Govt should be the third telco
THE right to internet access or right to broadband or freedom to connect is the right of people to access the Internet in order to exercise and enjoy their rights to freedom of expression and opinion and other fundamental human rights that “states have a responsibility to ensure that Internet access is broadly available, and that states may not unreasonably restrict an individual’s access to the Internet.” In 2011, a United Nations report said that disconnecting people from the Internet is a human rights violation and against international law.
It is clear that in our case, there is market failure due to bad service, high fees, snail speed and much more. The lack of competition has given rise to Globe and Smart dictating how things should be, with regulators unable to get them to respond to the needs of the market. Globe owns 300 MHz while Smart has 400 MHz of frequencies. They constitute what we call a duopoly, or two telecom companies monopolizing, dictating and controlling the market of cellular and internet services in the country.
The story of how they amassed the frequencies is a tale of how inutile, inefficient and captured the regulator is. The National Telecommunications Commission, or NTC, despite the creation of the Department of Information Communications Technology (DICT) under Republic Act 10844, lords it over small players and remains pro-duopoly. It does not help that the head of the agency has been sitting there for over three administrations already.
With the duopoly dictating how things should be, there continues to be formidable shadows in every effort to introduce a third player in the country. The two telecom companies secured the frequencies from congressional franchises with political connections and saliva as investments. They roll out according to their liking, putting roadblocks to every sectoral reform initiated by government. They blame local governments for the inability to build more towers and even point at malefactors who threaten their towers as proof that they cannot roll out and business is too risky. This, after decades of milking Filipinos from missing loads, bad interconnection, drop calls, bundled services that are non-existent, locked-in services and units, opposing VAS, promos that have deadlines etc. Decades after, rural Philippines is not connected; the last mile is unserved.
The frequencies they hold are owned by the 105 million Filipinos and yet no clawback has ever been done by the NTC due to bad and expensive service.
As we have been taught, in case of market failure, government needs to intervene to correct the market and protect the public. Much has been said and done on the road to designating the third telco or the new major player (NMP). Issues have been raised, approaches debated.
But, if we want to break the stronghold of the duopoly, to ensure that a fourth, fifth and even an eighth player can come into the market to compete, government must intervene and be the third telco. Government knows its assets. Just check the National Broadband Plan (NBP) and the pilot run of the National Fiber Backbone in the final quarter of 2018. The backbone is a “6,154-kilometer dark fiber network of National Grid Corporation of the Philippines (NGCP) and showcase high-speed internet to Government Network (GovNet) and Pipol Konek Free Wi-Fi in Public Places beneficiaries.”
“Seven point-to-point routes in Benguet, Tarlac, Pampanga, Batangas, Mindoro, Albay, Camarines Sur, Cagayan, and Bohol were identified for the pilot project, which is aimed to test both the integrity of NGCP Optical Groundwire (OPGW) and the latest optical transport technologies in the market.” It will also serve as the “prototype for the utilization of the National Fiber Backbone, which was greenlighted after the DICT signed a Tripartite Agreement with NGCP and National Transmission Corporation (TransCo) last June 2018.” Then there is the Luzon Bypass Infrastructure (LBI), a separate backbone which will “serve as distribution network for the 2-million Mbps of data capacity coming from the state-owned international landing stations.”
Imagine government leveling the playing field. Government has access to all 81 provinces, 145 cities and 1,485 municipalities as potential locator of cell towers, include there the AFP camps nationwide and that solves the required 30,000 towers needed to be built to offer normal quality service. Emphasis on normal and the Duopoly stands by saying we can’t do it? Leave that to the private sector and that’s 300 communication towers per month or 10,000 per day and much delay from licensing and the likes. If the duopoly can’t do it and stopped doing it after milking Filipinos, how can the NMP get it done? Only government can.
Congress would need to reform its franchise procedure and actually maintain the table of frequencies so that they know what is being given, what is being used and who are spectrum lords who just sit on frequencies for a ready flip. Congress should start the process of valuing frequency so that a policy is crafted clearly and process is not captured by an agency like NTC. Congress would have to pass so many needed legislation. Let’s start with the amendments of two archaic laws: public telecommunications act and the public service act. Then Congress will have to do spectrum management to clawback rules to a national roaming law to cell towers usage and management to consumer telco rights and privileges.
Government knows the frequencies and NTC won’t game it since it is PRRD on top of things, ensuring that they break the hold and allow all the bidders to come in via a service area concept. That way, it’s not just China controlling everything but allows competition and the best technology for Filipinos. By dividing the country into eight areas and allowing all bidders and their foreign partners to in effect to wire the whole nation, Filipinos are not shortchanged. And PRRD is not entangled with the moneymaking ways of some regulators hiding behind a presidential directive. This way, there is no digital divide and the last mile is hooked into the backbone. DICT should, once and for all, have a permanent secretary who can reorganize NTC and put in new commissioner, hopefully representing the consumers. Enough with capture. Let’s do service.
Boracay showed to all what political will can do and what public-private sector partnership can build to solve a problem. Cancel November 7, Mr. President. It won’t give us the solution. Let us not give our spectrum to China, the circular is tailor-fit for it. Let it be telecom-neutral and technology-neutral, with towers provided by government. Adopt a phase in-phase out procedure where government is the catalyst and pulls out once the platforms are in place allowing the telecom companies use it. In the remaining three years, get everyone to tow the line and roll out the infra and the service areas. Your intervention will get prices down and services up and force the duopoly to finally serve Juan better.
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