Philippine Internet Review: 10 Years of Internet History (1994-2004)

theTEAM

JanetteTORAL The main author and editor of this book. She is the founder of the Philippine Internet Commerce Society and DigitalFilipino.com. Through the Internet, she was able to gather support in pushing for the passage of the ECommerce Law and Y2K Law.

CarlosMiguelAlvarezPARAZ Simply known as “Migs” to friends, he is one of the historians of the Philippine Internet. He has been involved in the technical directions of the local Internet scene since its commercial beginnings in 1995. He is well-educated in contemporary Internet and software technology matters and can provide analyses of the subject. He has spoken about the Philippine Internet in foreign conferences from the perspective of a user and on its technical/operational aspect.

DannyESCASA Daniel O. Escasa has over 20 years experience in IT (he claims to be a child prodigy) in various capacities—teacher, developer, and writer. He still considers himself a student of IT, noting that “you can never stop learning, else your knowledge not only stagnates, but actually deteriorates.”

AntonioBUCU Tony was on his 5th year of Electrical Engineering in college when he discovered his heart was in graphic design and the arts. A Mac evangelist in the early days of the Mac/DOS warz, he continues to use the Mac in his everyday e-life. Tony currently teaches Adobe Illustrator at the Philippine Center for Creative Imaging, and is the first to develop and market his custom fonts online, a few of which were used in this book.

5

what’sINSIDE

5

Foreword

7

Introduction: The Bigger Picture

14

Internet Timeline: 1994 - 2004

The Filipino Internet User Evolving

47

Infrastructure: Bandwidth Map of the Philippines

Hi-Tech Crimes

81

73

People Power

Blazing Glory

101

91

Advocacy and Politics Online: A New Media

eGovernment: The Marikina Story

123 6

33

A Father’s Message

117

foreWORD

I

n the summer of March 2002, I met up with Ronald Jabal and Vonj Tingson of Capex Asia to discuss this ambitious project, the documentation of 10 years of the Internet in the country. After several meetings, we agreed that the time has come for this ambitious project.

philippineinternetreview

I spend almost half of my life nowadays online. I use the Internet as the sounding board of my advocacy, thoughts, dreams and success. I experienced failure through it as well. Without the Internet, I won’t be anywhere near where I am today.

Capex Asia Publisher

After a decade, I’ve witnessed various challenges brought by technology, especially to the young and the uninitiated. It has become complicated, uncontrollable, and political compared to how it was a few years ago.

Janette C. Toral Editor Carlos Miguel Alvarez Paraz Daniel O. Escasa Mayumi Canuto Fe Nuñez Johnson M. Chua Julius Gorospe Juan Magdaraog Contributors Okby Enriquez Twinkle Catalan Advertising Managers August San Esteban Cover Design Antonio Bucu Book Design, Layout and Illustrations

This special publication intends to give the reader a view of how Internet in the Philippines has evolved in the past 10 years. It does not intend to be nostalgic, but to make the reader realize the hard work and hurdles the industry went through to make the Internet accessible and affordable to many of us today. It also gives a perspective of things to come in the next 10 years that we should watch out for. Internet in our country will only grow and progress further if we will all be responsible, respectful, and vigilant in ensuring the proper use of this infrastructure. As we intend to update this publication every year, we hope that people will approach us and share how the Internet changed in their respective areas, to give a true country-wide picture of Internet’s evolution. We want this special project to inspire the next generation, to come up with great applications and tools that will empower more Filipinos in this globally competitive world.

The Philippine Internet Review: 10 years of the Internet in the Philippines is published by CapexAsia, Inc.: Unit 1220 Herrera Towers V.A. Rufino St. corner Valero St. Salcedo Village, Makati City. email: [email protected] • Tel. 813-4032 For subscription inquiries please email [email protected]. No part of this special publication may be used or reproduced in ay manner whatsoever without written permission of CapexAsia, Inc. Opinions expressed in this special publication are solely those of the writers and not of the Publisher.

Janette Toral 7

the

picture

by Janette Toral

M

y fascination with computers started as early as 1984 while I was in grade school. I remember the time when I went to the office of my Auntie and had my first encounter with the computer. It was running a spreadsheet program called Visicalc. I played around with it for a few minutes, just typing in numbers. From that moment on, I knew that I want to work in the field of computers. In 1986, I studied Basic Computer System with Cobol, Wordstar, Dbase II, and Visicalc. In 1988, there was a big marketing pitch that one doesn’t need a college degree to get a high paying job. I believed in it and took a computer literacy course and trainor’s training in two computer schools. I had my first computer tutorial job in 1989 and pursued various IT careers. In 1995, I logged at Daniel Chua’s Nightstalker Bulletin Board

System which convinced me to subscribe to Extra Mile Online. That’s where I moderated my first forum - Infotech. I wrote to several ISPs offering forum moderating work in exchange for Internet access. Portal Inc and The E-Mail Company accepted my offer. What is great about the Internet is that you can be who you want to be. In the past 9 years since I first went online, I had become a writer, community leader, lobbyist, activist, IT evangelist, event organizer, entrepreneur, and online educator—living all of these identities online and offline. IT and the Internet provides you with a feeling of empowerment. It can bring you greatness and numerous achievements if used properly. But it can destroy you as well if abused. Then it also gives you room to bounce back and start all over again. 9


We’re connected

the in the New Economy The Filipino’s ability to use ICT efficiently and develop new export markets was greatly powered by the Internet.

Filipino Internet Users (millions)

50 40 30 20 10 0 1994

1997

2000

2003

2006

2009

2014

Filipino Internet user growth estimates by Janette Toral, DigitalFilipino.com

Filipino Internet Users (billions)

A study on ICT and Internet Usage in the Product Export Sector that we did in 2003, 98% of organizations—majority of which are SMEs, have at least one desktop in their offices. Despite the fact that more and more SMEs are using the computer and the Internet, hardly any had more than a word processor, spreadsheet, and presentation programs. These basic productivity tools are used to generate all the reports that an organization need and aid them in decision making. Although there’s nothing wrong about this, foreign competitors of our SMEs have access to more sophisticated tools, leaving our SME sector at great disadvantage. The growth of Internet usage among organizations and individuals must be complemented with software meant to fit our socio-economic situation. In order to counter piracy, development of desktop and productivity applications that can be bought by consumers and SMEs at an affordable price must be pushed.

These 10 years has resulted in the emergence of great content online. From media organizations having their news content online, country information and statistics can now accessed by anyone.

15

10

50

1997

2000

2003

2006

2009

E-commerce growth estimates by Janette Toral, DigitalFilipino.com

10

With 5.5 million Internet users at the end of 2003, I expect this to reach 41 million by 2014 based on trends where the number of Internet users nearly doubles every two years.

Content is king

20

0 1994

The past 10 years allowed more and more Filipinos the luxury of having a personal computer at home. From fifty thousand pesos (P50,000) a few years back, one can now have a personal computer for less than twenty thousand pesos (P20,000) and it’s Internet ready.

thebiggerpicture

2014

The main question, however, is “how sure are we that the content we see now can still be accessed in 2014?” At this time, you hardly see content from 1994 to 1999 online especially among news web sites. In the course of our research for this book, only ITMatters (http://www.itmatters. com.ph) has managed to keep a great deal of its content online. This site also has a sophisticated search engine that allows a person looking for specific content to retrieve information in a fast and efficient manner. Among government sites, the National Statistics Office (http://www.census.gov.ph) stands out in disseminating useful country information.


Ken Ilio’s Tanikalang Ginto (http://www. filipinolinks.com) is the biggest directory online. His site is one of the few that remains consistent with its original purpose of recording the existence and evolution of Filipino websites.

month check issuance, 30 days mailing, and 45 days check clearing were unattractive at first. But entrepeneurs believed it was better than nothing. Today, there are sites like Ikobo.com that allowed money withdrawal through automated teller machines (ATMs)— in less than 24 hours—after online sales are completed. Despite these challeges, e-commerce sales volume is increasing. As we entered the 21st century, local e-commerce transaction reached PhP 1 billion. It also shows that there’s at least one billion transaction sales growth annually. If this trend continues, figures can reach up to PhP 20 billion as more businesses conduct online transactions.

Even as “global citizens”, Filipinos love to belong in communities. These types of web sites were the first to “click” as the Internet emerged. Web sites like PinoyExchange.com (http://www. pinoyexchange.com) live up to its purpose as a global contact point among Filipinos. Filipino community sites can be classified according to region, interest, and race, among others. An example is Tsinoy.com (http:// www.tsinoy.com) where Filipinos with Chinese background interact. As IT and Internet became hot topics, communities like PH-Cyberview (http:// groups.yahoo.com/group/ph-cyberview), CyberPromdi (http://groups.yahoo.com/group/ cyberpromdi), and DigitalFilipino (http:// groups.yahoo.com/group/digitalfilipino) became focal discussion points as well. E-commerce is bustling After 10 years of the Internet in the Philippines, local payment gateways still fail to serve the needs of SMEs that are interested in online trading. The low sales target of entrepreneurs and start-up companies do not appeal to local banks. Insurance requirements and bank account with high maintaining balance imposed by payment gateways discouraged entrepreneurs with small capital. Many attempted to sell products online but had to shut down their sites at the start of the millennium due to lack of a payment facility. However, there are few who persisted and availed of foreign payment gateway services. Terms like high charges, twice a

If significant economic growth takes place in the next 10 years, these estimates may even double or triple. E-commerce merchants in the country who managed to survive and thrive online owe their continuous existence to Filipino migrants. Websites like Turoturo (http://www.turoturo.com), YesPinoy (http://www.yespinoy.com), Divisoria (http:// www.divisoria.com), PinoyDelikasi (http://www. pinoydelikasi.com), MyAyala (http://www. myayala.com), and PadalaKo (http://www. padalako.com), among others, sell products and services to Filipinos abroad and to those who would like to send gifts to their loved ones in the country. Overseas Filipino workers (OFWs) are the primary customers of local websites. However, based on a small survey, the OFW Internet Habits Report, that we did in 2003, we discovered that only 25% of OFWs have access to the Internet and even less, only 16%, buy online. The passage of the E-Commerce Law— Republic Act 8792 contributed to the adoption of e-commerce among major corporations in the country. The biggest showcase is BayanTrade.com (http://www.bayantrade. com) where the top six conglomerates in the country, with 250 buyers, converge to trade with various suppliers online. Another highlight worth flaunting is SM Supermarket. Its company, Super Value Inc. (SVI), started harnessing the power of e-commerce as early as 1994. With 1,500 suppliers and growing, SVI has made a bold move of trading only with suppliers capable of conducting e-commerce. thebiggerpicture

11


The Tech-Savvy Filipino There’s no doubt that Filipinos have never been as tech-savvy as they are today. These days, almost all courses in college have a computer literacy component. This is also being pushed in elementary and high school. Efforts to push the use of computers and the Internet are ongoing in the public high schools. The government’s PC for High School Project plays a major role in this initiative. However, it will take some time and additional resources before the nearly 50,000 elementary schools nationwide will have access to computers and the Internet. Apart from students, local government units, cooperatives, and barangays are main targets as well of these capacity building initiatives by bringing technology to them. These facilities are also referred to as community telecenters. These include the B2BCenters of B2BPriceNow.com (http://www.b2bpricenow.com) and Barangay. net.ph (http://www.barangay.net.ph).

note that they need to be tech-savvy not only by understanding ICT and Internet but by being productive users of these as well. The Pro-Active Filipino SMEs are aware of the importance of e-mail and having a website in the context of today’s business setting, although it may not be an urgent requirement due to budgeting priorities. Those we interviewed in our surveys are currently not using e-mail and Internet have but plans to do so within the year. Most policy makers today recognize the significance of ICT in terms of achieving productivity and its contribution to job creation and economic growth. Most politicians, even if they are not Internet users, have an e-mail address where they can be reached. Some even have their own websites and use these during the campaign period. Senator Ramon Magsaysay Jr. and Former Congressman Leandro Verceles Jr. were the primary champions of e-commerce in the country. Not only did they push for the passage of the E-Commerce Law or Republic Act 8792, they personally use the Internet, e-mail their friends, and buy products online. Schools like the University of the Philippines (http://upou.org) and the Polytechnic University of the Philippines (http://www.pup. edu.ph) launched their respective e-learning initiatives with the intent of allowing Filipinos wherever they are to earn degrees, diplomas, and certificates from the school.

The challenge is to make sure that these telecenters will be sustainable and able to meet its purpose of empowering the community. Often, the people heading and running these telecenters lack ecommerce skills, experience, knowledge, and confidence to assist SMEs in their area to trade online. The same goes for educators teaching Internet and e-commerce to students. Training the trainors and community telecenter leaders will be very important and must be done continuously. If there’s any cluster of individuals that are important to be tech-savvy but are partly lagging behind are our politicians and judges. But with the Internetliterate younger generation of judges taking these important positions in the next 10 years, I believe that this will all change for the better. Note that by 2010, internet access will be available to majoriy of voters, whose numbers can make or break an aspiring president. Future politicians must take 12

thebiggerpicture

The Filipino as Online Activists The Internet has allowed new communities and groups to be formed as like-minded individuals meet online. This is especially true in the case of the Philippine Internet Commerce Society (PICS). I started floating the idea of creating the Philippine Internet Commerce Society (http://www.pics.org.ph) in August 1997 during a discussion in the PH-ISP list—a virtual community started by Miguel Paraz composed primarily of Internet Service Providers (ISPs). There were a lot of interested parties that lead to the creation of the PICS discussion list. When it became a registered non-government organization, the PICS community gathered about 700 members where everyone received about the organization’s activities, debates


on Internet issues, and lobby support for the passage of the E-Commerce Law. As PICS pushed for the passage of the Y2K Law, every potential ally that we met on the field became part of the community. The multi-sectoral composition allowed for people from various interest groups to come together and unite in pushing for the passage of the E-Commerce Law as well.

ICT progress can be triggered by concrete results-oriented programs. The private sector will play a major role in spurring these developments. We need more social entrepreneurs like Edgardo “Tedjie” Herbosa of B2BPriceNow.com (http:// www.b2bpricenow.com). By partnering with strategic organizations like the Landbank of the Philippines, Polytechnic University of the Philippines, Department of Agriculture, World Bank, Tedjie was able to educate numerous cooperatives in using the Internet and how they can trade using B2BPriceNow.com. The Internet and computer literacy among personnel agricultural cooperatives today can be attributed to this initiative. The next 10 years will be important in benchmarking the economic output of these projects. There’s also lack of funding in the dotcom sector and this has resulted to Filipino websites operating from small offices or from homes to survive. Their offerings are fairly simple and unhyped.

Prior to the Internet, one can only become part of a policy making body by getting introduced or endorsed by a member of that group. In the year 2000, the Information Technology Electronic Commerce Council (ITECC) headed by former Department of Trade and Industry Secretary Mar Roxas gave room to a democratic body. Anyone who has interest in helping or learning, were welcome to attend, observe, or participate. In the legal cluster that I headed then, minutes of the meeting were posted online (http:// groups.yahoo.com/group/ecomm-irr) for viewing and comments by those who don’t have time to attend the face-to-face meetings. No matter how much it has changed today, ITECC, now known as the Commission on Information and Communications Technology (CICT), remains a multi-sectoral policy making body composed of government, private sector, NGOs, and academe, among others. It works to make favorable policies and programs that will support the growth of ICT. Scarce resources If there’s one painful reality, it’s the lack of resources. There are still many towns and municipalities, especially in rural areas, that have no phones,much less an Internet connection. Although foreign aid has been used by some in bringing ICT to the rural areas, there were also research expenditures that have not translated to any concrete projects. In the next 10 years,

As with the dramatic entry of HatchAsia.com and IdeaFarm.com, among others to entice project ideas for funding, some were shocked with the decisions these companies have made. Failed investment projects placed a doom spell and poor faith in the quality of decision making. Today, many Internet entrepreneurs are still reluctant in trusting venture capitalists in their capability on what will “click”. There are also venture capitalists hesitant in investing and still think that they know more than most dotcom start-ups do. The next 10 years Aspiring Internet entrepreneurs in the next 10 years must be willing to start small and adapt to the changing market. With the possibility of serving 41 million Filipino Internet users in by 2014, patience, perseverance, humility, and hard work can bring great rewards. thebiggerpicture

13

When the Americans left in 1991, many thought

that Subic has seen the writings on the wall. Doomsday scenarios have been written all over its once pristine image. Soothsayers predicted, the once bustling community would turn out to be a huge wasteland devoid of any future with out the US military presence. But, as in most cases, the soothsayers were proven wrong. The resiliency, courage, patience and the genius of the Filipinos worked wonders in transforming Subic from an ammunition depot to a world class free port - admired not only locally but in the international community as well. Last year alone, the Subic Freeport, being managed by the Subic Bay Metropolitan Authority (SBMA), registered 293 more new projects amounting to over P3.025 billion worth of fresh investments- a clear indicator that no doubt the Subic Freeport plays a huge role in the local and national development. “The entry of new companies clearly shows a vote of confidence of investors who have seen the prospects of Subic Freeport to become one of the emerging economic hubs in the Asia Pacific region,” SBMA Chairman and Administrator Felicito C. Payumo said. And the huge volume of investments in the Freeport is not just a fluke of nature but a constant and a rising indicator, owing to the effective management of the SBMA administrator. By end 2003, SBMA has already recorded a whopping US$4.102 billion worth of investments, a marked 58% increase compared with investment figures in 1998 when Chairman Payumo assumed office. This will be surpassed this year as latest data shows, the Freeport has already registered US$4.112 billion worth of investments as of May 2004. The number of companies has also been steadily rising due to the improved economic conditions and business climate in Subic. From a measly 304 locators in 1998, the figures now ballooned by a stunning 203% to 922. This year, the Freeport continues to attract companies who want to set up businesses - a clear indication of businessmen’s seal of approval for the SBMA leadership. As of May 2004, 976 locators have set up shop in Subic.

INVESTMENTS 1998

2.591 B

1999

2.831 B

2000

3.082 B

2001

3.922 B

2002

4.047 B

2003

4.102 B

(58% increase over 1998)

4. 112 B

Jan-May 2004

0

1

2

3

4

5

INVESTMENTS IN BILLION US$

Companies: Cumulative-committed investments

As a consequence of the steady rise in investments, thousands of jobs were also created thereby providing livelihood to thousands of families to nearby cities, towns and provinces. As of May 2004, the Freeport employs close to 56,000 skilled workers. Jobs range from office personnel, to technical specialists, production workers and highly specialized managers.

EMPLOYMENT Standing Workforce (Excluding SBMA/FSC Employees) Corroborated by DOLE – REGION 3

304

1999

342

2000

449

2001

552

1998

7756

1999

16348

2000

30139

2001

45742 48874

2002 2003

51486


55745

Jan-May 2004

0

0

200

400

600

Companies

800

1000

3.658 3.986

2002

2.195

0.5

1998

1.58

1999

1.89

2000

1.90

2001

2.96 2.61

2002

1.5

2.0

2.5

3.0

3.5

4.0

1994 to 1998 1999 to May 2004

3.712 B (17%) 17.636 B (83%)

Total:

21.348 B (100%)

3.21


TOURISM

1.46

Jan-May 2004

0

1.0

The improved business climate and the additional theme park attractions and recreational facilities brought about by the new Subic investments have also tremendously boosted tourism in the Freeport. In fact, Subic is considered by the Department of Tourism as one of its prized eco-tourism enclaves. Since 1998, local and foreign tourists have flocked to Subic to enjoy the serene and lush environment and the beautiful beaches in the area. From 1994 to May this year, Subic has attracted more than 48 million tourists.

PAYROLL

2003

3.323


10000 20000 30000 40000 50000 60000 Employees

0.5

1.0

1.5

2.0

2.5

3.0

3.5

Payroll in PhP Biilions

Tax collection has also been on the rise much to the delight of the National Government, which acknowledges Subic as one the major pillars of national development. Latest data shows that Subic has contributed close to P26 billion to the national coffers from 1994 to May 2004, which is 30 times the P850 million equity of the National Government to the SMBA.

REVENUE CONTRIBUTION BIR Collections (5% Tax on Gross Income + Withholding Tax 1998

463.1

1999

505.9

2000

554.5

2001

747.7 635.4

2002

601.4


270.9

0

976

Jan-May 2004

2.175

2001

Customs Revenues (Billions PhP)

Jan-May 2004

922


2.299

2000

0.0

100

200

300

400

500

600

700

800

629

2003

2.871

1999

Jan-May 2004

BIR Revenues (Millions PhP)

2002

1998

2003

2003 1998

REVENUE CONTRIBUTION Customs Collections (5% Tax on Gross Income + Withholding Tax

1994 to 1998 1999 to May 2004

1.304 B 3.316 B

(28%) (72%)

Total:

4.620 B (100%)

1998

2.353

1999

3.468

2000

6.740

2001

6.935 7.972

2002 2003

7.886


2.910

Jan-May 2004

0

1

2

3

4

5

6

7

8

Visitor Arrivals (Millions )

But it was not all bed of roses when Chairman Payumo took his oath as the second SBMA administrator. During his assumption to office, he had to face the onslaught of the Asian financial crisis that has swept all emerging markets in the Asia Pacific leaving behind unimaginable disaster. He also had to assume his office marked by a bitter squabble with the first SBMA administrator, leaving behind a divided SBMA. But all these did not deter Chairman Payumo who, even as a congressman representing Bataan during the 8th, 9th and then 10th Congresses, has already formed his vision for the development of Central and Northern Luzon with the Subic Freeport as its central catalyst. Hence, he immediately instituted wide-ranging policies aimed at putting into place structures that will further promote Subic as a world-class facility. Chairman Payumo has also pioneered an integrated four-pronged approach for the freeport’s sustained development that is in tune with the challenges of the 21st century: Expanding Horizons, Port Development, Development of Nature Theme parks and CyberSubic With these policies in place, SBMA is fast realizing its dream as globally competitive economic, financial, and tourism hub.

Dreaming of CyberSubic SBMA Chairman Felicito Payumo has a dream. His dream is for the Freeport to become accessible online anytime, anywhere, 24/7. And his dream is finally at hand and well on its way to realization. First stop: automating all systems within the SBMA. And SBMA is very successful in this regard. To date, some 14 application systems are already fully functional each serving its respective clientele. Among these include: • Ecology Center Information System: it is an Oracle-based client-serve database application designed to assist to manager, analyze, monitor and display environmental conditions of the Freeport. The system is capable of presenting computerized comprehensive land-based information consisting of environmental and natural resources of the Freeport. • Asset Information System: it is a GIS (geographic information system)-based application system designed to enhance the monitoring and management of the SBMA assets and facilities (buildings and structures). • Subic Bay Freeport – GIS: it is a GIS-based application system designed to provide and display information such as the socio, economic, and physical profile of the Freeport. • Identification Badge System: it is a flexible platform for designing and producing identification badges. It features magnetic stripe encoding, bar coding, and color coding to distinguishing attributes of different types of badges. • Investment Handling System: A computerbased application designed to automate the investor handling process which facilitates SBMA assistance to investors from the time the latter inquires about Subic Bay up to the time they establish themselves as Subic Freeport enterprises. • Housing Reservation System: a reservation system for the tourists/guests who would like to rent housing units at the Binictican. • Tourism Reservation System: a reservation system for tourists that visit SBMA who will rent and reserve for a certain SBMA tourism facilities/ spots. • Locator Registration System: a database for tracking the history files of the licenses of a locator.

SBMA Chairman Payumo says these systems form the hard core of his dream of CyberSubic. These are the infrastructure that will further make Subic more attractive to multi-billion dollar investments. “We have to put in place systems that will make us more competitive than our competitors. Admittedly, the competition is tough, but we at SBMA strives to offer our clients world-class facilities that are truly unrivaled”, the SBMA administrator said. The challenge now for SBMA is to make all these application systems to be web-enabled. “It is not enough that we have these automations in place. Since our clientele is not just based here in the Freeport, we are always in the constant search for ways to attract those who are outside Subic and outside the country. Hence, we believe, we have to be web-enabled. This is the fruition of our dream of a 24/7 Subic Freeport,” Chairman Payumo said. Another innovative high-tech component of the CyberSubic program is the Mobile Alarm Remote System. An added feature of the SBMA’s Emergency Response System, the mobile alarm remote system, is a global system for mobile communication and subscriber identity based software, which by using cellular phones, will allow residents, visitors, business and commercial establishments located within “highend” community like the Subic Bay Freeport Zone, a direct communications link to police, fire, medical and rescue team. The system will also help the SBMA to answer public inquiry, give advice and update to the public. “We are doing all that we could to continue providing world-class services to our clients. After all, we are in the business of providing world-class public service,” SBMA Chairman Payumo stressed.

by Miguel Paraz and Janette Toral

T

here are many attempts in trying to document how the Internet has evolved in the Philippines. While making this publication, we realized that there’s hardly any attempts to record IS evolution, especially outside Metro Manila.

deals. Some of the early players were lucky as prime movers, but some are not as fortunate. In addition, the desire to make transactions over the Internet, often referred to as e-commerce, bonded the industry to push for the passage of the E-Commerce Law. They are listed here.

Various publications were used as a resource in coming up with this timeline. We were fortunate since there are useful sites like the Internet Archive WayBack Machine (http://web.archive. org) that allowed us to go back to old articles and websites online.

• Culture – As Filipinos go online, various forms of online activities are performed. From email to SMS over the web, this timeline intends to show the trends that caught the Filipinos’ attention.

The timeline shown here are based on the following: • Content – This shows how Internet content has matured. Websites that have come and gone through the years, especially those that became popular. • Communities and events – The Internet has allowed users to join various communities, interact, collaborate, and even debate on issues. This part will show the various communities that were formed and events that brought the Internet community together. • E-commerce – Through the Internet, entrepreneurs and big enterprises were able to trade services, form partnerships, and close 16

• Partnerships and cooperation – The Internet has brought a new dimension to public, academe, and private sector partnerships. International organizations like the World Trade Organization, Asia Pacific Economic Cooperation, United Nations, also started having an Internet and E-commerce work program agenda. This part intends to show the various partnerships and cooperation that have been formed. • Investments – The Internet has also stimulated investments in the country. From dotcoms to IT and Internet-enabled services like call centers, web development centers, and web animation studios, new opportunities that were not as accessible in the past became a reality. Some ventures went well while others failed to survive. This part shows some of these investments that have come and gone.


CONTENT EVOLUTION 1980’s – 1994 The earliest cyberspace content was text-based. The slow links of the time, starting at 300 bits per second, could not transfer graphics. Information systems such as Bulletin Boards and Online Services delivered their content through low-speed links. Bulletin Board Systems were oriented towards files containing freely-available text information. Online Services such as Binary Information Exchange (magazine) and Compuserve offered their subscribers licensed content and real time information such as stock prices. Compuserve (http://www.compuserve.com) and America Online (http://www.aol. com) eventually set up Manila access numbers for their services, but do not market their services locally. Compuserve planned its launch for Asia-Pacific services in 1996. 1993 The E-Mail Company (http://www.emc.com. ph) launches EMC Online, “the first Online Content Service in the Philippines which allows its subscribers to forge a strong and dynamic Online Community via Online chat forums.” This online service originated on the Macintosh platform using the FirstClass software, and was originally run separate from the Internet. Along with the forum systems that emerged later on, it promoted a self-contained community where everyone communicates on the same system.

1994 Binary Systems Holdings, Inc. puts up a commercial online service, called Portal Inc. (http://www.portalinc.com) that offered “a commercial online service (much like that of Delphi, Compuserve, even AOL) which, like the humble BBS, was the precursor to the ubiquitous Internet Service Providers we have now. [The system] was a proprietary online system with its own viewers (precursor to the browsers), email, etc. It started as a commercial online service that was available to its subscribers, 24-hours a day.” This ran along the same lines as EMC Online. The systems back then were “proprietary” since no unified standard for online systems has emerged, prior to the World Wide Web and today's standard HTML-based interfaces. 1

Chuck Gardner puts up the first high profile website, the soc.culture.filipino (“SCF”) homepage. It is now located at http://www.cyberbayan.org. This is the home page for the SCF newsgroup. Various Filipino-made web sites started going online showing the potential of Filipino content on the web, and inspired other webmasters to build their own sites. In a foreshadowing of the censorship moves, the PHnet trustees agreed on less regulation. This became a question early on since the unrestricted availability of content would certainly be opposed by some sectors.

phillipineinternettimeline

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1995 Cebu City ISP GSILink puts up G-Spot (http://www.gsilink.com/gspot), the first public Filipino search engine. It indexed keywords from websites using the Open Source software engine, but required users to manually add sites to its catalog. This showed that Filipinos wanted to look for content located within the country, which could not be satisfied by foreign engines of the time. No Filipino search engine has been able to do actual indexing of local content, until Google started offering country-specific searches.

1996 Public interest in the Internet leads to the rise of Internet publications. These include 1969, Internet World, , and The Web. Only The Web survived and is known today as Enterprise (http://www.enterprise. ph). Cybernet Live (http://mnl.cyb-live.com) developed a media portal called Powerhouse. Net (http://www.powerhouse.net/) to house websites for the leading print publications of that time. This site disappeared when Cybernet Live shut down. In the words of Alan Robles, editor of : “at that time (1996), the Internet was on a definite growth curve, everything was coming up Internet -- the excitement was palpable. It was my idea to get Nicholas Negroponte as a columnist (it was expensive) -- and there were all sorts of plans, but the management infrastructure and culture weren't up to the vision.” was a glossy Internet lifestyle magazine published by Benpres Publishing (now ABS-CBN Publishing).

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Companies connecting to the Internet became aware of their corporate image. Ayala Corporation—which would later be a dotcom player—started its website. Even while top companies like Ayala Corporation (http:// globe.com.ph/~isd/ac_home.htm) got press coverage when it went online, countless smaller companies have also built an online presence. Many of these started out as extensions of the personal pages built by company staff members who were the first to go online among their peers. 2

Internet pioneer and chronicler Jim Ayson puts up the Philippine Cyberspace Review website, featuring his original writing and reprints from Computerworld, which had no website at that time. It was then under his homepage at http://www.europa. com/~jra/ and now archived at http:// web.archive.org/web/19961222155753/ http://www.europa.com/~jra/~jra/stac/ stacfaq.html. This served as a rich source of information at a time that the mainstream news media did not publish its content on the Internet. The site evolved into the PHCyberview group at egroups, later Yahoo! Groups, which became a rich source of discussion and information on the local Internet. This is now at http://groups. yahoo.com/group/ph-cyberview with archives spanning back to August 1998 when the group started. Many historical events are documented there.

Internet censorship started to spark interest among governments and legislators around the world. The Philippine Senate called for a hearing on pornographic material on the Internet, and summoned Internet pioneers to testify. DOST Secretary William Padolina declares that he would rather “err on the side of freedom” when faced with the censorship issue. 3


1997 Yehey (http://www.yehey.com) was founded. It is still the country’s most prominent search engine or directory. At the time it competed against the EDSA directory. Since then, Yehey has branched into a general-use portal and ecommerce service provider with the PayPlus+ system. A portal is a general-purpose Internet site which caters to users seeking information or accessing common services such as checking email.

Content-rich media websites went up. Newspapers such as the Manila Bulletin (http://www.mb.com.ph), Philippine Star (http://www.philstar.com), Manila Times (http://www.manilatimes.net) and the Philippine Daily Inquirer (http://www.inq7.net) put Philippine news on the web.

The BusinessWorld Internet Edition, now BusinessWorld Online (http://www. bworldonline.com) was the first to go online, in October 1995. It put a large amount of regularly-updated content on the Web, satisfying readers abroad who sought Web versions of their daily Philippine reads.

ABS-CBN Interactive (later known as Pinoycentral – http://www.pinoycentral.com) and GMA Network (http://www.gmanetwork. com) started deploying content online as well.

1998 The first Philippine Webby Awards – later called the Philippine Web Awards (http:// www.philippinewebawards.com) – was held at the Hard Rock Café, Glorietta Mall, Makati City. The Awards was patterned after the US Webby awards, as it was originally organized by The Web Philippines magazine. The Web Magazine US ran the original awards. The sites that made up the entries and finalists served as a snapshot of the state of the Web industry, and with the number of sponsors involved, it became important commercial tool.

Bert is Evil (http://www.fractalcow.com/bert/ bert.htm) won the prestigious Webby Award (http://www.webbyawards.com) in San Francisco. Dino Ignacio is the first Filipino to win a Webby Award. (March 6, 1998)

PhilRadio (http://www.philradio.com) began its live Filipino radio programming on the Internet. It caters to Filipinos abroad who miss radio shows back home. 4

Legmanila (http://www.legmanila.com) and Localvibe (http://www.localvibe.com) started operations as independent companies. Both sites featured original writing and content. In 2000, they would be acquired and merged by Singaporean dotcom GetAsia.com. Later on, GetAsia Philippines would close down, and ClickTheCity.com, an online events and reviews site, started. 5


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2000 Mp3manila (http://www.mp3manila.com) was one of the more prominent dotcoms during their rise to prominence. It was funded by the dotcom venture company, Ajonet Holdings, and sought to promote local artists by hosting their music. While it became public through hype, it quietly faded away. I asked one of the founders, Nono Felipe, about this. His response: “On why or how we closed down, all I can say is that during the dot com era, business principles were not as sound as they are now. I mean let's face it, not all business models then were proven to be viable. Add that to an immature market like Manila, where the penetration of electronic commerce is negligible... the bottom line is that the Philippines was and is still not ready for digital rights management (DRM). And that was one of our biggest potential drivers. Setting up the whole infrastructure of DRM costs so much, yet no one wanted to buy digital music here. Add that to the fact that you could get pirated CDs for less than a hundred bucks. And it came just in time with the dot com bomb in the US.

2001 US-based Pinoy artist Dino Ignacio created the “Bert is Evil” site as a spoof. Sympathizers of Osama bin Laden used it to make the 9/11 leader look good, so Ignacio shut it down. This gave him worldwide fame. Dino Ignacio is the artist behind the animated “Maritess versus the Superfriends” (http://www.fractalcow.com/ rex/) cartoon, performed by Fil-Am comedian Rex Navarrete. 6

A lot happened. Market factors, financial factors, etc, etc. The way I see it, all good things come to an end. They can speculate all they want. They can guess what happened... But at the end of the day, it doesn't matter why or how we closed down. The mere fact that we built it still amazes me to this very day.”

“Maritess vs. the Superfriends” (above) and “Bert is Evil” are two of Dino Ignacio’s creations that put Filipino creativity on the Internet map.

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COMMUNITIES & EVENTS 1986 - 1994 The BBS community was formed online. BBS systems offer private messaging and message boards, based primarily on Fidotech technology. They interconnect to form BBS networks and exchanged messages called “echoes” since they echo or copy each others’ messages. The individual messages were called “echomail.” Since these systems were based on regular phone lines, and had no Internet connection, only one or a few users could log in at a time. The term “EB” was first applied used by the online community to mean meeting in person. It came from the language of the Citizen’s Band (CB) Radio community.

1988 The Science and Technology Advisory Council is formed to coordinate “expatriate human resources in key development programs of the country.” Its electronic network STACnet is important because it brought interest to the fledgling Philippine Internet from those around the world, with focus on the scientific community. The first email sent from the first live Philippine Internet connection at the University of San Carlos was addressed to STACnet, on March 29, 1994. 7

1994 Live Internet access brought access to facilities such as the Internet Relay Chat (IRC) chatrooms, and custom services accessed via the telnet protocol. These protocols allowed interactive connections which were impossible with the store-andforward systems used previously. The custom services included Multi-User Dungeons (MUDs), the forerunners of today’s graphical role-playing games and MMORPG’s (Massive Multiplayer Online Role Playing Games). Mosaic Communications established its own popular telnet-based chat server called “Chat Manila.” Real-life communities formed around these systems.

1990 The soc.culture.filipino (SCF) discussion group is formed by Aimee Manosa. Its charter provides “an open discussion on issues concerning the Philippines.” The group started with the Filipino Internet veterans abroad. The topics primarily reflect the point of view of the overseas Filipino and interested observers. The message archives are available at Google Groups: http:// groups.google.com. SCF uses the Usenet system where servers around the world exchange messages in categories called newsgroups. This system is separate from electronic mail, and uses the Network News Transfer Protocol (NNTP). It is no longer commonly used by today's casual Internet users. The system did not catch on in the Philippines due to the huge amount of bandwidth required. 8


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1996 ISP Sky Internet put up an IRC chat room called “The Lounge” which became popular among the local community. The Cyberspace Live ISP/online service established “eForums,” the first local webbased forum and discussion system. This was a precursor to the web-based bulletin boards that became popular in the late 90’s.

June 1996 The Philippine Internet Service Organization (PISO) was formed with Albert Velasco (of Mailstation Net) as the first president. This was the fruit of discussions among ISP officers since late 1995. The ph-isp mailing list served as the online forum for these initial discussions. On August 20, the officers and trustees were inducted in Malacañang by President Fidel V. Ramos.

September 1996 Internet World Philippines, the first local Internet show, was held at the EDSA ShangriLa Plaza Hotel. At this event, PLDT announced its acquisition of Infocom Technologies, marking its venture into the ISP business. This event also hosted the “Browser Brawl” between Microsoft Internet Explorer and Netscape Navigator, where representatives of the latter failed to show up. August 1997 February 1998 Local ISP’s IPhil Communications, Mindgate Systems and Worldtel Philippines host the third APRICOT (Asia Pacific Regional Internet Conference on Operating Technology). This technical conference was held at the Makati Shangri-La Hotel. Internet Engineering experts from all over the world came to hold technical sessions and tutorials. This conference has been held every year since 1996, and is hosted by a city in the AsiaPacific region. The event is also an important face-to-face social gathering for industry professionals. 9

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WS Expositions organized the Internet Commerce Expo Manila 1997 (ICE Manila 97) at the Shangri-la Hotel Makati City. This event introduced the WS Group to Fiesta Online, known for Yehey.com. 1999 PinoyExchange.com forum started operations. It became one of the largest online communities in terms of message volume, users and mind share. iAyala, the Internet venture arm of Ayala Corporation, made an investment in 2000. Several other forums followed. It is still running to date, surviving slowdowns and a system crash.


