrinti whether his/her computer IP address is not registered in the database of CERT-LT as one participating in harmful activities. CERT-LT registers and announces the information on the operation of the computers detected in botnets at https://www.cert.lt/botnet.15 In view of the growing number of incidents and in order to more effectively coordinate the actions required for stopping cyber-attacks and cyber security breaches, starting from 1 July 2013 CERT-LT performs its functions uninterruptedly 7 days a week, 24 hours a day. In 2013 CERT-LT investigated 25 337 reports on incidents in the electronic space, received from providers of electronic communications services, foreign CERT teams, which perform international incident investigations, and from the Internet users. Compared to 2012 (21 416 reports), the number of reports decreased by 18 per cent (see Figure 33).

30000 25 337 25000 21 860 21 416 20000

15000 12 588 10 050 10000

5000 225 343 0 2007 m. 2008 m. 2009 m. 2010 m. 2011 m. 2012 m. 2013 m. Reikia nuimti “m.” Figure 33. The number of incidents investigated by the national CERT-LT team in 2007–2013 Source: RRT

The data of CERT-LT shows that the problem, most frequently faced by Lithuanian Internet users in 2013, was malicious software and compromise of information systems – it was the subject of 43.9 per cent of the total number of reports. In the majority of cases, malicious software was used to break the computer’s control in order to involve it into a botnet (the so-called zombie computer network). Malicious software

15 Botnet – a remotely controlled network of compromised computer systems.

Communications Regulatory Authority of the Republic of Lithuania Annual Report 2013 actively spread through mobile devices (smart phones, tablet computers, etc.) (see Figure 34).

Malicious software – 43.9 %

Information system compromise – 43.1 %

Distributed denial of service (DDoS) attacks – 0.5 %

Phishing of electronic data – 2.2 %

Manipulation of electronic data – 0.3 %

Other – 10.0 %

Figure 34. The statistics of reports on network and information security incidents, investigated by CERT-LT in 2013, per cent Source: RRT

In 2013 CERT-LT investigated 10 924 incidents, related to compromise of information systems, i.e. 19 per cent more than in 2012 (9 148 cases), which accounted for 43.1 per cent of the total number of the investigated incidents. The data of the investigations, performed by CERT-LT, showed that most of the detected compromise cases were carried out by automated means through botnets, by inserting a malicious code into the websites that were poorly secured. CERT-LT continues to record the tendencies of growth in the number of such incidents. In 2013, the number of phishing incidents also increased. CERT-LT investigated 558 reports, which is 3 times more than in 2012 (185 reports). Most of such reports were reports about false financial settlement and banking websites, which most often were based in servers outside the European Union. By use of spam or other means of fraud, the evil-minded persons used to offer to visit false websites in order to elicit passwords and/or other confidential data. In 2013 when the Christmas season was approaching, CERT-LT received nearly 300 reports from people on attempts by malicious people to extort their money, gain access to their virtual bank accounts or payment card data by creating fake electronic shops. In response, CERT-LT prepared a press release with recommendations how to behave in case of having suffered from malicious activities. In 2013 CERT-LT warned mobile communication service users of a malicious software program spreading through mobile phones. Mobile communication service users were sent text messages with the following text: “Privet tut fotki http://bit.ly/YJ_DjG kak tebe?”. If a person opened the link, he/she was prompted to update a browser, after activating which a malicious software code, called a computer worm, was installed on a smartphone. CERT-LT recommended not to activate the aforementioned link and other similar links, even if they were sent by relatives or acquaintances. Anyway, if a phone was infected with the malicious code, it was recommended to reset all factory settings. Consultations on the Internet and network information security were also provided by calling the RRT’s free of charge number 8 800 20030. In 2013, CERT-LT investigated 130 reports on denial of service (DoS) attacks. Compared to 2012 (61 reports), the number of reports increase more than twice. Such attacks were performed by automated means, by use of botnet resources. Among such incidents, there were more than 6 Gbps attacks against targets in Lithuania. In order to terminate the attacks, CERT-LT gave recommendations to website owners or companies providing website hosting services how to stop such attacks, coordinated actions with internet service providers. In 2013, (a similar tendency is expected in 2014, too) one of the biggest threats for network and information security on the global scale and in Lithuania continues to be the botnets, which are used for 47

Communications Regulatory Authority of the Republic of Lithuania Annual Report 2013 criminal activities – malicious code, spamming, denial of service attacks and other criminal acts. According to CERT-LT investigation data, in 2013 about 7,000 active zombie computers in average were recorded in Lithuania every day. All CERT-LT incident statistics reports are available on the website at https://www.cert.lt/statistika.html. Taking into account the increasing number of incidents related to security gaps in user network equipment, which enable overtaking of equipment and using it for personal data theft, distributed denial of service (DDoS) attacks and other malicious acts on the Internet, CERT-LT created additional tools for Internet users on its website. One can check on https://www.cert.lt/irankiai whether or not network equipment used for accessing the Internet uses vulnerable UPnP 1.0 protocol and whether or not routers have Open resolver type security gaps. CERT-LT has an early warning system, which analyses the available information and, if necessary, notifies the corresponding groups of network and information security threats, also, the laboratory, which is improved on a constant basis, that investigates and analyses malicious code, creates security measures and recommendations for the users. Users who have networks and information security problems are advised to immediately address their Internet service providers and, if the latter are not able to solve such problems, to inform CERT-LT about it by filling in a special form at https://www.cert.lt/pranesti. The website of CERT-LT publishes the information on the amount of unsolicited emails (spam) detected by CERT-LT sensors in email servers.

Reliability study of the Internet network infrastructure in Lithuania

CERT-LT has a real-time monitoring system, which enables to monitor actual Border Gateway Protocol16 (BGP) routes, their accuracy and changes, collect data about the accessibility of critical objects of the Internet infrastructure. This system is constantly being improved. Since 2008 RRT has been performing periodical assessments of reliability of Lithuania’s Internet infrastructure. The main aim of such assessments is to analyse the reliability of the national Internet network infrastructure of Lithuania and identify the potential risks. In 2013 RRT created a system for analysing the objects (Internet names, addresses, Internet address spaces, routes, autonomous systems, etc.) of Lithuania’s Internet infrastructure that have essential functionality in providing critical electronic services to the society. This system can be used to assess the objects of Lithuania’s Internet infrastructure and the operation of critical objects. It is also planned to use this system for continuous monitoring of the operation of critical objects. RRT is going to continue the studies and analysis of the reliability of the critical Internet infrastructure nodes of Lithuania and improve the Lithuanian Internet Network Infrastructure System (LITIS), implement additional modules, which will help monitor the accuracy of actual BGP routes and their changes, and register the traffic generated during cyber-attacks and similar.

CERT-LT website is accessible also over the IPv6 protocol

Due to the growing demand for public IP addresses and the lack of available IPv4 addresses, it is

16 A protocol designed to exchange routing and reachability information between autonomous systems. 48

Communications Regulatory Authority of the Republic of Lithuania Annual Report 2013 important to ensure end users’ access to public sector services through the IPv6 protocol. According to the experts, Internet users, who will be assigned only IPv6 addresses, must have access to public sector services and the different protocols should not be an obstacle to receive those services. An IP address is a unique number used for unambiguous identification of the sender and the recipient of the data packet. IPv6 is a new Internet Protocol (IP) version, designed to replace the currently used IPv4 protocol and to solve related problems. IPv4 uses 32 bits for numeric addresses, so it is theoretically possible to use a total of more than four billion addresses. At present, IANA, the organization which allocates IPv4 addresses, no longer has any IPv4 addresses available. They have been distributed to the regional Internet registries. In September 2012, the allocation of the last block of IPv4 addresses was started. After this block is exhausted, only organizations receiving IP addresses from the regional Internet registries will have IPv4 addresses available. Therefore, the transition to IPv6, or the 6th version of IP addressing, is encouraged. In view of the above, CERT-LT has provided the possibility for Internet users to access its website www.cert.lt by using the IPv6 protocol.

Inter-institutional cyber training X1306, organized by CERT-LT

From 28 June to 1 July 2013, CERT-LT organized an inter-institutional cyber training X1306. The training was organized in preparation for the Lithuanian Presidency of the Council of the European Union. The training was aimed at checking the effectiveness of inter-institutional cooperation, speed of mutual communication, possibilities to find contact information of responsible representatives of relevant institutions in critical situations, readiness to use easily available encryption means for data transmission via public networks, and skills to quickly exchange information during possible cyber incidents. More than 24 state institutions, organizations and security incident investigation CERT groups participated in the training. In order to adapt the training to as real conditions as possible, the time chosen for the training was Friday afternoon, when the likelihood of cyber-attacks is the greatest. During the training, the actions of institutions and CERT groups as well as possible attacks against the website of the Lithuanian Presidency of the EU were analysed, the inter-institutional cooperation skills of responsible persons were evaluated. The participants of the training were given the tasks to immediately find the contact details of other institutions, forward the required information over a variety of communication channels, use electronic data encryption tools to identify attacking IP (Internet Protocol) addresses, and other tasks relevant to such situations. The majority of the institutions participating in the training performed the tasks by 100 per cent. CERT-LT specialists created a special platform, including task management, real-time situation monitoring possibilities. This platform is tailored to more complex tasks, further development and improvement. It is planned to organize this kind of practical training in the future as well, because only joint actions, communication and properly selected tools can protect against, and reduce the likelihood of, potential cyber incidents.

Communications Regulatory Authority of the Republic of Lithuania Annual Report 2013 Implementation of the Safer Internet Project

It has been for six years already that RRT implements the EU Safer Internet programme and, in cooperation with other partners, executes the Safer Internet project in Lithuania. The results of the EU Kids Online survey conducted in 2012 show that children in Lithuania belong a group of increased Internet usage and higher risk, therefore the focus is on children’s safety on the Internet. Objectives of the Safer Internet In 2012 RRT joined the European Commission and the project are to increase public Centre of Information Technologies in Education (ITC) agreement awareness about harmful content concerning the implementation of a new project “SIC LT II” and conduct on the Internet; promote continued the project works. ITC is a coordinator of this Project and safer usage of the Internet and RRT is responsible for the implementation of the Internet hotline new technologies, especially functions. among children; provide public with a contact point to When implementing the aforementioned project, in 2013 anonymously report illegal and RRT together with ITC administered the website harmful content, and provide help www.draugiskasinternetas.lt created for the Safer Internet project, to children, who faced cyber- where children and parents can find relevant information about bullying, sexual grooming, safety on the Internet, Safer Internet project, Safer Internet Day harmful content or other bad or events, activities of international organizations Insafe and INHOPE, intimidating experience over the etc. The website also informs about the hotline, which accepts Internet. Internet users’ reports on harmful and fraudulent content on the Internet, also, provides the information about the helpline, which can be contacted on the free of charge phone number 116 111 (the common European number for the helplines responding to children in need in many European countries). In 2013, for the purpose of awareness raising, a social campaign intended to celebrate the international Safer Internet Day (hereinafter referred to as the SID 2013) was commenced, which was celebrated throughout the world on 5 February 2013. The theme of SID 2013 was Online Rights and Responsibilities and the slogan – “Connect with respect!”. The main highlight of SID 2013 – a national Safer Internet conference entitled “Connect with respect!” for children, young people and adults that was organised in the Lithuanian exhibition and congress centre Litexpo. The conference saw participation of about 700 school students from different regions of Lithuania, including those who participated over the Internet through a live stream connection. The organisers of the conference – RRT, ITC, the Ministry of Education and Science, Lietuvos Radijas ir Televizija, Lithuanian Academic and Research Network LITNET, Lithuanian Human Rights League, Child line Vaikų Linija, association Langas į ateitį, Microsoft Lietuva, TEO LT, AB and others. During the event, children ratified the code of Lithuanian Kids’ Net Etiquette they had developed (about one thousand of Lithuanian school students had contributed to development of the Code). The Code covers the provisions relating to topics, such as activities on social networking websites, 50

Communications Regulatory Authority of the Republic of Lithuania Annual Report 2013 online reputation, commenting, emailing, and children are prepared to observe these provisions in cyber space. When performing the hotline functions, in 2013 RRT received and investigated 650 reports on illegal or harmful content on the Internet, including 114 cases, where according to the coordinated criteria the hotline identified that the Lithuanian laws might have been violated due to illegal or harmful Internet content. All the reports were forwarded to the competent institutions in Lithuania and abroad for further investigation and removal of the illegal content from the Internet (see Figure 35): • 54 reports were forwarded to the Police Department. Suspected illegal content: sexual abuse of children (41 reports), pornography (12), incitement of racial or ethnic hatred (1). • 15 reports were forwarded to the Office of the Inspector of Journalist Ethics. Suspected dissemination of information having a negative impact on minors. • 90 reports concerning possible sexual abuse of children were forwarded to the hotlines of other countries, the members of international hotline association INHOPE. • 48 reports were forwarded, along with NTD (Notice and Take Down), to Internet service providers in Lithuania and abroad informing them about illegal and harmful online content present in their networks and encouraging them to remove it. • no action was taken with regard to the remaining 443 reports, since the information was either legal or placed in other countries’ servers, where such content is not considered illegal according to the laws of the country (for instance, pornography in most of the countries is legal). 100 80 90 60 54 40 47 48 20 33 21 13 15 0 Forwarded to the NTD notices Forwarded to the Forwarded to police Office of the other hotlines Inspector of Journalist Ethics 2012 m. 2013 m.

Reikia nuimti “m.” Figure 35. The statistics of reports to the Internet hotline in 2012‒2013 Source: RRT

In order to encourage the Internet users to exercise their rights more actively and fight the harmful online content more efficiently, RRT paid attention to awareness raising about the hotline and its possibilities. In 2013, during SID 2013 the hotline was widely publicized on radio and television, in press releases as well as during the aforementioned conference dedicated to the Safer Internet Day. 4 press releases about the activities of the hotline providing detailed statistics of the reports received were prepared; interviews about the possibilities to block illegal online content and about children’s safety on the Internet and social networking websites were given to TV programme “Info diena” of the Info TV channel, radio stations M1 and Pūkas. The Safer Internet project consortium partners prepared a letter to members of the European Parliament from Lithuania regarding funding for the Safer Internet programme in 2014‒2020. The Safer

Communications Regulatory Authority of the Republic of Lithuania Annual Report 2013 Internet project was presented at the exhibition “Mokykla 2013” (School 2013), where the activities of the hotline were also presented. Descriptions of five free Internet content filtering tools (for home users), their installation and administration instructions were prepared in 2013. These filters restrict access to video and audio material, pictures and photos, communication programs, and web pages of unwanted content. After downloading the selected application, parents have the following possibilities: to set limits on how much time their children can spend online, set up a weekly browsing schedule, block specific website addresses (one of the ways is a sound signal (a dog’s barking) and this sound will be played sound every time a child tries to open a prohibited website); see the times and dates of visits to one or another page, the kinds of pages visited most frequently. For example, after installing the “Norton online family” content filtering application, you can activate the child’s personal information protection (input the data which, in your opinion, your child should not share online – it can be an e-mail address, phone number, etc.). The application provides an opportunity to see what kind of social websites (e.g., Facebook) your child visits. You can see (see the example below) when and how many times your child visited one or another social networking website.

One can download free content filtering programmes on the website at www.draugiskasinternetas.lt in the section “For Parents – Content Filtering Applications”. Here, parents are given advice regarding the usage of control and (or) filtering applications, how to decide whether to tell the child about this or not. Teenagers are constantly fighting for their independence and freedom to do everything their own way. Secret control or blocking of information without their consent may have an opposite effect. It is recommended to teach teenagers how they can accumulate their online experience in a responsible manner by blocking unwanted websites and content, develop necessary skills in order to become good citizens in cyber space and browse the Internet safely and conveniently.

Protection of consumer rights and legitimate interests in the postal sector

Supervision of universal postal services

The Law, Amending the Postal Law of the Republic of Lithuania, whereby the postal market was completely liberalised, entered into effect as of 1 January 2013. Complete opening of the postal market is a way to create the internal market of postal services in Lithuania and other EU members, which would warrant all the users a single level of universal postal services (hereinafter referred to as UPS) and would set common principles of postal service regulation on the EU scale. Since the entry into effect of the new Postal Law on 1 January 2013:  The reserved field has been cancelled, therefore there is no obligation to deliver letter-post items under the weight limit of 50 grams to other providers of postal services by applying a tariff of at least two-and-a-half-times the tariff for a letter-post item in the first weight step set to UPS providers;  A postal service provider operating a postal network is obliged to negotiate, upon a request from another postal service provider, and sign an agreement with the other postal service provider, when the latter applies, for the use of the postal network, including the system of postal codes, address 52

Communications Regulatory Authority of the Republic of Lithuania Annual Report 2013 data base, postal office boxes, and information on change of address, redirection service and return to sender service;  The scope17 of UPS has been reduced: UPS no longer includes postal items and postal parcels sent in volumes and services that have added value;  Lietuvos Paštas AB is obligated to provide the universal postal service until 31 December 2019 and is responsible for quality provision of universal postal service according to the Postal Law;  RRT has been assigned a new function to approve tariff ceilings for UPS, which was previously performed by the Government of the Republic of Lithuania.

Taking into account the provisions of the new Postal Law, in 2013 RRT developed and approved 3 legal acts, regulating the provision of universal postal service18. Also, in 2013 RRT developed the drafts of other legal acts provided for in the Postal Law and submitted them for the Government’s approval:  Draft Rules for Compensation of Loss-Making Universal Postal Services, Including the Criteria for Determining an Unfair Financial Burden;  Draft Rules on Compensation of Loss-Making Services of Delivery of Periodical Publications to Subscribers in Rural Areas. On 28 February 2013 the rules regulating the activities of postal service providers19 were approved by 3 orders of the Director of RRT. In 2013 RRT actively participated and presented comments and suggestions regarding the draft legal acts prepared by the Ministry of Transport and Communications of the Republic of Lithuania regulating the provision of UPS, quality requirements, determining characteristics of the network, the procedure on imposing obligations on the provider of UPS. Also, RRT submitted an amended draft regarding the amendment of the Rules on Compensation of Loss-Making Services of Delivery of Periodical Publications to Subscribers in Rural Areas, participated in the revision of the Government’s resolution regarding the list of the tariff ceilings applicable for this service. Upon receipt of an application from Lietuvos Paštas AB regarding compensation of the loss-making service of delivery of periodical publications to subscribers in rural areas for 2012 and the first half of 2013, RRT submitted its conclusions to the Ministry of Transport and Communications regarding the legitimacy and conformity of the losses of the loss-making service of delivery of periodical publications to subscribers in rural areas provided by Lietuvos Paštas AB with the requirements set forth in the Rules on Cost Accounting. In order to improve the quality and availability of information provided to users, in 2013 the structure of the part of the website www.rrt.lt related to postal activities was changed and the information provided therein was updated. The website contains information for users about postal service providers, currently effective legal acts, UPS quality testing results, other useful information about the postal market. The

17 It is set down in the Article 14 of the Postal Law that universal postal service includes: collection, sorting, transport and delivery of the postal items weighing up to 2 kg; collection, sorting, transport and delivery of the postal parcels up to 10 kg; collection, sorting, transport and delivery of the registered and insured postal items or parcels (the universal postal service indicated includes domestic and international postal service); delivery of parcels weighing up to 20 kg, received from other Member States. 18 Tariff Ceilings of Universal Postal Service (der No. 1V-8 of 3 January 2013), Rules on Cost Accounting of the Provider of Universal Postal Services (Order No. 1V-55 of 11 January 2013), Rules of Calculating Losses of Universal Postal Service (Order No. 1V-608 of 15 April 2013) 19 Regulations on Provision of Postal Service (Order No. 1V-332), Rules for Resolution of Disputes between Undertakings, Providing Electronic Communications Networks and/or Services, and Disputes between Providers of Postal Services Services (Order No. 1V- 333), Rules for Investigation of Disputes between the End Service Users and Providers of Electronic Communications Services and Disputes between the Providers and Users of Postal Services (Order No. 1V-336)

Communications Regulatory Authority of the Republic of Lithuania Annual Report 2013 information, related to the questions most frequently asked by users about compensation for lost, damaged postal items, storage of postal items and applying for lost international registered postal items has been also updated.

Establishment of service points for provision of universal postal services

Obligatory characteristics20 of public postal network are determined to providers of universal postal services, the latter characteristics determine the conditions for distribution of service points of universal postal services and requirements for installation of such points, in order that a sufficient number of postal service provision points is installed and that universal postal services are accessible to all users. The following requirements are determined in the characteristics:  in urban housing areas, the distance from place of residents of service user and stationary, mobile service points of UPS or service points of UPS provider agencies shall be not greater than 3 kilometres (by the most direct way), and the distance to post boxes for public use – not greater than 2 kilometres by the most direct way;  in rural residential areas on the territory of one subdistrict, there has to be at least one place, where UPS would be rendered or there has to be a workplace for the agents of UPS provider;  in rural residential areas remote from the sub-district centres, a mobile UPS establishment can be established additionally;  rural residential areas that have more than 200 receipt mail boxes (addresses) should be equipped with one postal box for public use;  points of access to universal postal services: stationary, mobile points of access, service points of UPS provider agencies; postal boxes for public use.

According to the data of 31 December 2013, Lietuvos Paštas AB provided its universal postal services at 829 (836 at the end of 2012) points of access to UPS: 676 stationary points of access to UPS (197 in cities and towns, 479 in rural areas), 19 post offices (16 in cities and towns, 3 in rural areas) and 27 mobile post offices, serving 134 points of access to universal postal services in rural areas. During 2013, a total of 7 points of access to UPS were closed: 1 point was closed in an urban area and 6 points – rural areas. 8 points of access to UPS were closed in Kaunas (5), Klaipėda (2) and Vilnius (1) regions, 1 point of access to UPS was opened in Kaunas region. During 2013, points of access to UPS were reformed in Kaunas (5), Klaipėda (1) and Panevėžys (1) regions. For the purpose of optimization of the results of activities, the provider of universal postal services, during the time period of 2006-2013, reduced the number of stationary points of access to postal services, which operated with a loss: in 2009 – 14.6 per cent, 2011 – 3.0 per cent, 2012 – 1.7 per cent, 2013 – 1.1 per cent, with the exception of 2010 when the number of stationary points of access to postal services increased by 0.1 per cent. However at the same time Lietuvos Paštas AB launched new mobile points of access to postal services, i.e. modern vehicles, specially equipped for conveyance of items of correspondence and postal parcels and provision of other services, which come to the residential areas at the set time. In 2008,

20 These characteristics are determined by the Order No. 3-46 of the Minister for Transport and Communications of the Republic of Lithuania of 25 January 2013 “On the Approval of the Characteristics of the Public Postal Network of the Provider of the Universal Postal Services”. 54

Communications Regulatory Authority of the Republic of Lithuania Annual Report 2013 16 mobile post offices served 80 points of access to UPS, in 2009 – 28 mobile post offices served 134, in 2010 – 135, 2011 – 138, 2012 – 27 mobile post offices served 133, and in 2013 – 27 mobile post offices provided UPS to residents in 134 rural residential areas (see Figure 36).

1000 862 736 800 737 715 703 695

600

400

135 200 80 134 138 133 134

0 2008 2009 2010 2011 2012 2013

Number of stationary points of access to UPS Number of mobile points of access to UPS

Figure 36. Change in the number of stationary points of access to UPS provided by Lietuvos Paštas AB in 2008-2013, units. Source: RRT

In 2013 Lietuvos Paštas AB implemented the national information system for delivery of electronic messages and electronic documents to natural persons and legal entities over the postal network (thereinafter referred to as the E-delivery system). With the E-delivery system, registered correspondence sent by state institutions can be received and sent by using another modern, secure and legally approved means. The system can be accessed on the website at www.epristatymas.lt. Using the E-delivery system, items can be sent not only to another electronic delivery box, but also by the traditional means of delivery – by post. In the latter case, an electronic item generated in the E-delivery system, if delivery by post is selected, will be printed, enveloped and physically delivered to the addressee. Starting from 2013 Baltic Post UAB, a subsidiary of Lietuvos Paštas AB, launched the provision of services of delivery and receipt of postal items through the self-service terminals LP EXPRESS 24. At present, 71 LP EXPRESS 24 self-service terminals are operational in 41 cities and towns of Lithuania. This is the widest network of self-service parcel terminals in the country.

Quality control of universal postal services

Lietuvos Paštas AB, the provider of UPS, is obliged to implement Standard LST EN 13850 “Postal Services. Quality of Services. Measurement of the transit time of end-to-end services for single piece priority mail and first class mail”21. An independent internal monitoring of the transit time of end-to-end services for ordinary priority mail items carried out in 2013 revealed that 90.03 per cent of priority items of correspondence were delivered on the business day following the dispatch (D+1) (in 2012 – 85.86 per cent) and on the third business day following the dispatch (D+3) - 99.56 per cent of items (in 2012 – 99.71 per cent). These indicators are better than those in the requirements for quality of UPS, established by the Ministry of Transport and Communications, i.e. on the business day following the dispatch D+1 ‒ 85 per

21 Order No. 3-128 of the Minister of Transport and Communications of the Republic of Lithuania of 28 February 2013 “On the Approval of the Description of the Requirements for Quality of Universal Postal Services” 55

Communications Regulatory Authority of the Republic of Lithuania Annual Report 2013 cent and D+3 – 97 per cent. In the course of the monitoring carried out in 2013, the number of sent test items totalled to 6,600.

Table 4. Results of measurement of the transit time of end-to-end services for single piece priority correspondence items, qualitative indicators (per cent) in Lithuania in 2012‒2013

Year D + 0 D + 1 D + 2 D + 3 D + 4 D + 5 D + 6 D + 7 D + 8 D + 9 D + 10

2012 9.72 85.86 98.05 99.71 100.00 100.00 100.00 100.00 100.00 100.00 100.00

2013 17.14 90.03 98.10 99.56 99.83 99.95 99.95 99.95 99.95 100.00 100.00

Source: Europos Tyrimai UAB (2012) and Spinter Tyrimai UAB (2013) * D is the day of sending the item.

According to the Postal Law, RRT shall supervise how a UPS provider organises a monitoring of the quality of UPS. In 2013 RRT had a meeting with the representatives of Lietuvos Paštas AB and Spinter Tyrimai UAB during which the issues, related to the implementation of Standard LST EN 13850:2013 “Postal Services. Quality of Services. Measurement of the transit time of end-to-end services for single piece priority mail and first class mail”, adopted by the European Committee for Standardization in 2013 and transposed by the Lithuanian Standards Board, were discussed. Lietuvos Paštas AB was given comments regarding the requirements provided for in Standard LST EN 13850:2013 related to the appointment of an independent monitoring organisation, confidentiality of the data of monitoring participants and submission of reports to RRT.

Investigation of user complaints

In 2013, RRT received 82 requests or complaints of users of postal services, 53 of them with regard to provision of UPS and 29 – with regard to the services provided by other postal service providers. Compared to 2012, the number of requests or complaints received by RRT regarding provision of UPS increased more than 2 times, while the number of requests or complaints regarding the services provided by other postal service providers decreased by 3.3 per cent (see Table 5). In 2013 RRT investigated 48 requests of users regarding provision of UPS, 32 – regarding the services provided by other postal service providers (see Figures 37 and 38), replied to 173 inquiries received by e-mai, and to 164 – by telephone. 24 complaints were investigated in accordance with the pre-trial dispute resolution procedure. The majority of users of postal services applied to RRT regarding the loss of, damage to, or delayed delivery of postal items.

Table 5. Complaints of users of postal services, received and investigated by RRT, and the decisions of RRT in 2008–2013 Complaints 2008 2009 2010 2011 2012 2013

Complaints with regard to the 31 24 17 28 30 29 provision of postal services: Decisions in favour of service users or a good-will way for resolution of the 6 1 3 6 6 9 dispute Answered according to the procedure prescribed by legal acts, providing 20 23 13 19 22 22 explanations Unsubstantiated 5 0 1 3 2 1 Complaints with regard to provision 38 24 31 48 26 53 56

Communications Regulatory Authority of the Republic of Lithuania Annual Report 2013 of universal postal services: Decisions in favour of service users or a good-will way for resolution of the 6 2 4 4 2 8 dispute Answered according to the procedure prescribed by legal acts, providing 32 20 23 36 7 31 explanations Unsubstantiated 0 2 4 8 17 9

25 23 22 22 20 20 19 Decisions in favour of service users or a good-will way for resolution of the dispute 15 13 Answered according to the procedure prescribed by legal 10 9 acts, providing explanations 6 6 6 5 5 3 3 Unsubstantiated 2 1 1 1 0 0 2008 2009 2010 2011 2012 2013

Figure 37. Dynamics of the number of complaints of users of postal services investigated by RRT in 2008–2013, units Source: RRT

40 36

35 32 31 30 Decisions in favour of service users or a good-will way for resolution of 23 25 the dispute 20 20 17 Answered according to the 15 procedure prescribed by legal acts, 9 providing explanations 10 8 8 6 7 4 4 4 Unsubstantiated 5 2 2 2 0 0 2008 2009 2010 2011 2012 2013

Figure 38. Dynamics of the number of complaints of users of universal postal services investigated by RRT in 2008–2013, units Source: RRT

Communications Regulatory Authority of the Republic of Lithuania Annual Report 2013 Protection of consumer rights and legitimate interests in the equipment sector

The activities of RRT in ensuring free movement and provision of equipment to the EU market

In 2013 Equipment and Devices EMC Control Division tested compliance of 165 devices (152 types) with the essential requirements for electromagnetic compatibility of the EU directives. 628 electromagnetic compatibility tests were performed (of which 356 – disturbance radiation tests, 272 – disturbance resistance tests, 163 test records were issued). 34 per cent of them were found non-compliant with the essential requirements for electromagnetic compatibility, thus the entry of such devices into the EU market was prevented, and the country’s manufacturers and importers of electric and electronic devices as well as vehicles could check compliance of their products with the EU mandatory requirements for electromagnetic compatibility. In cooperation with the State Road Transport Inspectorate (hereinafter referred to as the SRTI), electromagnetic compatibility tests and verifications of conformity to type were performed on vehicles and their component parts in accordance with Order No. 2B-262 of the Head of the State Road Transport Inspectorate of 29 June 2011 regarding granting the right to RRT to perform tests on vehicles. In 2013, 11 electromagnetic compatibility tests on vehicles were performed. According to the concluded long-term cooperation agreements with electrotechnical products certification center Sertika, compatibility evaluation of medical devices was performed, together with Certification Center for Electrical Appliances EGSC – evaluation of electromagnetic compatibility of electrotechnical equipment. Figure 39 shows distribution of perfomed tests by groups of electric and electronic devices.

Vehicles Lighting equipment 11 18

Radio communication Household equipment appliances 43 32

Industrial, scientific IT equipment and medical 11 equipment 50

Figure 39. Equipment, tested according to electromagnetic compatibility requirements in 2013, by groups of equipment, units Source: RRT

In order to cover more of the market of market of electronic and communications equipment and its testing, the accredited Equipment and Devices EMC Control Division of RRT continued expanding its scope of accreditation which is currently the largest among all conformity assessment institutions in the country ‒ it includes 175 Lithuanian and international standards, and the controlled radio frequency band is from 0 to 40 GHz. 58

Communications Regulatory Authority of the Republic of Lithuania Annual Report 2013 Elimination of radio interference

Implementation of new radio communication systems and technologies gives rise to a need not only to protect the latter from harmful radio interference, but also to protect previously installed radio communication systems, the operation of which may be negatively affected by the new ones. Due to such radio interference, the information transmitted may be distorted or even lost. This may affect the quality of the provision of electronic communications services, interfere with the operation of transport and other systems, bring economic losses, and threaten the security of people and property. In 2013 identification of radio interference and initiation of their elimination was the centre of attention of RRT. During 2013, 566 requests and notifications regarding radio interference were received from natural and legal persons (investigation of 3 requests was transferred from 2012). In 78 cases radio interference was successfully investigated and the reasons were eliminated. 408 complaints were unsubstantiated. In 77 cases the radio interference disappeared prior to identifying its source. Compared to 2012 (254 notifications), the significantly increased number of notifications in 2013 was also due to the number of unsubstantiated complaints received by RRT that could be attributed to the planned change of digital terrestrial television frequencies in different regions of the country. The distribution of received complaints is shown in Figure 40.

Successful investigations 78 Radio interferences disappeared prior to finding their source 77

Investigation of unsubstantiated complaints 408

Figure 40. The number of complaints regarding radio interference investigated in 2013, units Source: RRT

It is important to note that due to switching-off analogue television, the number of cases of actual interference for receiving of television programmes dropped from tens to a few cases per year. Most of the received requests were complaints about interference for receiving terrestrial radio and television programmes, public mobile communication services and other ICT services (Figure 41). The rest were requests to eliminate interference for internal radio communication networks, short-range devices and other objects.

