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‘Current policies burdensome to small data-service providers’

The rapid migration to the digital age should prompt the government to come up with policies that will empower small data-service providers, as this could help solve issues on Internet speed and access throughout the Philippines, an expert said.

“It is time to refocus policy to empower the smaller, non-telco players, in this age of data services. For one, I think policy reforms should do away with regulatory requirements—such as congressional franchise and the National Telecommunications Commission’s provisional authority—that might unnecessarily burden market players,” Mary Grace Mirandilla-Santos, an independent researcher in the information and communications technology space, told the BusinessMirror.

Under current laws, the provision of public telecommunications services— including fixed and mobile services—is subject to franchise and licensing requirements.

A company is required to get a franchise from Congress and licenses from the telco regulator, which requires potential players to prove their legal, technical and financial capabilities before being issued a certificate of public convenience and necessity.

Likewise, potential players are required to comply with the national restriction on foreign ownership, a mandate that only allows foreign investors a mere 40-percent stake in certain industries.

Second, the state must allow data-service providers to build and operate their own network, Santos, who is also the convener of rights group Better Broadband Alliance, said.

“Internet works differently from basic telecom services. It thrives on decentralization and distribution. We can have several networks all over the country—unlike the vertically integrated, nationwide networks that current telcos have —where smaller data providers operate in different segments or just one segment of the network, such as international connectivity, backbone, middle mile, last mile,” she explained.

Third, data-service providers should be allowed to provide connectivity using different kinds of technology, wired or wireless.

“Unfortunately current policies are telco-centric. In many cases, only a telco can build and operate a network,” she lamented.

Hence, potential broadband players are limited in what they can do. “So you have a situation where you’re not allowed to lay fiber or connect two premises a few meters away through wireless means if you’re not a telco,” Santos said. “This situation stifles both innovation and competition.”

Talks on the potential entry of another player in the Philippine telco sector have become much louder, after President Duterte announced that he has asked China Telecom  to enter the telco market.

Today, there are only two telco players in the Philippines: PLDT Inc. and Globe Telecom Inc.

Experts and government officials have long pushed for the entry of new players in the telco market, as this would force the existing vendors to provide better and more affordable mobile services to their customers.

To do this, experts argue that the government should start the refarming and reallocating mobile radio frequencies to allow a new player to thrive.

Data from the regulator showed that existing telcos hold majority of the said real estate to date.

PLDT holds 400 megahertz (MHz) of the total holdings, while Globe has rights to
325 MHz.

What remains for budding telecom players is a mere 140 MHz of frequencies in the 700 MHz, 850 MHz, 2100 MHz, 2500 MHz  and 3500 MHz spectra.

Spectrum is the real estate on which telecommunication operators develop their respective network to deliver services to customers.

The amount of spectrum assigned to a telco has an impact on the cost to build capacity, overall network performance, ability to offer new multimedia services and general customer experience of wireless services. Executives of the two telcos have long argued that they have been using the frequencies allocated to them extensively and actively—even the new ones that they bought from San Miguel Corp. in 2016.

 

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