2001 Blogs and online journals became common. These are text-oriented sites that reflect the daily opinions or chronicles of their publishers. They add fresh content from a personal point of view, as opposed to the corporate view espoused by mainstream websites. Blogs allow bits and pieces of information from the Philippines make their way to Filipino readers abroad. Online games (not gambling) become available with local servers. Mindgate offers pinoybattle.net, which provide action and shooting-oriented games. Surf Shop operates gamena.com, offering board and card games.

2003 Level Up! Games licenses the Oz World and Ragnarok online games. These become popular among young players, increasing growth in Internet usage at home and in cybercafes, and promoting e-commerce through online ordering of credits. The company is adopting the Korean model of multiplayer online gaming. 10

The Philippine Internet Commerce Society launched its PICS SME IT Excellence Awards in the 2nd E-Commerce Congress and recognized Godiva for its efforts in adopting ICT and Internet use.

2004 PLDT vs. PLDT The dispute over PLDT.COM between the Philippine Long Distance Telephone Company (PLDT) and Gerry Kaimo peaked on January 29, 2004. A judge of the Quezon City Regional Trial Court denied the request by PLDT for a preliminary injunction. PLDT accused Kaimo of infringing on the intellectual property of the trade name and “engaging in unfair competition for using the trade name.” This is not yet the end of the story, which started on in September 1999 when PLDT filed a 1.35 million peso lawsuit against Kaimo. Kaimo expected that PLDT would appeal the case to higher courts, while preparing his own 50-million peso countersuit against PLDT. ii phillipineinternettimeline

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E-COMMERCE 1996

1989 Jose Emmanuel “Joel” Disini administers the PH domain, the top level domain for the Philippines. He obtained the rights from thenadministrator of the global DNS services, Dr. Jon Postel. He operates an e-mail service called the E-Mail Company. 11

The Philippine Internet Commerce Society (PICS) was formed to advocate e-commerce. Internet banking starts. In December 1995, Urban Bank announced its plans to start a virtual bank. In 1997, the bank introduced its Home Virtual Banking service. According to Janette Toral: First investment bank website (information) is BPI Capital (http://globe.com.ph/~bpicapr/) (early 1996). First savings bank website (information) is BPI Family Bank (http://www.bpi.com.ph). (December 1996)

1997 The WS Expositions Group organizes the Internet Commerce Expo in September 1997. This shows that Internet commerce deserves its own events. The ATM network Bancnet operates an ISP for its member banks. This made use of the existing connections between the Bancnet system and its members.

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Today, many banks offer transactional services over the Internet, allowing their customers to access their bank accounts and services.

1998 San Miguel Draft Beer goes online. This is the first full e-commerce site operating from the Philippines. The proponents were World Port (an Internet services consulting firm), IBM, San Miguel Corporation, and Equitable Card Network; with the support of Intelligent Wave Philippines, and Infocom Technologies Incorporated; working with the Department of Trade and Industry (DTI) and the E- Commerce Promotion Council of the Philippines (ECPC). This showed that the Philippines is capable of facilitating online commerce. 12


1999

2000

Auction sites flourish, following the trend in the US, with popular services such as eBay. These include eAuctions.ph, which closed and reopened as Avalon.ph; PinoyAuctions, which was acquired by ABS-CBN and merged with PinoyCentral; SurfingBananas, which has closed down; and Bidshot, which offers SMS-based bidding. These make use of a C2C (Consumer to Consumer) model where the buyers and sellers transact directly and the website merely facilitates the meeting of the two. E-Store also began its e-commerce store operations. 13

2001 Various developments heated up the issue over the PH domain. The group opposed to dotPH and Joel Disini organized PhilDAC (Philippine Domain Authority Convenors). dotPH president Jose Emmanuel Disini sues Fernando Contreras, Jr., president of PISO (Philippine Internet Service Organization) and ISP Inter.net.

The E-Commerce Law—Republic Act 8792, was signed into law on June 14, 2000. It has a scope much wider than the “e-commerce” in its name, as it also covers digital signatures and “hacking” activities. The salient features of the E-Commerce Law are listed here: ht tp://w w w.digit alf ilipino.com/writing _ article.cfm?id=19

B2B Business Exchanges started operating, to offer services for corporate buyers and sellers. These include Bayantrade, formed by a consortium of large companies; SourcePilipinas, from the Yapster group; B2B Price Now; and PhilBX (Philippine Internet Business Exchange) from the SSI group. These systems allow companies to achieve savings and increase efficiency by bidding and procuring online. Since the companies involved have existing relationships, this avoids the B2C (Business to Consumer) problem of Philippine e-commerce where payment systems are not well developed. 14

Prosperity.com is found guilty of selling and distributing securities under an illegal pyramid scheme. It was selling expensive websites. During this time, Multi-level Marketing (MLM) schemes became popular on the Internet. 15

Yahoo Computer Services, a local company, loses yahoo.com.ph to Yahoo! Inc. This is the first time a Philippine company enters into a domain dispute with a foreign corporation and a well-known Internet brand. This shows that the scope of well-known Internet names is global, and Internet companies are concerned about misuse of their name even for local domains. 16 phillipineinternettimeline

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2003 Online merchants outside the country block transactions originating from the Philippines and some other countries. This measure is intended to prevent credit card fraud by blocking customers en masse, instead of addressing fraud on a case-to-case basis. One merchant with this policy is the domain registrar GoDaddy.com, which now blocks IP connections from the Philippines. Their blocking strategy affected local domain owners who used them to register domains. The Philippines is known among merchants to have high incidence of online fraud. 17

PLDT offers the Cyber Madness promo. It partners with dealers to offer computers on an installment basis when tied up with a dialup or DSL broadband subscription. This expands their consumer base beyond customers who already have PC’s, and aims to improve the low domestic PC penetration which hurts Internet expansion. 18 To this date, low credit penetration due to low income is a barrier to e-commerce adoption. Traditionally, Internet commerce systems have been dependent on credit cards. Fraud concerns also stop people abroad from using their cards on local sites.

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PARTNERSHIPS/COOPER ATION 1988 The Science and Technology Advisory Council is formed to coordinate “expatriate human resources in key development programs of the country.” Its electronic network STACnet is important because it brought interest to the fledgling Philippine Internet from around the world. The first e-mail sent from the live connection at the University of San Carlos was addressed to STACnet. 7

1992 Dr. William Torres was the managing director of the National Computer Center, the government agency promoting computerization in the country. At that time, the US academic, non-profit Internet was of the NSF (National Science Foundation) network. The NSF was headed by Steve Goldstein. The two met and Dr. Torres was convinced that a full-time Internet connection was necessary. 3

1993 Setting up the first live Internet connection was a cooperative effort of different groups. Dr. Torres approached the Manila Electric Company (Meralco), and the Philippine National Bank, since they were well-funded entities. Both declined to fund the project. DOST Secretary Ricardo Gloria heeded Dr. Torres' proposal for the Philippines to connect to the Internet. He included it in the Science and Technology Agenda for National Development. (STAND). Dr. Rodolfo Villarica of the Industrial Research Foundation (IRF) was put in charge. Philnet was formed. Dr. William Padolina became DOST secretary and oversaw the project. 3 Philnet started out with an email connection for “Phase I,” performed through a dialup UUCP (Unix-to-Unix Copy Protocol) connection made between the Ateneo de Manila University and the Victoria University of Technology in Australia. De La Salle University and UP Diliman joined the dialup network to receive international e-mail through the Ateneo gateway. This connection used UUCP to batch up mail to and from the Internet from the participating institutions. The DOST made a grant of PhP 12.45 million to the IRF to implement Philnet “Phase II,” for a direct, live connection to the Internet. The DOST contracted Computer Systems Network Corporation (ComNet), a networking equipment vendor to implement the network linking the

Dr. William Torres, Father of Philippine Internet.

various and universities and organizations. Arnie del Rosario, then chair of the Ateneo Computer Science Department, informed the chair of ComNet, the late Dr. Willy Gan about the project. Dr. Gan drew up the PHnet network design and convinced PLDT to deliver the facilities in time for the March 29, 1994 launch in Cebu. This was to coincide with the E-mail Conference headed by Dr. John Brule, a friend of Dr. Villarica and a visiting professor at the University of San Carlos. Benjamin “Benjie” Tan headed the technical part of project. Later, Philnet is renamed to PHnet to avoid a naming conflict with another group, a “philosophers’ network.” 19


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1994 March 29, 1994: The historic activation of the Philippine’s first Internet link with a permanent TCP/IP connection. This was a 64 Kilobit per second line using PLDT and Sprintlink, the IP service of US telco Sprint. Benjie Tan did the activation on the router co-located at the PLDT premises in Makati City, while Richie Lozada of Ateneo handled the Cebu end. This was in time for the target date, the day of the E-Mail Conference led by Dr. Brule, held at the University of San Carlos. The 64 Kilobit per second line run by PHnet is upgraded to larger capacity links, until the point where PHnet buys service from Bayantel's Internet service instead. This is when the institutional members of PHnet shifted their uplinks to commercial ISPs. 3

INVESTMENTS & BUSINESS Before 1994 Only multinational companies with external links to their home countries had Internet connections. These connections are linkedup to the commercial Internet at their home countries, passing through their corporate gateways and firewalls. This was because the Internet connectivity was only secondary to the goal of accessing Internet resources. When the Philippine Internet became more established, this situation reversed and most multinationals accessed their parent networks through encrypted Virtual Private Networks (VPN's) instead.

1995 More companies enter the ISP business. The number peaks at around 200 ISPs in 1999. An ISP directory went up (unfortunately, it is now closed) to count the growth, since the Philippines was proud to have the largest number of providers in the ASEAN region.

1998 Internet-focused consulting companies become prominent. They include Worldport, k2ia and 25by8. They offered Internet solutions and partnerships with service providers to provide useful utilities to the Internet public. 20

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1994 ISPs were the first type of Internet business. Companies with interests in IT and telecommunications were natural choices to study the possibility of Internet as a business opportunity. Most telcos were not aware of this potential and regarded the Internet as a threat to their traditional businesses. 1997 The Asian Currency Crisis affects sectors of the industry that depend on imports such as bandwidth, and capital expenditures like routers and servers. Some Internet providers had to adjust their rates or peg them to the US Dollar to keep up wih this development. Singaporean ISP Pacific Internet partners with local provider Primeworld Digital Systems to set up Pacific Internet Philippines. This was the first large foreign ISP to set up locally. Primeworld was started in 1996. The Philippine Stock Exchange offers online, real-time stock quotes with the help of ISP Portal, Inc. This coincided with the stock market boom, where many people including foreign investors were interested in the data.


1999 Established companies start moving into the dotcom boom. Ayala forms the Ayala Group Technology Business Development Group, which later becomes iAyala. The Benpres group of the Lopez family forms eLopez. PhilWeb. Com acquires majority control of South Seas Natural Resources, an exploration company— the first backdoor listing into the Philippine Stock Exchange. Acoje Holdings, a real estate company, becomes AJOnet. JG Summit sets up Latitude Web Philippines. This shows that the Internet has become mainstream in terms of business interest, both for complementing their existing business, and for opening avenues for investment in new ventures that were then considered lucrative – before the dot com crash. 21

2000 The dotcom boom hit the Philippines in full force. This included unbelievable hype from some players. The enthusiasm spread into venture capitalism, as investors looked for high returns on their investments. Startups became fashionable, and incubators such as HatchAsia (Helping Asian Technopreneurs Change Asia) became prominent. HatchAsia held a camp for start-ups, cashing in on people's interest in joining the craze. Business plan competitions took place to fish out new ideas from more people. 22

Timeline Tidbit Alan Robles, former editor-in-chief of magazine, described Philippine dotcom mania in his article “World Wide Wackiness: Silly Season in the Philippines”. http://www.hotmanila.ph/ leantech/silly.htm. I asked him if he felt vindicated when his predictions came to pass. His reply: It wasn't really hard to see it coming: despite all the predictions about a "new economy" and growth not subject to the normal laws of economics, anybody who'd read a few books and business magazines could see that what came up had to come down. As early as 1998 I remember telling my friends at Link how the exuberant (i.e., reckless) growth based on the disregard of due diligence couldn't last for long— it was all going to come crashing down. And of course once you saw it coming in the US, it was only a matter of time before the effects rippled down to our country. It didn't really help much that when the wallets of investors opened, the best that local companies here could think of were "me-toos" — free email, auction sites, medical sites. Nobody paid attention to the distributed nature of our working population— seven million Filipinos scattered around the world, many of them wired because of sheer necessity. Journalist Bill Huang says that the dotcom boom is (in hindsight: was) an April Fool’s joke. http://www.codewan.com.ph/CyberDyaryo/ commentary/c2000_0406_01.htm. US ISP and “Internet Supercarrier” PSInet acquires two local ISPs—IPhil Communications and Internext (I-Next)—as part of its global expansion. It merged the two into PSINet Philippines. In 2001, PSINet sells the local company to its spin-off company, Inter.net. PSINet later declares Chapter 11 bankruptcy, and Inter.net worldwide becomes an independent organization. SAGE (Sports and Gaming Entertainment) operates an Internet-based casino. It is licensed and monitored by PAGCOR (Philippine Amusements and Gaming Corporation), the only government body which can authorize gambling activities. The virtual casino is accessible from both Internet connections and kiosks set up at malls. 23


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CULTURE Filipino Internet Culture Filipino Internet culture started with the novelty of e-mail and chatting. When access to Web spread, personal homepages became popular. These were typically hosted on the space provided by the ISP, until free, ad- supported web space became common. Instant messengers made chatting more accessible to the casual user. ICQ was the first to be adopted. Extra messenger applications such as games, voice chat, and web cameras became popular and drove up usage. In 2003, Internet culture was shaped by Friendster social networking and the Ragnarok game. Friendster became the new “e-mail address,” as people connected to each other. While foreignbased social networks became popular, a local social network went up—funchain.com—by Jason Banico. The youth played—and got addicted to—the Ragnarok multiplayer game franchised by Level Up! Games. Internet use has cultural influences. Internet adoption echoed real world pop culture. The popularity of anime, cell phones, and music were copied into the virtual world. Websites that catered to particular communities emerged, such as Femalenetwork. com for women, ManilaTonight.com, MyGimmick, and others for “gimmicks”, and Tsinoy.com for the Filipino-Chinese community. Technology-oriented people had their share of communities for its different aspects. Sites such as Yahoo! Groups made it easy for people to create their own online communities for whatever purpose. Many of these online communities crossed over into real-life, with some becoming formal, registered organizations. The New Worlds Convention— http://www.newworlds. tk/—was organized twice by science fiction/ fantasy fan groups which were formed online.

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Traditional Culture The Internet has clashed with traditional Filipino culture. The issue of Internet pornography and inappropriate content recurs because of the easy availability of material through the Web and peer to peer file/sharing applications. “Scandal” pictures and videos have been circulated, and organized Internet pornography operations have popped up. The Philippine Catholic Church, traditionally a big influence in public morality, has spoken out against pornography. Filtered access was the main premise behind establishing the failed CBCPnet venture in 1999. This was intended as a large-scale Internet service provider, but ended in financial and legal ruin in 2002. Today, CBCPWorld.com is online again, with new partners. Instead of serving the consumer market, the ISP is connecting Catholic schools nationwide. It also provides Internet literacy capacity building or training to elementary and high school teachers focusing on how technology can be used in boosting the quality of education. Current ISP’s that offer filtering are Infocom’s Netsafe (http://netsafe.info.com.ph) and Uplink (uplink.com.ph). 24


Politics Despite the relatively small number of users, the Internet has been used for Philippine political purposes. Government offices and politicians have websites. The most prominent use of the Internet was during the ouster of President Joseph Estrada in 2001. ELagda sought to obtain one million online “signatures” to petition Estrada to resign. Other sites included Transparent Accountable Governance (tag.org.ph) and Guerilla Information Network (gin.ph, now closed). NAMFREL (National Movement for Free Elections) count of the 2001 Senatorial elections was run with the cooperation of ISPs which helped collect the results. The campaign for the 2004 elections saw the candidates with websites serving as the online equivalent of their real world campaigns. The candidate websites are complemented with online analysis. Blogs show people's perspectives on current events.


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SOURCES/REFERENCES 1 Email of Portal founder, Patrick Deakin, to the digitalfilipino group: http://groups.yahoo.com/group/digitalfilipino/ message/1853 2 Ayala Corporation Web Page Goes On-Line, by Joseph Dennis A. Cuan Computerworld Philippines - August 31, 1995, archived at: http://web.archive.org/web/19961224173725/ www.europa.com/~jra/cyber/news/ayala.htm 3 RP Marks 7th Year on the Internet (Computerworld Philippines, March 26, 2001) By Chin Wong and Melba-Jean Valdez h t t p : // w w w . i n f o . c o m . p h / ~ c h i n w o n g / RP%20marks%207th%20year.html 4 • Recollections of Heinz Bulos. http://www.heinztein.com/archives/2003_11_ 01_archives.htm • PhilRadio announcement at http://groups.yahoo.com/group/digitalfilipino/ message/5 5 Interview by Ruel de Vera for Sunday Inquirer Magazine, January 7, 2001 http://web.archive.org/web/20030605092817/ http://www.clickthecity.com/info/press4.asp 6 Urban Legends Reference Site. http://www.snopes2.com/rumors/bert.htm 7 • The STACnet FAQ archived at: h t t p : / / w e b . a r c h i v e . o r g / w e b / 19961224045743/www.europa.com/~jra/ stac/stacfaq.html • Source: Danilo Caacbay’s recollection at: http://www.pinoyfirst.com/oneinternetday/ caacbay.htm 8 • SCF: Flips in Cyberspace: Somewhere on the Internet, a virtual community of Filipinos has found a home by Jim Ayson. Archived at: http://web.archive.org/web/19961224173946/ www.europa.com/~jra/scf.htm • More SCF recollections from the early days are at: http://www.pinoyfirst.com/oneinternetday/ index2.htm 9 Reference: http://www.apricot.net/apricot98/ 10 Korean-born online games invade RP, by Erwin Lemuel E. Oliva, INQ7.net. http://www.inq7.net/inf/2003/may/11/text/ inf_2-1-p.htm 11 Facts and issues about the PH domain issue are presented at ITNetCentral: http://www.itnetcentral.com/special_reports/ dotph/introduction.htm 12 Site of the Times, Volume 1, No. 6, October 1998 http://web.archive.org/web/20010729014408/ www.msc.edu.ph/wired/internetbeer.html 13 • eAuctions.ph article by Janette Toral. h t t p : / / g r o u p s . y a h o o . c o m / g r o u p / digitalfilipino/message/4 • E-Store article by Janette Toral. h t t p : / / g r o u p s . y a h o o . c o m / g r o u p / digitalfilipino/message/18 • ABS-CBN buys into PINOYAUCTIONS.COM By Veronica C. Silva, Businessworld IT Matters, August 3 2000. h t t p : / / i t m a t t e r s . c o m . p h / n e w s / n e w s _ 08032000a.html 14 Text of RA 8792: h t t p : / / w w w . p i c s . o r g . p h / e - c o m . asp?action=view&id=7 15 SEC threatens to revoke Prosperity.com’s license, Catherine C. Junia, Businessworld Online: h t t p : / / i t m a t t e r s . c o m . p h / n e w s / n e w s _ 06152001e.html 32


16 • The WIPO (World Intellectual Property Organization) decision: http://arbiter.wipo.int/domains/decisions/ html/2001/dph2001-0001.htm • The story of local Internet credit card thieves is: Hacker’s Paradise by Daffyd Roderick, Time Magazine. http://www.time.com/time/asia/digital/printou t/0,9788,105665,00.html 17 E-commerce sites discriminating against Filipinos? By Eleanore C. Sanchez, Businessworld IT Matters, June 13-14, 2003 h t t p : // i t m a t t e r s . c o m . p h / n e w s / n e w s _ 06132003a.html 18 Telco promo seeks to grow PC and net service in RP homes, Maria Patricia Anne L. Perez, Businessworld IT Matters, May 19, 2003 h t t p : / / i t m a t t e r s . c o m . p h / n e w s / n e w s _ 05192003h.html 19 • Philnet program shifts into high gear by Edwin P. Boon, ComputerWorld Philippines, Dec 15, 1993. Included in the old soc.culture.filipino FAQ, archived at: http://faqs.jmas.co.jp/FAQs/filipinofaq/part2 • Mosaic Communications profile at: http://www. mozcom.com/company/profile.html 20 Local software companies look for niches amidst problems and competition, by Helen S. Andrade, BusinessWorld IT Matters, October 27, 1999. http://itmatters.com.ph/features/features_ 102798.html 21 • Philippines: The number's up for fixed lines by Mary Ann L Reyes, Asia Times Online July 18, 2001. http://www.atimes.com/reports/ CG18Ai01.html • Summit ties up with Singapore-based Internet Consultant by Helen AndradeJimenez, Businessworld I.T. Matters, September 21, 2000. h t t p : / / i t m a t t e r s . c o m . p h / n e w s / n e w s _ 09212000d.html • iAyala Profile. http://www.iayala.com/profile.htm • PhilWeb press release. h t t p : / / w w w . p h i l w e b i n c . c o m / t e m p l a t e . asp?target=news/2000/p_jan21_ssnr • AJONET website. http://www.ajonet.com/about.html 22 • RP still looking for global dotcom by Joey G. Alarilla, Inquirer Infotech, July 17 2000. http://www.inq7.net/infotech/jul2000wk3/ info_2.htm • Internet business plan contest launched in Asia, Businessworld IT Matters, September 21, 2000. h t t p : / / i t m a t t e r s . c o m . p h / n e w s / n e w s _ 09212000b.html 23 RP online gambling launched in August by Sol Jose Vanzi, Philippine Headline News Online. h t t p : / / w w w . n e w s f l a s h . o r g / 2 0 0 0 / 0 6 / s i / si000544.htm 24 The CBCPNet scandal, Basic rules ignored. By Helen A. Jimenez, Senior Reporter, Businessworld IT Matters http://itmatters.com.ph/features/features_ 07172002.html ii • h t t p : / / w w w . i n f o . c o m . p h / ~ c h i n w o n g / runningstories.htm • http://www.inq7.net/inf/2004/feb/04/inf_1-1.htm

by Janette Toral lobally, we’ve gone a long way in using the Internet. It is estimated that there were 490 million Internet users in 2001. By 2005, this figure is expected to reach 1 billion. The Computer Industry Almanac predicts that, in 2005, an increasing portion of Internet users will be using wireless devices such as web-enabled cellular phones and personal digital assistants (PDA) to go online. In the Philippines, from less than 5,000 Internet users in 1994, we now have an estimated 6 million in 2004. By 2014, we expect to have 41 million Filipino Internet users. In our research, the majority of Internet users as of 2003 are women (58%) compared to men (42%). In the first nine years of the Internet, men comprised the majority of users. Today, men may spend less time online but are more advanced in their Internet use. As the trends in this chapter will show, the Internet usage habits of a Filipino Internet user is greatly influenced by the infrastructure, cost, and resources available.


1 9 9 7

• The Philippines has an estimated 100,000 Internet users. • In the Philippines, estimates quoted by a study recently published by the Carlos P. Romulo Foundation for Peace and Development noted a mere US$1.6 million worth of business done through the Web in 1997, with only about 6% of those are Filipinos with Internet access who purchased products online. The forecast sees a jump to US$383.7 million by 2002, with the ratio of Net-connected Filipinos participating in such electronic commerce (or e-commerce) expected to grow to 30%. 1

Mr. Garcia said the country is also getting the critical mass of Internet users that an Internet-based service requires. “As of end-1998, we had 350,000 Filipino Internet users, not counting those abroad. By 2001, it is predicted that one million Filipinos will be on the Net. By 2005, there will be five million,” he said. 4

Mr. Alvin Yong, Asia Pacific technology office vice-president of Citibank NA Singapore, noted that Internet banking has grown at an annual rate of 174.5% from 1995 to 1998 with World Wide Web users totaling about 130 million. 5

36

filipinointernetuserevolving

• There were about 100,000 to 150,000 Internet users in the country, according to a report by W3 Business Communications. • Cisco Systems Philippines country manager Manuel Rivera said the Philippines is second only to the United States in terms of people with the highest inclination to adopt the the use of Internet in their activities. This finding is based on the results of a study, conducted by a Singaporebased firm, on the local Internet market. "On the average, the study said Filipinos use the Internet three hours per week," he said. It also showed that the average user maintains subscriptions with two Internet service providers or ISPs. Most of the Filipinos on the Net belong to the B and C economic classes. 2

1 9 9 8

The Social Weather Stations (SWS) also in the same year reported that only one percent of Filipino households have Internet access. This amounts to about 146,000 homes based on 1999 population estimates. 3

Neil Hortillo of WS Research Corp said there were an estimated 217,121 Internet users in the country as of end1998. Of this number, about 75% had access to the web. In 1998, only about 6% of Web surfers bought products through the Web. 6


1 9 9 9

• The 1999 Philippine Internet User Habits and Demographics Survey was released. It was conducted jointly by Web Philippines, Business-World Online and Market Frontiers Research. • There are more male (57%) than female Internet users and the average age of the user is 27.67 years. • Majority of the users (46%) belong to the 25 to 34 age bracket while 37% are within the 19 to 24 age bracket. • Fifty-one percent (51%) have finished college, and 32% are pursuing graduate work. • A majority (57%) use the Net more than once a day. Still, a significant numer (19%) do so only once a day. • Internet connections are usually done at home (69 %) while 35% said they log on both from their homes and offices. • The Internet is used primarily for e-mail (89%). Other uses, as confirmed by both studies, are research and conducting of business. 3

In the Philippine Communication Satellite Corporation (Philcomsat) April-May 1999 survey of 974 respondents in Metro Manila, Philcomsat found that at least “60% of Internet subscribers were unsatisfied” with their service provider. Their most common complaints include abrupt disconnections (34%), busy signals for dialup accounts (34%), and slow download times (45%). 8

Latest figures from market research firm International Data Corp. (IDC) Asia Pacific show e-commerce revenue from the Philippine market is expected to reach $153 million and $193 million in 2002 and 2003, respectively. 9

The Philippine Communications Satellite Corporation (Philcomsat) conducted a survey on Internet usage among 974 Filipino business professionals in 1999 Results shows that: • 60% of Internet subscribers in the Philippines are not satisfied with their current service due to frequent disconnections, busy signals or slow downloading times. • Electronic mail makes up the most of Internet usage in the Philippines at 88%, then web surfing at 60%. Internet chats came in at 29% and newsgroups at 17%. The survey also showed that downloading files in the Philippines is still the most popular of use of the Internet. 7

Internet commerce in the Philippines will rise at a compounded five-year growth rate of 250%, while Internet commerce worldwide and in Asia-Pacific, will grow at only 131% and 200% respectively, in the same period, said Neil Hortillo, research director of WS Research Corp., a local affiliate of United States-based International Data Corp. (IDC). Mr. Hortillo said the number of Filipino users of the World Wide Web who actually buy goods over the Internet will rise to about 30% by 2002. As of March 1999, the number of Internet users worldwide is estimated at close to 154 million. The number is broken down as follows: 27 million were in AsiaPacific, 87 million were in the US and Canada, and 34 million were in Europe. 6

Pacific Internet sales and marketing director Rowena Blas claimed that Pacific Internet has cornered 20% of the Internet market in the Philippines. Based on estimates made early this year, the number of Internet users in the country is about 220,000. 8


37


• ACNielsen reported that PhP2.41 billion was spent on online shopping in the first half of 2000. • PhP13,100 online spending per person in the second half of 2000 and PhP9,800 per person in the first half of the same year. 10

2 0 0 0

2 0 0 1

• ACNielsen estimated that PhP3.24 billion was spent in the second half of 2001 by Filipinos for online shopping. • PhP1.64 billion was spent by Filipino online shoppers in the first half of 2001. • PhP14,400 spending per online shopper in the second half of 2001. 10

DigitalFilipino.com estimates there are 2 million Internet users at this time.

DigitalFilipino.com launched the first e-commerce book in the Philippines in June 2000, followed with the StatsReport series with the intent of reviewing Internet developments in the country.

In the Filipino Online Shopper Report published in June 2002, the following findings were highlighted: Responses from online buyers show that the top 5 out of 20 products and services, Filipinos buy online are books (54%), computer software (33%), domain name (31%), web hosting (25%), and computer hardware (24%). The top 5 sites, out of 79 named, where Filipino buyers shop are Amazon (http://www. amazon.com-54%), E-Bay (http://www. e-bay.com-11%), MyAyala (http://www. myayala.com-11%), Network Solutions (http://www.netsol.com-8%), Barnes and Noble (http://www.bn.com-6%), and Register.com (http://www.register. com-6%). About 66% of computer owners access the Internet from their homes. With Internet access also available in the workplace, home use is done on a “per need basis.” In the provinces, there are those who don’t use it at home because there are no avalable telephone lines. Internet cafes continue to be a popular venue for access. However, as the number of PC usage at home increases, offices, and schools, the cafés will not be as popular. 23% connects to the Internet from these places from time to time.

38



What Filipinos Buy Online (2001)

What Filipinos Buy Online (2000) • Books • • Computer software • • Music • • Computer Hardware • • Catalog/Mail Order •

Where do Filipino Online Buyers Surf • • • • • • • • • • •

Where Filipinos Buy Online (2000) • Amazon • • Barnes and Noble • • Ebay • • Yahoo • • CDNow •

Internet Access from Cafes 16 and below 17-20 21-24 25-28 29-32 33-36 37-40 41-45 46-55 56 and up Age Group

10

20

30

40

50

60

70

Yahoo.com Google.com Inq7.net CNN.com Hotmail.com Philstar.com Yehey.com   bworldonline.com DFNN.com PinoyCentral.com PinoyMail.com

Where Filipinos Buy Online (2001)

Top Mobile VAS Applications

75% 17% 33% 29% 21% 11% 14% 7% 8% 17% 0

• Books • • Computer software • • Domain name • • Travel services • • Web hosting •

• Logos and icons • • Ring tones • • Picture messages • • Daily News • • Banking • • Games • 80

Percent (%)

Buyers' profile online Bankers

16 and below 17-20 21-24 25-28 29-32 33-36 37-40 41-45 46-55 56 and up

Age Group

Internet Access from Home

Age Group

100% 53% 62% 66% 74% 61% 97% 38% 77% 20% 0

20

40

60

Percent (%)

80

21-24

64%

25-28

45%

29-32

63%

33-36

45%

37-40

43%

41-45

0%

46-55

14% 0%

56 and up 0

100

10 20 30 40 50 60 70 80 Percent (%)

• 21-24 years old – Books, computer software, information services • 46-55 years old – Books, travel services, music CD • Shopping site – Amazon.com • 25-28 years old – Books, computer software, domain name, web hosting • Shopping sites – Amazon.com – Network Solutions – E-Bay • 29-32 years old – Books, domain name, web hosting • Shopping sites – Amazon.com – E-Bay – Register.com • 33-36 years old – Books, computer software, home electronics, travel services • 37-40 years old – Books, computer hardware • Shopping sites – Amazon.com – MyAyala.com

Where do Filipinos Buy Online (2001) Amazon (54%) Ebay (11%) MyAyala (11%) Network Solutions (8%) Barnes and Noble (6%) Register.com (6%) US$522.13 average annual purchase per user


39


2 0 0 2

• An ACNielsen survey titled, "The Online Consumer and E-commerce in the Philippines" which covers the first half of 2002, showed books are still the favorite products Filipinos buy online. • Other popular products are musicrelated items, travel bookings, DVDs and video cassettes, computer hardware (peripherals), magazine subscriptions and non-educational software. • As of 2002, there estimates indicated 935,000 regular Internet users in the country out of the 3.4 million Filipinos whose lives have been touched by the Internet. 1.3 million are occasional Internet users. • Regular Internet users are defined as those who use the Internet at least once a week. 59% of regular users are male, while 41% are female. • 380,000 access from their homes, 471,000 from work and 84,000 using other access points. • 223,000 online shoppers • 290,000 online bankers • Among the online shoppers, some shop online regularly, others have shopped only once or twice. • A total of PhP3.66 billion (US$68.245 million at PhP53.63=$1) was spent on online shopping. • Online spending per person is pegged at PhP16,400 during the first half of 2002. • 83% of regular users earn wages from a variety of white-collar occupations. 11

Filipino Internet Users Typical Email Received

39% of email received are personal 35% are work/business related 26% are spam 38% have been hit by a computer virus this year

40


On August 2002, the DigitalFilipino. com Filipino Internet User Report Part 1 highlighted the following findings depicting Internet users’ habits: • Research is the top reason for going online, followed by email, browsing, business transactions, news, entertainment, chatting, downloading, and shopping. 40% connects to the Internet from their homes with a prepaid card. Rebel Internet lead in prepaid card sales. • Pacific Internet and Infocom are fierce competitors for combined post-paid and prepaid subscriptions. 95% uses the Internet on a daily basis with the majority staying online for an average of three to four hours a day. • In the past, e-mail has proven to be the application leader and the main purpose of those going online. However, the increase in the popularity of text messaging and having the capability to send and receive e-mails over the cellular phone have affected local email communications. Our list of top websites does not differ much to the 2001 rankings. Yahoo.com leads as this dotcom never seems to run out of steam in its offerings. • Google.com moved up in our ranking as Filipinos began to rely on it more when looking for information online. • Inq7.net’s readership base grows at a continuous pace. Its strategy of coming up with new content online contributes to its staying power. • Hotmail.com entered our top 10 for the first time as it gained acceptance as a free email tool among Internet users of all ages. • Yehey.com held on to our top sites list. To think that a lot of people are saying that portals are dead, Yehey.com as a pure dotcom player is surviving and now provides more offerings. Its shift from a mere search engine to a high value-added services company contributes to its relevance among today’s Internet users.


Filipino Internet Users

Length of Internet use

Internet use per day

2 hours 1 hour 3 hours 5 hours 4 hours 8 hours < 1hour 10 hours 6 hours

By Daniel Escasa

23% 18% 18% 9% 7% 6% 5% 4% 4% 5

0

10

15

E

20

25

Percent (%)

Purpose of Using the Internet Research Email Just Browsing Business Transactions Entertainment News Chat/Messaging Download Bills Payment/Shopping

44% 21% 8% 7% 6% 6% 4% 3% 2% 0

10

20

30

40

50

Percent (%)

Top ISPs for Home Internet Users

Pacific Internet (17%) Infocom (12 %) Mozcom (9%) Globe (5%) Sky Internet (4%) i-Manila (2%) PLDT DSL (2%) Digitel One (2%) Prepaid Internet (40%) - Rebel - PhilWorld - Bl@st - Flash - PhilWeb Provincial ISPs (7%)

Top 10 Websites (2002)

Percentages are based on the number of Users who named the sites 69% 34% 24% 22% 16% 15% 14% 10% 8% 6%

Website

Yahoo.com Google.com Inq7.net Hotmail Yehey.com CNN.com MSN.com PinoyCentral ABS-CBN.com Microsoft 0

10

20

30

40

50

Percent (%)

60

70

80

ven before the Philippines got the live IP connection to the Internet, a few hundred Filipinos already got a taste of Cyberspace through dialup Bulletin Board Systems (BBSes). For the uninitiated, a BBS is a dialup service that takes data calls from their users and allows them limited access to the PC hosting the BBS through a “green screen” menu. This access comes in the form of message boards similar in content to newsgroups and discussion mailing lists. BBSes also had file areas similar to ftp sites which allowed users to download files onto their computers and, if they had files they wanted to share, upload these to the host PC. The vast majority of BBSes were operated free of charge by hobbyists on their home PCs, using a residential phone line. Consequently, almost all BBSes were single-line affairs, and complaints (albeit good-natured) from users about busy signals and difficulty in connecting became a status symbol among System Operators (SysOps), being a sign of popularity. A BBS was not necessarily stand-alone however. Fidonet technology provided protocols for creating an ad-hoc dial-up network through which participating BBSes synchronized message boards and shared files from their respective file areas. Several BBSes banded together to form such a network, linking users not only in Metro Manila but also those in Cebu, Baguio, San Fernando (Pampanga), and Davao. Then, courtesy of US ServicemenSysOps in Clark Air Base and Subic Naval Base, the Philippine network got a connection to the international Fidonet community. Philippine BBSes therefore provided users the means to interact with varied cultures, although only through the message boards. The BBSes brought about the culture of sharing. Filipino users’ experiences of the early BBS served them well in the larger world of the Internet. In fact, many BBS SysOps went on to become system operators of the first Philippine Internet Service Providers (ISPs). As for the

rest of us, we were, for the most part, country bumpkins (“syano” in local parlance) on our first visit to the big city. We stumbled through newsgroups and discussion mailing lists but still managed not to make absolute fools of ourselves. After all, those were similar enough to BBS message boards. Besides, Fidonet International had a means of gating between Fidonet message bases on the one hand and newsgroups and mailing lists on the other. We had therefore absorbed much of Cyberspace culture even before we started our adventure into the Internet. On the other hand, we had only an inkling of the technical aspects of the Internet. We were in awe of receiving a near-instant reply to an e-mail we’d sent out only moments earlier. Those of you who’ve connected only to the Internet and not to BBSes take that for granted. Remember that Fidonet created only an ad-hoc dial-up network and that it could take hours before a message could even leave the BBS host computer, let alone get to its intended recipient. It then takes several more hours before a reply, if any, can come back. All told, you might get a reply only after a day you have sent the message. The other service that held us in awe was Internet Relay Chat (IRC). There we were, exchanging pleasantries with dozens of users the world over. Our only previous real-time chat experience was with a one-on-one with a BBS SysOp. (Recall that most BBSes were single-line hobbyist services.) Eventually, we adapted. We even thrived, and some of us even distinguished ourselves. Gerry Kaimo’s parody site pldt.com consistently places among the top 50 in Google’s news/satire directory. In another chapter of this book, we saw kabayancentral.com’s Netscape Open Directory Cool Site rating. Remember the mailing list service e-groups which Yahoo! purchased in the late ‘90s and transformed into Yahoo!Groups? Leo Mercader’s eforums.com predated egroups by about a year.


