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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 E-
Commerce 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

Introduction: The Bigger Picture 7

14 Internet Timeline: 1994 - 2004

The Filipino Internet User Evolving 33

47 Infrastructure: Bandwidth Map of the Philippines

Hi-Tech Crimes 73

81 People Power

Blazing Glory 91

101 Advocacy and Politics Online: A New Media

eGovernment: The Marikina Story 117

123 A Father’s Message

6
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.

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
philippineinternetreview today.

After a decade, I’ve witnessed various challenges


brought by technology, especially to the young
and the uninitiated. It has become complicated,
Capex Asia
uncontrollable, and political compared to how it
Publisher was a few years ago.

Janette C. Toral This special publication intends to give the reader


Editor a view of how Internet in the Philippines has
evolved in the past 10 years. It does not intend
Carlos Miguel Alvarez Paraz to be nostalgic, but to make the reader realize the
Daniel O. Escasa hard work and hurdles the industry went through
Mayumi Canuto to make the Internet accessible and affordable to
Fe Nuñez many of us today. It also gives a perspective of
Johnson M. Chua things to come in the next 10 years that we should
watch out for.
Julius Gorospe
Juan Magdaraog
Internet in our country will only grow and progress
Contributors further if we will all be responsible, respectful,
and vigilant in ensuring the proper use of this
Okby Enriquez infrastructure.
Twinkle Catalan
Advertising Managers As we intend to update this publication every year,
we hope that people will approach us and share
August San Esteban how the Internet changed in their respective areas,
Cover Design to give a true country-wide picture of Internet’s
evolution.
Antonio Bucu
We want this special project to inspire the next
Book Design, Layout
generation, to come up with great applications
and Illustrations
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: capex@asia.com • Tel. 813-4032
For subscription inquiries please email
janette@digitalfilipino.com.

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
System which convinced me to subscribe to
Extra Mile Online. That’s where I moderated my
first forum - Infotech. I wrote to several ISPs
of my Auntie and had my first encounter with offering forum moderating work in exchange
the computer. It was running a spreadsheet for Internet access. Portal Inc and The E-Mail
program called Visicalc. I played around with Company accepted my offer.
it for a few minutes, just typing in numbers.
From that moment on, I knew that I want What is great about the Internet is that you
to work in the field of computers. In 1986, I can be who you want to be. In the past 9
studied Basic Computer System with Cobol, years since I first went online, I had become a
Wordstar, Dbase II, and Visicalc. writer, community leader, lobbyist, activist, IT
evangelist, event organizer, entrepreneur, and
In 1988, there was a big marketing pitch that online educator—living all of these identities
one doesn’t need a college degree to get a high online and offline.
paying job. I believed in it and took a computer
literacy course and trainor’s training in two IT and the Internet provides you with a feeling
computer schools. of empowerment. It can bring you greatness
and numerous achievements if used properly.
I had my first computer tutorial job in 1989 and But it can destroy you as well if abused. Then
pursued various IT careers. In 1995, I logged it also gives you room to bounce back and start
at Daniel Chua’s Nightstalker Bulletin Board all over again.

9
philippineinternetreview

We’re connected
the 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

in the New Economy less than twenty thousand pesos (P20,000) and it’s
Internet ready.

With 5.5 million Internet users at the end of 2003,


I expect this to reach 41 million by 2014 based on
The Filipino’s ability to use ICT trends where the number of Internet users nearly
efficiently and develop new doubles every two years.
export markets was greatly A study on ICT and Internet Usage in the Product
powered by the Internet. 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
50 processor, spreadsheet, and presentation programs.
These basic productivity tools are used to generate
Filipino Internet Users (millions)

all the reports that an organization need and aid


40
them in decision making. Although there’s nothing
wrong about this, foreign competitors of our SMEs
30 have access to more sophisticated tools, leaving
our SME sector at great disadvantage.
20
The growth of Internet usage among organizations
and individuals must be complemented with
10 software meant to fit our socio-economic situation.
In order to counter piracy, development of desktop
and productivity applications that can be bought by
0
1994 1997 2000 2003 2006 2009 2014 consumers and SMEs at an affordable price must
be pushed.
Filipino Internet user growth estimates
by Janette Toral, DigitalFilipino.com Content is king

These 10 years has resulted in the emergence of


great content online. From media organizations
20 having their news content online, country
information and statistics can now accessed by
Filipino Internet Users (billions)

anyone.
15
The main question, however, is “how sure are we
that the content we see now can still be accessed
10 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
50 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
0 search engine that allows a person looking for
1994 1997 2000 2003 2006 2009 2014 specific content to retrieve information in a fast
and efficient manner.
E-commerce growth estimates
by Janette Toral, DigitalFilipino.com Among government sites, the National Statistics
Office (http://www.census.gov.ph) stands out in
disseminating useful country information.

10 thebiggerpicture
philippineinternetreview

Ken Ilio’s Tanikalang Ginto (http://www. month check issuance, 30 days mailing, and
filipinolinks.com) is the biggest directory online. 45 days check clearing were unattractive at
His site is one of the few that remains consistent first. But entrepeneurs believed it was better
with its original purpose of recording the than nothing. Today, there are sites like
existence and evolution of Filipino websites. 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.

If significant economic growth takes place in


the next 10 years, these estimates may even
Even as “global citizens”, Filipinos love to belong double or triple.
in communities. These types of web sites were
the first to “click” as the Internet emerged. Web E-commerce merchants in the country who
sites like PinoyExchange.com (http://www. managed to survive and thrive online owe their
pinoyexchange.com) live up to its purpose as a continuous existence to Filipino migrants. Websites
global contact point among Filipinos. like Turoturo (http://www.turoturo.com), YesPinoy
(http://www.yespinoy.com), Divisoria (http://
Filipino community sites can be classified www.divisoria.com), PinoyDelikasi (http://www.
according to region, interest, and race, among pinoydelikasi.com), MyAyala (http://www.
others. An example is Tsinoy.com (http:// myayala.com), and PadalaKo (http://www.
www.tsinoy.com) where Filipinos with Chinese padalako.com), among others, sell products
background interact. and services to Filipinos abroad and to those
who would like to send gifts to their loved ones
As IT and Internet became hot topics, in the country.
communities like PH-Cyberview (http://
groups.yahoo.com/group/ph-cyberview), Overseas Filipino workers (OFWs) are
CyberPromdi (http://groups.yahoo.com/group/ the primary customers of local websites.
cyberpromdi), and DigitalFilipino (http:// However, based on a small survey, the OFW
groups.yahoo.com/group/digitalfilipino) Internet Habits Report, that we did in 2003,
became focal discussion points as well. we discovered that only 25% of OFWs have
access to the Internet and even less, only
E-commerce is bustling 16%, buy online.

After 10 years of the Internet in the Philippines, The passage of the E-Commerce Law—
local payment gateways still fail to serve the Republic Act 8792 contributed to the adoption
needs of SMEs that are interested in online of e-commerce among major corporations
trading. The low sales target of entrepreneurs in the country. The biggest showcase is
and start-up companies do not appeal to BayanTrade.com (http://www.bayantrade.
local banks. Insurance requirements and com) where the top six conglomerates in the
bank account with high maintaining balance country, with 250 buyers, converge to trade
imposed by payment gateways discouraged with various suppliers online.
entrepreneurs with small capital.
Another highlight worth flaunting is SM
Many attempted to sell products online but Supermarket. Its company, Super Value
had to shut down their sites at the start of Inc. (SVI), started harnessing the power of
the millennium due to lack of a payment e-commerce as early as 1994. With 1,500
facility. However, there are few who persisted suppliers and growing, SVI has made a bold
and availed of foreign payment gateway move of trading only with suppliers capable of
services. Terms like high charges, twice a conducting e-commerce.

thebiggerpicture 11
philippineinternetreview

The Tech-Savvy Filipino note that they need to be tech-savvy not only
by understanding ICT and Internet but by being
There’s no doubt that Filipinos have never been productive users of these as well.
as tech-savvy as they are today. These days,
almost all courses in college have a computer The Pro-Active Filipino
literacy component. This is also being pushed
in elementary and high school. SMEs are aware of the importance of e-mail
and having a website in the context of today’s
Efforts to push the use of computers and the business setting, although it may not be an urgent
Internet are ongoing in the public high schools. requirement due to budgeting priorities. Those
The government’s PC for High School Project plays we interviewed in our surveys are currently not
a major role in this initiative. However, it will take using e-mail and Internet have but plans to do so
some time and additional resources before the within the year.
nearly 50,000 elementary schools nationwide will
have access to computers and the Internet. Most policy makers today recognize the significance
of ICT in terms of achieving productivity and its
Apart from students, local government units, contribution to job creation and economic growth.
cooperatives, and barangays are main targets Most politicians, even if they are not Internet
as well of these capacity building initiatives by users, have an e-mail address where they can
bringing technology to them. These facilities are be reached. Some even have their own websites
also referred to as community telecenters. These and use these during the campaign period.
include the B2BCenters of B2BPriceNow.com
(http://www.b2bpricenow.com) and Barangay. Senator Ramon Magsaysay Jr. and Former
net.ph (http://www.barangay.net.ph). 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 Filipino as Online Activists


The challenge is to make sure that these telecenters
will be sustainable and able to meet its purpose The Internet has allowed new communities and
of empowering the community. Often, the people groups to be formed as like-minded individuals
heading and running these telecenters lack e- meet online. This is especially true in the case of
commerce skills, experience, knowledge, and the Philippine Internet Commerce Society (PICS).
confidence to assist SMEs in their area to trade
online. The same goes for educators teaching I started floating the idea of creating the
Internet and e-commerce to students. Training the Philippine Internet Commerce Society
trainors and community telecenter leaders will be
(http://www.pics.org.ph) in August 1997
very important and must be done continuously.
during a discussion in the PH-ISP list—a virtual
If there’s any cluster of individuals that are important community started by Miguel Paraz composed
to be tech-savvy but are partly lagging behind are primarily of Internet Service Providers (ISPs).
our politicians and judges. But with the Internet- There were a lot of interested parties that lead
literate younger generation of judges taking these to the creation of the PICS discussion list.
important positions in the next 10 years, I believe
When it became a registered non-government
that this will all change for the better. Note that by
2010, internet access will be available to majoriy organization, the PICS community gathered
of voters, whose numbers can make or break an about 700 members where everyone received
aspiring president. Future politicians must take about the organization’s activities, debates

12 thebiggerpicture
philippineinternetreview

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
on Internet issues, and lobby support for the be attributed to this initiative. The next 10
years will be important in benchmarking the
passage of the E-Commerce Law.
economic output of these projects.
As PICS pushed for the passage of the Y2K Law, every
potential ally that we met on the field became part There’s also lack of funding in the dotcom sector
of the community. The multi-sectoral composition and this has resulted to Filipino websites operating
allowed for people from various interest groups to from small offices or from homes to survive. Their
offerings are fairly simple and unhyped.
come together and unite in pushing for the passage
of the E-Commerce Law as well.

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 As with the dramatic entry of HatchAsia.com and
Information and Communications Technology IdeaFarm.com, among others to entice project
(CICT), remains a multi-sectoral policy making ideas for funding, some were shocked with the
body composed of government, private sector, decisions these companies have made. Failed
NGOs, and academe, among others. It works investment projects placed a doom spell and poor
to make favorable policies and programs that faith in the quality of decision making. Today,
will support the growth of ICT. many Internet entrepreneurs are still reluctant in
trusting venture capitalists in their capability on
Scarce resources what will “click”. There are also venture capitalists
hesitant in investing and still think that they know
If there’s one painful reality, it’s the lack of more than most dotcom start-ups do.
resources. There are still many towns and
municipalities, especially in rural areas, The next 10 years
that have no phones,much less an Internet
connection. Aspiring Internet entrepreneurs in the next 10
years must be willing to start small and adapt
Although foreign aid has been used by some in to the changing market. With the possibility of
bringing ICT to the rural areas, there were also serving 41 million Filipino Internet users in by
research expenditures that have not translated 2014, patience, perseverance, humility, and
to any concrete projects. In the next 10 years, hard work can bring great rewards.

thebiggerpicture 13
When the Americans left in 1991, many thought
As a consequence of the steady rise in investments, REVENUE CONTRIBUTION
thousands of jobs were also created thereby providing Customs Collections
that Subic has seen the writings on the wall. Doomsday livelihood to thousands of families to nearby cities, towns
(5% Tax on Gross Income + Withholding Tax
scenarios have been written all over its once pristine image. and provinces. As of May 2004, the Freeport employs
Soothsayers predicted, the once bustling community close to 56,000 skilled workers. Jobs range from office
would turn out to be a huge wasteland devoid of any personnel, to technical specialists, production workers 1998 2.871

future with out the US military presence. and highly specialized managers. 1999 2.299
But, as in most cases, the soothsayers were proven 2000 2.175
wrong. The resiliency, courage, patience and the genius of
EMPLOYMENT 2001 3.658
the Filipinos worked wonders in transforming Subic from
Standing Workforce (Excluding SBMA/FSC Employees)
an ammunition depot to a world class free port - admired Corroborated by DOLE – REGION 3
2002 3.986

not only locally but in the international community as 2003 (16% increase over 1998) 3.323

well. 1998 7756 Jan-May 2004 2.195


Last year alone, the Subic Freeport, being managed
1999 16348
by the Subic Bay Metropolitan Authority (SBMA), 0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0
registered 293 more new projects amounting to over 2000 30139 Customs Revenues (Billions PhP)

P3.025 billion worth of fresh investments- a clear indicator 2001 45742

that no doubt the Subic Freeport plays a huge role in the 2002 48874
local and national development. 1994 to 1998 3.712 B (17%)
2003 (563% increase over 1998) 51486
“The entry of new companies clearly shows a vote 1999 to May 2004 17.636 B (83%)
Jan-May 2004 55745
of confidence of investors who have seen the prospects of
Subic Freeport to become one of the emerging economic Total: 21.348 B (100%)
0 10000 20000 30000 40000 50000 60000
hubs in the Asia Pacific region,” SBMA Chairman and Employees
The improved business climate and the additional
Administrator Felicito C. Payumo said.
theme park attractions and recreational facilities
And the huge volume of investments in the
brought about by the new Subic investments have also
Freeport is not just a fluke of nature but a constant and
a rising indicator, owing to the effective management
PAYROLL tremendously boosted tourism in the Freeport. In fact,
Subic is considered by the Department of Tourism as one
of the SBMA administrator. By end 2003, SBMA has 1998 1.58
of its prized eco-tourism enclaves. Since 1998, local and
already recorded a whopping US$4.102 billion worth 1999 1.89
foreign tourists have flocked to Subic to enjoy the serene
of investments, a marked 58% increase compared with
2000 1.90 and lush environment and the beautiful beaches in the
investment figures in 1998 when Chairman Payumo
area. From 1994 to May this year, Subic has attracted more
assumed office. This will be surpassed this year as latest 2001 2.96
than 48 million tourists.
data shows, the Freeport has already registered US$4.112 2002 2.61

billion worth of investments as of May 2004. 2003 (103% increase over 1998) 3.21
The number of companies has also been steadily TOURISM
Jan-May 2004 1.46
rising due to the improved economic conditions and
business climate in Subic. From a measly 304 locators in 0 0.5 1.0 1.5 2.0 2.5 3.0 3.5
1998 2.353

1998, the figures now ballooned by a stunning 203% to Payroll in PhP Biilions 1999 3.468
922. This year, the Freeport continues to attract companies 2000 6.740
who want to set up businesses - a clear indication of
2001 6.935
businessmen’s seal of approval for the SBMA leadership. Tax collection has also been on the rise much to the
2002 7.972
As of May 2004, 976 locators have set up shop in Subic. delight of the National Government, which acknowledges
Subic as one the major pillars of national development. 2003 (235% increase over 1998) 7.886
INVESTMENTS Latest data shows that Subic has contributed close to Jan-May 2004 2.910

P26 billion to the national coffers from 1994 to May 2004,


1998 2.591 B
which is 30 times the P850 million equity of the National 0 1 2 3 4 5 6 7 8
2.831 B Visitor Arrivals (Millions )
1999 Government to the SMBA.
2000 3.082 B

2001 3.922 B
REVENUE CONTRIBUTION But it was not all bed of roses when Chairman Payumo
2002 4.047 B
BIR Collections took his oath as the second SBMA administrator. During
2003 (58% increase over 1998) 4.102 B
(5% Tax on Gross Income + Withholding Tax his assumption to office, he had to face the onslaught
Jan-May 2004 4. 112 B of the Asian financial crisis that has swept all emerging
markets in the Asia Pacific leaving behind unimaginable
0 1 2 3 4 5 1998 463.1 disaster. He also had to assume his office marked by a
INVESTMENTS IN BILLION US$
1999 505.9 bitter squabble with the first SBMA administrator, leaving
2000 554.5
behind a divided SBMA.
But all these did not deter Chairman Payumo who,
Companies: 2001 747.7
even as a congressman representing Bataan during the
Cumulative-committed investments 2002 635.4
8th, 9th and then 10th Congresses, has already formed his
2003 (30% increase over 1998) 601.4 vision for the development of Central and Northern Luzon
304
1998
Jan-May 2004 270.9 with the Subic Freeport as its central catalyst.
1999 342 Hence, he immediately instituted wide-ranging
2000 449 0 100 200 300 400 500 600 700 800 policies aimed at putting into place structures that will
2001 552
BIR Revenues (Millions PhP)
further promote Subic as a world-class facility. Chairman
Payumo has also pioneered an integrated four-pronged
2002 629
approach for the freeport’s sustained development
2003 (203% increase over 1998) 922 1994 to 1998 1.304 B (28%) that is in tune with the challenges of the 21st century:
Jan-May 2004 976 1999 to May 2004 3.316 B (72%) Expanding Horizons, Port Development, Development of

Nature Theme parks and CyberSubic
0 200 400 600 800 1000
Total: 4.620 B (100%) With these policies in place, SBMA is fast realizing
Companies
its dream as globally competitive economic, financial, and
tourism hub.
Dreaming of CyberSubic
SBMA Chairman Felicito Payumo has a dream. SBMA Chairman Payumo says these systems form
His dream is for the Freeport to become accessible the hard core of his dream of CyberSubic. These
online anytime, anywhere, 24/7. And his dream is are the infrastructure that will further make Subic
finally at hand and well on its way to realization. First more attractive to multi-billion dollar investments.
stop: automating all systems within the SBMA. And “We have to put in place systems that will make us
SBMA is very successful in this regard. more competitive than our competitors. Admittedly,
To date, some 14 application systems are already the competition is tough, but we at SBMA strives to
fully functional each serving its respective clientele. offer our clients world-class facilities that are truly
Among these include: unrivaled”, the SBMA administrator said.
• Ecology Center Information System: it is an The challenge now for SBMA is to make all these
Oracle-based client-serve database application application systems to be web-enabled. “It is not
designed to assist to manager, analyze, monitor and enough that we have
display environmental conditions of the Freeport. these automations in
The system is capable of presenting computerized place. Since our clientele
comprehensive land-based information consisting is not just based here
of environmental and natural resources of the in the Freeport, we are
Freeport. always in the constant
• Asset Information System: it is a GIS search for ways to attract
(geographic information system)-based application those who are outside
system designed to enhance the monitoring and Subic and outside the
management of the SBMA assets and facilities country. Hence, we
(buildings and structures). believe, we have to be
• Subic Bay Freeport – GIS: it is a GIS-based web-enabled. This is the
application system designed to provide and fruition of our dream of
display information such as the socio, economic, a 24/7 Subic Freeport,”
and physical profile of the Freeport. Chairman Payumo said.
• Identification Badge System: it is a flexible Another innovative
platform for designing and producing identification high-tech component of
badges. It features magnetic stripe encoding, the CyberSubic program
bar coding, and color coding to distinguishing is the Mobile Alarm
attributes of different types of badges. Remote System. An
• Investment Handling System: A computer- added feature of the SBMA’s Emergency Response
based application designed to automate the System, the mobile alarm remote system, is a global
investor handling process which facilitates SBMA system for mobile communication and subscriber
assistance to investors from the time the latter identity based software, which by using cellular
inquires about Subic Bay up to the time they phones, will allow residents, visitors, business and
establish themselves as Subic Freeport enterprises. commercial establishments located within “high-
• Housing Reservation System: a reservation end” community like the Subic Bay Freeport Zone,
system for the tourists/guests who would like to a direct communications link to police, fire, medical
rent housing units at the Binictican. and rescue team. The system will also help the SBMA
• Tourism Reservation System: a reservation to answer public inquiry, give advice and update to
system for tourists that visit SBMA who will rent the public.
and reserve for a certain SBMA tourism facilities/ “We are doing all that we could to continue
spots. providing world-class services to our clients. After
• Locator Registration System: a database for all, we are in the business of providing world-class
tracking the history files of the licenses of a locator. public service,” SBMA Chairman Payumo stressed.
by Miguel Paraz and Janette Toral

T
here are many attempts in trying to deals. Some of the early players were lucky as
document how the Internet has evolved prime movers, but some are not as fortunate. In
in the Philippines. While making this addition, the desire to make transactions over
publication, we realized that there’s hardly the Internet, often referred to as e-commerce,
any attempts to record IS evolution, especially bonded the industry to push for the passage of
outside Metro Manila. the E-Commerce Law. They are listed here.

Various publications were used as a resource in • Culture – As Filipinos go online, various


coming up with this timeline. We were fortunate forms of online activities are performed. From
since there are useful sites like the Internet email to SMS over the web, this timeline intends
Archive WayBack Machine (http://web.archive. to show the trends that caught the Filipinos’
org) that allowed us to go back to old articles attention.
and websites online.
• Partnerships and cooperation – The Internet
The timeline shown here are based on the has brought a new dimension to public,
following: academe, and private sector partnerships.
International organizations like the World Trade
• Content – This shows how Internet content Organization, Asia Pacific Economic Cooperation,
has matured. Websites that have come and United Nations, also started having an Internet
gone through the years, especially those that and E-commerce work program agenda. This
became popular. part intends to show the various partnerships
and cooperation that have been formed.
• Communities and events – The Internet
has allowed users to join various communities, • Investments – The Internet has also
interact, collaborate, and even debate on issues. stimulated investments in the country. From
This part will show the various communities dotcoms to IT and Internet-enabled services
that were formed and events that brought the like call centers, web development centers,
Internet community together. and web animation studios, new opportunities
that were not as accessible in the past became
• E-commerce – Through the Internet, a reality. Some ventures went well while others
entrepreneurs and big enterprises were able failed to survive. This part shows some of these
to trade services, form partnerships, and close investments that have come and gone.
16
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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
1994
The E-Mail Company (http://www.emc.com.
ph) launches EMC Online, “the first Online Binary Systems Holdings, Inc. puts up a
Content Service in the Philippines which commercial online service, called Portal Inc.
allows its subscribers to forge a strong and (http://www.portalinc.com) that offered “a
dynamic Online Community via Online chat commercial online service (much like that of
forums.” This online service originated on Delphi, Compuserve, even AOL) which, like the
the Macintosh platform using the FirstClass humble BBS, was the precursor to the ubiquitous
software, and was originally run separate Internet Service Providers we have now. [The
from the Internet. Along with the forum system] was a proprietary online system with
systems that emerged later on, it promoted its own viewers (precursor to the browsers),
a self-contained community where everyone email, etc. It started as a commercial online
communicates on the same system. 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.

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1995 Companies connecting to the Internet


became aware of their corporate image. Ayala
Cebu City ISP GSILink puts up G-Spot Corporation—which would later be a dotcom
(http://www.gsilink.com/gspot), the first player—started its website. Even while top
public Filipino search engine. It indexed companies like Ayala Corporation (http://
keywords from websites using the Open globe.com.ph/~isd/ac_home.htm) got press
Source software engine, but required users coverage when it went online, countless smaller
to manually add sites to its catalog. This companies have also built an online presence.
showed that Filipinos wanted to look for Many of these started out as extensions of the
content located within the country, which personal pages built by company staff members
could not be satisfied by foreign engines who were the first to go online among their
of the time. No Filipino search engine has peers. 2
been able to do actual indexing of local
content, until Google started offering
country-specific searches.

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 PH-
Cyberview group at egroups, later Yahoo!
Groups, which became a rich source of
1996 discussion and information on the local
Internet. This is now at http://groups.
Public interest in the Internet leads to the yahoo.com/group/ph-cyberview with
rise of Internet publications. These include archives spanning back to August 1998
1969, Internet World, <LINK>, and The when the group started. Many historical
Web. Only The Web survived and is known events are documented there.
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 Internet censorship started to spark interest
websites for the leading print publications among governments and legislators around
of that time. This site disappeared when the world. The Philippine Senate called
Cybernet Live shut down. for a hearing on pornographic material
on the Internet, and summoned Internet
In the words of Alan Robles, editor of <LINK>: pioneers to testify. DOST Secretary
“at that time (1996), the Internet was on a William Padolina declares that he would
definite growth curve, everything was coming rather “err on the side of freedom” when
up Internet -- the excitement was palpable. faced with the censorship issue. 3
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.”<LINK> was a glossy Internet lifestyle
magazine published by Benpres Publishing
(now ABS-CBN Publishing).

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1997
Content-rich media websites went up.
Newspapers such as the Manila Bulletin
Yehey (http://www.yehey.com) was founded.
(http://www.mb.com.ph), Philippine Star
It is still the country’s most prominent search
(http://www.philstar.com), Manila Times
engine or directory. At the time it competed
(http://www.manilatimes.net) and the
against the EDSA directory. Since then, Yehey
Philippine Daily Inquirer (http://www.inq7.net)
has branched into a general-use portal and e-
put Philippine news on the web.
commerce 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. 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:// Bert is Evil (http://www.fractalcow.com/bert/
www.philippinewebawards.com) – was bert.htm) won the prestigious Webby Award
held at the Hard Rock Café, Glorietta Mall, (http://www.webbyawards.com) in San
Makati City. The Awards was patterned Francisco. Dino Ignacio is the first Filipino to
after the US Webby awards, as it was win a Webby Award. (March 6, 1998)
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 PhilRadio (http://www.philradio.com) began
snapshot of the state of the Web industry, its live Filipino radio programming on the
and with the number of sponsors involved, Internet. It caters to Filipinos abroad who
it became important commercial tool. 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 2001
hype, it quietly faded away. I asked one of
the founders, Nono Felipe, about this. His US-based Pinoy artist Dino
response: Ignacio created the “Bert
is Evil” site as a spoof.
“On why or how we closed down, all I can Sympathizers of Osama bin
say is that during the dot com era, business Laden used it to make the 9/11 leader look
principles were not as sound as they are now. good, so Ignacio shut it down. This gave him
I mean let's face it, not all business models worldwide fame. Dino Ignacio is the artist
then were proven to be viable. Add that to behind the animated “Maritess versus the
an immature market like Manila, where Superfriends” (http://www.fractalcow.com/
the penetration of electronic commerce rex/) cartoon, performed by Fil-Am comedian
is negligible... the bottom line is that the Rex Navarrete. 6
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.

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
1990
The Science and Technology Advisory Council
is formed to coordinate “expatriate human The soc.culture.filipino (SCF) discussion
resources in key development programs of group is formed by Aimee Manosa. Its
the country.” Its electronic network STACnet charter provides “an open discussion on
is important because it brought interest to issues concerning the Philippines.” The
the fledgling Philippine Internet from those group started with the Filipino Internet
around the world, with focus on the scientific veterans abroad. The topics primarily reflect
community. The first email sent from the the point of view of the overseas Filipino and
first live Philippine Internet connection at interested observers. The message archives
the University of San Carlos was addressed are available at Google Groups: http://
to STACnet, on March 29, 1994. 7 groups.google.com.

SCF uses the Usenet system where servers


around the world exchange messages in
1994 categories called newsgroups. This system
is separate from electronic mail, and uses
the Network News Transfer Protocol (NNTP).
Live Internet access brought access to
It is no longer commonly used by today's
facilities such as the Internet Relay Chat
casual Internet users. The system did not
(IRC) chatrooms, and custom services
catch on in the Philippines due to the huge
accessed via the telnet protocol. These
amount of bandwidth required. 8
protocols allowed interactive connections
which were impossible with the store-and-
forward 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.

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1996 June 1996

ISP Sky Internet put up an IRC chat room The Philippine Internet Service Organization
called “The Lounge” which became popular (PISO) was formed with Albert Velasco
among the local community. (of Mailstation Net) as the first president.
This was the fruit of discussions among ISP
The Cyberspace Live ISP/online service officers since late 1995. The ph-isp mailing
established “eForums,” the first local web- list served as the online forum for these
based forum and discussion system. This initial discussions. On August 20, the officers
was a precursor to the web-based bulletin and trustees were inducted in Malacañang
boards that became popular in the late 90’s. by President Fidel V. Ramos.

September 1996

Internet World Philippines, the first local


Internet show, was held at the EDSA Shangri-
La 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 WS Expositions organized the Internet


Commerce Expo Manila 1997 (ICE Manila 97)
Local ISP’s IPhil Communications, Mindgate at the Shangri-la Hotel Makati City. This event
Systems and Worldtel Philippines host the introduced the WS Group to Fiesta Online,
third APRICOT (Asia Pacific Regional Internet known for Yehey.com.
Conference on Operating Technology). This
technical conference was held at the Makati
Shangri-La Hotel. Internet Engineering 1999
experts from all over the world came to
hold technical sessions and tutorials. This PinoyExchange.com forum started operations.
conference has been held every year since It became one of the largest online communities
1996, and is hosted by a city in the Asia- in terms of message volume, users and mind
Pacific region. The event is also an important share. iAyala, the Internet venture arm of
face-to-face social gathering for industry Ayala Corporation, made an investment in
professionals. 9 2000. Several other forums followed. It is still
running to date, surviving slowdowns and a
system crash.

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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

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E-COMMERCE

1989 1996

Jose Emmanuel “Joel” Disini administers The Philippine Internet Commerce Society
the PH domain, the top level domain for the (PICS) was formed to advocate e-commerce.
Philippines. He obtained the rights from then-
administrator of the global DNS services, Dr. Internet banking starts.
Jon Postel. He operates an e-mail service
called the E-Mail Company. 11 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)

Today, many banks offer transactional


services over the Internet, allowing their
customers to access their bank accounts and
1997
services.

The WS Expositions Group organizes the


Internet Commerce Expo in September
1997. This shows that Internet commerce 1998
deserves its own events.
San Miguel Draft Beer goes online. This is
The ATM network Bancnet operates an ISP the first full e-commerce site operating from
for its member banks. This made use of the the Philippines. The proponents were World
existing connections between the Bancnet Port (an Internet services consulting firm),
system and its members. 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

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1999
2000
Auction sites flourish, following the trend in
the US, with popular services such as eBay. The E-Commerce Law—Republic Act 8792,
These include eAuctions.ph, which closed was signed into law on June 14, 2000. It has
and reopened as Avalon.ph; PinoyAuctions, a scope much wider than the “e-commerce”
which was acquired by ABS-CBN and merged in its name, as it also covers digital signatures
with PinoyCentral; SurfingBananas, which and “hacking” activities. The salient features
has closed down; and Bidshot, which offers of the E-Commerce Law are listed here:
SMS-based bidding. These make use of a C2C ht tp://w w w.digit alf ilipino.com/writing _
(Consumer to Consumer) model where the article.cfm?id=19
buyers and sellers transact directly and the
website merely facilitates the meeting of the
two.
B2B Business Exchanges started operating,
E-Store also began its e-commerce store
to offer services for corporate buyers and
operations. 13
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
2001 avoids the B2C (Business to Consumer)
problem of Philippine e-commerce where
Various developments heated up the payment systems are not well developed. 14
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.

