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Internet Access in the Philippines CfC REFORM STORY NO. 11 1 Lorem ipsum dolor sit amet, consectetur adipisc- ing elitn nullam lobortis nisl nec eros consequat, in pretium nibh iaculis. Sed sed purus neque. Cras euismod ac magna in facilisis. Suspendisse biben- dum turpis nunc, in ultrices leo consectetur eu. “There is significant value in cultivating a broad support base and in working with key gatekeepers – even the opposition. Footnote here 2 CfC REFORM STORY NO.11 SMALL POLICY CHANGE, BIG IMPACT: Coalitions for Change (CfC) is a program IMPROVING INTERNET ACCESS of the Australian Embassy and The Asia Foundation Partnership in the Philippines. CfC strategically supports IN THE PHILIPPINES the development, introduction, adoption, and implementation of key policies NICHOLAS JONES, THE ASIA FOUNDATION consistent with the government’s agenda on economic growth, improved governance, and social development. THE INTERNET In March 2018, citizens in two remote The program creates spaces for municipalities of the Philippines accessed the AND ECONOMIC collaboration, strengthening coalitions Internet for the first time.1 The breakthrough and networks, civil society, private sector, was made possible by Pipol Konek, a government DEVELOPMENT the government, academia, and others to program aimed at providing free Internet bring about transformative change. access to millions of unserved and underserved There is strong evidence in the international development sphere that Filipinos. Internet access is a key driver of economic growth. Between 2000 and 2006, Working with these motivated groups 150 developing countries—including the Philippines—examined by a World and individuals, and armed with This story traces how a policy change introduced Bank study (2009) had “about a 1.38 percentage point increase in GDP for technical and political analysis, CfC each 10-percent increase in [broadband] penetration”.2 A few years later, in August 2017 unlocked the Pipol Konek ushers in reforms that lead to sustainable Scott (2012) also found that “…a 10% increase in broadband penetration program. It describes how a group of concerned is correlated with a 1.35% increase in GDP for developing countries and a and inclusive development, improving citizens and civil society organizations (CSOs) 1.19% increase for developed countries.”3 the lives of Filipinos. with support from Coalitions for Change (CfC) identified and eliminated a critical barrier that In the Philippines, the National Economic and Development Authority (NEDA) stressed the need for robust broadband infrastructure as a critical would lead to immediate and far-reaching component in building a competitive workforce and enabling participation implications for improving internet access for in the global market. High-speed broadband Internet and coverage millions of Filipinos. Before turning to the details throughout the country can provide Filipinos with better access of the reform, we briefly review the importance to economic opportunities. of the internet for economic development. 1 Simunul, Tawi-Tawi and San Jose, Dinagat Islands 2 Qiang, C. Rosottto, C., & Kimura, K. 2009. Economic impacts of broadband. Information and Communications for in Mindanao. See http://freepublicwifi.gov.ph/ Development 2009: Extending Reach and Increasing Impact, pp. 35-50. Retrieved from: http://web.worldbank.org/ pipol-konek-reaches-zamboanga-del-sur-and- 3 Scott, C. 2012. Does broadband Internet access actually spur economic growth? Retrieved from: http://www.eecs. tawi-tawi/ berkeley.edu/~rcs/classes/ictd.pdf. CfC REFORM STORY NO. 11 5 INTERNET ACCESS IN THE PHILIPPINES Despite 25 years of liberalization and deregulation, and substantial investments in telecommunications infrastructure, for millions of Filipinos, the Internet still is difficult to access. Data shows almost 45 percent (46 million) of Filipino citizens, and 74 percent (34,500) public schools do not have access to the Internet. While the country’s archipelagic nature makes it costly to deploy traditional telecommunications infrastructure, the lack of competition in the telecommunications industry is also a major factor in the limited Internet access in the Philippines. There are currently only two telecommunications companies (“duopoly”) that provide Internet service. These companies control all segments of the network—from international connectivity down to the end user’s device. International submarine cables must connect to landing stations in the Philippines. The two telecommunications companies own six out of seven of these stations.4 The duopoly then controls the country’s backbone networks and all the major cables and towers that distribute Internet capacity (middle mile), down to the segment of the network that connects the consumers (last mile). 