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THE OFFICIAL PUBLICATION OF THEARELLANO UNIVERSITY SCHOOL OF LAWE-LAW CENTER AND IT LAW SOCIETY

VOLUME 1, NUMBER 2IT Law Journal

THE PHILIPPINE QUARTERLY

by Ma. Cristina A. Ramos

E-CE-CE-CE-CE-COUROUROUROUROURTTTTT: C: C: C: C: CHANGINGHANGINGHANGINGHANGINGHANGING THETHETHETHETHE T T T T TRIALRIALRIALRIALRIAL E E E E ENVIRONMENTNVIRONMENTNVIRONMENTNVIRONMENTNVIRONMENT

n November 2003, aMemorandum of Agreement (MOA) wassigned by Sen. Aquilino Pimentel Jr., CourtAdministrator Presbitero Velasco Jr. andMayor Jejomar Binary of the City of Makatifor the installation of the country's firstelectronic court.

The electronic court (E-court) project is aninitiative of Sen. Pimentel, driven by his desireto allow the courts to maximize the use oftechnology in enhancing the court processes.For its initial budget, Sen. Pimentel allocatedP2 million of his Priority DevelopmentAssistance Fund. A counterpart of P2 millionshall be provided by the city government ofMakati. The installation of E-courts in otherregional trial courts will depend on thewillingness of the local government units toprovide a counterpart amount to shoulder theinitial budget of said courts.

Features of the E-court

The E-courts will have three majorinnovations, namely: computer-aidedtranscription (CAT) facilities, caseadministration or case management systemand tele-video conference room.

The computer-aided transcription facilities willallow courts to provide transcripts of theproceedings to be printed and distributed atthe end of every hearing. With these facilities,parties will not have to wait for weeks or evenmonths before they can be furnished withcopies of the transcripts of the proceedings.

The introduction of this digital recording andtranscription system in our courts will best

Insidewhat’s

2

1EEEEE-C-C-C-C-COURTOURTOURTOURTOURT: C: C: C: C: CHANGINGHANGINGHANGINGHANGINGHANGING THETHETHETHETHE

TTTTTRIALRIALRIALRIALRIAL E E E E ENVIRONMENTNVIRONMENTNVIRONMENTNVIRONMENTNVIRONMENT

EDITORIAL

PHILIPPINE FACTS &

FIGURES

IIIIISSSSS THERETHERETHERETHERETHERE SUCHSUCHSUCHSUCHSUCH AAAAA THINGTHINGTHINGTHINGTHING ASASASASAS

WMD? TWMD? TWMD? TWMD? TWMD? THEHEHEHEHE W W W W WEBEBEBEBEB ASASASASAS AAAAA

MMMMMEANSEANSEANSEANSEANS OFOFOFOFOF D D D D DESTRUCTIONESTRUCTIONESTRUCTIONESTRUCTIONESTRUCTION:::::

TTTTTHEHEHEHEHE S S S S SUPPOSEDUPPOSEDUPPOSEDUPPOSEDUPPOSED T T T T THREATHREATHREATHREATHREAT OFOFOFOFOF

CCCCCYBERTERRORISMYBERTERRORISMYBERTERRORISMYBERTERRORISMYBERTERRORISM

INTERNET DECENCY

REGULATION VS. FREE

SPEECH (THE US CASE OF

ASHCROFT VS. ACLU)

FROM FREE TO FEE?

JURISPRUDENCE IN

CYBERLAW

INTERNATIONAL E-TRADE:

GATT VS. GATS

LLLLLEXICONEXICONEXICONEXICONEXICON OFOFOFOFOF C C C C CYBERLAWYBERLAWYBERLAWYBERLAWYBERLAW

TTTTTERMINOLOGIESERMINOLOGIESERMINOLOGIESERMINOLOGIESERMINOLOGIES

PHILIPPINES AS KNOWLEDGE

CENTER OF ASIA IN THE

21ST CENTURY

AAAAAMENDMENTSMENDMENTSMENDMENTSMENDMENTSMENDMENTS TOTOTOTOTO TEHTEHTEHTEHTEH 1998 1998 1998 1998 1998

RRRRRULESULESULESULESULES OFOFOFOFOF THETHETHETHETHE H H H H HOUSEOUSEOUSEOUSEOUSE OFOFOFOFOF

RRRRR E P R E S E N T A T I V E SE P R E S E N T A T I V E SE P R E S E N T A T I V E SE P R E S E N T A T I V E SE P R E S E N T A T I V E S

EEEEELECTORALLECTORALLECTORALLECTORALLECTORAL T T T T TRIBUNALRIBUNALRIBUNALRIBUNALRIBUNAL

(HRET)(HRET)(HRET)(HRET)(HRET)

LLLLLEGALEGALEGALEGALEGAL C C C C CITATIONITATIONITATIONITATIONITATION: W: W: W: W: WEBSITESEBSITESEBSITESEBSITESEBSITES

ASASASASAS R R R R REFERENCEEFERENCEEFERENCEEFERENCEEFERENCE

[LEGALWEB]

WWW.SUPREMECOURT.GOV.PH:

BRINGING THE JUDICIARY

CLOSER TO THE PUBLIC

E-LAW CENTER EXECUTIVE

DIRECTOR ATTENDS

HARVARD INTERNET LAW

PROGRAM

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>> [ 3 ] E-Court

implement Section 16 of the Bill of Rightsproviding for the litigants' right to speedydisposition of cases. It is well recognized thatthe time spent by the parties in waiting for thetranscript of stenographic notes is a fact mostcontributory to the current 'at a snail's pace'disposition of cases. With the computerizationof the transcription, the parties will be assuredthat before they leave the courtroom, theywill have the copies of the transcript of theproceedings with them.

Moreover, for an enhanced casemanagement or case administration, theproject includes a computer linkage to theSupreme Court. This feature will allow theOffice of the Court Administrator to effectivelymonitor the cases pending in the trial courtand to check the letter's compliance with theguidelines and rules issued by the SupremeCourt as regards the disposition of the casesbefore it. Surely, this will be an effectivemeasure for the High Court to exercise itssupervisory functions over the lower courts.

Perhaps the best feature of the E-court projectis the tele-video conference room. This is aclosed-circuit video room which allows childwitnesses to testify outside the courtroom butwithin its vicinity to prevent them from beingintimidated or influenced by the accused orother persons. This facility will certainly protectvulnerable witnesses especially childrenwhose appearance before the courts couldbe traumatic to them.

To illustrate the advantage of the child witnessroom, Atty. Ivan John Uy, Chief of the

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T he e-Law Centerwould like to publicly express itsdeepest appreciation to the ArellanoUniversity School of Law and theArellano Law Foundation, particularlyto Dean Mariano Magsalin Jr. and Mr.Florentino Cayco III, for theirunwavering commitment to make thelaw school at the forefront of cyber laweducation, research, advocacy in thecountry.

With their continuing support, the e-Law Center was able to cause thepublication of this IT Law Journal, nowon its second issue. In my capacity asExecutive Director of the Center, I wasalso fortunate to participate in the2004 Internet Law Program of theBerkman Center for Internet andSociety of the Harvard Law School lastMay 2004. The websitewww.lawphil.net is fast becoming theleading repository of on-line legalresources and jurisprudence in thecountry.

On a personal note, I also wish tocommend the dedication andinvaluable contributions of Arellanolaw students who compose the IT LawSociety headed by Michael Vernon M.Guerrero. I recognize that their task

of helping the Center in the realizationof its vision and various activities entailsa lot of personal sacrifice consideringthe fact that almost all of them areworking students, not to mention therigors of their law studies.

Very few people in our country realizehow global developments ininformation technology have sharplyincreased during the last decade. Theobservation that information technologywould affect the way people live is acertainty, and not a mere fallaciousstatement. As the demand forinformation technology increases, theneed to address related legal concernsand issues also grow in the sameproportion. Hence, there is no iota ofdoubt that the vision set by the lawschool in 1997 to produce technologyoriented lawyers and professorsappropriately responds to globaltrends. Expect the e-Law Center to beat the forefront in the realization ofthis vision.

In this issue, the banner story is theelectronic court (e-Court) projectinitiated by Senator Aquilino PimentelJr. in cooperation with Supreme CourtAdministrator Presbitero Velasco Jr.and Makati City Mayor Jejomar Binay.

The issue also carries an article oncyberterrorism, or as the author putsit: “Web as a Means of Destruction”(WMD). The recent decision of the USSupreme Court in the case of “Ashcroftvs. ACLU” on the constitutionality ofthe Child On Line Protection Act(COPA) is also discussed in this journal.The case presented a constitutionalclash between the government’s rightto regulate Internet content and theright of the people to free speech. Forthe legal web section, this issue featuresthe website of the Philippine SupremeCourt, accessible atwww.supremecourt.gov.ph.

CHAIRMAN

Atty. Jaime N. Soriano, CPA, MNSA

MEMBERS

Ailyn L. CortezCharilyn A. DeeJhonelle S. EstradaPeter Joseph L. FauniCarlyn Marie Bernadette C. Ocampo-

GuerreroMichael Vernon M. GuerreroMa. Cristina A. Ramos

Editorial Board

Editorial

For subscriptions, contact:

TTTTTHEHEHEHEHE P P P P PHILIPPINEHILIPPINEHILIPPINEHILIPPINEHILIPPINE Q Q Q Q QUARTERLYUARTERLYUARTERLYUARTERLYUARTERLY

It Law Journal

e-Law Center2/F Heilbronn HallArellano University School of LawTaft Avenue corner Menlo StreetPasay City 1300 PhilippinesTels. +63 2 404-3089, 404-3090, 404-3091http://www.arellanolaw.netitlawjournal@arellanolaw.net

Volume 1, Issue 2

The Philippine Quarterly IT LawJournal is the official publication of the e-Law Center and the IT Law Society of theArellano University School of Law. It ispublished quarterly.

Contributions to the Philippine Quarterly ITLaw Journal express the views of their authorsand not necessarily the views of the ArellanoUniversity School of Law.

Philippine IT Facts and Figures

Women’s Internet Usage 1 in the Philippines

Women as % of Internet Users,2000 51.0

Total Women Internet usersin 000s 76.5

Total number Internet usersin 000s 150

Internet users as % of totalpopulation 0.6

Female professionals andtechnical workers as % of total 65.1

Female literacy rates 94.3

Source :1 Hafkin and Taggart (2001)

© 2004. All Rights Reserved.

Reconstituted November 2006. Proportionsmay differ slightly from original printed copy.

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<< [ 1 ] E-Court

Management Information SystemOffice (MISO) of the Supreme Court,gave as an example the examinationof a child who was allegedly raped byher father or uncle.

With the present procedure in ourcourts, the child will have to exposeherself to an embarrassing andtraumatic experience connected withthe litigation of the rape case as shewill have to narrate before the courtthe rape incident with the accused infront of her and with all the relativesand neighbors attending the hearing."It is already such a trauma being avictim; you're all again a victim thesecond time when you have to narrateit in front of that kind of audience. Foran adult, it is already traumatic. "whatmore for a child?" said Atty. Uy.

Certainly, this is what the child witnessroom seeks to prevent-the traumaticeffect on the child brought about bytestifying in front of the judge, theaccused and other people. Aside fromthe features mentioned above, the E-court will also have a website fordissemination of information to thepublic regarding the cases filedtherein.

Currently, the project is lodged beforethe Urban Development Division of theCity of Makati- The division ispreparing for the specifications of thefacilities to be submitted to theprocurement office of the Departmentof Budget and Management.

Not a paperless court

The MISO Chief clarified that the E-court project is not a court where

Atty. Uy discussed the possible set-upof a paperless court. He said that biglaw firms would be allowed to enrollin the digital court system so that theywill have an access to the system.There would be a virtual terminalwherein the documents (pleadings,motions, etc.) from the enrolled lawfirms will be sent to the Supreme Courtand it will be the Supreme Court whowill send the document to the trialcourts. He said that for authenticationpurposes a centralized processing ofdocuments must be had. Otherwise,there would be difficulties in themanagement of traffic and in thevalidation of the legitimacy of the lawfirm.

Moreover, the MISO Chief stressed thatit would be very expensive if thejudiciary will install multiple servers lieuof a central processing office. With thecountry's dwindling resources, thejudiciary will just have to make the bestout of its finances.

With the current efforts of the SupremeCourt, the optimistic outlook of Atty. Uy,the assistance of the likes of Sen.Pimentel, and the cooperation of thelocal government units, full automationof the judiciary will soon be realized.There will be expediency in thedisposition of cases. The rights of bothparties will be observed. They will beaccorded with protection fromemotional harm. Justice will be the endin view. When that time comes, it willnot just be a victory of a party in acase. Rather, it will be a victory of allthe party litigants as the best interestof justice is served.

* Based on the interview with Atty. Ivan

John Enrile Uy (MISO Chief, Supreme

Court of the Philippines)

everything will be digitized so that itwould be a paperless court. Theproject, as conceptualized, does notinclude a system that allows electronicfiling of pleadings.

"The concept of the E-court is toprovide technological facility availablenow that is most cost-effective and yetwill have significant impact on thecourtroom," Atty. Uy said.

As the project is intended to beimplemented the soonest possible time,only those things that are workable ina short period were considered,placing special emphasis on the budgetconstraints.

Doing a paperless court whereeverything is digitized requires solvinga lot of other issues. First, a lot of ruleshave to be changed; Second, apaperless court in which everything isdigitized has a huge fundingrequirement; Third, most of the judgesin the trial courts do not want to readthe text of the cases in the computermonitor. They still prefer to read themon paper. Most probably, therefore,despite the e-filing, judges would stillask to have the e-filed motions,pleadings and other orders and noticesprinted on paper. Taking these factorsinto consideration, a paperless courtis not feasible at this point in time,according to the MISO Chief.

Towards a digital court

Optimistic as he is, Atty. Uy said thatthe High Court would probably start itsinitiative towards a paperless court infive years' time. However, he foreseesthat full automation of the courtroomwill be selective at first.

“MY HOPE IS TO PUSH THIS COMMON SENSE ALONG. I HAVE BECOME INCREASINGLY AMAZED BY THE POWER OF THIS IDEA

OF INTELLECTUAL PROPERTY AND, MORE IMPORTANTLY, ITS POWER TO DISABLE CRITICAL THOUGHT BY POLICY MAKERS AND

CITIZENS. THERE HAS NEVER BEEN A TIME IN OUR HISTORY WHEN MORE OF OUR ‘CULTURE’ WAS AS ‘OWNED’ AS IT IS NOW.

AND YET THERE HAS NEVER BEEN A TIME WHEN THE CONCENTRATION OF POWER TO CONTROL THE USES OF CULTURE HAS

BEEN AN UNQUESTIONINGLY ACCEPTED AS IT IS NOW.” (PROF. LAWRENCE LESSIG, IN HIS BOOK “FREE CULTURE: HOW BIG

MEDIA USES TECHNOLOGY AND THE LAW TO LOCK DOWN CULTURE AND CONTROL CREATIVITY.”)

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IS THERE SUCH A THING AS WMD?

