Chapter 7

There is an urgent need to promote and support the implementation of a number of carefully selected action plans that can be transformed into strategic projects for the PII. These projects are referred to in this PII Framework Proposal as the “PII Strategic Initiatives.”

Like the action plans proposed for the PII development process, these strategic initiatives are applications-specific, concepts-oriented or both. Compared with the other action plans, they more directly, seriously and immediately impact government, the private sector and the consumers and users of PII-based applications and services.

The strategic initiatives selected for the PII also require the closer attention and firm commitments of support from both government and the private sector to ensure their successful implementation. These initiatives were selected among many identified urgent and high-impact PII projects presented as action plans for the PII. The selection was based on the following criteria:

· the project’s potential to demonstrate the usefulness of the PII to the nation and the Filipino people;

· the ability of the project to clearly illustrate the benefits that can be derived from the accelerated and rational development of the PII; and

· the role that the project has in achieving the goals of universal access and universal service in the Philippines.

Applications-oriented strategic initiatives are projects that involve specific applications such as the plan to establish a PII Training, Testing and Research Center.

Concept-oriented initiatives, on the other hand, are those involving ideas that are deemed crucial to the development of the PII such as the initiative involving the official adoption and creation of a national council for the PII development process.

Still another types of strategic initiative as proposed in this PII Framework Proposal involve both concepts and applications. For example, the proposal to introduce and institutionalize the Rural Information Infrastructure (RII) under the “rural” initiative involves the introduction of a novel concept for a financing mechanism like the Universal Access Fund and a specific application such as the establishment of community-based Multimedia Access Centers or telecenters.

The PII Strategic Initiatives represent the second set of substantive proposals that this PII Framework Proposal is submitting as a "package" vitally needed for the accelerated and rational development of the PII.

1. The “Rural” Initiative: introduces and institutionalizes the concept of the Rural Information Infrastructure (RII) as an integral component of the PII. As envisioned, the RII has two main pillars: the community-based Multimedia Access Centers or telecenters, an expanded and enhanced version of Public Calling Offices (PCOs) and the Universal Access Fund.

2. The “Urban” Initiative: kick-starts the planning process for a “CyberPlan”, a model project which will involve the establishment of “CyberZones” or “intelligent zones” and a “Cyber InfoLink”, an “intelligent corridor” that will link the intelligent zones with intelligent “drops” along the way. This project will serve as a model for the eventual establishment of additional “intelligent corridors” that will link other “intelligent zones” located in other areas in the Philippines. This strategic initiative can also be referred to as the “broadband” initiative. It also covers the action plans involved in the promotion of new advanced multimedia multi-services in the Philippines.

3. The “Government” Initiative: supports the speedy completion of planned and on-going government computerization projects by providing them with the information infrastructure components that they require. All these programs are high-priority projects of the administration of President Joseph Ejercito Estrada.

4. The “e-Commerce” Initiative: initiates the planning for a Public Key Infrastructure (PKI) and the supporting framework for the development of electronic commerce in the Philippines.

5. The “e-Governance” Initiative: initiates the planning for a shared and virtual Government Electronic Communications System (GECS) as a vital tool in electronic governance and in the delivery of basic services. The GECS will support and compliment the Government Information System (GIS) that is currently being planned. Both GECS and GIS are integral parts of the Government Information Infrastructure (GOVT II).

6. The “Global” Initiative: designs a feasibility project and initiates the planning process for a PII Training, Testing and Research & Development (R&D) Center that will, among others, research and “test-bed” the facilities and applications for linking the PII with the regional and global information infrastructures. This initiative also includes the action plan that calls for the establishment of a joint government and private sector body for technical standards.

7. The “Sustaining” Initiative: moves for the issuance of an Executive Order by the President of the Philippines establishing the national council for the PII, the Philippine Information Infrastructure (PII) Development Council, that will continue where the PII Policy Study Project left off. This initiative also covers the other action plans that are concerned with providing the sustained support for the PII development process. This includes the plans to establish the PII Task Force and the PII Secretariat within the DOTC; to organize the Second National PII Conference; to advocate the inclusion of PII projects in the “Flagship” program of the Estrada Administration; and to undertake promotional campaigns for the PII.

The “Rural” Initiative: Institutionalize the Concept of a Rural Information Infrastructure (RII) and its Two Pillars: theMultimedia Access Centers and the Universal Access Fund

The first strategic initiative proposed for the PII Framework for Development is termed the “Rural” initiative. The choice of this action plan as the first of seven initiatives proposed for the PII is intentionally slanted to the very important rural aspect of the PII development process.

