• Applicable Legislation
• Regulatory Framework
• Competition
• Licensing of Telecommunications Activities
• Regulation of Pricing
• Universal Services
• Interconnection
• Collocation and Facility Sharing
• Telecommunications Equipment

Telecommunications sector is one of the fastest growing sectors in the Lithuanian economy. In 2001 telecommunications market grew by about 30 percent in comparison to 2000. The biggest market player still is AB Lietuvos telekomas, the incumbent operator of fixed voice telephony, which upon its privatisation in 1998 was granted monopoly rights in order to adjust its networks, services and pricing for the future competition. However, during the last year AB Lietuvos telekomas has been facing increased competition from mobile operators.

The legal regulation of telecommunications has been developing significantly as well. Such pace is mainly due to the necessity to prepare the legal environment for full liberalisation of the telecommunications market from 1 January 2003. A whole package of new regulatory acts, including a new Law on Telecommunications, is expected to be enacted in order to enable a de facto competition in the fixed voice telephony market. Another reason for the changes in the telecommunications regulatory environment is Lithuania's negotiations on EU accession. The telecommunications and IT chapter of the EU accession negotiations was preliminarily closed in March 2001. Lithuania has undertaken to ensure full compliance of its telecommunications legislation with the acquis communautaire by 1 January 2004.


Applicable Legislation

1. The 9 June 1998 Law No. VIII-774 of the Republic of Lithuania "On Telecommunications";
2. Regulations of Import, Manufacture, Use and Sale of Radioelectronic and Electric Equipment within the Territory of the Republic of Lithuania, approved by the 15 December 1992 Resolution No. 949 of the Government of the Republic of Lithuania;
3. The 11 September 1997 Resolution No. 981 of the Government of the Republic of Lithuania "On Certification of Telecommunications Technical Equipment";
4. The 17 October 2000 Resolution No. 1236 of the Government of the Republic of Lithuania "On Approval of the List of Types of Telecommunications Activities Subject to Licensing and Conditions and Regulations of Licensing of Telecommunications Activities";
5. The 6 June 2001 Resolution No. 681 of the Government of the Republic of Lithuania "On Approval of the National Telephone Numbering Plan";
6. Regulations of Issuance of Authorisations to Engage in Non-Licensable Telecommunications Activities, approved by the 9 November 2000 Order No. 321 of the Minister of Communications of the Republic of Lithuania;
7. Regulations of Issuance of Authorisations to Install and Operate Public Radio Networks, approved by the 14 November 1994 Order No. 66 of the Ministry of Communications and Informatics of the Republic of Lithuania;
8. Regulations of Installation and Operation of Earth Transmission Stations of Satellite Communications, approved by the 28 May 1997 Order No. 61 of the Ministry of the Communications and Informatics;
9. Regulations of Provision of Public Fixed Telephone Communications Services, approved by the 20 June 2001 Order No. 7 of the Communications Regulatory Authority.

The principal institutions involved in regulation of the telecommunications are the Government, the Ministry of Communications and the Communications Regulatory Agency (the telecommunications regulator).

The Government has the general regulatory function, which includes approval of the list of telecommunications activities subject to licensing and the regulations of licensing, approval of the list of universal services, setting of the maximum prices for fixed telephony and universal services as well as for other services where certain conditions are met, approval of the national telephone numbering plan.

The Ministry of Communications performs the general functions of development and implementation of the State policy in the telecommunications sector, co-ordination of interaction between the telecommunications networks, development of the policy regarding negative environmental impact of all the telecommunications systems, etc. The Ministry of Communications also participates in drafting of the telecommunications regulatory acts, organises the tenders for telecommunications licences, and awards, suspends and withdraws licences for the telecommunications licences etc.