By Michael Vernon M. Guerrero

CCyberterrorism

yberterrorism, as acompound word, simply suggests theconvergence of cyberspace andterrorism. Cyberspace is the non-physical terrain created by computersystems, [ 1 ] or that it is the “virtualworld,” i.e. the “symbolic – true, false,binary, metaphoric representations ofinformation – that place in whichcomputer programs function and datamoves.” [ 2 ] Terrorism, on the otherhand, is the unlawful use or threateneduse of force or violence by a personor an organized group against peopleor property with the intention ofintimidating or coercing societies orgovernments, often for ideological orpolitical reasons, [ 3 ] or simply as thesystematic use of violence as a meansto intimidate or coerce societies orgovernments. [ 4 ] Construing the termcyberterrorism in a manner similar tothe simple arithmetic of one plus onemay mislead people to think thatmaking a terrorist organization activeon the Internet, through websitepostings and chatroom recruitments,would already constitutecyberterrorism. The term must bedistinguished from mere activism in themanner the latter is being pursuedover the Internet.

Cyberterrorism is generallyunderstood as the unlawful attacks andthreats of attack against computers,networks, and the information storedtherein when done to intimidate orcoerce a government or its people infurtherance of political or socialobjectives. [ 5 ] Emphasis is made onthe phrase “to intimidate or coerce,”a degree further than to merely“influence” a government or its

people, however subtle the differencemay be in certain cases. This distinctionis important in differentiatingcyberterrorism from the growingphenomenon of hacktivism.

It has been likewise suggested that thedefinition of cyberterrorism is that of“the premeditated, politically motivatedattack against information, computersystems, computer programs, and datawhich result in violence against non-combatant targets by sub-nationalgroups or clandestine agents.” [ 6 ] Thisnarrow definition is premised on thedefinition of terrorism provided by theUnited States Department of State, [ 7 ]

and aims to differentiate itself fromother computer abuses such aseconomic espionage and informationwarfare, which are deemed“legitimate” offensive and defensivefunctions of governments.

In sum, whether or not governmentsare excluded from the definition ofcyberterrorism, what is apparent is thatfor an attack to qualify as thatpertaining to cyberterrorism, it shouldresult in violence against persons orproperty, or at least cause enoughharm to generate fear. [ 8 ] Attacksinvolving computer systems that leadto physical injury or death, massivedisruption of public utilities, or severeeconomic loss would constitutecyberterrorism. On the other hand,expensive nuisance or disruption ofnon-essential services will not qualifyas cyberterrorism.

Who is a terrorist anyway

A terrorist is one that engages in actsor an act of terrorism, [ 9 ] or a radicalwho employs terror as a political

weapon. [ 10 ] The term, however, is soindiscriminately used that one whopossesses firearms or explosives, andhaving an adverse political opinion,would easily qualify as a terrorist. Theprevalent situation, whereingovernments are the ones active inlabeling organizations and individualsas terrorists, subtly suggests thatgovernments and their agents areexcluded as actors of terrorism, andwhich, of course, is erroneous asgovernments themselves are capableof intimidating or coercing societies.[ 11 ] An accurate definition of terrorismand terrorists has remained debatable,as the circumstances involving it areextremely complex and highly political.It is not unusual thus that, for example,a Palestinian organization such as theHamas is considered a terroristorganization by Israel and the UnitedStates for deploying suicide bombersagainst the Israeli population, whilePalestinians consider Israel as a terroriststate for committing alleged atrocitiesagainst their people and assassinatingkey militant leaders such as the lateHamas leader Abdel Aziz Rantisi. [ 12 ]

Further, the statement “One man’sterrorist is another man’s freedomfighter” reflects genuine doubt aboutthe contemporary, else the state-suggested, understanding of the term“terrorist.” Strong disagreements, asto the labeling of the Jewish group“Irgun Zeva’i Le’umi” (abbreviated asEtzel; Palestine, 1940s), the Viet Cong(South Vietnam, 1950s), theProvisional IRA (Northern Ireland,1960s), and the African NationalCongress (South Africa, 1980s) asterrorist organizations, have beenmade in the past. As the matter relatesto the Philippines, the Abu Sayyaf

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THE WEB AS A MEANS OF DESTRUCTION: THE SUPPOSED THREAT OF CYBERTERRORISM

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Group (ASG) and the Communist Partyof Philippines/New People’s Army(CPP/NPA) are listed as terroristorganizations by the United StatesDepartment of State. [ 13 ] A Philippinecommunist guerilla would insist, ofcourse, on the validity of his struggle.

What CyberTerrorism is not

Internet-aided Activism. This is thenormal, non-disruptive use of theInternet in support of an agenda orcause, and in fact, utilizes the Internetas a tool to communicate andcoordinate action. Activists may be ableto locate official policy statements,analyses, discussions, and otherdocuments and items related to theirmission. They can publish information,and disinformation, posted in theirwebsite or in newsgroups, or distributedin emails. They may participate indialogue and debate on policy issuesthrough e-mail, newsgroups, webforums, and chat. They may use theInternet to coordinate action amongmembers and with other organizationsand individuals. They may also pursuedirect lobbying of decision makers. Itis, however, observed that the Internetis not currently an adequate tool forpublic political movement as the moresuccessful organizations are those whoutilize traditional advocacy methods,including the use of the moreexpensive broadcasting media to reachthe public.

Terrorists groups likewise pursue theactivities of cyberactivism, as theiractivities are in fact an activism of theextreme kind. They put up theirwebsites to air their propaganda,recruit supporters, communicate andcoordinate action. Their use of theInternet is ancillary only to their usual,if not violent, activities. To note:

a. The Hizbullah operates its ownwebsite (www.hizbollah.org)

b. In 1996, Bin Laden’sheadquarters in Afghanistan wasequipped with computers andcommunication equipment.

c. Hamas activists have been said touse chat rooms and emails to planoperations and coordinateactivities.

Hacktivism. It is the marriage ofHacking (or aptly Cracking) andActivism. Hacktivism is, in essence,electronic civil disobedience, whichmethods includes virtual sit-ins andblockades, automated e-mail bombs,web hacks and computer break-ins,and computer viruses and worms. Avirtual sit-in or blockade is madepossible by the use of “hacking tools”by a sizable number of individualsagainst a particular website, such asby saturating the target server withnetwork packets, among others, for thepurpose of calling attention to the causeof the protesters by disrupting normaloperations and blocking access tofacilities. E-mail bombing is done bybombarding a recipient with thousandsof messages at once, distributed withthe aid of automated tools. Web hacksor Computer break-ins, which arerather common, are done by gainingaccess to websites and replacing someof the content with their own, or bytampering with the Domain NameService so that the site’s domain nameresolves to the IP address of anothersite. Lastly, computer viruses andworms have been used to spreadprotest message and/or cause seriousdamage to target computer systems.

Hacktivism methods such as web hackand email bombing were usedextensively during the Kosovo conflictsby both Serbs and Americans citizens,with Chinese nationals following suitattacking American websites after theaccidental bombing of the Chineseembassy in Belgrade at that time.Chinese and Taiwanese hackersexchange web hack attacks in 1999following Taiwan’s president statementthat China must deal with Taiwan on a“state-to-state” basis. The use ofhacktivism methods, however, are notexclusive to unarmed individuals andorganizations. It must be noted that:

a. In 1998, the ethnic Tamil guerillasswamped Sri Lankan embassieswith emails with messages thatread “We are the Internet BlackTigers and we’re doing this todisrupt your communications.”The volume of the emails sent was800 emails a day for a period oftwo weeks.

b. A file transfer protocol siteoperated by the Arkansas Highwayand Transportation Departmentwas turned into a repository ofOsama bin Laden videos, jihadistsongs and terrorist incident videosin July 2004. Links to those filesthen were posted at al Ansar, aradical Islamist Web site.

The Supposed Threat ofCyberTerrorism

Some security experts believe thatCyberTerrorism is an unsettling realitydue to the convergence of the physicalworld and the virtual world. Barry C.Collin of the institute of Security forSecurity and Intelligence (StanfordUniversity) outlined the variouspossibilities in which a cyberterroristmay attack: (1) a cyberterrorist willremotely access the processing controlsystems of a cereal manufacturer,change the levels of iron supplement,and sicken and kill the children of anation enjoying their food; (2) acyberterrorist will place a number ofcomputerized bombs around a city, allsimultaneously transmitting uniquenumeric patterns, each bombreceiving each other’s pattern; (3) acyberterrorist will disrupt the banks, theinternational financial transactions, andthe stock exchanges; (4) acyberterrorist will attack the nextgeneration of air traffic control systems,and collide two large civilian aircraft;(5) a cyberterrorist will remotely alterthe formulas of medication atpharmaceutical manufacturers; and(6) a cyberterrorist may decide toremotely change the pressure in gaslines, causing a valve failure, and ablock of sleepy suburb detonates andburns. [ 14 ] Mark M. Pollitt of the FBI

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Laboratory challenges the plausibilityof Collin’s scenarios inasmuch as thereis sufficient human involvement in thecontrol processes used today. In thecereal plant scenario, the quantity ofiron that would be required for thecereals to be toxic is substantial thatassembly line workers would notice inas much as the assembly line wouldrun out of iron sooner or later. In theair traffic control scenario, pilots aretrained to be aware of the situation andoperate even without the assistance ofair traffic controllers at all. [ 15 ] Further,in the computerized bomb scenario,there is doubt for terrorists to deploysophisticated bombs, which aredependent on complex systems andother technical considerations, toreplace crude homemade bombs,which are easier to deploy. On theother hand, the gas lines scenario maybe an apparent threat, inasmuch asthere are unconfirmed reports of aninstance where hackers, incollaboration with an insider, were saidto have a used a Trojan horse to gaincontrol of the central switchboard ofGazprom, the Russian state-run gasmonopoly and the largest natural gasproducer and largest gas supplier toWestern Europe, which controls gasflows in pipelines. [ 16 ] Notwithstandingthis isolated instance, most criticalutilities and sensitive military systemsenjoy the most basic form of Internetsecurity, i.e. that they are “air-gapped”or in other words are not physicallyconnected to the Internet and aretherefore inaccessible to outsidehackers. It would be a leap ofimagination to consider the immediatepossibility of a hacker to controlcomputers that would launch nuclearweapons, or to hijack satellite systemsor other high-consequence assets. Itwould also be a leap of imagination toconsider the contamination of watersupply and explosion of chemicalfactories, tasks which are harder to dophysically, can be made instantly justbecause of the prominence of theInternet. [ 17 ]

The bottom line remains that there hasbeen no instance of anyone everhaving been killed by a terrorist usinga computer. There has been noevidence that any terrorist organizationhas resorted to direct use of computersand computer networks for any sort ofserious destructive activity. At this time,the concept of cyberterrorism as areality is in the same level of thephantom of weapons of massdestruction that are supposed to bedeveloped and stashed in Iraq.Cyberterrorism is not an immediatereality.

Focusing on the real threats

Dismissing the immediate threat ofcyberterrorism, however, does notwarrant complacency. Terrorism is asreal as computer crimes are. Althoughthey are experienced independently,these problems need to be addressed.Citizens have to be protected,economic loss should be prevented,and negligence should be abated.

The protection of critical utilities orinfrastructure – telecommunications,banking and finance, electrical power,oil and gas distribution and storage,water supply and sewage,transportation, emergency services,and government services – for one,must be protected from attacks,whether the source of such attacks hasa political agenda or not.

In the past, there have been prominentcomputer-aided attacks on criticalutilities, some of which are:

a. Water supply and sewage. InApril 2000, a disgruntledconsultant-turned-hacker inMaroochy Shire, Australiacompromised a wastemanagement control system andloosed millions of gallons of rawsewage on the town. The formerinsider tried to unleash the wastein 46 tries, with the personnel

managing the infrastructure failingto detect the first 45 tries.

b. Transportation. In 1997, ahacker shut down the control towerservices as the Worcester,Massachusetts airport. Although itdid not cause any accidents,services were affected.

c . Emergency services. In theUnited States, in 1997, a Swedishhacker jammed the 911emergency telephone systemthroughout west-central Florida. ALouisiana man made a similar actin 2002 by tricking a handful ofMSN TV users into running amalicious e-mail attachment thatreprogrammed their set-top boxesto dial 911 emergency response.He was arrested February 2004and was charged withCyberTerrorism.

d. Government services. In 1998,several government and universitywebsites received “denial ofservice” attacks, preventingservers from answering networkconnections and crashingcomputers. This has been acommon occurrence in the pastyears. On the other hand, also in1998, the US DefenseDepartment’s unclassifiednetworks were penetrated,allowing hackers to accesspersonnel and payroll information.

It is thus necessary that computer assetmanagers should be aware whichsystems should be “air-gapped” fromother networks to prevent the risk ofintrusions by unauthorized personnel,if not crackers, or loosely, hackers.Precaution should be taken as to issuesof security vis-à-vis new technologythat may deployed, including thosepertaining to wireless technology.Public policy should be clear as to theminimum standards required in themaintenance of computer systems in

>> [24] Is there such a thing as WMD?

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INTERNET DECENCY REGULATION VS. FREE SPEECH

By Jaime N. Soriano

On June 29, 2004, the US

Supreme Court upheld the ruling ofthe Court of Appeals for the ThirdCircuit enjoining the enforcement ofthe Child Online Protection Act (COPA)because the law "likely" violated thefree-speech clause of the FirstAmendment of the US Constitution.The decision was reached by the HighCourt in the case of Ashcroft, Attorney-General v. American Civil LibertiesUnion, et. al. (No. 03-218) in anarrowly divided vote of 5-1.

Factual Antecedent

Alarmed over the exposure of minorsto sexually explicit materials in theInternet, US Congress enacted theCommunications Decency Act of1996. This law sought to penalizepersons and organizations thatknowingly transmit or display obsceneor indecent materials and messagesto minors over the Internet. In aconstitutional challenge posed by theAmerican Civil Liberties Union in thecase of (521 US 844), the USSupreme Court in 1997 struck downthis law for violating First Amendment.The Court argued that the law was notnarrowly tailored to serve compellinggovernmental interest and otherregulatory alternatives, that are leastrestrictive, are available.

With the constitutional nullity of theCommunications Decency Act, the USCongress, a year later, enacted COPAalso in response to the clamor againstInternet pornography. The law imposesa hefty fine and six monthsimprisonment for knowingly postingwebsite contents for commercialpurposes that are harmful to minors.

The law also provides for anaffirmative defense to commercial webspeakers who restrict access to harmfulmaterials by requiring the use of creditcards and other measures feasibleunder available technology. Indetermining whether or not an Internetmaterial is harmful to minors, the lawcalls for the application of the followingstandards: (i) contemporarycommunity standard test, (ii) depictionsof sexual act or exposure of sexualorgans, and (iii) the lack of seriousliterary, artistic, political or scientificvalue for minors of the web contenttaken as a whole.

Expectedly, civil libertarians alsosubmitted COPA to judicial scrutiny. InFebruary 1999, a US District Courtfor the Eastern District of Pennsylvaniaissued an injunction preventing thegovernment from enforcing the law.The District Court held that COPA wasinvalid because there is no way toprevent minors from harmful materialon the Internet without also burdeningadults from access to protected speech.Restricting access through credit cardsor adult access codes as affirmativedefense would unduly burden freespeech. The court likewise found thatgovernment failed to prove that the lawwas the least restrictive meansavailable to achieve the public goal ofrestricting harmful materials to minorsin the Internet.