Communications Regulatory Authority of the Republic of Lithuania Annual Report 2013 Short-range Other communication 16 devices 22 Internal radio communication networks 34

ICT services 497

Figure 41. The nature of received notifications on interference in 2013, units Source: RRT

The reasons of the radio interference identified in 2013 varied a lot (see Figure 42). Almost a third of them were the interference caused by radio and television broadcasting stations. In most of the cases, the problems were due to terrestrial digital synchronous network TV stations. This happened during a transitional period – during the change of broadcasting frequencies and partly after completion of their change. The problems with the compatibility of networks were successfully solved by the broadcasters themselves. The sources of interference included short-range devices (18.7 per cent) and active TV reception antennas, mostly made in Poland, and IT equipment and computers (each 13.3 per cent). Active TV antennas used to cause interference to base stations of public mobile communication. As in 2012, in 2013 there were also cases when the repeaters of the same communication signals, used by both service providers and individual persons, interfered with the operation of public mobile communication.

Other Short-range devices 9,3% 18,7% RTV broadcastin g stations 29,3% Internal radio communication network stations IT equipment and 2.7% computers Public mobile 13,3% Active TV antennas communication 13,3% Illegal frequency users equipment 5,3% 8,0% Figure 42. Successfully identified sources of radio interference in 2013, per cent Source: RRT

Upon receipt of a request, the investigation was performed by using mobile radio spectrum monitoring stations with the complex radio interference searching equipment available in them. Requests regarding investigation of radio interference may be provided by both legal and natural persons. This service is free. Information on this subject is provided to everyone requesting it by calling the free of charge helpline 8 800 20030 or on the website of RRT.

Communications Regulatory Authority of the Republic of Lithuania Annual Report 2013 Supervision of electronic communications infrastructure

In 2013 RRT, when implementing the functions, ascribed to it by the legal acts of the Government of the Republic of Lithuania, continued the activities on state supervision and control of installation and use of electronic communications infrastructure. RRT performed 9 investigations of consumer complaints regarding installation of electronic communication infrastructure. RTT replied to 6 notifications regarding installation of electronic communication infrastructure and to 8 electronic requests regarding installation of electronic communication infrastructure. In 2013 RRT organized a seminar on the subject of the installation of electronic communication infrastructure for the employees of the State Territorial Planning and Construction Inspectorate. During the seminar, the major infrastructure installation problems, limiting the development of electronic communications, were presented. For example, installation of lead-ins of a too small diameter in newly built blocks of flats. The seminar participants agreed on the need to improve the regulations of the key areas of electronic communications and the possibilities for institutions to cooperate in conducting the surveillance of electronic communications infrastructure.

Encouragement of usage of electronic signatures and infrastructure development

When promoting the development of electronic signature infrastructure and the usage of electronic signature, RRT raises public competence and consults persons regarding the issues of electronic signature usage; RRT also tries to increase the trust of electronic signature users in certification service providers. Since 2011 RRT is authorized by the Government to perform the functions of electronic signature supervisory institution. In order to implement these functions appropriately, RRT has to promote the development of electronic signature infrastructure while ensuring education of electronic signature users and improving their competences. In 2013 the supervision of the remote training system for the use of electronic signatures and electronic documents (hereinafter referred to as the Training System) was carried out, information regarding the electronic signature was further updated and supplemented, and the promotion of the Training System was performed (a promotional banner of www.elektroninisparasas.lt was made available on the website of RRT, a press release was published). In the Training System it is possible to receive all relevant information regarding electronic signatures, to view instructions how to sign an electronic document, check knowledge by tests and to receive an electronic certificate attesting to a successful completion of tests. Promoting the usage of electronic signatures, in 2013 RRT 69 times provided methodological guidance (by e-mail, telephone and during meetings) on the issues of electronic signature to persons not providing certification services. RRT employees provided answers to various questions on electronic signature usage and application of legal acts: regarding the validity of electronic signature when the validity of the certificate is expired, the usage of personal code in certificates, the usage of the certificate issued in EU countries in Lithuania, formats of electronic signature, means necessary to sign with electronic signature; reasons for termination of certificate validity; time-stamping usage; a possibility to foreigners to obtain means for electronic signature in Lithuania etc. Information about electronic signature was prepared and provided also to representatives of the media. RRT cooperated with the Office of the Chief Archivist of Lithuania regarding legalisation of electronic documents’ specifications, requirements for electronic documents’ specifications and the need of the specifications of electronic documents in PDF format, participated in the activities of the working group, 61

Communications Regulatory Authority of the Republic of Lithuania Annual Report 2013 established by the order of the Chief Archivist of Lithuania, for preparation of the specifications of electronic documents in PDF format, setting forth the requirements for software used to sign electronic documents in PDF format, selecting electronic signature formats that would ensure the validity of electronic signature, etc. RRT representatives participated in the following: - the activities of the Electronic Document Management Commission; - the activities of the working group, established by the Ministry of the Interior, regarding the options of the use of qualified certificates for opening a bank account; - the activities of the Consultative Council of Electronic Information Security (Cyber Security); - the meetings regarding the Regulation on ensuring the reliability of electronic identification and electronic transactions, proposed by the EC; - the meetings regarding the use of personal codes in qualified certificates, development of the usage of electronic signatures; - the round table discussion on "Initiatives of electronic documents and electronic signatures in the public sector", organized by the Government of the Republic of Lithuania together with State Enterprise Centre of Registers and IBM Lietuva UAB. In 2013 RRT provided official consultations to state institutions and enterprises as well as private enterprises, examined the requests received from natural persons: the clarification provided by public enterprise Versli Lietuva regarding documents in electronic form and their signing with electronic signatures; the opinion submitted to the Property Valuation Oversight Agency regarding the signing of property and business valuation reports with electronic signatures. RRT submitted comments regarding the draft order of the Director of the State Metrology Service, information to the Office of the Government regarding the implementation of the recommendations provided in the public audit report, and provided information to Skaitmeninio Sertifikavimo Centras UAB regarding the supervision of electronic signature, documentation of State Enterprise Centre of Registers. Positions regarding the distribution of the qualified certificates, issued by foreign state certification service providers, in Lithuania and the use of personal codes in qualified electronic signature certificates were prepared for publication. In 2013 in Lithuania there were three registered certification service providers providing the services of issuing qualified certificates under the supervision of RRT. Compared to 2012, in 2013 the total number of the qualified certificates, issued by the three certification service providers, increased by 27.6 per cent (in 2012 the number of issued certificates was more than 782 thousand, in 2013 – more than 997 thousand).

Communications Regulatory Authority of the Republic of Lithuania Annual Report 2013 PROMOTION OF COMPETITION IN ELECTRONIC COMMUNICATIONS AND POSTAL SECTORS

Competition in electronic communications sector

The sector of electronic communications decreased in 2013, compared to 2012 and in terms of revenues from the sector. The sector’s revenues in 2013 decreased by LTL 128 million or 5.64 per cent compared to 2012. During 2013, compared to 2012, there was an increase only in revenues from Internet access (an increase by 0.75 per cent) and pay TV services (an increase by 9.81 per cent). In 2013, the biggest drop in revenues was in mobile telephone communication services (a decrease by LTL 75.9 million), network interconnection services (a decrease by LTL 30.6 million) and fixed telephone communication services (a decrease by LTL 25.9 million). However, in contrast to the revenues of the electronic communications sector, in 2013, compared to 2012, investments in electronic communications networks increased. During 2013, the amount of investments in electronic communications networks was higher by LTL 42.7 million or 16.06 per cent than in 2012. Operators invested mostly in the development of fiber-optic access networks, upgrades of fixed and mobile networks, and in the development of infrastructure of 3G, 4G networks and mobile communication networks (for provision of data transmission services). In 2013 the trends of changes in the number of electronic communications service subscribers were similar to those in 2012. In 2013 there was a growth in the number of broadband Internet access subscribers (a 7.58 per cent growth) and pay TV subscribers (a 0.39 per cent growth). However, during 2013 the number of mobile telephone subscribers decreased by 8.63 percent. During 2013, the number of fixed telephone subscribers also continued to decline (a 7.50 per cent decline).

Market tendencies and participants

At the end of 2013 about 144 operators and service providers were engaged in the provision of electronic communications services (public fixed telecommunications network and services, mobile telecommunications network and services, leased line services, Internet access and other data transmission services, dark fibre access services, television (cable TV, MMDS, IPTV, terrestrial DVB-TV, satellite TV) services, broadcasting transmission services, wire radio activities. In 2013, 4 undertakings submitted their notifications on the intent to engage in the provision of public fixed telecommunication network and/or services (the number of undertakings, actually engaged in the activities, reduced from 48 (in 2012) down to 45). 3 undertakings submitted notifications of their intent to engage in public mobile telecommunication network and/or service provision (the number of undertakings executing the activities grew from 15 (in 2012) up to 16), 1 undertaking submitted its notification on the intent to engage in the provision of satellite communication services. According to the Specification of General Terms and Conditions for Engaging in Electronic Communications Activities, an undertaking shall be deleted from the list of providers of electronic communications services and/or networks, in case the undertaking, upon providing its notification on the commencement of activities, fails to commence the electronic communications activities, specified in the notification, for the time period longer than one year. Referring to the said provision, in 2013 1 undertaking was deleted from the list of undertakings engaged in the provision of public fixed telecommunications 63

Communications Regulatory Authority of the Republic of Lithuania Annual Report 2013 networks used for provision of public fixed telephone communication services and/or public fixed telephone communication services. 5 undertakings were deleted from the list of providers of electronic communications services and networks at their own request. In total, 7 undertakings submitted their notifications on the commencement of electronic communications activities in 2013.

Market analysis

In order to ensure efficient competition in electronic communication sector, and to prevent the undertakings having significant market power to abuse their power, RRT performs electronic communication market analysis22. At the end of 2013 RRT identified 13 undertakings having significant power on relevant markets. TEO LT, AB was identified as an undertaking having significant power on 13 markets, Lietuvos Radijo Ir Televizijos Centras AB – on 5 markets, Bitė Lietuva UAB, Omnitel UAB, Tele2 UAB, Lietuvos Geležinkeliai AB, Eurocom SIP UAB, Cubio UAB, CSC Telecom UAB, Linkotelus UAB, Mediafon UAB, Nacionalinis Telekomunikacijų Tinklas UAB, Telekomunikaciju Grupa UAB – on one market. The following obligations were imposed on TEO LT, AB:  Cost accounting, accounting separation and price control obligations when providing retail services in the market of access (provided to consumers) to public telephone communications networks and in the market of access (provided to service users except consumers) to public telephone communication in fixed location and in the market, when providing retail services. In the aforementioned markets TEO LT, AB is obliged to provide its subscribers the possibility to choose a public telephone communication provider and is also obliged to provide wholesale local line.  TEO LT AB, while providing retail leased lines services, has to follow non-discrimination, transparency, price control, cost accounting and accounting separation obligations.  TEO LT AB, while providing wholesale local line service, has to follow non-discrimination, transparency, cost accounting, price control and accounting separation obligations.  While providing wholesale services of call origination, national and international call transit, wholesale call termination, broadband communication access and physical network infrastructure at a fixed location, leased lines terminating segments and national leased lines trunk segments, the following obligations are imposed on TEO LT AB: obligation to provide access, non-discrimination, transparency, price control, cost accounting and accounting separation obligations. It should be noted that after Lithuania transitioned to digital television and switched off analogue terrestrial television broadcasting on 28 October 2012, the obligations imposed during the previous analyses of the market of broadcasting transmission services were still in force in the market of analogue terrestrial radio programmes broadcasting transmission services to deliver broadcast content to end users, when the radio frequency/channel is allocated to the transmitter Lietuvos Radijo ir Televizijos Centras AB, and in the market of analogue terrestrial radio programmes broadcasting transmission services to deliver broadcast content to end users, when the radio frequency/channel is allocated to the broadcaster. Following the Law

22 During the analysis the main aim is to evaluate if competition in the determined markets is efficient and to determine undertakings having significant power on relevant markets. If competition is not efficient, certain obligations for undertakings having significant power on relevant markets are determined. The aforementioned obligations may be subsequently (if situation changes after market analysis) changed or withdrawn if competition becomes efficient. 64

Communications Regulatory Authority of the Republic of Lithuania Annual Report 2013 on Electronic Communications23, RRT completed only parts of the broadcasting transmission services market analysis procedure and withdrew the obligations imposed on Lietuvos Radijo ir Televizijos Centras AB. After performing the analysis of the markets of public local and/or national telecommunication services provided to consumers at a fixed location, public local and/or national telecommunication services provided to service users, with the exception of consumers, at a fixed location, public international telecommunication services provided to consumers at a fixed location, public international telecommunication services provided to service users, with the exception of consumers, at a fixed location in July 2013, it was established that the aforementioned four markets had the characteristics influencing the development of competition without the need for ex ante regulation. Taking the above into consideration, the obligations imposed on TEO LT, AB after the previous market analyses were withdrawn. In 2013 RRT initiated analyses of the following markets:  The market of national transit services, in the fixed public telephone network;  The market of call origination on the public telephone network, provided at a fixed location;  The market of voice calls termination on individual public mobile networks;  The market of call termination on individual public telephone networks, provided at a fixed location. The objective of the analyses of these markets was to determine whether competitive constraints were still present in those markets, in other words, to find out whether it was necessary to leave the obligations imposed on TEO LT, AB as an undertaking having significant power in those markets after the previous analyses of the aforementioned markets. RRT completed the analysis of the market of broadcasting transmission services to deliver broadcast content to end users. During the analysis of the aforementioned market, RRT separately defined the markets of radio programmes broadcasting transmission services and the markets of television programmes broadcasting transmission services. After performing the analyses of the markets of radio programmes broadcasting transmission services, RRT found that the characteristics of the said markets (stable prices for radio broadcasting transmission services, capabilities to establish their own electronic communications networks) allowed the development of effective competition in them without the obligations imposed by RRT. As a result, RRT withdrew the obligations to provide access, transparency, non-discrimination, price control and cost accounting, and accounting separation imposed on Lietuvos Radijo ir Televizijos Centras AB in 2006 and 2010. After performing the analyses of the markets of television programmes broadcasting transmission services, RRT established that there was no effective competition in the markets of television programmes broadcasting transmission services over digital terrestrial television networks, provided Lietuvos Radijo ir Televizijos Centras AB and TEO LT, AB. Therefore, RRT will apply the following obligations to the aforementioned undertakings: obligation to provide access, transparency, non-discrimination, price control and cost accounting, and accounting separation obligations.

23 In accordance with paragraph 5 of Article 16 of the Law on Electronic Communications, Market analysis shall be initiated by a decision of RRT. RRT shall have the right to complete only parts of the market analysis procedure where it considers for justified reasons that it is not feasible to complete the whole procedure.

Communications Regulatory Authority of the Republic of Lithuania Annual Report 2013 The Competition Council of the Republic of Lithuania had no comments regarding the measures proposed by RRT. The EU Commission assessed the draft results of the market analysis conducted by RRT and approved the measures proposed by RRT. The results of the aforementioned market analyses are available at www.rrt.lt.

Supervision of execution of the obligations imposed on the undertakings having significant market power

In 2013 RRT, when performing the supervision of implementation of the legal acts, regulating electronic communications activities, continued to devote much attention to supervision of the implementation of the obligations imposed on the undertakings recognized as having significant power on relevant markets, applied in order to limit the market power of such undertakings. The observance of the imposed obligations helps reduce entrance barriers in certain markets and increase freedom of business initiatives, ensure equal competition conditions for undertakings in electronic communications markets and greater competition in them. This results in lower prices, greater diversity and higher quality of services for consumers of electronic communications services, and also ensures consumers the freedom to choose a service supplier who best meets their needs. In 2013 RRT performed supervision of obligations of transparency, non-discrimination, price control, cost accounting and accounting separation, provision of access and the obligations, pertaining to the provision of services to end users, imposed on the undertakings having significant power on relevant markets. The obligations are established referring to the EU legal acts regulating electronic communications activities, according to which, for the purpose of reaching a single EU market, market analyses are performed in all the Member States and the obligations are imposed on the undertakings having significant market power, the results of such analyses are coordinated with the European Commission. When supervising the ways how the undertakings having significant power on relevant markets follow the requirement to provide the agreements on provision of access (network interconnection, transit, unbundled access, lease of infrastructure, wholesale broadband access provision agreements), as well as wholesale leased lines, broadcasting transmission services and conditional access agreements, concluded with other undertakings, imposed by the transparency obligations, RRT registers the provided agreements and their amendments, analyses the said documents and makes the corresponding decisions with regard to compliance of the provisions of the said agreements with the requirements, established by the legal acts. In 2013, a total of 45 agreements and their amendments (additional agreements) were registered: 15 network interconnection agreements and their amendments; 1 agreement on provision of unbundled access to the local loop and its amendments, 6 agreements regarding wholesale broadband communication access ad their amendments, 4 agreements regarding wholesale leased lines and their amendments, 19 infrastructure lease agreements and their amendments. All the provided agreements, apart from the confidential information, are available on the RRT website at www.rrt.lt in the section “Electronic Communications – For Business – Promotion of Competition – Obligations on Undertakings – Agreements”. RRT also analyses reference offers from undertaking having significant market power regarding wholesale network infrastructure access, local line, broadband communication access services, leased lines, lease of infrastructure, networks interconnection and broadcasting transmission services. In 2013 the 66

Communications Regulatory Authority of the Republic of Lithuania Annual Report 2013 reference offers regarding wholesale (physical) network infrastructure access, networks interconnection, wholesale broadband communication access, wholesale local line and television broadcasting transmission services were revised and published on the website of RRT at www.rrt.lt. In the reference offers of broadcasting services of TEO LT, AB and Lietuvos Radijo ir Televizijos Centras AB violations were identified as regards the provision of services for a fixed period of time. The said violations were eliminated upon notifying the said undertakings and the reference offers were correspondingly updated. All the delivered reference offers are published in RRT website at www.rrt.lt in the section “Electronic Communications – For Business – Promotion of Competition – Obligations on Undertakings – Reference Offers” and on the websites of the corresponding undertakings.

Supervision of wholesale and retail fixed telecommunication services

In 2013 RRT performed supervision of the obligations of transparency, non-discrimination, provision of access and price control obligations on the markets of fixed telecommunication services. In 2013, no violations were observed by RRT when analysing the provision of wholesale fixed telecommunication services. For the purpose of creating the conditions to TEO LT, AB to implement the obligations imposed on it and implementing the requirements of the European Commission, on 15 February 2012 RRT started the work of creating (updating) the accounting module for fixed communications operator networks, BU-LRAIC. The module was completed in July 2013. While the module development works were still in progress, following the requirements of the European Commission, from 1 January 2013 to 31 March 2013 the highest price limit of call termination over public telecommunications network at a fixed location of TEO LT, AB was approved by Order No. 1V–1900 of the Director of RRT of 18 December 2012 (the prices are shown in Table 6). While from 1 April 2013 to 30 September 2013 the approved prices for call termination that had to be no higher than 0.0211 LTL per minute (without VAT) at any time, by connecting networks at any network connection point, were valid.

Table 6. The changes in the prices of call termination on public fixed telecommunication networks, set by RRT, From 1 January 2013 to 31 March 2013 Price from Price from 01-04- No. Service 01-01-2013 to 2013 31-03-2013* TEO LT, AB

1 National call termination during peak time, ct per minute 4.26 - 2 National call termination during non-peak time, ct per minute 1.16 - 3 Call setup, ct 0.69 - National call termination, not differentiating according to the time of 4 3.28 2.11 provision of the service, ct per minute Nacionalinis Telekomunikacijų Tinklas UAB, CSC Telecom UAB, Lietuvos Radijo ir Televizijos Centras AB, Telekominikaciju Grupa UAB, Mediafon UAB, Eurocom SIP UAB, Lietuvos Geležinkeliai AB, Linkotelus UAB, Cubio UAB 1 National call termination during peak time, ct per minute 2 National call termination during non-peak time, ct per minute Not higher than Not higher than that that for TEO LT, 3 Call setup, ct for TEO LT, AB AB National call termination, not differentiating according to the time of 4 provision of the service, ct per minute Explanations of the table:

* The prices were set by Order No. 1V-101 of the Director of RRT of 31 January 2008 and show 67

Communications Regulatory Authority of the Republic of Lithuania Annual Report 2013 the costs, incurred by an operator, efficiently operating on the market, however, they do not show the precise costs, calculated according to the requirements, provided by the Recommendation**.

** Commission Recommendation No. 2009/396/EC of 7 May 2009 on the Regulatory Treatment of Fixed and Mobile Termination Rates in the EU Source: RRT

Starting from 1 October 2013, undertakings, providing the services of call termination on fixed telecommunication networks, shall apply the prices of call termination no higher than those established on 1 April 2013. The analysis of the market of voice calls termination on individual public mobile networks, started by Order No. 1V-670 of the Director of RRT of 24 April 2013, will be completed in 2014 and then new price control and cost accounting obligations will be imposed. In 2013, the call setup fee for call origination services, provided over public telecommunication network at a fixed location of TEO LT, AB (hereinafter referred to as call origination services) were reduced (from 0.78 ct (w/o VAT) down to 0.69 ct (w/o VAT), the remaining prices of call origination and transit services remained unchanged. In 2013, after RRT finished the analysis of the markets of retail voice call services (the market of national telephone services for residential customers, the market of international telephone services for residential customers, the market of national telephone services for non-residential customers and the market of international telephone services for non-residential customers) and established the presence of effective competition in the aforementioned markets, by Order No. 1V-1090 of the Director of RRT of 16 July 2013 the obligations imposed on TEO LT, AB were withdrawn as from 1 January 2014. In order to ensure the compliance by the undertaking TEO LT, AB with the imposed obligations relating to cost accounting and accounting separation, RRT initiated the audit of the cost accounting and accounting separation systems of TEO LT, AB for 2012. The audit revealed discrepancies in the calculation of the weighted average cost of capital (WACC) and insufficient implementation of the principle of reliability of internal control procedures. However, in all other respects, the report on cost accounting and accounting separation for 2012 submitted by TEO LT, AB was found compliant with the requirements of the Rules for Cost Accounting According to the Fully Distributed Costs Method and the Rules for Accounting Separation or the deficiencies found were minor. The audit conclusion is made publicly available on the website of RRT at http://rrt.lt/lt/verslui/konkurencijos-prieziura/apskaitos-ir-kainu-kontrole.html.

Supervision of wholesale mobile telecommunication services

Implementing the price reduction obligations24 established at the end of 2009, the prices of call termination on public mobile telecommunication networks were further reduced in 2013. Information about the price reductions is given in Figure 43.

24 The price reduction obligation was set down in Order No. 1V-1515 of the Director of RRT of 24 December 2009 “On the undertaking Bitė Lietuva UAB, having significant power on the market of call termination in the public mobile telecommunication network of Bitė Lietuva UAB“, Order No. 1V-1516 of 24 December 2009 “On the undertaking Omnitel UAB, having significant power on the market of call termination in the public mobile telecommunication network of Omnitel UAB” and Order No. 1V-1517 of 24 December 2009 “On the undertaking Tele2 UAB, having significant power on the market of call termination in the public mobile telecommunication network of Tele2 UAB”. 68

Communications Regulatory Authority of the Republic of Lithuania Annual Report 2013 40 36,00 35 30 28,80 25 Not differentiating 18,00 20 18,04 During peak time 14,40 14,43 15 12,51 During non-peak time 10,01 10 9,02 6,26 6,99 5,60 3,60 5 3,50 3,60 3,60 0 2008 2009 2010 2011 2012 2013 Figure 43. The reduction of prices of call termination on the mobile networks of Bitė Lietuva UAB, Omnitel UAB and Tele2 UAB in 2008–2013

For the purpose of creating the conditions to Bitė Lietuva UAB, Omnitel UAB and Tele2 UAB to execute the imposed obligations and to implement requirements of the European Commission, on 15 February 2012 RRT started the work of creating (updating) the costs accounting module for mobile communications operator networks, BU-LRAIC. The module was completed in July 2013. Considering the fact that the works of the module creation were not finished in 2012 and following the requirements of the recommendation by the European Commission, from 1 January 2013 and from 1 April 2013 the highest price limit for call termination on the public mobile telecommunications networks of Bitė Lietuva UAB, Omnitel UAB, and Tele2 UAB was approved by Order No. 1V–1899 of the Director of RRT of 18 December 2012. The prices, indicated in Table 7, were valid until 30 September 2013.

Table 7. Prices of call termination on the networks of Bitė Lietuva UAB, Omnitel UAB and Tele2 UAB from 1 January 2013

Price from 01-01-2013 Price from No. Service to 31-03-2013 01-04- 2013

Voice call termination, when the prices are not differentiated according to the time of provision of services, 1. w/o VAT 1.1. Voice call termination, ct per minute, w/o VAT 0,0560 0,036 Voice call termination, when the prices are differentiated according to the time of provision of services, w/o 2. VAT Voice call termination during peak time*, ct per minute, w/o 2.1. VAT 0,0699 0,036 Voice call termination during non-peak time**, ct per 2.2. minute, w/o VAT 0,0350

Explanations of the table: * The peak time is considered the time from 8 a. m. to 8 p. m. business days ** The non-peak time - from 8 p. m. to 8 a. m. business days and round the clock on rest-days and holidays Source: RRT Starting from 1 October 2013 undertakings, providing the services of call termination on mobile telecommunication networks, shall apply the prices of call termination no higher than those established on 1 April 2013. The analysis of the market of voice calls termination on individual public mobile networks, started by Order No. 1V-670 of the Director of RRT of 24 April 2013, will be completed in 2014 and then new price control and cost accounting obligations will be imposed. 69

Communications Regulatory Authority of the Republic of Lithuania Annual Report 2013 In 2013, no violations were observed by RRT when analysing the provision of wholesale mobile telecommunication services.

Supervision of broadcasting transmission services

In order to make sure that Lietuvos Radijo ir Televizijos Centras AB complied with the obligations imposed on it related to cost accounting and accounting separation, RRT initiated the audit of the cost accounting and accounting separation systems of Lietuvos Radijo ir Televizijos Centras AB for 2012. During the audit, it was found that the principle of reliability, provided for in the legal acts, had not been fully implemented in the cost distribution system of Lietuvos Radijo ir Televizijos Centras AB, and that was the reason why the audit found some minor discrepancies in the submitted cost accounting and accounting separation report. In all other respects, the report on cost accounting and accounting separation for 2012, submitted by Lietuvos Radijo ir Televizijos Centras AB, was found compliant with the requirements of the Rules for Cost Accounting According to the Fully Distributed Costs Method and the Rules for Accounting Separation or the deficiencies found were minor. The audit conclusion is made publicly available on the website of RRT at http://rrt.lt/lt/verslui/konkurencijos-prieziura/apskaitos-ir-kainu-kontrole.html. Also, in 2013 RRT performed the inspection of how TEO LT, AB and Lietuvos Radijo ir Televizijos Centras AB complied with the obligations of price control, cost accounting and accounting separation on relevant markets in 2011, in order to ensure that the description of the cost accounting system, the description of accounting separation, the annual report on the cost accounting system and the annual set of accounting separation reports (hereinafter referred to as the Annual Report) were in line with the requirements, laid down in the relevant legal acts of RRT. The conclusions on the Annual Report 2011 are publicly available on the website of RRT at www.rrt.lt.

Supervision of roaming services

Upon comparing the publicly announced prices of the retail international roaming services with the requirements, established in Regulation (EU) No. 531/2012 of the European Parliament and of the Council, no violations were established in 2013. Upon collecting the information on the revenues and scopes of wholesale roaming services and upon calculating the average service revenues and comparing them with the provisions of the said Regulation, no violations were established by RRT. Inspections of retail service prices are performed each quarter, inspections of wholesale prices – each half-year. The information on supervision of roaming services is made publicly available on the website of RRT at www.rrt.lt. The above Regulation provides for further decrease of prices for wholesale and retail roaming services, regulation of prices of retail data roaming services and application of structural measures which, in long term perspective, would provide the possibility to refuse the regulation of prices. The structural measures include the following: provision of access to wholesale roaming services; separation of retail national and international roaming services, in order for the consumer to be able to select not the national but another international roaming service provider; access to the measures, allowing other service providers to provide international roaming services together with national service provider. In 2013 the regulated prices of wholesale voice, SMS and data transmission services as well as those of retail voice, SMS and data transmission services further decreased. Providers of international 70

Communications Regulatory Authority of the Republic of Lithuania Annual Report 2013 roaming services are required to offer their customers voice, SMS and data transmission services for the prices which shall not exceed the established price limits. The latter voice service is referred to as the euro- voice tariff, SMS service ‒ the euro-SMS tariff, and the data transmission service ‒ the euro-data tariff. The price limits for wholesale and retail services are provided in Table 8.

Table 8. The decrease in prices for wholesale and retail voice, SMS and data transmission services in 2011–2014 The highest price The highest price The highest price The highest price limit from 01-07- limit from 01-07- limit from 01-07- limit from 01-07- Services 2011 2012 2013 2014

Retail services

Tariff of voice call transmission in Europe, LTL per minute (with VAT of 1.4623 1.2116 1.0027 0.7938 21 per cent) Tariff of voice call reception in Europe, LTL for minute (with VAT of 21 per 0.4596 0.3342 0.2925 0.2089 cent) SMS transmission in Europe, LTL for 0.4596 0.3760 0.3342 0.2507 SMS (with VAT of 21 per cent) SMS reception in Europe free of charge free of charge free of charge free of charge Euro-data tariff, LTL per Mb (with VAT not regulated 2.9245 1.8800 0.8356 of 21 per cent)

Wholesale services

Wholesale voice service (origination, transit, termination), LTL per minute 0.6215 0.4834 0.3453 0.1726 (without VAT) Wholesale SMS transmission services 0.1381 0.1036 0.0691 0.0691 LTL per SMS (without VAT) Wholesale data transmission services, 1.7264 0.8632 0.5179 0.1726 LTL per Mb (without VAT) Notices: * The prices calculated using the official currency exchange rate of LTL and EUR; calculations were rounded to the fourth decimal place, in order that the determined price limit could not be exceeded when recalculating the price in EUR. Source: RRT

Promotion of competition based on infrastructure

In order to create better conditions for electronic communications providers to develop broadband communication networks using the existing infrastructure, RRT in cooperation with Vilnius City Municipality and Municipality Enterprise Vilniaus Planas created electronic access to the system of infrastructures spatial data administered by the Municipality (infrastructure maps). Information on the distribution of engineering communications (communication cable ducts) is stored in this sytem; this information is constantly updated with new data on designed and installed communications in Vilnius city. The access to the electronic database is available to all interested undertakings designing, providing and/or planning to provide electronic communications networks and/or services. More information on the project is available on the website www.e-infrastruktura.lt. In 2013 Kaunas City Municipality also joined the system of infrastructures spatial data of RRT, Vilnius and Klaipėda City Municipalities. Such electronic access would facilitate designing and development of broadband communication networks in cities and towns. It is anticipated in the agreement to prepare and install electronic access and to provide it to all the interested undertakings. 71

Communications Regulatory Authority of the Republic of Lithuania Annual Report 2013 Number portability service

The number portability service has been provided in Lithuania for nine years already (since 2004). The number portability service gives the user a greater freedom to choose a service provider according to the most important criteria: quality and variety of services, prices, loyalty systems, attractiveness of servicing, etc. According to the data of RRT, by 31 December 2013 consumers used the number portability service (i.e. migrated) 1 026 110 times, 984 954 of them were subscribers of mobile communications, 40 906 – fixed communication subscribers (geographic numbers) and 250 fixed communication subscribers (not geographic numbers, i.e. service numbers). The number portability service has already been used by 17.5 per cent of all active service users (see Figure 44).

1000000 984 954

900000 806 402 800000 700000 668 582 600000 552 913 500000 428 233 400000 300000 200000

100000 14043 16759 22302 27940 40906 0 2009 m. 2010 m. 2011 m. 2012 m. 2013 m. Judriojo ryšio numeriai Fikuostojo ryšio numeriai Reikia nuimti “m.” Fixed communication numbers Mobile communication numbers Figure 44. Distribution of number portability amongst fixed and mobile telephone numbers in 2009−2013 Source: RRT

Selection of a service provider

The possibility to select a service provider is aimed at encouraging competition in the electronic communications sector when ensuring the right for subscribers of public telecommunication networks and/or public telecommunication services, which are offered by providers having significant power on the market of connection to public telecommunication network and using the network at a fixed location, to choose any provider of public telecommunications services and to use the public fixed telecommunication services offered by that provider. In 2013, there were 17 (in 2012 – 15) service providers, whose public telecommunication services could be selected by dialling an operator selection code. One operator selection code was revoked in 2013. Since 2003, 20 operator codes from the short telephone number series of 10XX were allocated to operators in total.

