It’s a given that the Internet is a powerful tool, as it allows us to harness information and tools to accelerate economic development—and much more.
Of late, the newly created Department of Information and Communications Technology (DICT), headed by Secretary Rodolfo A. Salalima, a former telecommunications executive, said the Duterte administration is now considering building a national broadband network (NBN) following a failed venture in a previous administration.
The NBN plan requires an investment of up to P200 billion, and needs at least three years to put up. Can we wait that long?
In the first place, where would the Duterte administration get the P200 billion, as Congress allocated P335 billion of the proposed national budget for 2017 for debt and interest payments?
The Duterte administration has allocated P861 billion for its infrastructure program in 2017. This would be used to improve road networks, railways, seaports and airport systems. Salalima has acknowledged that the 2017 budget does not support an ICT upgrade.
As things now stand, the only way for faster and cheaper Internet—and accelerated economic development—is for the two telco firms to improve their services.
Both PLDT/Smart and Globe already have the means to do this under their agreement to jointly use the 700-megahertz (MHz) band from San Miguel Corp. (SMC) in May.
The 700-MHz spectrum delivers high-speed Internet and penetrates a wider range of areas than the current bands that the two telcos are using to provide broadband services.
Both telco firms are confident they can deliver much-improved Internet services of up to 100 megabytes per second using the 700-MHz band after the P70-billion joint use deal was signed on May 30.
But the Philippine Competition Commission (PCC) has insisted on reviewing the buyout, a move that PLDT/Smart and Globe said violates the implementing rules and regulations (IRR) of the very law that created the PCC.
The agreement on the joint use of the 700-MHz band by the two telecom providers has already been approved by the National Telecommunications Commission (NTC).
The PCC insists that the deal is “anticompetition,” since SMC could have given the two established telcos a run for their money and become the third player in the market.
Do we have a duopoly in the telecom sector? The international credit- ratings agency Fitch Ratings doesn’t think so, as it noted that the cutthroat competition between PLDT/Smart and Globe could intensify in the years ahead.
This, therefore, raises the question: Does the PCC want a favored third party to enter the picture?
If that’s the case, what will happen to the 100 million subscribers of PLDT/Smart and Globe who have been asking for improved and more advanced mobile services?
Under the agreement reached by the NTC with PLDT-Smart and Globe, the two parties should significantly improve their Internet services as one of the conditions for allowing them to use the 700 MHz spectrum that SMC had returned to the NTC.
The NTC wants the two telcos to show “substantial improvement in the quality of their service” within one year for them to fully use the 700-MHz band.
Both PLDT/Smart and Globe, according to reports, have already started installing additional cell sites using the 700-MHz band in June, in compliance with the NTC’s condition.
During the election campaign, presidential candidate Rodrigo R. Duterte expressed frustration over the quality of mobile phone and Internet services we have in the country.
The PCC, an independent quasi-judicial body, enjoys vast powers. But it appears to be the single biggest stumbling block to President Duterte’s goal of providing affordable, fast and reliable Internet service to Filipinos.
The commission’s move to review the deal, despite having been greenlighted by the NTC, may be an example of a confusing policy that discourages prospective investors from putting their money in
businesses here.
Is the PCC erecting a barrier to PLDT/Smart and Globe’s buyout agreement with SMC because it wants to give a favored player a slot in the highly lucrative telecoms market?
E-mail: ernhil@yahoo.com.
1 comment
Note that PCC’s original complaint is not even charging the two telcos of anti-competition practices, but merely based on some technical minutiae. It’s obvious they are pinning their victory on the public disgust over the state of our internet. The typical consumer is of the idea that the existence of the telco duopoly is ipso facto the reason that there is no competition. But the real reason as admitted by the DICT is that there is just too much red tape and too many fees involved for a telco to expand. That is the real reason competition has been lacking, despite the availability of the 700 mhz frequency for a long time. Not Smart and Globe, but the government agencies imposing these restrictions are the reason. Now comes PCC who wants to cancel out the deal and effectively bringing to a halt the work of the only two companies that have a headstart in rolling out the new frequency. Leave them be so they can fulfill the President’s demand for better internet and instead lessen those restrictions to allow more competition, and hopefully, better service at lower cost.