E-Government and E-Commerce - German Experiencein the Construction of Virtual Town Halls and Market Places

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Christine Siegfried

Paper delivered at the International Symposium "Developing an Electronic Commerce Infrastructure: What Should be the Role of Governmental and Private Organizations?", Beijing, Tsinghua University, School of Economics & Management, 19-21 September 2001

Introduction
The MEDIA@Komm initiative
The prizewinning municipalities: Bremen, Nürnberg municipal association, Esslingen
Current issues
Conclusion

Introduction

This essay deals with the experience of German municipalities in the construction of virtual town halls and market places by reference to the example of MEDIA@Komm. It aims to show the efforts which are being made in Germany to promote e-commerce and e-government and the experience that has been gained and is still being gained in the process. To this end, first of all the framework of the project MEDIA@Komm will be outlined and the municipalities of Bremen, Esslingen and the Nürnberg municipal association will be presented with their concepts and first results. Finally, current issues and obstacles will be described which have become apparent during the project and which are closely linked with the spread of e-commerce and e-government.

Since the mid-1980s the Business and finance department of the German Institute of Urban Affairs has dealt with the question of the effects of new information and communication technology and new media on towns and cities. For some time now, the subject of e-government has increasingly been at the centre of interest. We are therefore also trying to offer the local communities guidance and assistance in this area.

Not least because of its extensive experience in this area, the Institute was commissioned by the Federal Ministry of the Economy (BMWi) to act as the consortium leader and provide academic support and guidance to the federal government's largest multimedia initiative. Together with three other academic institutions, each of which deals with specific aspects of the subject, Difu deals with economic issues and questions of administrative science. In addition, specialist events are held and a cooperation and communication network is being established which also includes the Internet presentation on MEDIA@Komm.

Surveys show that the number of PCs in German households is constantly increasing. 38 % had a computer in 1998, but the figure rose to 45 % in 2000. The number of people using the Internet is also growing constantly: almost 30% of the total population above the age of 14 claim to use the Internet regularly. It can be said that PC and Internet are becoming an everyday medium in Germany. The Internet is no longer regarded as merely an instrument to obtain information, as it was a few years ago; it is now being discovered as a means of communication that can be used, for example, to send and receive e-mails. But it is also used as a "service instrument" which can be used at any time to call up news, shop on-line or call up advice pages.

PC and Internet are not only increasingly used in the population, technological information processing is now also an established element in the administrations of the national government, the federal states and local communities. The infrastructure in German towns and cities has improved considerably over the last three years. Almost 90 per cent of the administrative staff now have a PC, and almost half have internet access and can be contacted by e-mail.

With the increasing use of technical equipment in the administration and the continuous increase in the use of PCs and the Internet by the citizens, a change is also taking place in the self-presentation and self-image of towns and cities. Almost every German municipality can now be found on the Internet under "www.placename.de". Most of them, especially the smaller towns, offer information about their history or the local sights and provide details of their opening hours. With increasing experience in handling the new technology, and with the aim of improving the service quality for the citizens, towns and cities then extend their Internet presence. "Progressive" towns and cities offer their citizens the opportunity to communicate electronically in addition to the provision of information. In recent years, work is increasingly being done to enable transactions to be carried out on-line, so that citizens can carry out their "visits" to public authorities from home. In many municipalities, so-called virtual market places are arising which aim to provide the citizen with attractive on-line shopping facilities.

On-line services of the administration are already offered in many forms by many towns and cities. Recently, a number of municipalities have been trying to combine their administrative services and the e-commerce facilities in a single system. From an early stage, the discussion in Germany centred around the question of how such transactions could be made absolutely secure legally and how they could be seamlessly integrated across different media. The Digital Signature Act, which was passed in 1997 the Federal Republic, took this subject into account. It provides a basis for the use of chip card-based electronic signatures.

MEDIA@Komm offers the framework for the initial use of signatures in practice and the compilation of legally secure on-line-transactions. Over 100 transactions are being moved to the digital network, and more than 30 have already been implemented. Residential registration, change of address, planning approval applications and information from the registers will be seamlessly integrated across different media by electronic signature. And this includes electronic payment with chip cards in the same process.

MEDIA@Komm has a pioneering role in the use of digital signatures as a precondition for the introduction of secure and convenient on-line services. The emphasis in Germany is on the chip card solution, which is especially secure. Accredited and certified trust centres which comply with high security standards have been established for the issue and implementation of electronic signatures.

