Category Archives: Government

Loren: RP should initiate “mutual abrogation” of NBN deal

The Philippines should initiate diplomatic talks with China so that the two countries can “jointly abrogate” Manila’s highly contentious $329-million national broadband network (NBN) project that would be installed by Shenzen-based ZTE Corp. using a soft loan from Beijing, Sen. Loren Legarda said.

“The project has become too tainted — too quarrelsome — it is no longer tenable,” Legarda said.

“The Philippines should persuade China that the rescission of the deal is in the best interest of both countries. And that a mutual annulment is definitely much better than a unilateral cancellation by the Philippines,” Legarda said.

Once the project is diplomatically terminated, Legarda said a joint congressional commission of the Senate and the House should ascertain whether the country needs a state-owned broadband network, on top of existing high-speed commercial communication channels run by the private sector.

While looking into the need for the proposed NBN, Legarda said the commission might as well determine the suitability and feasibility of a “cyber education program” that aims to reinforce the public school system by using satellite technology to beam televised lectures to students and teachers.

Legarda said the bicameral commission can then draw up a report, to be approved by the Senate and the House in plenary, and then endorsed to Malacañang.

Legarda made the statement shortly after Malacañang “suspended” the NBN project and the $465-million cyber education project, also to be funded by a loan from China, without categorically saying whether both ventures would eventually be revived or terminated.

The senator expressed confidence that the NBN deal’s revocation would not impair Philippine-China relations in a big way.

“Philippine-China relations are far greater than the twin projects. The combined value of the projects is nothing much when compared to our larger political, economic and people-to-people relations with China,” Legarda stressed.

“Going forward, there will be numerous other occasions for China to help us some other way, and for us to help China — for the two countries to cooperate — with respect to information and communications technology (ICT) projects, or in other areas,” Legarda pointed out.

Legarda is author of a bill seeking to establish a new, full-fledged department that would “consciously advance” the country’s ICT sector, as well as several measures proposing to build up electronic commerce while bracing the war on cybercrime.

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Posted by on September 24, 2007 in Government


Solon bats for cheaper Internet-based phone calls

Catanduanes Rep. Joseph Santiago, chairman of the House committee on information and communications technology, is pushing for new legislation that would reduce considerably the cost of telephone calls through the aggressive promotion of Internet-based call services.

Santiago has revived the bill seeking to “totally liberalize” Voice over Internet Protocol (VOIP), a service that enables people to use the web as the medium for conveying voice calls.

House Bill 1328, authored by Santiago, mandates the NTC to ensure that VOIP services become available to the greatest number of consumers at the shortest possible time.

VOIP is a method for taking analog audio signals, like when talking on the phone, and turning them into digital data that can then be transmitted over the Internet.

The practical upshot of this method is that by using some of the free VOIP software that is available to make Internet phone calls, telephone companies (and their user charges) are totally bypassed.

Thus, VOIP calls do not incur a surcharge beyond what the user is paying for Internet access, much in the same way that the user does not pay anything for sending and receiving electronic mail over the web.

“There is no stopping VOIP. In the United States alone, VOIP subscribers are growing by leaps and bounds. The most conservative studies estimate that more than 44 million Americans will be using VOIP to make calls by 2010,” Santiago said.

Under Santiago’s bill, the NTC would ascertain the interconnection rates to be paid by VOIP service providers to network operators, mainly telephone companies.

The NTC would see to it that VOIP service providers enjoy a fair and reasonable margin, in order to keep them viable.

Network operators would be required “to ensure equal access in terms of quantity and quality” to all entities supplying Internet-based phone services.

Also under the bill, network operators would be banned from discriminating against VOIP service providers, and from degrading in any way the access of their subscribers.

For this purpose, the parties would be required to submit copies of their interconnection or access agreements to the NTC, for monitoring and supervision.

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Posted by on September 9, 2007 in Government


Senate bill seeks to punish identity theft, misuse of personal info by firms

Sen. Loren Legarda has filed a bill seeking to penalize the rapidly emerging crime of “identity theft,” and to compel firms that handle a great deal of restricted personal information, such as banks and credit card issuers, to build in adequate precautions to prevent any breach of the right of privacy of individuals.

Under Senate Bill 1371, identity theft is defined as “fraud committed using the sensitive personal information of another individual, with the intent to commit, or to aid or abet any unlawful activity that constitutes a violation of any existing laws and results in economic loss to that individual.”

As proposed by the bill, “sensitive personal information” would refer to an individual’s first name and surname in combination with other details, such as those that relate to, but not limited to, an individual’s financial account, credit standing, health condition, and family tree.

The most common kinds of identity theft involve the stealing of another person’s information in order to defraud the government, such as through the diversion of pension checks; to deceitfully obtain credit, mostly from card issuers; or to make false insurance claims.

Under Legarda’s bill, identity thieves would be punished with up to 10 years in prison, or a fine of as much as P500,000, or both.

The same penalty would apply to persons or the officers and directors of firms that “misappropriate” sensitive personal information, once it is proved that the misuse became injurious to the person with whom the facts pertained.

In pushing the bill’s swift congressional approval, Legarda invoked the Constitution, which she said, “distinctly protects the right to privacy.”

