The challenges facing the Philippine telecommunications sector

(Conclusion)

The Philippines found itself in a uniquely advantageous situation when the first policy enunciations towards de-monopolization were undertaken as early as 1989. Unlike India, China and quite a number of other countries in the global telecommunity, the Philippines did not have to go through the first step of corporatization and then the quantum leap to privatization, because as far back as I can remember, the sector has been in private hands. Nor did we have to evolve a regulatory body because there has always been a government agency regulating telecom operation and development. PLDT is 76 years old and previous to this corporate name was operating under another name.

Both India and China had to go through the long tedious process of privatization and evolve their respective regulatory bodies. But look at where they are today. I cannot help but remember Dr. Sam Pitroda, the brilliant adviser for telecommunications to the Prime Minister of India then. In our interactions in quite a number of meetings and forums, he told me that India was going through the complicated process of privatizing government telecom operations in his country and setting up their telecom regulatory body. I remember having wished him all the best then. It looks like success has rewarded their efforts, the same way it has, as regards the Chinese experience.

I know that they had a concrete road map for all the action points, and never strayed from it, except to make the map more attuned to the volatility of the times and the changes in the environment. Reliance on development experts was present but politics and political influences were not allowed to intervene realizing that telecommunications is a very vital sector for the overall development of the country. Both countries followed a fundamental theory that "government is too big and important to be left to the politician." And, perhaps, just to provide some levity in this extremely political age of ours, remember what H.L Mencken said: "There are some politicians who, if their constituents were cannibals, would promise them missionaries for dinner."

I will veer away from talking about the Service Areas Scheme (SAS), which was a centerpiece strategy for accelerated development of the sector, provided by the National Telecommunications Commission (NTC) leadership then. This was not in the DOTC’s abovementioned NTDP or the PIIPS. I have always been against it, against the cutting up of the country into 11 service areas for the 11 players in the industry. No study went into this venture. In fact, the very profitable Metro Manila area itself was cut up into four parts. The SAS provided for a subsidy formula (profitable operations and areas subsidizing unprofitable rural areas development). In the final analysis this did not work anyway simply because the carriers had to stay away from the unprofitable areas in order to survive. Hard times befell them because of the currency crisis that hit the Asian economies including the Philippines, plus the drastic lowering of international rates by the US, and another subsidy dimension provided for was for the profitable international gateway and cellular operations to subsidize the infrastructure and operations in the rural areas. All the former NTC commissioners got from the players was substantial compliance at its barest minimum, not the kind of specific performance required by the subsidy scheme. A lot of the rural areas remain un-served.

To this day, my information is that efforts are underway by the present telecom authorities to find out how to exact full compliance as mandated by the EO.

An even worst situation was the "Telepono sa Barangay" (TSB) project of the DOTC leadership when I was the Undersecretary for Communications. I have always been against it. It was a successor-project of the "Municipal Telephone Project," which had been earlier legislatively mandated for the department to undertake, creating a separate office – the MTPO (municipal telephone project office) headed by an MTPO Undersecretary reporting straight to the DOTC Secretary. I do not even know the identity of the telecom genius that created the TSB concept. The only thing I know is that, after the lapse of 10 years with a lot of municipalities not having been covered under the congressionally ordained MTP, the nightmare that was the "Telepono sa Barangay" was born.

I saw the list of at least 12 different contracts, proposed and already pursued, with 12 different suppliers from Israel, Korea, etc., providing for their own technologies – contracts fraught with political implications. And I knew then that, should the DOTC head pursue these projects, my country would have possibly the worst hodgepodge of a telephone network in the world. As the then Undersecretary for Communications, I found my head spinning in all directions. The next thing I did in order to save my sanity was to tender my irrevocable resignation from the Estrada administration.

But this sad story does not end there. Before I could even enjoy my seclusion, I found myself summoned with other incumbent officials to appear before the Senate Blue Ribbon Committee for an investigation on the TSB. Not only did the ugly arm of politics cut the DOTC right there in the gut, the height of malice and inequity happened when the responsible officials were spared the agony of going through such an irrational hearing.

Aside from the valuable friendships forged with some of the best and the brightest components of the backbone in a sector that has seen far too many dubious wonders and changes, the only rewarding thing that makes my experience unforgettable are the tangible results we see today from the liberalization and de-monopolization thrusts that we had been privileged to supervise and spearhead. Atty. Kathleen Heceta, career deputy commissioner of the NTC, and Engr. Aurora Rubio, career chief of the DOTC telecom policy and planning division – members of the backbone I have just mentioned – co-authored a paper submitted to the Telecom Development Symposium of the International Telecommunications Union recently, which stressed the fact that we have a more "vibrant and thriving industry" today.

The paper goes on: "In 1997 alone, investments in telecom reached P307 billion…. the monopoly was torn apart with the entry of more big players who established strategic partnerships with foreign allies, creating and expanding the needed telecommunications infrastructure to address the growing demands of the public. Telecommunications build-up remains to this day a priority of the Philippine government, as it remains the Philippines’ top income earner."

The person presently who has the tough responsibility to integrate and rationalize, as cohesively as possible, all projects/plans/policies/thrusts within the context of a concrete road map for development, is an extremely capable and knowledgeable official, Virgilio Peña, who recently was designated chairman with cabinet rank of the Commission on Information & Communications Technology (CICT), the mere EO creating said body requiring however the legislative fiat of the new Congress to legitimize it into a Department of Information & Communications Technology (DICT). He most likely knows by now that he has this valuable resource of a "career-backbone" to draw from, and staff support of no mean dimension – that efficient crew of staff assistants headed by Ramona "Amy" Reyes who have, after all these years, acquired the competence in the use of highly technical words which are daily fare in the technological world of telecommunications. They are going to be indispensable in the DICT.

There are indeed other priority areas of concern. Spectrum management policies have to be rationalized for more efficient usage, this being a scarce and finite resource of the country. Should there be greater open market entry leading to greater choices for the consumer market, through enhancing dynamic competition? Is there a need to strengthen the independence of the regulatory body, as well as endow the NTC with fiscal independence, which to my mind, is long overdue? What about local exchange facilities? With several infra-projects simultaneously and wantonly undertaken in the past, there is indeed a critical need to address the duplications that have resulted as far as local exchanges are concerned and, on the other hand, address likewise the disparity in the spread-out of these lines. Since an inventory of all networks was undertaken in 2002, couldn’t this be made the basis so that a rationalization process can be completed expanding and raising all these networks to technology-current levels? And all of them to be undertaken within the context of an integrated master plan?

Is there a way of eliminating the very political exercise of franchising carriers through the legislature, and finally transforming the extremely adversarial process in the issuance by the NTC of certificates of public convenience and necessity, and provisional authorizations, into a sleek, simple administrative process with emphasis on the technical and financial capability, a reform measure mandated by law but long overdue in undertaking. And what can be done with what has come to be known as the "Telof Problem"?

What about pushing necessary legislation aside from the bill creating the CICT, the other critical measures as the convergence bill, and the amendatory bill for updating and revising RA 7925?

Undertaking all these with dispatch will be a heroic act. It will be like reaching for the highest stars.

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Thank you for all the e-mails you sent me through jtl@info.com.ph.