On appeal, the Third Circuit Court ofAppeals affirmed the findings ofunconstitutionality of COPA by theFederal District Court but on a differentground, The appellate court anchoredits ruling on the fact that thecontemporary community standards

test' provided for by the law wouldessentially require web content to abideby the most restrictive communitystandards given the peculiargeography-free nature of cyberspace.The standard imposed by the law wasunconstitutionally overbroad, accordingto the appellate court.

In a petition for certiorari filed in 2001, the US Justice Department asked theUS Supreme Court to reverse thedecision of the Third Circuit AppellateCourt affirming the ruling of theFederal District Court in Pennsylvania.On May 13, 2002, the SupremeCourt, without making any categoricalruling on the constitutionality of COPA,rendered judgment holding that the"contemporary community standard"test, standing alone, is notunconstitutionally overbroad. The HighCourt emphasized that its decision waslimited on that narrow issue. At thesame time, it ordered the appellatecourt to decide on a wide range ofFirst Amendment issues posed by thelaw and determine whether the DistrictCourt was correct in grantingpreliminary injunction in theenforcement of COPA.

On remand, the Third Circuit Court ofAppeals, on March 6, 2003, affirmedits earlier decision finding COPA inviolation of the First Amendmentbecause it denied access to onlinespeech that is legally permissible foradults. The appellate court also heldthat the law was not the least restrictiveapproach available to government toserve the interest of preventing minorsfrom using the Internet to gain accessto indecent materials.

Features

(THE US CASE OF ASHCROFT VS. ACLU)

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Consequently, the US Supreme Courtwas called upon to review theconstitutionality of COPA for the secondtime.

The Majority Ruling

It can be recalled that COPA wasenacted a couple of years after itspredecessor-statute, theCommunications Decency Act of1996, was declared unconstitutionalfor violating the constitutional dictumon free expression. Thus, the majorityopinion written by Justice Kennedy, andjoined by Justices Stevens, Souter,Thomas, and Ginsburg, began withthe following declaration:

"The imperative of accordingrespect to the Congress,however, does not permit us todepart from well-establishedFirst Amendment principles.Instead, we must hold theGovernment to its constitutionalburden of proof."

The Court, in this case, furtherexplained by saying that the USConstitution "demands that content-based restrictions on speech bepresumed invalid, and that theGovernment bear the burden ofshowing their constitutionality. This istrue even when Congress twice hasattempted to find a constitutionalmeans to restrict, and punish, thespeech in question."

To uphold the constitutionality of astatute that regulates free speech, likeCOPA, the Supreme Court, reiteratingthe doctrine it laid down in Reno vs.ACLU, said:

"A statute that 'effectivelysuppresses a large amount ofspeech that adults have aconstitutional right to receiveand to address to one another. . . is unacceptable if lessrestrictive alternatives would beat least as effective in achievingthe legitimate purpose that the

statute was enacted to serve.'xxxx When plaintiffs challengea content-based speechrestriction, the burden is on theGovernment to prove that theproposed alternatives will notbe as effective as thechallenged statute."' (citationomitted)

The High Court noted that the FederalDistrict Court granted the preliminaryinjunction on the pretext of theproposition that other alternatives, lessrestrictive and more effective thanCOPA, are available to restrictchildren's access to indecent materials.These alternatives include the so-called"blocking and filtering software".

Filters are less restrictive than COPAbecause they "impose selectiverestrictions on speech at the receivingend, not universal restrictions, at thesource". Filters restrict minors from allsorts of pornography, not only fromAmerican websites. If COPA wereupheld, filtering software woulddiminish its effectiveness becausecontent providers would simply movetheir operations overseas, beyond thejurisdiction of American courts. Whilefilters are not the perfect solution tothe problem being addressed byCOPA, the Court observed the failureof government to show proof that themechanisms provided for under thelaw is less restrictive than availablefiltering technologies.

The Supreme Court also took note ofthe findings of the Federal DistrictCourt that verification systems, likecredit cards and access code, may bethe subject of evasion andcircumvention, even by the minorsthemselves. In fact, the CongressionalCommission on Child Online Protectionindisputably found that filters are moreeffective than age verification methodsin limiting minors from accessingInternet pornography. Hence, COPAfailed the "least restrictive alternative"test to justify a limitation on the exercise

of free speech under the FirstAmendment.

In allowing the preliminary injunctionto stand, pending a full trial on themerits by the District Court, theSupreme Court was concerned aboutthe potential and extraordinary harmthe law posed on protected speech.Despite the availability of affirmativedefense to possible violators, the Courtobserved that web speakers wouldlikely resort to self-censorship than riskthe perils of criminal prosecution.

The majority of the highly divided courtrecognizes however that the factualcircumstances of the case may notreflect current technological realities.And this is a serious flaw in any caseinvolving the Internet, as this technologyevolves at a rapid pace. The factualfindings of the District Court were madefive years ago, in 1999. In maintainingthe preliminary injunction andremanding the case for trial on themerits, the parties to the case wouldbe given ample opportunity to updateand supplement their respective factsto reflect present-day technology, andallow the District Court to decide thecase based on the current legallandscape.

On remand, the Supreme Court doesnot discount the possibility thatgovernment may be able to prove theconstitutionality of COPA as the leastrestrictive alternative available to satisfyits legislative imperatives.

The Dissenting Opinion

In his dissenting opinion, Justice Scaliafinds the COPA constitutional andshould not be subject of an exactingstandard of review. Since the lawpunishes only violators of commercialpornography in the Internet - a formof business activity that could bebanned entirely consistent with theprovisions of the First Amendment -COPA does not raise any constitutionalconcern.

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Justices Breyer, O'Connor, and ChiefJustice Rehnquist also departed fromthe majority opinion but agreed withthe majority that the law should besubjected to the "most exactingscrutiny". They argued that the "leastrestrictive alternative" test is acomparative term that cannot besatisfied without examining "both theextent to which the Act regulatesprotected expression and the natureof the burdens it imposes on thatexpression".

The dissenters argued that in the firstplace the Internet materials classifiedas legally obscene does not enjoy themantle of protection of the FirstAmendment citing the landmark caseof Miller vs. California (413 US 15).The opinion also noted that the lawdoes not censor, in fact, the materialswithin its ambit but merely requiresweb providers, of content consideredharmful to children, to limit accessthrough a verification screen.

The minority justices also find that thepresence of the filtering system is notan alternative legislative approach tothe problem of protecting minors fromcommercial pornography. This systemis part of the status quo when Congressenacted COPA. And by definition,status quo is always less restrictive thana new regulatory law for it "is alwaysless restrictive to do nothing than to dosomething". They concluded thatfiltering software, as presentlyavailable, does not solve the problemCOPA seeks to address. It is preciselythe inadequacies of the filtering systemthat prompted Congress to pass the lawrather than rely on its voluntary use.The obvious fact is - that despite theexistence of this blocking and filteringsoftware, Internet pornographycontinues to proliferate.

The dissenting view also attacked the"less restrictive alternatives"propounded by the majority calling onthe government to encourage the useof blocking and filtering software. The

result might be an alternative that isextremely effective but in the process,will tax heavily on governmentresources. Thus, there is no other lessrestrictive way to advance thecompelling interest to protect minorsfrom Internet pornography. Hence,COPA should be viewed asconstitutional within the framework ofthe First Amendment. All told, theminority justices of the Supreme Courtdo not see any compelling and logicalneed to remand the case to the DistrictCourt for the reception of additionalevidence.

Impression

The ruling of the US Supreme Courtdid not actually put an end to thenagging constitutional issue of whetheror not the Child Online Protection Act(COPA) violates the free speech clauseof the First Amendment. As stated inthe opening statement of the opinionof the Court:

"We must decide whether theCourt of Appeals was correctto affirm a ruling by the DistrictCourt that enforcement ofCOPA should be enjoinedbecause the statute likelyviolates the First Amendment.(italics supplied)

From this perspective and with theremand of the case to the District Courtfor trial on the merits, it is certain thatthe US Supreme Court would be finallypass judgment on the law for the thirdtime sometime in the future. It appearsfrom the court decision that theconstitutional permissibility orimpermissibility of the law hangs onthe balance based on the evidence thatwould be presented before the DistrictCourt on the "least restrictivealternative" test. The finaldetermination on the constitutionalchallenge to COPA could still go eitherway.

The Internet is a new form of massmedia that obviously fits within theframework of constitutionally protectedspeech in a democratic space. In thisjurisdiction, the Bill of Rights of the1987 Constitution provides:

"Sec. 4. No law shall be passedabridging the freedom ofspeech, of expression, or of thepress, or the right of the peoplepeaceably to assemble andpetition the Government forredress of grievances."

Since cyberspace is not defined by anyterritorial boundaries the most seriouschallenge to governments all over theworld is how to regulate and exercisejurisdiction over Internet activities thatserve as avenues for the commissionof crimes, and destroy the basic socialnorms and values of society likepornography or obscenity. To a certainextent, the Internet may capitulate thestate's traditional exercise of policepower unless governments act togetherto address this issue in unison, throughtreaties and international covenants.

Some has maintained the view that thisstate regulation is unnecessary and willonly hamper the full development ofinformation technology to serve theends of society. Their view is to allowthe advent, and look forward to theintroduction, of new technologies thatwould effectively deter the use of theinformation superhighway in thecommission of illicit, illegal, immoralor even plainly unacceptable webpractices, an act of self-regulation.

The constitutional challenge on COPA,beyond the clash between acompelling state interest to shieldminors from pornography and thefreedom of adults to free expression,is also a reflection on who should, andcan adequately, regulate the Internet:state laws or technology itself.

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Features

GTaxation in the Philippines

overnments makeexactions for revenue in order tosupport their subsistence and executetheir indisputable and genuineobjectives. The underlying tone oftaxation is governmental necessity,without it government can neither existnor endure. "Taxes are the lifebloodof the government and their promptand certain availability are animperious need." [ 1 ] As noted by JusticeVitug (2000), this phrase has oftenbeen used to justify the need forsummary remedies in the collection oftaxes. To borrow the words of Cooley,as cited by Justice Vitug (2000), thepower to tax "reaches to every tradeor occupation, to every object ofindustry, use or enjoyment, to everyspecies of possession; and it imposesa burden which, in case of failure todischarge, may be followed by seizureor confiscation of property. No attributeof sovereignty is more pervading andat no point does the power of thegovernment affect more constantlyand intimately all the relations of lifethan through the exactions madeunder it. [ 2 ]

At present, e-commerce transactionswithin the Philippines are not taxed.Since the total value of such businessis still small, however, closing thisloophole is not yet a priority for thegovernment... not just yet.

Internet

The term Internet means collectivelythe myriad of computer andtelecommunications facilities includingequipment and operating software,which comprise the interconnectedworld-wide network of networks that

employ the Transmission ControlProtocol/ Internet Protocol, or anypredecessor or successor protocols tosuch protocol, to communicateinformation of all kinds by wire orradio. [ 3 ] Indeed, it is a network ofnetworks.

John Gage, as cited by Lallana (2003),argues that - "The Internet is not a thing,a place, a single technology, or a modeof governance: it is an agreement. Ina language of those who build it, it isprotocol, a way of behaving. What isstartling the world is the dramaticspread of this agreement, sweepingacross all arenas - commerce,communications, governance - that relyon the exchange of symbols." [ 4 ] Thenature of Internet communication isdecentralized where its use is limitedonly by imagination without anyboundaries in mind; it does not followa exact, conventional or uniformpathway. As such, the Internet hasbecome the fastest growing medium.In a country comparison of Internetposted by CIA World Factbook, thePhilippines ranked 20 with 4.5 millionInternet users as of 2003. Hence,revenue authorities see the new goldengoose that lays the golden eggs of thenew millennium.

Country Internet users1. United States 165,750,0002. Japan 56,000,0003. China 45,800,0004. United Kingdom 34,300,0005. Germany 32,100,0006. Korea, South 25,600,0007. Italy 19,250,0008. Russia 18,000,0009. France 16,970,00010. Canada 16,840,00011.Brazil 13,980,00012. Taiwan 11,600,000

13. Australia 10,630,00014. Netherlands 9,730,00015. Spain 7,890,00016. India 7,000,00017. Poland 6,400,00018. Sweden 6,020,00019. Malaysia 5,700,00020. Philippines 4,500,000

Source: CIA World FactbookUnless otherwise noted,information in this page isaccurate as of January 1, 2003

Taxation and the Internet

E-commerce means any transactionsconducted over the Internet or throughInternet access, comprising the sale,lease, license, offer or delivery ofproperty, goods, services, orinformation, whether or not forconsideration, and includes theprovision of Internet access. [ 5 ] Withthe explosion of e-commerce, it isunderstandable why the governmenthas been grappling to extend itscollection arm in the Internet. In 2001,the Department of Finance of thePhilippines announced that it would bereviewing the possibility of taxing e-commerce transactions. Indeed, aninteresting business. But how it istaxed? By whom and where? Acomplex matter with complex issuesto resolve.

In Internet Transactions, the primarydevice used for Internet commerce isthe World Wide Web Page. The WorldWide Web can be simply defined as amultimedia interactive portion of theInternet, which visually resembles acatalogue or brochure and provides apresence for its operators on theInternet. The best comparison may beto an international telephone directory

by Ailyn L. Cortez

The only matters certain in life are death and taxes, says an old adage.

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combining both white and yellowpages. The main difference, however,is that once a user finds an entry thatinterests him, he may then retrievemore detailed information by followingelectronic links to other related pages.A common transaction on the Internetis the downloading, or retrieval, ofsoftware from a computer located inanother country. A user begins theprocess by using a "directory-assistance"-like search tool to findpages that fit his search parameters.Once a suitable entry is selected, theuser clicks on it and his computer goesto that page. The user will usually thenfind a text and graphical environmentwhere for example, software productsare described and offered. The finalstep when the user requests a program,for example a or business application,and it is sent, usually in minutes, rightto the user's computer. If the operatorsof a given Web site charge for aproduct or service, a credit card orother electronic payment system maybe used. [ 6 ]

Clearly, consumers are getting a rideon sales tax from online purchases atno cost. Perhaps, they are reaping thebenefits of a of a temporary taxhaziness that needs a well-structuredsystem to eradicate ambiguity. Easiersaid than done.

The difficulties arise because most taxlaws and regulations were passedbefore the beginning of electroniccommerce. Such laws and regulationsare rooted in concepts of physicallocation or presence. Determiningwhere the transaction is sited andidentifying key taxing points are oftenimportant to the administration oftaxes. Then again, the intricaciesrevolving around the Internet poses adifficult issue in identifying the keytaxing points of Internet transactions.While tax compliance relies on suchgeographical restrictions, such may notexist in the cyber world to identify keytaxing points. Indubitably, the multi-faceted nature of Internet and e-commerce makes Internet taxation anextremely complex and compound

matter. Hopeless to find new sourcesof income, a taxman should defy thelure of saying: "Tax the Internet now,ask questions later."

Opposing Views on InternetTaxation

* Positive. The first group viewsthat taxing the Internet is just andreasonable. For them, the idea ofexempting Internet transactionsfrom taxes is il logical. Nodiscrimination can be had betweenan online and brick-and-mortarbusiness. To allow otherwise wouldbe equivalent to granting suchbusiness a clear tax subsidy.Moreover, they are convinced thatthe online retail market will soonaccount for sizable chunk ofnational revenue. This isevidenced by the growing trendin Internet and online businessactivities. Hence, failure to takeadvantage of this will mean lostrevenues for the government.