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

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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 1992

The Science and Technology Advisory Council Dr. William Torres was the managing
is formed to coordinate “expatriate human director of the National Computer Center,
resources in key development programs of the government agency promoting
the country.” Its electronic network STACnet computerization in the country. At that time,
is important because it brought interest to the US academic, non-profit Internet was
the fledgling Philippine Internet from around of the NSF (National Science Foundation)
the world. The first e-mail sent from the live network. The NSF was headed by Steve
connection at the University of San Carlos Goldstein. The two met and Dr. Torres was
was addressed to STACnet. 7 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
Dr. William Torres, Father of Philippine Internet.
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. various and universities and organizations. Arnie
De La Salle University and UP Diliman joined the del Rosario, then chair of the Ateneo Computer
dialup network to receive international e-mail Science Department, informed the chair of
through the Ateneo gateway. This connection ComNet, the late Dr. Willy Gan about the project.
used UUCP to batch up mail to and from the Dr. Gan drew up the PHnet network design and
Internet from the participating institutions. convinced PLDT to deliver the facilities in time
for the March 29, 1994 launch in Cebu. This was
The DOST made a grant of PhP 12.45 million to to coincide with the E-mail Conference headed
the IRF to implement Philnet “Phase II,” for a by Dr. John Brule, a friend of Dr. Villarica and a
direct, live connection to the Internet. visiting professor at the University of San Carlos.
Benjamin “Benjie” Tan headed the technical
The DOST contracted Computer Systems Network part of project.
Corporation (ComNet), a networking equipment
vendor to implement the network linking the 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 1994

Only multinational companies with external ISPs were the first type of Internet
links to their home countries had Internet business. Companies with interests in IT and
connections. These connections are linked- telecommunications were natural choices to
up to the commercial Internet at their home study the possibility of Internet as a business
countries, passing through their corporate opportunity. Most telcos were not aware of
gateways and firewalls. This was because this potential and regarded the Internet as a
the Internet connectivity was only secondary threat to their traditional businesses.
to the goal of accessing Internet resources.
When the Philippine Internet became more
established, this situation reversed and most 1997
multinationals accessed their parent networks
through encrypted Virtual Private Networks The Asian Currency Crisis affects sectors of
(VPN's) instead. 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
1995 US Dollar to keep up wih this development.

More companies enter the ISP business. The Singaporean ISP Pacific Internet partners with
number peaks at around 200 ISPs in 1999. local provider Primeworld Digital Systems to
An ISP directory went up (unfortunately, it is set up Pacific Internet Philippines. This was
now closed) to count the growth, since the the first large foreign ISP to set up locally.
Philippines was proud to have the largest Primeworld was started in 1996.
number of providers in the ASEAN region.
The Philippine Stock Exchange offers online,
real-time stock quotes with the help of ISP
Portal, Inc. This coincided with the stock
1998 market boom, where many people including
foreign investors were interested in the data.
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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1999
Timeline Tidbit
Established companies start moving into the
dotcom boom. Ayala forms the Ayala Group Alan Robles, former editor-in-chief of <LINK>
Technology Business Development Group, magazine, described Philippine dotcom mania in
which later becomes iAyala. The Benpres group his article “World Wide Wackiness: Silly Season
of the Lopez family forms eLopez. PhilWeb. in the Philippines”. http://www.hotmanila.ph/
Com acquires majority control of South Seas leantech/silly.htm.
Natural Resources, an exploration company—
the first backdoor listing into the Philippine I asked him if he felt vindicated when his
Stock Exchange. Acoje Holdings, a real estate predictions came to pass. His reply:
company, becomes AJOnet. JG Summit sets It wasn't really hard to see it coming:
up Latitude Web Philippines. This shows that despite all the predictions about a "new
the Internet has become mainstream in terms economy" and growth not subject to the
of business interest, both for complementing normal laws of economics, anybody who'd
their existing business, and for opening read a few books and business magazines
avenues for investment in new ventures that could see that what came up had to come
were then considered lucrative – before the down. As early as 1998 I remember telling
dot com crash. 21 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
2000 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
The dotcom boom hit the Philippines in full help much that when the wallets of investors
force. This included unbelievable hype from opened, the best that local companies here
some players. The enthusiasm spread into could think of were "me-toos" — free email,
venture capitalism, as investors looked for auction sites, medical sites. Nobody paid
high returns on their investments. Startups attention to the distributed nature of our
became fashionable, and incubators such as working population— seven million Filipinos
HatchAsia (Helping Asian Technopreneurs scattered around the world, many of them
Change Asia) became prominent. HatchAsia wired because of sheer necessity.
held a camp for start-ups, cashing in on
people's interest in joining the craze. Business Journalist Bill Huang says that the dotcom
plan competitions took place to fish out new boom is (in hindsight: was) an April Fool’s joke.
ideas from more people. 22 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

phillipineinternettimeline 29
philippineinternetreview

CULTURE

Filipino Internet Culture Traditional Culture

Filipino Internet culture started with the novelty of The Internet has clashed with traditional Filipino
e-mail and chatting. When access to Web spread, culture. The issue of Internet pornography
personal homepages became popular. These were and inappropriate content recurs because of
typically hosted on the space provided by the the easy availability of material through the
ISP, until free, ad- supported web space became Web and peer to peer file/sharing applications.
common. “Scandal” pictures and videos have been
circulated, and organized Internet pornography
Instant messengers made chatting more accessible operations have popped up.
to the casual user. ICQ was the first to be adopted.
Extra messenger applications such as games, The Philippine Catholic Church, traditionally a
voice chat, and web cameras became popular and big influence in public morality, has spoken out
drove up usage. against pornography. Filtered access was the
main premise behind establishing the failed
In 2003, Internet culture was shaped by Friendster CBCPnet venture in 1999. This was intended
social networking and the Ragnarok game. as a large-scale Internet service provider, but
Friendster became the new “e-mail address,” as ended in financial and legal ruin in 2002.
people connected to each other. While foreign-
based social networks became popular, a local Today, CBCPWorld.com is online again, with
social network went up—funchain.com—by Jason new partners. Instead of serving the consumer
Banico. The youth played—and got addicted market, the ISP is connecting Catholic schools
to—the Ragnarok multiplayer game franchised by nationwide. It also provides Internet literacy
Level Up! Games. capacity building or training to elementary
and high school teachers focusing on how
Internet use has cultural influences. Internet adoption technology can be used in boosting the quality
echoed real world pop culture. The popularity of of education.
anime, cell phones, and music were copied into the
virtual world. Websites that catered to particular Current ISP’s that offer filtering are Infocom’s
communities emerged, such as Femalenetwork. Netsafe (http://netsafe.info.com.ph) and
com for women, ManilaTonight.com, MyGimmick, Uplink (uplink.com.ph). 24
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.

30 phillipineinternettimeline
philippineinternetreview

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.

phillipineinternettimeline 31
philippineinternetreview

SOURCES/REFERENCES

1 Email of Portal founder, Patrick Deakin, to the 16 • The WIPO (World Intellectual Property Organization)
digitalfilipino group: decision:
http://groups.yahoo.com/group/digitalfilipino/ http://arbiter.wipo.int/domains/decisions/
message/1853 html/2001/dph2001-0001.htm
2 Ayala Corporation Web Page Goes On-Line, by • The story of local Internet credit card thieves
Joseph Dennis A. Cuan Computerworld Philippines is: Hacker’s Paradise by Daffyd Roderick, Time
- August 31, 1995, archived at: Magazine.
http://web.archive.org/web/19961224173725/ http://www.time.com/time/asia/digital/printou
www.europa.com/~jra/cyber/news/ayala.htm t/0,9788,105665,00.html
3 RP Marks 7th Year on the Internet (Computerworld 17 E-commerce sites discriminating against Filipinos?
Philippines, March 26, 2001) By Chin Wong and By Eleanore C. Sanchez, Businessworld IT
Melba-Jean Valdez Matters, June 13-14, 2003
h t t p : // w w w . i n f o . c o m . p h / ~ c h i n w o n g / 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 _
RP%20marks%207th%20year.html 06132003a.html
4 • Recollections of Heinz Bulos. 18 Telco promo seeks to grow PC and net service
http://www.heinztein.com/archives/2003_11_ in RP homes, Maria Patricia Anne L. Perez,
01_archives.htm Businessworld IT Matters, May 19, 2003
• PhilRadio announcement at 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 _
http://groups.yahoo.com/group/digitalfilipino/ 05192003h.html
message/5 19 • Philnet program shifts into high gear by Edwin
5 Interview by Ruel de Vera for Sunday Inquirer Magazine, P. Boon, ComputerWorld Philippines, Dec 15,
January 7, 2001 1993. Included in the old soc.culture.filipino FAQ,
http://web.archive.org/web/20030605092817/ archived at: http://faqs.jmas.co.jp/FAQs/filipino-
http://www.clickthecity.com/info/press4.asp faq/part2
6 Urban Legends Reference Site. • Mosaic Communications profile at: http://www.
http://www.snopes2.com/rumors/bert.htm mozcom.com/company/profile.html
7 • The STACnet FAQ archived at: 20 Local software companies look for niches amidst
h t t p : / / w e b . a r c h i v e . o r g / problems and competition, by Helen S. Andrade,
w e b / 19961224045743/www.europa.com/~jra/ BusinessWorld IT Matters, October 27, 1999.
stac/stacfaq.html http://itmatters.com.ph/features/features_
• Source: Danilo Caacbay’s recollection at: 102798.html
http://www.pinoyfirst.com/oneinternetday/ 21 • Philippines: The number's up for fixed lines
caacbay.htm by Mary Ann L Reyes, Asia Times Online July
8 • SCF: Flips in Cyberspace: Somewhere on the 18, 2001. http://www.atimes.com/reports/
Internet, a virtual community of Filipinos has CG18Ai01.html
found a home by Jim Ayson. Archived at: • Summit ties up with Singapore-based
http://web.archive.org/web/19961224173946/ Internet Consultant by Helen Andrade-
www.europa.com/~jra/scf.htm Jimenez, Businessworld I.T. Matters, September
• More SCF recollections from the early days are at: 21, 2000.
http://www.pinoyfirst.com/oneinternetday/ 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 _
index2.htm 09212000d.html
9 Reference: • iAyala Profile.
http://www.apricot.net/apricot98/ http://www.iayala.com/profile.htm
10 Korean-born online games invade RP, by Erwin • PhilWeb press release.
Lemuel E. Oliva, INQ7.net. 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 .
http://www.inq7.net/inf/2003/may/11/text/ asp?target=news/2000/p_jan21_ssnr
inf_2-1-p.htm • AJONET website.
11 Facts and issues about the PH domain issue are http://www.ajonet.com/about.html
presented at ITNetCentral: 22 • RP still looking for global dotcom by Joey G.
http://www.itnetcentral.com/special_reports/ Alarilla, Inquirer Infotech, July 17 2000.
dotph/introduction.htm http://www.inq7.net/infotech/jul2000wk3/
12 Site of the Times, Volume 1, No. 6, October 1998 info_2.htm
http://web.archive.org/web/20010729014408/ • Internet business plan contest launched in
www.msc.edu.ph/wired/internetbeer.html Asia, Businessworld IT Matters, September 21,
13 • eAuctions.ph article by Janette Toral. 2000.
h t t p : / / g r o u p s . y a h o o . c o m / g r o u p / 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 _
digitalfilipino/message/4 09212000b.html
• E-Store article by Janette Toral. 23 RP online gambling launched in August by Sol
h t t p : / / g r o u p s . y a h o o . c o m / g r o u p / Jose Vanzi, Philippine Headline News Online.
digitalfilipino/message/18 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 /
• ABS-CBN buys into PINOYAUCTIONS.COM By si000544.htm
Veronica C. Silva, Businessworld IT Matters, 24 The CBCPNet scandal, Basic rules ignored.
August 3 2000. By Helen A. Jimenez, Senior Reporter,
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 _ Businessworld IT Matters
08032000a.html http://itmatters.com.ph/features/features_
14 Text of RA 8792: 07172002.html
h t t p : / / w w w . p i c s . o r g . p h / e - c o m . 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 /
asp?action=view&id=7 runningstories.htm
15 SEC threatens to revoke Prosperity.com’s license, • http://www.inq7.net/inf/2004/feb/04/inf_1-1.htm
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 phillipineinternettimeline
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.
philippineinternetreview

• There were about 100,000 to


• The Philippines has an estimated 150,000 Internet users in the
1 100,000 Internet users.
• In the Philippines, estimates quoted
country, according to a report by W3
Business Communications.
1
9 by a study recently published by • Cisco Systems Philippines country 9
the Carlos P. Romulo Foundation for manager Manuel Rivera said the
9 Peace and Development noted a mere Philippines is second only to the 9
US$1.6 million worth of business
7 done through the Web in 1997, with
United States in terms of people with
the highest inclination to adopt the
8
only about 6% of those are Filipinos the use of Internet in their activities.
with Internet access who purchased This finding is based on the results of
products online. The forecast sees a a study, conducted by a Singapore-
jump to US$383.7 million by 2002, based firm, on the local Internet
with the ratio of Net-connected market. "On the average, the study
Filipinos participating in such electronic said Filipinos use the Internet
commerce (or e-commerce) expected three hours per week," he said. It
to grow to 30%. 1 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

The Social Weather Stations (SWS)


also in the same year reported that
only one percent of Filipino households
have Internet access. This amounts to
Mr. Garcia said the country is also getting about 146,000 homes based on 1999
the critical mass of Internet users that population estimates. 3
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 Neil Hortillo of WS Research Corp said
users totaling about 130 million. 5 there were an estimated 217,121
Internet users in the country as of end-
1998. Of this number, about 75% had
access to the web. In 1998, only about
6% of Web surfers bought products
through the Web. 6

36 filipinointernetuserevolving
philippineinternetreview

• The 1999 Philippine Internet User The Philippine Communications Satellite


Habits and Demographics Survey was Corporation (Philcomsat) conducted a
released. It was conducted jointly by survey on Internet usage among 974 Filipino
1 Web Philippines, Business-World Online business professionals in 1999
and Market Frontiers Research.
9 • There are more male (57%) than female
Results shows that:
• 60% of Internet subscribers in the Philippines
Internet users and the average age of
9 the user is 27.67 years.
are not satisfied with their current service
due to frequent disconnections, busy
9 • Majority of the users (46%) belong to
the 25 to 34 age bracket while 37% are
signals or slow downloading times.
• Electronic mail makes up the most of
within the 19 to 24 age bracket. Internet usage in the Philippines at 88%,
• Fifty-one percent (51%) have finished then web surfing at 60%. Internet chats
college, and 32% are pursuing graduate came in at 29% and newsgroups at 17%.
work. The survey also showed that downloading
• A majority (57%) use the Net more files in the Philippines is still the most
than once a day. Still, a significant popular of use of the Internet. 7
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 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
In the Philippine Communication Satellite Corp., a local affiliate of United States-based
Corporation (Philcomsat) April-May 1999 survey International Data Corp. (IDC).
of 974 respondents in Metro Manila, Philcomsat Mr. Hortillo said the number of Filipino
found that at least “60% of Internet subscribers users of the World Wide Web who actually
were unsatisfied” with their service provider. buy goods over the Internet will rise to about
Their most common complaints include abrupt 30% by 2002. As of March 1999, the number
disconnections (34%), busy signals for dial- of Internet users worldwide is estimated at
up accounts (34%), and slow download times close to 154 million. The number is broken
(45%). 8 down as follows: 27 million were in Asia-
Pacific, 87 million were in the US and Canada,
and 34 million were in Europe. 6

Latest figures from market research firm


Pacific Internet sales and marketing
International Data Corp. (IDC) Asia Pacific
director Rowena Blas claimed that
show e-commerce revenue from the
Pacific Internet has cornered 20% of the
Philippine market is expected to reach $153
Internet market in the Philippines. Based
million and $193 million in 2002 and 2003,
on estimates made early this year, the
respectively. 9
number of Internet users in the country is
about 220,000. 8

filipinointernetuserevolving 37
philippineinternetreview

• ACNielsen reported that PhP2.41


2 billion was spent on online DigitalFilipino.com launched the first
shopping in the first half of 2000.
0 • PhP13,100 online spending per
e-commerce book in the Philippines in
June 2000, followed with the StatsReport
0 person in the second half of 2000
and PhP9,800 per person in the
series with the intent of reviewing
Internet developments in the country.
0 first half of the same year. 10

In the Filipino
Online Shopper
Report published
• ACNielsen estimated that in June 2002, the
PhP3.24 billion was spent in the
2 second half of 2001 by Filipinos
following findings
were highlighted:
0 for online shopping.
• PhP1.64 billion was spent by Responses from
0 Filipino online shoppers in the online buyers
first half of 2001. show that the
1 • PhP14,400 spending per online top 5 out of 20
shopper in the second half of products and
2001. 10 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
DigitalFilipino.com estimates buyers shop are Amazon (http://www.
there are 2 million Internet amazon.com-54%), E-Bay (http://www.
users at this time. 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 filipinointernetuserevolving
philippineinternetreview

What Filipinos Buy Online What Filipinos Buy Online


(2000) (2001)
• Books •
• Books • • Computer software •
• Computer software • • Domain name •
• Music • • Travel services •
• Computer Hardware • Where do Filipino • Web hosting •
• Catalog/Mail Order • Online Buyers Surf
• Yahoo.com
• Google.com
• Inq7.net
• CNN.com Where Filipinos Buy Online
Where Filipinos Buy Online (2001)
• Hotmail.com
(2000)
• Philstar.com • 21-24 years old
• Amazon • • Yehey.com   – Books, computer software,
• Barnes and Noble • • bworldonline.com information services
• Ebay • • 46-55 years old
• DFNN.com – Books, travel services, music CD
• Yahoo • • PinoyCentral.com
• CDNow • • Shopping site
• PinoyMail.com – Amazon.com
• 25-28 years old
– Books, computer software,
domain name, web hosting
• Shopping sites
Internet Access from Cafes Top Mobile – Amazon.com
VAS Applications – Network Solutions
16 and below 75%
17-20
– E-Bay
17%
21-24 33% • Logos and icons • • 29-32 years old
25-28 29% • Ring tones • – Books, domain name, web hosting
Age Group

29-32 21% • Picture messages • • Shopping sites


33-36 11% – Amazon.com
37-40 14% • Daily News • – E-Bay
41-45 7% • Banking • – Register.com
46-55 8% • Games • • 33-36 years old
56 and up 17%
– Books, computer software,
0 10 20 30 40 50 60 70 80 home electronics, travel services
Percent (%) • 37-40 years old
– Books, computer hardware
Buyers' profile • Shopping sites
online Bankers – Amazon.com
64%
– MyAyala.com
21-24
Internet Access from Home 25-28 45%
Age Group

16 and below 100% 29-32 63%


17-20 53% 33-36 45%
21-24 62% 37-40 43%
25-28 66% 0%
Where do Filipinos Buy Online
Age Group

41-45
29-32 74%
46-55 14%
(2001)
33-36 61%
56 and up 0% Amazon (54%)
37-40 97%
41-45 38% 0 10 20 30 40 50 60 70 80 Ebay (11%)
46-55 77% Percent (%) MyAyala (11%)
56 and up 20% Network Solutions (8%)
Barnes and Noble (6%)
0 20 40 60 80 100 Register.com (6%)
Percent (%) US$522.13 average annual purchase per user

filipinointernetuserevolving 39
philippineinternetreview

• An ACNielsen survey titled, "The Online On August 2002, the DigitalFilipino.


Consumer and E-commerce in the com Filipino Internet User Report Part 1
Philippines" which covers the first half highlighted the following findings
2 of 2002, showed books are still the depicting Internet users’ habits:
• Research is the top reason for
favorite products Filipinos buy online.
0 • Other popular products are music-
going online, followed by email,
browsing, business transactions, news,
0 related items, travel bookings, DVDs
and video cassettes, computer hardware
entertainment, chatting, downloading,
and shopping. 40% connects to the
2 (peripherals), magazine subscriptions Internet from their homes with a prepaid
and non-educational software. card. Rebel Internet lead in prepaid card
• As of 2002, there estimates indicated sales.
935,000 regular Internet users in the • Pacific Internet and Infocom are fierce
country out of the 3.4 million Filipinos competitors for combined post-paid
whose lives have been touched by the and prepaid subscriptions. 95% uses
Internet. 1.3 million are occasional the Internet on a daily basis with the
Internet users. majority staying online for an average
• Regular Internet users are defined as of three to four hours a day.
those who use the Internet at least • In the past, e-mail has proven to
once a week. 59% of regular users are be the application leader and the main
male, while 41% are female. purpose of those going online. However,
• 380,000 access from their homes, the increase in the popularity of text
471,000 from work and 84,000 using messaging and having the capability
other access points. to send and receive e-mails over the
• 223,000 online shoppers cellular phone have affected local e-
• 290,000 online bankers mail communications. Our list of top
• Among the online shoppers, some shop websites does not differ much to the
online regularly, others have shopped 2001 rankings. Yahoo.com leads as this
only once or twice. dotcom never seems to run out of steam
• A total of PhP3.66 billion (US$68.245 in its offerings.
million at PhP53.63=$1) was spent on • Google.com moved up in our ranking
online shopping. as Filipinos began to rely on it more when
• Online spending per person is pegged at looking for information online.
PhP16,400 during the first half of 2002. • Inq7.net’s readership base grows at a
• 83% of regular users earn wages from a continuous pace. Its strategy of coming
variety of white-collar occupations. 11 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
Filipino Internet Users are dead, Yehey.com as a pure
Typical Email Received
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.

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 filipinointernetuserevolving
philippineinternetreview

Filipino Internet Users


Internet use per day

2 hours 23% By Daniel Escasa


1 hour 18%
Length of Internet use

3 hours

E
18%
5 hours 9% ven before the Philippines got the rest of us, we were, for the most
4 hours 7% live IP connection to the Internet, part, country bumpkins (“syano” in
8 hours 6% a few hundred Filipinos already got local parlance) on our first visit to
< 1hour 5% a taste of Cyberspace through dial- the big city. We stumbled through
10 hours 4% up Bulletin Board Systems (BBSes). newsgroups and discussion mailing
6 hours 4% For the uninitiated, a BBS is a dial- lists but still managed not to make
0 5 10 15 20 25 up service that takes data calls from absolute fools of ourselves. After all,
Percent (%) their users and allows them limited those were similar enough to BBS
access to the PC hosting the BBS message boards. Besides, Fidonet
through a “green screen” menu. International had a means of gating
This access comes in the form of between Fidonet message bases
message boards similar in content on the one hand and newsgroups
Purpose of Using the Internet
to newsgroups and discussion and mailing lists on the other. We
Research 44% mailing lists. BBSes also had file had therefore absorbed much of
Email 21% areas similar to ftp sites which Cyberspace culture even before
Just Browsing 8% allowed users to download files onto we started our adventure into the
Business Transactions 7% their computers and, if they had Internet.
Entertainment 6% files they wanted to share, upload On the other hand, we had only
News 6% these to the host PC. The vast an inkling of the technical aspects
Chat/Messaging 4%
majority of BBSes were operated of the Internet. We were in awe of
Download 3%
free of charge by hobbyists on receiving a near-instant reply to an
Bills Payment/Shopping 2%
their home PCs, using a residential e-mail we’d sent out only moments
0 10 20 30 40 50 phone line. Consequently, almost all earlier. Those of you who’ve
Percent (%) BBSes were single-line affairs, and connected only to the Internet and
complaints (albeit good-natured) not to BBSes take that for granted.
from users about busy signals and Remember that Fidonet created
difficulty in connecting became only an ad-hoc dial-up network and
a status symbol among System that it could take hours before a
Top ISPs for Home Pacific Internet (17%)
Operators (SysOps), being a sign of message could even leave the BBS
Internet Users Infocom (12 %)
popularity. host computer, let alone get to its
Mozcom (9%)
A BBS was not necessarily intended recipient. It then takes
Globe (5%)
Sky Internet (4%)
stand-alone however. Fidonet several more hours before a reply,
i-Manila (2%) technology provided protocols for if any, can come back. All told, you
PLDT DSL (2%) creating an ad-hoc dial-up network might get a reply only after a day
Digitel One (2%) through which participating BBSes you have sent the message.
Prepaid Internet (40%) synchronized message boards and The other service that held us
- Rebel shared files from their respective in awe was Internet Relay Chat
- PhilWorld file areas. Several BBSes banded (IRC). There we were, exchanging
- Bl@st together to form such a network, pleasantries with dozens of users
- Flash linking users not only in Metro Manila the world over. Our only previous
- PhilWeb but also those in Cebu, Baguio, San real-time chat experience was with
Provincial ISPs (7%) Fernando (Pampanga), and Davao. a one-on-one with a BBS SysOp.
Then, courtesy of US Servicemen- (Recall that most BBSes were
SysOps in Clark Air Base and Subic single-line hobbyist services.)
Naval Base, the Philippine network Eventually, we adapted. We
Top 10 Websites (2002) got a connection to the international even thrived, and some of us even
Percentages are based on the number Fidonet community. Philippine distinguished ourselves. Gerry
of Users who named the sites BBSes therefore provided users Kaimo’s parody site pldt.com
the means to interact with varied consistently places among the top
Yahoo.com 69%
Google.com 34% cultures, although only through the 50 in Google’s news/satire directory.
Inq7.net 24% message boards. In another chapter of this book, we
Hotmail 22% The BBSes brought about the saw kabayancentral.com’s Netscape
Website

Yehey.com 16% culture of sharing. Filipino users’ Open Directory Cool Site rating.
CNN.com 15%
MSN.com 14%
experiences of the early BBS served Remember the mailing list service
PinoyCentral 10% them well in the larger world of the e-groups which Yahoo! purchased
ABS-CBN.com 8% Internet. In fact, many BBS SysOps in the late ‘90s and transformed
Microsoft 6% went on to become system operators into Yahoo!Groups? Leo Mercader’s
0 10 20 30 40 50 60 70 80 of the first Philippine Internet eforums.com predated egroups by
Percent (%) Service Providers (ISPs). As for the about a year.

filipinointernetuserevolving 41
philippineinternetreview

37 to 40
A summary chart • Top Websites
- Yahoo.com
showing our findings 25 to 28 - INQ7.net
on the Internet usage - Google.com
• Top Websites
habits per age group. - CNN.com
- Yahoo.com
Similarities and variations - Google.com - Hotmail.com
are obvious among those - INQ7.net • 68% male, 32% female
in close age ranges. - Hotmail.com • 82% are PC owners
- CNN.com • 45% go online primarily
• 60% male, 40% female from Home
• 78% are PC owners • Pacific Internet is the
• 42% go online primarily preferred ISP
from Work • Spends P573/month
16 and Below • Pacific Internet is the for Internet Access
preferred ISP
• Top Websites • Spends P897/month for
- Yahoo.com Internet Access
- Google.com
- MSN.com 41 to 45
• 42% male, 58% female • Top Websites
• 33% are PC owners - INQ7.net
• 50% go online primarily 29 to 32 - Yahoo.com
at Internet Cafes - CNN.com
• Top Websites
- Yahoo.com - Hotmail.com
- Google.com - MSN.com
- INQ7.net • 63% male, 37% female
• 87% are PC owners
17 to 20 - Yehey.com
• 60% go online primarily
- CNN.com
• Top Websites - Hotmail.com from Work
- Yahoo.com • 63% male, 37% female • Spends P1100/month
- Hotmail.com • 83% are PC owners for Internet Access
- Google.com • 42% go online primarily
- MTVAsia.com from Work
- PinoyCentral.com • Pacific Internet is the
- Yehey.com preferred ISP
• 22% male, 78% female • Spends P1147/month
46 to 55
• 50% are PC owners for Internet Access • Top Websites
• 50% go online primarily - Yahoo.com
from Schools - INQ7.net
- CNN.com
- Google.com
33 to 36 - Hotmail.com
• T op Websites - MSN.com
21 to 24 - Yahoo.com • 58% male, 42% female
- INQ7.net • 80% are PC owners
• Top Websites - Yehey.com • 53% go online primarily
- Yahoo.com - Google.com from Work
- Google.com - Hotmail.com • Pacific Internet is the
- Hotmail.com • 67% male, 33% female preferred ISP
- CNN.com • 86% are PC owners • Spends P1358/month
- INQ7.net • 60% go online primarily from for Internet Access
- MSN.com Work
• 44% male, 56% female • Infocom and Mozcom are
• 68% are PC owners the preferred ISPs
• 34% go online primarily • Spends P782/month for
from Work Internet Access 56 and up
• Pacific Internet is the
• Yahoo.com is the Top Website
preferred ISP
• 83% are PC Owners
• Spends P1250/month
• 50% Access the Internet
for Internet Access
from Work

42 filipinointernetuserevolving
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On its frequently visited sites, Where do Filipinos Buy Online


Yehey.com finally entered our (1999 - 2002)
top 5 list as Hotmail.com stepped Amazon (50%)
down. As far as the local sites are MyAyala (10%)
concerned, it is interesting to note Network Solutions (9%)
eBay.com (8%)
the entry of SunStar publication Barnes and Noble (5%)
in our top 5 list as BusinessWorld Register.com (5%)
Online, DFNN, and PinoyMail.com Others (13%)

slipped. US$513.50 average annual purchase per user

How Much do Filipinos Buy Online?


THE FILIPINO (per year)
ONLINE SHOPPER
Computer Software 400%
• 23% of the Internet Users Outdoor Equipment 325%
Shoes 323.5%
interviewed are online
Music CD 289%
shoppers Video 263%
• 76% Male, 24% Female Computer Hardware 191%
Books 190%
Web hosting 148%
e-learning 145%
Travel 134%
BUYERS’ PROFILE Tickets/Movies 124%
Information Services 97%
• 39% PDA Ownership Apparel 84%
• 83% access the Internet from Gifts 74%
Work Financial Services 73%
• 93% Computer Ownership Domain Names 70%

- 74% access the Internet 0 50 100 150 200 250 300 350 400
from Home Amount in US$
• ISP Subscriptions
– Pacific Internet
– Infocom, Mozcom
- PLDT DSL
- i-Manila Top Filipino Websites (2002)
Percentages are based on the number
of Users who named the sites
Inq7.net 24%
Buyers' Profile
Website

Yehey.com 16%
Online Bankers PinoyCentral 10%
16 and below 0%
17-20 0% ABS-CBN.com 8%
21-24 64% PhilStar.com 5%
25-28 45%
Age Group

0 5 10 15 20 25
29-32 63%
Percent (%)
33-36 45%
37-40 43%
41-45 0%
46-55 14%
56 and up 0% Top 10 Websites (2002)
Percentages are based on the number
0 10 20 30 40 50 60 70 80
of Users who named the sites
Percent (%)
Yahoo.com 69%
Google.com 34%
Inq7.net 24%
Hotmail 22%
Buyers' Profile
Website

Yehey.com 16%
CNN.com 15%
48% do Online Banking MSN.com 14%
BPI (43%) PinoyCentral 10%
UnionBank (15%) ABS-CBN.com 8%
Citibank (13%) Microsoft 6%
Equitable PCI (11%) 0 10 20 30 40 50 60 70 80
HSBC (8%)
Percent (%)
UCPB (3%)
Others

filipinointernetuserevolving 43
philippineinternetreview

Where do Filipino
Online Buyers Surf?
33 to 36
Popular Local Sites • What do they buy online?
for Online Shoppers – Books
We found more buyers as we • Inq7.net • – computer software,
increased our respondent base • Yehey.com • domain name
in 2002. 23% or 128 of survey • PinoyCentral.com • – Music cd, videos
respondents are online shoppers, • PhilStar.com • • Shopping sites
with 76% being male. It is important • Sunstar.com • – Amazon.com
to note, though, the amount people • ABS-CBN.com – MyAyala.com
spend online. Filipinos buying from – GoDaddy.com
Amazon.com spend an average of • Spends an average of
US$162 per year. US$429 online annually

Admittedly, there are a lot of 21 to 24


figure adjustments as the number
of survey respondents increase. • What do they buy online?
We took a particular interest on – Books
37 to 40
the ranking of ISPs where online – Tickets/Movies • What do they buy online?
buyers are subscribed. In the first – Computer software – Books
issue, Pacific Internet, PLDT DSL, – Information services – Computer hardware
Infocom, Mozcom, and DigitelOne • Where do they buy online? – Computer software
emerged as the top 5 ISPs. For this – Amazon • Shopping sites
update, DigitelOne dropped in the – MyAyala – Amazon.com
top 5 ranking while I-Manila came – eBay – MyAyala.com
stronger. • Spends an average of • Spends an average of
US$397 online annually US$953 a year online.
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
25 to 28 41 to 45
or not there was a decline on the
online shopping habits of Filipinos • What do they buy online? • What do they buy online?
for that year. – Books – Books, travel services
– domain name – Domain name
It is important to note the – computer software – Web hosting
amount that people spend for – Music CD, web hosting – Information services
online shopping. The respondents’ • Shopping sites • Shopping sites
combined purchase amounted – Amazon.com – Amazon.com
to US$64,000 from 1999 to the – Network Solutions – Network Solutions
present. – E-Bay • Spends an average of
• Spends an average of US$323 online annually
US$276 online annually.

