The Philippine Quarterly IT Law Journal :: Volume 1, Number 2

THE PHILIPPINE QUARTERLY THE OFFICIAL PUBLICATION OF THE

ARELLANO UNIVERSITY SCHOOL OF LAW

IT Law Journal E-LAW CENTER AND IT LAW SOCIETY

VOLUME 1, N UMBER 2

what’s
Inside
E-COUR
E-COURT: CHANGING THE TRIAL ENVIRONMENT
OURT
by Ma. Cristina A. Ramos
1 T-C
E OURT: CHANGING THE
RIAL ENVIRONMENT

2E DITORIAL

P HILIPPINE
FIGURES

4 IWMD?
M

7 IRS
D
EANS OF

NTERNET
I
F ACTS

S THERE SUCH A THING AS

T HE W EB AS A
ESTRUCTION:
THE SUPPOSED THREAT OF
CYBERTERRORISM

D ECENCY
EGULATION VS . F REE
& n November 2003, a
Memorandum of Agreement (MOA) was
signed by Sen. Aquilino Pimentel Jr., Court
Administrator Presbitero Velasco Jr. and
Mayor Jejomar Binary of the City of Makati
for the installation of the country's first
electronic court.

The electronic court (E-court) project is an

PEECH (THE US CASE OF
ASHCROFT VS. ACLU)
FROM FREE TO FEE?
10
15 JC URISPRUDENCE
YBERLAW
IN
16 IGATT
NTERNATIONAL E-TRADE:
VS. GATS
17 LT EXICON OF C YBERLAW
ERMINOLOGIES
18 PC21 HILIPPINES AS KNOWLEDGE
ENTER OF A SIA IN THE
ST CENTURY
21 RAR MENDMENTS TO TEH 1998
ULES OF THE HOUSE OF
EPRESENTATIVES
E LECTORAL T RIBUNAL
(HRET)
22 L REGAL CITATION: WEBSITES
AS EFERENCE
26 [LBEGALWEB]
WWW.SUPREMECOURT.GOV.PH:
RINGING THE JUDICIARY
CLOSER TO THE PUBLIC
28 DH-L
E AW CENTER EXECUTIVE
IRECTOR ATTENDS
ARVARD INTERNET LAW
PROGRAM
initiative of Sen. Pimentel, driven by his desire
to allow the courts to maximize the use of
technology in enhancing the court processes.
For its initial budget, Sen. Pimentel allocated
P2 million of his Priority Development
Assistance Fund. A counterpart of P2 million
shall be provided by the city government of
Makati. The installation of E-courts in other
regional trial courts will depend on the
willingness of the local government units to
provide a counterpart amount to shoulder the
initial budget of said courts.
Features of the E-court
The E-courts will have three major
innovations, namely: computer-aided
transcription (CAT) facilities, case
administration or case management system
and tele-video conference room.
The computer-aided transcription facilities will
allow courts to provide transcripts of the
proceedings to be printed and distributed at
the end of every hearing. With these facilities,
parties will not have to wait for weeks or even
months before they can be furnished with
copies of the transcripts of the proceedings.
The introduction of this digital recording and
transcription system in our courts will best
implement Section 16 of the Bill of Rights
providing for the litigants' right to speedy
disposition of cases. It is well recognized that
the time spent by the parties in waiting for the
transcript of stenographic notes is a fact most
contributory to the current 'at a snail's pace'
disposition of cases. With the computerization
of the transcription, the parties will be assured
that before they leave the courtroom, they
will have the copies of the transcript of the
proceedings with them.
Moreover, for an enhanced case
management or case administration, the
project includes a computer linkage to the
Supreme Court. This feature will allow the
Office of the Court Administrator to effectively
monitor the cases pending in the trial court
and to check the letter's compliance with the
guidelines and rules issued by the Supreme
Court as regards the disposition of the cases
before it. Surely, this will be an effective
measure for the High Court to exercise its
supervisory functions over the lower courts.
Perhaps the best feature of the E-court project
is the tele-video conference room. This is a
closed-circuit video room which allows child
witnesses to testify outside the courtroom but
within its vicinity to prevent them from being
intimidated or influenced by the accused or
other persons. This facility will certainly protect
vulnerable witnesses especially children
whose appearance before the courts could
be traumatic to them.
To illustrate the advantage of the child witness
room, Atty. Ivan John Uy, Chief of the
>> [ 3 ] E-Court
1

T he e-Law Center
would like to publicly express its
deepest appreciation to the Arellano
University School of Law and the
Arellano Law Foundation, particularly
to Dean Mariano Magsalin Jr. and Mr.
Florentino Cayco III, for their
unwavering commitment to make the
law school at the forefront of cyber law
education, research, advocacy in the
country.
With their continuing support, the e-
Law Center was able to cause the
publication of this IT Law Journal, now
on its second issue. In my capacity as
Executive Director of the Center, I was
also fortunate to participate in the
2004 Internet Law Program of the
Berkman Center for Internet and
Society of the Harvard Law School last
May 2004. The website
www.lawphil.net is fast becoming the
leading repository of on-line legal
resources and jurisprudence in the
country.
On a personal note, I also wish to
commend the dedication and
invaluable contributions of Arellano
law students who compose the IT Law
Society headed by Michael Vernon M.
Guerrero. I recognize that their task
Editorial Board
C HAIRMAN
The Philippine Quarterly IT Law Journal :: Volume 1, Number 2
Atty. Jaime N. Soriano, CPA, MNSA
M EMBERS
Ailyn L. Cortez
Charilyn A. Dee
Jhonelle S. Estrada
Peter Joseph L. Fauni
Carlyn Marie Bernadette C. Ocampo-
Guerrero
Michael Vernon M. Guerrero
Ma. Cristina A. Ramos
Volume 1, Issue 2
© 2004. All Rights Reserved.
Reconstituted November 2006. Proportions
may differ slightly from original printed copy.
2
Editorial
of helping the Center in the realization
of its vision and various activities entails
a lot of personal sacrifice considering
the fact that almost all of them are
working students, not to mention the
rigors of their law studies.
Very few people in our country realize
how global developments in
information technology have sharply
increased during the last decade. The
observation that information technology
would affect the way people live is a
certainty, and not a mere fallacious
statement. As the demand for
information technology increases, the
need to address related legal concerns
and issues also grow in the same The issue also carries an article on
proportion. Hence, there is no iota of cyberterrorism, or as the author puts
doubt that the vision set by the law it: “Web as a Means of Destruction”
school in 1997 to produce technology (WMD). The recent decision of the US
oriented lawyers and professors Supreme Court in the case of “Ashcroft
appropriately responds to global vs. ACLU” on the constitutionality of
trends. Expect the e-Law Center to be the Child On Line Protection Act
at the forefront in the realization of (COPA) is also discussed in this journal.
this vision. The case presented a constitutional
clash between the government’s right
In this issue, the banner story is the to regulate Internet content and the
electronic court (e-Court) project right of the people to free speech. For
initiated by Senator Aquilino Pimentel the legal web section, this issue features
Jr. in cooperation with Supreme Court the website of the Philippine Supreme
Administrator Presbitero Velasco Jr. Court, accessible at
and Makati City Mayor Jejomar Binay. www.supremecourt.gov.ph.
The Philippine Quarterly IT Law Philippine IT Facts and Figures
Journal is the official publication of the e-
Women’s Internet Usage 1
in the Philippines
Law Center and the IT Law Society of the
Arellano University School of Law. It is
published quarterly. Women as % of Internet Users,
2000 51.0
Contributions to the Philippine Quarterly IT
Law Journal express the views of their authors Total Women Internet users
and not necessarily the views of the Arellano in 000s 76.5
University School of Law.
Total number Internet users
For subscriptions, contact: in 000s 150
THE PHILIPPINE QUARTERLY Internet users as % of total
It Law Journal population 0.6
e-Law Center
2/F Heilbronn Hall Female professionals and
Arellano University School of Law technical workers as % of total 65.1
Taft Avenue corner Menlo Street
Pasay City 1300 Philippines Female literacy rates 94.3
Tels. +63 2 404-3089, 404-3090, 404-3091
http://www.arellanolaw.net Source:
itlawjournal@arellanolaw.net 1
Hafkin and Taggart (2001)

<< [ 1 ] E-Court
Management Information System
Office (MISO) of the Supreme Court,
gave as an example the examination
of a child who was allegedly raped by
her father or uncle.
With the present procedure in our
courts, the child will have to expose
herself to an embarrassing and
traumatic experience connected with
the litigation of the rape case as she
will have to narrate before the court
the rape incident with the accused in
front of her and with all the relatives
and neighbors attending the hearing.
"It is already such a trauma being a
victim; you're all again a victim the
second time when you have to narrate
it in front of that kind of audience. For
an adult, it is already traumatic. "what
more for a child?" said Atty. Uy.
Certainly, this is what the child witness
room seeks to prevent-the traumatic
effect on the child brought about by
testifying in front of the judge, the
accused and other people. Aside from
the features mentioned above, the E-
court will also have a website for
dissemination of information to the
public regarding the cases filed
therein.
Currently, the project is lodged before
the Urban Development Division of the
City of Makati- The division is
preparing for the specifications of the
facilities to be submitted to the
procurement office of the Department
of Budget and Management.
Not a paperless court
The MISO Chief clarified that the E-
court project is not a court where
everything will be digitized so that it
would be a paperless court. The
project, as conceptualized, does not
include a system that allows electronic
filing of pleadings.
"The concept of the E-court is to
provide technological facility available
now that is most cost-effective and yet
will have significant impact on the
courtroom," Atty. Uy said.
As the project is intended to be
implemented the soonest possible time,
only those things that are workable in
a short period were considered,
placing special emphasis on the budget
constraints.
Doing a paperless court where
everything is digitized requires solving
a lot of other issues. First, a lot of rules
have to be changed; Second, a
paperless court in which everything is
digitized has a huge funding
requirement; Third, most of the judges
in the trial courts do not want to read
the text of the cases in the computer
monitor. They still prefer to read them
on paper. Most probably, therefore,
despite the e-filing, judges would still
ask to have the e-filed motions,
pleadings and other orders and notices
printed on paper. Taking these factors
into consideration, a paperless court
is not feasible at this point in time,
according to the MISO Chief.
Towards a digital court
Optimistic as he is, Atty. Uy said that
the High Court would probably start its
initiative towards a paperless court in
five years' time. However, he foresees
that full automation of the courtroom
will be selective at first.
The Philippine Quarterly IT Law Journal :: Volume 1, Number 2
Atty. Uy discussed the possible set-up
of a paperless court. He said that big
law firms would be allowed to enroll
in the digital court system so that they
will have an access to the system.
There would be a virtual terminal
wherein the documents (pleadings,
motions, etc.) from the enrolled law
firms will be sent to the Supreme Court
and it will be the Supreme Court who
will send the document to the trial
courts. He said that for authentication
purposes a centralized processing of
documents must be had. Otherwise,
there would be difficulties in the
management of traffic and in the
validation of the legitimacy of the law
firm.
Moreover, the MISO Chief stressed that
it would be very expensive if the
judiciary will install multiple servers lieu
of a central processing office. With the
country's dwindling resources, the
judiciary will just have to make the best
out of its finances.
With the current efforts of the Supreme
Court, the optimistic outlook of Atty. Uy,
the assistance of the likes of Sen.
Pimentel, and the cooperation of the
local government units, full automation
of the judiciary will soon be realized.
There will be expediency in the
disposition of cases. The rights of both
parties will be observed. They will be
accorded with protection from
emotional harm. Justice will be the end
in view. When that time comes, it will
not just be a victory of a party in a
case. Rather, it will be a victory of all
the party litigants as the best interest
of justice is served.
* Based on the interview with Atty. Ivan
John Enrile Uy (MISO Chief, Supreme
Court of the Philippines)

“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.”)

3

IS THERE SUCH A THING AS WMD?
THE WEB AS A MEANS OF DESTRUCTION: THE SUPPOSED THREAT OF CYBERTERRORISM
C Cyberterrorism
yberterrorism,
terrorism. Cyberspace is the non-
as
compound word, simply suggests the
convergence of cyberspace and
physical terrain created by computer
a
systems, [ 1 ] or that it is the “virtual
world,” i.e. the “symbolic – true, false,
binary, metaphoric representations of
information – that place in which
computer programs function and data
moves.” [ 2 ] Terrorism, on the other
hand, is the unlawful use or threatened
use of force or violence by a person
or an organized group against people
or property with the intention of
intimidating or coercing societies or
governments, often for ideological or
political reasons, [ 3 ] or simply as the
systematic use of violence as a means
to intimidate or coerce societies or
governments. [ 4 ] Construing the term
cyberterrorism in a manner similar to
the simple arithmetic of one plus one
may mislead people to think that
making a terrorist organization active
on the Internet, through website
postings and chatroom recruitments,
would already constitute
cyberterrorism. The term must be
The Philippine Quarterly IT Law Journal :: Volume 1, Number 2
distinguished from mere activism in the
manner the latter is being pursued
over the Internet.
Cyberterrorism is generally
understood as the unlawful attacks and
threats of attack against computers,
networks, and the information stored
therein when done to intimidate or
coerce a government or its people in
furtherance of political or social
objectives. [ 5 ] Emphasis is made on
the phrase “to intimidate or coerce,”
a degree further than to merely
“influence” a government or its
4
Features
By Michael Vernon M. Guerrero
people, however subtle the difference
may be in certain cases. This distinction
is important in differentiating
cyberterrorism from the growing
phenomenon of hacktivism.
It has been likewise suggested that the
definition of cyberterrorism is that of
“the premeditated, politically motivated
attack against information, computer
systems, computer programs, and data
which result in violence against non-
combatant targets by sub-national
groups or clandestine agents.” [ 6 ] This
narrow definition is premised on the
definition of terrorism provided by the
United States Department of State, [ 7 ]
and aims to differentiate itself from
other computer abuses such as
economic espionage and information
warfare, which are deemed
“legitimate” offensive and defensive
functions of governments.
In sum, whether or not governments
are excluded from the definition of
cyberterrorism, what is apparent is that
for an attack to qualify as that
pertaining to cyberterrorism, it should
result in violence against persons or
property, or at least cause enough
harm to generate fear. [ 8 ] Attacks
involving computer systems that lead
to physical injury or death, massive
disruption of public utilities, or severe
economic loss would constitute
cyberterrorism. On the other hand,
expensive nuisance or disruption of
non-essential services will not qualify
as cyberterrorism.
Who is a terrorist anyway
A terrorist is one that engages in acts
or an act of terrorism, [ 9 ] or a radical
who employs terror as a political
weapon. [ 10 ] The term, however, is so
indiscriminately used that one who
possesses firearms or explosives, and
having an adverse political opinion,
would easily qualify as a terrorist. The
prevalent situation, wherein
governments are the ones active in
labeling organizations and individuals
as terrorists, subtly suggests that
governments and their agents are
excluded as actors of terrorism, and
which, of course, is erroneous as
governments themselves are capable
of intimidating or coercing societies.
[ 11 ]
An accurate definition of terrorism
and terrorists has remained debatable,
as the circumstances involving it are
extremely complex and highly political.
It is not unusual thus that, for example,
a Palestinian organization such as the
Hamas is considered a terrorist
organization by Israel and the United
States for deploying suicide bombers
against the Israeli population, while
Palestinians consider Israel as a terrorist
state for committing alleged atrocities
against their people and assassinating
key militant leaders such as the late
Hamas leader Abdel Aziz Rantisi. [ 12 ]
Further, the statement “One man’s
terrorist is another man’s freedom
fighter” reflects genuine doubt about
the contemporary, else the state-
suggested, understanding of the term
“terrorist.” Strong disagreements, as
to the labeling of the Jewish group
“Irgun Zeva’i Le’umi” (abbreviated as
Etzel; Palestine, 1940s), the Viet Cong
(South Vietnam, 1950s), the
Provisional IRA (Northern Ireland,
1960s), and the African National
Congress (South Africa, 1980s) as
terrorist organizations, have been
made in the past. As the matter relates
to the Philippines, the Abu Sayyaf