* Negative. The second groupbelieves that a free market on theInternet will encourage commerceto exploit this innovative means ofexchange instead of the traditionalsystem. Internet is too young andfragile a medium for its derivedprofits to survive the complex webof national and local taxes.Merchants who utilize this modeof transaction are anxious of thecomplex collection system thatmight be compulsorilyincorporated in their existingprocess. Moreover, thevulnerability of Internet transactionshould not be opened to theelements of taxation as this woulddiscourage people from bringinginto play this revolutionary method.As a consequence, it willaccelerate the technologicaladvancement and intensification ofthe Internet. To put it simply, thisgroup considers Internet taxeswould significantly jeopardize thegrowth of e-commerce.

Proposals of Taxing the Net

The primordial consideration in InternetTaxation is the type of tax that wouldbe utilized. Here are some proposalsin taxing the net.

Bit Tax. The term bit tax means anytax on electronic commerce expresslyimposed on or measured by volumeof digital information transmittedelectronically or the volume of digitalinformation transmitted electronicallyor the volume of digital informationper unit of time transmittedelectronically, but does not includetaxes imposed on the provision oftelecommunication services. [ 7 ] Theproponent of the bit tax is ArthurCondell, a Canadian economist. Asquoted by Atty. Jovi Tanada Yam,"whether the digital bit is part of aforeign exchange transaction, abusiness teleconference, an Internet e-mail or an electronic check clearance,each bit is a physical manifestation ofthe New Economy at work. Thus, thenew wealth of nations is to be found inthe trillion of digital bits of informationpulsing through global networks." [ 8 ] Itrepresents a new tax base that is atthe heart of the new economy. It is alsoa new tax base that is growing. It is atax base that can be easily identified,one where collection is in few hands.In the New Economy, it would be a taxthat is difficult to avoid. [ 9 ]

Soete's Tax proposal. The advocateof this proposal is Luc Soete, aneconomist who served as chairman ofa European Commission advisorypanel on information technology issues.His idea is to tax cyberspace bit by bit.He says that "the new tax base forInternet commerce is to be found inthese fast moving bits. We need toadjust the taxation forms to make surethey will include these new Internetactivities." [ 10 ] The suggested bit tax isa turnover on interactive digital traffic."Moving from the old highway to themetaphor of a new highway, Soete'sproposal is to tax the digital traffic onthe Information Highway. Whether thetax is levied an the traffic carried by a

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fiber optic cable or on microwave orwhether the tax is levied on interactivesatellite traffic, the bit tax presents away of accessing the new wealth beingcreated by the New Economy." Soetesuggested the tax rate to be .000001US cents per bit, or about one US centper megabit. Soete contrasted the bittax to the VAT: "The main consumptionand production tax levied in theEuropean countries is the VAT. VATallows material goods and services tobe taxed at their various points ofproduction and value creation - in away that is quite easy quantifiable." incyberspace, Soete's bit tax wouldreplace the VAT on immaterial goodsand services. The idea is to levy taxesonly as "a proportion of the intensity ofthe information transmission." The term"transmission" means the number ofbits flowing across the wires, not their"transaction value." [ 11 ]

Loopholes in these proposals.Soete's bit tax has been attacked onmany aspects. At what rate shouldnations tax digital bits? How would thenew taxes be collected? Critics raise aruckus that a bit tax will prove injuriousto the future of the Internet because itwould be extremely expensive forconsumers to pay the bit tax. At Soete'srate of one cent per megabit, you canjust imagine that cost of downloadinga two-hour movie with a transfer rateof two megabytes-per-second.Besides, the cost of the procedure andtechnical means for collecting such atax would likely be higher than therevenue, especially as micro-paymentsfor minuscule chunks of informationbecome commonplace. Moreover,some technologies - like satellitecommunication - simply make itimpossible to monitor bitstreams. Onthe political front, the bit tax wastemporarily rejected by the EuropeanUnion. Soete admitted that "the coregoal of the European Union policy isto accelerate the diffusion ofinformation technology in Europe. Andany idea that could slow downinvestments and growth in this areasbeing rejected - just because it comesat the wrong time." The European

Union has joined the US, Japan andother like-minded countries in keepingthe Internet duty-free, until the dust ofcyberspace settles. [ 12 ]

Internet Taxation in the UnitedStates

President William J. Clinton signed theInternet Tax Freedom Act on October21, 1998. On November 28, 2001,President George Bush signed into lawa two year extension to the ITFA. It isan act that imposed a three-yearmoratorium on new taxes on Internetaccess fees. The main goal of this actwas to prohibit new taxes from beinglevied on the using the Internet, suchas those paid by customers of AmericaOnline. [ 13 ]

Sales Tax or Use Tax. The termsales tax or use tax that is imposed onor incident to the sale, purchase,storage, consumption, distribution, orother use of tangible personal propertyor services as may be defined by lawsimposing such tax and which ismeasured by the amount of the salesprice or other charge for such propertyor service. [ 14 ]

The current moratorium does notexempt an online transaction from astate's sales tax. The moratorium hasnever been on sales taxes- that is amisnomer. The moratorium is on newtaxes. [ 15 ] If a state in its exercise oftaxing authority chooses to levy a salestax, that liability exists without regardto the medium used to make thepurchase (in person, by telephone ormail, or online). If the business doesnot meet the constitutional test of asubstantial physical presence in a statesthat would require the business tocollect and remit the sales tax to thatstate then consumers in those statesthat impose sales taxes who makepurchases from out-of-state businessesare liable to pay a use tax on thosepurchases. [ 16 ]

Nexus Rule. Nexus refers to thephysical presence - such as a salesforce, distribution center, or a

warehouse - a retailer must have in aconsumer's state to be required by thatstate to collect sales taxes.

The US Supreme Court in QuillCorporation v. North Dakota, [ 17 ]

pronounced that in order for an out-of-state company to collect sales taxesfrom another state, physical presence(nexus) requirement must beestablished. This means that any taxeslevied on Internet sales must be thesame as those levied on the same salesif they occur in a physical store orthrough mail order. A state may not,for example, assess one tax rate formerchandise that is purchased in aphysical store while levying another taxrate for the same merchandisepurchased through the Internet. TheInternet Tax Freedom Act proscribesthis. To have a nexus, a company musthave a store, office, warehouse or asalesperson in That locality.

Purposes of ITFA. The Internet TaxFreedom Act moratorium preventsstates from enacting discriminatorytaxes on online sales. For instance,under the moratorium, a state isprohibited from charging a new orhigher tax on online sales that is notlikewise levied on sales achievedoffline. [ 18 ]

As pointed out by Bick (2000) anotherpurpose of the Internet Tax FreedomAct is to prohibit double or multipletaxation of a single transaction. Forexample, if the buyer of a product mustpay taxes on the purchase and theseller of the same product must paytaxes on the sale to that particularbuyer, this is a multiple tax and isprohibited by the Internet Tax FreedomAct. Another example would be if ane-vendor is located in a state thatsources such income to the state andtaxes it where the income-producingactivity occurred, and sales are madeto a jurisdiction that sources suchincome to the state where the benefitis received and taxes levied, doubletaxation is possible on the sametransaction. [ 19 ]

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To give effect to the purposes of ITFA,the establishment of AdvisoryCommission on Electronic commercewas convened.

Advisory Commission onElectronic Commerce (ACEC).The Internet Tax Freedom Actestablished the commission to study theapplication of taxes to e-commerce andtelecommunications. The commissionwas composed of three federal, eightprivate, eight state and localgovernment representatives, includingUtah Gov. Michael O. Leavitt, VirginiaGov. James Gilmore, and WashingtonGov. Gary Locke. The commission senta report to Congress on April 12,2000, but failed to reach the requiredsupermajority (two-thirds) to makefindings and make recommendations.The commission refused to accept a"minority" report from Gov. Leavitt onbehalf of state and local governmentrepresentatives. [ 20 ] The goal of thecommission was to study the issuessurrounding Internet taxation andreport back with a formalrecommendation.

At the heart of the controversy aresales taxes. Currently, states can't forcean out-of-state business to collect themunless that business has a physicalpresence in state. The result is thatwhen a purchase is made across statelines, sales taxes often aren't paid. Fewstates have made any real effort tocollect those "lost" taxes directly.Instead, state and local officials wantCongress to let them draft out-of-statefirms as tax collectors. However, thecommission was not able to secure thetwo-thirds vote needed to deliver aformal recommendation.

Think Globally, Act Locally

Everyone makes an effort tounderstand these complex issues. Ascorrectly pointed out by Atty. Jovi Yam,"the best way all of us can help theNet grow is to work collaboratively onwhat the Net really needs: anuncomplicated infrastructure for fused,convoluted, cross-border Internet

Commerce. The tax issue is just oneof many complicated questions." Anduntil a simple principle can bepropounded, that Internet businesseswould be taxed no more and no lessthat they are in the physical world, ifnot, a moratorium on taxes should bedeclared. [ 21 ] In achieving this, globalstandards to prop up the Net shouldbe established.

Uniform Business Locator. Oneof the major problems facing taxauthorities in the context of electroniccommerce is that of the identify of theparties involved in commercialtransactions. In consumer sales overthe Internet, the parties may not beknown to each other, lest it be via thecompany handling credit cardtransactions. In the use of digitalmoney, the ability to trace transactionsand identify those involved may beeven more difficult. Knowing who youare dealing with is a right if not anecessity of the buyer. It is alsonecessary for fiscal accountability. Toresolve this issue, Alan McCluskey(1998) proposed the Uniform BusinessLocator. This method uniquely identifiesa business or trader and attributes thatentity to a specific country. There wouldbe some difficulties with attributing acompany to a given jurisdiction. Itremains to be seen if the definition ofthe domicile of a company issatisfactorily covered by current taxlegislation and how one would deal withmultiple domiciles. One might wellneed a system that catered for multiplemappings of a company to varyingjurisdictions. UBLs would not need tobe memorized as they are usedessentially as handles to call up moredetailed and readily understandableinformation from the database. As aresult they could be randomlygenerated, unique alphanumericstrings except for the part designed toidentify the country. The latter mighteasily be done using the current twoletter ISO country codes. Subsidiariesor branches within a company couldpossibly be treated like subdomains ofthe UBL of the parent company.

For a moderate fee, registration withan online commercial registry couldbe done via the web. Companies ortraders would be required to providethe necessary information such as theowner's name, his or her physicaladdress, tax domicile, telephonenumber, fax number, e-mail address,web url and domain name. A UBLwould then be attributed and would berequired in all business transactionsincluding credit card payments andbank transfers as well as for alldealings with tax authorities All UBL'swould be contained in a planet-widedistributed database a bit like for thedomain name system. Clicking on aUBL on a web page would call up asmall window containing the entry forthat company. The outstanding questionwith such a system would be that ofthe authentication of the company ortrader concerned and the verificationthat the UBL provided by a web pageor the trader's electronic caddy wasreally that of the trader in question. Apart guarantee in the latter case couldbe provided by binding payments tothe UBL - putting somebody else's UBLwould lead to the money going to thatother company. [ 22 ]

Streamlined Sales Tax Project.This project is an effort by states, withinput from local governments and theprivate sector, to design, test, andimplement radically simplified salesand use tax system for the 21st century.Spearheaded by the NationalGovernors Association, theStreamlined Sales Project wouldrequire participating states to have onlyone tax rate for personal property orservices effective by the end of 2005.Included in those services would beonline sales. [ 23 ] The goal of the Projectis to substantially reduce or eliminatethe costs and burdens of sales taxcompliance for businesses through acombination of simplified laws andadministrative policies and theimplementation of a no-cost system forretailers. [ 24 ]

Under the SSTP model legislation,states will develop uniform product

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codes and sourcing rules, uniformdefinition of what is taxable, andsimplify administration policies that areconsistent with other participating statesin the compact. This NGA-led projectis seeking to standardize sales tax laws,making them e-commerce friendly. InNovember 12, 2002, a draft for theproposed subject was finalized andnamed Streamlined Sales and Use TaxAgreement.

As such the US Supreme Courtspecifically left it to the Congress to"decide whether, when, and to whatextent the States may burden interstatemail order concerns with a duty tocollect. [ 25 ] Congress has the power tomodify the existing physical presencestandard on which businesses haverelied since 1967 (National BellesHess Inc. v. Department of RevenueIllinois 386 U.S. 753 (1967)) andprovide the states with the authority toimpose new collection responsibilitieson out of state vendors. Neither theConstitution nor the Court imposes anylimitation on Congress' power toregulate interstate commerce in thisregard, and the business communityurges the Congress to requiremeaningful simplification of the states'sales and use tax regime beforeundercutting the important bright-linestandards on which businesseshistorically have relied. [ 26 ]

Philippine Set-up. The Nexus ruleexists because our own Supreme Courthas said that the government has noauthority to collect taxes from out oftown merchants. Technically, theconsumer is supposed to pay usagetax on any purchase in which themerchant has not collected sales tax.When you purchase items in a bricks-and mortar store, you can pay any andall local and sales tax that apply to yourpurchase as part of the transaction. Thebusiness acts as a tax collector for thelocal governments". [ 27 ] If you purchasesomething through the mail, you paytaxes on the transaction only if you livein the same location as the retailer's

business establishment. However, if youdo not live in the same location as theretailer, you do not pay taxes to thatretailer for your state. [ 28 ] Followingan online purchase, consumers aresupposed to go to the Bureau of InternalRevenue Web site to fill out a formdocumenting their purchase, wherethey are charged a fee. [ 29 ] As for now,the government cannot demand out-of-town merchants collect sales taxunless a company has a nexus, orphysical presence within that locality.

Conclusion

In the Philippines, the basic question isto tax or not to tax On-line Transactions.Surely, the BIR is seeing a potentialgold mine. However we should notdiscount the fact that E-commerce inthe country is relatively young. It seemsbest that our government takes a backseat for a while and carefullyscrutinizes the possibility of exploringthe new heights of Internet Taxation.

The Department of Finance shouldmake a thorough study andinvestigation in dealing the complicatednature of Internet Taxation. Hastemakes waste. If the Internet is seen asa tax panacea, the lack of legalframework to address the issues ofInternet's technological leaps andbounds is a significant barrier to theadvocates of taxing the Net. Why killthe goose that lays the golden eggs? AWell-developed tax policy in traversingthe Information SuperHighway willdefinitely preserve the goose that laysthe golden eggs without sacrificing thefundamental principles of sound taxsystem: Fiscal Adequacy,Administrative Feasibility and mostimportantly Theoretical Justice.

Taxing the net should be fair to theaverage taxpayer. The notion ofneutrality on online transaction shouldprevail because On-line commerce isnot radically different from any otherform of commerce, but also andabove all, on the basis of their declared

intention the tax authorities should notbias market choices by their action. Thefollowing are the basic issues to beresolved by the Department of Financein achieving a polished and well-developed scheme of taxing the net.

1. Auditing System. Businessestablishments issue receipts inevery transaction. Pursuant to thisreceipts, the BIR can keep track ofthe operations of the business.With the advent of InternetTransactions, BIR should come upwith the scheme of an efficientmethod of determining On-linetransactions in lieu of the receiptsissued in ordinary mortar and brickbusiness.

2. Tax planning for E-business. Sincemost of our tax laws were enactedprior the advent of the Internet, acollaboration of the DOF, IT expertsand businesses taking advantageof the NET will be an edge indevising a structure with thecorresponding tax implications ofthe Internet Transactions.