“Based on the zones of privacy established by the Bill of Rights, every person clearly enjoys the right to be let alone, or the right to determine what, how much, to whom and when information about himself/herself may be disclosed,” Legarda stressed.

“Congress must now safeguard the right to privacy, which has become vulnerable to invasion and manipulation by corrupt individuals and entities that take advantage of new technology, including the spread of electronic databases,” she said.

An electronic database is a computerized collection of information produced to bring such facts together in one place or through one source so that these may be accessed by authorized persons.

Among the biggest generators of sensitive electronic databases are banks, credit card issuers and telecommunication service providers that, by the nature of their business, have to maintain large amounts of up-to-date customer or user personal details.

Legarda’s bill requires all entities that maintain sensitive personal information bases to develop and enforce reasonable security procedures against “any unauthorized access, destruction, use, modification or disclosure.”

They would also be required to establish prompt notification procedures once an individual’s personal information is violated, threatened or compromised.

The bill does not only cover private firms, but also public institutions with large repositories of personal data, such as the Social Security System, Government Service Insurance System, the Passport Office and the Land Transportation Office.

In the United States, a number of financial institutions have lost customer databases as a result of staff negligence, the unauthorized reproduction and sharing of files or high-tech theft by computer hackers. The losses have rendered millions of people exposed to identity theft.

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Posted by on August 27, 2007 in Government


House to push fixed terms for NTC chief, deputies

The House information and communications technology committee intends to push new legislation that will reinforce the National Telecommunications Commission (NTC) and give its officers fixed terms “to enhance their independence and insulate them from excessive politics.”

“This has been a lingering issue. The lack of fixed terms has definitely made the NTC unusually vulnerable to too much politics,” said lone Catanduanes Rep. Joseph Santiago, committee chairman.

Santiago was reacting to reports concerning the sudden removal of Abraham Abesamis as NTC chief. The reports suggested that Abesamis himself had no idea he had been replaced.

“This episode merely underscores the need for Congress to give the NTC commissioner and two deputy commissioners fixed terms. This way, they will be less susceptible to pressure, political or otherwise,” said Santiago, a former commissioner of the NTC.

“Right now, the three commission members do not enjoy solid terms. Naturally, their stay in office is totally conditional on whether or not they continue to enjoy the appointing power’s confidence,” Santiago said.

Should Abesamis’ reported replacement by Political Affairs Undersecretary Ruel Canobas push through, he will be the third NTC chief since 2001. Abesamis replaced lawyer Rolando Solis as NTC chief only in November last year.

Santiago said his panel is initially looking at the US Federal Communications Commission (FCC) as a possible model in bracing the NTC.

“The five commissioners of the FCC are appointed by the US President and confirmed by the Senate for fixed five-year terms, except when filling an unexpired term,” Santiago pointed out.

“But this not just about fixed terms. This is also about transforming the NTC into an independent and more potent quasi-judicial regulator going forward,” Santiago stressed. “Additionally, we have to raise the capabilities of the commission’s staff.”

The FCC is the US counterpart of the NTC. Like the NTC, the FCC is charged with regulating all communications by radio, television, wire, satellite and cable. As organized, the FCC is an independent agency, directly accountable to the US Congress.

Under US law, the White House designates one of the commissioners to serve as chair. Only three commissioners may be members of the same political party. None of them can have a financial interest in any commission-related business.

Santiago, meanwhile, said he was not totally surprised by Abesamis’ replacement “viewed in the context of a previously reported bigger, ongoing reorganization of senior posts.”

“Our sense is, when Malacañang sought the courtesy resignation of senior executives, including the chiefs of state-controlled firms, all appointed officials without fixed terms became openly replaceable,” Santiago said.

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Posted by on August 14, 2007 in Government


House vows full-dress probe on broadband deal

The House committee on information and communications technology (ICT) will definitely conduct “an exhaustive inquiry” on the government’s controversial $330-million contract with ZTE Corp. for the supply and construction of a national broadband network (NBN).

The new committee chairman, lone Catanduanes Rep. Joseph Santiago, vowed to launch the probe shortly, once the panel is fully organized.

“Instead of focusing on the players in the project, we want to look into the concept itself — whether government really needs to establish this network, or we would all be better off just leaving this entirely up to the private sector,” Santiago said.

The “players” alluded to by Santiago include the Chinese government, which owns a big chunk of ZTE; the U.S. government, which is subtly protesting the ZTE contract, after an American company that had wanted to bid for a similar project was sidelined; and House Speaker Jose de Venecia Jr.’s son, Jose III, who is the principal of yet another firm that had also wanted to undertake a comparable venture.

Santiago, former chief of the National Telecommunications Commission, was the first member of Congress to publicly question the NBN contract with ZTE. Two months ago, he expressed “grave concern” that the planned state-run NBN might just end up as another “costly and burdensome white elephant,” or might only be overtaken swiftly by new and cheaper technologies.

“The government’s lack of core competency is definitely an issue. But this is not the only issue. Cost-efficiency is another issue. Unlike private enterprise, state agencies are inherently inefficient,” Santiago said.