Group (ASG) and the Communist Party
of Philippines/New People’s Army
(CPP/NPA) are listed as terrorist
organizations by the United States
Department of State. [ 13 ] A Philippine
communist guerilla would insist, of
course, on the validity of his struggle.
What CyberTerrorism is not
Internet-aided Activism. This is the
normal, non-disruptive use of the
Internet in support of an agenda or
cause, and in fact, utilizes the Internet
as a tool to communicate and
coordinate action. Activists may be able
to locate official policy statements,
analyses, discussions, and other
documents and items related to their
mission. They can publish information,
and disinformation, posted in their
website or in newsgroups, or distributed
in emails. They may participate in
dialogue and debate on policy issues
through e-mail, newsgroups, web
forums, and chat. They may use the
Internet to coordinate action among
members and with other organizations
and individuals. They may also pursue
direct lobbying of decision makers. It
is, however, observed that the Internet
is not currently an adequate tool for
public political movement as the more
successful organizations are those who
utilize traditional advocacy methods,
including the use of the more
expensive broadcasting media to reach
the public.
Terrorists groups likewise pursue the
activities of cyberactivism, as their
activities are in fact an activism of the
extreme kind. They put up their
websites to air their propaganda,
recruit supporters, communicate and
coordinate action. Their use of the
Internet is ancillary only to their usual,
if not violent, activities. To note:
a. The Hizbullah operates its own
website (www.hizbollah.org)
b. In 1996, Bin Laden’s
headquarters in Afghanistan was
equipped with computers and
communication equipment.
c. Hamas activists have been said to
use chat rooms and emails to plan
operations and coordinate
activities.
Hacktivism. It is the marriage of
Hacking (or aptly Cracking) and
Activism. Hacktivism is, in essence,
electronic civil disobedience, which
methods includes virtual sit-ins and
blockades, automated e-mail bombs,
web hacks and computer break-ins,
and computer viruses and worms. A
virtual sit-in or blockade is made
possible by the use of “hacking tools”
by a sizable number of individuals
against a particular website, such as
by saturating the target server with
network packets, among others, for the
purpose of calling attention to the cause
of the protesters by disrupting normal
operations and blocking access to
facilities. E-mail bombing is done by
bombarding a recipient with thousands
of messages at once, distributed with
the aid of automated tools. Web hacks
or Computer break-ins, which are
rather common, are done by gaining
access to websites and replacing some
of the content with their own, or by
tampering with the Domain Name
Service so that the site’s domain name
resolves to the IP address of another
site. Lastly, computer viruses and
worms have been used to spread
protest message and/or cause serious
damage to target computer systems.
Hacktivism methods such as web hack
and email bombing were used
extensively during the Kosovo conflicts
by both Serbs and Americans citizens,
with Chinese nationals following suit
attacking American websites after the
accidental bombing of the Chinese
embassy in Belgrade at that time.
Chinese and Taiwanese hackers
exchange web hack attacks in 1999
following Taiwan’s president statement
that China must deal with Taiwan on a
“state-to-state” basis. The use of
hacktivism methods, however, are not
exclusive to unarmed individuals and
organizations. It must be noted that:
The Philippine Quarterly IT Law Journal :: Volume 1, Number 2
a. In 1998, the ethnic Tamil guerillas
swamped Sri Lankan embassies
with emails with messages that
read “We are the Internet Black
Tigers and we’re doing this to
disrupt your communications.”
The volume of the emails sent was
800 emails a day for a period of
two weeks.
b. A file transfer protocol site
operated by the Arkansas Highway
and Transportation Department
was turned into a repository of
Osama bin Laden videos, jihadist
songs and terrorist incident videos
in July 2004. Links to those files
then were posted at al Ansar, a
radical Islamist Web site.
The Supposed Threat of
CyberTerrorism
Some security experts believe that
CyberTerrorism is an unsettling reality
due to the convergence of the physical
world and the virtual world. Barry C.
Collin of the institute of Security for
Security and Intelligence (Stanford
University) outlined the various
possibilities in which a cyberterrorist
may attack: (1) a cyberterrorist will
remotely access the processing control
systems of a cereal manufacturer,
change the levels of iron supplement,
and sicken and kill the children of a
nation enjoying their food; (2) a
cyberterrorist will place a number of
computerized bombs around a city, all
simultaneously transmitting unique
numeric patterns, each bomb
receiving each other’s pattern; (3) a
cyberterrorist will disrupt the banks, the
international financial transactions, and
the stock exchanges; (4) a
cyberterrorist will attack the next
generation of air traffic control systems,
and collide two large civilian aircraft;
(5) a cyberterrorist will remotely alter
the formulas of medication at
pharmaceutical manufacturers; and
(6) a cyberterrorist may decide to
remotely change the pressure in gas
lines, causing a valve failure, and a
block of sleepy suburb detonates and
burns. [ 14 ] Mark M. Pollitt of the FBI
5
 Laboratory challenges the plausibility
of Collin’s scenarios inasmuch as there
is sufficient human involvement in the
control processes used today. In the
cereal plant scenario, the quantity of
iron that would be required for the
cereals to be toxic is substantial that
assembly line workers would notice in
as much as the assembly line would
run out of iron sooner or later. In the
air traffic control scenario, pilots are
trained to be aware of the situation and
operate even without the assistance of
air traffic controllers at all. [ 15 ] Further,
in the computerized bomb scenario,
there is doubt for terrorists to deploy
sophisticated bombs, which are
dependent on complex systems and
other technical considerations, to
replace crude homemade bombs,
which are easier to deploy. On the
other hand, the gas lines scenario may
be an apparent threat, inasmuch as
there are unconfirmed reports of an
instance where hackers, in
collaboration with an insider, were said
to have a used a Trojan horse to gain
control of the central switchboard of
Gazprom, the Russian state-run gas
monopoly and the largest natural gas
producer and largest gas supplier to
Western Europe, which controls gas
flows in pipelines. [ 16 ] Notwithstanding
this isolated instance, most critical
utilities and sensitive military systems
enjoy the most basic form of Internet
security, i.e. that they are “air-gapped”
or in other words are not physically
connected to the Internet and are
therefore inaccessible to outside
hackers. It would be a leap of
The Philippine Quarterly IT Law Journal :: Volume 1, Number 2
imagination to consider the immediate
possibility of a hacker to control
computers that would launch nuclear
weapons, or to hijack satellite systems
or other high-consequence assets. It
would also be a leap of imagination to
consider the contamination of water
supply and explosion of chemical
factories, tasks which are harder to do
physically, can be made instantly just
because of the prominence of the
Internet. [ 17 ]
6
The bottom line remains that there has
been no instance of anyone ever
having been killed by a terrorist using
a computer. There has been no
evidence that any terrorist organization
has resorted to direct use of computers
and computer networks for any sort of
serious destructive activity. At this time,
the concept of cyberterrorism as a
reality is in the same level of the
phantom of weapons of mass
destruction that are supposed to be
developed and stashed in Iraq.
Cyberterrorism is not an immediate
reality.
Focusing on the real threats
Dismissing the immediate threat of
cyberterrorism, however, does not
warrant complacency. Terrorism is as
real as computer crimes are. Although
they 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 or
infrastructure – 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 has
a political agenda or not.
In the past, there have been prominent
computer-aided attacks on critical
utilities, some of which are:
a. Water supply and sewage. In
April 2000, a disgruntled
consultant-turned-hacker in
Maroochy Shire, Australia
compromised a waste
management control system and
loosed millions of gallons of raw
sewage on the town. The former
insider tried to unleash the waste
in 46 tries, with the personnel
managing the infrastructure failing
to detect the first 45 tries.
b. Transportation. In 1997, a
hacker shut down the control tower
services as the Worcester,
Massachusetts airport. Although it
did not cause any accidents,
services were affected.
c . Emergency services. In the
United States, in 1997, a Swedish
hacker jammed the 911
emergency telephone system
throughout west-central Florida. A
Louisiana man made a similar act
in 2002 by tricking a handful of
MSN TV users into running a
malicious e-mail attachment that
reprogrammed their set-top boxes
to dial 911 emergency response.
He was arrested February 2004
and was charged with
CyberTerrorism.
d. Government services. In 1998,
several government and university
websites received “denial of
service” attacks, preventing
servers from answering network
connections and crashing
computers. This has been a
common occurrence in the past
years. On the other hand, also in
1998, the US Defense
Department’s unclassified
networks were penetrated,
allowing hackers to access
personnel and payroll information.
It is thus necessary that computer asset
managers should be aware which
systems should be “air-gapped” from
other networks to prevent the risk of
intrusions by unauthorized personnel,
if not crackers, or loosely, hackers.
Precaution should be taken as to issues
of security vis-à-vis new technology
that may deployed, including those
pertaining to wireless technology.
Public policy should be clear as to the
minimum standards required in the
maintenance of computer systems in
>> [24] Is there such a thing as WMD?

INTERNET DECENCY REGULATION
(THE US CASE OF ASHCROFT VS. ACLU)
O n June 29, 2004, the US
Supreme Court upheld the ruling of
the Court of Appeals for the Third
Circuit enjoining the enforcement of
the Child Online Protection Act (COPA)
because the law "likely" violated the
free-speech clause of the First
Amendment of the US Constitution.
The decision was reached by the High
Court in the case of Ashcroft, Attorney-
General v. American Civil Liberties
Union, et. al. (No. 03-218) in a
narrowly divided vote of 5-1.
Factual Antecedent
Alarmed over the exposure of minors
to sexually explicit materials in the
Internet, US Congress enacted the
Communications Decency Act of
1996. This law sought to penalize
persons and organizations that
knowingly transmit or display obscene
or indecent materials and messages
to minors over the Internet. In a
constitutional challenge posed by the
American Civil Liberties Union in the
case of (521 US 844), the US
Supreme Court in 1997 struck down
this law for violating First Amendment.
The Court argued that the law was not
narrowly tailored to serve compelling
governmental interest and other
regulatory alternatives, that are least
restrictive, are available.
With the constitutional nullity of the
Communications Decency Act, the US
Congress, a year later, enacted COPA
also in response to the clamor against
Internet pornography. The law imposes
a hefty fine and six months
imprisonment for knowingly posting
website contents for commercial
purposes that are harmful to minors.
Features
VS.
By Jaime N. Soriano
The law also provides for an
affirmative defense to commercial web
speakers who restrict access to harmful
materials by requiring the use of credit
cards and other measures feasible
under available technology. In
determining whether or not an Internet
material is harmful to minors, the law
calls for the application of the following
standards: (i) contemporary
community standard test, (ii) depictions
of sexual act or exposure of sexual
organs, and (iii) the lack of serious
literary, artistic, political or scientific
value for minors of the web content
taken as a whole.
Expectedly, civil libertarians also
submitted COPA to judicial scrutiny. In
February 1999, a US District Court
for the Eastern District of Pennsylvania
issued an injunction preventing the
government from enforcing the law.
The District Court held that COPA was
invalid because there is no way to
prevent minors from harmful material
on the Internet without also burdening
adults from access to protected speech.
Restricting access through credit cards
or adult access codes as affirmative
defense would unduly burden free
speech. The court likewise found that
government failed to prove that the law
was the least restrictive means
available to achieve the public goal of
restricting harmful materials to minors
in the Internet.
On appeal, the Third Circuit Court of
Appeals affirmed the findings of
unconstitutionality of COPA by the
Federal District Court but on a different
ground, The appellate court anchored
its ruling on the fact that the
contemporary community standards
The Philippine Quarterly IT Law Journal :: Volume 1, Number 2
FREE SPEECH
test' provided for by the law would
essentially require web content to abide
by the most restrictive community
standards given the peculiar
geography-free nature of cyberspace.
The standard imposed by the law was
unconstitutionally overbroad, according
to the appellate court.
In a petition for certiorari filed in 2001
, the US Justice Department asked the
US Supreme Court to reverse the
decision of the Third Circuit Appellate
Court affirming the ruling of the
Federal District Court in Pennsylvania.
On May 13, 2002, the Supreme
Court, without making any categorical
ruling on the constitutionality of COPA,
rendered judgment holding that the
"contemporary community standard"
test, standing alone, is not
unconstitutionally overbroad. The High
Court emphasized that its decision was
limited on that narrow issue. At the
same time, it ordered the appellate
court to decide on a wide range of
First Amendment issues posed by the
law and determine whether the District
Court was correct in granting
preliminary injunction in the
enforcement of COPA.
On remand, the Third Circuit Court of
Appeals, on March 6, 2003, affirmed
its earlier decision finding COPA in
violation of the First Amendment
because it denied access to online
speech that is legally permissible for
adults. The appellate court also held
that the law was not the least restrictive
approach available to government to
serve the interest of preventing minors
from using the Internet to gain access
to indecent materials.
7
 Consequently, the US Supreme Court
was called upon to review the
constitutionality of COPA for the second
time.
The Majority Ruling
It can be recalled that COPA was
enacted a couple of years after its
predecessor-statute, the
Communications Decency Act of
1996, was declared unconstitutional
for violating the constitutional dictum
on free expression. Thus, the majority
opinion written by Justice Kennedy, and
joined by Justices Stevens, Souter,
Thomas, and Ginsburg, began with
the following declaration:
"The imperative of according
respect to the Congress,
however, does not permit us to
depart from well-established
First Amendment principles.
Instead, we must hold the
Government to its constitutional
burden of proof."
The Court, in this case, further
explained by saying that the US
Constitution "demands that content-
based restrictions on speech be
presumed invalid, and that the
Government bear the burden of
showing their constitutionality. This is
true even when Congress twice has
attempted to find a constitutional
means to restrict, and punish, the
speech in question."
The Philippine Quarterly IT Law Journal :: Volume 1, Number 2
To uphold the constitutionality of a
statute that regulates free speech, like
COPA, the Supreme Court, reiterating
the doctrine it laid down in Reno vs.
ACLU, said:
"A statute that 'effectively
suppresses a large amount of
speech that adults have a
constitutional right to receive
and to address to one another
. . . is unacceptable if less
restrictive alternatives would be
at least as effective in achieving
the legitimate purpose that the
8
statute was enacted to serve.'
xxxx When plaintiffs challenge
a content-based speech
restriction, the burden is on the
Government to prove that the
proposed alternatives will not
be as effective as the
challenged statute."' (citation
omitted)
The High Court noted that the Federal
District Court granted the preliminary
injunction on the pretext of the
proposition that other alternatives, less
restrictive and more effective than
COPA, are available to restrict
children's access to indecent materials.
These alternatives include the so-called
"blocking and filtering software".
Filters are less restrictive than COPA
because they "impose selective
restrictions on speech at the receiving
end, not universal restrictions, at the
source". Filters restrict minors from all
sorts of pornography, not only from
American websites. If COPA were
upheld, filtering software would
diminish its effectiveness because
content providers would simply move
their operations overseas, beyond the
jurisdiction of American courts. While
filters are not the perfect solution to
the problem being addressed by
COPA, the Court observed the failure
of government to show proof that the
mechanisms provided for under the
law is less restrictive than available
filtering technologies.
The Supreme Court also took note of
the findings of the Federal District
Court that verification systems, like
credit cards and access code, may be
the subject of evasion and
circumvention, even by the minors
themselves. In fact, the Congressional
Commission on Child Online Protection
indisputably found that filters are more
effective than age verification methods
in limiting minors from accessing
Internet pornography. Hence, COPA
failed the "least restrictive alternative"
test to justify a limitation on the exercise
of free speech under the First
Amendment.
In allowing the preliminary injunction
to stand, pending a full trial on the
merits by the District Court, the
Supreme Court was concerned about
the potential and extraordinary harm
the law posed on protected speech.
Despite the availability of affirmative
defense to possible violators, the Court
observed that web speakers would
likely resort to self-censorship than risk
the perils of criminal prosecution.
The majority of the highly divided court
recognizes however that the factual
circumstances of the case may not
reflect current technological realities.
And this is a serious flaw in any case
involving the Internet, as this technology
evolves at a rapid pace. The factual
findings of the District Court were made
five years ago, in 1999. In maintaining
the preliminary injunction and
remanding the case for trial on the
merits, the parties to the case would
be given ample opportunity to update
and supplement their respective facts
to reflect present-day technology, and
allow the District Court to decide the
case based on the current legal
landscape.
On remand, the Supreme Court does
not discount the possibility that
government may be able to prove the
constitutionality of COPA as the least
restrictive alternative available to satisfy
its legislative imperatives.
The Dissenting Opinion
In his dissenting opinion, Justice Scalia
finds the COPA constitutional and
should not be subject of an exacting
standard of review. Since the law
punishes only violators of commercial
pornography in the Internet - a form
of business activity that could be
banned entirely consistent with the
provisions of the First Amendment -
COPA does not raise any constitutional
concern.