3. Efficient Tax Strategy. In taxing On-line transactions, the issue boilsdown into the efficiency of taxadministration. It would be sheeridiocy to propose taxing measuresin Internet transactions while BIRhas been missing out in collectingthe proper amount of revenuefrom other taxpayers. If theproblem is the system, all taxmeasures are bound to fail.

"There are no obvious solutions at thispoint, but there are many questions asto how to make future tax laws work.Many are concerned about the expenseof developing a tool that would allowonline merchants to convert the salestax on purchase depending on thecustomer's whereabouts. Also, thereare worries about the use of encryptiontechnologies that could allow peopleand steer around a Net Sales tax. Fornow, e-commerce continues to grow

>> [25] From Free to Fee

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A & M RA & M RA & M RA & M RA & M RECORDSECORDSECORDSECORDSECORDS, I, I, I, I, INCNCNCNCNC., ., ., ., ., ETETETETET ALALALALAL. . . . . VSVSVSVSVS. N. N. N. N. NAPSTERAPSTERAPSTERAPSTERAPSTER I I I I INCNCNCNCNC.....

Jurisprudence in CyberLaw

(This section will be a regular featureof the journal to highlight significantcases decided in the Philippines andin foreign jurisdictions relating toinformation technology)

by Jhonelle S. Estrada

Facts: Plaintiffs are engaged in thecommercial recording, distribution andsale of copyrighted musicalcompositions. It was alleged in thecomplaint that NAPSTER is acontributory and vicarious copyrightinfringer. NAPSTER facilitates thetransmission of MP3 files between andamong its users, through a processcalled "peer to peer" file sharing.NAPSTER allows its users to: 1) makeMP3 music files stored on individualcomputer hard drives available forcopying by other Napster users; 2)search for MP3 music files stored onother user's computers; and 3) transferexact copies of the contents of otherusers' MP3 files from one computer toanother via the Internet. TheNAPSTER's Music Share Softwaremade these functions available withoutcharge from NAPSTER's Internet site.The Plaintiffs claimed that NAPSTERSusers were engaged in the wholesalereproduction and distribution ofcopyrighted works, all constitutingDirect Infringement. They also claimedthat NAPSTER, is secondarily liable forthe Direct Infringement under twodoctrines of copyright law: contributorycopyright infringer and vicariouscopyright infringement. NAPSTER onthe other hand contends that its userdo not directly infringe plaintiffs'copyrights because the users areengaged in the fair use of the materialand that it doe not know of the direct

infringement Plaintiffs seek injunctiverelief.

Issue: Whether Napster can be heldliable for direct infringement?

Held: The evidence showed thatmajority of Napster users use theservice to download and uploadcopyrighted music; acts that constitutesdirect infringement of plaintiffs' musicalcompositions, recordings. It was alsoestablished that Napster users infringeat least two of the copyright exclusiverights; the rights of reproduction anddistribution. Its contention that its usersdo not directly infringe plaintiffs'copyrights because its users areengaged in fair use of the materialcannot be given weight. Several factorswere considered to determine itsdefense of fair use of the material.These are 1. the purpose andcharacter of the use, 2. the nature ofthe copyrighted material, 3. the"amount and substantiality of theportion used" in relation to the work asthe whole; and 4. the effect of the useupon the potential market or the valueof the work. The "purpose andcharacter" factor focuses on whetherand to what extent the new work is'transformative' this factor also requiresthe court to determine whether thealleged infringing use is commercialor non-commercial. The courtdetermined that Napster users engagein commercial use of the copyrightedmaterials. Direct economic benefit isnot required to demonstrate acommercial use, but it is the repeatedand exploitative copying of copyrightedworks. The record shows that repeatedand exploitative unauthorized copiesof copyrighted works were made to

save the expense of purchasingauthorized copies. The second factoralso exist. Works that are creative innature are 'closer to the core ofintended copyright protection' It wasdetermined by the court that theplaintiffs' 'copyrighted musicalcompositions and sound recordingsare creative in nature', thus cuts againsta finding of fair use under the secondfactor. Under the third factor, recordsshow that Napster users engage in'wholesome copying' of copyrightedmaterials because file transferringinvolves copying the entirety of thecopyrighted work. The Effect of Use inMarket shows that Napster use harmsthe market for their copyrightedmusical compositions and soundrecordings. Its defense of fair use isuntenable.

Issue [2]: Whether Napster can beheld liable for direct infringementuncle r the doctrine of (a) contributorycopyright infringement, or (b) vicariouscopyright infringement.

Held [2]: (a) "One who, withknowledge of the infringing activity,induces, causes or materiallycontributes to the infringing conduct ofanother, may be held liable as a"contributory infringer" Contributoryliability requires that the secondaryinfringer "know or have reason to knowof direct infringement. The recordsmust show that NAPSTER hasknowledge, both actual andconstructive of direct infringement.Napster was proven to have actualknowledge when: l. a documentauthored by Napster co-foundermentioned 'the need to remainignorant of users' real names and IP

239 F3d 1004 (9th Cir. 2001)

>> [24] Jurisprudence in CyberLaw

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IIIIINTERNANTERNANTERNANTERNANTERNATITITITITIONALONALONALONALONAL EEEEE-T-T-T-T-TRADERADERADERADERADE: GA: GA: GA: GA: GATTTTTT T T T T VSVSVSVSVS. GA. GA. GA. GA. GATSTSTSTSTS

Features

T he 1948 GeneralAgreement on Tariffs and Trade(GATT), now supported by more than120 countries, led to the formation in1995 of the World Trade Organization(WTO).

GATT practices the following principlesin international trade:

· Non-Discrimination: This isreflected in the Most FavoredNation Clause that, in essence,mandates a country granting atrade advantage or favor to onecountry to give that sameadvantage to all contractingparties.

· National Treatment: This meansthat imported goods are to betreated as if they were domesticproducts and any form ofdiscrimination against them infavor of like national products, isprohibited.

· Transparency: This provides thattrade measures should be madeknown to other contracting partiesto ensure that the system ofmultilateral trade rules are in factoperating. All laws, regulations,and tariffs of member countriesshould be published and open.

Trade of goods dominated internationaltrade when GATT was established.Much later, trade of services (such astransportation, travel, banking,insurance, and telecommunications)and trade of ideas (like inventions anddesigns) became importantcommodities of internationalcommerce. In keeping with thesedevelopments, GATT was amendedand updated into new WTOAgreements along side with the

General Agreement on Trade inServices (GATS), Agreement onTelecommunications Services (ATS)and the Trade Relation Aspects ofIntellectual Property Rights (TRIPS).

On 12 June 1996, the United NationsCommission on International TradeLaw (UNCITRAL) adopted the "ModelLaw on Electronic Commerce" infurtherance of its mandate to promotethe harmonization and unification ofinternational trade iaw and removeunnecessary obstacles to internationaltrade caused by inadequacies anddivergence in the law affecting trade.The Model Law was prepared inresponse to a major change in themeans by which communications aremade between parties usingcomputers or other modern technologyin doing business. It also serves a guidefor the establishment of relevantlegislation in nations where nonepresently exists.

In March 1998, the WTO released astudy entitled: "Electronic Commerceand the Role of the WTO". The studyexamined the potential gains tointernational trade arising from theincreased use of the Internet forcommercial purposes. [ 1 ]

The WTO study also contended thatthe Internet, as an Instrument forinternational trade, should fall underGATS. The study emphasized that it isnot always clear from GATS how themarket access and national treatmentcommitments of member countriescover the supply of Internet accessservices. A distinction should be madebetween the supply of Internet accessservices, and the supply of otherservices using the Internet as a mediumof delivery: whether the supply is inthe GATS or GATT regime. [ 2 ]

With the tremendous potential forgrowth in e-commerce and the newopportunities it creates in internationalcommerce, Trade Ministers at theSecond Ministerial Conference of theWTO in Geneva on May 20, 1998have adopted a "Declaration onGlobal Electronic Commerce" toestablish a work program to examineall trade-related issues relating toglobal electronic commerce.Member-nations also declared that theywould continue their current practiceof not imposing customs duties onelectronic transmissions.

WTO Director-General RenatoRuggiero Indicated at the OttawaMinisterial in October 1998 that thegoal of the WTO was not to create aset of new rules to govern the electronicmarketplace, but rather to use existingframeworks already in place. He saidthat existing agreements such as theGATS, TRIPS and ATS are WTOagreements that already in one formor another deal with e-commercerelated issues. [ 3 ]

Certain exceptions are provided underGATS in relation to the GATT standardsor principles. The member states canchoose the services in which they makemarket access and 'national treatment'commitments. They can limit thedegree of market access and thenational treatment they provide. Theycan even take a limited exception evenfrom the 'Most Favored Nation' clauseobligation, for a period of ten (10)years. Use of quotas wheregovernment wishes to maintainlimitations on market access arepermitted, unlike in GATT. [ 4 ]

In June 2000, the Asia PacificEconomic Cooperation (APEC) alsoagreed to a moratorium on the

by Jaime N. Soriano

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imposition of customs duties onelectronic transmission amongmember-nations.

On November 14, 2001, a MinisterialDeclaration was adopted during theDoha WTO ministerial meetingdeclaring "that members will maintaintheir current practice of not Imposingcustoms duties on electronictransmissions until the Fifth Session."In the United States, the thrust of thegovernment with respect to electroniccommerce is to ensure that trade overthe Internet remains unimpeded. Thus,the United States has sought to keepcyberspace "duty free" -- that is, freefrom tariffs or customs duties onelectronic transmissions (the datastreams that constitute products andservices in cyberspace). [ 5 ]

A cyberspace free of customs does notmean that physical goods ordered overthe Internet are free from customsduties. Nor does it mean that itemsordered electronically are exemptfrom internal taxes. Duty-freecyberspace merely means thatelectronic transmissions corning fromabroad are not subject to customsduties at the border. A deliverymechanism based on an open network,where borders are meaningless,imposing customs duties at the borderwould be a burden that would slow thegrowth of electronic commerce. [ 6 ]

While no country currently imposesduties on electronic transmissions. theUnited States is the only WTO memberthat has formalized this commitmentby specifying it in its tariff schedule.The United States is encouraging allWTO members to make a similar,internationally binding commitment. Ithas also urged member nations to

formally adopt the understanding thatelectronic commerce falls within thescope of existing WTO rules. This willensure a predictable, trade-liberalizingenvironment, promote the growth ofe-commerce, and create opportunitiesfor trade for WTO members at allstages of development. [ 7 ]

At the center of e-commerce tradedilemma is the definition of goods andservices. There is a consensus that abook ordered online, but deliveredphysically, for the purposes ofinternational trade rules, is consideredas "goods". This concept Makes thebook subject to the international rulesfor trade in goods, the GATT. However,when the same book is deliveredelectronically (by downloading it to thecomputer) there is no agreementwhether this digital product should betreated as a good under GATT or aservice, which would make it subjectto a GATS regime. Not a trivialdistinction, since there are importantdifferences between the rules coveringgoods and services, including the typeof market access granted and non-discrimination between national andforeign suppliers. For example,discrimination against foreign suppliersis, in general, forbidden for trade ingoods, but not for trade in services.The status of these e-products is as yetto be agreed by governments in theWTO. [ 8 ]

Another issue is whether commitmentsmade under WTO agreements - inparticular related to services - are"technologically neutral" - i.e., whetherthey also cover electronic delivery.Generally, WTO members andcommentators argue that a country'scommitment to open its market forcross border supply of accountancy

services, for instance, applies equallywhether those services are providedby letter, fax or over the Internet.However, some question whetherspecific commitments made during theUruguay Round, predating the e-commerce era, should include supplyover electronic networks. [ 9 ]

There is much to be done also by wayof international regulatory cooperationwith the expected growth of cross-border trade in e-commerce. Dataprivacy, encryption technology,development of secure paymentssystems and taxation, among others,would raise legitimate public policyquestions that should not result torestrictions in electronic trade. [ 10 ]With the borderless nature ofcyberspace, negotiations andunderstanding among member-countries will play a vital role in theemergence of information technologyas a more effective medium ofinternational trade.

Endnotes

1. p. 23-26, Sax, Michael M., "InternationalElectronic Trade Carrying out Consumerand Commercial Transactions on theInternet", originally submitted as LL.M.requirement to Osgoode Hall LawSchool York University, Toronto, CanadaInternational Trade and CompetitionLaw program, 4 January 1999.

2. Ibid.3. Ibid.4. Ibid.5. Marantis, Demetrios, and McHale,

Jonathan, Office of the US TradeRepresentative (USTR), "The Internet andCustoms Duties"

6. Ibid.7. Ibid.8. Nielson, Julia and Morris, Rosemary, "E-

Commerce and Trade: ResolvingDilemmas", OECD Observer, 30 March2001.

9. Ibid.

10. Ibid.

LLLLLEXICONEXICONEXICONEXICONEXICON OFOFOFOFOF C C C C CYBERLAWYBERLAWYBERLAWYBERLAWYBERLAW T T T T TERMINOLOGYERMINOLOGYERMINOLOGYERMINOLOGYERMINOLOGY

(This will be a regular section to acquaint lawpractitioners, students and researchers onlegal terms in IT law preferably from the

Philippine context).

"Convergence" refers totechnologies moving together towards

a common point and elimination ofdifferences between the provisioningof video, voice and data, using digitaland other emerging technologies; thecoming together of two or moredisparate disciplines or technologies;

the ability of different networkplatforms to carry any kind of service;and the coming together of consumerdevices such as, but not limited to, thetelephone, television and personal

>> [23] Lexicon of Cyberlaw Terminology

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initiatives, as well as economic andtechnical cooperation, within Asia-Pacific Cooperation during the Manila-Subic ministerial and leaders meetingsin 1996.

The Philippine Situation. The principalstrengths of the Philippine IT industryinclude a well-educated, price-competitive labor force, Englishproficient, with a growing track recordof successful IT work, fast-growingtelecom infrastructure, governmentinterest in the industry, less regulationthan those of some of its neighbors,good capabilities to dealing with foreignpartners, and strong entrepreneurship.Yet, there are missing elements forintegrated IT diffusion in the Philippinescompared with other countries such as:improved access to IT technology andknow-how from other countries acrossindustries; preferential treatment ofadvanced local users in learning fromforeign firms; more integratedapproaches to national strategies forIT diffusion -- e.g. pace setting activitiesin cost-sharing, government-industrypartnerships, and IT consultancies;user-oriented IT strategy to encouragebuilding a critical mass of local IT firms;support to creating world-classmanagerial skills in informationmanagement and organization.

Globally, competition in electronics hasshifted away from final assemblers andvertical control to "open-but-owned"systems, with standard owners goingafter a growing installed base ofcustomers. These opportunities are yetto be tapped by the Philippines.

In telecommunications, Agila II waslaunched in 1997, with a reachcovering all Southeast Asian countriesand some parts of China and Japan. Itfurther expands local

F i l ipino ITpractitioners, including technicians andprogrammers, are very much indemand all over the world, such as inadvanced countries as United States,Australia and Singapore, acquiring astature of proficiency second to Indianprogrammers who are dominating theIT outsource market today. But variousprofessional groups and relatedorganizations today have sprouted withthe purpose of honing the skills of ourIT professionals and expanding theircapabilities. All these scattered effortsare now being harnessed andcoordinated by the Philippine NationalTechnical Council, which can boldlyassert that the international communitynow sees the Philippines as anemerging IT-competitive economy.

