Wednesday, February 04, 2009

When Running Code in Filipino Part 3: Ultra Vires

To the future or to the past, to a time when thought is free, when men are different from one another and do not live alone— to a time when truth exists and what is done cannot be undone: From the age of uniformity, from the age of solitude, from the age of Big Brother, from the age of doublethink — greetings!

-George Orwell, 1984

Five stories. I gave you five fictitious scenarios that did not require any business relationship with a telecom provider, save that in each instance the parties involved were subscribed to use the telecom's internet offering or should they require a static IP address. They were five stories of intelligence that exist at the end point of the network.

Of course no one is stopping a telecom provider from offering their own music store or to sell videos and goods online or doing any of the above business.

Could you see:

How New Media translates to mean that anyone can be both content provider and content developer, and thus blurring the line between producer and developer?

How counter productive it is to subject online content to a licensing fee?

How diverse the definition of content is, and

How this, including mobile phone content is already governed by The Electronic Commerce Act and ergo the primary agency ought to be the Department of Trade and Industry. As clearly all of it is a matter of commerce and not mere telecommunication infrastructure.

The commission, perhaps it thinks it is acting in the public's best interest when it wrote about rates:

“The rates shall be deregulated. The contents, information, applications and/or electronic games provider shall inform the Commission of the rates for each of the content, information, application or electronic game offered at least three (3) days prior to the offering of such content, information, application or electronic game. Contents, information, applications and/or electronic games providers seeking increases in rates shall inform the Commission of the details of such increases at least five (5) days prior to the implementation of the increase. The Commission in the exercise of its mandate to protect consumers may not allow the increase. If the Commission does not act on the information within five (5) days from receipt of the same, the contents, information, applications and/or electronic games provider can impose the new rates.”

Even if it were under their jurisdiction, when The NTC wrote the rates were to be deregulated, it completely overturns this when it says, “To protect consumers, the commission may not allow an increase” and goes so far as to say that content developers can impose new rates if the commission ignores their adjusted rates.

Clearly the National Telecommunication Commission does not wish for a deregulated industry.

Why should government impose such restrictions? Is it an attempt to make more money? Ergo this law becomes a form of taxation?

I argue that the even the price of SMS and the fees associated with it isn’t under the NTC but under the Department of Trade and Industry.

Is it out of fear that a telecom for instance would raise rates on text messaging? A person could either choose to pay the higher SMS cost, or not at all. That's the nature of the business isn't it? It isn't life or death not to send out a text message. Neither is it life or death for someone to download a ringtone or game.

Either you have the money to pay for it or not and if fewer people used the telecommunication's service then, that's the telecommunication company’s problem isn't it? They're a business and should know how much the market will be willing to pay for a service or good. They teach those things in business school do they not?

What the commission is proposing will not serve the market place at all. It is a hindrance to real competition between the telcos and content providers and content developers.

What happens when lifecasting comes to the Philippines? That’s right, how do you “regulate” Qik for example that lets you share live video from a mobile phone?

While the Electronic Commerce Act under section 41, has mandated the National Telecommunications Commission, among other implementing agencies “to aggressively formulate, promote and implement a policy environment and regulatory or non-regulatory framework that shall lead to the substantial reduction of costs of including, but not limited to, leased lines, land, satellite, and dial-up telephone access, cheap broadband and wireless accessibility” by government and the general Public.

Why is there such a blatant disregard for a free market?

Networks, systems and/or facilities providers shall provide access to contents, information, applications and/or electronic games providers upon request and based on an access agreement. Access to the networks, systems and/or facilities of duly authorized providers by registered contents, information, applications and/or electronic games providers shall be mandatory.

If taken benevolently could be interpreted that each telecom would provide each other access. That network interoperability should exist. That it only pertains to telecom companies.

Taken or interpreted differently it simply means government without even going to a court of law could ask for the content of a server. It could require access to servers and files just about anything, just like that. No telecom, however evil should be subjected to such process.

In the wrong hands, such act is powerful, and detrimental to free expression, free speech and privacy.

No government or person should have that power without due process, without going to legal processes like a court of law, no matter how rubber stamp such process could be. The level of abuse this could lead to is unimaginable. Suddenly, private family photos and private email could be opened just like that.

Even email.

Even confidential corporation information.

What about the NTC regulating the cost of doing business?

The access charge shall be negotiated. The access charge shall be cost-oriented and shall not be higher than the prevailing retail rates, not promotional rates, for the service where the contents, information, applications and/or electronic games are offered/provided.

While the Electronic Commerce Act allows the NTC to provide a regulator or non-regulatory framework, with respect to the infrastructure, to determine the cost for content developers, I believe is outside their mandate and for any agency to do so, is equally wrong. The NTC isn’t the Ministry of Truth.

The iTunes Music Store

Take the case of Apple’s iTunes Music Store. This music store serves the iPhone. Similar stores for Google Android and Palm are available. The iTunes model, which applies to both Application and Media (both music and video) the price and revenue sharing is clearly between Apple (the provider and owner of the store) and the Content Developer (the Music labels, the musicians, the Movie and Television studios).

Clearly, the matter between the content developer or the applications developer of not just the Mobile Phone segment, falls under the same category as the iTunes Music Store. How it is priced or how revenue is shared is no one’s business except the business entities, both free to negotiate their transaction. Should it be cost oriented, revenue sharing or whatever other method, shouldn’t that be up to them? It is a business decision that government should not interfere. To take that away from the market place where government clearly does not need to step in to regulate is a mistake. I believe to regulate this industry would go against the policy to promote Electronic Commerce.

As to the point where the NTC would like to license just about every content, as we’ve stated the definition of content is so broad and sweeping that it encompasses different industries and genres that the Electronic Commerce Act already covers superiorly. Not to mention the utter futility to subject every content to a license and how detrimental such activity would be.

Richard Edelman wrote about A Different Davos and he talked about the conundrum of media:

Conundrum of Media—At the Media and Entertainment Governors session, there was little consensus on a way forward. Distribution is the new hot area (YouTube is now the #2 search vehicle); content, which was king, now is not. There is expectation of free content, which may well mean more consumer-generated and aggregated material improved by democratization. Media companies must provide a “live” experience, allowing more continuous updates. Subscription models, such as Thomson Reuters, only work because they are aiming at professionals with inelastic demand for high-grade material at their fingertips. The display model for advertising is broken; the ad agencies need to find better ways to reach specific audiences through more targeted, measured advertising.

The intelligence aspect of the network, should be under the watchful eye of the Department of Trade and Industry while the underlying infrastructure, how telecoms do business falls with the National Telecommunications Commission.

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