[5] The State of the Net in Hungary by John Horvath jhorv@helka.iif.hu As the seconds tick the time out for the second millennium, Hungary is still playing catch-up on the long and winding infobahn. High telephone charges coupled with metered rates for local calls make domestic access still a luxury for many. In addition, the country's digital infrastructure is still inadequate to handle large volumes of traffic and high bandwidth applications. Yet despite these and many other shortcomings, Hungary has made some progress over the past few years. The Internet has finally broken out from its isolation as a seedy and potential dangerous place for youngsters and society at large. Indeed, even the extreme fringes of the political spectrum now have a presence on the Internet. The Internet as a source of mass media has gained ground in the past year, albeit still very slowly. Conventional media radio, television, and print have increasingly made references to the "new" media. In fact, many have their own online presence. Shows dealing specifically with the Internet have also been on the rise. As for e-commerce, although still in its embryonic stages, it has started to become more prominent. This year saw a big boost for the commercial Internet as the country's largest savings bank, OTP, launched an array of online services. This has taken place in conjunction with the rise of other business activities, like ordering a pizza online. As a result, advertising is beginning to spill over from "cyberspace". Many advertisements placed within traditional venues now include a web site or e-mail address. Coupled with all these advances, there has been an exponential rise in native language content. This is directly related to the growth in user demographics which, although still well below the European average, not to mention North America and Japan, has risen substantially. The latest demographic figures from IDC show that there are 650,000 Internet users in Hungary and this is expected to increase by almost 30 percent in the next three years. Much of this can be attributed to the government's effort at wiring the schools to the Internet. Known as Sulinet, the program has introduced many students, teachers, and administrators to the world of computers and networking, and has offered them an opportunity to go online that they otherwise would not have had. There have also been several private sector initiatives at broadening the user base. Cable access has made its appearance, providing more reliable service and higher bandwidth. Not only this, but with cable threatening the ISP position of the country's leading telecom provider, MATAV, the access market has become more competitive, to the benefit of consumers. In addition to this, the post office has been busy establishing "telepost" offices in various communities. In conjunction with usual postal services, these offices enable people to use computers and the Internet, providing them with e-mail and a host of other services. A total of 17 such offices are presently scattered throughout the country, with plans to open another 30 offices next year. Although the progress the country has made over the year to bring the Internet to the average citizen is noteworthy, it is still far too early to proclaim that the Internet revolution has "taken off" in Hungary. On the contrary, the country still faces many challenges. Unless these are addressed, the potential of the Internet will be stagnant. One of the major problems still faced, not only by Hungary but other countries of Central and Eastern Europe, is that the area is still being used a dumping ground for redundant technology. The new computer system at OTP, for example, which was purchased and implemented in the mid-nineties, is outdated by at least a decade. This impediment of redundant technology, due either to ignorance or economic considerations, is not limited to merely Hungarian enterprises, however. A Dutch bank operating in Hungary, which last year implemented a new retail card system, only found out at the beginning of this year that its new system was not Y2K compliant. On the commercial side of things, although the presence of the Internet is obvious in advertising and marketing strategies, Hungarian companies (especially SMEs) still are unable to see the advertising potential nor fully grasp the dynamics of online advertising. On the other hand, those that do are often behind the times, perpetually caught in a cycle of playing catch-up with western trends. For instance, although many companies have now begun to make a shift toward the Internet, the new trend in the U.S. is to actually "flee the dot-com". As Keith Dawson writes in his weekly log, Tasty Bits from the Technology Front (see: http://tbtf.com/blog/1999- 11-07.html as well as http://interactive.wsj.com/articles/ SB942276734846706339.htm and http://www .msnbc.com/news/333919.asp), "focus groups are beginning to show that average folks don't remember the companies, don't like the ads, and resent the ever-present image of the greedy twenty-something zillionaire." Meanwhile, telework remains a remote and wishful concept. Despite increased traffic congestion and pollution in most of Hungary's major cities, especially Budapest, it's not economically feasible to have people work from home, given the poor state of the telecommunications infrastructure -- not to mention the cost. Moreover, most Hungarians still work along lines of an industrial and agrarian economy, as opposed to a knowledge-based one. As for e-commerce, while making a grandiose appearance, it's caught in an awkward predicament. To be sure, e-commerce in Hungary will grow but, if present trends continue, its influence will be limited. The main reason is that many are wary of initiating a system for serious online transactions. Even non-monetary transactions, such as booking and reservation services, are not widely