Where do Filipino
Online Buyers Surf? 46 to 55
29 to 32 • What do they buy online?
• Yahoo.com •
• Google.com • • What do they buy online – Books
– Books – Computer software, travel
• Inq7.net •
– Computer software, services
• CNN.com •
domain name – Apparel, music cd
• Yehey.com • • Shopping sites
– web hosting
– Computer hardware, – Amazon.com
financial services – MyAyala.com
• Shopping sites • Spends an average of
– Amazon.com US$552 online annually
• Spends an average of
US$910 online annually

44 filipinointernetuserevolving
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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
BPI - 58%
- 58% Most Popular Banks for
Internet Banking
Citibank - 16%
18%
Age Group

BPI - 58%
Unionbank - 6%
- 14% Citibank - 18%

Age Group
Equitable-PCI - 6%
- 6% Unionbank - 11%

HSBC - 3% Equitable-PCI - 9%
- 11%
HSBC - 5%
0 10 20 30 40 50 60
Percent (%) 0 10 20 30 40 50 60
Percent (%)

Internet Connection
at Home by Gender: Total
DigitalFilipino.com
published the Filipino
Internet User Report Part
2 in September 2003.
This report highlighted
that there are more
women (58%) online
Male Female
than men. Additional Telephone Modem - 94% Telephone Modem - 97%
findings as follows: DSL - 5% DSL - 1.4%
Others - 1% Others - 1.6%

Internet Access

The school is the most common access point


Internet Connection
for the majority of respondents. This very at Home: Total
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 Use at home

72% of the respondents have personal


computers at home. Similarly in past surveys,
more male Internet users have computers at Telephone modem 94%
home compared with women users. DSL 5%
Others 1%

filipinointernetuserevolving 45
philippineinternetreview

Most Common Access Points Internet Online Activities


to Internet Users by Male DSL Users
E-mail 12%
School - 54% Instant messaging 19%
Internet café - 52% News reading 8%
Entertainment information 5%
Home - 46%
Access Points

Shopping 1%
Work - 20% Hobbies 3%
Friends - 12% Travel 1%
Medical 1%

Activity
Library - 5%
Games 6%
Others - 1% Banking 1%
0 10 20 30 40 50 60 Browsing 10%
Chat 1%
Percent (%)
Jobs 2%
Music 20%
School work 2%
Most Common Access Points Work at home 5%
to Internet Users per Gender Sex 2%
Distance learning 1%
School (Male) - 44%
Government website 2%
(Female) - 61%
0 5 10 15 20
Internet café - 50%
Time Spent (Percent %)
- 54%
Home - 56%
Age Group

- 39%
Work - 26% Most Popular Internet
Activities by Gender
- 16%
E-mail (Male) - 84%
Friends - 12% (Female) - 85%
Web surfing or browsing - 60%
- 10% - 55%
Library - 4% Instant messaging - 50%
- 60%
- 6% Accessing entertainment - 44%
information - 50%
Others - 1% Reading news - 50%
- 46%
Activity

- 1% Doing school work - 37%


- 41%
0 10 20 30 40 50 60 70 80 Chat - 34%
Percent (%) - 40%
Games - 37%
- 30%
Music - 33%
25%
Hobbies - 32%
Number of Years Online Total - 20%
by Gender 0 20 40 60 80 100
Percent (%)

Overall Most Popular


Internet Activities
Number of Years Online Total E-mail - 85%

Male Female Web surfing or browsing - 57%


<1 year - 14% <1 year - 14% Instant messaging - 56%
1 to <2 years - 10% 1 to <2 years - 10% Accessing entertainment - 48%
2 to <4 years - 33% 2 to <4 years - 33% information
Reading news - 48%
Activity

4 to <6 years - 27% 4 to <6 years - 27%


6< years - 16% 6< years - 16% Doing school work - 39%
Chat - 38%
Games - 33%
Music - 28%
Hobbies - 25%

Less than one year - 15% 0 20 40 60 80 100


One year to less than two years - 13%
Percent (%)
Two years to less than four years - 33%
Four years to less than six years - 26%
Six or more years - 13%

46 filipinointernetuserevolving
philippineinternetreview

Use of the Internet:


Use of the Internet: Online Activities: Male
Online Activities: Female E-mail - 32%
- 29%
E-mail - 19% Instant messaging - 22%
- 35% - 20%
Instant messaging - 19% News reading - 1%
- 7%
1 IS RP READY TO HANDLE
- 5%
News reading - 4%
- 3%
Entertainment information - 3%
- 4%
CYBERCASH?
New Users
Entertainment information - 6%
2%
Shopping - 1%
- 1% Very Experienced Users http://www.itmatters.com.ph/
Hobbies - 0%
- 4%
Hobbies - 3%
- 1%
features/features_101299.html
Travel - 0% New Users Travel - 1%
- 1% Very Experienced Users - 0%
Medical - 0% Medical - 3% 2 STUDY SHOWS FILIPINOS ARE

Activity
- 2% - 4%
HIGHLY INCLINED TO USE THE NET
Activity

Games - 2% Games - 3%
- 0% - 1%
Browsing - 10%
5%
Banking - 1% http://www.itmatters.com.ph/news/
- 0%
Chat - 15%
- 30%
Browsing - 17% news_110298a.html
- 5%
Jobs - 1% Chat - 1%
- 0% - 2%
Music - 3%
- 1%
Jobs - 2% 3 h t t p : / / w w w . n c c a . g o v . p h /
- 3%
School work - 13%
- 5%
Music - 3% culture&arts/cularts/others/
- 4%
Work at home - 1%
- 3% Stocks - 0% communication/communication-
- 1%
Distance learning - 2%
- 2% School work - 4% newmedia.htm
Maintain website - 0% - 2%
- 1% Work at home - 0%
- 2%
0 5 10 15 20 25 30 35 Sex - 2% 4 FILIPINOS READY TO TRADE
Percent (%) - 2%
Religious - 1% ONLINE?
- 3%
Distance learning - 1% http://www.itmatters.com.ph/news/
- 1%
Discussion - 2% news_072899a.html
- 3%
Maintain website - 1%
Very experienced users spent the - 5%
5 CITIBANK TO DEBUT FINANCIAL
largest percentage of their time 0 5 10 15 20 25 30 35
Percent (%)
SERVICES PORTAL NEXT WEEK?
dealing with e-mail, chatting, instant http://www.itmatters.com.ph/ news/
messaging, reading news, and news_081899a.html
browsing. New users, on the other
hand, spend a larger part of their
Use of the Internet: 6 RP INTERNET BUSINESS TO
time with e-mail followed by instant
messaging, browsing, chatting, school Online Activities: Total OUTPACE OTHERS, SAYS IDC
work, and reading entertainment E-mail - 24%
AFFILIATE
information. - 32% http://www.itmatters.com.ph/ news/
Instant messaging - 20%
- 14% news_031899a.html
News reading - 3%
Comparing women new users and - 5%
Entertainment information - 5%
very experienced ones shows similar - 3%
New Users
7 h t t p : / / w w w . a m e r i c a n . e d u /
results. Very experienced women Shopping - 0%
- 1% Very Experienced Users carmel/bree/internet.html
Internet users spend a significant Hobbies - 1%
- 2%
percentage of their time using e- Medical - 1%
- 3% 8 PHILCOMSAT TARGETS LEADING
Activity

mail, chatting, instant messaging, Games - 2%


browsing and researching. New users, - 1% INTERNET SERVICE PROVIDERS
Browsing - 13%
on the other hand, spend a big part - 5% http://www.itmatters.com.ph/news/
of their time on e-mail and instant
Chat - 10%
- 15% news_101999d.html
Jobs - 2%
messaging, followed by chatting, - 1%
school work, browsing and accessing Music - 3%
- 3% 9 ASIAWORLD ONLINE PORTAL
entertainment information. Trading stocks - 0%
- 1% TARGETS FILIPINOS OVERSEAS
School work - 10%
- 3% http://www.itmatters.com.ph/news/
Very experienced male Internet Work at home - 1%
- 2% news_090199c.html
users spend majority of their time Auction - 0%
on e-mail, instant messaging, news - 1%

reading, browsing and maintaining


Sex - 1%
- 1% 10 http://www.itmatters.
websites. New users, on the other
Religious - 1%
- 2% com.ph/
hand, spend their time on e-mail Distance learning - 2%
- 1%
indicators/indicators_01272003.html
followed by instant messaging, Discussion - 0%
- 2%
browsing, and school work. Maintain website - 1%
- 3%
11 http://www.itmatters.com.ph/
0 5 10 15 20 25 30 35
indicators/indicators_01272003.html
Percent (%) 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
philippineinternetreview

Ed Castañeda and Dan Angeles set Fidonet Philippines, the Bulletin Board
up the first public access Bulletin Board System (BBS) network, allows e-mail
System (BBS), called First-FIL RBBS. connections using its Netmail private
This is the conceptual forerunner of message format. When it started, it
today’s e-mail systems and bulletin made use of the free international calls
boards. through the US bases. When this was no
longer available when the bases’ shut
The Star BBS (run by Efren Tercias down, it shifted to taking incoming calls
and James Chua of Wordtext from the US, and then to dialing out
Systems) uses the Fidonet technology to Taiwan. The Philippine network was
to exchange messages with Fox BBS interconnected with the global Fidonet
(run by Jonathan Sumpio). network of enthusiasts, allowing mail
to be sent to local addresses using a
special non-Internet address.

Obet Verzola set up E-Mail Center,


Long-distance connections to the using the domain phil.gn.apc.org.
Internet started. Telcos such as Eastern His system dialed long-distance to
Telecoms and Philcom offered the X.25 GreenNet in the UK. 2
packet switching service. This allowed
a connection to online services such as As early as February 1991, De La Salle
Western Union’s Easylink. These services University (DLSU) signed up with the
were terminal-oriented, allowing the E-mail Company for dial-up access for
local user to access the foreign system e-mail. Kelsey Hartigan–Go, then a
through a remote text-based log-in. faculty member, estimated the cost at
Multinational organizations such as P15 per kilobyte per message. 3
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, The Far Eastern Broadcast Company
which we accessed through the Bank’s offers e-mail on a donation basis. Its
dedicated X.25 connection to Hong Kong. local users needed an email connection
So yes, we were telnetting and ftp’ing to their US headquarters. This was
and Usenetting and e-mailing around implemented using a Fidonet link and
1992-93.” Since these connections were Netmail, using their FEBnet BBS System.
not direct, they were hard to use and The donation scheme was to help offset
primitive by today’s standards. 1 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
Jim Ayson is one of the country’s first Internet
RP-Internet.
advocates, promoting Internet literacy through
his discussion forums, talks, and website.

50 internetinfrastructuredevelopment
philippineinternetreview

Mosaic Communications (Moscom, Commercial Internet Service Providers


also known as Mozcom) operates as a begin operations. These include: G-
commercial service provider offering Net from Globe Telecoms, IBM Global
a live IP connection. It gets its first Network, IPhil Communications, and
connection from Phnet, and later SequelNet (Sequel Concepts and
established its own connections directly Infocom). The Industrial Research
to the US and other foreign countries. Foundation, the caretaker of PHnet,
also offered public accounts. During
RP-INTERNET forum participants this time, “shell” accounts which offered
discussed putting up an Internet Unix access were still offered, since they
Cooperative, subscribing to PHnet consumed less bandwidth than full TCP/
facilities. The idea was to split the costs IP PPP accounts. However, these were
equally among individual members. eventually phased out due to security
This did not materialize, partly because issues and lack of interest.
the overhead made it more feasible
for the participants to obtain their own Cybernet Live, Virtual Asia, and
individual commercial connections. 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 know-
how, 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
philippineinternetreview

PLDT puts up the first peering Preparations for the Y2K “Millenium
point in the country, the Philippine Bug” occupied IT companies. ISPs
Internet Exchange. (PhIX). The first and telcos were included in the
members were Infocom, IPhil, Mosaic contingency plans, since they provided
Communications, Worldtel Philippines vital infrastructure to companies which
and V-Link. This allows the participants needed Y2K assurance. PLDT’s phone
to exchange traffic through a local metering proposal, also known as local
facility. Without peering, sending the measured service, becomes prominent.
packets out of the country is inefficient It has been an issue since the mid-
since they have to cross through 90s. PLDT claimed that it required rate
international lines twice. At that time, rebalancing to stop the subsidy of the
many of these lines were congested. local phone service by international
toll charges. In 1998, this gave rise to
Providers introduced prepaid access the Philippine League for Democratic
through cards. This changed the Telecommunications (PLDTI). This is
consumer market, eventually making it also led to the domain dispute case
the dominant mode of dial-up access. between PLDT and Gerry Kaimo, who
Among the first providers were Manila registered the domain name PLDT.COM
Online and Webscape (later I-Next). and used it for satire. PLDT eventually
shelved the metering proposal, but the
Local network engineers discussed the dispute over PLDT.COM continues until
Philippine Network Information Center today.
(PH-NIC) as a potential manager of
local network resources such as IP Edsamail starts its dial-up e-mail
addresses. Handling the .PH top level service. At the time, it was free for
domain was also considered. The group subscribers to use, supported by
was never formed. advertisements displayed on the e-
mail client. It receives funding from
PLDT assisted the NGO community by the Ayala and Yuchengco groups,
putting up CODE-WAN (Countrywide and Singapore-based New Era. The
Development-Wide Area Network). 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 internetinfrastructuredevelopment
philippineinternetreview

The independent (non-telco) ISPs PLDT launches its dial-up service called
struggle as telco services enter their “Vibe.” It has the option to charge
space. PLDT’s residential DSL (Digital the service to the monthly phone bill.
Subscriber Line broadband service) is PISO complains about more unfair
highlighted by the industry as a symptom competition and demands access to
of unfair telco competition. The rates the dial-up infrastructure, such that
for DSL service were artificially low and customers can gain access to their ISP’s
subsidized by the telco, compared to through PLDT facilities. 12
the wholesale dial-up rates offered to
ISPs. The PISO position declares that Edsamail switches to a fee-based
the Republic Act 7925 requires the model. General Manager Margarita
Internet services of telcos to compete Torres cites “changes in the Internet
with the ISPs on an equal footing. 11 and financial world” that require this.
Existing users were required to pay
: subscription fees. This is met with an
One of the ISP owners I interviewed uproar from users who were relying on
says that “there was a collective a free service. 13
wringing of fingers in the industry”
this year.

Chikka launches instant messenger Mobile phone company Globe Telecoms


service for sending SMS from PC’s. This offers mobile corporate e-mail using
is useful for overseas Filipinos sending GPRS, while Smart partners with
messages from countries with easier hardware manufacturer Research
access to PC’s and the Internet. It also In Motion (“RIM”). These allow PC-
shows the predominance of SMS over based e-mail to integrate with mobile
Internet in the Philippines, mainly due communications, catering to the needs
to the availability of service and low of executives on the move. This also
price of equipment (handsets versus reflects the fact that users upgrade
computers.) 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.

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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 dial-
up 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 Almost all IP traffic today (2004) passes through
service. It underwent expansion in 1997. IPhil IP services operated by the telcos. The telcos
and I-Next were acquired by “Internet Super connect to the IP “port” or router operated by
Carrier” PSINet in 2000 and merged their foreign IP providers—telco or ISP. This has not
operations. PSINet formed a new company always been the case. The local Internet started
for its global consumer operations, Inter.net. with non-telco ISPs leasing the lines from the
The Philippine company was moved to Inter. US, and managing the connectionn with the
net in 2001. Inter.net acquired the subscriber foreign ISP. Now, almost all ISPs either buy
bases of various ISP’s to boost its customer bandwidth from the ISP’s over leased lines or
base. collocation, or rent modem ports where dial-up
subscribers may dial in.
Pacific Internet is an Asia-wide ISP based in
Singapore. In 1997, it partnered with Primeworld Globe Telecoms was the first telco to set up
Digital Systems, to operate Pacific Internet an Internet business. It started a corporate-
Philippines. It started operations with 56K dial- oriented service in 1996, with a 64 Kbps link to
up modems, which were new at the time. It Singapore Telecom, its affiliate. It later operated
offers DSL in partnership with Globequest. the “GIX” or Globe Internet Exchange, for

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wholesale Internet connectivity; DSL services, Vibe dial-up service for phone subscribers and
dialup for landline subscribers, wireless (WiFi) prepaid users. PLDT also set up a general-
access points and a hosting data center. purpose IT subsidiary, ePLDT. This company
operates physical infrastructure: the Vitro
While PLDT entered the Internet business data center; and security infrastructure:
through Infocom, the services were not under the MySecureSign digital security service.
the PLDT name. PLDT-branded services began It started its wireless access point business
in 2000 with I-Gate, a wholesale Internet as “Blink,” and then acquired Airborne
access service sold to companies and other Access, another WiFi company. It operates
ISPs. In 2001, it started residential and the first Internet exchange, the PhIX. ePLDT
corporate DSL service. In 2002, it expanded also has investments in Netopia Computer
its reach to the dialup sector by offering the Technologies.

Quarter One, 1995 by Julius Gorospe


• Jose Picache joined Sequel Concepts, Inc. (South the Internet to the public in
Plainfield, NJ, USA) and became the sponsor of the Sampaloc.
Internet project. • The Infocom also created
February, 1995 and posted websites of the
• Sequel Concepts, Inc. initiated the plan to provide Philippine Embassy and its
Internet service in the Philippines as soon as it Consulates in the US.
realized the potential business opportunities • The team introduced the
of the new technology. The company leveraged Internet to the office of
previous investments in trans-pacific E1 line and Richard Gordon. The Subic
telecommunication equipment. Bay Free Port website
Julius Gorospe was appointed to head the project. was created and launched
He immediately registered the sequel.net domain online.
in behalf of Sequel Concepts, Inc. Together with Quarter One, 1996
Rey Alonzo (the network’s first network engineer), • Through a partnership with Mecklermedia, planning
the team started research and development with for the Internet World show started. Ernie Agtarap,
the goal of developing the blueprint for Sequel’s was hired to create the Internet World website.
network. • PLDT signaled its interest in acquiring Infocom.
• Joel Maloff (a prominent figure in the US online • Infocom was burdened with technical issues during
industry) was hired by Sequel to consult for the that time. There was a clear need to expand the
project. Mr. Maloff, together with Phil Balevre, company’s resources to ensure delivery of quality
provided insights about the Internet industry and service to customers. i
business models of online industries in the US. Infocom’s Contribution to
April, 1995 the Local Internet Industry
• After completing research and development work • Targeting early-adopters and policy-makers to use
in New Jersey, Julius Gorospe arrived in Manila in the Internet was key in the successful diffusion of
late April to start building the network. Internet locally.
• Infocom was a Philippine subsidiary of Sequel • The high E1-bandwidth made a big difference. Early
Concepts, Inc. Inder the Infocom name, sequel. providers were able to deliver Internet access but
net was introduced to the market. the limited bandwidth that they offered proved to
• Engineers, mostly from NEC Cebu, were hired. Unix be counter-productive.
system administrators with sufficient networking Subsequently, market forces gave birth to new
background were in scarce supply in Manila during products and competitive pricing models.
this period. Nazario Parsacala was appointed to • The network model, 24x7 operation center and
head the network operations team. customer support structure, that Mr. Julius
July, 1995 Gorospe developed for Infocom were replicated
• In July 8, 1995, sequel.net was launched and the by partner ISPs and became a standard model for
network became accessible to customers. many ISPs in the country. Serious players in the
• Soon after the dial-up business started, technical industry were forced to provide the same level of
development efforts shifted to the corporate service to stay competitive.
leased-line segment of the network. • The proliferation of partner ISPs in different regions
• Infocom’s presence in many regions of the Philippines can be attributed to the “cloning strategy” that
sprouted quickly. Ms. Julie Figueroa implemented. Infocom regional
August, 1995 partners were allowed to copy and replicate the
• The company’s revenue soared and hit the PhP1M mark. Infocom organization, network, support and sales
• Julie Figueroa, Manny Aldana, Julius Gorospe, Boyet structures.
Picache attended a meeting with senior officials
in Malacanang to showcase the Internet and its
potentials.
• The Malacañang website was created and placed online Mr. Julius Gorospe was the project manager and
by the Infocom team. The upkeep of the site was
technical lead responsible for building and bringing
subsequently turned over to the President’s staff.
• Through a speech about the Internet that was delivered
to market the Infocom Internet network to the
by Julius Gorospe, President Fidel Ramos introduced Philippines.

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Eastern Telecoms started its Internet operation Cable TV operator Destiny Cable was the first
as the local node of its former parent company, to operate a broadband service on a large
Cable & Wireless. It later became independent scale. Since it is not a telco, it has to purchase
with its own infrastructure. For broadband, aside capacity from carriers.
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. 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
Digital Telecommunications Philippines log on to the same PC to receive messages.
(Digitel) is known for covering Luzon with
landline services. It was the first to offer dialup BBS systems also offered files, online games
Internet to its Luzon landline subscribers and utilities.
in 1999. It partnered with Global Crossing
to establish Digitel Crossing. When Global Gateways are used to transfer messages from
Crossing went bankrupt, the Asian part of the BBS technology to the Internet. They either
network was sold to Asia Netcom, a Chinese connected to “live” networks over TCP/IP,
telco. Asia Netcom maintains a local node. or dialed up using UUCP (Unix to Unix Copy
Protocol). UUCP was used to transfer messages
The Lopez group, through the Sky Cable between the Unix machines that were the
company, operates SKY Internet since 1996, backbone of the dial-up messaging system
and offers cable Internet under the ZPDee that predated the availability of live IP. In
brand in 2000. Another company, Bayantel, the early days of the Philippine Internet, vital
operates United Network Access (UNA) communication between the small core of
which was merged with Sky. Today, Bayantel Internet users and the rest of the world, was
offers DSL service and dial-up for landline 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.

The transition to telco outsourced dial-up


subscribers. Bayantel offers wholesale IP changes the technology a bit. In a completely
transit service in partnership with Teleglobe, outsourced solution, the IP addresses assigned
a Canadian telco. Bayantel hosts the local to the customers belong to the telco’s IP
node for Teleglobe. service. The Internet bandwidth for these calls

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is provided by the telco. Another option is to WiFi became prominent in 2003 with the increased
tunnel the call to the ISP, and the ISP provides deployment of the IEEE 802.11x standard.
the Internet bandwidth. This option is also The WiFi deployments of PLDT and Globe are
useful for outsourced dial-up for non-ISPs, limited to indoor “hot spots” for mobile users
such as corporate networks. With this option, with laptops or PDAs. While WiFi technology
a leased line or similar connection is needed to may be used to build outdoor networks, this has
carry the traffic. yet to happen. This issue concerns challenged
the National Telecommunications Commission
Prepaid services make use of database systems (NTC) which is hard pressed to adapt the old
which contain usernames and IDs. These laws to new developments. For a long time,
systems communicate with the RAS to accept WiFi and related use of the radio spectrum
or deny users. Leased lines make use of copper was limited by the license of Manila Electric
wire dedicated for a data channel, from 64 Kbps Company (Meralco) for the 2.4 Ghz frequency
to E1 (2 Megabits per second). The line could for internal use.
be hauled through other media such as fiber or
radio for segments of the trip. Traditionally, a Fixed wireless is a technology used by carriers
corporate user would order a line going to an that own spectrum capacity and lease it to fixed
ISP, then the ISP would deliver the bandwidth users with antennas (not mobile users like Wifi
coming in. With telcos acting as the ISP, both or cellular). Providers in this space include
the IP service and the physical connection would Broadband Philippines and Meridian Telecoms.
come from the same company, but the service
is still known as a “leased line to the Internet.” Satellite technology has been prominent since
the early days of the Internet since it offered
Broadband a way to bypass the international submarine
cables. Back when there was limited and
Philippine broadband includes cable Internet, expensive international capacity, satellites
DSL, WiFi, fixed wireless, and satellite systems. offered the ability to transmit from the US
or other foreign countries to the Philippines
Cable Internet had limited at a cheaper rate. The return path was
deployment in 1998. with through cable. For instance, a company could
Newgen IT offering the service subscribe to a 256 Kbps satellite channel,
over Home Cable facilities. but lease only a 64 Kbps circuit going back
Home Cable later tied up with Infocom when it to the US. This was possible because of the
was acquired by PLDT. Destiny Cable and Sky inherent asymmetry of Philippine Internet
Cable (as ZPDee) offered service in various areas, traffic – the data going out of the country is
concentrating on high-income or high-density only a fraction of the data coming in due to
residential locations. These used the DOCSIS the predominance of web content.
(Data Over Cable Service Interface Specification)
standard. Many ISPs made use of satellite at one point
or another. OneVirtual was one provider that
The first DSL deployment was by MosCom Baguio relied exclusively on two-way satellite.
in 1999 using the copper wires of Piltel. DSL
became commercially known with PLDT’s entry Satellite for personal use was not as widespread.
in 2001. Globe, Eastern, Digitel and Bayantel Among the providers in this space were Zaksat
followed. DSL service may only be offered by (distributed by the Philworld Online ISP which
the owner of the physical copper wire, started 1998), Dream VSAT (of the Dream
though the telco has the option to Broadcasting Network, a direct-to-home TV
resell the service to other ISPs. 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.

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IP Routing Voice over IP

Three Internet exchanges (IX) were set up: Voice over IP (VoIP) emerged from the Voice
PLDT’s PhIX, PHnet’s Common Routing Exchange over Internet services that were developed
(CORE, or “Come On Route Everybody”), and around 1995. It started with PC-to-PC calls
Eastern Telecoms’ Manila IX (MIX). These allow where both callers need to be Internet-
Internet traffic to be exchanged locally. They connected. The technology became interesting
made use of a local access network (LAN) where as a means of bypassing the relatively expensive
participants “park” their routers, and handle their International Direct Dialing rates (IDD). The
leased lines. However, few ISP’s connected to free long-distance calls offered by Dialpad.com
all three, and some did not connect at all. The became popular. Operators called International
“Philippine Internet” that could survive the failure Simple Resale (ISR) operators made use of
of US networks did not happen. VoIP hardware to squeeze in more calls in a
data leased line, and in some cases, Internet
For international connectivity, the dominant lines. Some of these were illegal operations.
carriers were MCI’s UUNET, AT&T, Teleglobe and Mainstream telcos adopted the technology and
Cable & Wireless. Sprint and its affiliate, Global made use of it to maximize their international
One, had an early lead in delivering IP services capacity.
to the Philippines, but it eventually declined.
For satellite connectivity, Interpacket, Loral VoIP became a point of contention between
Cyberstar and Panamsat were used. Connections telcos and their corporate subscribers since
to other Asian countries were made to Hong the latter could resell those services. ISP’s
Kong (Pacific Century Cyberworks/Hong Kong have been interested in getting legal access
Telecom), Taiwan (Asia Netcom), Japan (KDD), to the technology as a value-added service,
and Singapore (Singapore Telecom). while franchised telcos complain about losses
in revenue and the need to protect their
Today, there is a large amount of international investment in fixed-line infrastructure.
bandwidth available, though no figures are
publicly released. Based on experience, there is a A new business is emerging where VoIP traffic
lot of unused outgoing bandwidth which may be is controlled by companies who handle the
used for hosting services such as outsourcing. switching but are not collocated with the VoIP
switches. One application for this is prepaid
Mobile Phones calling services. The call center industry also
makes use of VoIP. 19
Before cellphones came in, beepers were
enabled for very short message transmission. Data Centers

The popularity of mobile phones and SMS The dotcom boom led to a growth in content
tied up with the Internet. The mobile carriers and applications that demanded server space.
developed gateways between SMS and Data centers became commonplace in the US,
email systems for short e-mail messages. and replaced ad-hoc server parking. Companies
In 1999, when local SMS was still free, local established their own capital-intensive
companies set up unauthorized Internet to infrastructure for Philippine operations, circa
SMS gateways that were eventually 2000. These include the Ayala group’s Ayalaport,
shut down. PLDT’s Vitro, Mod.Net, and Reach (a venture
between Pacific Century Cyberworks/Hong Kong
Sites for sending free SMS became Telecom and Telstra, the Australian national
popular, to bypass the SMS tariffs. carrier). The data centers were the platform
for value-added and managed services, and
Longer messages were first carried enhanced traditional services such as e-mail
by dial-up WAP (the first generation and web hosting.
of WAP), and later over GPRS. The
current testing of higher bandwidth Portals
EDGE technology, leading to “3G,”
will show greater integration between Portals became the rage when foreign portals/
mobile devices and the Internet. search engines such as Yahoo! came in. The
This is complemented by the move local portals were based on webpage technology
towards smartphones and PDAs with that allowed dynamic and personalized content,
communication capabilities. as opposed to plain static pages. Portals were

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descended from the search engine, which customers, by making copies close to the end-
became popular when users needed to find user. This reduces load on international lines,
their way around the Internet. The dot com and cuts down the waiting time for surfers.
boom made portals valuable as aggregators of
content.

Yehey! started in 1997 as a search engine and


later acquired more features.
I think the most important growth in the local
Foreign portals didn’t make headway in the Internet in the years to come will be with the
Philippines, even if Lycos made an announcement local loop. Today’s abundance in bandwidth
and Yahoo! was rumored to be coming in. In needs to be delivered to end users to be
2003, Microsoft Network (MSN) announced it viable. This is where technologies like Wimax
was putting up a local portal with PLDT. 20 are needed for the metro areas. (Bitstop is
doing that today with 802.11 in less densely
Chat populated areas such as Dagupan City.)

Pinoy chat started in Internet Relay Chat (IRC), The cellular companies’ move to “3G” is less
which makes use of servers linked together to feasible since it requires a forklift upgrade of
distribute the load. In the early days of PHnet, their infrastructure.
users made use of the Unix “talk” command
when logged into multiuser Unix systems. Now, Economies of scale make handheld devices
numerous channels or “chat rooms” exist for such as cellular phones affordable to the
mass conversation. masses. Thus they could very well be the
usage driver. PC’s don’t get cheaper, they just
Person-to-person chat is typically done using get more powerful for the same price. This is
instant messengers. These messengers route the result of the massive capital investment in
all messages through central servers in the US, chip fabrication plants, and R&D efforts, among
which was once an issue back when international others. I don’t think PD’s are becoming the
connectivity was scarce. 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
Instead, Voice over IP traffic will balance
The popularity of Napster and other file sharing the path. VoIP traffic is symmetric in nature,
protocols got Pinoys interested. The relative lack since conversations flow both ways. If VoIP is
of broadband connectivity didn’t make this very deregulated to the VAS (value-added service
popular, and the lack of local peering didn’t let providers such as ISPs) level - a hot topic at the
local users share among each other. Instead, moment - then we can have greater amount
they shared with the rest of the world. of return traffic. I can’t speak for the telcos,
of course, but from an IP efficiency standpoint
Content Delivery this is a good thing, since fiber optic submarine
cables have equal capacity going in and out of
The Akamai Content Delivery Network (CDN) the country. (A few years ago, satellite usage
system partnered with local providers who was more common, but it seems that their
had sufficient traffic and customer bases. This application has dwindled down, especially now
system acts as an automatic mirror for its with the glut of fiber optic cable).

