I am writing to comment on your article entitled “Connectivity a must in golden age of infrastructure,” which was published in your July 16, 2017 print edition.
The PCC’s “unjustifiable” overlapping role with that of the NTC and the DICT
It should be noted that the Philippine Competition Commission (PCC) was created under the Fair Competition Act (RA 10667) with the specific remit of enforcing the law against anti-competitive practices in order to enhance competition for the benefit of national competitiveness and development, as well as more choices, better service and lower prices for consumers. It is hoped that this new law and the commission will finally break the monopolistic hold over Philippine telecommunications and Internet, and encourage adoption of global best practices that are open, transparent, fair and competitive.
For over a decade under the two dominant players—Globe and PLDT-Smart—the quality of Philippine internet has fallen behind that of its neighbors. The Philippines’ average internet speed finally fell to last place in the region as of the 4th quarter of 2016 (Akamai State of the Internet Connectivity Report). For the longest time, many had hoped that these two dominant players would provide internet connectivity at par with other countries in the region. Clearly, this has not been the case.
Thus the Philippine Chapter of the Internet Society supports the PCC’s review of the take-over by Globe and PLDT of the SMC telecommunications companies and the mobile frequencies (e.g. 700 MHz) previously assigned to these SMC companies, in the wake of Telstra’s planned but scuttled entry into the Philippine market.
It should be noted that the dominant telcos brought the matter of the PCC’s review of the SMC telecommuncations takeover to the courts, thus it is the dominant telcos who are responsible for any delays in the required review. It should also be noted that, the dominant telcos have allocated between themselves the frequencies (including 700 MHz) previously assigned to the SMC telecommunications companies, and that they have had use of these for over a year, with no significant improvement in average mobile Internet speeds.
“[Salalima] added that they prefer the option to build a broadband infrastructure that will be operated and managed by the government through the DICT.”
The Philippine Chapter of the Internet Society supports DICT’s moves towards a National Broadband Network that will enhance connectivity across the country. However, a taxpayer-funded NBN should not merely serve as an adjunct to the dominant telcos’ networks or primarily benefit large players. But, as a national network, instead serve and further enhance the provision of internet by all players, including smaller ISPs particularly those outside Metro Manila and in the countryside.
“In order to implement the plan, DICT needs operational telcos like PLDT-Smart and Globe Telecom to participate in the program.”
As mentioned in the preceding paragraph, there already exists a “last-mile” ecosystem of small ISPs (many are cable TV operators), but these small ISPs are at the mercy of the two dominant telcos for wholesale internet pricing and availability. This was highlighted at a Senate (economic affairs committee) hearing, where a lawyer representing these small ISPs informed the committee that despite their having invested out-of-pocket for infrastructure in previously unserved rural areas, the dominant telcos had not provided the “middle mile” wholesale connectivity that would enable their smaller networks to operate.
Thus the focus should not primarily be on serving the needs of the existing large (and highly profitable) players, but in supporting existing and potential efforts by smaller players to “wire the countryside,” at the same time fostering a more open, transparent and competitive wholesale Internet market. The government’s NBN can thus serve as a national internet backbone providing reliable and reasonably-priced wholesale Internet connectivity to all players in a fair, open and transparent fashion.
“PLDT-Smart and Globe Telecoms—might be affected by the aggressive intervention of the Philippine Competition Commission in the work, decisions, and actuation of both the National Telecommunications Commission and the DICT.”
On the contrary, it is precisely because the Philippine internet, under the dominance of only two large players operating in a monopoly environment, has fallen towards the bottom of the regional and global rankings, that the PCC should fulfill its lawfully mandated duty to ensure fair and open competition for the benefit of consumers and national development as a whole. To tailor-fit an NBP or NBN to the wishes of the two dominant telcos will be tantamount to government intervention that effectively socializes (their) costs whilst maintaining (their) privatized profits.
Winthrop Yu
Chairman
Philippine Chapter
Internet Society