4 Department of Information and Communications Technology (DICT). 2017. National Broadband Plan: Building Infostructures for a Digital Nation. Diliman, FIGURE 1. HOW THE PHILIPPINES CONNECTS TO THE INTERNET Quezon City. Source: DICT, Telecom Summit, 2017 6 CfC REFORM STORY NO.11 7 THE SEARCH These long-drawn processes have FOR WAYS TO HELP discouraged many new competitors from entering the industry. In 2014, two CSOs—Democracy.net.ph and cellular mobile technology and concentrated on Other countries in Asia are already extensively entity (PTE). A provider wanting to Internet Society - Philippine Chapter (ISOC. urban areas. Expanding network reach beyond using satellite technology for commercial and set up satellite broadband needs to obtain PH)—began working together informally to urban centers was not considered cost-effective, household access, including Indonesia—a much a telecommunications franchise issued advocate key reforms in current Information to the disadvantage of people living in rural and bigger archipelago with 10,000 more islands by the Philippine Congress, a costly and and Communication Technology (ICT) policy. remote areas. than the Philippines—as well as Japan, South time-consuming process. When Senator Benigno “Bam” Aquino IV held Korea, and Singapore, which are some of the a Senate hearing on the slow and expensive Many of those concerned with the state of the most well-connected countries in the world. Additionally, to operate the service, one Internet service in 2015, it opened the door country’s broadband service, including President Currently, there are at least four satellites would need to get a license from the National to opportunities for civil society to coordinate Rodrigo Duterte5, believed the solution to be that cover the Philippines. The most promising Telecommunications Commission (NTC), the with reform-minded legislators. By mid-2016, greater competition in the telecom sector, which development was the launch of the KOREASAT7 regulatory agency. Securing a license entails the the Better Broadband Alliance (BBA)—a group led to the bidding and eventual selection of a satellite in May 2017, primarily designated to conduct of public hearings, at which any entity of civil society organizations, business and third major player to compete with the duopoly. serve the Philippines and the West Philippine affected may raise comments and objections. industry associations, Internet user groups, Sea.7 These developments indicate that others industry experts, and researchers—emerged, In addition to introducing competition, other were already aware of the potential of satellite These long-drawn processes have discouraged with a commitment to support reforms focused coalition partners saw satellite technology as a technology and that there was sufficient Internet many new competitors from entering the on improving access, affordability, and quality promising option for delivering Internet access capacity to provide this type of service to industry. In one case, a potential competitor of broadband services in the Philippines. to rural and remote areas. Unlike traditional the Philippines. spent almost five years in regulatory hearings Democracy.net.ph and ISOC.PH remain as key wired infrastructure, satellite broadband before the approval to operate was granted. members of the BBA, which CfC has supported can be deployed quickly and cost-efficiently. Unfortunately, while satellite broadband By that time, the incumbent players had built since its inception. A 2006 study by Communications Research technology looked promising, there were their networks and captured market share, Canada found that satellite technology is the key policy and regulatory barriers to using forcing the new entrant to withdraw. Some members of the BBA identified the reliance most cost-effective way to deliver broadband the technology. Philippine regulations of government and private service providers on in areas where the population density is less classify satellite broadband as a ‘basic the existing infrastructure of the two dominant than 70 people per square kilometer.6 Given the telecommunications service,’ which means it can telecommunications companies as the main sparse nature of many areas in the Philippine only be offered by a public telecommunications roadblock for the limited Internet access. These archipelago, satellite offers the best solution for incumbent operators invested primarily in nation-wide Internet access. 5 BusinessWorld. Jan 2018. Gov’t strengthening connectivity as telecoms search for a third player. Retrieved 7 KOREASAT-7 aims to provide data and video applications, including internet access, broadcasting, and con- from: http://www.bworldonline.com/govt-strengthening-connectivity-telecoms-search-third-player/
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