Internet Governance 15 July 2016

Is this the start of a new digital era for the Philippines?

By Rajnesh SinghFormer Regional Vice President - Asia-Pacific

The past month or so has seen a flurry of activities in the Philippines, particularly on the ICT and Internet front, and these have attracted much media attention.

Apart from the highly publicized recent election of a new President and Vice-President, the outgoing President signed into law Republic Act 10844, which created the Department of Information and Communications Technology (DICT). More recently, the two biggest telcos in the country (PLDT and Globe) finally signed a domestic Internet peering agreement.

The issue of poor Internet services in the Philippines has been a long-standing issue — so much so that it also became an election issue. (And speaking of the elections — the Commission on Elections itself suffered a data breach in the lead-up to the elections that left voter data exposed — highlighting the need for greater vigilance when holding the personal data of individuals.)

The possible entry of a third major telco in the Philippines market was something that many were looking forward to. There was much promise of an improvement in both services and cost with the new telco planning to rapidly deploy mobile broadband.

However, that possibility fell apart as the San Miguel-Telstra joint venture fizzled out. In May, mobile spectrum that had been secured for the third telco was acquired by Globe and PLDT — in itself a somewhat peculiar development. One would have thought the spectrum would have been returned to the regulator, and then perhaps re-auctioned, rather than two dominant incumbents acquiring spectrum that would basically lock out any possibility of a third player entering the market. I do wonder out aloud if the Competition Commission has — or will have — something to say on this.

The domestic Internet peering agreement between PLDT and Globe has been a long time in coming — several years in fact. As the two largest service providers, this peering should do much to stop Internet traffic from one telco’s network having to pass through an overseas transit point to enter the other telco’s network. The net effect should be an improvement in local Internet traffic performance — but there is a bit more that needs to be done.

Over the last several months, the Internet Society together with government agencies has been facilitating workshops in the Philippines to help support the use of a neutral Internet Exchange. It would be good to see both the major telcos fully connecting to PHOpenIX so that all service providers — and thus all users in the Philippines — can benefit from keeping local traffic local. This can only but further help the Internet ecosystem in the Philippines. (PHOpenIX is a non-profit discussion group operated by the Philippine Department of Science and Technology that “allows the exchanges of Internet traffic in a free-market environment among local internet and data service providers.”)

Till the establishment of DICT, the Philippines has not had a focused national level entity that looks after ICT and Internet issues — various functions have been carried out by a number of different agencies, offices and departments over the years. Agencies such as the National Telecommunications Commission (NTC), the National Privacy Commission (NPC) and the Cybercrime Investigation and Coordination Center (CICC) will all now be coordinated by DICT.

It is expected the creation of DICT will help provide greater focus on the role of the Internet and ICTs for national development — including underserved and unserved areas — as well as help provide a cohesive integrated approach in dealing with policy and regulatory issues in the Philippines.

With around 40% Internet penetration, there is much headroom for growth in the Philippines particularly for locations outside the main urban areas. As the ASEAN economies work on transitioning towards a digital economy, the role of the Internet will be critical. Even more so will be the need for an Internet that is accessible, affordable and trusted.

With a large Business Process Outsourcing (BPO) industry, high literacy rates and an educated work force, the Philippines is well positioned to become a major contributor to the regional and global digital economy. Many of the pieces required to achieve this are slowly falling into place — the challenge now is to take full advantage of the opportunities that lie ahead.

This piece was first published in BusinessWorld Philippines in June 2016.

Disclaimer: Viewpoints expressed in this post are those of the author and may or may not reflect official Internet Society positions.

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