Covid-19 has made clearer than ever before the importance of technology to our day-to-day lives. Whether it is families and friends supporting each other through lockdown, businesses serving their customers in new ways, or public services adapting to changing circumstances, technology has been pivotal. One strategic direction for that would enable Romania to recover and grow in a sustainable way is  to implement digitalisation on a large scale.  This means: ensuring wide coverage of very high quality broadband infrastructure and services, digital solutions for the public and private sector/smart cities, digital education, telemedicine solutions, as well as building an e-Government ecosystem. These directions are aligned to the EU vision of building a more digitalised Europe, with technology playing a key role in driving economic and social progress. 

The European Commission has set clear objectives on 5G coverage (COM/2016/0587) to increase the availability of very high-speed connectivity (Connectivity for the digital single market). These objectives are reflected in both the 5G strategy for Romania (H.G. 429/2019), as well as the coverage obligations for the 5G spectrum auction.  Building the e-Government ecosystem is another key priority. The European Commission has stated that: “public administrations and public institutions in the European Union should be open, efficient and inclusive, providing borderless, personalised, user-friendly, end-to-end digital public services to all citizens and businesses in the EU”. 

The e-government ecosystem includes citizens and companies and their representatives as stakeholders, as well as interconnected platforms that host digital public services (such as Governmental Cloud etc). The creation of public digital services based on these platforms as well as the democratisation of access and participation of Romanian citizens in these digital e-Government processes (based on connectivity and digital ID/signatures using different technologies including mobile SIMs) is essential for Romania in its path towards greater digitalisation of society. 
 
Romania ranked 26th out of 28 EU Member States (including the UK) in the 2020 Digital Economy and Society Index (DESI). Digitalisation of the economy lags behind the rest of Europe, especially in relation to digital public services and digitalisation of businesses. 
 

Investment in digital brings an immense opportunity to both accelerate the recovery and also address existing divides which have been exacerbated in this crisis. In order to do this, allocating 20% of the Recovery and Resilience Fund to digitalisation is an absolute necessity.
By addressing the digital divide – for the benefit of the people, for businesses and for the local authorities in rural areas, we will ensure that every euro of public money that is spent through the Recovery and Resilience funds allocated to Romania delivers the maximum return.
 

The penetration of broadband services continues to be a key challenge in Romania, despite the progress registered in the last few years. Although Romania ranks among the first countries in Europe for ultrafast broadband penetration (at least 100Mbps), national coverage with Next Generation Access Networks (NGA)  technologies remains significantly lower than in other EU member states and is still very much limited to urban areas. 

Only 53.4% of rural households had access to NGA networks in June 2019, which is significantly below the target of 100% coverage with 30 Mbps by 2020, set through the National Plan for the Development of the Next Generation Network (NGN) Infrastructure. Penetration of fixed internet broadband covered only 22.5% of the population in June 2019, much lower than the EU average. (Romania came in last but one place in the EU). Moreover, in the European Commission’s Communication – Connectivity for a Competitive Digital Single Market - Towards a European Gigabit Society, new ambitious targets were set in relation to broadband penetration and coverage. Building on the Digital Agenda for Europe 2020 targets, the European Commission stated that all European households, rural or urban, should have access to networks offering a download speed of at least 100 Mbps, which can be upgraded to 1 Gigabit. Moreover, all urban areas as well as major roads and railways should have uninterrupted 5G wireless broadband coverage, starting with fully-fledged commercial service in at least one major city in each EU Member State by 2020.

Romanian operators have already started to deploy 5G technology and are waiting for the allocation of a new spectrum. This new technology increases the access of customers and companies to very high-quality broadband services. Further development of 5G networks will involve roll out of fiber optic connections and installation of new telephone masts.

In this context we would like to emphasise the need to harmonise the entire regulatory framework with the EU legislation via the transposition into national legislation of the European Electronic Communications Code (“the Code”).   We believe that a faithful transposition of the Code and granting a reasonable amount of time to operators for the implementation of the new obligations will contribute to an increased number of satisfied customers and to higher usage of broadband services.

