Experts in the telecommunications space all agreed that the establishment of a National Broadband Network
(NBN) should be a priority of the newly formed Department of Information and Communications Technology (DICT) and, possibly, the Public-Private Partnership (PPP) Center.
“A national broadband network is critical, as it frees the government from dependence upon the telcos, and it opens the possibility of government as a third player,” Winthrop Yu, who chairs the Internet Society of the Philippines, told the BusinessMirror.
Currently, the Philippine telecommunications market is lorded over by two players—PLDT Inc. and Globe Telecom Inc. While the duo has poured in billions of pesos in infrastructure, the government has yet to issue a single check to fund the building of its own network.
Governments of neighboring countries, such as South Korea and Singapore, are supportive of the development of their digital economies, having their own national broadband backbones.
The current state of the country’s Internet connection is comparable to a network of roads and highways built over the long period of agricultural and industrial era.
But now that demand for better transportation of digital goods and products is high, the country needs to build some kind of a digital highway for public use.
Today, practically, all of the digital roads and highways are privately owned and impose a “toll fee” per use. “If there is one thing that our group and the government agrees on, it would be that the government should invest in infrastructure,” Yu said.
This proposal is now being crafted under the National Broadband Plan, which will provide detailed physical targets and strategies to effect nationwide broadband deployment and widespread use.
Such a plan, which, according to the government, will be adopted within the year, would analyze existing and planned government and private-sector deployment, and address supply and demand gaps by recommending policy and nonpolicy-related actions.
Currently, the Philippines is one of the few countries in the region wherein the government has yet to fully invest in telco infrastructure.
Neighboring countries in the Asean have already started to implement national broadband plans, earmarking billions of dollars to develop a government-owned backbone for the information superhighway. In Thailand, for example, the government has invested $114 million to improve the Internet service or availability. The fund is part of Bangkok’s economic policy.
The Vietnamese government, on the other hand, owns two of the three largest telecommunications companies in Ho Chi Minh City. Investments mainly come from the government. Malaysia has now spent a total of $4.5 billion over a 10-year period to lay fiber-optic lines to every home in the country’s urban area. Other developing and developed economies are investing billions of dollars to improve Internet access in their countries.
“While it would be good to have a coherent National Broadband Plan, one must also bear in mind that the Internet is naturally decentralized and distributed. Thus, it is possible to start building a ‘National Broadband Network’ via short, even separated or redundant segments, then ‘tie it all together’ later,” Yu said.
He added: “This reduces the need for large up-front budgets and allows for segmented trials.”
Mary Grace Mirandilla-Santos, an independent researcher on information and communications technology and telecommunications policies, agreed, saying that the backbone should be telco-neutral and allow open access to all Internet service providers (ISPs).
“If the government would invest in a telco-neutral national broadband network, it could provide an alternative to what PLDT and Globe have to offer, especially if it allows open access to all telcos and ISPs,” she told the BusinessMirror.
She explained that a telco-neutral national broadband network means that it is not owned by a telco, hence, the backbone operator will allow anyone to connect (i.e., lease capacity) because it won’t discriminate against other telcos and ISPs, whom it might otherwise consider as competitors. “Much like the situation today where PLDT and Globe would discriminate by refusing connection or imposing high access charges to small telcos and ISPs that depend on their backhaul and backbone network,” Santos said.
Cost of Internet, then, should go down from the current average of P999 for 5GB worth of data.
“Ideally, yes, prices should go down, especially if the government will invest in it. It really depends on the terms of the deal. Will the government invest full, or will it be a PPP?
“Will it be used for government purposes only or will the infrastructure be leased out to private telcos for commercial purposes?” Santos said.
Yu backed this claim, saying that a PPP model could work, or it could also be mixed with foreign fund or with government funds.
“A PPP can be viable. The government can invest in a national broadband network, but get a private third party to operate it, under strict compliance to open access rules and fair and nondiscriminatry rates to telcos and ISPs who would want to connect,” Santos said.
She added: “This can be of particular importance to expanding broadband access in areas that remain unserved or underserved by the two largest telcos.”
The digital space is a critical realm that the government should keenly focus on, as this has caused a huge disruption in almost all economies—especially those that are highly mobile savvy.
The Philippines, deemed as the social-media capital of the world, currently has one of the most barren Internet connections in the Asia Pacific. Data from Akamai Technologies, a Massachusetts-based content delivery network player that measures the quality of the Internet around the globe, showed that Filipinos enjoyed an average speed of 3.5 Mbps in the first quarter of 2016.
This is a 24-percent improvement against its average Internet speed of 2.8 Mbps the year prior. But despite this development, the Philippines still trailed its neighbors in the Asia Pacific.
It is tied with India at 14th place in the region, while ranking 113th globally. Developed countries, such as South Korea, Hong Kong and Japan, claimed the top spot in the Asia-Pacific Region. Singapore, on the other hand, claimed the first place in the speed race in the Asean.
Increasing Internet speed, according to National Telecommunications Commission Deputy Commissioner Edgardo V. Cabarios, would result in an expansion in the country’s GDP.
“Where there’s an increase of 10 percent in broadband penetration, there is also a 1.23-percent increase in GDP. When you double the speed of the connection, the GDP will also rise by 0.3 percent,” he said.
The government first attempted to create a national Web backbone in 2007, but failed to move forward with the project because the deal signed with Hainan-based ZTE Corp. due to allegations of corruption.