The MEDIA@Komm initiative

MEDIA@Komm is currently the largest multimedia initiative of the federal government. The aim is to exploit the new information and communication technology for the benefit of the citizens. The contact between the state and its citizens is closest in towns and cities, which is why MEDIA@Komm is working to advance the all-round creation of virtual town halls and virtual market places. The project is part of the federal government programme "Innovation and jobs in the information society of the 21st century".

The implementation of the MEDIA@Komm model projects goes back to a municipal competition declared in 1998. 136 towns, cities and local communities took part with their concepts. In 1999 the jury determined the three prizewinners: the Hanseatic city of Bremen, Esslingen and the Nürnberg municipal association. A fourth town - Rathenow in Brandenburg - was awarded a special prize for the implementation of an individual project, electronic access to records.

But not only the prizewinning municipalities are working on the implementation of their concepts. Even towns and cities which were not among the winners of the competition are continuing to develop their virtual town halls. A survey carried out by Difu among German towns and cities in 2000 showed that almost 10 per cent already "had their plans in the drawer". Almost 18 per said that they would soon "lay the foundation stone", and 43 per cent are "already working on the foundations". 16 per cent claimed that the "lower floors are already built", and 6 per cent aim to celebrate their "topping out ceremony" soon.

As an example of the experience of e-government and e-commerce in Germany, the concepts and results of the prizewinning municipalities of Bremen, Nürnberg and Esslingen will now be presented. The implementation of the projects started at the beginning of 2000, and they should be completely implemented by the end of 2002. A total of over 120 mill. DM are being invested in the projects, including 50 mill. DM in subsidies from the Federal Ministry of the Economy and Technology (BMWi).

The prizewinning municipalities: Bremen, Nürnberg municipal association, Esslingen

All MEDIA@Komm municipalities aim to carry out legally binding transactions by electronic means from start to finish by using the digital signature. It will now be explained how the municipalities aim to achieve this goal and what milestones they have already reached.

Free Hanseatic City of Bremen
Goals and project structure
The Bremen MEDIA@Komm project "Legally binding multimedia services with digital signatures in the Free and Hanseatic City of Bremen" is being implemented by bremen online service GmbH & Co. KG and comprises three large core areas with further sub-projects:

Access to secure and legally binding on-line services: Here, in addition to access from home, further opportunities will be created, e.g. via supervised user stations in public places and kiosks. The widest possible distribution of signature cards and scanners is necessary to increase acceptance and gain initial practical experience of applications, so these facilities also come under the heading of access.
Platform and OSCI™: This includes the creation and operation of a platform on which the communication between the administration, citizens and businesses is structured by the use of forms. To this end a uniform communication standard OSCI™ (Online Services Computer Interface) must be developed and then harmonised with other local communities at the national level. And finally, different payment procedures should also be integrated.
Applications / life situations: The applications transported via the platform are grouped by so-called life situations. The guidance of the citizen in virtual visits to the public authority or calls for information is based on his current interest, his "life situation" which leads him to contact the public authority. In the Bremen project these situations are building a house, buying a car, communication between lawyers/notaries and courts, communication between tax consultants and the revenue office, residence and change of address, award of public contracts, applications for students and leisure/on-line ticket sale. In the course of the Bremen project, a total of nine life situations and sub-projects with more than 70 transactions and well over 20 external service providers are to be implemented.

Progress to date
Access - how to get e-government to the citizens
Many measures were adopted in the Bremen project to facilitate access to the card and the applications. A total of 1000 signature cards have been issued since the project began. As in the other MEDIA@Komm municipalities, it is assumed that the banks in Germany will in future issue combined cards for payments (EC card) and digital signatures, so that in a few years most citizens will have chip cards which can also be used for electronic signatures. The signature cards can be obtained at various points in the city such as the municipal library and the Sparkasse bank. The necessary scanner can also be obtained for a modest charge - in addition to signatures, this scanner can also be used for purse card payment via the Internet. To help users to familiarise themselves with the signature card, the scanner and the services offered by the bremer-online service under professional guidance, supervised user sites have been set up. A completely equipped computer can be used free of charge, and supervisors are available to answer questions. There is a free telephone hotline for technical questions and further information on the project.

Platform and products
The development of a local community protocol standard for on-line administrative transactions is the ambitious goal in Bremen. The development of such a standard known as OSCI (On-line Services Computer Interface) is constantly moving forward. To achieve standardisation of local community transactions, the German standardisation institution DIN has taken on the task of coordinating various working parties in the framework of the accompanying research of MEDIA@Komm. The goal is to develop specifications which are available to the public so that exchange and electronic processing of documents are possible throughout Germany.