He was referring to a study by the University of the Philippines’ School of Economics (UPSE), which warned that the government lacked the “core competency” to own, maintain and use an IT backbone on top of the two already being run separately by Philippine Long Distance Telephone Co. and a league of its rivals.

Santiago, for his part, said that one of the strongest arguments against a government broadband system “is the fact that even the highly advanced governments of other countries do not have state-owned (broadband) networks.”

“In many countries, governments agencies simply rely on existing, more efficient and highly reliable privately owned networks that provide universal access and connectivity,” he said.
Those to be summoned to the House inquiry include officials of the National Economic and Development Authority; Department of Transportation and Communications; National Telecommunications Commission; and the Commission on Information and Communications Technology.

Representatives of ZTE Corp. and rivals Amsterdam Holdings Inc. and Arescom Inc. will also be invited to the public hearing, along with the authors of the UPSE study that listed many reasons why the government should not pursue the NBN project and another $460-million plan to build a satellite-based IT backbone for “cyber education.”

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Posted by on August 12, 2007 in Government


Broadband project’s national security implications troublesome — Senator

Sen. Gregorio “Gringo” Honasan has expressed concern over “the potential national security implications” of the government’s controversial $329-million national broadband network (NBN) project to be put up by ZTE Corp., an entity controlled by the Chinese government.

“We are unsettled by the project’s national security ramifications, apart from the huge cost of developing and maintaining a system that might just end up as another massive non-performing government asset,” Honasan said.

“At the center of this project is the highly sensitive matter of government communications,” the senator pointed out.

“Assuming the bureaucracy becomes wholly dependent on the NBN, and the network suddenly crashes, resulting in the complete breakdown of government communications, whom do we call to restore the system?

“Is it possible that the government, out of desperation, may be forced later on to ask ZTE or another private entity to take over the network’s maintenance as well? These are valid questions that beg answers,” Honasan said.

A study by the University of the Philippines’ School of Economics earlier warned that the government lacked the “core competency” to maintain the proposed NBN, and that this inadequacy was “one of the strongest arguments” against the project.

Honasan, meanwhile, said Congress should now also “look at the bigger picture,” and not just the controversial NBN project.

He cited the possible need for new legislation patterned after the US Foreign Investment and National Security Act (FINSA), which reinforces (US) government and intelligence oversight of foreign takeovers of sensitive infrastructures and entities.

“We absolutely support the open investment policy. We strongly favor foreign capital in the country. However, we must have sufficient oversight with respect to foreign entities putting up or taking over communications, energy, water and similar vital facilities,” Honasan stressed.

“If a powerful and totally open country such as the US deems it appropriate to closely watch foreign stakes in sensitive sectors, then surely a far more vulnerable nation such as the Philippines should also see it necessary to exercise similar oversight,” Honasan added.

US President Bush signed the FINSA into law only last month. The FINSA strengthens the US Committee on Foreign Investment, the interagency body that reviews foreign acquisitions of companies that own, operate or manage critical US infrastructures such as power plants, ports and tunnels.

The US Congress passed the new law in the wake of the agitation sparked by Dubai Ports World’s acquisition of shipping operator Peninsular & Oriental Steam Navigation, including its subsidiaries that operate six key US ports. The Emirate of Dubai owns 100 percent of Dubai Ports World.

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Posted by on August 12, 2007 in Government


Top US online stockbroker’s customer services offshored to RP

E TRADE Financial Corp., one of the largest US online discount stockbrokers that cater mainly to retail clients, has outsourced its customer services to the Philippines.

Lone Catanduanes Rep. Joseph Santiago, the new chairman of the House committee on information and communications technology, disclosed the positive development.

“We definitely welcome E TRADE’s resolve to entrust its customer services to the Philippines,” said Santiago, former chief of the National Telecommunications Commission.

“With this, we also expect E TRADE’s rivals in the rapidly growing US online discount brokerage space to consider the option of relegating their customer services to the Philippines, in order to stay cost-competitive,” Santiago added.

Santiago said E TRADE has outsourced its client services to the Philippine contact centers and back offices of Arlington, Virginia-based Access Worldwide Communications Inc., a business process outsourcing provider that specializes in customer management.

Access Worldwide, with offices in Makati City, supports a number of companies in a variety of industries, including financial services, technology, telecommunications, consumer products, healthcare and media.

New York, New York-based E TRADE is the third-largest US provider of online securities brokerage services and technology-based financial services, predominantly through the Internet.

E TRADE has more than 3.6 million mostly retail brokerage accounts that have more than $214 billion invested in the stock market.

The electronic broker handles an average of 171,387 trades every day.

E TRADE’s customers can buy and sell stocks, bonds, options, futures and over 6,000 non-proprietary mutual funds.

The company also has a banking business, with about 821,000 accounts.

E TRADE has a market capitalization of $8.2 billion. The only two other online brokers that are larger than E TRADE are San Francisco, California-based The Charles Schwab Corp., with a market capitalization of $24.5 billion, and Omaha, Nebraska-based TD Ameritrade Holding Corp., with a market capitalization of $10.2 billion.

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Posted by on August 10, 2007 in Government