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Andrey Belousov

Government regulating Information Technologies

Andrey Belousov One of the most difficult and important aspects in modern jurisprudence is the question on limits of national jurisdiction concerning Internet segments.

The problem of regulating the Internet in a legal way gives rise to the following basic questions:

• Is the Internet a sphere that should be regulated with laws? What is the legal nature of this phenomenon?

• Should the state be permitted to interfere with the Internet relations? If yes, within what limits? How should the jurisdiction of various states be differentiated with reference to such relations?

• What correlation between state established obligatory rules and network community self-regulating norms should the Internet normative regulations have?

The Internet-community representatives think that the state should not be allowed interfering with electronic relations.

From this point of view, the Internet is a unique information environment having the following features:

• The Internet is neither mass media nor communication hardware. It represents a unique environment of interpersonal dialogue having a supranational character.

• The Internet as a whole or taken separately has no proprietor, belongs to no state, organization or physical person^;

• An access to the Internet resource is an individual right and cannot be limited by establishing any administrative barriers preventing it from being used in a free way (licensing of access, censorship of the Internet-resource contents, etc.)^;

• The Internet is a completely self-regulated information environment and its users can independently determine rules of conduct when using it.

At the same time, there is an opinion that the Internet relations should be regulated to adapt the current legislation to “requirements of a virtual life”.

In this connection the legal regulation includes: laws on mass media, civil laws and civil-remedial legislation (an order of conducting transactions through the Internet including an e-signature, the validity and evidentiary force of electronic documents, recognition of domain names as objects of intellectual property, etc.)^; laws on competition (regarding the Internet advertisement, non-admission of misusing a free competition connected with domain names).

First, the Internet is a unique means of an information exchange including an international one. In this connection, one of the most difficult and serious problems of regulating the Internet relations is to differentiate the corresponding jurisdiction of various states.

The lawmaker undertakes some attempts to determine a place of the state in the system of Internet relations, theoretically and practically solve a problem of substantiating the state jurisdiction with reference to particular rules, transactions and crimes on the Internet.

According to Proposals on principles of the national policy of developing and using the Russian Internet segment prepared by A. Shubin [1], the vice-president of the State Duma Committee on information politics, the virtual nature of the Net does not remove it from the Russian Federation jurisdiction and in this connection the Russian legislation adjusted for the specific character of computer communications fully applies to the electronic relations.

It should be noted that the problem of national jurisdiction (concerning the right of the state to establish obligatory rules of conduct and institute proceedings against those violating them) is solved in various fields of the modern legislation by the territorial principle.

For example, the RF Criminal code (Article 11) determining limits of Russia's criminal jurisdiction indicates those or other physical objects (territory, territorial waters and air space, continental shelf, exclusive economic zone, vessel registered at the Russian Federation port, etc.) where the state can institute criminal proceedings against those committing crimes. When criminal proceedings should be instituted against foreign diplomatic representatives, Russia's military men deployed outside their native country and so on, any questions on the correlation between foreign criminal jurisdictions are solved at the international contract level.

Even at perfunctory examination of the problem of delimitating national jurisdiction concerning this or that Internet segment (an address space area) it is easy to notice that its traditional approaches cannot be applied to the Internet "virtual" relations.

Thus, the federal legislation "About regulation of Russia's Internet segment" (About use of global public information and telecommunication networks) defines the Internet Russian segment (a global public information and telecommunication network) as a set of Internet addresses coming within the Russian Federation jurisdiction. Such a legislative idea is not something new. Researchers noted more than once that by virtue of the specific character of Internet information resources every Internet-resource could "be attached" to a certain territory only by registering a domain name in the definite Internet segment.

At the same time, there is no idea or rules of establishing jurisdiction limits in the above draft. Article 1 of the draft allows drawing an indirect conclusion that the Russian Federation jurisdiction arises from using "global public information and telecommunication networks by the Russian Federation public authorities and institutions of local governing, juridical and physical persons on the Russian Federation territory ".

Base norms of the draft are contradictory. On the one hand the Russian Federation jurisdiction limits are outlined by a certain address space (obviously, .RU zone), on the other hand, an inappropriate attempt was made to attach the concept of jurisdiction in the virtual space to the physical one (national territory). When discussing a place of the state in the Internet relations, legal experts noted more than once that it was impossible to apply a classical principle of address involving an availability of a certain physically tangible connection of the subject of legal relationships with a definite territory (residence, location) to the Internet relations having no clear territorial connection with any state.

The tendency to attach juridical and physical persons to the national jurisdiction based on a usual address principle can be traced in the Regulations of the Russian Federation Ministry of Communication and Information "On order of using domain names in the Russian Internet segment" [2]: "Official web sites of Russia's juridical persons should be located only in the Russian Internet segment (.RU zone) and only on servers of licensed Internet providers". It is easy to notice that this definition does not solve a problem of establishing precise jurisdiction rules. In addition to "official" web sites (this definition is also rather relative), other ones not coming within those or other possible criteria can be available as well. The correlation between a similar duty and the Russian Federation Constitution established right to freely search, receive, transfer, produce and distribute information in any legal way (Item 4, Article 29) also remains open to question. Besides, establishing a duty to place sites in certain Internet segments does not solve a problem of determining legal regulations subject to application when Russia's juridical person comes into relations complicated with a foreign element.

