ESIS extension - Israel - Regulatory Developments

The following report outlines new developments in the past three months and the state of on-going developments.

The dynamic development of Israel into an Information Society continue. Risk capital investments for the first quarter of 2000 reached $597 million (59% of the overall amount for the whole year 1999). The demands for technological human resources by the hi tech industry are much larger than that the country is presently able to fill. A significant increase in the use of the Internet can be noticed: the overall volume of minutes for inland calls rised from 1999 by 10% and the share of the Internet calls in them is now 22% in comparison to 13% for the first quarter of 1999.

In the period from April to the end of June 2000 several important steps were taken in Israel for completing the opening of the telecommunications market to competition.

The Attorney General to the Government, Elyakim Rubinstein, ruled on the conflict between the Ministry of Finance and Ministry of Communications regarding the extension of the licenses for the cable TV companies. The licenses are due to expire in 2002 and 2005. Their renewal weight in the decision of cable companies to invest in new services like Internet broadband access and inland telephony. The Ministry of Finance demanded a new tender to be held for licenses for Cable TV. The Ministry of Communications wanted to extend the licenses, without any compensation, to the year 2013.

The Attorney General ruled that the Ministry of Communications cannot provide licenses for broadband Internet and inland telephony to the cable companies without a major ammendment to the Telecommunications Law. He also established that presently, the extension of the licenses for the cable TV companies cannot be discussed; they will be allocated when the licenses expire. Although the companies own their infrastructure they should pay for their licenses when they are extended for another 4 years. The value of the extended licenses should be established by an independent arbiter. (Yedioth, Economy, p. 2, 11.4.2000). He thus denied the demand of the Ministry of Finance for an open tender for cable TV provision.

Rubinstein stated that he also want the telecom market opened as soon as possible to competition. However long term considerations should overcome those for the short term. He included in his considerations the public interest, social and economic factors as well as the government policy.

Licenses for the new services will wait until the ammendment to the Telecommunications Act is legislated and enacted. The Parliament committees are advancing the necessary legislation speedly having shortened many procedures. The Ministry of Communications is posing several demands from the historical operator, the Bezeq, prior to licensing its new broadband ADSL services. The purpose of these demands seems to be to delay the provision of ADSL until effective competition by cable companies is established. (Ministry of Communications site: http://www.moc.gov.il ).

A related regulatory matter concerns the YES satellite DBS multichannel TV company. YES is intended to offer effective competition to cable TV companies in the multichannel TV market; it will also provide broadband Internet access . It is partially owned by the historical operator the Bezeq.

Several decisions taken by the Anti Trust Commissioner, David Tadmor, and by the Council for Cable and Satellite Broadcasting, chaired by Dorit Inbar lead to an arrangement acceptable to the parties. The Commissioner ruled that cable companies have established an effective cartel regarding the production and acquisition of content. This posed a substantial obstacle to the viability of the YES company, unable to offer similar content packages. The Council for Cable and Satellite broadcasting decided that cable companies must sell content to the YES company; YES will also enjoy a "tiering" window of at least 9 months, beginning July 20, 2000. The tiering arrangement (content packages to be chosen by customers) should provide an advantage to YES in the process of entering the multichannel TV market.

Tenders for the allocation of licenses and spectrum are expected in coming months. These include:

In May the Government dedicated several meetings for an in depth discussion of the national priorities for the economic and social area. The background papers and presentations for this discussion were prepared by a team of economists and sociologists chaired by Prof. Haim Ben Shachar. They were made available at the site: http://econ.tau.ac.il/priorities (Hebrew)

The main problems were defined as increasing inequality; low growth of the economy and high unemployment. The strategy pursued in the last decade was that of lowering the defense budget and increasing social welfare budgets to counteract the increased inequality in raw income. Large social welfare budgets are a problematic solution: they increase economic dependency, social tension and impose an increasing burden on the state budget. Solutions were sought that decrease inequality and may increase economic growth. The recommendations focused in investments to be made in the areas of education and infrastructures. The need to get more results from the educational system is stressed: while the level of investments in education in Israel is high compared with other countries the return in terms of capabilities in the areas of sciences and mathematics are relatively low.

Investments in the areas of Research and Development and in Education are shown to provide the best overalll return to the economy. Priority should be given to investments in the areas of Professional Training and infrastructures. In Transport Israel is well behind in comparison to European countries.

These national priorities suggest that large investments related to the development of the Information Society in Israel are expected in the budget for 2001. This should be reflected in the use of ICT in the educational system, both at the K12 and the post-secondary level; and increased investments in R&D.

No significant changes since the last Master report. The Parliament (Knesseth), following the ruling of the General Attorney for the Government is now working on the amendment to the Telecommunications Act. The amendment will enable the Ministry of Communications to issue licenses for Internet broadband provision and inland telephony by the cable companies.

There is no umbrella, Information Society policy in Israel. However, in several areas overviewed in the previous Master report IS policies can be identified. These include opening the telecommunications market to competition and privatisation; R&D for both basic research and technological business applications; in Education; in Broadcasting; national infrastructures development.

The Local Government Union has established Web sites for 254 among the 260 local authorities in Israel. The sites include comprehensive information and are open to the inclusion of additional links related to the specific local authority (see: http://www.ladpc.gov.il/shilton/eng/open.htm ).

Some expressions of increased government access have taken place in this last quarter:

Tax Reform Site: The recommendations of the Ben Bassat Committee for reform of the tax system in Israel were published at the site of the Ministry of Finance. Tens of thousands of users downloaded the recommendations. They also sent their questions to the support team through the site. The site includes a calculator so that the users can enter their present wages, pension funds allocation and training allowance and calculate their net wages after the enactment of the tax reform. (see http://www.mof.gov.il ). (Haaretz, A4, 5.5.2000).

The Police established his site and followed it up by a publicity campaign inviting the citizens to make their acquaintance with its services. This act is well integrated into the community policing approach developed by the recent administration (see http://www.police.gov.il ).

The Land Authority for Israel is adopting a complete transparency policy. All its decisions and land registries are now accessible in its site. In a second phase certificates could be obtained directly from the Authorities site and paid through credit cards (see: http://www.mmi.gov.il ).

Broadband facilities for Internet access are ready to become operational through several means: cable modems by the cable TV companies; ADSL services to be provided by the historical operator, the Bezeq; downlink from the DBS YES multichannel TV company.

Licenses for these Internet broadband services are dependent on main legislation ammending the Telecommunications Act.

Tenders for licenses and spectrum allocation for LMDS and WLL services are expected in coming months.

Intensive activities are observed towards the establishment or the adaptation of existing Internet Portals for serving information through Cellular telephony.

WebTrust: The Israel CPA Chamber is considering the establishment of a training program for its members as providers of Web Trust certificates for electronic commerce. The board analysed the suggestion in all its operative aspects and it intends to adopt it so as to become the leading professional body in this area in Israel. The certificate is intended to increase the trust among customers carrying out commercial operations through the Internet. The chairman of the board, Alex Hilman said that the Chamber will consider leading the Web Trust program exactly like it has been carried out by the CPA Chambers in the US and Canada. (Haaretz, C4, 7.5.2000)

The Internet Mall 522 mobilised $ 1.5 million being valued at $ 12 million. The Mall started operation in September 1999 and in February 2000 began a publicity campaign of half a million dollars. The company was established in June ’98. In the initial phase it sold directly to customers using a telephone marketing system. "We started with 30 thousand products and we were commited to extremely low prices" say Dan Regev the general manager. Barak the International Calls company bought a third of the company in September ’99 and then the Virtual Mall was inaugurated. The services integrate the telephone marketing system and the Internet. The customer at the Web site clicks a button and reach a telephonist which helps him conclude his acquisition. The capital mobilised will be applied for three purposes: entering the food business; applications in establishing similar Malls abroad; and the main goal, that of establishing business to business ecommerce services. (Haaretz, C3, 2.5.2000).

Hed Artzi, the main music publishing company in Israel signed an agreement with the EverAd startup. Internet users may download songs from the network without payment. The technology called PlayJ enable compositors and disk companies to earn from the publicity that appears in the screen during the execution of the downloaded song files (Haaretz, C4, 30.6.2000)

Dr Uzi Melamed, the coordinator of the National Program for ICT in Education carried out a survey among 2,234 students of the 9th grade in 32 settlements. He found that 85% of the students have at their homes a Pentium PC computer. They use it each week for the mean time of 11.85 hours; boys using it for double the time (16 weekly hours) than girls (7.3 weekly hours). Most of the students use the computer as a text processor (29%) but also as a game player (24%). 17% use it to seek information in the Internet but only 5% send and receive email. Dr Melamed says that he expects disparities between students which have and those which do not have access to computer to become larger in the coming years; the Ministry of Education should take steps to avoid or at least mitigate this digital gap. (Haaretz, A7, 29.6.2000)

The Ministry of Education and the National Lottery invested in the program for computerisation of the educational system more than 500 million NIS in the last six years. Surveys carried out by the Ministry among 10 thousand teachers show that many of them are afraid of the computer and this is a substantial obstacle to its integration in the curriculum. Only 16% of teachers at Junior High School who teach Mathematics and Humanities are making current use of the computer in their classrooms. Only 1 among every 10 English teachers are able to use the Internet in their classrooms.

