RP marks 7th year on the Internet

THE Philippines marks its seventh year on the Internet this week, a country much changed by the efforts of a group of pioneers that brought the nation into the Internet age.

Today, there are 2.9 million Filipinos online, a number that the International Data Corporation expects will grow to 12.5 million by 2005. E-commerce, pegged at $270 million last year, is expected to reach $8.6 billion over the same period.

These numbers would have surely boggled the minds of the technology enthusiasts who gathered seven years ago at the University of San Carlos (USC) in Cebu for the first International Conference on Electronic Mail. There, on March 29, 1994, at exactly 10:18 a.m. the country established its first leased line connection to the Internet, amid the cheers of enthusiastic conference attendees.


BACKWOODS TRAIL

The road that led to USC, however, is one that goes back many years, and began as a backwoods trail on the frontiers of Philippine cyberspace. This trail was inhabited largely by hobbyists and techies who put up their own bulletin board systems (BBSes) dating back to the last half of the 1980s.

Using a dial-up communication protocol called Fidonet, bulletin boards were able to link up to each other, allowing callers to send e-mail to other nodes, download shareware, and participate in discussion forums that are the forerunners of today’s e-groups or newsgroups.

People who put up the boards and called in formed the core of the Philippine online community, says Jim Ayson, a chronicler of local Internet events and Computerworld columnist.

The first public access BBS was named First-FIL RBBS, set up in August 1986 by Ed Castañeda and Dan Angeles, Ayson says. The board ran on an XT-compatible assembled by Castañeda’s company. The board ran 24 hours a day.

“The general message area was open to the public but for all the other areas, Ed and Dan—sensing electronic commerce somewheredown the pike—charged an annual subscription of P1,000,” Ayson says.

A month after First-FIL RBBS went up, Efren Tercias and James Chua of Wordtext Systems launched Star BBS, the first BBS in the country running Fido software. Using a dial-up protocol called FidoNet, Chua and Tercias later managed to link their board to Fox BBS run by Johnson Sumpio, marking another milestone in the country’s online history.

“Using Tom Jenning’s bizarre little dial-up communications protocol, FidoNet, they actually sent e-mail to each other,” Ayson recalls. “Of course, the fact that their offices were just next door to each other tended to blur that achievement a bit.”

Other Fido-based boards followed, including Andromeda, run by Obet Verzola and funded by a non-government organization; and a popular board run by Eddie Manalo, the grandson of the founder of the Iglesia ni Cristo.

By 1991, people could send e-mail to the Internet from the BBS network. However it would take three to four days for the mail to reach the recipient on the Internet, Ayson notes.

There was also access to US-based online services like CompuServe, The Source, Byte Information Exchange (BIX), and Easymail from the Philippines using X.25 packet services from companies like Eastern Telecom and Philcom.

“You would dial up the local node and you would be connected to the X.25 network, but this was slow and very expensive,” Ayson says, so much so that the service was out of reach of most individuals and used primarily by corporations.

Kelsey Hartigan-Go, a faculty member in De La Salle University at the time, recalls that DLSU had signed up with the E-Mail Company of Joel Disini as early as February 1991 to gain dial-up access for e-mail. “I think that cost something like P15 per kilobyte per message,” says Go, who is now assistant vice president for IT at SM Prime Holdings, Inc.

CAMPAIGNING FOR PHNET

Dial-up connections were not enough, however, for Dr. William Torres, then managing director of the National Computer Center (NCC). In January 1992, Dr. Torres met with Steve Goldstein, director of the US National Science Foundation (NSF), and came away with the idea that the time was ripe for a leased line connection. “When I came back to the Philippines, I shared that information with other people through seminars,” Dr. Torres says. At the time, he adds, there were already multinational companies such as IBM that had links to the Internet. “Some people were also connecting to the Internet via dial-up and paid long distance rates,” he recalls. In 1993, Dr. Torres, now the president of Mosaic Communications, Inc., campaigned for funding. “I did not go to the government because I knew the government did not have the money for it,” he says.

The first company he approached was the Manila Electric Company (Meralco) but was turned down. Then he went to the Philippine National Bank, but the head of the government-owned bank didn’t think the Internet was important.

In mid-1993, in his last attempt, Torres went to the Department of Science and Technology (DOST). “The campaign I had with the DOST was that they wouldn’t have to spend money, if they could convince the PNB, which had the money,” says Dr. Torres. “So it happened… Secretary [Ricardo] Gloria assigned it to William Padolina, who eventually became the DOST secretary, so the push really started there.”