41


37 to 40 A summary chart showing our findings on the Internet usage habits per age group. Similarities and variations are obvious among those in close age ranges.

16 and Below • Top Websites - Yahoo.com - Google.com - MSN.com • 42% male, 58% female • 33% are PC owners • 50% go online primarily at Internet Cafes

17 to 20 • Top Websites - Yahoo.com - Hotmail.com - Google.com - MTVAsia.com - PinoyCentral.com - Yehey.com • 22% male, 78% female • 50% are PC owners • 50% go online primarily from Schools

25 to 28 • Top Websites - Yahoo.com - Google.com - INQ7.net - Hotmail.com - CNN.com • 60% male, 40% female • 78% are PC owners • 42% go online primarily from Work • Pacific Internet is the preferred ISP • Spends P897/month for Internet Access

41 to 45 29 to 32 • Top Websites - Yahoo.com - Google.com - INQ7.net - Yehey.com - CNN.com - Hotmail.com • 63% male, 37% female • 83% are PC owners • 42% go online primarily from Work • Pacific Internet is the preferred ISP • Spends P1147/month for Internet Access

33 to 36 21 to 24 • Top Websites - Yahoo.com - Google.com - Hotmail.com - CNN.com - INQ7.net - MSN.com • 44% male, 56% female • 68% are PC owners • 34% go online primarily from Work • Pacific Internet is the preferred ISP • Spends P1250/month for Internet Access

42


• Top Websites - Yahoo.com - INQ7.net - Google.com - CNN.com - Hotmail.com • 68% male, 32% female • 82% are PC owners • 45% go online primarily from Home • Pacific Internet is the preferred ISP • Spends P573/month for Internet Access

• T op Websites - Yahoo.com - INQ7.net - Yehey.com - Google.com - Hotmail.com • 67% male, 33% female • 86% are PC owners • 60% go online primarily from Work • Infocom and Mozcom are the preferred ISPs • Spends P782/month for Internet Access

• Top Websites - INQ7.net - Yahoo.com - CNN.com - Hotmail.com - MSN.com • 63% male, 37% female • 87% are PC owners • 60% go online primarily from Work • Spends P1100/month for Internet Access

46 to 55 • Top Websites - Yahoo.com - INQ7.net - CNN.com - Google.com - Hotmail.com - MSN.com • 58% male, 42% female • 80% are PC owners • 53% go online primarily from Work • Pacific Internet is the preferred ISP • Spends P1358/month for Internet Access

56 and up • Yahoo.com is the Top Website • 83% are PC Owners • 50% Access the Internet from Work


On its frequently visited sites, Yehey.com finally entered our top 5 list as Hotmail.com stepped down. As far as the local sites are concerned, it is interesting to note the entry of SunStar publication in our top 5 list as BusinessWorld Online, DFNN, and PinoyMail.com slipped.

Where do Filipinos Buy Online (1999 - 2002) Amazon (50%) MyAyala (10%) Network Solutions (9%) eBay.com (8%) Barnes and Noble (5%) Register.com (5%) Others (13%) US$513.50 average annual purchase per user

How Much do Filipinos Buy Online?

THE FILIPINO ONLINE SHOPPER

(per year) Computer Software Outdoor Equipment Shoes Music CD Video Computer Hardware Books Web hosting e-learning Travel Tickets/Movies Information Services Apparel Gifts Financial Services Domain Names

• 23% of the Internet Users interviewed are online shoppers • 76% Male, 24% Female

BUYERS’ PROFILE • 39% PDA Ownership • 83% access the Internet from Work • 93% Computer Ownership - 74% access the Internet from Home • ISP Subscriptions – Pacific Internet – Infocom, Mozcom - PLDT DSL - i-Manila

400% 325% 323.5% 289% 263% 191% 190% 148% 145% 134% 124% 97% 84% 74% 73% 70% 0

50 100 150 200 250 300 350 400 Amount in US$

Top Filipino Websites (2002) Percentages are based on the number of Users who named the sites

Online Bankers 16 and below 17-20 21-24 25-28 29-32 33-36 37-40 41-45 46-55 56 and up Age Group

0% 0% 64% 45% 63% 45% 43% 0% 14% 0% 10

20

30

40

50

60

70

24% 16%

PinoyCentral

10%

ABS-CBN.com

8%

PhilStar.com

5% 5

0

10 15 Percent (%)

20

25

Top 10 Websites (2002)

Percentages are based on the number of Users who named the sites

80

Percent (%)

Buyers' Profile 48% do Online Banking BPI (43%) UnionBank (15%) Citibank (13%) Equitable PCI (11%) HSBC (8%) UCPB (3%) Others

69% 34% 24% 22% 16% 15% 14% 10% 8% 6%

Yahoo.com Google.com Inq7.net Hotmail Yehey.com CNN.com MSN.com PinoyCentral ABS-CBN.com Microsoft

Website

0

Inq7.net Yehey.com

Website

Buyers' Profile

0

10

20

30

40

50

60

70

80

Percent (%)


43


Where do Filipino Online Buyers Surf?

We found more buyers as we increased our respondent base in 2002. 23% or 128 of survey respondents are online shoppers, with 76% being male. It is important to note, though, the amount people spend online. Filipinos buying from Amazon.com spend an average of US$162 per year. Admittedly, there are a lot of figure adjustments as the number of survey respondents increase. We took a particular interest on the ranking of ISPs where online buyers are subscribed. In the first issue, Pacific Internet, PLDT DSL, Infocom, Mozcom, and DigitelOne emerged as the top 5 ISPs. For this update, DigitelOne dropped in the top 5 ranking while I-Manila came stronger. Our ranking of online shopping habits didn’t change that much although figures continue to change. Since 2002 was still not over, we could not see whether or not there was a decline on the online shopping habits of Filipinos for that year. It is important to note the amount that people spend for online shopping. The respondents’ combined purchase amounted to US$64,000 from 1999 to the present.

Where do Filipino Online Buyers Surf? • Yahoo.com • • Google.com • • Inq7.net • • CNN.com • • Yehey.com •

44


Popular Local Sites for Online Shoppers • Inq7.net • • Yehey.com • • PinoyCentral.com • • PhilStar.com • • Sunstar.com • • ABS-CBN.com

33 to 36 • What do they buy online? – Books – computer software, domain name – Music cd, videos • Shopping sites – Amazon.com – MyAyala.com – GoDaddy.com • Spends an average of US$429 online annually

21 to 24 • What do they buy online? – Books – Tickets/Movies – Computer software – Information services • Where do they buy online? – Amazon – MyAyala – eBay • Spends an average of US$397 online annually

25 to 28 • What do they buy online? – Books – domain name – computer software – Music CD, web hosting • Shopping sites – Amazon.com – Network Solutions – E-Bay • Spends an average of US$276 online annually.

37 to 40 • What do they buy online? – Books – Computer hardware – Computer software • Shopping sites – Amazon.com – MyAyala.com • Spends an average of US$953 a year online.

41 to 45 • What do they buy online? – Books, travel services – Domain name – Web hosting – Information services • Shopping sites – Amazon.com – Network Solutions • Spends an average of US$323 online annually

46 to 55 29 to 32 • What do they buy online – Books – Computer software, domain name – web hosting – Computer hardware, financial services • Shopping sites – Amazon.com • Spends an average of US$910 online annually

• What do they buy online? – Books – Computer software, travel services – Apparel, music cd • Shopping sites – Amazon.com – MyAyala.com • Spends an average of US$552 online annually


DigitalFilipino.com in its Filipino Internet Banker Report also found that only 15% of Internet users bank online. By end of 2003, it was estimated that there are 525,000 Internet bankers in the country but less than half were active users. The male segment of society leads the early adopters having a 68% share in the survey and 32% of online bankers were female.

Most Popular Banks for Internet Banking by Gender Most Popular Banks for Internet Banking

Citibank - 16% 18%

BPI - 58%

Unionbank - 6% - 14% Age Group

Age Group

BPI - 58% - 58%

Equitable-PCI - 6% - 6%

Citibank - 18% Unionbank - 11%

Equitable-PCI - 9%

HSBC - 3% - 11% 0

10

20

30

40

Percent (%)

50

60

HSBC - 5% 0

10

20

30

40

50

60

Percent (%)

DigitalFilipino.com published the Filipino Internet User Report Part 2 in September 2003. This report highlighted that there are more women (58%) online than men. Additional findings as follows:

Internet Connection at Home by Gender: Total

Male Telephone Modem - 94% DSL - 5% Others - 1%

Female Telephone Modem - 97% DSL - 1.4% Others - 1.6%

Internet Access The school is the most common access point for the majority of respondents. This very much reflects our population where the young represents the majority. The penetration of computers and Internet in the school helped greatly as well to this development.

Internet Connection at Home: Total

Internet Use at home 72% of the respondents have personal computers at home. Similarly in past surveys, more male Internet users have computers at home compared with women users.

Telephone modem 94% DSL 5% Others 1%


45


Most Common Access Points to Internet Users

Internet Online Activities by Male DSL Users E-mail 12% Instant messaging 19% News reading 8% Entertainment information 5% Shopping 1% Hobbies 3% Travel 1% Medical 1% Games 6% Banking 1% Browsing 10% Chat 1% Jobs 2% Music 20% School work 2% Work at home 5% Sex 2% Distance learning 1% Government website 2%

School - 54%

Home - 46% Work - 20% Friends - 12%

Activity

Access Points

Internet café - 52%

Library - 5% Others - 1% 0

10

20

30

40

50

60

Percent (%)

Most Common Access Points to Internet Users per Gender School (Male) - 44% (Female) - 61%

0

Internet café - 50% - 54%

5 10 15 Time Spent (Percent %)

20

- 39%

Most Popular Internet Activities by Gender

Work - 26% - 16% Friends - 12% - 10% Library - 4% - 6% Others - 1% - 1% 0

10

20

30 40 50 Percent (%)

60

70

80

Number of Years Online Total by Gender

E-mail (Male) - 84% (Female) - 85% Web surfing or browsing - 60% - 55% Instant messaging - 50% - 60% Accessing entertainment - 44% information - 50% Reading news - 50% - 46% Doing school work - 37% - 41% Chat - 34% - 40% Games - 37% - 30% Music - 33% 25% Hobbies - 32% - 20%

Activity

Age Group

Home - 56%

0

20 40 60 80 100 Percent (%)

Overall Most Popular Internet Activities Number of Years Online Total

E-mail - 85% Web surfing or browsing - 57%

Female <1 year - 14% 1 to <2 years - 10% 2 to <4 years - 33% 4 to <6 years - 27% 6< years - 16%

Instant messaging - 56% Accessing entertainment - 48% information Reading news - 48%

Activity

Male <1 year - 14% 1 to <2 years - 10% 2 to <4 years - 33% 4 to <6 years - 27% 6< years - 16%

Doing school work - 39% Chat - 38% Games - 33% Music - 28% Hobbies - 25%

Less than one year - 15% One year to less than two years - 13% Two years to less than four years - 33% Four years to less than six years - 26% Six or more years - 13%

46


0

20

40 60 80 100 Percent (%)


0 5 10 15 20 25 30 35 Percent (%)

Very experienced users spent the largest percentage of their time dealing with e-mail, chatting, instant messaging, reading news, and browsing. New users, on the other hand, spend a larger part of their time with e-mail followed by instant messaging, browsing, chatting, school work, and reading entertainment information. Comparing women new users and very experienced ones shows similar results. Very experienced women Internet users spend a significant percentage of their time using email, chatting, instant messaging, browsing and researching. New users, on the other hand, spend a big part of their time on e-mail and instant messaging, followed by chatting, school work, browsing and accessing entertainment information. Very experienced male Internet users spend majority of their time on e-mail, instant messaging, news reading, browsing and maintaining websites. New users, on the other hand, spend their time on e-mail followed by instant messaging, browsing, and school work.

E-mail - 32% - 29% Instant messaging - 22% - 20% News reading - 1% - 7% Entertainment information - 3% - 4% Shopping - 1% - 1% Hobbies - 3% - 1% Travel - 1% - 0% Medical - 3% - 4% Games - 3% - 1% Banking - 1% - 0% Browsing - 17% - 5% Chat - 1% - 2% Jobs - 2% - 3% Music - 3% - 4% Stocks - 0% - 1% School work - 4% - 2% Work at home - 0% - 2% Sex - 2% - 2% Religious - 1% - 3% Distance learning - 1% - 1% Discussion - 2% - 3% Maintain website - 1% - 5%

New Users Very Experienced Users

3 h t t p : / / w w w . n c c a . g o v . p h / culture&arts/cularts/others/ communication/communicationnewmedia.htm 4 FILIPINOS READY TO TRADE ONLINE? http://www.itmatters.com.ph/news/ news_072899a.html 0 5 10 15 20 25 30 35 Percent (%)

Use of the Internet: Online Activities: Total E-mail - 24% - 32% Instant messaging - 20% - 14% News reading - 3% - 5% Entertainment information - 5% - 3% Shopping - 0% - 1% Hobbies - 1% - 2% Medical - 1% - 3% Games - 2% - 1% Browsing - 13% - 5% Chat - 10% - 15% Jobs - 2% - 1% Music - 3% - 3% Trading stocks - 0% - 1% School work - 10% - 3% Work at home - 1% - 2% Auction - 0% - 1% Sex - 1% - 1% Religious - 1% - 2% Distance learning - 2% - 1% Discussion - 0% - 2% Maintain website - 1% - 3%

1 IS RP READY TO HANDLE CYBERCASH? http://www.itmatters.com.ph/ features/features_101299.html 2 STUDY SHOWS FILIPINOS ARE HIGHLY INCLINED TO USE THE NET http://www.itmatters.com.ph/news/ news_110298a.html

Activity


Activity

E-mail - 19% - 35% Instant messaging - 19% - 5% News reading - 4% - 3% Entertainment information - 6% 2% Hobbies - 0% - 4% Travel - 0% - 1% Medical - 0% - 2% Games - 2% - 0% Browsing - 10% 5% Chat - 15% - 30% Jobs - 1% - 0% Music - 3% - 1% School work - 13% - 5% Work at home - 1% - 3% Distance learning - 2% - 2% Maintain website - 0% - 1%

Use of the Internet: Online Activities: Male


5 CITIBANK TO DEBUT FINANCIAL SERVICES PORTAL NEXT WEEK? http://www.itmatters.com.ph/ news/ news_081899a.html 6 RP INTERNET BUSINESS TO OUTPACE OTHERS, SAYS IDC AFFILIATE http://www.itmatters.com.ph/ news/ news_031899a.html 7 h t t p : / / w w w . a m e r i c a n . e d u / carmel/bree/internet.html 8 PHILCOMSAT TARGETS LEADING INTERNET SERVICE PROVIDERS http://www.itmatters.com.ph/news/ news_101999d.html

Activity

Use of the Internet: Online Activities: Female

9 ASIAWORLD ONLINE PORTAL TARGETS FILIPINOS OVERSEAS http://www.itmatters.com.ph/news/ news_090199c.html 10 http://www.itmatters. com.ph/ indicators/indicators_01272003.html

0 5 10 15 20 25 30 35 Percent (%)

11 http://www.itmatters.com.ph/ indicators/indicators_01272003.html and http://www.itmatters.com.ph/ indicators/indicators_01242003.html filipinointernetuserevolving

47

By Miguel Paraz

I

t took a lot of effort, patience, collaboration, and hard work for the Internet to become a reality. This chapter will show you how the Internet evolved in our country and what to expect in the years to come.

49


Ed Castañeda and Dan Angeles set up the first public access Bulletin Board System (BBS), called First-FIL RBBS. This is the conceptual forerunner of today’s e-mail systems and bulletin boards. The Star BBS (run by Efren Tercias and James Chua of Wordtext Systems) uses the Fidonet technology to exchange messages with Fox BBS (run by Jonathan Sumpio).

Long-distance connections to the Internet started. Telcos such as Eastern Telecoms and Philcom offered the X.25 packet switching service. This allowed a connection to online services such as Western Union’s Easylink. These services were terminal-oriented, allowing the local user to access the foreign system through a remote text-based log-in. Multinational organizations such as Motorola, Intel, and Texas Instruments had early TCP/IP connectivity through their head offices. Jim Ayson recalls, “we at the Asian Development Bank connected through BIX and Compuserve, which we accessed through the Bank’s dedicated X.25 connection to Hong Kong. So yes, we were telnetting and ftp’ing and Usenetting and e-mailing around 1992-93.” Since these connections were not direct, they were hard to use and primitive by today’s standards. 1

Jim Ayson is one of the country’s first Internet advocates, promoting Internet literacy through his discussion forums, talks, and website. 50

internetinfrastructuredevelopment

Fidonet Philippines, the Bulletin Board System (BBS) network, allows e-mail connections using its Netmail private message format. When it started, it made use of the free international calls through the US bases. When this was no longer available when the bases’ shut down, it shifted to taking incoming calls from the US, and then to dialing out to Taiwan. The Philippine network was interconnected with the global Fidonet network of enthusiasts, allowing mail to be sent to local addresses using a special non-Internet address. Obet Verzola set up E-Mail Center, using the domain phil.gn.apc.org. His system dialed long-distance to GreenNet in the UK. 2 As early as February 1991, De La Salle University (DLSU) signed up with the E-mail Company for dial-up access for e-mail. Kelsey Hartigan–Go, then a faculty member, estimated the cost at P15 per kilobyte per message. 3

The Far Eastern Broadcast Company offers e-mail on a donation basis. Its local users needed an email connection to their US headquarters. This was implemented using a Fidonet link and Netmail, using their FEBnet BBS System. The donation scheme was to help offset the cost since the company could not officially charge for this service. External users who donate were piggybacking on the long distance connection. 4 : BBSes were a hotbed for the tech community. For me, the most significant programmer discussion was at the FEBnet BBS. Jonathan Marsden is also instrumental in bringing Linux to the Philippines, spreading it to early adopters Eric Pareja and Dr. Pablo Manalastas. On the Fidonet network, Internet discussions were spurred by the RP-INTERNET echo (a forum that was distributed across all member networks). Jim Ayson moderated RP-Internet.


Mosaic Communications (Moscom, also known as Mozcom) operates as a commercial service provider offering a live IP connection. It gets its first connection from Phnet, and later established its own connections directly to the US and other foreign countries. RP-INTERNET forum participants discussed putting up an Internet Cooperative, subscribing to PHnet facilities. The idea was to split the costs equally among individual members. This did not materialize, partly because the overhead made it more feasible for the participants to obtain their own individual commercial connections.

Commercial Internet Service Providers begin operations. These include: GNet from Globe Telecoms, IBM Global Network, IPhil Communications, and SequelNet (Sequel Concepts and Infocom). The Industrial Research Foundation, the caretaker of PHnet, also offered public accounts. During this time, “shell” accounts which offered Unix access were still offered, since they consumed less bandwidth than full TCP/ IP PPP accounts. However, these were eventually phased out due to security issues and lack of interest. Cybernet Live, Virtual Asia, and Extra Mile Online followed the “online services” model. They offered dialup services and a closed community similar to BBS technology, with the Internet as a bonus. Competition between the providers started to drive down the price of access. By November 1995, there were 18 local ISP’s. Some of these bought their connection from other local providers, which in turn had a direct international link to a foreign ISP. 5 PHnet’s growth is hindered by a number of factors, including the lack of knowhow, telephone lines, and funding. Some of these are by-products of PHnet’s roots as a research and educational network. Nevertheless, it was able to achieve its targets to connect its members and educate administrators and users. It served as an incubator for its members’ forays into the Internet, until the time when it became more practical for them to establish their own commercial connections. 6

Republic Act 7925, the Omnibus Telecommunications Act, legalized the operations of Value-Added Service (VAS) providers such as ISPs. VAS providers are required to subscribe to a franchised telco’s facilities but do not need their own congressional franchise. Prior to this, the ISPs operated under a legal gray area since they were providing commuication services to the public without the legal prerequisites. VAS providers are required to register with NTC, but this is only a strict requirement when the provider wishes to offer service to a government agency. This law would later be invoked by ISP’s to justify the legalization of Voice Over IP technology and complain about unfair competition from telcos in offering Internet services. 7 internetinfrastructuredevelopment

51


PLDT puts up the first peering point in the country, the Philippine Internet Exchange. (PhIX). The first members were Infocom, IPhil, Mosaic Communications, Worldtel Philippines and V-Link. This allows the participants to exchange traffic through a local facility. Without peering, sending the packets out of the country is inefficient since they have to cross through international lines twice. At that time, many of these lines were congested. Providers introduced prepaid access through cards. This changed the consumer market, eventually making it the dominant mode of dial-up access. Among the first providers were Manila Online and Webscape (later I-Next). Local network engineers discussed the Philippine Network Information Center (PH-NIC) as a potential manager of local network resources such as IP addresses. Handling the .PH top level domain was also considered. The group was never formed. PLDT assisted the NGO community by putting up CODE-WAN (Countrywide Development-Wide Area Network).

Preparations for the Y2K “Millenium Bug” occupied IT companies. ISPs and telcos were included in the contingency plans, since they provided vital infrastructure to companies which needed Y2K assurance. PLDT’s phone metering proposal, also known as local measured service, becomes prominent. It has been an issue since the mid90s. PLDT claimed that it required rate rebalancing to stop the subsidy of the local phone service by international toll charges. In 1998, this gave rise to the Philippine League for Democratic Telecommunications (PLDTI). This is also led to the domain dispute case between PLDT and Gerry Kaimo, who registered the domain name PLDT.COM and used it for satire. PLDT eventually shelved the metering proposal, but the dispute over PLDT.COM continues until today. Edsamail starts its dial-up e-mail service. At the time, it was free for subscribers to use, supported by advertisements displayed on the email client. It receives funding from the Ayala and Yuchengco groups, and Singapore-based New Era. The technology is developed by Evoserve, an ISP and solutions provider. 8 The Philippines becomes prominent in the global Internet as the source of the Love Bug virus, allegedly written by Onel de Guzman. The Love Bug shuts down systems worldwide, causing an estimated US$8-10 Billion in damages. This was one of the motivations behind the E-Commerce Law. 9 Senator Vicente “Tito” Sotto III proposes a Service Area Scheme to require ISP’s to offer service to rural areas with high demand for broadband. This echoed the Service Area Scheme regulation that requires cellular and international phone operators to operate land lines. ISP operators opposed this since they showed that they lacked the capital to establish operations in unprofitable areas. 10

52



The independent (non-telco) ISPs struggle as telco services enter their space. PLDT’s residential DSL (Digital Subscriber Line broadband service) is highlighted by the industry as a symptom of unfair telco competition. The rates for DSL service were artificially low and subsidized by the telco, compared to the wholesale dial-up rates offered to ISPs. The PISO position declares that the Republic Act 7925 requires the Internet services of telcos to compete with the ISPs on an equal footing. 11 : One of the ISP owners I interviewed says that “there was a collective wringing of fingers in the industry” this year.

Chikka launches instant messenger service for sending SMS from PC’s. This is useful for overseas Filipinos sending messages from countries with easier access to PC’s and the Internet. It also shows the predominance of SMS over Internet in the Philippines, mainly due to the availability of service and low price of equipment (handsets versus computers.)

PLDT launches its dial-up service called “Vibe.” It has the option to charge the service to the monthly phone bill. PISO complains about more unfair competition and demands access to the dial-up infrastructure, such that customers can gain access to their ISP’s through PLDT facilities. 12 Edsamail switches to a fee-based model. General Manager Margarita Torres cites “changes in the Internet and financial world” that require this. Existing users were required to pay subscription fees. This is met with an uproar from users who were relying on a free service. 13

Mobile phone company Globe Telecoms offers mobile corporate e-mail using GPRS, while Smart partners with hardware manufacturer Research In Motion (“RIM”). These allow PCbased e-mail to integrate with mobile communications, catering to the needs of executives on the move. This also reflects the fact that users upgrade their cellphones more frequently than their computers. 14 Intel and GlobeQuest (Globe Telecom’s Internet arm) announce that GlobeQuest has passed Intel’s Wireless Verification Program. This program ties up with Intel’s promotion of its “Centrino” wireless-enabled laptops for use with GlobeQuest’s hotspots in commercial areas. 15 Infocom launches DSAT satellite access for broadband services outside of wired DSL and cable service areas. It partnered with Mabuhay Satellite for the coverage and GV Broadcast for the uplink services from the ground up. This expands the PLDT group’s reach beyond the wired Internet. 17 Photo Blogging makes use of cameras on MMS (Multimedia Messaging Service) cellular phones to send pictures to websites such as blogs.


53


Infocom Technologies started in 1995 as the local company of Sequel Concepts, a US company which operated the Sequelnet service from 1995 to 1996. In 1996, PLDT bought into Infocom and renamed the service. Because of the acquisition, PLDT easily acquired dialup phone and leased lines. It also delivered services through cable TV (through Home Cable) and satellite (through “DSAT” with Mabuhay Satellite and GV Broadcasting). Mosaic Communications (MosCom) started in 1994 when PHnet contracted Computer Network Systems (COMnet) to build its infrastructure. It started with a share of the international line, and established its own independent connections later. The company franchised out its ISP connections to companies around the country, giving them a wide nationwide reach. MosCom offers DSL services by renting telco capacity. It has an affiliated hosting and managed services company, ModNet. IPhil Communications started in 1995 as a consulting firm and a provider of corporate Internet services. It did not sell to end-users. Instead sold bandwidth and consulting services to end-user ISPs which ventured intop the business. Webquest was launched in June 1996 as a partnership between the Philippine Global Communications (Philcom) and the Webscape group. This group established the I-Next service. It underwent expansion in 1997. IPhil and I-Next were acquired by “Internet Super Carrier” PSINet in 2000 and merged their operations. PSINet formed a new company for its global consumer operations, Inter.net. The Philippine company was moved to Inter. net in 2001. Inter.net acquired the subscriber bases of various ISP’s to boost its customer base. Pacific Internet is an Asia-wide ISP based in Singapore. In 1997, it partnered with Primeworld Digital Systems, to operate Pacific Internet Philippines. It started operations with 56K dialup modems, which were new at the time. It offers DSL in partnership with Globequest. 54


Almost all IP traffic today (2004) passes through IP services operated by the telcos. The telcos connect to the IP “port” or router operated by foreign IP providers—telco or ISP. This has not always been the case. The local Internet started with non-telco ISPs leasing the lines from the US, and managing the connectionn with the foreign ISP. Now, almost all ISPs either buy bandwidth from the ISP’s over leased lines or collocation, or rent modem ports where dial-up subscribers may dial in. Globe Telecoms was the first telco to set up an Internet business. It started a corporateoriented service in 1996, with a 64 Kbps link to Singapore Telecom, its affiliate. It later operated the “GIX” or Globe Internet Exchange, for


wholesale Internet connectivity; DSL services, dialup for landline subscribers, wireless (WiFi) access points and a hosting data center. While PLDT entered the Internet business through Infocom, the services were not under the PLDT name. PLDT-branded services began in 2000 with I-Gate, a wholesale Internet access service sold to companies and other ISPs. In 2001, it started residential and corporate DSL service. In 2002, it expanded its reach to the dialup sector by offering the

Quarter One, 1995 • Jose Picache joined Sequel Concepts, Inc. (South Plainfield, NJ, USA) and became the sponsor of the Internet project. February, 1995 • Sequel Concepts, Inc. initiated the plan to provide Internet service in the Philippines as soon as it realized the potential business opportunities of the new technology. The company leveraged previous investments in trans-pacific E1 line and telecommunication equipment. Julius Gorospe was appointed to head the project. He immediately registered the sequel.net domain in behalf of Sequel Concepts, Inc. Together with Rey Alonzo (the network’s first network engineer), the team started research and development with the goal of developing the blueprint for Sequel’s network. • Joel Maloff (a prominent figure in the US online industry) was hired by Sequel to consult for the project. Mr. Maloff, together with Phil Balevre, provided insights about the Internet industry and business models of online industries in the US. April, 1995 • After completing research and development work in New Jersey, Julius Gorospe arrived in Manila in late April to start building the network. • Infocom was a Philippine subsidiary of Sequel Concepts, Inc. Inder the Infocom name, sequel. net was introduced to the market. • Engineers, mostly from NEC Cebu, were hired. Unix system administrators with sufficient networking background were in scarce supply in Manila during this period. Nazario Parsacala was appointed to head the network operations team. July, 1995 • In July 8, 1995, sequel.net was launched and the network became accessible to customers. • Soon after the dial-up business started, technical development efforts shifted to the corporate leased-line segment of the network. • Infocom’s presence in many regions of the Philippines sprouted quickly. August, 1995 • The company’s revenue soared and hit the PhP1M mark. • Julie Figueroa, Manny Aldana, Julius Gorospe, Boyet Picache attended a meeting with senior officials in Malacanang to showcase the Internet and its potentials. • The Malacañang website was created and placed online by the Infocom team. The upkeep of the site was subsequently turned over to the President’s staff. • Through a speech about the Internet that was delivered by Julius Gorospe, President Fidel Ramos introduced

Vibe dial-up service for phone subscribers and prepaid users. PLDT also set up a generalpurpose IT subsidiary, ePLDT. This company operates physical infrastructure: the Vitro data center; and security infrastructure: the MySecureSign digital security service. It started its wireless access point business as “Blink,” and then acquired Airborne Access, another WiFi company. It operates the first Internet exchange, the PhIX. ePLDT also has investments in Netopia Computer Technologies.

by Julius Gorospe the Internet to the public in Sampaloc. • The Infocom also created and posted websites of the Philippine Embassy and its Consulates in the US. • The team introduced the Internet to the office of Richard Gordon. The Subic Bay Free Port website was created and launched online. Quarter One, 1996 • Through a partnership with Mecklermedia, planning for the Internet World show started. Ernie Agtarap, was hired to create the Internet World website. • PLDT signaled its interest in acquiring Infocom. • Infocom was burdened with technical issues during that time. There was a clear need to expand the company’s resources to ensure delivery of quality service to customers. i Infocom’s Contribution to the Local Internet Industry • Targeting early-adopters and policy-makers to use the Internet was key in the successful diffusion of Internet locally. • The high E1-bandwidth made a big difference. Early providers were able to deliver Internet access but the limited bandwidth that they offered proved to be counter-productive. Subsequently, market forces gave birth to new products and competitive pricing models. • The network model, 24x7 operation center and customer support structure, that Mr. Julius Gorospe developed for Infocom were replicated by partner ISPs and became a standard model for many ISPs in the country. Serious players in the industry were forced to provide the same level of service to stay competitive. • The proliferation of partner ISPs in different regions can be attributed to the “cloning strategy” that Ms. Julie Figueroa implemented. Infocom regional partners were allowed to copy and replicate the Infocom organization, network, support and sales structures.

Mr. Julius Gorospe was the project manager and technical lead responsible for building and bringing to market the Infocom Internet network to the Philippines.


55


Eastern Telecoms started its Internet operation as the local node of its former parent company, Cable & Wireless. It later became independent with its own infrastructure. For broadband, aside from DSL, it operates Gigabit Ethernet systems for “wired buildings.” It operates the “Internet Direct Service” for wholesale Internet, hosting services, and a Virtual ISP.

Digital Telecommunications Philippines (Digitel) is known for covering Luzon with landline services. It was the first to offer dialup Internet to its Luzon landline subscribers in 1999. It partnered with Global Crossing to establish Digitel Crossing. When Global Crossing went bankrupt, the Asian part of the network was sold to Asia Netcom, a Chinese telco. Asia Netcom maintains a local node. The Lopez group, through the Sky Cable company, operates SKY Internet since 1996, and offers cable Internet under the ZPDee brand in 2000. Another company, Bayantel, operates United Network Access (UNA) which was merged with Sky. Today, Bayantel offers DSL service and dial-up for landline

Cable TV operator Destiny Cable was the first to operate a broadband service on a large scale. Since it is not a telco, it has to purchase capacity from carriers.

BBS/Online Services The Bulletin Board Systems (BBSes), and the online systems that followed them, are based on dial-up systems. The original BBS typically had only one phone line, thus only one caller may log on at a time. Thus, messages posted to the “board” are read only after the caller logs off. To promote efficient use, BBS systems made use of offline mail readers, similar to today’s POP mail. With these, users could download their mail and forum messages, disconnect, write replies, and then upload them. BBS formed networks so members can exchange messages amongst each other. This way, users need not log on to the same PC to receive messages. BBS systems also offered files, online games and utilities. Gateways are used to transfer messages from BBS technology to the Internet. They either connected to “live” networks over TCP/IP, or dialed up using UUCP (Unix to Unix Copy Protocol). UUCP was used to transfer messages between the Unix machines that were the backbone of the dial-up messaging system that predated the availability of live IP. In the early days of the Philippine Internet, vital communication between the small core of Internet users and the rest of the world, was done through these gateways. Dial-up and Leased Line Dial-up modem technology converts digital signals into the audio that may be transmitted over phone lines. The original modems ran up to 33.6 Kbps, the limit of analog lines. In places where the phone lines are noisy, this rate may not be achieved. In 1997, lines with digital signal (E1R2) were provided by the telcos. On the ISP side, the call is handled by a device called a Remote Access Server (RAS) that takes in leased lines. Each leased line carries 30 phone lines.

subscribers. Bayantel offers wholesale IP transit service in partnership with Teleglobe, a Canadian telco. Bayantel hosts the local node for Teleglobe. 56


The transition to telco outsourced dial-up changes the technology a bit. In a completely outsourced solution, the IP addresses assigned to the customers belong to the telco’s IP service. The Internet bandwidth for these calls


is provided by the telco. Another option is to tunnel the call to the ISP, and the ISP provides the Internet bandwidth. This option is also useful for outsourced dial-up for non-ISPs, such as corporate networks. With this option, a leased line or similar connection is needed to carry the traffic. Prepaid services make use of database systems which contain usernames and IDs. These systems communicate with the RAS to accept or deny users. Leased lines make use of copper wire dedicated for a data channel, from 64 Kbps to E1 (2 Megabits per second). The line could be hauled through other media such as fiber or radio for segments of the trip. Traditionally, a corporate user would order a line going to an ISP, then the ISP would deliver the bandwidth coming in. With telcos acting as the ISP, both the IP service and the physical connection would come from the same company, but the service is still known as a “leased line to the Internet.” Broadband Philippine broadband includes cable Internet, DSL, WiFi, fixed wireless, and satellite systems. Cable Internet had limited deployment in 1998. with Newgen IT offering the service over Home Cable facilities. Home Cable later tied up with Infocom when it was acquired by PLDT. Destiny Cable and Sky Cable (as ZPDee) offered service in various areas, concentrating on high-income or high-density residential locations. These used the DOCSIS (Data Over Cable Service Interface Specification) standard. The first DSL deployment was by MosCom Baguio in 1999 using the copper wires of Piltel. DSL became commercially known with PLDT’s entry in 2001. Globe, Eastern, Digitel and Bayantel followed. DSL service may only be offered by the owner of the physical copper wire, though the telco has the option to resell the service to other ISPs.

WiFi became prominent in 2003 with the increased deployment of the IEEE 802.11x standard. The WiFi deployments of PLDT and Globe are limited to indoor “hot spots” for mobile users with laptops or PDAs. While WiFi technology may be used to build outdoor networks, this has yet to happen. This issue concerns challenged the National Telecommunications Commission (NTC) which is hard pressed to adapt the old laws to new developments. For a long time, WiFi and related use of the radio spectrum was limited by the license of Manila Electric Company (Meralco) for the 2.4 Ghz frequency for internal use. Fixed wireless is a technology used by carriers that own spectrum capacity and lease it to fixed users with antennas (not mobile users like Wifi or cellular). Providers in this space include Broadband Philippines and Meridian Telecoms. Satellite technology has been prominent since the early days of the Internet since it offered a way to bypass the international submarine cables. Back when there was limited and expensive international capacity, satellites offered the ability to transmit from the US or other foreign countries to the Philippines at a cheaper rate. The return path was through cable. For instance, a company could subscribe to a 256 Kbps satellite channel, but lease only a 64 Kbps circuit going back to the US. This was possible because of the inherent asymmetry of Philippine Internet traffic – the data going out of the country is only a fraction of the data coming in due to the predominance of web content. Many ISPs made use of satellite at one point or another. OneVirtual was one provider that relied exclusively on two-way satellite. Satellite for personal use was not as widespread. Among the providers in this space were Zaksat (distributed by the Philworld Online ISP which started 1998), Dream VSAT (of the Dream Broadcasting Network, a direct-to-home TV service) and Infocom’s DSAT (with Mabuhay Satellite and GV Broadcasting). 18 The 2002 launching of PREGINET, the Philippine Research, Education and Government Information Network, by DOST ASTI (Advanced Science and Technology Institute) brought research and education back to the forefront of Internet development. The PREGINET nationwide broadband network enables collaboration in Internet-oriented research. The official site is at http://preginet.asti.dost.gov.ph. internetinfrastructuredevelopment

57


IP Routing

Voice over IP

Three Internet exchanges (IX) were set up: PLDT’s PhIX, PHnet’s Common Routing Exchange (CORE, or “Come On Route Everybody”), and Eastern Telecoms’ Manila IX (MIX). These allow Internet traffic to be exchanged locally. They made use of a local access network (LAN) where participants “park” their routers, and handle their leased lines. However, few ISP’s connected to all three, and some did not connect at all. The “Philippine Internet” that could survive the failure of US networks did not happen.

