Internet Peering in the Philippines

The lack of cooperation among telecom companies has been keeping the cost of Internet services in the Philippines elevated.  The National Telecommunication Commission (NTC) said Internet Protocol or IP peering should be put in place among telecom providers or carriers to improve Internet services.

Globe Telecom, the second most dominant telco in the Philippines, supports the proposal of the NTC.  Globe lawyer Froilan Castelo said there should not be any access charge to IP peering to maintain or lower Internet costs.  

IP peering refers to an agreement among companies to reciprocally provide access to each others' customers.  IP peering allows one ISP to connect with another, giving both entities a direct route for fast exchange of information. 

“A mandatory IP peering among major Internet service providers in the country would greatly improve internet speeds. The absence of an effective and applicable IP peering agreement among major telecommunications providers in the Philippines has been huge deterrent in further advancing internet development in the country. It is high time that the NTC addresses this issue squarely amid mounting calls of Filipino consumers for faster internet speeds,” Mr. Castelo said.

The NTC, in a recent joint hearing of the Senate committees on trade and public services, cited the lack of IP peering among local ISPs as one of factors that contribute to slower Internet speeds in the country. 

The NTC cited the case of Singapore and South Korean, both of which generate most of their Internet content locally, and as a result of IP peering, enhance Internet speeds.

Globe said 15 percent to 23 percent of all Internet traffic in the Philippines is domestic, which means domestic traffic originates and terminates in the country. However, up to 70 percent of this local traffic is being routed externally, such as in Hong Kong and the US, before returning to the Philippines. 

This means that instead of getting routed directly between origin and destination, data is routed outwards through large ISPs that sell transit before the data is routed back to its target destination, thus causing delay in data transmission and effectively slowing Internet connectivity.

Philippine Long Distance Telephone Co., the top telco in the country, however, said IP peering “cannot really address the objective of improving the speed of Internet services given that 80 percent to 90 percent of traffic goes overseas.”

"When IP peering was proposed in the past, we also raised concerns that this could compromise the quality and security of Internet traffic in the country," PLDT vice president Ramon Isberto was quoted as saying.

He said mandatory IP peering also lead to a situation where some parties "free ride" on the networks of others.


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