Justices Breyer, O'Connor, and Chief
Justice Rehnquist also departed from
the majority opinion but agreed with
the majority that the law should be
subjected to the "most exacting
scrutiny". They argued that the "least
restrictive alternative" test is a
comparative term that cannot be
satisfied without examining "both the
extent to which the Act regulates
protected expression and the nature
of the burdens it imposes on that
expression".
The dissenters argued that in the first
place the Internet materials classified
as legally obscene does not enjoy the
mantle of protection of the First
Amendment citing the landmark case
of Miller vs. California (413 US 15).
The opinion also noted that the law
does not censor, in fact, the materials
within its ambit but merely requires
web providers, of content considered
harmful to children, to limit access
through a verification screen.
The minority justices also find that the
presence of the filtering system is not
an alternative legislative approach to
the problem of protecting minors from
commercial pornography. This system
is part of the status quo when Congress
enacted COPA. And by definition,
status quo is always less restrictive than
a new regulatory law for it "is always
less restrictive to do nothing than to do
something". They concluded that
filtering software, as presently
available, does not solve the problem
COPA seeks to address. It is precisely
the inadequacies of the filtering system
that prompted Congress to pass the law
rather than rely on its voluntary use.
The obvious fact is - that despite the
existence of this blocking and filtering
software, Internet pornography
continues to proliferate.
The dissenting view also attacked the
"less restrictive alternatives"
propounded by the majority calling on
the government to encourage the use
of blocking and filtering software. The
result might be an alternative that is
extremely effective but in the process,
will tax heavily on government
resources. Thus, there is no other less
restrictive way to advance the
compelling interest to protect minors
from Internet pornography. Hence,
COPA should be viewed as
constitutional within the framework of
the First Amendment. All told, the
minority justices of the Supreme Court
do not see any compelling and logical
need to remand the case to the District
Court for the reception of additional
evidence.
Impression
The ruling of the US Supreme Court
did not actually put an end to the
nagging constitutional issue of whether
or not the Child Online Protection Act
(COPA) violates the free speech clause
of the First Amendment. As stated in
the opening statement of the opinion
of the Court:
"We must decide whether the
Court of Appeals was correct
to affirm a ruling by the District
Court that enforcement of
COPA should be enjoined
because the statute likely
violates the First Amendment.
(italics supplied)
From this perspective and with the
remand of the case to the District Court
for trial on the merits, it is certain that
the US Supreme Court would be finally
pass judgment on the law for the third
time sometime in the future. It appears
from the court decision that the
constitutional permissibility or
impermissibility of the law hangs on
the balance based on the evidence that
would be presented before the District
Court on the "least restrictive
alternative" test. The final
determination on the constitutional
challenge to COPA could still go either
way.
The Philippine Quarterly IT Law Journal :: Volume 1, Number 2
The Internet is a new form of mass
media that obviously fits within the
framework of constitutionally protected
speech in a democratic space. In this
jurisdiction, the Bill of Rights of the
1987 Constitution provides:
"Sec. 4. No law shall be passed
abridging the freedom of
speech, of expression, or of the
press, or the right of the people
peaceably to assemble and
petition the Government for
redress of grievances."
Since cyberspace is not defined by any
territorial boundaries the most serious
challenge to governments all over the
world is how to regulate and exercise
jurisdiction over Internet activities that
serve as avenues for the commission
of crimes, and destroy the basic social
norms and values of society like
pornography or obscenity. To a certain
extent, the Internet may capitulate the
state's traditional exercise of police
power unless governments act together
to address this issue in unison, through
treaties and international covenants.
Some has maintained the view that this
state regulation is unnecessary and will
only hamper the full development of
information technology to serve the
ends of society. Their view is to allow
the advent, and look forward to the
introduction, of new technologies that
would effectively deter the use of the
information superhighway in the
commission of illicit, illegal, immoral
or even plainly unacceptable web
practices, an act of self-regulation.
The constitutional challenge on COPA,
beyond the clash between a
compelling state interest to shield
minors from pornography and the
freedom of adults to free expression,
is also a reflection on who should, and
can adequately, regulate the Internet:
state laws or technology itself.
9
 Features

FROM FREE TO FEE

FEE??
by Ailyn L. Cortez

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

G Taxation in the Philippines

overnments make
exactions for revenue in order to
support their subsistence and execute
their indisputable and genuine
objectives. The underlying tone of
taxation is governmental necessity,
without it government can neither exist
employ the Transmission Control
Protocol/ Internet Protocol, or any
predecessor or successor protocols to
such protocol, to communicate
information of all kinds by wire or
radio. [ 3 ] Indeed, it is a network of
networks.

John Gage, as cited by Lallana (2003),

13. Australia
14. Netherlands
15. Spain
16. India
17. Poland
18. Sweden
19. Malaysia
20. Philippines
10,630,000
9,730,000
7,890,000
7,000,000
6,400,000
6,020,000
5,700,000
4,500,000

nor endure. "Taxes are the lifeblood
of the government and their prompt
and certain availability are an
imperious need." [ 1 ] As noted by Justice
Vitug (2000), this phrase has often
been used to justify the need for
summary remedies in the collection of
taxes. To borrow the words of Cooley,
as cited by Justice Vitug (2000), the
power to tax "reaches to every trade
or occupation, to every object of
industry, use or enjoyment, to every
species of possession; and it imposes
a burden which, in case of failure to
discharge, may be followed by seizure
or confiscation of property. No attribute
of sovereignty is more pervading and
at no point does the power of the
government affect more constantly
and intimately all the relations of life
than through the exactions made
under it. [ 2 ]
The Philippine Quarterly IT Law Journal :: Volume 1, Number 2
argues that - "The Internet is not a thing,
a place, a single technology, or a mode
of governance: it is an agreement. In
a language of those who build it, it is
protocol, a way of behaving. What is
startling the world is the dramatic
spread of this agreement, sweeping
across all arenas - commerce,
communications, governance - that rely
on the exchange of symbols." [ 4 ] The
nature of Internet communication is
decentralized where its use is limited
only by imagination without any
boundaries in mind; it does not follow
a exact, conventional or uniform
pathway. As such, the Internet has
become the fastest growing medium.
In a country comparison of Internet
posted by CIA World Factbook, the
Philippines ranked 20 with 4.5 million
Internet users as of 2003. Hence,
revenue authorities see the new golden
Source: CIA World Factbook
Unless otherwise noted,
information in this page is
accurate as of January 1, 2003
Taxation and the Internet
E-commerce means any transactions
conducted over the Internet or through
Internet access, comprising the sale,
lease, license, offer or delivery of
property, goods, services, or
information, whether or not for
consideration, and includes the
provision of Internet access. [ 5 ] With
the explosion of e-commerce, it is
understandable why the government
has been grappling to extend its
collection arm in the Internet. In 2001,
the Department of Finance of the
Philippines announced that it would be
reviewing the possibility of taxing e-

goose that lays the golden eggs of the commerce transactions. Indeed, an
At present, e-commerce transactions new millennium. interesting business. But how it is
within the Philippines are not taxed. taxed? By whom and where? A
Since the total value of such business Country Internet users complex matter with complex issues
is still small, however, closing this 1. United States 165,750,000 to resolve.
loophole is not yet a priority for the 2. Japan 56,000,000
government... not just yet. 3. China 45,800,000 In Internet Transactions, the primary
4. United Kingdom 34,300,000 device used for Internet commerce is
Internet 5. Germany 32,100,000 the World Wide Web Page. The World
6. Korea, South 25,600,000 Wide Web can be simply defined as a
The term Internet means collectively 7. Italy 19,250,000 multimedia interactive portion of the
the myriad of computer and 8. Russia 18,000,000 Internet, which visually resembles a
telecommunications facilities including 9. France 16,970,000 catalogue or brochure and provides a
equipment and operating software, 10. Canada 16,840,000 presence for its operators on the
which comprise the interconnected 11.Brazil 13,980,000 Internet. The best comparison may be
world-wide network of networks that 12. Taiwan 11,600,000 to an international telephone directory