Voice over IP (VoIP) emerged from the Voice over Internet services that were developed around 1995. It started with PC-to-PC calls where both callers need to be Internetconnected. The technology became interesting as a means of bypassing the relatively expensive International Direct Dialing rates (IDD). The free long-distance calls offered by Dialpad.com became popular. Operators called International Simple Resale (ISR) operators made use of VoIP hardware to squeeze in more calls in a data leased line, and in some cases, Internet lines. Some of these were illegal operations. Mainstream telcos adopted the technology and made use of it to maximize their international capacity.

For international connectivity, the dominant carriers were MCI’s UUNET, AT&T, Teleglobe and Cable & Wireless. Sprint and its affiliate, Global One, had an early lead in delivering IP services to the Philippines, but it eventually declined. For satellite connectivity, Interpacket, Loral Cyberstar and Panamsat were used. Connections to other Asian countries were made to Hong Kong (Pacific Century Cyberworks/Hong Kong Telecom), Taiwan (Asia Netcom), Japan (KDD), and Singapore (Singapore Telecom). Today, there is a large amount of international bandwidth available, though no figures are publicly released. Based on experience, there is a lot of unused outgoing bandwidth which may be used for hosting services such as outsourcing. Mobile Phones Before cellphones came in, beepers were enabled for very short message transmission. The popularity of mobile phones and SMS tied up with the Internet. The mobile carriers developed gateways between SMS and email systems for short e-mail messages. In 1999, when local SMS was still free, local companies set up unauthorized Internet to SMS gateways that were eventually shut down. Sites for sending free SMS became popular, to bypass the SMS tariffs. Longer messages were first carried by dial-up WAP (the first generation of WAP), and later over GPRS. The current testing of higher bandwidth EDGE technology, leading to “3G,” will show greater integration between mobile devices and the Internet. This is complemented by the move towards smartphones and PDAs with communication capabilities. 58


VoIP became a point of contention between telcos and their corporate subscribers since the latter could resell those services. ISP’s have been interested in getting legal access to the technology as a value-added service, while franchised telcos complain about losses in revenue and the need to protect their investment in fixed-line infrastructure. A new business is emerging where VoIP traffic is controlled by companies who handle the switching but are not collocated with the VoIP switches. One application for this is prepaid calling services. The call center industry also makes use of VoIP. 19 Data Centers The dotcom boom led to a growth in content and applications that demanded server space. Data centers became commonplace in the US, and replaced ad-hoc server parking. Companies established their own capital-intensive infrastructure for Philippine operations, circa 2000. These include the Ayala group’s Ayalaport, PLDT’s Vitro, Mod.Net, and Reach (a venture between Pacific Century Cyberworks/Hong Kong Telecom and Telstra, the Australian national carrier). The data centers were the platform for value-added and managed services, and enhanced traditional services such as e-mail and web hosting. Portals Portals became the rage when foreign portals/ search engines such as Yahoo! came in. The local portals were based on webpage technology that allowed dynamic and personalized content, as opposed to plain static pages. Portals were


descended from the search engine, which became popular when users needed to find their way around the Internet. The dot com boom made portals valuable as aggregators of content. Yehey! started in 1997 as a search engine and later acquired more features. Foreign portals didn’t make headway in the Philippines, even if Lycos made an announcement and Yahoo! was rumored to be coming in. In 2003, Microsoft Network (MSN) announced it was putting up a local portal with PLDT. 20 Chat Pinoy chat started in Internet Relay Chat (IRC), which makes use of servers linked together to distribute the load. In the early days of PHnet, users made use of the Unix “talk” command when logged into multiuser Unix systems. Now, numerous channels or “chat rooms” exist for mass conversation. Person-to-person chat is typically done using instant messengers. These messengers route all messages through central servers in the US, which was once an issue back when international connectivity was scarce.

customers, by making copies close to the enduser. This reduces load on international lines, and cuts down the waiting time for surfers.

I think the most important growth in the local Internet in the years to come will be with the local loop. Today’s abundance in bandwidth needs to be delivered to end users to be viable. This is where technologies like Wimax are needed for the metro areas. (Bitstop is doing that today with 802.11 in less densely populated areas such as Dagupan City.) The cellular companies’ move to “3G” is less feasible since it requires a forklift upgrade of their infrastructure. Economies of scale make handheld devices such as cellular phones affordable to the masses. Thus they could very well be the usage driver. PC’s don’t get cheaper, they just get more powerful for the same price. This is the result of the massive capital investment in chip fabrication plants, and R&D efforts, among others. I don’t think PD’s are becoming the mainstream, despite the onslaught of the tech magazines that show them off. I doubt if the traditional telcos will install more wireline DSL coverage. I think they can’t afford to put the DSLAMs (DSL access multiplexers or switches) out in the open since those are expensive pieces of equipment. The local collocation and infrastructure companies aren’t competitive with US hosting services that offer innovations such as virtual Linux boxes. I don’t see any improvement there, using up the return path from the Philippines for outgoing traffic.

File Sharing The popularity of Napster and other file sharing protocols got Pinoys interested. The relative lack of broadband connectivity didn’t make this very popular, and the lack of local peering didn’t let local users share among each other. Instead, they shared with the rest of the world. Content Delivery The Akamai Content Delivery Network (CDN) system partnered with local providers who had sufficient traffic and customer bases. This system acts as an automatic mirror for its

Instead, Voice over IP traffic will balance the path. VoIP traffic is symmetric in nature, since conversations flow both ways. If VoIP is deregulated to the VAS (value-added service providers such as ISPs) level - a hot topic at the moment - then we can have greater amount of return traffic. I can’t speak for the telcos, of course, but from an IP efficiency standpoint this is a good thing, since fiber optic submarine cables have equal capacity going in and out of the country. (A few years ago, satellite usage was more common, but it seems that their application has dwindled down, especially now with the glut of fiber optic cable). internetinfrastructuredevelopment

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By Janette Toral We estimate that there are 115 ISPs in the country today, with a total post-paid dial-up subscriber base of 250,000. From such figure, revenues can range from 270 to 300 million per annum. In the case of ISPs that have franchises or branches in different parts of the country, each independentlyowned location was considered as one ISP. Although prepaid Internet cards became popular in the country, this is mostly available in urban areas. We estimate that only 24% of ISPs currently offer such service. Please note that several ISPs came up with multiple brands of Internet cards in the market. Therefore, we can’t consider one Internet card brand belonging to one company alone. There are also co-branded cards in the market. A few years ago, the country has nearly 200 ISPs. For the past three years, there’s a gradual attrition that sparked concern in its community. In our 2002 surveys, 26% of the post-paid home Internet users and 8% of prepaid are subscribed to telecommunication providers’ Internet service. As far as the corporate market is concern, 35% are using carrier provided Internet service as of year-end 2002. Definitely, carriers providing Internet service is growing in terms of capturing market share. The primary service being offered by ISPs are dialup Internet connection and web hosting. Other forms of service are also provided but driven by resources and market demand. A typical Internet service provider in the province has 280 dial-up account subscribers. In Metro Manila, the number of dial-up subscriber ranges from 400 to 50,000 in any given ISP depending on which tier they belong to.

Sources of revenue

The primary source of revenue for any ISP is its dial-up Internet service. On the average, 53% of an ISPs’ income comes from this. Those offering prepaid Internet attribute 34% of gross revenue to this service. Web hosting is a service that is offered by all ISPs. However, it is hardly a revenue generator. Only ISPs which are also into web development services tend to get prospective clients for this service.

Work opportunities

A typical ISP in the province has 10 employees and maintains one to two part-time staff members. Hardly is there work opportunity available among those whom we interviewed. The bigger ISPs have 40 to 80 full-time staff members on board.

Competitive advantage

Respondents claim the following reasons why clients still approach them for their Internet needs: 1. Technical excellence. When Tridel started, it focused its core competence of building and offering technical excellence. This in turn has created a loyal following, which has served as a solid foundation for the company’s steady growth. 2. Longevity. An ISP respondent from Iloilo City said that being in the business long enough made consumers trust them more for their Internet needs. 3. Quality service. For Westlink Batangas, loyal personnel, and management leadership produce good products and services for its clients. There are still corporate and consumer clients who prefer having close ties with their ISP. An ISP in Metro Manila offering personalized service by well-trained personnel claims this as an important advantage. For OrmocNet, company staff members are given incentives to consistently provide quality service to clients.

1. 2. 3. 4. 5. 6.

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Dial-up Internet Website hosting Dedicated dial-up Prepaid Internet access Leased line connection Domain name hosting


Vigilant network monitoring is consistently performed by an ISP respondent in Dagupan City, to ensure consistency in the service being offered and drive undesirable elements away.

Poor government support

All respondents interviewed gave a poor rating on government support. It emphasized that there’s


no effort from the government to help ISPs in its present predicament. Here are some of the concerns given by participants and believe that government should address: Lack of incentives. There are no incentives for the industry or any protection from the telecom providers now entering the Internet service field. No ratings and standards. There are no standards for services, hence, many low quality service providers are killing the better quality providers. There should be an ISP standard rating. This standard rating should include average speed and ease of connection. False advertisement. There should be truth in advertising. Some ISPs are selling their prepaid services claiming that their PhP100 cards are worth 16 hours when in fact, it is only 6 hours. Also, some are claiming fast Internet access and end up having poor and unreliable Internet connection. There’s no law against monopolistic practices. The lack of protection does not give ISPs the level playing field they need to grow, sustain, and survive in these hard times. Better enforcement of the E-commerce Law. The slow adoption of various government offices regarding the Internet/e-commerce mandate of the E-Commerce Law is affecting possible growth and adoption in the countryside.

Telecommunication and bandwidth infrastructure

63% of ISPs feel that the current bandwidth and telecommunication services still have a lot of concerns that need to be addressed. These include: Carrier interconnection. There are still problems with the interconnections among carrier providers. It is still hard to connect to non-PLDT phones from PLDT phones. Since PLDT serves 70% of all telecommunication users, this is a real concern. Service reliability. Carrier or bandwidth provider downtime is prevalent and support is poor. Problems take days to solve. Also, there’s no refund or incentive provided to ISPs, corporate users, and end-user clients to compensate for these downtime. Oversupply of bandwidth. 25% of respondents feel that there is overcapacity in infrastructure today. The cost of getting and maintaining it though is still prohibitive based on competitive market prices today. Telephone penetration in the provinces has increased but expensive. There is a wide digital divide between rural and urban areas. In the case of telephone access in rural households, phone metering is implemented making Internet access a luxury for those who cannot afford it. Sad to say, Internet users in

the rural area pay more than those in urban areas.

Long-term survival challenges

There are several challenges that ISPs, big or small, have to deal with in order to survive. These include: Look into new opportunities. ISPs should evolve into more professional organizations with keen focus on the financials and an outlook for more opportunities. It has to adapt to changes in current industry environment as well as client’s needs. ISPs have to offer varied services, high tech products, and services shifting its major source of income from dialup Internet connection subscription to new forms of services. Unfair competition. ISPs that offered Internet access to the Filipino community stress unfair competition from carriers. Although it is easier to get a leased line nowadays, ISPs— price wise—can’t be competitive versus carriers offering Internet access services directly to consumers and corporations. Despite appeals to government policy makers, concrete action still remains to be seen. This is a concern that is killing small entrepreneurs, particularly in the rural areas. Expensive and unreliable power supply. In rural areas, it is still considered normal to experience daily power outages. For ISPs, maintaining back-up power resource is an add-on cost that is not helping the business. Note as well that power rates in the provinces are higher than in urban areas. If addressed, savings can be passed on as higher pay to personnel and expansion of services. Post-paid accounts have tons of bad debts. If all receivables are claimed then small ISPs will earn and have enough money to upgrade their equipment. People are not afraid when they don’t pay their debts since they know businesses don’t want to go into the hassle of taking them to court if the debt is not in the thousands. So businesses are the ones afraid of abusive subscribers.

Extinction of small Internet service providers

In a year or two, more small and independent ISPs will close doors because they cannot compete. In the provinces, ISPs don’t have the pricing power and the corporate base to sell their service. Their cost is higher since ISPs have to pay for the leased line to Manila. Selling to consumers is not as profitable as it used to be since buyers go for the lowest price no matter how good or bad a service is. Marketing prepaid Internet access card is not a viable option either as hardly any reliable and consistent revenue can be derived from it.


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Despite advancement in technology, ISPs will still have to rely on dial-up subscription sales. Schools and local offices are still contented with dial-up Internet connection. They are not eager in taking advantage of networking technology that would entail investment. Although there’s higher margin for high-speed Internet, there’s little demand in rural areas at this point. In the end, the only companies providing Internet are the telecommunication providers while small ISPs in the rural areas relegated to being Internet cafés and computer rental shops.

Conclusion

Internet service providers, particularly the provinces have somehow accepted that they will close shop sooner or later because they don’t see the situation improving. The government is not taking action to help when it is the only one empowered to do so. ISPs are partly to blame. Their lack of cooperation in giving information reflects that it has not done a good job in escalating Internet penetration in the country. This raises the question: “Is the industry worth saving if their contributions to economy and Internet penetration can’t be measured accurately?” Carriers, on the other hand, are playing an important role in bringing down the cost of access and offering better bandwidth infrastructure. As it penetrates the dial-up Internet subscription, which is the number one source of revenues among ISPs, one can’t help but doubt the intent of carriers in bringing down the ISP market that they also serve. Government’s role in protecting and helping the SMEs still needs to be felt by this sector, especially the ISPs in rural areas. Although regulation is not encouraged before to allow market forces to dictate its growth, the current situation shows that we will see ISPs vanish one by one with their entrepreneurial faith in government regulators shattered. Rules and regulations must be set-up to ensure that there won’t be destructive and unfair competition between ISPs and telecommunication companies. Of course, such a perspective is only worth looking into if we ever care at all for this sector.

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Indicator/Year A. International bandwidth (BW) International Internet BW (IIBW) Price of IIBW per Mbps B. Local Access BW BB BW in municipalities BB BW in cities BB BW in provincial capitols BB BW in elementary / high school BB BW in colleges / universities BB BW in IT zones/parks BB BW in hospitals BB BW in tourist spots C. Coverage BB Homes passed Coverage of municipalities and provincial capitals Coverage of cities and provincial capitals Coverage of elementary and high schools Coverage of colleges and universities Coverage of IT zones and parks Coverage of hospitals Coverage of tourist spots D. BB Subscribers Residential Business registered with SEC BB Residential Subscribers with websites BB Business Subscribers with websites E. Average Annual BB Price Per Mbps leased line Per 128 Kbps line (Cable)


BroadBand (BB) Indicators & Targets (1994-2014) 1994

2004 BEST

2009

AVERAGE

BEST

2014

AVERAGE

BEST

AVERAGE

64kpbs

8 Gbps

2 Gbps

6Gbps

10 Gbps

$160,000.00

$1,000.00

$1,000.00

$200.00

$200.00

$100.00

$100.00

14.4 kbps

128 Kbps

33.6 Kbps

256 Kbps

128 Kbps

E1 leased line

256 Kbps

14.4 kbps

10 Mbps

56 Kbps

100 Mbps

E1 leased line

1 Gbps

10 Mbps

14.4 kbps

E1 leased line

33.6 Kbps

10 Mbps

64 Kbps

100 Mbps

E1 leased line

14.4 kbps

64 Kbps

33.6 Kbps

256 Kbps

64 Kbps

E1 leased line

256 Kbps

14.4 kbps

E1 leased line

64 Kbps

10 Mbps

E1 leased line

100 Mbps

10 Mbps

14.4 kbps

100 Mbps

1 Mbps

500 Mbps

10 Mbps

1 Gbps

100 Mbps

14.4 kbps

E1 leased line

dial up

E1 leased line

64 Kbps

10 Mbps

128 Kbps

14.4 kbps

128 Kbps

33.6 Kbps

E1 leased line

128 Kbps

10 Mbps

E1 leased line

<1%

10%

5%

70%

50%

100%

70%

<1%

50%

30%

70%

50%

100%

70%

<1%

70%

50%

100%

70%

100%

100%

<1%

10%

5%

70%

50%

100%

70%

<1%

30%

20%

70%

30%

100%

70%

* not applicable

70%

50%

100%

80%

100%

100%

<1%

50%

40%

70%

50%

100%

70%

<1%

50%

40%

70%

50%

100%

70%

0

10%

5%

50%

30%

70%

50%

<1%

20%

10%

50%

30%

70%

70%

<1%

5%

2%

25%

10%

50%

25%

<1%

50%

40%

70%

50%

100%

70%

$22,000.00 $24,000.00

$4,800.00

$6,000.00

$2,400.00

$2,666.67

$28,000.00 $30,000.00

$6,000.00

$7,500.00

$3,000.00

$3,333.33

* no IT parks then Estimates made by Miguel Paraz and Janette Toral. Template from the Department of Transportation and Communications. internetinfrastructuredevelopment

63

philippineinternetreview 1 http://groups.yahoo.com/group/ph-cyberview/ message/2506

S O U R C E S / R E F E R E N C E S

2 For a complete account of Fidonet Philippines from Carlos Legaspi, one of its pioneers: http://member.newsguy.com/~twilight/tz/ history.asc 3 Philippines looks back on 7 years on the Net By Chin Wah Wong and Melba-Jean M. Valdez, Computerworld Philippines h t t p : / / w w w . i d g . c o m . h k / c w / r e a d s t o r y . asp?aid=20010402001 4 Email interview with Jonathan Marsden, administrator and BBS sysop (systems operator) 5 • New Service Providers Storm Philippine Internet Beachhead By Betty B. Daguio, Computerworld Philippines, May 15, 1995 http://web.archive.org/web/19961224173834/ www.europa.com/~jra/cyber/globe.htm • Six New Ways to go Online in Manila by P.W. Wong, PC Digest Philippines, August 1995, archived at: http://web.archive.org/web/19961224173745/ www.europa.com/~jra/cyber/feat/newonlin.htm • Internet Access Costs Down 50% by Betty B. Daguio, Computerworld Philippines, November 30, 1995, archived at: http://web.archive.org/web/19961224173622/ www.europa.com/~jra/cyber/news/intcost.htm 6 • Internet use hampered by dearth of lines, funds By Betty B. Daguio, Computerworld Philippines (January 31, 1995) http://www.internetreview.ph/modules.php?na me=Forums&file=viewtopic&t=158 • PHnet marks its first anniversary By Betty B. Daguio, Computerworld Philippines, April 15, 1995 http://www.internetreview.ph/modules.php?na me=Forums&file=viewtopic&t=157 7 The text of the act is at: http://www.ntc.gov.ph/laws/ra7925.html 8 Edsamail offers “ISP-free” e-mail service by Mayme Fernandez, The Web Philippines, March 31, 2000. http://www.itnetcentral.com/article.asp?id=2933 9 • Lessons of the Love Bug by Will Garside, ComputerWeekly.com http://www.computerweekly.com/Article46080. htm • Philippine student group notorious for hacking, Geoffrey P. Ramos, Computerworld h t t p : / / w w w . c n n . c o m / 2 0 0 0 / T E C H / computing/05/18/manila.hackers.idg/ 10 Proposed law brings IT to unserved rural areas by Margarita D. De Pano, Businessworld IT Matters, July 9 2001 h t t p : / / i t m a t t e r s . c o m . p h / n e w s / n e w s _ 07092001d.html 64


11 RP ISPs face uphill fight for survival By Helen A. Jimenez, Businessworld IT Matters, December 10, 2001. http://itmatters.com.ph/features/features_ 12102001.html 12 PLDT eyes 60% of RP Internet mart, by Helen A. Jimenez and Manolette P. Tabingo, Businessworld IT Matters. h t t p : / / i t m a t t e r s . c o m . p h / n e w s / n e w s _ 05302002a.html 13 Edsamail ends free e-mail service by Rosary Grace Sarmiento, Computerworld Philippines, April 10, 2002. h t t p : / / w w w . i t n e t c e n t r a l . c o m / a r t i c l e . asp?id=8536 14 Globe unveils wireless e-mail service, by Eleanore C. Sanchez, Businessworld IT Matters. h t t p : / / i t m a t t e r s . c o m . p h / n e w s / n e w s _ 06122003e.html 16 Intel boosts verification program for ‘hotspots’ by Geoffrey P. Ramos, Chief of Reporters; Computerworld Philippines http://www.itnetcentral.com/computerworld/ article.asp?id=12477&leveli=0&info=Computer world 17 PLDT firm sees PhP31.5-M earnings from satellite Net service, by Manolette P. Tabingo, Businessworld IT Matters h t t p : / / i t m a t t e r s . c o m . p h / n e w s / n e w s _ 02052003d.html 18 A summary of Philippines wireless developments: The Philippines Taking the Wireless Path, By Alex Villafania Metropolitan Computer Times http://www.mctimes.net/2003/2003-ender/ The_Philippines_Taking_the_Wireless_Path. html 19 NTC eyes VoIP guidelines by Lawrence Casiraya, Computerworld Philippines Reporter http://www.itnetcentral.com/computerworld/ article.asp?id=12834&leveli=0&info=Computer world 20 PLDT, Microsoft team up to launch MSN Philippinesby Lawrence Casiraya, CW Reporter http://www.itnetcentral.com/computerworld/ article.asp?id=12735&info=Computerworld&lev eli=0

i Events since the acquisition by PLDT can be found at http://www.elife.ph/aboutus/aboutus. php?f=aboutus


Promoting Innovation Through Effective Regulation The Case of WLAN in the Philippines

Dealing with Innovation Innovation is never supposed to be a bad thing. In fact, for many industries, it is the engine that powers the business. In electronics, information technology, Internet, telecoms, software, pharmaceutical and automotive, innovation defines the business more than anything else. Because of the huge economic benefits that it brings, regulation is often used as a tool to encourage innovation. But as with every new product or service, regulation often does not come easy. This is especially true when a greater part of the rules needed to govern the technology has yet to be written. In such cases, the regulatory task becomes that of extending the reach of government, leading to a less than optimal approach. Innovation has its price. It displaces old technologies and adds to the competitive pressure in the market. And no matter the number of times firms are reminded that this is part of normal business risk, innovation continues to be approached with the same level of anxiety. Perceived as a threat, existing players resort to various strategies to hinder its innovation and this is when things turn bad. Still, it is this constant pursuit of the next best thing that keeps markets healthy and promotes progress. So for agencies charged with policymaking and regulation, the main challenge lies in specifying and implementing rules to govern every new innovation that yield the greatest benefits in the long run.

Questions and Answers In the case of WLAN, regulatory authorities are faced with the challenge posed by every innovation that enters the market—how to regulate it and what regulations to apply. Given the varying concerns aired about WLAN by different sectors and conflicting interests that certain parties seek to advance, it appears—at least on the surface—that regulators are faced

By Johnson M. Chua

with a host of issues; some of which may not be readily dealt with under current laws and restrictions. On closer inspection, however, the issues are actually few and fairly simple (see Table 1).

Table 1. Roots of the WLAN Debate Primary Issues: • There is no existing regulation that covers WLAN technology and shared spectrum usage • Previous laws and regulations were written without reference or consideration to innovations such as WLAN Secondary Issues: • Use of a common frequency • Interference especially given that some of the frequencies recently determined and reserved for WLAN are currently assigned and used by other parties • Need for guidelines to govern private and public (commercial) WLAN operations laws and relate it to the prevailing situation; and to rule on issues relating to new technology in line with such updated interpretation The main issue involves the presence of a regulatory gap. This follows from the fundamental limitation of the regulatory process when it comes to industries that are prone to revolutionary shifts in technology. First, laws and regulation—however forwardlooking they may have been purposely crafted, were written with a limited perspective dictated by the technologies of the times. As such, existing laws and regulations essentially do not define provision or readily cover innovations such as WLAN. They also do not provide the most ideal rules to address unique traits that may characterize a new technology such as WLAN’s system of shared spectrum use. internetinfrastructuredevelopment

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Second, because the new innovation often has no exact counterpart in regulation, a regulatory vacuum is created. Given the lengthy process of drafting new legislation and policies tailored specifically to govern the new market that arise from the new technology, regulators usually adopt a “second-best” approach of simply scanning the universe of existing policies and making do with what is most applicable. While this usually works, this exposes the market to the potential problem of being made to function under the wrong regulatory regime—which can negate most of its economic benefits. Such a strategy also leaves the regulator open to potential challenges and possible blame later on. Lastly, certain innovations make certain laws irrelevant and obsolete, often resulting to confusion in the market. This leads to two different approaches. At one end, regulators attempt to shape the new market to conform to existing laws. At the other, strong-willed and enlightened regulators make full use of their powers to interpret laws, update the interpretation of existing laws to conform to the times and draft new rules as needed.

Bridging the Regulatory Gap Because all telecom regulatory agencies worldwide have in one way or another faced the similar situation of coping with the introduction of innovative products—that involve a unique technology and give rise to new markets--clues to resolving the regulatory gap in WLAN may lie in examining “best practices” employed by such agencies in response to new developments.

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Table 2. EU Directive: Setting a Common Regulatory Framework for Electronic Communication Networks and Services (Adopted July 25, 2003) A newly adopted EU directive contains guidelines regarding spectrum allocation as follows “radio frequencies are an essential input for radio-based electronic communications services and, in so far as they relate to such services, should therefore be allocated and assigned by national regulatory authorities according to a set of harmonized objectives and principles governing their action as well as to objective, transparent and nondiscriminatory criteria, taking into account the democratic, social, linguistic and cultural interests related to the use of frequency. It is important that the allocation and assignment of radio frequencies is managed as efficiently as possible.”

they are regarded. Following the examples of EU countries that notably impose some of the most restrictive spectrum policies, the key to coping with the WLAN issue lies in the exercise of judicial powers assigned to duly prescribed telecom authorities: power to interpret laws and relate it to the prevailing situation; and to rule on issues relating to new technology in line with such updated interpretation.

As a standard rule, radio control laws in other countries embody spectrum usage and allocation policies similar to that of the Philippines (see Table 2). It can even be argued that developed markets such as US, Japan and the European community have more stringent measures relating to frequency use compared to the Philippines.

Because of the absence of clearly stated guidelines relating to a new technology, which is the case with WLAN, regulatory authorities are given privilege to exercise their ability to broadly interpret laws. In effect, the current policy adopted in most developed countries regarding WLAN is achieved—rightly—with less fear of violating the letter of the law and with stronger intent to adhere to its spirit.

In the same way, very few countries have existing regulation that closely relates to WLAN, unlicensed devices and shared spectrum use (see Table 3). And yet, even in countries with tougher radio spectrum regulatory regimes, WLAN is typically free and unlicensed (see Table 4). How?

As a point clearly driven by the international community, it is not inconsistent for countries to maintain restrictive policies relating to spectrum allocation and use and yet permit free and unlicensed spectrum use for WLAN. Such a situation should be possible in the Philippines (see Table 5).

Contrary to the prevailing view in the Philippines, the answer does not involve going against existing laws relating to the use of spectrum, no matter how dated or irrelevant

In grappling with the Radio Control Law, regulators may have to remember that the law was premised on past technologies, without any notion that a shared spectrum technology of the



scale involved in WLAN is or will be possible. As such, present day regulators are given basis to apply the full extent of its powers to broadly interpret the law and apply it to the new market realities. It can do so by taking exception of the fact that WLAN utilizes a system of shared spectrum—something that existing laws do not cover. Operation shall not resume until the condition causing the harmful interference has been corrected The rules for unlicensed use of RF devices were first established approximately 60 years ago. In 1938, the National Telecommunications Commission allowed devices employing relatively low level RF signals to be operated without the need for individual licensing as long as their operation caused no harmful interference to licensed services, and the devices did not generate emissions or field strength levels greater than a specified level that was chosen to ensure that the device generally would not cause interference. The NTC can adopt similar policies relating to spectrum allocation and use and still permit free and unlicensed spectrum use for WLAN.

Born Free While WLAN regulation in the Philippines is slowly being folded into the regulatory structure of traditional telcos, it is apparent that other regulators worldwide do not share the same position. In fact, by keeping it free and unlicensed, they have directly acknowledged that WLAN should not be regulated as though it is a traditional telco service.

Table 3. Rules on Unlicensed Devices in the US: Part 15 of the US FCC Rules sets out regulation covering unlicensed devices. The basic premise of Part 15 is that unlicensed devices cannot cause interference to licensed operations nor are they protected from any interference. The operational parameters for unlicensed operations are set forth in Section 15.5 of the rules as follows: (a) Persons operating intentional, unintentional radiators shall not be deemed to have any vested or recognizable right to continued use of any given frequency by virtue of prior registration or certification of equipment (b) Operation of an intentional, unintentional, or incidental radiator is subject to the conditions that no harmful interference is caused and that interference must be accepted that may be caused by the operation of an authorized radio station, by another intentional or unintentional radiator, by industrial, scientific and medical (ISM) equipment, or by an incidental radiator (c) The operator of a radio frequency device shall be required to cease operating the device upon notification by a Commission representative that the device is causing harmful interference.

Table 4. Benchmarking Wi-Fi Regulations US

Netherlands

Spain

Covered by Part 15 rules on unlicensed devices and operations

No license required

No license required

Spectrum is free

Spectrum is free

Moving towards the creation of a free independent wirelessnet work insome cities

Growing presence of free public access areas

France Indoor use does not require any license Outdoor use is subject to liberal authorization procedures

Italy

UK

Public WLAN operators must be registered and authorized

No license Spectrum is free

Devices are certified to ensure compliance Commercial WLAN operations are registered for business and monitoring purposes Market is open to all participants internetinfrastructuredevelopment

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Such a distinction is made by these regulators on account of several unique qualities of WLAN. The first relates to its origin and purpose. As a new technology, perspectives about the precursor of WLAN varies. One side argues that since it bears a similar mark to a miniature cellular or small radio communication system it should be a closer relative of telcos. The other side presents a more compelling view, which the international market appears to adopt. In this, WLAN is descended from its “wired” LAN counterpart. It is an improvement over the existing LAN architecture or on a commercial scale, an extension of the traditional wired Internet access service. Second, WLAN technology is distinct from traditional telco systems and as such, qualifies for lesser regulation on account of its unique utilization of the frequency spectrum. Rules applied to a “commons” market are and should

Table 5. Living the Law “The radio frequency spectrum is a scarce public resource that shall be administered in the public interest and in accordance with international agreements and conventions to which the Philippines is a party...”—Sec. 4c, RA 7925 “The radio spectrum allocation and assignment shall be subject to review in the interest of public service and in order to keep pace with the development in the wireless technology with the end in view of ensuring wider access to the limited radio spectrum and the use of cost effective technology...”— IRR of RA 7925

Table 6. Unlicensed Devices in the US • • • • • • • • •

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Cordless telephones Remote control toys TV remote controls Toy walkie-talkies Garage door openers Keyless entry and car alarm systems Home security systems Wireless routers Bluetooth


be different to that of private or exclusive spectrum domains that characterize typical telco operations. Property rights are not assignable—a fundamental feature of WLAN which justifies why its spectrum is deemed free in other countries. Third, WLAN technology has long been a mainstay in the household through products such as remote control toys, microwave ovens, cordless phones and baby monitors (see Table 6). These have historically been subject to minimal regulation without complications or problems. Fourth, WLAN relates to data rather than voice. In the Philippines, as with other countries, data is regarded as a deregulated market. Lastly, WLAN does not compete with traditional telco services. All these hints of the non-telco pedigree of WLAN, and provide a good picture of the mindset that regulatory authorities in other countries adopted when they decided not to regulate WLAN as a traditional telco service.

Necessary Regulation Still, while WLAN should not qualify or be subject to telco-like regulation, regulators are nonetheless tasked to oversee the market. Two reasons justify this: use of radio frequency and—more importantly—use of such frequency for profit. This highlights other relevant aspects involved in the current WLAN debate—interference and regulation of public (commercial) WLAN operations. On both, market-oriented solutions can guide the regulatory process (see Table 7). Preventing interference. The case for interference follows from the fact that the frequency for WLAN is currently owned by Meralco. While the general view is that this would be a non-issue had the frequency been free. Interference is actually a concern regardless of whether or not the WLAN spectrum is free. Standard solutions to address this involve measures such as setting of noninterference standards, certification of all WLAN devices to ensure compliance and the conduct of interference studies. Interestingly, the case for protection from interference presented by the Meralco situation is not unique to the Philippines. France, for instance, had a more compelling reason to disallow WLAN—the frequency is used by its military. Yet, indoor use of WLAN systems is not regulated and through a system of authorization, public WLAN operations is allowed.


Table 7. Weighing the Options Key Issue

Regulatory Options

Interference • • • • • •

Adoption of non-interference limits/standards and resolution mechanism Certification of all WLAN devices Licensing of all public and commercial WLAN operations Interference studies Transition period to facilitate transfer of currently assigned WLAN frequency users Compensation of Meralco and other current assignees of the shared WLAN frequency by commercial WLAN operators

Private WLAN Operations • • •

Certification/authorization requirement for all equipment utilizing the shared WLAN frequency Collection of certification fees No spectrum user fees

Free Public • WLAN Operations • (Free Wi-Fi operations— government, schools, • community-based • or enterprise-based • freenets, etc.)

Registration of public WLAN operation Collection of registration fees Commercial WLAN Operations Franchise and/or licensing requirement Collection of franchise and/or licensing fees Collection of spectrum user fees for shared usage

There are also other ways to limit the interference problem from becoming troublesome. In the US, regulators are currently moving to allocate additional spectrum for unlicensed broadband use following the findings of a working group on unlicensed devices and experimental licenses that “the creation of unlicensed bands has been very successful in allowing the rapid introduction of new technology and that additional unlicensed bands would create more opportunities.” Allowing private/free WLAN system to evolve and flourish. In the case of private, large enterprise-based, communitybased or free WLAN systems (freenets), the mainstream perspective is that regulation should be kept at a minimum to permit such systems to freely evolve and allow the market to enjoy its full benefits. In many cases, regulation is extended only insofar as to ensure that WLAN equipment comply with set standards. Larger enterprisebased, community or free WLAN systems are registered with the government for monitoring purposes.

Establishing guidelines for public/ commercial WLAN operations. Public WLAN operations are distinguished by the pursuit of profits. In effect, the main distinction that regulators should make is between private and commercial operations. As a commercial service, regulators are required to come up with guidelines to govern public WLAN operators. Different levels of regulation are used for this purpose. Typically, this involves a form of certification for devices and class licenses for commercial operations. As a ‘commons’

Cornering the Market One of the ideas currently being floated involves the possible limitation of the operation of commercial WLAN services to certain types of companies. Using the argument that commercial WLAN involves a network element, licensed telcos are currently pushing to make public WLAN their exclusive market. The argument is based on the assumption that in the network elements market, no restriction is made to effect a certain form of market exclusivity. internetinfrastructuredevelopment

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Knowing the Technology (in a box) Spread spectrum communication systems use special modulation techniques that spread the energy of the signal being transmitted over a very wide bandwidth. The information to be conveyed is modulated onto a carrier by some conventional techniques, usually a digital modulation technique and the bandwidth of the signal is deliberately widened by means of a spreading function. The spreading technique used in the transmitter is duplicated in the receiver to enable detection and decoding of the signal. Spread spectrum systems offer two important technological advantages over conventional transmission schemes. First, the spreading reduces the power density of the signal at a given frequency within the transmitted bandwidth, thereby reducing the probability of causing interference to other signals occupying the same spectrum. Second, the signal processing in spread spectrum systems tends to suppress undesired signals, thereby enabling such systems to tolerate strong interfering signals.

As Nicholas Negroponte points out in one of his articles, the market for Wi-Fi calls on the regulator to adopt a new perspective: “what people have learned in Wi-Fi, and recent experiments with spread spectrum…is that we can rethink how we allocate spectrum. We can consider parts of it as a large commons, rather than small lots. Strict boundaries are then replaced by suitable behavior.” As mentioned earlier, one of the most significant differences between a WLAN network and traditional networks is that the spectrum is shared; that it is organized as a ‘commons.’ And, as mentioned earlier, property rights are not clearly assignable in this case. In effect, the technology inherently allows for multiple players. For this reason, regulation usually applied to govern traditional telcos does not extend to WLAN. Such is the premise with which regulatory authorities have opted to stand down and adopt looser rules when it comes to WLAN technology. The second involves the issue of franchise restrictions. If telcos continue their efforts to corner the WLAN market, the market will have to insist that regulators look at existing franchises and clarify whether commercial wireless Internet access services is covered in 70


such franchises. Franchises would need to be examined to ascertain whether it automatically authorizes telcos to engage in building a new network for WLAN and make money by offering the service to the public. RA 7925 defines a franchise as “a privilege conferred upon a telecommunications entity by Congress, authorizing that entity to engage in a certain type of telecommunications service.” Franchises given to existing operators limit companies to a specific type of business. For instance, holders of a local exchange franchise are not allowed to operate a cellular phone service or international gateway facility unless they also own a franchise to operate such services. In the case of commercial WLAN services, RA 7925 does not provide any equivalent definition for such a service. Current franchises owned by telcos do not automatically extend to the provision of new commercial services as they are developed, such as the case with wireless internet and other future innovations. The commercial provision of new services based on a new technology—if deemed to involve a network infrastructure element—are not necessarily subordinate to existing franchises, as with the rational for creating a separate franchise requirement for mobile phone services.

Wireless Internet Service Providers • • • • •

Fixed line players Mobile phone operators Internet service providers Pure play WLAN operators Property owners

Under such a situation, the only way the franchise question can be avoided is by recognizing that public WLAN is a value-added service (VAS) or a quasi-VAS. Current Internet services that are provided by telcos and non-telco ISPs are considered value-added services and are thus, covered by more relaxed rules which entails licensing rather than franchise requirements (see Table 8). Commercial WLAN thus needs to be defined whether it is network-based or simply a valueadded service. If it is deemed network-based, then a franchise may be required as existing laws and franchises do not cover nor consider any such service and technology. With this interpretation, public WLAN is essentially a


new network-based system facilitating wireless Internet access. It is distinct from networks of existing services such as local exchange or mobile phone. If the issue is forced that only existing franchised telcos own the right to operate WLAN commercially then regulators would need to determine which type of franchise currently covers such a service and address the issue of whether only holders of mobile and other radio-based franchises have the exclusive right to operate a commercially WLAN system thereby restricting pure local exchange franchise holders or cable operators from entering the market, or whether it is the other way around. Pure play WLAN operators would have no place in such a market. Interestingly, all commercial WLAN operations and business models fit the “reseller” or “value-added service” definition. WLAN operators, private or public, use telco facilities to access the Internet. The global telecom community appears to adopt the same interpretation. In fact, by keeping the spectrum free and the operation unlicensed, regulators agree that the WLAN market should be open. As such, there are commercial operations in

the US by non-telco companies such as Boingo Wireless and Wayport, and even companies such as McDonald’s and smaller scale operations by individual entrepreneurs and property owners.

