On 18 December 1998, the head of the Committee for Post and Telecommunications (CPT) signed an ordinance under the new Telecom law entitled "Licensing of telecommunication services". Part II of this document said that the following year a general license should be issued to, among others "4.INTERNET - Internet Service Providers."

The apparently normal concern of the government to ensure high quality services in fact concealed serious background issues.

Under the Telecom law government officials were to be allowed access to every document belonging to ISPs licensed under it. This could obviously result in leaking of usernames, password, log files, and other sensitive material. Indeed, it could lead to a serious breach of the law on special surveillance, as the investigators would not need a court order to examine personal information. Knowledge of individuals’ usernames and passwords would allow the police to read private mail without proper authority.

The license fee was subject to a percentage of gross annual sales; in certain cases this would mean an additional hidden tax of about 20% - 40% of profits. The CPT claimed that the license fee was not "that high - 2.3 % of sales"; but with profits of 5 to 10 % of sales, this was effectively a sales tax of 23 -46%.

On 24 December, after learning about the new law, the chairman of the Internet Society of Bulgaria (ISOC-Bulgaria), Veni Markovski, sent an urgent fax to the chief of the CPT, warning that such an order went against good practice on the Internet, but hoping that this was perhaps just an oversight on the part of the chairman of the CPT in terms of complying with European practice. Since there was no response from the CPT, ISOC issued a press release alerting people to the new ordinance.

On 30 December newspaper articles appeared in a number of Bulgarian newspapers, under the headline "A Christmas "present" for Internet users".

Early in 1999, many more articles appeared in the media. Veni Markovski, Dimitar Ganchev and Dimitar Kirov –(members of the Board of ISOC–) gave several live interviews. One of them was a live 15 minute prime time piece with one of the authors of the new Telecom law, under which the ordinance was issued. After a month of CPT silence, on 27 January an injunction was filed by ISOC and sent to the Supreme Administrative court. The Supreme Administrative Court is the only court with the power to reverse government decrees and ordinances that contravene Bulgarian law European conventions ratified by the Bulgarian Parliament.

According to Mr. Markovski (a qualified lawyer), the ordinance contravened Articles 2, 3, 7, 10 and 16, subsection 3, and Article 17 of the Telecommunications Act; the "Sector Policy in Telecommunications" adopted by decision N 570/1998 of the Council of Ministers; articles 34, 39, 40 and 41 of the Constitution of the Republic of Bulgaria and Article 10 of the European Convention on Human Rights (the right to freedom of expression); European Union directives and recommendations relating to the Internet: Directive 97/13/EC, Recommendation 3/97, as well as European Union principles relating to telecommunications; and Article 84, subsection 3 of the Constitution of the Republic of Bulgaria. The full text of the injunction can be found at http://www.isoc.bg/kpd/index-eng.html.

The reaction of ISOC was admittedly more instinctive than reasoned. The fact that the head of the CPT (the equivalent of Ministry of telecommunications) had decided to place restrictions on using the Internet was so shocking that it provoked enormous opposition. It also raised certain fears in some business quarters.

ISOC was the only organization to confront and take action against the government’s decision a fact which raises a number of important issues in Bulgaria and worldwide.

ISPs in Bulgaria had not been able to unite to protect their rights. This was due in some part to cross-cultural differences but also to a lack of self-confidence and a lack of belief in the ability of a united to win.Only a non-governmental organization could opposed the government;  intervention by a business organization would have been seen as merely protecting private commercial interests.

ISOC was very lucky that several of the country’s foremost lawyers were willing to work for free. It should be noted however, that. the lawyers of the Helsinki human rights committee, for instance, were not very hopeful of our chances of success. The situation in Bulgaria was actually very favourable the efforts of ISOC. The country was under the supervision of the Parliamentary Assembly of the Council of Europe. Members of the European Parliament visited Bulgaria twice a year to monitor Bulgaria’s progress in preparing to join the EU. Many foreign heads of states made visits to Bulgaria, including the German Chancellor Herr Shroeder and US President Clinton.

In January 1999 ISOC began holding regular press conferences, and more than 300 articles were published in the next ten months. Members of the ISOC Board took part in TV, radio and live talk shows, making a number of appearances on national TV, to audiences of about 60% of the population.