The next 10 years will represent a historic opportunity for Romania to significantly accelerate its economic and social development by maximizing the value added by strategic EU funds obtained as a result of extensive negotiations in Brussels. Almost 80 bn EUR have been allocated to Romania to help the country develop key sectors that will enable it to leapfrog other countries in the European Union. We now need to put into practice the vision of a stronger and more resilient Romania that can enable economic growth and create more jobs, while reaping the benefits of its European identity.

To capitalise on this opportunity, Romania must absorb its allocated funds in a manner which maximises the long-term benefits for the economy. Historically, the country has never had to absorb such a significant amount of funding in such a tight timeframe.  Generating mature projects in Romania’s strategic sectors should not be solely the responsibility of the public sector. Digital transition will rely heavily on private investment, especially in relation to digital networks, and linking this with reforms supported by recovery funds will be essential.

A joined-up approach between government and industry must be taken to maximize the benefits of recovery funds, stimulate private investment and ensure there is a supportive and efficient regulatory framework. By enabling the private sector to become a more active partner in the country’s development, more and larger scale projects could be implemented, generating long-term value for Romanian society and the economy (while also generating a better absorption rate of EU funds), as well as allowing the government to obtain higher leverage on its investments..

We support the broad consensus that Europe must become greener and more digital. This will bring jobs and economic growth and at the same time make our economies more resilient, more sustainable, and more inclusive. The 37% allocation of funds to green and 20% allocation to digital in the EU recovery plans is an excellent starting point and we believe this should be reflected in Romania’s national recovery strategy

The IT&C sector in Romania represent approximately 7% of GDP, with a growth rate consistently surpassing other more traditional sectors. IT&C also has a strong indirect impact on other sectors, by bringing more efficiency, productivity and transparency. The telecom sector is the enabler which creates the prerequisites for accelerated development of the IT&C sector in the future. 

Telecom infrastructure is the only type of infrastructure which has not been developed through public funds, and it is the only type of infrastructure in which Romania is among the top performers in the world. Romania has the highest Internet speed in Europe and a buoyant IT&C sector. This is reflected in the country’s Digital Economy and Society Index (DESI) Connectivity score of 56.2, which is higher that EU average of 50.1. (Romania also ranks 11th among Member States). In the last decade, consumers have enjoyed high internet speeds at low prices, driven by the continuous high level of investments made by private companies and the strong, healthy competition in the telecom market. Telecom infrastructure has become critical during the COVID-19 pandemic. In the absence of a robust, functional communication network, many businesses would have ground to a halt, schools would not have been able to operate without physical presence and hospitals would not have been able to use telemedicine solutions.

There is an urgent need for greater public support for future investments in developing network infrastructure, in particular 5G. Other European countries will invest massive amounts of public funds in the telecom industry in the next few years, which might cause Romania to lose one of its main competitive advantages. For example, Spain has recently announced the allocation of 33% of EU funds to digital and its aim is for 75% of the population to have access to 5G coverage. EU funds could also be used to support potential future infrastructure component swaps driven by regulatory or security considerations.

Given that the recovery fund is of market shaping size, it is essential that the way in which it is allocated should preserve effective competition in the market. We also believe that bold improvements in policy are needed to ensure that both public and private investment is maximised; for example, spectrum awards that focus on investment (rather than licence fees or unjustified market shaping), network sharing and co-investment to drive efficiency and competition as well as removal of barriers to network deployment. 

Small and medium sized companies (SMEs) are the most relevant segment of any robust economy and unfortunately, the most exposed and sensitive to the outside world, and to dramatic changes in the business climate. They represent around 90% of Europe’s businesses, employ around 63% of Europe’s workforce and contribute 4 trillion EUR to the total added value of the EU, yet only 17.5% sell online.

To achieve an immediate positive impact and future sustainability the FIC recommends that these companies’ existing use of technology (connectivity) should be augmented with digital tools, enhanced cyber security, and business continuity prerequisites. The online presence of these firms should be strengthened, and end-to-end digitalisation of the customer’s journey should be implemented. Moreover, a digital secure workplace should be created for employees, as well as digital training and data protection. Recently, especially for small and medium sized companies, the Internet of Things has also proven its potential to compensate for confusion, anxiety, and detrimental business decisions, by assessing automation and risk mitigation. 

