Who’s to blame for slow internet

Even if all goes well, the so called third telco won’t be able to provide the kind of competition we need to make the existing duopoly treat us more kindly… not any time soon.

That means we are doomed to keep the title of the slowest internet in the civilized world in the foreseeable future. Not only that… having spent so much in start up costs, the investors in the third telco will be eager to earn as much as they can in as short a time possible.

Expect the third telco to behave like the duopoly. Indeed, expect it to act like it’s part of an oligopoly in the telco industry where the three major participants virtually coordinate their moves. They sometimes call it “coopetition” but it simply means the competitors cooperate with each other to screw the consumers.

The thing is… we don’t even need another telephone company or telco. How many of us still regularly use “land lines” or call “long distance”?

We need fast internet. And good broadband service can be provided by more tech savvy smaller entities using access provided by Google and Facebook via satellite or submarine cables. But our laws are so antiquated that we require anyone who wants to provide services in the tech driven digital world to be a telephone company.

Congress is reluctant to modernize because they will lose their business of granting franchises. That’s probably because that’s how many of them earn tons of pocket money on the side.

The rent-seekers also have a thriving business getting those franchises even if they have no intention or means to run an honest-to- goodness telephone company. They will just hold the franchise until someone needs one badly and they can cash in.

That’s exactly what happened to Mislatel. It has not operated for years after getting their franchise. Under the terms of their franchise, they should have lost it a long time ago.

For Mislatel, things happened as they had hoped for. The original Mislatel folks effectively sold their franchise to a rich and acquisitive crony of the President who is in partnership with China Telecom.

The Senate then worked double time to “cure” the franchise violation by a resolution that grants permission to what had already been done. The House did the same thing earlier.

It is a mess. We will always have lousy Internet service unless we do something drastic to reform the current system.

But reform is not going to happen. Not if Sen. Ralph Recto can help it.

There is a pending bill, a very important one, called the Open Access bill, that offers our only immediate hope to introduce competition that will improve our Internet service. But Sen Ralph Recto is holding approval of the measure.

The reason of Sen Recto is national security. He and some other senators are afraid that the Chinese will get into our telecoms industry and pose a serious security risk. This is also the same excuse of Sen Recto for delaying passage of the revised Public Service Act that will allow foreign entities to invest a hundred percent in telecoms.

I have news for Sen. Recto. The Chinese are already in our telecom system. That happened when the senators passed a resolution allowing the Mislatel Consortium to qualify as the third telco. Close to 40 percent of the equity there belongs to Chinese government-owned China Telecom.

Dennis Uy will likely be bankrolled by the Bank of China for his share of the equity. That will effectively make the third telco a Chinese owned or controlled company.

 Preventing other entities, local or foreign to come in under open access and give China Telecom some competition is like protecting the market share of the virtual Chinese telco consortium. Using the senator’s thinking, that poses a continuing national security risk.

On the other hand, the Open Access bill makes it possible for smaller entities to compete in the provision of broadband services. Right now, we are the only country that requires an act of Congress to operate a network, no matter how small!

Just for review, the Open Access in Data Transmission bill aims to introduce an appropriate regulatory framework for data/ internet services, which will:

– Lower barriers to entry for data network providers. Data network operators will not be required to secure a franchise from Congress and a Provisional Authority / Certificate of Public Convenience and Necessity from the NTC for offering data-only services in any segment of the network.

Today, data networks are lumped together with telecom (local exchange, circuit switched) networks, which actually work differently and therefore should be treated separately.

This Open Access bill will enable and empower small broadband providers to build and operate networks especially in communities that are not considered commercially viable by the large players;

– Mandate interconnection and promote infrastructure sharing among data networks on a fair, reasonable and non-discriminatory basis. This includes expediting the permitting process for network deployment;

– Promote transparent and equitable spectrum management; and

– Clarify and update the role of NTC in the data/ broadband age.

Ultimately, the bill aims to strengthen competition, promote a level playing field, and put in place clear, consistent rules for data transmission networks.

Because one senator is stopping key reforms from happening, expect Philippine internet to remain slow and expensive for the next few years.

It’s an unfortunate, frustrating situation given all the work that have been put in by ICT champions in Congress and concerned stakeholders for the past two years or so, just to be put to a halt by one senator who’s supposed to be an ICT champion. It is back to square one with the new Congress.

Every time you want to scream bloody murder because your broadband connection barely crawls, think of Sen. Ralph Recto. It is his fault.

Boo Chanco’s e-mail address is [email protected]. Follow him on Twitter @boochanco