Unfounded Fears Many concerns raised about WLAN are clearly overstated. For example, among the most popular fears about WLAN is that the frequency will be saturated. Given its small range, frequency hopping capabilities, large allocated spectrum, and limited market in the country, the frequency allotted to WLAN can even be regarded as more than adequate, if not too much. Not every household or business will install a WLAN system or much less go into the commercial WLAN business. Only a handful of commercial operators can be expected to venture into the WLAN business. This makes the reserved spectrum band allocated for WLAN more than ample, and likely to leave certain portions of its reserved spectrum unused or underutilized. The same point applies to the hype about interference. WLAN remains a highly evolving technology. More sophisticated methods

Table 8. Commercial WLAN Operators need a Franchise? Nature Possible Regulatory Requirement

Why?

Involves a network element Franchise • WiFi is a new public communication network (i.e., only duly enfranchised PTEs are authorized to offer the service for compensation) • Commercial WiFi involves a new technology, an improved service, and a unique system of shared spectrum usage that is distinct from all currently enfranchised telecom networks and services (i.e., local exchange, cellular phone, international gateway, etc.) • Current franchises do notautomatically cover or extend tothe commercial (for profit) operation of new technologies as they are developed • The commercial offering of new technological products and innovations are not automatically subordinate to existing franchise • RA 7925 does not provide any equivalent definition for new technological innovations such as commercial WiFi

More of a value added service License • WiFi is a derivative and/or improvement of services that ISPs currently deliver • WLAN is an improved LAN or private radio communications network which allow multiple users to share a common spectrum • Rules for WLAN can be similar to that of radio or paging operators • As a VAS or near-VAS innovation, commercial WiFi operations are open to non-telco competition • Telco infrastructure is used to connect to the Internet • Commercial WiFi competes with traditional ISPs, not telcos • Like the ISP sector today, telcos will likely dominate the market • Meralco, which currently owns a portion of the frequency band allocated for WiFi services should not be restricted from offering WiFi on a commercial scale


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‘Free’ Wi-Fi Networks • • • •

Community networks Shop owners (e.g., mall operators, fastfood joints such as McDonalds) Enterprise-based WLAN service (e.g., banks offering free WLAN access to clients) School/Campus WLAN services Government WLAN services (public parks, airports, police, government offices, etc.)

of managing the spectrum and eliminating possible interference can be expected in the future. Market-based solutions can similarly be expected to evolve and effective mechanisms to control and safeguard against interference are likely to be established. Such arguments support the view that the move to corner the commercial WLAN market is more a product of a natural impulse rather than rational thought. For one thing, telcos do not have to resort to such a strategy, which can otherwise be interpreted as an overkill. Like traditional ISPs, public WLAN operators will rely on telco-owned infrastructure to connect to the Internet. Similar to what is happening to the ISP sector today, telcos will eventually dominate the market (in fact, they are already offering WiFi service commercially ahead of a regulation). But even then, such foreseen dominance of the public WLAN market by telcos should not come at the expense of limiting competition, specifically by putting a gag on small-scale commercial WLAN operations, free WLAN networks, community-based and large enterprise-based networks which can bring about significant social benefits.

Enlightened Approach Regulating new technologies requires balancing several interests that are often competing. Taking a cue from the experiences of other countries, certain strategies can provide valuable guidance in regulating WLAN. Focus on the issue. As stated earlier, the issue is really about the absence of WLAN regulation. In effect, regulators are playing catch up with the technology. Possible missteps could have a dramatic impact on the market for WLAN and other related technologies currently being 72


developed. This could also lead to a regulatory challenge by several parties. Forward looking. New regulation must make provisions to accommodate rather than stifle further developments in the technology. This can be done by directly drafting new rules or by adopting a more liberal interpretation of the law (with the purpose of making them relevant to the times). Market-oriented. While certain regulators hold the perspective that the choice is either to side with industry players or the consumers, it should be the protection of the market system through enlightened policy making and regulation that should be of utmost concern. Focus should be made to maximize the long run benefits that can be derived with the introduction of new technologies. Recognize the changing market. The market is changing and technology is developing in ways that were never previously thought possible. Traditional structures must not be maintained at the cost of foregoing the benefits that come when new markets are created. Innovation is good. Innovation lowers costs, improves margins, promotes greater efficiency and increases productivity. In the case of WLAN, it also has the potential social benefit of making Internet technology more accessible and even help expand rural access. Just imagine if fixed line or paging operators successfully lobbied to limit cellular phone operations in the early 90’s by using the argument that it will affect the viability of the business.

Going Against the Grain Undoubtedly, the WLAN debate touches on various interests and positions, some of which are technical in nature. Without risking being mired under the weight of such details, regulators must adopt a stance, consistent with its mandate that focuses on the market rather than its personalities. In particular, the welfare of the market for WLAN operation must be the target of regulation. WLAN has the potential to improve competition, with freenets, and smallscale commercial operations. It is also likely to give birth to a host of new applications. To bar such possibilities would be to move in the direction opposite of where the rest of the world is heading.

advertorial

By Daniel Escasa

ver since man learned to walk on two feet and a straight back, crime has been around. Ever since computers came about, crime has been around. Many a theologist will point to original sin as the soul of crime, while evolutionists will point to our animal roots. Whatever the reason is beyond the scope of this chapter. What we do want to accomplish in this chapter is to define computer-related crime, how perpetrators carry out their evil deeds, and how to protect ourselves from being victimized. In order to illustrate computer-related crime in action, we’ll browse through a few choice cases. If you’ve been using personal computers long enough, you’ll know that viruses and trojans are nothing new. Since worms spread through a network, and the Internet has been widely available only the past 10-15 years, early PC users didn’t have to worry about worms. Even local area networks (LANs) were still rare. It was fairly easy to write a virus, although spreading it was a little harder. In fact, in most cases, writing a virus was easier than spreading it, because the latter had to use diskettes as a conduit. One type of virus was the boot virus, which infected the boot sector of a diskette. It could do something as innocuous as changing the volume label of all subsequently infected diskettes, and later, of hard drives. Or, it could plant a tiny program in the boot sector that would interrupt your work every so often with messages which could be political statements or simply the inane musings of a prepubescent programmer.

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File viruses were executable files that infected other executables and altered their behavior. A virus planted into a word processing program might rig it so that the author of all documents is some individual, possibly the creator of the virus. Vigilance was - and still is - key to preventing infection. A boot virus resides in the boot sector of a diskette, so all it takes to protect yourself against it is not to boot from it. However, that may be oversimplifying the matter, because even a non-bootable diskette can still harbor a boot virus. When you attempt to boot from one and it displays the message “Non-system disk or disk error. Press any key to continue,” it has already loaded the boot sector into memory. Do not simply replace the diskette with a clean boot diskette and “press any key to continue.” Instead, insert a clean diskette you know to be clean then hit the reset button. Practicing safe computing includes knowing what dangers lurk in diskettes or executable files, and how to neutralize them. Continue to educate yourself, because then, as now, there were virus creation kits circulating in the underground which made it easy for even programming bunglers to write a fairly sophisticated virus. You’ve heard the statement so often you could retch, so you’ll excuse me if I repeat it: Computers have made doing things easier. That, unfortunately, includes crime against others - i.e., using the computer as a tool for perpetrating crime. Alberto “Abet” dela Cruz, acting president of the Philippine Computer Emergency Response Team (PH-CERT), defines high-tech crime as any act in violation of the penal code, and of the E-commerce Act. “There

An example of a spoof email from an address that does not exist. It contains an attachment of dubious origin, with a high possibility of it being an email virus. 76

hightechcrimes

are two kinds of high-tech crime, or crime involving computers,” says dela Cruz. “The first is the usual penal code violations using the computer as a tool. For example, the famous Nigerian scam and its variants used to employ fax. Now that the Internet is accessible, the letter which used to be faxed are now sent by e-mail.”

For those unaware of the Nigerian scam, this is a letter sent supposedly by a deposed Nigerian dictator’s close relative who wants to take millions of dollars out of the country and seeks a “partner” to help him out. The letter writer claims that the money is not ill-gotten (yeah, sure) and wants a legitimate business cover to deposit the money in some foreign bank. That’s where you come in: You’re supposed to pose as a contractor, mainly in construction work, proposing to undertake a major project in Nigeria, for which they will pay you, by bank transfer, the full amount of their loot. For your trouble, you’ll retain 20% of the money. You’re supposed to provide them with your dollar account details (or open one if you don’t have one yet). Once you do so, you wake up the next morning to find that it’s empty, and that the scamsters are nowhere to be found. Be extremely wary of even replying to this scam mail, as the perpetrators won’t stop at anything—not even murder—to get what they want, or to keep you from recovering your money. An interesting twist to the Nigerian scam appeared shortly after EDSA II, when a modified form of the letter, allegedly signed by former First Lady Loi Ejercito, made the rounds of e-mail. Same modus operandi just a different cast of characters.

Although not as potentially life-threatening as the Nigerian scam and its spawn, unsolicited commercial e-mail (UCE) attracted enough attention to spur some countries to pass tough anti-UCE laws. UCE, more informally known as spam, is, as the name implies, mail sent from vendors who want to inform you of their products via e-mail in the hopes that you will buy their products. These products range from sex enhancement and weight loss pills to computer hardware and software to home mortgages. Many of them are downright ridiculous for the recipient. In my case, I recive several messages in my inbox claiming the most effective drugs for weight loss. My weight of 64kg is ideal for


my height of 1.7 m so weight loss is the least of my needs. There are also these messages offering “the lowest rates” on housing loans, then a line toward the bottom of the message saying that the loans are available only to US residents. Those messages should give you an example of how much of a waste of bandwidth and mail server storage space they can be. Some spammers scour newsgroups and mailing lists for e-mail addresses where they may send their product pitches. Some shadowy Internet businesses make lists of e-mail addresses available on CD for varying amounts of money depending on the number of addresses. These are for the spammers who want to get into business right away and don’t want to wait till they’ve gathered a sizable number of addresses. In either case, you’ll note that spamming does entail some expenses, but all they need is a response rate of about 1% to make a profit. So, stopping spam means that they should get lower than 1% response rate and the closer to zero, the better. That means that when you get spam in your inbox, delete it. If your ISP has a webmail interface, go there before downloading your mail into your local storage, and delete mail that you’re sure is spam. While mail filters can stop most spam from getting into your inbox, there are still those that might make it through. Mail filters that search for “viagra” in the subject or body of the mail will be fooled by variations, e.g., via gra or v*i*a*g*r*a. You’ll have to purge it yourself, before you download your mail onto your own PC. The best way to handle spam is to try not to get it in the first place. Sites with content meant for mature audiences are some of the worst places to leave your e-mail address. If you must leave an address, open a free webmail account and use that one instead. Use that same address if you want to participate in discussion mailing lists

An e-mail inbox full of spam, or unsolicited messages (actual URL edited for security purpose).

or usenet newsgroups. You can also mask your e-mail address by adding a bogus host name in the domain portion, e.g., my mangled address might be [email protected], then my signature would contain instructions on how to make a valid address out of that—which is simply to take out the “no-spam” part. Doing this will foil automated email address mining software that scours newsgroups and mailing lists for the addresses of the participants. At the same time, if anyone in the discussion group has a legitimate reason for getting in touch with you, they’ll know how. On the other hand, it should be safer to leave your email address at well-known and established sites such as Yahoo! or Lycos, or at the sites of erstwhile exclusively brick-and-mortar companies such as WalMart or Macy’s. Web sites of established print and audio-video media such as the New York Times, the Washington Post, and the like should also be responsible enough not to let others so much as see your e-mail address, let alone harvest them for spamming. Always look for their privacy statement and a commitment from them that they won’t sell your e-mail address, before you leave it with them. One more thing: although the US has passed anti-spam legislation, don’t expect the Philippines to follow suit. The Internet isn’t as ubiquitous here as in the US, so our legislators won’t have that on their minds. If there’s one thing we might have to worry about, it’s cell phone spam. Fortunately, the cellular carriers have decided to police themselves and bar spam from their networks.

Back to dela Cruz, he says: “The target of the second type of high-tech crime is the computer itself. Viruses, trojans, and worms are the most high-profile computer-targeted crimes. Hacking, as defined in the E-Commerce Act, is another.” Viruses, trojans, and worms are more sophisticated today than in the early days of personal computing, when they had to be executable files that had to spread, in large part, by diskette. Today, electronic villains come in data files (e.g., .DOC, .XLS, or .ZIP files), and propagate through the hundreds of millions of computers on the Internet. As an aside, I should mention that Microsoft’s .DOC and .XLS files are not purely data files but may include macros which constitute the executable portion of the file. .ZIP files, on the other hand, are not executable themselves but may include hightechcrimes

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executables, e.g., PIFs (Program Information Files, a left-over from Windows-on-DOS) or screensavers (yes, they’re actually .EXEs with a .SCR extension). Microsoft’s overly powerful scripting language has enabled viruses, trojans, and worms to hijack an Outlook Express address book and spread itself by sending copies of itself to all the entries in the address book. In some cases, a virus can even mask the sender by using a random entry from the address book. So, if you receive an infected email message that supposedly came from me, don’t be fooled. I don’t use Windows, let alone Outlook—I use either PINE or Ximian’s Evolution, and read webmail from Mozilla, on FreeBSD, whereas the viruses are written specifically for Outlook on Windows. My last sentence shouldn’t be interpreted as a statement advocating the junking of Windows in favor of some other OS—that would be beyond the scope of this publication. The only thing I’ll say about FreeBSD is that it has worked for me over the past five years, and that I hardly have to use Windows. When I am in Windows, I do have to be careful when reading my web-based mail, specifically about opening attachments. No matter how secure and upto-date the security might be of the network I may be working in, I’m still paranoid, especially about file attachments, even from people I know. If I don’t expect a file from them, I’m suspicious, and ask them about it—by a voice call if they’re just a local call away. One particular kind of robotic troublemaker that’s particularly disturbing can hijack not just your address book, but your entire PC, and convert it into a zombie to participate in a distributed denial-of-service (DDOS) attack against other computers. In effect, you become an unwitting accomplice in a criminal offense. A DDOS attack saturates a server with so many requests that it slows down to a crawl, or gives up altogether and hangs. DDOS attacks are unfortunately platformindependent, meaning they can hit Windows, Macintosh, or *nix servers. Fortunately, there is a defense against DDOS, and the Anino project, based on OpenBSD, withstood DDOS attacks in last year’s DefCon Manila. Also worthy of mention is the fact that it was a Filipino team that designed Anino. 78

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“Vigilance, vigilance, and vigilance,” says dela Cruz, “are the three most important weapons to counter high-tech crime of any kind. You have to ensure that you have the latest patches, and even then, you should be wary of unexpected occurrences, e.g., an email message even from someone you know, with a file attachment that you’re not expecting, or with an out-of-character subject or body. A Subject: like ‘Re: project’ should raise suspicions especially if, by convention, you always mention the specific project that you and a partner or associate are working on, e.g., ‘Subject: Eddie Gil campaign’.”

Computer networks employ some form of security to ensure that only authorized users can get into the system. Hacking, as defined in the E-Commerce Act, is unauthorized access of a computer system. Purists will complain that the act defined in the ECA is, strictly speaking, cracking, not hacking. Hackers are highly skilled techies who know more about the ins and outs of computer systems, both hardware and software, than the above-average user. They can do tricks with even word processing programs that will drop jaws. Cracking, on the other hand, involves breaking into a computer system to cause some harm: mainly to steal or destroy data, or in the least malevolent cases, leaving digital graffiti in the manner of “Kilroy was here.” Website defacement has become a high-profile manifestation of crackers. “Again,” says dela Cruz, “vigilance, vigilance, vigilance. Make sure that your servers are secure by applying the latest patches not just to the OS but to any application software that exposes your server to the outside world. Web servers, telnet or ftp daemons, instant messaging servers: make sure that you subscribe to security alerts that will inform you of any vulnerabilities in your server software, and how to correct them. Telnet and ftp daemons in particular are a bad idea because they’re inherently unsafe. Use sshd (secure shell daemon) or sftpd (secure FTP daemon) instead. Then disable remote root login.” Crackers exploit vulnerabilities in server software to gain control of a computer. Such vulnerabilities usually involve what’s known as buffer overflows, where a command might exceed its programmerallocated length. The excess characters are not discarded but get into the computer’s command buffer where they might steal the user account file, or maybe the file of website accounts. “Regardless of the possibility that they might be stolen due to a security hole, passwords are still


important. Impress upon your users the need for secure, hard-to-guess passwords,” continues dela Cruz. “Words taken from any language are a bad idea. Better to combine two words, and maybe separate them with a punctuation mark or numeric digits - maybe both. The system should also prompt them regularly, maybe once every month or two, for a password change.” “Perform a vulnerability assessment of your system,” says dela Cruz. “If you can, engage the services of white-hat hackers.” White-hat hackers are those who have the skills to break into systems but choose not to use them for nefarious ends. Instead, they identify possible security holes in a system and recommend measures to better secure the system. There are some sites on the Internet that can conduct a rudimentary remote vulnerability assessment of your computers. This mostly involves checking for open ports or insecure server software that crackers might use to intrude into your system. Unix and its variants (GNU/Linux, the BSDs), have a command map that’ll check for your open ports. Whatever you use, close the ports that you don’t need, or stop the services that you don’t need. For instance, there’s little sense in running a POP or web server on your home PC. In fact, the Acceptable Use Policies (AUPs) of the broadband providers prohibit the latter on residential accounts. For a more in-depth vulnerability assessment though, you’ll need the physical presence of a security team. One question I asked dela Cruz was if there were any documented cases of computer breakins. Normally, the victims of computer break-ins would rather keep things quiet, because of the perception of poor security. A stolen database is a sure way to repel customers if the news broke out. “Surprisingly,” answered dela Cruz, “there have been documented cases. The LoveLetter virus, even if it wasn’t a crime when Oniel de Guzman allegedly let it out into the open, is the prime example. The exposure even went international. Then there’s this Asian Pride group that owned up to the defacement of several sites. There’s also the Thames case.” A more recent case was the credit card fraud case involving Yes! Pinoy. I also heard on at least two occasions that the Philippines was the hotbed for cracking. I found that strange, because I saw the transcript of an underground chat room for crackers. One of them called Filipino crackers “lamerz”—i.e., amateurs who don’t really know how to break into systems.

I also asked dela Cruz about that. “Hotbed of cracking activity? Yeah, I also heard about that. But there’s nothing we’ve found to support that allegation.” Maybe the sources of those allegations have read Gartner’s and the Meta Group’s reports about the Philippines having the most qualified IT professionals, and jumped to the conclusion that Filipinos are the also most skilled crackers? But that’s like saying that a sharpshooter will make a good assassin. In any event, let’s look at some real-life cases.

As the old classic love songs goes “Love letters straight from the heart...” This one, however, came straight from a computer, allegedly from that of Oniel de Guzman, then a graduating student of AMA Computer College. News reports indicate that de Guzman submitted the virus as part of his senior thesis, and that the panel rejected it, denying de Guzman his college degree. The circumstances surrounding its release are still unclear, but what is clear is that it wrought havoc on computers worldwide. The virus came as an e-mail with the subject “I Love You” and a file attachment that harbors a virus that searches the user’s hard drive and erases all standard graphic files: GIFs, JPEGs, BMPs, etc. That’s just the beginning: it then sends itself to all the addresses in your Outlook Express address book. That’s how it was able to spread so quickly. Ironically, it shouldn’t have been able to do so if people were more suspicious about a purported love letter from a stranger. Internet users should’ve learned by now not to trust in a mail message that has an attachment you’re not expecting. In my case, the first copy I got was from another male, and it was easy for me to smell a rat. Others opened the attachment, maybe out of curiosity. Whatever the reason may be, the virus then opened up their Outlook Express address books and spread itself, but not before wiping out every graphic image file on the hard drive. To repeat: it was easy to avoid Love Letter and its variants, just be suspicious of all attachments. hightechcrimes

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There was also a trick to foil a virus so it doesn’t spread beyond your PC which involved entering a dummy entry in your address book, and it should begin with an exclamation point (!) to ensure that it’ll be the first entry. The virus then will confine itself to your PC, and you’ll have contained the damage. It also pays to keep backups of your most important files. A complete discussion of backup strategies and devices is beyond the scope of this article, but I do want to mention that both CD burners and writeable CDs are cheap enough to end all arguments about backing up. Thumb drives, solid state devices that plug into a USB port, are more expensive but have the advantage of portability. Lastly, I would like to disagree with the notion that Love Letter was a work of genius. It was not, it was based on scripts that are widely available in the computing underground.

The Thames International School of Business stores its curricula and course materials, including courseware, on its computer network. A pair of former employees used their old access codes to log on to the network and copy the course materials. The case is now in court so we can’t discuss it at length here.

Total Solutions Software, Inc. (TSSI) is a subsidiary of YES Limited, a Hong Kongbased IT company founded in 1988. In 2003, TSSI launched www.YesPinoy.com, a Filipino community website aimed at bringing together Filipinos from all over the world and provide them with a means to contact Filipinos both in the homeland and those working abroad. The service relevant to our discussion is YESPinoy Send Money, which provides members a way to send money to a SMART Money cardholder in the Philippines using a credit card and an Internet connection. YESPinoy also provides a mechanism for members to order SMART Money Cards for friends and family. In the middle of October 2003, TSSI noticed irregular activity within its computer system. A number of YESPinoy members were sending money to the same individual, some successfully, but other transactions were not honored by the credit card issuer. The registration details of members who had allegedly sent money to the same individual had details of persons in the US. Oddly enough, their access point was, according to TSSI’s audit trail, a Philippine Internet Service 80

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Provider (ISP). TSSI then called some of the US residents who were supposed to have been sending money, and found that the latter had never heard of YESPinoy and had no connections with anyone here. With the cooperation of SMART Telecommunications, TSSI found that the SMART Money Card was drawing cash from Automated Teller Machines (ATMs) in Quezon City. TSSI, after further investigation, worked with the National Bureau of Investigation (NBI) to conduct a sting operation that resulted in the arrest of three individuals who were detained at the NBI jail and charged with violations of RA 8484 (Credit Card Fraud), RA 8792 (E-Commerce Act), and falsification of public documents and estafa under the Revised Penal Code. TSSI said the design of its software enabled them to detect and trace the fraudulent transactions. The audit trail’s revelation that members who were supposed to be in the US but were using a Philippine ISP was key to breaking the case. One thing that TSSI officials wanted the public to know was that, when a credit cardholder disputes a charge, the issuing bank will decline the transaction and it’s the merchant who’s left holding the bag. In this case, TSSI would take the hit. It’s important to mention this, because those who might intend to engage in a fraudulent credit card transactions have to realize that it’s not the issuing bank (e.g., Citibank or Standard Chartered) that absorbs the loss, it’s the merchant. In this case, TSSI had to account for the charges, which meant that they were spending money that wasn’t coming back to them, in contrast to the salaries they pay their programmers. If there are enough declined charges, TSSI could go out of business and their Filipino programmers unemployed. There’s much more to cover. I haven’t even managed to mention other cybernasties. What I can do is send you over to http://www.aoema. org, which engages in educating the computing public about viruses, trojans, and worms, spams, Internet scams, and the like.


Albert “Abet” Pangilinan Dela Cruz President, Philippine Computer Emergency Response Team (PH-CERT) Columnist, Entrepreneur and Consultant

Janette Toral (JT): Are there any significant breakthroughs with the way we fight cyber crime today? Abet Dela Cruz (ADC): Most definitely. People from all sectors including law enforcement agencies are now very aware of the dangers and implications of computerrelated crime. We have learned our lessons very well and are taking proactive steps to combat such. The public has reached a level of consciousness in IT that has made them aware of both the benefits and consequent dangers of using the computer and the Internet. There’s big progress on the development of awareness and technical know how of our law enforcement agencies. It’s not as great as first world countries but we are definitely on our way up. I see major efforts, despite the limited resources, of our law enforcers to upgrade their capabilities to acceptable levels. Various cooperative efforts with the US and other countries have been happening and have lead to great strides in our effort to fight computer related crime. JT: Government is now disseminating posters showing most wanted criminals, kidnappers, and the likes. Do you think these wanted posters will be on their websites soon? ADC: That’s relatively easy. We now have law enforcement websites up and running, and that can be done in a jiffy. You’ll be surprised on how the technical capabilities of some of our investigators have improved. The only problem is the lack of tools and equipment. JT: Do you see our law enforcement entities or courts having more ICT expertise in the next 10 years?

ADC: Again my answer is on the affirmative side. I see thatconcrete steps and efforts are underway today as we speak. We have a judiciary that is forward-looking and very aware of the benefits of information technology. We have good people in the law enforcement sector, who either have or will undergo training. I see foreign assistance for our anti-cybercrime endeavors as well as full support from our country’s leaders. We have been at the bottom and there’s no way for us to go but up. JT: How technology-sophisticated do you think criminals will be in the next 10 years? Do you foresee organized crime or online syndicates demanding protection money for safe transactional environments? ADC: The more information gets out on the net, the more sophisticated everybody will become, not just the bad guys but also those who are out to catch them. The cat and mouse scenario will still persist but the stakes will indeed be higher and more complicated. The group that will have the resources will eventually win as progress in technology will greatly speed up processes, applications, and of course computing power will increase. Speed spells the difference in a lot of things, the more things you can do in a short span of time, the more efficient and effective you will be. There is a possibility that indeed computerrelated crime will grow into a more organized and systematic manner. With the progress in technology, so goes the dangers as well, just like anything else in life. We cannot discount the possibility and all we can do is prepare for it.

“Abet” is known for founding and being part of several successful companies like Trends & Technologies, NetX, Wolfpac and Data Networks &Defense. A few months after he starts a company, you’ll hear a major corporation buying it. He also works hard in pushing for IT advocacy becoming part of the e-commerce Subcommittee of ITECC which churned out the Rules on Electronic Evidence. He is also part of various private/public sector initiatives to promote information security and IT in general.

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By Janette Toral

I

t is amazing to know how the Internet has empowered ordinary individuals whose main craft is not in the field of information technology at all. This chapter features some of them showing how the Internet can empower Filipinos.


Science-Fiction / Comics Writer and Artist Website: http://www.komikero.com Mission: “Provide a means by which I could share my artwork with the rest of the world.” Gerry Alanguilan is well known for his expertise in comics. His fiction work, like “Wasted,”easily touches the heart of the reader and remembered for years to come. JT: Please give us a background about your website and other endeavors. GA: I have been drawing comics for several years before the Internet hit it big in the mid 90s. When I first surfed the web in 1996, I realized its huge potential for better communication. I resolved to put my portfolio online for the purpose of finding people who would like to hire me for various projects. In that regard, my online portfolio has been quite successful because I’ve gotten jobs through people who hired me after visiting my site. I produce my art simply with paper and any art tools I have available placing ink on paper. I use the computer only when I need to send the art via the Internet which consists of scanning and some cleaning in Photoshop. Being a comics artist, much of my time, effort and concentration is directed towards that. This is perhaps why I never changed my site in terms of design and technology. I’ve yet to master HTML, and I’m clueless when it comes to things like Javascript and Flash. So I just try to make my site as easy to navigate and as asy to look at as possible. JT: Does the Internet age mean the death of personal privacy? Why? GA: I’ve always been puzzled as to why people are up in arms about “loss of privacy” on the Internet. It doesn’t matter to me if people know what my name is, what my e-mail address is or my educational attainment. It doesn’t matter to me if people know my hobbies, my favorite movies, or the places I go to on the Internet. How exactly can those things be used against me, or used to take advantage of me? Spam? Junk mail? So what? I can delete them all if I 84

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want. It’s not like there’s a camera in my room connected to the Internet monitored by the government to see what I say and do 24 hours a day. This issue of death of personal privacy because you give up some personal details online is a whole lot of bullshit. People find out MORE about you in the trash you throw out of your house. Why don’t people watch against that? JT: Do you worry about your obsolescence and that of “speculative” or “exploratory” fiction? GA: I don’t worry about it at all. I honestly don’t know what the Internet can possibly do to kill “speculative” fiction. A lot of people will still want to read in spite of the Internet. And read actual printed books no less. In spite of the propagation of advanced albeit pirated versions of Harry Potter and the Order of the Phoenix as a passable PDF version online, people still went in droves to buy the book, making it one of the best selling books worldwide. JT: What do you think will be the most unexpected and spectacular impact of the Internet in the next 10 years (circa 20042014)? Why? GA: I really can’t see that far ahead. I mean, 10 years ago who would have thought that the Internet would explode in just a few years and revolutionize communications forever? A lot of people have made predictions before then and none of them have mentioned the Internet. So I’ll just wait to be surprised. If I would have to hazard a guess, and mind you this is just for fun speculation, something that I could put in my comics... I see people connected to the Internet ALL the time whether they are at home or on the road. They would carry their computers on a small device attached to the arm. Young kids will make it into a fashion accessory. Of course one can do this with cellphones, but computers of the future will be more sophisticated with a lot more features than what cellphones today can offer. Because speed would have risen astronomically by then, downloading files, no matter how big, will no longer be a problem. People can watch movies anywhere they like,


listen to whatever music they want to hear. Of course, piracy grows along with the growth of technology so downloading free movies and music will become more rampant. Taking it even further... probably 50 years from now, people will be able to enter the Internet themselves and interact in a virtual community which exists online. Information will come fast and furious. No information in the world can be hidden from anyone. People will then continue to live in their computers and a thousand years down the line mankind will evolve even further. Human bodies will physically shrink as reliance to these diminish while brains grow as use increase. In a few thousand years we would have evolved into beings who are suspiciously like the aliens we are so scared of in movies like the X-Files. JT: Will the Internet change the struggles of love, relationships, and interpersonal dynamics? GA:It has certainly changed mine and not exactly for the better. My wife is continuously frustrated to find me online instead of being on my desk working. Being online is very addicting...and I think if this tool is not used well (and evidence suggests it has not been used well a lot), it does not bode well for the future. It could build walls between people, although it could also bring people together. Lately I noticed people would tend to just email instead of call or meet personally. On the other hand, it can also help maintain the communication between two people who would not have otherwise communicated because of distance.

JT: What type of person and what skills are rewarded by an Internet dominated society? I really have no idea. I think anyone can be adept in whatever skills necessary to get a handle on the Internet. But I do think those who are NOT afraid of the computer (I was once), and have the knowledge of it inside out would do well. JT: There are now portable e-book readers in the market. Does this affect writers and publishers? I think the writers and publishers let it affect them when it really shouldn’t. Like the Harry Potter example I cited previously, PDF files of the latest book have been circulating widely months before the book came into print. And yet when the book finally became available, people STILL came in droves to buy it. Maybe some writers opt to write books specifically for the e-book format. But unless the problem of piracy is solved, there is little chance of it becoming profitable in the long run. JT: Do you think as downloadable titles and literature become more available online in the future, Filipino consumers will prefer reading from such? GA: Speaking strictly for myself, I wouldn’t. If such books are not available elsewhere, I might download it and print it so I can read it. But I don’t see myself actually reading a book from a computer.

Looking further at the positive side of it, the Internet has brought people together. I am part of two alumni mailing lists from my high school and college. Through the mailing lists, I managed to get in touch with people I would not have otherwise have gotten in touch with if there was no Internet. JT: Write the first sentence for the novel or short story you might write sometime after the year 2014 and set it in cyberspace. GA: Ever since he flew into town, everybody was suspicious of him. Some were afraid, some were curious, and a few wanted to kill him. He was different. He looked different, and he acted different. And unlike them, he was entirely human. peoplepower

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By Juan Magdaraog

Former Executive Director Information Technology and Electronic Commerce Council Melissa “Toby” Monsod was a DTI Assistant Secretary from 2000 to 2002. She is the first Executive Director and laid the groundwork of the Information Technology and ECommerce Council (ITECC) from July 2000 to April 2001. She led the drafting of the Implementing Rules and Regulations of the E-Commerce Law. It was completed within 30 days from the passage of the law. Toby was greatly involved in the formulation of the Internet Strategy of the Philippines (ISP.COM) that focused the efforts of the government and private sector in capturing business opportunities in IT now referred to as “E-Services Philippines” to generate export revenues and employment for the country.

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“The power of the Web is in its universality. Access by everyone regardless of disability is an essential aspect.”— Tim Berners-Lee, W3C Director and inventor of the World Wide Web For the first time in history the technology is available to level the playing field for

People

With

Disabilities

(PWD). The Internet, World Wide Web and ICT in general have empowered PWDs. I should know. I’m one of those empowered individuals. I’m fortunate enough to be living in the age of information technology. A time wherein the tools have been developed where access to information is virtually at your fingertips. I’m also fortunate to have family who encouraged me to learn and develop the skills necessary to make use of the Internet and ICT. My first experience surfing the Internet was on a 486 PC with a 28.8 kbps modem. I was still in college at that time. Even then the Internet proved to be a big help. I had a difficult time going to the library for research and to look for books. The Internet opened a wealth of information that was available from the comfort of my home and at a click of a mouse button. Doing school work was made easier because I had the information that I needed. I developed my skills on using the Internet and other related technologies as time went by. I didn’t have any computer related background in college so I had to self-study and read a lot of books on how computers and the Internet worked. I decided on learning web design because I found out that it’s something that I could do and is at least somewhat related to the course I took in college. I was able to finish with a B.S in Industrial Design (Product Design). I spent a year after graduating from college working in a small company my dad, cousin and I put up. The company did multimedia and web site development. It was there that I honed my skills in web designing. After a year, I decided that I would take a break from the company and try to look for a job in another company. I wanted to find out if companies would give PWDs a chance and employ them.


I applied at several companies. Some of which did not give me a chance. I eventually found one that did. After several interviews with HR and the Executive Director they decided to give me a chance. Due to the nature of my work (web design) the Executive Director agreed to allow me to work from home or telecommute. I would report to the office once or twice a week for meetings. The Internet and ICT played a significant role in making this work arrangement possible. At the start of the work day I would connect to the Internet, log in to an instant messaging service, and download my e-mails. It was through instant messaging and e-mail that I had contact with people at work. My boss would e-mail me the work needed to be done and we would chat via instant messaging to clarify or discuss whatever needed to be talked about. I would then do my work and upon completion use File Transfer Protocol (FTP) to upload it to our server. For almost two years this was my work arrangement. Technology improved as time passed by. I eventually upgraded to a DSL connection. This improved telecommuting a great deal since I was able to stay online the whole day. Bigger bandwidth also made for faster downloads and viewing of richer content and media. Conferencing was also made available—both group conferencing and voice conferencing. This improved communication between the office and me. I eventually left the company I worked for due to the downturn in the economy. I was able to apply the things that I’ve learned from that experience, when I returned to the small company we put up. Using the Internet, I was able to get clients from abroad by communicating with them via the same technologies I had used in my previous work. At first my clients from abroad didn’t even know I have a disability until I told them. They were that pleasantly surprised. If you meet me online, you would not even think that I have a disability because I’m as regular as the next person. Apart from gaining access to work, the Internet also opened the doors to communication to the world. I’ve fostered new friendships with people from all over the world as well as strengthen old friendships. I communicate with them a lot through e-mail and instant messaging. We’re able to exchange photos, video conference, play games and a whole lot more. The Internet has truly opened the doors of the world for people. Another important benefit that the Internet has brought is the ability to search for people and information that otherwise would prove to be close to impossible. Due to the rarity of my illness it has been difficult in the past to search for information about it much less doctors who specialize in treating it. The Internet made this

easy. Now, access to information and doctors are readily available. Websites and discussion groups about it have also sprouted connecting patients all over the world. Patients can now share information, experiences and ideas on how to deal with the illness. Support for patients and their families are made accessible because of it. I regularly communicate with other patients and share with them thoughts about our situation. From dealing with the physical disability it has brought up to dealing with the emotional stress that have resulted due to it. I can truly say that the Internet has helped me a great deal in coping with my illness. In the virtual world we call the Internet, opportunities are equalized for both people with disabilities and those with out. While it is true that some PWDs still have a difficult time accessing information through the Internet, it goes without saying that it is easier now than it was several years ago. As technology progresses it will become easier and easier for people with disabilities, like those who have sensory impairment, to make full use of the Internet and its power. It is therefore important to teach and equip PWDs with the knowledge and the facilities to make use of the Internet. It will surely open doors and opportunities to live and work better. I know, I have a better life because of it.

Juan Magdaraog is the Web Design Director for Innov8, Inc. He also contributed to the book, “Reflections from a Different Journey. What Adults with Disabilities Want All Parents to Know” (http:// www.disabilitiesbooks.com/reflections/index.html)

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The Philippine Web Awards Website: http://www.philippinewebawards.com Mission: To recognize the best Philippine websites on the Internet. the Philippine licensee—launched the Webbys in 1997.

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The Philippine Web Awards is the premiere award-giving body that recognizes the best Filipino websites on the Internet.

As editor of The Web Philippines (http://www. theweb.com.ph), I thought it was a good idea to extend the mission of the magazine—which is partly to recognize the growing number of Filipino websites—to another format for a wider audience. And the idea caught on.

JT: Please give a background about yourself and your Internet life.

JT: What is your role in the Philippine Web Awards?