We received strong international support from APC, ISOC, GILC and other international organizations.

The proposed licensing of ISPs would put an end to freedom of speech on the Internet in Bulgaria. ISPs would be afraid to object to unauthorized listening, for fear of losing their license. In Russia later that year the so-called SORM-2 made it possible for the FSS (formerly known as KGB) to monitor Internet traffic on ISP servers via leased lines and root access (facilitated by ISPs at their own expenses and without a court order).

In June 1999, after two hearings, the Supreme court temporarily halted the ministerial ordinance and gave hope to Internet users in Bulgaria. In July ISOC decided to continue its fight, and accepted the support of the "St. George's day" (Gergiovden) political movement. this led to a great deal of media interest in August. Various articles were published, among the best of which was the analysis by the well-known Bulgarian journalist Dimitri Ivanov, available at http://www.isoc.bg/kpd/news-sega-02-07-99-eng.html.

The government agenda hidden behind the ordinance was:

Some members of the new government had demonstrated their desire to control information about Bulgaria on the Internet in 1998. Ex-cabinet member Mario Tagarinski said publicly that such control was necessary to prevent misuse of terms such as "Bulgaria", etc.

The CPT organized a public debate in September 1999 to try to justify their motives in accepting the ordinance. They failed to provide a strong defense against ISOC’s arguments, in particular the very well prepared thesis by the chairman of the Committee of Bulgarian emigrants in Sweden, Ivan Ivanov. Mr Ivanov had made a thorough search of the papers, documents, recommendations and directives of the European Union, the European Council, and the European Commission.

In the meantime, the court appointed a three-person expert group to address questions raised by the case. Among them was Dr. Kiril Boyanov, a well-known figure in IT, not only in Bulgaria, but worldwide. The expert report examined questions on the nature of the Internet, its relation to telecommunication services, etc.

In October 1999 the main aims of ISOC were to recruit more supporters and to exploit meetings of Bulgarian officials with foreign counterparts. Thus we managed to ask the German Chancellor Shroeder for his opinion on the licensing of ISPs. The recent German law on Telematic services explicitly states that Internet services should free of any licensing or registration restrictions. In a public meeting at the Economic University in Sofia, Mr. Shroeder said without hesitation that "licensing of ISPs cannot be justified on economic or political grounds".

This opinion was applauded by ISOC.

German chancellor was the second politician to support us. The first was the Bulgarian vice-president Todor Kavaldjiev. Mr Kavaldjiev had a one-hour meeting with the chairman of ISOC in August 1999. During this meeting the Bulgarian vice-president was very supportive and his position was publicized in the Bulgarian press.

At the beginning of November 1999 there were changes in the government. Several key ministers were likely to be replaced, among them the deputy Prime Minister responsible for telecommunications. President Clinton was expected to visit Bulgaria on November 18, just a few days after the next hearing of the ISOC case at the Supreme Administrative court. ISOC-Bulgaria made it clear that they would ask President Clinton about his views on licensing.

A week before the hearing, however, a communiqué was suddenly released by the Cabinet, ordering the chairman of the CPT to meet representatives from ISOC and reach an out-of-court agreement to stop the proposed licensing. This came as a complete surprise to ISOC, regardless of rumours in the air.

Representatives of ISOC and of the CPT, the State Telecommunications Commission (equivalent of the FCC) along with the secretary of the "Gergiovden" movement met for 3 days to negotiatie a solution. A joint statement was drafted, setting out the case with solid arguments with which the CPT could reply to any future critics. The CPT, however, sent back a totally different document, which promoted licensing as a good thing for Bulgaria.

We refused to sign the document and four days before the trial we announced that the CPT had not followed the recommendations of the Bulgarian Prime-Minister and would not agree to withdraw the proposed system of licensing. On the following day rumours spread that the chairman of the CPT had in fact decided to change the ordinance, moving Clause 4 from Part II (licensing) to Part III (free services). Two days later, during the hearing, the CPT lawyers brought a copy of the new ordinance to court. Seeing this, ISOC decided to accept the government’s changes and withdrew their case.

ISOC’s reasons for withdrawing were:

The case resulted in more than just the fall of the proposed licensing system: