January 2001

Palestinian territories Master Report

1. Introduction and Summary

2. Information Society Policy

2.1. Historical overview and general legislation

2.1.1 Overview

Prior to the establishment of the Palestinian Authority, the Telecommunication Office of the Israeli Civil Administrations in the West Bank and Gaza Strip assumed the role of the policy maker, regulator and operator. No formal regulatory framework existed. This resulted in limited telecommunication services concentrated in the limited business sectors of the main cities. No value-added services of any nature existed. On the other hand, the general policy favoured Israeli companies in terms of equipment provision. The switching capacity was totally controlled by a single Israeli telecommunication equipment supplier.

With the establishment of the Palestinian National Authority, the Ministry of Post and Telecommunication assumed the role of the regulator. While the official policy of the Palestinian Authority is to engage the private sector in all operational aspects and thus establish a regulatory framework adequate for a liberalised market it is evident that the framework does not exhibit coherence or maturity for stimulating the required activities of the private sector. The only sizeable regulatory activity was issuing the license agreement of the Palestine Telecommunication Company, PALTEL, as a provider of telecommunication services. Neither the scope nor the characteristics of the license have been publicised. As a result, the regulatory framework does not provide the adequate transparency for the involvement of the private sector. In addition, the Ministry has been selective in exercising its regulatory duties. For example it has failed to cap the excessive tariffs levied by PALTEL for data-communication services such as point to point leased lines, whereas, it has imposed unprecedented licensing fees on the consumers of such services.

The telecommunication equipment market lacks any regulatory standardisation. Most of the equipment is channeled through Israel and is subject to compliance with Israeli standards. On the other hand, the Ministry has imposed licensing procedures marked by excessive fees for trading with wire-line and wire-less telecommunication equipment and is trying to expand this policy to the data-communication market. Spectrum management is limited to rationing the frequencies that were allocated by Israel for the use of the Palestinian Authority as provisioned by the Telecommunication annexes of the Oslo agreements. Excessive fees also mark issuing of licenses for local radio stations.

2.1.2 Present general legislation

The present legislative system in Palestine is of mixed heritage. The system combines Islamic rules from the Ottoman era, English Common Law and French Civil Code principles, in addition to Jordanian legislation (particularly in the West Bank) and customary practices. The result is a complex set of legal principles layered atop each other without philosophical coherence. The courts in Palestine are two-tiered: First Instance and Appeals in the West Bank and similarly in Gaza, although in Gaza, the court of appeals is a Supreme Court. The trial system is adversarial. Palestine does not use juries.

2.1.3 Key legislative measures

In an attempt to rectify the judicial system in Palestine in a manner that encourages investment and development, the Palestinian National Authority has embarked on a set of legislative measures. Among these measures are:

2.1.4 Industrial Zones Law

The Law on the Industrial Estates and Industrial Free Zones was enacted in 1998. The Law designates certain areas Free Zones to facilitate the establishment of regional and international export centres. An autonomous Industrial Estate and Industrial Free Zone Authority was established to oversee such development. This authority is entrusted to creating a regulatory framework for the success of their operations.

2.1.5 Law on the Encouragement of Investment

The law was enacted in 1998 with the objective of providing a comprehensive framework of guarantees, incentives and benefits to the investor. Incentives include; exemptions from income tax for the first 5 years; investments exceeding US$5 million are granted an additional 20-year period at the rate of 10%; any special investment in type and capital may be entitled to an additional 20-year period at the rate of 10%; and exemptions between US$1million – 5 million are granted an additional 12-year period at the rate of 10%.

2.2. Umbrella Policies and national IS strategy

The signing of the first peace agreement, titled "Declaration of Principals (DOP) on Interim Self-Government Arrangements", in Washington DC between the Palestine Liberation Organisation and the State of Israel on September 13, 1993 set the framework for limited territorial withdrawal from the West Bank and the Gaza Strip by Israel and introduced the structure of a recognised Palestinian governmental body, the Palestine National Authority (PNA) to replace the Israeli Civil Administration. The PNA, in light of the DOP and subsequent agreements with the Israelis, is legally permitted to "build and operate separate and independent communications systems and infrastructures including telecommunication networks." (Article 36 of the Israeli-Palestinian Interim Agreement on the West Bank and Gaza Strip, Washington D.C., September 28, 1995. Also referred to as the Oslo II agreement). PNA promotes and supports the use of information technology in all the areas of the government structure.

The regulatory environment may be characterised by renewed attempts to adjust the general telecommunication regulatory framework. On one hand there has been a public campaign centred on a "call of appeal" to President Yasser Arafat, conducted by ITSIG (Information Technology Special Interest Group). The members of ITSIG were asked to forward a letter (either by fax or e-mail) to the President requesting concrete steps towards liberalisation of the telecommunication market so that Palestine will be better positioned to counter the expected advancements in neighbouring countries. This move has been well received by the President. A clear directive was issued to Minister Massri, Minister of Economy and Trade, to follow up on the issue and report back clear recommendations for action.

As a result, Minister Massri decided to call upon the Steering Committee of the "Study for the Restructuring of the Telecommunication Sector in Palestine", conducted by KPMG for the Palestinian Economic Council For Development and Reconstruction (PECDAR), in order to discuss ways of updating the recommendations of the study taking into consideration the developments in the sector over the past few years.

On the other hand, PITA (Palestinian Information Technology Association) continues to negotiate and push, Mr. Imad Al-Falouji, Minister of Post and Telecommunications, to eliminate the burdening licensing procedures required for using value-added service. Several meetings were conducted in an attempt to reduce the licensing fees required for the importation and sales of business telephone systems, cellular terminals and other telecommunication equipment. In addition, PITA continues to campaign for the removal of the licensing fees required annually for users of any leased line circuits.

2.3. Government and administration (national, regional, local)

Although the Palestinians were due to have declared statehood on September 13, they pushed back the date to give more time for peace negotiations with Israel. The Palestinian leadership now says its main goal is to build national institutions so they will be up and running once statehood is eventually proclaimed. For its part, the communications ministry has vowed to implement reform.

As the web of Palestinian-run territories approaches statehood, the Palestinian leadership has increasingly touted the Internet as a possible springboard to launch its new national economy. Many Palestinian Internet entrepreneurs point out that the monopoly telephone provider in the territories, has bridled the sector’s development. While President Arafat has repeatedly said he hopes to turn the future Palestinian state into an information technology powerhouse similar to Singapore, Palestinian professionals speaking at a symposium, at Ramallah the 13^th and 14^th of September, described the current hi-tech sector as unpredictable and that a more clearly defined playing field would help attract investors.

2.4. Telecommunications and Internet

2.4.1 Public telecommunication operator - The Palestine Telecommunications Company (PALTEL)

On May 1995, the Palestine National Authority and a group of private investors agreed to establish The Palestine Telecommunications Company (PALTEL), the public telecommunications operator in Palestine. PALTEL assumed its operational responsibilities in January 1997 after a long process of negotiations for its license. PALTEL is a joint stock company - registered in Jericho- with an initial capital of 45 million Jordanian dinars (about $50 million) of which PADICO’s share is 22%. 66 institutional investors, including PADICO own three-quarters of the company’s shares, while the remainder is owned by the public sector. PALTEL has therefore become the first privately controlled public telecommunications operator in the Middle East-North Africa region. The Ministry of Post and Telecommunications regulates PALTEL through a licensing agreement.

The objectives of PALTEL include implementing the general development plan of the telecommunications sector, including expansion of the communications network by adding 600,000 new lines and upgrading the existing network. The required investment is estimated at US$550-600 million over 10 years.

2.4.2 PalTel Introduces ISDN

Palestine Telecommunications will be offering Integrated Services Digital Network (ISDN), in most of its service areas in the next few weeks. The new service has been authorised by the Ministry of Post and Telecommunications (MoPT) and was announced by Surinam Mashriqi, PalTel marketing director. According to Mashriqi, the telecommunications breakthrough is the result of enhancing and upgrading the services of the regular network. ISDN can provide faster, higher quality, telephone, fax, data, and photocopies transmission services. The availability of two fast 64kbps lines enables customers to send faxes and make telephone calls during Internet connection.