The digital society is undergoing major changes. As more and more of our day-to-day activities go electronic and digital, very large volumes of data about us become available. This phenomenon is being compounded by both technological and behavioural factors (e.g.: increased use of online services such as e-commerce, e-government, social media, etc).

Today, many firms are building their business models around their use of this data, especially for advertising, personalised offers and real time customer interactions. This use can also generate services that will benefit both individuals and society in general.

In this context, a user centric privacy framework must be based on a correct understanding of the user’s privacy interests. There is a need to provide a consistent user privacy experience that will establish familiarity with the privacy implications of applications and services, empowering the user and leading to better privacy management.

When human activity is outsourced to technology based on algorithms, there will always be a fear of loss of autonomy. As from 25 May 2018, the General Data Protection Regulation (GDPR) became applicable. The GDPR revised and supplemented the general rules on data protection, as introduced at EU level in 1995 (via the Data Protection Directive 95/46/EC) and at Romanian level via Law No. 677/2001. The GDPR was followed by rules aimed at implementing so-called “open clauses” in Romania (via Law No. 190/2018) and various decisions adopted by the National Authority for the Supervision of Personal Data Processing, such as the decision on its investigative activity and the list of activities for which a data protection impact assessment is needed. 

In parallel, the discussions on completing the proposed ePrivacy Regulation have continued. Similarly to GDPR, the ePrivacy Regulation aims to review and update data protection rules in the electronic communications field, irrespective of whether it is a free or paid for service and including all traditional and modern forms of communication. In May 2018 the European Council published its own draft of the proposed ePrivacy Regulation. Following this action, the European Parliament entered into tripartite negotiations with the European Council and the European Commission, in order to agree on a finalised text to be adopted by the European Parliament. 

These legislative changes have a significant impact on all companies carrying out activities in Romania, including in the ITC sector. Companies have needed to gradually adapt their products and services, as well as their internal processes, to ensure compliance with data protection requirements. The authorities have provided only limited support for these efforts, while the amount of information and data available on how the authorities apply the data protection norms is limited. 

The practice of the National Authority for the Supervision of Personal Data Processing is not transparent and repeated changes in approach are not publicised. This may lead to practical roadblocks in the promotion of new types of services, as companies are unsure how to comply with data protection requirements. 

The Electronic Identification and Trust Services Regulation (eIDAS Regulation 910/2014/EC) seeks to enhance trust in electronic transactions by providing a common foundation for secure electronic interaction between citizens, businesses and public authorities, thereby increasing the effectiveness of public and private online services, electronic business and electronic commerce in the EU.

The Regulation lays down the conditions for the recognition of notified electronic identification schemes of Member States, as well as the rules for trust services, especially those for electronic transactions, and establishes a legal framework for electronic signatures, seals and stamps.
 

It became applicable for trust services on 1 July 2016 and finally provided a consistent legal framework for cross-border acceptance of electronic identities and signatures. It is directly applicable in all EU Member States and does not need to be transposed into member states’ national laws. As an exception, some aspects must be defined at national level, such as the liability regime for trust services providers and the legal effects of simple and advanced electronic signatures, as the Regulation does not govern their validity and the evidential weight in court. Qualified electronic signatures are, by Regulation, equivalents to handwritten signatures and have equivalent legal effects.

The internal market principle provides that a qualified trust service based on a qualified certificate issued in one Member State will be recognised as a qualified trust service in all other Member States. Products and trust services that comply with the Regulation need to be permitted to circulate freely in the internal market.
 

At national level, there are three draft laws on electronic signature registered in Parliament. The draft laws were registered by different Parliament members and they have been discussed together by the IT and Communications Commission of the Chamber of Deputies (decisional chamber), which took the lead on public consultations at expert level. Consequently, both the public authorities and businesses have embarked on a roller coaster journey to regulate the issues left by the European legislator to the discretion of each Member State.

The main points of discussion and dispute have been related to express recognition of legal effects for all three types of electronic signatures, differentiated according to the level of trust and security and to remote or technology-based identification procedures allowed for the acquisition of qualified electronic signatures.

