Spectrum user fee cuts for small ISPS eyed to widen Internet access
THE National Telecommunications Commission (NTC) will craft in early May a memorandum circular that reduces the spectrum user fees for fixed wireless services to encourage small Internet service providers (ISPS) to offer cheaper and better services to unserved and underserved areas.
Department of Information and Communications Technology (DICT) Undersecretary Eliseo M. Rio Jr. said by encouraging small telcos to set up their own home Internet services in rural areas, more and more Filipinos will stand to benefit from the power of the Internet—crucial in these times given how the Covid-induced lockdowns forced many workers and companies to rely on work-from-home schemes.
“We will make frequencies of Internet connectivity affordable to smaller players. This will promote lower cost interest connection for fixed establishments, especially in underserved and unserved areas in the country,” he said in a phone interview.
Rio explained that today, frequencies used for fixed wireless are charged the same spectrum user fee as those used for mobile networks. He explained that mobile network operators such as Smart and Globe pay up to P500 million per year on spectrum user fees.
“Even if we peg the spectrum user fee to P50 million, but a small player only has 1,000 subscribers, how can it thrive in business?” Rio said. “We have to lower fees for frequencies involved in bringing Internet to the home— that way smaller players can compete.”
He stressed it is time to change the norm, whereby individual users use mobile data connection even when they are at home. Rio explained that there needs to be home broadband connection to help reduce the congestion on mobile networks.
Having a home Internet, he added, should be part of the growing trend of working and studying from home, especially now that people are required to adhere to social distancing and health protocols to stop the spread of Covid-19.
“It is also cost-efficient to users because they don’t have to frequently top up their mobile load credits for Internet connection. They simply need a home connection from a small ISP to either work or study from home,” Rio said.
He lamented that the Philippines trails its Asean neighbors in home Internet connectivity. Today, Rio estimates that only 20 percent of the total homes in the country are connected to the Internet, compared with Malaysia’s 90 percent and Singapore’s 100 percent.
“With Internet from home, we are promoting work-from-home and school-from-home arrangements because these are the new norms,” he said. “The recent situation showed us it is doable, but of course we need to have good Internet connection to do this.”
Aside from this, Rio said that lowering the cost of spectrum fees for fixed wireless connection can boost the Philippine economy.
“This can perk up our economy because the new norm is people working at home and people studying at home. We can actually do most of our transactions in the virtual world—we don’t have to physically do business. We will be transforming based on real-world transactions to an economy based on virtual world transaction,” he said.
Online workers
RIO explained that online Filipino workers—the new breed of OFWS— are now helping fuel the economy. According to an independent study conducted by Payoneer, the Philippines ranked sixth in the world’s list of fastest-growing markets for the gig industry.
“We really can copy the successes of other countries, but we have to have quality Internet to do that,” he said.
Internet access in the Philippines, according to data from We Are Social Inc., is limited to “one-third” of the population.
Despite this and the lockdowns imposed on communities, Internet services are becoming more popular than ever. People are now embracing ecommerce for their groceries, food deliveries via apps, electronic payments for their transactions, and some are even using services such as e-dalaw for their incarcerated loved ones.
“Fixed wireless is easier to roll out versus fiber, which we still need to balance out the demand,” Rio said.
The downside of this initiative, he noted, would be the lowering of the NTC’S revenue collections, which are currently being used to fund the Free Wi-fi in public places program of the DICT.
“But, if we can connect more subscribers to the smaller players, then we will need less Free Wi-fi access points. So even though the collections would become lower, we will need fewer access points—it’s all balanced out,” he said.