Gov’t eyes partnership with ISPs to break telco duopoly

The Department of Information and Communications Technology (DICT) revealed another route for a so-called third player to break the PLDT Inc. and Globe Telecom duopoly: the proliferation of small internet service providers in partnership with the government.

Eliseo Rio Jr., recently named officer-in-charge of the DICT, outlined steps the department would take to bring down the cost of internet, given exploding demand around the Philippines, especially in rural areas.

With this plan—which involves several phases and includes components of the DICT’s P77.9-billion National Broadband Project—the government ultimately hopes to signal to smaller ISPs they have the full support of the government.

The DICT hopes the number of ISPs will increase. Moreover, with access to inexpensive bandwidth from government-held infrastructure, they will be be able to pass on these savings to end users.

“This partnership of government and small players will constitute the third player,” Rio said in a social media post. He later told the Inquirer that existing ISPs could be contracted by the DICT within the year.

“In providing free wi-fi in public places nationwide, DICT is going to subscribe to ISPs, which should increase in numbers because of this demand,” Rio said.

The plan will initially rely on leased facilities from commercial providers, Rio said, while adding that the DICT would eventually gain access to its own international gateway in 2019 with a capacity of 2 terabits per second.

Rio added the DICT would have landing stations, linking the Philippines to world, in Baler, Aurora and Poro Point, La Union. Most landing stations in the Philippines are held by PLDT and Globe.

Rio said the National Broadband Plan would also have in place the Domestic Wideband Information Network (DWIN), which includes the government’s own backbone and middle mile network, by 2019.

By this time, ISPs can transition to the government’s network to provide “last mile” links to various access points such as public places, schools, military and police posts.

Rio added that the DICT’s backbone would likely use the nationwide network of state-run National Transmission Corp.

The DICT hopes ISPs will participate in a bidding exercise in November this year. Rio explained that the bid price would be in the form of subscriptions “which include the cost of leasing the backbone and the middle mile from existing commercial providers and the last mile that they will provide.”

“Our people will start feeling improvement in our internet access around the third quarter of 2018. RA10929 or The Free Internet Access to Public Places Act will cover around 250,000 public places,” Rio said.

Industry advocates are supportive of the DICT’s latest initiative.

“The crucial enabler of a diverse and innovative last mile access network, whether in the metro or in rural areas is the availability of transparent and reasonably priced, reliable wholesale internet connectivity,” said Winthrop Yu, Chair of the Internet Society, Philippines Chapter.

“We are heartened to hear of DICT’s plans to provide the internet backbone and middle mile to downstream players at fair, reasonable and transparent terms, and hope this can be fast-tracked,” Yu added.

The DICT’s plan has its limitations. Rio said they mainly wanted to increase challengers in the fixed-internet space, which comprises a “big market.” Mobile services would so far be left to PLDT and Globe.

“If one is mobile, then he/she can access the internet on the mobile networks owned by the duopoly,” Rio said.

“But as I pointed out, 80 percent of the time, we are stationary. This can now be done because smartphones can automatically and seamlessly connect from fixed to mobile internet access and vice-versa,” he added.

Rio assumed the role of OIC of the DICT after Secretary Rodolfo Salalima resigned from his post last month. President Duterte has yet to appoint a new DICT secretary.