OSCAR (On-line Service Computer Interface Architecture) is the latest development in the Bremen project. This name stands for a system architecture for secure and legally binding applications in the area of public administration. For the first time, a platform has thus successfully been developed for e-government on which it is possible to carry out on-line transactions irrespective of the technology used and the manufacturer. It enables forms to be provided, filled in and electronically signed on-line, then sent back to the public authority by secure data transmission.

Applications, applications, applications
The first "visit" to a public authority carried out completely on-line, in which a marriage certificate was ordered and the fee was paid directly with a purse card via a secure Internet link, was presented in September 2000. Since then, the citizens of Bremen have been able to call on various on-line services of the administration and private service providers. In the life situation residence and change of address, for example, they include registration and cancellation of gas, electricity and water with the municipal utility companies, changing bank accounts at the Sparkasse and mail forwarding arrangements with the post office. Birth, marriage and death certificates, copies from the family register and information about the time of birth can also be ordered on-line from the registry office in Bremen - and paid for electronically. Since June 2001 the residential registration office of the city Bremen has also offered on-line services. There, legally binding entries and deletions can be made in the residential register via the Internet by using the electronic signature.

Since May 2001, applications for students have also been in place. Changes of address, registration of semesters on leave and exmatriculation can be carried out on-line with the signature card by students at the University of Bremen and the higher education college in Bremen and Bremerhaven. In the course of the year, other applications will also be offered to students of these higher education institutions.

A service for solicitors and businesses is currently in the test phase. They can call up information in electronic form free of charge from the register of companies database at the Local Court (Amtsgericht). A further process, which is also likely to interest small and medium-sized companies, is the on-line debt collection application, which is being developed for the Free Hanseatic City of Bremen by bos GmbH in cooperation with a Düsseldorf software company. With this software, applicants will be able to file debt collection applications electronically via the Internet, thus saving time, effort and costs. And finally, the prototype of a digital tender platform for the award of public orders in the construction industry is currently being developed in Bremen. The process is being developed in cooperation with the private company Conject AG and will make it possible in future to read announcements and download tender documents over the Internet.

Nürnberg municipal association - Nürnberg, Fürth, Erlangen, Schwabach, Bayreuth
Goals and project structure
The goal of the project "MEDIA@Komm in the Nürnberg region", implemented by the project sponsor: Curiavant Internet GmbH, is the same as in the other municipalities - to offer legally binding multimedia services with digital signatures in the municipal association. A regional communication platform is to be created which will support secure communications and offer the citizens various communal and private services. The Nürnberg municipal association consists of five municipalities of different sizes in the region. The special challenge here is to develop on-line services and products which are equally "fitting" for all municipalities.

On the basis of past experience and the difficulties in transferring pilot projects to the individual municipalities, it was decided to develop a series of software modules (e.g. for signature, payment etc) which can then be used for the implementation of the respective individual on-line services.

In Nürnberg, as in Bremen, there are three pillars of the project, but they are "sorted" differently.

Cross-section projects denote the individual projects such as the platform, security concept, digital signatures, payment function, document management, user interface, regional on-line platform (operation) and proposals for standards for administrative procedures (geographical information systems). The cross-section projects provide important services for all communal and public-private partnership projects.
Communal projects, e.g. the educational region, parking permits for residents, electronic support for the council, electronic house construction file, geographical information, residential register (entries, changes and deletions), information from the residential register, information from the trade supervision register, business registration, changes and closure, vanity vehicle numbers, on-line libraries, invitations for tender, award of public contracts and public participation in communal construction planning processes.
Public-private partnership projects, including for example applications for the regional virtual market place, medical Intranet, support for business start-ups, on-line judicial practice, public transport tickets, company identity cards and the establishment of a local card operating company for the multi-functional chip card/bank card. Work is being also being carried out to facilitate access to the Internet not only via a PC, but also to provide communal on-line services on the Internet via TV sets and mobile appliances (cellular phones, hand-helds etc.).

Progress to date
Cross-section projects
Curiavant Internet GmbH has developed a platform which has already been used as the basis for the communal application "Resident's parking permit" in Nürnberg, Erlangen and Fürth (Nürnberg October 2000, Erlangen and Fürth 2001). To offer additional communal services, a business partner with a similar technological orientation was sought and found. In future, both companies will work jointly on the modular on-line platform to provide the other planned communal and private commercial applications.