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By Janette Toral
We estimate that there are 115 ISPs in the country Sources of revenue
today, with a total post-paid dial-up subscriber The primary source of revenue for any ISP is its
base of 250,000. From such figure, revenues can dial-up Internet service. On the average, 53% of
range from 270 to 300 million per annum. In the an ISPs’ income comes from this. Those offering
case of ISPs that have franchises or branches in prepaid Internet attribute 34% of gross revenue
different parts of the country, each independently- to this service.
owned location was considered as one ISP.
Web hosting is a service that is offered by all
Although prepaid Internet cards became popular ISPs. However, it is hardly a revenue generator.
in the country, this is mostly available in urban Only ISPs which are also into web development
areas. We estimate that only 24% of ISPs currently services tend to get prospective clients for this
offer such service. Please note that several ISPs service.
came up with multiple brands of Internet cards
in the market. Therefore, we can’t consider one Work opportunities
Internet card brand belonging to one company A typical ISP in the province has 10 employees and
alone. There are also co-branded cards in the maintains one to two part-time staff members.
market. Hardly is there work opportunity available among
those whom we interviewed. The bigger ISPs have
A few years ago, the country has nearly 200 ISPs. 40 to 80 full-time staff members on board.
For the past three years, there’s a gradual attrition
that sparked concern in its community. Competitive advantage
Respondents claim the following reasons why
In our 2002 surveys, 26% of the post-paid home clients still approach them for their Internet
Internet users and 8% of prepaid are subscribed needs:
to telecommunication providers’ Internet service. 1. Technical excellence. When Tridel started,
it focused its core competence of building and
As far as the corporate market is concern, 35% offering technical excellence. This in turn has
are using carrier provided Internet service as created a loyal following, which has served as
of year-end 2002. Definitely, carriers providing a solid foundation for the company’s steady
Internet service is growing in terms of capturing growth.
market share. 2. Longevity. An ISP respondent from Iloilo City
said that being in the business long enough
The primary service being offered by ISPs are dial- made consumers trust them more for their
up Internet connection and web hosting. Other Internet needs.
forms of service are also provided but driven by 3. Quality service. For Westlink Batangas,
resources and market demand. loyal personnel, and management leadership
produce good products and services for its
A typical Internet service provider in the province clients.
has 280 dial-up account subscribers. In Metro
Manila, the number of dial-up subscriber ranges There are still corporate and consumer clients
from 400 to 50,000 in any given ISP depending who prefer having close ties with their ISP. An ISP
on which tier they belong to. 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. Dial-up Internet Vigilant network monitoring is consistently


2. Website hosting performed by an ISP respondent in Dagupan City,
3. Dedicated dial-up to ensure consistency in the service being offered
4. Prepaid Internet access and drive undesirable elements away.
5. Leased line connection
6. Domain name hosting Poor government support
All respondents interviewed gave a poor rating on
government support. It emphasized that there’s

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no effort from the government to help ISPs in the rural area pay more than those in urban
its present predicament. Here are some of the areas.
concerns given by participants and believe that
government should address: Long-term survival challenges
Lack of incentives. There are no incentives There are several challenges that ISPs, big or
for the industry or any protection from the small, have to deal with in order to survive. These
telecom providers now entering the Internet include:
service field. Look into new opportunities. ISPs should
No ratings and standards. There are no evolve into more professional organizations
standards for services, hence, many low quality with keen focus on the financials and an
service providers are killing the better quality outlook for more opportunities. It has to adapt
providers. There should be an ISP standard to changes in current industry environment as
rating. This standard rating should include well as client’s needs. ISPs have to offer varied
average speed and ease of connection. services, high tech products, and services
False advertisement. There should be shifting its major source of income from dial-
truth in advertising. Some ISPs are selling up Internet connection subscription to new
their prepaid services claiming that their forms of services.
PhP100 cards are worth 16 hours when in fact, Unfair competition. ISPs that offered
it is only 6 hours. Also, some are claiming fast Internet access to the Filipino community stress
Internet access and end up having poor and unfair competition from carriers. Although it is
unreliable Internet connection. easier to get a leased line nowadays, ISPs—
There’s no law against monopolistic price wise—can’t be competitive versus carriers
practices. The lack of protection does not give offering Internet access services directly to
ISPs the level playing field they need to grow, consumers and corporations. Despite appeals
sustain, and survive in these hard times. to government policy makers, concrete action
Better enforcement of the E-commerce still remains to be seen. This is a concern that
Law. The slow adoption of various government is killing small entrepreneurs, particularly in
offices regarding the Internet/e-commerce the rural areas.
mandate of the E-Commerce Law is affecting Expensive and unreliable power supply.
possible growth and adoption in the In rural areas, it is still considered normal to
countryside. experience daily power outages. For ISPs,
maintaining back-up power resource is an
Telecommunication and bandwidth add-on cost that is not helping the business.
infrastructure Note as well that power rates in the provinces
63% of ISPs feel that the current bandwidth are higher than in urban areas. If addressed,
and telecommunication services still have a lot savings can be passed on as higher pay to
of concerns that need to be addressed. These personnel and expansion of services.
include: Post-paid accounts have tons of bad
Carrier interconnection. There are still debts. If all receivables are claimed then
problems with the interconnections among small ISPs will earn and have enough money
carrier providers. It is still hard to connect to to upgrade their equipment. People are not
non-PLDT phones from PLDT phones. Since afraid when they don’t pay their debts since
PLDT serves 70% of all telecommunication they know businesses don’t want to go into the
users, this is a real concern. hassle of taking them to court if the debt is not
Service reliability. Carrier or bandwidth in the thousands. So businesses are the ones
provider downtime is prevalent and support afraid of abusive subscribers.
is poor. Problems take days to solve. Also,
there’s no refund or incentive provided to Extinction of small Internet service
ISPs, corporate users, and end-user clients to providers
compensate for these downtime. In a year or two, more small and independent ISPs
Oversupply of bandwidth. 25% of will close doors because they cannot compete. In
respondents feel that there is overcapacity in the provinces, ISPs don’t have the pricing power
infrastructure today. The cost of getting and and the corporate base to sell their service. Their
maintaining it though is still prohibitive based cost is higher since ISPs have to pay for the leased
on competitive market prices today. line to Manila.
Telephone penetration in the provinces
has increased but expensive. There is a Selling to consumers is not as profitable as it used
wide digital divide between rural and urban to be since buyers go for the lowest price no matter
areas. In the case of telephone access in rural how good or bad a service is. Marketing prepaid
households, phone metering is implemented Internet access card is not a viable option either
making Internet access a luxury for those who as hardly any reliable and consistent revenue can
cannot afford it. Sad to say, Internet users in 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 Indicator/Year
entail investment.
A. International bandwidth (BW)
Although there’s higher margin for high-speed
Internet, there’s little demand in rural areas at International Internet BW (IIBW)
this point.
Price of IIBW per Mbps
In the end, the only companies providing Internet B. Local Access BW
are the telecommunication providers while small
ISPs in the rural areas relegated to being Internet BB BW in municipalities
cafés and computer rental shops.
BB BW in cities
Conclusion BB BW in provincial capitols
Internet service providers, particularly the
provinces have somehow accepted that they will BB BW in elementary / high school
close shop sooner or later because they don’t
see the situation improving. The government is BB BW in colleges / universities
not taking action to help when it is the only one
BB BW in IT zones/parks
empowered to do so.
BB BW in hospitals
ISPs are partly to blame. Their lack of cooperation
in giving information reflects that it has not done a BB BW in tourist spots
good job in escalating Internet penetration in the
country. This raises the question: “Is the industry
C. Coverage
worth saving if their contributions to economy BB Homes passed
and Internet penetration can’t be measured
accurately?” Coverage of municipalities and provincial capitals

Carriers, on the other hand, are playing an Coverage of cities and provincial capitals
important role in bringing down the cost of access
Coverage of elementary and high schools
and offering better bandwidth infrastructure. As
it penetrates the dial-up Internet subscription, Coverage of colleges and universities
which is the number one source of revenues
among ISPs, one can’t help but doubt the intent Coverage of IT zones and parks
of carriers in bringing down the ISP market that
Coverage of hospitals
they also serve.
Coverage of tourist spots
Government’s role in protecting and helping the
SMEs still needs to be felt by this sector, especially D. BB Subscribers
the ISPs in rural areas. Although regulation is
not encouraged before to allow market forces to Residential
dictate its growth, the current situation shows Business registered with SEC
that we will see ISPs vanish one by one with their
entrepreneurial faith in government regulators BB Residential Subscribers with websites
shattered.
BB Business Subscribers with websites
Rules and regulations must be set-up to ensure
E. Average Annual BB Price
that there won’t be destructive and unfair
competition between ISPs and telecommunication Per Mbps leased line
companies. Of course, such a perspective is only
worth looking into if we ever care at all for this Per 128 Kbps line (Cable)
sector.

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

1994 2004 2009 2014


BEST AVERAGE BEST 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.

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1 http://groups.yahoo.com/group/ph-cyberview/ 11 RP ISPs face uphill fight for survival By Helen A.


message/2506 Jimenez, Businessworld IT Matters, December
10, 2001.
2 For a complete account of Fidonet Philippines http://itmatters.com.ph/features/features_
from Carlos Legaspi, one of its pioneers: 12102001.html
http://member.newsguy.com/~twilight/tz/
history.asc 12 PLDT eyes 60% of RP Internet mart, by Helen A.
Jimenez and Manolette P. Tabingo, Businessworld
3 Philippines looks back on 7 years on the Net IT Matters.
By Chin Wah Wong and Melba-Jean M. Valdez, 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 _
Computerworld Philippines 05302002a.html
S O U R C E S / R E F E R E N C E S

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 13 Edsamail ends free e-mail service by Rosary
Grace Sarmiento, Computerworld Philippines,
4 Email interview with Jonathan Marsden, admin- April 10, 2002.
istrator and BBS sysop (systems operator) 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
5 • New Service Providers Storm Philippine Internet
Beachhead By Betty B. Daguio, Computerworld 14 Globe unveils wireless e-mail service, by Eleanore
Philippines, May 15, 1995 C. Sanchez, Businessworld IT Matters.
http://web.archive.org/web/19961224173834/ 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 _
www.europa.com/~jra/cyber/globe.htm 06122003e.html
• Six New Ways to go Online in Manila by P.W.
Wong, PC Digest Philippines, August 1995, 16 Intel boosts verification program for ‘hotspots’
archived at: by Geoffrey P. Ramos, Chief of Reporters;
http://web.archive.org/web/19961224173745/ Computerworld Philippines
www.europa.com/~jra/cyber/feat/newonlin.htm http://www.itnetcentral.com/computerworld/
• Internet Access Costs Down 50% by Betty B. article.asp?id=12477&leveli=0&info=Computer
Daguio, Computerworld Philippines, November world
30, 1995, archived at:
http://web.archive.org/web/19961224173622/ 17 PLDT firm sees PhP31.5-M earnings from
www.europa.com/~jra/cyber/news/intcost.htm satellite Net service, by Manolette P. Tabingo,
Businessworld IT Matters
6 • Internet use hampered by dearth of lines, funds 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 _
By Betty B. Daguio, Computerworld Philippines 02052003d.html
(January 31, 1995)
http://www.internetreview.ph/modules.php?na 18 A summary of Philippines wireless developments:
me=Forums&file=viewtopic&t=158 The Philippines Taking the Wireless Path, By
• PHnet marks its first anniversary By Betty B. Alex Villafania Metropolitan Computer Times
Daguio, Computerworld Philippines, April 15, 1995 http://www.mctimes.net/2003/2003-ender/
http://www.internetreview.ph/modules.php?na The_Philippines_Taking_the_Wireless_Path.
me=Forums&file=viewtopic&t=157 html

7 The text of the act is at: 19 NTC eyes VoIP guidelines by Lawrence Casiraya,
http://www.ntc.gov.ph/laws/ra7925.html Computerworld Philippines Reporter
http://www.itnetcentral.com/computerworld/
8 Edsamail offers “ISP-free” e-mail service by article.asp?id=12834&leveli=0&info=Computer
Mayme Fernandez, The Web Philippines, March world
31, 2000.
http://www.itnetcentral.com/article.asp?id=2933 20 PLDT, Microsoft team up to launch MSN
Philippinesby Lawrence Casiraya, CW Reporter
9 • Lessons of the Love Bug by Will Garside, http://www.itnetcentral.com/computerworld/
ComputerWeekly.com article.asp?id=12735&info=Computerworld&lev
http://www.computerweekly.com/Article46080. eli=0
htm
• Philippine student group notorious for hacking, i Events since the acquisition by PLDT can be
Geoffrey P. Ramos, Computerworld found at http://www.elife.ph/aboutus/aboutus.
h t t p : / / w w w . c n n . c o m / 2 0 0 0 / T E C H /
php?f=aboutus
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 internetinfrastructuredevelopment
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Promoting Innovation
Through Effective Regulation
The Case of WLAN in the Philippines By Johnson M. Chua

Dealing with Innovation with a host of issues; some of which may not
be readily dealt with under current laws and
Innovation is never supposed to be a bad thing. restrictions. On closer inspection, however, the
In fact, for many industries, it is the engine that issues are actually few and fairly simple (see
powers the business. In electronics, information Table 1).
technology, Internet, telecoms, software,
pharmaceutical and automotive, innovation
defines the business more than anything else. Table 1. Roots of the WLAN Debate
Because of the huge economic benefits that
it brings, regulation is often used as a tool
to encourage innovation. But as with every Primary Issues:
new product or service, regulation often does • There is no existing regulation that
not come easy. This is especially true when a covers WLAN technology and shared
greater part of the rules needed to govern the spectrum usage
technology has yet to be written. In such cases, • Previous laws and regulations were written
the regulatory task becomes that of extending without reference or consideration to
the reach of government, leading to a less than innovations such as WLAN
optimal approach. Secondary Issues:
• Use of a common frequency
Innovation has its price. It displaces old • Interference especially given that some
technologies and adds to the competitive of the frequencies recently determined
pressure in the market. And no matter the and reserved for WLAN are currently
number of times firms are reminded that this assigned and used by other parties
is part of normal business risk, innovation • Need for guidelines to govern private and
continues to be approached with the same public (commercial) WLAN operations
level of anxiety. Perceived as a threat, existing laws and relate it to the prevailing
players resort to various strategies to hinder situation; and to rule on issues relating to
its innovation and this is when things turn new technology in line with such updated
bad. Still, it is this constant pursuit of the next interpretation
best thing that keeps markets healthy and
promotes progress. So for agencies charged
with policymaking and regulation, the main The main issue involves the presence of
challenge lies in specifying and implementing a regulatory gap. This follows from the
rules to govern every new innovation that yield fundamental limitation of the regulatory
the greatest benefits in the long run. process when it comes to industries that are
prone to revolutionary shifts in technology.
Questions and Answers First, laws and regulation—however forward-
looking they may have been purposely crafted,
In the case of WLAN, regulatory authorities are were written with a limited perspective
faced with the challenge posed by every innovation dictated by the technologies of the times. As
that enters the market—how to regulate it and such, existing laws and regulations essentially
what regulations to apply. do not define provision or readily cover
innovations such as WLAN. They also do not
Given the varying concerns aired about WLAN provide the most ideal rules to address unique
by different sectors and conflicting interests that traits that may characterize a new technology
certain parties seek to advance, it appears—at such as WLAN’s system of shared spectrum
least on the surface—that regulators are faced use.

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Second, because the new innovation often has


no exact counterpart in regulation, a regulatory Table 2. EU Directive: Setting a Common
vacuum is created. Given the lengthy process
of drafting new legislation and policies tailored
Regulatory Framework for Electronic
specifically to govern the new market that arise Communication Networks and Services
from the new technology, regulators usually (Adopted July 25, 2003)
adopt a “second-best” approach of simply
scanning the universe of existing policies and
making do with what is most applicable. While A newly adopted EU directive contains
this usually works, this exposes the market to guidelines regarding spectrum allocation
the potential problem of being made to function as follows “radio frequencies are an
under the wrong regulatory regime—which can essential input for radio-based electronic
negate most of its economic benefits. communications services and, in so far
as they relate to such services, should
Such a strategy also leaves the regulator open therefore be allocated and assigned by
to potential challenges and possible blame later national regulatory authorities according
on. Lastly, certain innovations make certain to a set of harmonized objectives and
laws irrelevant and obsolete, often resulting principles governing their action as well
to confusion in the market. This leads to two as to objective, transparent and non-
different approaches. At one end, regulators discriminatory criteria, taking into account
attempt to shape the new market to conform the democratic, social, linguistic and
to existing laws. At the other, strong-willed cultural interests related to the use of
and enlightened regulators make full use of frequency. It is important that the allocation
their powers to interpret laws, update the and assignment of radio frequencies is
interpretation of existing laws to conform to the managed as efficiently as possible.”
times and draft new rules as needed.

Bridging the Regulatory Gap they are regarded. Following the examples of
EU countries that notably impose some of the
Because all telecom regulatory agencies most restrictive spectrum policies, the key to
worldwide have in one way or another faced the coping with the WLAN issue lies in the exercise
similar situation of coping with the introduction of judicial powers assigned to duly prescribed
of innovative products—that involve a unique telecom authorities: power to interpret laws
technology and give rise to new markets--clues and relate it to the prevailing situation; and to
to resolving the regulatory gap in WLAN may lie rule on issues relating to new technology in line
in examining “best practices” employed by such with such updated interpretation.
agencies in response to new developments.
Because of the absence of clearly stated
As a standard rule, radio control laws in guidelines relating to a new technology, which
other countries embody spectrum usage is the case with WLAN, regulatory authorities
and allocation policies similar to that of the are given privilege to exercise their ability to
Philippines (see Table 2). It can even be argued broadly interpret laws. In effect, the current
that developed markets such as US, Japan and policy adopted in most developed countries
the European community have more stringent regarding WLAN is achieved—rightly—with less
measures relating to frequency use compared fear of violating the letter of the law and with
to the Philippines. stronger intent to adhere to its spirit.

In the same way, very few countries have As a point clearly driven by the international
existing regulation that closely relates to WLAN, community, it is not inconsistent for countries
unlicensed devices and shared spectrum use to maintain restrictive policies relating to
(see Table 3). And yet, even in countries with spectrum allocation and use and yet permit free
tougher radio spectrum regulatory regimes, and unlicensed spectrum use for WLAN. Such a
WLAN is typically free and unlicensed (see Table situation should be possible in the Philippines
4). How? (see Table 5).

Contrary to the prevailing view in the In grappling with the Radio Control Law,
Philippines, the answer does not involve going regulators may have to remember that the law
against existing laws relating to the use of was premised on past technologies, without any
spectrum, no matter how dated or irrelevant notion that a shared spectrum technology of the

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scale involved in WLAN is or will be possible. As


such, present day regulators are given basis to apply Table 3.
the full extent of its powers to broadly interpret the
law and apply it to the new market realities. It can
Rules on Unlicensed Devices
do so by taking exception of the fact that WLAN in the US:
utilizes a system of shared spectrum—something
that existing laws do not cover. Part 15 of the US FCC Rules sets out
regulation covering unlicensed devices. The
Operation shall not resume until the condition basic premise of Part 15 is that unlicensed
causing the harmful interference has been devices cannot cause interference to
corrected The rules for unlicensed use of RF licensed operations nor are they protected
devices were first established approximately from any interference.
60 years ago. In 1938, the National
Telecommunications Commission allowed The operational parameters for unlicensed
devices employing relatively low level RF signals operations are set forth in Section 15.5 of
to be operated without the need for individual the rules as follows: (a) Persons operating
licensing as long as their operation caused no intentional, unintentional radiators shall
harmful interference to licensed services, and not be deemed to have any vested or
the devices did not generate emissions or field recognizable right to continued use of
strength levels greater than a specified level any given frequency by virtue of prior
that was chosen to ensure that the device registration or certification of equipment (b)
generally would not cause interference. Operation of an intentional, unintentional,
or incidental radiator is subject to the
The NTC can adopt similar policies relating to conditions that no harmful interference
spectrum allocation and use and still permit is caused and that interference must
free and unlicensed spectrum use for WLAN. be accepted that may be caused by the
operation of an authorized radio station, by
Born Free another intentional or unintentional radiator,
by industrial, scientific and medical (ISM)
While WLAN regulation in the Philippines equipment, or by an incidental radiator (c)
is slowly being folded into the regulatory The operator of a radio frequency device
structure of traditional telcos, it is apparent that shall be required to cease operating the
other regulators worldwide do not share the device upon notification by a Commission
same position. In fact, by keeping it free and representative that the device is causing
unlicensed, they have directly acknowledged harmful interference.
that WLAN should not be regulated as though it
is a traditional telco service.

Table 4. Benchmarking Wi-Fi Regulations

US Netherlands Spain France Italy UK


Covered by No license No license Indoor use does Public WLAN No license
Part 15 rules required required not require any operators Spectrum is
on license must be free
unlicensed Spectrum Spectrum is Outdoor use is registered
devices and is free free subject to liberal and
operations authorization authorized
Moving Growing procedures
towards the presence of
creation of a free public
free access areas
independent
wirelessnet
work insome
cities
Devices are certified to ensure compliance
Commercial WLAN operations are registered for business and monitoring purposes
Market is open to all participants

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Such a distinction is made by these regulators be different to that of private or exclusive


on account of several unique qualities of WLAN. spectrum domains that characterize typical
The first relates to its origin and purpose. telco operations. Property rights are not
As a new technology, perspectives about the assignable—a fundamental feature of WLAN
precursor of WLAN varies. One side argues that which justifies why its spectrum is deemed free
since it bears a similar mark to a miniature in other countries.
cellular or small radio communication system it
should be a closer relative of telcos. Third, WLAN technology has long been a
mainstay in the household through products
The other side presents a more compelling such as remote control toys, microwave ovens,
view, which the international market appears cordless phones and baby monitors (see Table
to adopt. In this, WLAN is descended from its 6). These have historically been subject to
“wired” LAN counterpart. It is an improvement minimal regulation without complications or
over the existing LAN architecture or on a problems. Fourth, WLAN relates to data rather
commercial scale, an extension of the traditional than voice. In the Philippines, as with other
wired Internet access service. countries, data is regarded as a deregulated
market. Lastly, WLAN does not compete with
Second, WLAN technology is distinct from traditional telco services. All these hints of
traditional telco systems and as such, qualifies the non-telco pedigree of WLAN, and provide
for lesser regulation on account of its unique a good picture of the mindset that regulatory
utilization of the frequency spectrum. Rules authorities in other countries adopted when they
applied to a “commons” market are and should decided not to regulate WLAN as a traditional
telco service.

Table 5. Living the Law Necessary Regulation

Still, while WLAN should not qualify or be


“The radio frequency spectrum is a scarce subject to telco-like regulation, regulators
public resource that shall be administered are nonetheless tasked to oversee the
in the public interest and in accordance with market. Two reasons justify this: use of radio
international agreements and conventions frequency and—more importantly—use of
to which the Philippines is a party...”—Sec. such frequency for profit. This highlights
4c, RA 7925 other relevant aspects involved in the current
WLAN debate—interference and regulation
“The radio spectrum allocation and of public (commercial) WLAN operations. On
assignment shall be subject to review in both, market-oriented solutions can guide the
the interest of public service and in order regulatory process (see Table 7).
to keep pace with the development in the
wireless technology with the end in view of Preventing interference. The case for
ensuring wider access to the limited radio interference follows from the fact that the
spectrum and the use of cost effective frequency for WLAN is currently owned by
technology...”— IRR of RA 7925 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
Table 6. Unlicensed Devices in the US this involve measures such as setting of non-
interference standards, certification of all WLAN
devices to ensure compliance and the conduct
• Cordless telephones of interference studies.
• Remote control toys
• TV remote controls Interestingly, the case for protection from
• Toy walkie-talkies interference presented by the Meralco situation
• Garage door openers is not unique to the Philippines. France, for
• Keyless entry and car alarm systems instance, had a more compelling reason to
• Home security systems disallow WLAN—the frequency is used by its
• Wireless routers military. Yet, indoor use of WLAN systems is not
• Bluetooth regulated and through a system of authorization,
public WLAN operations is allowed.

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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 • Registration of public WLAN operation


WLAN Operations • Collection of registration fees Commercial
(Free Wi-Fi operations— WLAN Operations
government, schools, • Franchise and/or licensing requirement
community-based • Collection of franchise and/or licensing fees
or enterprise-based • Collection of spectrum user fees
freenets, etc.) for shared usage

There are also other ways to limit the interference Establishing guidelines for public/
problem from becoming troublesome. In the commercial WLAN operations. Public WLAN
US, regulators are currently moving to allocate operations are distinguished by the pursuit
additional spectrum for unlicensed broadband of profits. In effect, the main distinction that
use following the findings of a working group regulators should make is between private
on unlicensed devices and experimental and commercial operations. As a commercial
licenses that “the creation of unlicensed bands service, regulators are required to come up with
has been very successful in allowing the guidelines to govern public WLAN operators.
rapid introduction of new technology and that Different levels of regulation are used for this
additional unlicensed bands would create more purpose. Typically, this involves a form of
opportunities.” certification for devices and class licenses for
commercial operations. As a ‘commons’
Allowing private/free WLAN system to
evolve and flourish. In the case of private, Cornering the Market
large enterprise-based, communitybased or
free WLAN systems (freenets), the mainstream One of the ideas currently being floated involves
perspective is that regulation should be kept the possible limitation of the operation of
at a minimum to permit such systems to freely commercial WLAN services to certain types of
evolve and allow the market to enjoy its full companies. Using the argument that commercial
benefits. In many cases, regulation is extended WLAN involves a network element, licensed
only insofar as to ensure that WLAN equipment telcos are currently pushing to make public
comply with set standards. Larger enterprise- WLAN their exclusive market. The argument is
based, community or free WLAN systems are based on the assumption that in the network
registered with the government for monitoring elements market, no restriction is made to
purposes. effect a certain form of market exclusivity.

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such franchises. Franchises would need to be


Knowing the Technology (in a box) examined to ascertain whether it automatically
authorizes telcos to engage in building a new
Spread spectrum communication systems network for WLAN and make money by offering
use special modulation techniques that the service to the public.
spread the energy of the signal being
transmitted over a very wide bandwidth. The RA 7925 defines a franchise as “a privilege
information to be conveyed is modulated onto conferred upon a telecommunications entity by
a carrier by some conventional techniques, Congress, authorizing that entity to engage in
usually a digital modulation technique and a certain type of telecommunications service.”
the bandwidth of the signal is deliberately Franchises given to existing operators limit
widened by means of a spreading function. companies to a specific type of business. For
The spreading technique used in the instance, holders of a local exchange franchise
transmitter is duplicated in the receiver are not allowed to operate a cellular phone
to enable detection and decoding of the service or international gateway facility unless
signal. Spread spectrum systems offer two they also own a franchise to operate such
important technological advantages over services.
conventional transmission schemes. First,
the spreading reduces the power density of In the case of commercial WLAN services, RA
the signal at a given frequency within the 7925 does not provide any equivalent definition
transmitted bandwidth, thereby reducing for such a service. Current franchises owned
the probability of causing interference to by telcos do not automatically extend to the
other signals occupying the same spectrum. provision of new commercial services as they
Second, the signal processing in spread are developed, such as the case with wireless
spectrum systems tends to suppress internet and other future innovations. The
undesired signals, thereby enabling such commercial provision of new services based on a
systems to tolerate strong interfering new technology—if deemed to involve a network
signals. infrastructure element—are not necessarily
subordinate to existing franchises, as with
the rational for creating a separate franchise
As Nicholas Negroponte points out in one of his requirement for mobile phone services.
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 Wireless Internet Service Providers
spread spectrum…is that we can rethink how
we allocate spectrum. We can consider parts of • Fixed line players
it as a large commons, rather than small lots. • Mobile phone operators
Strict boundaries are then replaced by suitable • Internet service providers
behavior.” As mentioned earlier, one of the • Pure play WLAN operators
most significant differences between a WLAN • Property owners
network and traditional networks is that the
spectrum is shared; that it is organized as a
‘commons.’ And, as mentioned earlier, property Under such a situation, the only way the franchise
rights are not clearly assignable in this case. question can be avoided is by recognizing that
public WLAN is a value-added service (VAS)
In effect, the technology inherently allows for or a quasi-VAS. Current Internet services that
multiple players. For this reason, regulation are provided by telcos and non-telco ISPs are
usually applied to govern traditional telcos considered value-added services and are thus,
does not extend to WLAN. Such is the premise covered by more relaxed rules which entails
with which regulatory authorities have opted licensing rather than franchise requirements
to stand down and adopt looser rules when it (see Table 8).
comes to WLAN technology.
Commercial WLAN thus needs to be defined
The second involves the issue of franchise whether it is network-based or simply a value-
restrictions. If telcos continue their efforts added service. If it is deemed network-based,
to corner the WLAN market, the market will then a franchise may be required as existing
have to insist that regulators look at existing laws and franchises do not cover nor consider
franchises and clarify whether commercial any such service and technology. With this
wireless Internet access services is covered in interpretation, public WLAN is essentially a

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new network-based system facilitating wireless the US by non-telco companies such as Boingo
Internet access. It is distinct from networks Wireless and Wayport, and even companies such
of existing services such as local exchange or as McDonald’s and smaller scale operations by
mobile phone. If the issue is forced that only individual entrepreneurs and property owners.
existing franchised telcos own the right to
operate WLAN commercially then regulators Unfounded Fears
would need to determine which type of
franchise currently covers such a service and Many concerns raised about WLAN are clearly
address the issue of whether only holders of overstated. For example, among the most
mobile and other radio-based franchises have popular fears about WLAN is that the frequency
the exclusive right to operate a commercially will be saturated. Given its small range, frequency
WLAN system thereby restricting pure local hopping capabilities, large allocated spectrum,
exchange franchise holders or cable operators and limited market in the country, the frequency
from entering the market, or whether it is the allotted to WLAN can even be regarded as more
other way around. than adequate, if not too much. Not every
household or business will install a WLAN system
Pure play WLAN operators would have no place or much less go into the commercial WLAN
in such a market. Interestingly, all commercial business. Only a handful of commercial operators
WLAN operations and business models fit the can be expected to venture into the WLAN
“reseller” or “value-added service” definition. business. This makes the reserved spectrum band
WLAN operators, private or public, use telco allocated for WLAN more than ample, and likely
facilities to access the Internet. The global to leave certain portions of its reserved spectrum
telecom community appears to adopt the same unused or underutilized.
interpretation. In fact, by keeping the spectrum
free and the operation unlicensed, regulators The same point applies to the hype about
agree that the WLAN market should be open. interference. WLAN remains a highly evolving
As such, there are commercial operations in technology. More sophisticated methods

Table 8. Commercial WLAN Operators need a Franchise?

Nature Involves a network element More of a value added service


Possible
Regulatory Franchise License
Requirement

• WiFi is a new public communication • WiFi is a derivative and/or


network (i.e., only duly enfranchised improvement of services that ISPs
PTEs are authorized to offer the service currently deliver
for compensation) • WLAN is an improved LAN or private
• Commercial WiFi involves a new radio communications network which
technology, an improved service, and a allow multiple users to share a
unique system of shared spectrum common spectrum
usage that is distinct from all currently • Rules for WLAN can be similar to that
enfranchised telecom networks and of radio or paging operators
services (i.e., local exchange, cellular • As a VAS or near-VAS innovation,
phone, international gateway, etc.) commercial WiFi operations are open
Why? • Current franchises do notautomatically to non-telco competition
cover or extend tothe commercial (for • Telco infrastructure is used to connect
profit) operation of new technologies to the Internet
as they are developed • Commercial WiFi competes with
• The commercial offering of new traditional ISPs, not telcos
technological products and • Like the ISP sector today, telcos will
innovations are not automatically likely dominate the market
subordinate to existing franchise • Meralco, which currently owns a
• RA 7925 does not provide any portion of the frequency band
equivalent definition for new allocated for WiFi services should not
technological innovations such as be restricted from offering WiFi on a
commercial WiFi commercial scale

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developed. This could also lead to a regulatory


‘Free’ Wi-Fi Networks challenge by several parties.

