Keeping up with technology
DEMAND AND SUPPLY - Boo Chanco (The Philippine Star) - May 27, 2019 - 12:00am

Technology is changing the way people live in our world today whether we are ready for change or not. Countries resistant to change or simply not ready for change, will find it very difficult to compete against nimbler economic and political rivals.

Basic in adjusting to the brave new world is updating laws that impact on our ability to adopt new technology. Outdated laws hinder the pace of development. Investors hesitate to put in the resources and the effort required to benefit from new technology.

Outdated laws have been cited as a major reason why our tech sector has lagged behind other Asian countries. Telecommunications, the internet, and its various applications could have progressed faster if we had updated some of our laws early on.

This is why bills such as the one on open access in broadband services and the revision of the 82-year-old Public Service Act are important pieces of legislation. Unfortunately, some senators don’t see the urgency of those measures.

Sen. Grace Poe says she has done her duty. The Senate Committee on Public Services she heads has endorsed for plenary deliberations Senate Bill 1754, or the proposed “Act Amending Commonwealth Act No.146, Otherwise known as The Public Service Act, as amended…,” which was a consolidation of five bills.

In the case of the Open Access bill, it sets out rules for services not available until a few years ago. We are trying to regulate the service by pretending we are dealing with traditional telephone services and that’s totally inappropriate.

Our present Constitution had also been made out of date by tech developments. The 100 percent Filipino citizenship requirement for mass media ownership looks absolutely ridiculous in a world where national boundaries have been obliterated by technology.

I remember the discussion on that provision. It was proposed due to fears that foreign media ownership would result in a kind of cultural imperialism that would infect the way Filipinos think. It is as if it’s possible to isolate our people, with our widespread diaspora, from foreign influence.

Even China and its great firewall to keep foreign media influence out has not been that successful. They may have been able to keep Facebook, Twitter, and CNN out of reach for ordinary citizens, but foreign influence on Chinese thinking is stronger than ever.

Theoretically, Facebook and Twitter should be banned from the Philippines because of their foreign ownership. Both entities broadcast news and opinion, and influence cultural tastes. Our constitutional restriction simply looks antiquated and downright silly.

State of the art technology also requires significant amounts of investments. We cannot hope to attract investors to risk capital in our tech sector with our outdated and even confusing bits and pieces of regulations.

A recent study of PIDS, a government think tank, pointed out we are not ready to properly regulate the tech sector. Even the creation of DICT didn’t eliminate the conflict in regulatory functions with other government agencies.

Convergence made the situation more difficult for our regulatory system to cope with. Such convergence had been defined as “the coming together of telecommunications, computing, and broadcasting into a single digital bitstream,” or the takeover of “all forms of media by one technology, (that is) digital computers,” resulting in the “expansion of services in the traditional industries.”

The law creating the DICT is a recognition by our government of the need to consolidate the regulation of converging sectors into one entity. But the law is not clear as to the extent of DICT’s authority over the various components of the ICT sector.

The PIDS study observed that “given the potential for overlaps with other government agencies, the lack of specificity in the extent of the powers of DICT creates uncertainty in the implementation and application of the DICTA (DICT Act) in relation to the ICT and ICT-ES (ICT enabled services) sectors.”

The convergence of technologies “challenges established rules, regulations, and legal interpretation over services traditionally governed by their own separate legal and regulatory regimes. It also results in conflict in the application of laws and rules, thus creating barriers to trade and investment on ICT services.”

The PIDS study also pointed out the problem posed by the cumbersome process an investor must go through to get into the business.

“To engage in a telecommunications activity, an applicant needs to first secure a legislative franchise and a certificate of public convenience and necessity, among other permits and licenses.

“Given that the processing of the first two can take an average of five years, this slows down investment in telecommunications services. This, in turn, creates a domino effect on other ICT services and ICT-ES dependent on basic telecommunications services and infrastructure.”

Aside from the nationality restriction on ownership, the Constitution also limits to Filipino nationals the practice of professions specifically needed in ICT services. These provisions restrain the entry of foreign capital, technology, and skilled human resource that, together with the use of local resources, could be equally harnessed to spur ICT development.

When the telecom industry was demonopolized during the Ramos administration, there was a mushrooming of telecom companies. At that time the management skills to run such entities were not readily available locally.

So the telcos went around the citizenship requirement by hiring foreign managers as consultants. We ended up with funny titles like chief executive consultant in place of a regular chief executive officer.

The world is now talking about 5G and other advanced technologies, while we are still trying to catch up with very basic broadband because our outdated laws hinder investment and growth.

If our Congress is to be relevant and justify their heavy maintenance cost to the taxpayer, they should fix our laws to facilitate our entry into the digital age.

There are enough digitally savvy Filipinos whose lives would be greatly improved if we had world class digital infrastructure. That will not happen until we update our laws.

Boo Chanco’s e-mail address is bchanco@gmail.com. Follow him on Twitter @boochanco

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