The DOST decided to make the Internet connection a priority project under its Science and Technology Agenda for National Development (STAND 2000).

The project, in turn, was assigned to Dr. Rodolfo Villarica of the Industrial Research Foundation, Inc. (IRF).

PHNET

In that same year, 1993, PhilNet (later renamed PHNet because of trademark issues) was created with the vision of becoming the country’s research and development backbone and the gateway to the Internet. Later, the Philippine Network Foundation, Inc. was formed to manage the network.

The PHNet project had two phases. Phase One was connectivity via a dial-up connection. Only the lead system administrators of the original member-schools of PHNet had a hand. Ateneo’s Arnie Del Rosario became project leader for this phase.

Dr. Villarica recalls that the DOST granted P50,000 to a technical committee headed by Del Rosario of the Ateneo de Manila University, Go of DLSU, and Rodel Atanacio of the University of the Philippines Diliman. Glenn Sipin, then the deputy executive director for the Philippine Council for Advanced Science and Technology Research and Development (PCASTRD) of the DOST, represented the agency in PHNet’s technical committee.

The money was supposed to be used for IDD calls to Victoria University of Technology (VUT) in Australia. VUT had granted the group a mailbox on their server. “Ateneo was supposed to be the central service where people could download and upload their e-mail. That was PHNet Phase One,” Villarica says.

Go recalls that Ateneo was chosen as the node to VUT because they had extra phone lines. Ateneo linked to VUT and then rerouted e- mail to the network via Unix-to-Unix Copy (UUCP), a Unix utility and protocol that enables one computer to send files to another computer over a direct serial connection or via modems and the telephone system. Del Rosario, who was chairman of ADMU’s computer science department, says the idea behind Phase One was to get the schools—Ateneo, De La Salle, and UP Diliman to become subnetworks of VUT via the dial-up connection. “At first, we dialed up once a day, and then it became twice a day…and so on,” he says.

Richard Lozada, now the director of the e-Commerce Group of Microsoft Philippines, was a faculty member at the Ateneo’s computer science program and the school’s systems administrator when he became involved in Phase One. “We had to make long distance phone calls to connect to Australia, to connect to an Internet jump point,” Lozada recalls. They set up mail servers to use Australia as the gateway and then sent messages over the Internet at 14.4 kbps maximum.

Go says the budget allotted for the project was depleted in six weeks so the schools pooled their own funds until PHNet Phase Two.

Phase Two involved the connection of various local nodes via dedicated leased lines.

Villarica says the technical group was indecisive over who should act as the lead school. “The decision was to get a party that was non-partisan,” says Villarica. “A letter from the technical group asked us if we could act as the administrator for the Internet set-up in the Philippines.”

During the PHNet’s first technical meeting in October 1993, the then IRF executive director, Cesar Santos, presented a list of equipment and leased line requirements. These would cost P8.5 million.

Later, during a visit to the US in 1993, Villarica told a friend, Dr. John Brule, an educational missionary, that he was in charge of setting up the Internet connection in the Philippines. Dr. Brule had been going in and out of the country, teaching in San Carlos University in Cebu.

Villarica learned from Dr. Brule that he had proposed to Del Rosario that the first E-mail Conference be held in USC in March. Villarica decided there and then to make the conference the target date for the country’s first Internet connection.

Then on Nov. 25, 1993, the DOST approved a funding of P12.5 million for PHNet Phase Two. Villarica said the budget was released by January. With the budget in hand, PHNet could go shopping.

NETWORK SET-UP

In setting up the network, Torres says they called Willy Gan, chairman of ComNet, a networking equipment vendor. “He became the consultant, provider, supplier and the network designer of the project,” says Torres. “In fact, we labeled him the Architect of the Philippine Internet.”

Torres says Gan bought the Cisco equipment, had it delivered, and convinced the Philippine Long Distance Telephone (PLDT) Company to give him the lines by March 29, 1994, the scheduled link-up to the Internet.

“In 1993, Del Rosario called me and told me that DOST was funding a project that would connect universities to the Internet,” says Gan. “He knew I’d been dealing with networking equipment like routers.” Gan says he faxed Del Rosario a lot of information about the Cisco routers.