• Community networks Forward looking. New regulation must make


Shop owners (e.g., mall operators, provisions to accommodate rather than stifle
fastfood joints such as McDonalds) further developments in the technology. This
• Enterprise-based WLAN service (e.g., can be done by directly drafting new rules or
banks offering free WLAN access to by adopting a more liberal interpretation of the
clients) law (with the purpose of making them relevant
• School/Campus WLAN services to the times).
• Government WLAN services (public
parks, airports, police, government Market-oriented. While certain regulators hold
offices, etc.) 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
of managing the spectrum and eliminating made to maximize the long run benefits that
possible interference can be expected in the can be derived with the introduction of new
future. Market-based solutions can similarly be technologies.
expected to evolve and effective mechanisms
to control and safeguard against interference Recognize the changing market. The market
are likely to be established. is changing and technology is developing in ways
that were never previously thought possible.
Such arguments support the view that the Traditional structures must not be maintained
move to corner the commercial WLAN market at the cost of foregoing the benefits that come
is more a product of a natural impulse rather when new markets are created.
than rational thought. For one thing, telcos do
not have to resort to such a strategy, which can Innovation is good. Innovation lowers costs,
otherwise be interpreted as an overkill. Like improves margins, promotes greater efficiency
traditional ISPs, public WLAN operators will and increases productivity. In the case of WLAN,
rely on telco-owned infrastructure to connect it also has the potential social benefit of making
to the Internet. Similar to what is happening Internet technology more accessible and even
to the ISP sector today, telcos will eventually help expand rural access. Just imagine if fixed
dominate the market (in fact, they are already line or paging operators successfully lobbied to
offering WiFi service commercially ahead of limit cellular phone operations in the early 90’s
a regulation). But even then, such foreseen by using the argument that it will affect the
dominance of the public WLAN market by telcos viability of the business.
should not come at the expense of limiting
competition, specifically by putting a gag on Going Against the Grain
small-scale commercial WLAN operations, free
WLAN networks, community-based and large Undoubtedly, the WLAN debate touches on
enterprise-based networks which can bring various interests and positions, some of
about significant social benefits. which are technical in nature. Without risking
being mired under the weight of such details,
Enlightened Approach regulators must adopt a stance, consistent with
its mandate that focuses on the market rather
Regulating new technologies requires balancing than its personalities. In particular, the welfare
several interests that are often competing. of the market for WLAN operation must be the
Taking a cue from the experiences of other target of regulation. WLAN has the potential to
countries, certain strategies can provide improve competition, with freenets, and small-
valuable guidance in regulating WLAN. scale commercial operations. It is also likely
to give birth to a host of new applications. To
Focus on the issue. As stated earlier, the issue bar such possibilities would be to move in the
is really about the absence of WLAN regulation. direction opposite of where the rest of the world
In effect, regulators are playing catch up with is heading.
the technology. Possible missteps could have
a dramatic impact on the market for WLAN
and other related technologies currently being

72 internetinfrastructuredevelopment
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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are two kinds of high-tech crime, or crime


involving computers,” says dela Cruz. “The first
File viruses were executable files that infected is the usual penal code violations using the
other executables and altered their behavior. A computer as a tool. For example, the famous
virus planted into a word processing program Nigerian scam and its variants used to employ
might rig it so that the author of all documents is fax. Now that the Internet is accessible, the
some individual, possibly the creator of the virus. letter which used to be faxed are now sent by
Vigilance was - and still is - key to preventing e-mail.”
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 For those unaware of the Nigerian scam, this is
even a non-bootable diskette can still harbor a a letter sent supposedly by a deposed Nigerian
boot virus. When you attempt to boot from one dictator’s close relative who wants to take
and it displays the message “Non-system disk millions of dollars out of the country and seeks
or disk error. Press any key to continue,” it has a “partner” to help him out. The letter writer
already loaded the boot sector into memory. claims that the money is not ill-gotten (yeah,
Do not simply replace the diskette with a clean sure) and wants a legitimate business cover
boot diskette and “press any key to continue.” to deposit the money in some foreign bank.
Instead, insert a clean diskette you know to That’s where you come in: You’re supposed
be clean then hit the reset button. Practicing to pose as a contractor, mainly in construction
safe computing includes knowing what dangers work, proposing to undertake a major project
lurk in diskettes or executable files, and how to in Nigeria, for which they will pay you, by bank
neutralize them. Continue to educate yourself, transfer, the full amount of their loot. For your
because then, as now, there were virus creation trouble, you’ll retain 20% of the money. You’re
kits circulating in the underground which made supposed to provide them with your dollar
it easy for even programming bunglers to write account details (or open one if you don’t have
a fairly sophisticated virus. You’ve heard the one yet). Once you do so, you wake up the next
statement so often you could retch, so you’ll morning to find that it’s empty, and that the
excuse me if I repeat it: Computers have made scamsters are nowhere to be found.
doing things easier.
Be extremely wary of even replying to this
That, unfortunately, includes crime against scam mail, as the perpetrators won’t stop at
others - i.e., using the computer as a tool for anything—not even murder—to get what they
perpetrating crime. Alberto “Abet” dela Cruz, want, or to keep you from recovering your
acting president of the Philippine Computer money. An interesting twist to the Nigerian
Emergency Response Team (PH-CERT), defines scam appeared shortly after EDSA II, when a
high-tech crime as any act in violation of the modified form of the letter, allegedly signed
penal code, and of the E-commerce Act. “There 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
An example of a spoof email from an address that does
not exist. It contains an attachment of dubious origin,
in my inbox claiming the most effective drugs
with a high possibility of it being an email virus. for weight loss. My weight of 64kg is ideal for

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my height of 1.7 m so weight loss is the least or usenet newsgroups. You can also mask your
of my needs. There are also these messages e-mail address by adding a bogus host name in
offering “the lowest rates” on housing loans, the domain portion, e.g., my mangled address
then a line toward the bottom of the message might be descasa@no-spam.techie.com, then
saying that the loans are available only to US my signature would contain instructions on
residents. how to make a valid address out of that—which
is simply to take out the “no-spam” part. Doing
Those messages should give you an example this will foil automated email address mining
of how much of a waste of bandwidth and software that scours newsgroups and mailing
mail server storage space they can be. Some lists for the addresses of the participants.
spammers scour newsgroups and mailing lists
for e-mail addresses where they may send At the same time, if anyone in the discussion
their product pitches. Some shadowy Internet group has a legitimate reason for getting in
businesses make lists of e-mail addresses touch with you, they’ll know how. On the
available on CD for varying amounts of money other hand, it should be safer to leave your
depending on the number of addresses. These email address at well-known and established
are for the spammers who want to get into sites such as Yahoo! or Lycos, or at the sites
business right away and don’t want to wait till of erstwhile exclusively brick-and-mortar
they’ve gathered a sizable number of addresses. companies such as WalMart or Macy’s. Web
In either case, you’ll note that spamming does sites of established print and audio-video
entail some expenses, but all they need is a media such as the New York Times, the
response rate of about 1% to make a profit. Washington Post, and the like should also
So, stopping spam means that they should get be responsible enough not to let others so
lower than 1% response rate and the closer to much as see your e-mail address, let alone
zero, the better. That means that when you get harvest them for spamming. Always look for
spam in your inbox, delete it. If your ISP has a their privacy statement and a commitment
webmail interface, go there before downloading from them that they won’t sell your e-mail
your mail into your local storage, and delete address, before you leave it with them.
mail that you’re sure is spam.
One more thing: although the US has passed
While mail filters can stop most spam from anti-spam legislation, don’t expect the
getting into your inbox, there are still those Philippines to follow suit. The Internet isn’t as
that might make it through. Mail filters that ubiquitous here as in the US, so our legislators
search for “viagra” in the subject or body of the won’t have that on their minds. If there’s one
mail will be fooled by variations, e.g., via gra thing we might have to worry about, it’s cell
or v*i*a*g*r*a. You’ll have to purge it yourself, phone spam. Fortunately, the cellular carriers
before you download your mail onto your own PC. have decided to police themselves and bar
The best way to handle spam is to try not to get spam from their networks.
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 Back to dela Cruz, he says: “The target of the
use that one instead. Use that same address if second type of high-tech crime is the computer
you want to participate in discussion mailing lists 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
An e-mail inbox full of spam, or unsolicited messages portion of the file. .ZIP files, on the other hand,
(actual URL edited for security purpose). are not executable themselves but may include

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executables, e.g., PIFs (Program Information “Vigilance, vigilance, and vigilance,” says dela
Files, a left-over from Windows-on-DOS) or Cruz, “are the three most important weapons to
screensavers (yes, they’re actually .EXEs with counter high-tech crime of any kind. You have
a .SCR extension). Microsoft’s overly powerful to ensure that you have the latest patches, and
scripting language has enabled viruses, trojans, even then, you should be wary of unexpected
and worms to hijack an Outlook Express address occurrences, e.g., an email message even from
book and spread itself by sending copies of itself someone you know, with a file attachment that
to all the entries in the address book. you’re not expecting, or with an out-of-character
subject or body. A Subject: like ‘Re: project’ should
In some cases, a virus can even mask the sender raise suspicions especially if, by convention, you
by using a random entry from the address book. always mention the specific project that you
So, if you receive an infected email message and a partner or associate are working on, e.g.,
that supposedly came from me, don’t be fooled. ‘Subject: Eddie Gil campaign’.”
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 Computer networks employ some form of
on Windows. security to ensure that only authorized users
can get into the system. Hacking, as defined in
My last sentence shouldn’t be interpreted as a the E-Commerce Act, is unauthorized access of
statement advocating the junking of Windows in a computer system. Purists will complain that
favor of some other OS—that would be beyond the act defined in the ECA is, strictly speaking,
the scope of this publication. The only cracking, not hacking. Hackers are highly skilled
thing I’ll say about FreeBSD is that techies who know more about the ins and outs of
it has worked for me over the computer systems, both hardware and software,
past five years, and that I hardly than the above-average user. They can do tricks
have to use Windows. When I with even word processing programs that will
am in Windows, I do have to drop jaws.
be careful when reading my
web-based mail, specifically Cracking, on the other hand, involves breaking into
about opening attachments. a computer system to cause some harm: mainly
No matter how secure and up- to steal or destroy data, or in the least malevolent
to-date the security might be of cases, leaving digital graffiti in the manner of
the network I may be working in, “Kilroy was here.” Website defacement has
I’m still paranoid, especially about become a high-profile manifestation of crackers.
file attachments, even from people I know. If “Again,” says dela Cruz, “vigilance, vigilance,
I don’t expect a file from them, I’m suspicious, vigilance. Make sure that your servers are secure
and ask them about it—by a voice call if they’re by applying the latest patches not just to the OS
just a local call away. but to any application software that exposes your
server to the outside world. Web servers, telnet
One particular kind of robotic troublemaker or ftp daemons, instant messaging servers: make
that’s particularly disturbing can hijack not sure that you subscribe to security alerts that will
just your address book, but your entire PC, inform you of any vulnerabilities in your server
and convert it into a zombie to participate in software, and how to correct them. Telnet and
a distributed denial-of-service (DDOS) attack ftp daemons in particular are a bad idea because
against other computers. In effect, you become they’re inherently unsafe. Use sshd (secure shell
an unwitting accomplice in a criminal offense. daemon) or sftpd (secure FTP daemon) instead.
A DDOS attack saturates a server with so many Then disable remote root login.”
requests that it slows down to a crawl, or gives
up altogether and hangs. Crackers exploit vulnerabilities in server software
to gain control of a computer. Such vulnerabilities
DDOS attacks are unfortunately platform- usually involve what’s known as buffer overflows,
independent, meaning they can hit Windows, where a command might exceed its programmer-
Macintosh, or *nix servers. Fortunately, there is allocated length. The excess characters are not
a defense against DDOS, and the Anino project, discarded but get into the computer’s command
based on OpenBSD, withstood DDOS attacks buffer where they might steal the user account
in last year’s DefCon Manila. Also worthy of file, or maybe the file of website accounts.
mention is the fact that it was a Filipino team “Regardless of the possibility that they might be
that designed Anino. stolen due to a security hole, passwords are still

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important. Impress upon your users the need I also asked dela Cruz about that. “Hotbed of
for secure, hard-to-guess passwords,” continues cracking activity? Yeah, I also heard about that.
dela Cruz. But there’s nothing we’ve found to support that
allegation.”
“Words taken from any language are a bad idea.
Better to combine two words, and maybe separate Maybe the sources of those allegations have read
them with a punctuation mark or numeric digits Gartner’s and the Meta Group’s reports about
- maybe both. The system should also prompt the Philippines having the most qualified IT
them regularly, maybe once every month or two, professionals, and jumped to the conclusion that
for a password change.” “Perform a vulnerability Filipinos are the also most skilled crackers? But
assessment of your system,” says dela Cruz. that’s like saying that a sharpshooter will make
“If you can, engage the services of white-hat a good assassin. In any event, let’s look at some
hackers.” real-life cases.

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), As the old classic love songs goes “Love letters
have a command map that’ll check for your open straight from the heart...” This one, however, came
ports. straight from a computer, allegedly from that of
Oniel de Guzman, then a graduating student of
Whatever you use, close the ports that you don’t AMA Computer College. News reports indicate
need, or stop the services that you don’t need. For that de Guzman submitted the virus as part of
instance, there’s little sense in running a POP or web his senior thesis, and that the panel rejected it,
server on your home PC. In fact, the Acceptable denying de Guzman his college degree.
Use Policies (AUPs) of the broadband providers
prohibit the latter on residential accounts. For a The circumstances surrounding its release are
more in-depth vulnerability assessment though, still unclear, but what is clear is that it wrought
you’ll need the physical presence of a security havoc on computers worldwide. The virus came
team. One question I asked dela Cruz was if there as an e-mail with the subject “I Love You” and a
were any documented cases of computer break- file attachment that harbors a virus that searches
ins. Normally, the victims of computer break-ins the user’s hard drive and erases all standard
would rather keep things quiet, because of the graphic files: GIFs, JPEGs, BMPs, etc. That’s
perception of poor security. A stolen database is just the beginning: it then sends itself to all the
a sure way to repel customers if the news broke addresses in your Outlook Express address book.
out. “Surprisingly,” answered dela Cruz, “there That’s how it was able to spread so quickly.
have been documented cases. The LoveLetter
virus, even if it wasn’t a crime when Oniel de Ironically, it shouldn’t have been able to do
Guzman allegedly let it out into the open, is so if people were more suspicious about a
the prime example. The exposure even went purported love letter from a stranger. Internet
international. users should’ve learned by now not to trust in
a mail message that has an attachment you’re
Then there’s this Asian Pride group that owned not expecting. In my case, the first copy I got
up to the defacement of several sites. There’s was from another male, and it was easy for me
also the Thames case.” A more recent case was to smell a rat. Others opened the attachment,
the credit card fraud case involving Yes! Pinoy. maybe out of curiosity. Whatever the reason
I also heard on at least two occasions that the may be, the virus then opened up their Outlook
Philippines was the hotbed for cracking. I found Express address books and spread itself, but not
that strange, because I saw the transcript of an before wiping out every graphic image file on the
underground chat room for crackers. One of them hard drive. To repeat: it was easy to avoid Love
called Filipino crackers “lamerz”—i.e., amateurs Letter and its variants, just be suspicious of all
who don’t really know how to break into systems. attachments.

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There was also a trick to foil a virus so it doesn’t Provider (ISP). TSSI then called some of the
spread beyond your PC which involved entering a US residents who were supposed to have been
dummy entry in your address book, and it should sending money, and found that the latter had
begin with an exclamation point (!) to ensure that never heard of YESPinoy and had no connections
it’ll be the first entry. The virus then will confine with anyone here. With the cooperation of SMART
itself to your PC, and you’ll have contained the Telecommunications, TSSI found that the SMART
damage. It also pays to keep backups of your Money Card was drawing cash from Automated
most important files. A complete discussion of Teller Machines (ATMs) in Quezon City. TSSI, after
backup strategies and devices is beyond the scope further investigation, worked with the National
of this article, but I do want to mention that both Bureau of Investigation (NBI) to conduct a sting
CD burners and writeable CDs are cheap enough operation that resulted in the arrest of three
to end all arguments about backing up. individuals who were detained at the NBI jail
and charged with violations of RA 8484 (Credit
Thumb drives, solid state devices that plug into a USB Card Fraud), RA 8792 (E-Commerce Act), and
port, are more expensive but have the advantage falsification of public documents and estafa under
of portability. Lastly, I would like to disagree with the Revised Penal Code.
the notion that Love Letter was a work of genius.
It was not, it was based on scripts that are widely TSSI said the design of its software enabled them to
available in the computing underground. 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
The Thames International School of Business wanted the public to know was that, when a credit
stores its curricula and course materials, cardholder disputes a charge, the issuing bank will
including courseware, on its computer network. decline the transaction and it’s the merchant who’s
A pair of former employees used their old left holding the bag. In this case, TSSI would take
access codes to log on to the network and copy the hit. It’s important to mention this, because those
the course materials. The case is now in court who might intend to engage in a fraudulent credit
so we can’t discuss it at length here. 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
Total Solutions Software, Inc. (TSSI) is a back to them, in contrast to the salaries they pay
subsidiary of YES Limited, a Hong Kong- their programmers. If there are enough declined
based IT company founded in 1988. In 2003, charges, TSSI could go out of business and their
TSSI launched www.YesPinoy.com, a Filipino Filipino programmers unemployed.
community website aimed at bringing together
Filipinos from all over the world and provide There’s much more to cover. I haven’t even
them with a means to contact Filipinos both in managed to mention other cybernasties. What I
the homeland and those working abroad. The can do is send you over to http://www.aoema.
service relevant to our discussion is YESPinoy org, which engages in educating the computing
Send Money, which provides members a way to public about viruses, trojans, and worms, spams,
send money to a SMART Money cardholder in the Internet scams, and the like.
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

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Albert “Abet” Pangilinan Dela Cruz


President, Philippine Computer
Emergency Response Team (PH-CERT)
Columnist, Entrepreneur and Consultant

Janette Toral (JT): Are there any significant ADC: Again my answer is on the affirmative
breakthroughs with the way we fight cyber side. I see thatconcrete steps and efforts
crime today? are underway today as we speak. We have
a judiciary that is forward-looking and
Abet Dela Cruz (ADC): Most definitely. very aware of the benefits of information
People from all sectors including law technology. We have good people in the law
enforcement agencies are now very aware enforcement sector, who either have or will
of the dangers and implications of computer- undergo training. I see foreign assistance for
related crime. We have learned our lessons our anti-cybercrime endeavors as well as full
very well and are taking proactive steps to support from our country’s leaders. We have
combat such. been at the bottom and there’s no way for us
The public has reached a level of to go but up.
consciousness in IT that has made them aware
of both the benefits and consequent dangers of JT: How technology-sophisticated do you
using the computer and the Internet. think criminals will be in the next 10 years?
There’s big progress on the development Do you foresee organized crime or online
of awareness and technical know how of syndicates demanding protection money for
our law enforcement agencies. It’s not safe transactional environments?
as great as first world countries but we
are definitely on our way up. I see major ADC: The more information gets out on
efforts, despite the limited resources, the net, the more sophisticated everybody
of our law enforcers to upgrade their will become, not just the bad guys but also
capabilities to acceptable levels. Various those who are out to catch them. The cat and
cooperative efforts with the US and other mouse scenario will still persist but the stakes
countries have been happening and have will indeed be higher and more complicated.
lead to great strides in our effort to fight The group that will have the resources will
computer related crime. eventually win as progress in technology will
greatly speed up processes, applications,
JT: Government is now disseminating posters and of course computing power will increase.
showing most wanted criminals, kidnappers, Speed spells the difference in a lot of things,
and the likes. Do you think these wanted the more things you can do in a short span
posters will be on their websites soon? of time, the more efficient and effective you
will be.
ADC: That’s relatively easy. We now have law There is a possibility that indeed computer-
enforcement websites up and running, and related crime will grow into a more organized
that can be done in a jiffy. You’ll be surprised and systematic manner. With the progress in
on how the technical capabilities of some of technology, so goes the dangers as well, just
our investigators have improved. The only like anything else in life. We cannot discount
problem is the lack of tools and equipment. the possibility and all we can do is prepare
for it.
JT: Do you see our law enforcement entities
or courts having more ICT expertise in the
next 10 years?

“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.

hightechcrimes 81
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.
philippineinternetreview

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 want. It’s not like there’s a camera in my room
in comics. His fiction work, like “Wasted,”easily connected to the Internet monitored by the
touches the heart of the reader and remembered government to see what I say and do 24 hours
for years to come. a day. This issue of death of personal privacy
because you give up some personal details
JT: Please give us a background about your online is a whole lot of bullshit. People find out
website and other endeavors. MORE about you in the trash you throw out of
your house. Why don’t people watch against
GA: I have been drawing comics for several that?
years before the Internet hit it big in the mid 90s.
When I first surfed the web in 1996, I realized JT: Do you worry about your obsolescence and
its huge potential for better communication. that of “speculative” or “exploratory” fiction?
I resolved to put my portfolio
online for the purpose of finding GA: I don’t worry about it at all. I honestly
people who would like to hire don’t know what the Internet can possibly do to
me for various projects. In that kill “speculative” fiction. A lot of people will still
regard, my online portfolio has want to read in spite of the Internet. And read
been quite successful because actual printed books no less. In spite of the
I’ve gotten jobs through people propagation of advanced albeit pirated versions
who hired me after visiting my of Harry Potter and the Order of the Phoenix as
site. a passable PDF version online, people still went
in droves to buy the book, making it one of the
I produce my art simply with best selling books worldwide.
paper and any art tools I have
available placing ink on paper. JT: What do you think will be the most
I use the computer only when unexpected and spectacular impact of the
I need to send the art via the Internet in the next 10 years (circa 2004-
Internet which consists of scanning and some 2014)? Why?
cleaning in Photoshop.
GA: I really can’t see that far ahead. I mean,
Being a comics artist, much of my time, effort 10 years ago who would have thought that the
and concentration is directed towards that. Internet would explode in just a few years and
This is perhaps why I never changed my site revolutionize communications forever? A lot of
in terms of design and technology. I’ve yet to people have made predictions before then and
master HTML, and I’m clueless when it comes none of them have mentioned the Internet. So
to things like Javascript and Flash. So I just try I’ll just wait to be surprised.
to make my site as easy to navigate and as asy
to look at as possible. If I would have to hazard a guess, and mind
you this is just for fun speculation, something
JT: Does the Internet age mean the death of that I could put in my comics... I see people
personal privacy? Why? connected to the Internet ALL the time whether
they are at home or on the road. They would
GA: I’ve always been puzzled as to why people carry their computers on a small device
are up in arms about “loss of privacy” on the attached to the arm. Young kids will make it
Internet. It doesn’t matter to me if people know into a fashion accessory. Of course one can
what my name is, what my e-mail address is or do this with cellphones, but computers of the
my educational attainment. It doesn’t matter future will be more sophisticated with a lot
to me if people know my hobbies, my favorite more features than what cellphones today
movies, or the places I go to on the Internet. can offer. Because speed would have risen
How exactly can those things be used against astronomically by then, downloading files, no
me, or used to take advantage of me? Spam? matter how big, will no longer be a problem.
Junk mail? So what? I can delete them all if I People can watch movies anywhere they like,

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listen to whatever music they want to hear. Of JT: What type of person and what skills are
course, piracy grows along with the growth of rewarded by an Internet dominated society?
technology so downloading free movies and
music will become more rampant. I really have no idea. I think anyone can be
adept in whatever skills necessary to get a
Taking it even further... probably 50 years from handle on the Internet. But I do think those
now, people will be able to enter the Internet who are NOT afraid of the computer (I was
themselves and interact in a virtual community once), and have the knowledge of it inside out
which exists online. Information will come fast would do well.
and furious. No information in the world can be
hidden from anyone. JT: There are now portable e-book readers
in the market. Does this affect writers and
People will then continue to live in their publishers?
computers and a thousand years down the
line mankind will evolve even further. Human I think the writers and publishers let it affect
bodies will physically shrink as reliance them when it really shouldn’t. Like the Harry
to these diminish while brains grow as use Potter example I cited previously, PDF files of
increase. In a few thousand years we would the latest book have been circulating widely
have evolved into beings who are suspiciously months before the book came into print. And
like the aliens we are so scared of in movies yet when the book finally became available,
like the X-Files. people STILL came in droves to buy it.

JT: Will the Internet change the struggles of love, Maybe some writers opt to write books
relationships, and interpersonal dynamics? specifically for the e-book format. But unless
the problem of piracy is solved, there is little
GA:It has certainly changed mine and not chance of it becoming profitable in the long
exactly for the better. My wife is continuously run.
frustrated to find me online instead of being
on my desk working. Being online is very JT: Do you think as downloadable titles and
addicting...and I think if this tool is not used literature become more available online in the
well (and evidence suggests it has not been future, Filipino consumers will prefer reading
used well a lot), it does not bode well for the from such?
future. It could build walls between people,
although it could also bring people together. GA: Speaking strictly for myself, I wouldn’t. If
Lately I noticed people would tend to just e- such books are not available elsewhere, I might
mail instead of call or meet personally. On download it and print it so I can read it. But I
the other hand, it can also help maintain the don’t see myself actually reading a book from
communication between two people who would a computer.
not have otherwise communicated because of
distance.

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.

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By Juan Magdaraog

“The power of the Web is in its universality.


Former Executive Director Access by everyone regardless of disability is
Information Technology and an essential aspect.”— Tim Berners-Lee, W3C
Electronic Commerce Council Director and inventor of the World Wide Web

For the first time in history


Melissa “Toby” Monsod was a DTI Assistant the technology is available
Secretary from 2000 to 2002. She is the first to level the playing field for
Executive Director and laid the groundwork People With Disabilities
of the Information Technology and E- (PWD). The Internet, World
Commerce Council (ITECC) from July 2000 Wide Web and ICT in general
to April 2001. have empowered PWDs. I
should know. I’m one of those
She led the drafting of the Implementing empowered individuals.
Rules and Regulations of the E-Commerce I’m fortunate enough
Law. It was completed within 30 days from to be living in the age of
the passage of the law. information technology. A
time wherein the tools have
been developed where access
Toby was greatly involved in the formulation
to information is virtually at
of the Internet Strategy of the Philippines
your fingertips. I’m also fortunate to have family
(ISP.COM) that focused the efforts of the
who encouraged me to learn and develop the skills
government and private sector in capturing necessary to make use of the Internet and ICT.
business opportunities in IT now referred My first experience surfing the Internet was
to as “E-Services Philippines” to generate on a 486 PC with a 28.8 kbps modem. I was still
export revenues and employment for the in college at that time. Even then the Internet
country. 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.

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I applied at several companies. Some of which easy. Now, access to information and doctors
did not give me a chance. I eventually found one are readily available. Websites and discussion
that did. After several interviews with HR and groups about it have also sprouted connecting
the Executive Director they decided to give me a patients all over the world. Patients can now
chance. Due to the nature of my work (web design) share information, experiences and ideas on how
the Executive Director agreed to allow me to work to deal with the illness. Support for patients and
from home or telecommute. I would report to the their families are made accessible because of it.
office once or twice a week for meetings. I regularly communicate with other patients and
The Internet and ICT played a significant role share with them thoughts about our situation.
in making this work arrangement possible. From dealing with the physical disability it has
At the start of the work day I would connect brought up to dealing with the emotional stress
to the Internet, log in to an instant messaging that have resulted due to it. I can truly say that
service, and download my e-mails. It was through the Internet has helped me a great deal in coping
instant messaging and e-mail that I had contact with my illness.
with people at work. My boss would e-mail me the In the virtual world we call the Internet,
work needed to be done and we would chat via opportunities are equalized for both people
instant messaging to clarify or discuss whatever with disabilities and those with out. While it is
needed to be talked about. I would then do my work true that some PWDs still have a difficult time
and upon completion use File Transfer Protocol accessing information through the Internet, it
(FTP) to upload it to our server. For almost two goes without saying that it is easier now than it
years this was my work arrangement. was several years ago. As technology progresses
Technology improved as time passed by. I it will become easier and easier for people
eventually upgraded to a DSL connection. This with disabilities, like those who have sensory
improved telecommuting a great deal since I was impairment, to make full use of the Internet and
able to stay online the whole day. Bigger bandwidth its power. It is therefore important to teach and
also made for faster downloads and viewing of equip PWDs with the knowledge and the facilities
richer content and media. Conferencing was also to make use of the Internet. It will surely open
made available—both group conferencing and doors and opportunities to live and work better.
voice conferencing. This improved communication I know, I have a better life because of it.
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 Juan Magdaraog is the Web Design Director for
be close to impossible. Due to the rarity of my Innov8, Inc. He also contributed to the book,
illness it has been difficult in the past to search “Reflections from a Different Journey. What Adults
for information about it much less doctors who with Disabilities Want All Parents to Know” (http://
specialize in treating it. The Internet made this 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.

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
The Philippine Web Awards is the premiere is partly to recognize the growing number of
award-giving body that recognizes the best Filipino websites—to another format for a wider
Filipino websites on the Internet. audience. And the idea caught on.

JT: Please give a background about yourself JT: What is your role in the Philippine Web
and your Internet life. Awards?

HB: I have a parallel career in finance, having HB: During the first two years, I was
worked in SGV and BPI. But I started using actively involved in practically all aspects—
the Internet in 1996 when I first wrote for PC conceptualizing the awards guidelines, inviting
World Philippines, later penning its Web Watch judges, overseeing the judging process,
column where I reviewed the first few Filipino promoting the awards, even writing the script
websites then. Then PC World of the awards night program!
included an insert, which I edited,
about website reviews, taken from Recently, I’ve taken a more consultative role,
The Web magazine of the US. A as each area of organizing an awards program
year later, WSCPC spun off The has been delegated to specific committees.
Web Philippines, and I became the There are different people handling the judging
editor. I served in that capacity process, the updating of the website, the
from 1997 to 2000, and resumed promotions, the event management, etc. I do
in 2002, renaming and reformatting not have a direct hand or operating responsibility
the magazine into a business and in the entire process but I am always around
technology publication as Enterprise for consultation. I still do help in promoting the
magazine later that year. awards through tri-media.

I was also WSCPC’s Online Business Manager JT: Would you refer to the Philippine Web
from 2000 to 2002, launching and managing the Awards as the FAMAS for the Internet?
operations of our IT portal, ITnetcentral (http://
www.itnetcentral.com), and our publication HB: Well, that’s how we billed it when we
sites. In total, I’ve been using the Internet for launched it in 1997, since it’s a quick way
close to eight years. Given the nature of my of getting people to understand what it’s all
work, I’m online almost everyday for almost about. While we no longer promote it as the
the entire work day. The Internet, particularly FAMAS for the Internet set, it still boils down to
the Web and e-mail, are an integral part of my an industry competition which awards the most
professional and personal life. outstanding Filipino websites of the year.

JT: Can you give us a bit of history on how the JT: How did the Philippine Web Awards
Philippine Web Awards started? 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 HB: The first few years were naturally a learning
magazine (now Enterprise magazine). It was experience for us, given the ad hoc approach
pattered after the Webby Awards of the US we took. It was a way like an Internet startup—
(Webbys). The Web magazine in the US— bootstrapping and multitasking. We started in a
published by IDG (International Data Group), small venue (Hard Rock Café in Glorietta, Makati)
of which WSCPC (WS Computer Publishing and later moved up to bigger ones (Shangri-La,
Corporation, now Media G8Way Corporation) is Meralco Theater, New World Hotel).

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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?

HB: Primarily because they believe in the


Every year, we fine-tuned the judging process, concept. It also has that coolness factor which
making sure we cover loopholes. Definitely, the they might want to be associated with. But more
set of judges we’ve invited have increasingly than that, they want to be associated with the
become highly regarded, given their background promise of the Internet and New Media. They
and reputation in the web development know these web developers are at the cutting
community. We’ve had more and more judges edge of New Media and they want to support
who are well-known internationally. So there this effort to recognize them.
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 JT: Is the awards going to be institutionalized
that regard. Their multimedia talents continue (or is it already)? Or will it just keep on moving
to wow the crowd during the awards night with for as long as there are sponsors?
their animated clips.
HB: It’s not institutionalized in the sense that
We’ve also done a better job in the People’s there’s a separate foundation or academy
Choice Awards segment, and last year we running it, like the Academy Awards. But while
introduced SMS voting as a way of expanding the actual operations reside with us, it has the
further the audience of the PWA. participation and support of the web community,
whose members are perennial screeners and
The awards night itself has become better- judges. In the end, it’s the web community,
organized and continues to be entertaining. along with some experts from other industries
Some of the country’s top bands and artists that decide the winners. It’s peer competition if
have performed at the PWA. you look at it that way.

We changed the name from the Philippine And it’s practically a widely-recognized industry-
Webby Awards to the Philippine Web Awards supported awards program, which has the same
after seeking the advice of IDG. But it does credibility and support as awards programs
recognize and encourage our efforts. of other industries. Press releases, news
articles, brochures, annual reports, executive
Now that we’ve formed a separate events speeches, and other promotional materials of
group, we’ll be expanding the PWA franchise past winners--from the freelance web designer
to cover more areas and groups. We’ll also be to the Top 100 companies--all mention their
introducing ancillary activities such as seminars. achievements from the PWA.

