Telecommunications Development in Asia

A systems framework to telecommunication policy: the Philippine experience, 1989‐2009

“…Because members of the elite were closely linked to each other through kinship (Ure, 1995) and were aligned with personalities rather than party ideology, de facto government control rotated among them and no group lost its assets immediately or permanently (Levy and Spiller, 1994). However, because of this rotation, there had been a corresponding weak regulatory commitment by the state, which, in turn, had resulted in poor investment and growth in the industry (Ure, 2008).…”

“…The legislative branch felt that the Ramos administration had preempted its prerogative to issue franchises after it released licenses to the new players by virtue of EO109 whereas telecom companies can only get a franchise to operate through a bill in Congress (Ure, 1995). As a result, Congress passed the Telecommunications Act of the Philippines (Republic Act 7925) in 1995 to affirm its power as the sole franchise-giving body in the country (Ure, 2008). At the same time, the law quite belatedly institutionalized the reforms that Ramos had begun: the liberalization of the industry, the cross-subsidization scheme, and the privatization of government communication facilities (Carlos-Salazar, 2007).…”

“…Thus, SAS did not completely achieve its targets. Telephone density significantly increased but subscribed density remained low, resulting in un-optimized investment in a country with poor capital inflows (Levy and Spiller, 1994;Kim, 2003;Ure, 2008). Geographic assignments resulted in non-contiguous service areas and interconnection problems that benefited PLDT as the operator the main telecom backbone and weakened the competitiveness of the new market entrants.…”

“…Specifically, the political sector is composed of the executive, legislative, and judicial branches of government. At the intersection of these three branches is the National Telecommunications Commission (NTC), which was created in 1979 but which has undergone organizational changes with the liberalization agenda in the 1990s (Ure, 1995(Ure, , 2008. Meanwhile, the business sector is composed of the for-profit organizations that provide consumer telecom products and services.…”

“…The delay between the development of the NTDP and its implementation starting in 1989 further weakened the national telecom infrastructure which was privately maintained by the Philippine Long Distance Telephone Company (PLDT). The company, a monopoly operated by cronies of former President Ferdinand Marcos (Cabanda, 2002;Serafica, 1998;Ure, 1995Ure, , 2008, performed so poorly that when the Aquino government assumed power in 1986, over a million applications for landline phone services were unfulfilled (Alampay et al, 2003;Serafica, 1998). Thus, a revised NTDP which was in line with the liberalization of telecom industries in Asia (Cabanda, 2002;Fink et al, 2001;Singh, 2000;Yan and Pitt, 1999) and the world (Gutierrez and Berg, 2000) became a priority project of the Aquino administration.…”