Allan S Cabanlong, ASEAN Eng.
The Republic Act 11659 or the “Act Amending Commonwealth Act No.146, otherwise known as the Public Service Act,” was recently passed into law, allowing up to 100% foreign ownership of three primary public services (telecommunications, airline, and railways) in the country. The liberal regulations on full foreign ownership are believed to attract more global investments, modernize the telecommunications industry, improve the delivery of fast and reliable telecommunications and Internet connectivity, and promote competition in the telecommunications market. Thus, lowering the Internet subscription cost per capita.
The Public Service Act (PSA) allows up to 100% foreign ownership of the telecommunications services, but it includes provisions for safeguarding the country from national security risks, such that the President may veto any investments related to state-owned corporations. Also, section 26 of the Public Service Act mandates that “any person and companies engaged in the telecommunications business shall obtain and maintain certifications from an accredited certification body attesting to compliance with the relevant ISO on information security, as prescribed by the DICT.” This specific provision ensures cybersecurity of telecommunications and data transmission, standardization of the hardware used by the telecommunications operators, and process of operations as defined by the relevant information security standards and guidelines. In 2016, the DICT published the National Cybersecurity Plan 2022, a roadmap that defines the strategies and the four key imperatives to implement cyber resilience programs, including compliance certifications duly certified and recognized by the DICT, as well as cyber hygiene, education, and awareness programs.
The Act is projected to modernize the telecommunications industry infrastructure by adopting advanced technologies and globally recognized equipment security standards from foreign partners. It is expected to improve Internet speed and increase Internet penetration in every household of Filipino consumers. Today, the Philippines is considered one with the most expensive Internet subscription fees in the region. According to moneymax.ph, Philippines has an average monthly subscription fee of 47.15USD at 60Mbps Internet average speed compared to South Korea, which is only 24.90USD at 60Mbps. Regarding the average download speed, the Philippines has an average mobile download speed of 29.12Mbps and an average broadband download speed of 49.31Mbps which is too slow compared to its neighbors, South Korea and Singapore, which have an average mobile and broadband speed of 241.58Mbps, 186.06Mbps, and 79.25Mbps, 245.5Mbps respectively.
The new Act did not amend or repeal laws and administrative regulations deregulating or delisting services, industries, or rates. However, it may lower the cost of Internet subscriptions due to competition. It focuses on improving the delivery of telecommunications services to the Filipino consumers with the promise of increasing the Internet speed and reach of the telecommunications services to minimize the impact of the digital divide, modernizing the telecommunications industry infrastructure with the adoption of the new and advanced technologies from the foreign partners. With the perceived growth of global investments in the telecommunications market, it is also expected to generate more jobs for Filipino engineers and other professionals, allowing an exchange of skills and technology transfer with foreign investors.
Amidst these developments come administration challenges, especially in the allocation of frequencies to the new entrants. For instance, according to a National Telecommunications Commission (NTC) official, many investors have already shown interest in investing and entering the Philippines telecommunications market. However, issues and challenges in the implementation are expected to arise because the bulk of frequencies was already assigned to the incumbent operators. Another challenge is how NTC consolidates and takes back unused and underutilized frequencies, including from some operators that failed to pay the Spectrum Users Fee (SUF). These idle frequencies can be useful to new entrants and investors and must be reviewed and consolidated. This is one of the vital policies that the new DICT administration can look into.
The recent approval by the National Telecommunications Commission on the entry of Starlink into the Philippines telecommunications market is a welcoming activity of the new Public Service Act. Starlink is expected to cover unserved and underserved areas to provide high-speed, low-latency internet service. However, its success will depend on how fast the NTC would enable the spectrum allocation for Starlink’s speedy deployment of its infrastructure to service the Filipino nation. In this way, the government can prove its desire and dedication to providing efficient administration in the delivery of an effective public service. Another question is, will the majority of Filipino users afford the 99USD subscription cost of a Starlink service?
In due time, the Public Service Act will affect necessary changes to the telecommunications market, ensuring that the general public has more choices, receives better services, and pays less. It will fundamentally alter the competitive landscape for public services and utilities, resulting in a more competitive economy for the country. The DICT and NTC need to promulgate proactive ICT, and telecommunications unified security standards, policies, and regulations that will benefit the Filipino people and ultimately answer the question of “For whom is the regulation?”.