10

combining both white and yellow
pages. The main difference, however,
is that once a user finds an entry that
interests him, he may then retrieve
more detailed information by following
electronic links to other related pages.
A common transaction on the Internet
is the downloading, or retrieval, of
software from a computer located in
another country. A user begins the
process by using a "directory-
assistance"-like search tool to find
pages that fit his search parameters.
Once a suitable entry is selected, the
user clicks on it and his computer goes
to that page. The user will usually then
find a text and graphical environment
where for example, software products
are described and offered. The final
step when the user requests a program,
for example a or business application,
and it is sent, usually in minutes, right
to the user's computer. If the operators
of a given Web site charge for a
product or service, a credit card or
other electronic payment system may
be used. [ 6 ]
Clearly, consumers are getting a ride
on sales tax from online purchases at
no cost. Perhaps, they are reaping the
benefits of a of a temporary tax
haziness that needs a well-structured
system to eradicate ambiguity. Easier
said than done.
The difficulties arise because most tax
laws and regulations were passed
before the beginning of electronic
commerce. Such laws and regulations
are rooted in concepts of physical
location or presence. Determining
where the transaction is sited and
identifying key taxing points are often
important to the administration of
taxes. Then again, the intricacies
revolving around the Internet poses a
difficult issue in identifying the key
taxing points of Internet transactions.
While tax compliance relies on such
geographical restrictions, such may not
exist in the cyber world to identify key
taxing points. Indubitably, the multi-
faceted nature of Internet and e-
commerce makes Internet taxation an
extremely complex and compound
matter. Hopeless to find new sources
of income, a taxman should defy the
lure of saying: "Tax the Internet now,
ask questions later."
Opposing Views on Internet
Taxation
* Positive. The first group views
that taxing the Internet is just and
reasonable. For them, the idea of
exempting Internet transactions
from taxes is illogical. No
discrimination can be had between
an online and brick-and-mortar
business. To allow otherwise would
be equivalent to granting such
business a clear tax subsidy.
Moreover, they are convinced that
the online retail market will soon
account for sizable chunk of
national revenue. This is
evidenced by the growing trend
in Internet and online business
activities. Hence, failure to take
advantage of this will mean lost
revenues for the government.
* Negative. The second group
believes that a free market on the
Internet will encourage commerce
to exploit this innovative means of
exchange instead of the traditional
system. Internet is too young and
fragile a medium for its derived
profits to survive the complex web
of national and local taxes.
Merchants who utilize this mode
of transaction are anxious of the
complex collection system that
might be compulsorily
incorporated in their existing
process. Moreover, the
vulnerability of Internet transaction
should not be opened to the
elements of taxation as this would
discourage people from bringing
into play this revolutionary method.
As a consequence, it will
accelerate the technological
advancement and intensification of
the Internet. To put it simply, this
group considers Internet taxes
would significantly jeopardize the
growth of e-commerce.
The Philippine Quarterly IT Law Journal :: Volume 1, Number 2
Proposals of Taxing the Net
The primordial consideration in Internet
Taxation is the type of tax that would
be utilized. Here are some proposals
in taxing the net.
Bit Tax. The term bit tax means any
tax on electronic commerce expressly
imposed on or measured by volume
of digital information transmitted
electronically or the volume of digital
information transmitted electronically
or the volume of digital information
per unit of time transmitted
electronically, but does not include
taxes imposed on the provision of
telecommunication services. [ 7 ] The
proponent of the bit tax is Arthur
Condell, a Canadian economist. As
quoted by Atty. Jovi Tanada Yam,
"whether the digital bit is part of a
foreign exchange transaction, a
business teleconference, an Internet e-
mail or an electronic check clearance,
each bit is a physical manifestation of
the New Economy at work. Thus, the
new wealth of nations is to be found in
the trillion of digital bits of information
pulsing through global networks." [ 8 ] It
represents a new tax base that is at
the heart of the new economy. It is also
a new tax base that is growing. It is a
tax base that can be easily identified,
one where collection is in few hands.
In the New Economy, it would be a tax
that is difficult to avoid. [ 9 ]
Soete's Tax proposal. The advocate
of this proposal is Luc Soete, an
economist who served as chairman of
a European Commission advisory
panel on information technology issues.
His idea is to tax cyberspace bit by bit.
He says that "the new tax base for
Internet commerce is to be found in
these fast moving bits. We need to
adjust the taxation forms to make sure
they will include these new Internet
activities." [ 10 ] The suggested bit tax is
a turnover on interactive digital traffic.
"Moving from the old highway to the
metaphor of a new highway, Soete's
proposal is to tax the digital traffic on
the Information Highway. Whether the
tax is levied an the traffic carried by a
11
 fiber optic cable or on microwave or
whether the tax is levied on interactive
satellite traffic, the bit tax presents a
way of accessing the new wealth being
created by the New Economy." Soete
suggested the tax rate to be .000001
US cents per bit, or about one US cent
per megabit. Soete contrasted the bit
tax to the VAT: "The main consumption
and production tax levied in the
European countries is the VAT. VAT
allows material goods and services to
be taxed at their various points of
production and value creation - in a
way that is quite easy quantifiable." in
cyberspace, Soete's bit tax would
replace the VAT on immaterial goods
and services. The idea is to levy taxes
only as "a proportion of the intensity of
the information transmission." The term
"transmission" means the number of
bits flowing across the wires, not their
"transaction value." [ 11 ]
Loopholes in these proposals.
Soete's bit tax has been attacked on
many aspects. At what rate should
nations tax digital bits? How would the
new taxes be collected? Critics raise a
ruckus that a bit tax will prove injurious
to the future of the Internet because it
would be extremely expensive for
consumers to pay the bit tax. At Soete's
rate of one cent per megabit, you can
just imagine that cost of downloading
a two-hour movie with a transfer rate
of two megabytes-per-second.
Besides, the cost of the procedure and
technical means for collecting such a
tax would likely be higher than the
The Philippine Quarterly IT Law Journal :: Volume 1, Number 2
revenue, especially as micro-payments
for minuscule chunks of information
become commonplace. Moreover,
some technologies - like satellite
communication - simply make it
impossible to monitor bitstreams. On
the political front, the bit tax was
temporarily rejected by the European
Union. Soete admitted that "the core
goal of the European Union policy is
to accelerate the diffusion of
information technology in Europe. And
any idea that could slow down
investments and growth in this areas
being rejected - just because it comes
at the wrong time." The European
12
Union has joined the US, Japan and
other like-minded countries in keeping
the Internet duty-free, until the dust of
cyberspace settles. [ 12 ]
Internet Taxation in the United
States
President William J. Clinton signed the
Internet Tax Freedom Act on October
21, 1998. On November 28, 2001,
President George Bush signed into law
a two year extension to the ITFA. It is
an act that imposed a three-year
moratorium on new taxes on Internet
access fees. The main goal of this act
was to prohibit new taxes from being
levied on the using the Internet, such
as those paid by customers of America
Online. [ 13 ]
Sales Tax or Use Tax. The term
sales tax or use tax that is imposed on
or incident to the sale, purchase,
storage, consumption, distribution, or
other use of tangible personal property
or services as may be defined by laws
imposing such tax and which is
measured by the amount of the sales
price or other charge for such property
or service. [ 14 ]
The current moratorium does not
exempt an online transaction from a
state's sales tax. The moratorium has
never been on sales taxes- that is a
misnomer. The moratorium is on new
taxes. [ 15 ] If a state in its exercise of
taxing authority chooses to levy a sales
tax, that liability exists without regard
to the medium used to make the
purchase (in person, by telephone or
mail, or online). If the business does
not meet the constitutional test of a
substantial physical presence in a states
that would require the business to
collect and remit the sales tax to that
state then consumers in those states
that impose sales taxes who make
purchases from out-of-state businesses
are liable to pay a use tax on those
purchases. [ 16 ]
Nexus Rule. Nexus refers to the
physical presence - such as a sales
force, distribution center, or a
warehouse - a retailer must have in a
consumer's state to be required by that
state to collect sales taxes.
The US Supreme Court in Quill
Corporation v. North Dakota, [ 17 ]
pronounced that in order for an out-
of-state company to collect sales taxes
from another state, physical presence
(nexus) requirement must be
established. This means that any taxes
levied on Internet sales must be the
same as those levied on the same sales
if they occur in a physical store or
through mail order. A state may not,
for example, assess one tax rate for
merchandise that is purchased in a
physical store while levying another tax
rate for the same merchandise
purchased through the Internet. The
Internet Tax Freedom Act proscribes
this. To have a nexus, a company must
have a store, office, warehouse or a
salesperson in That locality.
Purposes of ITFA. The Internet Tax
Freedom Act moratorium prevents
states from enacting discriminatory
taxes on online sales. For instance,
under the moratorium, a state is
prohibited from charging a new or
higher tax on online sales that is not
likewise levied on sales achieved
offline. [ 18 ]
As pointed out by Bick (2000) another
purpose of the Internet Tax Freedom
Act is to prohibit double or multiple
taxation of a single transaction. For
example, if the buyer of a product must
pay taxes on the purchase and the
seller of the same product must pay
taxes on the sale to that particular
buyer, this is a multiple tax and is
prohibited by the Internet Tax Freedom
Act. Another example would be if an
e-vendor is located in a state that
sources such income to the state and
taxes it where the income-producing
activity occurred, and sales are made
to a jurisdiction that sources such
income to the state where the benefit
is received and taxes levied, double
taxation is possible on the same
transaction. [ 19 ]

To give effect to the purposes of ITFA,
the establishment of Advisory
Commission on Electronic commerce
was convened.
Advisory Commission on
Electronic Commerce (ACEC).
The Internet Tax Freedom Act
established the commission to study the
application of taxes to e-commerce and
telecommunications. The commission
was composed of three federal, eight
private, eight state and local
government representatives, including
Utah Gov. Michael O. Leavitt, Virginia
Gov. James Gilmore, and Washington
Gov. Gary Locke. The commission sent
a report to Congress on April 12,
2000, but failed to reach the required
supermajority (two-thirds) to make
findings and make recommendations.
The commission refused to accept a
"minority" report from Gov. Leavitt on
behalf of state and local government
representatives. [ 20 ] The goal of the
commission was to study the issues
surrounding Internet taxation and
report back with a formal
recommendation.
At the heart of the controversy are
sales taxes. Currently, states can't force
an out-of-state business to collect them
unless that business has a physical
presence in state. The result is that
when a purchase is made across state
lines, sales taxes often aren't paid. Few
states have made any real effort to
collect those "lost" taxes directly.
Instead, state and local officials want
Congress to let them draft out-of-state
firms as tax collectors. However, the
commission was not able to secure the
two-thirds vote needed to deliver a
formal recommendation.
Think Globally, Act Locally
Everyone makes an effort to
understand these complex issues. As
correctly pointed out by Atty. Jovi Yam,
"the best way all of us can help the
Net grow is to work collaboratively on
what the Net really needs: an
uncomplicated infrastructure for fused,
convoluted, cross-border Internet
Commerce. The tax issue is just one
of many complicated questions." And
until a simple principle can be
propounded, that Internet businesses
would be taxed no more and no less
that they are in the physical world, if
not, a moratorium on taxes should be
declared. [ 21 ] In achieving this, global
standards to prop up the Net should
be established.
Uniform Business Locator. One
of the major problems facing tax
authorities in the context of electronic
commerce is that of the identify of the
parties involved in commercial
transactions. In consumer sales over
the Internet, the parties may not be
known to each other, lest it be via the
company handling credit card
transactions. In the use of digital
money, the ability to trace transactions
and identify those involved may be
even more difficult. Knowing who you
are dealing with is a right if not a
necessity of the buyer. It is also
necessary for fiscal accountability. To
resolve this issue, Alan McCluskey
(1998) proposed the Uniform Business
Locator. This method uniquely identifies
a business or trader and attributes that
entity to a specific country. There would
be some difficulties with attributing a
company to a given jurisdiction. It
remains to be seen if the definition of
the domicile of a company is
satisfactorily covered by current tax
legislation and how one would deal with
multiple domiciles. One might well
need a system that catered for multiple
mappings of a company to varying
jurisdictions. UBLs would not need to
be memorized as they are used
essentially as handles to call up more
detailed and readily understandable
information from the database. As a
result they could be randomly
generated, unique alphanumeric
strings except for the part designed to
identify the country. The latter might
easily be done using the current two
letter ISO country codes. Subsidiaries
or branches within a company could
possibly be treated like subdomains of
the UBL of the parent company.
The Philippine Quarterly IT Law Journal :: Volume 1, Number 2
For a moderate fee, registration with
an online commercial registry could
be done via the web. Companies or
traders would be required to provide
the necessary information such as the
owner's name, his or her physical
address, tax domicile, telephone
number, fax number, e-mail address,
web url and domain name. A UBL
would then be attributed and would be
required in all business transactions
including credit card payments and
bank transfers as well as for all
dealings with tax authorities All UBL's
would be contained in a planet-wide
distributed database a bit like for the
domain name system. Clicking on a
UBL on a web page would call up a
small window containing the entry for
that company. The outstanding question
with such a system would be that of
the authentication of the company or
trader concerned and the verification
that the UBL provided by a web page
or the trader's electronic caddy was
really that of the trader in question. A
part guarantee in the latter case could
be provided by binding payments to
the UBL - putting somebody else's UBL
would lead to the money going to that
other company. [ 22 ]
Streamlined Sales Tax Project.
This project is an effort by states, with
input from local governments and the
private sector, to design, test, and
implement radically simplified sales
and use tax system for the 21st century.
Spearheaded by the National
Governors Association, the
Streamlined Sales Project would
require participating states to have only
one tax rate for personal property or
services effective by the end of 2005.
Included in those services would be
online sales. [ 23 ] The goal of the Project
is to substantially reduce or eliminate
the costs and burdens of sales tax
compliance for businesses through a
combination of simplified laws and
administrative policies and the
implementation of a no-cost system for
retailers. [ 24 ]
Under the SSTP model legislation,
states will develop uniform product
13
 codes and sourcing rules, uniform
definition of what is taxable, and
simplify administration policies that are
consistent with other participating states
in the compact. This NGA-led project
is seeking to standardize sales tax laws,
making them e-commerce friendly. In
November 12, 2002, a draft for the
proposed subject was finalized and
named Streamlined Sales and Use Tax
Agreement.
As such the US Supreme Court
specifically left it to the Congress to
"decide whether, when, and to what
extent the States may burden interstate
mail order concerns with a duty to
collect. [ 25 ] Congress has the power to
modify the existing physical presence
standard on which businesses have
relied since 1967 (National Belles
Hess Inc. v. Department of Revenue
Illinois 386 U.S. 753 (1967)) and
provide the states with the authority to
impose new collection responsibilities
on out of state vendors. Neither the
Constitution nor the Court imposes any
limitation on Congress' power to
regulate interstate commerce in this
regard, and the business community
urges the Congress to require
meaningful simplification of the states'
sales and use tax regime before
undercutting the important bright-line
standards on which businesses
historically have relied. [ 26 ]
Philippine Set-up. The Nexus rule
exists because our own Supreme Court
has said that the government has no
The Philippine Quarterly IT Law Journal :: Volume 1, Number 2
authority to collect taxes from out of
town merchants. Technically, the
consumer is supposed to pay usage
tax on any purchase in which the
merchant has not collected sales tax.
When you purchase items in a bricks-
and mortar store, you can pay any and
all local and sales tax that apply to your
purchase as part of the transaction. The
business acts as a tax collector for the
local governments". [ 27 ] If you purchase
something through the mail, you pay
taxes on the transaction only if you live
in the same location as the retailer's
14
business establishment. However, if you
do not live in the same location as the
retailer, you do not pay taxes to that
retailer for your state. [ 28 ] Following
an online purchase, consumers are
supposed to go to the Bureau of Internal
Revenue Web site to fill out a form
documenting their purchase, where
they are charged a fee. [ 29 ] As for now,
the government cannot demand out-
of-town merchants collect sales tax
unless a company has a nexus, or
physical presence within that locality.
Conclusion
In the Philippines, the basic question is
to tax or not to tax On-line Transactions.
Surely, the BIR is seeing a potential
gold mine. However we should not
discount the fact that E-commerce in
the country is relatively young. It seems
best that our government takes a back
seat for a while and carefully
scrutinizes the possibility of exploring
the new heights of Internet Taxation.
The Department of Finance should
make a thorough study and
investigation in dealing the complicated
nature of Internet Taxation. Haste
makes waste. If the Internet is seen as
a tax panacea, the lack of legal
framework to address the issues of
Internet's technological leaps and
bounds is a significant barrier to the
advocates of taxing the Net. Why kill
the goose that lays the golden eggs? A
Well-developed tax policy in traversing
the Information SuperHighway will
definitely preserve the goose that lays
the golden eggs without sacrificing the
fundamental principles of sound tax
system: Fiscal Adequacy,
Administrative Feasibility and most
importantly Theoretical Justice.
Taxing the net should be fair to the
average taxpayer. The notion of
neutrality on online transaction should
prevail because On-line commerce is
not radically different from any other
form of commerce, but also and
above all, on the basis of their declared
intention the tax authorities should not
bias market choices by their action. The
following are the basic issues to be
resolved by the Department of Finance
in achieving a polished and well-
developed scheme of taxing the net.
1. Auditing System. Business
establishments issue receipts in
every transaction. Pursuant to this
receipts, the BIR can keep track of
the operations of the business.
With the advent of Internet
Transactions, BIR should come up
with the scheme of an efficient
method of determining On-line
transactions in lieu of the receipts
issued in ordinary mortar and brick
business.
2. Tax planning for E-business. Since
most of our tax laws were enacted
prior the advent of the Internet, a
collaboration of the DOF, IT experts
and businesses taking advantage
of the NET will be an edge in
devising a structure with the
corresponding tax implications of
the Internet Transactions.
3. Efficient Tax Strategy. In taxing On-
line transactions, the issue boils
down into the efficiency of tax
administration. It would be sheer
idiocy to propose taxing measures
in Internet transactions while BIR
has been missing out in collecting
the proper amount of revenue
from other taxpayers. If the
problem is the system, all tax
measures are bound to fail.
"There are no obvious solutions at this
point, but there are many questions as
to how to make future tax laws work.
Many are concerned about the expense
of developing a tool that would allow
online merchants to convert the sales
tax on purchase depending on the
customer's whereabouts. Also, there
are worries about the use of encryption
technologies that could allow people
and steer around a Net Sales tax. For
now, e-commerce continues to grow
>> [25] From Free to Fee