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peoplepower 91
T
he timing seemed perfect: the There has been enough analyses about
Philippines had just gotten a live the causes of the dotcom crash. A report
IP connection to the Internet, and from Infoworld, however, is worth
all the major IT industry think tanks— mentioning mainly because it described
Gartner, the Meta Group, Forrester­­— one of the pitfalls that successful
were predicting that the Web would dotcoms avoided.
generate billions of dollars in revenue.
Thus, we were all witness to the Gold According to Infoworld, the dotcom
Rush of the 20th century, and this one owners were living it up, buying the most
was on a global scale – anyone, even if expensive Beamers and Rolexes, leasing
they only had a part-time (e.g., dial-up) the most expensive and hightech office
connection to the Internet needed only a spaces, and flying first class. Oddly
Web hosting service and a surfeit of guts enough, this was the idea of the venture
to take the plunge. capitalists or angel investors, who
wanted their wards to project an
There was no shortage of venture image of profitability. Ironically,
capitalists and angel investors with that was one of the practices that
bulging moneybags seeking out dotcoms would prove their downfall. In
that would create the next generation of the so-called “new economy,”
millionaires. On the other hand, there old-economy rules still
was no shortage either of Net-based applied: mainly, that people
entrepreneurs looking to make their still expected something
millions on the Web. After all, a mere in return for money. I come
fraction of the world’s 100 million users neither to bury dotcom, nor to
could generate enough traffic to attract praise it.
advertisers into pouring in the money. At
least that was the theory. Unless you’ve Several writers have already
been living a hermit’s life on Mt. Banahaw, done both, the former perhaps
you would know that Netrepreneurs prematurely. What I do want to
discovered—to their dismay—a yawning do is look at those dotcoms that
gap between theory and practice. survived the crash so that we
might remember their adherence
Advertisers did fight for prime placement to old-economy rules and apply
on websites, and kept the dotcom boom them if we should dare a dotcom
going. Unfortunately, they soon found venture ourselves. In particular,
out that their ad placements were not I’d like to look at Philippine
generating any sales. They might’ve dotcrash survivors in the hopes
gotten some click-throughs, but too few that some enterprising Pinoys
of those translated into transactions. might shrug off the dot-bomb
Advertisers realized that they were shakes and come up with a
paying for ad placements that weren’t working revenue model for
contributing to the bottom line, and the a dotcom. Rather than go
decision to cut down on or altogether mile-wide and inch-deep, I
eliminate Web advertising was a no- intend to look closely at two
brainer. Without this lifeblood, the dotcoms: a high-profile and
dotcoms collapsed, turning the dotboom a silent operator. The former
era into dotbomb, dotcrash, and other is a webmail provider, the
similar labels. second an online shop. By Daniel Escasa
philippineinternetreview

SMEs Trailblazing with E-Commerce Thus, interested companies shell out US$500 for
By Janette Toral the US$1,000 worth of products. GODIVA Natural
Skin Care assumes shipping cost as an added
The Philippine Internet Commerce Society launched incentive to these distributors.
the PICS-SME IT Excellence Awards for its 2nd The program, if successfully done, will lead to
National E-commerce Congress (2003). It aimed a steady increase in sales to a level of US$50,000
to recognize SMEs who have managed to utilize monthly.
information technology and e-business best
practices in their operations - and have managed Regional Foods Marketing
to gain benefits in terms of profitability, savings, http://www.bangus-online.com
efficiency, customer relations, supplier relations and Regional Foods Marketing is in the business
other relevant metrics. We’re featuring three of the of de-boning and distribution of Bonuan bangus
nominated companies here. (milkfish). It was established in 1999 and acted as
the exclusive distributor of Bonuan Boneless Bangus
Godiva Natural Skin Care products. Due to the clamor of various independent
http://www.godivaskincare.com distributors, it established its first factory outlet at
Godiva Natural Skin Care won the PICS-SME IT OPN Center Commonwealth Ave. Quezon City. The
Excellence Awards. The company is well known for factory outlet also serves as a showroom and pick-
its innovation in the skin whitening market. up station for independent dealers who are currently
Godiva Licorice Skin Whiteners enjoy high distributing its products.
customer satisfaction. It uses only purified licorice
with the highest glabridin content (40%), a product The company’s website, http://www.bangus-online.
of the latest, state-of-the-art Japanese isolation and com, is the only bangus store on the Internet.
purification technology. Through the awareness he was able to built, the
GODIVA, Inc. has introduced new and exciting company now exports to Abu Dhabi.
natural skin care products to the international Hulsey believes that Internet selling is the thing
market. These products are now being imitated of the future. He explained, “You can reach a lot of
by global brands. GODIVA has been using purified people all over the world with just one website. You
licorice as an active ingredient since 1996, long can send your sales copy to a number of segments
before international well-known brands have started with one click of the mouse, unlike before where
doing so. 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 frequent-
buyer 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 only go so far. As an aside, and for what it’s


worth, many of Yahoo!’s ads are in-house (i.e.,
All experts say that e-mail is the most popular about Yahoo!’s other services).
application on the Internet, not only in terms of
penetration (i.e., percentage of Internet users The answer here is premium services. You can
using it), but also in terms of traffic. Therefore, choose from one of several dozen free mail
e-mail is a strong potential source of revenue. domains from mail.com, but you can get a
As a result, there is a proliferation of free web- “cooler” address, one more indicative of your
based e-mail services. There were three major occupation or personality, for about US$20 a
sources of these mail providers. 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 pop-
unders 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!
There were the stand-alone services whose main also gives out additional storage for as low as
offering was the mail service. Into this category US$9.99 a year. fastmail.fm also provides this
are iname.com (since renamed to mail.com), free service, although fastmail.fm’s IMAP is free,
graffiti.net, fastmail.fm, and several others you and they also have premium services that give
should be able to find on search engines. And, you more storage, or more e-mail addresses.
just in case you think I forgot, there’s hotmail.
com, which attracted enough attention to earn Lastly, graffiti.net’s premium services consist of
a purchase of the business from Microsoft. I IMAP access and more storage. Of the dozens
should also mention that, while mail is the of free mail providers I tried, only one has
primary offering, some services also feature dropped out altogether, a sign that free e-mail
amenities like discussion groups—graffiti.net is can be a profitable proposition. On the other
one such site. The second source was the so- hand, graffiti.net has slowly revised its charging
called portal which allowed one to customize structure—IMAP access used to be free, but it’s
entry point into the site. The biggest and most a premium service now.
prominent example is Yahoo!, which delivers
news, a search engine, and mailing lists, among That’s not necessarily a sign of trouble
others. Another popular example is Lycos. The that graffiti.net might be experiencing, just
third source was the site whose main offering the natural adjustments that any business
was some other service that gave out e-mail undergoes. The bottom line is that free mail,
addresses as a bonus. like any other business, needs a sound revenue
model. This was what was on the mind of
The International Data Group (IDG) gave out Dominick “Dom” Danao when he founded
idgnetmail.com e-mail addresses. In a few PinoyMail.com. He knew, even before the dot-
cases, these sites managed the web mail com crash, that excessive reliance on revenues
service themselves, although many preferred from advertising was an invitation to disaster.
to outsource to mail.com, OutBlaze, and other He therefore looked at corporations that might
dedicated mail providers. Now for the puzzling need e-mail but could not justify a full-blown
part of this equation: if mail providers saw e- IT department just to have an email service.
mail as a major revenue generator, how did they No matter how much money you have, you
make money? Of course, they had advertising don’t spend it on something that’s not cost-
support, but one of the most striking lessons effective. An IT department whose only
from the dotcrash was that advertising could function is to manage e-mail is an overkill.

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You’d have to look for other jobs for them to calendaring, electronic routing of forms, the
do. Your information processing needs – which works. The technical enhancements would’ve
may or may not include e-mail – should weigh cost only a fraction of the competitor’s current
in your decision to set up an IT department. marketing budget, yet management could not
“There are, for example, all these law offices provide anything for development. But that’s
with lots of money but not much in the way the way it goes when you cede control. I respect
of information processing requirements,” says the new management’s decision to concentrate
Danao. “Maybe their IT needs are met by office more on marketing than development.” Still,
suites or other canned software. One day, they Vea’s purchase of PinoyMail made Danao one
decide that e-mail would be beneficial for them. of the first Philippine dotcom millionaires,
But that’s their only urgent IT need, and is not if not the first. Although PinoyMail is under
enough reason to set up a full IT department. new management, the old economy habits
That’s where we come in. We set them up for that Danao instilled will ensure that PinoyMail
as many e-mail addresses as they need for remains profitable for many years to come. At
their staff, and they’re good to go.” Yet, it’s not this point, there’s the inevitable comparison
only cash-rich law offices that can benefit from between PinoyMail and EDSAmail. Although
outsourcing their e-mail. “Schools are among the two employ different technologies, their
our target market for our corporate mail service,” philosophies and marketing strategies are
continues Danao. “For example, we gave Centro similar. PinoyMail requires its users to have
Escolar University (CEU) 3,000 e-mail accounts. some form of Internet access, either at home,
It didn’t even cost the students any significant at the office (subject to the Acceptable Use
increase in their fees, because CEU incorporated Policy, or AUP), or at a Net café. EDSAmail, on
the charge into their computer lab fees. We did the other hand, only requires a modem. Where
a study that convinced them that it was more PinoyMail users access their mailboxes through
cost-effective to outsource their e-mail to us PinoyMail’s Webmail interface, EDSAmail has a
rather than do it themselves, either through an dedicated Windows-only client that dials up to
IT department or through some team (possibly EDSAmail’s servers and retrieves mail and sends
one-person) of part-time mail administrators. In out any pending messages from the user’s PC.
fact, regardless of the size of the organization, Those who are familiar with the Offline Mail
we can demonstrate the cost-effectiveness of Readers (OMRs) that were popular among users
outsourcing vis-a-vis an in-house administered of electronic Bulletin Board Systems (BBSes)
e-mail system.” Obviously, PinoyMail won’t turn should experience déjà vu with EDSAmail.
down advertisers. Danao notes that Citibank,
one of PinoyMail’s first advertisers, continues to EDSAmail, like PinoyMail, started during the
place advertisements there. “Apparently, they early days of the Internet in the Philippines,
get enough business from our users to justify when Internet penetration was still low and
their continued presence,” says Danao. Still, still fairly expensive. A dedicated dial-up client
PinoyMail won’t fold up if all their advertisers independent of an ISP therefore made sense.
suddenly pulls out because the corporate mail Even today, you can’t beat EDSAmail on price,
service is the center of its revenue model. As especially if you don’t care all that much for
an aside, PinoyMail practices what it preaches: Web surfing, friendster, or streaming media,
the philosophy of cost-effective solutions and and need only basic e-mail.
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 blazingglory
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KabayanCentral.com
Spotlight
The IT industry think-tanks’ predictions on
billions of dollars worth of business on the Jovel Cipriano
Internet were anchored in large part on e- PinoyDelikasi.com
commerce, specifically online business-to-
consumer (b2c) storefronts which housed, Jovel Cipriano is well known for being the
electronically, goods and services for Internet entrepreneur behind PinoyDelikasi.com (http://
users to purchase. Thus, Jeff Bezos put up www.pinoydelikasi.com), a web site that sells
amazon.com, and several others followed. Once Filipino delicacies—like danggit, dried pusit, dried
again, though, traditional economic practices mangoes, tuna belly, among others—online.
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.

Prior to this venture, he worked for IBM


Philippines for five years handling its Visayas-
Mindanao 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
Speaking of payment gateways, one of the
a distribution network to
challenges facing potential Netrepreneurs
other countries that enabled
was a means of accepting payments. Credit
him to deliver PinoyDelikasi
cards were – and probably still are – the most
products efficiently. Jovel
popular payment scheme. However, credit card
believes that for as long
merchant accounts still required a considerable
as one has the passion in
amount of work, and not just anybody could
what they’re doing, nothing
get one. Thus, if I put something up for bid on
can stop success from
ebay, just about the only way for the winning
happening.
bidder to pay me was to go to the bank and
Despite problems in
order a money transfer, since I don’t expect
logistics, online payments,
to be able to get a merchant account. On the
export restriction of Filipino
other hand, if I were to put up a Web storefront,
delicacies, and encountering
I may just have to bite the bullet and apply
unethical distributors, he
for a merchant account. Over the years, many
enjoyed the recognition and fame accorded to
electronic money services have sprung up that
PinoyDelikasi.com by various sectors as he got
allowed anybody with an e-mail address to send
invited in various events to share his story. His
and receive money electronically. This meant
site was also featured in international publications
that PayPal users could send money to other
and got nominated for several awards.
PayPal users, in much the same way that you
Apart from running his export business, he
might pay me out of your wallet, face to face,
now does consulting as well for companies who
for a used cell phone I might be selling. The
are planning to put up their own dotcom site.
aforementioned PayPal was among the first,
and remains the most well-known.

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Similar to what happened with success stories in the case of PayPal, possible,” says Santiaguel.
involving small companies, PayPal was purchased (Remember that PayPal doesn’t accept Philippine-
by Amazon.com. PayPal and similar electronic based accounts.) “It didn’t really cost us anything
money remittance services were meant mainly extra because he was there already anyway.”
for non-merchant Internet users who needed Although Santiaguel replies to the webmaster and
to get paid for goods or services. For instance, info@kabayancentral.com addresses, he’s much
independent programmers who work from home, more than a webmaster. He’s actually functioning
or away from their customers’ premises, could as the head of the Manila operations, supervising
benefit from a PayPal account. All their clients two messengers. He also does customer support,
have to do is pay them through PayPal, which will which consists mainly of questions about deliveries
then credit the programmers’ PayPal accounts. and debited credit cards against goods that hadn’t
PayPal also has a merchant account set-up. If US- been delivered yet.
based netrepreneurs had to contend with setting
up payment gateways, the challenge for RP Web He sends off the two messengers from a rented
merchants was an order of magnitude higher. In the two-story apartment in Kapitolyo, Pasig City to the
early days of Internet commerce, local banks were malls, primarily Megamall in nearby Mandaluyong
slow to give out merchant accounts. If a Philippine- City, to buy the goods ordered by their customers,
owned storefront wanted a merchant account, it then pack them for shipping. Although they pay
was easier to get one from a foreign bank. retail prices, they don’t have to maintain inventory,
so the margin of retail over wholesale just about
However, that meant a time frame of three months evens out with what inventory would’ve cost them.
for the issuing bank to transfer the credit to their The PhP15,000 they pay for rental of the apartment,
accounts. Today, merchant accounts are a bit easier the cable Internet connection, Web hosting, the
to get from local banks. On the other hand, payment wages of the messengers, and Santiaguel’s own pay
gateways like PayPal are in fierce competition with constitute much of Kabayan Central’s overhead.
credit cards, and there’s still a sizable number of
Internet shoppers with PayPal accounts who prefer “We don’t need a fancy office in some expensive
to use those over credit cards. Thus, a PayPal business district like Makati’s CBD (Central
account is a must. Unfortunately, the Philippines is Business District), the Ortigas Center, Eastwood,
on the list of countries where PayPal doesn’t operate. or Bonifacio,” says Santiaguel. “We don’t ever need
The reason, without elaborating, Paypal gave on its to entertain visitors. We don’t have any wholesale
web site is “local banking laws.” Another payment deals with Vicor or Viva, or with any of the publishing
gateway is StormPay, which used to accept users companies. We don’t entertain customers either,
with Philippine addresses. However, a year or two because they’re in the US. We don’t have a local
ago, StormPay struck the Philippines from the list market.” Kabayan Central sells just about anything
of acceptable countries, citing the prevalence of Filipino: mainly books, and audio and video discs.
credit card fraud, and cancelled all accounts with “Video discs of classic Filipino films are popular, as
Philippine addresses. are audio CDs of both contemporary and classic
Filipino music,” says Santiaguel. “Cookbooks with
These were the challenges facing KabayanCentral. recipes of Philippine cuisine also sell well.” Kabayan
In fact, they had barely begun operations, as Central has found itself a market of Filipinos in the
tatakpinoy.com, when they faced a legal challenge: US. Fil-Ams also frequent the online store. “We
a San Francisco resident was claiming rights over the found that second- or third-generation Filipinos
domain tatakpinoy.com, and threatened a lawsuit. are curious about the homeland of their ancestors,
“He wasn’t even Filipino, as far as I remember,” especially the culture and the cuisine,” continues
says Armin Santiaguel, who replied to my mail Santiaguel. “That explains the popularity of audio
addressed to info@kabayancentral.com. “We talked and video discs, and of cookbooks.”
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 Kabayan Central’s US-centric marketing explains
domain claimant wanted to sue us, he’d have to work why hardly anyone has heard of them here. They
for our US visas so we could appear in court. In the didn’t have any high-profile launches in glitzy
end, we decided that it wasn’t worth it, and gave up hotels, or full-page, full-color ads in any of the
the domain. We didn’t even receive reimbursement local publications. They haven’t even issued any
for our domain registration expenses. We just just press releases. At least I had an excuse when I
had to write it off as a loss.” If you visit Kabayan first admitted to Santiaguel that I hadn’t heard
Central’s website, you’ll find that they accept the of them until I read a post in internetreview.ph.
usual major credit cards, and PayPal as well. “One “If we were to place ads, it would be in the US
of our partners set up an office in the US so getting media,” says Santiaguel, “since that’s our market.
merchant and PayPal accounts would be easier. Or, We did purchase a sponsored link from Google

98 blazingglory
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and looksmart, which cost us about US$70 a


month. We could probably launch a major media Chikka.com
campaign in the US and possibly get us more
customers, but we’re not sure we want to do that. Given its minimal capital in the beginning,
We’ve been going back and forth over the issue Chikka.com started during the dotcom bust.
in the past few years and never really decided to However, customer service, innovation, and
do anything but stay put. Anyway, we’re covering good technology are the company’s competitive
our expenses, and pulling a decent profit.” The advantage. The company protected its initial
business model seems too simple to be true. competitive advantage, the Chikka.com Instant
However, it does work, and in fact, Kabayan Messaging solution, by patenting it.
Central doesn’t have any exclusivity rights over Dennis Mendiola, CEO of Chikka.com,
the model. “divisoria.com, for one, employs the strongly protects value in the chain by building
same system,” says Santiaguel. “The times I have on businesses that are related in nature, where
to hit the malls myself, I might run into my friends community begets community. Having the first
from divisoria.com and we’d greet each other with advantage will make it expensive for rivals to get
snickers because we both know what the other to the same level as where Chikka.com is now.
is doing there.” So, can anyone else build an e- Dennis’ business wisdom was greatly influenced
commerce site around the same model? “Sure,” by his experience in eRegalo.com (http://www.
says Santiaguel. “Aside from Kabayan Central, eregalo.com). It taught him to manage his operating
there’s also divisoria.com that operates under the cash flow, have financial discipline, prudence, and
same system. There might be one or two others, sensibility in making projections.
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 Chikka.com is expected to scale up further
“Netscape Open Directory Cool Site” citation but that in the next 10 years because of its technology,
shouldn’t stop or discourage those who just want to knowledge, and rich implementation experience,
make some money on the Web. Hey, how many jobs on how to conduct Internet and mobile marketing
do you know of that involve shopping at Megamall? the right way.
Kabayan Central has since launched new services. Instead of doing everything on its own, it is
One of them, called e-kain.com, lets Filipinos in the expanding through franchising by finding local
US treat their Philippine-based families and friends counterparts in immediate target markets. As of
to a banquet. They choose from among several this writing, the company has operations and/or
restaurants with their respective menus, fill in the subsidiary in China, Indonesia, Thailand, Hong Kong,
name, address, and phone number of the Philippine and United States like Guam, among others.
beneficiary and the date and time of the banquet, Chikka.com is driving and pulling the SMS
then supply their credit card or PayPal number. In market place forward. It plays a great role on what
order to protect against credit card or PayPal fraud, makes the Philippines the most sophisticated and
Santiaguel calls the Philippine resident to ensure advanced SMS user in the world today.
that someone will pay for the meal in case the credit
card charges are declined or repudiated. Kabayan
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Central also has a grocery delivery service where


Jay Frank De Jesus a US resident may order and pay for groceries on
Titik Pilipino- The Online Resource for Filipino Songs behalf of a Philippine resident, for delivery to the
latter. If you have relatives in the US, you might
Titik Pilipino.com started as a lyric server for Original drop a few hints and ask them to visit http://www.
Pilipino Music (OPM). With issues on intellectual kabayancentral.com – I’m sure Santiaguel and his
property rights and Jay’s respect for the copyrights partners will be happy to attend to them. A discussion
of the Filipino Artists, Titik Pilipino.com has now of Philippine dotcoms wouldn’t be complete without
evolved to encompass more information about mentioning yehey.com – the inspiration should be
Filipino songs, artists and the albums. obvious. Yehey has gone beyond its search engine
It now includes, album information and directory services and created PayPlus, which
such as track, artist, composer, lyricist, allows depositors of the Bancnet consortium of
arranger and producer listings in a banks to use their ATM cards to pay at accredited
fully searchable database. Jay initially sites. There are also a few unknown sites that give
gathered all this in extensive research foreign customers a video or audio-only chat with
through old albums, cassettes and Filipinas – and no, there’s no pornography involved,
CDs from all over. Now, record labels just wholesome conversation. Some sites have
provide most of the album info. integrated the ubiquitous cell phone with their
In relation with local Music labels, website, the most prominent being the instant
Titik Pilipino has of a section on music messaging provider Chikka.
news covering album releases, concerts,
events, album and artist awards. This is Chikka is a Windows client that can exchange
complemented by an artist discussion forum that lists messages with cell phones. On the cell, the message
more than 500 Filipino artists, with info such as songs shows up as an SMS (Short Messaging Service), and
released, official website, and trivia. 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.

100 blazingglory
Advocacy and Politics Online:
A New Media

T 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.
philippineinternetreview

Caring for Filipinos with Special Needs In its humble efforts, 53 students were able
to participate from 2001 to 2003. IBM loaned
Visual impairment is one of the most prevalent 21 computers and allowed use of its training
disabilities in the Philippines. According to the classrooms. The software IBM Home Page
2000 census, 942,098 Filipinos have some Reader, a web browser reader, was also used.
type of disability. Individuals with low vision, Students were taught computer skills, word
at 37.41%, top the list followed by partial processing, e-mail, Internet use, and website
blindness at 8.14%. design and publishing, aided by a screen reader
Despite the fact that technology is now program that speaks, through the sound card,
available for people with eyesight disability, whatever text is displayed on the screen.
many can still not afford it. Computers donated Web pages of the students can be viewed at
to various schools don’t have any provision to http://www.cyberhip.ph.
enable this special type of access. In the next 10 ATRIEV (Adaptive Technology for
years, making ICT useful to people with special Rehabilitation, Integration and Empowerment of
needs is a task that needs to be addressed as the Visually Impaired) fielded a blind instructor
well. for the camp. They eventually placed a blind
graduate in IBM’s on-the-job training program.
IBM Computer Eyes Program
Content for Children
In June 2001, the Resources for the Blind (RBI)
approached IBM with a request to provide Philippine Schools Cyberfair Project
training facilities and technology for the first http://www.cyberfair.ph
national computer camp for blind students.

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 advocacyandpolitics
philippineinternetreview

the Philippines—the largest national cyber-event Local attractions award


for schools. WINNER
To date, the PSCP is the only cultural Internet- Don Bosco Makati
based competition in the Philippine meant to The Philippines - 7100 Times beyond Expectations
empower and educate students in elementary http://dbti.edu.ph/7100islands
and high school. It focuses on content that will Runner-up
bring children to value their country’s natural Bislig City National High School
resource, people and heritage. The Natural Wonders of Bislig City
http://www.angelfire.com/folk/bislighi/
Close to 1,000 students and teachers from

all over the Philippines participated in the 2002-
Local music & art form award
2004 edition of this competition.
WINNER
All Philippine entries shall also join the Bayugan National Comprehensive High School
International School CyberFair (http://www. Naliyagan Festival: Enjoy, Explore and Discover
globalschoolhouse.org/cf), described as the the Pride of Agusan del Sur
largest educational event of its kind ever held http://www.angelfire.com/clone2/naliyagan/first.htm
on the Internet. This program has brought
together more than one million students from Community groups & special populations award
over 100 countries. Six Philippine schools also WINNER
won recognition in the international competition STI Academy High School
in 2002 and 2003. 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
2004 Awardees WINNER
March 29, 2004 St. Mary’s College of Meycauayan
Makati Sports Club Makati City Meycauyan’s Pride
http://www.geocities.com/meycauayanpride/
Environmental Awareness Awards Honorable mention
WINNERS Liceo de Cagayan University
Zamboanga City High School CDO Night Café
Main’s 3 R’s of Zamboanga City http://cdonightcafe.tripod.com/
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

advocacyandpolitics 105
philippineinternetreview

2003 Awardees Environmental Awareness Award


March 28, 2003 WINNER
Traders Hotel, Pasay City 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

2002 Awardees
Web Philippines, Inc. Local Leaders Award March 28, 2002
WINNER Glorietta Center, Makati City
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/
Philippine Daily Inquirer Environmental
VCTI-IT Community Groups and Special
Awareness and Issues Award
Population Award
Catanduanes State Colleges
WINNER
Agojo Marine Park and Sanctuary
Claret School of Quezon City
http://www.geocities.com/ampsanctuary/
Claret School Associates In Social Involvement
Website
Eastern Telecoms Historical Landmarks Award
http://www.geocities.com/claretschool_asin
Jubilee Christian Academy
Honorable Mention
EDSA. One Nation with One Voice.
Don Bosco Technical Institute - Makati City
http://www.edsa.schoolreference.com/
Salesians of Don Bosco
http://salesiansofdb.tripod.com
INQ7.Net Businesses and Organizations Award
Leyte National High School
Mapua IT Center Local Attractions Award
Pintados-Kasadyaan
WINNERS
http://lnhs.CyberFair.ph/
Antique National School
Antique’s Treasures
Local Attractions (Natural and Man Made) Award
http://antiquehigh.CyberFair.ph
MSC High School
Holy Trinity College
San Pablo City (City of Seven Lakes) ... Streets
Discover Sabang
and Historical Landmarks
http://holytrinity.CyberFair.ph
http://www.msc.net.ph/CyberFair_entry/
Local Music and Art Forms Award
www.Iskul.Org
WINNER
Local Music and Art Forms Award
Centre for International Education
St. Benedict College
Science and Information Technology High School
A Trip to the Artists’ Paradise
Sinulog: One Beat, One Rhythm, One Nation
http://www.stbenedict.edu/CyberFair/
http://sinulog.cie.edu
Honorable Mention
Goodwill Bookstore Local Leaders Award
De La Salle Santiago Zobel School
Gregorio Araneta University Foundation
The Artists Entrance
PIPOL
http://www34.brinkster.com/cf03artiste
http://www.pipol.schoolreference.com/
106 advocacyandpolitics
philippineinternetreview

Spotlight individual government’s efforts may be thwarted by hackers and


Attorney JJ Disini other liberally- minded citizens.
I don’t believe the traditional courts can effectively handle
Disini & Disini Law Office multi-jurisdictional issues arising from the Net. Unless, of course,
http://www.disini.ph those courts are created by international agreements and some
order is placed in terms of venue and jurisdiction. Still, I imagine
JJ is a lawyer specializing in information those kinds of suits will be very expensive to litigate and very
technology matters. He represents inconvenient to at least one of the parties.
mobile content providers, e-commerce
companies engaged in e- banking, B2B JT: As work-at-home arrangements are becoming popular in the
marketplaces, online services, as well Philippines, do you find companies monitoring workers-at-home for
as, “traditional” IT companies such as privacy violation?
systems integrators, ISPs, and network
providers. The website, http://www.disini.ph, was established in JJ: I’m not aware if monitoring is that effective for people who tele-
2000 at the same time he formed his lawfirm. One of his main commute. I imagine that at best, the company can screen the person’s
goals in maintaining the site is to provide legal information for those email. Still, in the workplace, a vast majority of employers—at least
interested in various areas of the law. He continuously updates the in the US—monitor computer use to avoid unauthorized surfing
resources section of the site by including informative materials such and other factors that affect productivity. In that respect, I believe
as an Investment Primer and an Outsourcing Primer. the employer has a right to institute monitoring equipment. In the
He was also the principal drafter of the Implementing Rules and final analysis, computer resources are provided by the employer
Regulations of the E-Commerce Law - Republic Act 8792. He also for business purposes only. As such, the employer has the right to
wrote a position paper for the Philippine Internet Commerce Society, monitor the use of those resources to ensure their proper utilization.
in support of Cebu-based CyberPromdi in 2000 to counter a proposed If employees want privacy, then they should use their own computer
ordinance banning minors in Internet cafés. resources—at home, for example.

JT: Since the passage of the E-Commerce Law what’s happening in JT: Is it possible for Filipinos to elect a Philippine President from the
the legislative arena? comforts of their own home or work place (especially for OFWs)?

JJ: There have been various initiatives in Congress relating to e- JJ: Theoretically, yes. The issue of course is authentication. But
commerce such as the cyber crime bill, the convergence bill, and that’s a common issue for all on-line transactions as well as current
of course, the bill creating the Dept of ICT. However, there have “off-line” election procedures in place.
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 JT: Do you think it’s possible in the future that there will be a candidate
the national agenda. However, I do believe that certain initiatives in national politics that will represent the Internet community? Who
are worth pursuing. In particular, I believe a data protection and do you think that will be?
privacy law would benefit various sectors of the IT industry including
the outsourcing providers as well as the public in general (whose JJ: I guess it’s difficult to say or determine who comprises the
informational privacy can be secured through the law). Internet community. There are users and there are business people,
government officials -- all having different interests that need to be
JT: What’s next? Do you see tougher issues in the area of cryptography protected. I think at most, we can have a candidate with an agenda
and intellectual property? that supports various interests within the Internet community.
Perhaps, that would be enough.
JJ: I think the challenge now in the policy arena revolves around Who would that be? Anybody who takes up the cudgels for
formulating a strategy for addressing various issues. There appears promoting Internet use and commerce in the Philippines.
to be no “game plan” emanating from our policy makers with a
specific agenda and action items. I think the time for motherhood JT: Many believe the Internet changes everything about the law.
statements of support and development have passed. We need to Almost everyone can maximize the use of the Internet for both good
initiate steps to implement specific programs to get the industry and bad purposes. As a safety principle especially in legislation, what
going and ensure the continued development of the ICT sector. 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
JT: Do you ever see the Internet being governed? Will it be through will remain the rule of thumb in the next 10 years? How does this
traditional courts or dispute resolution? double-edged sword affect our rights and liberties?