The program of Neemanei Mehashev (Computer Trustees) is seeking to establish students as computer tutors for their teachers with very good results (Haaretz, A7, 29.6.2000).

The Directorate for Science and Technology of the Ministry of Eduation, headed by Yaffa Vigodsky organised with the Israel Association for Computers in Education an International Conference on ICT in Education –Towards the New Milennium. More than 1,700 participants registered for the conference that has taken place June, 26-28, 2000. The proceedings and the exhibits, commercial and that for the ICT educational initiatives expressed the strenght of the multimedia industry in Israel and the ongoing computerisation program of the educational system. A significant presence of leading people involved in applications of ICT in education could be noticed, specially those associated with the EUN – European Schoolnet, the network of networks established by the Ministries of Education of the EU. (see: http://www.congress.co.il/education).

Ministry of Health: The Ministry of Health expanded considerably the services available through its Web site. The site allow transparency to the protocols and decisions of the Ministry and access to reports on Health in Israel; access to the Drugs Database and health statistics. Several services aimed to the general public are now available: The Bill of Rights of the Patient; Healthy Way of Life; The health of the mother and the child; How to avoid smoking; How to avoid infectious diseases; Dietetics and food; Mental Health, information guide. See: http://www.health.gov.il (Hebrew).

Foreign Labour for the Hi-Tech Industry in Israel: The demand for additional workers in the Hi Tech industry in Israel is growing. The Ministry of Trade and Industry presented an experimental program to the government for the employment of 1,000 foreigh Hi Tech workers for three years. This program is proposed in the wake of the demand by the Electronics Industries Association presented by its chairman Ami Arel (President, Elrom), Danny Goldstein (Formula) and the Association director Uri Har. They ask for permits for the employment of 10,000 foreign technicians and engineers for two years. They suggest that the industry pay 50,000 NIS for each foreign worker license so that a fund be established for the development of professional and technological education in Israel.

Due to the lack of qualified workers Israeli companies are emigrating and employing outside the country. AMDOCS employs 1,000 employees in Cyprus; Formula 300 workers in India and Elron 100 workers in Rumania. The turnover of workers in the industry reaches 15% to 20% and workers that bring an additional worker receive 20,000 NIS as a premium.

Strong objections to this program are expected in the discussion to be held in the government. There is preference for an alternative program for re training of engineers, specially new immigrants for hi tech occupations. This is in line of the government program for investments in human capital and combating unemployment. (Haaretz, C1, 29.6.2000).

In The Human Resources Conference held in April by the Israeli Center for Management several presenters pointed out to the critical, unfulfiled demand for technological human resources. Yehuda Porat director for Human Resources of Motorola Israel said that without additional human resources it will not be possible to run the Development Centers. For Israel to keep its status in the world technological market it should train 2,800 engineers a year while it is getting only 1,000 engineers. Prof. Yitzhak Parness, former chairman of the National Council for Research and Development said that the Ministries are unable to advance science learning. The progress in this area is too fast and teachers are unable to keep abreast. (Haaretz, C4, 14.4.2000).

The Ministry of Communications demands from Bezeq equal access to broadband Internet infrastructure (ADSL) for all Internet providers: The Ministry intends to establish in this way competition in the area of broadband Internet even in case that the offer of cable modem Internet access is delayed. The Ministry expect to be able to get lower prices for the subscribers to the new service. Daniel Rosenne, the Director General of the Ministry proposes that the ISP be allowed to set ADSL systems at the Bezeq exchanges and transmit fast Internet over the copper line that connects the user to the Bezeq. In the present experiment carried out by Bezeq the user can choose the provider from an opening screen; the Ministry demands that direct connections be allowed. The Bezeq expects to get 100 NIS for a monthly subscription to the new service (about 27 Euros). (Haaretz, C1, 17.5.2000).