Initial services will be offered in Nablus, Ramallah, Al-Bireh, Bethlehem, Hebron, Ar-Ram, Qalqiliya, Jenin and Gaza. ISDN call charges will follow the pricing of regular, local, national, and international calls. Bulletins regarding pricing will be distributed by the various customers service centres around Palestine.

2.4.3 Internet access

Telecommunications minister Imad Al-Faluji issued a ministerial decree (the order is due to take effect from the 1^st of October) imposing a flat 20-dollar rate for Internet access aiming to increase the number of Palestinians connected to the Internet by lowering costs.

2.4.4 Internet technology

The Across Borders Project was initiated in January 1999 by the Birzeit University Information Technology Unit. It aims to bring Internet technology into Palestinian refugee camps across the Middle East and will see the creation of bilingual (English/Arabic) camp websites, including on-line news, oral history and stories from Palestinians refugees. The Across Borders Project also aims to facilitate the connection of refugees with each other. The pilot phase of the project was launched in Deheishe Camp, near Bethlehem at the Ibdaa Centre. A fully equipped computer lab was opened in Deheishe on Saturday 24 July 1999, and 10 camp residents have completed a 36-hour training course at Birzeit University. Courses in basic computer use and Internet training have been launched. By utilising the latest in Internet technology Palestinian refugees living in camps will be able to directly communicate with the world on an unprecedented scale. Importantly, this communication will be coming directly from refugees themselves, not mediated by other interests. The camp websites will revolutionise the ability of refugees to portray their situation to the international community. They promise to increase the advocacy efforts of refugees and their representative bodies through raising their voice on an international stage.

2.5. Education and research

The Ministry of Higher Education strives towards initiating a qualitative leap forward in higher education from a strategic point of view and through daily interaction with Palestinian universities and colleges. The Ministry has established councils, administrations and departments and sections in order to help achieve the above-mentioned aims. Each Directorate-General has its own work plan emanating from the Ministry’s general objectives.

2.5.1 Directorate General of Planning and Development.

The Directorate – General of Planning and Development is in charge of compiling quantitative and qualitative data on higher education in Palestine. It is responsible for laying out a strategic plan for scientific research and its support, in addition to preparing the Ministry’s plans and those of higher education in Palestine in general. Follow-up of these plans, their implementation, evaluation and proposing development programs for Palestinian universities and colleges are also part of the Directorate General’s responsibilities.

The Directorate General comprises the following departments and sections:

• The information Systems Department

• The planning and Development Department

• The Computer Department

• PASNet

The information Systems Department is responsible for gathering quantitative and qualitative data on Palestinian higher education and preparing the tools necessary, i.e. questionnaires for the above mentioned purpose. In addition, the department is responsible for documentation, categorization, classification and tabulation of the information in computerized databases. The department analyses the data and publishes it as reports and special leaflets. The department also offers technical support to researchers from the Ministry or to outsiders through its databases and leaflets or by other means.

The planning Department is responsible for setting both short and long-term plans for the Ministry and Palestinian higher education, in addition to proposing developmental programs for Palestinian universities and colleges. The department also assumes responsibility for preparing the Ministry’s budget.

The Computer Department is in charge of installation and maintenance of the internal network, in addition to running programs and building any computer software needed by the various departments and sections at the Ministry. The department also transmits the Ministry’s activities and news to the world through the Internet, in addition to retrieving information needed by the Directorate-General for Planning or other Directorates for purposes of research or planning.

2.5.2 PASNet

PASNet is an information and communications network for the institutions of higher education and research in Palestine. This network depends on electronic communications to connect Palestinian institutions of higher education to international networks and universities. The aim is to exchange information, share resources and strengthen ties between students, professors and employees in the academic and research fields.

2.6. Transport

PCBS’ (Palestinian Central Bureau of Statistics) Transportation and Communication Statistics Program is expected to fulfil the responsibilities of:

• Compilation of statistics on activities related to the physical features of transportation and communication, as defined by international standards and classifications, and to provide an overview of the transportation and communication sector in Palestine.

• Activate the dialogue between the data providers and users

• Meet the needs of local and international transport and communication statistics users by presenting the data in user friendly manner

Now, the Transportation and Communication Statistics Program is publishing the current status report on transportation and communication statistics.