Resolution of disputes between undertakings

A significant tool for encouraging self-regulatory mechanisms in electronic communications market is ensuring simple, clear and efficient procedures for resolution of disputes between the operating 72

Communications Regulatory Authority of the Republic of Lithuania Annual Report 2013 undertakings. For the said purpose RRT has established a permanent Commission for Resolution of Disputes between the Undertakings Providing Electronic Communications Networks and/or Services (hereinafter referred to as the Dispute Resolution Commission25), which, according to the mandatory preliminary out-of-court procedure, resolves the disputes arising between the undertakings engaged in electronic communications activities in the area of social relations26, regulated by the Law on Electronic Communications. In 2013, the Dispute Resolution Commission resolved 6 disputes. In 2012 TEO LT, AB applied to the Dispute Resolution Commission with a request to verify the consistency of the prices of the services of installation of digital terrestrial television (DVB-T) transmitters provided by Lietuvos Radijo ir Televizijos Centras AB with the costs of the services of installation of such transmitters and, in case the prices of the services of installation of DVB-T transmitters were found to be inconsistent with the costs, to fix cost-based prices of installation of DVB-T transmitters in the objects of Lietuvos Radijo ir Televizijos Centras AB. The Dispute Resolution Commission satisfied the request of TEO LT, AB and obligated Lietuvos Radijo ir Televizijos Centras AB to apply cost-based prices. The Dispute Resolution Commission refused to satisfy the following:  The request of TEO LT, AB to obligate Lietuvos Radijo ir Televizijos Centras AB to apply the specific prices of the services of installation of DVB-T transmitters indicated by TEO LT, AB and left unexamined the request by TEO LT, AB to assess the one-off fees and any other additional payments to be paid by TEO LT, AB to Lietuvos Radijo ir Televizijos Centras AB for the services of installation of transmitters.  The request of TEO LT, AB to reduce the prices of the services of installation of DVB-T transmitters in the dispute between TEO LT, AB and Lietuvos Radijo ir Televizijos Centras AB regarding the prices of the services of installation of DVB-T transmitters. SATV Network UAB applied to RRT twice regarding the prices of the infrastructure lease services provided by Lietuvos Radijo ir Televizijos Centras AB and the provisions of the agreement regarding the said services. The investigations of both the disputes were merged into one. The Dispute Resolution Commission decided to refuse to satisfy the request of SATV Network UAB to recognize that Lietuvos Paštas AB was discriminating against SATV Network UAB and the request to obligate Lietuvos Radijo ir Televizijos Centras AB to provide access to the electronic communication infrastructure (necessary for provision of the television broadcasting transmission service), owned by the latter undertaking, and also refused to satisfy the request to obligate Lietuvos Radijo ir Televizijos Centras AB to provide to SATV Network UAB the price for access to the electronic communication infrastructure (necessary for provision of the television broadcasting transmission service), owned by Lietuvos Paštas AB, separately from the prices of other offered services and to obligate Lietuvos Paštas AB to apply a certain price for the services of access to its electronic

25 Information about the composition of the Dispute Resolution Commission is available on the website of RRT at http://www.rrt.lt/lt/verslui/gincu-sprendimas.html, 21 February 2014. 26 The undertakings in dispute, prior to applying to the court for resolution of a dispute, must apply to the Dispute Resolution Commission, whose resolutions, approved by the Director of RRT, are public to the extent that does not infringe the provisions on protection of state, service or commercial secrets or private life of a natural person and are obligatory to be executed by the parties to the dispute as of the moment of their entering into effect. The disputes are resolved according to the Rules for Resolution of Disputes between the Undertakings Providing Electronic Communications Networks and/or Services and between the Providers or Postal and/or Courier Services (hereinafter referred to the Dispute Resolution Rules). When making its decisions, the Dispute Resolution Commission refers to the Law on Electronic Communications, the Civil Code and other legal acts, takes into consideration regulatory restrictions and obligations applicable to any of the parties to the dispute, the relative status of the parties to the dispute on the market and the need to encourage competition.

Communications Regulatory Authority of the Republic of Lithuania Annual Report 2013 communication infrastructure (necessary for provision of the television broadcasting transmission service) provided in 26 objects to SATV Network UAB. Tele2 UAB applied to RRT with a request to resolve the dispute with Mediafon UAB regarding the Telecommunication Networks Interconnection Agreement concluded on 9 June 2006 according to which the parties agreed to interconnect the public mobile communication network of Tele2 UAB and the public fixed communication network of Mediafon UAB. Tele2 UAB requested to recognize that Mediafon UAB did not provide the services of the mobile communication network and voice call traffic termination on the mobile communication network, and also to obligate Mediafon UAB to apply the prices for each call minute originated in the mobile communication network of Tele2 UAB and transferred to the telephone numbers belonging to Mediafon UAB to Tele2 UAB that would be no higher than those fixed in Order No. 1V-1523 of the Director of RRT of 24 December 2009 “On the undertaking Mediafon UAB, having significant market power on the market of call termination in the public telephone network of Mediafon UAB, provided at a fixed location”. Toptronas UAB requested to solve the dispute with Lietuvos Paštas AB regarding access to infrastructure. The Dispute Resolution Commission decided to obligate Lietuvos Paštas AB to provide Toptronas UAB access to the infrastructure located at the Vilnius RTV tower, owned by Lietuvos Paštas AB. It was decided to leave the following unexamined: the request of Toptronas UAB to obligate Lietuvos Paštas AB to provide and ensure the possibility for Toptronas UAB to install and mount a channel 60 DVB-T transmission station at the Vilnius RTV tower and to service it, and the request to obligate Lietuvos Paštas AB to provide Toptronas UAB the services of access to the infrastructure located at the Vilnius RTV tower and installation of the channel 60 DVB-T transmission station at the Vilnius RTV tower at the prices specified in Letter No. 5A-821/26-14 of Lietuvos Paštas AB of 15 May 2012 and the said prices should be no higher than those indicated in the aforementioned letter to Toptronas UAB. Decisions regarding the two remaining disputes will be made in 2014. Detailed information regarding disputes is available on the website of RRT at www.rrt.lt in the section “Electronic Communications – For Business – Resolution of Disputes”, where relevant information regarding resolution of disputes, activities of the Dispute Resolution Commission, accepted requests and decisions is available.

Competition in the postal services sector

Participants and tendencies of the postal services market

At the end of 2013, there were 76 registered undertakings having the right to provide postal services (see Figure 45). Compared to 2012, in 2013 the total number of the market participants slightly increased: from 73 to 76 postal service providers, which was mostly related to complete liberalization of the market from 1 January 2013. Observing the dynamics of the number of postal service providers in Lithuania during 2008- 2013, it can be seen that in recent years their number has stabilized and now is more than 70.

Communications Regulatory Authority of the Republic of Lithuania Annual Report 2013

2013 76

2012 73

2011 74

2010 71

2009 84

2008 78

60 65 70 75 80 85 Postal service providers

Figure 45. Dynamics of the number of postal service providers in Lithuania in 2008–2013 Source: RRT

In 2013, RRT received 17 applications of undertakings requesting to be included into the list of postal service providers, and 14 undertakings were deleted from the list of postal service providers. In accordance with the provisions of the Rules for Provision of Postal Services, undertakings shall be deleted from the list of providers of postal services, in case within one year they fail to deliver reports to RRT on the postal services provided. Referring to the said provision, 5 undertakings were deleted from the list in 2013. 9 undertakings were deleted from the list of postal service providers at their own request. Compared to 2012, in terms of revenues, the overall postal services market grew by 12.7 per cent in 2013 and reached LTL 349 million. The traditional postal market increased by 18.2 per cent in 2013 and amounted to LTL 148 million. In this market, in terms of revenues, the largest share is held by Lietuvos Paštas AB – 92.0 per cent. The market of the handing in of postal items in person with acknowledgement of receipt (through a courier), in terms of revenues and compared to 2012, grew by 6.1 per cent and reached LTL 201 million in 2013. The dominating operators remained the same as in 2012: DPD Lietuva UAB, Venipak LT UAB and DHL Lietuva UAB, they held the following market shares correspondingly: 31.3 per cent and two shares of 13.0 per cent. As a result of the liberalization of the postal market from 1 January 2013 and the cancellation of the reserved field, part of postal service providers, who previously provided courier services, transferred their operations to the traditional postal market and now deliver correspondence to receipt mail boxes. Consequently, the share of the postal correspondence market held by Lietuvos Paštas AB on the traditional postal market decreased, while the share held by other providers of such services increased from 13 per cent in 2012 to 23.8 per cent in 2013. This shows increasing competition in this segment of the postal market. The total postal correspondence market, in terms of quantity, decreased by 8.4 per cent in 2013. The decrease in quantity of postal correspondence items has been observed for several years in a row. A significant effect on the continuous decrease of the market of postal correspondence was made by the competitive effect of electronic communications services. On the other hand, recent years have seen a trend that parcels become an increasingly larger part of correspondence (in 2012 they accounted for 8.9 per cent and in 2013 – 10.3 per cent of all postal items), and there also is an increase in their quantity, thus at least partially offsetting the losses incurred by postal service providers due to the decreasing flows of postal correspondence items. In 2013 in the postal parcels market, the number of sent and received parcels, compared to 2012, grew by 8.4 per cent. The number of international parcels alone increased by 12.7 per

Communications Regulatory Authority of the Republic of Lithuania Annual Report 2013 cent, which shows that the growth of the number of parcels is largely due to the increasing popularity of electronic commerce and emigration of residents.

Tariffs and cost accounting of universal postal services

According to the provisions of the Postal Law, Lietuvos Paštas AB is a provider of universal postal services (UPS) in the territory of Lithuania27. The tariffs of UPS are regulated by setting tariff ceilings, i.e. maximum possible tariffs. Since the entry into effect of the new Postal Law as of 2013, RRT has been assigned to perform a new function ‒ approve tariff ceilings for UPS according to the weight steps of postal items. RRT exercises supervision of the application of tariffs in order to ensure that the tariffs of universal postal services are affordable for all users of postal services, geared to the costs of the services provided, transparent and non-discriminatory. If the tariffs of UPS are loss-making, following the procedures established by the resolution of the Government of the Republic of Lithuania, a provider of UPS may apply for compensation for losses or initiate UPS tariff changes, based on costs. RRT establishes basic principles of cost accounting for a UPS provider and sets requirements for the cost accounting system as well as other requirements related to the cost accounting system. According to the Rules on Cost Accounting of the Provider of Universal Postal Services, approved by the Order of the Director of RRT, a provider of UPS must, once per accounting period, prepare and submit to RRT the detailed annual report, sufficient for RRT to assess whether the cost accounting system, used by the provider of UPS complies with the principles of cost accounting and the requirements of the cost accounting system, as well as the requirements of other legal acts approved by RRT. In 2013, RRT received and analysed the Annual Report on Costs of Universal Postal Services and Reserved Postal Services of 2012, provided by Lietuvos Paštas AB, and determined that Lietuvos Paštas AB calculated its costs of universal postal services and reserved postal services in observance of the requirements established for the provider of UPS and that, based on the data of the aforementioned Report, the activities of the provider of UPS were profitable in 2012. In addition, on the initiative of RRT, in 2013 an independent audit of Lietuvos Paštas AB was performed with the aim of establishing whether the cost accounting system, used by the provider of UPS in 2012, complied with the principles and requirements for handling of cost accounting, established in the Rules on Cost Accounting of the Provider of Universal Postal Services. Also, an analysis of the structure of the cost of the services provided by the company was performed, the verification of correctness of the annual report on cost accounting was prepared, as well as other works and procedures were executed for the purpose of verification of the cost accounting system. The independent auditor provided proposals of an advisory nature for optimizing the cost accounting system. The conclusions of the independent audit showed that in most important aspects the information and data, provided in the annual cost accounting report, was correct and the cost accounting report of 2012 was prepared in observance of the requirements provided by legal acts. Following the Postal Law, RRT has been performing supervision of the loss-making service of delivery of periodical publications to subscribers in rural areas since 2012. In accordance with the Rules

27 Universal postal services shall include: the clearance, distribution, transport and delivery or handing in of letter-post items of up to 2 kilograms; the clearance, distribution, transport and delivery or handing in of registered or insured postal items of up to 10 kilograms (UPS shall include both domestic and international postal services); the delivery or handing in of postal parcels of up to 20 kilograms received from other Member States of the European Union. An UPS provider must ensure uninterrupted provision of UPS to all the users of postal services on the same conditions, at the same tariffs applicable both to urban and rural residents. 76

Communications Regulatory Authority of the Republic of Lithuania Annual Report 2013 approved by Decision No. 835 of the Government of the Republic of Lithuania of 11 July 2012 “On the Approval of the Rules on Compensation of Loss-Making Services of Delivery of Periodical Publications to Subscribers in Rural Areas”, periodical publications to subscribers in rural areas in Lithuania shall be delivered by the provider of UPS. In accordance with the procedure established in the aforementioned Rules, the provider of UPS shall be compensated for the losses incurred due to the difference between the costs of the provision of the service of delivery of periodical publications to subscribers in rural areas and the tariff ceilings for the service of delivery of periodical publications approved by the Government. In 2013 RRT received two applications regarding compensation of the losses related to the provision of the service of delivery of periodical publications: on 11 April 2013 Lietuvos Paštas AB submitted an application regarding compensation of losses for 2012, and on 19 September 2013 ‒ for the first half of the year 2013. RRT analysed the documents, data and calculations provided by Lietuvos Paštas AB and delivered to Ministry of Transport and Communication of the Republic of Lithuania the conclusions regarding the losses incurred during those periods and regarding the validity and compliance of the data and calculations with the requirements laid down in the Rules of Cost Accounting.

Communications Regulatory Authority of the Republic of Lithuania Annual Report 2013 CREATING PRECONDITIONS FOR TECHNOLOGICAL DEVELOPMENT OF ELECTRONIC COMMUNICATIONS MARKET

Promotion of investments and development of advanced ICT technologies

Radio frequency resources are the basis for the innovative and dynamic electronic communications sector, related to wireless communication services. As underlined in the Digital Agenda for Europe, wireless broadband is an important means to boost competition, consumer choice and access in rural and other areas where deployment of wired broadband is difficult or not economically viable. That is why in radio frequency management a great deal of attention is given to how to deploy the EU-wide harmonized frequency bands for wireless broadband access (hereinafter referred to as WBA). In order to develop wireless broadband communication in Lithuania and implementing Decision No 243/2012/EU of the European Parliament and of the Council of 14 March 2012 establishing a multiannual radio spectrum policy programme, in 2013 RRT performed the works of radio frequency planning and coordination of the conditions for allocation of radio frequencies and, through public auction, granted mobile communication operators the right to use radio frequencies/channels in the frequency bands released from the first digital dividend (790–862 MHz) for the provision of WBA services. The increase of broadband radiocommunication penetration is still the priority in order to make services provided over new-generation networks available on the whole territory of the country. For the purpose of maximizing the efficient use of radio frequencies and avoiding harmful interferences and herewith promoting investments and assuring the development of advanced information and communication technologies (hereinafter referred to as ICT), it is important to harmonise the use of specific radio frequency bands on the widest level possible. In this respect, Lithuania being an EU border state has a special position. Decisions regarding harmonized radio frequency bands that are going to be adopted by international organizations and the European Commission are very important for Lithuania. Currently, the most pressing question is the second digital dividend (694-790 MHz), i.e. to what extent and on what terms will the use of this frequency band be harmonized? If the European Union Member Sates agree to free up this radio frequency band and allocate it for WBA, this will be a very important alteration of TV broadcasting in the 470-694 MHz radio frequency band, including the related replacement of TV programme transmission and reception equipment. The position of non-Member States on this issue is no less important because, if there is no agreement on a joint action scenario, border territories might become buffer zones with very limited possibilities to use radio frequencies. Although there is no decision on the issue to date, RRT representatives are actively involved in the activities of the International Telecommunications Union (hereinafter referred to as ITU), working groups of the Electronic Communications Committee (ECC) of the European Conference of Postal and Telecommunications Administrations (hereinafter referred to as CEPT), and of the European Commission. More information regarding international cooperation – in the section “Integration into the decision making system of the EU and international regulatory space”.

Communications Regulatory Authority of the Republic of Lithuania Annual Report 2013 Radio frequency management and implementation of modern technologies

In 2013, a public auction of radio frequencies was organized for the first time in Lithuania. The winners of the auction – Bitė Lietuva UAB, Omnitel UAB and Tele2 UAB – were granted the right to use radio frequencies/channels in the 790-862 MHz frequency bands. One winner of the action (Bitė Lietuva UAB) was imposed network development and data transmission speed obligations after three and five years from the date of receipt of permits, while until 2020 this undertaking will be obliged to provide not less than 95 percent of Lithuanian households access to electronic communication services with data transmission speeds of at least 4 Mbps. The other two winners of the auction will install radio communication networks at their own discretion, depending on the demand for services and return on investment. Prior to allocating the 790-862 MHz frequency band for the development of mobile communications networks to provide WBA services, it was necessary to remove operational channels 61‒65 television stations from the aforementioned radio frequency band – the work was completed by 1 July 2013. All users of television channels 61-65 were offered other television channels of the same use in the 470-790 MHz radio frequency band. According to Decision No 243/2012/EU of the European Parliament and of the Council of 14 March 2012 establishing a multiannual radio spectrum policy programme, the EU Member States have the target to make available 1200 MHz of radio spectrum for wireless broadband data communication, thereby allowing, among other things, the development of innovative ICT. Following the decisions taken by RRT in 2013, nearly 910 MHz of radio spectrum have already been allocated in Lithuania (see Table 8).

Table 8. The summary of the radio spectrum allocated by RRT in 2013 Radio frequency band Spectrum size Use

791‒821 / 832‒862 MHz 60 MHz in the process of implementation

880‒915 / 925‒960 MHz 70 MHz GSM-900

171‒1785 / 1805‒1880 MHz 150 MHz GSM-1800, UMTS, LTE

1920‒1980 / 2110‒2170 MHz 120 MHz UMTS

2500‒2560 / 2620‒2680 MHz 120 MHz LTE

3410‒3600 MHz 190 MHz BPP

3600‒3800 MHz 200 MHz BPP

Total: 910 MHz Source: RRT

Currently, the conditions for usage of 190 MHz radio spectrum in 1452–1492 MHz, 2300–2400 MHz and 2500–2690 MHz radio frequency bands are being coordinated. The conditions for usage of radio spectrum in the above radio frequency bands have already been set and the coordination of auction documents has been practically completed. The said auction documents are required in order to allocate, through public auction, the 2560–2570 MHz and 2680–2690 MHz coupled radio frequency bands and the 2570–2620 MHz radio frequency band. This was successfully done after the procedure of removal of MMDS

Communications Regulatory Authority of the Republic of Lithuania Annual Report 2013 networks from the 2570‒2620 MHz radio frequency band was completed at the end of 2013. After the planned auction, the whole 2500–2690 MHz radio frequency band will be allocated for users to provide WBA services. In 2013 requests to coordinate 1309 radio relay link stations in Lithuania were sent to communications administrations of neighbour countries. Communications administrations of neighbour countries responded to the requests to coordinate 1684 radio relay stations and 654 wireless broadband access (WBA) station entries, sent in 2012 and 2013. Requests were received from communications administrations of neighbour countries to coordinate 63 new WBA and 1610 radio relay link station entries. Requests of communications administrations of neighbour countries to coordinate 55 WBA and 2173 radio relay link station entries were analysed and responded. Rejections were made regarding notification of 29 WBA station entries in ITU circulars. The analysis of conditions for use of radio frequencies was performed prior to granting the right to use 24 WBA stations (47 sectors). Compared to 2012, in 2013 the number of the received operator requests decreased about 10 times. Registration of 5 WBA stations (12 sectors) was eliminated. According to the requests received, frequencies for 59 new radio relay links were planned. In 2013 RRT made changes to its Electronic Document System e.rrt.lt, enabling interested natural and legal persons to get radio station information necessary to evaluate the compliance of electromagnetic fields with hygiene standards. RRT performed measurements of the power of the WiMAX equipment used by Lietuvos Paštas AB. The results of the measurements will allow more accurate assessment of the compliance of the stations with the criteria of international coordination agreements. In 2013 RRT performed calculations of probable coverage zones of WBA systems, operating within the 3410–3600 GHz band. The results of the calculations showed that the WBA systems covered approximately 71 per cent of the territory of Lithuania (fixed communication – at the height of 10 m, mobile – 1.5 m). For the second time already (the first one was commenced in 2012), in 2013, RRT performed the calculations of probable coverage zones of GSM, UMTS and LTE networks of the following undertakings: Bitė Lietuva UAB, Omnitel UAB and Tele2 UAB (see Figures 46, 47 and 48). The zones were calculated at different signal levels according to the base stations registered as on 1 December 2013. The calculations were made using the same methods for all operators, taking into account the local terrain and forest impacts. Calculations of GSM network coverage were performed using the Okumura Hata Davids model. Calculations of UMTS network coverage were performed using COST 231 model, and calculations of LTE – ITU-R P.1812. The models were selected on the basis of the measurement results. The results show probable signal levels at the height of 1.5 m above the ground. Coverage maps published by RRT are important in informing consumers about possible mobile radiocommunication network coverages.

Communications Regulatory Authority of the Republic of Lithuania Annual Report 2013

100,0 86,1 79,4 80,0 56 60,0 48,3 % 32,2 40,0 26,8 20,9 15,0 20,0 11,1 7,0 3,3 8,0 0,0 -105 dBm -95 dBm -85 dBm -75 dBm Level of signal Bitė Lietuva Omnitel Tele2

Figure 46. UMTS network coverage in Lithuania in 2013, per cent Source: RRT

98,9 88,0 % 98,8 61,6 86,5 57,7 98,6 86,3 57,3

-95 dBm -85 dBm -75 dBm Level of signal Bitė Lietuva Omnitel Tele2

Figure 47. GSM network coverage in Lithuania in 2013, per cent Source: RRT

10 8,6 8 5,5 6 % 3,9 4 2,7 2 2 1,3 1 0,5 0,5 0,2 0 -115 dBm -105 dBm -95 dBm -85 dBm -75 dBm Level of signal

Omnitel Tele2

Figure 48. LTE network coverage in Lithuania in 2013, per cent Source: RR

Digital TV and radio

The year 2013 was exceptional for Lithuanian digital terrestrial television broadcasters, transmitters and RRT in that it was the year when it was necessary to plan, organize and carry out the replacement of a 81

Communications Regulatory Authority of the Republic of Lithuania Annual Report 2013 large part of radio frequencies/channels used on digital terrestrial television networks by other television channels of the same purpose. During the reorganization of digital terrestrial television networks28, Lithuanian residents had a lot of questions related to the setting and usage of specific equipment. RRT, through its free of charge helpline 8 800 20030, advised residents on how to properly set the parameters of television receiving equipment, and also on television programme reception possibilities in different geographic areas of the country. After the replacements were made, the European Commission Decision 2010/267/EU of 6 May 2010 on harmonised technical conditions of use in the 790-862 MHz frequency band for terrestrial systems capable of providing electronic communications services in the European Union was implemented, and also the distribution of television channels, planned during the conference in Geneva in 2006, ensuring a much more effective use of limited public resources – radio frequencies (channels) and opening up possibilities to fully exploit the coverage of new digital terrestrial television networks, was fulfilled. It was not possible to carry out such replacements before the switch-off of analogue terrestrial television or to establish digital terrestrial television networks in 2006–2007 that would be precisely consistent with the distribution provided in the Geneva plan for 2006, because those radio frequencies (channels) were occupied by analogue terrestrial television. It should be noted that when replacing radio frequencies (channels), neither the power of transmitters was reduced nor other parameters of television stations were changed. Therefore, the possibility to receive digital television remained the same or even better if the frequency (channel) used before the replacement had been replaced by a lower frequency with noticeably better radio wave propagation. All replacements of radio frequencies (channels) were made during the first half of 2013, the total number of replaced radio frequencies (channels) – 59 in 27 locations in Lithuania. Upon completion of each phase of the replacement of digital terrestrial television and radio frequencies/channels, RRT updated its website information for consumers about the probable coverage zones of digital terrestrial television networks and the single-frequency synchronous networks comprising them, the coverage areas of which had been affected by frequency replacements. Local and regional digital terrestrial television station coverage area maps were also calculated and published on the website. The vast majority of local and regional digital terrestrial television stations began operation in 2012, immediately after the switch-off of analogue terrestrial television broadcasting. However, in 2012 part of the winners of the public tender to grant the right to use television channels in local and regional digital terrestrial television stations were slow to submit to RRT the necessary documents (projects of the radio-technical part of digital terrestrial television stations, etc.) serving as a basis for granting permits to use radio frequencies (channels). For that reason, two undertakings, announced as winners of the tender, were issued relevant permits in 2013. As a result the complex situation on the local and regional television broadcasting market, in the second half of 2013 the broadcasting of the programmes of Aukštaitijos Krašto Televizija and TV Medica was suspended in Panevėžys and Jonava, while public institution Raseinių Krašto Televizija, by its request of 30 December 2013 refused the permit issued by RRT to use the television channel. 12 terrestrial radiocommunications networks of national coverage operated at the end of 2013 (LRT RADIJAS, LRT KLASIKA, LRT OPUS, Laisvoji Banga, M–1, M–1 Plius, Marijos Radijas, ZIP FM, Pūkas, Radiocentras, Lietus, Žinių Radijas), they included 178 UTB stations; local and regional radio programmes

28 The replacement of radio frequencies (channels) was carried out implementing the objective of the second phase of digital terrestrial television implementation, as provided for in the Digital Terrestrial Television Development Plan – to reorganize the channels used in the four digital terrestrial television networks put into operation during the first phase in accordance with the Geneva plans for 2006, while maintaining the operational continuity of the aforementioned networks. 82

Communications Regulatory Authority of the Republic of Lithuania Annual Report 2013 were broadcasted by additional 69 UTB stations. In 2012, new UTB radio stations in Marijampolė and Biržai were launched (in 91.4 MHz and 98.2 MHz radio frequencies, Marijos Radijas radio programme), one frequency was changed in each Kaunas and Šiauliai, conditions of coverage of stations operating in the 91.9 MHz radio frequency in Kaunas, 93.1 MHz – in Vilnius, 95.7 MHz – in Kaunas and Šiauliai, 97.4 MHz and 102.1 MHz – in Šiauliai were improved, the transfer of a station operating in the 612 kHz radio frequency from Vilnius to Sitkūnai, Kaunas district, was completed. In order to provide for new radio frequencies for broadcasting (rebroadcasting) of radio programmes, the amendment of the Plan for the Assignment of Radio Frequencies for Broadcasting and Transmission of Radio and Television Programmes, approved by Order No. 1V-125 of the Director of the Communications Regulatory Authority under the Government of the Republic of Lithuania of 15 October 2003 “On the Approval of the Plan for the Assignment of Radio Frequencies for Broadcasting and Transmission of Radio and Television Programmes” and Resolution No. 89 of the Radio and Television Commission of Lithuania of 15 October 2003 “On the Approval of the Plan for the Assignment of Radio Frequencies for Broadcasting and Transmission of Radio and Television Programmes”, was adopted. In accordance with the procedure established in Article 49 of the Law on Electronic Communications, RRT submitted information about 16 coordinated radio frequencies, provided for in the aforementioned Plan, to the Radio and Television Commission of Lithuania, and these frequencies are intended to be assigned to broadcasters and/or re- broadcasters, to whom licences or permits granting the right to establish and operate their own electronic communications networks have been or will be issued by the Radio and Television Commission of Lithuania. In 2013 108 digital terrestrial television stations operated in Lithuania. 34 stations operated in the first digital terrestrial television network of national coverage, 27 – in the second one, 24 – in the third one, and 6 – in the fourth one. 15 stations were used by local and regional broadcasters – Aidas UAB, public enterprise Alytaus Regioninė Televizija, Aukštaitijos Televizija UAB, Balticum TV UAB, Ilora UAB, Kėdainių Krašto Televizija UAB, public enterprise LN Televizija, public enterprise Marijampolės Televizija, public enterprise Raseinių Krašto Televizija, Roventa UAB, Šiaulių Apskrities Televizija UAB, TV7 UAB, and individual enterprise of V. Krušna – for transmission of television programmes, and 2 were used for high definition rebroadcasting of National Geographic HD, Discovery HD Showcase and Eurosport HD television programmes.

Mobile radiocommunication

Mobile radiocommunication is widely used by public mobile communication network operators for the provision of public mobile telephone communication services, and also by companies for satisfaction of their internal telecommunication needs and by state institutions for the activities pertaining to national defence, guarding the state borders, national security, maintenance of public order and state rescue services. However, the largest share of the spectrum, allocated for the mobile service, is used by the public network operators having the right to launch public mobile radiocommunication system networks in Lithuania and provide electronic communications services over such networks. The above network operators increased their share of the spectrum in 2013. They were granted by 3 permits to use radio frequencies (channels) in the 790–862 MHz radio frequency band and were granted the right to use these frequency bands in terrestrial radiocommunication networks and to provide electronic communications services over these networks. Also, in 2013 the public NEXEDGE technology network for digital radio communication in

Communications Regulatory Authority of the Republic of Lithuania Annual Report 2013 the 400 MHz radio frequency band was developed rapidly. 17 permits to establish a public radiocommunication network of narrow-band core (trunk) systems in the territories of individual municipalities of Lithuania were granted. On their basis, the operator established new base stations and improved the quality of the radiocommunication services provided to emergency ambulance services. In 2013 radio frequency users using mobile radiocommunication frequencies for their own use expanded their networks insignificantly. In 2013 RRT received 1215 requests and inquiries regarding the use of mobile radiocommuncation. Upon investigation of the said requests, 777 replies were prepared, 849 radiocommunications stations were registered, 279 permits to use mobile service radio frequencies, 314 permits to use ship stations and 166 permits to use aircraft stations were issued. In 2013 RRT executed supervision of the radio frequencies intended to mobile communication, through which 1482 internal radiocommunication networks, 131 terrestrial stations and 464 aircraft stations of the aeronautics mobile service, 39 shore stations and 786 ship stations of the marine mobile service operated. At the end of 2013 the operators of public mobile radiocommunication networks used 6573 base stations in the radio frequency bands, allocated to them. Compared with previous years, the number of base stations increased by 12.24 per cent (see Figures 49 and 50).

7000 6 573 5 856 6000 4 766 5000 4 261 3 932 4000 3 624

3000

2000

1000

0 2008 2009 2010 2011 2012 2013 Figure 49. The growth of the number of base stations of public mobile radiocommunication networks in 2008– 2013 Source: RRT

Communications Regulatory Authority of the Republic of Lithuania Annual Report 2013

LTE, 155 WiMAX, 552 2013 GSM 1800, 652 UMTS, 2136 GSM 900, 3017 LTE, 133 WiMAX, 532 2012 GSM 1800, 605 UMTS, 1678 GSM 900, 2867 LTE, 21 WiMAX, 364 2011 GSM 1800, 565 UMTS, 1426 GSM 900, 2605

WiMAX, 289 2010 GSM 1800, 527 UMTS, 1076 GSM 900, 2459

WiMAX, 217 2009 GSM 1800, 490 UMTS, 903 GSM 900, 2347

WiMAX, 8 2008 GSM 1800, 459 UMTS, 728 GSM 900, 2247

Figure 50. Base stations of public mobile radiocommunication networks in 2008–2013 Source: RRT

During 2013 operators of public mobile radiocommunication system networks GSM (GSM-900 and GSM-1800), UMTS, LTE and WiMAX registered 825 base stations and at the end of the year used 6512 base stations in total. Compared to 2012, in 2013 the number of GSM-900 base stations grew by 5.23 per cent, the number of GSM-1800 base stations – by 7.76 per cent, the number of UMTS base stations – by 27.30 per cent, the number of WiMAX mobile stations increased by 3.76 per cent, the number of LTE base stations – by 16.54 per cent. In 2013 the most rapid increase was in the number of UMTS base stations in the 900 MHz frequency band. This was influenced by the fact that UMTS networks were allowed to function in the 900 MHz frequency bands together with the GSM networks. The operators took advantage of the said solution. RRT registered 292 UMTS base stations in the 900 MHz frequency band. The distribution of the number of base stations of public mobile radiocommunication systems in terms of systems is shown in Figure 51.

WiMAX 532 8% UMTS 2136 33% GSM 1800 652 10% LTE 155 2%

GSM 900 3017 47%

Figure 51. The number of base stations in 2013 Source: RRT

Communications Regulatory Authority of the Republic of Lithuania Annual Report 2013 In 2013 operators also ceased a part of their base stations (refused to use them or changed the conditions of their use): 14 UMTS stations, 119 GSM-900 stations, 12 GSM-1800 stations, 4 LTE stations and 4 WiMAX mobile stations. In 2013, 1 base station was registered in the digital terrestrial mobile radiocommunication network, intended for the activities pertaining to maintenance of public order, state rescue services, guarding the state borders and national security, and at the end of the year 228 base stations were in use. In 2013 Lietuvos Geležinkeliai AB, using the railroad radiocommunication (GSM-R) network, did not register any new base stations. In 2013 the operator of the public radiocommunication network of TETRA technology registered 2 new base stations and at the end of the year 12 base stations in total were used in this network. The new NEXEDGE technology network for digital radio communication in the 400 MHz radio frequency band, the installation of which was launched in 2012, was further developed in 2013. In total in 2013, 21 base stations of the NEXEDGE network were registered. In 2013, when performing international coordination of radio frequencies for mobile service, 10 requests to coordinate radio frequencies (channels) were sent to radiocommunication administrations of neighbour countries, and 17 requests received from communication administrations of neighbour countries to coordinate radio frequencies (channels) of mobile service were examined and replies were made. Aeronautics mobile service radio frequencies, provided for coordination to neighbour countries, undergo continuous evaluation for electromagnetic compatibility in the radio frequency coordination system, administered by the European Organisation for the Safety of Air Navigation EUROCONTROL. In 2013, information about the radio frequencies used in the 118‒137 MHz radio frequency band and intended for aeronautics mobile service, was reviewed and adjusted in this system. In 2013 RRT signed an agreement with the Lithuanian Maritime Safety Administration for the exchange of information about the ships registered by the Lithuanian Maritime Safety Administration and the permits to use ship stations issued by RRT. This agreement allows institutions to quickly obtain the information necessary for the issuance of necessary documents to the owners and users of ships, and also to simplify documentation issuance procedures.

