Country Readiness Assessment Report – Kyrgyzstan Soros Foundation in Bishkek . TCP/IP, FR AsiaInfo Internet access services provided by FreeNet and the Soros Foundation are free because the providers themselves are non-commercial organisations and operate with the support of foreign sponsors. This Internet access is provided selectively, based on a statement made by the sponsor. In general, it is provided to educational, science or other organisations (eg. the mass media) on a competitive basis. 3.3.4 Current condition of the Internet services market in Kyrgyzstan (1999-2001) The last two years of Internet market development have been characterised not only by an expansion of both the technical potential of providers and the number of Internet users, but also by the increasing number of services being provided. A good indicator of Internet development during the last two years is the increase of the joint Internet access channel. While in 1998, the common channel of providers was about 768 Kb/s, in 2000, the joint channel has risen five times and amounts to more than 4 Mb/s. In fact, the Internet access market has about 6,000 active users. The number of potential users is approximately 20,000. This category includes people that could use the Internet but do not have access to it. Free opportunities to learn about and use the Internet, provided by institutions of higher education and international organisations, considerably influence the number of potential users. An important aspect of this Internet development period is the increase in number of Internet services, meaning that the Internet is not just an economical way to communicate. For example, Internet technologies have now been used for the first time during parliamentary and presidential elections in the Kyrgyz Republic. The State Computer-aided System “Shailoo”, based on Internet technologies, enabled interactive counting of votes in every region of the Republic. For the first time, Internet radio broadcasting also took place. Carried out in cooperation with national television channels, the Interactive voting system can be added to the achievements of the last years, permitting as it did live participation of viewers in social opinion polls. Another peculiarity of this period of Internet market development is KyrgyzTelecom’s, preparation to enter the Internet market, concerning which there is mixed opinion. However, the fact that the biggest communication operator in Kyrgyzstan is entering the field, demonstrates the level of competition which there will be in this market. Competition in the Internet services market is becoming increasingly tough stimulating a growth in the number of special promotions designed to attract clients. While there are special state committees to protect and develop competition, there is no guarantee that KyrgyzTelecom will not seek to pull in customers via special events where inducements from one of the other sectors in which the company has a monopoly, will be offered. With a monopolist providing Internet services as one of its branches, these services could now be provided at lower cost. Questions, however, remain - how will the cost of services will be determined?, and will the new structure be biased, as other providers pay for services obtained from other branches of the monopoly? Even if the Internet branch of KyrgyzTelecom pays market prices, but without direct payments, then conditions of inequality appear due to differences in the cost of finance. KyrgyzTelecom can develop without any additional finance, because it monopolises communication facilities. KyrgyzTelecom should enter the Internet services market on the basis of a warranty of 28