HB: I have a parallel career in finance, having worked in SGV and BPI. But I started using the Internet in 1996 when I first wrote for PC World Philippines, later penning its Web Watch column where I reviewed the first few Filipino websites then. Then PC World included an insert, which I edited, about website reviews, taken from The Web magazine of the US. A year later, WSCPC spun off The Web Philippines, and I became the editor. I served in that capacity from 1997 to 2000, and resumed in 2002, renaming and reformatting the magazine into a business and technology publication as Enterprise magazine later that year.

HB: During the first two years, I was actively involved in practically all aspects— conceptualizing the awards guidelines, inviting judges, overseeing the judging process, promoting the awards, even writing the script of the awards night program!

I was also WSCPC’s Online Business Manager from 2000 to 2002, launching and managing the operations of our IT portal, ITnetcentral (http:// www.itnetcentral.com), and our publication sites. In total, I’ve been using the Internet for close to eight years. Given the nature of my work, I’m online almost everyday for almost the entire work day. The Internet, particularly the Web and e-mail, are an integral part of my professional and personal life.

JT: Would you refer to the Philippine Web Awards as the FAMAS for the Internet?

JT: Can you give us a bit of history on how the Philippine Web Awards started?

JT: How did the Philippine Web Awards mature/change year-after-year? What were the significant changes/milestones?

HB: The Philippine Web Awards (PWA) started in 1998 as a project of The Web Philippines magazine (now Enterprise magazine). It was pattered after the Webby Awards of the US (Webbys). The Web magazine in the US— published by IDG (International Data Group), of which WSCPC (WS Computer Publishing Corporation, now Media G8Way Corporation) is

HB: The first few years were naturally a learning experience for us, given the ad hoc approach we took. It was a way like an Internet startup— bootstrapping and multitasking. We started in a small venue (Hard Rock Café in Glorietta, Makati) and later moved up to bigger ones (Shangri-La, Meralco Theater, New World Hotel).

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Recently, I’ve taken a more consultative role, as each area of organizing an awards program has been delegated to specific committees. There are different people handling the judging process, the updating of the website, the promotions, the event management, etc. I do not have a direct hand or operating responsibility in the entire process but I am always around for consultation. I still do help in promoting the awards through tri-media.

HB: Well, that’s how we billed it when we launched it in 1997, since it’s a quick way of getting people to understand what it’s all about. While we no longer promote it as the FAMAS for the Internet set, it still boils down to an industry competition which awards the most outstanding Filipino websites of the year.


We’re also looking into specific segments in the ICT industry that we can spin off as separate awards. JT: People tend to say that awards like this are all hype. Do you agree with that? HB: In one sense, it is hype in that it puts the spotlight on web developers. It’s the closest thing to being a celebrity. But there is substance to it, as it helps them in terms of exposure and promotions, which may lead to new business and career opportunities. It also serves as a venue for promoting best practices in web design, content, and development. JT: Why do sponsors support the Philippine Web Awards?

Every year, we fine-tuned the judging process, making sure we cover loopholes. Definitely, the set of judges we’ve invited have increasingly become highly regarded, given their background and reputation in the web development community. We’ve had more and more judges who are well-known internationally. So there have been a lot less, if not no, complaints about their credentials. We’ve been working with different web development companies for our website almost every year, and we’ve certainly improved in that regard. Their multimedia talents continue to wow the crowd during the awards night with their animated clips. We’ve also done a better job in the People’s Choice Awards segment, and last year we introduced SMS voting as a way of expanding further the audience of the PWA. The awards night itself has become betterorganized and continues to be entertaining. Some of the country’s top bands and artists have performed at the PWA. We changed the name from the Philippine Webby Awards to the Philippine Web Awards after seeking the advice of IDG. But it does recognize and encourage our efforts. Now that we’ve formed a separate events group, we’ll be expanding the PWA franchise to cover more areas and groups. We’ll also be introducing ancillary activities such as seminars.

HB: Primarily because they believe in the concept. It also has that coolness factor which they might want to be associated with. But more than that, they want to be associated with the promise of the Internet and New Media. They know these web developers are at the cutting edge of New Media and they want to support this effort to recognize them.

JT: Is the awards going to be institutionalized (or is it already)? Or will it just keep on moving for as long as there are sponsors? HB: It’s not institutionalized in the sense that there’s a separate foundation or academy running it, like the Academy Awards. But while the actual operations reside with us, it has the participation and support of the web community, whose members are perennial screeners and judges. In the end, it’s the web community, along with some experts from other industries that decide the winners. It’s peer competition if you look at it that way. And it’s practically a widely-recognized industrysupported awards program, which has the same credibility and support as awards programs of other industries. Press releases, news articles, brochures, annual reports, executive speeches, and other promotional materials of past winners--from the freelance web designer to the Top 100 companies--all mention their achievements from the PWA. peoplepower

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he timing seemed perfect: the Philippines had just gotten a live IP connection to the Internet, and all the major IT industry think tanks— Gartner, the Meta Group, Forrester— were predicting that the Web would generate billions of dollars in revenue. Thus, we were all witness to the Gold Rush of the 20th century, and this one was on a global scale – anyone, even if they only had a part-time (e.g., dial-up) connection to the Internet needed only a Web hosting service and a surfeit of guts to take the plunge. There was no shortage of venture capitalists and angel investors with bulging moneybags seeking out dotcoms that would create the next generation of millionaires. On the other hand, there was no shortage either of Net-based entrepreneurs looking to make their millions on the Web. After all, a mere fraction of the world’s 100 million users could generate enough traffic to attract advertisers into pouring in the money. At least that was the theory. Unless you’ve been living a hermit’s life on Mt. Banahaw, you would know that Netrepreneurs discovered—to their dismay—a yawning gap between theory and practice. Advertisers did fight for prime placement on websites, and kept the dotcom boom going. Unfortunately, they soon found out that their ad placements were not generating any sales. They might’ve gotten some click-throughs, but too few of those translated into transactions. Advertisers realized that they were paying for ad placements that weren’t contributing to the bottom line, and the decision to cut down on or altogether eliminate Web advertising was a nobrainer. Without this lifeblood, the dotcoms collapsed, turning the dotboom era into dotbomb, dotcrash, and other similar labels.

There has been enough analyses about the causes of the dotcom crash. A report from Infoworld, however, is worth mentioning mainly because it described one of the pitfalls that successful dotcoms avoided. According to Infoworld, the dotcom owners were living it up, buying the most expensive Beamers and Rolexes, leasing the most expensive and hightech office spaces, and flying first class. Oddly enough, this was the idea of the venture capitalists or angel investors, who wanted their wards to project an image of profitability. Ironically, that was one of the practices that would prove their downfall. In the so-called “new economy,” old-economy rules still applied: mainly, that people still expected something in return for money. I come neither to bury dotcom, nor to praise it. Several writers have already done both, the former perhaps prematurely. What I do want to do is look at those dotcoms that survived the crash so that we might remember their adherence to old-economy rules and apply them if we should dare a dotcom venture ourselves. In particular, I’d like to look at Philippine dotcrash survivors in the hopes that some enterprising Pinoys might shrug off the dot-bomb shakes and come up with a working revenue model for a dotcom. Rather than go mile-wide and inch-deep, I intend to look closely at two dotcoms: a high-profile and a silent operator. The former is a webmail provider, the second an online shop.

By Daniel Escasa


SMEs Trailblazing with E-Commerce By Janette Toral

The Philippine Internet Commerce Society launched the PICS-SME IT Excellence Awards for its 2nd National E-commerce Congress (2003). It aimed to recognize SMEs who have managed to utilize information technology and e-business best practices in their operations - and have managed to gain benefits in terms of profitability, savings, efficiency, customer relations, supplier relations and other relevant metrics. We’re featuring three of the nominated companies here. Godiva Natural Skin Care http://www.godivaskincare.com Godiva Natural Skin Care won the PICS-SME IT Excellence Awards. The company is well known for its innovation in the skin whitening market. Godiva Licorice Skin Whiteners enjoy high customer satisfaction. It uses only purified licorice with the highest glabridin content (40%), a product of the latest, state-of-the-art Japanese isolation and purification technology. GODIVA, Inc. has introduced new and exciting natural skin care products to the international market. These products are now being imitated by global brands. GODIVA has been using purified licorice as an active ingredient since 1996, long before international well-known brands have started doing so.

Thus, interested companies shell out US$500 for the US$1,000 worth of products. GODIVA Natural Skin Care assumes shipping cost as an added incentive to these distributors. The program, if successfully done, will lead to a steady increase in sales to a level of US$50,000 monthly. Regional Foods Marketing http://www.bangus-online.com Regional Foods Marketing is in the business of de-boning and distribution of Bonuan bangus (milkfish). It was established in 1999 and acted as the exclusive distributor of Bonuan Boneless Bangus products. Due to the clamor of various independent distributors, it established its first factory outlet at OPN Center Commonwealth Ave. Quezon City. The factory outlet also serves as a showroom and pickup station for independent dealers who are currently distributing its products. The company’s website, http://www.bangus-online. com, is the only bangus store on the Internet. Through the awareness he was able to built, the company now exports to Abu Dhabi. Hulsey believes that Internet selling is the thing of the future. He explained, “You can reach a lot of people all over the world with just one website. You can send your sales copy to a number of segments with one click of the mouse, unlike before where you’ll be mailing expensive brochures. Internet marketing, the job gets easier with less cost, which is very important to an SME. Let the computer do the selling.” Worldnet Achievers Consultancy http://www.worldnetachievers.com Worldnet Achievers Consultancy Co. Ltd. is a tax auditing firm handling the bookkeeping and other tax-related services of a huge base of clients. The firm has been in the field of tax consultancy and business management services since the late 40s. Its website, http://www.worldnetachievers.com, is used by clients to access their records conveniently and in a secured manner. For Worldnet’s clients, the ability to check and update current tax and government records online are important.

The company has two websites namely http:// www.godivaskincare.com and http://www.i-godiva. com. It has developed loyal clientele from the United States, Canada, Britain, Australia, and Japan. As early as 2002, the company makes up to US$3,000 per month. Godiva’s online revenues kept getting better, with every month considered as a sales record breaker. The company has also rolled out an e-commerce promotional program where big-ticket and frequentbuyer clients are encouraged to make money by partnering with GODIVA as a distributor. The present scheme provides prospective distributors 50% discount on online store rates, for a minimum purchase of US$1,000 worth of GODIVA products.

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PinoyMail.com All experts say that e-mail is the most popular application on the Internet, not only in terms of penetration (i.e., percentage of Internet users using it), but also in terms of traffic. Therefore, e-mail is a strong potential source of revenue. As a result, there is a proliferation of free webbased e-mail services. There were three major sources of these mail providers.

There were the stand-alone services whose main offering was the mail service. Into this category are iname.com (since renamed to mail.com), graffiti.net, fastmail.fm, and several others you should be able to find on search engines. And, just in case you think I forgot, there’s hotmail. com, which attracted enough attention to earn a purchase of the business from Microsoft. I should also mention that, while mail is the primary offering, some services also feature amenities like discussion groups—graffiti.net is one such site. The second source was the socalled portal which allowed one to customize entry point into the site. The biggest and most prominent example is Yahoo!, which delivers news, a search engine, and mailing lists, among others. Another popular example is Lycos. The third source was the site whose main offering was some other service that gave out e-mail addresses as a bonus. The International Data Group (IDG) gave out idgnetmail.com e-mail addresses. In a few cases, these sites managed the web mail service themselves, although many preferred to outsource to mail.com, OutBlaze, and other dedicated mail providers. Now for the puzzling part of this equation: if mail providers saw email as a major revenue generator, how did they make money? Of course, they had advertising support, but one of the most striking lessons from the dotcrash was that advertising could

only go so far. As an aside, and for what it’s worth, many of Yahoo!’s ads are in-house (i.e., about Yahoo!’s other services). The answer here is premium services. You can choose from one of several dozen free mail domains from mail.com, but you can get a “cooler” address, one more indicative of your occupation or personality, for about US$20 a year. In addition, mail.com also charges for mail forwarding, which automatically sends your mail.com messages to another mailbox of your choice. This saves you from ever having to visit the website, which assaults you with ads for classmates.com in the form of popunders and interrupts. There is, however, a price—literally—for getting rid of those ads. You can also pay extra for more storage, which is a good idea if you want to keep some mail on their servers. With regards to hotmaiL.com and Yahoo!, you can pay extra for POP (Post Office Protocol) access so you can read your mail from your favorite mail client, e.g., Eudora or Ximian’s Evolution. You can check external POP mailboxes from Yahoo! for free and. For a fee, Yahoo! allows you to send out mail using your ID from those external POP accounts. Yahoo! also gives out additional storage for as low as US$9.99 a year. fastmail.fm also provides this free service, although fastmail.fm’s IMAP is free, and they also have premium services that give you more storage, or more e-mail addresses. Lastly, graffiti.net’s premium services consist of IMAP access and more storage. Of the dozens of free mail providers I tried, only one has dropped out altogether, a sign that free e-mail can be a profitable proposition. On the other hand, graffiti.net has slowly revised its charging structure—IMAP access used to be free, but it’s a premium service now. That’s not necessarily a sign of trouble that graffiti.net might be experiencing, just the natural adjustments that any business undergoes. The bottom line is that free mail, like any other business, needs a sound revenue model. This was what was on the mind of Dominick “Dom” Danao when he founded PinoyMail.com. He knew, even before the dotcom crash, that excessive reliance on revenues from advertising was an invitation to disaster. He therefore looked at corporations that might need e-mail but could not justify a full-blown IT department just to have an email service. No matter how much money you have, you don’t spend it on something that’s not costeffective. An IT department whose only function is to manage e-mail is an overkill. blazingglory

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You’d have to look for other jobs for them to do. Your information processing needs – which may or may not include e-mail – should weigh in your decision to set up an IT department. “There are, for example, all these law offices with lots of money but not much in the way of information processing requirements,” says Danao. “Maybe their IT needs are met by office suites or other canned software. One day, they decide that e-mail would be beneficial for them. But that’s their only urgent IT need, and is not enough reason to set up a full IT department. That’s where we come in. We set them up for as many e-mail addresses as they need for their staff, and they’re good to go.” Yet, it’s not only cash-rich law offices that can benefit from outsourcing their e-mail. “Schools are among our target market for our corporate mail service,” continues Danao. “For example, we gave Centro Escolar University (CEU) 3,000 e-mail accounts. It didn’t even cost the students any significant increase in their fees, because CEU incorporated the charge into their computer lab fees. We did a study that convinced them that it was more cost-effective to outsource their e-mail to us rather than do it themselves, either through an IT department or through some team (possibly one-person) of part-time mail administrators. In fact, regardless of the size of the organization, we can demonstrate the cost-effectiveness of outsourcing vis-a-vis an in-house administered e-mail system.” Obviously, PinoyMail won’t turn down advertisers. Danao notes that Citibank, one of PinoyMail’s first advertisers, continues to place advertisements there. “Apparently, they get enough business from our users to justify their continued presence,” says Danao. Still, PinoyMail won’t fold up if all their advertisers suddenly pulls out because the corporate mail service is the center of its revenue model. As an aside, PinoyMail practices what it preaches: the philosophy of cost-effective solutions and not spending more than one has to. PinoyMail’s success didn’t escape the notice of the industry, and that of Alfonso “Doy” Vea in particular. Vea found PinoyMail so attractive that he offered Danao “a cheque representing more money than I had seen my entire life,” recalls Danao. Vea’s purchase was a sign of the confidence he had in the foundations laid by Danao, and of the potential that might have escaped even Danao. On the other hand, it meant that Danao would lose operational control over PinoyMail. On that note, Danao could not hide his disappointment. “I had this vision of the PinoyMail engine becoming a serious competitor of Microsoft Exchange Server—shared folders, workgroup-oriented 96

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calendaring, electronic routing of forms, the works. The technical enhancements would’ve cost only a fraction of the competitor’s current marketing budget, yet management could not provide anything for development. But that’s the way it goes when you cede control. I respect the new management’s decision to concentrate more on marketing than development.” Still, Vea’s purchase of PinoyMail made Danao one of the first Philippine dotcom millionaires, if not the first. Although PinoyMail is under new management, the old economy habits that Danao instilled will ensure that PinoyMail remains profitable for many years to come. At this point, there’s the inevitable comparison between PinoyMail and EDSAmail. Although the two employ different technologies, their philosophies and marketing strategies are similar. PinoyMail requires its users to have some form of Internet access, either at home, at the office (subject to the Acceptable Use Policy, or AUP), or at a Net café. EDSAmail, on the other hand, only requires a modem. Where PinoyMail users access their mailboxes through PinoyMail’s Webmail interface, EDSAmail has a dedicated Windows-only client that dials up to EDSAmail’s servers and retrieves mail and sends out any pending messages from the user’s PC. Those who are familiar with the Offline Mail Readers (OMRs) that were popular among users of electronic Bulletin Board Systems (BBSes) should experience déjà vu with EDSAmail. EDSAmail, like PinoyMail, started during the early days of the Internet in the Philippines, when Internet penetration was still low and still fairly expensive. A dedicated dial-up client independent of an ISP therefore made sense. Even today, you can’t beat EDSAmail on price, especially if you don’t care all that much for Web surfing, friendster, or streaming media, and need only basic e-mail.


KabayanCentral.com The IT industry think-tanks’ predictions on billions of dollars worth of business on the Internet were anchored in large part on ecommerce, specifically online business-toconsumer (b2c) storefronts which housed, electronically, goods and services for Internet users to purchase. Thus, Jeff Bezos put up amazon.com, and several others followed. Once again, though, traditional economic practices still applied in the new economy. The new part of the deal was in the payment system, where buyers had a choice of credit card payment or, later, in electronic money in the form of payment gateways such as PayPal. On the other hand, maintaining inventory and delivering to the customer within a reasonable time were old rules that were not going away—not ever.

Speaking of payment gateways, one of the challenges facing potential Netrepreneurs was a means of accepting payments. Credit cards were – and probably still are – the most popular payment scheme. However, credit card merchant accounts still required a considerable amount of work, and not just anybody could get one. Thus, if I put something up for bid on ebay, just about the only way for the winning bidder to pay me was to go to the bank and order a money transfer, since I don’t expect to be able to get a merchant account. On the other hand, if I were to put up a Web storefront, I may just have to bite the bullet and apply for a merchant account. Over the years, many electronic money services have sprung up that allowed anybody with an e-mail address to send and receive money electronically. This meant that PayPal users could send money to other PayPal users, in much the same way that you might pay me out of your wallet, face to face, for a used cell phone I might be selling. The aforementioned PayPal was among the first, and remains the most well-known.

Spotlight Jovel Cipriano PinoyDelikasi.com Jovel Cipriano is well known for being the entrepreneur behind PinoyDelikasi.com (http:// www.pinoydelikasi.com), a web site that sells Filipino delicacies—like danggit, dried pusit, dried mangoes, tuna belly, among others—online.

Prior to this venture, he worked for IBM Philippines for five years handling its VisayasMindanao operations. On August 2000, he decided to give up his IBM job to focus on PinoyDelikasi. com, giving it 100% of his time. The idea for PinoyDelikasi.com began in March 1999. It went online on January 2000. From a simple shopping site, Jovel was able to build a distribution network to other countries that enabled him to deliver PinoyDelikasi products efficiently. Jovel believes that for as long as one has the passion in what they’re doing, nothing can stop success from happening. Despite problems in logistics, online payments, export restriction of Filipino delicacies, and encountering unethical distributors, he enjoyed the recognition and fame accorded to PinoyDelikasi.com by various sectors as he got invited in various events to share his story. His site was also featured in international publications and got nominated for several awards. Apart from running his export business, he now does consulting as well for companies who are planning to put up their own dotcom site.

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Similar to what happened with success stories involving small companies, PayPal was purchased by Amazon.com. PayPal and similar electronic money remittance services were meant mainly for non-merchant Internet users who needed to get paid for goods or services. For instance, independent programmers who work from home, or away from their customers’ premises, could benefit from a PayPal account. All their clients have to do is pay them through PayPal, which will then credit the programmers’ PayPal accounts. PayPal also has a merchant account set-up. If USbased netrepreneurs had to contend with setting up payment gateways, the challenge for RP Web merchants was an order of magnitude higher. In the early days of Internet commerce, local banks were slow to give out merchant accounts. If a Philippineowned storefront wanted a merchant account, it was easier to get one from a foreign bank. However, that meant a time frame of three months for the issuing bank to transfer the credit to their accounts. Today, merchant accounts are a bit easier to get from local banks. On the other hand, payment gateways like PayPal are in fierce competition with credit cards, and there’s still a sizable number of Internet shoppers with PayPal accounts who prefer to use those over credit cards. Thus, a PayPal account is a must. Unfortunately, the Philippines is on the list of countries where PayPal doesn’t operate. The reason, without elaborating, Paypal gave on its web site is “local banking laws.” Another payment gateway is StormPay, which used to accept users with Philippine addresses. However, a year or two ago, StormPay struck the Philippines from the list of acceptable countries, citing the prevalence of credit card fraud, and cancelled all accounts with Philippine addresses. These were the challenges facing KabayanCentral. In fact, they had barely begun operations, as tatakpinoy.com, when they faced a legal challenge: a San Francisco resident was claiming rights over the domain tatakpinoy.com, and threatened a lawsuit. “He wasn’t even Filipino, as far as I remember,” says Armin Santiaguel, who replied to my mail addressed to [email protected]. “We talked it over, and one of us was so agitated that he wanted to fight it out. After all, he said half in jest, if the domain claimant wanted to sue us, he’d have to work for our US visas so we could appear in court. In the end, we decided that it wasn’t worth it, and gave up the domain. We didn’t even receive reimbursement for our domain registration expenses. We just just had to write it off as a loss.” If you visit Kabayan Central’s website, you’ll find that they accept the usual major credit cards, and PayPal as well. “One of our partners set up an office in the US so getting merchant and PayPal accounts would be easier. Or, 98

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in the case of PayPal, possible,” says Santiaguel. (Remember that PayPal doesn’t accept Philippinebased accounts.) “It didn’t really cost us anything extra because he was there already anyway.” Although Santiaguel replies to the webmaster and [email protected] addresses, he’s much more than a webmaster. He’s actually functioning as the head of the Manila operations, supervising two messengers. He also does customer support, which consists mainly of questions about deliveries and debited credit cards against goods that hadn’t been delivered yet. He sends off the two messengers from a rented two-story apartment in Kapitolyo, Pasig City to the malls, primarily Megamall in nearby Mandaluyong City, to buy the goods ordered by their customers, then pack them for shipping. Although they pay retail prices, they don’t have to maintain inventory, so the margin of retail over wholesale just about evens out with what inventory would’ve cost them. The PhP15,000 they pay for rental of the apartment, the cable Internet connection, Web hosting, the wages of the messengers, and Santiaguel’s own pay constitute much of Kabayan Central’s overhead. “We don’t need a fancy office in some expensive business district like Makati’s CBD (Central Business District), the Ortigas Center, Eastwood, or Bonifacio,” says Santiaguel. “We don’t ever need to entertain visitors. We don’t have any wholesale deals with Vicor or Viva, or with any of the publishing companies. We don’t entertain customers either, because they’re in the US. We don’t have a local market.” Kabayan Central sells just about anything Filipino: mainly books, and audio and video discs. “Video discs of classic Filipino films are popular, as are audio CDs of both contemporary and classic Filipino music,” says Santiaguel. “Cookbooks with recipes of Philippine cuisine also sell well.” Kabayan Central has found itself a market of Filipinos in the US. Fil-Ams also frequent the online store. “We found that second- or third-generation Filipinos are curious about the homeland of their ancestors, especially the culture and the cuisine,” continues Santiaguel. “That explains the popularity of audio and video discs, and of cookbooks.” Kabayan Central’s US-centric marketing explains why hardly anyone has heard of them here. They didn’t have any high-profile launches in glitzy hotels, or full-page, full-color ads in any of the local publications. They haven’t even issued any press releases. At least I had an excuse when I first admitted to Santiaguel that I hadn’t heard of them until I read a post in internetreview.ph. “If we were to place ads, it would be in the US media,” says Santiaguel, “since that’s our market. We did purchase a sponsored link from Google


and looksmart, which cost us about US$70 a month. We could probably launch a major media campaign in the US and possibly get us more customers, but we’re not sure we want to do that. We’ve been going back and forth over the issue in the past few years and never really decided to do anything but stay put. Anyway, we’re covering our expenses, and pulling a decent profit.” The business model seems too simple to be true. However, it does work, and in fact, Kabayan Central doesn’t have any exclusivity rights over the model. “divisoria.com, for one, employs the same system,” says Santiaguel. “The times I have to hit the malls myself, I might run into my friends from divisoria.com and we’d greet each other with snickers because we both know what the other is doing there.” So, can anyone else build an ecommerce site around the same model? “Sure,” says Santiaguel. “Aside from Kabayan Central, there’s also divisoria.com that operates under the same system. There might be one or two others, or maybe even dozens of others that we haven’t heard of, working quietly in the US, or maybe even outside of North America.

There’s a large number of Filipinos, both expats and immigrants, in Australia and New Zealand. Both are promising markets.” Not everyone though will win a “Netscape Open Directory Cool Site” citation but that shouldn’t stop or discourage those who just want to make some money on the Web. Hey, how many jobs do you know of that involve shopping at Megamall? Kabayan Central has since launched new services. One of them, called e-kain.com, lets Filipinos in the US treat their Philippine-based families and friends to a banquet. They choose from among several restaurants with their respective menus, fill in the name, address, and phone number of the Philippine beneficiary and the date and time of the banquet, then supply their credit card or PayPal number. In order to protect against credit card or PayPal fraud, Santiaguel calls the Philippine resident to ensure that someone will pay for the meal in case the credit card charges are declined or repudiated. Kabayan

Chikka.com Given its minimal capital in the beginning, Chikka.com started during the dotcom bust. However, customer service, innovation, and good technology are the company’s competitive advantage. The company protected its initial competitive advantage, the Chikka.com Instant Messaging solution, by patenting it. Dennis Mendiola, CEO of Chikka.com, strongly protects value in the chain by building on businesses that are related in nature, where community begets community. Having the first advantage will make it expensive for rivals to get to the same level as where Chikka.com is now. Dennis’ business wisdom was greatly influenced by his experience in eRegalo.com (http://www. eregalo.com). It taught him to manage his operating cash flow, have financial discipline, prudence, and sensibility in making projections.

Chikka.com is expected to scale up further in the next 10 years because of its technology, knowledge, and rich implementation experience, on how to conduct Internet and mobile marketing the right way. Instead of doing everything on its own, it is expanding through franchising by finding local counterparts in immediate target markets. As of this writing, the company has operations and/or subsidiary in China, Indonesia, Thailand, Hong Kong, and United States like Guam, among others. Chikka.com is driving and pulling the SMS market place forward. It plays a great role on what makes the Philippines the most sophisticated and advanced SMS user in the world today.

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Jay Frank De Jesus Titik Pilipino- The Online Resource for Filipino Songs Titik Pilipino.com started as a lyric server for Original Pilipino Music (OPM). With issues on intellectual property rights and Jay’s respect for the copyrights of the Filipino Artists, Titik Pilipino.com has now evolved to encompass more information about Filipino songs, artists and the albums. It now includes, album information such as track, artist, composer, lyricist, arranger and producer listings in a fully searchable database. Jay initially gathered all this in extensive research through old albums, cassettes and CDs from all over. Now, record labels provide most of the album info. In relation with local Music labels, Titik Pilipino has of a section on music news covering album releases, concerts, events, album and artist awards. This is complemented by an artist discussion forum that lists more than 500 Filipino artists, with info such as songs released, official website, and trivia.

Central also has a grocery delivery service where a US resident may order and pay for groceries on behalf of a Philippine resident, for delivery to the latter. If you have relatives in the US, you might drop a few hints and ask them to visit http://www. kabayancentral.com – I’m sure Santiaguel and his partners will be happy to attend to them. A discussion of Philippine dotcoms wouldn’t be complete without mentioning yehey.com – the inspiration should be obvious. Yehey has gone beyond its search engine and directory services and created PayPlus, which allows depositors of the Bancnet consortium of banks to use their ATM cards to pay at accredited sites. There are also a few unknown sites that give foreign customers a video or audio-only chat with Filipinas – and no, there’s no pornography involved, just wholesome conversation. Some sites have integrated the ubiquitous cell phone with their website, the most prominent being the instant messaging provider Chikka. Chikka is a Windows client that can exchange messages with cell phones. On the cell, the message shows up as an SMS (Short Messaging Service), and on the Windows client, as an instant message. Bidshot.com also uses the cell phone, first to send a password or activation code, and then sends answers to potential buyers’ questions to the user’s cell phone. The seller can then reply to bidshot’s gateway, which will forward the reply to the potential buyer’s handset. No matter what kind of business you decide to put up on the Web, remember that cell phone penetration in the Philippines is approximately five times that of the Internet, and so it pays to incorporate some gateway between your site and all three cellular networks, if possible. Lastly, remember that, while it is a new economy, old economy rules still apply.

The site has developed quite a following. It currently receives a daily average of 5,000 visitors with 40,000 page views. For 2003, the site has received a total of over a million visitors and 7.2 million page views comprised of visits from Filipinos based in the United States, Japan,Canada, Australia, Saudi Arabia, United Kingdom and 100 other countries around the globe. For the past five years, Titik Pilipino also has been a consistent finalist in the Philippine Web Awards Music Category. In 2003, Titik Pilipino won the Best Philippine Music Site Award. What’s next for Titik Pilipino? The site currently has numerous e-commerce functions that allow visitors to buy music CDs online. Jay promises more to come for the Filipino music lover.

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Advocacy and Politics Online: A New Media

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he Internet gave an accessible platform to Filipinos in meriting support for their advocacy. Some were even able to advance their current programs by integrating ICT as soon as they realize its benefits. Here are some examples in this area.


Caring for Filipinos with Special Needs Visual impairment is one of the most prevalent disabilities in the Philippines. According to the 2000 census, 942,098 Filipinos have some type of disability. Individuals with low vision, at 37.41%, top the list followed by partial blindness at 8.14%. Despite the fact that technology is now available for people with eyesight disability, many can still not afford it. Computers donated to various schools don’t have any provision to enable this special type of access. In the next 10 years, making ICT useful to people with special needs is a task that needs to be addressed as well. IBM Computer Eyes Program In June 2001, the Resources for the Blind (RBI) approached IBM with a request to provide training facilities and technology for the first national computer camp for blind students.

In its humble efforts, 53 students were able to participate from 2001 to 2003. IBM loaned 21 computers and allowed use of its training classrooms. The software IBM Home Page Reader, a web browser reader, was also used. Students were taught computer skills, word processing, e-mail, Internet use, and website design and publishing, aided by a screen reader program that speaks, through the sound card, whatever text is displayed on the screen. Web pages of the students can be viewed at http://www.cyberhip.ph. ATRIEV (Adaptive Technology for Rehabilitation, Integration and Empowerment of the Visually Impaired) fielded a blind instructor for the camp. They eventually placed a blind graduate in IBM’s on-the-job training program. Content for Children Philippine Schools Cyberfair Project http://www.cyberfair.ph

One of the common problems identified today include minors age 18 and below having a hard time finding educational resources suitable to their academic requirements on the Internet. Even with the growing number of Internet cafés and computer facilities, the lack of educational content prevents the youth from maximizing its use. The Philippine Schools CyberFair Project is a learning program, envisioned to be used by elementary and high school institutions nationwide—for students to conduct research about their local communities and publish their findings on the Internet. It is intended to complement subjects such as English, Social Studies, Computer Education, and Practical Arts, among others. Prizes are awarded to schools for the best entries in each of eight categories: local leaders, businesses, community organizations, historical landmarks, environment, music, art, and local specialties. This contest encourages students to become ambassadors for their own local communities by working collaboratively with community members and using technology tools to publish a website that displays what they have learned. The contest will involve students from different schools all over 104

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the Philippines—the largest national cyber-event for schools. To date, the PSCP is the only cultural Internetbased competition in the Philippine meant to empower and educate students in elementary and high school. It focuses on content that will bring children to value their country’s natural resource, people and heritage. Close to 1,000 students and teachers from all over the Philippines participated in the 20022004 edition of this competition. All Philippine entries shall also join the International School CyberFair (http://www. globalschoolhouse.org/cf), described as the largest educational event of its kind ever held on the Internet. This program has brought together more than one million students from over 100 countries. Six Philippine schools also won recognition in the international competition in 2002 and 2003.

2004 Awardees March 29, 2004 Makati Sports Club Makati City

Environmental Awareness Awards WINNERS Zamboanga City High School Main’s 3 R’s of Zamboanga City http://www.geocities.com/zchscyberfair2004 MSC High School Sampalok Lake..Paradise Lost..Paradise Reborn http://warlock.msc.net.ph/cyberfair_2004/ Runner-up Antique National High School Laragway http://202.91.162.51/websites/ antiquehigh/2004/index.htm

Local attractions award WINNER Don Bosco Makati The Philippines - 7100 Times beyond Expectations http://dbti.edu.ph/7100islands Runner-up Bislig City National High School The Natural Wonders of Bislig City http://www.angelfire.com/folk/bislighi/

Local music & art form award WINNER Bayugan National Comprehensive High School Naliyagan Festival: Enjoy, Explore and Discover the Pride of Agusan del Sur http://www.angelfire.com/clone2/naliyagan/first.htm Community groups & special populations award WINNER STI Academy High School The Calling http://www.aloofhosting.com/dcalling/ Runner-up Claret School of Quezon City Sibol: Beyond the Walls http://www.geocities.com/claret_webteam/ SIBOL/ Honorable mention De La Salle Zobel The Z in MuZic http://muzic.overtranced.net/ Business & Organizations WINNER De La Salle Araneta Malabon: The Cradle of United Business Entrepreneurs http://www.malaboncube.tk/ Honorable mention Roosevelt College Quirino RCQ’s CyberFlair...the Genre http://www.rcquirino.tripod.com/ Local specialties WINNER St. Mary’s College of Meycauayan Meycauyan’s Pride http://www.geocities.com/meycauayanpride/ Honorable mention Liceo de Cagayan University CDO Night Café http://cdonightcafe.tripod.com/

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2003 Awardees March 28, 2003 Traders Hotel, Pasay City

Environmental Awareness Award WINNER Liceo de Cagayan University Cagayan de Oro River http://www.angelfire.com/blues2/river/home.html Local Specialties Award WINNER MSC High School PASALUBONG from the City of San Pablo http://warlock.msc.net.ph/CyberFair_entry_03 2nd Place St. Benedict College Paete http://www.stbenedict.edu/CyberFair/paete/index.htm

Web Philippines, Inc. Local Leaders Award WINNER De La Salle - Araneta University ‘POOLiticos’ http://www.geocities.com/pooliticos2002 2nd place Zamboanga City High School Main ZAMBOANGA LEADERS - Then... & Now... http://www.geocities.com/zchsCyberFair Honorable Mention Philippine Cultural High School Pillars of Philippines http://www.pchsonline.org/philweb/ VCTI-IT Community Groups and Special Population Award WINNER Claret School of Quezon City Claret School Associates In Social Involvement Website http://www.geocities.com/claretschool_asin Honorable Mention Don Bosco Technical Institute - Makati City Salesians of Don Bosco http://salesiansofdb.tripod.com Mapua IT Center Local Attractions Award WINNERS Antique National School Antique’s Treasures http://antiquehigh.CyberFair.ph Holy Trinity College Discover Sabang http://holytrinity.CyberFair.ph Local Music and Art Forms Award WINNER Centre for International Education Science and Information Technology High School Sinulog: One Beat, One Rhythm, One Nation http://sinulog.cie.edu Honorable Mention De La Salle Santiago Zobel School The Artists Entrance http://www34.brinkster.com/cf03artiste 106

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2002 Awardees March 28, 2002 Glorietta Center, Makati City

Philippine Daily Inquirer Environmental Awareness and Issues Award Catanduanes State Colleges Agojo Marine Park and Sanctuary http://www.geocities.com/ampsanctuary/ Eastern Telecoms Historical Landmarks Award Jubilee Christian Academy EDSA. One Nation with One Voice. http://www.edsa.schoolreference.com/ INQ7.Net Businesses and Organizations Award Leyte National High School Pintados-Kasadyaan http://lnhs.CyberFair.ph/ Local Attractions (Natural and Man Made) Award MSC High School San Pablo City (City of Seven Lakes) ... Streets and Historical Landmarks http://www.msc.net.ph/CyberFair_entry/ www.Iskul.Org Local Music and Art Forms Award St. Benedict College A Trip to the Artists’ Paradise http://www.stbenedict.edu/CyberFair/ Goodwill Bookstore Local Leaders Award Gregorio Araneta University Foundation PIPOL http://www.pipol.schoolreference.com/


Spotlight Attorney JJ Disini Disini & Disini Law Office http://www.disini.ph JJ is a lawyer specializing in information technology matters. He represents mobile content providers, e-commerce companies engaged in e- banking, B2B marketplaces, online services, as well as, “traditional” IT companies such as systems integrators, ISPs, and network providers. The website, http://www.disini.ph, was established in 2000 at the same time he formed his lawfirm. One of his main goals in maintaining the site is to provide legal information for those interested in various areas of the law. He continuously updates the resources section of the site by including informative materials such as an Investment Primer and an Outsourcing Primer. He was also the principal drafter of the Implementing Rules and Regulations of the E-Commerce Law - Republic Act 8792. He also wrote a position paper for the Philippine Internet Commerce Society, in support of Cebu-based CyberPromdi in 2000 to counter a proposed ordinance banning minors in Internet cafés.

individual government’s efforts may be thwarted by hackers and other liberally- minded citizens. I don’t believe the traditional courts can effectively handle multi-jurisdictional issues arising from the Net. Unless, of course, those courts are created by international agreements and some order is placed in terms of venue and jurisdiction. Still, I imagine those kinds of suits will be very expensive to litigate and very inconvenient to at least one of the parties. JT: As work-at-home arrangements are becoming popular in the Philippines, do you find companies monitoring workers-at-home for privacy violation? JJ: I’m not aware if monitoring is that effective for people who telecommute. I imagine that at best, the company can screen the person’s email. Still, in the workplace, a vast majority of employers—at least in the US—monitor computer use to avoid unauthorized surfing and other factors that affect productivity. In that respect, I believe the employer has a right to institute monitoring equipment. In the final analysis, computer resources are provided by the employer for business purposes only. As such, the employer has the right to monitor the use of those resources to ensure their proper utilization. If employees want privacy, then they should use their own computer resources—at home, for example.