available. This is because there lingers a fear and mistrust of online services. For instance, while the ability to order and pay by credit card over the telephone has relatively a long and established tradition elsewhere -- notably the U.S. and Canada it's still a concept very much alien to the Hungarian economy. A less than extensive user base is an additional problem. Hungary remains one of the most expensive places in Europe for Internet use. Although the increase in the number of users may look impressive, it still represents less than 7 percent of the population, with only 14 percent of all PCs in Hungary connected to the Internet. While efforts have been made to get more people online, access is still hindered by high telecommunication charges. This also goes for cable, which costs about a quarter of an average Hungarian's salary. A study commissioned by the OECD confirmed that high connection fees coupled with the high cost of local telephone calls is impeding the uptake of the Internet in Hungary. Unfortunately, this situation looks set to worsen, with a 20-40% rise in telephone charges expected in the new year. Alternative efforts to entice more people online, such as the post office's telepost offices, are not only expensive but also suffer from inconsistent and lopsided development. In the Galga valley, for example, a region about 40 km east of Budapest, a small village has a telepost office while neighbouring towns and villages, which are larger and more strategically located, don't. As for the social aspect of computer networking, here, too, formidable challenges and obstacles exist. While the Sulinet program may have succeeded to a certain extent in introducing many to the medium, students and teachers are, nevertheless, not encouraged to understand the medium, but are taught to simply use it. Similarly, for the community of users as a whole, the concept of a "net community" is lacking somewhat. Most know nothing about ICANN, no less have an understanding nor even interest about any of the issues surrounding the future of the Internet. Another challenge faced by Hungarians embracing the Internet is the view of computer-mediated communications as an alternative source for information. Unfortunately, the Internet is still regarded as a supplement to conventional media, a view that is being reinforced by radio, television, and print. Meanwhile, the old habit of regarding the Internet as a cesspool of anarchy and perversity dies hard. Earlier in the year, a report on hackers was aired on Hungarian television. Instead of presenting a comprehensive view into this sub-culture, with an additional follow-up into Hungary's unique hacker culture, the report turned out to be nothing more than a shoddy play on Eric Raymond's dichotomy of hackers and crackers (see "Homesteading the Noonesphere"), the simplified conclusion being that one group (hackers) is benevolent (they are people who try to find weaknesses in systems) while the other (crackers) are nothing more than a malevolent bunch of people. To this extent, a 3-5 person special group within the police will be established in the new year to deal with "illegal" activities on the Internet. According to media reports, the main purpose of this department is to scan Hungarian sites for pedophilia and bomb-making information which, according to authorities and the media, are the two most "dangerous" types of content to be had. However, as with all such seemingly noble efforts to protect the public from harm, the objectives are vague enough to be used as a means for silencing social discontent and political dissent. Despite these shortcomings, the future is not entirely hopeless; nor will it be entirely mundane. One thing to watch for is the possible rise of Linux in Hungary. The government had already squandered a chance when it had decided on Unix for the Sulinet program. Not that it mattered much, for Hungary still has a vibrant hacker underground. (Admittedly, the efforts of the Business Software Alliance have not gone unnoticed either, as many first time users and administrators in public institutions take the threats of the software police seriously.) With the anticipated release of a Hungarian version of Star Office some time at the beginning of the new millennium, it remains to be seen how Linux will affect the digital landscape in Hungary. As Linux applications become more compatible with commercial (i.e. Microsoft) products, cash-strapped institutions and administrators may seize the opportunities offered by free software. On the other hand, Microsoft's slick and subtle media campaigns over the past year (Bill Gates is regarded by many users in Hungary as one of the main forces behind the Internet) has done much to cement their level of support. At the same time, Linux's unfamiliar and relatively less user-friendly interface are obstacles which still need to be overcome. Other systems, meanwhile, such as BeOS or FreeBSD, are not only insignificant in number but are also unavailable in the local language. For Hungary, the irony of the whole situation is that although the country boasts some of the best talent in the field of computer programming and mathematics, it's not reflected within the general population. Instead of bringing Hungary up to speed on the "infobahn", this level of talent has either added to the country's brain drain syndrome or has taken part in the construction of the multi-tier "information society" which has emerged. Only time will tell if this is a temporary enigma or will turn out to be a chronic handicap. ---------------------------------------------------------------------- Reprinted from the Amateur Computerist Vol 10 No 2 Spring 2001. The whole issue or a subscription is available for free via email. Send a request to jrh@ais.org or see http://www.ais.org/~jrh/acn/ ----------------------------------------------------------------------