In Nürnberg, too, the ability to enable electronic signature and payment is mandatory. Like in Bremen and Esslingen, it is hoped that the chip cards can be used for multi-functional purposes as far as possible. Thus, there is now a proprietary "flip chip card" developed by Curiavant (with chips on both sides) which can be used for electronic signature and payment. On one side it contains a purse card from the Sparkasse which is not linked to a bank account, and on the other side it contains the digital signature from the Deutsche Post subsidiary Signtrust. Other payment modes are currently being designed for use in on-line services and implemented in the communal sub-projects. An important aspect is the integration of the payment process into the internal work flow of the local authorities.

In the next task building blocks, modules such as authentication, verification, entitlement checking, encryption, key management in the administration, archiving etc. will be implemented in practice.

Communal projects
The first pilot project, which was successfully transferred to the different computer infrastructures of the municipalities in the association, was the parking permit for residents. Thus, not only the residents of Nürnberg can now apply and pay for their parking permit with their digital signature - inhabitants of Erlangen and Fürth can also do so with the same solution. At the latest in the autumn of 2001, the next steps will be the implementation of the applications "Residential registration" and "Special use of public traffic space.

Of the total of 19 different local community sub-projects, 12 have already begun in Nürnberg. A further 7 sub-projects will start shortly (trade registration, information from the trade register, vanity vehicle registration numbers, TÜV (Technical Control Board) registration, invitations for tender/award of contracts, dustbin orders, citizen participation). The overview shows which projects are now being successfully transferred to other local communities.

Public-private partnership projects
In the virtual market place which is developing in the Nürnberg region (independently of MEDIA@Komm), the prototype of an interactive electronic leisure and tourism agent now helps visitors with their questions. The user is automatically sent tourist information and proposals selected to suit his interests.

To ensure alternative access to the communal on-line information service for all groups of the population, a prototype is being developed for TV access via a set-top Internet box in collaboration with a local major manufacturer of home electronic entertainment appliances. The solutions will be presented at the end of the summer.

Esslingen
Goals and project structure
There are two special features of the projects in Esslingen: the underlying principle and the starting situation. The "local community of citizens" is the principle behind all activities, and the aim is to strengthen citizen participation and involvement. This includes the goal of developing away from a mere approval body and becoming a service provider for citizens and businesses. A further major goal of the Esslingen project is to set the threshold for on-line use by the citizen as low as possible and to create a high degree of acceptance in the population, for example for the use of signature cards.

With 80,000 inhabitants, Esslingen is the smallest of the municipalities in MEDIA@Komm and therefore has the ambition to develop solutions specifically for medium-sized towns. By contrast with Bremen and Nürnberg, the computer infrastructure for the virtual town hall is still largely not available in Esslingen and Ostfildern. And the town information system www.esslingen.de is only now being designed. This provides an opportunity to develop a homogeneous and integrated solution without the need to make allowances for any existing structures. At the same time, information facilities must be developed to a far greater extent than in the other MEDIA@Komm municipalities to enable the "triangle" of information, communication and transactions in the Internet to be created.

Six sub-projects make up Mediakomm Esslingen:

Communal services. After thorough analysis and definition of priorities for on-line services which are equally useful and attractive for citizens and the administration, information services are to be established for citizens, business and the town council. The name should not be misleading: in addition to information, the services should also include communication and secure and legally binding on-line services.
Education. This sub-project includes, for example, the creation of an education forum and an education database on the Internet, a school and education network and a youth network.
E-commerce and e-business. This heading covers various individual projects such as the creation of a regional on-line shopping mall and a "small ad market" on the Internet. Tele-cooperation in virtual companies is to be supported, WAP applications (mobile computing) should appeal especially to citizens involved in the business life of the community.
Culture. Databases should provide an overview of the clubs and cultural life, and it should be possible to buy tickets on-line. A further goal is to provide all-round on-line services for congresses in the region.
Social affairs. Information is also the initial concern in the social sector, for example with directories of social services or a social database. In addition, the project aims to provide access for disadvantaged groups and to encourage the development of competence.
Cross-section. The base technologies and a basic infrastructure must be provided for these projects and sectors. This includes the technical platform, the security concept and the preconditions for the use of digital signatures (PKI).

The responsibility for each sub-project lies with a different institution or company; the sponsoring body Mediakomm e.V. in Esslingen is responsible for communication.