The Council sets out a clear vision thatby the end of the first half of the 21stcentury, "the Philippines will have laidthe infrastructure for every business,every agency of government, everyschool, and every home to haveaccess to information technology. By2005, Philippine companies will beproducing competitive IT products forworld markets. Within the first decade,it will be a leader in IT education, IT-assisted training, and in the applicationof information and knowledge ofbusiness, professional services, andthe arts. And telecommunications willprovide the infrastructure forinterconnection and networkingthroughout the Philippine archipelago."Its goal, therefore, is to make thePhilippines as the Knowledge Centerof Asia.

The role of government in PhilippineIT development is that of an enabler,lead user, and partner of the privatesector providing national informationInfrastructure and the policy, program,

PHILIPPINES AS KNOWLEDGE CENTER OF ASIA IN THE 21ST CENTURY

and institutional environment that willencourage the growth of IT use andthe IT industry in the country. Thoseinvolved in telecommunications,education and R&D will each play theirown supportive roles --telecommunication is for the physicalinfrastructure, education for theadequate preparation of the laborforce, the R&D community fordeveloping local products andapplications, and for adaptingtechnology sourced overseas toPhilippine conditions, as well as to actin a broader capacity as governmentor private business.

In industry, it hopes to turn thePhilippines into an Asian hub ofsoftware development and training.And sees that private industry will adoptIT solutions for competitiveness anddevelop a global niche for PhilippineIT products and services. Ingovernment, it seeks to improvecapacity and efficiency and toprofessionalize bureaucracy. Ineducation, public and privateeducation and training institutions willadopt IT in their curricula and developa critical mass of IT professionals andan IT literate workforce. And in overallsupport services, it seeks to createpolicies, programs, institutions, and aculture that would make the Philippinesachieve the Council's goal.

IT became a concern of multilateralpolicy agreements, particularly withinthe General Agreement on Trade inServices (GATS) within the World TradeOrganization and the FrameworkAgreement within ASEAN forexpanding intro-regional trade inservices. The National InformationTechnology Council noted that ITpermeated various trade andinvestment liberalization and facilitation

by Carlyn Marie Bernadette C. Ocampo-Guerrero

Features

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telecommunications and broadcastinfrastructure without depending onforeign-owned satellite facilities. Fourtelecommunications bills were inconsideration in Congress: ProposedReorganization of the NationalTelecommunications Commission;Cable Television Rationalization Bill;Anti-telecom Fraud Bill; ArbitraryResistance to Interconnection whichseeks to criminalize the refusal of acompany to interconnect.

More Internet Service Providers areexpanding their services to includecontent provision as well. The firstPhilippine Internet Exchange or PhIX,was launched in 1997. PhIX is anetwork access point that allows ISPsto exchange local Internet traffic withinthe Philippines without having toconnect host servers overseas. ThePhIX was established by PLDT andinterconnects Infocom, Iphil, Mozcom,Virtualink, and Worldtel.

The banking industry is one of thePhilippine pioneers in IT use. Megalinkoperated the first shared network ofautomated teller machines (ATMs) andwas the first switch company toundertake ISO 9000 certification. AndAmong other IT projects in banking arethe following: the Philippine DealingSystem (PDS), an electronic off-floorforeign exchange trading system thathas been in place since 1992; thePhilippine Dollar Transfer System(PDDTS), a vehicle and electronicfacility to handle and monitorbookkeeping claims to US dollars beingtraded among participating banks;IDInet Philippines Inc., a companyjointly owned by Ayala Corp. andSingapore Network; Project AbstractSecure (PAS), a functional collaborationbetween the Bureau of Customs (BOC)and the BAP, where an electronicsystem has been put in place to verifythe proper payment of customs/taxesand to remit payments electronicallythrough the banks.

The Philippine Stock Exchange set upan electronic trading system in 1994and provided the investing public withaccess to market information during

trading by using investor terminalslocated at the public galleries. Anelectronic link-up with the Securitiesand Exchange Commission started in1996. A paperless trading system wasintroduced in 1997, with the settlementand clearing of transactions usingcertificates replaced by a book-entrysystem of transferring ownership forequities and lodging the certificates ina central repository. A clearing facilityis being built to supplement the centralstock depository.

The Philippine electronics industry isthe country's major export winner. Theindustry is export-oriented, essentiallyengaged in assembly manufacturingand labor intensive activities,dominated by multinationalcorporations (MNCs) such as Intel,Texas Instruments, Fujitsu, Matsushita,Toshiba and others.

In Education., Quality and expertisedistinguish the Filipino IT professional.Filipinos find it easy working on legacyapplications as well as fourthgeneration languages. Thousands ofFilipinos are adept with mainframesand experienced in minicomputeroperations. Filipino microcomputerprofessionals have experience withconnectivity and data communicationsthrough Local Area Networks (LAN)and micromain frame links. The useof IT to improve teaching, learning ,and educational management in basiceducation was introduced throughSchools of the Future equipped withmultimedia facilities opened inCamarines Sur in 1997. Variouselectronic information networks areencouraging greater inter-action withinthe country's networks are encouraginggreater inter-action within the country'sS&T community: the Science Academeand Research Network NARNET aimsto connect to the Net thousands oftertiary and secondary schools all overthe Philippines; the Science andTechnology education network(STEDNET); and the Health R&DInformation network (HERDIN).

In Government. With the support ofprivate sector, the Government

launched its own campaign to bringout a competitive IT industry. TheIntellectual Property Rights Code,Republic Act No. 8393, seeks toimpose stiffer penalties and fees forthe manufacture, distribution and useof unlicensed software. HouseResolution 890, called for theinterconnection of local Internet Serviceproviders into on Internet exchange.The exchange, to be otherwise knownas the RPWEB, electronically links upvia the Internet the entire governmentorganization.

The Government's Action Agenda.

A . Provide the Policy Environment.

1. Adoption and implementation ofpolicies to promote increasedinvestments in IT and relatedelectronics industries--e.g., throughstrategic partnerships, venturecapital.

Specific Actions followed werepromulgating administrativelegislative measures to promotewider private sector participation inventure capital financing to expandthe capital base for IT R&D and otherIT-related development ventures;

Adoption measures to promotestrategic partnerships and alliancesby local companies/institutions withleading international R&Dinstitutions, technology providers,developers, and manufacturers;

Promotion of technologicalinnovation and experimentation bycreating new products, services andapplications;

Focus R&D on high-value added ITproducts and services as well as onproduct creation/design andimprovement in high growth sectorssuch as telecommunicationssoftware development (informationsystems, common applicationpackages, educational/coursewarepackages, multimedia applications,computer animation, promotionalproducts etc.).

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2. Adoption of more investor-friendlypolicies systems and procedures ingovernment.

Specific actions such as Fast-tracklegislation/adoption ofadministrative measures to furtherliberalize foreign investment;

Establishing fast lane services forforeign investors/businessmen atports of entry and when transactingbusiness with government to createinvestor-friendly environment;

Organizing a taskforce onmonitoring and publicaccountability aimed at making theadministrative and policyenvironment for more conducive forinvesting and doing business in thePhilippines.

3. Implementation of Philippinecommitments to internationalagreements that affect the IT sectorfavorably -e.g. the IT Agreement(ITA).

4. Adaptation of administrativemeasures to effectively enforce thelaws on intellectual property rights(IPR), particularly as they affect ITproducts and services.

5. Rationalization and coordination ofdevelopment of technoparks andcybercities throughout the country forgreater complimentarity ininvestments and infrastructuredevelopment.

B . Enhance the PhysicalInfrastructure

1. Accelerating universal access, i.e.,Making telecommunications servicesaccessible and affordable to all, bycompleting telecommunicationsprograms, especially in underservedareas.

2. Fast-tracking the formulation andimplementation of the PhilippineInformation Infrastructure (PII).

3. Intensifying investment promotion inthe telecommunications industry.

4. Formulating appropriate cyber lawsin the use of networks, particularly

the Internet, to ensure informationsecurity and network reliability.

5. Promoting telecommuting/teleworking, particularly in softwaredevelopment and multimediaproduction.

C . Develop the IT Manpower Base

1. Producing the critical mass of ITprofessionals and IT-literatemanpower including competent ITeducators and teachers at all levels.

2. Designating from among IT traininginstitutions, universities or collegesIT Centers of Excellence as a formof recognition and reward.

3. Organizing a nationwide networkof Core Competency institutions inIT in partnership with local andinternational developmentinstitutions and businessorganizations.

4. Conducting continuing IT educationfor teachers/trainors, IT practitionersand workers.

5. Adopting dual-tech approach in ITeducation and training.

6. Establishing high-quality distanceeducation and learning.

7. Developing and implement life-longlearning through the internet.

D. Pump-prime IT IndustryDevelopment

1. Implementing a government-widecomputerization program withemphasis on the development anddeployment of front-line, mission-critical and common applicationinformation systems.

2. Providing appropriate financingsupport to allow active participationby private sector in R&D and in thedevelopment and the incubation ofnew products and solutions.

Fast-tracking measures to streamlineadministrative processes andprocedures in governmentprocurement, budgeting,

accounting, auditing, monitoringreporting, etc.

E . Organize for Action:Institutional Reforms

1. Reorganizing the NITC to broadenand strengthen private sector.

2. Involvement in IT developmentactivities.

3. Constituting NITC task forces tocarry out specific IT 21 programs/actions.

4. Organizing a private sector AdvisoryCouncil to facilitate meaningfulprivate sector participation in theimplementation of IT 21.

5. Strengthening the NCC to enable itto better carry out its primarymandate of promoting widespreaduse of IT in government.

6. Creating a comprehensive databasemanagement, monitoring andbenchmarking system for key ITindicators.

F. Marketing the National IT planfor the 21st Century

1. Organizing task forces to undertakea nationwide communication andadvocacy program, includingfocused It trade missions andinternational roadshows.

2. Developing, producing, anddisseminating promotional materialson IT21 and the Philippine IT ActionAgenda.

3. Creating a Philippine websitepromoting IT 21 and IT ActionAgenda.

In conclusion, Phase Three involvesdeveloping a global niche for thePhilippine IT in knowledge products andservices. It looks to sustaining ITinnovation geared towards knowledgecreation, pushing for higher levels ofgrowth for the Philippine IT industry,and sustaining its role as "TheKnowledge Center in Asia".

Source: www.neda.gov.ph/ads/IT21/

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Rule 75 are the factors in assessingthe evidentiary weight of an electronicdocument. Rule 76 are the factors tobe considered when it comes to theintegrity of an Information and Rule77 are the exceptions to the HearsayRule. On the other hand, how thepresumptions provided for in Rule 77may be overcome is provided for inRule 78. Both rules are reiterationof Rule 8, Secs. 1 and 2, BusinessRecords as Exception to the HearsayRule.

Rule 79, Affidavit of Evidence, andRule 80, the process required fromthe affiant with regard to the affirmanceof the contents of the affidavit in opencourt, as well as the procedure ofcross-examination by the adverseparty are reiterations of Rule 9, Sec.1 and 2, Method of Proof.

Rule 81 lays down the procedure tobe followed after summarily hearingthe parties pursuant to Rules 79 and80 of the above Rules; Rule 82affirms the necessity of transcriptionby the stenographer, stenotypist orother recorder of the entire proceedingof the examination of a witness doneelectronically; Rule 83 declares thatthe electronic evidence and recordingof it as well as stenographic notes shallform part of the record of the case.Rules 81 to 83 are all reiteration ofRule 10, Sec. 1,2,3 on Examinationof Witnesses.

Rule 84 sets forth the condition whenaudio, video and similar evidence shallbe admissible in Court; and Rule 85states how ephemeral (lasting only avery short time) electroniccommunication which includestelephone conversation, text messages,

O n 1 April 2003, theAmendments at the 1998 Rules of theHouse of Representatives ElectoralTribunal (HRET) were adopted.Specifically, Rules 1 (Title), 4(Organization), 11 (Administrativestaff), 16 (Election protest), 21(Summary dismissal of electioncontest), 31 (Filing fees), 32 (Cashdeposit), 34 (Legal fees), 35 (Whenballot boxes, election returns and otherelection documents brought before thetribunal), 36 (Revision teams), 37(Revisors; Compensation), 39(Procedure during revision), 40(Where revision done; Who may bepresent), 48 (Photographing orphotocopying, and 59 (Time limit forpresentation of evidence) wereamended. The former Rules 66 to 83of the 1998 Rules were renumberedas Rules 86 to 103 in the current rulesto admit 20 new rules on ElectronicEvidence, applying therefore provisionsof the Rules of Electronic Evidence(A.M. No. 01-701-SC) promulgatedin July, 2001 to electoral mattersinvolving the HRET. Moreover, therenumbered Rules 88 (Pilot precincts;Initial revision), 94 (Finality andexecution of decisions; Motion forreconsideration), 95 (Entry ofJudgment), 96 (Procedure after finalityof decision; Execution of decision;Publication of decisions), and 103(Effectivity) were also modified.

Rules 66 to 85 of the amendedHRET Rules state the rules on howelectronic documents or electronic datamessage may be used, offered andadmitted in evidence.

Rule 67, as stated in Rule 3, Sec. 2on Electronic Documents (A.M. No.01-7-01-SC), declares that anelectronic document is admissible in

AMENDMENTS TO THE 1998 RULES OF THE HOUSE OF REPRESENTATIVES

ELECTORAL TRIBUNAL (HRET)

evidence if it complies with the ruleson admissibility prescribed by the Rulesof Court and related laws and isauthenticated in the manner prescribedby the said Rules. The definition ofElectronic document is a reiteration ofthe definition given in the Rule 2(Definition of Terms and Construction)of Electronic Evidence of the SC (REEof the SC).

Rule 68 states that an electronicdocument shall be regarded as theequivalent of an original documentunder the Best Evidence Rule. Rule69, expounds on how a copy of adocument shall or shall not beadmissible to the same extent as theoriginal. Both Rules 68 and 69 arelifted from Rule 4, Secs. 1 and 2, BestEvidence Rule

In Rule 70, various means arepresented on how a person seeking tointroduce an electronic document mayprove its authenticity. Rule 71, Proofof Electronically Notarized Document,points that a document electronicallynotarized shall be considered as apublic document and proved as anotarial document under the Rulespromulgated by the Supreme Court(lifted from Rule 5, Secs. 1, 2 and 3,Authentication of ElectronicDocuments.)

Rule 72 details the various manneron how an electronic signature maybe authenticated. Rule 73 are thedisputable presumptions relating toElectronic Signature. Rule 74, on theother hand, are the disputablepresumptions relating to DigitalSignatures. (Rules 72, 73 and 74 arereiteration of Rule 6, Sec. 1, 2, 3 and4 on Electronic Signatures.)

by Carlyn Marie Bernadette C. Ocampo-Guerrero

Features

>> [24] Amendments to HRET Rules

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Features

hen lawyers arguetheir case and judges write theiropinion, they cite authority. Referenceis made to the statutes, regulations andjurisprudence found to be applicableto the given state of facts. Thus, thereader and the writer must master thelanguage of "Legal Citation."

