Thursday, December 02, 2010

Verceles: Blueprint for National Internet Exchange - Will it happen in the Aquino administration?

I got the chance to catch up lately with former Congressman Leandro Verceles Jr. For newbies in the Internet community, Verceles is a major proponent and co-author of important IT-related legislations in the country such as Y2K Law and E-Commerce Law. He is also the man behind RPWeb that mandates government to connect online and use it as a means to render public service.

Shared with him the paper written by Tunde Fafunwa on the Need for a National Internet Exchange where the urgency for such is amplified or else the quality of our Internet infrastructure will degrade in the long run. Having a local Internet exchange will provide more reasons as well for sites to be hosted locally rather than route all Internet traffic abroad.

The Need for a True National Internet Exchange (Philippines) - V1.2 by Tunde Fafunwa of

This issue is not new anymore and discussed from time to time for a decade now. Verceles sent me quite a lengthy reply on this and decided to publish it in full.

I am hopeful that for as long as the local Internet community keeps clamoring for better Internet, there is still chance for a National Internet Exchange to be implemented in the country. I guess it is only a question of whether President Noynoy Aquino will take the leadership and mandate the players to make it happen.


My comments on the “NATIONAL INTERNET EXCHANGE” and a suggested BLUEPRINT for its immediate implementation and sustainability

by Leandro Verceles Jr. (former Congressman of Catanduanes 1992-2001)

I am quite surprised that it has been a decade now and the viable “National Internet Exchange” (“NIE”) concept continues to remain a concept. As then congressman and chairman of the Congressional Sub-Committee of Information Technology (1992-2001), I had advocated for the realization of this important infrastructure item to pole-vault the growth of the then sunrise IT industry. Starting with RPWEB (1997) that mandated internet connectivity in every government division office numbering in the thousands and the E-Commerce Act (2000), both of which I humbly had authored, it was the intention eventually that a NIE would come to be to handle the steadily growing internet traffic in the country.

The creation of the NIE would give more sense to and reduce the cost of expensive bandwidth for our telcos and ISPs. The choking point is that pipe from the Philippine gateways to the international internet grid, most likely ending up in the United States. By avoiding this pipe in the transmitting and receiving of data, traffic from the Philippines meant for the Philippines would be less congested, less delayed, and will translate to savings for the local carriers and users of bandwidth. Business wise, it would really have made good sense for the telcos if they had set up a NIE in the country.

I would suppose that the normal distrust of the stakeholders, most especially among the telcos, with having a supposed neutral entity to run the NIE has been a deterrent to its set-up. An organizational model that would be acceptable to the stakeholders, most especially to the telcos, has so far eluded the industry. Likewise, the distrust of government to be that neutral entity has likewise been a consideration.

With confidence on the present administration to level the playing field starting with the President’s strong support for private sector-public sector joint ventures and a non-sense regulatory environment to be demonstrated by minimal government interference and equal treatment to all, government should try once again to get the industry stakeholders together.

The Commission on Information and Communications Technology (CICT) with the participation of the DOTC and the NTC can take hold of this great opportunity and invite the stakeholders, most importantly the telcos, in a sit down conference to work out a strategy leading to the creation of the NIE. At this juncture, the stakeholders have nothing to lose if they attend the conference. Coffee will be free and snacks should also be served and the air-conditioning cold to make it as comfortable as possible so all will stay for the talks. Telcos sponsors of the conference should be avoided.

Invited should be no less than at least executive vice presidents of industry stakeholders, most especially the telcos, to ensure that the talks will start at a high level. If that proves difficult, then go to Plan B, that is, the occasion may be graced by the President himself even for 30 minutes only. With President Aquino there, it is the hope that there will be enough excitement and gentle persuasion for the CEOs and presidents of the telcos to come to the conference and involve their companies in the NIE.

Once there is positivity amongst the invited stakeholders to at least explore the possibility of creating the NIE then the work can be left with the stakeholders’ middle management to work out the figures, details and implementing activities.

Taking the lead in trying to get the stakeholders to come up with a NIE may be a special task group coming from the CICT. But it must be very clear that the participation of the CICT is not to run the NIE or put it under their jurisdiction but only to get the stakeholders together. The end product (a NIE) will be the creation of stakeholders themselves. The DOTC and the NTC can assign officers to be seconded to the CICT to help the stakeholders navigate the complicated government regulations.

Some ideas for consideration in the set-up of the NIE:
  • The CICT, DOTC and the NITC should not have jurisdiction in the policy making or implementation of the NIE as the latter is strictly a private endeavor. But as an expression of the government’s sincere efforts to ensure the long-term existence of the NIE, the CICT, DOTC and the NITC can assign officers or offices to support the needs of the NIE if assistance is so desired.

  • The NIE may be non-profit corporation fashioned after the United Nations organization to give the telcos comfort. Like the UN security council, there may be a council/board comprising of about 12 members wherein the major telcos will be permanent members such that a veto vote from any of them on any measure will immediately cause the rejection of that measure. The chairman of the council/board does not vote and may be determined by rotation and better if he is not representing a major telco. Other members of the council/board composed of the smaller telcos and ISPs, who incidentally are also members in the bigger general assembly (to be discussed later below) can be rotated to seat in the council/board. But all the members of the council/board must be members of said bigger general assembly akin to the UN General Assembly. All major and minor telcos and ISPs of the general assembly will have one vote each. The measures voted upon in the general assembly may be expressions of ideas translated into resolutions of the industries represented and like activities. These measures are recommendatory in nature but in relevant cases, may be elevated to the council/board if said measures are of a character that will need the cooperation and implementation of the major telcos who are permanent members of said council/board. Working committees can be established with their outputs sent to the council/board or the general assembly.

  • The NIE can also be the institution that will unify the IT industry. The NIE as a whole will become the most persuasive organization that will work hand in hand with government to ensure maximum growth and a healthy and harmonious business environment of our domestic IT industry, which, steadily with the BPO industry, is becoming a major contribution to the nation’s GDP. To include the BPO and computer industries including non-profit organizations representing them as members of the general assembly (not as permanent members of the council/board) may be worth considering.

  • Quarterly financial contribution of the members of the general assembly (and council/board) should be based on their estimated usage of the exchange gauged by their bandwidth access requirements. Failing to pay the quarterly financial contributions will mean losing temporarily voting rights in the general assembly and the council/board as the cases may be. This should even apply to the major telcos who are permanent members of the council/board. Otherwise other parameters of cost sharing can be explored. But for the initial set-up, physical works and electronics, etc. the telcos inasmuch as they are more capable, should contribute more, either in cash or in kind. In exchange the telcos get permanent seats in the council/board and veto rights.