As a strategic initiative, the “Rural” initiative packages a number of action plans presented in the preceding chapter. These are Action Plans 4, 5, 6, 7 and 8.

In developing countries, there must be two concurrent tracks of development work for the national information infrastructure. The first must be focused on the development of broadband multimedia multi-services facilities in the urban and highly industrialized areas of the country. The second must be concentrated on the development of facilities suitable to the needs of people in remote and rural areas of the country.

The first considers the more-advanced communications and information requirements of people living in urban areas and the more-sophisticated needs of the financial, business, commercial and industrial sectors thereat. As this segment of the market is considered in the Philippine environment as competitive and profitable, the responsibility for this rests primarily with the private sector. On the other hand, there has to be a clear strategy and effort on how the needs of the remote and rural areas can be met.

The government especially in the early years of the PII development process might not have the funds to allocate for rural infrastructure. The private sector, on the other hand, remains lukewarm to investing in these so-called unserved or underserved areas unless they are provided with incentives that can really motivate them to move toward this direction.

The lack of effective incentives for the private sector to operate in the non-viable areas remains a major problem. With its budgetary constraints, government might find it hard to give up badly needed revenues as incentives to the private sector.

The Service Area Scheme (SAS) was a strategy that was designed to balance investments between urban and rural areas, even on a skewed 10 to 1 ratio, by providing incentives to those who were to provide service to the so-called unserved areas. Still, the SAS hardly accomplished the objectives set for rural development. Most of what were built by the private sector particularly by the new entrants was still concentrated in the urban areas of the country.

There is, therefore, an urgent need for government to formulate new and more effective strategies to promote the further spread of communications and information services to the countryside, including putting up the infrastructure itself, if and when needed.

In the remote and rural areas, the problem is that the people have different needs and requirements than those in the urban areas. As a rule, providing them facilities and services is an even more expensive proposition. For this reason, privately owned franchised communications carriers, mainly motivated by quick and high returns on investments usually ignore their social obligation of installing lines and other communications facilities in these so-called "non-viable" areas.

This situation has given rise to wide and glaring disparities in the availability of even basic “dialtone” service. The lack of a balanced development and distribution of local telephone lines across the country has further aggravated the widening gap between rich and poor in our country. When it comes to multimedia multi-services requirements, it is projected that if government does not introduce new initiatives in these areas, the disparities will grow even wider and in more glaring proportions.

The need for a real focus on rural infrastructure development has been extensively discussed in several action plans in the preceding chapter.

Undoubtedly, there is an urgent and a highly strategic need for government to introduce and institutionalize the concept of Rural Information Infrastructure (RII) and its two pillars: the Multimedia Access Centers or telecenters and the Universal Access Fund.

As a strategic initiative, the objective is to get the DOTC to advocate and promote these concepts and seek their wide acceptance and support. The DOTC must also work for the enactment of the required legislative measures in order that these proposed concepts can become legally accepted institutions in the Philippines.

Public Calling Offices (PCOs) was a concept that was introduced by the then Congressman Vicente C. Rivera, Jr. and ably supported by Senator John Henry Osmeña in the Senate. The Public Calling Office (PCO) was institutionalized with the passing of the law on the “one telephone for every municipality” or Republic Act No 6849. What is envisioned is for this law, which is expiring by next year, to be replaced with a new law. It is this new law that will institutionalize the concepts of the Rural Information Infrastructure (RII) and its component Multimedia Access Centers (telecenters) and the Universal Access Fund.

As a strategic initiative, it is expected that the DOTC will immediately issue a policy statement on the RII as well as on the Universal Access Fund and the Multimedia Access Centers. At the same time, it will work on the drafting of the legislative measure that will institutionalize these concepts into a law immediately after the approval of this PII framework proposal.

It is expected that by the first quarter of 1999, the DOTC will have issued the policy statement on its rural information infrastructure strategy. At the same time, the DOTC will have drafted the legislative measures to replace RA 6849 and to enable the creation of the Universal Access Fund. These two measures should be filed in the House of Representatives at the same time.

It is expected that they will both be certified as priority bills by the Executive Department and accordingly passed by Congress and signed by the President of the Philippines into law before the end of 1999.

The other action plans related to this strategic initiative should be acted upon by the DOTC and the NTC and completed on or before the end of the first quarter of 1999.

The "Urban" Initiative Initiate the Planning for the “CyberPlan”: the Establishment of “CyberZones’’ and a “Cyber InfoLink”

Strategic Initiative 2 presents the “urban” or “broadband” initiative. This will complement the first strategic initiative that is focused on rural development.

