Network POLICY

To what extent does the policy environment promote or hinder the growth of ICT adoption and use?

Telecommunications Regulation.

Iceland has experienced major changes in electronic communications in recent years. In 1987 the EU Commission published a Green Paper on electronic communications, laying the foundation for deregulation of the European electronic communications market and the development of an internal market for electronic communications services in Europe. Following the publication of the Green Paper and others, the EU Council and Commission have issued several directives which were comprised to form the EU Regulatory Framework. The framework consists of four major parts, Consumer rights, Open markets, Radio Waves, and Broadcasting. The EU Directives have resulted in changes to Icelandic electronic communications legislation. As a result a new Icelandic policy had to be formulated.

The objectives of the policy include:

• To privatize the telecom industry
• To increase of the country’s competitiveness, making Iceland one the leading nations in IT utilization in order to ensure progress, opportunities and welfare.
• Electronic convergence, without regard to national boundaries, creating new opportunities for individuals and enterprises.
• To ensure non-discrimination and transparency when decisions are taken concerning electronic communications enterprises required to stimulate competition.
• To encourage industrial development, and ensure the efficient utilization of financial resources and coordinated prioritization of projects.
• To ensure price equalization and universal service.
• To ensure Data privacy and security.
• To restrict government intervention in the electronic communications market.

Today, Iceland has the highest Internet penetration in the world (over 70 percent). Nonetheless, the country is in the early stages of privatizing the telecom services & infrastructure. Iceland Telecom, a former state owned monopoly, has been privatized. Telecommunication market is slowly evolving as several other companies are entering the market. One of the companies is the Northern Lights Communication (NLC), a multimedia company that consists of the Icelandic Broadcasting Company and Skífan. The two companies merged last year. NLC is one of the few companies in the country that has the financial means and technical capacity to compete with Iceland Telecom, and to provide broadband services in the near future.

The policy emphasized a number of key features necessary for competitive advantage:

• High-speed connectivity

  All Icelanders should have access to a high-speed connection.
  All upper secondary schools, universities and research institutes should have a high-speed connection, ranging from 10Mbps to 1Gbps, depending on the institution size.

• Mobile connectivity

  High-speed mobile services should be available everywhere in Iceland
  Long-range, digital mobile phone service should be available everywhere in Iceland and in offshore waters upon the termination of NMT service.

• Digital broadcasting

  Digital television via high-speed network should be available.
  Distribution of television programming by Icelandic National Broadcasting (INB), as well as radio programming on INB radio stations 1 and 2, to vessels in Icelandic waters and to remote areas of the country should be by digital satellite transmission.
  Interactive digital television should reach 99.9% of Icelanders.

To be competitive and achieve competitive advantage, there needs to be a convergence of media. Many telecommunications needs exist, including the transmission of the following: voice, sound/music, video and data (e-mail, web). These are transmitted over various media such as: telephone lines, radio, TV antennas, Internet (copper). The policy emphasizes convergence, for the needs to be fulfilled over the Internet (IP) by the means of Copper, Wireless and Fiber Optic.

Iceland government is aware of the strong correlation between ICT and economic growth. The belief is: providing high-speed communications would bring major advantages to the country and its citizens for the following reasons:

1. Geographically Iceland is at a great distance from Trade markets, which hinders the development of trade and industry. Internet can effectively remove much of the effects of the distance.

2. Iceland’s limited competition in service providers translates to high cost, the internet can bring the cost saving and the higher quality of service by enabling global competition.

Iceland policy makers recognize the importance of security and data protection. The policy emphasizes the importance of security and data protection by stating the following objectives:

• To provide guidance to consumers, together with information material on security issues, consumer protection, personal data protection and ethical issues.
• To establish a Computer Emergency Response Team (CERT) to enable more effective response to undesirable activity on the Internet and to fight cyber attacks.
• To define clear security criteria and minimum quality requirements for the functioning of fixed and mobile networks and ensure proper follow up.
• To define the requirements to be made of Internet service providers concerning quality and security of operations.
• To have a risk assessment made of Iceland’ s international connections to ensure that they are secure from disruption and to define minimum service and response plans in the case of breakdown or threat, e.g. if a submarine cable connection is interrupted.
• To define the role of Civil Protection concerning the functioning of electronic communications networks and take steps to ensure that security of electronic communications installations will comply with government requirements.
• To set out and implement an action plan for defense against spam.
• To inform the public of its rights to protection of privacy in electronic communications, the dangers which electronic communications may involve and responses to them.

On top of the EU existing privacy laws, Iceland has put together the following laws:

• Freedom of Information Legislation
  The legislation defines the public’s rights to access the state and municipal information.

  Act on Information
  Access to Information Act

• Data Protection/Privacy Legislation
  The legislation defines rules and guidelines on protecting personal and public data.

  Act on the Protection of Privacy as regards the Processing of Personal Data, No. 77/2000, as amended

• eCommerce Legislation
  The legislation defines rules and regulations related to eCommerce and taxation.

  Act on Electronic Commerce
  Act relating to eCommerce
  Value Added Tax Act, No. 50/1988

• eCommunications Legislation

  The legislation defines rules for deregulation and privatization, ensures the enhancement of competition.
  Act on Telecommunications / Act on Communications
  Electronic Communications Act in 2003

• eSignature Legislation
  The legislation provides guidelines for fully qualified electronic signatures and enforces their power to be equivalent to that of a regular signature.

  Act on electronic signature No. 28/2001

• eProcurement Legislation
  The legislation defines rules for public procurement, serves to regulate electronic auctions.

  Act on Public Procurement
  Public Procurement Act, No. 94/2001

• Re-use of Public Sector Information (PSI)
  The legislation defines the rules for public access to information and the restrictions on the right to information. It deals with transmission and re-use of information through electronic means.

  PSI Directive
  Access to Information Act

Per the policy, the government involvement is to be limited by the legislation. Some of the main measures available to the state are as follows:

• To impose regulatory obligations on electronic communications providers.
• To take initiative in purchasing and introducing new or innovative electronic communications technology and services.
• To finance projects for the public good, security purposes, environmental reasons or regional development
• To provide electronic communications services for public parties.
• To provide extended universal service in locations where it may not be profitable for private communications services providers.
• To oversee data security and personal data protection

ICT Trade Policy.

Given Iceland's small size, participation in international trade is seen as an indispensable element of economic policy and one of the factors explaining the country's economic success. Iceland’s trade policy falls within the framework of the European Economic Area (EEA) and Organization for Economic Co-operation and Development (OECD).

Iceland makes efforts to trade with many nations. One of Iceland's primary policy goals in international trade is to strengthen the competitiveness of domestic businesses in world markets by extending its bilateral trade relations. However, the authorities indicate that the focus of trade policy remains Iceland's membership in the EEA, European Free Trade Association (EFTA), and the World Trade Organization (WTO).

Overall Iceland grants largely unrestricted access to goods, workers, services, and capital from European Union (EU) members. While most of Iceland’s trade laws mirror the EU laws, Iceland has a large number of additional free-trade agreements, the complexity of which may burden the country’s small administration, thus potentially making it difficult for others to conduct business with Iceland.

Although Iceland has greatly liberalized its foreign investment regime since 1980, it is among the OECD countries with the highest level of overall restrictions to foreign direct investment. Foreign states (non -EEA and EFTA) cannot invest in companies domiciled in Iceland, including the following: telecommunication, construction and related engineering services, and distribution services. All entities seeking to invest must obtain a permit from the Minister of Industry and Commerce. In addition, foreigners (non EEA and EFTA citizens) must obtain a permit from the Ministry of Justice to own real estate in Iceland.