JT: Since the passage of the E-Commerce Law what’s happening in the legislative arena?

JT: Is it possible for Filipinos to elect a Philippine President from the comforts of their own home or work place (especially for OFWs)?

JJ: There have been various initiatives in Congress relating to ecommerce such as the cyber crime bill, the convergence bill, and of course, the bill creating the Dept of ICT. However, there have been no new laws to date. I’m not entirely sure if this is a good thing or not. It seems to indicate that ICT isn’t much of a priority in the national agenda. However, I do believe that certain initiatives are worth pursuing. In particular, I believe a data protection and privacy law would benefit various sectors of the IT industry including the outsourcing providers as well as the public in general (whose informational privacy can be secured through the law).

JJ: Theoretically, yes. The issue of course is authentication. But that’s a common issue for all on-line transactions as well as current “off-line” election procedures in place.

JT: What’s next? Do you see tougher issues in the area of cryptography and intellectual property? JJ: I think the challenge now in the policy arena revolves around formulating a strategy for addressing various issues. There appears to be no “game plan” emanating from our policy makers with a specific agenda and action items. I think the time for motherhood statements of support and development have passed. We need to initiate steps to implement specific programs to get the industry going and ensure the continued development of the ICT sector.

JT: Do you think it’s possible in the future that there will be a candidate in national politics that will represent the Internet community? Who do you think that will be? JJ: I guess it’s difficult to say or determine who comprises the Internet community. There are users and there are business people, government officials -- all having different interests that need to be protected. I think at most, we can have a candidate with an agenda that supports various interests within the Internet community. Perhaps, that would be enough. Who would that be? Anybody who takes up the cudgels for promoting Internet use and commerce in the Philippines.

JT: Do you ever see the Internet being governed? Will it be through traditional courts or dispute resolution?

JT: Many believe the Internet changes everything about the law. Almost everyone can maximize the use of the Internet for both good and bad purposes. As a safety principle especially in legislation, what is commonly noted is that whatever is allowed in the real world should be allowed on the Internet and vice-versa. Do you think this principle will remain the rule of thumb in the next 10 years? How does this double-edged sword affect our rights and liberties?

JJ: Internet governance is far too complex to have a ready answer. Overall, I do believe that the use of technology (probably through private contracting) remains the strongest source of regulation on the Internet. The best example is the Uniform Dispute Resolution Policy (UDRP) of ICANN which effectively legislated protection to trademark owners against cybersquatting. In a mix of private contracting and technological control, UDRP has been an unqualified success. I think there are important lessons in that experience relating to Internet governance. Of course, a government can take an extreme position, similar to China where ISPs are heavily regulated in order to block access to “offensive” sites. In the final analysis, the success of government control depends on many factors and an

JJ:It’s not so much a rule of thumb as a stop-gap measure. The advent of the Internet and the pace at which adoption and usage has grown over the past years has far outpaced Congress. Making laws is a deliberate and deliberative process that cannot possibly be done in Internet time. So, in the absence of any pronouncements from Congress, the courts have no choice but to apply existing laws to new situations—with varying success. I believe this will continue but I also believe that the process is continually improving as the legal analysis improves and legal experts come to understand the peculiar issues the Internet brings to the law. On the whole, I wouldn’t be too concerned about our rights and liberties. I don’t think excessive regulation is in the offing and those of us online should be free from restrictions for years to come.

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The E-Commerce Law Policy Advocacy Process Petite is a fresh graduate from the University of the Philippines, Los Baños (UPLB) with a degree of Bachelor of Science in Development Communication, major in Development Journalism.   She’s  a member of the Gamma Sigma Delta Honor Society of Agriculture , an organization whose main objective is to encourage high standards of scholarship and worthy attainment in agriculture and related sciences.

By Petite Nuñez “The passage of the E-Commerce Law is a living proof that the Internet, if used well, can be an enabling tool for policy advocacy. This landmark law is the only law in the country to date that was supported by numerous sectors throughout the country. The passage of the law is seen as a great catalyst for leveling the playing field, benefiting SMEs and Filipinos worldwide.” – Janette Toral

A

t this time and age, the size of an organization does not guarantee its success. The organization’s achievement will depend on how fast its plans are implemented and how it makes use of the first-mover advantage. Andy Grove of Intel said that in five years all companies will be Internet-based or nothing at all. With these implications, the Electronic Commerce Act (Republic Act No. 8792; E-Commerce Act) paved the way for local companies to examine themselves and their place in the New Economy. It should be emphasized that the passage of the Act is but the first step in the government’s efforts to secure the country’s place in the New Economy (Disini, et al, 2000). The E-Commerce Act is an important piece of legislation for the Philippines. As intended, the passage of the Act has opened the door for investments in Information Technology projects as well as a number of back-door listings in the Philippine Stock Exchange. Consequently, companies became interested in electronic commerce and they have been forced to deal with the changes brought about by the New Economy (Disini, et al, 2000). On June 14, 2000, President Estrada signed the E-Commerce Act (Republic Act No. 8792), “An Act Providing for the Recognition and Use of Electronic Commercial and Non-commercial Transactions, Penalties For Unlawful Use Thereof, And Other Purposes.” On July 13, 2000, the “Implementing Rules and Regulations of the E-Commerce Act” was likewise signed (FavisVillafuerte, 2001). Estella (1997), one of the authors of the book Uncovering the Beat, wrote, “There are bills – and bills. Some find their way to the front pages; most don’t. Some became the subject of heated debates from the time they are taken up in the committees to the time they are debated on by the plenary body; others never see the light of day.” The thrusts of the E-Commerce Act (RA No. 8792) have been contentious even before the first bill was drafted. Bills, according to Reyes (1998), “must be beautifully packaged through communication strategies

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that can influence the passage of a bill into a law.” The advancement of a bill into a law has always been a dance between talent and politics, with the use of various communication strategies. There are as many communication strategies to process a bill, as there are individual policy-makers. With the growing popularity of computers, Internet, and e-commerce, comes the greater need for the ECommerce Act to be enacted into a law. Assuming that a policy-maker has relevant knowledge and is openminded, the problems of bridge design arise. Thus, the question: What form/s of communication strategies did the policy advocates of the E-Commerce Act use to communicate their policy idea? This study focused on the progress of the ECommerce Act from its emergence as a bill, to its status as a law. It zeroed in on the communication strategies the policy-makers employed during the passage of the E-Commerce Act. Salient Features of the E-Commerce Act Republic Act No. 8792, “An Act Providing for the Recognition and Use of Electronic Commercial and Non-commercial Transactions, Penalties For Unlawful Use Thereof, And Other Purposes,” is popularly known as the Electronic Commerce Act or E-Commerce Act. As stated in the Section 3 of the E-Commerce Act: This Act aims to facilitate domestic and international dealings, transactions, arrangements, contracts and exchanges and storage of information through the utilization of electronic, optical and similar medium, mode, instrumentality and technology to recognize the authenticity and reliability of electronic data messages or electronic documents related to such activities and to promote the universal use of electronic transactions in the government and by the general public. The salient features of the E-Commerce Act are the following (Favis-Villafuerte 2001: 161-163): a) The provisions of the law apply to both commercial and non-commercial transactions whether the transactions are international or domestic in scope; b) Electronic data messages and electronic documents have now the same legal status as paper/written documents including its admissibility as evidence; c) Electronic signatures have now the same legal status as manually-signed signatures; d) Government offices will perform their functions and conduct business electronically within two years from the effectivity of the law; e) The Supreme Court is given authority to come out with rules on electronic notarization;

philippineinternetreview f) The installation within two years from the effectivity of the E-Commerce law of a government-wide electronic on-line network that will facilitate the on-line interaction between government agencies and the general public; g) As a general rule, service providers incur no civil or criminal liability for providing some access to electronic data message or electronic documents; h) For the Department of Trade and Industry (DTI) to direct and supervise the promotion and development of electronic commerce in cooperation with other government agencies; i) For the DTI to issue rules and regulations establish quality standards or issue certifications to give effect to the provisions of the E-Commerce law; j) There are penalty provisions for hacking; piracy of intellectual property rights; violations of the consumer law and other laws as well – for transactions that involve electronic data messages or electronic documents; k) The DTI, Department of Budget and Management (DBM) and the Bangko Sentral ng Pilipinas (BSP) are mandated to enforce the provisions of the E-Commerce Law in coordination with the Department of Transportation and Communications (DOTC), National Computer Center (NCC), National InformationTechnology Council (NITC), Commission on Audit, other concerned agencies and the private sector; l) A Congressional Oversight Committee composed of the Committees on Trade and Industry, Commerce, Science and Technology, Finance, and Appropriations in the Senate and House of Representatives shall monitor the implementation of the E-Commerce Law and shall meet every quarter for the first two years and every semester for the third year after the approval of the E-Commerce Law; m) The three government agencies implementing the E-Commerce Law [as mentioned above] are also required to submit to the Congressional Oversight Committee a quarterly performance report for the first three years; n) Parties to a contract involving electronic data message or electronic document may agree to modify any provision of the E-Commerce Law; and o) Benefits conferred by the provisions of the ECommerce Law including the practice of profession may be conferred to other nationalities of countries that grant the same benefits to Filipino citizen. Policy advocacy process The E-Commerce Law policy advocacy groups utilized numerous communication strategies during the various stages (i.e. from first reading up to the bicameral conference) of the E-Commerce bill in both Houses. The advocacy strategies are face-to-face, testimonies, networking, alliance building, tapping key legislators, and using mass media. The elements of the advocacy process in this study are: a) the legislators and interest groups; b) the advocacy strategy/ies; and c) the E-Commerce Act. Interplay of each element in the policy advocacy process of the E-Commerce Act (Figure 1) starts from the advocates who drafted the bill. Advocates could either be an interest group that stands to gain from its passage, or the congressional representative or senator with a constituency to serve. The conveyor of interests or advocate used one or several of the communication strategies earlier

• Legislators • • Interest Groups •

Figure 1. Framework of the policy advocacy process of the E-Commerce Act

Advocacy/ Communication Strategies: • Face-to-face • • Testimonies• • Networking • • Alliance Building • • Tapping Key Legislators • • Use of Mass Media •

E-Commerce Act

stated, to promote and accelerate the passage of the E-Commerce Act into a law. Evolution of the E-Commerce Act The Electronic Commerce Act (Republic Act No. 8792; the “E-Commerce Act”) is the merged version of House Bill No. 9971 (HB 9971) and Senate Bill No. 1902 (SB 1902). The primary authors and sponsors were Senator Ramon Magsaysay, Jr., Representatives. Leandro Verceles, Jr. and Marcial Punzalan, Jr. Co-Authors of the Act who filed electronic commerce bills were Senators Juan Flavier, and Blas Ople and Representatives Harry Angping, Roilo Golez and Dante Liban. Other co-authors include Sen. Vicente Sotto III, Franklin Drilon, Francisco Tatad, Raul Roco, Aquilino Pimentel Jr., Miriam Defesor-Santiago and Representatives Herminio Teves, Magtanggol Guinigundo, Rolando Sarmiento, Orlando Fua, Joey Salceda, Oscar Moreno, and Ignacio Bunye. Senate Bills Four bills were filed in the Senate in relation to ecommerce: a) Senate Bill No. 10, “AN ACT PROMOTING THE USE OF ELECTRONIC DATA INTERCHANGE (EDI) IN TRADE TRANSACTIONS AND FOR OTHER PURPOSES”, authored principally by Senator Juan M. Flavier on June 30, 1998; b) Senate Bill No. 1184, “AN ACT PROVIDING FOR AN ELECTRONIC COMMERCE LAW AND FOR OTHER PURPOSES”, introduced by Senator Juan M. Flavier on Sept. 10, 1998; c) Senate Bill No. 1523, “AN ACT PROVIDING FOR AN ELECTRONIC COMMERCE LAW AND OTHER PURPOSES”, introduced by Senators Ramon B. Magsaysay, Jr., Vicente Sotto III, Juan Flavier, and Blas Ople on March 25, 1999; and d) Senate Bill No. 1902, “AN ACT PROVIDING FOR AN ELECTRONIC COMERCE LAW AND FOR OTHER PURPOSES” Feb. 15, 2000. The first bill on electronic commerce was filed in 1992. It was called the Electronic Data Interchange (EDI) bill and was re-filed as Senate Bill No. 10 (SB 10) during the 11th Congress. However, when the United Nations Commission on International Trade Law (UNCITRAL) Model Law on Electronic Commerce (Model Law) was adopted, the EDI bill was abandoned in favor of the Model Law framework. Besides, the EDI bill was considered technology-specific and

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Table 1. Timeline of the passage of E-Commerce Act at the Senate Date

Senate

1992

Electronic Data Interchange (EDI) bill

June 30, 1998

EDI re-filed as Senate Bill No. 10 (SB 10) during the 11th Congress

Sept. 10, 1998

Senate Bill No. 1184 was introduced by Sen. Flavier

March 25, 1999

Senate Bill No. 1523 was introduced by Sen. Magsaysay Jr. et al.

Feb. 15, 2000

Senate Bill 1902 was read on first reading and referred to the Committee(s) on Trade and Commerce; and Science and Technology Returned and submitted jointly by the Committee(s) on Trade and Commerce;

and Science and Technology recommending its approval without amendment

Feb. 16, 2000

Bill on Second Reading

Feb. 21, 2000

Start of interpellation

March 7, 2000

The conclusion of interpellations for SB 1523 After the conclusion of interpellations for SB 1523, the bill was referred back to the Committees on Trade and Industry and Science and Technology where it was replaced by SB 1902. Start of period of committee amendments

March 15, 2000

Period of committee amendments closed

March 21, 2000

Start of period of individual amendments

April 4, 2000

Period of individual amendments closed

April 10, 2000

Approved on Second Reading with amendments

Bill on Third Reading SB 1902 was approved

if passed, might inadvertently promote the use of a declining technology, EDI. In addition, it was felt that given the long and tedious legislative process in the Philippines, a technologyneutral law would provide more stability inasmuch as it can adapt to and withstand advances in technology. The Model Law was thus incorporated in Committee Report No. 34 and Senate Bill No. 1523 (SB 1523). In addition, the Electronic Transactions Act of Singapore (ETA) was considered as suggested by several participants in the technical working group. The ETA, at that time, had just been passed in Singapore and it was believed that innovations in that statute would prove beneficial in the Philippine setting. After the conclusion of interpellations for SB 1523, the bill was referred back to the Committees on Trade and Industry and Science and Technology where it was replaced by SB 1902. SB 1902 departs from SB 1523 in that provisions of the ETA were minimized and the bill reverted back to the framework of the Model Law. This revision was prompted by concerns that since the Philippine judicial system frequently adopt US case law; conflicting Singaporean jurisprudence on the ETA might unduly confuse the issues on what is already considered a complex area of the law. However, the SB 1902 did not undergo the usual process wherein once the report reverted to the committee, the committee had in its possession an original measure that should have been heard, as though there had been no previous hearings beforehand. The Senate President clarified that it would not, as there were instances in the past where the Body, in order to facilitate the proceedings, discussed the draft of a bill as of a certain date without referring it back to the committee. In this instance, he said that the Rules of the Senate (Rule XI, Section 32) was presumed to have been suspended to allow the Body to debate on a new draft. 110

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It is significant to point out that all debates in the Senate regarding the Act referred to SB 1523 not SB 1902. SB 1902 was approved on April 2000 (Table 1). House Bills During the first regular session of the 11th Congress, there were four bills on e-commerce initially filed in the House to the Committee on Trade and Industry for consolidation: a) House Bill No. 1756, “AN ACT PROMOTING THE UTILIZATION OF ELECTRONIC DATA INTERCHANGE IN TRADE TRANSACTIONS, AND FOR OTHER PURPOSES,” which was introduced by Representative Harry C. Angping on Sept. 14, 1998; b) House Bill No. 4123 “AN ACT PROMOTING AND ENHANCING ELECTRONIC COMMERCE, USE OF ENCRYPTIONS IN TRADE AND INDUSTRY, IN GOVERNMENT AND FOR OTHER PURPOSES,” introduced by Representative Roilo R. Golez on Oct. 12, 1998; c) House Bill No. 7104, “AN ACT PROVIDING FOR AN ELECTRONIC COMMERCE LAW, AND FOR OTHER PURPOSES,” which was introduced by Representative Leandro B. Verceles, Jr. on March 24, 1999; and d) House Bill No. 8046, “AN ACT PROVIDING FOR AN ELECTRONIC COMMERCE LAW, AND FOR OTHER PURPOSES,” which was introduced by Representative Marcial C. Punzalan, Jr. on Aug. 4, 1999. Representatives Punzalan and Verceles filed separate bills which were copies of SB 1523. At the same time, Committee Report No. 34 and SB 1523 were filed in the Senate. After the above bills have been subjected to several committee hearings

philippineinternetreview with both government and the private sector providing their inputs and comments, the Committee on Trade and Industry came up with a substitute bill on the above e-commerce measures on March 7, 2000. This substitute bill was subjected to further comments and refinements and eventually led to House Bill No. 9971 (HB 9971) – “AN ACT PROVIDING FOR PROTECTION OF ELECTRONIC COMMERCIAL TRANSACTION, PENALTIES FOR UNLAWFUL USE THEREOF AND FOR OTHER PURPOSES” – which was jointly approved by the Committee on Trade and Industry and the Committee on Science and Technology on March 22, 2000. HB 9971 was spearheaded by Rep. Harry C. Angping. It is the consolidated version of the bills filed in the House, and was presented and deliberated upon by the House in May 2000. The bill was approved by the House on June 6, 2000 (Table 2). Bicameral Conference Committee Tasked with reconciling the provisions of HB 9971 and SB 1902, the Bicameral Conference Committee convened on June 7, 2000 in Manila Hotel. Senators Magsaysay, Roco and Flavier represented the Senate panel and Congressmen Punzalan, Verceles, Angping, Moreno, and Sandoval represented the House panel. The rule, “any provision appearing in one version which does not appear in the other” was adopted in the final report. Interestingly enough, since HB 9971 did not abandon the provisions of the ETA (as distinguished by SB 1902), these provisions found their way back to the final version of the Act. In the

case of conflicting provisions in both HB 9971 and SB 1902, these were resolved through discussion. The report of the Bicameral Conference Committee was issued on June 7, 2000 and approved by the House later that evening. On June 8, 2000, the Senate approved the same report. After the bill has been enacted and approved by both Houses, it was endorsed to the Office of the President for signing. The Electronic Commerce Act (Republic Act No. 8792) was signed into law on June 14, 2000 (Table 3). Stages of the Policy Advocacy Process The role of the Congress must be, as mentioned by Senator Ramon B. Magsaysay, Jr., the Chairman of the Committee on Trade and Commerce in the Senate, “Not to pose any obstacle to e-commerce or the growth of EDI (Electronic Data Interchange) in trade transactions. If it cannot help at all, it must, at least, not hinder.” Senate Version During the 11th Congress, the principal author of the re-filed EDI bill, Senate Bill No. 10 (SB 10) and Senate Bill No. 1184, was Senator Juan M. Flavier. However, Senator Flavier believed that there were others who had better technical competence at discussing the bill better than the knowledge he possesses. Consequently, he let Senator Ramon B. Magsaysay, Jr., then the Chairman of the Committee on Trade and Commerce in the Senate take over the passage of the bill. Senator Flavier’s acknowledgment of his limited knowledge about the EDI was apparent in the committee meeting

Table 2. Timeline of the passage of E-Commerce Act at the House of Representatives Date

House

Sept. 14, 1998

HB 1756 was introduced by Rep. Angping

Oct. 12, 1998

HB 4123 was introduced by Rep. Goilez

March 24, 1999

HB 7104 was introduced by Rep. Verceles

Aug. 4, 1999

HB 8046 was introduced by Rep. Punzalan

March 7, 2000

The Committee on Trade and Industry came up with a substitute bill on the ecommerce measures, HB 9971

March 22, 2000

HB 9971 was jointly approved by the committee on Trade and Industry and the Committee on Science and Technology Both Committees submitted HB 9971 for approval in substitution to HB 1756, HB 4123, HB 7104, and HB 8046

April 5, 2000

Start of period of sponsorship

April 7, 2000

Certified as urgent I Love You Virus

May 17, 2000

End of period of sponsorship

May 24, 2000

Start of period of interpellations

May 2000

HB 9971 was presented and deliberated upon by the House

June 5, 2000

End of period of interpellations

June 6, 2000

Period of committee amendments Period of individual amendments Third reading HB 9971 was approved by the House Transmitted to the Senate

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Table 3. Timeline of the passage of E-Commerce Act at the Bicameral Conference Committee

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Date

Bicameral Conference Committee

May 8, 2000

Certified by the President of the Philippines for immediate enactment on April 7, 2000

June 7, 2000

Bicameral Conference on the disagreeing provisions of SB No. 1902 and House Bill No. 9971 The report of the Bicameral Conference Committee was approved by the House later that evening

June 8, 2000

The Senate approved the Bicameral Conference Committee report and the Act was referred to the Office of the President for Signing.

June 14, 2000

The Electronic Commerce Act (Republic Act No. 8792; the “Act”) was signed into law by then President Joseph Ejercito Estrada

of the Committee on Trade and Commerce joint with Committee on Science and Technology on Sept. 9, 1998: SEN. FLAVIER. … I am not an information technology person. I am, as everyone probably knows, a medical doctor and a rural development worker. In fact, I have difficulty distinguishing between a mouse and a rat, a CD rom and a CD or Christian Dior perfume, a megabyte and a love bite. In fact, my nine-year old grandson knows more about the computer than I do.

The Chairman. …go through this bill and not be limited by what you see in the bill but you see what is needed to encourage, simplify and make the country even as competitive as Singapore. Don’t be afraid to copy. We don’t have to be the pioneers. But if you look at the more advanced countries, let us find out what are the good things, and then our own local input. But when I say simplify, if you can say it in one page, you say it. That is an attention to the lawyers. If you can say it in half page, even better, as long as the message is there…

In one of the public hearings in September 1998 conducted by the Committee on Trade and Commerce joint with the Committee on Science and Technology, the chairman, Senator Magsaysay, Jr. expressed that the private sector should spearhead the promotion of the use of e-commerce in the Philippines. This was supported by many of those in the private sector. When the United Nations Commission on International Trade Law (UNCITRAL) Model Law on Electronic Commerce (Model Law) was adopted, the EDI bill was abandoned in favor of the Model Law framework. In addition, the Electronic Transactions Act of Singapore (ETA) was considered as suggested by several participants in the technical working group. The members of the Technical Working Group (TWG) who worked closely with the Committee Technical Staff led by Atty. Sofronio Larcia and Atty. Rodolfo Noel Quimbo of the Office of Senator Juan M. Flavier were Mrs. Janette Toral of the Philippine Internet Commerce Society and its members; Mr. Gamaliel Pascual of the E-Commerce Promotion Council; Mr. Paul Brown of the US Embassy; Mr. Albert dela Cruz, Director General Ike Señeres of the National Computer Center; and the Department of Trade and Industry. According to Janette Toral, a member of the TWG and the founder and then president of the Philippine Internet Commerce Society (PICS) – an organization whose primary mandate is to push for the passage of the E-Commerce law – in making provisions for the law, they deliberated on which provisions of the model laws they got (Singapore and US) were better. Having decided which one is more appropriate, they copied it, fixed it, then gave it during the deliberation/lobbying. This approach was encouraged by Senator Magsaysay, Jr. (Sept. 17, 1998 Public Hearing conducted by the Committee on Trade and Commerce joint with the Committee on Science and Technology):

Since it was difficult to explain the concept individually to the senators, and it was complicated to expound technical concepts in layman’s term, AGILE, one of the interest groups came up with a simple publication— the E-Primer: An introduction to E-commerce. This was a primer on frequently asked questions on ecommerce from that technical and operational side of it, up to the legal issues concerned in e-commerce transactions. This was released on January 2000 and was distributed to the senators and their staff. However, after several deliberations, the process was stalled by Senator Raul S. Roco who, according to Toral, “requested another version”. The interpellation of Senator Roco was manifested in the Senate’s Journal of Feb. 1, 2000: Senator Roco believed that the bill would be difficult to understand considering that Singapore law has different roots in terms of legal development. He inquired why Singapore was particularly chosen instead of the standard references. Likewise, he asked on the jurisprudence that would prevail in legal cases—that of Singapore, that of the international community by usage, custom or convention, or as understood by the United Nations’ agencies. Accordingly, in two days, they revised everything and submitted another technical committee report. The Model Law, having been adopted, was incorporated in Committee Report No. 34 and Senate Bill No. 1523 (SB 1523), “AN ACT PROVIDING FOR AN ELECTRONIC COMMERCE LAW AND OTHER PURPOSES.” SB 1523 was filed by Senator Magsaysay, Jr.

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First Reading Nothing much happened during the first reading of SB 1523. Here, the bills were announced and their numbers and titles were read before the plenary body. Afterwards, the Speaker or the Senate President referred it to a particular committee to

philippineinternetreview which the proposed measure is assigned. According to Atty. Rudy Quimbo, one of the members of the TWG and the Chief of Staff of Senator Flavier, the bill was referred to the committee of Senator Magsaysay, Jr. - the Committee on Trade and Commerce. Since Senator Magsaysay, Jr. was the one who defended the bill on the floor. Thus, the E-Commerce Act is most of the time identified with him. Nevertheless, the first reading took quite some time because Senator Magsaysay, Jr. conducted many hearings. Atty. Quimbo cited two main reasons: there were other bills that were competing with it and there was the “fear of the unknown” among the senators. Their greatest enemy was, more than anything, ignorance. Atty. Quimbo’s sentiment about the senators’ “fear of the unknown” was resounded by Atty. Suharni Samanodi, Head of the Congressional Oversight Committee on E-Commerce Secretariat and the Chief Technical Officer of the Office of Senator Magsaysay, Jr. “One basic problem that we had before was that it (e-commerce) was not easily understood by a lot of people. …it was new and technology is not really practiced by most of the senators – actually, the elderly ones.” Consequently, Senator Magsaysay, Jr. had a difficult time hammering the new concept so that it will be acceptable to everybody. Second Reading With the senators, properly educated through their staff members, comes the bombardment of questions during the second reading. Atty. Quimbo recounted that they had difficulty during this stage, only in the sense that many senators participated, “...marami ng tanong sa floor. Marami nang gustong i-amend. Syempre they were gaining knowledge also from the Internet, getting materials... (...there were many questions on the floor. They wanted to amend a lot of things...)” He further added that, “they (senators) were trying to put certain provisions which they felt were important but which we (TWG) felt were provisions that would only create even greater confusion.” There were certain provisions the TWG felt should not have been included and they were successful in making sure that the bill was not cluttered, “I think about 85 to 90 percent of that, we were successful in making it as much as possible “hue” to the original version, which was the UNCENTRAL model.” Still, he emphasized that it was not perfect. Other senators also complained about its being too technical. However, it could not be avoided because it really had technical components. To build alliance with senators, one of the tactics employed by Senator Magsaysay, Jr. during the second reading was flattery: Senator Roco:… Would the distinguished gentleman yield to questions that I have been asked to study? Senator Magsaysay: Very willingly, Mr. President, from the sage of the Bicol Region, the highest-placing presidential candidate in 1998 in the demographics of class A and B, including the youth, having been the top. Senator Roco: Mr. President, I am about to sit down because as we all know, in this Hall, flattery will get us everywhere. [Laughter] However, since most of the members of the senate of the 11th Congress were lawyers, Senator Magsaysay,

Jr.’s stature as an engineer was belittled in a subtle way and they challenged the legal parlance of the Act: Senator Roco: We have total trust in the staff, Mr. President. I am just calling attention to some notions that they may wish to adopt. Now, as for “hacking,” may we suggest also that the staff revisit the definition? Again, we lawyers are always prone to defining by enumeration. But since hacking is one of the criminal acts we penalized, we may want to definitely state the elements. Because we are penalizing. So we cannot just go by enumeration. Again, I just leave that, Mr. President. I am just calling attention to them by way of drafting, if we may do so. Senator Roco: Now, Mr. President, I will ask a series of questions and I will leave it to the sponsor to answer. I am really leading him to the answers, but again this is for the lawyers who will read the record. When we say “accessible” in Section 9, what exactly do we mean? Downloaded? And if it is secured, secured with permission. If it is coded, what exactly do we mean by “accessible”? To get the support of Senator Roco, Senator Magsaysay, Jr. acknowledged and welcomed his amendments during the discourse. Also, he emphasized the Information Technology (IT) title of the former: Senator Magsaysay: That is a welcome statement from the gentleman from Camarines Sur, who is also a champion of IT and e-commerce. On March 28, 2000, One Internet Day was held in the Senate. This was an event conceptualized by PICS, one of the interest groups, with the support of Senator Magsaysay Jr. It was held as a lobbying battle cry for the passage of the E-Commerce Law. Free seminar, food, technology exhibit, and entertainment were offered during the event. It carried the theme “Internet Para Sa Lahat”. Senator Magsaysay Jr. and sponsors provided the necessary resources to make the event highly successful that allowed PICS to accommodate close to 300 attendees. As a tactic Toral—the founder of PICS and one of the advocates—said they invited all the senators to drop by and say a few words and somehow get a verbal commitment that they support the passage of the E-Commerce Law. After the conclusion of interpellations for SB 1523 on March 2000, the bill was referred back to the Committees on Trade and Industry and Science and Technology where it was replaced by SB 1902. SB 1902 departs from SB 1523 in that provisions of the ETA were minimized and the bill reverted back to the framework of the Model Law. It is significant to point out that all debates in the Senate respecting the Act referred to SB 1523 not SB 1902. Nevertheless, after several measures were done to educate the senators about the e-commerce, there were still several issues that were not comprehensive to some during the second reading and the period of interpellation. Illustrations of this were another discourse between Senator Roco and Sen Magsaysay, Jr. during the second reading: Senator Roco: Yes, Mr. President. I am sure the staff—they were nodding their heads— caught that part of the introductory paragraph of UNCITRAL.

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philippineinternetreview The variation by agreement is also one that I have difficulty understanding. If it can be explained a little. I do not understand why it is here. In fact, I do not know what it is saying. It is difficult. It says: As between parties involved in generating, sending, receiving, storing or otherwise processing data message, and except as otherwise provided, the provisions of Part II, Chapter III, may be varied by agreement. I honestly could not identify, unless it means communication of data messages. I cannot figure it out. And the discourse of then Senator Teofisto T. Guingona, Jr. with Ike Señeres, the director general of the National Computer Center, and Gamaliel Pascual of the E-Commerce Promotion Council about some provisions on March 15, 2000, during the period of interpellation: Senator GUINGONA: Itong “by other means,” I don’t know what this means, or by other means, very, very soft. MR. SEÑERES: I think the reason why it is there, Senator, is… Senator GUINGONA: I know that, technology is progressing. I mean, it’s very hard to put it down and just that… MR. PASCUAL: But I guess the allowance there is, as the technology improves, there may be other means for storing. To help the senators further understand the concepts, Senator Magsaysay, Jr. and the policy advocates used examples and comparisons during their explanations (interpellation, March 15, 2000): SEN GUINGONA: All right, electronic signature refers to any distinctive mark, characteristic or sound. What is sound? How will that represent signature? MR. PASCUAL: I’ll give you an example, Senator. For example, let’s say, in the US Justice system, the Parole Board verifies the parolees by…You have to dial up into a 1800 to report, but the computer actually verifies your voice print. It actually verifies, it checks the caller ID. For example, if you have to stay in Kansas, it will check very quickly that, “Yes, that is the area code for Kansas. Yes, that is the voice print of Liel Pascual.” MR. PASCUAL: (talking to Senator Guingona). I’ll show you another example. When we talk about electronic signatures, we have to agree mutually. This is another method. This is what they call a hard token wherein this generates a sequence every 60 seconds. This ID which is registered to me. That’s the one we are using for the Small Investors’ Program wherein the Bureau of the Treasury knows with certainty that that is coming from me because this is a unique number being generated every 60 seconds. Third Reading This is an excerpt from the “EXPLANATION OF VOTE OF SENATOR MAGSAYSAY”: Senator Magsaysay: Mr. President, this is a very brief explanation. It took us almost two years since 1998 to discuss the e-commerce bill in three public hearings, and more than six formal technical working group meetings, and other informal discussions conducted in my office by the TWG, up to its approval today on Third Reading. The passage in this august Chamber of the ecommerce bill, Senate Bill No. 1902, has been awaited by all sectors which actively participated and worked hand in hand with the Committees on Trade and Commerce; the Science and Technology… 114

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The result of the voting on the Third Reading on SB 1902, “AN ACT PROVIDING FOR AN ELECTRONIC COMMERCE LAW AND FOR OTHER PURPOSES” was 16 affirmative votes, no negative vote, and one abstention. With this, Senate Bill No. 1902 was approved on Third Reading on April 10, 2000. House Version During the first regular session of the 11th Congress, there were four bills on e-commerce initially filed in the House to the Committee on Trade and Industry for consolidation: HB 1756, HB 4123, HB 7104, and HB 8046. After the above bills have been subjected to several committee hearings with both government and the private sector providing their inputs and comments, the Committee on Trade and Industry came up with a substitute bill on the above e-commerce measures on March 7, 2000. This substitute bill was subjected to further comments and refinements and eventually led to House Bill No. 9971 (Committee Report No. 685) – “AN ACT PROVIDING FOR PROTECTION OF ELECTRONIC COMMERCIAL TRANSACTION, PENALTIES FOR UNLAWFUL USE THEREOF AND FOR OTHER PURPOSES” – which was jointly approved by the Committee on Trade and Industry and the Committee on Science and Technology on March 22, 2000. First Reading Similar to the Senate, HB 9971 was announced during the first reading and its number and title were read before the plenary body. During floor deliberations, the policy advocates were there to aid the congressman who will be defending the bill. Zorayda Andam, a project associate for e-commerce ans a representative of AGILE (a US funded project), related that if there were questions that were not included in their prepared anticipated questions and answers, the congressman would buy time until they finished their suggested answer and were able to hand it over, “we also had index cards prepared.” It was also during this time that the TWG and policy advocates really saw the need to explain how e-commerce really come into play because they observed that the congressmen were having a hard time understanding concepts as they (congressmen) ask the questions. With this, copies of the E-Primer: An introduction to Ecommerce were also distributed in the House. On the other hand, during the period of sponsorship in the House, the bill was certified as urgent by then Pres. Joseph Estrada. According to Andam, one of the policy advocates, at the House, it was certified during the advent of the “I Love You” virus. Popularly called “love bug,” the “I Love You” virus wreaked billions of dollars worth of havoc on thousands of computers worldwide in May 2000. In an online article written by Helen S. Andrade-Jimenez (2001) entitled “Preventing the ‘Love Bug’ from biting again,” she reported that: Philippine authorities were in quandary on what charges to file against the suspect, former AMA computer student Onel A. De Guzman, for being responsible for the spread of the virus. The worm affected Windows-based computer systems on May 4 (2000) through an e-mail attachment with the subject line ‘I Love You.’ The love bug overwrote files on local and remote drives, including document, music and image files. “Industry estimates peg that at least 45 million

philippineinternetreview computers around the world were infected by various strains of the virus,” she said further. Andam recalled that the virus really facilitated the readings and the discussions on the floor. This was reaffirmed by Toral, “nakatulong din yung lumabas yung kay Onel De Guzman, yung I Love You Virus. Kasi nasa kalagitnaan na kami noon.” (talks about the “I Love You” virus helped the House. Although Representative Marcial C. Punzalan, Jr. was the committee head, it was Representative Leandro G. Verceles who defended the bill during the floor deliberations. As Andam related, Representative Punzalan believed that Representative Verceles is more knowledgeable about the topic than he is. Consequently, he turned over the defense of the HB 9971 to Representative Verceles. Second Reading Sometime in May, a One Internet Day at the House was also held. Similar to the event at the Senate, it was held as a lobbying battle cry for the passage of the ECommerce Law. During the second reading, Representative Verceles employed an unusual but striking introduction to his sponsorship speech on the measure being discussed. Addressed to the deputy speaker, Representative Fuentes after being recognized: Representative Verceles: Thank you, Madam Speaker. “I love you”, Madam Speaker. I like to tell you again, “I love you,” Madam Speaker. The Deputy Speaker (Representative Fuentes): I am hearing you loud and clear. Representative Verceles: Madam Speaker, however, this is not an amorous or intimate invitation. This is the name of the bug, a computer bug, that had recently plagued the computer industry in the last few days… During his sponsorship, he also quoted the Far Eastern Review: Representative Verceles: … In this Far Eastern Review, September 2 issue… it said there that there are only two countries in this world outside of the western world which are on the right time and the right place to gain the momentum in Information Technology and to gain the benefits of the information economy of e-commerce, one is India and the other is the Philippines. India is about one decade ahead of us. They are now into e-commerce. The toughest part in the passage of the E-Commerce Act in the House, according to Andam, was the Second Reading. This was because it was the part where they accepted amendments. During the time where certain provisions in the bill were referred for committee amendments, Andam and other policy advocates gave pieces of advice, comments and proposals to the Committee on Trade and Industry. She narrated that they, the policy advocates, were able to establish that kind of confidence with the committee. Thus, the committee listens to them. One of the reasons why the committee trusted them was because they do not just negate a certain provision; they give and explain their reasons why certain provisions should not be included in the bill due to its legal implications. Some provisions would complicate the situation, and they were barring those provisions to prevent it from happening.

