National broadband will connect gov't agencies, rural areas

Metro Manila (CNN Philippines) — The President has approved plans to build a national broadband network, which will be used to run online government services and connect rural areas to the internet.

Under the new National Broadband Plan, the government will deploy fiber optic cables and wireless technologies across the country, Department of Information and Communications Technology (DICT) officials confirmed in a forum on Thursday.

The network will primarily be used to host a national government portal online.

"It will be like a one-stop shop for services for citizens," ICT Undersecretary Denis Villorente said in a speech.

"Instead of waiting in line, waiting under the sun at different government agencies, they will have the different government websites available from the comfort of their own homes," he said.

The network will also bring internet to remote areas, where private companies often do not go because there are not enough users to justify the infrastructure investment.

"For unserved and underserved areas, this is where government should be looking at investing or subsidizing the infrastructure rollout," Villorente said.

Telco firms could then be allowed to lease the network from the government so they can offer their services in the countryside.

The National Broadband Plan is posted in the DICT's website and it is open for comments. ICT Secretary Rodolfo Salalima said this would promote transparency and reduce the risk of corruption.

The last time the government sought to build a national broadband network was in 2007. However, it was scrapped after then-President Gloria Macapagal-Arroyo, her family and some officials were accused of demanding bribes from Chinese firm ZTE Corp.

Arroyo faced two impeachment complaints because of the $329-million corruption scandal, but these were junked eventually.

The costing for the new National Broadband Plan is not yet final. Estimates have ranged from P70 billion to P200 billion, though Salalima has said it would be closer to the lower end of the range.

Once the final version of the plan is published, the DICT will conduct a feasibility study in the second quarter of this year. This will give the agency a better idea of how much the network will cost and how the government can best pay for it, Salalima said.

"If we have the money, we will build it ourselves. If we don't, we will look for project partners," he explained.

Third player

The national broadband network could solve another long-standing issue with the telecommunications industry: the market domination of Globe Telecom, Inc. and PLDT, Inc.

Edgardo Cabarios, deputy chief of the National Telecommunications Commission (NTC), said companies struggle to compete with Globe and PLDT since they cannot match their resources and experience in the industry.

Half of their upfront cost is laying down their own network, he pointed out. "So now the viability of the third player is supported by the NBP or National Broadband Plan," he said.

NTC Commissioner Gamaliel Cordoba said any interested parties are encouraged to apply.

"We saw how [Sun Cellular] changed the market when it came in. It started all the unlimited promos we have now," Cordoba said in a panel discussion.

He said the NTC received inquiries from "four to five players" about possibly entering the market.

He did not give any details, but he said, "What foreign investors see when they see the Philippine telco industry, though, is the 60-40 restriction. That makes it hard."

The Constitution restricts foreign ownership of telecommunication networks to 40%. Filipino citizens must own 60% of the company.