A BROADBAND BACKBONE SANS POLITICS

The Philippine Star
06/26/09

Most nations of the world are moving at breakneck pace to bring their citizens to the era of high-speed connectivity. And why not? The benefits of providing no less than 8 megabits per second broadband access to every household can no longer be ignored.

South Korea did it

In South Korea , which is being used as the model for 100 percent household broadband connectivity, people now watch movies through the Internet. The cost of high resolution “video on demand” using a broadband connection is cheaper than renting a DVD. Low-income students review for college entrance tests through the Internet.

Korean businesses have also benefited from the widespread use of broadband. There had been a strong growth in the number of start-ups in the IT sector, which ultimately increased its share of revenues in the gross national product.

The online gaming industry had grown to be a national pastime and passion, and even spawned multi-million dollar related businesses. South Korea had also become a sought-after supplier of hardware and advice on IT in many Asian countries and Russia .

Government direction and support

South Korea ’s success in household broadband penetration, it seems, could not have happened without the strong support of its government. Strong regulatory processes, unwavering commitment, and enough incentives for private businesses to invest in the sector helped bring the cost of services down and Internet speeds to as high as 20 mbps.

In 1995, fewer than 1 percent of South Korean households were connected by broadband. A decade later, more than 70 percent of families were enjoying high-speed Internet connection.

In clear and unequivocal words, South Korea had laid out to its citizens its objectives when the program started: big office and apartment buildings were to be connected with fiber optics by 1997; and 30 percent of households would have broadband access by 2000; more than 80 percent by 2005would have access to fast connections of 20mbps or more, which is about the rate needed for high-definition television.

Its government also committed to building a national broadband network linking all government buildings and public offices to radical improve the way the bureaucracy delivered its services. The budget was set at $24 billion.

Private sector pitched in

Korean Telco, which until the early 1990s was wholly owned by the state, was opened up for privatization. The new owners, however, were pledged to bring broadband to every municipality in the country, which they eventually complied with.

What does South Korea ’s tale tell us? Yes sir, it can be done! And so countries like Australia , New Zealand , even the U.S. are keenly studying and picking up precious lessons from this tiny East Asian country’s story.

Telecom deregulation, RP style

In the early 1990s, the Philippines had its own ambitions too. In an effort to dismantle the monopoly held by the Cojuangco-owned Philippine Long Distance Telephone Co., and to spur private sector interest in investing in the country’s telecommunications industry, several legislative and executive orders were approved.

Back then, it was still the era of telephony, and the main complaint against PLDT had been its high rates, especially for overseas calls serving our growing numbers of workers abroad, plus the low household penetration of land line phone services especially in the rural areas.

The resulting liberalization of the industry had its corresponding success story, with a slight twist. The need for land line telephone connections was overtaken by the emergence of a new technology – the wireless phone.

The availability of mobile phone services spread throughout the country at record speed, and even earned for the country the moniker of being the “texting” capital of the world. In fact, cutthroat competition had brought our text messaging rates to one of the lowest in the world. Every Filipino could own a phone depending on his earning capacity.

Correcting limitations

But the Telecommunications Policy Act of 1993 had also its limitations. It clearly needed to be updated in view of the fast changing technologies covering the way people communicate. This certainly included broadband technology in the way that many countries are now embracing it.

The household broadband penetration in the Philippines is still at a low 10 percent, and since most cabling still uses the old telephone lines, speed is greatly hampered – and often times unreliable. Many Filipinos still rely on dial-ups to connect to their Internet at painfully slow speeds. Rates in the Philippines are still on the high side, even for the minimum – and super slow – 384 kbps.

The local telecom industry is just waking up to the potential of broadband internet access, including the fiber-to-home technology – an old story, of course, where South Korea is concerned.

This only underscores the need for government to define and set achievable targets. Perhaps even draw up incentives to encourage the inflow of investments at the quickest time.

Without doubt, communications based on broadband and fiber optics is the cheapest and best technological alternative now that could best contribute to the country’s productivity. A good think-tank should be able to draft an amendment to current laws and reshape it into something more encompassing.

As an aside, if every household in the country had broadband access, children could do their lessons from home during a strong storm or even to avoid the spread of the A(H1N1) virus.

Government broadband-based backbone

As for the government’s controversial and failed bid to build its own broadband-based backbone, now is also the time to rise from all the political mud and restudy how best to connect the bureaucratic machinery – from barangays to the national government – in one seamless thread. There are indeed benefits – including savings – to be realized if government would have its own real-time connectivity.

The real challenge, however, is building this sans politics and big-time corruption.

Should you wish to share any insights, write me at Link Edge, 25th Floor, 139 Corporate Center, Valero Street, SalcedoVillage, 1227 MakatiCity. Or e-mail me at reydgamboa@yahoo.com. For a compilation of previous articles, visit www.BizlinksPhilippines.net.