Internet telephony complements traditional networks

By Philip M. Lustre Jr. Manila Standard Today

Practically everybody in the telecommunications sector has been apprehensive of a looming industry crisis when the National Telecommunications Commission has defined voice calls over the Internet (VoIP), as a value added service. The sector has the reason to be fearful because the verdict, which means the official adoption and use of Internet telephony in the country, enables telecommunications entities, other than the big telcos, to offer this service and compete openly. The fear stems from the warning from big telcos that they would contest the NTC before the court, thus raising the sight of a debilitating and protracted legal battle.

But for some reasons, the big telcos have yet to file a case. The awaited temporary restraining order or court injunction has not yet materialized. Instead of fighting it in court, the telcos have decided to join the fray, augmenting their systems with the acquisition of IP-based networks and equipment and offering cheap VoIP services before their competitors, including the ISPs, could offer theirs. To their credit, the big telcos could have felt they could neither alter nor impede the global adoption of VoIP. Going ahead of its competitors is indeed a better commercial option than slugging it out in the court. It could be said too that the big telcos, while publicly voicing their opposition against VoIP, were already preparing, albeit secretly, their IP-based networks and products even before the NTC decision. They were never remiss in doing their homework and their opposition was just part of the overall strategy to continue their domination of the sector.

To its credit too, the NTC has seen that it is for the national interest to define it that way. In defining VoIP as VAS, the NTC, through Memorandum Circular 05-08-2005, said in the explanatory note that it had used RA 7925, or the Public Telecommunications Policy Act of 1995, as a mere “guidepost.” This is to be expected because VoIP, being a recent discovery, is a gray area in terms of legal coverage. No specific law covers it at the moment. Even NTC commissioner Ronald Solis admits that the NTC finds itself in a legal bind when dealing with recent telecommunications technologies (like the VoIP), which are not covered by law. This is why he keeps on advocating for the overhauling of RA7925 to make it more responsive to the changing times.

Hence, the NTC has defined VAS as “enhanced services beyond those ordinarily provided by the local exchange and inter-exchange operators and overseas carriers through circuit-switched networks.” Hence, the NTC ruling allows non-PTE (public telecommunications entities) VAS providers to offer VoIP services to the public without securing a franchise from Congress. Hence, the NTC memorandum-circular allows non-PTE VAS providers to use its own equipment capable only of routing, storing, and forwarding messages in whatever format for the purpose of providing enhanced or augmented telecommunication services.

The telcos’ opposition emanates from their persistent view that Internet telephony is a “disruptive technology” that adversely affects the traditional business model, which they have developed for years and invested huge money. It is heartbreaking to see that their networks and services becoming obsolete at the flick of a finger all because of a recent discovery. But Internet telephony is “consumer friendly” because it allows users to have information at the tip of their fingers. Moreover, it is cheap.

Now, Internet telephony appears to be no longer disruptive in any way because (credit the human genius again, please), several equipment suppliers have come out with new technologies that effectively and viably merge the traditional networks with IP-based networks. In short, a telco does not have to throw away the traditional networks; all it has to do is to augment. Traditional and IP-based networks are no longer contradictory; they have become complementary.

Curiously, the ISPs have yet to come forward to compete with the telcos. They have yet to offer their complete menus of IP-based services. It would seem though that it is the big telcos, which continue to dominate to IP-based services, both voice calls and broadband. It would seem too that ISPs are not in a competitive mode to compete with the telcos. Hence, it would appear that a competition policy has to be put in place to enhance the competitive posture of the other telecommunications entities. We have to wait for the NTC competition policy.