Progressive policy and regulatory framework to boost internet access in PH

CONSIDER the following: —In Myanmar, the government opened up the telecommunications market and allowed anyone to operate in any segment of the network. The response was immediate; foreign and local companies came pouring in, armed with their own technologies and business models. As a result, the country’s mobile service subscribers grew from nil to almost 20 million in just four years.

—Globe Telecom estimates that at least 25 permits are needed to put up one cell site and at least eight (8) months are needed to complete the whole permitting process.

—Internet is widely recognized as a key driver of economic growth and equal access to information, yet 45 percent of the Philippines’ 103 million people remain unconnected to the internet. Furthermore, the United Nations sees the Internet as a critical enabler for sustainable development and in the Philippines and situate them in a policy and regulatory framework based primarily on analog-era and landline technology in an increasingly digitizing world. It explores emerging internet technologies beyond those traditionally used for Internet connectivity in the Philippines, especially those

underserved areas. Based on the assessment, three technologies seem appropriate and feasible for the Philippines: 1) Fiber to the Premises with Gigabit Passive Optical Network, 2) Fixed mobile substitution with 5G, and 3) Low earth orbit satellite networks.

The report further argues that the rise of emerging internet technologies — with the promise to bridge the digital divide — can provide the much-needed impetus for reforming the Philippines’ policy and regulatory environment to bring it to the digital age. However, government agencies, regulators, and Internet service providers interested in introducing new digital technologies are forced to operate in an analog-era policy environment.

To address the unfortunate situation, the report examines six spe- vice providers to deploy emerging

improve access, quality, and cost of Philippine internet service. These are: 1) removal of the requirements to install landlines for entry into the telecommunications and

- tion of data service to distinguish them from basic telecommunications; 3) relaxation of restrictions on foreign ownership to encourage more investment and foster competition; 4) introduction of standards and harmonized rules for communications and broadband infrastructure; 5) adoption of spectrum management reforms; and 6) enhancement of the regulatory environment.

Among the six recommended reforms, relaxing restrictions on foreign equity share has the most far-reaching impact. It is interesting to note that the issue of easing the present 60-40 equity participation in favor of foreign investors is a regular topic of discussions to allow the introduction of innovation into the country. In the current case, the proposed revision on equity share is deemed a pre-requirement to improve Internet access.

It will take a Charter change to revise the limitation on foreign equity stake in a Philippine company. As a general principle, foreign

It militates against the foremost objectives in introducing innovation in Internet access: reaching out to the disadvantaged sectors

and reducing the digital divide through affordable Internet access for the rest of us.

There has also been a number of occasions when the rollout of an

fund sources. Likewise, there have been instances when the foreign investor assumes a major role in

Filipino partner relegated to marketing or administrative functions and

of the foreign investor throughout the life of the business. Whatever happened to transfer technology from Big Brother?

Furthermore, faster Internet will likely entrench the superiority of other foreign players who are already lording it over in areas like e-commerce and can easily afford the transition to potentially viable emerging technologies. At best, locals will have to play catch up and there may not be enough time to be at par with those with strong competitive presence on the World Wide Web.

On a more positive outlook, the revision of foreign equity participation can be equally directed towards the introduction of emerging Internet technologies that will impact on the basic needs of our people such as food security, better living conditions and lasting protection against the onslaught of climate change. This is beyond the scope of the Asia Foundation study but it may be worth looking into when it’s time to seriously consider its recommendations.