NGCP, DICT move forward on fiber optic capacity for National Broadband Project

The National Grid Corporation of the Philippines (NGCP) and the Department of Information and Communications Technology (DICT) have reached a mutual decision to move forward in relation to NGCP’s fiber optic capacity that will be made available to third parties in the implementation of the National Broadband Program (NBP).

After a meeting with NGCP President and CEO Henry Sy Jr, DICT OIC Undersecretary Eliseo Rio committed to partner with NGCP on the use of transmission facilities as backbone for the NBP for the duration of the latter’s Concession. In a statement, Usec. Rio noted, “The core of the matter is who owns the dark fiber of NGCP/Transco. When it is turned over to TransCo, whatever agreement was done with NGCP may be modified, changed, or reviewed by TransCo.”

NGCP earlier reiterated that it is willing to enter into a bilateral agreement with government for the lease of its fiber optic capacity available for use of third parties at no cost. “NGCP will enter into the agreement up to the life its Concession, which is until 2034, provided that in the event that the Concession is extended, the bilateral agreement will also be extended,” the company said in a statement.

“NGCP will not object to any separate agreement DICT signs with TransCo for so long as the exclusive rights of the company in relation to transmission and related businesses, for the entire duration of its concession are upheld,” it added.

NGCP’s explained that its existing fiber optic cable network enables real-time communication between transmission facilities, and with generators and distribution utilities. The fiber optic capacity to be leased out by the company uses transmission facilities. Allowing government or third parties to “piggy-back” on this transmission communication backbone will be critical in the immediate implementation of government’s national broadband program.

“We are not interested in entering the telecommunications business. Transmission operations remains the primary business of NGCP. The lease of available fiber optic capacity is specifically allowed under our concession as a ‘related business to maximize the utilization of its assets.’  Such lease agreement is contemplated by our concession and franchise and is not considered our primary mandate,” the company stressed.

NGCP further explained that its available fiber optic capacity can potentially support both the needs of government and a private party. “Should the government use only a portion of the fiber optic capacity available for use by third parties, NGCP may also enter into other bilateral contracts with interested telecommunication companies based on the contract with government, for the use of the remaining capacity. Under the EPIRA, 50% of the net income from these bilateral contracts will be used to reduce transmission rates. But priority use remains with NGCP’s internal communications purposes and government’s NBP,” the company added.

NGCP is a Filipino-led, privately owned company in charge of operating, maintaining, and developing the country’s power grid, led by majority shareholders Henry Sy Jr. and Robert Coyiuto Jr./au