Fixed radiocommunication and satellite communication

Fixed radiocommunication

In 2013, as in previous years, the number of radio relay link (hereinafter referred to as RRL) stations continued to grow (see Figure 52). This growth is related to the overall development of mobile communication networks. Many operators started offering LTE communication services, for which higher data transmission capacities were required. The demand for RRLs of larger transmission capacities also grew because of the increase of data transmission flows. The volumes of provision of the mobile Internet services are also increasing, new and new services are provided over mobile communication networks, where RRLs are used for internal connections. In recent years, RRLs, which allow transmission at the speed rate of up to 320 Mbps, are used. The particularly rapid growth in the number of RRLs of fixed service which has been observed over the past few years has somewhat slowed down, because operators have been preparing to provide new services for a few years already. In 2013, RRT issued 205 permits to use RRLs, which means that the radio frequency is intended to be used in 410 new RRLs. In 2013 operators refused to

Communications Regulatory Authority of the Republic of Lithuania Annual Report 2013 use the frequencies (channels) in 128 radio relay links, due to which the total number of RRL stations increased only by 154 radio relay link stations. In 2013, the growth of RRLs was about 2 per cent.

2013 m. 7 701

2012 m. 7 547

2011 m. 7 119

2010 m. 6 601

6000 6200 6400 6600 6800 7000 7200 7400 7600 7800

Figure 52. The growth in the number of radio relay link stations in 2010–2013 Source: RRT

At present radio frequencies up to 38.5 GHz are used for fixed radiocommunication in Lithuania. Percentages of the number of RRL stations in terms of radio frequency bands are shown in Figure 53.

Other bands 2.2-2.69 GHz 10% 11% 31-38.5 GHz 8% 5.7-7.8 GHz 15%

21.2-23.6 GHz 56%

Figure 53. Percentages of the number of RRL stations in terms of radio frequency bands in 2013 Source: RRT

RRT applied an electronic registration system for the following radio frequency bands: 64–64.5/65– 65.5 GHz and 74.625–75.875/84.625–85.875 GHz. As a result, it has become easier for radio frequency users to register radio relay links. Lately, there has been a great interest in these radio frequency bands. However, the number of users is still small because of quite expensive equipment.

Satellite communication

In 2013 RRT started the international coordination procedure of radio frequencies, intended for the first Lithuanian satellites. The applications for the use of radio amateur frequencies in 145 MHz and 436 MHz bands in satellite communication networks Lituanicasat-1 and Litsat-1 were submitted by public enterprise Inovatyvūs Inžineriniai Projektai and state enterprise Liepiškių Technologijų Parkas. Currently, the use of low-orbit nano-satellites is not separately regulated internationally. After consultations with ITU and the authority of the Netherlands (currently the said country is one of the most advanced in the nano-satellite

Communications Regulatory Authority of the Republic of Lithuania Annual Report 2013 manufacturing sector) and taking into account the practices of other countries, RRT decided to apply an auditing mode to the regulation of this activity. The plan for coordination and verification of radiocommunication stations was coordinated together with satellite operators. Half a year before the planned launch of the satellites into orbit, RRT submitted to ITU advance information announcement applications for both satellite networks. RRT representatives participated in the tests of communication between space and Earth stations performed by operators. In 2013 RRT issued permits to use of radio frequencies in Lituanicasat-1 and Litsat-1 satellite networks. Lithuania further actively seeks progress in the joint EU project, which aims to exploit the benefits of mobile satellite service (MSS) systems in the 2 GHz band in providing advanced communications services to consumers. After investigating the performance of the obligations by the selected operators Solaris and Inmarsat, RRT found that in Lithuania none of the operators had completely fulfilled the obligations imposed by the decision of the European Commission. The findings were submitted to the European Commission which, together with the Member States, decided to impose additional obligations on both the operators to launch the satellites and MSS services across the EU by the year 2016. When informing the European Commission and MSS operators, RRT expressed its concern about the valuable part of the radio frequency spectrum still unused in Lithuania. An important achievement of RRT in 2013 was ensured access to 3.5 GHz frequency band for terrestrial broadband communication systems. Taking into consideration the arguments, submitted by Lithuania and Russia, explaining the provisions of the Radio Communication Regulation and the Rules for the Application of Procedures, ITU decided to record in the Master International Frequency Register that the Earth station in Kaliningrad notified by communication administration of Russia had not been fully coordinated with Lithuania, therefore the station would no longer be entitled to international protection from interference. RRT coordinated one satellite communication Earth stations, operated in the 14 GHz band, with the communications administration of Russia. RRT allocated radio frequencies to the Embassy of the United States in Vilnius for use in a satellite Earth station in order to ensure the operations of the diplomatic missions and consular institutions. In 2013, RRT issued ten permits to use satellite news collection stations in Vilnius and Kaunas for broadcasting Euroleague basketball games. Four permits for transmission of commentary by satellite networks during the EU Eastern Partnership meeting held in Vilnius were issued to Spanish, Polish and German operators. RRT analysed twenty-five international frequency information circulars, published by the ITU Radio Bureau every two weeks and intended for satellite services. The above circulars publish the advanced publication, coordination and notification statements of the states intending to implement satellite networks. Upon performing the technical analysis of the inquiries regarding potential interference by the new coordinated networks, RRT sent coordination requirements to the communications administrations of the United States of America, Qatar, the United Arab Emirates, United Kingdom, France, Norway and China. In 2013, a representative of RRT participated in the activities of the working group for resolution of the issues, relating to the implementation of the National Programme of Scientific Research and Development of Technologies and Innovation in the Area of Space in 2013-2015.

Communications Regulatory Authority of the Republic of Lithuania Annual Report 2013 Radio amateur activities

According to Article 60 of the Law on Electronic Communications, RRT determines the procedure of granting the right to engage in radio amateur activities, the conditions of these activities, procedure and conditions of radio amateur permit issuing29. At present there are 833 individual radio amateur stations and 15 radio amateur clubs holding 921 valid permits in Lithuania (Figure 54), 530 of them – CEPT (the European Conference of Postal and Telecommunications Administrations) permits for the radio amateur activities of Class A, 286 ‒ for the radio amateur activities of Class B: 229 (national) and 57 CEPT radio amateur licences; and also 105 licences to use radio call signs (90 – for individual stations and 15 – for radio amateur clubs). The radio amateur qualification examination commissions, formed by the order of the Director of RRT in 5 major cities in Lithuania (Kaunas, Klaipėda, Panevėžys, Šiauliai and Vilnius) which, according to the prepared and approved questions of level B and A examine the persons, wishing to engage in radio amateur activities and radio amateurs, wishing to obtain higher class licenses for radio amateur activities (equivalents of the CEPT licence) and according to the Harmonised Amateur Radio Examinations Certificates (hereinafter referred to as HAREC), issued according to the CEPT Recommendation T/R 61-02. In 2013, 23 persons passed the qualification examinations successfully and became radio amateurs, 5 of them took the examinations of levels B and A, and 2 radio amateurs were granted a higher level. In 2013, 139 requests from radio amateurs were examined, 26 official letters regarding examination or permit issuing were sent, 160 orders were prepared: 120 – regarding granting and/or withdrawal of permits to engage in radio amateur activities, 40 ‒ regarding granting and/or withdrawal of permits to use radio call signs; 154 permits were issued: 115 permits for radio amateur activities (75 permits of Class A and 40 ‒ CEPT radio amateur licences) and 39 permits to use radio call signs, of which 22 ‒ to use occasional radio call signs. 21 HAREC certificates were issued. 16 radio amateurs renewed their activities, 5 – changed their radio call signs, and 3 – received additional radio call signs. 51 requests relating radio amateur activities were received and replies were sent by e-mail. 23 new radio amateurs were registered (see Figure 54). RRT further maintains close relations with the social organizations, uniting Lithuania’s radio amateurs – Lithuanian Radio Amateur Society and Lithuanian Radio Sports Federation. All the necessary information regarding radio call signs assigned to radio amateurs, time period of validity of licences, the information on the new legal acts regulating radio amateur activities and the relevant legal acts and other relevant information is published by RRT on its website at www.rrt.lt in the section “Electronic Communications – For Consumers – For Radio Amateur”. In case of misunderstandings or non- standard situations, radio amateurs are consulted additionally.

29 RRT assigns call signs for individual and club radio amateur stations, filles, manages and protects the register of radio amateurs, referring to the Law on Personal Data Protection, continuously provides information related with these activities.

Communications Regulatory Authority of the Republic of Lithuania Annual Report 2013

1000 889 918 921 848 832 833 767 823 792 800 800

600

400

200

0 2009 2010 2011 2012 2013 Number of call signs Number of radio amateurs Figure 54. The change of the number of radio amateurs and call signs assigned to them in 2009–2013 Source: RRT

Radio spectrum monitoring

In 2013 RRT continued performing its functions in the area, i.e. measurements of occupation of radio frequencies, electromagnetic strength of the radiated signals and their parameters, searching for radio frequencies, used without authorization and their users, etc. In order to ensure the quality of the broadcasted programmes and to avoid potential radio interference from the frequency modulation radio programmes broadcasting stations, the parameters of the signals, radiated by such stations, were periodically measured throughout Lithuania in 2013. 1004 measurements of radio frequency deviation were performed. In 4.1 per cent of all the cases, incompliances of the signal norms with the applicable technical requirements were established. Looking at the statistics of the last few years (Figure 55), it can be seen that the number of violations in this area is decreasing. This has been achieved by continuous and focused work performed by RRT in this sphere. All the violations of radio frequency norms were eliminated.

2013 4,1% 95,9%

2012 4,6% 95,4%

2011 4,1% 95,9%

2010 7,9% 92,1%

2009 10,0% 90,0%

0% 20% 40% 60% 80% 100%

Determined violations No violations

Figure 55. The statistics of results of radio frequency deviation measurements in 2009–2013, per cent Source: RRT

In 2013, the search for radio frequencies used in an unauthorized manner and their users was continuously performed all over Lithuania. 24 cases of unauthorized use of radio frequencies were identified in 2013 (see Figure 56). 22 cases were investigated, of which 13 – investigated successfully. In 8 cases, 90

Communications Regulatory Authority of the Republic of Lithuania Annual Report 2013 identification of users failed due to the stopped usage of radio frequencies. The majority of violations were found in the frequency band from 30 to 1000 MHz by using fixed radio spectrum monitoring stations. In 2013 searching for illegal users of frequencies, 38 visits to sites were made. For that purpose, next-generation real-time spectrum monitoring and signal searching equipment, either developed by or with active participation of RRT employees, was used. 140 120 100 116 80 85 60 40 51 20 32 24 0 2009 2010 2011 2012 2013

Figure 56. The statistics of the cases of unauthorized use of radio frequencies in 2009–2013, units Source: RRT

Inspection of radiocommunication networks and stations

The inspection of radiocommunication networks and stations is performed in order to ensure the electromagnetic compatibility and prevent radio interferences. During the inspection the observance of the conditions of use of radio frequencies, established in the project and the licence issued by RRT is verified. In 2013, 170 planned inspections of operating networks and 21 inspections of new internal radiocommunication networks as well as 26 planned inspections of operating radio and television programmes broadcasting stations and 56 new stations were performed. Figure 57 shows the relation of the internal radiocommunication networks (a) and radio and television (RTV) broadcasting stations (b), in which violations were noted, to all the inspected networks and stations.

2013 77,5% 22,5% 2013 96,3% 3,7%

2012 79,2% 20,8% 2012 89,1% 10,9%

2011 60,4% 39,6% 2011 84,2% 15,8%

2010 80,0% 20,0% 2010 65,0% 35,0%

0% 20% 40% 60% 80% 100% 0% 20% 40% 60% 80% 100% Incompliances not established Incompliances not established Established incompliances Established incompliances a) Internal radiocommunication networks b) RTV broadcasting stations

Figure 57. The established cases of incompliance with the project and/or the conditions, stated in the licence in 2010–2013, per cent Source: RRT

When inspecting the internal radiocommunication networks, 43 violations were established, in cases of radio and television programmes broadcasting stations 5 violations were found. The most frequent violation in internal radiocommunication networks was the excessive permissible ERP power of transmitters 91

Communications Regulatory Authority of the Republic of Lithuania Annual Report 2013 (45 per cent). Even 7 stations were found in different places than indicated in the permits issued to frequency users. Distribution of the established violations is shown in Figure 58. All the established violations and incompliances with the project and/or frequency (channel) usage conditions stated in the relevant licences were eliminated.

Not all network Unauthorized radio stations registered frequencies used 12,5% 12,5% Unauthorized installation location 14,6%

Other violations Unauthorized or 10,4% inappropriately installed antenna 4,2%

Unauthorized ERP 45,8%

Figure 58. The violations, established in internal radiocommunication networks in 2013, per cent Source: RRT

Radiocommunication equipment

RRT, like other EU institutions, controlling radio frequency spectrum resources, evaluates the compliance of the radiocommunication interface of radiocommunication equipment and devices of Class 2, operated in the non-harmonised EU radio frequency bands with the conditions for use of radio frequencies/channels in the Republic of Lithuania prior to the provision of the equipment to the market30. The manufacturer of radiocommunication equipment or a telecommunications terminal equipment unit or its authorized representative must evaluate whether the unit complies with the essential requirements provided in the Directive 1999/5/EC prior to the provision of the unit to the market. In situations where RRT establishes that the radiocommunication equipment interfaces fail to comply or do not fully comply with the conditions for the use of radio frequencies in Lithuania, RRT notifies the relevant parties, who provided notifications of the issue, in writing and requires to include relevant information into the user manual of the radiocommunication unit in order to inform the user on the restrictions, if any, of the equipment use (certain technical parameters, geographical location etc. can be limited), provided limitations are established. In 2013, 799 notifications of the provision of equipment of Class 2 to the market were received (1007 in 2012). All the received notifications were investigated and the replies regarding the possibilities of equipment provision to the market and conditions for equipment usage in Lithuania were forwarded to the equipment providers: only in 4 cases (0.5 per cent of all the received notifications) the relevant parties were informed that the equipment was prohibited to be used in Lithuania, in 274 cases (34.3 per cent) restriction on equipment use were imposed, in other cases (65.2 per cent) no restrictions on use were imposed.

30 When evaluating the compliance of the radiocommunication equipment interface as it is determined in the Directive 1999/5/EC of the European Parliament and the Council of 9 March 1999 on radio equipment and telecommunications terminal equipment and the mutual recognition of their conformity (hereinafter referred to as the Directive 1999/5/EC), the conditions of use of radiocomunication equipment, established by the manufacturer, are controlled for compliance with the radio frequencies/channels use plans in the Republic of Lithuania by evaluating the electromagnetic compatibility prospects as regards the use of the existing radiocommunication systems with the radiocommunication equipment to be used. The radiocommunication equipment is also controlled to see if it ensures efficient use of the frequency spectrum intended for terrestrial and/or spatial and satellite communication and the orbital resources as well as for the avoidance of harmful interference. 92

Communications Regulatory Authority of the Republic of Lithuania Annual Report 2013 The verification, performed by RRT ensures that the consumers on the Lithuanian market purchase equipment, compliant with the EU requirements and obtain the relevant information on the specifics of use of the radiocommunication equipment in due time.

Management of other resources

Management of telephone numbers

RRT performed supervision of the National Numbering Plan and assigned telephone numbers. Compared to 2012, the total number of assigned telephone numbers grew in 2013. The summary of the issued/revoked licences to use telephone numbers is presented in Table 9. Table 9. The summary of the permits to use telephone numbers, issued/revoked in 2013

The total number The right granted The right cancelled The purpose of numbers of numbers (numbers assigned) (numbers refused) assigned

The 10XX short numbers 0 1 20

The 18XX short numbers 6 0 55 The 19XXX short numbers 3 3 26 The 116 XXX short numbers 0 0 3 The public fixed telephone service 18827 65343 958160 numbers The public mobile telephone service 116006 132565 7278837 numbers Service numbers 7XX XXXXX 29300 10525 19211 Source: RRT

RRT has assigned three numbers from the five numbers for harmonised services of social value: . In 2012, short telephone number 116000 assigned to the non-governmental organisation Missing Persons' Families Support Centre, intended for helpline messages regarding missing children; . Short telephone number 116111 to the State Child Rights Protection and Adoption Service under the Ministry of Social Security and Labour for launching a helpline, intended to provide assistance to the children lacking care and security; . Short telephone number 116123 (psychological help) to the Association of Telephone Psychological Help Services of Lithuania.

In 2013 RRT announced tenders for the assignment of numbers 116006 and 116117; however, no applications were received. RRT will repeatedly announce the tenders for assignment of the numbers for harmonised services of social value in 2014. In 2013 RRT received a letter from the Ministry of the Interior of the Republic of Lithuania regarding the single emergency call number 112, informing that providers of public communications networks and/or public electronic communications services were possibly not complying, or improperly complying, with the requirements of the Specification of the Procedure for Subscribers and/or Users’ Possibility to Use the

Communications Regulatory Authority of the Republic of Lithuania Annual Report 2013 Services of the Institutions, Providing On-call Assistance Services31. RRT carried out an investigation and presented the findings to the Minister of the Interior of the Republic of Lithuania. RRT obligated Omnitel UAB and Bitė Lietuva UAB by 31 December 2013 to ensure that location information of the subscribers and other users, who cannot be identified by their telephone number, shall be automatically made available to the Emergency Response Centre, i.e. each time when a subscriber and/or user uses emergency call services by calling to the single emergency call number 112. In January 2014 the Emergency Response Centre informed RRT that Omnitel UAB and Bitė Lietuva UAB provided location information to the Emergency Response Centre automatically, when calling from terminal devices with and without SIM cards, as required by the revised Specification of Detailed Technical Requirements for the Provision of Location Information of Public Mobile Telephone Communication Subscribers and/or Service Users, Calling to the Single Emergency Call Number 112, to the Emergency Response Centre.

Management of network identifiers

In 2013, 1 national signalling point code was assigned. In total, the following identifiers were assigned: . 29 international signalling point codes; . 6 public mobile telecommunication codes; . 2 public data communication identifier codes; . 33 number portability service identifiers; . 104 national signalling point codes; . 8 identifier codes of digital terrestrial television transmission networks and services.

Internet addresses

RRT is authorized to issue permissions regarding the use of the name of Lithuania before the top- level domain ".lt". The authorizations provided to RRT ensure that the name of Lithuania is used in an appropriate manner and encourages a proper representation of Lithuania on the Internet. The name of Lithuania is the official long or short name of the state of Lithuania, i.e. "the Republic of Lithuania" or "Lithuania" in all the official languages of the EU Member States and in all the grammatical forms of the said languages (for instance, manolietuva.lt, lietuvosrespublika.lt). In 2013 RRT issued 34 licences (Figure 59) granting the right to the applicant to use the name of Lithuania in the second level domain name before the top-level domain “lt” and revoked 2 licences that had been issued previously. Licences are issued for unlimited time and the procedure of issuing is very simple. If the application corresponds all the indicated requirements, RRT issues the licence in 5 working days.

31 The Specification of the Procedure for Subscribers and/or Users’ Possibility to Use the Services of the Institutions, Providing On-call Assistance Services, approved by Order No. 1V-1087 of the Director of RRT of 7 November 2011. 94

Communications Regulatory Authority of the Republic of Lithuania Annual Report 2013 40 35 36 30 34 25 27 20 24 15 10 5 6 0 2009 2010 2011 2012 2013

Figure 59. The number of licences to use the name of Lithuania, issued by RRT in 2009–2013 Source: RRT

Communications Regulatory Authority of the Republic of Lithuania Annual Report 2013

INTEGRATION INTO DECISION MAKING SYSTEM IN THE EU AND INTERNATIONAL REGULATORY SPACE

PRESIDENCY OF THE COUNCIL OF THE EU

In the second half of 2013 (from 1 July 2013 to 31 December 2013) Lithuania had an important task to assume the Presidency of the EU Council for the first time. Under the decree of the President of the Republic of Lithuania two civil servants of RRT were awared commemoratvive badges for their contribution towards the Lithuanian Presidency of the Council of the EU.

Dr. Virgilijus Stundžia, a representative from RRT, chaired the EU Council Working Party on Technical Harmonisation, where the proposal submitted by the European Commission for a Directive of the European Parliament and of the Council on the harmonisation of the laws of the Member States relating to the making available on the market of radio equipment32 was discussed. To harmonize the provisions of the Directive, 8 meetings of the Working Party on Technical Harmonisation were held in Brussels. The representative of RRT, chairing the EU Council Working Party, also participated in technical meetings and trialogues with the European Parliament and the European Commission. During the Presidency, the main task was to make as much progress as possible towards the consensus in the EU Council on the aforementioned legal act. Maximum results were achieved after intensive meetings, formal and informal communication with the EU Member States, and the representatives of the European Parliament and of the European Commission. After the representative of RRT, chairing the EU Council’s Working Party, received the mandate from the permanent representatives of the EU Member States to negotiate, on behalf of the Council, the proposal with the European Parliament and the European Commission, during the trialogue held on 20 December 2013 the representatives of the EU Council, the European Parliament and the European Commission agreed on the provisions of the Directive and adopted all compromise provisions of the Directive – an excellent result of the Lithuanian Presidency of the EU Council Working Party on Technical Harmonisation and the contribution to the overall success of the Lithuanian Presidency. The text of the Directive was drafted, coordinated and, after a review, adopted during the Greek Presidency of the EU Council. The Directive’s substantive provisions and their benefits for market players and consumers are as follows:  The scope of application is more clearly defined. The Directive will apply only to radio devices (such as mobile phones, car security systems, modems, etc.) and will not apply to wired telecommunications terminal equipment.

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Communications Regulatory Authority of the Republic of Lithuania Annual Report 2013  The Directive provides for more effective measures of market surveillance and a higher level of compliance of equipment, supplied to the EU market, which will help prevent interference between radio systems and ensure compliance with safety requirements.  Reduced administrative burden on operators. There will be no obligation that each device placed on the market should be accompanied by a full declaration of conformity. Manufacturers will be able to specify a web address, where a declaration of conformity of a relevant terminal device will be published. Also, manufacturers will be able to provide information to market surveillance authorities electronically.  A legal basis has been established that for certain groups of radio devices (e.g., mobile phones) uniform charging device interfaces should be developed, which will provide more favourable conditions for users. Also, RRT representatives participated in the meetings of the EU Council Working Party on Telecommunications and Information Society aimed at discussing the European Commission’s proposal for a Regulation on electronic identification and trust services for electronic transactions in the internal market. In the second half of 2013, the meetings were chaired by a representative of the Ministry of Transport and Communications. RRT representatives provided their opinion on the following proposals of the European Commission:  Proposal for a Regulation of the European Parliament and of the Council on electronic identification and trust services for electronic transactions in the internal market33;  Proposal for a Directive of the European Parliament and of the Council concerning measures to ensure a high common level of network and information security across the Union34;  Proposal for a Regulation of the European Parliament and of the Council on measures to reduce the cost of deploying high-speed electronic communications networks35;  Proposal for a Regulation of the European Parliament and of the Council laying down measures concerning the European single market for electronic communications and to achieve a Connected Continent, and amending Directives (hereinafter – the Regulation on the European single market for electronic communications)36. In 2014 when Greece takes over the Presidency of the EU Council, its representatives will continue discussions on these proposals. The aforementioned proposals are aimed at adapting the regulation of the electronic communications sector to its changing operating conditions. The Commission’s proposal for a Regulation on the European single market provides for substantial changes in the current electronic communications regulatory framework of the EU: introduction of a single EU authorisation for electronic communications activities, changes in radio frequency management by giving new powers to the European Commission, new roaming tariff reduction policies, and new provisions relating to consumer protection.

33 (COM(2012) 238) 34 (COM(2013) 48) 35 (COM(2013) 147 36 2002/20/EC, 2002/21/EC and 2002/22/EC and Regulations (EC) No. 1211/2009 and (EU) No. 531/2012 (COM(2013) 627)

Communications Regulatory Authority of the Republic of Lithuania Annual Report 2013 In the course of discussions on the aforementioned proposal of the Commission that were held during the meetings of the EU Council Working Party on Telecommunications and Information Society, it became clear that delegations, though basically supporting the proposal’s objective – to increase competition, promote investment, to achieve a high level of consumer protection, reduce roaming charges, expressed their concern about certain aspects of the proposal. A lack of wide–ranging public consultation with regard to the Commission’s proposal was noted. Concern was expressed about the proposed spectrum management method, which in any case should be chosen by taking into account national circumstances and competencies; about the impact which certain provisions might have on the investment climate (e.g., regarding roaming), emphasizing the need to achieve a proper balance between the interests of consumers and operators; about smaller operators and markets, as some provisions were deemed to be promoting market consolidation rather than competition. On 11 November 2013 RRT held a public discussion with the Lithuanian authorities, market players and consumer protection organizations about the Regulation on the European single market for electronic communications. During the meeting, all stakeholders were given the opportunity to express their opinions on the Commission’s proposal and the changes required in the electronic communications sector. In 2013 RRT representatives participated in the activities of the Communications Committee, the Radio Spectrum Committee and the Radio Spectrum Policy Group of the European Commission. The Communications Committee focused a lot on drafting the Commission Recommendation on consistent non- discrimination obligations and costing methodologies which, after discussions, was adopted on 11 September 201337. The aim of the recommendation is to apply stricter non-discrimination rules and through this to ensure a level playing field, to establish predictable and stable regulated wholesale copper access prices. In 2013 RRT representatives actively participated in the activities of the Radio Spectrum Committee (RSCOM) and the Radio Spectrum Policy Group (RSPG). Issues relating radio communication management harmonisation in EU were discussed in this Committee and in the Group. RSCOM, with the participation of a representative of RRT, approved decisions on the use of 2.6 GHz LTE systems on board aircraft, on the harmonized use of short-range devices, approved the mandate to CEPT on the 5 GHz band analysis, in order to achieve the compatibility of systems already existing in the band with broadband access systems. The European Commission granted a derogation to Lithuania on the implementation of the EC Decision 2010/267/EC until June 30 in accordance with paragraph 4 of Article 6 of the Radio Spectrum Policy Programme. RSPG prepares conclusions for the European Commission regarding the relevant issues relating to management and use of radio frequencies. In 2013 considerable attention was devoted to wireless broadband radiocommunication and coordination of the usage of radio spectrum in the European Union. RSPG has started drafting a conclusion on the long-term strategy for the future use of the UHF band (470‒ 790 MHz). This document will be very important for Lithuania, since it will evaluate the importance of digital terrestrial television and spectrum demand in each country, the development of broadband radiocommunication in this radio frequency band, the possibility of convergence of technologies and the associated benefits and costs, and will assess the need to assign the 700 MHz radio frequency band for

37 Commission Recommendation 2013/466/EU, of 11 September 2013, on consistent non-discrimination obligations and costing methodologies to promote competition and enhance the broadband investment environment 98

Communications Regulatory Authority of the Republic of Lithuania Annual Report 2013 wireless broadband access by 2020. In 2013 RRT representatives participated in drafting and approving the following conclusions and reports of RSPG:  Opinion on policy objectives for the World Radiocommunication Conference 2015 (WRC- 15);  Opinion on the growing demand for radio spectrum for wireless broadband in Europe;  Report on radio spectrum for wireless broadband in the 400 MHz - 6 GHz radio frequency range;  Report on the coordination of radio spectrum for broadcasting in the case of a reallocation of the 700 MHz radio frequency band;  Report on radio interference management;  Opinion on licensed shared access. In 2013 RRT representatives participated in the meeting of the Postal Directive Committee of the European Commission. In 2013 the Study on Main Developments in the Postal Sector (2010–2013), conducted by the consulting company WIK Consult at the request of the European Commission, was published, to the preparation of which the EU Member States, including Lithuania, had contributed by providing data. During the meetings of the Postal Directive Committee, a lot of attention was paid to issues related to cross-border parcel delivery, taking into account the following issues to be addressed according to the Commission’s Green Paper of November 2012 on ‘An integrated parcel delivery market for the growth of e- commerce in the EU’: to keep e-retailers better informed; find effective return solutions; ensure track and trace options in cases of lighter parcels; improve labelling systems and ensure better communication in handling consumer complaints. On 16 December 2013 Communication from the Commission 'A roadmap for completing the single market for parcel delivery' (revised on 10 January 2014), identifying the physical delivery of goods ordered online as one of the key elements for e-commerce growth, was submitted to the Council of the European Union. The aforementioned Communication provides the Roadmap for increased transparency and information for all actors along the e-commerce value chain, improved availability, quality and affordability of delivery solutions, enhanced complaint handling and redress mechanisms for consumers. The Roadmap attributes specific tasks and roles to the various stakeholders. The Commission will facilitate this collaborative process through dedicated fora and workshops, and will closely monitor progress. Also, in 2013 a representative of RRT attended the trusted lists-related meeting of the Technical Working Group for implementation of Directive 2006/123/EC of the European Parliament and of the Council of 12 December 2006 on services in the internal market. In 2013 RRT was responsible for implementation of the following EU legal acts:  Commission Implementing Decision 2013/752/EU of 11 December 2013 amending Decision 2006/771/EC on harmonisation of the radio spectrum for use by short-range devices and repealing Decision 2005/928/EC;  Commission Implementing Decision 2013/654/EU of 12 November 2013 amending Decision 2008/294/EC to include additional access technologies and frequency bands for mobile communications services on aircraft (MCA services);

Communications Regulatory Authority of the Republic of Lithuania Annual Report 2013  Commission Recommendation 2013/466/EU of 11 September 2013 on consistent non- discrimination obligations and costing methodologies to promote competition and enhance the broadband investment environment;  Commission Decision C(2013) 4613 (of 23 July 2013) granting a derogation to the Republic of Lithuania pursuant to Article 6(4) of Decision No 243/2012/EU of the European Parliament and of the Council of 14 March 2012 establishing a multiannual radio spectrum policy programme (RSPP);  Commission Implementing Decision 2013/195/EU of 23 April 2013 defining the practical arrangements, uniform formats and a methodology in relation to the radio spectrum inventory established by Decision No 243/2012/EU of the European Parliament and of the Council establishing a multiannual radio spectrum policy programme;  Commission Recommendation of 12 December 2012 on the notification procedure provided for in Article 22(3) of Directive 2002/22/EC of the European Parliament and of the Council on universal service and users' rights relating to electronic communications networks and services.

The Body of European Regulators for Electronic Communications (BEREC)

In 2013 RRT representatives participated in the activities of the Body of European Regulators for Electronic Communications (BEREC). Representatives of national regulators, acting in cooperation with one another and with the European Commission, seek to ensure the consistent application in all Member States of the EU regulatory framework of electronic communications networks and services. The work of BEREC is significant, as regulatory institutions jointly solve issues of practical implementation of the EU directives, develop and disseminate the best regulatory practices, common approaches, methodologies or guidelines on the implementation of the EU regulatory framework. In 2013 BEREC became involved in the procedure of deliberating on the European Commission’s proposal for a Regulation on the single European market for electronic communications. This draft legal act is related to changes in the electronic communications regulatory framework. Therefore BEREC carefully studied the proposal in order to find out existing problems in the EU electronic communications market development and find solutions that would ensure a competitive business- and consumer-friendly environment in the sector both in the EU Member States and globally. On 16 September 2013 BEREC issued a statement38, and on 17 October 2013 – views39 where, in view of the proposed Regulation on the European single market, drew attention to the fact that the proposal would jeopardise the regulatory consistency of the electronic communications sector, which might adversely affect the achievements of the existing regulatory framework in terms of investment, competition and consumer benefit. When studying the provisions in the proposed Regulation on the European single market for electronic communications, BEREC representatives stressed the importance of consumer protection by providing them as favourable conditions as possible to use electronic communications services, i.e. seeking

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Communications Regulatory Authority of the Republic of Lithuania Annual Report 2013 consistent regulation of contractual relations with service providers and establishment of clear conditions under which the user could change providers. The study of the proposal will be continued in 2014 by the EU Council Working Party on Telecommunications and Information Society. RRT will provide an expert opinion in preparing Lithuania’s position, while BEREC, where requested, will provide comments to the representatives of the European Commission and of the Parliament. BEREC activities outlined in its Work Programme 2013 focused on the promotion of the development of broadband communications networks and the EU internal market, consumer protection reinforcement. The BEREC Work Programme was implemented by the working groups composed of the representatives of national regulators, which drafted BEREC views, reports, common positions, etc. The most important activities of BEREC working groups to be noted are as follows:  The Remedies Expert Working Group developed a methodology for monitoring the application of BEREC Common Positions on wholesale access products (wholesale local access (WLA), wholesale broadband access (WBA) and wholesale leased lines (WLL). For BEREC members, it is important that these Common Positions be implemented in the whole of the EU, because this leads to the development of telecommunications and the creation of the EU single market. The purpose of the methodology is to ensure that all members of BEREC (EU Member States, regulators) have the same understanding and consistently implement Common Positions and to enable BEREC to monitor the appropriateness of their implementation;  The Remedies Expert Working Group issued an opinion to the European Commission regarding the latter’s recommendation regarding non-discrimination obligations and costing methodologies. The objective of the EC recommendation is to ensure effective broadband development by applying the principle of non-discrimination, setting a method for the calculation of access prices and thus ensuring certainty in the market. In accordance with the working procedure, BEREC submitted its proposals to the European Commission concerning a more efficient regulatory intervention practice that wasprovided for in the approved recommendation.  The International Roaming Expert Working Group of BEREC prepared the guidelines on the implementation of Articles 4 and 5 of the International Roaming Regulation40. BEREC’s recommendation seeks that mobile operators and virtual operators in the EU Member States equally apply compatible technical solutions, which allow the user to select the provider of roaming services (voice, data and SMS) when traveling in other EU Member States.  The Net Neutrality Expert Working Group of BEREC prepared the Draft Guidelines for Quality of Service in the Scope of Net Neutrality. A representative of RRT, involved in this Working Group, prepared the part of the aforementioned document on the evaluation methods of Internet access services. The purpose of the document is to create the basis, which would enable to: 1) monitor the quality of Internet access services, while providing transparent information to consumers about the quality of services and 2) to perform the monitoring of access to the Internet service. The document is expected to be approved at the beginning of 2014.  In 2013 the Expert Working Groups established by BEREC under Article 7 and 7a of the Framework Directive (2009/140/EU) examined and submitted decisions for voting on the 12 cases of serious doubts expressed by the European Commission over the decisions of the EU national regulators related to market regulation measures.