Avoiding cross ownerships: The Anti-Trust Commissioner, David Tadmor, imposed on the businesman Eliezer Fishman, transfering his shares in the Internet Service Provider Netvision to the companies Elron and Tevel. In 1999 Aureq and Fishman bought 33% of the Netvision’s shares for $ 17 million. It was then expected that the Anti Trust Commissioner will object to the transaction due to the interests of Aureq and Fishman in other telecommunications companies, like Barak (International calls and Internet), one of the main competitors to Netvision. The parties agreed that in case the transaction is not approved they should sell their shares to Elron and Tevel at a previously agreed price. (Haaretz, C1 page 1, 7.4.2000)

Rating Committee as Monopoly: The Anti Trust Commissioner may establish that the Rating Committee for Broadcasts and the Tel-Gal companys are a monopoly. Since March ’98 the Committee through Tel-Gal operates the People-Meter to collect rating data. Tel-Gal is jointly owned by Gallup and Teleseker. The Committee is composed by the Broadcasting Authority; the Second Authority for Television and Radio; the three concessionnaires for the Second TV Channel – Reshet, Keshet and Telad; the Educational Television; the Israel Association for Publicity (companies that use publicity); the Association of Publicity Workers. The Anti Trust action is the result of complaints from other independent media planning companies – Pro-Media; Media-Planet; and Select-Media. Haaretz, page C4, 7.4.2000.

The Ministry of Education in cooperation with Microsoft Israel is running a campaign in schools against the use of unlawful software. The campaign is lead by Roni Dayan the Ministry National Inspector for Computer Applications in Education. It offers students who write essays regarding the need to respect intellectual property rights free copies of the Word 2000 software package.

Freedom of Information Law: The Freedom of Information Law entered in force a year ago. The Law demands that all governmental institutions and local authorities publish an annual report on the process of implementation. The Law garantees access to all citizens to governmental information (exceptions restricted to security related files). The citizen needs not justify his request for information; in case of refusal he can appeal to a court. The Government Publications office is leading the process for adequate Web solutions informing the public on the available archives and the ways to request the information. An extension of the deadline for the publication of the first annual report due in July is expected.

A meeting towards the establishment of a CERT like office in Israel has taken place in May at the initiative of the Israel Internet Association (http://www.isoc.org.il) . The meeting followed several months of contacts with the Israeli ISPs and the main institutions involved in the protection of the networks. A slow process of confidence building among the possible partners may culminate in the establishment of this service.

Bezeq – The Internet takes 22% of the local calls minutes The Bezeq financial report for the first quarter shows that the operational profit of the company is down by 30% in comparison to the first quarter of 1999. The price regime imposed to the company by the Grunau Report caused a decline in profits although there was a marked increase in the use of the lines. The income is down by 4% in comparison to the first quarter of 1999. The main cause is the decline by 20% of the income for inland calls. This decline is very salient due to the rise by 10% in the number of minutes of calls. The share of the Internet in the calls is a mean of 22% for the first quarter compared to 13% for the first quarter of 1999 and 19% for the last quarter of 1999. (Haaretz, C12, 25.5.2000)

The Cellular market expected to growth by 15% a yearA comprehensive study of the cellular market in Israel carried out by Sandar Kasabagi from Solomon-Smith-Barney values the Israel cellular market in $ 10.6 billion dollars: Pelephone - $ 3.8 billion; Partner – $ 3.6 billion; and Cellcom – 3.2 billion. The rate of penetration of cellular telephony reached at the end of 1999 49.2%, higher than the European mean of 45.7%. There are now 2.95 million users or 3.1 million if the users of the business wireless network MIRS are included. This express a rate of growth of 87% since 1994. The explanation offered includes: low prices, relatively high product per capita, young population, educated and concentrated in urban areas, high technological awareness and also a component of "show off and making an impression". Kasabagi says that despite the high rate of penetration there is still potential for growth albeit lower than that of the last five years. He forecasts an annual growth rate of 15% a year until 2005. We will then arrive to a rate of penetration of 88% in case of a fourth cellular provider (and 82% without a fourth provider). (Haaretz, C8, 24.4.2000).