A & M RECORDS, INC., ET AL. VS. NAPSTER INC.
(This section will be a regular feature
of the journal to highlight significant
cases decided in the Philippines and
in foreign jurisdictions relating to
information technology)
by Jhonelle S. Estrada
Facts: Plaintiffs are engaged in the
commercial recording, distribution and
sale of copyrighted musical
compositions. It was alleged in the
complaint that NAPSTER is a
contributory and vicarious copyright
infringer. NAPSTER facilitates the
transmission of MP3 files between and
among its users, through a process
called "peer to peer" file sharing.
NAPSTER allows its users to: 1) make
MP3 music files stored on individual
computer hard drives available for
copying by other Napster users; 2)
search for MP3 music files stored on
other user's computers; and 3) transfer
exact copies of the contents of other
users' MP3 files from one computer to
another via the Internet. The
NAPSTER's Music Share Software
made these functions available without
charge from NAPSTER's Internet site.
The Plaintiffs claimed that NAPSTERS
users were engaged in the wholesale
reproduction and distribution of
copyrighted works, all constituting
Direct Infringement. They also claimed
that NAPSTER, is secondarily liable for
the Direct Infringement under two
doctrines of copyright law: contributory
copyright infringer and vicarious
copyright infringement. NAPSTER on
the other hand contends that its user
do not directly infringe plaintiffs'
copyrights because the users are
engaged in the fair use of the material
and that it doe not know of the direct
Jurisprudence in CyberLaw
239 F3d 1004 (9th Cir. 2001)
infringement Plaintiffs seek injunctive
relief.
Issue: Whether Napster can be held
liable for direct infringement?
Held: The evidence showed that
majority of Napster users use the
service to download and upload
copyrighted music; acts that constitutes
direct infringement of plaintiffs' musical
compositions, recordings. It was also
established that Napster users infringe
at least two of the copyright exclusive
rights; the rights of reproduction and
distribution. Its contention that its users
do not directly infringe plaintiffs'
copyrights because its users are
engaged in fair use of the material
cannot be given weight. Several factors
were considered to determine its
defense of fair use of the material.
These are 1. the purpose and
character of the use, 2. the nature of
the copyrighted material, 3. the
"amount and substantiality of the
portion used" in relation to the work as
the whole; and 4. the effect of the use
upon the potential market or the value
of the work. The "purpose and
character" factor focuses on whether
and to what extent the new work is
'transformative' this factor also requires
the court to determine whether the
alleged infringing use is commercial
or non-commercial. The court
determined that Napster users engage
in commercial use of the copyrighted
materials. Direct economic benefit is
not required to demonstrate a
commercial use, but it is the repeated
and exploitative copying of copyrighted
works. The record shows that repeated
and exploitative unauthorized copies
of copyrighted works were made to
The Philippine Quarterly IT Law Journal :: Volume 1, Number 2
save the expense of purchasing
authorized copies. The second factor
also exist. Works that are creative in
nature are 'closer to the core of
intended copyright protection' It was
determined by the court that the
plaintiffs' 'copyrighted musical
compositions and sound recordings
are creative in nature', thus cuts against
a finding of fair use under the second
factor. Under the third factor, records
show that Napster users engage in
'wholesome copying' of copyrighted
materials because file transferring
involves copying the entirety of the
copyrighted work. The Effect of Use in
Market shows that Napster use harms
the market for their copyrighted
musical compositions and sound
recordings. Its defense of fair use is
untenable.
Issue [2]: Whether Napster can be
held liable for direct infringement
uncle r the doctrine of (a) contributory
copyright infringement, or (b) vicarious
copyright infringement.
Held [2]: (a) "One who, with
knowledge of the infringing activity,
induces, causes or materially
contributes to the infringing conduct of
another, may be held liable as a
"contributory infringer" Contributory
liability requires that the secondary
infringer "know or have reason to know
of direct infringement. The records
must show that NAPSTER has
knowledge, both actual and
constructive of direct infringement.
Napster was proven to have actual
knowledge when: l. a document
authored by Napster co-founder
mentioned 'the need to remain
ignorant of users' real names and IP
>> [24] Jurisprudence in CyberLaw
15

INTERNATI
NTERNATIONAL E-TRADE: GA
TIONAL
T he 1948 General
Agreement on Tariffs and Trade
(GATT), now supported by more than
120 countries, led to the formation in
1995 of the World Trade Organization
(WTO).
GATT practices the following principles
in international trade:
· Non-Discrimination: This is
reflected in the Most Favored
Nation Clause that, in essence,
mandates a country granting a
trade advantage or favor to one
country to give that same
advantage to all contracting
parties.
· National Treatment: This means
that imported goods are to be
treated as if they were domestic
products and any form of
discrimination against them in
favor of like national products, is
prohibited.
· Transparency: This provides that
trade measures should be made
known to other contracting parties
to ensure that the system of
The Philippine Quarterly IT Law Journal :: Volume 1, Number 2
multilateral trade rules are in fact
operating. All laws, regulations,
and tariffs of member countries
should be published and open.
Trade of goods dominated international
trade when GATT was established.
Much later, trade of services (such as
transportation, travel, banking,
insurance, and telecommunications)
and trade of ideas (like inventions and
designs) became important
commodities of international
commerce. In keeping with these
developments, GATT was amended
and updated into new WTO
Agreements along side with the
16
Features
TT VS. GA
GAT TS
GATS
by Jaime N. Soriano
General Agreement on Trade in
Services (GATS), Agreement on
Telecommunications Services (ATS)
and the Trade Relation Aspects of
Intellectual Property Rights (TRIPS).
On 12 June 1996, the United Nations
Commission on International Trade
Law (UNCITRAL) adopted the "Model
Law on Electronic Commerce" in
furtherance of its mandate to promote
the harmonization and unification of
international trade iaw and remove
unnecessary obstacles to international
trade caused by inadequacies and
divergence in the law affecting trade.
The Model Law was prepared in
response to a major change in the
means by which communications are
made between parties using
computers or other modern technology
in doing business. It also serves a guide
for the establishment of relevant
legislation in nations where none
presently exists.
In March 1998, the WTO released a
study entitled: "Electronic Commerce
and the Role of the WTO". The study
examined the potential gains to
international trade arising from the
increased use of the Internet for
commercial purposes. [ 1 ]
The WTO study also contended that
the Internet, as an Instrument for
international trade, should fall under
GATS. The study emphasized that it is
not always clear from GATS how the
market access and national treatment
commitments of member countries
cover the supply of Internet access
services. A distinction should be made
between the supply of Internet access
services, and the supply of other
services using the Internet as a medium
of delivery: whether the supply is in
the GATS or GATT regime. [ 2 ]
With the tremendous potential for
growth in e-commerce and the new
opportunities it creates in international
commerce, Trade Ministers at the
Second Ministerial Conference of the
WTO in Geneva on May 20, 1998
have adopted a "Declaration on
Global Electronic Commerce" to
establish a work program to examine
all trade-related issues relating to
global electronic commerce.
Member-nations also declared that they
would continue their current practice
of not imposing customs duties on
electronic transmissions.
WTO Director-General Renato
Ruggiero Indicated at the Ottawa
Ministerial in October 1998 that the
goal of the WTO was not to create a
set of new rules to govern the electronic
marketplace, but rather to use existing
frameworks already in place. He said
that existing agreements such as the
GATS, TRIPS and ATS are WTO
agreements that already in one form
or another deal with e-commerce
related issues. [ 3 ]
Certain exceptions are provided under
GATS in relation to the GATT standards
or principles. The member states can
choose the services in which they make
market access and 'national treatment'
commitments. They can limit the
degree of market access and the
national treatment they provide. They
can even take a limited exception even
from the 'Most Favored Nation' clause
obligation, for a period of ten (10)
years. Use of quotas where
government wishes to maintain
limitations on market access are
permitted, unlike in GATT. [ 4 ]
In June 2000, the Asia Pacific
Economic Cooperation (APEC) also
agreed to a moratorium on the

imposition of customs duties on
electronic transmission among
member-nations.
On November 14, 2001, a Ministerial
Declaration was adopted during the
Doha WTO ministerial meeting
declaring "that members will maintain
their current practice of not Imposing
customs duties on electronic
transmissions until the Fifth Session."
In the United States, the thrust of the
government with respect to electronic
commerce is to ensure that trade over
the Internet remains unimpeded. Thus,
the United States has sought to keep
cyberspace "duty free" -- that is, free
from tariffs or customs duties on
electronic transmissions (the data
streams that constitute products and
services in cyberspace). [ 5 ]
A cyberspace free of customs does not
mean that physical goods ordered over
the Internet are free from customs
duties. Nor does it mean that items
ordered electronically are exempt
from internal taxes. Duty-free
cyberspace merely means that
electronic transmissions corning from
abroad are not subject to customs
duties at the border. A delivery
mechanism based on an open network,
where borders are meaningless,
imposing customs duties at the border
would be a burden that would slow the
growth of electronic commerce. [ 6 ]
While no country currently imposes
duties on electronic transmissions. the
United States is the only WTO member
that has formalized this commitment
by specifying it in its tariff schedule.
The United States is encouraging all
WTO members to make a similar,
internationally binding commitment. It
has also urged member nations to
LEXICON OF CYBERLAW TERMINOLOGY
(This will be a regular section to acquaint law
practitioners, students and researchers on
legal terms in IT law preferably from the
Philippine context).
"Convergence" refers to
technologies moving together towards
formally adopt the understanding that
electronic commerce falls within the
scope of existing WTO rules. This will
ensure a predictable, trade-liberalizing
environment, promote the growth of
e-commerce, and create opportunities
for trade for WTO members at all
stages of development. [ 7 ]
At the center of e-commerce trade
dilemma is the definition of goods and
services. There is a consensus that a
book ordered online, but delivered
physically, for the purposes of
international trade rules, is considered
as "goods". This concept Makes the
book subject to the international rules
for trade in goods, the GATT. However,
when the same book is delivered
electronically (by downloading it to the
computer) there is no agreement
whether this digital product should be
treated as a good under GATT or a
service, which would make it subject
to a GATS regime. Not a trivial
distinction, since there are important
differences between the rules covering
goods and services, including the type
of market access granted and non-
discrimination between national and
foreign suppliers. For example,
discrimination against foreign suppliers
is, in general, forbidden for trade in
goods, but not for trade in services.
The status of these e-products is as yet
to be agreed by governments in the
WTO. [ 8 ]
Another issue is whether commitments
made under WTO agreements - in
particular related to services - are
"technologically neutral" - i.e., whether
they also cover electronic delivery.
Generally, WTO members and
commentators argue that a country's
commitment to open its market for
cross border supply of accountancy
a common point and elimination of
differences between the provisioning
of video, voice and data, using digital
and other emerging technologies; the
coming together of two or more
disparate disciplines or technologies;
The Philippine Quarterly IT Law Journal :: Volume 1, Number 2
services, for instance, applies equally
whether those services are provided
by letter, fax or over the Internet.
However, some question whether
specific commitments made during the
Uruguay Round, predating the e-
commerce era, should include supply
over electronic networks. [ 9 ]
There is much to be done also by way
of international regulatory cooperation
with the expected growth of cross-
border trade in e-commerce. Data
privacy, encryption technology,
development of secure payments
systems and taxation, among others,
would raise legitimate public policy
questions that should not result to
restrictions in electronic trade. [ 10 ]
With the borderless nature of
cyberspace, negotiations and
understanding among member-
countries will play a vital role in the
emergence of information technology
as a more effective medium of
international trade.
Endnotes
1. p. 23-26, Sax, Michael M., "International
Electronic Trade Carrying out Consumer
and Commercial Transactions on the
Internet", originally submitted as LL.M.
requirement to Osgoode Hall Law
School York University, Toronto, Canada
International Trade and Competition
Law program, 4 January 1999.
2. Ibid.
3. Ibid.
4. Ibid.
5. Marantis, Demetrios, and McHale,
Jonathan, Office of the US Trade
Representative (USTR), "The Internet and
Customs Duties"
6. Ibid.
7. Ibid.
8. Nielson, Julia and Morris, Rosemary, "E-
Commerce and Trade: Resolving
Dilemmas", OECD Observer, 30 March
2001.
9. Ibid.
10. Ibid.
the ability of different network
platforms to carry any kind of service;
and the coming together of consumer
devices such as, but not limited to, the
telephone, television and personal
>> [23] Lexicon of Cyberlaw Terminology
17

PHILIPPINES AS KNOWLEDGE CENTER OF ASIA IN THE 21ST CENTURY
by Carlyn Marie Bernadette C. Ocampo-Guerrero
F programmers, are very much in
ilipino IT
practitioners, including technicians and
demand all over the world, such as in
advanced countries as United States,
Australia and Singapore, acquiring a
stature of proficiency second to Indian
programmers who are dominating the
IT outsource market today. But various
professional groups and related
organizations today have sprouted with
the purpose of honing the skills of our
IT professionals and expanding their
capabilities. All these scattered efforts
are now being harnessed and
coordinated by the Philippine National
Technical Council, which can boldly
assert that the international community
now sees the Philippines as an
emerging IT-competitive economy.
The Council sets out a clear vision that
by the end of the first half of the 21st
century, "the Philippines will have laid
the infrastructure for every business,
every agency of government, every
school, and every home to have
access to information technology. By
2005, Philippine companies will be
producing competitive IT products for
world markets. Within the first decade,
The Philippine Quarterly IT Law Journal :: Volume 1, Number 2
it will be a leader in IT education, IT-
assisted training, and in the application
of information and knowledge of
business, professional services, and
the arts. And telecommunications will
provide the infrastructure for
interconnection and networking
throughout the Philippine archipelago."
Its goal, therefore, is to make the
Philippines as the Knowledge Center
of Asia.
The role of government in Philippine
IT development is that of an enabler,
lead user, and partner of the private
sector providing national information
Infrastructure and the policy, program,
18
Features
and institutional environment that will
encourage the growth of IT use and
the IT industry in the country. Those
involved in telecommunications,
education and R&D will each play their
own supportive roles
telecommunication is for the physical
infrastructure, education for the
adequate preparation of the labor
--
force, the R&D community for
developing local products and
applications, and for adapting
technology sourced overseas to
Philippine conditions, as well as to act
in a broader capacity as government
or private business.
In industry, it hopes to turn the
Philippines into an Asian hub of
software development and training.
And sees that private industry will adopt
IT solutions for competitiveness and
develop a global niche for Philippine
IT products and services. In
government, it seeks to improve
capacity and efficiency and to
professionalize bureaucracy. In
education, public and private
education and training institutions will
adopt IT in their curricula and develop
a critical mass of IT professionals and
an IT literate workforce. And in overall
support services, it seeks to create
policies, programs, institutions, and a
culture that would make the Philippines
achieve the Council's goal.
IT became a concern of multilateral
policy agreements, particularly within
the General Agreement on Trade in
Services (GATS) within the World Trade
Organization and the Framework
Agreement within ASEAN for
expanding intro-regional trade in
services. The National Information
Technology Council noted that IT
permeated various trade and
investment liberalization and facilitation
initiatives, as well as economic and
technical cooperation, within Asia-
Pacific Cooperation during the Manila-
Subic ministerial and leaders meetings
in 1996.
The Philippine Situation. The principal
strengths of the Philippine IT industry
include a well-educated, price-
competitive labor force, English
proficient, with a growing track record
of successful IT work, fast-growing
telecom infrastructure, government
interest in the industry, less regulation
than those of some of its neighbors,
good capabilities to dealing with foreign
partners, and strong entrepreneurship.
Yet, there are missing elements for
integrated IT diffusion in the Philippines
compared with other countries such as:
improved access to IT technology and
know-how from other countries across
industries; preferential treatment of
advanced local users in learning from
foreign firms; more integrated
approaches to national strategies for
IT diffusion -- e.g. pace setting activities
in cost-sharing, government-industry
partnerships, and IT consultancies;
user-oriented IT strategy to encourage
building a critical mass of local IT firms;
support to creating world-class
managerial skills in information
management and organization.
Globally, competition in electronics has
shifted away from final assemblers and
vertical control to "open-but-owned"
systems, with standard owners going
after a growing installed base of
customers. These opportunities are yet
to be tapped by the Philippines.
In telecommunications, Agila II was
launched in 1997, with a reach
covering all Southeast Asian countries
and some parts of China and Japan. It
further expands local

