 | Issue: | Asia-Pacific II 2003 |
| Article no.: | 3 | |
| Topic: | Regulation in the Philippines in the Era of Convergence | |
| Author: | Armi Jane R Borje | |
| Title: | Commissioner | |
| Organisation: | National Telecommunications Commission, Republic of the Philippines | |
| PDF size: | 176KB |
About author
Armi Jane R Borje is the Chairman of the Philippines’ National Telecommunications Commission (NTC). The NTC is the Philippine government’s telecommunications and broadcast regulatory agency. Ms Borje held the post of Deputy Commissioner of the NTC before her current appointment. Ms Borje, a lawyer, served in the past as legal counsel to a number of telecommunications and broadcasting companies. As Chairman of the NTC, she has vigorously championed consumer interests. Chairman Borje has a master’s degree from the National Security Administration of the National Defense College of the Philippines where she graduated with honours. She is also a Lt Col (Res.) in the Philippine army.
Article abstract
The National Telecommunications Commission (NTC) of the Philippines is working to establish a regulatory framework and to restructure the telecom sector to take advantage of the opportunities that technological convergence can bring to the country. The restructuring includes the arbitration of interconnection disputes to facilitate competitive services, the restructuring of universal access subsidiaries and regulation of incumbent charges to ease the market entry of newcomers. High on the priority list are the unbundling of infrastructure and the introduction of VoIP.
Full Article
Convergence has offered new challenges and opportunities to the National Telecommunications Commission (NTC) of the Republic of the Philippines. Given the present environment facing the sector, the NTC continues its proactive approach to regulation. The NTC is successfully establishing a regulatory framework conducive to the sustainable growth and development of information infrastructure and services. It is also eager to promote and sustain an environment that would foster a healthy relationship among stakeholders particularly between service providers and the consumers. However, as a developing country, there remain important domestic and foreign challenges facing the Philippines telecommunications and broadcast sectors. Restructuring of the telecommunications sector to make it more compatible with convergence is underway in the Philippines as in most countries around the world. Some measures initiated by the Commission to make it more efficient and effective are: arbitration of interconnection between carriers if voluntary negotiations fail, to facilitate competition by allowing new entrants to share incumbents’ networks restructuring of Universal Access/ Service subsidies to make them more compatible with competition changes in pricing for networks and services and aligning entry incentives with efficiency. While these are important steps towards a deregulated competitive environment in telecommunications, they are not themselves deregulation, but re-regulation deemed necessary to accomplish policy goals. The NTC looks forward to the day when it does not have to regulate since the marketplace has reached its full competitive potential. Role of the Philippine Regulator in a Convergent Era The NTC sees its role in this convergent era depending on the stage of telecommunications sector reform or restructuring. At all stages of the process, regulatory development requires skills and financial resources. As the market starts to develop, the regulator’s role is increased, but it is decreased as the liberalisation mechanisms are in place and the market becomes fully competitive. Further, there is no standard regulatory regime that meets the needs of every country – no single recipe for success when it comes to sector restructuring in the era of convergence. This means each country must choose the most appropriate path for its sector modernisation. The process of deregulation (or re-regulation) is controversial, contentious and complex. The current state of competition is a multi-dimensional challenge to regulators trying to guide the sector to a fully competitive environment. This process took 15 to 20 years in the highly developed markets such as the US, Canada and the UK. Emerging economies, such as the Philippines, are trying to liberalise, meet Universal Access/Service goals and restructure the sector all in a few years. They can, however, take advantage of the experience of countries that have already restructured their telecom sectors. Regulatory considerations are further complicated by convergence, which leads telecommunications service providers to offer a wider range of multimedia services. Unbundling the interconnections to the basic infrastructure – currently controlled by a dominant supplier – is needed to give competitive basic telecommunications suppliers effective access to the market. This is also critical for services such as video over Internet services, since access to the local loop – the final customer – is controlled by a ‘major supplier’ who also offers the same Internet video service. The components of multimedia services come from vastly differently market structures and regulatory environments. Accordingly, convergence is a significant challenge to regulators trying to ensure that regulations applied across different segments of the multimedia industry are broadly consistent. Convergence is certainly changing the sector. Convergence has been driving changes in technology, market structure and spearheading economic efficiency. The NTC sees convergence as a product – a natural result – of market forces, so ignoring its existence and challenging it, rather than helping it develop, will be unsustainable and disruptive. The NTC is moving to establish an economic and regulatory environment for the Philippines that is conducive to the rapid development of convergent technologies and related markets. The NTC understands its role as regulator is to facilitate the rapid development of the telecommunications sector and to help the sector thrive as a growth engine for the Philippine economy. The NTC believes that convergence has the potential to raise the quality of life of the Philippine consumer and is developing reforms and regulations to facilitate the full development of convergence in the Philippines. Consultations with stakeholders in the Philippine telecommunications sector have been the corner stone of the NTC’s planning of the regulatory process. The NTC continually discusses how to expand investment in the telecommunications sector and drive the growth and development of the Philippine economy. Future Challenges The NTC is preparing itself by consulting with sector representatives, to meet the challenges and take advantage of the available opportunities for the benefit of the Philippines. The NTC gives priority to the consumer by regulating to encourage new services that will give them more choice in the marketplace. The Philippines will continue to reform the sector to prepare the environment to meet the challenges presented by convergence. The NTC hopes to achieve the best possible environment for investors as well as consumers by continuing to be dynamic and proactive. There is no time to waste. The Philippines needs to act now or the gap that separates it from the developed countries will continue to widen. To deal effectively with the challenges of convergence, several issues must be addressed: the NTC is giving priority to the question of interconnection. The NTC can and does, with notable success, intervene in interconnection disputes between carriers to resolve any impasse. The basic framework is in place and the NTC is working to convert current wholesale arrangements to help reflect the costs involved more closely. Last year, the NTC issued its landmark guidelines for the competitive pricing of wholesale interconnect services. In the coming months, the NTC will focus on the next phase of the transition – the accounting separation guidelines that it will use to better regulate the sector. The Commission is aware that interconnection is a dynamic issue that requires regular attention the Department of Transportation and Communications of the Republic of the Philippines has consulted stakeholders regarding a framework for convergence. All recognise the importance of such a policy. However, the existing barriers to convergence must first be addressed in the constitution, the Telecommuni-cations Policy Act as well as in related Executive Orders. There are measures regarding convergence being discussed now by the Philippine legislature voice over Internet Protocol (VoIP) is a central part of the convergence question and a framework for its use must be clearly defined. VoIP lets users anywhere in the world speak to each other without using the high-cost services of international telephone carriers. The NTC is currently seeking guidance from the Department of Transportation and Communications. VoIP can help provide affordable, universal, access to international voice and data communications to the Philippines. Accordingly, with VoIP, the Philippines will be able to foster new applications, increase investments and jobs and help the Philippines compete in the global information and communications technology markets. The challenges of regulating the telecom sector in the era of convergence are daunting. The Philippines is having growth pains and the problems seem endless but the challenges must be met. The efficiency and relevance of regulators such as the National Telecommunications Commis-sion of the Republic of the Philippines will depend greatly upon its proactive stands and hard work. Soon, we will harvest what we have planted.