The Internet relations are often impossible to attach to any territory and, hence, to any law and order because of their complexity and availability of a foreign element. It seems the most logical to give parties of these relations according to the autonomy principle an opportunity to solve problems of an applicable law and many other ones connected with settling similar transactions. However, any relations complicated with a foreign element, first, require following national legislation instructions obligatory for the parties and, second, cannot be regulated by them thereby causing the necessity to use conflict rules of national legislations. The relations regulated with criminal and administrative laws have even more problems. It should be noted that today the problem of differentiating various national jurisdictions with reference to legal relationships connected with the use of Internet-technologies can be solved by concluding a multilateral international treaty with obligatory for its participants conflict rules that allow applying those or other legal relationships to the concrete national jurisdiction. This contract should also specify general principles and a mechanism of settling conflict questions by the interested states. It is also important to gradually unify various national legislations.

As to the correlation between obligatory legal rules established by the state, rather progressive regulations of the Russian Federation legislation "On Russian Federation national policy to develop and use Internet" submitted to the Parliament hearings "On legal regulation of use of Internet in Russian Federation " of May, 18, 2000 should be noted. In particular, the legislation formulates the following main principles of regulating the Internet relations (Article 4):

1. The Internet relations in the Russian Federation are regulated by federal public authorities through the combination of the state regulation and public self-government with observing the following principles:

• Protecting human rights and freedoms established by the Russian Federation Constitution^;

• Considering features of the Internet development, technical and organizational norms and rules, as well as rules and customs existing in communities of Internet operators and users and not conflicting with the Russian Federation legislation^;

• Applying no methods of legal regulation to organizational and technological aspects of the Internet development and operation that infringe rights and interests of the person, society and state.

2. The preliminary expert examination of standard acts on regulating the Internet relations in the Russian Federation should be made with participation of representatives from public organizations of Internet operators and users.

When indicating the general and "frame" nature of the draft norms, it should be noted that the lawmaker realizes the necessity to consider norms and customs existing for a long time among Internet users and impossibility of regulating the Internet relations in an imperative way. At the same time, law experts consider it necessary to regulate them when the Internet is used to exchange information and develop relations regulated by other branches of law (first of all, the question is about the necessity of an additional regulation in connection with the use of Internet-technologies in the civil-law sphere).

The new modern law on regulating telecommunications in Ukraine is of a great interest to local telecommunication operators, state officials, foreign investors and even Ukraine's President who reminded with his Decree of December 6, 2001 of the necessity to accept the law " On telecommunications”.

Nevertheless, the Parliament could not advance in accepting this law up to now. The deputies should not be blamed for it. Experts and representatives of some interested companies passed sharp strictures on the draft last proposed by the Cabinet of Ministers and, as a result, it was defeated in its first reading last May. At the same time, deputies also turned down an alternative project [3] that had some insignificant differences from the governmental one.

Soon after that, the Supreme Rada registered one more draft introduced by a group of Profile Committee deputies [4]. However, it was too early to disregard the draft because the Profile Committee prepared the project of Resolution on elaborating a coordinated bill on the base of the Cabinet and deputy projects to consider it again in its first reading [5]. It is interesting to compare these two bills by dwelling on some of their key moments.

When comparing them, it is evident that the deputy variant is wordier. The volume was increased through a more detailed elaboration of some norms, which were given a compressed and too indistinct account in the Cabinet variant. Besides, the new bill has solved some important problems that were ignored by the governmental draft authors. The contents of some important articles and sections contain radical differences. Some of them are considered below.

Public administration and regulation

Like the governmental project, the deputy variant stipulates the same two telecommunication organs of government (Ukraine's Cabinet of Ministers and corresponding Central executive authority body) and a regulatory agency (the National telecommunication commission (NTC). However, their likeness comes here to an end. If the Cabinet of Ministers assumes the whole executive and regulatory system in its project, the deputy bill follows a world practice of forming a regulatory body independent of the executive authority. According to the deputy draft, NTC is not the "central executive authority body with a special status " but independent corporate one with very large powers and its own budget formed through special funds and service payments. The President appoints Commission members with the Supreme Rada's consent for the five-year term. The unnecessary stand-by duplication of functions between the commission and executive authority bodies, as well as the telecommunication regulation on the part of the latter are excluded.

The Cabinet reserved to itself the right to determine general policy and strategy of developing the branch. The authorized central body was entrusted with performing its public administration duties of introducing this policy and strategy (preparing projects of normative-legal acts^; specifying licensed activities on concrete territories, the number of licenses issued and mechanism of paying them^; standardizing and certifying the equipment and services^; scientific and technical maintenance^; establishing an international cooperation and so forth). The deputy draft conferred on NTC the following major powers: an issuing or canceling of licenses and general sanctions, managing of their conditions, imposing of sanctions, approving of utmost tariffs, monitoring of operator activities, satisfying of user needs and observing of fair competition rules.