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Communications Regulatory Authority of the Republic of Lithuania Annual Report 2013 On 25 September 2013, BEREC held the 1st meeting of the BEREC Stakeholder Forum, which was attended by representatives of the electronic communications sector. During the meeting, discussions were held with market participants on the most relevant issues of regulation, investment, net neutrality, the future of the telecommunications sector. As the Forum was organized after the European Commission published the proposal for a Regulation on the European single market for electronic communications, BEREC members and representatives of the electronic communications market expressed their views on the need to refine the regulatory issues relating to investment in infrastructure and only then look for solutions, the implementation of which would not damage consumer confidence. Also, BEREC adopted decisions on BEREC activities in 2014 related to boosting the roll out of next generation networks, consumer protection, and analysis of the measures to create the internal market (international roaming, electronic communications regulation). In addition, it is planned to undertake a study, aimed at finding out how the issue of net neutrality is perceived by end-users and getting a more complete picture of the needs of users. It is also planned to prepare a document related to Machine-2-Machine (M2M) problems. The purpose of the document – to examine if there are any regulatory barriers in the area of M2M that hinder the provision of these services, as this area is increasingly affecting the consumer environment.

European Regulators Group for Post (ERGP)

The European Regulators Group for Post (ERGP) was established by the decision of the European Commission of 10 August 2010. ERGP consists of representatives of national postal regulatory authorities of 28 EU Member States. This Group is developing best regulatory practice and acts as an expert advisor to the European Commission on postal issues. ERGP has an important role in developing the single market for postal services and ensuring high quality consumer-oriented postal services. RRT representatives participate in plenary and Contact Network meetings of ERGP, as well as in the meetings of ERGP working groups. The plenary meeting of the European Regulators Group for Postal Services (ERGP) was held on 21 November 2013 in Luxembourg. During the meeting, Feliksas Dobrovolskis, the Director of RRT, was elected as Chair of ERGP in 2015. In 2014, F. Dobrovolskis will hold the office of Vice-Chair of ERGP. In 2013 RRT representatives participated in the following working groups of ERGP, which prepared the aforementioned ERGP documents: working groups on Cost Accounting and Price Regulation, Net Cost and Added Value, Consumer Satisfaction and Market Data Monitoring, and Access Regulation. A representative of RRT participated in the activities of the working groups on Cost Accounting and Price Regulation and on Net Cost and Added Value and actively contributed to drafting the following documents: ERGP Report on Net Cost of USO – VAT treatment in the calculation of Net cost of USO (the input was developed on ‘The calculation of VAT exemption effects (burden/benefit)’); and ERGP Draft Report on Experimentation/exploration of the implementation of methodology of" the Net cost calculation using a reference scenario (the input developed – ‘The demand reaction’). Taking into consideration the changes in the postal market and the impact of the current regulatory environment, in June 2013 during the seminar held before the plenary meeting of ERGP, ERGP members discussed possible directions of ERGP activities for 2014. During the seminar, Lithuanian representatives participated in a roundtable discussion on access regulation and the promotion of competition. This is an especially important topic for both Lithuania and other Member States, which completely liberalized their postal markets only from 1 January 2013. There was a discussion on convergence of postal services and

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Communications Regulatory Authority of the Republic of Lithuania Annual Report 2013 electronic communications services, influencing changes in both the market and customer needs, leading to a continuous decrease in the volumes of correspondence. ERGP recognized the importance of the development and opportunities of e-commerce and called on the European Commission to continue the work by involving ERGP members. In 2013 ERGP devoted much attention to statistical data collection issues, as the quality and accessibility of information are important in order to better understand and assess the postal market and its developments. At the end of the third year of its functioning, ERGP put special emphasis on the importance and value of active participation by all national regulatory authorities, which is also reflected in the documents adopted in 2013: ERGP Report on specific cost allocation issues; ERGP Report on the quality of service and end-user satisfaction; ERGP Opinion on the European cross-border e-commerce parcels delivery and questions related to market analysis, which was prepared under request of the European Commission; ERGP Report on net cost of USO – VAT exemption as a benefit or a burden, and ERGP Report on data on market indicators. In 2013 RRT actively cooperated with the EU national regulatory authorities in responding to inquiries and questionnaires on a variety of issues related to the regulation of the postal market. The most frequent requests from foreign regulatory authorities were to provide information on the universal service obligation procedure after the liberalization of the postal market, access to the postal network, price affordability, quality requirements and applicable standards, and the procedure for storage of postal items. Taking into account the projected changes in the Lithuanian postal market, RRT submitted an inquiry to the EU national regulatory authorities regarding the dimensions applicable to items of correspondence and correspondence handling procedures.

Cooperation with national regulatory authorities

The Nordic-Baltic dimension of cooperation

In 2013 RRT took part in cooperation events of national regulatory authorities of the Nordic and Baltic countries: the meeting of the heads of the authorities and working group meetings on statistical issues. During the meeting of the heads of the national regulatory authorities of the eight Nordic and Baltic countries (Denmark, Estonia, Finland, Iceland, Latvia, Lithuania, Norway and Sweden) held in Lillesand, Norway, where the issues of rolling out of broadband, mobile coverage, and security of networks and information were discussed, it was decided to call on the European Commission to improve consumer awareness of mobile receiver performance. Experiences from all the countries are that smartphones vary a lot when it comes to receiver performance, and the parameters of receivers and antennas may have a crucial impact on reception quality at the users’ end. During the meeting in Norway, the representatives of the national regulatory authorities of Denmark, Estonia, Finland, Iceland, Latvia, Lithuania, Norway and Sweden decided to urge the Commission to take the necessary steps in order to create an EU labelling scheme for receiver performance in mobile phones. Such scheme would create transparency for consumers and would provide them more options to choose a product of higher quality and, at the same time, information about receiver performance would make it an additional parameter for competition.

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Communications Regulatory Authority of the Republic of Lithuania Annual Report 2013 The Eastern Partnership Programme

RRT is actively involved in the activities of the group of electronic communications authorities of the Eastern Partnership countries (hereinafter referred to as EaP) and, together with the national regulatory authorities of other EU Member States (Austria, Poland, Latvia, Spain, Romania and the Czech Republic), has been one of the initiators of the establishment of the EaP. In 2012, in Chisinau, a Memorandum of Understanding of the EaP Regulators Network was signed under which the EaP Electronic Communications Regulators Network was officially established. The objective of EaP is to bring the legal framework and principles of the Eastern Partnership Member States in line with the EU legislation, to exchange experiences and best practices and pass them on to neighbour countries, promote cooperation amongst them. In 2013, the Director of RRT held the position of Vice-Chairman of EaP. He was elected to the position for the second time ‒ for the year 2014. EaP is chaired by Eastern partners: in 2013 – by Moldova, in 2014 – by Ukraine. The national electronic communications authorities of eight Eastern countries – Armenia, Azerbaijan, Belarus, Georgia, Moldova and Ukraine ‒ are involved in EaP’s activities. Partnership is implemented at the following two levels: at the level of Director Generals – during plenary sessions (in 2013 the plenary sessions took place in Kiev and Yerevan), at the level of experts – during technical, specialized workshops, involving the participation of technical-level experts, where they listen to lectures on specific electronic communications issues (price regulation, assurance of quality of services, etc.). One of the forthcoming tasks is to ensure the continuity of EaP activities after the end of the technical assistance funding for the project provided by the European Commission.

Cooperation of Baltic regulators

In August 2013 the Latvian national regulatory authority organized the meeting of the Baltic regulators, which was attended by the representatives of the Estonian, Latvian and Lithuanian electronic communications and postal regulatory authorities. During their 10th meeting, the Baltic regulators presented the current situation and trends of electronic communications and postal markets. During the meeting, the participants shared information about the process of digital dividend auctions (in the 800 MHz radio frequency band), Internet speed measurement problems, the trends of growth in the number of Internet users, etc. They also discussed the trends in the postal sector – changes in the legal environment, liberalization of the postal sector, and development of the universal postal services market. Lithuania presented information on the practice of Presidency of the EU Council working parties, as the topic was particularly relevant to Latvia, which would take over Presidency of the EU Council in the first half of 2015. Such meetings are useful because of the similarities of the three Baltic markets and the opportunity to exchange and apply best practice solutions in the national electronic communications and postal markets, sharing similar sector development trends.

Bilateral institutional cooperation

In 2013 representatives of the Kosovo National Electronic Communications and Postal Regulation Authority (hereinafter referred to as the Telecommunications Regulatory Authority or TRA) visited RRT. During the visit, the issues relating to sharingof electronic communications infrastructure, provision of access to the local loop, practical models for implementation of cost accounting and accounting separation on relevant regulated markets were discussed. The visit was organized in collaboration with the European 104

Communications Regulatory Authority of the Republic of Lithuania Annual Report 2013 Commission’s Technical Assistance and Information Exchange (TAIEX). RRT representatives presented to the visitors the practical aspects of sharing of infrastructure and the benefits of regulation in promoting the development of high-speed broadband communication networks. TRA representatives were given a practical demonstration of the application of the Long Run Average Incremental Costs (LRAIC) models, implemented by RRT for accounting the costs of both fixed and mobile communications operators. In addition, RRT representatives demonstrated the impact of the implementation of the Commission Recommendation 2009/396/EC of 7 May 2009 on the Regulatory Treatment of Fixed and Mobile Termination Rates in the EU on the interconnection prices; and also the perspectives of regulation in the area of interconnection were discussed. On 28 June 2013 a delegation of representatives of the South African Department of Communications visited RRT. The purpose of their visit was to take over experience in the field of broadband communications. Via the European Commission, Lithuania had been selected as one of the countries to be visited by the South African representatives because of Lithuania’s current experience in the area of broadband network development. The guests wanted to learn about the broadband policy implementation challenges and solutions to problems in Lithuania. RRT representatives introduced to the guests the situation of the Lithuanian electronic communications market: Lithuania’s leadership in terms of the penetration of broadband Internet over fiber-optic lines; and also in terms of high Internet speed. RRT presented in detail the peculiarities of regulation in the area of broadband communications, the regulatory measures promoting the provision of broadband communications, the situation in the area of the use of radio frequencies for the development of wireless broadband communications networks, as well as the system for monitoring the quality of the Internet access services provided over public mobile and wireless communications networks. The delegation very positively evaluated RRT’s policy for regulation of infrastructure sharing, the creation of electronic access to infrastructure maps, and the system for monitoring the quality of the Internet access services.

Administrative cooperation of EU supervision institutions

As of 1 September 2012 a representative of RRT was appointed the main coordinator of the joint electromagnetic compatibility market surveillance campaign of the EU Member States, and was responsible for the preparation of a common report of the EU Member States. A representative of RRT prepared a report on the 5th joint cross-border EMC market surveillance campaign of the EU Member States held from 1 September 2012 to March 2013 and in November 2013 presented it during the meeting of the EMC Working Party dealing with issues within the scope of the EU Electromagnetic Compatibility (EMC) Directive. This report provides summarized data from 19 Member States of the EU – this is by far the largest number of participants in the electromagnetic compatibility campaigns. The purpose of the campaign was to assess the compliance of switching power supplies (hereinafter referred to as SPS) intended for use by laptop computers or similar devices with the essential requirements of the EMC Directive (i.e. compliance with relevant harmonised standards), as well as their compliance with administrative requirements. During the campaign, it was found that only 2 SPS out of 136 tested (10 types were tested in Lithuania) had been manufactured in the EU. ‒ 56 per cent of 134 products tested complied with the essential requirements (harmonised standards); compliance with the administrative requirements ‒ 31 per cent. It should be noted

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Communications Regulatory Authority of the Republic of Lithuania Annual Report 2013 that during this campaign all tested SPS had the CE marking, of which 119 (88 per cent) were assessed as meeting the marking requirements (i.e. in terms of the shape and size of the CE marking).

The European Conference of Postal and Telecommunications Administrations (CEPT)

CEPT is a regional organization uniting 48 communications administrations of the European countries the objective of which is to develop a dynamic European telecommunication and postal sector. CEPT strives to ensure compatibility and integrity of radiocommunication systems and telecommunications regulatory regime throughout Europe, Europe’s common position on significant telecommunication and postal issues in international organizations, and drafts European positions when preparing for International Telecommunication Union conferences. In 2013 RRT representatives participated in the meetings of the following 3 CEPT committees – Electronic Communications Committee (hereinafter referred to as ECC), the European Committee for Postal Regulation (hereinafter referred to as CERP) and the Committee for the ITU Policy (hereinafter referred to as Com ITU), as well as the main working groups and project teams under the said committees. In 2013, a representative of RRT held the position of Deputy Chairman of the Project Team Technical Regulatory Issues (PT TRIS) of ECC within CEPT. Com ITU Committee prepared Europe’s positions for the ITU Council, its working groups and the World Telecommunication Policy Forum, examined the problems relevant to the ITU members related to the results of the World Conference on International Telecommunications and the attitude of European countries towards the International Telecommunications Regulation approved by the aforementioned Conference, and also addressed the issues of the ITU budget, the role of governments in the Internet governance system, and other issues. The Committee discussed the European region’s preparation for the ITU Plenipotentiary Conference (PP) and the World Telecommunication Development Conference (WTDC), prepared CEPT guidelines and initial proposals for the WTDC Conference. In 2013, the ECC Committee, involving the representative of RRT, approved 20 reports, 3 decisions and 1 recommendation relating to the harmonized planning and usage of radio frequencies in Europe, numbering resources, the quality of electronic communications services. The problematic issues relevant to Lithuania concerning the use of the 800 MHz frequency band for broadband mobile communication, preparation for the ITU Radiocommunication Conference in 2015, where decisions on the usage of the 700 MHz frequency band would be taken, were discussed.

In 2013, in the Radio Frequency Management Working Group of CEPT ECC (RRT’s representative also participated in the group), perspectives of long-term radio frequency usage in European countries were discussed – with a view to developing the European radio frequency table, draft decisions of ECC on the usage conditions of certain radio frequency bands (under which national usage conditions of radio frequency bands are arranged) were prepared, recommendation documents relating to coordination of radio frequency assignments were drafted. In 2013, in the issues most frequently analysed during the meetings of this working group were related to the allocation of new radio frequency bands to various radio communication systems and technologies and other issues relating to coordination of radio frequency usage in European countries. Intense activities were undertaken to identify appropriate radio frequency bands for broadband

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Communications Regulatory Authority of the Republic of Lithuania Annual Report 2013 wireless radiocommunication, public security and disaster warning, and systems of direct-air-to-ground communications.

At CEPT level, RRT is involved in the working group FM44 dealing with the issues of satellite communication. In 2013, the problem of radio interference between satellite networks became particularly relevant. The United Kingdom offered a new concept for interference identification – to assign identification number to each Earth station carrier. In this regard, a seminar was held with the participation of broadcasters, operators and regulators. Different views were expressed concerning the involvement of regulators in this initiative. Operators would like to minimize the influence of regulators, while broadcasters would like more regulation. The group started drafting a report. Another important issue – the need for additional frequencies for receiving signals from satellites. An amendment to the ECC decision is being drafted in order to allow the use of Earth stations in the 17.7‒19.7 GHz band without any permits required. Lithuania, like most other European countries, stated that in this band it would give the priority to terrestrial radiocommunication systems, because the band already was being extensively used for installation of radio relay links. Endorsing the objective application of the provisions of the Radio Regulations and taking into account the opinion of the Lithuanian astronomers, during CEPT meetings, RRT, together with the representatives of Germany, Austria, Switzerland and the Netherlands, prepared a letter to the Communications Administration of the USA, asking to ensure that the new satellite system, Iridium NEXT, caused no harmful interference to radio stations. RRT stated its position in a separate letter to the Federal Communications Commission of the USA.

A representative of RRT prepared documents with the results of measurements concerning the relevant issue of compatibility between mobile LTE devices and short-range devices in the 800 MHz band and presented them to the ECC Spectrum Engineering working group (WG SE). The representative of RRT presented the document on calculation of maximum permissible field strength at fixed radio monitoring station antenna sites to the ECC's Spectrum Monitoring Project Team (PT FM22) of the ECC Spectrum Management Working Group (WG FM). The representative of RRT, holding the position of Deputy Chairman of the Technical Regulatory Issues Project Team (PT TRIS) of the ECC of CEPT, was actively involved in the drafting and finalizing the CEPT 195 report on the quality of Internet access services. On 15–17 October 2013 a meeting of the ECC's Numbering and Networks working group (WG NaN) was held in Lithuania. During the meeting, the use of Mobile Network Codes (MNCs) was discussed. With the emergence of new business areas (M2M, other technologies), when the medium of information transmission is the mobile communications network, there is a risk that, in the short term, it may happen that there will not be enough mobile network code resources available. Therefore the ECC is preparing a report on further development of mobile network codes. The main areas of activity: in cooperation with ITU, to approve the increase of code symbols from 2 to 3; introduce the use of a proxy MNC, when one code can be used by several companies, etc. There was a discussion on the need for essential changes in the national numbering plans, because in 12 years (since the publication of the current guidelines) there have been new developments, suc as new ways of numbering usage on VoIP networks, harmonised numbers for services of social value (116XXX), etc. The WG NaN approved fixed-to-mobile number portability, and set the task to ensure number portability functionality in the European Union Member States by 2020. On 23‒24 May 2013 RRT representatives participated in the 48th plenary meeting of the European Committee for Postal Regulation (CERP) in Kristiansand, Norway, during which the issues of CERP’s cooperation with the Universal Postal Union (UPU) were discussed. During the plenary meeting, it was noted

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Communications Regulatory Authority of the Republic of Lithuania Annual Report 2013 that CERP should seek closer cooperation with UPU organizations, including those in developing countries, as well as strengthen relationships with the European Association of Postal Operators (PostEurop). When discussing CERP’s future plans, the majority of countries supported the proposal to share best practices with UPU Member States, by transferring European postal market regulation practices and exchanging views on the issues discussed at UPU Congresses, the Postal Operations Council (POC) and the Council of Administration (CA). Taking into consideration the Memorandum of Understanding (MOU) signed between CEPT and UPU on 25 April 2013, CERP has started developing the guidelines intended for the experts involved in UPU projects, which provide recommendations on the promotion of postal reform processes. These guidelines are expected to be ready by the plenary meeting of CERP in the spring of 2014. The ECC Decision on the harmonised use of the frequency band 1452-1492 MHz for mobile/fixed communications networks has been finalized. In most of European countries this frequency band has been used for the purpose stated in the Radio Regulations – digital broadcasting of radio programmes. Therefore, the new Decision will give national radio communication administrations more freedom in using this frequency band, although for Lithuania, like for other border countries of the European Union, the usage of the 1452 - 1492 MHz radio frequency band is heavily constrained by foreign radio communication systems.

The International Telecommunication Union (ITU)

The International Telecommunication Union (ITU) is a global telecommunications organization, uniting 193 Member States. ITU is unique in that this organization performs global allocation of radio frequency spectrum and positions of geo-stationary satellites, i.e., limited resources, without which no telecommunications activities are possible. It also prepares and adopts plans for electronic communications and information society development, international legal acts in this field, international information and communication technology standards. Thus, participation in ITU activities is obligatory for a country, which is actively developing its electronic communications and information society and is creating a knowledge-open information society. In 2013 RRT representatives participated in the meetings of the Radiocommunication Sector (ITU- R) Joint Task Group 4-5-6-7 (JTG 4-5-6-7) and the Spectrum Monitoring Working Party 1C (WP 1C) of ITU. The ITU-R Joint Task Group JTG 4-5-6-7 deals with issues relevant to the additional allocation of radio frequencies for the development of broadband communications and the use of the 694‒790 MHz frequency band for mobile communications. Representatives of Lithuania, together with representatives of other European countries, submitted to the Joint Task Group three documents regarding the compatibility between the mobile service and the aeronautical radionavigation service in the 694-790 MHz frequency band. In December 2013, during the meeting of the Radio Regulations Board (RRB) of ITU, Dr Mindaugas Žilinskas, a representative of RRT, was elected Vice-Chairman of the RRB. This is not the first position of M. Žilinskas on this Board – in 2009 he was elected Chairman of the RRB. The RRB was established and its members were elected by the supreme organ of ITU – the Plenipotentiary Conference. The RRB is obligated to resolve disputes between parties concerning radio interference, provide interpretations of the Radio Regulations, propose, if necessary, new radio regulatory procedures and, after a public discussion, approve them.

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Communications Regulatory Authority of the Republic of Lithuania Annual Report 2013 In recent years, the RRB has made good a progress in resolving conflicts between countries regarding the use of radio frequencies. Taking into account the calls made by the RRB, Italy is changing its legal framework by approximating it to international obligations. Lately, the RRB has stopped receiving complaints from Cuba regarding harmful interference from the United States of America; also, RRB was informed that Eutelsat’s satellites, serving customers in the Middle East, Iran and Syria zones, already operated without any interference. The two-year dispute over the use of the satellite position 26E among Iran, Saudi Arabia and France has been resolved. On 3-5 July 2013, RRT representatives took part in the ITU’s Global Symposium for Regulators in Warsaw, where next-generation regulatory issues under the changing conditions of the communications ecosystem, changing market dynamics and traffic patterns were discussed. The Symposium approved the Best Practice Guidelines to help regulators improve operational tools and methods in order to contribute to the development of the future digital market. Feliksas Dobrovolskis, Director of RRT, was invited to participate in the Symposium as a panelist and addressed the meeting during the discussion session on “Digital Transactions In Today's Smart Society”.

The Universal Postal Union (UPU)

On 8-25 April 2013 RRT representatives participated in the plenary sessions of the Postal Operations Council (POC) and the Council of Administration (CA) of the Universal Postal Union (UPU), in meetings of committees and working groups in Berne, Switzerland. During the meetings, the Final Protocol to the Parcel Post Regulations, the Final Protocol to the Letter Post Regulations and the Final Protocol to the Internal Regulations were reviewed and solemnly signed by Ambassador Bishar A. Hussein, Secretary General of the UPU. The amendments to the documents will enable the development of new postal services, depending on the needs of electronic commerce. During the plenary meeting of the Council of Administration (CA), the conclusions of the Ministerial Conference, held at the UPU’s Doha Congress, were presented, emphasizing the need to adapt to the development of electronic services, network modernization, stressing the importance of financial services at post offices. It was underlined that the UPU’s goal was to reduce the digital divide between post offices of individual countries in order to enable sustainable development of postal services and to secure the interests of consumers all over the world. It was envisaged that the UPU would pay a special attention to sustainable development, including the preparation of national development plans, the strengthening and promotion of cooperation. In view of the regional development plan, various types of support would be provided to developing countries. During the plenary session and the meetings of the working groups of the Postal Operations Council (POC), the resolutions approved at the Congress on quality of service, Global Monitoring System (GMS) and address infrastructure strategy were presented, and the key activity guidelines were adopted.

The Forum of European Supervisory Authorities for Electronic Signatures (FESA)

On 17 October 2012, RRT representative was elected Chairman of the Forum of European Supervisory Authorities for Electronic Signatures (FESA). FESA members are representatives of the

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Communications Regulatory Authority of the Republic of Lithuania Annual Report 2013 institutions responsible for supervision of electronic signature, as indicated in Directive 1999/93/EC of the European Parliament and of the Council of 13 December 1999 on a Community framework for electronic signatures (currently FESA comprises representatives of 25 EU Member States and Israel). The objective of FESA is to promote cooperation between institutions supervising electronic signature and to prepare common positions when cooperating with political and technical organizations. FESA members meet regularly, at least twice a year, and during these meetings they share information and discuss cooperation aspects. During 2013, the following activities related with FESA chairing were undertakent: FESA meetings in the Hague and Athens as well as a meeting to be held in Reykjavik were organized; the meetings were chaired and information about Lithuania was presented; FESA’s position on the Regulation on electronic identification and trust services for electronic transactions in the internal market proposed by the EC was prepared and submitted to the European Commission and the Council; FESA’s comments on ETSI standards related to the issues of electronic signature were prepared and presented to ETSI; consultations on electronic signature supervision were provided to FESA members.

The International Association of Internet Hotlines INHOPE

A hotline established by RRT is a member of the International Association INHOPE since May 2008. The membership in this association paves the way for closer cooperation with hotlines of other countries and facilitates information exchange in order to eliminate illegal or harmful content from cyberspace more efficiently. In 2013 RRT representatives participated in the work of INHOPE General Assemblies, as well as : in the work of the Executive Board of INHOPE, in the meetings of NetEx, P2P and IHRMS working groups. RRT representatives took part in the forum “Safer Internet” in October in Brussels, where the activities of INHOPE and hotlines were presented. In 2013 RRT representatives provided information for the documents drafted by INHOPE, statistics of hotline reports also were delivered. At present, INHOPE includes 46 Internet hotlines in 40 countries worldwide.

The Internet Corporation for Assigned Names and Numbers (ICANN) and the Governmental Advisory Committee (GAC)

The administration of Internet Protocol (IP) addresses, domain name system and Internet root servers is performed by the Internet Corporation for Assigned Names and Numbers (ICANN), based in the United States of America. ICANN is responsible for ensuring smooth and stable operation of the Internet; it pays a lot of attention to competition promotion in the area of Internet access, to consumers’ initiatives, and consensus. ICANN operates on the basis of a private-public partnership. The main function of the Governmental Advisory Committee (GAC) of the Internet Corporation for Assigned Names and Numbers (ICANN) is to advise ICANN on public policy and issues relevant to individual governments. Within ICANN, GAC strives to represent the entire diversity of views and opinions and establish general principles for administration of existing domain names and assignment of the new ones. In 2013 GAC traditionally had three meetings, during which the issues related to the allocation and protection of generic top level domains (gTLD) were discussed. A representative of RRT participated in one of the meetings of GAC. 110

Communications Regulatory Authority of the Republic of Lithuania Annual Report 2013 ICANN launched the development of the new gTLD program in 2011, and the application procedure for the first gTLDs (to apply for one or another gTLD domain) was opened on 12 January 2012. The process of allocation of these domains is complicated due to consumer protection, intellectual property rights, community interests, and the stability of the whole domain system, therefore the allocation of gTLDs is executed in accordance with a complex evaluation procedure approved by ICANN. GAC seeks to advise ICANN in cases when the allocation of gTLDs involves conflict situations relating to public policy and when the issues addressed by ICANN are related to national interests, national and international policy or law. Representatives of governments who participate in the activities of GAC, when providing recommendations (after each meeting of GAC) advise ICANN on how to better protect gTLDs (and consumers, taking into account the context of the conflict), for example, the allocation of generic top level domains, such as .doctor, .weather, and their content development should not mislead consumers. In addition, GAC, when providing recommendations to ICANN, speaks of the need to protect the names of international (non-) governmental organizations, such as the Red Cross/Red Crescent, the International Olympic Committee, and the names of cities or regions (.Spa in Belgium, .Date in Japan, .Patagonia region in South America) and domains that may cause problems for manufacturers, such as .wine.

Negotiations with communication administrations of neighbouring countries

In January 2013, bilateral negotiations with the radio communication administration of Latvia took place in Vilnius. During the negotiations, the issues concerning the use of radio frequencies of the mobile, fixed and broadcasting services were addressed and bilateral agreements on the use of radio frequencies for terrestrial broadband systems (UMTS / LTE / WiMAX) capable of providing electronic communications services were signed. The reached agreements regarding the use of 900 MHz and 1800 MHz radio frequency bands will allow to install UMTS / LTE mobile base stations much closer to the border with the neighbour country and to provide electronic communications services to users living closer to the border. The signed agreement on the use of broadband systems in the 2600 MHz radio frequency band will provide better conditions for operators to develop broadband communication at the border with Latvia. The negotiations involved discussions on the switch-off of Latvian television stations operating in the 790-862 MHz frequency band in order to enable the use of the 790–682 MHz frequency band for mobile and (or) fixed broadband systems in Lithuania. It was agreed on the possibility to start using radio frequencies from the digital dividend for mobile broadband radio communication and also on the switch-off schedule of television stations operating in the 790-862 MHz frequency band in Latvia and Lithuania. TV channel 37 was coordinated for further use (after 1 January 2013) in Vilnius. This channel will continue HDTV broadcasting in the Vilnius region. In 2013 negotiations between RRT and the radio communication administration of Belarus took place in Vilnius. During the bilateral negotiations, the issues concerning the use of radio frequencies of the mobile and fixed services were addressed. During the negotiations, an agreement was reached on the use of 1710– 1730 MHz and 1805–1825 MHz radio frequency bands on broadband systems. This will allow to install UMTS and LTE mobile base stations much closer to the border with the neighbour country and to provide electronic communications services to users living closer to the border.

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Communications Regulatory Authority of the Republic of Lithuania Annual Report 2013 Also, the agreement, signed between the communication administrations of Belarus and Lithuania in 1998 on the use of part of the 225–400 MHz radio frequency band intended for the needs of the State to meet the essential needs for the use of radio communication relating to national defence, was revised. New conditions for coordination of radio frequencies in the aforementioned band were determined. In order to coordinate the conditions for the use of broadband systems throughout the entire 1800 MHz frequency band and in the 900 MHz radio frequency band, it was proposed to organize joint electromagnetic compatibility measurements of LTE/UMTS and GSM mobile communication systems and to demonstrate the advantages of broadband systems, operating in the aforementioned frequency bands. In order to double the effective use of the 150.0–171.0 MHz radio frequency band, priority channels of this band were distributed by using the 12.5 kHz (the former distribution was based on the 25 kHz grid).

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Communications Regulatory Authority of the Republic of Lithuania Annual Report 2013 FINANCIAL STATEMENT

The revenues, received by RRT in 2013 for the services provided and works completed according to the Special Communications Management and Control Programme

Revenues, 2013 No. RRT revenue groups LTL thousand Per cent

1. Supervision of observance of the conditions for 88.25 0.45 engaging in electronic communications activities 2. Supervision of observance of the conditions for 63.25 0.32 provision of postal services 3. Revenues from tenders and auctions for granting the 8.47 0.04 right to use radio frequencies/channels and telephone numbers 4. Issuance of licenses to use ship or aircraft stations (written documents), licenses for radio amateur 7.80 0.04 activities, and also issuance of temporary or revised licences for engaging in radio amateur activities (written documents) (until 1 September 2013) 5. Setting of conditions for use of radio 261.22 1.33 frequencies/channels and radio stations and the conditions for engaging in radio amateur activities 6. Supervision of the use of radio frequencies/channels, 16 151.20 82.36 including monitoring 7. Supervision of the use of telephone numbers 2 869.10 14.63

8. Tests of radiocommunication equipment and 153.90 0.79 telecommunications terminal equipment, tests of electromagnetic compatibility of apparatus and equipment 9. Other 7.42 0.04

10. TOTAL (1+2+3+4+5+6+7+8+9) 19 610.61 100

Communications Regulatory Authority of the Republic of Lithuania Annual Report 2013 Formation and Execution of the State Budget of the Republic of Lithuania and Budgets of Municipalities", the amount of LTL 1 631.4 thousand of non-used contributions into the state budget of the previous year was transferred into 2013 and used for funding of the Special Communications Management and Control Programme, executed by the Communications Regulatory Authority of the Republic of Lithuania by exceeding the amount of appropriations, approved by the Parliament of the Republic of Lithuania. Referring to the estimate, approved on 27 March 2013, the amount of LTL 23 631.4 thousand in total was foreseen for funding of the Special Communications Management and Control Programme, executed by RRT in 2013 (22 000.0 + 1 631.4) – the amount, including the non-used contributions into the state budget of the previous year. RRT, in observance of the provisions of the Law on Electronic Communications of the Republic of Lithuania, must evaluate the conformity and legitimacy of the costs and collected charges. Upon evaluation of the revenues received and the funds not used in 2012 and in order to balance the costs and revenues of 2013, on 27 March 2013, by Order No 1V-498 of the Director of the Communications Regulatory Authority, RRT established the recalculation rate 0.9 for the tariffs of supervision of the use of radio frequencies/channels, including radio monitoring, which was in effect from 1 April 2013 to 30 November 2013. In 2013 the total amount of revenue contributions transferred by RRT to the state budget was LTL 18 942 thousand. RRT used LTL 20 449.1 thousand for the Communications Management and Control Programme executed in 2013 (including LTL 18 872.1 thousand – RRT revenue contributions, and LTL 1 577 thousand – state budget funds, dedicated to cover RRT revenue contributions used for state budget needs in 2009). Utilization of funds, allocated for Communications Management and Control Programme, executed by RRT in 2013

For Communications Management and Control Programme No. Expenses Pay-box expenses Pay-box expenses 2013 2012 (LTL thousand) (LTL thousand)

1. Total expenses 13 781.8 13 827.1 including: 1.1. Work remuneration 7 298.4 8 016.8 1.2. Social insurance contributions 2 276.7 2 499.7 1.3. Expenses for goods and services 3 868.6 3 248.5 1.4. Social allowances (income support) 87.9 60.0 1.5. Other expenses (for current purposes) 5.0 2.1 1.6. Transfer of EU, other international financial 245.2 - assistance and co-financing funds

2. Tangible and intangible property expenses 7 164.4 6 622.0 Including: 2.1 For constructions (buildings and structures) 87.5 - 2.2 For purchasing of fixed assets 7 076.9 6 622.0

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Communications Regulatory Authority of the Republic of Lithuania Annual Report 2013 3. TOTAL (1+2) 20 946.2* 20 449.1**

Notices: * LTL 1449.4 thousand of total expenses in 2012 are state budget funds, of which LTL 11.5 thousand were used for purchasing of fixed assets, the rest – LTL 1437.9 thousand – for coverage of expenses. ** LTL 1577.0 thousand of total expenses in 2013 are state budget funds, of which LTL 15 thousand were used for purchasing of fixed assets, the rest – LTL 1562.0 thousand – for coverage of expenses.