The Committee of Information Society Development, a governmental institution established in 2001, is also involved in regulation of telecommunications. The Committee of Information Society Development participates in the development of the State policy of telecommunications and information technologies and coordination of this policy as well as preparation of telecommunications regulatory acts. The Committee is in charge of coordination of the development of the national telecommunications and IT infrastructure following the EU requirements, preparation and coordination of governmental telecommunications and IT projects etc.

The Communications Regulatory Authority was established in 2000 as an independent governmental institution charged with the functions of the telecommunications market regulator, but started activities only in the middle of 2001. The Communications Regulatory Authority performs the following functions:

1. supervises the compliance with the terms and conditions of telecommunications licences;
2. issues individual authorisations for non-licensable telecommunications activities, manufacture, import, sale and use of telecommunications equipment;
3. adopts the regulations of the construction, use and protection of telecommunications networks;
4. adopts the general terms and conditions of agreements on interconnection of telecommunications networks, the procedure for the settlement of disputes between telecommunications operators regarding interconnection;
5. adopts the rules and regulations establishing the procedure for joint use by telecommunications operators of conduits, cable ducts, collectors, towers and poles;
6. adopts the regulations of provision of public telecommunications services and approves the standard service agreements;
7. allocates the radio and TV frequencies (channels) to the service providers;
8. prepares, controls and supervises the National Telecommunications Numbering Plan;
9. resolves disputes between telecommunications operators concerning interconnection of telecommunications networks and facility sharing;
10. performs other functions provided by the regulatory acts.

Currently all telecommunications activities and services are open to competition subject to general competition rules, except for the operation of public fixed telecommunications network and provision of fixed telephony services over it. The incumbent operator AB Lietuvos telekomas enjoys monopoly rights to provide public fixed telephony services until 31 December 2002. According to the Law on Telecommunications, until this date additional licences or authorisations, which would change the conditions of the incumbent's operations, may not be issued.

The Law on Telecommunications prohibits provision, organisation or advertising of the so-called "call-back" services.


Licensing of Telecommunications Activities

Licences

According to Article 9 of the Law on Telecommunications, only those telecommunications activities which require limited resources - radio frequencies and numbers - may be subject to licensing. The current List of Types of Telecommunications Activities Subject to Licensing includes the following activities which require licences:

1. establishment and/or operation of public broadband wireless communications networks and/or provision of public broadband wireless communications services via such networks;
2. establishment and/or operation of public mobile radio communications networks and/or provision of public mobile radio communications services via such networks;
3. provision of radio (except wired radio) and television program transmission services.

According to the current Law on Telecommunications, licences are awarded through public tender by the Ministry of Communications. Fees charged for the processing of bids must be cost - oriented. Decision on the winning bid must be made within 3 months from the date of the bid based on the following criteria:

1. qualitative parameters, launch and development terms of telecommunications services, amount of proposed investment into telecommunications network;
2. tariffs for the services;
3. feasibility of the proposed technical solutions;
4. financial resources of the bidder;
5. number of the jobs to be newly created;
6. experience of the bidder.

Notably, only the enterprises registered in Lithuania, as well as branches of foreign enterprises registered in Lithuania, may be awarded a telecommunications licence.

Authorisations

Where a type of telecommunications activities is not licensable, an individual authorisation may be required. The authorisations for non-licensable telecommunications activities are issued by the Communications Regulatory Authority. The authorisation must be obtained before starting the following activities:

1. establishment, operation of public data transmission networks and provision of data transmission services via such networks;
2. provision of mobile satellite communications services;
3. establishment and operation of cable television networks;
4. establishment and operation of microwave multi-channel television systems;
5. installation and technical maintenance of satellite communications transmission equipment;
6. establishment and operation of wire radio network and provision of transmission services via such network;
7. establishment and operation of internal (private) telecommunications networks (if the networks are developed outside the territory of an enterprise).

Notably, only the enterprises registered in Lithuania as well as branches of foreign enterprises registered in Lithuania may obtain an authorisation for non - licensable telecommunications activity.


