How bureaucracy can hold back the Philippines' internet development

When the Philippines makes headlines, they tend to focus on the fiery statements of President Rodrigo Duterte or the country’s bloody war on drugs. But a recent report from the Cyber Stewards Network raised concerns over the state of the country’s communication services, including matters around ISP ownership, the digital divide, and surveillance.

The Philippines’ telco sector is dominated by two main players: PLDT (which owns other providers such as Smart, Talk n Text, and Sun Cellular and a great deal of the nation’s infrastructure) and Globe Telecom. Both groups exert a huge amount of control over internet services and costs, controlling 83% of the market.

This market is quite restricted for new companies to penetrate. A new telco trying to enter the country is required to obtain various licenses at federal and local levels and the company must be at least 60% owned by Filipinos.

Evidence of these hurdles is not hard to find. Australia’s Telstra and Filipino food giant San Miguel attempted to launch a third major telco in 2015 but negotiations fell apart.

“[The Philippines’] bureaucracy has also acted as an impediment to the efforts to improve service quality and set up vital infrastructure. All telecom companies are required to secure a minimum of 25 permits for setting up infrastructure such as cell sites; the process takes at least eight months,” says Tulika Saxena from research and advisory firm, Aranca.

This concentration has led to poorer connectivity, claimed the report. Urban centres are generally well-connected and there has been a boom in smartphone ownership but rural areas, unsurprisingly, are getting the short end of the stick and, according to the Asian Institute of Journalism and Communication, most schools are poorly connected, if at all. Meanwhile projects like free public wi-fi have been delayed and stymied by bureaucracy too.

There are of course geographical constraints that inhibit the offering of solid broadband services – the Philippines is an archipelago of thousands of islands.

But Saxena anticipates that this will change soon: “President Rodrigo Duterte, along with the Department of Information and Communications Technology (DICT), has expressed willingness to allow the entry of new players with the required expertise and capital.”

She points to efforts to speed up the process of granting permits and Duterte’s revival of the National Broadband Program, which was initially shelved due to corruption allegations.

The Philippines has a lot of parallels to India, she adds, when it tried to improve its internet services across the country but was met with bureaucracy and alleged corruption. These efforts are never quick and easy.


Slow crawl of legislation

Technology has outpaced legislation, which is not unique to the Philippines but the country has particularly struggled. Lawmakers have grappled with cybercrime legislation. One cybercrime act, for example, came under scrutiny for provisions on online libel that would have serious implications for free speech.

Filipino governments have been slow to act on the importance of ICT. Despite years of debate and wrangling, it wasn’t until June of 2016 that it finally established the Department of Information and Communications Technology, or DICT.

The Cyber Stewards report is keen to point out that the various state agencies and regulators that fall under the banner of ICT have rarely had their policies and priorities aligned. DICT’s predecessors had little or no say in how the cybercrime act was written up and at the same time, the bodies had no sway when it comes to bringing in non-governmental organisations for consultation.

DICT should, at least on paper, allow for greater coordination among agencies and communication with outside interests because currently internet-related civil society groups still have little or no real influence on political discussion pertaining to the online sphere.


Surveillance has been unaddressed

For a long time, there was little or no evidence of the Philippines instituting content controls, unlike many of its Southeast Asia neighbours where the practice was common. However there have been incidents that have raised alarm in recent times. In the run up to the 2016 election, police warned internet users that spreading “foul” political memes could be grounds for prosecution.

This controversy was not exactly isolated. With burgeoning internet use in the face of concentrated ISP ownership comes privacy and internet freedoms concerns. Once again, this isn’t unique to the Philippines – where communications methods blossom, governments and law enforcement may seek to control it or influence it – but the structure of its agencies and government makes accountability difficult.

In 2015, the infamous Italian surveillance software firm Hacking Team was itself hacked. The hack revealed that the firm was selling its wares to governments, both in the West and those with questionable human rights records. The data dump showed that the Philippines’ National Bureau of Investigations had, at the very least, enquired about purchasing the technology, though there is no evidence that a sale occurred nor explanation of why it was interested in this tech.

The Cyber Stewards report does refer to the government purchasing a product codenamed Spectrum from German communications company Rohde and Schwarz in 2014. The equipment could allegedly scoop up data from emails, social media, and cell phones.

Keeping track of the Philippine government’s intelligence activities is “near-impossible”, according to the researchers, due to the existence of so many agencies with similar surveillance goals but no coordination.

“The maze-like hierarchy is further complicated by rivalries and reported infighting between the institutions themselves, which are made up mainly of military personnel, police officers, and retired members of both uniformed services,” they write.

A concrete examination of the Philippines’ intelligence framework is still required to pick apart this web of agencies and agendas as thorough understanding of how it all works “remains elusive”.


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Jonathan Keane

Jonathan Keane is a freelance journalist, living in Ireland, covering business and technology

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