New players key to solving Internet woes

Lowering entry barriers, adopting open access and updating decades-old regulations are key steps to resolving “slow and expensive” Internet services in the Philippines.

These were some of the recommendations contained in a policy brief presented on Wednesday by the Joint Foreign Chambers of the Philippines.

The brief, written by independent researcher Mary Grace Mirandilla Santos, also called for the creation of a Department of ICT (Information and Communications Technology), infrastructure sharing and interconnection among telecommunication companies and appropriate spectrum management.

The publication comes as the Philippines falls behind its neighbors in the region in terms of the quality of Internet service, which is seeing a boom in demand. The cost of broadband here is also among the highest, with the Philippines ranking the “second-worst” in terms of affordability in the Asean region.

The report said a change in policy was timely given the upcoming presidential elections in May this year.

“This is good opportunity to design and implement another cycle of major reforms,” a portion of the policy brief read. “It is hoped that broadband connectivity would be one of the key focus areas not just as an issue of infrastructure but that of competitiveness, innovation, development and consumer welfare.”

Telecommunications services in the country are controlled by two players: Philippine Long Distance Telephone Co. and Globe Telecom. Easing or removing barriers to entry, which include a congressional franchise and foreign ownership caps as well as the “anti-competitive” structure in the backhaul networks would help lure more competition.

The National Telecommunications Commission was also scored for its “weak and ineffective” regulation. Outdated laws, too, needed to be revised.

For example, fines for erring telcos are based on the 80-year-old Public Service Act, which levies a penalty of just P200 a day. Separately, the Public Telecommunications Policy Act was enacted more than two decades ago, before Internet services were commercially available in the country.

During the launch, Winthrop Yu, chair of the Internet Society-Philippines Chapter, said weaknesses on the regulatory side could be partly solved with added competition.

“We really do need more players in this sector, otherwise even the most powerful regulator can’t do much,” he said.

An Open Access scheme, for example, allows the separation of infrastructure from service provisioning. The current structure, on the other hand, encourages a telco to own and maintain a network that provides all services. Open Access would open up the market to different players without requiring a congressional franchise, the policy brief said.

“Having poor and expensive Internet is equivalent to a malnourished child. If we don’t want our national development stunted, we have to improve Internet connectivity,” Yu said. TVJ

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