This proposed strategic initiative has been presented in more detail in the preceding chapter as Action Plan 23. As an initiative, the goal is to be able to convert in the soonest possible time at least two specially selected areas of the country into "intelligent” and knowledge-based special zones referred to as “CyberZones”. These special intelligent zones will then be connected together using the most advanced communications and information technologies by an intelligent corridor that will be referred to as the “Cyber InfoLink”.

The plan that will conceptualize and operationalize the “CyberZones” and the “Cyber InfoLink” will be referred to as the “CyberPlan”.

The intelligent zones are envisioned to be equipped with the latest multimedia broadband technologies and facilities, and can also serve as a pilot or testing area for future projects with a bigger and wider coverage. Interactive information kiosks can also be tested in these zones.

These intelligent zones can also be used to locate new research facilities including the proposed PII Training, Testing and Research Center. It is from these locations where “test-bed” activities and other international cooperative programs can be done for the Philippine end.

Private sector participation in the ”CyberPlan” will be encouraged through the provision of incentives to those who will invest in these locations and on the intelligent corridor itself. It is envisioned that those who will provide the facilities that will comprise the intelligent highway will be limited only to franchised public communications companies duly authorized and licensed by the National Telecommunications Commission (NTC).

The above is essentially what Action Plan 23 is all about. As Strategic Initiative 2, it can also be the showcase of the “urban” aspect of the PII development process. This is a complimentary initiative to the “rural” aspect of the PII process presented as the first strategic initiative in the PII Framework Proposal.

The “Government” Initiative: Support the Speedy Completion of On-going and Planned Government IT and Computerization Projects

The PII is an integral and essential element in the speedy and successful completion of almost all of the ongoing and planned computerization projects of the Estrada Administration. In many cases, the PII has not been considered in the planning process for these projects and has simply been assumed to be or will be available.

This strategic initiative proposes to demonstrate what the speedy development of the PII can do to ensure the success of the priority projects of government.

For instance, one of the declared priority thrusts of President Joseph E. Estrada is to fully computerize the elections on a nationwide basis. The PII and its components are vital to the realization of this goal.

Action Plan 29 of this PII Framework Proposal entitled “Support Government Projects with Information Infrastructure Needs” details the various aspects of this project, along with a number of other on-going and planned projects commonly denominated by their need for at least the physical layer of the PII. The list is, however, by no means complete.

As mentioned in the action plan, it is first necessary for the NITC to approve this proposal and consider it as one of their inter-component projects under the “T-I-G-E-R-S” strategy. The next step is for the NITC to undertake through possibly the National Computer Center (NCC) an inventory of projects that might be included in this strategic initiative. Subsequently, the NITC and NCC can monitor developments for the purpose of coordinating all efforts to ensure the successful completion of all projects. At the same time, they should ensure that economies of scale and/or rationalization of activities are achieved. These can result into savings in the costs for at least the physical infrastructure layer of these projects by relating them to the PII development process.

The proposed PII action arms, the PII Task Force and the PII Secretariat can support the NITC and the NCC in this project and strategic initiative. Through this support mechanism, coordination can be made with each of the government departments, bureau, office or agency involved in these projects. The objective is to align and optimize their planning and implementation with that of the PII.

As a strategic initiative, it is expected that this will be one of the priority items that will have the attention of the NITC as well as the PII Development Council and of its task force and secretariat for the PII.

The kind of support that will be provided will vary from one case to another. Others may be simple and may be completed in a few months of work while others might take more time and may also require special expertise and experience. The latter kind of projects may even require special funding support.

It is envisioned that this strategic initiative is one that can be implemented almost immediately. It is, of course, well recognized that it might take more than one year to complete all the identified projects that will be certified by the NITC as needing support from the PII bodies.

The “e-Commerce” Initiative: Initiate the Planning for a Public Key Infrastructure (PKI) to Support Electronic Commerce

Action Plan 26 of this PII Framework Proposal entitled “Accelerate the Development of a Public Key Infrastructure (PKI)” presents in detail the proposal to establish a PKI for the Philippines. This is also proposed to be one of the strategic initiatives for the PII.

Electronic commerce is among the most important applications of the Information Age. In the future, major transactions and transfers will be done online electronically, giving way to the so-called “cashless” society.

Envisioned as the next frontier of the economy, digital information flowing from information infrastructures is expected to replace traditional hard copies as the dominant medium of transacting business. While this would bring profound benefits to society as well as impact greatly on the economy, it is recognized that e-commerce must operate in a safe, secure and trusted environment. It must be almost completely protected from fraud and various security breaches. Unless this kind of a situation is realized in the Philippines, e-commerce will not prosper in the country.

