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Chapter 2
Review of Related Literature
This chapter consist of the review or related literatures and studies from
both foreign and local sources and synthesis.

Related Literature

Foreign

According to Justin Jaffe (October, 2019), An Internet Service Provider

(ISP) is a company such as AT&T, Verizon, Comcast, or BrightHouse that
provides Internet access to companies, families, and even mobile users.
ISPs use fiber-optics, satellite, copper wire, and other forms to provide
Internet access to its customers.

The type of Internet access varies depending on what the customer

requires. For home use, cable or DSL (digital subscriber line) is the perfect,
affordable choice. The price of home use can range anywhere from free to
roughly $120 a month. The amount of bandwidth is usually what drives the
price. Bandwidth is the amount of data that can be sent through an internet
connection in a given amount of time. The speed for home use usually
varies from 14 kilobits per second to 100 megabits per second. For large
companies and organizations, their bandwidth requirements may be 1 to 10
gigabits per second, which is both insanely fast and expensive!

Local

According to Ron Camargo (March, 2015), The History of Internet in the

Philippines has been steadily catching up with other countries over the past
few decades when it comes to providing the nation with access to the
Internet and the rest of the world. On that note, the Philippines has seen
quite a number of milestones in this endeavor, all of which started in 21
years ago in March 29, 1994, when users first got to establish a connection
to the Internet. Such a landmark moment has opened the doors for progress
on the side of having Filipinos have access to the information wellspring that
the Internet offers over the following years ever since; the ICTO and DOST
are continuing this progress with the Free Public Wi-Fi Project and the use
of TV White Space (TVWS) Project.

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One of the precursors to the Free Public Wi-Fi Project is the conversion of
the TV White Space (TVWS) as a means to provide Internet connectivity for
rural areas such as barrios and towns. The use of TVWS as the preliminary
means of connecting barrios to the Internet is one that is cost-effective, as it
converts the unused TV and radio frequencies available, and these
frequencies can cover more distance than current Wi-Fi technology (with a
maximum range of 20 kilometers).

The importance of being able to connect to the Internet regardless of

location is becoming a necessity as information and instantaneous
communication have been shifting to a more digital medium. As such, the
ICTO and DOST are addressing this need with the Free Public Wi-Fi Project
and the TVWS project. These projects aim to provide free Internet access to
Filipinos in various public places within their respective municipalities.

Related Studies

Foreign

According to Justin Jaffe (October, 2019), In 2019, Speed, price and the
pros and cons of every type of high-speed internet service has become as
vital as other utilities like water and electricity. It's the gateway for everything
from news to education, dating to dining and all manners of entertainment,
from music to gaming -- and even what we used to call "TV." For most
Americans, a reliable and high-speed internet connection is now a
foundational part of both work and family life.

The US ranks 10th (see 2017 PDF report) among countries for the highest
average internet speeds (at 18.7 megabits per second, or Mpbs), according
to the most recent data available. To the chagrin of citizens and politicians
alike, high-speed internet isn't yet universally available. We can't even agree
on the scale of the problem. Roughly 7% of the US population -- that's 19
million Americans -- still doesn't have access to a broadband connection,
according to the FCC. A more recent survey from research firm NPD Group
puts the estimate much higher: It says that 100 million Americans don't have
access to 25 Mbps or faster internet speeds.

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Local

According to Kyle Chua (November, 2018), PH internet economy to grow

from $5B to $21B by 2025 – Google Despite being only second to Indonesia
in terms of number of internet users in Southeast Asia (SEA), the
Philippines' internet economy is the smallest among the 6 SEA nations in
Google's latest SEA internet economy study.

The Philippine internet economy, measured as gross market value (GMV), is

currently at $5 billion, with Malaysia being the closest at $8 billion, and
Indonesia leading the region at $27 billion. In the next 7 years, the
Philippines' internet economy will more than quadruple in size, reaching $21
billion by 2025. It follows the general trend for SEA, whose internet economy
will collectively triple from $72 billion to $240 billion by 2025 – a projection
that's $40 billion higher than initial estimates.

