Licensed to Thrill

Licensing ISPs in Central and Eastern Europe

While North America and western Europe are moving toward deregulation, many countries within Central and Eastern Europe have adopted (or are in the process of adopting) the practice of licensing ISPs. However, the way in which ISPs are licensed, as well as the motivation for doing so, varies from country to country within the region.

In Bulgaria, where Internet penetration is still very much in the development stage, the Committee on Posts and Telecoms has recently decided to introduce regulatory licensing of Internet Service Providers (ISPs). In reaction to this, many users are vowing to fight against this measure.

In many areas of Central and Eastern Europe the situation for the licensing of ISPs appears not so complex. However, there are some notable exceptions.

Russia seems to lead the pack with not just one but two different kinds of licenses. The first is for data transmission. This kind of license is necessary for companies that wish to run a data communications business, such as frame relay, ATM, X.25, TCP/IP, etc. The second kind is for telematics and covers all types of online service (e.g., email, conferences, etc). Hence, for ISPs the second kind of license is best since it covers everything. The only ones who don't require a license are content providers, that is, those with web sites but who don't possess the network platform on which they are run.

In Croatia, meanwhile, although just one kind of license is needed, there's another problem. A concession is also necessary for any kind of data communication service - including running an ISP. This concession is granted by the Ministry of Transportation and Communication and requires a "technical certificate". This certificate is to ensure that the provider's technical infrastructure is adequate. Ironically, this certificate is provided by the national telecom who also happens to run an ISP service, known as HPT (HPT). As a result, Croats at present have a choice between only one of two ISPs: the HPT and a service run by IBM (IBM). There is talk that efforts are underway to change this system; however at the speed in which change progresses in the region, this change may yet be long in coming.

While talk of licensing sends shivers down the spines of many, not everyone considers it to be something negative. As Internet consultant Nick Gassman sees it, "licensing and regulation is not a bad thing in itself. It depends on the market and how things are done." Likewise, Steve Carlson of iSYS Hungary, a former ISP turned web developer, thinks that the idea behind ISP licensing -- a means by which to protect the consumer - is a laudable one. He does admit, though, that far too often "this idea amounts to just another bureaucratic hoop to jump."

In the case of Russia, most within the industry believe ISP licensing to be a taxation issue pure and simple. In Bulgaria, however, the proposed law for the licensing of ISPs makes a distinction between commercial and non-profit ISP's. Thus, as Boris Basmadjiev of Bulnet points out, Bulgaria's largest ISP, the academic network (which, incidentally, also offers commercial ISP services), would be exempt from certain stipulations arising from the new law.

While ISP licensing may be pursued in different ways for different reasons, one thing is for certain: considering that the European Union has ruled against ISP licensing, and that most countries within the region are aspiring to become members of the union, the days of ISP licensing in Central and Eastern Europe look to be numbered - in oneway or another.

Links for further reference: Text of the proposed law to introduce ISP licensing (in Bulgarian only)
Links to Central European Internet research, ISPs, etc., also here
A collection of Russian ISPs (in Russian only)
A list of Czech ISPs (in English)
Information on Romanian ISPs
Information on commercial and non-commercial ISPs in Hungary