Third Reading During this stage, Representative Punzalan was the one who read the proposed provisions before it was brought to the Bicameral Conference. With 160 affirmative votes, 11 negative votes, and 0 abstentions, HB 9971 was approved by the House on June 6, 2000 and was transmitted to the Senate. Before the Bicameral Conference Since the Senate version of the bill came out first, the TWG of the House during this stage, together with some of the policy advocates, already made sure that the Senate version and the House version were fairly consistent. There were some provisions in the Senate version that were, as said by Andam, “troubled waters” which had unfavorable legal implications. What the policy advocates did was to make a counter provision on the House version. One of these was the provision on tax. “Yung counter provision eh napasa sa House, ngayon, at least yun yung mga ide-deliberate nila doon sa Conference Committee. (The counter provisions passed in the House are the ones being deliberated on by the Conference Committeee.) We had to do that,” Andam explained. She added that they had to have foresight, “if you do not want any provision in the Senate version, eh lumabas, gawa ka ng counter provision dito sa House. So alam mo, may coordinating work involved doon.” Accordingly, there was not much discussion when it came to the Bicameral Conference. Conference Committee Deliberations Tasked with reconciling the provisions of HB 9971 and SB 1902, the Bicameral Conference Committee convened on June 7, 2000. Senators Magsaysay, Roco and Flavier represented the Senate panel and Congressmen Punzalan, Verceles, Angping, Moreno, and Sandoval represented the House panel. As a rule, any provision appearing in one version which does not appear in the other, is adopted in the final report. This was suggested by Senator Roco: Senator Roco: Well, if there is a provision from the House or from the Senate version that does not conflict with anyone, we will just combine it. In the areas where you have a provision and they have a provision and they are just based on words, the staff can clean it up. But the staff must identify where there is a policy difference, hindi ba? And then we sit down again after, let’s say, two hours or three hours, to clean up or even just authorize the Chairmen to work it out. While the staff was combining the rest, the committee discussed the contentious issues. In the case of conflicting provisions in both HB 9971 and SB 1902, these were resolved through discussion. The counter provision on tax made by the policy advocates of the House was one of the issues deliberated upon: THE CHAIRMAN (REP. PUNZALAN): So, we do not intend to impose new taxes on e-commerce transaction, likewise, I think the Senate intends to… THE CHAIRMAN (Senator MAGSAYSAY): That is the intention of the Senate although it did not

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philippineinternetreview contain any terms like existing. But I think the House version is more specific… They eventually erased the provision. The report of the Bicameral Conference Committee was issued on June 7, 2000 and approved by the House later that evening. On June 8, 2000, the Senate approved the same report. After the bill has been enacted and approved by both Houses, it was endorsed to the Office of the President for signing. The Electronic Commerce Act (Republic Act No. 8792) was signed into law on June 14, 2000. Communication Strategies In the case of the E-Commerce Act, the following advocacy or communication strategies were employed to various extents: face-to-face, testimonies, networking, alliance building, tapping key legislators, and use of mass media. Face-to-Face Similar with Reyes’ (1998) study, this study found out that face-to-face contacts occur most often with staff members of the legislators than with representatives and senators. This was largely due to the constraints in getting an appointment with members of the Congress since demands on their time were tremendous and actual meetings with them were preceded by delays, procrastinations, and postponements. Consequently, the advocates would feel presumptuous to talk to a legislator straight unless they were asked. Thus, the advocates went to the legislators through their staff members. Atty. Quimbo emphasized, “Staff ang aming tutukan, isa-isa. (We had to Zero in on the staff members).” Although this strategy was employed all throughout the advocacy process, this was foremost employed before the Second Reading of the bills wherein the advocates educated the staff of the senators and congressmen who were in charge of the bill. Educating the staff was conducted through seminars and lectures. Likewise, educating them was done by dining them out of their office building where there would be guests to deliver lectures on the importance of the E-Commerce Act. Atty. Quimbo emphasized the value of inviting the staff out, “Ang weakness lang naman ng mga tao dito, basta ilabas mo sila para hindi nakakasawa yung venue, tapos pakainin mo sila, makikinig na yun. (Just bring them to a different venue so they will not be bored.) So we took advantage of it.” Other face-to-face interactions employed were: visits to the legislators offices and holding of seminars, conferences and regular meetings to explain to both the staff of the legislators many of the technical terms on how e-commerce really comes into play; one-onone explanations given to legislators who have further queries; and the advocates’ and staff’s briefing of congressmen and senators defending the bill. Testimonies In giving testimonies, one must be able to provide the members of the Committee with succinct information and arguments why a certain measure is needed to prepare the Committee during the deliberation and Second Reading (Reyes, 1998). Quality of testimony is important (Guither, 1980, cited in Reyes, 1998). A witness must be concise and should give figures to back up the points presented. 116

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Atty. Samanodi, the staff of Senator Magsaysay and one of the respondents, affirmed the importance of accurate figures in the advocacy process, “Everything should be backed by data.” In terms of the E-Commerce Act of 2000, testimonies were mostly employed during the committee hearings, the period of sponsorship after the First Reading, and during the period of interpellations in the Second Reading. Networking As defined by Piotrow et al. (1997), networking is “foraging partnerships, linkages, networks or alliances with other organizations, sectors, or communities.” This aims to enhance the strength of one’s position most especially in advocating a cause or socially-desirable action or program. The respondents relayed that networking in the case of RA No. 8792 were employed among the advocates of the E-Commerce law, and between and among sectors in interest groups. Andam, one of the respondents, said that networking is essential in strengthening the stand or position of the advocates, “Mas maganda kung unified yung aming stand or position on a certain ecommerce issue. It is stronger kasi. (It is better to have a unified position on the matter.)” To have a unified stand, advocates released position papers on certain issues. Advocates exchanged position papers during meetings and then make sure that they give the key people who will be defending the bill and who will be working on the bill, copies of their position papers so that they will know the rationale behind why advocates propose certain provisions. To be able to avail of the required and related ecommerce data, this type of strategy was also utilized. The advocates had to connect with information technology (IT) people in the Philippines and other countries abroad, particularly with the US Embassy (which was assisting the advocates at that time). According to Atty. Samanodi, networking with them was done through e-mail, telephone conversations and faxed letters. Accordingly, they got all the inputs, numbers, or at least the estimates which they needed for the deliberation of RA No. 8792. Alliance Building This strategy, according to Andam, is an integral part of the advocacy process. This is where you establish relationships with the key people who will be “calling the shots” or those people who are in charge of working on the passage of the E-Commerce bill into law. Alliance building, in the case of RA No. 8792 was employed with the advocates and with the people in government who were working on the bill. This was generally done on the committee level. This is similar to Brim and Duston’s (1983, as cited in Reyes, 1998) advice that the best time to approach is before the committee has reported on the bill. Piotrow et al. (1997) emphasized that, “Communication strategies depend on credible sources who are trusted and respected by people”. Consequently, persuasive communication depends on trust as well as expertise - people will not follow advisors they do not trust. Andam, acknowledged the magnitude of trust in the alliance building of the advocacy. The advocates worked closely with the technical working group. “We really sat with them and really discussed as if we were part of the technical working

philippineinternetreview group. [Thus] we were treated as part of the technical working group.” Alliance building was also utilized in the event of the One Internet Day Celebration in both Houses where legislators were invited to speak about thier stand on the proposed E-Commerce Act. Tapping Key Legislators This strategy is done to convince a legislator to agree on the measure. This includes asking key legislators and influential persons to persuade other legislators. According to Reyes (1998), one way to tap influential persons is to contact government policy-makers. The purpose is to gain access to a member of Congress or agency official when other officials do not seem open to the idea. In the case of the E-Commerce Act’s passage in the House of Representatives, the advocates tapped the committee head on the Committee on Trade and Industry and not the congressman with a constituency to serve. Andam explained, “I worked closely with the committee secretary who was apparently the one who is doing all the paperwork involved. So we worked with her; we established a professional relationship with her.” Mass Media This includes the print and broadcast media that were utilized in the policy advocacy process. A good communication strategy combines different media to repeat and reinforce key messages. This is because the same channels of communication do not reach everyone. Thus, a multimedia approach is the only way to reach a substantial proportion of the audience (Piotrow et al., 1997). However, in the case of the RA No. 8792, some respondents stated that this type of strategy was not used too consciously and only on a minimal level. They did not use it since there was already media interest in the bill, especially in the information technology section of the newspapers. Atty. Quimbo shared, “Minsan kulang yung balita, ano yung gagawin mong balitang local? So, ‘Ito, gumagalaw yung e-commerce. (Sometimes the news are insufficient, what can you use for local news? Here we have e-commerce on the move).” By publicizing the effort and the fact that there was an e-commerce bill that was pending in the senate, the media also advocated for it, although not directly. Also, some of the press releases related to the E-Commerce Act were, according to Andam, mostly individual efforts of the congressmen and senators. Some publications that were released by the advocates were: the book entitled Business@Philippines. com, which was distributed to the office of the senators, in the hopes that the staff in charge of the bill would read the book, and then by reading the book, they (the staff) will also inform their principals (Senators) of the importance of the bill; and the E-Primer: An introduction to E-commerce which was released on January 2000 and was distributed to the legislators in both Houses before the floor deliberations, and to the Committee on Trade and Industry (Senate) before the Second Reading.

be most effective (Berry, 1997 as cited by Reyes, 1998). This is backed up by Rogers (1983, cited by Piotrow et al., 1977), who conveyed that by the end of the 1970’s the accepted view of mass media was that they were effective for increasing awareness but that only interpersonal communication could persuade or motivate action. This was demonstrated in the case of the ECommerce Act of 2000. Although one of the respondents from the Senate stated that the use of electronic mail facilitated the passage of the E-Commerce bill, the rest of the respondents acknowledged that face-toface interactions was the one that truly facilitated the passage. This is because they deal with the people directly. The advocates personally talked to them and adviced them. Also, they did not just give the primer and their position papers to the legislators; they made sure that they were there to explain the material so that they could address further questions. Andam affirmed, “Tingin ko it is really face-to-face kasi nothing beats personal explanation to the legislator. Kasi at least kapag may mga follow-up questions you are able to address it at that point already.” She added that they cannot anticipate all questions. You can only know their questions when they actually have read the paper and you find out that there are still some issues you were not able to address. Thus, one cannot trust that single position paper could address all the issues and concerns of the legislators. Moreover, alliance building was also done faceto-face. Trust and confidence of the key legislators could not be obtained if it were not for the face-toface interactions. Atty. Quimbo recognized that, “In so far as I am concerned, we would not have been as successful had we not concentrated on face-to-face interaction.” Communication Problems during the Policy Advocacy According to the respondents, the major problem in their advocacy was the ignorance of the senators and congressmen on e-commerce transactions. Since it was a new technology at that time and it was not really practiced by most of the legislators, particularly the elderly ones, there was a resistance at first. With this, the chairman of both Houses had a difficult time hammering the new concept so that it will be acceptable to everybody. Although some of the legislators have a working understanding of the concept of e-commerce, some issues were not easily understood. In fact, some of them complained that it was too technical. However, the technicality of the E-Commerce Act cannot be avoided since it involves technical components. There was also the problem in the availability of e-commerce data in the Philippines. E-commerce related data, during the policy advocacy, were very important in supporting the positions and provisions being lobbied in Congress. According to one of the respondents, although there were some data, they were not complete and updated.

Key Strategy in the E-Commerce Act

Pointers for Future Advocates

Of all the techniques open to public interest representatives, the personal presentation of argument to government officials is thought to

There is no one set of ‘lessons’ on advocacy that needs to be learned. However, pointers were given by the respondents of the study for future policy advocates:

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philippineinternetreview a) First of all, you should know the terrain. Many people who go to Congress to advocate for certain bills or certain issues do not know how to lobby. You should ascertain the process on how legislation works. b) After knowing the terrain, find out the key persons that you need to talk to in each office. You do not go through the office of the Senate President and expect that other senators would know about the issue. You have to go to each and every office door. So talk to each and every senator’s staff, or staff-incharge for a particular issue. The easiest is to seek an appointment with the chief-of-staff and then the chief-of-staff will probably introduce you to the staff in-charge for that. c) When you already know the key persons in having your proposed provisions enacted, start off by establishing a relationship of confidence with them – whether it be at the House level or the Senate level. Gaining their confidence and trust is essential so that they will listen to your issues and concerns. d) In getting your proposed provisions enacted, you have to entail all measures that will ascertain that those provisions will be enacted. Know your strategy and carefully deliberate on what is effective (e.g. Plan A, Plan B, etc.). Map out a strategy and make sure that you implement it. e) Patience is essential during the advocacy. Do not fight and debate with those who do not agree with you. Just patiently explain to them what your proposed law is all about. Eventually they will accept. f) Compromise is important. You have to be open to amendments and opinions. You cannot be selfrighteous because it is a committee work. You have to accept their proposed changes in the bill so that it can become a law. g) Do good research. If you are not prepared when you are in the floor the legislator defending the bill will also be left hanging. h) You have to attend all meetings. By being present, you are able to monitor and guard your proposed provision; at the same time have your say at whatever is being discussed. i) When you meet with the key actors, you must have a goal in mind and be prepared. Accordingly, you must do your paperwork. j) Position papers should not be too long and should be redrafted for their (target person) understanding. Make it in bullet forms because most legislators opt to read short, brief papers. Personally deal with the key actors. The process does not stop at giving them position papers and other research materials. You cannot trust that a single position paper will be able to address all their issues and concerns. Those are only supplementary. You have to deal with them personally so that your stand will be properly explained.

REFERENCES Alicias, MDG. (2003). Handbook on advocacy strategy and techniques development. Manila, Philippines: Institute for Popular Democracy. Andam, Z. (personal communication, Feb. 9, 2004). Andrade-Jimenez, H.S. (2001). Preventing the “love bug” from biting again. http://itmatters.com.ph/ features/features_01122001d.html (Feb.21, 2004). Anigan GR. (personal communication, Jan. 16, 2004). Disini, JM., Jr., & Toral, JC. (2000). Republic Act No. 8792 implementing rules and regulations of the Electronic Commerce Act. http://www.disini.ph/downloads/ EcomIRR%20Annotations.pdf (Jan. 11, 2004). Estella, C., et al. (1997). Uncovering the beat. Pasig, Manila: Philippine Center for Investigative Journalism. Favis-Villafuerte, N. (2001). Understanding… cyber space. Makati, Philippines: Apples of Gold Publishing. Johns Hopkins Center for Communication Programs. (ND). “A” Frame for advocacy. http:// www.jhuccp.org/pr/advocacy/ (29 Aug. 2003) Navarra RJ., Jr. (personal communication, Dec. 17, 2003). Piotrow, PT., et al. (1997). Health communication: lessons from family planning and reproductive health. USA: Praeger Publishers. Quimbo, RS. (personal communication, Dec. 17, 2003). Republic Act No.8792 - An Act Providing for the Recognition and Use of Electronic Commercial and Non-commercial Transactions, Penalties For Unlawful Use Thereof, And Other Purposes. 2000. Reyes, LC. (1998). The policy advocacy process of the National Water Crisis Act of 1995 (Republic Act No. 8041). Unpublished Master’s Thesis. Institute of Development Communication, UPLB. Samanodi, S. (personal communication, Dec. 17, 2003). Toral, JC. (personal communication, Jan. 9, 2004). Toral, JC. (2001). History - one internet day http:// www.oneinternetday.com/history.php (Jan 11, 2004). Yandoc, MGY. (1996). The communication agenda of the Philippines: a compilation and analysis of communication related legislation filed in the Ninth Congress of the Philippines. Unpublished Undergraduate Research. Institute of Development Communication, UPLB.

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he Internet gave its users the profound idea of having a transparent and efficient governance. Although much is still to be desired on this subject, numerous initiatives are gaining momentum.


by Mayumi Canuto Mayumi Canuto is the winner of the 1st Philippine Internet History Writing Competition.

ne of the lures of writing this article is also being able to satisfy a personal curiosity—of how a place that used to be a town not so much known except for its quality shoes could become a burgeoning city that has completely transformed itself into a model place to live and do business in. Living in Marikina all my life and witnessing the massive improvements around, especially because I have always lived in the proximity of the Marikina River, made me want to know if the place where I live and the assertions made by our politicians hold true. Modernization not only comes with seeing infrastructure being built, although this accounts for most of it, but also being able to respond to the call of the times. By this I mean that not only the physical aspects of the city is changing, but also the way the people see computerization as a concept to facilitate how things are being done. In other words, if the people living in what we call a newly transformed and modernized city have also been re-engineered to act accordingly, then transformation has hit its mark. One of the aims of this article is to be able to span the period whereby the city has actively made use of computers, the Internet, built their computer departments in the city offices and promoted automation as a faster way of doing transactions. It will discuss the benefits it derived, opportunities yet to be seized, the vision being pursued, and the challenges being encountered in line with keeping up with modernization in the city. The use of the Internet started in the Philippines during the turn of the 1990’s and went live in 1994. I could still remember that we had computer classes in the late 1980’s and Model 486 was the fad. By the time the early 1990’s came, there was a furious change in computer models and technologies. I of course witnessed the changes in the University and not in my hometown. When I used to type reports in Wordstar—using a PC with a black monitor, green fonts and blinking cursor—I was also witness to the evolution of the Windows-based PC with a more appealing screen and an office suite, not to mention a mouse. At the time I was doing my reports in the mid-1990’s, I relied on the computer shops sprouting along Katipunan Avenue. There were no computers being rented out in Marikina City. Neither were there any stores, which sell floppy disks nor 120

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diskettes. I heard about the Internet at that time, but the computer shops do not offer the use of the Internet as the rates were very steep. Today, as I write this article, Internet technology has become more accessible and affordable, and the current PC models have made the models of the 1980’s jurassic. To date, I count four (4) shops renting out computers, or what we call “Internet Cafés” within the barangay where I live, when before these shops were non-existent. These cafés are all situated in the house of the owner— that is, a room facing the street is refurbished or converted into a business establishment. The entire city has about four (4) Internet cafes in each of the 14 barangays. Aside from the owner’s houses, Internet cafés can also be found in the Riverbanks Center and other commercial establishments in Marikina situated near the marketplace and in the proximity of schools. Visiting the local internet cafés in the area, I observed that a typical establishment holds about 10 to 12 PCs, networked using UTP (Unshielded Twisted Pair) cables held by one switch. Most if not all the local internet cafés cater to network gamers, although residents also use the cafés to check websites to find jobs, write email, chat, or do research for homework, mostly through search engines like Google, Yahoo and MSN. Internet cafés also offer other range of services like tutorials, PC repair and troubleshooting, scanning, design of resumés and business cards, invitations, and printing and fax services. Internet is available through a dial-up facility, with mostly Globelines as the ISP. PLDT also provides telecommunication services.

philippineinternetreview Even if DSL could be made available, most owners do not opt to use them since network gaming attracts bulk of the users and provides more revenue. Internet speed via DSL purchased is normally only at 128 Kbps. Because of this, the average rate for an hour’s use of the PC is Php 20.00 for network gaming and Php 25.00 for Internet use. If you do not use up one hour, the owner or the keeper of the café charges you in increments of PhP5.00, depending on the time that was consumed. True to the concept of a café where one can have refreshments while using the computers, these establishments offer snacks to patrons similar to the costs in the sarisari stores. Hardly is coffee served, unlike in the more posh Internet cafés, where charges climb as high as Php70.00 per hour (for those with complete amenities and found in exclusive or prime locations). Customers of these local Internet shops range from grade schoolers and teenagers to yuppies. An Internet café fronting Provident Villages, a shop converted from what used to be a beauty parlor, opens at 10 a.m. Customers already come assoon as the shop opens. Lull occur at 2 p.m. to 4 p.m. Peak hours are from 4 p.m. until closing time, which is at usually at 10 p.m. The keeper attributes this to the fact that it is around this time that people are done with school or with work and have enough time to go to the cafés. Weekends are particularly good business days. It could be observed that the local internet cafés in Marikina City is akin to a family den, except that Mom is not around to admonish or to set limits on the noise level and the length of playtime. It sometimes tend to be too relaxed at times, as people doing research are overpowered by the noise of the network gamers. Local Internet cafes do not have dividers or cubicles that allows privacy for each user. PCs are normally lined up in a row on a long table, where players or users sit side by side. Local Internet cafés also do not offer peripherals and accessories per PC like scanners, speakers, microphones, printers and webcams. Not all PCs have CD-ROM drives since most computers are used for network gaming.

Status of Telephone Service

Based on the statistics (Figure 1), we can see that the city’s phone line capacity is not yet saturated and can make way for businesses and even households to have a better chance of hooking up. Based on a 2002 demographic data available, Marikina City has a population of 427, 037, translating to roughly a person to phone ratio of 6:1. Household count, on the other hand, is at 90,636 in year 2002. Therefore, a ratio of one phone to one household, based on the capacity as illustrated, is achievable. Since telecommunication lines are the primary conduit of Internet data and its availability a determinant of whether a city could afford to go online, we could infer that telecommunication is not a bar for the City to achieve its goal of enjoining the populace to use Internet technology since there are plenty of telephone lines. Currently, only one out of 10 households in Marikina have Internet connection, translating to approximately 10,000 internet users in the entire city. The time the Internet and the concept of hitech was sweeping the country was also the time that the Fernando’s came to office in Marikina City. Then Mayor Bayani “BF” Fernando did not only transform the physical infrastructure or “look” of Marikina City by improving the roads, cleaning up the river and transforming it into a park. Marikina was also envisioned to be a modern city where people need not go to the city hall to conduct transactions in person. Posted conspicuously in the City Hall are the following: “The best city hall is where no people go,” implying that transactions are envisioned to be conveniently done online. The Marikina City Council reinforced this vision by the enactment of an e-government resolution, which was passed last year (2003)—the “Resolution Adopting the Revised Marikina Computerization Framework.” In compliance with the resolution, a Management Information System (MIS) Division was set up to ensure total computerization of city government operations, replacing the traditional manual system of the local government. In September 2003, the Marikina City government commissioned BayanMap Corporation of the Lopez Group of Companies to install the Geographic Information System (GIS) for

As of July, 2001 Location

Capacity

North Marikina 38,300 lines (Along A. de Guzman St., Con. Uno) South Marikina 50,882 lines (Along Marcos Highway, Cainta Rizal)   T O T A L

89,182 lines

Working

Available

35,895 lines

2,405 lines

33,431 lines

17,451 lines

69,326 lines

19,856 lines

Figure 1 themarikinastory

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philippineinternetreview the city. Among the types of services the citizenry can enjoy through this computerization sweep are access to records involving methods of processing documents like renewal of business licenses; health advisories; and various government policy agenda. Information services on taxes, legal matters, public service, police, fire department and education, among others, will also be more accessible. A call center will be set up by the MIS Division, envisioned to have command and control functions in the future. Part of the computerization effort is a website for Marikina City. The website has 24 main slides supporting the homepage. The homepage gives a view of the Marikina City River Gazebo, the picture of the City Mayor, Mrs. Maria Lourdes “Marides” Fernando (MCF) and other advertisements and thumbnails to promote the city. It also offers links to city government information, city news, city radio station, e-procurement announcements, e-governance write ups, business opportunities in the city, community bulletin, guestbook, and contact information/directory of the city government officials and personnel. There are less than a hundred links leading to the e-procurement files and community bulletin postings. There is a city map that can be found in the website and a downloadable brochure of the city. According to Mr. Adrian Salvador, Chief of the General Services Office (GSO) of the Marikina City Hall, Marikina set up its website in 1998 as a pilot/ test project by then Mayor Bayani “BF” Fernando. The project was commissioned to Web.Com,and used Mosaic Communications (Mozcom) as the ISP. The (MIS) Division as set up will take over the website’s operation and maintenance in 2004. “At present, out of the approximately 1,500 LGUs, only 184 have web presence, and Marikina is one of them,” Mr. Salvador proudly said. He attested to the gradual shift from the manual to the computerized mode of doing transactions in the city. Marikina City currently performs online bidding process through the web. An eprocurement icon is placed on the homepage and carries links to notices of public auction, invitations to bid, and bid resolutions. City equipment which are unserviceable and need to be disposed of are listed and posted in the website for interested buyers. Instead of going to the city hall in person, a buyer can be informed just by visiting the city’s website. Purchases are made transparent as the winning bidders and awards are likewise published on the website. Mr. Salvador foresees an EPS (Electronic Payment System) being set up in the future to support this infrastructure. 122

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Ms. Sally Balagot, formerly of the Marikina Public Information Office (PIO) said the Marikina City website was used as a vehicle for people to know the services offered by the Marikina City government, and to provide important facts about the city. Aside from complying with the E-Commerce Act as mandated by the Office of the President, whereby government offices should have web presence by year 2001, the city considers the value of the website as a stepping stone into global competitiveness. She reiterated the city’s vision of becoming a “little Singapore”— its citizens well-mannered and the city clean and progressive. The website was promoted throughout Marikina City through radio announcements (DZBF, the local radio station), the city newspaper and billboards. Eventually, the website reached international viewership and has become an avenue where its citizensparticularly ht OFWs—can read news and information about their hometown. To date, the guestbook lists a minimum of 10 visitors per day, the community bulletin 15 visitors a day, and the city e-mail receiving roughly 20 notes a day, within and outside Marikina. Foreign presence has been felt with visitors of the site from Sweden, China, parts of Europe and the US sending inquiries about investment opportunities in Marikina’s shoe industry. The City getting into the Guiness Book of World Records in 2003 for the world’s biggest shoe also contributed to the healthy rate of web traffic. However, there is still no online ordering system and inquiries are responded to by provision of a list of shoe manufacturers or referrals to the head of the city Trade and Industry Office. Ms. Balagot disclosed that the Marikina website was patterned after another LGU’s website, which Mr. Salvador acknowledged. As the technical aspects of hosting and maintenance is left to the service providers (later on to their own MIS), brainstorming on the web content is the task of the Marikina Public Information Office (PIO), with the office of the City Mayor having the final say on which items and segments are to be published. Ms. Balagot, assigned to monitor the website— responds to queries made online; reads comments, observations and points of improvement for the website; and occasionally practices censorship of wayward messages in the community bulletin. She said although city hall personnel welcomed the website and the chance to go online, the technology has yet to be maximized. As much as 400 personnel can be afforded e-mail addresses for use in the domain but only 18 are active. There are no links to commercial or other government agencies from the Marikina City website, albeit it has links to the Marikina City Council of Fashion website and Secretary Bayani Fernando’s website. She acknowledged that the website may need to be more aesthetically pleasing and that additional information can still be added to address the needs of the people researching about Marikina City. More

philippineinternetreview features can be explored, such as accomplishment of more egovernment transactions, inclusion of the GIS, placement of an online ordering system, and the like. She said that the website is still in the process of further improvement. Mr. Bernard Berja, an MIS consultant, now heads the MIS Office, which was mobilized during the second semester of 2003. He is a professional IT services consultant with a wide range of experience both here and abroad. Together with city government representatives, he surveyed the extent of computer modernization in other cities prior to starting construction of the Marikina MIS Office. He observed that many LGUs spent millions of pesos in modernization efforts but were not very successful in making technology work for them, chiefly because government employees and the representatives who purchased the technology were swayed by IT salesmen and marketing people. In the end, the users were either confused on what they have, do not know how to use the technology, or have purchased equipment and software which are not suitable to their needs. For Marikina, Mr. Berja used his work experience and lessons learned from other LGUs to identify the specifications for the construction of the MIS Office. They then called on bidders to supply the specified equipment, software and services. They called on a bidding for the purchase of a central server in November 2003. The server is currently set up in the new MIS Office. The server processes and stores all pertinent Marikina City government files, and has redundancy and other security features. The server has a net capacity of 620 GB of data. He also revisited contracts between Marikina and IT companies servicing the city government, and worked on creating new contracts to the advantage of Marikina. Starting 2004, Marikina will be hosted by e-PLDT instead of Moscom, and web development and maintenance will be done by an in-house MIS team. A programming team, about seven to ten people, is currently working to develop the back end applications/modules customized to the needs of the different offices. In the future, the public can also benefit from these functionalities as these can be accessed through web technology, subject of course to different levels of access. Priority modules to be developed by the team are related to revenue collection, to help fund ongoing construction. The Marikina Treasury Office is now using its own system, but this will be replaced by a new one this year. A new, accurate and more up to date database is expected to be generated from the use of this new system. Marikina now has a network capacity of a meager 128 Kbps. In anticipation of the city-wide shift from the manual to the automated form of transactions,

the Marikina City government requested PLDT to lay down new cables with 1MB capacity. PLDT will complete work on it by this year. The Office of the City Mayor is also pushing for the MIS Office to be open and operational by the end of this year. The MIS Office will have a receiving area, a conference room, cubicles for the Call Center personnel, an administration area, and a server room with glass panels (a symbol that they believe in total transparency). Kiosks will be put in areas around city hall,so the public can conduct online transactions such as visiting the website, paying their taxes online, requesting for information, downloading forms, and the like. In the future, access of Marikeños to the city hall offices is also seen to be done conveniently at home, in the public schools and libraries via WAN. Marikina has come a long way. As a resident, I feet the city government strives to keep up with the modern times, and the changes made in line with modernization though gradual, is picking up speed. The city still has some way to go in terms of realizing its vision of an online and paperless transaction system, promoting the use of the Internet as the medium for business and leisure, and perhaps making it a way of life among its residents. This may be attributed mainly to the fact that Internet access still remains a privilege — not all homes have computers, a reason why there is a proliferation of Internet cafés. Public education in the area has just started to incorporate the Internet in its curriculum, as computer basics need to be taught first. Provision of computers is a challenge. I addition, we can say that not all users are receptive to using technology. I know of some people who still get intimidated by a computer. For those who currently have access, not eveyone is aware of the power of the Internet, because many are still unexposed and unaware of its breadth and depth. For all its worth, it is notable that the City while busy with promoting its world class shoes and trade has tagged information technology as an additional medium to reach more people. It is very encouraging to realize that my hometown is maturing and keeping up with the times. Perhaps in the next decade, information technology would pull the direction of trade and industry in the city. All it would take now is for Marikeños to visit the city website.

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Father of the Philippine Internet

His persistence and patience paved the way for the Internet connectivity we are enjoying today.

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A Fat h e r ’ s M e s s a g e Janette Toral (JT): Ten years ago, did you envision the Internet to reach its present state? Dr. William Torres (WT): It has gone

beyond my expectations. At that time, I saw it simply as a tool for communicating and accessing information. That’s all. But now, because of its useful application in business, the Internet has gone a long way. It is now the main, if not the sole, information infrastructure for most businesses today.

JT: Which sector do you think has benefited

the most from the Internet?

WT: It is the private sector. Because of it, a lot of enterprises have enhanced their business processes with ICT. To a certain extent, some educational institutions have also benefited. JT: How would you describe the Internet

evolution in the past 10 years?

WT: Briefly, the first five years was about building the infrastructure. The main applications were email and surfing. During the second half, Internet applications became more sophisticated—e-commerce and e-business took place. The World Wide Web (WWW) is the Internet application that gave rise to many enterprise-oriented applications. In the beginning, we were just interested in access. People would simply access the Internet and do whatever they wanted to do. However, we came to realize that there’s a bigger purpose to having access. Thus putting up content, websites, and portals became important. The Internet user became interested in something of value and something that can contribute towards increased productivity. The dotcom mania was in response to expectations that any content placed on the Internet will be accessed by people. However, their interests were pegged on the value of information to their lives and their work. They use it in education, business and others. JT: What do you think are the reasons why the

Internet has not taken off to a greater extent compared to other countries?

WT: One deterrent in the Philippines is that Internet access is not yet at the stage where it is simply “taken for granted.” Broadband is 126

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available but still quite expensive. We’re not moving as fast as we should in our infrastructure build-up. The price of International Private Line (IPL) then was not only expensive, but it was in short supply. Today there’s a glut in IPL and that has made it affordable. On the other hand, being able to distribute bandwidth nationwide and interconnecting different provinces are still quite expensive. I also do not agree that we are behind, as implied in many international reports. The measurements or criteria used in ranking developed, underdeveloped, and developing countries in ICT development should not be the same. Consider telephone density, for example: the Philippines can’t catch up using this measure, which is expressed in terms of the number of telephone lines per 100 persons. I believe that for the developing and underdeveloped countries this should be based on how many people have access to a telephone, or how far or near a person is from a payphone. With respect to the Internet, we are measured on access that takes place from the home. Instead, we need to factor in shared community access, then the number of people with Internet access will increase. JT: With telcos competing with traditional

ISPs today, how is Mozcom coping and keep its organization strong?

WT: We are diversifying to value-added services. It is not true that we will always remain strong in a given area. We have to change our direction, moving from access to value-added services. The health of our organization will come from our ability to innovate. For example, the WWW is an innovation that came out from the Internet. The World Wide Web gave birth to numerous applications like e-commerce. We need to move on from the usual things that we do to new things.

Mozcom had more than 70 branches and partners before. Many have closed because they were no longer viable due to telcos penetrating the market. We now have only between 40 and 50 PoPs (points of presence). Incidentally, I believe that the number of “independent ISPs” will come down to less than 10 within the next 10 years. It is difficult to fight the telcos since they own the infrastructure. ISPs should now take the attitude that they can work together


with the telcos. If everyone is into connectivity only, the bigger players will surely kill the smaller ones. But in the area of value-added services, there’s room for competition because there are numerous possible applications one could develop for a wide market. JT: I noticed that you are quite active in

promoting e-learning. What would encourage schools to really consider it?

• Republic Act 7925 does not allow VAS providers to offer voice-related services. This has to be revised in order to make VOIP an easy-to-access and affordable commodity for all. At present, only telcos can offer this service which puts ISPs at a disadvantage and unable to maximize the full potential of our Internet infrastructure.

WT: We have to push for it more aggressively. We need to educate the market – showing our educational and training institutions how elearning can lower costs and go beyond the campuses into a larger market. In general, we’re interested in applications that have nationwide impact. That is why we support e-government, e-commerce, and e-learning for education.

Philippine education needs all our help now—it is a big if not the biggest problem of our country. ICT-based innovation is the only way to go. And we need to do this with utmost speed and on a nationwide scale. JT: What are the things that should take place

in order for full Internet adoption to be realized in the country?

WT: There are numerous challenges that need to be addressed. These include: • The country’s current broadband map tells us only where we have access. We should focus on capacity and actual connectivity. The Commission on ICT can mandate this. A map should be able to describe the magnitude of data flow to and from Cebu, Manila, Davao and other points. • We need to allocate resources for our ECommerce and Intellectual Property Rights laws to be fully implemented. This includes having a functioning computer emergency response team. • We need to have a Convergence Law that will allow us to integrate and make use of the various infrastructures like broadcast, cable, and satellite in developing and deploying applications. Although this is partly mentioned in the E-Commerce Law, the government agencies concerned did not come up with guidelines to implement that. • We still have piracy. We can’t really capitalize on our intellectual property if we don’t respect those of others. If we pirate software and content, ours can be pirated as well. Investment flow to our country will be limited until our laws are properly implemented.

In the next 10 years, the Commission on Information and Communications Technology (CICT) can serve as focal point. We can consolidate our laws, policies, implementing rules and regulations in such a way that it can foster better competition and breed innovators on the use of the Internet for enterprise. The Internet per se may not be profitable but its application in various forms in business, education, government, will certainly create more wealth for our country. JT: But how about the private sector? It seems

that today’s ICT community is fragmented today.

WT: One of the many things we should do is to think of ourselves as belonging to one industry. We should cooperate to make ourselves better competitors. We must be active and firm in recommending policies. If we are a united industry, we could have a stronger voice in lobbying—not only to complain but to explain issues well. Internet security is being advocated only by a few. It should have been promoted as a critical component of the ICT industry. People would listen to us only if we have a strong association.

With the CICT (which hopefully becomes a Department of ICT soon) we can hold a high level agency responsible for all our industry concerns. Reporting directly to the President, through the Department of ICT, we don’t have to go to multiple agencies as we do now. Hopefully, a better future will arrive sooner for all of us! drwilliamtorres

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Programs and output for 2004 – 2014. Expected impact to community. HED : Today’s internet market is rapidly changing and customers have increasing expectations so we have to make sure we have what it takes to cope with the demands of the emerging e–generation. The focus for the next few years will be on more relevant products that would address the basic and unrecognized needs of the market. Emphasis would be on delivering faster access with bigger bandwidth capacity. Demand from the residential market has been gradually increasing as professionals and students alike do a lot of activities from their home computers. With this realization comes the need to deliver the needed speed and reliability of service. The other priority is to bring down the cost of the broadband service and eventually capture the dial up market which has a lot of limitations at the moment. As people watch their cable and use cable broadband we want them to experience the price benefit and the speed advantages that only SkyCable can offer. New trends in areas of entertainment, education and business would benefit from our services. Soon we will offer total entertainment, immediate information and easy to understand yet secure e- commerce. World class Cable services, high capacity, high speed Cable Broadband at the most affordable price will be our focus for the coming years. Future of the internet for the next 10 years. HED : A bit difficult to forecast. Who would imagine that we would have millions of cellular phone users and the text capital of the world 10 years ago? My two cents worth... Entertainment, education and the way we conduct business would be redefined. As the percentage of residential computer owners increase, education becoming more modern and companies creating new channels for advancement, the demand for convenience would, like I said, be redefined. The one thing that is common to all of us is that we want convenience... and that’s the future of the internet in the Philippines –convenience!!! Convenience will be embraced in every household in its own unique way. Imagine having access to any available movie, not just thru Cable but thru your Broadband Internet at home. Imagine immediate access to any information by just one click. Imagine ordering your groceries, shopping or even calling an early morning conference... all made possible thru your affordable, high speed broadband internet service. The greater potential which may or may not happen is the ability to have the whole computer shabang right in our cellphones. Now this will really make chess geniuses out of each owner...and life would never be the same.

Philippine Internet Review: 10 Years of Internet History (1994-2004)

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