Government mulls major reforms in telecoms sector

Government is looking at implementing major reforms in the telecommunications sector, especially in the area of regulation where some of the existing policies may no longer be attuned with new technologies, The STAR has learned.

Commission on Information and Communications Technology (CICT) chairman Secretary Virgilio Pena disclosed that one of the things being ‘relooked’ by government is the service area scheme (SAS) under which telecommunications operators were obligated to install 400,000 and 300,000 landlines respectively in exchange for a license to offer mobile phone service (cellular mobile telephone system or CMTS) and international gateway facility (IGF).

"One aspect we are looking at is identifying other sources of cross subsidy. Under the SAS, revenues from international long distance was supposed to subsidize local exchange (fixed lines). But with rates for ILD going down from $3 per minute to only 40 cents a minute, we are studying a rate restructuring and finding out whether CMTS and IGF can be the alternative sources of cross subsidy," he said.

CICT is the government agency that now handles all offices relating to information and communications technology. Supervision over the National Telecommunications Commission (NTC) as an attached agency has been transferred from the Department of Transportation and Communications (DOTC) to the CICT.

The new commission is also seen as the government agency that would pave the way for the eventual creation of a Department of Information and Communications Technology which is being pushed as an urgent administrative measure.

Other priorities include redefining what basic telecommunications service and value-added services (VAS) especially in the light of a recent Supreme Court ruling which noted the absence both in the Public Telecommunications Act and its implementing rules and regulations of a clear enumeration of what constitutes VAS, a reclassification of telecommunications entities to include a new one for content providers, the implementation of a successful universal access program, changes in the regulatory framework towards multi-service applications whether vertical or horizontal, among others.

Pena also revealed that government is coming up with rules for the unlicensed use of radio frequencies such as Bluetooth, as well as one allowing non-telecommunications entities to provide last-mile communications.

Meanwhile, the NTC has just come up with the proposed rules that would govern voice over the Internet Protocol (VOIP) with public hearings expected to last for two months, and a set of guidelines prepared before the end of the year.

However, Pena said a decision has yet to be made as to whether or not VoIP should be deregulated or regulated. "If we consider VoIP as Internet, then it should be deregulated. If it is a telephone service, then it should be regulated," he told the STAR. Also being addressed is the issue of whether VoIP is a basic or value-added service.

"We have to differentiate as to whether the means of doing VoIP is computer to computer or computer to telephone. If it is computer to computer, then we can deregulate it as in other countries. When it is computer to telephone, we can maintain some regulation to address the concerns of the telephone companies," he explained.

Telecommunications companies, including the Philippine Long Distance Telephone Co. (PLDT), want the provision of VoIP to be limited to telcos due to the huge investments they have made as against ISPs or Internet service providers which have little investments. VoIP is a means of making international calls through the computer without having to pay the long distance charges, a matter that is worrying local telcos due to the potential loss of voice revenues.