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Searching for telecoms competition – Business Mirror

Searching for telecoms competition – Business Mirror

The Philippine government—not just the Duterte administration—dug itself into a deep, deep hole with regard to the telecommunications industry and is still shoveling.

While it is true the telecoms sector saw modern life as crony capitalism pre-Edsa, Republic Act (RA) 6849, or “Providing for the Installation, Operation and Maintenance of Public Telephones in each and every Municipality in the Philippines”—passed in 1990—was the pinnacle of foolish government overreach.

Forget about the fact that before the ink was dry on this law, second- generation cell phones were already in the hands of the public. At that time, the Philippines did not have the infrastructure or the money to set an effective wireless communication system. Well, actually it did.

Australia has set up its “School of the Air” education program in 1951 for the remote areas, where there were not enough children for a formal school. Eventually, two-way communications between students and teachers were conducted over shortwave radio until replaced by the Internet in 2009.

RA 6849 was needed as the Philippine government was “Recognizing that the benefits of modern communication technology are as important to rural development.” The program was never close to completion before modern wireless technology—not something invented in 1876 and in principle little changed since then—made the law useless and obsolete.

Actually, the law was useless and obsolete on day one as a viable, efficient and cost-effective shortwave-radio system could have been put in place within months to connect each and every municipality. Certainly, a user could not have necessarily told a sweetheart in Manila how much he or she was loved without the whole world listening in. Yet, it could have fulfilled some of the basic communication needs of the general public.  Something would have been better than the nothing that never came.

Recognizing that the state owns the airwaves and that telecoms are a public utility, the government also failed with RA 7925—An Act to Promote and Govern the Development of Philippine Telecommunications and the Delivery of Public Telecommunications Services—in 1995. Article 2 only paid lip service to “a healthy competitive environment shall be fostered.”

While other telecoms providers came, they all went, folded into the “Monopoly of the Two”—Smart and Globe. Note that both of these companies absolutely followed the law and did nothing improper. However, the law allowed them to buy not only the hard assets of other companies but, in effect, also the right to operate and use the airwaves allotted to those firms.

If competition in the telecoms industry is going to be a reality, then the industry must be treated in somewhat the same way as other sectors. The argument that telecoms require massive infrastructure to operate is valid but not prohibitive. Further, if duplicating infrastructure is a problem, then follow regulatory pricing, as with water and electric supply services.

It is unlikely that the telecom firms would want to go that route.

The consumers deserve more than a “duopoly” or even a “triopoly” in terms of competitive pricing and service. While wireless communication is not its direct responsibility, the Department of Information and Communications Technology was established “to provide oversight over agencies governing and regulating the information and communications technology  sector and ensure consumer protection and welfare, data privacy and security, foster competition and the growth of the ICT sector.” It is time genuine experts be brought in to offer concrete advice and plans to solve our telecoms problems.

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