The Transportation and Communication Statistics Department finalized a brief proposal for the work plan for the period 1998-2000; the main projects to be carried out are:

• A general quarterly report on transportation and communication statistics

• A yearly traffic volume survey (traffic counts) covering traffic movement.

• A survey of trucks, reflecting goods movement in Palestine. The statistical unit in this survey will be on the level of trucks.

• A survey of communication. This survey is to be carried out with the co-operation of the Palestinian Telecommunications Company

2.7. Health care

Since its establishment in 1994, the Ministry of Health (MOH) has assumed direct responsibility for the provision and development of health services in the Palestinian territories. The Ministry has been striving to optimise the utilisation of the available resources and opportunities, in order to attain its goals of meeting the health needs of the Palestinian population. Among the resources to assist the MOH are Technical Assistance Projects (TAP) including the "Health Service Management Unit". The Ministry of Health established the HSMU in 1995, with the assistance of UNICEF and the Italian Co-operation. The global objective of HSMU is to contribute to building up the technical managerial and administrative skills that are needed to run an efficient and effective health system.

The Palestinian health sector suffers from the lack of reliable data on many aspects such as morbidity, mortality and other health status measures. This fact, therefore, complicates the process of identifying priorities, making policies and allocation of resources, both efficiently and effectively. As indicated in the Palestinian National Health Plan (NHP), an efficient nation-wide computerised communication link facilitating the operation of an efficient Management Information System (MIS), is very significant for improving the health care management. Also, the NHP identified MIS as a priority area to improve the quality and efficiently of the Palestinian health care system.

Therefore, the Ministry of Health developed several proposals concerning this issue and presented them to donors. Moreover, the Ministry of Planning & International co-operation conducted feasibility studies for establishment of communication links. The MOH has commissioned on a competitive base, a local firm to conduct feasibility study concerning communication links and to pilot its implementation. In addition, it has developed a project to establish a MIS on a national level. On that account, the MOH intends to effectively use local and international resources in co-ordination with the Ministry of Planning & International Co-operation via its governmental Computer System, in order to establish the communication hardware that links the West Bank & Gaza Strip and to train people who will use this system.

General Objectives:

• Develop a nation wide computerised communication links facilitating the operating of an effective health management information system to be connected to the National Information System that link all Palestinian ministries.

• Serve the Palestinian community by a system that collects, tabulates, stores and makes the information on demography, health status and health resources available for policy makers in the health area.

It is expected that the communication of MIS and E-MAIL will be properly functioning at the national, regional, district and the community levels, and will be served by a data system that is capable to:

• Detect and monitor conditions contributing to morbidity and mortality.

• Support epidemiological surveillance system.

• Provide necessary data for development and evaluation of prevention control measures, and research strategies.

• Identify and create sources of community data to be used in measuring progress of its health status

• Ensure that organisations follow standardised procedures for collecting health data.

• Establishing a satellite-based computer network to provide a national health management information system linking all districts of the Gaza Strip & West Bank.

• At a regional level two central units will be developed so as to collate data from both Gaza Strip and West Bank district units; one of these regional central units is already existing. (Governmental Computer Centre, Gaza). A process of establishment the other regional central unit in the west Bank is underway.

• At a district level, each district unit will be provided with a computer network that connects it to the relevant regional central unit on one hand, and to the health institutions (hospitals/or clinics) on the other.

• At the institution level, each institution will be provided with equipment (according to the size of work) enabling them to be networked to their district unit.

2.8. Labour

Ministry of Labour was established in Palestine on 28.7.1994, after signing the Palestine-Israel Declaration of Principles. HTTC, is a Training Centre for advanced technical skills with emphasis on computer-based training and methods. The centre is a joint project of the Palestinian Ministry of Labour and the HANNS SEIDEL STIFTUNG. The aim of the project is to offer advanced training in computer Aided skills for the Palestinian Workforce.

The target groups of HTTC are:

• Professionals: Such as Doctors, Civil Engineers, Mechanical Engineers, Accountants, statisticians, managers, researchers, and teachers.