Definition and purpose

Legal Citation is defined as [ 1 ] "astandard that allows one writer to referto legal authorities with sufficientprecision and generality that others canfollow the references. A referenceproperly written in legal citation helps:

a. Identify the document anddocument part to which the authoris referring.

b. Provide the reader with sufficientinformation to find the documentand document part in the sourcesthe reader has available (whichmay or may not be the samesources as those used by thewriter), and

c. Furnish important additionalinformation about the referencedmaterial and its connection to thewriter's argument that a readertrying to decide whether or not topursue the reference would wantto know"

Some students and practitioners finddifficulty in citing authorities. LegalCitation is a technical language thatshould be mastered. Some writerseven said that it is easier to read thanto write. Two of the most widely usedmanuals in legal citation is the"BLUBOOK" which is a codification of

professional norms that introducedgenerations of law students to legalcitation and the other one is the "ALWDCITATION MANUAL" which is analternative reference designed forinstructional use, prepared by theAssociation of Legal Writing Directors.

BlueBook and the ALWD CitationManual

The Bluebook, although used earlierthan the ALWD CITATION MANUALhas been much criticized. It was saidthat it has too many editions and thatstudents control the Bluebook. TheBluebook has been created primarilyby law students. Their lack ofexperience and their being turned overby 100% every few years hascontributed to difficulties with theBluebook.

The members of the Association ofLegal Writing Directors (ALWD) find itfrustrating to teach citations found inthe Bluebook, prompting members ofALWD formed a committee and chosea person to write a new citationmanual, giving birth to the ALWDCitation Manual. "The ALWD CitationManual is not merely a referencebook, but is also a teaching book" Itaims to simplify some of the rules incitation, reduce inconsistencies, makerules responsive to the needs oflawyers as well as scholars and toprovide stability and uniformity ofcitation rules.

Websites

The Art of Legal Citation is complicated.Most students find it hard to citeauthorities coming from theconventional sources such as books,

journals, etc. and now, due to theadvancement in InformationTechnology and with the proliferationof websites, its use as a referencematerial became a common thing.Thus, here comes the Big Question,HOW DO WE CITE WEBSITES AS OURREFERENCE MATERIAL? The Bluebookand the ALWD Citation Manual bothprovided certain examples.

a. BLUEBOOK:Federal Judicial Center, FederalJudicial Center Publications (visitedJuly 10, 1999) <http://www.fjc.gov/pubs.html>

b. ALWD CITATION MANUAL:Federal Judicial Center, FederalJudicial Center Publications <http://www. f j c .gov/pubs .h tml>(accessed July 10, 1999)

The ALWD Citation Manual moved thedate to the end to be more consistentwith other sources. ALWD uses"accessed" instead of "visited" to give amore professional tone and beconsistent with non-legal citation guides

The book "Basic Legal Writing" byMauricio Ulep provided for differentguidelines in citing Internet sources forlegal documents.

a. For Periodical Articles

For Journals available on the web:Author(s), 'title of article,' volume,Journal title, article Reference(year) <Journal Uniform ResourceLocator> [paragraph pinpoint]

Where an article is published onthe web but is not part of thejournal:

LLLLLEGALEGALEGALEGALEGAL C C C C CITITITITITAAAAATITITITITIONONONONON: W: W: W: W: WEBSITESEBSITESEBSITESEBSITESEBSITES ASASASASAS R R R R REFERENCEEFERENCEEFERENCEEFERENCEEFERENCE

by Jhonelle S. Estrada

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Author(s), ' t it le of article,'Homepage Title, relevantOrganization, article reference(year), <Uniform ResourceLocator> (Copy on file withAuthor) [paragraph pinpoint]

b. For Cases published in Electronicform:Surname of parties, [CourtIdentifier] G.R. docket number anddate of promulgation (Unreported,ponente) <uniform resourcelocator> at date file retrieved[pinpoint]

c. For Statutes/Rules published inelectronic form:State/country, Title of statutes/rules, date adopted orpromulgated by name of authority<uniform resource locator> atdate file retrieved (paragraphpinpoint]

d. For E-mailAuthor of e-mail, message.Subject line of the message[online available e-mail: name ofrecipient @ address.edu. fromauthor @) address.edu.date ofmessage.

Advantages and Disadvantages

Since the use of websites became acommon practice nowadays, its use areference material has its advantagesand disadvantages.

The use of websites can help one getall the necessary data easier. Oneneed not go to the library to borrowvarious books on the subject. It is moreaccessible. All that a person has to dois log on, on the Internet. It is cheaperbecause it saves the person moneyfrom photocopying books, journals,and cases. Websites are sometimesmore updated. It is much easier torevise. Yet, the use of websites as areference material also has itsdrawbacks. There are still a range ofdoubts regarding its validity. There arecritics questioning the validity of theresources, since one can write aboutsomething and just post it without theapproval of the appropriate authority.One cannot even be sure regardingthe authenticity of documents found inwebsites. There is also no certaintyregarding the person who made thewebsites. Any person who has noexpertise or is not accredited in thatparticular field can just give his/herview, and can become an expert all ofa sudden. Thus, a person should notentirely base his findings or opinionson documents found in websites. Booksare still more accurate because it hasthe approval of the proper authoritiesand has undergone various processesbefore it is published and printed. Thereliability of websites can also bequestioned, since its contents can beeasily changed. A problem may evenarise if the websites are not alwaysupdated. If a person write a certaindocument and has no knowledge

regarding that certain subject, and he/she relied completely on websites, he/she is not the only one who will bemisled by the wrong information buthis readers as well. His/Her reader'soutlook might be tainted and they mightarrive into erroneous conclusionregarding that certain topic.

Conclusion

The use of websites as a referencematerial became an ordinary thing, butwe should bear in mind, that websitesshould only be supplement informationcoming from the conventional sources.We should avoid using it as our solereference, because it is not a conclusivereference material.Endnotes

1. Martin, Peter "Introduction to Basic LegalWriting" , (2003 ed) <http//www.law.cornell edu/citation>

Bibl iography

1 . Martin, Peter, "Introduction to Basic LegalCitation," (2003 ed) >http://www.law.cornell.edu/citation>

2. Schiess, Wayne, "Meet ALWD: The NewCitation Manual", (2002) <http://schiess.freeservers.com/alwd.html>

3. Jamar, Steven, "A Review of ALWDCitation Manual" Citation System for theLaw (2000) <http://www.law.harvard.edu/faculty/pages/jamar/scholarship/alwdciterev.htm>

4. UCHastings College of Law, "LegalWriting and Research" (2000-2001).<http://uchastings.edu/wr-o1/classes/alwd.manual.htm>

5. Ulep, Mariano "Basic Legal Writing."

(2002)

<< [17] Lexicon of Cyberlaw Terminology

computer. (Sec. 6 (d), Chapter 1, PartII, Implementing Rules and Regulationsof the E-Commerce Act of 2000).

"Interconnection" refers to thelinkage, by wire, radio, satellite orother means, of two or more existingtelecommunication carriers oroperators with one another for thepurpose of allowing or enabling thesubscribers of one carrier or operatorto access or reach the subscribers ofthe other carriers or operators. (Sec.3 (k), R. A. No. 7925)

"Intermediary" refers to a personwho in behalf of another person andwith respect to a particular electronicdocument sends, receives and/orstores or provides other services inrespect of that electronic document.(Sec. 5 (h), R. A. No. 8792)

"Originator" refers to a person bywhom, or on whose behalf, theelectronic document purports to havebeen created, generated and/or sent.The term does not include a personacting as an intermediary with respect

to that electronic document. (Sec. 5(i), R. A. No. 8792)

"Telecommunications" refer to anyprocess which enables atelecommunications entity to send andreceive voice, data, electronicmessages, written or printed fixed ormoving pictures, music or visible oraudible signals or any control signalsof any design and for any purpose bywire, radio or other electromagnetic,optical, or technological means. (Sec.3 (a), R. A. No. 7925)

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<< [15] Jurisprudence in Cyberlaw

addresses, since they are exchangingpirated music.; and 2. the RecordingIndustry Association of America (RIAA)informed Napster of more than12,000 infringing files, some of whichare still available. There is alsoconstructive knowledge because: 1.executives have recording industry; 2.they have enforced intellectualproperty rights in other instances; 3.Napster executives have downloadedcopyrighted songs from the system and4. they have promoted the site with"screen shots listing infringing files."Napster provides the 'site and facilities'for direct infringement. Plaintiff's claimthat Napster can be held liable forcontributory copyright infringement ismeritorious.

(b) Vicarious copyright liability is 'anoutgrowth' of respondeat superior. Itextends beyond an employer/employee relationship to cases in whicha defendant has the right and ability tosupervise the infringing activity and alsohas a direct financial interest in suchactivities.' The court finds Napster'sfailure to police the system's"premises," combined with a showingthat Napster financially benefits fromthe continuing availability of infringingfiles on its system, leads to theimposition of vicarious liability.

The order of Preliminary Injunction isaffirmed with modifications.

<< [21] Amendments to HRET Rules

chatroom sessions, streaming audio,streaming video and other electronicform of communication shall beproven by the testimony of a personwho was a party to the same or haspersonal knowledge thereof. Both rulesare taken from Rule 11, Secs. 1 and2 on Audio, Photographic, Video andEphemeral Evidence.

Therefore, Rules 66 to 85 is just arepetition or reiteration of the Ruleson Electronic Evidence as promulgatedby the Supreme Court (A.M. No. 01-7-01-SC).

<< [6] Is there such a thing as WMD?

relation with the critical utility that theyare designed to support, as a meansto minimize negligence on the matter,and prevent potential disasters as aresult thereof. Pollitt made an aptreminder on this matter. He said, “Aswe build more and more technologyinto our civilization, we must ensurethat there is sufficient human oversightand intervention to safeguard thosewhom technology serves.” [ 18 ]

On the other hand, critical data mustlikewise be protected. TheGovernment should provide the ampleprotection through the enactment oflaws for stiffer penalties against e-mailbombing or flooding, denial of serviceattacks, and computer break-ins. Thegovernment and industries must findsolutions to increase the quality ofsystem security, mass-market computerproducts, and emergency technicalresponse. The economic consequenceof crashed or unusable systems andcorrupted data is clear. In the end,anything that would threaten economicviability may appear to be greater thanthe threat of physical harm, foreventually what is worse than the deaththat we fear is the reality of borderlineexistence that we have to endure.

Endnotes

1. What is Cyber? A word definition fromthe Webopedia Computer Dictionary.Retrieved 4 May 2004. http://w w w. w e b o p e d i a . c o m / T E R M / c /cyber.html. http://www.webopedia.com/. Copyright, 2004Jupitermedia. All rights reserved.Reprinted with permission from http://www.internet.com.

2. Collin, Barry C., “The Future ofCyberTerrorism,” Proceedings of 11thAnnual International Symposium onCriminal Justice Issues, The Universityof Illinois at Chicago, 1996 http://www.acsp.uic.edu/OICJ/CONFS/terror02.htm

3. The American Heritage® Dictionary ofthe English Language, Fourth EditionCopyright © 2000 by Houghton MifflinCompany. Published by Houghton MifflinCompany. All rights reserved.

4. WordNet ® 1.6, © 1997 PrincetonUniversity.

5. Denning, Dorothy E.. “Testimony beforethe Special Oversight Panel on TerrorismCommittee on Armed Services US

House of Representatives.” GeorgetownUniversity, 23 May 2000. Retrieved 4May 2004. http://www.cs.georgetown.edu/~denning/infosec/cyberterror.html

6. Pollitt, Mark M. “CyberTerrorism: Factor Fancy?” Retrieved 4 May 2004. http://www.cs.georgetown.edu/~denning/infosec/pollitt.html

7. “The term ‘Terrorism’ meanspremeditated, politically motivatedviolence perpetuated against non-combatant targets by sub-nationalgroups or clandestine agents.” UnitedStates Department of State, “Patterns ofGlobal Terrorism,” Washington DC,1996

8. Denning, Dorothy E. http://www.cs.georgetown.edu/~denning/infosec/cyberterror.html, supra.

9. The American Heritage®, supra.10. WordNet ® 1.6, supra.11. The word “terrorism” entered into

European languages in the wake of theFrench revolution of 1789 when thegovernment in Paris tried to impose itsradical new order on a reluctantcitizenry. As a result, the first meaningof the word “terrorism,” as recorded bythe Académie Française in 1798, was“system or rule of terror,” a reminderthat terror is often at its bloodiest whenused by dictatorial governments againsttheir own citizens. See BBC, History, TheChanging Faces of Terrorism. http://www.bbc.co.uk/history/war/sept_11/changing_faces_01.shtml

12. CNN.com – Hamas leader killed in airstrike – Apr 17, 2004. Retrieved 4 May2004. http://edition.cnn.com/2004/W O R L D / m e a s t / 0 4 / 1 7 /mideast.violence/index.html. See alsoCNN.com - Ambassador: Hamas leaderwas ‘doctor of death’ – Apr 19, 2004.Retrieved 4 May 2004. http://edition.cnn.com/2004/WORLD/meast/04/19/ un.rantisi/index.html

13. Appendix B - Background Informationon Designated Foreign TerroristOrganizations. Retrieved 4 May 2004.http://www.globalsecurity.org/security/l i b ra r y / repor t /2004/pg t_2003/pgt_2003_31711pf.htm

14. Collin, Barry C., “11th AnnualInternational Symposium on CriminalJustice: The Future of Cyberterrorism,where the physical and virtual worldsconverge.” Retrieved on 4 May 2004.http://afgen.com/terrorism1.html

15. Pollitt, Mark M., “Cyberterrorism: Factor Fancy?” Retrieved 4 May 2004 http://www.cs.georgetown.edu/~denning/infosec/pollitt.html

16. Denning, Dorothy E. http://www.cs.georgetown.edu/~denning/infosec/cyberterror.html, supra.

17. Green, Joshua. “The Myth ofCyberterrorism.” Retrieved 4 May 2004.http://www.washingtonmonthly.com/features/2001/0211.green.html

18. Pollitt, Mark M., “Cyberterrorism: Factor Fancy?” supra.

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<< [14] From Free to Fee

and thrive in a sheltered marketplace.[ 30 ] At the end of the day, nothing ismore satisfying that to have days offree Internet.

Endnotes

1. Commisioner v Pineda, 21 SCRA 1052. Vitug and Acosta (2000). Tax Law and

Jurisprudence. Second Edition, pg 3.Quezon City, Philippines, Rex Bookstore.

3. No.6, Section 1104, The Internet TaxFreedom Act. Accessed May 17, 2004.http://www,gseis.ucla.edu/iclp/itfa.htm

4. Lallana, E. (2003) www eprimers.org/Infoage/page44.asp

5. No.3, Section 1104, The Internet TaxFreedom Act. Accessed May 17, 2004.http://www.gseis.ucla.edu/iclp/itfa.htm

6. Muscovitch, Zac (-). Accessed July 16,2004. http://www.firstmonday.dk/I s s u e s / i s s u e 2 _ 1 0 / m u s c o v i t c h /index.html#Conclusion

7. No.1, Section 1104, The Internet TaxFreedom Act. Accessed May 17, 2004.http://www,gseis.ucla.edu/iclp/itfa.htm

8. Yam, Jovi (2001). Net taxation: The BitTax. http://www.itmatters.com.ph/column/yam_07052001.html

9. Cordell, Arthur(1996). New Taxes for aNew Economy. Accessed July 14, 2004.http://www.usask.ca/library/gic/v2n4/cordell/cordell.html

10. Yam, Jovi (2001). Net taxation: The BitTax. Accessed. http://www. i tma t t e r s . com.ph/co lumn/yam_07052001.html

11. Ibid.12. Ibid.13. Glover, Marilee (year). Taxation and the

Internet. http://web.utk.edu/~mglover/IS567Paper.html

14. No. 17, Section 1104, The Internet TaxAct. Accessed May 17, 2004. http://www,gseis.ucla.edu/iclp/itfa.htm

15. Andal, Dean ( ). "Electronic Commerce:"Bright Line" Definition of NexusNeeded." Cal-Tax Digest. Sept. 1999.Accessed May 28, 2004. http://www.cal tax.org/MEMBER/diges t/sep99/sep99-4.htm.