“Arnie called me up again and invited me to another technical meeting as an observer,” says Gan. “That’s where I met Kelsey and Ritchie. I was listening to the discussion and Arnie stood up and drew what they think should be phase two.”

Gan says the group didn’t really know the technology and what equipment to use.

“One day, Dr. Villarica and Dr. Santos were at Asian Development Bank, talking to the people over there,” says Gan. “They were talking with the networking group at ADB, and one of them, Michael Hawkins, told them that they should be talking to me because I was the one who designed the ADB network and implemented it successfully.”

After the meeting with the ADB people, Dr. Villarica called Gan on the night of Dec. 23, 1993. “He knew me but that was the first time he called me to assist the group,” says Gan. “He asked me to come to his house that night. I told him it’s Christmas season and that if we can meet after the New Year but he said no.” That night, Gan went over to Dr. Villarica’s house in Corinthian Gardens and there they sketched the design of the network that would be connected to the Internet. “In our second meeting, on Jan. 2, 1994, again at his house, we talked about details and what equipment to use. I said they should use Cisco because it is the only the equipment used to connect to the Internet,” says Gan. “After the meeting, we parted and I ordered the equipment.” Dr. Villarica, he adds, asked him to order the newest model because he wanted the network to be based on state-of-the-art technology.

On March 24, Gan and Tan were in Hong Kong attending a conference when they got a call telling them that the Cisco equipment had arrived. Gan sent Tan back to Manila right away, on that same day, to check the equipment.

“Around March 25, Benjie loaded the big Cisco 7000 router,” recalls Gan. “At that time, that was the largest router produced by Cisco. That was a big and very heavy machine. Benjie, being a big guy, carried that equipment and loaded that in his Toyota corolla and brought it to PLDT Makati,” says Gan. He adds that Tan had to take the router down to the basement himself because that was where PLDT had reserved a space for them, as a collocation service.

Tan recalls how he lugged the huge Cisco Model 7000 router—worth about $25,000 to $30,000 at the time—to PLDT’s Ramon Cojuangco Building in Makati. To get to that point, he had to bring the router through Customs, clear it tax-free, and have PLDT and Sprint coordinate over the leased line connection.

Gan says the connection to Sprint was via a 64kbps leased line. The line was up but they still had to rely on the engineers at Sprint, because they had little experience on how to configure the new router.

“It took quite a while,” Gan recalls. “It started on the night of March 25. Until March 29, we still couldn’t get it up and running,” says Gan. “At that time, there was a conference at the University of San Carlos in Cebu and March 29 was the last day, and they were supposed to end at noon of that day.” Meanwhile, Lozada, who was in charge of the PHNet’s technical operations, had to fly to Cebu a day or two days earlier to put in some equipment. “I was practically lugging around a gigantic router,” he says.

Tan says he finally installed the router with the help of a PLDT technician. He switched the router on, did initial tests on it, configured it, called SprintLink, the Internet group of Sprint, to confirm the equipment’s readiness, and watched the Internet traffic flow in.

“Of course, I did treat myself to about two hours of free Internet surfing… What else was I going to do at 3 o’clock in the morning while waiting for the sun to rise so I could inform Dr. Villarica in Cebu that the Philippines was connected?” says Tan. “There were no Web sites then, everything was text-based.”

Gan says that in the early morning of March 29. they could see the Internet but the port was facing the US, so Tan had to reconfigure the port to face University of San Carlos.

D-DAY, MARCH 29

At 10:18 a.m., after Tan reconfigured the port, the University of San Carlos in Cebu went up. There was a euphoric cheer.

From day one of the conference, the participants were all expectant, Villarica says. “Finally on the third day, the connection was announced, and there was a loud cheer in the auditorium. The people were so jubilant. They were ecstatic!”

Ayson says that a live chat demo was scheduled between Dr. Brule and his son in Syracuse, New York. “I think Dr. Brule said something like, ‘We’re in’ and ‘This is live’ and the people in the auditorium applauded and cheered,” Ayson says.

Go and Lozada, too, remember the euphoria following the successful connection.

As a historical footnote, Gan says De La Salle University was the first to get a leased line connected to the Cisco router in PLDT, but because of the conference, the University of San Carlos was the first to connect to the Internet.

EARLY DAYS

PHNet Phase Two had two types of nodes, primary and secondary.