Local

According to Reddit user v/vlodia (April, 2015), How PLDT Deliberately

Keeps Local Internet Traffic Slow and More Expensive In Philippines
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

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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.

Since PLDT has enough muscle in this country to dictate what it wants and
disobey common standards of data routing, it 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.

Unfortunately, the NTC (Philippines's version of FCC) has no power to

rectify the situation which is very obvious because PLDT is the country's
largest telco; a company that holds more than 40% of Meralco via MPI and
Beacon Electric Asset; a conglomerate that almost single-handedly owns
most major newspapers in PH like Inquirer, Philstar, Interaksyon,
MediaQuest, etc. Heck, it's too big, it even holds the highest chunk of power
in the Philippine Stock Exchange itself. Bring this elephant down and the
whole economy of PH will be fucked up.

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

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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.

Synthesis

Internet in the Philippines has remained, more or less, the same from a year
ago. Speeds have seen a slight increase, but relative to the rest of the
world, the country remains in the lower tier. In the most recent global index
by internet speed monitor Ookla, the Philippines ranked 97th out of 125 in
mobile speed with an average of 14.05 Megabits-per-second (Mbps) and
84th out of 135 in fixed broadband with an average of 17.73 Mbps.

Internet speed improvement has been repeatedly declared as the Duterte

administration's tech priority – a problem that will be aided, as the
government believes, with the entry of a third telco to force competition-
fueled changes in the landscape. That has been the focal point of any talk
regarding improving the broadband situation in the Philippines. Below, we
show you where we're currently at with regards to finding the third telco, as
well as a few other important developments over the past year.

The prospective telco will be scored and selected according to these factors
on a 5-year projected “commitment period,” moving away from a traditional
bidding process. With the 5-year commitment period, the prospective telco
must be able to at least invest P200 billion in that timespan.

Duterte has also said that the government will not pay for the frequencies
currently in possession by the two established telcos to be redistributed to
the third telco. The frequencies should not be resold to the government as is
currently the demand of the two telcos, he said. Along with faster internet
speeds, what the administration has repeatedly mentioned with regards to

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its tech priorities is providing internet access to more people. One of the
ways it has tried to do so is with the “Free Internet Access Program,” which
Duterte signed into law in August 2017.

The basic tenets of the law ensure that there is free internet access in areas
including national and local government offices, public basic education
institutions, hospitals, health centres, parks, plazas, libraries, airports,
seaports and transport terminals. The law is part of the National Broadband
Plan, the DICT’s flagship campaign to improve internet in the country,
ordered by Duterte back in 2016.

Internet as utility

Currently in Congress is House Bill 5337, which has yet to be passed, but
seeks to reclassify internet services as a basic service like a landline
telephone instead of a value-added service. If internet services were to be
reclassified as a basic service, the NTC will be able to impose minimum
service standards and direct regulatory supervision on broadband services
and broadband service providers.

Sources

Jaffe, Justin (2019). An Internet Service Provider (ISP) is a company such

as AT&T, Verizon, Comcast, or BrightHouse. https://www.cnet.com/how-
to/best-internet-providers-in-2019/

Camargo, Ron (2015). The History of Internet in the Philippines.

https://dict.gov.ph/the-history-of-internet-in-the-philippines/

Jaffe, Justin (2019). Speed, price and the pros and cons of every type of
high-speed internet service. https://www.cnet.com/how-to/best-internet-
providers-in-2019/

Chua, Kyle (2018). PH internet economy to grow from $5B to $21B by 2025.
https://www.rappler.com/technology/news/217123-philippine-internet-
economy-to-grow-to-21-billion-dollars-2025

Vlodia (2015). How PLDT Deliberately Keeps Local Internet Traffic Slow and
More Expensive In Philippines.
https://www.reddit.com/r/Philippines/comments/2aurzq/how_pldt_deliberatel
y_keeps_local_internet/

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