IDC forecasts 1.5 million users of the Internet in Israel for 2002. In comparison to the number of 660 Internet users obtained by IDC for June 1999 their forecast 1.5 million users for 2002. (Haaretz, C2, 21.4.2000)

Reorganisation of the Bezeq. 530 workers of the Bezeq, the historical telecom operator, will be dismissed by June 2000 with special compensation. Some additional hundreds workers may dismissed as well. This is part of the reorganisation of the company: operational units are being closed and reorganised into three central units that will operate vis a vis private and public customers. An additional unit will be established, the National Network Unit. The Bezeq dismissed workers several times in recent years. By the end of 1999, 1800 workers were dismissed or retired early. (Yedioth, Mamon, p.3, 7.4.2000)

Cellular Internet: Competition between the cellular telephony providers for Internet Cellular access is expected to begin in about a month. The GoNext company owned by Pelephone and Suny will start in the coming week an Internet cellular service; it will offer Samsung devices. Partner acquired some thousands WAP devices from the Nokia company to be able to react to the GoNext announcement. Cellcom seems to be less ready; it is carrying some experiments using Nokia 7160, Erikshon 280i and Mitsubishi T250. Cellcom will offer cellular modems enabling owners of the PalmPilot a fixed connection to the Internet. (Haaretz, C7, 29.6.2000).

Religious Radio: In the wake of the new coalition agreement that enable the legalisation of the pirate radio broadcast of the SHAS Religious party the Broadcasting Authority is establishing a special religious radio broadcast channel. In October ’99 the Board of Directors of the Broadcasting Authority, under pressure from the National Religious Party representatives decided to transform the A Channel into a religious radio broadcasting channel. The ensuing public reaction lead the director of the radio Amnon Nadav and the chairman of the Board, Gil Samsonov, to announce that the A Channel will not be impaired and that the Religious Channel will not be established at its expenses.

Newspapers reading: 71.6 % of the population reads a daily newspaper; 84.4% read newspapers at the weekend. The distribution of the readers is 64.7% Yedioth Aharonot; 35.3% Maariv and 8.6% Haaretz. About 30% of the readers of daily newspapers read two of them (698 thousand). The survey was carried out by TGI a company jointly owned by Gallup and Teleseker (Haaretz, Economy, page C6, 31.3.2000).

No significant changes in the composition of the national regulatory authorities since our last report. The only significant observation is the direct intervention of the Attorney General for the Government, at the request of the Prime Minister, in the conflict between the Ministry of Finance and the Ministry of Communications. The Attorney General is not normally considered an regulatory authority.

The Anti Trust Authority continues to be very active. It has had a leading role, in coordination with the chairman of the Council for Cable and Satellite Broadcasting settling the conditions for establishing the YES company as a viable competitor in the market of multichannel television.

No significant events to be noticed since our last report. The chairman of the Plenary Board for the Public Broadcasting Authority, Gil Samsonov, in the wake of the devastating Vardi Report (see our last quarterly report) proposed a reform of the public broadcasting system. The proposal was prepared in consultation with the European Association of Broadcasting Authorities which is ready to follow up its implementation. The proposal seeks to establish the administrative and financial autonomy of the Authority. The Vardi Report recommended the dismissal of the present management of the Public Broadcasting Authority.

The Chief Scientist at the Ministry of Trade and Industry Orna Berry left the office and was substituted by Carme Varnia. The office of the Chief Scientist has an annual budget of about $ 400 million and is the main player in supporting RTD in Israel. This in addition to the Universities which receive their budget through the Committee for Planning and Budgeting of the Council of Higher Education directly from the Ministry of Finance.

A joint committee formed by the office of the Chief Scientist and the Budgeting Division of the Ministry of Finance are now elaborating the new law for the support of RTD. The present law, enacted in the eigthties is not adapted to the present needs. The influx of risk capital in the recent years ( $2 billion in 1999, an increase of more than 60% since 1998) and the new national priorities policy requires a reformulation of the RTD support policy.

The unit called HILA (Preparing Israel for the Information Age) was transferred from the Prime Ministry Office to the Ministry of Science, Culture and Sports as reported in a previous report. The competitive call for nominating the director of the unit from among the present officers of the Ministry did not succeed in nominating the director. There is now an open call for an external nomination. Before the nomination process is completed the unit is not expected to become fully operational.

4. Market: Privatisation, foreign investment, mergers, acquisitions, call for tenders,…

Lucent bough Chromatis for $ 5.7 billion dollars. Lucent Technologies the producer of telephony equipment bought the Israeli Chromatis company in a deal of shares exchanges for $ 5.7 billion. Chromatis was established in 1997 and has 100 workers. Its sales are $ 25 Million and it deals with opto electrical devices for urban networks. (Haaretz, C3, 28.5.2000)

The exports of the Israeli Hi Tech Industry are expected to reach $ 37 billion in 2010 the Israeli Hi Tech industry has potential to growth 10% a year which can bring a rise of 14% a year in exports. These are the forecasts of economists Jacob Sheinin and Yossi Holander in an special report they prepared for the Israel Democracy Institute. If these forecasts are realised Israel Hi Tech exports will reach $ 37 Billion in 10 years and will take a 45% share of the export of services and goods of the country. Twenty percent of the annual additional employees in the country will be absorbed in the Hi Tech industry and will reach 230 thousand employees, 10% of the employees in the business sector in Israel in less than ten years.