The primary nodes were composed of the DOST, IRF, and eight universities: Ateneo de Manila University, De La Salle University; Saint Louis University of Baguio; University of the Philippines Diliman; UP Los Baños; University of Santo Tomas; University of San Carlos; and Xavier University of Cagayan De Oro. The secondary nodes would be where non-academic users gained access to the Internet.

Academic institutions outside the eight primary nodes were charged P3,000 for a secondary node connection. Government and NGOs would pay P5,000 a month, while commercial establishments were charged P7,000. Individual users were charged P300 a month.

The PHNet members were linked to the US Internet backbone via a 64Kbps connection to PHNet’s main router in PLDT’s head office in Makati.

According to the pioneers, the main stumbling block to the connection was financial. Dr. Villarica tells Computerworld that cost and ignorance proved to be the major obstacles. “There were a lot of obstacles then, the money was released at the last minute, and the equipment arrived only on March 25, two days before the conference.”

Ayson says the problem was being able to sustain the project after the grant money had run out. “Once the grant money had run out, the universities who were hooked up had to pay their share of some P30,000 a month,” he says.

He adds that PHNet signed up some commercial customers such as the ADB, the International Rice Research Institute, the Asian Institute of Management, and Mosaic Communications—all of which were paying P60,000 a month for the privilege. “Obviously the project succeeded because PHnet is still around today,” says Ayson.

Go also says that the major hindrance was cost. At the time, they had to pay $10,000 to $12,000 a month for the leased lines which is very expensive. He adds that technical knowledge was another obstacle because nobody knew about the Internet yet. Another problem for PHNet had to do with the .PH domain, which has been administered by Disini since 1989, the year he obtained that authority from the Internet Assigned Numbers Authority (IANA).

PHNet needed to be able to create domains for its users, but it couldn’t do so because IANA had given that authority to Disini. Talks between Dr. Villarica and Disini did not prosper, and for awhile, it looked like PHNet would have no domains to issue, says Ayson.

“But close to the Cebu conference, Disini wrote IANA (the precursor of today’s ICANN) that he was handing over gov.ph and edu.ph to PHnet, but would continue to keep all other domains to himself,” Ayson says. “That solved the impasse and PHNet was able to proceed.”

OTHER ISSUES

Since those early days, other issues have emerged to test the fledgling industry. Among these were pressures for regulation and franchising, censorship, and telephone service metering.

In July 1994, the PHNet board of trustees agreed that the operation of the Internet network need not be governed by a standard franchise.

A few months later, in September 1994, Secretary Padolina told Computerworld that the government was inclined to allow the local Internet gateway to operate without much government regulation. On censorship, in March 1996, Padolina again took a liberal stand. Commenting at the time on a US bill that would censor information transmitted over the Internet, he said he would rather “err on the side of freedom”, adding that it would be impossible to censor the Internet.

Another issue that emerged in 1997 was PLDT’s bid to impose metering on local telephone service, a move that Internet service providers and users believed would raise dial-up Internet access costs.

A noisy campaign and the ensuing political pressure eventually led to the shelving of PLDT’s metering plan in 1999.

COMMERCIAL USE

The commercial aspect of the Internet came in September 1994, when Gan of ComNet formed Mosaic Communications, Inc. to became the first commercial ISP.

MosCom signed up with PHNet and offered different levels of connectivity for corporate and individual clients. In May 1995, Globe Telecoms launched its G-Net ISP service, becoming the first telecommunications company to enter the field. Globe chose a 64Kbps leased line connection to it’s Singapore partner, SingTel.

In June 1995, IPhil Communications Network, Inc., a sister company of The Online Advanced Systems Corporation, launched its own Internet access service, by putting up its own dedicated line to the Internet. In the same month, IBM Philippines launched the Global Network, a suite of value-added networking services including Internet access.

In June 1995, Infocom Technologies, Inc. began operations using Sequel.net as the gateway link to the Internet backbone, riding on a 2.048 Mbps E1 international private line connecting Manila to the US via fiber optic link. In April of the following year, PLDT bought 51% of Infocom.

A key development for the industry in 1995 was the passage of Republic Act No. 7925 or the Omnibus Telecommunications Act. Among other things, the law classified ISPs as value-added services that ride on existing network facilities. As such, they would require no congressional franchise to operate. This formalized what was already happening in the industry and paved the way for the establishment of even more ISPs. Significantly, this would also lead to unresolved issues in later years over how ISPs, unregulated by any franchising requirements, could compete against heavily regulated telecommunications carriers to provide services such as voice over IP (Internet Protocol).