16. ______. Internet Taxation: Myth versusFact." http://www.sa les taxs impl i f i ca t ion .org/documents/myth.doc. Accessed 1 July2004.

17. 504 US 29818. ______. Internet Taxation: Myth versus

Fact." http://www.sa les taxs impl i f i ca t ion .org/documents/myth.doc. Accessed 1 July2004.

19. Glover, Marilee (year). Taxation and theInternet. http://web.utk.edu/~mglover/IS567Paper.html

20. National Governors associationaccessed May 19, 2004. http://www.nga.org/legislativeUpdate/HHS/1,2243„00.html

21. Yam, Jovi (2001). Net Taxation: Duty-free cyberspace... for now. AccessedJune 12, 2004. http://www.itmatters.com.ph/ column/yam_06282001.html.

22. McCluskey, Alan (1998). Taxation andthe Internet. Accessed.w w w. c o n n e c t e d . o r g / g o v e r n /taxation.html

23. Mark, Roy (2002). End of the Beginning:Internet Sales Tax. Accessed July 01,2004. http://www.internetnews.com/ec-news/article.php/1499501

24. National Governors associationaccessed May 19, 2004. http://www.nga.org/legislativeUpdate/HHS/1,2243„00.html

25. Quill v North Dakota 504 US 298 (1992)26. ______. Internet Taxation: Myth versus

Fact." http://www.sa les taxs impl i f i ca t ion .org/documents/myth.doc. Accessed 1 July2004.

27. Glover, Marilee (year). Taxation and theInternet. http://web.utk.edu/~mglover/IS567Paper.html

28. Ibid.29. Mangalindan, Marciano (2000). The

Web Tax is Free... or is it? Accessed 1July 2004. http://trim811.addsites.com/webtax.html

30. Mangalindan, Marciano (2000). TheWeb Tax is Free... or is it? Accessed 1July 2004. http://trim811.addsites.com/webtax.html

<< [28] Harvard Internet Law Program

· Yochai Benkler, Professor of Law atYale Law School with J. D. at HarvardLaw School. He clerked tot USSupreme Court Associate JusticeStephen Breyer and had extensiveresearch and papers on the effectsof laws, as well as political andeconomic theory, that regulateinformation production andexchange.

· William Fisher III, Hale and DorrProfessor of Intellectual Property atHarvard Law School, FacultyDirector of the Berkman Center andspecializes in intellectual propertylaw and the implications of Internetand technology on copyright, andauthor of "Promises to Keep".

· Jerry Kang, Professor of Law of UCLAand visiting professor of HarvardLaw School. His scholarship pursuitsinclude civil procedure, race andcommunication. He is the author ofthe leading casebook,"Communications Law & Policy:Cases and Materials".

· Lawrence Lessig, Professor of Lawand John A. Wilson DistinguishedFaculty Scholar at Stanford LawSchool. He is the founder of theBerkman Center and Chairman ofthe Creative Commons. He was arecipient of the Cyberspace LawExcellence Award from the AmericanBar Association and was named asone of the Scientific American's "Top50 Innovators" in 2002. He is anauthor of various books oncyberlaw, his most recent being: "FreeCulture: How Big Media UsesTechnology and the Law to LockDown Culture and ControlCreativity".

· Charles Nesson, Professor of Law atHarvard Law School, Faculty Co-Director and co-founder of theBerkman Center in 1997. Heclerked for US Supreme CourtAssociate Justice John MarshallHarlan and continues to incorporatecutting-edge technology in his lawclasses.

· Jonathan Zittrain, Professor of Lawand Faculty Co-Director and co-founder of the Berkman Center andserves as its first executive directorfrom 1997-2000. His researchincludes the technologies andpolitics of control of Internetarchitecture and protocol and the

future of the open source software.

In his ten page Participation Report toLaw School Dean Mariano MagsalinJr. and Mr. Florentino Cayco III, Prof.Soriano said that the program gavehim a better perspective of the currentissues affecting the Internet from thelegal, political, economic andtechnological perspectives. He alsonoted that many of the participants areunaware of current developments intechnology law in the Philippines.

The Berkman Center for Internet andSociety observed that this year'sprogram was a great success. It wasthe largest and arguably the best ofthe 6th Internet Law Programs hostedby the center.

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I

LegalWeb

This section is a continuing series of articlesfeaturing various websites which may berelevant to legal practitioners, legal

researchers, and law students.

n 1998, theSupreme Court of the Philippinesmade information from and about thejudiciary available to the world throughthe Internet.

For almost six years now the officialwebsite of the Supreme Court hasbeen functioning as a clearinghousefor information from and about theJudicial Branch of the Philippinegovernment. The site has also beenhelpful to legal practitioners, judges,legal researchers and law students asthe site contains up-to-date informationnecessary in the field of law.

The homepage provides links to pagesabout the following: announcementsfrom the Supreme Court, history of theHighest Tribunal, its mission and vision,the present justices, the Court'sorganizational structure, bar matters,decisions, resolutions, circulars andorders, references, publications, newsand information, frequently askedquestions, the Philippine JudicialAcademy (PHILJA) and telephonedirectory of the Supreme Court.

Information from and about theJudiciary

Under "History" is a brief story of theCourt. It traces the beginnings of theJudicial Branch of the PhilippineGovernment starting from the time theSpaniards came wherein judicialauthority was being exercised in itsprimitive. It provides for the laws andissuances that led to the introduction

WWW.SUPREMECOURT.GOV.PH:

BRINGING THE JUDICIARY CLOSER TO THE PUBLICby Ma. Cristina A. Ramos

of a formal judicial structure and itschanges through the years.

"Vision/Mission" contains the policystatement of the Judicial Branch.

"Justices" makes the public acquaintedwith the present justices of the SupremeCourt as it provides for the profiles ofthe latter placing special emphasis ontheir educational background and stintin the judiciary and legal profession.Photographs of each of the justices arealso posted in these pages.

The organizational structure of thePhilippine court system is shown in"Organizational Structure." A space isalso provided for the Supreme Court'sorganizational chart in the same pagebut chart is not yet posted.

"Announcements" is a virtual publicbulletin board wherein invitations toapply for eligibility and to bid, noticesof awards and similar information areposted.

"News and Information" is almostsimilar to "Announcements" as it alsofunctions as a virtual bulletin board.Under this section, the following areposted: Search for 2004 Chief JusticeDavide Awardees, Cultivation of EthicalValues in the Judiciary (a speech ofthe Chief Justice), downloadableawards forms for judicial excellence.

One of the interesting parts of the siteis "Bar Matters." Under it, one can findthe list of successful bar examineesfrom 1998-2003. It also contains alist of bar topnotchers from the pre-war period up to present and the rollof attorneys. Hence, if one wants to

check whether a person is indeed amember of the bar, he or she can findit out in a mouse click.

The section on "Publication" is the spacereserved for interesting works of themembers of the Bench. At present, itcontains three articles written by JusticeArtemio V. Panganiban entitled "Battlesin the Supreme Court," "Justice andFaith" and "Leadership By Example."

The "Directory" provides a list of contactnumbers of the different offices in theSupreme Court. It contains a list of thetelephone numbers of the First, Secondand Third Divisions, PHILJA,Presidential Electoral Tribunal,Management Information SystemOffice, Judicial and Bar Council, theOffices of the Clerk of Court, BarConfidant, Court Reporter, ChiefAttorney, and Court Administrator. Thecontact number of the differentservices such as Administrative,Medical, Dental, Library and Printing,are likewise displayed. Other officeswhose contact numbers are listed inthe site are the following: JudicialRecords Office, Fiscal Managementand Budget Officer, financial ServicesDivision/ Internal Audit Division,Program Management Office,Committee on Halls of Justice, andSecurity and Maintenance Unit inBaguio City.

Frequently Asked Questions

The site also gives space for thefrequently asked questions under"FAQ." Some of the questions may betrivial but they are merely reflective ofthe fact that some trivial questions areworth asking as the answers are

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sometimes not known even to thoselearned in the law. The following arethe questions answered in this section.

1. What are the three branches ofgovernment?

2. What is the difference betweenthe Judiciary and the SupremeCourt?

3. What is the difference betweenthe Supreme Court and theDepartment of Justice?

4. What is the Bench and the Bar?5. What are Shari'a courts? Are these

Courts under the Supreme Court?6. What does the term En Banc

mean? Why are there threedivisions in the Supreme Court?

7. How are justices of the SupremeCourt and the Court of Appealsand the judges of the lower courtsappointed?

8. What is the reason behind themandatory retirement age of 70for members of the Bench?

9. What are the functions of theCourt Administrator? Is the Officeof the Court Administrator (OCA)under the Supreme Court?

10. What cases are elevated or canbe appealed to the SupremeCourt?

11. Does the Supreme Court decideon cases that have not been triedin inferior or lower courts?

12. What does the term"jurisprudence" mean?

13. Is there a prescribed time framefor the Supreme Court to reviewcases appealed to it? How aboutlower courts?

For sure, even a person in the field oflaw may find one or two of thesequestions interesting. It may also betrue that although a personunderstands the terms and has an ideaon the above queries, still, when askedto explain them to a third person, heor she may find a hard time to makean intelligent response. Want foranswers? Just visit the site and you canfind intelligent and well explainedanswers to the questions above.

PHILJA

The site www.supremecourt.gov.phcontains pages about the PhilippineJudicial Academy (PHILJA). PHILJA'spages provide, among others,information about the academy, theprograms and courses being offered,the on-going seminars and its projectswith partners.

Legal Research Service

The official website of the SupremeCourt contains important researchmaterials for the members of thebench and the bar and to those whoare in the field oflaw. The sectionson "Decisions,""Resolu t ions, ""Circulars andOrders" and" R e f e r e n c e s "form part of a'virtual library' ofthe Judiciary.

" D e c i s i o n s "contains the fulltext of thedecisions handeddown by theCourt. They aregrouped basedon the months onwhich they werepromulgated. The depository, thoughnot complete as it contains only thosepromulgated starting January 1999,includes all the latest decisions of theHighest Tribunal. The same is true withthe "Resolutions." This section does notcontain all the resolutions issued by theCourt but it provides for the full text ofthose passed from January 1999 upto this date.

Before the advent of the"www.supremecourt.gov.ph," a legalpractitioner had to browse the pagesof the newspapers to be updated withthe Supreme Court Circulars andOrders. Now, with just one click of the

mouse, he or she can update himselfof the latest circulars and orders.

Aside from jurisprudence, resolutions,circulars and orders, the "References"section provides for the rules recentlypromulgated by the Supreme Court.Among those posted in the site are thefollowing: 2004 Rules on NotarialPractice, Administrative Matter No. 03-08-01-SC (Fixing the Lifetime of Bondsin Civil Actions or Proceedings), A.M.No. 03-03-03-SC (Consolidation ofIntellectual Property Courts WithCommercial Courts), Rule onGuardianship of Minors, Amendmentto the Rules on Summary Procedure,

Rules on Legal Separation, Declarationof absolute Nullity of Void Marriagesand Annulment of Voidable Marriagesand Rule on Adoption.

"References" also contains the 1987Constitution, the Rules of Court andLegal Fees and Costs.

Indeed, the Judicial Branch issatisfactorily adapting to the needs ofthe times. The volume and quality ofthe information available inwww.supremecourt.gov.ph only showthat the Judiciary is not lagging behindand is prepared for technologyrevolution.

The homepage of the Philippine Supreme Court (http://www.supremecourt.gov.ph). The website was launched in 1998.

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The Center and the Society

rof. Jaime N.Soriano, Executive Director of the eLawCenter, participated in the 2004Internet Law Program of the BerkmanCenter for Internet & Society of theHarvard Law School in Cambridge,Massachusetts.

The Internet Law Program is a regularoffering of the Berkman Center forInternet & Society to provide acomprehensive survey of the changinglegal system that govern the Internetand give the participants from variousjurisdictions the opportunity to discussrecent legal developments with leadingscholars in the field.

The Berkman Center for Internet &Society is a pro-active researchprogram founded to explorecyberspace, share in its study and helpprocess its development. It representsa network of faculty, students, fellows,entrepreneurs, lawyers, and virtualarchitects working to identify andengage with the challenges andopportunities of cyberspace under acommon understanding of the Internetas a social and political space. Currentprojects include digital media, Internetand politics, net governance,

E-LAW CENTER EXECUTIVE DIRECTOR ATTENDS

HARVARD INTERNET LAW PROGRAMby Peter Joseph L. Fauni

international developmentand intellectual property.

This year's program washeld at the Austin Hall ofthe Harvard Law Schoolon May 13-15, 2004.Similar programs wereheld off-campus in thepast, notably in Brazil,Stanford University in theUS, and Singapore.The 2004 Internet LawProgram drew 125participants from 20countries. Half of theparticipants though camefrom the United States. Theparticipants included lawyers,government officials, corporateexecutives, technology experts,educators, and representatives ofcause-oriented, mass media, andresearch groups.

The program actually started on 14April 2004 with the launching of onlineinstruction modules accessible only toconfirmed participants and moderatedby Derek Bambauer, a third yearstudent of Harvard Law School andstudent fellow at the Berkman Center.

Topics included: Copyrightand Peer-to-Peer Copying,Alternatives to IntellectualProperty, Privacy, Freedom ofExpression on the Internet,Legal Regulation onInterconnectivity, Cybercrime,Online Business MethodPatents, Domain Names,Jurisdiction and Zoning, and,Access to the Internet.

The participants were alsoprovided with the followingfour-taped lectures in DVDformat for mandatory viewing >> [25] Harvard Internet Law Program

prior to the on-site sessions: A CrashCourse in Internet Technologies,Regulation, The Technical is Political:Access to an Open InformationEnvironment, and Legal Regulation ofDigital Media.

During the three-day program atHarvard Law School, leadingprofessors and Internet law expertspresented an in-depth and thoughtprovoking discussion on the followingsubjects: Pornography - An Applicationof Law, Norms, Market, Architecture,Physical Layer: Wires and Wireless,Logical Layer: End-to-End, Lessonsfrom the Domain Name Controversy,Content Layer: The Future of Copyrighton the Internet, Free Culture, PeerProduction of Information, PressingIssues, Intellectual Property Protectionfor Code? SCO and the Fight OverSoftware Patents, Privacy, and TheInternet and Politics.

Faculty members of the Harvard LawSchool who took part in the programwere the following:Prof. Soriano with Prof. Lawrence Lessig of Harvard

Law School and Founder of the Berkman Center forInternet and Society.

Prof. Soriano with Ms. Robyn Mintz, Executive Director ofthe Berkman Center for Internet and Society of HarvardLaw School (right), and Ms. Rebecca MacKinnon, CNNTokyo Bureau Chief and Harvard Fellow (left)