telecommunications and broadcast
infrastructure without depending on
foreign-owned satellite facilities. Four
telecommunications bills were in
consideration in Congress: Proposed
Reorganization of the National
Telecommunications Commission;
Cable Television Rationalization Bill;
Anti-telecom Fraud Bill; Arbitrary
Resistance to Interconnection which
seeks to criminalize the refusal of a
company to interconnect.
More Internet Service Providers are
expanding their services to include
content provision as well. The first
Philippine Internet Exchange or PhIX,
was launched in 1997. PhIX is a
network access point that allows ISPs
to exchange local Internet traffic within
the Philippines without having to
connect host servers overseas. The
PhIX was established by PLDT and
interconnects Infocom, Iphil, Mozcom,
Virtualink, and Worldtel.
The banking industry is one of the
Philippine pioneers in IT use. Megalink
operated the first shared network of
automated teller machines (ATMs) and
was the first switch company to
undertake ISO 9000 certification. And
Among other IT projects in banking are
the following: the Philippine Dealing
System (PDS), an electronic off-floor
foreign exchange trading system that
has been in place since 1992; the
Philippine Dollar Transfer System
(PDDTS), a vehicle and electronic
facility to handle and monitor
bookkeeping claims to US dollars being
traded among participating banks;
IDInet Philippines Inc., a company
jointly owned by Ayala Corp. and
Singapore Network; Project Abstract
Secure (PAS), a functional collaboration
between the Bureau of Customs (BOC)
and the BAP, where an electronic
system has been put in place to verify
the proper payment of customs/taxes
and to remit payments electronically
through the banks.
The Philippine Stock Exchange set up
an electronic trading system in 1994
and provided the investing public with
access to market information during
trading by using investor terminals
located at the public galleries. An
electronic link-up with the Securities
and Exchange Commission started in
1996. A paperless trading system was
introduced in 1997, with the settlement
and clearing of transactions using
certificates replaced by a book-entry
system of transferring ownership for
equities and lodging the certificates in
a central repository. A clearing facility
is being built to supplement the central
stock depository.
The Philippine electronics industry is
the country's major export winner. The
industry is export-oriented, essentially
engaged in assembly manufacturing
and labor intensive activities,
dominated by multinational
corporations (MNCs) such as Intel,
Texas Instruments, Fujitsu, Matsushita,
Toshiba and others.
In Education., Quality and expertise
distinguish the Filipino IT professional.
Filipinos find it easy working on legacy
applications as well as fourth
generation languages. Thousands of
Filipinos are adept with mainframes
and experienced in minicomputer
operations. Filipino microcomputer
professionals have experience with
connectivity and data communications
through Local Area Networks (LAN)
and micromain frame links. The use
of IT to improve teaching, learning ,
and educational management in basic
education was introduced through
Schools of the Future equipped with
multimedia facilities opened in
Camarines Sur in 1997. Various
electronic information networks are
encouraging greater inter-action within
the country's networks are encouraging
greater inter-action within the country's
S&T community: the Science Academe
and Research Network NARNET aims
to connect to the Net thousands of
tertiary and secondary schools all over
the Philippines; the Science and
Technology education network
(STEDNET); and the Health R&D
Information network (HERDIN).
In Government. With the support of
private sector, the Government
The Philippine Quarterly IT Law Journal :: Volume 1, Number 2
launched its own campaign to bring
out a competitive IT industry. The
Intellectual Property Rights Code,
Republic Act No. 8393, seeks to
impose stiffer penalties and fees for
the manufacture, distribution and use
of unlicensed software. House
Resolution 890, called for the
interconnection of local Internet Service
providers into on Internet exchange.
The exchange, to be otherwise known
as the RPWEB, electronically links up
via the Internet the entire government
organization.
The Government's Action Agenda.
A . Provide the Policy Environment.
1. Adoption and implementation of
policies to promote increased
investments in IT and related
electronics industries--e.g., through
strategic partnerships, venture
capital.
Specific Actions followed were
promulgating administrative
legislative measures to promote
wider private sector participation in
venture capital financing to expand
the capital base for IT R&D and other
IT-related development ventures;
Adoption measures to promote
strategic partnerships and alliances
by local companies/institutions with
leading international R&D
institutions, technology providers,
developers, and manufacturers;
Promotion of technological
innovation and experimentation by
creating new products, services and
applications;
Focus R&D on high-value added IT
products and services as well as on
product creation/design and
improvement in high growth sectors
such as telecommunications
software development (information
systems, common application
packages, educational/courseware
packages, multimedia applications,
computer animation, promotional
products etc.).
19
 2. Adoption of more investor-friendly
policies systems and procedures in
government.
Specific actions such as Fast-track
legislation/adoption of
administrative measures to further
liberalize foreign investment;
Establishing fast lane services for
foreign investors/businessmen at
ports of entry and when transacting
business with government to create
investor-friendly environment;
Organizing a taskforce on
monitoring and public
accountability aimed at making the
administrative and policy
environment for more conducive for
investing and doing business in the
Philippines.
3. Implementation of Philippine
commitments to international
agreements that affect the IT sector
favorably -e.g. the IT Agreement
(ITA).
4. Adaptation of administrative
measures to effectively enforce the
laws on intellectual property rights
(IPR), particularly as they affect IT
products and services.
5. Rationalization and coordination of
development of technoparks and
cybercities throughout the country for
greater complimentarity in
investments and infrastructure
development.
B . Enhance the Physical
The Philippine Quarterly IT Law Journal :: Volume 1, Number 2
Infrastructure
1. Accelerating universal access, i.e.,
Making telecommunications services
accessible and affordable to all, by
completing telecommunications
programs, especially in underserved
areas.
2. Fast-tracking the formulation and
implementation of the Philippine
Information Infrastructure (PII).
3. Intensifying investment promotion in
the telecommunications industry.
4. Formulating appropriate cyber laws
in the use of networks, particularly
20
the Internet, to ensure information
security and network reliability.
5. Promoting telecommuting/
teleworking, particularly in software
development and multimedia
production.
C . Develop the IT Manpower Base
1. Producing the critical mass of IT
professionals and IT-literate
manpower including competent IT
educators and teachers at all levels.
2. Designating from among IT training
institutions, universities or colleges
IT Centers of Excellence as a form
of recognition and reward.
3. Organizing a nationwide network
of Core Competency institutions in
IT in partnership with local and
international development
institutions and business
organizations.
4. Conducting continuing IT education
for teachers/trainors, IT practitioners
and workers.
5. Adopting dual-tech approach in IT
education and training.
6. Establishing high-quality distance
education and learning.
7. Developing and implement life-long
learning through the internet.
D. Pump-prime IT Industry
Development
1. Implementing a government-wide
computerization program with
emphasis on the development and
deployment of front-line, mission-
critical and common application
information systems.
2. Providing appropriate financing
support to allow active participation
by private sector in R&D and in the
development and the incubation of
new products and solutions.
Fast-tracking measures to streamline
administrative processes and
procedures in government
procurement, budgeting,
accounting, auditing, monitoring
reporting, etc.
E . Organize for Action:
Institutional Reforms
1. Reorganizing the NITC to broaden
and strengthen private sector.
2. Involvement in IT development
activities.
3. Constituting NITC task forces to
carry out specific IT 21 programs/
actions.
4. Organizing a private sector Advisory
Council to facilitate meaningful
private sector participation in the
implementation of IT 21.
5. Strengthening the NCC to enable it
to better carry out its primary
mandate of promoting widespread
use of IT in government.
6. Creating a comprehensive database
management, monitoring and
benchmarking system for key IT
indicators.
F. Marketing the National IT plan
for the 21st Century
1. Organizing task forces to undertake
a nationwide communication and
advocacy program, including
focused It trade missions and
international roadshows.
2. Developing, producing, and
disseminating promotional materials
on IT21 and the Philippine IT Action
Agenda.
3. Creating a Philippine website
promoting IT 21 and IT Action
Agenda.
In conclusion, Phase Three involves
developing a global niche for the
Philippine IT in knowledge products and
services. It looks to sustaining IT
innovation geared towards knowledge
creation, pushing for higher levels of
growth for the Philippine IT industry,
and sustaining its role as "The
Knowledge Center in Asia".
Source: www.neda.gov.ph/ads/IT21/

AMENDMENTS TO THE 1998 RULES OF THE HOUSE OF REPRESENTATIVES
ELECTORAL TRIBUNAL (HRET)
by Carlyn Marie Bernadette C. Ocampo-Guerrero
O n 1 April 2003, the
Amendments at the 1998 Rules of the
House of Representatives Electoral
Tribunal (HRET) were adopted.
Specifically, Rules 1 (Title), 4
(Organization), 11 (Administrative
staff), 16 (Election protest), 21
(Summary dismissal of election
contest), 31 (Filing fees), 32 (Cash
deposit), 34 (Legal fees), 35 (When
ballot boxes, election returns and other
election documents brought before the
tribunal), 36 (Revision teams), 37
(Revisors; Compensation), 39
(Procedure during revision), 40
(Where revision done; Who may be
present), 48 (Photographing or
photocopying, and 59 (Time limit for
presentation of evidence) were
amended. The former Rules 66 to 83
of the 1998 Rules were renumbered
as Rules 86 to 103 in the current rules
to admit 20 new rules on Electronic
Evidence, applying therefore provisions
of the Rules of Electronic Evidence
(A.M. No. 01-701-SC) promulgated
in July, 2001 to electoral matters
involving the HRET. Moreover, the
renumbered Rules 88 (Pilot precincts;
Initial revision), 94 (Finality and
execution of decisions; Motion for
reconsideration), 95 (Entry of
Judgment), 96 (Procedure after finality
of decision; Execution of decision;
Publication of decisions), and 103
(Effectivity) were also modified.
Rules 66 to 85 of the amended
HRET Rules state the rules on how
electronic documents or electronic data
message may be used, offered and
admitted in evidence.
Rule 67, as stated in Rule 3, Sec. 2
on Electronic Documents (A.M. No.
01-7-01-SC), declares that an
electronic document is admissible in
Features
evidence if it complies with the rules
on admissibility prescribed by the Rules
of Court and related laws and is
authenticated in the manner prescribed
by the said Rules. The definition of
Electronic document is a reiteration of
the definition given in the Rule 2
(Definition of Terms and Construction)
of Electronic Evidence of the SC (REE
of the SC).
Rule 68 states that an electronic
document shall be regarded as the
equivalent of an original document
under the Best Evidence Rule. Rule
69, expounds on how a copy of a
document shall or shall not be
admissible to the same extent as the
original. Both Rules 68 and 69 are
lifted from Rule 4, Secs. 1 and 2, Best
Evidence Rule
In Rule 70, various means are
presented on how a person seeking to
introduce an electronic document may
prove its authenticity. Rule 71, Proof
of Electronically Notarized Document,
points that a document electronically
notarized shall be considered as a
public document and proved as a
notarial document under the Rules
promulgated by the Supreme Court
(lifted from Rule 5, Secs. 1, 2 and 3,
Authentication of Electronic
Documents.)
Rule 72 details the various manner
on how an electronic signature may
be authenticated. Rule 73 are the
disputable presumptions relating to
Electronic Signature. Rule 74, on the
other hand, are the disputable
presumptions relating to Digital
Signatures. (Rules 72, 73 and 74 are
reiteration of Rule 6, Sec. 1, 2, 3 and
4 on Electronic Signatures.)
The Philippine Quarterly IT Law Journal :: Volume 1, Number 2
Rule 75 are the factors in assessing
the evidentiary weight of an electronic
document. Rule 76 are the factors to
be considered when it comes to the
integrity of an Information and Rule
77 are the exceptions to the Hearsay
Rule. On the other hand, how the
presumptions provided for in Rule 77
may be overcome is provided for in
Rule 78. Both rules are reiteration
of Rule 8, Secs. 1 and 2, Business
Records as Exception to the Hearsay
Rule.
Rule 79, Affidavit of Evidence, and
Rule 80, the process required from
the affiant with regard to the affirmance
of the contents of the affidavit in open
court, as well as the procedure of
cross-examination by the adverse
party are reiterations of Rule 9, Sec.
1 and 2, Method of Proof.
Rule 81 lays down the procedure to
be followed after summarily hearing
the parties pursuant to Rules 79 and
80 of the above Rules; Rule 82
affirms the necessity of transcription
by the stenographer, stenotypist or
other recorder of the entire proceeding
of the examination of a witness done
electronically; Rule 83 declares that
the electronic evidence and recording
of it as well as stenographic notes shall
form part of the record of the case.
Rules 81 to 83 are all reiteration of
Rule 10, Sec. 1,2,3 on Examination
of Witnesses.
Rule 84 sets forth the condition when
audio, video and similar evidence shall
be admissible in Court; and Rule 85
states how ephemeral (lasting only a
very short time) electronic
communication which includes
telephone conversation, text messages,
>> [24] Amendments to HRET Rules
21

