Internet connection

Why the Philippine Digital Strategy 2011 – 2016 should be scrapped

Internet Map: World Connection Density (click to enlarge)

The Commission on Information and Communications Technology recently published the Philippine Digital Strategy 2011 to 2016. The first indication that the CICT doesn’t understand the situation is indicative in its SWOT test. This isn’t to say, “Internet for all”, isn’t a good end goal. It is to say that there is no clear strategy to get there based on the Philippine Digital Strategy.

Philippine Digital Strategy SWOT test
Philippine Digital Strategy SWOT test (Click to enlarge)

What it is though, is trying to create a network for the government. To quote the PDS, it wants the Spectrum Fees collected by the NTC to be used to fund the Universal Access and Service Fund.  What this does is essentially pay for the Government’s Broadband Infrastructure, which essentially is a variation of a “national broadband”.

“A UASF uses a transparent, accountable and competitive mechanism to allocate this finance (also called smart subsidies). Private sector entities who may be interested in supplying broadband Internet service to unserved communities will be invited to submit bids in response to a request for proposal (RFP). The party asking for the least subsidy – either because it has the most efficient technology and business plan or because it is investing more of its own capital – will be declared the winner.

The UASF could fund the following items:

  • Broadband infrastructure, both backbone and access network and the subsequent service provision;
  • Broadband connections for elementary and high schools in collaboration with DepED;
  • Broadband connections for prioritized rural hospitals and health centers in collaboration with the DoH;
  • Broadband connections for existing and newly created CeCs, including a limited time of operational support if required until the CeCs are expected to become financially self-sustaining;
  • COMELEC precincts to stabilize poll automation; and/or > ICT awareness and training campaigns.”

Does this translate to funding from the Government to pay for the needs of Elementary and High Schools or Hospitals?  It doesn’t make sense when these entities are supposedly devolved from the national government.  Take for instance, a hospital under the DOH pays for its own operating expenses.  Part of being independent translates to being able to determine what capital expenditure they will need, and operating expenses, correct?  So their ICT strategy ought to be focused on the local level, correct?

As for the COMELEC, shouldn’t their ICT awareness and training come from their own budget?  As does their poll automation funding?

The PDS line of thinking comes from the fact it doesn’t understand the situation, and the needs of the future.


The Philippine Internet situation

What is the situation?  The business sector and consumers in general complain of a lack of broadband infrastructure. This is indicative, among other things of The Global Information Technology Report 2010-2011.

Why is this important?

The significance of broadband to an economy is like the significance of a road, a highway, a railway, a seaport, an airport and power plants.  A nation living in the 21st Century can not do business when its network infrastructure is crappy.

Creative industries that according to recent reports indicate an explosion of 50 percent in the next few years.  And yet the global consumption of media— driven by creativeness— is entirely digital.  Everything from Books to movies to music; from entertainment to serious work is driven entirely by the Internet.  This is why Netflix is growing.  This is why the Bloomberg alternative, StockTwits TV is growing.  This is why there is a whole “television” network called Twit is growing.  This makes possible, Blackberry email that is so well loved in Government and Business and it rely on Research and Motion servers.

Everything hinges on the Internet.  Not just the creation of content, but the availability of the tools to create this content is facilitated by the Internet.  Final Cut Pro X for example is available on the Mac Apps Store and it is several gigabytes of download.  Not only that, Software used to create mobile advertising, write mobile applications are downloaded off the Internet.


The South Korean model

The South Korean broadband model seems to be the best in the world.  This is something Filipinos ought to borrow.  What has South Korea done?  Essentially the government invested in providing for the network.  It was a public-private partnership.  It help build the Broadband Infrastructure just as America built their interstate highway.

The government has to first recognize the value of Broadband.  It has to first see that Broadband is an essential component of the economy.  It has to first see that broadband is as important as a highway that connects Manila and Batangas.  It is as important as having Caticlan International Airport make Boracay accessible to tourists.

If the NTC has two billion in funds annually on spectrum fees then it ought to go back into building broadband internet in the Philippines, which actually serves everyone.  It goes without saying that two billion pesos in annual spectrum fees won’t be enough to help setup a real deal broadband network in the Philippines. In fact, South Korea spent over thirty trillion won in building its broadband network. In US Dollars it is approximately 30 billion. In Philippine terms, it is in the neighborhood of over 1.4 trillion pesos. That would upgrade existing South Korean network to 1 Gigabit per second download. South Koreans currently enjoy 100Mbit/s speed.

The Philippine norm is 1MB/s.

Obviously, various stakeholders have to sit together to plan the network; to build the infrastructure and the costs of course would be different from the South Korean.

What reframing public policy into thinking that Broadband is a key economic driver does several things.  First, a true Philippine interconnection could be accomplished between the various service providers.  Second, a plan could now be put in place to have multiple network access from the Philippines, and going to elsewhere.  Third, it can help facilitate building of broadband infrastructure in provincial areas where it might not be economically viable to setup shop.


Other key elements missing

Getting the government to reframe its thinking that Broadband is an economic driver is part of the solution to drive a Philippine Digital Strategy.

1. It also needs to look into allegations that Broadband providers enter into exclusive agreements with Local Government Units.  To put it in another way, there must be real, honest to goodness free market happening on the ground.

2. If you want to drive Computer literacy; to make the Internet prevalent then you have to get the digital devices to be really accessible.  Computers, tablets, mobile phones, network infrastructure shouldn’t be taxed too much.

3. The government also needs to clean up the power sector.  Why the power sector?  Well, how else could you drive technology without electricity?  How else could you get businesses to invest in knowledge-based, in creative industries when the electricity these machines run on is expensive?

4. The government also needs to focus on getting content creators in the Philippines.  It shouldn’t stop at the BPO sector because as much as the BPO sector gets people to have jobs, we need to have an environment where animators can survive.  We need to have an environment where scientists and labs could be grown.  We need to have an environment where ebook publishing could thrive, and where music, movies and television programs could readily be purchased.

President Aquino recently dissolved the Commission on Information and Communications Technology.  It is my hope that what the government replaces it with is an agency that is forward thinking, non-political and essentially knows what are the problems, and how to solve them.  It is clear that the Philippine Digital Strategy as it stands today doesn’t understand the needs of tomorrow.  The essential idea of “Internet for all” is great.  The PDS doesn’t have the strategy to make sure that “Internet for all” actually happens.  What it is in a nutshell is a government-centric network.

Yesterday, President Aquino dissolved the Commission on Information and Communications Technology. As of this writing no reason was given, so I shall refrain from saying, great.

What President Aquino ought to do is reframe the Philippine Digital Strategy before the country is set on a path and spend money that would have no impact on the real needs of tomorrow’s Filipino.

Image source: Chris Harrison, Internet Map: World Connection Density.


Philippine Digital Strategy 2011 to 2016:

( Philippine Digital Strategy 2011 to 2016 )

( The Global Information Technology Report 2010 to 2011 )