NET NEUTRALITY NOW THE RULE in the US: 3 Reasons Why It May Not Happen Yet in the Philippines

Elpidio V. Peria
8 March 2015

The Federal Communications Commission in the US recently adopted last 26 February an administrative issuance mandating net neutrality in the US. For beginners, here is a good explanation from US news website Vox what net neutrality is:

Network neutrality is the idea that internet service providers (ISPs), including cable companies like Time Warner and wireless providers like Sprint, should treat all internet traffic equally. It says your ISP shouldn’t be allowed to block or degrade access to certain websites or services, nor should it be allowed to set aside a “fast lane” that allows content favored by the ISP to load more quickly than the rest.

The term was coined in 2002 by Tim Wu, who is now a law professor at Columbia University. In a 2003 paper explaining the concept, Wu argued for a non-discrimination rule that would ensure a level playing field among Internet applications.

While the net neutrality rule approved in the US will only apply in the US, it may take a while before the rule will become a reality in the Philippines for the following reasons :

1. The PLDT’s stance on internet exchange connectivity results in the Philippines having the slowest internet speed in the ASEAN

The website showed this infographic on internet speeds in the ASEAN and we’re at the bottom rung, even Laos and Myanmar have faster internet speeds than the Philippines!



As explained in, (accessed 8 March 2015), with some parts edited to focus on the topic we are dealing with :
The international standard for Internet Service Providers (ISP) requires countries to have their own IX (Internet Exchange) point to allow faster exchange of local traffic from other local ISP customers. This is required so the traffic for that country can be shared freely from one local ISP to another with less hops, rather than having it jumped from other countries like U.S, Europe, Australia, Hong Kong, etc. resulting to low latency and broken connection. Using this system also costs less because ISPs using IX aren’t required to pay anything unlike if data is passed from another third-party network.

Aside from using a unified IX, ISPs are also expected to pay for a backbone service from selected providers for outgoing traffic. In Southeast Asia, PACNET is the one in charge. Backbones are important because it let ISPs connect to mainstream internet, i.e: the world’s internet. In return, ISPs are required to pay PACNET for its service.

Below you will see how PLDT deliberately refuses to use an IX or at least, pay for a real backbone company to properly route all its data.
First Problem: PLDT Doesn’t Want To Share Its Traffic Through Peers Via Unified IX

• Here in PH, we have one called Philippine Open Internet Exchange (PHOpenIX) used by all ISPs here like Infocom, Evoserve, Pacific Internet including Globe (Sky & Bayan) with the exception of PLDT (Smart) — and this is where all the problem roots out.

• … PLDT …. chooses a different approach that will only benefit itself and not other peers like Globe; instead of routing data to our country’s own IX, PLDT connects to Hong Kong Internet eXchange (HKIX) through its private VIX (Vitro Internet Exchange). This is a very shady practice because the data, that should originate and terminate here in Philippines, is instead, routed outside in Hong Kong just to return back to Philippines.

• So instead of keeping the traffic inside Philippines, so it can be routed faster directly, PLDT deliberately chooses to route it outside our country hampering its peers like Globe to do do traffic exchange with PLDT DSL customers.

• This is one of the main reasons why Globe / Sky / Bayan users connecting to GARENA has “high ping” when joining rooms. This is also the reason why overall traffic exchange, local in particular, is very slow in this country regardless how much Globe improves its network facilities.
Second Problem: PLDT Thinks It’s The Backbone

• Since PLDT believes it’s the only reason why this country is able to communicate, it has enough muscle to be the country’s own ‘fake’ backbone; using its antiquated data-routing technique instead of letting real backbone providers like PACNET do all the work, a business that thrives on providing data and connectivity solutions to major Telcos in South East Asia.

• Most ISPs pay for a backbone service simply because it solves all the complexities of data traffic management from one country to the next; it’s faster and provides better overall bandwith for customers. As an example, PACNET spends almost a billion dollar constructing a fiber-optic submarine network that expands more than 40,000 kilometers reaching key locations in South East Asia including China with speeds ranging from 17 Terabits up to 31 Terabits (link) — something any telcos like PLDT won’t be able to afford. This kind of technology is the reason why ISPs in South East Asia are thriving with average speed of at least 10mpbs+ (S.K at 13.3mbps, Singapore at 17mbps, Hong Kong at 65 mbps). Unfortunately, PLDT doesn’t want to directly pay for PACNET’s blazing speed network, it instead relies to its obsolete DFON network. The result? Average internet speed for this country lies at 3mbps even worse than India or Indonesia. Take note that PLDT’s network is also more expensive since it’s required to build its own fiber-optic network since it’s now acting as the company’s backbone rather than simply ‘renting’ from real internet backbone providers. On this report, it shows PLDT spent 2.5 billion PHP for upgrading its Domestic Fiber Network (DFON) for that year alone. Imagine all the money saved if the company only chooses to ‘rent’ a real backbone service provider.

• … ISPs here in PH are actually paying PLDT because it acts as the country’s backbone. This also explains the reason why Pinoys are paying more for slow internet connection (because PLDT is spending billions of pesos for its DFON) while U.S and other countries in Europe pay less with better internet speeds because ISPs there simply rent for a backbone network, NOT build one.

Any Fix?
Enough of the rambling, let’s see if this problem is fixable. Fortunately, the answer is ‘Yes’. On this report: Globe is aware of the issue and has asked PLDT to share its traffic by opening its network to our country’s IX.

Notwithstanding the need to further validate the assertions made in the reference just cited, it somehow points to a more basic issue in the country when it comes to internet connectivity concerns, that of having a reliable and robust internet exchange that does not rely or is dominated by a single company. Will the rule on net neutrality similar to the US become relevant in this context? This is something that needs more debate and information so that the real issues would come out and be resolved.

2. There is a 1995 law, Republic Act 7925, that needs to be updated before the issue of net neutrality becomes relevant
If the definition of telecommunications in a 1995 law, Republic Act 7925, is to be read closely, it seems internet service can also be included in the following :

any process which enables a telecommunications entity to relay and receive voice, data, electronic messages, written or printed matter, fixed or moving pictures, words, music or visible or audible signals or any control signals of any design and for any purpose by wire, radio or other electromagnetic, spectral, optical or technological means.
But with the pervasiveness of the internet especially through the use of smartphones, it is now imperative that this law be amended to cope with the challenges of the various services mediated through apps that are downloaded from smartphones. Even the law does not define what value-added services are so a relevant question here is, who will be regulating all the kinds of services that are coursed through these apps, are they also supposed to be regulated by the NTC or the relevant government agency specifically dealing with those services?

3. In its 2012 Annual Report, the National Telecommunications Commission (NTC) noted that 50% of all complaints they received involved poor services on broadband internet, but apparently the rights of consumers using internet services are not adequately defined.

We were not able to find the 2013 and 2014 annual report of the NTC, so the 2012 report gives a big picture of the country situation vis-à-vis internet service. But notwithstanding the efforts of consumers to seek redress for their grievances, it seems the provisions of the Consumer Act of the Philippines, or Republic Act 7394 on quality service imperfection or service warranties may need to be updated to give relief to people who suffer from lousy internet services, not only in terms of the efficiency in the resolution of these complaints but also in the penalties to be imposed on companies who perpetrate these below-par services.


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