As such, safe, secured and trusted systems that a PKI will ensure must be developed under the following concepts and principles:

· The PKI seeks to ensure the integrity of the PII, most especially applications such as electronic commerce. A security system such as the PKI is an integral feature of any successful information infrastructure especially where

it is used for commercial transactions. It is, therefore, a crucial element in fostering the continued growth and acceptance of e-commerce and of the PII itself.

· The PKI serves to open a new window of opportunities for new businesses and applications. The PKI initiative will also serve to complement the on-going efforts to promote e-commerce by the E-Commerce Promotion Council.

· A public key infrastructure is a network that makes possible secure exchanges of sensitive information and financial electronic transactions between relative strangers. A PKI will provide confidentiality, authentication, integrity and non-repudiation support to information technology applications and electronic commerce transactions.

· A PKI with the use of public key cryptography and the associated electronic key management infrastructure plays a critical role in ensuring end-to–end security of electronic communications requiring authorization and authentication.

At the same time that a PKI is being established, government must also institute the necessary legal, policy and regulatory framework for its acceptance as a validating/authenticating mechanism for electronic documents and transactions.

As a strategic initiative, it is expected that the plans for the PKI will be authorized and funded within 1998 or, at the latest, during the first quarter of 1999. The plan should be completed by mid-1999 and approved for implementation by both the DOTC and the DTI as well as by the NITC, the E-Commerce Promotion Council and the proposed PII Development Council which should already be operational by that time.

This means that before the year 2000 there should already be an operational PKI in place with a number of accredited/licensed Digital Signature/Certification Authority providing the requisite security and authentication process for e-commerce transactions in the Philippines.

PII Strategic Initiative 5 The “e-Governance” Initiative: Initiate the Planning for a Sharedand Virtual Government Electronic Communications System or GECS

The proposal to establish a shared and “virtual” Government Electronic Communications System or GECS is well explained in Action Plan 28.

This proposed government system is separate and distinct from the currently planned Government Information System (GIS). It will, however, support and compliment the GIS. While the GIS is assumed to be focused on the development of information systems of government, the proposed GECS is involved with communications networks, the interconnectivity and interoperability of government systems and the management of government information, data and statistics stored in databases through the provision of information access facilities.

A way of describing the relationship of the two systems is by using the PII definition as the basis. The GECS is about the core layer, the physical infrastructure and partly the second layer, as it is also involved with databases and the information stored in them. The GIS, on the other hand, is mainly concerned about the second layer and the third layer, content.

The action plan as proposed in this framework study is to immediately form an ad hoc Working Group within the NITC that will be led by the DOTC in the preparation of a Project Feasibility Plan for the proposed GECS. This working group will also look for possible funding sources for the entire project or parts thereof.

It is expected that this vitally important project will be able to draw funding support from the Philippine government as well as from official development/assistance programs of foreign governments.

The strategic initiative is to have this action plan approved by the DOTC and the NITC and that the work on the project can get started if possible within the last months of 1998 or, at the latest, during the first months of 1999. It is important that work on this project be undertaken on an almost parallel basis as that of the GIS. It is, of course, understood that the GIS planning process has already started.

The “Global” Initiative: Initiate the Establishment of a PII Training, Testing and Research Center

There is a strategic and urgent need to immediately start the process of establishing a research center in the Philippines. Such a facility can be also used for training, testing and other learning activities related to the development of the Philippine Information Infrastructure (PII). The proposed training, testing and research will be the first of its kind in the Philippines and it is expected to support the accelerated and rational development of the PII.

Considering the potential problem of raising the necessary funds to build a fully-equipped PII Research & Development Center, a “test-bed” laboratory with adequate training facilities can initially be established which will later form the nucleus of the full-blown PII R&D center.

The first test-bed projects will involve the Philippines in the on-going test-bed projects of the Asia Pacific Economic Council (APEC). APEC test-bed projects are currently focused on the use of broadband transmission facilities, using both satellite and fiber optic cable, to test application programs like “telemedicine” over ATM networks.

The cooperation of the private carriers and of the technology and equipment suppliers in the project is deemed very important. The facilities of the research center should be open and accessible to all.

At present, the DOTC is in the process of drafting a project feasibility study for both the operational aspects and the physical infrastructure requirement of such a center. The initial physical infrastructure envisioned for the center will essentially consist of a laboratory building with adequate training facilities and other facilities for test-bed projects.