There is no doubt that the deputy draft model is capable of regulating the branch in a more objective, stable and professional way.


The scheme of licensing proposed by the Cabinet of Ministers can be summarized in a few words: the executive authority is entrusted with specifying certain activities subject to licensing and solving all main problems of issuing licenses (conditions, criteria, order of issuing licenses, amount of payment). The deputy bill offers a new model meeting the European Community requirements. According to it, telecommunication activities can be realized through general sanctions, individual licenses and without them. Any physical or juridical person is licensed on condition that all necessary documents on rendering the following services are submitted: fixed telephone communication (including the Internet-telephony), vehicular communication, search radio communication, tele- and broadcasting. Individual licenses issued on a competitive basis are required only for activities on assigning a number or radio frequency and/or those of a special state interest to defining their license conditions. The draft gives an exhaustive list of cases of such a special interest (for example, imposing as special duties of rendering users universal services and/or providing them with public networks on dominating and exclusive operators).

All other activities are carried out without any sanctions and licenses. The draft authors specially list some of these "other" activities (an access to the Internet, data transfer, use of telecommunication networks, etc.) to prevent from misunderstanding. Thus, the bill considerably reduces the list of services subject to licensing as compared with the Cabinet variant and protects from enlarging it for political or other reasons (for example, an item of the above presidential decree where the Cabinet is entrusted with preparing amendments to the legislation within two months that stipulate a licensing of the Internet-provider activities).

The draft specifies that licenses and sanctions are paid to cover administrative charges and it establishes norms preventing the licensing activity of NTC from the discrimination.

In spite of the progressive character of the chosen approach, some regulations of the draft should be improved. Thus, it is not clear how the service of "data transfer" requiring no license should be distinguished in a technical way from that of "Internet voice transfer of information" defined as the Internet-telephony in the draft and demanding a license. These two drafts fully ignore Ukraine's law currently in force "On licensing certain economic activities". Meanwhile, the introduction of new licensing rules should be accompanied with improving this law.

Universal services

In general, the set of universal services (telephone and cable communication, wire broadcasting, inquiry ones, etc.) meets Ukraine's social and economic requirements. It would be premature to include, for example, services of an access to the Internet into this list as it was already done by some developed countries. Nevertheless, it appears that the law should provide for mechanisms of solving the problem of "giving physical and juridical persons of all property forms in Ukraine a wide access to the Internet" specified in Ukraine's President Decree of July 31, 2000.

The process of rendering universal services has a more detailed regulation when compared with the governmental bill. It provides for establishing the Universal Service Fund to partially finance their development and pay damages of operators rendering such services. In particular, the target charge from incomes of all telecommunication operators and attraction of local and foreign investments are defined as sources of the Fund formation. The procedures of forming and using the Fund were also established.

The draft classifies operators of telecommunication services (dominating, exclusive and others) and principles of their activities. The interaction between operators and interconnection between networks are regulated in a new way. The article about an operational and technical network monitoring that the government wanted to impose on "Ukrtelecom" is excluded. Approaches to the state regulation of tariffs are specified. Rights of users to telecommunication services are expanded a little. The section that should replace Ukraine's law currently in force "On radio-frequency resource " is added.

At the same time, some norms that should be reconsidered are literally copied of the Cabinet draft (for example, a duty of operators to install technical means of operative search at their own expense). As compared with the law in force "On communication», both projects restrict users' opportunities to compensate damages caused by a careless fulfillment of obligations on the part of operators. Sections devoted to technical means of telecommunication, standardization, certification and metrological maintenance underwent no essential changes (except for the redistribution of powers in favor of NTC).

Article 28 "Registration of Internet domain names" in the deputy draft should be mentioned as well. It is likely to arouse conflicting opinions among Ukraine's Internet users. However, it should be recognized that the national domain could not remain for a long time above state interests. It is not a bad idea of resigning commissions of the state regulation to the National commission as proposed in the draft especially against a current situation when a unit of Ukraine's Security Service pretends to perform these duties.

It can be concluded that the deputy draft surpasses much the Ministry project both in contents and a level of jurisdictional technique and much better meets requirements of harmonizing Ukraine's legislation with EU laws. Accepting the law based on this draft (adjusted for necessary improvements) would create conditions that were more favorable for Ukraine's market of telecommunication. However, one should remember such concepts as "freedom of speech", “personal correspondence”, "vote" and so on.

1. http://www.shubin.ru/zak5.html.
2. http://www.lenta.ru/internet/1999/12/28/domains/proect.htm.
3. Introduced by Deputies G.Omelchenko and A.Ermak.
4. A.Khmelevoj, V.Elchaninov, B.Kostinjuk, D.Kostrzhevsky.
5. http://oracle2.rada.gov.ua/pls/zweb/ ¹ 2059-2 of May 14, 2003. The Law "On telecommunications"

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