JJ: Internet governance is far too complex to have a ready answer. JJ:It’s not so much a rule of thumb as a stop-gap measure. The
Overall, I do believe that the use of technology (probably through advent of the Internet and the pace at which adoption and usage
private contracting) remains the strongest source of regulation on has grown over the past years has far outpaced Congress. Making
the Internet. The best example is the Uniform Dispute Resolution laws is a deliberate and deliberative process that cannot possibly be
Policy (UDRP) of ICANN which effectively done in Internet time. So, in the absence
legislated protection to trademark of any pronouncements from Congress, the
owners against cybersquatting. In a mix courts have no choice but to apply existing
of private contracting and technological laws to new situations—with varying success.
control, UDRP has been an unqualified I believe this will continue but I also believe
success. I think there are important that the process is continually improving as
lessons in that experience relating the legal analysis improves and legal experts
to Internet governance. Of course, come to understand the peculiar issues the
a government can take an extreme Internet brings to the law. On the whole,
position, similar to China where ISPs I wouldn’t be too concerned about our
are heavily regulated in order to block rights and liberties. I don’t think excessive
access to “offensive” sites. In the final regulation is in the offing and those of us
analysis, the success of government online should be free from restrictions for
control depends on many factors and an 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
that can influence the passage of a bill into a law.”
“The passage of the E-Commerce Law is a living
The advancement of a bill into a law has always been
proof that the Internet, if used well, can be an a dance between talent and politics, with the use of
enabling tool for policy advocacy. This landmark various communication strategies. There are as many
law is the only law in the country to date that was communication strategies to process a bill, as there are
supported by numerous sectors throughout the individual policy-makers.
country. The passage of the law is seen as a great With the growing popularity of computers, Internet,
and e-commerce, comes the greater need for the E-
catalyst for leveling the playing field, benefiting Commerce Act to be enacted into a law. Assuming that
SMEs and Filipinos worldwide.” – Janette Toral a policy-maker has relevant knowledge and is open-
minded, the problems of bridge design arise. Thus,
the question: What form/s of communication strategies

A
t this time and age, the size of an organization did the policy advocates of the E-Commerce Act use to
does not guarantee its success. The organization’s communicate their policy idea?
achievement will depend on how fast its plans are This study focused on the progress of the E-
implemented and how it makes use of the first-mover Commerce Act from its emergence as a bill, to its status
advantage. Andy Grove of Intel said that in five years as a law. It zeroed in on the communication strategies
all companies will be Internet-based or nothing at all. the policy-makers employed during the passage of the
With these implications, the Electronic Commerce Act E-Commerce Act.
(Republic Act No. 8792; E-Commerce Act) paved the
way for local companies to examine themselves and their Salient Features of the E-Commerce Act
place in the New Economy. It should be emphasized
that the passage of the Act is but the first step in the Republic Act No. 8792, “An Act Providing for the Recognition
government’s efforts to secure the country’s place in and Use of Electronic Commercial and Non-commercial
the New Economy (Disini, et al, 2000). Transactions, Penalties For Unlawful Use Thereof, And
The E-Commerce Act is an important piece of Other Purposes,” is popularly known as the Electronic
legislation for the Philippines. As intended, the passage Commerce Act or E-Commerce Act.
of the Act has opened the door for investments in As stated in the Section 3 of the E-Commerce Act:
Information Technology projects as well as a number This Act aims to facilitate domestic and international
of back-door listings in the Philippine Stock Exchange. dealings, transactions, arrangements, contracts and
Consequently, companies became interested in exchanges and storage of information through the
electronic commerce and they have been forced to deal utilization of electronic, optical and similar medium, mode,
with the changes brought about by the New Economy instrumentality and technology to recognize the authenticity
(Disini, et al, 2000). and reliability of electronic data messages or electronic
On June 14, 2000, President Estrada signed the documents related to such activities and to promote the
E-Commerce Act (Republic Act No. 8792), “An Act universal use of electronic transactions in the government
Providing for the Recognition and Use of Electronic and by the general public.
Commercial and Non-commercial Transactions, Penalties The salient features of the E-Commerce Act are
For Unlawful Use Thereof, And Other Purposes.” On July the following (Favis-Villafuerte 2001: 161-163):
13, 2000, the “Implementing Rules and Regulations a) The provisions of the law apply to both commercial
of the E-Commerce Act” was likewise signed (Favis- and non-commercial transactions whether the
Villafuerte, 2001). transactions are international or domestic in
Estella (1997), one of the authors of the book scope;
Uncovering the Beat, wrote, “There are bills – and bills. b) Electronic data messages and electronic documents
Some find their way to the front pages; most don’t. have now the same legal status as paper/written
Some became the subject of heated debates from the documents including its admissibility as evidence;
time they are taken up in the committees to the time c) Electronic signatures have now the same legal
they are debated on by the plenary body; others never status as manually-signed signatures;
see the light of day.” The thrusts of the E-Commerce d) Government offices will perform their functions
Act (RA No. 8792) have been contentious even before and conduct business electronically within two
the first bill was drafted. years from the effectivity of the law;
Bills, according to Reyes (1998), “must be e) The Supreme Court is given authority to come out
beautifully packaged through communication strategies with rules on electronic notarization;

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f) The installation within two years from the effectivity


of the E-Commerce law of a government-wide • Legislators •
electronic on-line network that will facilitate the • Interest Groups • Figure 1. Framework of the
policy advocacy process of
on-line interaction between government agencies
the E-Commerce Act
and the general public;
g) As a general rule, service providers incur no civil Advocacy/
or criminal liability for providing some access to Communication
electronic data message or electronic documents; Strategies:
h) For the Department of Trade and Industry (DTI) to • Face-to-face •
direct and supervise the promotion and development • Testimonies•
of electronic commerce in cooperation with other • Networking •
government agencies; • Alliance Building •
i) For the DTI to issue rules and regulations establish • Tapping Key Legislators •
quality standards or issue certifications to give effect • Use of Mass Media •
to the provisions of the E-Commerce law;
E-Commerce Act
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 stated, to promote and accelerate the passage of the
(DBM) and the Bangko Sentral ng Pilipinas E-Commerce Act into a law.
(BSP) are mandated to enforce the provisions
of the E-Commerce Law in coordination with the Evolution of the E-Commerce Act
Department of Transportation and Communications
(DOTC), National Computer Center (NCC), National The Electronic Commerce Act (Republic Act No. 8792; the
InformationTechnology Council (NITC), Commission “E-Commerce Act”) is the merged version of House Bill
on Audit, other concerned agencies and the private No. 9971 (HB 9971) and Senate Bill No. 1902 (SB 1902).
sector; The primary authors and sponsors were Senator Ramon
l) A Congressional Oversight Committee composed of Magsaysay, Jr., Representatives. Leandro Verceles, Jr.
the Committees on Trade and Industry, Commerce, and Marcial Punzalan, Jr. Co-Authors of the Act who filed
Science and Technology, Finance, and Appropriations electronic commerce bills were Senators Juan Flavier,
in the Senate and House of Representatives shall and Blas Ople and Representatives Harry Angping, Roilo
monitor the implementation of the E-Commerce Golez and Dante Liban. Other co-authors include Sen.
Law and shall meet every quarter for the first two Vicente Sotto III, Franklin Drilon, Francisco Tatad, Raul
years and every semester for the third year after the Roco, Aquilino Pimentel Jr., Miriam Defesor-Santiago and
approval of the E-Commerce Law; Representatives Herminio Teves, Magtanggol Guinigundo,
m) The three government agencies implementing the Rolando Sarmiento, Orlando Fua, Joey Salceda, Oscar
E-Commerce Law [as mentioned above] are also Moreno, and Ignacio Bunye.
required to submit to the Congressional Oversight
Committee a quarterly performance report for the Senate Bills
first three years;
n) Parties to a contract involving electronic data message Four bills were filed in the Senate in relation to e-
or electronic document may agree to modify any commerce:
provision of the E-Commerce Law; and a) Senate Bill No. 10, “AN ACT PROMOTING THE
o) Benefits conferred by the provisions of the E- USE OF ELECTRONIC DATA INTERCHANGE (EDI)
Commerce Law including the practice of profession IN TRADE TRANSACTIONS AND FOR OTHER
may be conferred to other nationalities of countries PURPOSES”, authored principally by Senator Juan
that grant the same benefits to Filipino citizen. M. Flavier on June 30, 1998;
b) Senate Bill No. 1184, “AN ACT PROVIDING FOR AN
Policy advocacy process ELECTRONIC COMMERCE LAW AND FOR OTHER
PURPOSES”, introduced by Senator Juan M. Flavier
The E-Commerce Law policy advocacy groups utilized on Sept. 10, 1998;
numerous communication strategies during the various c) Senate Bill No. 1523, “AN ACT PROVIDING FOR
stages (i.e. from first reading up to the bicameral AN ELECTRONIC COMMERCE LAW AND OTHER
conference) of the E-Commerce bill in both Houses. PURPOSES”, introduced by Senators Ramon B.
The advocacy strategies are face-to-face, testimonies, Magsaysay, Jr., Vicente Sotto III, Juan Flavier, and
networking, alliance building, tapping key legislators, Blas Ople on March 25, 1999; and
and using mass media. d) Senate Bill No. 1902, “AN ACT PROVIDING FOR
The elements of the advocacy process in this AN ELECTRONIC COMERCE LAW AND FOR OTHER
study are: a) the legislators and interest groups; b) PURPOSES” Feb. 15, 2000.
the advocacy strategy/ies; and c) the E-Commerce
Act. Interplay of each element in the policy advocacy The first bill on electronic commerce was filed in 1992. It
process of the E-Commerce Act (Figure 1) starts from was called the Electronic Data Interchange (EDI) bill and
the advocates who drafted the bill. Advocates could was re-filed as Senate Bill No. 10 (SB 10) during the 11th
either be an interest group that stands to gain from its Congress. However, when the United Nations Commission
passage, or the congressional representative or senator on International Trade Law (UNCITRAL) Model Law on
with a constituency to serve. Electronic Commerce (Model Law) was adopted, the EDI
The conveyor of interests or advocate used one bill was abandoned in favor of the Model Law framework.
or several of the communication strategies earlier 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
Approved on Second Reading with amendments
April 10, 2000 Bill on Third Reading
SB 1902 was approved

if passed, might inadvertently promote the use of a declining It is significant to point out that all debates in the Senate
technology, EDI. In addition, it was felt that given the long and regarding the Act referred to SB 1523 not SB 1902. SB
tedious legislative process in the Philippines, a technology- 1902 was approved on April 2000 (Table 1).
neutral law would provide more stability inasmuch as it can
adapt to and withstand advances in technology. House Bills
The Model Law was thus incorporated in Committee
Report No. 34 and Senate Bill No. 1523 (SB 1523). In During the first regular session of the 11th Congress, there
addition, the Electronic Transactions Act of Singapore were four bills on e-commerce initially filed in the House to
(ETA) was considered as suggested by several participants the Committee on Trade and Industry for consolidation:
in the technical working group. The ETA, at that time, had a) House Bill No. 1756, “AN ACT PROMOTING THE
just been passed in Singapore and it was believed that UTILIZATION OF ELECTRONIC DATA INTERCHANGE
innovations in that statute would prove beneficial in the IN TRADE TRANSACTIONS, AND FOR OTHER
Philippine setting. After the conclusion of interpellations PURPOSES,” which was introduced by Representative
for SB 1523, the bill was referred back to the Committees Harry C. Angping on Sept. 14, 1998;
on Trade and Industry and Science and Technology where b) House Bill No. 4123 “AN ACT PROMOTING AND
it was replaced by SB 1902. SB 1902 departs from SB ENHANCING ELECTRONIC COMMERCE, USE OF
1523 in that provisions of the ETA were minimized and ENCRYPTIONS IN TRADE AND INDUSTRY, IN
the bill reverted back to the framework of the Model Law. GOVERNMENT AND FOR OTHER PURPOSES,”
This revision was prompted by concerns that since the introduced by Representative Roilo R. Golez on Oct.
Philippine judicial system frequently adopt US case law; 12, 1998;
conflicting Singaporean jurisprudence on the ETA might c) House Bill No. 7104, “AN ACT PROVIDING FOR AN
unduly confuse the issues on what is already considered a ELECTRONIC COMMERCE LAW, AND FOR OTHER
complex area of the law. PURPOSES,” which was introduced by Representative
However, the SB 1902 did not undergo the usual Leandro B. Verceles, Jr. on March 24, 1999; and
process wherein once the report reverted to the committee, d) House Bill No. 8046, “AN ACT PROVIDING FOR AN
the committee had in its possession an original measure ELECTRONIC COMMERCE LAW, AND FOR OTHER
that should have been heard, as though there had been no PURPOSES,” which was introduced by Representative
previous hearings beforehand. The Senate President clarified Marcial C. Punzalan, Jr. on Aug. 4, 1999.
that it would not, as there were instances in the past where
the Body, in order to facilitate the proceedings, discussed Representatives Punzalan and Verceles filed separate
the draft of a bill as of a certain date without referring it back bills which were copies of SB 1523.
to the committee. In this instance, he said that the Rules of At the same time, Committee Report No. 34 and
the Senate (Rule XI, Section 32) was presumed to have been SB 1523 were filed in the Senate. After the above bills
suspended to allow the Body to debate on a new draft. have been subjected to several committee hearings

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with both government and the private sector providing case of conflicting provisions in both HB 9971 and SB
their inputs and comments, the Committee on Trade 1902, these were resolved through discussion.
and Industry came up with a substitute bill on the The report of the Bicameral Conference
above e-commerce measures on March 7, 2000. This Committee was issued on June 7, 2000 and approved
substitute bill was subjected to further comments and by the House later that evening. On June 8, 2000,
refinements and eventually led to House Bill No. 9971 the Senate approved the same report.
(HB 9971) – “AN ACT PROVIDING FOR PROTECTION After the bill has been enacted and approved by
OF ELECTRONIC COMMERCIAL TRANSACTION, both Houses, it was endorsed to the Office of the
PENALTIES FOR UNLAWFUL USE THEREOF AND FOR President for signing. The Electronic Commerce Act
OTHER PURPOSES” – which was jointly approved (Republic Act No. 8792) was signed into law on June
by the Committee on Trade and Industry and the 14, 2000 (Table 3).
Committee on Science and Technology on March 22,
2000. Stages of the Policy Advocacy Process
HB 9971 was spearheaded by Rep. Harry C.
Angping. It is the consolidated version of the bills filed The role of the Congress must be, as mentioned by
in the House, and was presented and deliberated upon Senator Ramon B. Magsaysay, Jr., the Chairman of the
by the House in May 2000. The bill was approved by Committee on Trade and Commerce in the Senate, “Not
the House on June 6, 2000 (Table 2). to pose any obstacle to e-commerce or the growth of
EDI (Electronic Data Interchange) in trade transactions.
Bicameral Conference Committee If it cannot help at all, it must, at least, not hinder.”

Tasked with reconciling the provisions of HB 9971 Senate Version


and SB 1902, the Bicameral Conference Committee
convened on June 7, 2000 in Manila Hotel. Senators During the 11th Congress, the principal author of the
Magsaysay, Roco and Flavier represented the re-filed EDI bill, Senate Bill No. 10 (SB 10) and Senate
Senate panel and Congressmen Punzalan, Verceles, Bill No. 1184, was Senator Juan M. Flavier. However,
Angping, Moreno, and Sandoval represented the Senator Flavier believed that there were others who
House panel. had better technical competence at discussing the bill
The rule, “any provision appearing in one version better than the knowledge he possesses. Consequently,
which does not appear in the other” was adopted he let Senator Ramon B. Magsaysay, Jr., then the
in the final report. Interestingly enough, since HB Chairman of the Committee on Trade and Commerce in
9971 did not abandon the provisions of the ETA (as the Senate take over the passage of the bill. Senator
distinguished by SB 1902), these provisions found Flavier’s acknowledgment of his limited knowledge
their way back to the final version of the Act. In the 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 e-
commerce 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

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 The Chairman. …go through this bill and not be
Committee on Science and Technology on Sept. 9, limited by what you see in the bill but you see what
1998: is needed to encourage, simplify and make the
SEN. FLAVIER. … I am not an information technology country even as competitive as Singapore. Don’t
person. I am, as everyone probably knows, a be afraid to copy. We don’t have to be the pioneers.
medical doctor and a rural development worker. But if you look at the more advanced countries, let
In fact, I have difficulty distinguishing between a us find out what are the good things, and then our
mouse and a rat, a CD rom and a CD or Christian own local input. But when I say simplify, if you can
Dior perfume, a megabyte and a love bite. In fact, say it in one page, you say it. That is an attention
my nine-year old grandson knows more about the to the lawyers. If you can say it in half page, even
computer than I do. better, as long as the message is there…

In one of the public hearings in September 1998 Since it was difficult to explain the concept individually
conducted by the Committee on Trade and Commerce to the senators, and it was complicated to expound
joint with the Committee on Science and Technology, technical concepts in layman’s term, AGILE, one of the
the chairman, Senator Magsaysay, Jr. expressed that interest groups came up with a simple publication—
the private sector should spearhead the promotion of the E-Primer: An introduction to E-commerce. This
the use of e-commerce in the Philippines. This was was a primer on frequently asked questions on e-
supported by many of those in the private sector. commerce from that technical and operational side
When the United Nations Commission on of it, up to the legal issues concerned in e-commerce
International Trade Law (UNCITRAL) Model Law on transactions. This was released on January 2000 and
Electronic Commerce (Model Law) was adopted, the was distributed to the senators and their staff.
EDI bill was abandoned in favor of the Model Law However, after several deliberations, the process
framework. was stalled by Senator Raul S. Roco who, according to
In addition, the Electronic Transactions Act of Toral, “requested another version”. The interpellation
Singapore (ETA) was considered as suggested by of Senator Roco was manifested in the Senate’s Journal
several participants in the technical working group. The of Feb. 1, 2000:
members of the Technical Working Group (TWG) who Senator Roco believed that the bill would be
worked closely with the Committee Technical Staff led difficult to understand considering that Singapore
by Atty. Sofronio Larcia and Atty. Rodolfo Noel Quimbo of law has different roots in terms of legal development.
the Office of Senator Juan M. Flavier were Mrs. Janette He inquired why Singapore was particularly chosen
Toral of the Philippine Internet Commerce Society and instead of the standard references. Likewise, he
its members; Mr. Gamaliel Pascual of the E-Commerce asked on the jurisprudence that would prevail in legal
Promotion Council; Mr. Paul Brown of the US Embassy; cases—that of Singapore, that of the international
Mr. Albert dela Cruz, Director General Ike Señeres of community by usage, custom or convention, or as
the National Computer Center; and the Department of understood by the United Nations’ agencies.
Trade and Industry. Accordingly, in two days, they revised everything
According to Janette Toral, a member of the and submitted another technical committee report.
TWG and the founder and then president of the The Model Law, having been adopted, was incorporated
Philippine Internet Commerce Society (PICS) – an in Committee Report No. 34 and Senate Bill No. 1523
organization whose primary mandate is to push for (SB 1523), “AN ACT PROVIDING FOR AN ELECTRONIC
the passage of the E-Commerce law – in making COMMERCE LAW AND OTHER PURPOSES.” SB 1523 was
provisions for the law, they deliberated on which filed by Senator Magsaysay, Jr.
provisions of the model laws they got (Singapore
and US) were better. Having decided which one First Reading
is more appropriate, they copied it, fixed it, then
gave it during the deliberation/lobbying. This Nothing much happened during the first reading of
approach was encouraged by Senator Magsaysay, SB 1523. Here, the bills were announced and their
Jr. (Sept. 17, 1998 Public Hearing conducted by the numbers and titles were read before the plenary
Committee on Trade and Commerce joint with the body. Afterwards, the Speaker or the Senate
Committee on Science and Technology): President referred it to a particular committee to

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which the proposed measure is assigned. According Jr.’s stature as an engineer was belittled in a subtle
to Atty. Rudy Quimbo, one of the members of the way and they challenged the legal parlance of the
TWG and the Chief of Staff of Senator Flavier, the bill Act:
was referred to the committee of Senator Magsaysay, Senator Roco: We have total trust in the
Jr. - the Committee on Trade and Commerce. Since staff, Mr. President. I am just calling attention to
Senator Magsaysay, Jr. was the one who defended the some notions that they may wish to adopt.
bill on the floor. Thus, the E-Commerce Act is most of Now, as for “hacking,” may we suggest also that
the time identified with him. the staff revisit the definition? Again, we lawyers
Nevertheless, the first reading took quite some are always prone to defining by enumeration.
time because Senator Magsaysay, Jr. conducted many But since hacking is one of the criminal acts we
hearings. Atty. Quimbo cited two main reasons: there penalized, we may want to definitely state the
were other bills that were competing with it and there elements. Because we are penalizing. So we
was the “fear of the unknown” among the senators. cannot just go by enumeration.
Their greatest enemy was, more than anything, Again, I just leave that, Mr. President. I am
ignorance. just calling attention to them by way of drafting,
Atty. Quimbo’s sentiment about the senators’ if we may do so.
“fear of the unknown” was resounded by Atty. Suharni Senator Roco: Now, Mr. President, I will ask
Samanodi, Head of the Congressional Oversight a series of questions and I will leave it to the
Committee on E-Commerce Secretariat and the Chief sponsor to answer. I am really leading him to the
Technical Officer of the Office of Senator Magsaysay, answers, but again this is for the lawyers who will
Jr. “One basic problem that we had before was that read the record.
it (e-commerce) was not easily understood by a lot
of people. …it was new and technology is not really When we say “accessible” in Section 9, what exactly do
practiced by most of the senators – actually, the elderly we mean? Downloaded? And if it is secured, secured
ones.” Consequently, Senator Magsaysay, Jr. had a with permission. If it is coded, what exactly do we
difficult time hammering the new concept so that it will mean by “accessible”?
be acceptable to everybody. To get the support of Senator Roco, Senator
Magsaysay, Jr. acknowledged and welcomed his
Second Reading amendments during the discourse. Also, he emphasized
the Information Technology (IT) title of the former:
With the senators, properly educated through their staff Senator Magsaysay: That is a welcome
members, comes the bombardment of questions during statement from the gentleman from Camarines Sur,
the second reading. Atty. Quimbo recounted that they who is also a champion of IT and e-commerce.
had difficulty during this stage, only in the sense that
many senators participated, “...marami ng tanong sa On March 28, 2000, One Internet Day was held in
floor. Marami nang gustong i-amend. Syempre they the Senate. This was an event conceptualized by
were gaining knowledge also from the Internet, getting PICS, one of the interest groups, with the support
materials... (...there were many questions on the floor. of Senator Magsaysay Jr. It was held as a lobbying
They wanted to amend a lot of things...)” battle cry for the passage of the E-Commerce
He further added that, “they (senators) were trying Law. Free seminar, food, technology exhibit, and
to put certain provisions which they felt were important entertainment were offered during the event. It
but which we (TWG) felt were provisions that would carried the theme “Internet Para Sa Lahat”. Senator
only create even greater confusion.” There were certain Magsaysay Jr. and sponsors provided the necessary
provisions the TWG felt should not have been included resources to make the event highly successful that
and they were successful in making sure that the bill allowed PICS to accommodate close to 300 attendees.
was not cluttered, “I think about 85 to 90 percent As a tactic Toral—the founder of PICS and one of
of that, we were successful in making it as much as the advocates—said they invited all the senators to
possible “hue” to the original version, which was the drop by and say a few words and somehow get a
UNCENTRAL model.” Still, he emphasized that it was verbal commitment that they support the passage
not perfect. of the E-Commerce Law.
Other senators also complained about its being too After the conclusion of interpellations for SB
technical. However, it could not be avoided because it 1523 on March 2000, the bill was referred back to
really had technical components. the Committees on Trade and Industry and Science
To build alliance with senators, one of the tactics and Technology where it was replaced by SB 1902.
employed by Senator Magsaysay, Jr. during the second SB 1902 departs from SB 1523 in that provisions
reading was flattery: of the ETA were minimized and the bill reverted back
Senator Roco:… Would the distinguished to the framework of the Model Law. It is significant
gentleman yield to questions that I have been to point out that all debates in the Senate respecting
asked to study? the Act referred to SB 1523 not SB 1902.
Senator Magsaysay: Very willingly, Mr. Nevertheless, after several measures were done
President, from the sage of the Bicol Region, the to educate the senators about the e-commerce, there
highest-placing presidential candidate in 1998 in were still several issues that were not comprehensive
the demographics of class A and B, including the to some during the second reading and the period
youth, having been the top. of interpellation. Illustrations of this were another
Senator Roco: Mr. President, I am about to sit discourse between Senator Roco and Sen Magsaysay,
down because as we all know, in this Hall, flattery Jr. during the second reading:
will get us everywhere. [Laughter] Senator Roco: Yes, Mr. President. I am
sure the staff—they were nodding their heads—
However, since most of the members of the senate of caught that part of the introductory paragraph of
the 11th Congress were lawyers, Senator Magsaysay, UNCITRAL.

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The variation by agreement is also one that I have The result of the voting on the Third Reading on SB 1902,
difficulty understanding. If it can be explained a little. “AN ACT PROVIDING FOR AN ELECTRONIC COMMERCE
I do not understand why it is here. In fact, I do not LAW AND FOR OTHER PURPOSES” was 16 affirmative
know what it is saying. It is difficult. It says: votes, no negative vote, and one abstention. With this,
As between parties involved in generating, sending, Senate Bill No. 1902 was approved on Third Reading on
receiving, storing or otherwise processing data message, April 10, 2000.
and except as otherwise provided, the provisions of Part
II, Chapter III, may be varied by agreement. House Version
I honestly could not identify, unless it means communication
of data messages. I cannot figure it out. During the first regular session of the 11th Congress,
And the discourse of then Senator Teofisto T. there were four bills on e-commerce initially filed in
Guingona, Jr. with Ike Señeres, the director general of the House to the Committee on Trade and Industry for
the National Computer Center, and Gamaliel Pascual consolidation: HB 1756, HB 4123, HB 7104, and HB
of the E-Commerce Promotion Council about some 8046.
provisions on March 15, 2000, during the period of After the above bills have been subjected to several
interpellation: committee hearings with both government and the
Senator GUINGONA: Itong “by other means,” private sector providing their inputs and comments,
I don’t know what this means, or by other means, the Committee on Trade and Industry came up with a
very, very soft. substitute bill on the above e-commerce measures on
MR. SEÑERES: I think the reason why it is there, March 7, 2000. This substitute bill was subjected to
Senator, is… further comments and refinements and eventually led
Senator GUINGONA: I know that, technology is to House Bill No. 9971 (Committee Report No. 685) –
progressing. I mean, it’s very hard to put it down “AN ACT PROVIDING FOR PROTECTION OF ELECTRONIC
and just that… COMMERCIAL TRANSACTION, PENALTIES FOR
MR. PASCUAL: But I guess the allowance there UNLAWFUL USE THEREOF AND FOR OTHER PURPOSES”
is, as the technology improves, there may be other – which was jointly approved by the Committee on
means for storing. Trade and Industry and the Committee on Science and
Technology on March 22, 2000.
To help the senators further understand the concepts,
Senator Magsaysay, Jr. and the policy advocates used First Reading
examples and comparisons during their explanations
(interpellation, March 15, 2000): Similar to the Senate, HB 9971 was announced during the
SEN GUINGONA: All right, electronic signature first reading and its number and title were read before the
refers to any distinctive mark, characteristic or sound. plenary body.
What is sound? How will that represent signature? During floor deliberations, the policy advocates were
MR. PASCUAL: I’ll give you an example, Senator. For there to aid the congressman who will be defending the
example, let’s say, in the US Justice system, the Parole bill. Zorayda Andam, a project associate for e-commerce
Board verifies the parolees by…You have to dial up into ans a representative of AGILE (a US funded project),
a 1800 to report, but the computer actually verifies related that if there were questions that were not included
your voice print. It actually verifies, it checks the caller in their prepared anticipated questions and answers, the
ID. For example, if you have to stay in Kansas, it will congressman would buy time until they finished their
check very quickly that, “Yes, that is the area code for suggested answer and were able to hand it over, “we also
Kansas. Yes, that is the voice print of Liel Pascual.” had index cards prepared.”
MR. PASCUAL: (talking to Senator Guingona). It was also during this time that the TWG and policy
I’ll show you another example. When we talk about advocates really saw the need to explain how e-commerce
electronic signatures, we have to agree mutually. This really come into play because they observed that the
is another method. This is what they call a hard token congressmen were having a hard time understanding
wherein this generates a sequence every 60 seconds. concepts as they (congressmen) ask the questions.
This ID which is registered to me. That’s the one we With this, copies of the E-Primer: An introduction to E-
are using for the Small Investors’ Program wherein the commerce were also distributed in the House.
Bureau of the Treasury knows with certainty that that is On the other hand, during the period of sponsorship
coming from me because this is a unique number being in the House, the bill was certified as urgent by then Pres.
generated every 60 seconds. Joseph Estrada. According to Andam, one of the policy
advocates, at the House, it was certified during the advent
Third Reading of the “I Love You” virus.
Popularly called “love bug,” the “I Love You” virus wreaked
This is an excerpt from the “EXPLANATION OF VOTE OF billions of dollars worth of havoc on thousands of computers
SENATOR MAGSAYSAY”: worldwide in May 2000. In an online article written by Helen
Senator Magsaysay: Mr. President, this is a very S. Andrade-Jimenez (2001) entitled “Preventing the ‘Love
brief explanation. Bug’ from biting again,” she reported that:
It took us almost two years since 1998 to discuss Philippine authorities were in quandary on what
the e-commerce bill in three public hearings, and more charges to file against the suspect, former AMA
than six formal technical working group meetings, and computer student Onel A. De Guzman, for being
other informal discussions conducted in my office by responsible for the spread of the virus. The worm
the TWG, up to its approval today on Third Reading. affected Windows-based computer systems on May 4
The passage in this august Chamber of the e- (2000) through an e-mail attachment with the subject
commerce bill, Senate Bill No. 1902, has been awaited line ‘I Love You.’
by all sectors which actively participated and worked The love bug overwrote files on local and remote
hand in hand with the Committees on Trade and drives, including document, music and image files.
Commerce; the Science and Technology… “Industry estimates peg that at least 45 million

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computers around the world were infected by Third Reading


various strains of the virus,” she said further.
Andam recalled that the virus really facilitated the During this stage, Representative Punzalan was the one
readings and the discussions on the floor. This was who read the proposed provisions before it was brought
reaffirmed by Toral, “nakatulong din yung lumabas to the Bicameral Conference. With 160 affirmative
yung kay Onel De Guzman, yung I Love You Virus. votes, 11 negative votes, and 0 abstentions, HB 9971
Kasi nasa kalagitnaan na kami noon.” (talks about was approved by the House on June 6, 2000 and was
the “I Love You” virus helped the House. transmitted to the Senate.