In 1999 the Hi Tech sales were $ 11.5 billion; the number of employees reached 100 thousand that are 8% of the employees in the business sector. The industry brought to the country about $ 7 billion in addition to sales and wages: $ 3 billion mobilised in the world Stock Exchanges; Israeli companies were bought by $ 2 billion (excluding the sale of DSPC to Intel for $ 1.6 billion) and risk capital funds mobilised another $ 1.5 billion. (Haaretz, C6, 24.4.2000).

Rise of 74% in Risk Capital investments in Start Ups in the First Quarter of 2000 - $ 597 Million The rate of growth of risk capital investments in Israel rise from quarter to quarter. In the last quarter of 1999 the investmets reached $ 343 Million, in the first quarter of 2000 they rised by 74% reaching $ 597 Million which is 59% of the overall capital mobilisation in the whole year 1999. The survery refers to the period prior to the fall in the NASDAQ technological shares. The component of Israeli funds in this investment is $ 209.9 million against 139.9 in the former quarter; their share in the investments have droped from 41% to 35%. (Haaretz, c1, 14.4.2000) .

Drop in the value of Israeli shares: The value of Israeli companies in the American Stock Exchanges fell by 50% in the last month. The five leading companies lost 27 billion dollars of their value (Check Point from $22 b. to $12 b.; Amdocs from $20 b to $13.8 b; Comverse from $18.7 b. to $12.7.b.). (Yedioth, page 4, 5.4.2000)

Diamonds in the Internet: The Diamonds Marketing Site set up by Odimo-Com owned by Benny Steinmatz and the japanese investment bank Softbank completed mobilization of capital in the order of 125 million dollars. Investors from Europe, Japan, New Zealand and Australia. This investment add to the 31 million dollars invested by Softbank in Odimo a month ago (Yedioth, Mamon, 31.3.2000)

BackWeb which specialises in push technologies has acquired the technologies from Movick for 16 million dollars due to the increased demand for push solutions for cellular telephony. (Haaretz, C7, 29.6.2000)

Cellular solutions for a market of $ 4 billion. Mihshuv Yashir Systems (Direct Computing) is one of the four final contenders for the award Microsoft Platform Solution of the Year. Their subsidiary Cellutions offers cellular access to the organisation databases for customers and field officer like marketing and service agents. Waplook enables an owner of a cellular phone to carry out any action on the Outlook database; another application, enables the management of the customer system using the cellular phone. (Haaretz, C10, 29.6.2000 )

AOL invested $ 60 Million this year: The AOL company invested $ 60 million in from the beginning of this year in five Internet companies and in four risk capital funds ($ 5-15 million in each fund) and $ 1-5 million in each Internet company. One of the companies is Earthnoise which enable users to upload private video films to the Internet. The other companies are Gizmo, E-Sim, Deal Time. Most investments were made after the visit to Israel of Ken Lider , General Manager of AOL Investments. (Haaretz, C9, 15.5.2000).

The Israel Internet Association (http://www.isoc.org.il) announced that a Beta version of the Netscape Communicator 4.6 supporting for standard Hebrew is now available to the public. The association provided funds for developing such browser in cooperation with IBM. The purpose of this initiative is to avoid having the Israeli market dependent exclusively from the Microsoft Explorer version 5.0 browser for Hebrew support. So far the Explorer was the only browser fully supporting standard Hebrew. A public domain version of the Netscape Communicator Messenger supporting standard (logical) Hebrew is to be developed next by the Association. These interventions became necessary as no other commercial body was interested in providing standard Hebrew support for Netscape products.

An W3C office is being established in Israel and its board is chaired by Prof. Michael Bercovier from the Hebrew University. The steering committee is composed by the Israel Internet Association; ILA, Israel IT Association; the Hebrew University; the Technion; Tel Aviv University. Following the W3C council meeting held in May the office is beginning efforts to expand the membership of Israeli companies in this central standardisation body.

Please note that this report has been prepared under the sole responsibility of the ESIS II contractors.
It does not necessarily reflect the views of the Commission, nor does the Commission accept responsibility for the accuracy or completeness of information contained herein.
The ESIS Team of contractors welcomes any additional information or corrections.