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FINANCE
Secretary Margarito Teves recently told reporters the
controversial national broadband network (NBN) and the
Cyber Education project (CEP) deals with China are under
review. The NBN contract, according to Teves, is far
from perfect.
Indeed,
the Department of Finance (DOF) should review them
thoroughly and with great transparency because, if these
deals push through, Filipino taxpayers are going to pay
for them in the next 20 years. The amount is huge: $829
million in all, covering $329 million for the NBN and
another $500 million for the CEP, for projects with
dubious technical and economic merits.
“Far
from perfect” is an understatement. Those deals have
always been suspicious. They seem to possess most, if
not all, indicators of anomaly, and the government has
not explained properly the deals to the public. In fact,
government agencies like the Department of
Transportation and Communications (DOTC), which has been
enthusiastically pushing the deal, and the National
Economic and Development Authority (Neda), have been
obfuscating the issue. The myths and lies thus far
spawned are simply adding to the confusion.
At least
three major myths or lies are easily detectable.
Myth
number 1—DOTC
officials say it’s the best deal the government could
ever have. It will save the government bureaucracy close
to P4 billion in government expenses on communications,
including landline calls, cellular-phone calls and
Internet connections.
DOTC
officials say the NBN and the CEP deals are the most
technologically superior vis-à-vis the proposals offered
by competitors Filipino-owned Amsterdam Holdings Inc. (AHI)
and the American firm Arescom. DOTC officials say AHI’s
offer is limited to the urban areas while Arescom is
satellite-based, which is supposedly expensive to
maintain.
In
truth, it was President Arroyo herself who clarified
that the bulk of those communications expenses by
government are accounted for by mobile- phone calls, and
government officials are going to continue using the
facilities of the telcos. Recent advertisements by the
DOTC indicate that government will even continue relying
on existing private Internet providers despite the NBN.
The DOTC says that government agencies will save through
NBN’s voice-over-internet calls among themselves. That
is true, but they are not saying something crucial: the
government will still have to pay the telcos when it has
to call outside of the NBN backbone.
Right
now one would never know the true worth of the NBN,
because there are just too many unknowns. From the
original amount of only $135 million (Arescom’s offer),
the amount has inflated to more than $800 million after
the government spun off the CEP from the original NBN
component. Besides, both supply deals were not subjected
to either a Swiss challenge or international bidding, so
there’s no chance of knowing the real score.
And if
indeed, a satellite-based technology as proposed by
Arescom is obsolete and expensive, why did the
government agree for such technology to be used in the
other controversial cyber twin, the CEP? The fact is
that the DOTC’s technical working group has always
proposed a single backbone for both the NBN and CEP and
has opposed satellite-based technology.
Myth
number 2—The
NBN will address the “digital divide.” This is Neda’s
line, a dig at the private telcos, which officials say
make money by concentrating their operations in the
major cities but neglect the countryside. Neda officials
say the NBN is a perfect foil to this trend.
In
truth, the NBN won’t address the digital divide. The
backbone the NBN is going to build will be used solely
by government agencies, including about 50 percent of
the barangay halls. Yes, barangay halls, but not the
barangay residents! Residents in remote barangays will
have to wait for the rollout of private telecoms before
they can even fantasize about flying in the ethereal
realm of the digital world.
And myth
number 3—The
government needs a dedicated state-owned and controlled
Intranet and separate backbone for “national security”
reasons. The government, DOTC officials say—and echoed
by Neda—has to own and control that backbone so that
neither a snoop nor a malevolent hacker could do mayhem.
This
argument is really the craziest. The truth is that
government has been using private networks for its
e-mail and other communications needs since time
immemorial, but “security issues” was never a problem.
It has never been a problem during the time of President
Fidel V. Ramos, a former general who probably
appreciates “national security” more than anybody else
in the DOTC. Besides, if “national security” were an
issue here, then wouldn’t it be riskier to entrust
government’s information to a foreign state? Unless
they’re saying a foreign government is trusted more than
the Filipino private sector.
In our
midst today are huge multinationals owning sensitive
intellectual property, including patents and trade
secrets worth billions of dollars greater than the
Philippine GDP. Yet these MNCs never felt compelled to
build their own separate fiber-optic backbone. Imagine a
situation where everybody lays down fiber-optic cables
for “security reasons.” Wouldn’t that be the ultimate
“spaghetti sa ibaba,” underneath our soil and the
seas?
But
private firms do have their own private and secure
network, not by having their own separate physical
backbone, but by buying capacities from existing
privately run backbones—PLDT and Telecphil. For
instance, it’s not uncommon for these huge firms to use
Telecphil facilities for their Philippine operations
while connecting to the PLDT backbone for their
fiber-optic link to their headquarters in the US. And
security has never been an issue because there are a
thousand and one ways of securing them.
If
there’s one agency that should be crazy about having a
“secure network,” it should be the Department of
Interior and the Local Government (DILG). The truth,
according to sources from Neda, is that the DILG was
never enthusiastic about the project, and this is why
Arescom’s proposal, initially offered to the DILG, went
nowhere. According to Neda sources, DILG officials
thought the backbone was not their priority, thus giving
DOTC officials the opportunity to disregard Arescom and
endorse ZTE to the Neda Investment Coordination
Committee.
The two
deals could also be examined on transparency, governance
and economic issues—something the professors of the
University of the Philippines School of Economics have
done extremely well without any reply from either the
Neda or DOTC. The DOF should cover all these issues
before even thinking of approving the deals.
We dare
the DOF to make its own review open to the public. |