In June 1996, 15 local ISPs banded together to form the Philippine Internet Service Organization (PISO) to promote widespread use of the Internet. PISO aims to educate the local market about the Internet, to officially represent the country’s ISPs before other members of the Philippine and global IT communities, and to promote the collective use of the country’s ISPs.

The following year, the ISPs formed the Philippine Network Information Center (PhNIC) to handle policies regarding Internet resources such as IP allocation and automatic system numbering.

In July 1997, PLDT launched the Philippine Internet Exchange (PhIX), a network access point that interconnects local ISPs, allowing them to route local traffic among themselves. The first five ISPs that joined PhIX were Infocom Technologies, Mosaic Communications, Iphil Communications, Virtual Link, and WorldTel Philippines.

One year after, a second Internet exchange was put up, this time by the Philippine Network Foundation to enable ISPS that have leased lines from telecommunications carriers outside of the PLDT to interconnect with other providers. In that same year, PHNet connected to Japan’s Advanced Pacific Network (APAN) backbone to provide faster Internet communications between the Philippines and other countries in the region.

GROWTH

As the number of ISPs grew, so did the number of Internet users.

A year after the country’s connection to the Internet, awareness of the Internet reached a high degree among professionals and in academic circles, but actual usage and specific knowledge was low, according to a Computerworld Philippines survey done in March 1995.

This was to change rapidly. According to IDC, the number of Internet users rose 272% in the following year, to 57,430, up from 15,430 users in 1995. This base grew 170% to 154,840 in 1997, and 41% to 218,670 in 1998. The country breached the half million mark in 1999, with 521,135 users, and continued to grow rapidly. In the year 2000, IDC says, the country had 2.9 million Internet users.

This growth has surprised some, and disappointed others among the country’s online trailblazers.

“I was hoping it would grow a bit faster,” says Tan, who points out that many families will “buy all the other appliances first” before buying a PC. “Thank goodness for Internet cafes,” he says.

Del Rosario, on the other hand, is surprised at the rate of growth. “I knew the Internet was pervasive, but I didn’t expect it to grow as fast as it did,” he says. “Actually I’m surprised at the explosion of the Internet.”

“I knew it would catch on,” adds Lozada. “We knew it had value a lot of people would realize it, but none of us could have predicted the World Wide Web. We knew e-mail was good, we knew Gopher was cool but we never saw the potential of the Web.”

Local content on the Internet also grew rapidly in the years following the country’s first connection. Personal Web pages were soon joined by hundreds of corporate Web sites and more sophisticated portals as more and more companies realized the need to maintain an online presence. Unfortunately for many Web entrepreneurs, the dot-com fever that fueled the sky-high valuation of Internet stocks in the US never really made it to Philippine shores. In 2000, the beginnings of a dot-com boon was cut short by the fallout on Wall Street. The bubble had burst before most local dot-coms could cash in.

The new century, however, presents new challenges and opportunities as the country heads into its eighth year of connection to the Internet. The year 2000 saw the passage of the E-Commerce Act, clearing the way for the legal recognition of electronic documents and signatures. How companies can fully exploit the provisions of the new law is yet unclear. Despite the dot-com fallout, many companies—including a number of industrial giants—have placed their bets on online business-to-business (B2B) exchanges. The first of these, Bayantrade, was set up last year. Mobile commerce is also gaining ground, as cell phone service providers move to capitalize on their rapidly growing subscriber base.

At the same time, the industry continues to grapple with fundamental issues. As the country moved toward the seventh anniversary celebration of its Internet connection this week, longstanding policy questions over how the .PH domain should be managed surfaced anew. Debate also continues over legislation that would take into account the convergence of telecommunications, IT, and the broadcast media. Even more basic, the country will need to address the digital divide that separates the connected few from the disconnected many: even at 2.9 million users, the Internet penetration is still very low in relation to a total population of 80 million.

The promise of a level playing field for all remains tantalizing, but within reach. Dr. Villarica, who is a trustee of the PHNet Foundation today, remains optimistic. “Today, for as little as P20 an hour, anyone in the Philippines can gain access to the Internet through an Internet cafe,” Villarica says. “This wasn’t always the case.”

This can-do outlook brought the country into the Internet age; it may yet bring the full fruits of connection to bear.

With Melba-Jean Valdez, Published in Computerworld Philippines, March 26, 2001

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