• Technical Specialists: Such as hardware Engineers, Software Engineers, Information System Managers, Telecommunication Specialists, Network Administrators, Technicians, Programmers.

• Office Staff: Such as Executives, Executive Assistants, and Administrators.

• Designers: Computer Aided Designers, Fashion Designers, Advertising Specialist, Photographer, Architects, and desktop publishers. Video producers.

2.9. Competition

Apart from the licensing agreement of PALTEL, the licensing procedures in Palestine thus far may be characterized as "Class Licensing" type. The Ministry of Post and Telecommunication has setup a regime of licensing for almost every aspect of the telecommunication sector. The regime includes both consumers as well as providers of services. The following is a sample list:

• Class License for Internet service providers

• A rigorous process for applications including clearances from the tax authorities and local government with an annual licensing fee of US $ 1400.

• Class License for users of leased lines

• A rigorous process for applications including clearances from the tax authorities and local government with an annual licensing fee of US $ 570.

• Class License for trade in wire-line and wire-less equipment (including telephone sets, PBX's, cellular terminals, fax machines, etc)

• A rigorous process for applications including clearances from the tax authorities and local government with an annual licensing fee of US $ 1400.

• Class License for FM radio stations

• A rigorous process for applications including clearances from the tax authorities and local government

• An annual licensing fee of US $ 1400

As the license of PALTEL has not been made public, only observations about Universal Service, Tariffs and QoS can be made.

2.10. Access for all

It is evident that PALTEL is subject to continuous pressure from the Ministry of Post and Telecommunication to reduce the cost of telecommunication services. While success has been evident in telephony services, the value-added services such as point-to-point leased lines are still highly priced. For example, the Minister of Post and Telecommunication has just announced that the Ministry have succeeded in modifying the telephone service rates as follows:

• 35% reduction on all international calls.

• Local calls (with in area) has changed tariff form NIS 0.29 per unit (unit length varies between 3 minutes/unit in peak hours and 38 minutes/unit in off-hours) to NIS 0.03 per minute.

• On the other hand leased line users continue to pay US $ 475 for a managed 64Kbps national link.

(See also Appendix: Telephone Tariffs in Palestinian Authority Areas)

2.11. Copyright, intellectual property rights

Palestine aims to apply for membership of the World Trade Organisation (WTO). WTO related IPR rules are being examined to determine the scope of compliance required. The PNA has committed to modernise its intellectual property laws. Presently, Trade-name Law No. 30 of 1953; Trademark Law No. 33 of 1952; Patent Law No. 22 of 1953 due to their old policy considerations do not reflect the changes in intellectual property rights. As to copyright, Ottoman Mejjlah principles apply. Presently, the Ministry of Culture has prepared a draft Copyright Law. The draft Copyright Law will be reviewed for WTO compliance. As for the existing laws, the Ministry of Economy and Trade is presently reviewing the draft law for compliance with WTO TRIPS.

2.12. Privacy, data protection, consumer protection

In Palestine, adequate protection of privacy is lacking. While some Government Registers such as the Company Register, Commercial Register and Land Register have rules for access through the operation of, say the Company Law or Real Property Law or Police Registers, other information databases that are becoming electronically available have not been addressed - neither the proposed basic law nor other legislation such as a Privacy Law or Official Secrets Law or Data Protection Law. While the public may have difficulty accessing information about their own records, the police for example can easily have unlimited access.

Computer-related crimes such as theft of information, fraud, record falsification, piracy are not covered in the Palestinian criminal law. The language of existing provisions is sufficiently broad that computer crimes may be included, however changes to the criminal law are under consideration required. The draft Copyright Law addressed copyright of computer programs and software.

The Systems Development (SYSD) department, under the Palestinian Central Bureau of statistics (PCBS), has a development plan that includes the initialisation and implementation of data protection legislation.

2.13. Others

2.13.1 Interconnection

Recent attempts by the Ministry of Post and Telecommunication to eliminate the Israeli restrictions on international connectivity have been successful. The Ministry managed to secure a successful vote among the members of the ITU to grant Palestine an international country code. The code 970 has been granted and a number of countries have started using it.

3. Institutions and organisations in charge of IS regulation

4. International relationships and agreements

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

6. Standards

Appendix