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Communications Regulatory Authority of the Republic of Lithuania Annual Report 2013 Annex 1. The results of market analysis, performed by RRT

The imposed obligations

Market

No. Undertakings

Acc.to

leased

having Rec. Name significant 2003/

lines

market power lease

Rec. pricing

services

application of

discrimination

separation

- 2007* Accounting

Transparency

discriminative

Wholesale line

Selection of the

cost cost accounting

Price controland

provider of public

Non

telecommunication

Non

Provision of

Provision of access 1. The market of access to public telephone network at TEO LT, AB X X X X X X a fixed location for residential customers 2. The market of access to public telephone network at TEO LT, AB X X X X X X a fixed location for non- residential customers 3. The market of publicly available local and/or national telephone services, TEO LT, AB provided at a fixed location for residential customers 4. The market of publicly available international telephone services, provided TEO LT, AB at a fixed location for residential customers 5. The market of publicly available local and/or national telephone services, TEO LT, AB provided at a fixed location for non-residential customers 6. The market of publicly available international telephone services, provided TEO LT, AB at a fixed location for non- residential customers 7. The market of the minimum set of leased lines (which comprises the specified types of leased lines up to TEO LT, AB X X X X X and including 2 Mbps, as referenced in Article 18 of and Annex VII to the Universal Service Directive) 8. The market of call origination on the public TEO LT, AB X X X X X telephone network, provided at a fixed location 9. / 3. The market of call TEO LT, AB, X X X X X termination on individual Lietuvos Geležinkeliai public telephone networks, AB, Lietuvos Radijo ir provided at a fixed location Televizijos Centras AB, Cubio UAB, CSC Telecom UAB, Eurocom SIP UAB, Linkotelus UAB, X X Mediafon UAB, Nacionalinis Telekomunikacijų Tinklas UAB, Telekomunikaciju Grupa UAB 10. The market of national TEO LT, AB together transit services, in the fixed with the related X X X X X public telephone network entities 10. The market of international TEO LT, AB together transit services, in the fixed with the related X X X X X public telephone network entities 11. / 4. Wholesale market of unbundled access (including shared unbundled access) TEO LT, AB X X X X X to the physical network infrastructure, provided at a fixed location 12. / 5. Wholesale broadband TEO LT, AB X X X X X communication access 116

Communications Regulatory Authority of the Republic of Lithuania Annual Report 2013 market

13. 13.1 Market of terminating segments of low speed rate TEO LT, AB X X X X X leased lines

13.2 Market of terminating N/A. The market is segments of high speed rate still under leased lines development. 14. 14.1 Market of trunk segments of national leased TEO LT, AB X X X X X lines

14.2 Market of trunk N/A. The market is segments of International efficiently gateway leased lines competitive. 15. Market of access and call N/A. The market is origination on public mobile efficiently telephone networks competitive. 16. / 7. The market of voice calls Omnitel UAB, Bitė termination on individual Lietuva UAB, Tele2 X X X X mobile networks UAB 17. National wholesale market for international roaming - services on public mobile networks** 18. The market of digital terrestrial radio programmes broadcasting transmission services to deliver broadcast Lietuvos Radijo ir content to end users, where Televizijos Centras X X X X X the radio frequency/channel AB is allocated to the transmitter Lietuvos Radijo ir Televizijos Centras AB 18. The market of analogue terrestrial radio programmes broadcasting transmission services to deliver broadcast Lietuvos Radijo ir content to end users, where Televizijos Centras X X X X X the radio frequency/channel AB is allocated to the transmitter Lietuvos Radijo ir Televizijos Centras AB 18. The market of analogue terrestrial radio programmes broadcasting transmission services to deliver broadcast Lietuvos Radijo ir Televizijos Centras X X X X X content to end users, where AB the radio frequency/channel is allocated to the broadcaster 18 The market of analogue terrestrial television programmes broadcasting transmission services to deliver broadcast content to Lietuvos Radijo ir Televizijos Centras end users, where the radio AB frequency/channel is allocated to the transmitter Lietuvos Radijo ir Televizijos Centras AB 18. The market of digital terrestrial television programmes broadcasting transmission services to deliver broadcast content to Lietuvos Radijo ir Televizijos Centras X X X X X end users, where the radio AB frequency/channel is allocated to the transmitter Lietuvos Radijo ir Televizijos Centras AB 18. The market of analogue terrestrial television programmes broadcasting Lietuvos Radijo ir transmission services to Televizijos Centras deliver broadcast content to AB end users, where the radio frequency/channel is 117

Communications Regulatory Authority of the Republic of Lithuania Annual Report 2013 allocated to the broadcaster

18. The market of digital terrestrial television programmes broadcasting transmission services to deliver broadcast content to TEO LT, AB X X X X X end users, where the radio frequency/channel is allocated to the transmitter TEO LT, AB * EC Recommendation 2007/879/EC of 17 December 2007 on relevant product and service markets within the electronic communications sector susceptible to ex ante regulation in accordance with Directive 2002/21/EC of the European Parliament and of the Council on a common regulatory framework for electronic communications networks and services (Framework Directive), in which the list of 7 markets was established, superseded the previous EC Recommendation 2003/311/EC of 11 February 2003 on relevant markets, in which the list of 18 markets was established. The column of the table states the number of the market according to the list, provided in the annex to the relevant recommendation. The markets, analysed in 2013, are highlighted in colour.

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Communications Regulatory Authority of the Republic of Lithuania Annual Report 2013 Annex 2. The orders of the Director of RRT

1. Order No. 1V-8 of the Director of RRT of 3 January 2013 “On the Approval of Tariff Ceilings of Universal Postal Service”;

2. Order No. 1V-55 of the Director of RRT of 11 January 2013 “On the Amendment of Order No. 1V- 625 of the Director of the Communications Regulatory Authority of the Republic of Lithuania of 1 July 2005 “On the Approval of the Rules on Cost Accounting of the Provider of Universal Postal Services””;

3. Order No. 1V-118 of the Director of RRT of 25 January 2013 “On the Amendment of Order No. 1V- 367 of the Director of the Communications Regulatory Authority of the Republic of Lithuania of 7 April 2011 “On the Approval of the Description of the Procedure of Tariffs and Payment for Services Provided and Works Performed by the Communications Regulatory Authority of the Republic of Lithuania””;

4. Order No. 1V-122 of the Director of RRT of 25 January 2013 “On the Amendment of Order No. 1V- 1013 of the Director of the Communications Regulatory Authority of the Republic of Lithuania of 21 October 2011 “On the Approval of the Rules for Ensuring of Security and Integrity of Public Communications Networks and Public Electronic Communications Services””;

5. Order No. 1V-332 of the Director of RRT of 28 February 2013 “On the Approval of the Regulations on Provision of Postal Service and Invalidation of Some Orders of the Director of the Communications Regulatory Authority of the Republic of Lithuania”;

6. Order No. 1V-333 of the Director of RRT of 28 February 2013 “On the Amendment of Order No. 1V- 1017 of the Director of the Communications Regulatory Authority of the Republic of Lithuania of 21 October 2011 “On the Approval of the Rules for Resolution of Disputes between Undertakings, Providing Electronic Communications Networks and/or Services, and Disputes between Providers of Postal Services and/or Courier Services””;

7. Order No. 1V-334 of the Director of RRT of 28 February 2013 “On the Amendment of Order No. 1V- 340 of the Director of the Communications Regulatory Authority of the Republic of Lithuania of 8 April 2005 “On the Approval of the Description of the General Terms and Conditions for Engaging in Electronic Communications Activities””;

8. Order No. 1V-336 of the Director of RRT of 28 February 2013 “On the Amendment of Order No. 1V- 1015 of the Director of the Communications Regulatory Authority of the Republic of Lithuania of 21 October 2011 “On the Approval of the Rules for Investigation of Disputes between the End Service Users and Providers of Electronic Communications Services and Disputes between the Providers and Users of Postal and/or Courier Services””;

9. Order No. 1V-490 of the Director of RRT of 25 March 2013 “On the Amendment of Order No. 1V-293 of the Director of the Communications Regulatory Authority of the Republic of Lithuania of 16 September 2004 “On the Approval of the Rules for Imposition of Economic Sanctions””;

10. Order No. 1V-498 of the Director of RRT of 27 March 2013 “On the Determination of Tariffs of Supervision of Use of Radio Frequencies/Channels, Including Radio Monitoring”41;

11. Order No. 1V-499 of the Director of RRT of 27 March 2013 “On the Amendment of Order No. 1V-367 of the Director of the Communications Regulatory Authority of the Republic of Lithuania of 7 April 2011 “On the Approval of the Description of the Procedure of Tariffs and Payment for Services Provided and Works Performed by the Communications Regulatory Authority of the Republic of Lithuania””;

12. Order No. 1V-568 of the Director of RRT of 8 April 2013 “On the Amendment of Order No. 1V-593 of the Director of the Communications Regulatory Authority of the Republic of Lithuania of 1 December 2004 “On the Approval of the Rules for Publishing of the Information, Relating to the Implementation of the Law on Electronic Communications of the Republic of Lithuania and the Postal Law of the Republic of Lithuania””;

41 The Order was valid from 1 April 2013 to 30 November 2013. 119

Communications Regulatory Authority of the Republic of Lithuania Annual Report 2013 13. Order No. 1V-608 of the Director of RRT of 15 April 2013 “On the Approval of the Rules of Calculating Losses of Universal Postal Service”;

14. Order No. 1V-728 of the Director of RRT of 6 May 2013 “On the Amendment of Order No. 1V-854 of the Director of the Communications Regulatory Authority of the Republic of Lithuania of 6 October 2005 “On the Approval of the Rules for the Allocation and Use of Radio Frequencies/Channels””;

15. Order No. 1V-729 of the Director of RRT of 6 May 2013 “On the Amendment of Order No. 1V-824 of the Director of the Communications Regulatory Authority of the Republic of Lithuania of 28 September 2005 “On the Approval of the Rules of Auction for Granting the Right to Use Electronic Communications Resources””;

16. Order No. 1V-730 of the Director of RRT of 6 May 2013 “On the Approval of the Plan for Development of Radiocommunications in the 790–862 MHz Radio Frequency Band”;

17. Order No. 1V-939 of the Director of RRT of 18 June 2013 “On the Amendment of Order No. 1V-730 of the Director of the Communications Regulatory Authority of the Republic of Lithuania of 6 May 2013 “On the Approval of the Plan for Development of Radio Communications in the 790–862 MHz Radio Frequency Band””;

18. Order No. 1V-1149 of the Director of RRT of 23 July 2013 / Decision No. KS-109 of the Radio and Television Commission of Lithuania “On the Amendment of Order No. 1V-125 of the Director of the Communications Regulatory Authority under the Government of the Republic of Lithuania of 15 October 2003 “On the Approval of the Strategic Plan for the Assignment of Radio Frequencies for Broadcasting and Transmission of Radio and Television Programmes” and Decision No. 89 of the Radio and Television Commission of Lithuania of 15 October 2003 “On the Approval of the Strategic Plan for the Assignment of Radio Frequencies for Broadcasting and Transmission of Radio and Television Programmes””;

19. Order No. 1V-1345 of the Director of RRT of 28 August 2013 “On the Amendment of Order No. 1V- 367 of the Director of the Communications Regulatory Authority of the Republic of Lithuania of 7 April 2011 “On the Approval of the Description of the Procedure of Tariffs and Payment for Services Provided and Works Performed by the Communications Regulatory Authority of the Republic of Lithuania””;

20. Order No. 1V-1930 of the Director of RRT of 18 December 2013 “On the Amendment of Order No. 1V-407 of the Director of the Communications Regulatory Authority of the Republic of Lithuania of 19 April 2011 “On the Approval of the Description of the Procedure of Provision of Time-Stamping Services””;

21. Order No. 1V-1952 of the Director of RRT of 20 December 2013 “On the Amendment of Order No. 1V-1207 of the Director of the Communications Regulatory Authority of the Republic of Lithuania of 29 October 2007 “On the Approval of the Rules for Measuring the Coverage Zones of the Networks of the Global Mobile Radiocommunication System and of the Universal Mobile Radiocommunication System””;

22. Order No. 1V-1964 of the Director of RRT of 27 December 2013 “On the Amendment of Order No. 1V-297 of the Director of the Communications Regulatory Authority of the Republic of Lithuania of 17 September 2004 “On the Approval of Rules on Market Analysis””.

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Communications Regulatory Authority of the Republic of Lithuania Annual Report 2013 Annex 3. Annual report on strategic activity plan

ACTIVITY RESULTS OF THE COMMUNICATIONS REGULATORY AUTHORITY OF THE REPUBLIC OF LITHUANIA IN 2013

I. IMPLEMENTATION OF STRATEGIC CHANGES

Activity priorities of the Communications Regulatory Authority of the Republic of Lithuania (hereinafter referred to as – RRT) in 2013 are as follows: – protection of the rights and legitimate interests of users of electronic communications and postal services; – ensuring competition on the broadband communication services market by creating favourable conditions for access to the physical network infrastructure; – efficient management of radio frequencies by creating the conditions for development of modern technologies and services. When implementing activity priorities of 2013, RRT performed the following works and reached these results: Assurance of competition on the broadband service market included many works and measures, the most important of which is market research, assurance of access to physical network infrastructure, development of Next Generation technologies and services, assurance of low rates of electronic communication services. None of European countries has managed so far to surpass Lithuania in deployment of fibre access. For the fifth consecutive year Lithuania remains the leader in terms of FTTH Internet penetration. This data has been published by FTTH Council Europe“42, an international organisation whose mission is to accelerate the development of FTTH in Europe. During 2013, the number of Fiber To The Home/Building (FTTH/B) users in Lithuania increased by 9 per cent and at the end of 2013 reached more than 440 thousand. At the end of 2013 fiber-optic Internet was used by one-third (33.89 per cent) of all Lithuanian households (at the end of 2012 – 28.3 per cent). According to the data published in the annual report of the FTTH Council, Sweden, as before, takes the 2nd place in the European FTTH Ranking. In this country, at the end of 2013 fiber-optic Internet was used by 1.2 million or more than one-quarter (26.74 per cent) households. Latvia (23.3 per cent) – in the third place. In all the rest of the countries of Europe fiber-optic Internet is used by less than 20 per cent households. TEO LT, AB has the most developed fiber-optic Internet network in Lithuania. The fiber-optic Internet access services provided by this undertaking are used by more than 180 000 households and businesses. At the end of December 2013, Lithuanian residents had access to more than 1.3 million fiber-optic Internet access points, almost 2/3 of them (61.5 per cent) were in TEO LT, AB Internet network. Lithuanian ranks the 7th in the world in terms of FTTH Internet penetration. The Global FTTH Ranking is led by the United Arab Emirates, where the scale of use of the FTTH Internet is really impressive

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Communications Regulatory Authority of the Republic of Lithuania Annual Report 2013 – currently there are 85 per cent of homes subscribing to FTTH. South Korea ranks the 2nd, Hong Kong – 3rd, Japan – 4th, Singapore – 5th, and Taiwan – 6th. According to data of RRT, currently there are 60 Internet service providers capable to offer their subscribers to connect to the Internet over fibre line. The number of subscribers connected to the Internet over the fibre lines in the end of 2013 in Lithuania was 438 thousand, i.e. 52.2 per cent of the total number of broadband Internet access subscribers.

0,05 Fibre lines

21,03 Wireless communication lines 1,64 Cable TV networks 4,57 52,2 LAN 20,49

xDSL

Figure 1. The distribution of the broadband Internet access service subscribers against technologies of fixed communication in IV quarter in 2013, per cent (total number of broadband Internet access subscribers – 838.3 thousand)

In 2013, the analyses of the following 4 markets were performed: – The market of publicly available local and/or national telephone services, provided at a fixed location for residential customers; – The market of publicly available local and/or national telephone services, provided at a fixed location for non-residential customers; – The market of publicly available international telephone services, provided at a fixed location for non-residential customers; – The market of publicly available international telephone services, provided at a fixed location for residential customers. After performing the analyses of the aforementioned markets, the obligations of price control and cost accounting, accounting separation and non-discriminatory pricing imposed on the undertaking TEO LT, AB will be withdrawn from 1 January 2014.

Improvement of conditions of access to the physical network infrastructure

Despite the high penetration rate of fibre lines, there are main issues to be solved while laying next generation access (NGA) networks. These issues are often faced by retail Internet access providers i.e. development of access to the physical network infrastructure. RRT (cooperating with the municipalities of Vilnius, Klaipėda and Kaunas) created electronic access to information regarding terrestrial network infrastructure in order to ensure that developers of electronic communications networks could receive relevant information regarding terrestrial physical network infrastructure (both energetics, communication networks, electronic communications network cable channels etc.), to improve conditions for investment in development of electronic communications networks and to decrease the costs of such development. It shall allow electronic communication operators to use relevant information necessary for development of 122

Communications Regulatory Authority of the Republic of Lithuania Annual Report 2013 electronic communication networks. There is a website at www.e-infrastruktura.lt with spatial data from infrastructure databases administrated by Vilnius, Klaipėda and Kaunas municipalities. Prices for electronic communications services are one of the criteria showing the level of competition in a certain market. For comparing prices for services, the average revenue per user (ARPU) indicator showing revenues for certain services received from one service user (subscriber) per month, is used. Retail Internet access service prices in Lithuania are one of the lowest in Europe and constantly decrease. Table 1. ARPU comparison of Internet access services delivered by different methods (technologies), in LTL

DSL Mobile (metallic FTTx (fibre Cable TV Year LAN WiFi WiMAX communic pair local lines) networks ation loop) 2011 40.7 34.46 24.6 30.7 25.4 31.9 19.61 2012 39.19 34.38 21.10 28.31 22.35 27.89 19.27 2013* 39.70 32.70 21.10 28.30 14.60 27.20 17.80 * preliminary data

Data in Table 1 shows that Lithuanian retail Internet access service providers compete on price and due to this factor the end user wins.

Management of radio frequencies/channels through creation of conditions for investment into next generation wireless communication networks and development of innovative technologies and services

In order to create conditions for the development of next generation wireless communication networks, a public auction of radio frequencies was organized for the first time in Lithuania in 2013. The winners of the auction – Bitė Lietuva UAB, Omnitel UAB and Tele2 UAB – were granted the right to use radio frequencies/channels in the frequency bands released from the first digital dividend (790–862 MHz). One winner of the action (Bitė Lietuva UAB) was imposed network development and data transmission speed obligations after three and five years from the date of receipt of permits, while until 2020 this undertaking will be obliged to provide not less than 95 percent of Lithuanian households access to electronic communication services with data transmission speeds of at least 4 Mbps. The other two winners of the auction will install radio communication networks at their own discretion, depending on the demand for services and return on investment. The permits to use these frequency bands will provide the auction winners the opportunity to develop wireless electronic communications networks, which would be used for provision of both data transmission and wireless Internet services on the whole territory of the Republic of Lithuania. Prior to allocating the 790-862 MHz radio frequency band for mobile service, it was necessary to remove operational channels 61‒65 television stations from the aforementioned radio frequency band. All users of television channels 61-65 were offered other television channels of the same use in the 470-790 MHz radio frequency band. All replacements of radio frequencies (channels) were made during the first half of 2013, the total number of replaced radio frequencies (channels) – 59 in 27 locations in Lithuania.

Protection of the rights and legitimate interests of users of electronic communications and postal services 123

Communications Regulatory Authority of the Republic of Lithuania Annual Report 2013

In 2013, RRT performed the calculations of probable coverage zones of GSM, UMTS and LTE networks of the following undertakings: Bitė Lietuva UAB, Omnitel UAB and Tele2 UAB. On the maps of probable coverage zones, the zones are indicated according to different electromagnetic signal levels, ranging from a minimum, allowing to establish a connection in an open area, up to a level that ensures connectivity inside buildings. The calculations of the network coverage zones of all operators were made using the same method, based on actually performed measurements, taking into account the local terrain and forest impacts. The calculations were made on the basis of the base station data provided by operators and registered by RRT by 1 December 2013. The maps of probable network coverage zones allow users to compare and choose mobile services according to the level of quality that best meets their needs, i.e. in order to find out which service provider offers the strongest signal in a certain relevant area, the user can theoretically check this out on the map. RRT is planning to recalculate and correct GSM coverage data twice a year, UMTS and LTE data – four times a year. RRT supervises the activity of undertakings of the regulated sector and consults them regarding the requirements for their activity applied in Lithuania. In 2013 RRT performed 25 planned inspections of undertakings engaged in electronic communications activities and found violations in 19 undertakings. All the violations were corrected by the end of the relevant inspections. In 2013 RRT performed 30 planned inspections of postal service providers and found violations in 3 undertakings that were corrected by the end of the relevant inspections. Also, RRT performed 3 unplanned inspections of postal service providers, including that of Lietuvos Paštas AB. In 2013 unplanned inspection of Lietuvos Paštas AB was completed. In accordance with the procedure established by the Postal Law, Lietuvos Paštas AB was warned about the violations found – failure to publish information. By failing to publish the information on all types of provided postal services, the terms of their provision, including tariffs and other information affecting the user’s decision to use the postal service, Lietuvos Paštas AB violated paragraph 6 of part 1 of Article 10 of the Postal law and paragraph 17.9 of the Rules for the Provision of the Postal Service. An economic sanction was initiated, but the undertaking corrected the violation before a meeting of the Council of RRT and it was decided not to impose any sanction. Also, RRT examined radio equipment and telecommunications terminal equipment for compliance with the Technical Regulation of Radio Equipment and Telecommunications Terminal Equipment, performed the surveillance with regard to compliance of equipment and devices with the electromagnetic compatibility requirements according to the Technical Regulation of Electromagnetic Compatibility, and inspected points of sale. In 2013, in total, 107 types of equipment and devices were inspected for compliance, 30 of them failed to comply with the administrative requirements of the Regulations, i.e. improper marking, a declaration of conformity missing, a notification concerning the placing on the market of such a product not submitted when required, etc. 25 types of equipment were taken from the market for inspection of their technical parameters and provided to the laboratory of RRT for testing, related to effective usage of radio frequency spectrum. Also, 15 types of devices were taken from the market and provided to the laboratory of RRT for testing, related to electromagnetic compatibility. In order to ensure network and information security, the biggest threats were identified: in 2013 one of the biggest threats to the security of networks and information in Lithuania remained botnets (so called

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Communications Regulatory Authority of the Republic of Lithuania Annual Report 2013 zombie computers or robots) networks. These networks are used for performing criminal activities, such as dissemination of malicious code and spam, DoS attacks and other criminal activities. In 2013 CERT-LT investigated 25 337 incidents according to the reports on online incidents received from Lithuanian electronic communication service providers, foreign CERT organisations (performing international incident investigations) and Lithuanian Internet users. Compared to 2012 (21 416 reports), the number of such reports increased by 18 per cent. The problem, most frequently faced by Lithuanian Internet users in 2013, was malicious software, used to involve computers into botnets, and compromise of information systems. During this period, CERT-LT investigated 11125 cases of the use of malicious software ‒ it was the subject of 43.9 per cent of all the incidents investigated. In 2013 CERT-LT, in cooperation with the German national CERT unit (CERT-Bund), found and neutralized a botnet control server functioning in Lithuania that was used to control and manage compromised computers (bots). After the investigation, it was found that since May 2013 this botnet control centre could control 5400 computers around the world. At closing time, the HTTP-based controller controlled more than 600 active compromised devices, among them – 75 in Lithuania. CERT-LT informed the Lithuanian and foreign Internet service providers and international partners supervising the IP addresses of the compromised computer devices. Since the end of 2013 CERT-LT website www.cert.lt has become accessible over the IPv6 protocol. IPv6 is a new Internet Protocol (IP) version, designed to replace the currently used IPv4 protocol and to solve related problems (the shortage of available IPv4 addresses).

II. RESULTS OF IMPLEMENTATION OF STRATEGIC ACTIVITY PLAN

2.1. Impact evaluation factor of strategic objective

Strategic objective – to ensure a wide range of technologically advanced, high-quality, secure and affordable ICT and postal services (products) for each and every resident of the Republic of Lithuania; to create the possibilities for development of information and communications technologies and postal business on the basis of a flexible regulatory framework, harmoniously functioning on the common EU market, influencing the supply of the services on the market. RRT implements the strategic objective by performing the Communications Management and Control Programme (hereinafter referred to as – the Programme) which is continuing (started to be performed in 2001 and continued in 2013).

Table 2. Implementation of effect evaluation criteria of strategic objective in 2013 Code of the Planned Actual Factor evaluated Name of impact evaluation factor values for values in implementation factor 2013 2013 percentage 1. The possibility to use digital terrestrial television E-01-01 services (DVB-T) is ensured (share of households, 99.0 99.1 100.1 in per cent)

2. The possibility to use services of mobile radiocommunication of wireless broadband access E-01-02 (UMTS, WIMAX, LTE) networks is ensured (share 91.0 94.2 103.5 of households, in per cent)

3. Residents who use a 30 Mbps or faster Internet E-01-03 connection (share of the total population, in per 30 30.0 101.7 cent)

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Communications Regulatory Authority of the Republic of Lithuania Annual Report 2013 Code of the Planned Actual Factor evaluated Name of impact evaluation factor values for values in implementation factor 2013 2013 percentage 4. Market share of alternative networks and service providers (fixed, mobile telephone communication) E-01-04 3.8 3.02 79.5 (in per cent, in terms of revenues)

5. Improvement of the main ICT service qualitative E-01-05 indicators (compliance of qualitative indicators with 96.5 100 104 the determined values, in per cent)

6. The decline in the number of the same IP addresses involved in malicious activities, detected E-01-06 90 93 97 on the networks of Internet service providers (share of repeated IP addresses, in per cent) 7. Development of the market of postal services in E-01-07 terms of revenues (compared to previous years, in 3.0 15.3 510 per cent) 8. The growth of number of qualified certificates E-01-08 provided by providers of certification services (in per 20 27.6 138 cent compared with to previous years) Source: RRT

Impact factor E-01-01 – the possibility to use digital terrestrial television (DVB-T) services is ensured (share of households, in per cent). 99.1 per cent of households were able to use DVB-T services in 2013. Common coverage of DVB-T networks and stations increased due to the change of radio frequencies/channels carried out in the first half of 2013, when the majority of the frequencies used in DVB-T networks were changed to lower frequencies with better propagation characteristics. Factor implemented by 100.1 per cent.

99,5% 99,1% 99,0% 99,0% 98,7% 98,5% 98,0%98,0% 98,0% 98,0% 98,0% 97,4% 97,5%

97,0%

96,5% 2010 2011 2012 2013 2014 2015 actual data planned data

Figure 2. The possibility to use digital terrestrial television (DVB-T) services is ensured (share of households, in per cent) Source: RRT

Impact factor E-01-02 – the possibility to use of mobile radiocommunication of wireless broadband access (UMTS, WIMAX, LTE) networks (share of households, in per cent.). According to the calculated signal level of the registered UMTS stations – 95dBm and the calculated signal level of mobile WIMAX stations (ensuring the possibility to use the networks at least 99.9 per cent of all time) networks of mobile radiocommunication of wireless broadband access cover 94.2 per cent of households. Factor implemented by 103.5 per cent.

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Communications Regulatory Authority of the Republic of Lithuania Annual Report 2013

96,0% 94,2% 93,0% 94,0% 91,8% 91,0% 91,2% 91,5% 92,0% 90,0% 90,0% 90,5% 90,0% 88,0% 86,0% 84,0% 84,0% 82,0% 80,0% 78,0% 2010 2011 2012 2013 2014 2015 actual data planned data

Figure 3. The possibility to use of mobile radiocommunication of wireless broadband access (UMTS, WIMAX, LTE) networks (share of households, in per cent) Source: RRT

Impact factor E-01-03 ‒ residents who use a 30 Mbps or faster Internet connection (share of the country's total population, in per cent). According to preliminary data, at the end of 2013 the percentage of residents using a 30 Mbps or faster broadband connection (per cent of the country’s total households) was 30.0 per cent, over the years it has increased by 1.8 percentage points. Factor implemented by 100 percent.

actual data planned data Figure 4. Residents who use a 30 Mbps or faster Internet connection (share of the country's total population, in per cent) Source: RRT

Impact factor E-01-04 – market share of alternative networks and service providers (fixed, mobile telephone communication) in per cent in terms of revenues. Market share of the new ICT network and service providers (alternative public fixed and mobile telecommunication service providers) for the nine months of 2013 constituted around 3.02 per cent of total market value in terms of revenues (revenues of alternative providers for the nine months of 2013 amounted to LTL 24.25 million, a decrease by 13.9 per cent compared to the same period in 2012). The reason for the market share of new ICT network and service providers being less than planned was due to the overall decrease of the ICT market revenues (partly as a result of wholesale price regulation, decreasing prices for end users). Factor implemented by 79.5 per cent.

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Communications Regulatory Authority of the Republic of Lithuania Annual Report 2013 6,00% 5,5%

5,00% 4,1% 4,3% 3,8% 3,8% 4,00% 3,5% 3,10% 3,25% 3,26% 3,02% 3,00%

2,00%

1,00%

0,00% 2010 2011 2012 2013 2014 2015 actual data planned data

Figure 5. Market share of alternative networks and service providers (fixed, mobile telephone communication) in per cent in terms of revenues Source: RRT

Impact factor E-01-05 – improvement of the main ICT service qualitative indicators (compliance of qualitative indicators with the determined values, in per cent). The quality of universal electronic communications services provided by the universal electronic communications service provider TEO LT, AB meet the requirements of the Description of the Requirements for Quality of Universal Services, approved by Order No. 1V-214 of the Director of the Communications Regulatory Authority of the Republic of Lithuania of 15 February 2006. The report is published in the supplement “Informaciniai pranešimai” (Information Notices) to the Official Gazette “Valstybės žinios” (2013, No. 41) and on the website of RRT. In order to evaluate if service providers do not exceed limit values of service qualitative indicators determined to them, RRT performs measurements of qualitative indicators in networks of service providers and publishes evaluation reports on service qualitative indicators on the website of RRT. Factor implemented by 104 per cent

101,0% 100,0% 100,0% 100,0% 100,0% 100,0% 99,0% 98,0% 97,0% 96,5% 96,5% 96,5% 96,5% 96,5% 96,5% 96,0% 95,0% 94,0% 2010 2011 2012 2013 2014 2015 actual data planned data Figure 6. Improvement of the main ICT service qualitative indicators (compliance of qualitative indicators with the determined values, in per cent) Source: RRT

Impact factor E-01-06 – the decline in the number of the same IP addresses involved in malicious activities, detected on the networks of Internet service providers (share of repeated IP addresses, in per cent). 93 per cent of IP addresses involved in malicious activities are repeated. Often these are end-users who have routers, which are used by persons who are not customers of Internet access service providers.

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Communications Regulatory Authority of the Republic of Lithuania Annual Report 2013 There is no legal basis for taking stricter actions to stop the activities of repeated IP addresses. Factor implemented by 97 per cent.

