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What to expect from the PLDT-Globe IP peering

A few weeks before Rodrigo Duterte, whose campaign slogan reads “change is coming,” sits as the new president, PLDT and Globe appear to be in a mad rush to, well, change their business strategy and corporate messaging.

The incumbent telcos are doing, in a span of four months, what they could not or did not want to do over the past decade!

Back in March, after San Miguel Corporation’s talks with Telstra fell through, it was reported that PLDT and Globe began negotiations with the giant conglomerate to acquire the latter’s telco assets.

Towards the end of May, PLDT and Globe applied with NTC for co-use of certain spectrum bands held by Bell Telecommunications, Inc., a subsidiary of Vega Telecom, which is owned by San Miguel Corporation.

A couple of days later, the two telcos announced a deal to buy controlling shares, 50-50, in Vega Telecom, hence effectively blocking out SMC as a potential third telco.

And just last week, PLDT and Globe signed a deal on bilateral IP peering.

Of course, the peering of the country’s two dominant telcos is a welcome milestone, one that industry observers and reform advocates have been waiting for for years.

Bilateral IP peering is a global practice that has helped improve latency and lower cost for many networks. Why PLDT and Globe decided to directly peer just recently is anyone’s guess. But it is safe to say that they finally found a mutually beneficial reason to do so.

This peering arrangement, however, comes with a set of limitations.

PLDT and Globe will provide 3Gbps per month only of free traffic threshold. If the model of the two telcos’ private internet exchanges is to be followed, there will be charges per megabyte beyond the ceiling, effectively a data cap in IP peering!

While this would seem to discourage the growth of traffic to be exchanged between the two telcos, there is always room (and hope) for amendments to this initial agreement.

Will this arrangement have an impact on the ISPs peered through PLDT’s PHIX and Globe’s GIX? Maybe or maybe not. Since the agreement is bilateral, it is up to PLDT and Globe whether they would let the benefits of peering trickle down to the other ISPs connected to their networks in terms of latency and cost.

Will the PLDT-Globe IP peering directly affect their subscribers? It still depends. IP peering is the exchange of local traffic between the core networks of ISPs. Thus, the user experience of internet subscribers will still depend on other factors, such as the availability of infrastructure and the quality of service at the last mile, but nothing that’s beyond the control of the two telcos.

In short, bilateral IP peering is just a piece in the Philippine Internet puzzle.

Ideally, and this is my main point, both PLDT and Globe would peer through an open and neutral Internet exchange point, like the Philippine Open Internet Exchange (PHOpenIX), which allows for multilateral peering, i.e., “connect to one, connect to all.” While Globe is already connected and peering, PLDT has agreed only to peer with the government.

Again, everything is up in the air until Duterte starts office on July 1. But for now, we can hope that change is, indeed, coming.