Regulation of Pricing

Pricing of telecommunications services in general is not regulated and is subject to the general competition law. However, under the Law on Telecommunications there are three exceptions to this general rule. First of all, maximum prices may be set for a particular type of telecommunications service in the licences or individual authorisations issued to all operators of a particular service. Secondly, the Government is authorised to establish maximum prices for fixed telecommunications and universal services. The Government may also set maximum prices for other telecommunications services in the following cases:

1. when there is only one provider of a particular type of telecommunications services;
2. when a telecommunications service provider is dominant in the market of a particular type of telecommunications services;
3. when the sole or dominant telecommunications operator or service provider cross-subsidises its other network which is used to provide telecommunications services on competitive grounds.

The Law on Communications provides that the Government will approve the list of universal services and establish maximum prices of such services. However, the regulation of universal service obligations is still very scarce. Currently, provision of universal services is imposed on the incumbent AB Lietuvos telekomas by its exclusive public fixed voice telephony licence.

It is expected that the regulations on the list of universal services and their pricing will be adopted by 31 December 2002 when the incumbent's monopoly rights expire.


Interconnection

In cases provided for in the Law on Telecommunications, operators of public telecommunications networks must satisfy requests of other licensed telecommunications operators to interconnect public or private telecommunications networks. The request to interconnect may not be rejected if it is reasonable and technically feasible. The networks must be interconnected within 3 months from the date of a relevant request.

Refusal to interconnect must be reasoned and it must be submitted to the requesting operation and the Communications Regulatory Authority. In case of a dispute (due to refusal or inability of the parties to agree on interconnection of the networks in due time), either party may apply to the Communications Regulatory Authority. The Communications Regulatory Authority investigates the dispute and must adopt a decision within 2 months from the date of application.

Interconnection agreements are registered at the Communications Regulatory Authority and are open to public, except for commercial secrets.

According to the Law on Communications, the Communications Regulatory Authority is authorised to approve the general terms and conditions of agreements on interconnection of telecommunications networks and the procedure for the settlement of disputes regarding interconnection.


Collocation and Facility Sharing

The Law on Telecommunications contains a rather general provision regarding facility sharing. If a telecommunications operator is not able to exercise its right to install new telecommunications lines or equipment or if the costs of such exercise are be unreasonably excessive, the Communications Regulatory Authority may request any other telecommunications operator to allow shared use of existing pipelines, cable ducts, collectors, towers or other equipment or to install telecommunications equipment on a non-discriminatory basis, as long as it is economically reasonable and does not require additional essential works. Disputes regarding conditions of the agreements on facility sharing and the amount of compensation for it are examined by the Communications Regulatory Authority.

The Communications Regulatory Authority is also authorised to adopt the rules and regulations establishing the procedure for joint use by telecommunications operators of conduits, cable ducts, collectors, towers and poles.


Telecommunications Equipment

Telecommunications equipment may be imported, manufactured, sold and used only upon obtaining of the relevant authorisation from the Communications Regulatory Authority. Such authorisations may be issued only for certified equipment.

Certified telecommunications equipment must comply with the mandatory requirements of:

1. consumer safety;
2. maintenance personnel safety;
3. electromagnetic compatibility;
4. protection of public telecommunications network from possible damage;
5. effective use of radio frequencies;
6. interaction of terminal equipment with the public telecommunications network;
7. interaction of several items of terminal equipment through the public telecommunications network;
8. transmission characteristics of radio transmitting equipment.

1. based on the result reports of the tests performed in the accredited test laboratories of Lithuania;
2. by recognising conformity certificates and test reports issued by accredited institutions of the States with which Lithuania has entered into recognition agreements;
3. by recognising EU type approval certificates, manufacturer's conformity declarations in conjunction with ISO certificates, as well as harmonised EU standard test reports;
4. by recognising foreign conformity certificates and test reports;
5. based on the test reports when tests have been performed at the manufacturer's laboratories or at the operation site or by recognising the results of expert review of the equipment technical documentation.