Progress to date
To achieve goals such as greater transparency of the administration, customer orientation, better accessibility for the citizen and faster handling of administrative procedures, the Esslingen citizen information service ESSOS ("Esslingen On-line Service") was founded. In addition to a catalogue of information, concerns from the areas of foreign residents, vehicles, trade and industry, children, social benefits and changes of address will be offered on-line under the heading of life situations. Applications which are currently in the pilot project stage include resident's parking permit applications, the trade register (registration, change of details, deletion), information from the trade register, dog registration and deletion, dog tax and fault reports. The virtual lost property office is also already available on-line. Many other Internet services are planned.

Since the summer of 2001, some citizen services have also been available for mobile phones via WAP. For example, a mobile phone car park guidance system is heavily oriented towards the users. This service can be accessed from anywhere at any time, and it provides information on the available space in the indoor car parks in Esslingen.

In accordance with the principle of the local community of citizens, projects have now been implemented or are shortly to be implemented which provide information for the citizens and involve them in the process of discussion on developments in the town. Thus, citizen forums have been set up on the Internet which enable interested persons to discuss topics relevant to Esslingen. The zoning plan provides an even more practical example. The formal participation of the citizens in the development of a new construction area in Esslingen was also implemented via the Internet.

For construction projects an on-line planning approval procedure is also offered as a new service in which all information (plans, illustrations, correspondence) is available via an Internet platform - after the user has identified himself with his digital signature. This can be used on-line by the administration, the citizens, contractors and architects.

To counteract the "digital divide", projects such as the supervised citizen PC (Bürger-PCTM) were implemented, which particularly aims to help population groups in Esslingen with little experience of new media to make use of the Internet and digital signatures. At central points in the town (e.g. in schools), PCs are available for the use of the public. They are equipped with standard software and have Internet access and signature card scanners. To ensure data security and confidentiality, each user is assigned his own profile which is created once in the location and then given to the user on a disk. The PC is configured so that whenever the system is rebooted, every user is presented with the original status from his disk, and the PC itself contains no traces of the data of the previous user.

Great attention was attracted by the world's first legally binding on-line election of a public body - the Municipal Youth Council in Esslingen - which was (partly) carried out via the Internet with the aid of digital signatures (from 9.7. to 12.7.2001). The on-line election fulfills all legal requirements; the municipal regulations had to be adapted for this purpose.

Current issues

In the implementation of the individual projects in the towns and cities, it soon became apparent that many questions are still unsolved, that progress depends on technical and economic factors in many cases and that the legal and regulative framework is largely not yet in place to enable the goal of legally binding on-line transactions which are seamlessly integrated across different media. Some important factors which are still being discussed in the complex area of implementing e-government and e-commerce will now be enlarged on.

Diffusion of electronic signatures
From the outset, the towns and cities assumed that signature cards, which are earmarked for use in many areas, would become established in the market during the period covered by the project. This expectation was mainly addressed to the banks, and it was assumed that they would add the digital signature to their EC cards, which are in widespread use in Germany. This wish has not so far been fulfilled, which means that the distribution of signature cards is still low and the price is still far above what citizens are willing to pay. The cards which are now available on the market, which citizens can purchase from state-certified trust centres, are still very expensive. At present, the citizens must pay about DM 100.- for a card, plus an extra DM 150,- for the necessary scanner. But there are still only very few applications for which the citizens can use the card. Many on-line services - especially in e-commerce - can also be used without the expensive card, which means that the card and the necessary infrastructure are still too expensive in relation to the benefits offered.

User friendliness and user benefit
A further problem lies in the lack of user-friendliness. At present, the cost and effort needed to be able to use a signature clearly outweighs the benefit, because there are not enough applications for general use. Standardisation and interoperability questions also need to be dealt with, because the products which are available on the market at present are not compatible

Creating a technical platform to handle on-line transactions
Creating the necessary technical platforms in towns and cities to enable on-line administration services to be handled is not a trivial matter, as the experience of the MEDIA@Komm towns and cities has shown. Problems need to be solved in detail in every single application. The design of on-line services and the task of integrating them into the various heterogeneous departmental procedures in the administration, the integration of digital signatures and in some cases the integration of electronic payment systems demands a major investment of time and can rarely be transferred to all towns and cities. Creating a standard for communal on-line transactions, such as that which Bremen is now working on, is a small step forwards.