LEGAL CITATI
ITA ON: WEBSITES AS REFERENCE
TION
W hen lawyers argue
their case and judges write their
opinion, they cite authority. Reference
is made to the statutes, regulations and
jurisprudence found to be applicable
to the given state of facts. Thus, the
reader and the writer must master the
language of "Legal Citation."
Definition and purpose
Legal Citation is defined as [ 1 ] "a
standard that allows one writer to refer
to legal authorities with sufficient
precision and generality that others can
follow the references. A reference
properly written in legal citation helps:
a. Identify the document and
document part to which the author
is referring.
b. Provide the reader with sufficient
information to find the document
and document part in the sources
the reader has available (which
may or may not be the same
sources as those used by the
writer), and
c. Furnish important additional
The Philippine Quarterly IT Law Journal :: Volume 1, Number 2
information about the referenced
material and its connection to the
writer's argument that a reader
trying to decide whether or not to
pursue the reference would want
to know"
Some students and practitioners find
difficulty in citing authorities. Legal
Citation is a technical language that
should be mastered. Some writers
even said that it is easier to read than
to write. Two of the most widely used
manuals in legal citation is the
"BLUBOOK" which is a codification of
22
Features
by Jhonelle S. Estrada
professional norms that introduced
generations of law students to legal
citation and the other one is the "ALWD
CITATION MANUAL" which is an
alternative reference designed for
instructional use, prepared by the
Association of Legal Writing Directors.
BlueBook and the ALWD Citation
Manual
The Bluebook, although used earlier
than the ALWD CITATION MANUAL
has been much criticized. It was said
that it has too many editions and that
students control the Bluebook. The
Bluebook has been created primarily
by law students. Their lack of
experience and their being turned over
by 100% every few years has
contributed to difficulties with the
Bluebook.
The members of the Association of
Legal Writing Directors (ALWD) find it
frustrating to teach citations found in
the Bluebook, prompting members of
ALWD formed a committee and chose
a person to write a new citation
manual, giving birth to the ALWD
Citation Manual. "The ALWD Citation
Manual is not merely a reference
book, but is also a teaching book" It
aims to simplify some of the rules in
citation, reduce inconsistencies, make
rules responsive to the needs of
lawyers as well as scholars and to
provide stability and uniformity of
citation rules.
Websites
The Art of Legal Citation is complicated.
Most students find it hard to cite
authorities coming from the
conventional sources such as books,
journals, etc. and now, due to the
advancement in Information
Technology and with the proliferation
of websites, its use as a reference
material became a common thing.
Thus, here comes the Big Question,
HOW DO WE CITE WEBSITES AS OUR
REFERENCE MATERIAL? The Bluebook
and the ALWD Citation Manual both
provided certain examples.
a. BLUEBOOK:
Federal Judicial Center, Federal
Judicial Center Publications (visited
July 10, 1999) <http://
www.fjc.gov/pubs.html>
b. ALWD CITATION MANUAL:
Federal Judicial Center, Federal
Judicial Center Publications <http:/
/ w w w. f j c . g o v / p u b s . h t m l >
(accessed July 10, 1999)
The ALWD Citation Manual moved the
date to the end to be more consistent
with other sources. ALWD uses
"accessed" instead of "visited" to give a
more professional tone and be
consistent with non-legal citation guides
The book "Basic Legal Writing" by
Mauricio Ulep provided for different
guidelines in citing Internet sources for
legal documents.
a. For Periodical Articles
For Journals available on the web:
Author(s), 'title of article,' volume,
Journal title, article Reference
(year) <Journal Uniform Resource
Locator> [paragraph pinpoint]
Where an article is published on
the web but is not part of the
journal:

Author(s), 'title of article,'
Homepage Title, relevant
Organization, article reference
(year), <Uniform Resource
Locator> (Copy on file with
Author) [paragraph pinpoint]
b. For Cases published in Electronic
form:
Surname of parties, [Court
Identifier] G.R. docket number and
date of promulgation (Unreported,
ponente) <uniform resource
locator> at date file retrieved
[pinpoint]
c. For Statutes/Rules published in
electronic form:
State/country, Title of statutes/
rules, date adopted or
promulgated by name of authority
<uniform resource locator> at
date file retrieved (paragraph
pinpoint]
d. For E-mail
Author of e-mail, message.
Subject line of the message
[online available e-mail: name of
recipient @ address.edu. from
author @) address.edu.date of
message.
Advantages and Disadvantages
Since the use of websites became a
common practice nowadays, its use a
reference material has its advantages
and disadvantages.
<< [17] Lexicon of Cyberlaw Terminology
computer. (Sec. 6 (d), Chapter 1, Part
II, Implementing Rules and Regulations
of the E-Commerce Act of 2000).
"Interconnection" refers to the
linkage, by wire, radio, satellite or
other means, of two or more existing
telecommunication carriers or
operators with one another for the
purpose of allowing or enabling the
subscribers of one carrier or operator
to access or reach the subscribers of
the other carriers or operators. (Sec.
3 (k), R. A. No. 7925)
The use of websites can help one get
all the necessary data easier. One
need not go to the library to borrow
various books on the subject. It is more
accessible. All that a person has to do
is log on, on the Internet. It is cheaper
because it saves the person money
from photocopying books, journals,
and cases. Websites are sometimes
more updated. It is much easier to
revise. Yet, the use of websites as a
reference material also has its
drawbacks. There are still a range of
doubts regarding its validity. There are
critics questioning the validity of the
resources, since one can write about
something and just post it without the
approval of the appropriate authority.
One cannot even be sure regarding
the authenticity of documents found in
websites. There is also no certainty
regarding the person who made the
websites. Any person who has no
expertise or is not accredited in that
particular field can just give his/her
view, and can become an expert all of
a sudden. Thus, a person should not
entirely base his findings or opinions
on documents found in websites. Books
are still more accurate because it has
the approval of the proper authorities
and has undergone various processes
before it is published and printed. The
reliability of websites can also be
questioned, since its contents can be
easily changed. A problem may even
arise if the websites are not always
updated. If a person write a certain
document and has no knowledge
"Intermediary" refers to a person
who in behalf of another person and
with respect to a particular electronic
document sends, receives and/or
stores or provides other services in
respect of that electronic document.
(Sec. 5 (h), R. A. No. 8792)
"Originator" refers to a person by
whom, or on whose behalf, the
electronic document purports to have
been created, generated and/or sent.
The term does not include a person
acting as an intermediary with respect
The Philippine Quarterly IT Law Journal :: Volume 1, Number 2
regarding that certain subject, and he/
she relied completely on websites, he/
she is not the only one who will be
misled by the wrong information but
his readers as well. His/Her reader's
outlook might be tainted and they might
arrive into erroneous conclusion
regarding that certain topic.
Conclusion
The use of websites as a reference
material became an ordinary thing, but
we should bear in mind, that websites
should only be supplement information
coming from the conventional sources.
We should avoid using it as our sole
reference, because it is not a conclusive
reference material.
Endnotes
1. Martin, Peter "Introduction to Basic Legal
Writing" , (2003 ed) <http//
www.law.cornell edu/citation>
Bibliography
1. Martin, Peter, "Introduction to Basic Legal
Citation," (2003 ed) >http://
www.law.cornell.edu/citation>
2. Schiess, Wayne, "Meet ALWD: The New
Citation Manual", (2002) <http://
schiess.freeservers.com/alwd.html>
3. Jamar, Steven, "A Review of ALWD
Citation Manual" Citation System for the
Law (2000) <http://
www.law.harvard.edu/faculty/pages/
jamar/scholarship/alwdciterev.htm>
4. UCHastings College of Law, "Legal
Writing and Research" (2000-2001).
<http://uchastings.edu/wr-o1/classes/
alwd.manual.htm>
5. Ulep, Mariano "Basic Legal Writing."
(2002)
to that electronic document. (Sec. 5
(i), R. A. No. 8792)
"Telecommunications" refer to any
process which enables a
telecommunications entity to send and
receive voice, data, electronic
messages, written or printed fixed or
moving pictures, music or visible or
audible signals or any control signals
of any design and for any purpose by
wire, radio or other electromagnetic,
optical, or technological means. (Sec.
3 (a), R. A. No. 7925)
23
 << [15] Jurisprudence in Cyberlaw
addresses, since they are exchanging
pirated music.; and 2. the Recording
Industry Association of America (RIAA)
informed Napster of more than
12,000 infringing files, some of which
are still available. There is also
constructive knowledge because: 1.
executives have recording industry; 2.
they have enforced intellectual
property rights in other instances; 3.
Napster executives have downloaded
copyrighted songs from the system and
4. they have promoted the site with
"screen shots listing infringing files."
Napster provides the 'site and facilities'
for direct infringement. Plaintiff's claim
that Napster can be held liable for
contributory copyright infringement is
meritorious.
(b) Vicarious copyright liability is 'an
outgrowth' of respondeat superior. It
extends beyond an employer/
employee relationship to cases in which
a defendant has the right and ability to
supervise the infringing activity and also
has a direct financial interest in such
activities.' The court finds Napster's
failure to police the system's
"premises," combined with a showing
that Napster financially benefits from
the continuing availability of infringing
files on its system, leads to the
imposition of vicarious liability.
The order of Preliminary Injunction is
affirmed with modifications.
The Philippine Quarterly IT Law Journal :: Volume 1, Number 2
<< [21] Amendments to HRET Rules
chatroom sessions, streaming audio,
streaming video and other electronic
form of communication shall be
proven by the testimony of a person
who was a party to the same or has
personal knowledge thereof. Both rules
are taken from Rule 11, Secs. 1 and
2 on Audio, Photographic, Video and
Ephemeral Evidence.
Therefore, Rules 66 to 85 is just a
repetition or reiteration of the Rules
on Electronic Evidence as promulgated
by the Supreme Court (A.M. No. 01-
7-01-SC).
24
<< [6] Is there such a thing as WMD?
relation with the critical utility that they
are designed to support, as a means
to minimize negligence on the matter,
and prevent potential disasters as a
result thereof. Pollitt made an apt
reminder on this matter. He said, “As
we build more and more technology
into our civilization, we must ensure
that there is sufficient human oversight
and intervention to safeguard those
whom technology serves.” [ 18 ]
On the other hand, critical data must
likewise be protected. The
Government should provide the ample
protection through the enactment of
laws for stiffer penalties against e-mail
bombing or flooding, denial of service
attacks, and computer break-ins. The
government and industries must find
solutions to increase the quality of
system security, mass-market computer
products, and emergency technical
response. The economic consequence
of crashed or unusable systems and
corrupted data is clear. In the end,
anything that would threaten economic
viability may appear to be greater than
the threat of physical harm, for
eventually what is worse than the death
that we fear is the reality of borderline
existence that we have to endure.
Endnotes
1. What is Cyber? A word definition from
the 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, 2004
Jupitermedia. All rights reserved.
Reprinted with permission from http://
www.internet.com.
2. Collin, Barry C., “The Future of
CyberTerrorism,” Proceedings of 11th
Annual International Symposium on
Criminal Justice Issues, The University
of Illinois at Chicago, 1996 http://
w w w.acsp.uic.edu/OICJ/CONFS/
terror02.htm
3. The American Heritage® Dictionary of
the English Language, Fourth Edition
Copyright © 2000 by Houghton Mifflin
Company. Published by Houghton Mifflin
Company. All rights reserved.
4. WordNet ® 1.6, © 1997 Princeton
University.
5. Denning, Dorothy E.. “Testimony before
the Special Oversight Panel on Terrorism
Committee on Armed Services US
House of Representatives.” Georgetown
University, 23 May 2000. Retrieved 4
May 2004. http://
www.cs.georgetown.edu/~denning/
infosec/cyberterror.html
6. Pollitt, Mark M. “CyberTerrorism: Fact
or Fancy?” Retrieved 4 May 2004. http:/
/www.cs.georgetown.edu/~denning/
infosec/pollitt.html
7. “The term ‘Terrorism’ means
premeditated, politically motivated
violence perpetuated against non-
combatant targets by sub-national
groups or clandestine agents.” United
States Department of State, “Patterns of
Global 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 the
French revolution of 1789 when the
government in Paris tried to impose its
radical new order on a reluctant
citizenry. As a result, the first meaning
of the word “terrorism,” as recorded by
the Académie Française in 1798, was
“system or rule of terror,” a reminder
that terror is often at its bloodiest when
used by dictatorial governments against
their own citizens. See BBC, History, The
Changing Faces of Terrorism. http://
www.bbc.co.uk/history/war/sept_11/
changing_faces_01.shtml
12. CNN.com – Hamas leader killed in air
strike – Apr 17, 2004. Retrieved 4 May
2004. http://edition.cnn.com/2004/
W O R L D / m e a s t / 0 4 / 1 7 /
mideast.violence/index.html. See also
CNN.com - Ambassador: Hamas leader
was ‘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 Information
on Designated Foreign Terrorist
Organizations. Retrieved 4 May 2004.
http://www.globalsecurity.org/security/
library/report/2004/pgt_2003/
pgt_2003_31711pf.htm
14. Collin, Barry C., “11th Annual
International Symposium on Criminal
Justice: The Future of Cyberterrorism,
where the physical and virtual worlds
converge.” Retrieved on 4 May 2004.
http://afgen.com/terrorism1.html
15. Pollitt, Mark M., “Cyberterrorism: Fact
or 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 of
Cyberterrorism.” Retrieved 4 May 2004.
http://www.washingtonmonthly.com/
features/2001/0211.green.html
18. Pollitt, Mark M., “Cyberterrorism: Fact
or Fancy?” supra.