100,0% 93,0% 90,0% 90,0% 80,0% 80,0% 70,0% 70,0% 60,0% 50,0% 40,0% 30,0% 20,0% 10,0% 0,0% 2012 2013 2014 2015 actual data planned data Figure 7. The decline in the number of the same IP addresses involved in malicious activities, detected on the networks of Internet service providers (share of repeated IP addresses, in per cent) Source: RRT

Impact factor E-01-07 – development of the market of postal services in terms of revenues (compared to previous years, in per cent). During the first to third quarter of 2013, compared to the same period in 2012, the market postal services grew by 15.3 per cent. The growth of the postal market was mostly due to the increase of electronic commerce, which influenced the growth in the flows of both international and domestic parcels. Factor implemented by 510 per cent.

20,0% 15,3% 15,0% 13,8%

10,0%

5,0% 3,0% 3,0% 3,0% 2,0%

0,0% 2012 2013 2014 2015

actual data planned data

Figure 8. Development of the market of postal services in terms of revenues (compared to previous years, in per cent) Source: RRT

Impact factor E-01-08 – the growth of number of qualified certificates provided by providers of certification services (in per cent compared to previous years). According to preliminary data, at the end of 2013, the number of qualified certificates was 997 919. Compared to 2012 (782 095 qualified certificates), their number increased by 27.6 per cent. Factor implemented by 138 per cent.

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Communications Regulatory Authority of the Republic of Lithuania Annual Report 2013 30,0% 27,6%

25,0% 20,0% 20,00% 20,0%

15,0% 10,0% 10,00% 10,0% 8,5%

5,0%

0,0% 2012 2013 2014 2015 actual data planned data

Figure 9. The growth of number of qualified certificates provided by providers of certification services (in per cent compared to previous years) Source: RRT

2.2. Programme implementation according to the objectives

Objective 1 – ensuring efficient and transparent competition on the ICT and postal services/products markets

Market analyses

In order to create competitive conditions in the electronic communication market, RRT performs analyses of electronic communication markets taking in consideration the European Commission Recommendation 2007/879/EC43.

In 2013, the analyses of the following 4 markets were completed: the market of publicly available local and/or national, and international telephone services, provided at a fixed location for residential customers and non-residential customers. After performing the analyses of the aforementioned markets, the obligations of price control and cost accounting, accounting separation and non-discriminatory pricing imposed on the undertaking TEO LT, AB will be withdrawn from 1 January 2014.

The analyses of other 4 markets were initiated:

– The analysis of the market of programmes broadcasting transmission services to deliver broadcast content to end users. The analysis is divided into two independent analyses: the market of broadcasting transmission services and the market of services of providing broadcasting transmission means. Reports on both of the aforementioned market analyses were submitted for public consultation until 16 December 2013. After the end of the public consultation, the results of the analysis of the market of programmes broadcasting transmission services to deliver broadcast content to end users were submitted to the European Commission for comments. Currently, the report on the analysis of the market of services of providing broadcasting transmission means and related documents are coordinated and adjusted in the light of comments received. The results of the alter market analysis are going to be submitted to the European Commission in February 2014. – The analysis of the market of call termination on individual public telephone networks, provided at a fixed location. A draft report on the market analysis has been prepared. – The market of voice calls termination on individual public mobile networks. A draft report on the market analysis has been prepared.

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Communications Regulatory Authority of the Republic of Lithuania Annual Report 2013 – The markets of (national and international) transit services, provided at a fixed location in public telephone networks. Draft reports on the analyses of the aforementioned markets are being prepared. Information on the aforementioned market analyses is available at http://www.rrt.lt/lt/verslui/konkurencijos-prieziura/rinku-tyrimai.html.

Surveillance of implementations of obligations imposed on undertakings having significant power

RRT performed the supervision of execution of the obligations imposed on the undertakings having significant market power. Upon finding any deficiencies, undertakings were asked to provide additional information and/or to ensure implementation of the obligations imposed. Complaints were received about the amended terms of the wholesale broadband communication service, provided by TEO LT, AB. It was found that TEO LT, AB had unduly amended the prices of wholesale broadband communication access. TEO LT, AB was obligated to retain the old prices until RRT would review costs and present conclusions. No violations of other obligations, except for the aforementioned violation of the obligation of non-discrimination, were established in 2013.

Legislation improvement

In order to ensure favourable conditions for new operators to enter Lithuanian communications markets and to create opportunities for all to develop their activities, RRT worked on improving the regulatory environment and legal framework. 22 legal acts were prepared and approved by orders of the Director of RRT, 6 draft amendments of the resolutions of the Government of the Republic of Lithuania were prepared, and 3 draft amendments of the resolutions of the Government of the Republic of Lithuania were adopted in 2013. The list of the legal acts prepared and approved by orders of the Director of RRT is provided in Annex 2 to the Annual Report 2013.

Installation and usage of electronic communications infrastructure

In order to ensure that developers of electronic communications networks could receive relevant information regarding terrestrial physical infrastructure (both energetics, communication networks, electronic communication network cable channels, etc.), RRT has signed cooperation agreements with Vilnius, Klaipėda and Kaunas City Municipalities regarding development of electronic access to the terrestrial infrastructure digital spatial data system (access to the infrastructure maps of Vilnius, Klaipėda and Kaunas City Municipalities has been created). Electronic access of communication operators to the effective and constantly running digital spatial data system of terrestrial infrastructure is very important in order to improve conditions for investments into development of electronic communications networks and to reduce expenses of such development.

RRT performed supervision of installation and use of electronic communications infrastructure: conducted investigations regarding violations of the installation of electronic communications infrastructure, violations of the rules for installation and use of electronic communications networks. In 2013 RRT organized a seminar on “Current developments in the area of the installation of electronic communication infrastructure” for the employees of the State Territorial Planning and Construction Inspectorate who perform the state supervision of construction. During the seminar, the major infrastructure installation problems, limiting the development of electronic communications, were presented. For example, installation of lead-ins of a too small diameter in buildings, no distribution cabinets installed, no or improperly installed trunk routes. Also, 131

Communications Regulatory Authority of the Republic of Lithuania Annual Report 2013 RRT representatives noted that no lead-ins were installed for laying television antenna or other network cables over the roofs of newly built buildings. The seminar participants agreed on the need to improve the regulations of the key areas of electronic communications, because that would help better conduct the surveillance of construction of such networks.

Market surveillance (surveillance of compliance with activity conditions)

RRT performs measures to reduce administrative burdens: RRT applies the advance binding ruling, follows the rule of two dates of entry into force in legislation introducing according which legal acts (under which the legal regulation of new or amended activities and/or surveillance of undertakings is determined) should enter into force since 1st of May or 1st of November. When performing the measures to reduce administrative burdens, the priority of RRT was consultations and methodical guidance for undertakings. In 2013 market participants were consulted regarding issues of legal framework for the performance of activities, market regulation, statistic report preparing, Internet network interconnection, quality of universal services, and problems related with improper delivery of postal items, etc. Following the plan of planned inspections of undertakings engaged in electronic communications activities and of providers of postal services that was approved by RRT in 2013, in 2013 RRT performed 25 planned inspections of undertakings engaged in electronic communications activities and found violations in 19 undertakings. All the violations were corrected by the end of the relevant inspections. The most frequently found violations of undertakings engaged in electronic communications activities – failure to comply with the requirements applied to service provision, failure of service provision agreements to comply with the established requirements. Unplanned inspection of Lietuvos Paštas AB was completed. In accordance with the procedure established by the Postal Law, Lietuvos Paštas AB was warned about the violations found – failure to publish information. By failing to publish the information on all types of provided postal services, the terms of their provision, including tariffs and other information affecting the user’s decision to use the postal service, Lietuvos Paštas AB violated paragraph 6 of part 1 of Article 10 of the Postal law and paragraph 17.9 of the Rules for the Provision of the Postal Service. An economic sanction was initiated, but the undertaking corrected the violation before a meeting of the Council of RRT and it was decided not to impose any sanction. In 2013 RRT performed 30 planned inspections of postal service providers and found violations in 3 undertakings that were corrected by the end of the relevant inspections. Also, RRT performed 3 unplanned inspections of postal service providers, including that of Lietuvos Paštas AB. The most frequent violations of undertakings providing postal services were failures to comply with consignment delivery instructions. The most common violations determined in the units of the universal postal service provider were related with the place of postal service delivery, guidelines regarding letterboxes and information delivery. In 2013 RRT received 6 disputes between the undertakings engaged in electronic communications activities, 5 of them were examined and decisions were made, and the examination of 1 dispute was extended until 12 March 2014. In 2013 1 dispute between undertakings engaged in postal activities was examined and a decision was made.

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Communications Regulatory Authority of the Republic of Lithuania Annual Report 2013 Objective 2 – ensuring the protection of rights and legitimate interests of the users of ICT and postal services/products according to the competence of RRT

Customer complaint and dispute handling

In 2013 RRT received 652 complaints and enquiries from service users relating to electronic communications services, 501 of which were investigated in accordance with the pre-trial dispute resolution procedure. Compared to 2012, this number increased by 1.5 times. The majority of them were disputes regarding demands to pay penalties, repay the discounts granted in cases of early termination of electronic service provision agreements, also regarding invoices, tariffs and quality. Service users, who decide to terminate their fixed-term electronic communications service provision agreements prior to their expiry, are requested by service providers to repay the discounts granted to them (on equipment, monthly fees, etc.) and (or) penalties. In 2013 RRT received 82 complaints and applications regarding the provision of postal and universal postal services. 24 complaints were investigated in accordance with the pre-trial dispute resolution procedure. Compared to 2012, the number of complaints increased by 1.6 times. The majority of them were complaints regarding lost, undelivered (returned) or delayed and damaged postal items.

User awareness

In order to ensure the efficient organization of work with consumers and implementing the measures for improvement of quality of consumer information and service, RRT launched the helpline 8 800 20030. After dialling the helpline number 8 800 20030, consumers can choose the topics of consultations on radio or television programme reception, networks and information security, postal issues, and report on radio interference. RRT also provides consultations on the issues of electronic signature, registration of radiocommunication equipment (on ships, aircraft, vehicles), etc. 8577 calls were received to the helpline in 2013. On 13 December 2013, RRT organised a meeting on consumer rights protection improvement issues, which was attended by providers of electronic communications services, consumer rights protection authorities and public organisations. The main purpose of this meeting was to discuss practical matters arising when RRT examines users’ requests and solves disputes of end users with providers of electronic communications services. In 2013 RRT had the task to plan, organize and carry out the replacement of a large part of radio frequencies/channels used on digital terrestrial television networks by other television channels of the same purpose. During the replacement of terrestrial digital television programme broadcasting frequencies (channels), RRT provided free consultations to residents on how to adjust television programme receiving equipment to reception of new channels and also on television programme reception possibilities in different geographic areas of the country. In most cases, consultations were provided by phone. In cases of likely radio interference, visits were made to relevant sites. Consultations were provided by 25 employees of RRT. 6180 calls were registered during the consultation period. The replacement of radio frequencies (channels) was carried out implementing the objective of the second phase of digital terrestrial television implementation, as provided for in the Digital Terrestrial Television Development Plan – to reorganize the channels used in the four digital terrestrial television networks put into operation during the first phase in 133

Communications Regulatory Authority of the Republic of Lithuania Annual Report 2013 accordance with the Geneva plans for 2006, while maintaining the operational continuity of the aforementioned networks. RRT has developed special online tools, which help consumers evaluate different electronic communications services: www.esaugumas.lt – provides information on the most frequent problems on the Internet: computer and mobile viruses, spam, methods of online fraud, other potential security threats, and also gives recommendations and advice how to avoid possible incidents; www.skaiciuok.lt − the installed price calculator helps consumers choose the electronic communications service providers’ offers which suit their needs best in terms of the most favourable prices of electronic communications services; http://epaslaugos.rrt.lt/matavimai/ – the residents, visiting the website, can themselves evaluate the quality of the wireless Internet access services provided in different regions of Lithuania; RRT’s remote electronic signature training system, www.elektroninisparasas.lt, which provides comprehensive information about electronic signature, the fields of its application, etc.

Quality of postal services

The results of the inspection of the quality of universal postal services performed in 2012 were published on the website of RRT. RRT inspected whether the delivery terms of priority postal correspondence sent within Lithuania were in compliance with the requirements for quality of universal postal services, established in the Description of the Requirements for Quality of Universal Postal Services. The results of the inspection showed that the quality indicators of priority postal correspondence delivery by Lietuvos Paštas AB to users had improved, although slightly, i.e. 77.16 per cent of all letters were delivered in 1 business day (in 2011 – 75.75 per cent), when the required standard is 85 per cent. The delivery rate in three working days was 98.92 per cent (in 2011 – 99.18 per cent) – slightly decreased, however, it is higher than the required standard – 97 per cent. A universal postal service provider is required to handle its accounting in accordance with the main principles of cost accounting and the requirements for the cost accounting system established by RRT, as well as other requirements related to cost accounting, including the requirement to perform an audit. In 2013, an audit of the costs of Lietuvos Paštas AB, the provider of universal postal services, for 2012 was performed. In the submitted audit report, it was stated that the annual cost accounting report for 2012 of Lietuvos Paštas AB had been prepared correctly in accordance with the requirements of the Rules for Cost Accounting of the Universal Postal Services Provider43 and was found compliant with the cost accounting principles and requirements established in the aforementioned Rules.

Quality of electronic communication services

When performing control measurements of technical parameters of electronic communication networks and lines, technical parameters of 20 cable TV (CTV) networks were inspected and no violations were found. When performing control measurements of quality rates of electronic communication services, test voice telephony calls were made, SMS messages were sent, and test data transmissions were made I

43 Order No. 1V-55 of the Director of RRT of 11 January 2013 134

Communications Regulatory Authority of the Republic of Lithuania Annual Report 2013 public mobile telephone communication networks, test public fixed telephone calls were made in the networks of the providers obligated to provide universal services. When performing control measurements of quality rates of public mobile telephone communication services, 2522 test voice telephony calls were made, 3256 SMS messages were sent in three public mobile telephone communication networks. When performing control measurements of quality rates of wireless Internet access services, 22229 tests of data transfer were performed in the network of Omnitel UAB, 22151 tests – in the network of Bitė Lietuva UAB, 21 157 tests – in the network of Tele2 UAB, 18 543 tests – in the network of Telecentras (communication technologies – 2G, 3G, LTE, WIMAX). When performing control measurements of quality rates of the public fixed telephone communication services in the networks of the operators obligated to provide universal services, 23 724 test calls were made in 2013. After performing the aforementioned control measurements, RRT found that the measured time values of failed national calls (0.47 per cent and 0.44 per cent respectively by quarters) and average national setup duration (0.85 seconds and 0.5 seconds) satisfied the threshold values of service quality indicators imposed on providers of universal services. Other quality rates declared by TEO LT, AB also satisfied the threshold values of service quality indicators imposed on universal service providers. In order for Lithuanian consumers to have the possibility to better choose the services which suit their needs best in terms of the price-quality ratio, RRT publishes evaluation reports on quality rates of public mobile telephone communication and wireless Internet access services on the website of RRT at http://rrt.lt/lt/apzvalgos-ir-ataskaitos/viesuju-judriojo-telefono-rj7y.html; http://www.rrt.lt/lt/apzvalgos- ir-ataskaitos/belaides-interneto-prieigos-m4ms.html. Electronic communications service users, visiting the specialized website of RRT at http://epaslaugos.rrt.lt/matavimai/, can themselves evaluate compare the quality of the wireless Internet access services provided in different regions of Lithuania. Along with a growing trend that consumer choices are determined not only by the price, but also by the quality of the service, the data provided by RRT increases the possibilities to choose the services that best meet the individual needs of the users of services and promotes transparent competition. In 2013, by joining the development of the Open Data initiative in Lithuania, RRT provided access to primary data of wireless Internet speed measurements. From now on, such data will be freely available for use by developers of different mobile apps and applications and by undertakings providing electronic communications services. Special access allows the computer to automatically import data from the database of the Internet access monitoring system. Measurement data is also available in an open format at http://epaslaugos.rrt.lt/WebServices/.

Price regulation

From 1 April 2013 RRT reduced wholesale prices of call termination in the public fixed telephone communication network of TEO LT, AB by 36 per cent and in the public mobile telephone communication networks of Bitė Lietuva UAB, Omnitel UAB and Tele2 UAB: the price of call termination in public fixed telephone communication networks was 2.11 ct per minute without VAT, providing network interconnection 24 hours in any network interconnection point, and in mobile telephone communication networks – not higher than 3.6 ct per minute without VAT.

135

Communications Regulatory Authority of the Republic of Lithuania Annual Report 2013 40,00

28,80 28,80 30,00 28,80 23,04 20,00 10,81 14,43 10,00 10,81 10,01 5,60 6,49 6,49 5,42 3,60 4,35 3,28 0,00 2,11 2006 2007 2008 2009 2010 2011 2012 2013

in fixed telephone communication (FTC)… in mobile telephone communication (MTC)…

Figure 9. Prices of call termination in fixed (FTC) and mobile (MTC) telephone communication networks, ct per min, without VAT

From 1 July 2013, the prices for roaming services were decreased to users in all the European Union: in 2013 the price of calls was decreased from LTL 1.21 per minute to LTL 1.00 per minute including VAT, and the price of incoming calls – from LTL 0.33 per minute to LTL 0.29 per minute including VAT. The price of SMS messages was reduced from LTL 0.38 to LTL 0.33 including VAT, the retail price of data transfer was reduced from LTL 2.92 per MB (including VAT) to LTL 1.88 per MB (including VAT).

3,5000

2,9245 3,0000

2,5000

2,0000 1,8800

1,4623 1,5000 1,2116 1,0027 1,0000 0,7938 0,8356 0,4596 0,5000 0,3342 0,4596 0,3760 0,2925 0,2089 0,3342 0,2507 0,0000 From 01-07-2011 From 01-07-2012 From 01-07-2013 From 01-07-2014

Tariff for outgoing voice call in Europe, LTL/min (including VAT of 21 per cent) Tariff for incoming voice call in Europe, LTL/min (including VAT of 21 per cent) Tariff for outgoing SMS in Europe LTL/SMS (including VAT of 21 per cent) Tariff for data transfer in Europe, LTL/MB (including VAT of 21 per cent)

Figure 10. Change of retail roaming prices determined by the European Commission

In 2013 the wholesale prices for roaming services were further decreased in all the European Union.

136

Communications Regulatory Authority of the Republic of Lithuania Annual Report 2013 2,00 1,7264 1,50 0,8632 1,00 0,6215 0,5179 0,4834 0,3453 0,50 0,1381 0,1036 0,1726 0,1726 0,0691 0,0691 0,00 From 01-07-2011 From 01-07-2012 From 01-07-2013 From 01-07-2014 Wholesale voice services (origination, transit, termination), LTL/min. (without VAT) Wholesale SMS sending VAT, LTL/SMS

Wholesale data transmission services (without VAT), LTL/MB

Figure 11. Change of wholesale roaming prices determined by European Commission

CERT–LT activities

In 2013 CERT-LT investigated 25 337 incidents according to the reports on online incidents received from Lithuanian electronic communication service providers, foreign CERT organisations (performing international incident investigations) and Lithuanian Internet users. Compared to 2012 (21 416 reports), the number of such reports increased by 18 per cent. The problem, most frequently faced by Lithuanian Internet users in 2013, was malicious software and compromise of information systems. During this period, CERT-LT investigated 11125 cases of the use of malicious software ‒ it was the subject of 43.9 per cent of all the incidents investigated. In 2013 the number of incidents, related to compromise of information systems, increased. CERT-LT investigated 10924 incidents of such nature – 19 per cent more than in 2012 (9148 cases), which accounted for 43.1 per cent of the total number of the investigated incidents. In 2013 m. CERT-LT organized and conducted an inter-institutional cyber training X1306. The training was aimed at checking the effectiveness of inter-institutional cooperation, speed of mutual communication, possibilities to find contact information of responsible representatives of relevant institutions in critical situations. 10 state institutions and 4 security incident investigation CERT groups participated in the training. In 2013, 565 orders to close websites trying to collect users’ data of access to banking and other financial systems were submitted. During 2013, RRT received, over its Internet hotline, 650 reports on illegal and harmful content on the Internet. Compared to 2012 (607 reports), in 2013 the number of such reports increased by 7 per cent. Internet users sent reports on the information found of the Internet relating to incitement of racial or ethnic hatred, pornography, sexual abuse of children, as well as unauthorized publication of personal information. The majority of reports (62 per cent), in respect of which, after investigation, further actions were taken, were related to online images of child sexual abuse. In 2012 the number of such reports was 38 per cent. 159 reports were forwarded, according to competence, for further investigation to the Police Department, the Office of the Inspector of Journalist Ethics, the hotlines of other countries, and the members of international hotline association INHOPE. 48 cases were forwarded, along with NTD (Notice and Take Down), directly to Lithuania or foreign Internet service providers, hosting service providers or website administrators informing them about illegal online content present in their networks, in order to remove it as 137

Communications Regulatory Authority of the Republic of Lithuania Annual Report 2013 soon as possible. In more than 80 per cent cases, illegal content was removed from the Internet after the reports were forwarded for further investigation to the Police Department or INHOPE.

Equipment market surveillance

RRT verifies whether the radiocommunication equipment and telecommunications terminal equipment, brought into the Republic of Lithuania complies with the administrative and technical requirements, provided by the Technical Regulations of Radiocommunication Equipment and Telecommunications Terminal Equipment44 (hereinafter referred to as the Regulations). Also, market surveillance regarding the compliance of devices and equipment with the administrative and technical requirements, laid down in the Technical Regulation on Electromagnetic Compatibility45 (hereinafter referred to as the EMC Regulation) was performed. 77 types of radiocommunication equipment and telecommunications terminal equipment were examined in 2013, 30 of them failed to comply with the administrative requirements of the Regulations, i.e. improper marking, a declaration of conformity missing, a notification concerning the placing on the market of such a product not submitted when required, etc. Also, 30 types of devices were examined for compliance with the administrative requirements of the EMC Regulation. 5 types of devices failed to comply with the administrative requirements of the EMC Regulation, i.e. there was no serial number, manufacturer or importer identified on the products. 25 types of equipment were taken from the market for inspection of their technical parameters and provided to the laboratory of RRT for testing, related to effective usage of radio frequency spectrum. Also, 15 types of devices were taken from the market and provided to the laboratory of RRT for testing, related to electromagnetic compatibility. The accredited Equipment and Devices EMC Control Division of RRT, performing evaluation of compatibility of electric and electronic equipment in the market, is the only institution accredited by the Lithuanian National Accreditation Bureau having the right to perform the tests46 under harmonized European standards necessary for performing procedures of equipment and device compatibility (on demand of manufacturers and/or equipment importers of Lithuania). The scope of accreditation is 173 Lithuanian and international electromagnetic compatibility standards. The tests in this laboratory are usually performed by Lithuanian manufacturers. In order to ensure effective usage of radio frequencies (channels) in Europe in non-harmonized radio frequency bands, compatibility of conditions between radio equipment interfaces and radio frequencies used in Lithuania is inspected. In 2013 notifications regarding 784 types of equipment operating in non- harmonized radio frequency bands were examined, in 274 cases partial limitations to use equipment in Lithuania were determined, and in 4 cases the use of equipment in Lithuania was prohibited. 112 (types of equipment) declarations of conformity were analysed.

Supervision of electronic signature

44 Order No. 138 of the Director of the Communications Regulatory Authority under the Government of the Republic of Lithuania of 14 October 2002 “On the Approval of the Technical Regulations of Radiocommunication Equipment and Telecommunications Terminal Equipment” 45 Order No. 1V-1328 of the Director of RRT of 15 December 2006 “On the Approval of the Technical Regulation on Electromagnetic Compatibility” 46 Directive 2004/108/EC of the European Parliament and of the Council of 15 December 2004 on the approximation of the laws of the Member States relating to electromagnetic compatibility and repealing Directive 89/336/EC, (OJ 2004 L 390, p. 24); 138

Communications Regulatory Authority of the Republic of Lithuania Annual Report 2013

From 1 May 2011, RRT started to perform functions of electronic signature supervision institution. When performing these functions, RRT supervises how the providers of certification services follow the determined requirements, aims at ensuring electronic signature equipment compatibility in Lithuania and at international level; also aims at accreditation of service providers (accredited in Lithuania) at international level. In 2013 in Lithuania there were three registered certification service providers providing the services of issuing qualified certificates under the supervision of RRT: Skaitmeninio Sertifikavimo Centras UAB, State Enterprise Centre of Registers and the Residents’ Register Service under the Ministry of the Interior of the Republic of Lithuania. According to the data received from the aforementioned certification service providers, at the end of 2012 the number of valid qualified certificates issued in Lithuania was 782 095. During 2013, this number increased and at the end of 2013 was 997 919. After examining the information provided by the providers providing the services of issuing qualified certificates, no violations were established in 2013.

1200000 997919 1000000 782095 800000 721112 600000 497696

400000 243469 200000 0 2009 2010 2011 2012 2013

Figure 12. The dynamics of growth of the total number of qualified certificates in 2009–2013 Source: RRT

When promoting the development of electronic signature infrastructure and the use of electronic signature, RRT consulted individuals (by e-mail, telephone and during meetings) on issues relating the use of electronic signature, aiming at increasing the trust of electronic signature users in services provided by the providers of certification services and aiming at ensuring efficient competition conditions in the area of provision of certification services. The investment project “Modernization of the remote training system for the use of electronic signatures and electronic documents” was implemented in 2013. From 17 December 2013 everyone wishing to learn to use or already using electronic signatures can visit the updated remote electronic signature training system of RRT at www.elektroninisparasas.lt. The remote training system provides comprehensive information about electronic signature, the fields of its application, companies issuing qualified certificates. Users registered in the system can also can pass a test consisting of theoretical and practical questions related to the area of electronic signature. All who successfully pass the test are issued a certificate attesting the completion of the electronic signature course. According to the information provided by Skaitmeninio Sertifikavimo Centras UAB and the Residents’ Register Service under the Ministry of the Interior, the list of TSL in Lithuania (the list including information on trusted services provided by certification service providers registered and/or accredited in Lithuania) was updated and published on the website of RRT. 139

Communications Regulatory Authority of the Republic of Lithuania Annual Report 2013 On 8 December 2013 RRT approved a new version of the Description of the Procedure of Provision of Time-Stamping Services, which will enter into force from 1 May 2014. This procedure regulates the procedure and conditions for including certification service providers, providing time-stamps for qualified electronic signatures, in the trusted list, drawn up, managed and published electronically by RRT. Publication of information about these certification service providers and their time-stamping services in the trusted list will ensure greater awareness of time-stamp users about the services provided by a specific service provider and trust in them.

Objective 3 – creation of conditions for long-term investments into electronic communications infrastructure and development of innovative ICT

Management of radio frequencies

In order to create conditions for the development of next generation LTE (Long Term Evolution) wireless communication networks, a public auction of radio frequencies was organized for the first time in Lithuania in 2013. The winners of the auction – Bitė Lietuva UAB, Omnitel UAB and Tele2 UAB – were granted the right to use radio frequencies/channels in the frequency bands released from the first digital dividend (790–862 MHz). One winner of the action (Bitė Lietuva UAB) was imposed network development and data transmission speed obligations after three and five years from the date of receipt of permits, while until 2020 this undertaking will be obliged to provide not less than 95 percent of Lithuanian households access to electronic communication services with data transmission speeds of at least 4 Mbps. The other two winners of the auction will install radio communication networks at their own discretion, depending on the demand for services and return on investment. Prior to allocating the 790-862 MHz radio frequency band for mobile service, it was necessary to remove operational channels 61‒65 television stations from the aforementioned radio frequency band. All users of television channels 61-65 were offered other television channels of the same use in the 470-790 MHz radio frequency band. All replacements of radio frequencies (channels) were made during the first half of 2013, the total number of replaced radio frequencies (channels) – 59 in 27 locations in Lithuania. In 2013, in total, 1097 permits to use radio frequencies (channels), stations, networks and 177 permits for radio amateur activities and to use call signs were issued.

Coordination of radio frequencies and stations

In order to ensure electromagnetic compatibility of radio communication networks (systems), international coordination of radio frequencies (channels) with communication administrations of neighbour countries were performed, Lithuanian radio stations in the radio frequency assignment system of ITU terrestrial service were notified, the conformity of entries (published in the Radiocommunication Bureau International Frequency Information Circulars (BRIFIC) of ITU) in the International Radio Frequency Register with international regulation provisions were controlled within the competence, and international protection of the latter entries was ensured. In 2013 RRT held negotiations with the communications administrations of Latvia and Belarus on the use of radio frequencies of mobile and fixed services. During the negotiations, the agreements were reached on the use of radio frequencies for terrestrial broadband systems (UMTS / LTE / WiMAX) capable of 140

Communications Regulatory Authority of the Republic of Lithuania Annual Report 2013 providing electronic communications services. This will allow to install UMTS/LTE base stations much closer to the border with the neighbour countries and to provide modern electronic communications services to users living closer to the border. Lithuanian radio stations in the radio frequency assignment system of ITU terrestrial service were notified – 19 notifications regarding 1210 frequency assignments to stations were performed in 2013.

Radio spectrum control (monitoring)

Radio spectrum monitoring is performed in order to control how the radiocommunication requirements regulated by legal acts are followed. In 2013 RRT further performed the following: measurements of radio frequency occupation, measurements of electromagnetic strength of emitted signals and their parameters, searching for radio frequencies, used without authorization and their users, etc. When performing radio spectrum control (monitoring), 24 cases of unauthorized use of radio frequencies (channels) were determined, 56 inspections of newly coming into operation digital radio and television broadcasting stations were performed regarding the conformity to the project and conditions determined in the permit to use radio frequencies (channels); 192 inspections of internal radiocommunication networks regarding the conformity to the project and conditions determined in the permit to use radio frequencies (channels) were also performed: 21 new radiocommunication networks and 171 in operation; 14 measurements of coverage zones of public radiocommunication networks (terrestrial digital television networks/stations, mobile radiocommunication networks (GSM and UTMS)) were performed. In order to ensure the quality of broadcast programmes and in order to avoid possible radio interferences from FM broadcast stations, 1794 control measurements of emission parameters of radio and television broadcasting stations were performed: 1004 – frequency deviation measurements, 673 – power of frequency modulation, 2 – other parameters and 115 – emission of TV stations, 316 control measurements of strength of electromagnetic fields created by radio and television broadcasting stations were also performed, 568 notifications were accepted and examined regarding elimination of radio interferences for ICT services, radiocommunication networks etc. RRT mobile radio control stations allow performance of research of interferences in the entire territory of Lithuania and measurements of emission parameters of television and radio broadcasting transmitters.

Management of other electronic communication resources

In 2013, 70 requests to allocate telephone numbers were examined, 165 872 telephone numbers (fixed, mobile, service and short numbers) were assigned. In 2013 the number of performed public telephone number transfers (number portability service) was 148632: mobile communication numbers – 137062, fixed communication numbers – 11513, service numbers – 57. Upon receipt of a notification from the Ministry of the Interior informing that not all mobile communication operators ensured provision of location information to the Emergency Response Centre, RRT carried out an investigation in order to find out whether or not providers of public communications networks and/or public electronic communications services properly complied with the requirements of the 141

Communications Regulatory Authority of the Republic of Lithuania Annual Report 2013 Specification of the Procedure for Subscribers and/or Users’ Possibility to Use the Services of the Institutions, Providing On-call Assistance Services regarding provision of location information to the Emergency Response Centre. RRT obligated Omnitel UAB and Bitė Lietuva UAB by 31 December 2013 to ensure that location information of the subscribers and other users, who cannot be identified by their telephone number, shall be automatically made available to the Emergency Response Centre.

Objective 4 – integration into the EU and international regulatory space and efficient activities of RRT

International and interinstitutional cooperation

RRT cooperates with EU institutions and regulatory authorities of other countries in order to ensure an efficient integration of electronic communication and postal sector of Lithuania into the EU internal market. In 2013 RRT employees also participated in the activities of the Body of European Regulators for Electronic Communications (BEREC), the Independent Regulators Group (IRG), the European Regulators Group for Postal Services (ERGP), the European Conference of Postal and Telecommunications Administrations (CEPT), the Universal Postal Union (UPU), the International Telecommunication Union (ITU) and activities of its World Radiocommunication Conference, committees and activities of working and research groups. In order to coordinate conditions of radio frequency suitability and efficient usage and to ensure coordination, it was participated in activities of all international organizations and conferences relating the management of radio frequency spectrum. After Lithuania took over the Presidency of the Council of the European Union from Ireland on 1 July 2013, a representative from RRT, started chairing the EU Council’s Working Party on Technical Harmonisation (G.07G) on the issues of radio equipment. During the Presidency, the discussions on the proposal submitted by the European Commission for a Directive on the harmonisation of the laws of the Member States relating to the making available on the market of radio equipment were continued. On 20 December 2013 representatives of the European Council, the European Parliament and the European Commission agreed on the provisions of the Directive of the European Parliament and of the Council on the harmonisation of the laws of the Member States relating to the making available on the market of radio equipment. The new Radio Equipment Directive will ensure better surveillance of the market for radio equipment (mobile phones, car security systems, modems, etc.) in order to prevent interference between radio systems and ensure compliance with safety requirements, and also it will be possible to provide for the requirement to use a uniform charging device for all types of mobile phones. RRT, within the limits of its competence, contributes to implementation of the priorities of Lithuania’s foreign policy through active participation in the activities of the working group of regulatory authorities for electronic communications networks and services of the Eastern Partnership countries (hereinafter referred to as EaP). The objective of EaP is to bring the legal framework and principles of the Eastern Partnership Member States to the EU legislation, to exchange experiences and best practices and pass them on to neighbour countries, promote cooperation amongst them. In 2013 RRT performed the functions of Vice- Chairman of EaP. EaP involves the following six Eastern countries: Armenia, Azerbaijan, Belarus, Georgia, Moldova and Ukraine. The members of EaP are the national electronic communications authorities of Eastern countries (except for Azerbaijan, which is represented by the Communications and Information Technology Ministry). However, it is aimed to raise the project to the political level and involve the relevant 142

Communications Regulatory Authority of the Republic of Lithuania Annual Report 2013 ministries, in order that the development of the electronic communications sector in the Eastern neighbourhood countries, the economic and social benefits of electronic communications become important at the state level, too.

