Traditional Telcos Running Scared
A couple of stories these past few days seem to indicate this. First is on inq7.net, and involves a major Philippine telco. Another was featured just a while ago on the ABS-CBN program, XXX. A reporter accompanied NTC operatives to arrest a distributor of VoIP phones and services which allow users to call landlines in the US and elsewhere for just PhP1.00 per minute (that's PhP60.00/hour). Obviously this would devastate the telcos' international long-distance business if it becomes more popular. It could even devastate their local long-distance profits. Which is why they're panicking. Of course, the NTC raid was ostensibly because of the multi-level marketing scheme of the VoIP start-up, with some distibutors complaining of not getting their cuts. Everything the telcos and the NTC did is, of course, legal and above-board. Still, my conspiracy-prone mind thinks there might be more happening behind the scenes. I'm not accusing anyone of anything; heavens, no, this is just opinion. You go figure for yourself.
My personal view on this is that VoIP should be thoroughly deregulated for it to provide the maximum benefit to Filipino consumers. Declaring it a value-added service (which allows non-telcos to offer it) was a step in the right direction, but then the NTC put up regulatory roadblocks that unfairly favor the traditional telcos. Capitalization and performance bond requirements of PhP10-million and PhP5-million, respectively, discriminate against non-telco players, while the telcos (which could easily afford these) are exempt. Even worse, service providers are required to enter into an agreement with the telcos before offering VoIP. This means that, to quote Disini, "The telcos can simply set terms and conditions for VoIP VAS providers, and if the latter don't want to accept them, then they can't offer the service even if those terms and conditions are unreasonable." This means there's little chance of consumers getting the lowest rate. Whatever we pay for VoIP, a substantial chunk of it will still go to the traditional telcos, at little or no cost to them. Chances are, it's the telcos themselves that will provide VoIP, and we'll have no choice at all.
Cheap international and even national long-distance phone calls are against the interests of the traditional telcos, burdened as they are by their legacy networks, from which they'd prefer to wring out every last drop of profit. So for them to provide VoIP, which can drastically lower the costs of these calls, is very much counterproductive to them. They would rather pervert the service. They'd make it expensive enough to keep their profits. Even independent VoIP providers are required to negotiate agreements with the telcos, so we can't expect them to be any cheaper. Result: instead of PhP1.00/minute, we have PLDT's PhP5.00/minute -- five times more expensive than VoIP could, and should, be! Instead of protecting consumers, the NTC is further driving them to fly-by-night VoIP providers, since only they could provide its real benefits.
It is not the state's duty to ensure that large corporations do not go bankrupt. They made their bets on these old technologies, they should face the consequences. It is not the state's role to hold back technological progress. It is not the state's role to force consumers to subsidize unimaginative corporate decision-making. Deregulate VoIP as it should have been deregulated. Let the chips fall where they may. Let the big telcos take the hit as they should. That's the least the NTC could do.
My personal view on this is that VoIP should be thoroughly deregulated for it to provide the maximum benefit to Filipino consumers. Declaring it a value-added service (which allows non-telcos to offer it) was a step in the right direction, but then the NTC put up regulatory roadblocks that unfairly favor the traditional telcos. Capitalization and performance bond requirements of PhP10-million and PhP5-million, respectively, discriminate against non-telco players, while the telcos (which could easily afford these) are exempt. Even worse, service providers are required to enter into an agreement with the telcos before offering VoIP. This means that, to quote Disini, "The telcos can simply set terms and conditions for VoIP VAS providers, and if the latter don't want to accept them, then they can't offer the service even if those terms and conditions are unreasonable." This means there's little chance of consumers getting the lowest rate. Whatever we pay for VoIP, a substantial chunk of it will still go to the traditional telcos, at little or no cost to them. Chances are, it's the telcos themselves that will provide VoIP, and we'll have no choice at all.
Cheap international and even national long-distance phone calls are against the interests of the traditional telcos, burdened as they are by their legacy networks, from which they'd prefer to wring out every last drop of profit. So for them to provide VoIP, which can drastically lower the costs of these calls, is very much counterproductive to them. They would rather pervert the service. They'd make it expensive enough to keep their profits. Even independent VoIP providers are required to negotiate agreements with the telcos, so we can't expect them to be any cheaper. Result: instead of PhP1.00/minute, we have PLDT's PhP5.00/minute -- five times more expensive than VoIP could, and should, be! Instead of protecting consumers, the NTC is further driving them to fly-by-night VoIP providers, since only they could provide its real benefits.
It is not the state's duty to ensure that large corporations do not go bankrupt. They made their bets on these old technologies, they should face the consequences. It is not the state's role to hold back technological progress. It is not the state's role to force consumers to subsidize unimaginative corporate decision-making. Deregulate VoIP as it should have been deregulated. Let the chips fall where they may. Let the big telcos take the hit as they should. That's the least the NTC could do.
posted by Demosthenes at 10:56 PM
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