<< [14] From Free to Fee
and thrive in a sheltered marketplace.
[ 30 ]
At the end of the day, nothing is
more satisfying that to have days of
free Internet.
Endnotes
1. Commisioner v Pineda, 21 SCRA 105
2. Vitug and Acosta (2000). Tax Law and
Jurisprudence. Second Edition, pg 3.
Quezon City, Philippines, Rex Bookstore.
3. No.6, Section 1104, The Internet Tax
Freedom 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 Tax
Freedom Act. Accessed May 17, 2004.
http://www.gseis.ucla.edu/iclp/itfa.htm
6. Muscovitch, Zac (-). Accessed July 16,
2004. http://www.firstmonday.dk/
Issues/issue2_10/muscovitch/
index.html#Conclusion
7. No.1, Section 1104, The Internet Tax
Freedom Act. Accessed May 17, 2004.
http://www,gseis.ucla.edu/iclp/itfa.htm
8. Yam, Jovi (2001). Net taxation: The Bit
Tax. http://www.itmatters.com.ph/
column/yam_07052001.html
9. Cordell, Arthur(1996). New Taxes for a
New Economy. Accessed July 14, 2004.
http://www.usask.ca/library/gic/v2n4/
cordell/cordell.html
<< [28] Harvard Internet Law Program
· Yochai Benkler, Professor of Law at
Yale Law School with J. D. at Harvard
Law School. He clerked tot US
Supreme Court Associate Justice
Stephen Breyer and had extensive
research and papers on the effects
of laws, as well as political and
economic theory, that regulate
information production and
exchange.
· William Fisher III, Hale and Dorr
Professor of Intellectual Property at
Harvard Law School, Faculty
Director of the Berkman Center and
specializes in intellectual property
law and the implications of Internet
and technology on copyright, and
author of "Promises to Keep".
· Jerry Kang, Professor of Law of UCLA
and visiting professor of Harvard
Law School. His scholarship pursuits
include civil procedure, race and
communication. He is the author of
the leading casebook,
"Communications Law & Policy:
Cases and Materials".
10. Yam, Jovi (2001). Net taxation: The Bit
Tax. Accessed.
w w w. i t m a t t e r s . c o m . p h / c o l u m n /
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 Tax
Act. Accessed May 17, 2004. http://
www,gseis.ucla.edu/iclp/itfa.htm
15. Andal, Dean ( ). "Electronic Commerce:
"Bright Line" Definition of Nexus
Needed." Cal-Tax Digest. Sept. 1999.
Accessed May 28, 2004. http://
w w w. c a l t a x . o r g / M E M B E R / d i g e s t /
sep99/sep99-4.htm.
16. ______. Internet Taxation: Myth versus
Fact."
w w w. s a l e s t a x s i m p l i f i c a t i o n . o r g /
documents/myth.doc. Accessed 1 July
2004.
17. 504 US 298
18. ______. Internet Taxation: Myth versus
Fact."
w w w. s a l e s t a x s i m p l i f i c a t i o n . o r g /
documents/myth.doc. Accessed 1 July
2004.
19. Glover, Marilee (year). Taxation and the
Internet. http://web.utk.edu/
~mglover/IS567Paper.html
20. National Governors association
accessed May 19, 2004. http://
www.nga.org/legislativeUpdate/HHS/
1,2243„00.html
· Lawrence Lessig, Professor of Law
and John A. Wilson Distinguished
Faculty Scholar at Stanford Law
School. He is the founder of the
Berkman Center and Chairman of
the Creative Commons. He was a
recipient of the Cyberspace Law
Excellence Award from the American
Bar Association and was named as
one of the Scientific American's "Top
50 Innovators" in 2002. He is an
author of various books on
cyberlaw, his most recent being: "Free
Culture: How Big Media Uses
Technology and the Law to Lock
Down Culture and Control
Creativity".
· Charles Nesson, Professor of Law at
Harvard Law School, Faculty Co-
Director and co-founder of the
Berkman Center in 1997. He
clerked for US Supreme Court
Associate Justice John Marshall
Harlan and continues to incorporate
cutting-edge technology in his law
classes.
The Philippine Quarterly IT Law Journal :: Volume 1, Number 2
21. Yam, Jovi (2001). Net Taxation: Duty-
http:// free cyberspace... for now. Accessed
June 12, 2004. http://
www.itmatters.com.ph/ column/
yam_06282001.html.
22. McCluskey, Alan (1998). Taxation and
the 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 association
accessed 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
http:// Fact." http://
w w w. s a l e s t a x s i m p l i f i c a t i o n . o r g /
documents/myth.doc. Accessed 1 July
2004.
27. Glover, Marilee (year). Taxation and the
Internet. http://web.utk.edu/
http:// ~mglover/IS567Paper.html
28. Ibid.
29. Mangalindan, Marciano (2000). The
Web Tax is Free... or is it? Accessed 1
July 2004. http://trim811.addsites.com/
webtax.html
30. Mangalindan, Marciano (2000). The
Web Tax is Free... or is it? Accessed 1
July 2004. http://trim811.addsites.com/
webtax.html
· Jonathan Zittrain, Professor of Law
and Faculty Co-Director and co-
founder of the Berkman Center and
serves as its first executive director
from 1997-2000. His research
includes the technologies and
politics of control of Internet
architecture and protocol and the
future of the open source software.
In his ten page Participation Report to
Law School Dean Mariano Magsalin
Jr. and Mr. Florentino Cayco III, Prof.
Soriano said that the program gave
him a better perspective of the current
issues affecting the Internet from the
legal, political, economic and
technological perspectives. He also
noted that many of the participants are
unaware of current developments in
technology law in the Philippines.
The Berkman Center for Internet and
Society observed that this year's
program was a great success. It was
the largest and arguably the best of
the 6th Internet Law Programs hosted
by the center.
25

WWW.SUPREMECOURT.GOV.PH:
BRINGING THE JUDICIARY CLOSER TO THE PUBLIC
This section is a continuing series of articles
featuring various websites which may be
relevant to legal practitioners, legal
I researchers, and law students.
n 1998, the
Supreme Court of the Philippines
made information from and about the
judiciary available to the world through
the Internet.
For almost six years now the official
website of the Supreme Court has
been functioning as a clearinghouse
for information from and about the
Judicial Branch of the Philippine
government. The site has also been
helpful to legal practitioners, judges,
legal researchers and law students as
the site contains up-to-date information
necessary in the field of law.
The homepage provides links to pages
about the following: announcements
from the Supreme Court, history of the
Highest Tribunal, its mission and vision,
the present justices, the Court's
organizational structure, bar matters,
decisions, resolutions, circulars and
orders, references, publications, news
and information, frequently asked
The Philippine Quarterly IT Law Journal :: Volume 1, Number 2
questions, the Philippine Judicial
Academy (PHILJA) and telephone
directory of the Supreme Court.
Information from and about the
Judiciary
Under "History" is a brief story of the
Court. It traces the beginnings of the
Judicial Branch of the Philippine
Government starting from the time the
Spaniards came wherein judicial
authority was being exercised in its
primitive. It provides for the laws and
issuances that led to the introduction
26
LegalWeb
by Ma. Cristina A. Ramos
of a formal judicial structure and its
changes through the years.
"Vision/Mission" contains the policy
statement of the Judicial Branch.
"Justices" makes the public acquainted
with the present justices of the Supreme
Court as it provides for the profiles of
the latter placing special emphasis on
their educational background and stint
in the judiciary and legal profession.
Photographs of each of the justices are
also posted in these pages.
The organizational structure of the
Philippine court system is shown in
"Organizational Structure." A space is
also provided for the Supreme Court's
organizational chart in the same page
but chart is not yet posted.
"Announcements" is a virtual public
bulletin board wherein invitations to
apply for eligibility and to bid, notices
of awards and similar information are
posted.
"News and Information" is almost
similar to "Announcements" as it also
functions as a virtual bulletin board.
Under this section, the following are
posted: Search for 2004 Chief Justice
Davide Awardees, Cultivation of Ethical
Values in the Judiciary (a speech of
the Chief Justice), downloadable
awards forms for judicial excellence.
One of the interesting parts of the site
is "Bar Matters." Under it, one can find
the list of successful bar examinees
from 1998-2003. It also contains a
list of bar topnotchers from the pre-
war period up to present and the roll
of attorneys. Hence, if one wants to
check whether a person is indeed a
member of the bar, he or she can find
it out in a mouse click.
The section on "Publication" is the space
reserved for interesting works of the
members of the Bench. At present, it
contains three articles written by Justice
Artemio V. Panganiban entitled "Battles
in the Supreme Court," "Justice and
Faith" and "Leadership By Example."
The "Directory" provides a list of contact
numbers of the different offices in the
Supreme Court. It contains a list of the
telephone numbers of the First, Second
and Third Divisions, PHILJA,
Presidential Electoral Tribunal,
Management Information System
Office, Judicial and Bar Council, the
Offices of the Clerk of Court, Bar
Confidant, Court Reporter, Chief
Attorney, and Court Administrator. The
contact number of the different
services such as Administrative,
Medical, Dental, Library and Printing,
are likewise displayed. Other offices
whose contact numbers are listed in
the site are the following: Judicial
Records Office, Fiscal Management
and Budget Officer, financial Services
Division/ Internal Audit Division,
Program Management Office,
Committee on Halls of Justice, and
Security and Maintenance Unit in
Baguio City.
Frequently Asked Questions
The site also gives space for the
frequently asked questions under
"FAQ." Some of the questions may be
trivial but they are merely reflective of
the fact that some trivial questions are
worth asking as the answers are

sometimes not known even to those
learned in the law. The following are
the questions answered in this section.
1. What are the three branches of
government?
2. What is the difference between
the Judiciary and the Supreme
Court?
3. What is the difference between
the Supreme Court and the
Department 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 three
divisions in the Supreme Court?
7. How are justices of the Supreme
Court and the Court of Appeals
and the judges of the lower courts
appointed?
8. What is the reason behind the
mandatory retirement age of 70
for members of the Bench?
9. What are the functions of the
Court Administrator? Is the Office
of the Court Administrator (OCA)
under the Supreme Court?
10. What cases are elevated or can
be appealed to the Supreme
Court?
11. Does the Supreme Court decide
on cases that have not been tried
in inferior or lower courts?
12. What does the term
"jurisprudence" mean?
13. Is there a prescribed time frame
for the Supreme Court to review
cases appealed to it? How about
lower courts?
For sure, even a person in the field of
law may find one or two of these
questions interesting. It may also be
true that although a person
understands the terms and has an idea
on the above queries, still, when asked
to explain them to a third person, he
or she may find a hard time to make
an intelligent response. Want for
answers? Just visit the site and you can
find intelligent and well explained
answers to the questions above.
PHILJA
The site www.supremecourt.gov.ph
contains pages about the Philippine
Judicial Academy (PHILJA). PHILJA's
pages provide, among others,
information about the academy, the
programs and courses being offered,
the on-going seminars and its projects
with partners.
Legal Research Service
The official website of the Supreme
Court contains important research
materials for the members of the
bench and the bar and to those who
are in the field of
law. The sections
on "Decisions,"
"Resolutions,"
"Circulars and
Orders" and
"References"
form part of a
'virtual library' of
the Judiciary.
"Decisions"
contains the full
text of the
decisions handed
down by the
Court. They are The homepage of the Philippine Supreme Court (http://
grouped based www.supremecourt.gov.ph). The website was launched in 1998.
on the months on
which they were
promulgated. The depository, though
not complete as it contains only those
promulgated starting January 1999,
includes all the latest decisions of the
Highest Tribunal. The same is true with
the "Resolutions." This section does not
contain all the resolutions issued by the
Court but it provides for the full text of
those passed from January 1999 up
to this date.
Before the advent of the
"www.supremecourt.gov.ph," a legal
practitioner had to browse the pages
of the newspapers to be updated with
the Supreme Court Circulars and
Orders. Now, with just one click of the
The Philippine Quarterly IT Law Journal :: Volume 1, Number 2
mouse, he or she can update himself
of the latest circulars and orders.
Aside from jurisprudence, resolutions,
circulars and orders, the "References"
section provides for the rules recently
promulgated by the Supreme Court.
Among those posted in the site are the
following: 2004 Rules on Notarial
Practice, Administrative Matter No. 03-
08-01-SC (Fixing the Lifetime of Bonds
in Civil Actions or Proceedings), A.M.
No. 03-03-03-SC (Consolidation of
Intellectual Property Courts With
Commercial Courts), Rule on
Guardianship of Minors, Amendment
to the Rules on Summary Procedure,
Rules on Legal Separation, Declaration
of absolute Nullity of Void Marriages
and Annulment of Voidable Marriages
and Rule on Adoption.
"References" also contains the 1987
Constitution, the Rules of Court and
Legal Fees and Costs.
Indeed, the Judicial Branch is
satisfactorily adapting to the needs of
the times. The volume and quality of
the information available in
www.supremecourt.gov.ph only show
that the Judiciary is not lagging behind
and is prepared for technology
revolution.
27
 The Center and the Society

E-LAW CENTER EXECUTIVE DIRECTOR ATTENDS

HARVARD INTERNET LAW PROGRAM
by Peter Joseph L. Fauni

P rof. Jaime N.
Soriano, Executive Director of the eLaw
Center, participated in the 2004
Internet Law Program of the Berkman
Center for Internet & Society of the
Harvard Law School in Cambridge,
Massachusetts.

The Internet Law Program is a regular

international development
and intellectual property.

This year's program was

offering of the Berkman Center for
Internet & Society to provide a
comprehensive survey of the changing
legal system that govern the Internet
and give the participants from various
jurisdictions the opportunity to discuss
recent legal developments with leading
scholars in the field.
The Berkman Center for Internet &
Society is a pro-active research
program founded to explore
cyberspace, share in its study and help
process its development. It represents
a network of faculty, students, fellows,
entrepreneurs, lawyers, and virtual
architects working to identify and
engage with the challenges and
opportunities of cyberspace under a
common understanding of the Internet
as a social and political space. Current
projects include digital media, Internet
The Philippine Quarterly IT Law Journal :: Volume 1, Number 2
held at the Austin Hall of
the Harvard Law School
on May 13-15, 2004.
Similar programs were
held off-campus in the
past, notably in Brazil,
Stanford University in the
US, and Singapore.
The 2004 Internet Law
Program drew 125 Prof. Soriano with Ms. Robyn Mintz, Executive Director of
participants from 20 the Berkman Center for Internet and Society of Harvard
countries. Half of the Law School (right), and Ms. Rebecca MacKinnon, CNN
participants though came Tokyo Bureau Chief and Harvard Fellow (left)
from the United States. The
participants included lawyers, prior to the on-site sessions: A Crash
government officials, corporate Course in Internet Technologies,
executives, technology experts, Regulation, The Technical is Political:
educators, and representatives of Access to an Open Information
cause-oriented, mass media, and Environment, and Legal Regulation of
research groups. Digital Media.
The program actually started on 14 During the three-day program at
April 2004 with the launching of online Harvard Law School, leading
instruction modules accessible only to professors and Internet law experts
confirmed participants and moderated presented an in-depth and thought
by Derek Bambauer, a third year provoking discussion on the following
student of Harvard Law School and subjects: Pornography - An Application

and politics, net governance, student fellow at the Berkman Center.
Prof. Soriano with Prof. Lawrence Lessig of Harvard
Law School and Founder of the Berkman Center for
Internet and Society.
Topics included: Copyright
and Peer-to-Peer Copying,
Alternatives to Intellectual
Property, Privacy, Freedom of
Expression on the Internet,
Legal Regulation on
Interconnectivity, Cybercrime,
Online Business Method
Patents, Domain Names,
Jurisdiction and Zoning, and,
Access to the Internet.
The participants were also
provided with the following
four-taped lectures in DVD
format for mandatory viewing
of Law, Norms, Market, Architecture,
Physical Layer: Wires and Wireless,
Logical Layer: End-to-End, Lessons
from the Domain Name Controversy,
Content Layer: The Future of Copyright
on the Internet, Free Culture, Peer
Production of Information, Pressing
Issues, Intellectual Property Protection
for Code? SCO and the Fight Over
Software Patents, Privacy, and The
Internet and Politics.
Faculty members of the Harvard Law
School who took part in the program
were the following:
>> [25] Harvard Internet Law Program

28