Although Representative Marcial C. Punzalan, Jr. was Before the Bicameral Conference
the committee head, it was Representative Leandro
G. Verceles who defended the bill during the floor Since the Senate version of the bill came out first, the
deliberations. As Andam related, Representative TWG of the House during this stage, together with
Punzalan believed that Representative Verceles is some of the policy advocates, already made sure that
more knowledgeable about the topic than he is. the Senate version and the House version were fairly
Consequently, he turned over the defense of the HB consistent.
9971 to Representative Verceles. There were some provisions in the Senate version
that were, as said by Andam, “troubled waters” which
Second Reading had unfavorable legal implications. What the policy
advocates did was to make a counter provision on the
Sometime in May, a One Internet Day at the House was House version. One of these was the provision on tax.
also held. Similar to the event at the Senate, it was “Yung counter provision eh napasa sa House, ngayon,
held as a lobbying battle cry for the passage of the E- at least yun yung mga ide-deliberate nila doon sa
Commerce Law. Conference Committee. (The counter provisions passed
During the second reading, Representative Verceles in the House are the ones being deliberated on by the
employed an unusual but striking introduction to his Conference Committeee.) We had to do that,” Andam
sponsorship speech on the measure being discussed. explained. She added that they had to have foresight,
Addressed to the deputy speaker, Representative “if you do not want any provision in the Senate version,
Fuentes after being recognized: eh lumabas, gawa ka ng counter provision dito sa
Representative Verceles: Thank you, Madam House. So alam mo, may coordinating work involved
Speaker. “I love you”, Madam Speaker. I like to tell doon.”
you again, “I love you,” Madam Speaker. Accordingly, there was not much discussion when it
The Deputy Speaker (Representative came to the Bicameral Conference.
Fuentes): I am hearing you loud and clear.
Representative Verceles: Madam Speaker, Conference Committee Deliberations
however, this is not an amorous or intimate invitation.
This is the name of the bug, a computer bug, that Tasked with reconciling the provisions of HB 9971
had recently plagued the computer industry in the and SB 1902, the Bicameral Conference Committee
last few days… convened on June 7, 2000. Senators Magsaysay,
Roco and Flavier represented the Senate panel
During his sponsorship, he also quoted the Far Eastern and Congressmen Punzalan, Verceles, Angping,
Review: Moreno, and Sandoval represented the House
Representative Verceles: … In this Far panel.
Eastern Review, September 2 issue… it said there that As a rule, any provision appearing in one version
there are only two countries in this world outside of which does not appear in the other, is adopted in
the western world which are on the right time and the final report. This was suggested by Senator
the right place to gain the momentum in Information Roco:
Technology and to gain the benefits of the information Senator Roco: Well, if there is a provision from
economy of e-commerce, one is India and the other is the House or from the Senate version that does not
the Philippines. India is about one decade ahead of conflict with anyone, we will just combine it. In the
us. They are now into e-commerce. areas where you have a provision and they have a
provision and they are just based on words, the staff
The toughest part in the passage of the E-Commerce can clean it up. But the staff must identify where
Act in the House, according to Andam, was the Second there is a policy difference, hindi ba? And then we sit
Reading. This was because it was the part where they down again after, let’s say, two hours or three hours,
accepted amendments. to clean up or even just authorize the Chairmen to
During the time where certain provisions in the bill work it out.
were referred for committee amendments, Andam and While the staff was combining the rest, the
other policy advocates gave pieces of advice, comments committee discussed the contentious issues. In the
and proposals to the Committee on Trade and Industry. case of conflicting provisions in both HB 9971 and
She narrated that they, the policy advocates, were able SB 1902, these were resolved through discussion.
to establish that kind of confidence with the committee. The counter provision on tax made by the
Thus, the committee listens to them. One of the policy advocates of the House was one of the issues
reasons why the committee trusted them was because deliberated upon:
they do not just negate a certain provision; they give THE CHAIRMAN (REP. PUNZALAN): So, we do
and explain their reasons why certain provisions should not intend to impose new taxes on e-commerce
not be included in the bill due to its legal implications. transaction, likewise, I think the Senate intends
Some provisions would complicate the situation, and to…
they were barring those provisions to prevent it from THE CHAIRMAN (Senator MAGSAYSAY): That
happening. is the intention of the Senate although it did not

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contain any terms like existing. But I think the Atty. Samanodi, the staff of Senator Magsaysay
House version is more specific… and one of the respondents, affirmed the importance of
accurate figures in the advocacy process, “Everything
They eventually erased the provision. should be backed by data.” In terms of the E-Commerce
The report of the Bicameral Conference Committee Act of 2000, testimonies were mostly employed during
was issued on June 7, 2000 and approved by the the committee hearings, the period of sponsorship after
House later that evening. On June 8, 2000, the Senate the First Reading, and during the period of interpellations
approved the same report. in the Second Reading.
After the bill has been enacted and approved by both
Houses, it was endorsed to the Office of the President Networking
for signing. The Electronic Commerce Act (Republic Act
No. 8792) was signed into law on June 14, 2000. As defined by Piotrow et al. (1997), networking is “foraging
partnerships, linkages, networks or alliances with other
Communication Strategies organizations, sectors, or communities.” This aims to
enhance the strength of one’s position most especially
In the case of the E-Commerce Act, the following in advocating a cause or socially-desirable action or
advocacy or communication strategies were employed to program.
various extents: face-to-face, testimonies, networking, The respondents relayed that networking in the case
alliance building, tapping key legislators, and use of of RA No. 8792 were employed among the advocates of
mass media. the E-Commerce law, and between and among sectors
in interest groups. Andam, one of the respondents,
Face-to-Face said that networking is essential in strengthening the
stand or position of the advocates, “Mas maganda kung
Similar with Reyes’ (1998) study, this study found out unified yung aming stand or position on a certain e-
that face-to-face contacts occur most often with staff commerce issue. It is stronger kasi. (It is better to
members of the legislators than with representatives have a unified position on the matter.)”
and senators. This was largely due to the constraints in To have a unified stand, advocates released position
getting an appointment with members of the Congress papers on certain issues. Advocates exchanged position
since demands on their time were tremendous and papers during meetings and then make sure that they
actual meetings with them were preceded by delays, give the key people who will be defending the bill and
procrastinations, and postponements. Consequently, the who will be working on the bill, copies of their position
advocates would feel presumptuous to talk to a legislator papers so that they will know the rationale behind why
straight unless they were asked. Thus, the advocates advocates propose certain provisions.
went to the legislators through their staff members. Atty. To be able to avail of the required and related e-
Quimbo emphasized, “Staff ang aming tutukan, isa-isa. commerce data, this type of strategy was also utilized.
(We had to Zero in on the staff members).” The advocates had to connect with information
Although this strategy was employed all throughout technology (IT) people in the Philippines and other
the advocacy process, this was foremost employed countries abroad, particularly with the US Embassy
before the Second Reading of the bills wherein the (which was assisting the advocates at that time).
advocates educated the staff of the senators and According to Atty. Samanodi, networking with them
congressmen who were in charge of the bill. Educating was done through e-mail, telephone conversations
the staff was conducted through seminars and lectures. and faxed letters. Accordingly, they got all the inputs,
Likewise, educating them was done by dining them out numbers, or at least the estimates which they needed
of their office building where there would be guests to for the deliberation of RA No. 8792.
deliver lectures on the importance of the E-Commerce
Act. Atty. Quimbo emphasized the value of inviting the Alliance Building
staff out, “Ang weakness lang naman ng mga tao dito,
basta ilabas mo sila para hindi nakakasawa yung venue, This strategy, according to Andam, is an integral part
tapos pakainin mo sila, makikinig na yun. (Just bring of the advocacy process. This is where you establish
them to a different venue so they will not be bored.) So relationships with the key people who will be “calling the
we took advantage of it.” shots” or those people who are in charge of working on
Other face-to-face interactions employed were: the passage of the E-Commerce bill into law. Alliance
visits to the legislators offices and holding of seminars, building, in the case of RA No. 8792 was employed
conferences and regular meetings to explain to both with the advocates and with the people in government
the staff of the legislators many of the technical terms who were working on the bill. This was generally done
on how e-commerce really comes into play; one-on- on the committee level. This is similar to Brim and
one explanations given to legislators who have further Duston’s (1983, as cited in Reyes, 1998) advice that
queries; and the advocates’ and staff’s briefing of the best time to approach is before the committee has
congressmen and senators defending the bill. reported on the bill.
Piotrow et al. (1997) emphasized that,
Testimonies “Communication strategies depend on credible sources
who are trusted and respected by people”. Consequently,
In giving testimonies, one must be able to provide the persuasive communication depends on trust as well as
members of the Committee with succinct information expertise - people will not follow advisors they do not
and arguments why a certain measure is needed to trust.
prepare the Committee during the deliberation and Andam, acknowledged the magnitude of trust in
Second Reading (Reyes, 1998). Quality of testimony the alliance building of the advocacy.
is important (Guither, 1980, cited in Reyes, 1998). A The advocates worked closely with the technical
witness must be concise and should give figures to back working group. “We really sat with them and really
up the points presented. discussed as if we were part of the technical working

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group. [Thus] we were treated as part of the technical be most effective (Berry, 1997 as cited by Reyes,
working group.” 1998). This is backed up by Rogers (1983, cited by
Alliance building was also utilized in the event of Piotrow et al., 1977), who conveyed that by the end
the One Internet Day Celebration in both Houses where of the 1970’s the accepted view of mass media was
legislators were invited to speak about thier stand on that they were effective for increasing awareness
the proposed E-Commerce Act. but that only interpersonal communication could
persuade or motivate action.
Tapping Key Legislators This was demonstrated in the case of the E-
Commerce Act of 2000.
This strategy is done to convince a legislator to agree on Although one of the respondents from the
the measure. This includes asking key legislators and Senate stated that the use of electronic mail
influential persons to persuade other legislators. facilitated the passage of the E-Commerce bill, the
According to Reyes (1998), one way to tap influential rest of the respondents acknowledged that face-to-
persons is to contact government policy-makers. The face interactions was the one that truly facilitated
purpose is to gain access to a member of Congress or the passage. This is because they deal with the
agency official when other officials do not seem open to people directly.
the idea. The advocates personally talked to them and
In the case of the E-Commerce Act’s passage in adviced them. Also, they did not just give the primer
the House of Representatives, the advocates tapped and their position papers to the legislators; they made
the committee head on the Committee on Trade and sure that they were there to explain the material so
Industry and not the congressman with a constituency that they could address further questions. Andam
to serve. Andam explained, “I worked closely with the affirmed, “Tingin ko it is really face-to-face kasi
committee secretary who was apparently the one who nothing beats personal explanation to the legislator.
is doing all the paperwork involved. So we worked with Kasi at least kapag may mga follow-up questions you
her; we established a professional relationship with are able to address it at that point already.” She
her.” added that they cannot anticipate all questions. You
can only know their questions when they actually have
Mass Media read the paper and you find out that there are still
some issues you were not able to address. Thus, one
This includes the print and broadcast media that were cannot trust that single position paper could address
utilized in the policy advocacy process. all the issues and concerns of the legislators.
A good communication strategy combines different Moreover, alliance building was also done face-
media to repeat and reinforce key messages. This is to-face. Trust and confidence of the key legislators
because the same channels of communication do not could not be obtained if it were not for the face-to-
reach everyone. Thus, a multimedia approach is the only face interactions.
way to reach a substantial proportion of the audience Atty. Quimbo recognized that, “In so far as I am
(Piotrow et al., 1997). concerned, we would not have been as successful had
However, in the case of the RA No. 8792, some we not concentrated on face-to-face interaction.”
respondents stated that this type of strategy was not
used too consciously and only on a minimal level. They Communication Problems
did not use it since there was already media interest during the Policy Advocacy
in the bill, especially in the information technology
section of the newspapers. Atty. Quimbo shared, According to the respondents, the major problem in
“Minsan kulang yung balita, ano yung gagawin mong their advocacy was the ignorance of the senators and
balitang local? So, ‘Ito, gumagalaw yung e-commerce. congressmen on e-commerce transactions. Since it
(Sometimes the news are insufficient, what can you was a new technology at that time and it was not
use for local news? Here we have e-commerce on the really practiced by most of the legislators, particularly
move).” By publicizing the effort and the fact that there the elderly ones, there was a resistance at first. With
was an e-commerce bill that was pending in the senate, this, the chairman of both Houses had a difficult
the media also advocated for it, although not directly. time hammering the new concept so that it will be
Also, some of the press releases related to the acceptable to everybody.
E-Commerce Act were, according to Andam, mostly Although some of the legislators have a working
individual efforts of the congressmen and senators. understanding of the concept of e-commerce, some
Some publications that were released by the issues were not easily understood. In fact, some of
advocates were: the book entitled Business@Philippines. them complained that it was too technical. However,
com, which was distributed to the office of the senators, the technicality of the E-Commerce Act cannot be
in the hopes that the staff in charge of the bill would avoided since it involves technical components.
read the book, and then by reading the book, they (the There was also the problem in the availability of
staff) will also inform their principals (Senators) of the e-commerce data in the Philippines. E-commerce
importance of the bill; and the E-Primer: An introduction related data, during the policy advocacy, were very
to E-commerce which was released on January 2000 and important in supporting the positions and provisions
was distributed to the legislators in both Houses before being lobbied in Congress. According to one of the
the floor deliberations, and to the Committee on Trade respondents, although there were some data, they
and Industry (Senate) before the Second Reading. were not complete and updated.

Key Strategy in the E-Commerce Act Pointers for Future Advocates

Of all the techniques open to public interest There is no one set of ‘lessons’ on advocacy that needs
representatives, the personal presentation of to be learned. However, pointers were given by the
argument to government officials is thought to respondents of the study for future policy advocates:

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a) First of all, you should know the terrain. Many REFERENCES


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
Alicias, MDG. (2003). Handbook on advocacy
works.
b) After knowing the terrain, find out the key persons
strategy and techniques development. Manila,
that you need to talk to in each office. You do not Philippines: Institute for Popular Democracy.
go through the office of the Senate President and
expect that other senators would know about the Andam, Z. (personal communication, Feb. 9, 2004).
issue. You have to go to each and every office door.
So talk to each and every senator’s staff, or staff-in- Andrade-Jimenez, H.S. (2001). Preventing the
charge for a particular issue. The easiest is to seek “love bug” from biting again. http://itmatters.com.ph/
an appointment with the chief-of-staff and then the features/features_01122001d.html (Feb.21, 2004).
chief-of-staff will probably introduce you to the staff
in-charge for that. Anigan GR. (personal communication, Jan. 16, 2004).
c) When you already know the key persons in having
your proposed provisions enacted, start off by Disini, JM., Jr., & Toral, JC. (2000). Republic Act No.
establishing a relationship of confidence with them 8792 implementing rules and regulations of the Electronic
– whether it be at the House level or the Senate Commerce Act. http://www.disini.ph/downloads/
level. Gaining their confidence and trust is essential EcomIRR%20Annotations.pdf (Jan. 11, 2004).
so that they will listen to your issues and concerns.
d) In getting your proposed provisions enacted, you
Estella, C., et al. (1997). Uncovering the beat.
have to entail all measures that will ascertain that
those provisions will be enacted. Know your strategy
Pasig, Manila: Philippine Center for Investigative
and carefully deliberate on what is effective (e.g. Journalism.
Plan A, Plan B, etc.). Map out a strategy and make
sure that you implement it. Favis-Villafuerte, N. (2001). Understanding…
e) Patience is essential during the advocacy. Do not fight cyber space. Makati, Philippines: Apples of Gold
and debate with those who do not agree with you. Publishing.
Just patiently explain to them what your proposed law
is all about. Eventually they will accept. Johns Hopkins Center for Communication
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to amendments and opinions. You cannot be self- www.jhuccp.org/pr/advocacy/ (29 Aug. 2003)
righteous because it is a committee work. You have
to accept their proposed changes in the bill so that Navarra RJ., Jr. (personal communication, Dec. 17, 2003).
it can become a law.
g) Do good research. If you are not prepared when Piotrow, PT., et al. (1997). Health communication:
you are in the floor the legislator defending the bill lessons from family planning and reproductive
will also be left hanging.
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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
Quimbo, RS. (personal communication, Dec. 17, 2003).
whatever is being discussed.
i) When you meet with the key actors, you must have Republic Act No.8792 - An Act Providing for the
a goal in mind and be prepared. Accordingly, you Recognition and Use of Electronic Commercial and
must do your paperwork. Non-commercial Transactions, Penalties For Unlawful
j) Position papers should not be too long and should be Use Thereof, And Other Purposes. 2000.
redrafted for their (target person) understanding.
Make it in bullet forms because most legislators opt Reyes, LC. (1998). The policy advocacy process of
to read short, brief papers. the National Water Crisis Act of 1995 (Republic Act
No. 8041). Unpublished Master’s Thesis. Institute of
Personally deal with the key actors. The process does Development Communication, UPLB.
not stop at giving them position papers and other
research materials. You cannot trust that a single Samanodi, S. (personal communication, Dec. 17,
position paper will be able to address all their issues 2003).
and concerns. Those are only supplementary. You
have to deal with them personally so that your stand
Toral, JC. (personal communication, Jan. 9, 2004).
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Toral, JC. (2001). History - one internet day http://
www.oneinternetday.com/history.php (Jan 11,
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118 advocacyandpolitics
T 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.
philippineinternetreview

by Mayumi Canuto diskettes. I heard about the Internet at that time,


but the computer shops do not offer the use of the
Mayumi Canuto is the winner of Internet as the rates were very steep.
the 1st Philippine Internet History
Today, as I write this article, Internet technology
Writing Competition. 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
ne of the lures of writing this article is also
Cafés” within the barangay where I live, when before
being able to satisfy a personal curiosity—of
these shops were non-existent. These cafés are all
how a place that used to be a town not so
situated in the house of the owner— that is, a room
much known except for its quality shoes could
facing the street is refurbished or converted into a
become a burgeoning city that has completely
business establishment. The entire city has about
transformed itself into a model place to live and
four (4) Internet cafes in each of the 14 barangays.
do business in.
Aside from the owner’s houses, Internet cafés can
also be found in the Riverbanks Center and other
Living in Marikina all my life and witnessing the
commercial establishments in Marikina situated near
massive improvements around, especially because
the marketplace and in the proximity of schools.
I have always lived in the proximity of the Marikina
River, made me want to know if the place where I
Visiting the local internet cafés in the area, I observed
live and the assertions made by our politicians hold
that a typical establishment holds about 10 to 12
true. Modernization not only comes with seeing
PCs, networked using UTP (Unshielded Twisted Pair)
infrastructure being built, although this accounts for
cables held by one switch. Most if not all the local
most of it, but also being able to respond to the call
internet cafés cater to network gamers, although
of the times. By this I mean that not only the physical
residents also use the cafés to check websites
aspects of the city is changing, but also the way the
to find jobs, write email, chat, or do research for
people see computerization as a concept to facilitate
homework, mostly through search engines like
how things are being done. In other words, if the
Google, Yahoo and MSN. Internet cafés also offer
people living in what we call a newly transformed
other range of services like tutorials, PC repair and
and modernized city have also been re-engineered
troubleshooting, scanning, design of resumés and
to act accordingly, then transformation has hit its
business cards, invitations, and printing and fax
mark.
services. Internet is available through a dial-up
facility, with mostly Globelines as the ISP. PLDT also
One of the aims of this article is to be able to span
provides telecommunication services.
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

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Even if DSL could be made available, most owners do Based on the statistics (Figure 1), we can see
not opt to use them since network gaming attracts that the city’s phone line capacity is not yet
bulk of the users and provides more revenue. saturated and can make way for businesses
Internet speed via DSL purchased is normally only and even households to have a better chance
at 128 Kbps. Because of this, the average rate for of hooking up. Based on a 2002 demographic
an hour’s use of the PC is Php 20.00 for network data available, Marikina City has a population of 427,
gaming and Php 25.00 for Internet use. If you do not 037, translating to roughly a person to phone
use up one hour, the owner or the keeper of the café ratio of 6:1. Household count, on the other
charges you in increments of PhP5.00, depending on hand, is at 90,636 in year 2002. Therefore, a
the time that was consumed. True to the concept ratio of one phone to one household, based on
of a café where one can have refreshments while the capacity as illustrated, is achievable. Since
using the computers, these establishments offer telecommunication lines are the primary conduit of
snacks to patrons similar to the costs in the sari- Internet data and its availability a determinant of
sari stores. Hardly is coffee served, unlike in the whether a city could afford to go online, we could
more posh Internet cafés, where charges climb as infer that telecommunication is not a bar for the
high as Php70.00 per hour (for those with complete City to achieve its goal of enjoining the populace
amenities and found in exclusive or prime locations). to use Internet technology since there are plenty
Customers of these local Internet shops range from of telephone lines. Currently, only one out of 10
grade schoolers and teenagers to yuppies. An households in Marikina have Internet connection,
Internet café fronting Provident Villages, a shop translating to approximately 10,000 internet users
converted from what used to be a beauty parlor, in the entire city.
opens at 10 a.m. Customers already come assoon
as the shop opens. Lull occur at 2 p.m. to 4 p.m. The time the Internet and the concept of hitech
Peak hours are from 4 p.m. until closing time, which was sweeping the country was also the time that
is at usually at 10 p.m. The keeper attributes this to the Fernando’s came to office in Marikina City.
the fact that it is around this time that people are Then Mayor Bayani “BF” Fernando did not only
done with school or with work and have enough time transform the physical infrastructure or “look” of
to go to the cafés. Weekends are particularly good Marikina City by improving the roads, cleaning up the
business days. river and transforming it into a park. Marikina was
also envisioned to be a modern city where people
It could be observed that the local internet cafés need not go to the city hall to conduct transactions
in Marikina City is akin to a family den, except that in person. Posted conspicuously in the City Hall are
Mom is not around to admonish or to set limits the following: “The best city hall is where no people
on the noise level and the length of playtime. It go,” implying that transactions are envisioned to be
sometimes tend to be too relaxed at times, as conveniently done online.
people doing research are overpowered by the noise
of the network gamers. Local Internet cafes do not The Marikina City Council reinforced this vision by the
have dividers or cubicles that allows privacy for enactment of an e-government resolution, which was
each user. PCs are normally lined up in a row on a passed last year (2003)—the “Resolution Adopting
long table, where players or users sit side by side. the Revised Marikina Computerization Framework.”
Local Internet cafés also do not offer peripherals In compliance with the resolution, a Management
and accessories per PC like scanners, speakers, Information System (MIS) Division was set up to
microphones, printers and webcams. Not all PCs ensure total computerization of city government
have CD-ROM drives since most computers are operations, replacing the traditional manual system
used for network gaming. of the local government. In September 2003, the
Marikina City government commissioned BayanMap
Corporation of the Lopez Group of Companies to
Status of Telephone Service install the Geographic Information System (GIS) for
As of July, 2001

Location Capacity Working Available

North Marikina 38,300 lines 35,895 lines 2,405 lines


(Along A. de Guzman St.,
Con. Uno)
South Marikina 50,882 lines 33,431 lines 17,451 lines
(Along Marcos Highway,
Cainta Rizal)  

T O T A L 89,182 lines 69,326 lines 19,856 lines

Figure 1

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the city. Among the types of services the citizenry Ms. Sally Balagot, formerly of the Marikina Public
can enjoy through this computerization sweep are Information Office (PIO) said the Marikina City
access to records involving methods of processing website was used as a vehicle for people to know the
documents like renewal of business licenses; services offered by the Marikina City government, and
health advisories; and various government policy to provide important facts about the city. Aside from
agenda. Information services on taxes, legal complying with the E-Commerce Act as mandated
matters, public service, police, fire department by the Office of the President, whereby government
and education, among others, will also be more offices should have web presence by year 2001, the
accessible. A call center will be set up by the MIS city considers the value of the website as a stepping
Division, envisioned to have command and control stone into global competitiveness. She reiterated
functions in the future. the city’s vision of becoming a “little Singapore”—
its citizens well-mannered and the city clean and
Part of the computerization progressive.
effort is a website for
Marikina City. The website The website was promoted throughout Marikina City
has 24 main slides through radio announcements (DZBF, the local radio
supporting the homepage. station), the city newspaper and billboards. Eventually,
The homepage gives a view the website reached international viewership and
of the Marikina City River has become an avenue where its citizens­particularly
Gazebo, the picture of the ht OFWs—can read news and information about their
City Mayor, Mrs. Maria hometown. To date, the guestbook lists a minimum
Lourdes “Marides” of 10 visitors per day, the community bulletin 15
Fernando (MCF) and visitors a day, and the city e-mail receiving roughly
other advertisements and 20 notes a day, within and outside Marikina. Foreign
thumbnails to promote the city. It also offers links presence has been felt with visitors of the site from
to city government information, city news, city Sweden, China, parts of Europe and the US sending
radio station, e-procurement announcements, inquiries about investment opportunities in Marikina’s
e-governance write ups, business opportunities shoe industry. The City getting into the Guiness Book
in the city, community bulletin, guestbook, of World Records in 2003 for the world’s biggest shoe
and contact information/directory of the city also contributed to the healthy rate of web traffic.
government officials and personnel. There However, there is still no online ordering system and
are less than a hundred links leading to the inquiries are responded to by provision of a list of
e-procurement files and community bulletin shoe manufacturers or referrals to the head of the
postings. There is a city map that can be found city Trade and Industry Office.
in the website and a downloadable brochure of
the city. Ms. Balagot disclosed that the Marikina website was
patterned after another LGU’s website, which Mr.
According to Mr. Adrian Salvador, Chief of the Salvador acknowledged.
General Services Office (GSO) of the Marikina City As the technical aspects of
Hall, Marikina set up its website in 1998 as a pilot/ hosting and maintenance
test project by then Mayor Bayani “BF” Fernando. is left to the service
The project was commissioned to Web.Com,and providers (later on to their
used Mosaic Communications (Mozcom) as the own MIS), brainstorming
ISP. The (MIS) Division as set up will take over on the web content is the
the website’s operation and maintenance in 2004. task of the Marikina Public
“At present, out of the approximately 1,500 LGUs, Information Office (PIO),
only 184 have web presence, and Marikina is one with the office of the City Mayor having the final say
of them,” Mr. Salvador proudly said. on which items and segments are to be published.
Ms. Balagot, assigned to monitor the website—
He attested to the gradual shift from the manual responds to queries made online; reads comments,
to the computerized mode of doing transactions observations and points of improvement for the
in the city. Marikina City currently performs website; and occasionally practices censorship
online bidding process through the web. An e- of wayward messages in the community bulletin.
procurement icon is placed on the homepage She said although city hall personnel welcomed
and carries links to notices of public auction, the website and the chance to go online, the
invitations to bid, and bid resolutions. City technology has yet to be maximized. As much as
equipment which are unserviceable and need 400 personnel can be afforded e-mail addresses
to be disposed of are listed and posted in the for use in the domain but only 18 are active. There
website for interested buyers. Instead of going to are no links to commercial or other government
the city hall in person, a buyer can be informed agencies from the Marikina City website, albeit it
just by visiting the city’s website. Purchases are has links to the Marikina City Council of Fashion
made transparent as the winning bidders and website and Secretary Bayani Fernando’s website.
awards are likewise published on the website. Mr. She acknowledged that the website may need to
Salvador foresees an EPS (Electronic Payment be more aesthetically pleasing and that additional
System) being set up in the future to support information can still be added to address the needs
this infrastructure. of the people researching about Marikina City. More

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features can be explored, the Marikina City


such as accomplishment government requested
of more egovernment PLDT to lay down new
transactions, inclusion of cables with 1MB capacity.
the GIS, placement of an PLDT will complete work
online ordering system, on it by this year. The
and the like. She said Office of the City Mayor is
that the website is still also pushing for the MIS
in the process of further Office to be open and
improvement. operational by the end of
this year. The MIS Office
Mr. Bernard Berja, an will have a receiving
MIS consultant, now area, a conference
heads the MIS Office, room, cubicles for the
which was mobilized Call Center personnel,
during the second semester of 2003. He is a an administration area, and a server room with
professional IT services consultant with a wide range glass panels (a symbol that they believe in
of experience both here and abroad. Together with total transparency). Kiosks will be put in areas
city government representatives, he surveyed the around city hall,so the public can conduct online
extent of computer modernization in other cities prior transactions such as visiting the website, paying
to starting construction of the Marikina MIS Office. their taxes online, requesting for information,
He observed that many LGUs spent millions of pesos downloading forms, and the like. In the future,
in modernization efforts but were not very successful access of Marikeños to the city hall offices is also
in making technology work for them, chiefly because seen to be done conveniently at home, in the public
government employees and the representatives schools and libraries via WAN.
who purchased the technology were swayed by IT
salesmen and marketing people. In the end, the Marikina has come a long way. As a resident, I
users were either confused on what they have, do not feet the city government strives to keep up with
know how to use the technology, or have purchased the modern times, and the changes made in line
equipment and software which are not suitable to with modernization though gradual, is picking up
their needs. For Marikina, Mr. Berja used his work speed. The city still has some way to go in terms
experience and lessons learned from other LGUs to of realizing its vision of an online and paperless
identify the specifications for the construction of the transaction system, promoting the use of the
MIS Office. They then called on bidders to supply Internet as the medium for business and leisure,
the specified equipment, software and services. and perhaps making it a way of life among its
They called on a bidding for the purchase of a central residents. This may be attributed mainly to the
server in November 2003. The server is currently set fact that Internet access still remains a privilege
up in the new MIS Office. The server processes and — not all homes have computers, a reason
stores all pertinent Marikina City government files, why there is a proliferation of Internet cafés.
and has redundancy and other security features. The Public education in the area has just started
server has a net capacity of 620 GB of data. to incorporate the Internet in its curriculum,
as computer basics need to be taught first.
He also revisited contracts between Marikina Provision of computers is a challenge. I addition,
and IT companies servicing the city government, we can say that not all users are receptive to
and worked on creating new contracts to the using technology. I know of some people who
advantage of Marikina. Starting 2004, Marikina will still get intimidated by a computer. For those
be hosted by e-PLDT instead of Moscom, and web who currently have access, not eveyone is aware
development and maintenance will be done by an of the power of the Internet, because many are
in-house MIS team. A programming team, about still unexposed and unaware of its breadth and
seven to ten people, is currently working to develop depth.
the back end applications/modules customized to
the needs of the different offices. In the future, the For all its worth, it is notable
public can also benefit from these functionalities that the City while busy with
as these can be accessed through web technology, promoting its world class
subject of course to different levels of access. shoes and trade has tagged
Priority modules to be developed by the team are information technology
related to revenue collection, to help fund ongoing as an additional medium
construction. The Marikina Treasury Office is now to reach more people. It
using its own system, but this will be replaced by is very encouraging to
a new one this year. A new, accurate and more up realize that my hometown
to date database is expected to be generated from is maturing and keeping up
the use of this new system. with the times. Perhaps in
the next decade, information technology would pull
Marikina now has a network capacity of a meager the direction of trade and industry in the city. All
128 Kbps. In anticipation of the city-wide shift from it would take now is for Marikeños to visit the city
the manual to the automated form of transactions, 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.

drwilliamtorres 125
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A Fat h e r ’ s M e s s a g e
Janette Toral (JT): Ten years ago, did available but still quite expensive. We’re not
you envision the Internet to reach its present moving as fast as we should in our infrastructure
state? build-up. The price of International Private Line
(IPL) then was not only expensive, but it was
Dr. William Torres (WT): It has gone in short supply. Today there’s a glut in IPL and
beyond my expectations. At that time, I saw that has made it affordable. On the other hand,
it simply as a tool for communicating and being able to distribute bandwidth nationwide
accessing information. That’s all. But now, and interconnecting different provinces are still
because of its useful application in business, quite expensive.
the Internet has gone a long way. It is now the
main, if not the sole, information infrastructure I also do not agree that we are behind, as
for most businesses today. implied in many international reports. The
measurements or criteria used in ranking
JT: Which sector do you think has benefited developed, underdeveloped, and developing
the most from the Internet? countries in ICT development should not be
the same. Consider telephone density, for
WT: It is the private sector. Because of it, a example: the Philippines can’t catch up using
lot of enterprises have enhanced their business this measure, which is expressed in terms
processes with ICT. To a certain extent, some of the number of telephone lines per 100
educational institutions have also benefited. persons. I believe that for the developing
and underdeveloped countries this should be
JT: How would you describe the Internet based on how many people have access to a
evolution in the past 10 years? telephone, or how far or near a person is from
a payphone. With respect to the Internet, we
WT: Briefly, the first five years was about are measured on access that takes place from
building the infrastructure. The main the home. Instead, we need to factor in shared
applications were email and surfing. During the community access, then the number of people
second half, Internet applications became more with Internet access will increase.
sophisticated—e-commerce and e-business
took place. The World Wide Web (WWW) JT: With telcos competing with traditional
is the Internet application that gave rise to ISPs today, how is Mozcom coping and keep its
many enterprise-oriented applications. In the organization strong?
beginning, we were just interested in access.
People would simply access the Internet and WT: We are diversifying to value-added
do whatever they wanted to do. However, we services. It is not true that we will always remain
came to realize that there’s a bigger purpose strong in a given area. We have to change our
to having access. Thus putting up content, direction, moving from access to value-added
websites, and portals became important. The services. The health of our organization will
Internet user became interested in something come from our ability to innovate. For example,
of value and something that can contribute the WWW is an innovation that came out from
towards increased productivity. The dotcom the Internet. The World Wide Web gave birth
mania was in response to expectations that any to numerous applications like e-commerce. We
content placed on the Internet will be accessed need to move on from the usual things that we
by people. However, their interests were pegged do to new things.
on the value of information to their lives and
their work. They use it in education, business Mozcom had more than 70 branches and
and others. partners before. Many have closed because they
were no longer viable due to telcos penetrating
JT: What do you think are the reasons why the the market. We now have only between 40 and
Internet has not taken off to a greater extent 50 PoPs (points of presence). Incidentally, I
compared to other countries? believe that the number of “independent ISPs”
will come down to less than 10 within the next
WT: One deterrent in the Philippines is that 10 years. It is difficult to fight the telcos since
Internet access is not yet at the stage where they own the infrastructure. ISPs should now
it is simply “taken for granted.” Broadband is take the attitude that they can work together

126 drwilliamtorres
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with the telcos. If everyone is into connectivity • Republic Act 7925 does not allow VAS
only, the bigger players will surely kill the providers to offer voice-related services.
smaller ones. But in the area of value-added This has to be revised in order to make
services, there’s room for competition because VOIP an easy-to-access and affordable
there are numerous possible applications one commodity for all. At present, only telcos
could develop for a wide market. can offer this service which puts ISPs at a
disadvantage and unable to maximize the
JT: I noticed that you are quite active in full potential of our Internet infrastructure.
promoting e-learning. What would encourage
schools to really consider it?

WT: We have to push for it more aggressively.


We need to educate the market – showing our
educational and training institutions how e-
learning 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 In the next 10 years, the Commission on
nationwide scale. Information and Communications Technology
(CICT) can serve as focal point. We can
JT: What are the things that should take place consolidate our laws, policies, implementing
in order for full Internet adoption to be realized rules and regulations in such a way that it can
in the country? foster better competition and breed innovators
on the use of the Internet for enterprise. The
WT: There are numerous challenges that need Internet per se may not be profitable but
to be addressed. These include: its application in various forms in business,
• The country’s current broadband map tells education, government, will certainly create
us only where we have access. We should more wealth for our country.
focus on capacity and actual connectivity.
The Commission on ICT can mandate JT: But how about the private sector? It seems
this. A map should be able to describe the that today’s ICT community is fragmented today.
magnitude of data flow to and from Cebu,
Manila, Davao and other points. WT: One of the many things we should do is to
• We need to allocate resources for our E- think of ourselves as belonging to one industry.
Commerce and Intellectual Property Rights We should cooperate to make ourselves better
laws to be fully implemented. This includes competitors. We must be active and firm in
having a functioning computer emergency recommending policies. If we are a united
response team. industry, we could have a stronger voice in
• We need to have a Convergence Law that lobbying—not only to complain but to explain
will allow us to integrate and make use of issues well. Internet security is being advocated
the various infrastructures like broadcast, only by a few. It should have been promoted as
cable, and satellite in developing and a critical component of the ICT industry. People
deploying applications. Although this is would listen to us only if we have a strong
partly mentioned in the E-Commerce Law, association.
the government agencies concerned did not
come up with guidelines to implement that. With the CICT (which hopefully becomes a
• We still have piracy. We can’t really Department of ICT soon) we can hold a high
capitalize on our intellectual property if we level agency responsible for all our industry
don’t respect those of others. If we pirate concerns. Reporting directly to the President,
software and content, ours can be pirated through the Department of ICT, we don’t have
as well. Investment flow to our country to go to multiple agencies as we do now.
will be limited until our laws are properly Hopefully, a better future will arrive sooner for
implemented. all of us!

drwilliamtorres 127
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.