Based on DOTC’s initial cost estimates and calculations, the project will require an initial funding of less than P10 million only. The objective is to be able to start the project before the end of this year.

By operating as a training center, the project is expected to immediately generate revenues and thereby operate independently without hard-to-come-by budgetary allocations from government.

The project can also be funded through grants from international sources like the World Bank, ITU or the Asian Development Bank. Sponsorships and fees from users and participating carriers and technology/equipment suppliers as well as other forms of cooperative arrangements are expected to help in underwriting the costs for operating and maintaining the PII center.

This proposed strategic initiative is presented in more detail as Action Plan 31 entitled “Establish a PII Training, Testing and Research Center in the Philippines” of this PII Framework Proposal.

As a strategic initiative, it is expected that within this year the feasibility study for this project will have already started by the DOTC as the lead-implementing agency and completed by the end of the first quarter of 1999.

It is projected that before the year 2000, the proposed center will already be operational.

The “Sustaining” Initiative: Advocate the Signing of an Executive Order by the President Establishing the PII Development Council and Mandating DOTC to Prepare the PII National Development Plan

Action Plan 32 in this PII Framework Proposal recommends that the President of the Philippines should establish a national council for PII development through the promulgation of an Executive Order. The national council shall act as a high-level joint government and private sector consultative, deliberative and coordinating body.

This council will assist the DOTC and the NITC in their respective responsibilities and tasks in the development of the PII. This national council is proposed to be referred to as the PII Development Council or the PII DC.

The establishment of the PII DC is critically needed to ensure that the momentum for PII development can be sustained. The council shall assist the DOTC in developing policies and in its other functions related to the task of building support and consensus among all sectors for the PII. One of the most important tasks that will be given to this council will be to provide support to the DOTC in the formulation of the PII National Development Plan.

The PII DC can also recommend policies, plans and programs that it determines to be required and favorable to the rational and accelerated development of the PII. It can also recommend funding mechanisms and other similar devices in order to ensure that projects of the PII can be

successfully implemented. The PII DC will also advise and assist the NITC in all its functions related to the PII.

It is proposed that the establishment of this council be done along the lines of the national council created for the promotion of electronic commerce in the country. Executive Order No. 468 signed by then President Fidel V. Ramos last February 23, 1998 created the Electronic Commerce Promotion Council. Please refer to Annex “H” of this study report and proposal.

The Undersecretary for Communications of DOTC is proposed to chair the proposed PII Development Council. It will have as its co-chair a representative from the private sector. Government-sector membership in the council shall be composed of representatives from the following:

Government representatives to the council shall be preferably at the level of undersecretaries but no lower than assistant secretaries, or their official equivalent positions.

The National Telecommunications Commission (NTC) represented by its Commissioner and the National Computer Center (NCC) represented by its Managing Director shall also sit as government sector members in the national council.

Aside from the co-chair who shall come from the private sector, it is proposed that there will be five other private sector representatives from the telecommunications and the IT industry. Aside from the representatives from the industry, there should also be representatives from the academe and from non-government organizations involved in the PII. The Presidents of the CIO Forum and of the GO-IT shall both automatically sit in the council as members.

The PII Task Force and the PII Secretariat shall support the PII council in its work. These two bodies are proposed for establishment under Action Plan No. 33 of this PII Framework Proposal.

The PII council may also create appropriate committees to assist it in the discharge of its functions.

The PII council shall meet at least once a month to discuss matters pertinent to the progress of PII development and deployment in the country of the PII.

The DOTC shall provide an appropriate amount from its budget for the operational expenses of the PII council during its initial year of operation. Budgetary requirements for the continued operations of the council during the succeeding years shall be secured from the contributions of the private sector and from concerned agencies of government as may be agreed upon.

The President of the Philippines shall make all appointments to the council. For the government representation, the respective department heads shall recommend government representatives to the council. For the private sector representatives, the different industry associations recognized by the DOTC and the NITC shall nominate the representatives from the private sector. The Secretary of Transportation and Communications shall select from among those nominated and shall endorse to the President of the Philippines the names of those recommended to sit in the council.

All private sector appointments shall be for a period of one year renewable for a period of another year. The objective is to always have in the PII council a fresh cross sectional representation from the different sectors of the telecommunications and IT.

As one of the proposed PII action plans and, in fact, one of its strategic initiatives, it is envisioned that the first organizational meeting of the PII council will be held during the first months of 1999.

The issuance of an Executive Order authorizing the creation of the PII Development Council is also one of the executive policy reform proposals presented in this study report and proposal.