Thursday, June 20, 2024

Gov?t urged to scrap franchise requirement for new Internet providers

By Andres Ansula

The Philippines should adopt an “open access” model wherein companies with no congressional franchise can provide Internet services in the country.

This is the recommendation of the “Philippine Broadband: A Policy Brief” study commissioned by Joint Foreign Chambers of the Philippines (JFC) and the United States Agency for International Development (USAID) under the “Arangkada” project.

Internet Society-Philippines president Wynthrop Yu (left) speaks during the broadband forum. Beside him is policy researcher Grace Mirandilla-Santos and forum organizers
Internet Society-Philippines president Wynthrop Yu (left) speaks during the broadband forum. Beside him is policy researcher Grace Mirandilla-Santos and forum organizers

Independent ICT researcher and consultant Mary Grace Mirandilla-Santos said that “adopting an open access model where segments of the Internet infrastructure will be opened up to more and different players both local and foreign” can greatly help in making Internet more affordable, as well as faster, in the country.

“The current structure of the telecom market, as allowed by law, imposes a high barrier to entry of new, independent players, both local and foreign,” the policy brief said in their recommendations to make local broadband service competitive.

The brief was officially released and presented to the public by the JFC with a press conference at the AIM Conference Center in Makati City.

Mirandilla-Santos, currently a national ICT research consultant at the Asian Development Bank (ADB), said that the Philippines is unique in that it is the only country in the world that grants a congressional franchise for a telecommunications company.

She pointed out that the requirement of a congressional franchise as a telco was a high barrier for entry of an independent, new player.

“We should not be limited to telcos with a congressional franchise to offer Internet service. That’s the status quo. Our thinking now is: anything that has to do with telecoms, even connectivity, a telco should be the one that should provide it,” Santos said in an interview at the press conference.

Santos, however, said that one does not need to be a telco to connect, or to provide Internet services.

The report pointed out that the old network operator model is no longer relevant today.

“Instead of a single, vertically integrated network, an ‘open access’ approach is recommended. Open access model is the separation of the physical infrastructure from service provisioning. This means identifying the various segments in the infrastructure and opening them up to more and different players without requiring a congressional franchise,” the policy brief explained.

“As a result, open access is expected to encourage the entry of multiple independent players operating in different segments, as well as the building of neutral, passive infrastructure, where the business incentive of the operator is to grow and improve services for its clients instead of treating them as competition,” the brief said.

The policy brief also recommended updating and upgrading laws and policies, which includes amendments to the Public Telecommunications Policy Act and the enactment of the bill creating a Department of ICT.

It also recommended the leveling of the playing field in the ICT sector by promoting open and neutral Internet exchange points (IXPs) and encouraging infrastructure sharing.

The policy brief also called for improving spectrum management; and ensuring and protecting the competitiveness of the telecommunications industry.

The brief noted that while Internet access was growing in the Philippines, the growth was coming at a much slower pace compared to those seen among its neighbors in the Southeast Asian region.

The policy brief also noted the problem of the Philippines having one of the slowest Internet speed in the Asean, but also being one of the most expensive in the world.

“In Akamai?s State of the Internet report for Q3 2015, the Philippines recorded the second slowest average download speed (at 2.8 Mbps) in the Asia Pacific, besting only India. The country has been constantly outperformed by its ASEAN counterparts such as Indonesia (3.0 Mbps), Vietnam (3.4 Mbps), Malaysia (4.9 Mbps), and Thailand (8.2 Mbps),” the study said.

“According to (global broadband testing and network diagnostic apps services provider) Ookla, in Q4 2014, the Philippines offered the second most expensive retail Internet service out of the 62 countries that were ranked.

?Meanwhile, (ICT policy and regulation think tank) LIRNEasia?s broadband quality of service experience (QoSE) study in Q1 2014 found that Philippine ISPs offered the lowest value for money ? in terms of actual download speed experienced by customers vis- ?-vis the cost of a monthly data plan ? compared to their counterparts in South and Southeast Asia,” the brief noted.


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