The COVID-19 pandemic has affected businesses at large, which turned to digital technologies to keep their activities running. Signing documents is one of the most recurrent and important processes in every business. Even in normal conditions, the entire process is time-consuming, requiring printing, exchanging with all signers, and mailing. This became even more challenging when signers started working remotely and needed to avoid physical contact as much as possible. Unfortunately, digitalisation measures such as the recognition of the legal effects of all three types of electronic signatures, which would have facilitated day to day processes, have not yet been enacted in Romania. 
 

In the meantime, the Government published a draft Emergency Ordinance stating that labour related documents can be signed with qualified electronic signatures. However, even though the intention of the Government was to digitalise the labour reports, the Emergency Ordinance 36/2021 does not allow enough flexibility and it risks being too bureaucratic and counterproductive, generating the opposite effect to that desired, i.e. less digitalisation. Moreover, the segmentation of regulations, on the use of electronic signatures, generates risks such a as potential negative effects in terms of regulation and uniform application of the rules for using electronic signatures.

In 2015 the European Commision (EC) announced the Digital Single Market, a flagship policy that seeks to eliminate the barriers and fragmentation within the single market, build a better online service for consumers and businesses, increase trust and boost cross-border e-commerce. Five years later we are entering a new phase, the “Digital Decade”, in which the EC’s strategy aims at making the digital transformation work for people and businesses, while helping to achieve its target of a climate-neutral Europe by 2050.

While still lagging behind, Romania has proved to be competitive and has great potential in terms of the development of e-commerce at national and regional level, This has seen double digit growth  in the last few years, and is expected to grow by at least 30% in 2020, to a turnover of 5.5 billion euros, according to E-commerce Europe. This growth is possible because the market is still underdeveloped. According to the Digital Economy and Society Index (DESI) 2020 Country Report, only 29% of Romanian internet users have purchased something online in the last year, compared to the European average of 71%. Moreover, only 3% of Romanian internet users have sold something online in the past year, while the EU average is 23%. On the other hand, only 11% of Romanian SMEs sell online (compared to an EU average of 18%) and only 5% do it cross-border.

The statistic related to digital skills also give cause for concern. While Romania is performing well with regard to ICT graduates, ranking 5th among EU Member States, with 5.6% of all graduates, the same cannot be said about the general population’s digital skills. Romania ranks second to last among EU countries on human capital and its ranking stagnated compared to the previous year. Only 31% of Romanians have at least basic digitals skills (compared to the EU average of 58%), 10% have above basic digital skills (EU average 33%), while 18% of Romanians have never used the internet (double the EU average of 9%). 

After repeated delays, in July the Parliament adopted a bill initiated by the Government in 2016 on electronic IDs. The new legislation, which became Law no. 162/2020, provides for the issuing of electronic IDs that would allow Romanian citizens to identify themselves in relation to electronic databases of Romanian public authorities as well as private third parties. 

Furthermore, the law states that electronic IDs will incorporate an advanced certificate for electronic signature to be issued by the Ministry of Internal Affairs and will also allow storage of a qualified certificate for electronic signature issued by a trusted services provider. 

The implementation of the law would allow citizens to  benefit from a large range of private electronic services, including banking, insurance, telecom services etc. However, the norms of the law make no reference to the issuance of associated qualified certificates.

e-IDs would also “open the door” to Romanian citizens to also authenticate themselves in other EU Member States, if they are notified to the European Commission and accepted by them, as the Romanian national electronic identification scheme. Mutually recognised electronic identification means would facilitate cross-border provision of numerous services and enable businesses to operate on a cross-border basis without facing many obstacles they currently encounter in interactions with public authorities.

Moreover, by adopting Emergency Ordinance no. 38/2020 on the use of documents in electronic format in relations with public authorities and institutions, the Government created the framework through which public authorities are required to accept electronic signatures in relation to taxpayers. 

Furthermore, the Authority for the Digitalisation of Romania (ADR) has been quite active. On 1 September 2020, the ADR announced the signing of a contract worth nearly RON 100 million for a Centralised Software Platform for Digital Identification - “PSCID”. The aim is to ensure the proper „gateway” for the use of electronic signatures in relation to public authorities. However, the project was launched without proper consultation with stakeholders. 

