Baguio stripped from Cyber corridor

INFORMATION Technology (IT) industry players have delisted this mountain resort city as one of the primary IT and call center hubs in the country due to the lack of sufficient telecommunication infrastructure which would guarantee continuous service to their foreign and local clients.

This was disclosed by Trinidad Trinidad, executive director of the Baguio-Benguet Chamber of Commerce and Industry, Inc. (BBCCII), who added that it is now time for government to come out with appropriate measures to attract telecommunication investors to come to the city and put up the needed facilities for advanced IT operations.

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She added IT and call center companies expanding their operations in the Philippines prefer to go to Cebu, Davao, Clark or Subic because of the presence of three or more service providers which could guarantee uninterrupted service to their clients in the other parts of the world.

In the city, only the Philippine Long Distance Telephone Company (PLDT) and sister company Smart Telecommunications provide telephone lines for call centers.

Trinidad said the delisting of the city is a big setback to the repeated pronouncements of national and local officials that the city is fast becoming the IT and call center hub of the North.

While business in the city remains in good shape despite the economic slow down in the US and the unabated oil price increases, Dennis Sy, president of the Baguio Filipino Chinese Chamber of Commerce and Industry (BFCCI), said government, both national and local, must adopt appropriate programs and projects which are designed to boost investor confidence in areas like Baguio City so the desired economic growth in the areas outside Metro Manila could be achieved.

In the case of Baguio, businessmen have time and again prodded local officials to pass the local investment plan to serve as a plus factor for prospective investors to infuse capital in the local scene especially in the telecommunication industry where the city is fast falling behind.

Trinidad said IT and call center companies have helped in providing employment to thousands of locals but the delisting of the city could affected the economic gains the city has achieved over the past several years.

Ironically, telecommunication companies are having second thoughts of infusing billions of pesos in improving their facilities to cope with the advancement of technology because of alleged huge capital needed due to the mountainous terrain and the rather low return of investment because of a small market. (DS)

Telcos nix Remonde’s media plan

By Philip M. Lustre - Manila Standard Today

We were amused to read Economic Planning Secretary Romulo Neri’s answer to our series on the $435-million Cyber Education Project (see Standard Today, May 24, 28, and 31). Published on June 9 issue of the Standard Today, Neri’s explanation was brief to avoid any complications and mistakes, but it did not in any way assail or clarify what we earlier said about the project. In short, Neri did not deny that the project is an expensive march of folly that uses obsolete technology.

Neri, who looks more of a choirboy than a political illusionist that he has become after three years in the Arroyo Cabinet, has forgotten what transpired in the Nov. 21, 2006 Cabinet meeting, which tackled among other things the Cyber Education Project. We are publishing unedited portions of that meeting, a transcript of which we got in our sleuthing about details of this project. President Gloria Macapagal Arroyo, Neri and Secretary Ramon Sales, who recently resigned as chairman of the Commission on Information and Communications Technology, had a vigorous exchange of views in that meeting.

Excerpts:

Sales: Okay. So, the summary for the [Medium-Term Philippine Investment Plan] is the government broadband at P5.1 billion ...

PGMA: Do we need a government broadband?

Neri: Physically, Ma’am we need a backbone but who will provide this is the issue, but there’s the private sector... plus later on, we will probably need on-site...

PGMA: At saka ano, remember what happened to the... itong distance learning. Ito ba iyong kay Jesli Lapus?

Neri: That’s right.

PGMA: That becomes the backbone because you’ll gonna reach all the barangays.

Neri: The way it was structured, Ma’am, it’s not broadband but it’s satellite-based.

PGMA: If it’s satellite-based so what wrong with that?

Sales: The satellite is among the most expensive medium today.

PGMA: But if it is already going to be provided, we might as well maximize the use of it so that we will have another second backbone.

Neri: The way it’s emerging, it can stand alone...

PGMA: Which one?

Neri: Itong education, Ma’am.

PGMA: But even it can stand alone, it doesn’t stop from using it as a backbone. Because otherwise we have to spend another P5 billion.

Neri: We analyzed it Ma’am. Mukhang puedeng two systems because one is TV-based...

PGMA: But not if we will spend. If we will spend only one.

Neri: ’Yang backbone, Ma’am, posibleng gawing BOT iyan...

PGMA: That’s why you have to make sure it’s BOT, that’s why I asked where is the money coming from. So government broadband network parenthesis BOT.

Neri: But we will spend for is only the education component.

PGMA: But the education is already in no. 2 so iba ’yon, it’s a separate project. That’s why I wanted that education becomes the backbone to maximize the... [inaudible] that we gonna spend. If somebody else would provide additional, BOT unsolicited, therefore, no subsidy.

Neri: That’s right Ma’am. The only way to make it work, Ma’am, is for government to be the customer for this backbone if we also have them revive the TELOF.

PGMA: Ang mangyayari n’yan take or pay, which is the whole issue of MRT 7.

Neri: What we need to do, Ma’am, is to structure it in such a way that there is no government subsidy, but the government will become just a main customer for this backbone.

PGMA: But not take or pay.

Neri: We will avoid the take or pay provision, Ma’am.

PGMA: It has to be you use, you pay.

Neri: Oho, that’s what we will tell. But the way it is emerging, Ma’am, mukhang magiging separate system itong education.

PGMA: So you have to specify that government broadband is BOT, not government would gonna spend for it.

Sales: Yes.

Judging from the exchange of views, the emerging plan at that day was to pursue the cyber education project, which is distance learning through satellite, at a modest scale of around P5 billion, which was the same as the national broadband network’s. The plan was also to put it under build-operate-transfer scheme so that the government would not spend for it.

But the projected entry of the Chinese money had pushed the Arroyo administration to pursue the projects at a much grander scale—the cyber education project at $435 million (P26.7 billion) and the national broadband network at $330 million (P15.5 billion). They were to be pursued as government-to-government projects, not BOTs. This was what we were saying in the earlier published series.

Strangely, the Department of Education has yet to make its own explanation on this dubious project. Let’s wait how Lapus will tell his side when Congress starts investigating these two highly questionable projects in August.

* * *

Presidential management Staff chief Cerge Remonde got the shock of his life when major telcos had rejected his overtures for them to finance his media plan to promote the government’s Cyber Corridor Project. According to the grapevine, Remonde had sought the telcos’ help to bankroll to the tune of slightly over P3 million a media plan to disseminate details of the Cyber Corridor, which seeks to install Internet connectivity to all public schools in major urban centers—from Baguio City through Subic. Clark, Metro Manila, Central Visayas up to Davao City .

The grapevine said Remonde apparently misread the telcos, probably thinking that they would finance a laudable project without something or anything in return. Telcos do not know much about Remonde, who, as a broadcaster, was based mostly in Cebu City. Remonde, of course, was mad on the rebuff.

* * *

The resignation of Sales as CICT chief had somehow stirred the hornet’s nest. Speculations abound, but the most plausible explanation was that Sales was aghast by the confusion on his job description. With the transfer of the Telecommunications Office and National Telecommunications Commission from the Department of Transportation and Communications, CICT was left with no office, except the National Computer Center, to supervise.

Earlier, CICT commissioners, including Emmanuel Lallana, had resigned and left for some more financially and morally fulfilling jobs elsewhere. Sales found himself the only one remaining at CICT. As CICT chief, Sales did not have to implement projects but oversee several ICT related projects. No less than the President had spelled this out to him. But this did not sit well with Sales, who wanted a more active role. Unfortunately, Congress has yet to enact a bill creating the proposed Department of Information and Communications Technology. E-mail: telecom_digest@yahoo.com