Re-engineering processes in the administration
The great challenge for the administrations is to create ways of seamlessly integrating different media for uninterrupted communication and work processes. This not only means restructuring the individual departmental procedures and integrating digital signatures - the present working procedures must be taken back to the drawing board and subjected to a re-engineering process. This involves an examination of whether changes are necessary in the structure and procedures of the administrative departments themselves.

Statutory framework
The idea of offering on-line services completely by electronic means still causes problems from a legal point of view because administrative procedure law is not yet adapted to the practicalities of such services. It is true that there are some areas in which written form (e.g. in applications) is not required; a dustbin, for example, can basically be ordered from the administration even by phone or e-mail (principle of freedom of form in administrative procedures). But written form is a mandatory requirement in a whole range of administrative procedures. Here it remains to be determined in which cases written form can be replaced by an electronic format, and what security features will need to be maintained. It will probably take until the end of 2001 before the proposed revision of the Act on Administrative Proceedings will solve this problem.

Conclusion

E-government is the buzzword of the moment, and many German towns and cities have realised that they should also offer their services to citizens on-line. On the one hand, the towns and cities could improve the quality of their services by enabling citizens to deal with their concerns around the clock, irrespective of opening hours and areas of responsibility. On the other hand, this could also lead to gains in efficiency for the administration, because if such transactions can be carried in a seamlessly integrated network of different media, this creates considerable potential for savings. And in the competition between local communities, the Internet and multimedia facilities are an important location factor which affects the economic viability of the location and the promotion of business. For the towns and cities, the issue is therefore not so much whether they should follow the e-government trend - the current discussion focuses more on the "How". However, e-government cannot be taken for granted from the point of view of the users. The difficulties have already been mentioned: the expensive infrastructure and the scarcity of available applications mean that such systems cannot be adequately used - and are therefore not widely distributed.

If e-government for the citizens cannot yet be taken for granted, it is worth looking at e-commerce and asking whether the experience gained there gives any indication of whether secure transactions can become established at all. In e-commerce we must distinguish between two different business relationships: business-to-consumer and business-to-business. In the business-to-consumer sector, on-line transactions are very often handled even without an absolute demand for security, based only on trust. To use on-line shopping services via the Internet, all that is needed is trust that the provider that will deliver the goods in a reasonable condition, and a credit card to pay with. Although there is a trend here, too, towards secure transmission and secure payment, there is still a considerable difference between on-line shopping and on-line public administration transactions in relation to the necessary requirements and the effort required to satisfy them. This is different in the business-to-business sector. On the platforms on which business companies handle their business dealings, the confidentially of Internet communication and secure authenticity verification are more or less essential, so software certificates and chip cards are widely used.

Until we know how the two areas considered here - e-government and e-commerce - will develop in terms of acceptance, use and turnover, it will also be difficult to assess whether the German approach of aiming for the maximum degree of security by using chip cards will become established. But the MEDIA@Komm towns and cities are subsidised by the national government for this very reason. The aim is for them to show where the problems lie, what requirements need to be fulfilled and what detailed solutions are, in fact, possible.

In closing, I will now look at the link between e-government and e-commerce. Many German towns and cities are working on solutions for a virtual town hall and gathering experience in the creation of virtual market places. In the Federal Republic of Germany - and in the whole world - there is currently a discussion on so-called portals which can provide access to both the administration and private service providers. The life situation concept which is being implemented in Bremen is based on the idea that, from the user's point of view, a variety of information and transaction facilities (both private and public) need to be combined, and that this is the only way to create benefits for all. This supports the idea of merging administrative services and private services on a single platform, in other words treating virtual town halls and virtual market places as a single entity.

It is not yet clear what criteria can be applied to decide whether a portal which combines both areas can be regarded as economically viable. Towns and cities are not always able or willing to integrate private service providers into their municipal portals. Nor are they eager to integrate their services into the portals of private enterprises without any service in return. Experiments are currently in progress to determine what forms of public-private partnerships could be successful for both sides.

The debate about portals also clearly shows that the implementation of virtual town halls does not only involve questions of e-government - although even this presents a major challenge to the administrations because of the necessary internal reorganisation. In fact, virtual town halls have an effect on the entire economic situation of the towns and cities, and it is also necessary to integrate private service providers, citizens and institutions into the social and cultural sectors. The public discussion in the towns and cities is only just beginning to move in this direction. Much research is therefore still needed to obtain a clear picture of the interdependence and the factors for success in the relationship between e-commerce and e-government.