In October 2020, the ADR also launched a public consultation on a major public policy proposal on eGovernment. The aim of the project is to develop the institutional capacity of public authorities to develop eGovernment tools for citizens and the business environment, as well as to ensure the vision and directions of action in eGovernment.

In early November, the ADR launched a public consultation on a draft Government Decision (HG) on technical norms for the procedure for identifying a person remotely using video means. Although the aim is to streamline digitalisation efforts, the draft presents problems of both substance and form, mainly because it is not in accordance with current legislation and does not observe the requirements for the legislative process. 

On the negative site, the two bills initiated in 2019 and which were meant to create a national framework for fully implementing Regulation (EU) No 910/2014 of the European Parliament and of the Council of 23 July 2014 on electronic identification and trust services for electronic transactions in the internal market (e-IDAS) are still awaiting the decision of the Chamber of Deputies. As a result, national legislation on the use of electronic signatures remains unclear.

However, even though progress has been made, there are still steps that need to be taken before this progress is felt by citizens and the business environment, as well as by public authorities.

Over the last decade, the development of information technologies, sensors, big data and products/services based on information has changed the way people live in cities. Access to information, services and communication is now provided anywhere and anytime by smartphones and people have adapted to this new way of living. This has created an urban environment with a growing demand for efficiency and resources. As a result, public administrations need to consider the development of the management models of cities. Moreover, Romania needs to eliminate the digital divide and ensure strong gigabit and 5G connectivity. 5G is not just about improving quality and meeting increased demand; it is also a key asset for Romania to compete, especially in relation to manufacturing, cities, transport, vehicles, utilities, and connected healthcare. 
 

Developing smart cities and the digitalisation of business will support the green transition. For example Smart Energy Meters enable businesses, municipal authorities and households to monitor, manage and reduce their energy use. Smart cities improve the efficiency of energy-intensive services such as public transport, public road networks and street lighting. The conception and development of Smart Cities is highly dependent on Internet of Things technologies, and sometime the two become synonymous.  

Smart cities deliver a huge breadth of opportunities and benefits. Some key highlights are smart grids, as well as greater mobility, better protection of the environment and greater safety. Smart Grids work with connected sensors in various municipal systems to help cities to become more efficient by better managing energy demand and supply. With connected mobility infrastructure, smart cities can manage traffic flows and public transport services to reduce congestion and support the mobility of citizens. By managing congestion, smart cities can also help to improve air quality, while smart municipal services can manage wider pollution through intelligent waste removal. Finally, by using an integrated system, smart cities can improve safety in traffic, as well as facilitate wider security management e.g. through optimal allocation of security resources and traffic management for emergency responses. 

By managing congestion, smart cities can also help to improve air quality, while smart municipal services can manage wider pollution through intelligent waste removal. Finally, by using an integrated system, smart cities can improve safety in traffic, as well as facilitate wider security management e.g. through optimal allocation of security resources and traffic management for emergency responses. 

The main challenge the public sector faces in responding to the opportunities a “smart city” brings is to quantify the impact of disruptive technologies. This can lead to challenging investment decisions. The structure and culture of city councils can impede strategic thinking on information and communications technology and the required organisational changes can be hard to implement.

In Romania, 594 smart city projects had been implemented by June 2020 in 87 cities; almost double compared to the beginning of 2019. The projects are grouped within the six Smart City Verticals – Smart Economy, Smart Mobility, Smart Environment, Smart People, Smart Living and Smart Governance.

The leading cities, by number of planned, work in progress or finalised projects are: Alba Iulia (106), Cluj-Napoca (54), Timișoara (26), Arad (19), Iași (19), Brașov (18), Bucharest– Sector 4 (18), Oradea (17), Sibiu (16), Piatra Neamț (15), according to the Romanian Association for Smart cities. 

Among the solutions introduced in Alba Iulia, the most active city in terms of initiatives, the following stand out: free Wi-Fi in public areas and on public transport, traffic management, an environment monitoring dashboard with comparative measurements in urban and suburban areas, real time notifications of the public transport schedule, smart lighting, and a city proximity engagement platform promoting tourism, water management in remote areas, as well as online surveys.