Position preparation for EU and international documents

In 2013 RRT coordinated 46 positions prepared by institutions of the Republic of Lithuania relating issues discussed by EU (for instance, regarding a network and information security strategy, data protection, free trade agreements, protection of personal data, Europe’s growth on the basis of digital technologies, the use of public sector information, electronic identification and access to public institutions’ websites, regarding trans-European telecommunications networks (TEN-T), agreements with Japan, Ukraine, Morocco, etc.). Preliminary comments were submitted on the following: on a draft Regulation on measures to reduce the cost of deploying high-speed electronic communications networks, on the implementation of 116000 number, on short-range devices, on implementing universal service for digital society, on the EC Decision on granting a derogation pursuant to Decision No. 243/2012/EU, on the use of 2.5 GHz radio frequencies, on the EC proposal for a Regulation on the European single market for electronic communications, etc. Information on the EC proposal for a Regulation on the European single market for electronic communications was prepared and presented to the interested authorities. EU legal acts and other documents relating issues of electronic communication and postal regulation were analysed, RRT opinion (positions) was provided to the responsible public authorities regarding documents of international organizations, ICT and postal sectors and the usage of radio frequency spectrum, and other documents of international organizations relating ICT and postal sectors determining not only the main electronic communication and postal activity conditions, promoting development of new technologies and ensuring quality of life of EU residents, but also having influence on the use of electronic communication and radio frequency spectrum in a much wider region.

RRT activity organization and control

Since the beginning of 2010 RRT has been executing the Project of Development and Implementation of the System for Management of the Activities of the Communications Regulatory Authority of the Republic of Lithuania (hereinafter referred to as the Project) according to the Measure VP1-4.2-VRM- 03-V “Improvement of the public administration subjects system” of implementation of Priority 4 “Strengthening of the administrative capacities and improvement of efficiency of public administration” of the Human resources development programme 2007-2013. The aim of the project is to improve the efficiency of internal administration of RRT, ensure efficient planning and control of the activities and management of electronic documents and information. The Project is targeted at automation of control of strategic planning and performance of the RRT activities, its financial resources, the processes of provision of services and management of electronic documents and ensuring a more efficient exchange of information between the employees of RRT. After extending the agreement of the Project financing and administration No. VP1-4.2-VRM-03-V- 01-043/No. (7.2)-1E-9 until 19 June 2014, a new public purchase tender was performed and on 11 January 2013 a new agreement (No. SSD-2013/01/11-01/Nr. (7.2)-1E-2) was signed with ATEA UAB, acting together 143

Communications Regulatory Authority of the Republic of Lithuania Annual Report 2013 with IKOLTA UAB on the basis of Joint Venture Agreement No. SSD-2012/12/03-01. According to the contract performance report of 27 January 2014 submitted by ATEA UAB, the percentage of analysis and design works – 100 per cent, programming works – 85 per cent, and system testing works – 38 per cent. While implementing the project “Creation of the Communications Activity Information System”, a public procurement tender was organized and a service purchase and sale contract was signed with the winner company ATEA UAB. The issues related to the design of the portal e.rrt.lt and detailed analysis and specification of the System for creation of Module I (the portal’s development) were coordinated, the phase of the System data collection module development analysis was performed. According to Resolution No. 535 of the Government of the Republic of Lithuania of 12 June 201347, the maximum permissible number of positions of civil servants and employees working under employment contracts in RRT was increased from 158 to 162, not including the position of the Director of RRT (the Director of RRT is a state official), in order to ensure CERT-LT activities on a 24/7 basis, i.e. 24 hours a day, 7 days a week. RRT personnel trainings were organized in accordance with the approved RRT’s personnel training plan for 2013. In 2013 the focus was on enhancement and development of RRT personnel's professional knowledge. In order to develop the staff’s competence in ICT, innovations and future trends in the field of ICT, the training “Prospects of development of ratio communication systems and technical – economic analysis of telecommunications networks and services” was organised, which was attended by 53 employees. In order to develop civil servants’ knowledge in the area of professional ethics and prevention of corruption, a seminar “Prevention of corruption in Lithuania” was organised, which was attended by 49 employees. Also, trainings on the following topics were held: “Psychology and behaviour characteristics of children when exposed to harmful content and unpleasant behaviour on the Internet”, “Data security”, “Impact of conflicts and stress on customer service”, as well as training under the fire safety training programme for civil servants and employees. 151 RRT employees participated in training events organised in 2013, 70 civil servants improved their knowledge of the EU working languages, 9 trainings were held under the EU-funded projects.

Objective 5 – ensuring performance of obligations that may be imposed on operators and providers of electronic communications services in the interest of national defence, national security and maintenance of public order as well as in cases of extraordinary circumstances

RRT was obligated to procure, manage, maintain and update equipment for the purposes, stated in parts 1 and/or 3 of Article 77 of the Law on Electronic Communications of the Republic of Lithuania. Under the contracts of agency, in 2013 the State Security Department implemented the procedures for the procurement of special signal processing and decoding software and hardware, 2 agreements were signed for the procurement of the aforementioned special signal processing and decoding software and hardware. In 2013, the amount of LTL 4500.0 thousand was provided for the procurement of the equipment, the amount of LTL 4302.8 thousand was used. The procured special signal processing and decoding

47 Resolution No. 535 of the Government of the Republic of Lithuania of 12 June 2013 "On the Amendment of Resolution No. 1283 of the Government of the Republic of Lithuania of 2 November 2011 “On the Approval of the Highest Permissible Number of Positions of Civil Servants and Employees, Working under Employment Contracts and Receiving Work Remuneration from the State Budget and State Funds"" 144

Communications Regulatory Authority of the Republic of Lithuania Annual Report 2013 software and hardware will, in accordance with the procedure laid down in legal acts, be transferred to the State Security Department under loan for use agreements.

2.3. Programme implementation results

Table 3 below provides the values of the plan of implementation of evaluation factors of the Programme’s objectives and tasks. Table 3. Implementation of evaluation factors of objectives and tasks of the Programme in 2013

Values of evaluation factors Code of Names and units of evaluation factors of the Plan of Implementation evaluated factor Programme’s objectives and tasks Implemented 2013 in per cent Objective 1 – ensuring efficient and transparent competition on the ICT and postal services/products markets 1. The share of the market of alternative public fixed telephone communication networks and R-81-01-01 service providers, per cent (in terms of the number 9.5 9.8 103.15 of subscribers (service users)) 2. The share of the market of postal and courier R-81-01-02 service providers (except Lietuvos Paštas AB) (in 57 59 103.5 terms of revenues) 3. The share of EU legal acts implemented and transposed into national legislation under terms R-81-01-03 determined by the Council competence (per cent of 98 100 102.04 the total number of legal acts to be transposed and implemented) 4. Functionality of the electronic information system of communications cable duct system and R-81-01-04 2 3 150.0 interfaces with Lithuanian municipalities (the number of connected municipalities) Task 1 of Objective 1 – to ensure that there are no distortions and limitations of competition in electronic communications and postal sectors 1. The share of inspections performed on how the undertakings having significant power follow the P-81-01-01-01 imposed obligations (per cent of the total number of 100 100 100 undertakings determined as having the significant power in the market) 2. The decrease of prices for fixed/mobile telecommunication network interconnection P-81-01-01-02 services (in per cent compared with prices applied 50/35 36/36 100 before the market analysis and prior to imposition of obligations) 3. The number of market analyses under the EC P-81-01-01-03 Recommendation 2007/879/EC of 17 December 4 4 100 2007 4. The share of subscribers who used the right of P-81-01-01-04 number portability (per cent of the total number of >10.5 18.2 173.3 active subscribers) 5. The share of notifications examined regarding violations of electronic communication installation, P-81-01-01-05 100 100 100 building and usage (per cent of the total number of received notifications regarding violations) Task 2 of Objective 1 – to perform surveillance of electronic communications and postal activities performed by undertakings, while ensuring efficiency of activities 1. The number of inspections performed on P-81-01-02-01 25 25 100 electronic communication services providers 2. The number of inspections performed on postal P-81-01-02-02 30 30 100 and/or courier services providers 3. The share of methodological guidance provided P-81-01-02-03 to undertakings on the issues within the 100 100 100 competence of RRT(per cent of the total number of 145

6. The number of cooperation agreements signed P-81-02-01-06 2 – – with CERT centers of other countries

7. Participation, upon invitation, in international P-81-02-01-07 30 – – cyber defence exercises, per cent 8. Participation, upon invitation, in the events on electronic information security (cyber security) P-81-02-01-08 20 – – organized by the NATO, the European Union and the United Nations Organization, per cent 9. The share of Lithuania’s critical electronic communications and Internet network P-81-02-01-09 infrastructures that are under regular monitoring 30 40 133.3 and the number of elements of Lithuania’s cyber perimeter compared to the total, in per cent 10. Number of operational and cooperating CERT P-81-02-01-10 teams engaged in computer emergency response 3 5 166.7 activities

Task 2 of Objective 2 – supervision of provision of the ICT and postal services, including the universal services

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Communications Regulatory Authority of the Republic of Lithuania Annual Report 2013 Values of evaluation factors Code of Names and units of evaluation factors of the Plan of Implementation evaluated factor Programme’s objectives and tasks Implemented 2013 in per cent 1. The share of the complaints received from of ICT and postal service users, including users, P-81-02-23-01 examined according to the competence of RRT 100 100 100 (per cent of the total number of received complaints) 2. The share of performed control measurements of technical parameters of electronic P-81-02-02-02 100 100 100 communications networks and lines (per cent of the total number of planned control measurements) 3. The share of performed control measurements of quality rates of electronic communication P-81-02-02-03 100 100 100 services (per cent of the total number of the planned control measurements) Task 3 of Objective 2 – ensuring and supervision of compliance of radio equipment and telecommunications terminal equipment, existing on the market of the Republic of Lithuania, with the obligatory requirements of the Regulations and the electromagnetic compatibility requirements 1. The number of the inspected types of radiocommunication equipment and P-81-02-03-01 telecommunications terminal equipment for 70 71 101.43 compliance with the administrative requirements of the Regulations 2. The number of the inspected types of equipment P-81-02-03-02 for compliance with the administrative requirements 30 30 100 of the EMC Regulation 3. The number of types of equipment taken from the market for laboratory testing in order to P-81-02-03-03 25 25 100 determine if they comply with the technical requirements of the Regulations 4. The number of types of equipment taken from the market for laboratory testing in order to P-81-02-03-04 15 15 100 determine if they comply with the technical requirements of the EMC Regulation 5. The number of the performed testing on radiocommunication equipment and telecommunication terminal equipment and testing P-81-02-03-05 of electromagnetic compatibility on equipment, and 100 100 100 the number of the issued testing protocols (per cent of the total number of the equipment submitted for testing) 6. The number of the examined notifications concerning the placing on the market of P-81-02-03-06 100 100 100 radiocommunication equipment of Class 2 (per cent of the total number of received notifications) Task 4 of Objective 2 – to perform functions of electronic signature supervision institution 1. The growth of the number of users of the remote system for learning to use electronic signatures P-81-02-04-01 20 21 105 and electronic documents (in per cent compared to the previous year) 2. The share of persons’ complaints regarding activities of certification service providers, P-81-02-04-02 examined according to the competence of RRT 100 100 100 (per cent of the total number of received complaints) 3. The share of provided methodological guidance P-81-02-04-03 on the issues of electronic signature (per cent of 100 100 100 the total number of inquiries) Objective 3 – creation of conditions for long- term investments into electronic communications infrastructure and development of innovative ICT R-81-03-01 1. The share of issued permits granting the right to 75 94.3 126 147

Communications Regulatory Authority of the Republic of Lithuania Annual Report 2013 Values of evaluation factors Code of Names and units of evaluation factors of the Plan of Implementation evaluated factor Programme’s objectives and tasks Implemented 2013 in per cent use radio frequencies (channels) on digital terrestrial television networks (per cent of the total number of received applications) 2. The share of residents of the territory of Lithuania covered by wireless broadband access R-81-03-02 91 94.2 104.7 mobile radiocommunication networks (UMTS, WIMAX, LTE), in per cent 3. Broadband communication penetration, in per R-81-03-03 cent 36 38.1 105.8 Task 1 of Objective 3 – to perform radio frequency (channel) management, supervision of their usage, including monitoring, management of other electronic communication resources 1. The share of issued permits granting the right to use radio frequencies (channels) on mobile P-81-03-01-01 95 99.52 104.75 radiocommunication internal networks (per cent of the total number of received requests) 2. The share of issued permits granting the right to use radio frequencies (channels) on new P-81-03-01-02 radiocommunication technology networks (radio 80 100 125 stations) (per cent of the total number of received requests) 3. The share of issued permits granting the right to establish experimental radiocommunication P-81-03-01-03 90 100 111 networks (per cent of the total number of received requests) 4. The share of inspections and control measurements of the newly installed radio and P-81-03-01-04 100 100 100 television broadcasting stations (per cent of the total number of newly installed stations) 5. The share of radio broadcasting stations, the emission parameters of which are inspected on a P-81-03-01-05 100 100 100 quarterly basis (per cent of the total number of installed stations 6. The number of inspections of radio and P-81-03-01-06 24 26 108.3 television broadcasting stations 7. The number of inspections of internal P-81-03-01-07 190 192 101 radiocommunication networks 8. The share of the decisions of the Electronic Communications Committee (ECC) regarding radio P-81-03-01-08 70 81.3 116 frequencies (channels) implemented in Lithuania, in per cent Objective 4 – integration into the EU and international regulatory space and efficient activities of RRT 1. A possibility for RRT to provide services at the R-81-04-01 fourth maturity level (per cent of the total number of 30 0 – services provided by RRT)

2. The share of service users who are aware where R-81-04-02 to make complaints regarding the quality of ICT 78 – – and postal services, in per cent Task 1 of Objective 4 – efficient integration in the EU decision making process

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Task 2 of Objective 4 – efficient organization, publicity and control of activities of RTT

1. The share of civil servants who participated in P-81-04-02-01 events for development of skills during the 80 97 121.3 accounting year, in per cent

2. The share of the created Communications P-81-04-02-02 30 30 100 Activity Information System, in per cent

Objective 5 – ensuring performance of obligations that may be imposed on the operators and providers of electronic communications services in the interest of national defence, national security and maintenance of public order as well as in cases of extraordinary circumstances 1. Ensured implementation of obligations relating to R-81-05-01 Yes Yes 100 surveillance of electronic communications traffic Task 1 of Objective 5 – to ensure that operators and providers of electronic communications services perform their obligations that may be imposed on them in the interest of national defence, national security and maintenance of public order as well as in cases of extraordinary circumstances 1. The share of the procured equipment, used for the purposes stated in parts 1 and/or 4 of Article 77 P-81-05-01-01 of the Law on Electronic Communications of the 100 100 100 Republic of Lithuania (per cent of the total number of required equipment) * On 10-15 March 2013 Spinter Tyrimai UAB conducted a social survey only on the usage of universal electronic communications services by residents, therefore, all ICT services cannot be evaluated. Source: RRT

The causes for failure to implement the factors: Factor R-81-02-01 – a social survey on the quality of postal services was not conducted in 2013. On 8-15 March 2013, market and public opinion research company Spinter Tyrimai performed a representative survey of residents of Lithuania for the purpose of establishing the habits of the country’s residents in using universal services (fixed telephone communication and payphones) and electronic signatures. Factor R-81-02-02 implemented by 81.3 per cent. When examining the compliance of radiocommunication equipment and telecommunications terminal equipment placed on the market with the

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Communications Regulatory Authority of the Republic of Lithuania Annual Report 2013 administrative requirements of the Technical Regulations of Radiocommunication Equipment and Telecommunications Terminal Equipment, 77 types of equipment were examined, 30 of them failed to comply with the administrative requirements, i.e. improper marking, a declaration of conformity missing, a notification concerning the placing on the market of such a product not submitted when required, etc. When participating in the EU’s fifth joint cross-border ADCO market surveillance campaign under the Radio and Telecommunications Terminal Equipment (R&TTE) Directive and the fifth joint cross-border electromagnetic compatibility market surveillance campaign under the Electromagnetic Compatibility Directive, target groups of equipment (LED lighting products and computer power supply sources) were tested and, as a result, more types of equipment were found to be non-compliant with the administrative requirements. Factor P-81-02-01-05 – no requests for approval of filtering tools were received in 2013. Factor P-81-02-01-06 – due to the limited participation of CERT-LT staff in international events, no new cooperation agreements with CERT centers of other countries were signed in 2013. Factor P-81-02-01-07 – no invitations to participate in any cyber defence training were received in 2013. Factor P-81-02-01-08 – no invitations to participate in electronic information security (cyber security) events organized by the NATO, the European Union and the United Nations Organization were received in 2013. Factor R-81-04-01 not implemented. The Communications Activity Information System, intended for provision of RRT services electronically, to ensure a two-way communication channel between RRT and natural and legal persons, to automate an electronic database of electronic communications network operators and service providers, postal service providers, processes of collection and transfer of statistical information about the electronic communications and postal sectors, preparation of summaries and provision of data for the performance of other functions of RRT, is currently in the process of development. Due to protracted procurement procedures, the Communications Activity Information System project was launched in the second half of 2013 and is planned to be completed in the third quarter of 2014. Factor R-81-04-02 – no survey was performed in 2013.

2.4. Usage of the Programme’s appropriations

Table 4 below provides summarised data on usage of the Programme’s appropriations. Table 4. Usage of the Programme’s appropriations Approved Used (corrected) The share of used Appropriations appropriations, appropriations, appropriations, per cent thousand LTL thousand LTL* The total amount of appropriations for the 23 631.4 20 449.1 86.5 Programme (1+2): including by sources of financing: 1. State Budget of the Republic of Lithuania: 23 631.4 20 449.1 86.5 1.1. co-financing 1.2. financial contributions of the European Union and other international contributions 1.3. target contributions and revenue contributions 23 631.4 20 449.1 86.5 2. Other sources (financial contributions from the European Union for project implementation and other legally obtained contributions) Source: RRT 150

Communications Regulatory Authority of the Republic of Lithuania Annual Report 2013

In 2013 RRT executed one Communications Management and Control Programme, code 01.81. The revenues, received for the services provided and the works performed by RRT are transferred into the budget and later returned from the budget for covering the activity costs. For funding the programme LTL 22 000.0 thousand of appropriations, including LTL 20 422.0 thousand – RRT revenue contributions, and LTL 1578.0 thousand – state budget funds were allocated according to the Law on the Approval of Financial Indicators of the State Budget and Municipal Budgets of 2013 of the Republic of Lithuania. LTL 8 700.0 thousand for work remuneration and LTL 6 845.0 thousand for purchasing of assets were allocated in 2013. In 2013, from all funds of state budget (LTL 1 578.0 thousand) dedicated to RRT Programme, LTL 1 562.0 thousand are dedicated to cover RRT revenue contributions used for state budget needs in 2009 and LTL 16 thousand are foreseen for the ongoing investment project “Development of the Software Tool for Handling Lists of Trusted Certification Services”, which was launched in 2012. Referring to the Law on the Structure of the Budget of the Republic of Lithuania, Resolution No 543 of the Government of the Republic of Lithuania of 14 May 2001 "On the Approval of the Procedure of Formation and Execution of the State Budget of the Republic of Lithuania and Budgets of Municipalities", the amount of LTL 1 631.4 thousand of non-used contributions into the state budget of the previous year was transferred into 2013 and used for funding of the Special Communications Management and Control Programme, executed by the Communications Regulatory Authority of the Republic of Lithuania by exceeding the amount of appropriations, approved by the Parliament of the Republic of Lithuania. Referring to the estimate, approved on 27 March 2013, the amount of LTL 23 631.4 thousand in total was foreseen for funding of the Special Communications Management and Control Programme, executed by RRT in 2013 (22 000.0 + 1 631.4), i.e. the amount, including the non-used contributions into the state budget of the previous year. RRT, in observance of the provisions of the Law on Electronic Communications of the Republic of Lithuania, must evaluate the conformity and legitimacy of the costs and collected charges. Upon evaluation of the revenues received and the funds not used in 2012 and in order to balance the costs and revenues of 2013, on 27 March 2013, by Order No 1V-498 of the Director of the Communications Regulatory Authority, RRT established the recalculation rate 0.9 for the tariffs of supervision of the use of radio frequencies/channels, including radio monitoring, which was in effect from 1 April 2013 to 30 November 2013.

The main reasons for differences in appropriations:

1) RRT, economically and rationally used funds for goods and services purchased, however, savings emerged as a result of lower than planned prices, offered by suppliers during public purchase procedures. Therefore, funds anticipated for financing and acquisition of tangible or intangible assets, in some articles relating expenditure for services (for instance security, cleaning etc.) were saved. A part of funds for acquisition of intangible assets (software) anticipated for 2013 were also not used for the providers still have contractual obligations to implement; 2) Savings in work remuneration emerged regarding cases of sick leave of RRT employees, labour turnover and open positions (when applicants are interweaved), therefore, there were saving also in expenditure for social security contributions.

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Communications Regulatory Authority of the Republic of Lithuania Annual Report 2013 2.5. Priorities of short-term activity plan

The main planned directions of RRT activities for 2014 are as follows: – Protection of rights and legitimate interests of consumers using electronic communications and postal services; – Ensuring security of electronic communications networks and information and prevention of cyber- attacks; – Promoting investments into broadband wireless communication networks of next generation, development of advanced technologies and services. In order to ensure the possibility for end users of electronic communication services, including consumers, and users of postal services to use different electronic communication and postal services under favourable conditions, taking in consideration technological developments in the markets and change of needs of users and business, the priority of RRT in 2014 is protection of rights and legitimate interests of consumers using electronic communications and postal services. Most attention in solving issues of consumer rights in the area of electronic communications services is going to be paid to the quality of broadband wireless communication services, including problems of data transmission by mobile telephone networks, and to improving cooperation with companies providing services and other consumer rights protection institutions. The protection of the rights and legitimate interests of end users, including consumers, is one of the essential tasks of RRT, relating to investigation of service users’ complaints, supervision of provision of universal services, etc. In order to ensure the right of service users, including consumers, to receive services of appropriate quality, RRT also performs quality control of public electronic communication services. Project “Creation of consumers’ complaints information system” (classifier of consumers’ complaints and enquiries) was started in 2013 and is going to be completed in 2014. It is planned that an electronic information system of broadband communication services will start to be created in 2014, which will contain information about location of broadband communication networks in Lithuania (i.e. an interactive electronic broadband communication map for end users, created on the basis of geographically oriented databases, which will indicate technologies used by providers of broadband communication services). With the rapid growth of the ICT sector and development of the e. business, e. health, e. learning and other ICT services, network and information security becomes increasingly relevant on the level of not only an individual country, but also the whole world. Another priority of RRT for 2014 is ensuring security of electronic communications networks and information and prevention of cyber-attacks. Electronic services may be developed only after the security of networks and information is ensured. In 2014, RRT will devote much attention to the Cybersecurity Strategy established by the European Commission and to the Commission proposal for a Directive on Network and Information Security, and will also participate in analysing the aforementioned documents and preparing Lithuania’s position. The Cybersecurity Strategy of the European Union: An Open, Safe and Secure Cyberspace is a comprehensive EU vision how to prevent threats in cyberspace and what counter-measures to take. The concrete actions are aimed at protecting information systems from electronic crimes and at ensuring secure development of the digital economy. RRT performs CERT-LT (Computer Emergency Response Team) activities and must ensure security and integrity of public communication networks and public electronic communications services, 152

Communications Regulatory Authority of the Republic of Lithuania Annual Report 2013 prevent spreading of security incidents, must seek to reduce the risk of damage that providers of public communication networks and/or public electronic communications services and users of public electronic communications services may incur due to security incidents. One of major tasks is to perform prevention of cyber-attacks. The system of monitoring of the infrastructure of the Lithuanian Internet network (LITIS) is being improved. It enables to establish the topology of the Lithuanian Internet network and critical elements of the infrastructure of the Lithuanian Internet network, to analyse their accessibility, load on the networks and other parameters. It is planned that 60 percent of the elements of the Lithuanian Internet network infrastructure will be identified in 2014. In 2015, after improvement of working methods and accuracy in collecting information, the system should identify about 95 percent of elements of the Lithuanian Internet network infrastructure. Taking in consideration fast changes in technologies, decisions made during the World Radiocommunication Conference WRC-12 and Decision No. 243/2012/EU of the European Parliament and of the Council, that are directly linked to the Lithuanian communications market and that will affect the plans of RRT till 2015, another priority of RRT in 2014 is promoting investments into broadband wireless communication networks of next generation, development of advanced technologies and services. As new radio communication technologies appear, operators intensively develop public mobile radio communication systems of next generation and, when these systems operate, electromagnetic compatibility problems regularly arise, also there are problems of compatibility of new technologies with existing digital terrestrial television networks, UMTS, GSM networks, which need to be urgently addressed. In 2014, RRT is going to announce a public tender for the right to use radio frequencies (channels) from 2300–2400 MHz radio frequency band and to issue permits granting the right to use radio frequencies (channels) from this band. It is also planned to give the right to use radio frequencies (channels) from 2560– 2570 MHz and 2680–2690 MHz coupled radio frequency band and 2570–2620 MHz radio frequency band by way of an auction. It is expected that in 2014 broadband wireless access mobile radiocommunication (UMTS, WIMAX, LTE) networks will cover about 92 per cent of the territory of the Republic of Lithuania, the penetration of broadband communication will reach 38 per cent and about 38 percent of Lithuanian residents will use 30 Mbps and faster Internet. Another no less important area of RRT activities is ensuring competition in the postal market. One of the main objectives of the EU postal policy is to harmonize the gradual and controlled liberalisation of the market for postal services and to ensure that the provision of universal services is guaranteed at least once a day, five days a week on equal terms for all the country’s users. At the beginning of the year the Lithuanian postal sector underwent essential changes – the postal services market was liberalised, the reserved field was cancelled, which means that all postal services providers can compete without any restrictions. Competition will encourage all participants of the postal services market to develop their activities more effectively, to improve the quality of the postal services and the range of offered services. An important field of RRT’s activities in the nearest time will be encouragement of transparent and effective competition in the postal services market, forming the postal services market regulation practices under the liberal market conditions, in order to ensure provision of good quality postal services to users for an affordable price and protection of users’ interests and rights. In order to ensure effective functioning of the postal infrastructure, RRT will pay more attention to permanent supervision related to access to the postal network, in this way creating possibilities for postal services providers to use the postal network of Lietuvos Paštas AB under transparent and non-discriminatory conditions. 153

Communications Regulatory Authority of the Republic of Lithuania Annual Report 2013 But even after liberalisation of the postal market, the obligation on the EU Member States to ensure provision of universal postal services at least once a day, five days per week on equal terms for all users in the country will undoubtedly remain. The challenge for the liberal postal market is, after refusal of reserved postal services, to ensure uninterrupted provision of universal postal services. The Regulation of the European Parliament and of the Council on electronic identification and trust services for electronic transactions in the internal market is going to be approved in 2014, at the same time updating related technical standards. With regard to this, in 2014–2016 the legal regulation of electronic signature will be improved and the following will be prepared: – Draft resolution of the Government of the Republic of Lithuania “On the Amendment of Resolution No. 2108 of the Government of the Republic of Lithuania “On the Approval of the Requirements for the Certification Services Providers Issuing Qualified Certificates, Requirements for the Electronic Signature Equipment, the Procedure for Registration of Certification Services Providers Issuing Qualified Certificates, and the Electronic Signature Supervision Regulations”, dated 31 December 2002”; – Draft order of the Director of RRT “On the Amendment of Order No. 1V-406 of the Director of the Communications Regulatory Authority of the Republic of Lithuania “On the Approval of the Description of the Procedure for Registering Persons for Obtaining Certificates and Provision of Consultation Services”, dated 19 April 2011”. When drafting legal acts in 2014–2016, a lot of attention will be paid to efficient management and use of electronic communications resources, creation of favourable technological conditions, harmonisation of legal acts with the EU regulatory legal framework. In order to achieve efficient and harmonized management and use of radio frequencies (channels) on international and EU level, in 2014–2016 relevant legal acts will be drafted and adopted, which will be aimed at implementing: 1. Decision No. 243/2012/EU of the European Parliament and the Council of 14 March 2012, which establishes a long-term Radio Spectrum Policy Programme (OJ 2012 L 81, p. 7); – Draft order of the Director of RRT “On the Amendment of Order No. 1V-1160 of the Director of the Communications Regulatory Authority of the Republic of Lithuania “On the Approval of the Plan for Use of Radio Frequencies”, dated 24 December 2008” (to be implemented till 15 February 2015); – Draft order of the Director of RRT “On the Amendment of Order No. 1V-854 of the Director of the Communications Regulatory Authority of the Republic of Lithuania “On the Approval of the Rules for Allocation and Use of Radio Frequencies (Channels)”, dated 6 October 2005” (to be implemented till 15 February 2015). 2. Commission Implementing Decision 2012/688/EU of 5 November 2012 on the harmonisation of the frequency bands 1920-1980 MHz and 2110-2170 MHz for terrestrial systems capable of providing electronic communications services in the Union (OJ 2012 L 307, p. 84): – Draft order of the Director of RRT “On the Amendment of Order No. 1V-1160 of the Director of the Communications Regulatory Authority of the Republic of Lithuania “On the Approval of the Plan for Use of Radio Frequencies”, dated 24 December 2008” (to be implemented till 31 May 2014). Referring to EC Recommendation 2007/879/EC of 17 December 2007 on relevant product and service markets within the electronic communications sector susceptible to ex ante regulation in accordance with Directive 2002/21/EC of the European Parliament and of the Council on a common regulatory framework for electronic communications networks and services (Framework Directive), in 2014 RTT is planning to finish the analyses of the following markets that were commenced in 2013: 154

Communications Regulatory Authority of the Republic of Lithuania Annual Report 2013 – Market analysis of broadcasting transmission services to deliver broadcast content to end users. The analysis is divided into two independent analyses: the market of broadcasting transmission services and the market of services of providing broadcasting transmission means; – Market analysis of call termination on individual public telephone networks at a fixed location; – Market analysis of voice call termination on individual public mobile telephone networks; – Market analysis of transit services provided on public telephone networks at a fixed location (national and international call transit). The following market analyses are going to be started in 2014: – Leased lines market analysis, which would include analyses of the market of a minimal set of leased lines, the market of leased lines terminating segments, the market of leased lines trunk segments; – Market analysis of wholesale leased lines terminating segments, disregarding the technology used to provide guaranteed (allocated) transmission capacities. The Digital Agenda for Europe is one of the seven flagship initiatives implemented under the Europe 2020 Strategy for smart, sustainable and inclusive growth. Successful delivery of this Digital Agenda for Europe, established by the European Commission, would substantially spur the EU’s economic growth and would make the benefits of the digital era available to the whole society. The aim of this initiative is to deliver sustainable economic and social benefits from a digital single market, to help meet the objective to bring broadband Internet to all residents by 2013 and to ensure that by 2020 all Europeans have access to much higher Internet speeds of above 30 Mbps and also to seek to ensure that 50 per cent or more of European households subscribe to Internet connections above 100 Mbps. The Government of the Republic of Lithuania, by its Resolution No. 301 of 16 March 2011 approved the Lithuanian Information Society Development Programme 2011–2019. The purpose of the Programme is to define the priorities, objectives and tasks of information society development in order to maximise the social and economic advantages provided by information and communication technologies, primarily the Internet as a very important instrument for economic and social activities, the use of which allows one to provide or receive services, work, access entertainment, communicate and freely express opinions. When implementing the Lithuanian Information Society Development Programme 2011-2019, the Government of the Republic of Lithuania approved, by Decision No. 1281 of 24 October 2012, the Interinstitutional Activity Plan of the Lithuanian Information Society Development 2011-2019 Programme Implementation; RRT also implements the measures of the aforementioned Programme. The ultimate objective of all the actions of RRT is to seek to ensure a wide range of technologically advanced, high-quality, secure and affordable electronic communications and postal services (products) for residents of Lithuania. The measures provided for in the strategic activity plan of RRT for the year 2014 continue the works started in previous years by consistently implementing the system for promotion of competition in the electronic communications sector regulated by both Lithuanian and EU legislation, and by implementing public policies in the sectors of electronic communications and postal services. ______

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