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Friday, September 21, 2007

National Broadband Network: Do we really need it? Now?

I was glued to the Senate hearing on the ZTE-NBN deal, all six and a half hours of it! Never wanting to miss anything, I had to switch on every TV set and radio whenever I moved from one room to another. There were many revelations as expected, never mind if diluted with many safe-side qualifications, as there were indications that even department heads do not understand what they wee doing. That’s what you get for hiring incompetents for political payback. For now, I’ll look at the technical specs.

Transportation and Communications Secretary Leandro Mendoza came with his technocrats whom he had to answer for him several times. The IT expert, or so they say, Mr. Formoso did all the technical explaining job which was, overall, unimpressive and even gave me the impression that he had abused his superiors’ gullibility, ignorance maybe, in terms of the intricacies of IP technology but showed his ugly nakedness when it came to economics, management and law. Why do I suspect it was his capricious design which, of course, was fed him by ZTE engineers, that dominated the blueprint for the NBN?

What’s so special about ZTE’s specs that this Formoso adores so much, he probably keeps it in his altar? WiMax, that’s it.

In the Philippines we are familiar with first-generation protocols CDMA (Do you still remember the first cellphones as thick as your College Algebra book then later slimmed down to MicroTacs, StarTacs and those that looked like "pangkayod ng yelo ng halo-halo" that was easily cloned, at one time, I was billed by now-defunct Mobiline P70,000 for calls I didn't make?), GSM (the breakthrough technology that made Pinoys the world's biggest texters), and GPRS and 3G/HSDPA which today are the prevalent local standards.

The other more popular protocols are 1) DSL which is fast becoming a must-have in many middle class Pinoy homes, 2) Cable Modem Internet, 3) FTTH (Fiber to the Home), 4) BPL (Broadband over Power Line) which Napocor/Transco has installed in its system as Sen. Gordon divulged in the hearing, 5) EvDo (Evolution Data only), 6) WiFi which is comparable but much inferior to WiMax but shorter in range, slower throughput and is a security disaster, 7) 4G which is basically 3G with TV now available to Smart subscribers.

WiMax, (short for Worldwide Interoperability for Microwave Access) is a second-generation communications protocol standard described in Institute of Electrical and Electronics Engineers (IEEE) Standards Book as IEEE 802.16-2004 for the fixed wireless applications and IEEE 802.16e-2005 for mobile wireless. As explained by Formoso, WiMax boasts of point-to-point (P2P - tower-to-tower) line-of-sight (LOS) range of 30 miles @ 72MBps and point-to-multipoint (P2MP - tower-to-enduser) non-line-of-sight (NLOS) range of 6 miles @ 40MBps. It claims to be the best 4-play alternative to the expensive T1/E1 of big business (dedicated lines), cable TV substitute via Internet Protocol Television (IPTV), Voice over Internet Protocol (VoIP) which is used in practically all call centers and homes with Skype or Vonage capable phones, or as backhaul for WiFi hotspots like those you find in Starbucks, and lastly, the usual cellphone towers. Practically, all these capabilities are available today from the existing providers. Further, they have deployed 3G (for 3rd Generation) and 3G+TV which is very much what 4G really is; WiMax is second-generation protocol!

Formoso preference is flawed in the sense that WiMax design was created for high-density urban areas that require much of the bandwidth available, providing multi-protocol communication possibilities, with portability and mobility as its main selling point. WiMax accomplishes this by planting multiple base stations to carry the load. The 6-mile NLOS range of WiMax is about the size of a small city. This is ideal for road warriors who browse the net on their laptops in their cars, cellphones, or generally, the very mobile upscale yuppies. But if the purpose, as Formoso stresses, is to bring voice/data/image to remote, unwired, 5th and 6th class municipalities, this is not the most economical solution. Why spend hundreds of thousands of dollars to erect a single base station covering an area 28 square miles if the purpose is to connect a single far-flung barangay hall or public school to the network?

The cellular and legacy telephone infrastructure is already available from the existing private service providers, and as standard industry practice even in third world countries, First and Second-class cities and municipalities are 100% covered, 3rd and 4th class 40-60%, 5th and 6th class 0-30%. But as Formoso himself admitted upon information given by Sen. Chiz Escudero, the existing roadmap under GMA’s E-Governance Project specifies that up to 80% of 4th class cities and municipalities shall be completed by the private sector by 2010. What is the need, therefore, to build a new broadband backbone? I’m sure extending just the existing private-owned networks to include the remaining 20% of the 4th class, and the whole of the 5th and 6th class, would be cheaper a hundredfold! Instead of spending just for a few shower faucets, they want to install a new pipeline! Sen. Roxas, sarcastically, cornered Formoso on the issue when the guy cannot reply when asked how many endpoints were in the “last-mile”. Gordon was impressive unlike his performance during Doble’s cross-examination. He stressed that while the chronic disease that plagues the country’s education and health services leaves much to be desired, we will spend billions on a haphazardly conceived project just to justify a loan.

The final blow was delivered by Blue Ribbon Chair Sen. Alan Cayetano when he asked if DepEd’s Cyber-Ed project, another ZTE undertaking was a duplicate except for the mode of transmission which was by satellite, which had Formoso suddenly dumbfounded. For he knows Cayetano was right but he could not say so cuz it might jeopardize his baby, falling under the same loan package from China Eximbank. Cayetano finished with, “kanina mo pa kami kinukumbinse dito sa NBN na ito, pero hindi mo man lang kinumbinse si Sec. Lapus para ma-justify itong broadband mo.”

I’ll dissect the economic aspect as soon as I see some of the figures submitted. For now, Formoso says ZTE’s P15.5B @ 25-yrs proposal covers 25,000 endpoints that's a cool P25B including interest! A PLDT MyDSL or Globe Broadband Internet connection with one free phone line costs about P1000 without the VOIP charges or only about P9B in 20 yrs. for the same number of endpoints.

The legal aspect is in the Supreme Court and judging by what we have heard from the Senate, it was clearly in violation of existing procurement laws. In one earlier interview, Cayetano said almost everything is now out in the open, and that should Gloria still insist on pursuing the deal, that will be her own undoing.

The question now is, who will get to her first, the law or the Chinese?

7 Comments:

At 9:32 AM, September 21, 2007, Blogger Diego K. Guerrero said...

The Senate hearing yesterday was saturated with technicalities and disputed executive agreement. The Filipino people want blood. Malacanang crooks that are responsible for the ZTE-NBN scam should be prosecuted and guilty parties must rot in jail.

The Senate Blue Ribbon Committee should focus more on alleged influence peddling by presidential husband Miguel Arroyo. We hope that some witnesses will collaborate Joey De Venecia’s expose‘. Sen. Alan Cayetano can pin down his Tito Mike on Anti-Graft and Corrupt Practices Act. Let the Philippine Supreme Court decides the legality of the so-called executive agreement.

Section 5 of the Anti-Graft and Corrupt Practices Act (Republic Act 3019) states that: “It shall be unlawful for the spouse or for any relative, by consanguinity or affinity, within the third civil degree, of the President of the Philippines, the Vice-President of the Philippines, the President of the Senate, or the Speaker of the House of Representatives, to intervene, directly or indirectly, in any business, transaction, contract or application with the Government.”

 
At 11:24 AM, September 22, 2007, Blogger Ellen said...

Wow, Tongue. Impressive!

I tried hard na hindi mahilo to understand those technicalities.

I learned something but not everything.Matutuhan ko rin yun. Unti-unti lang. Rome was not built in a day, ano.

Did you get the partial transcript from Mar Roxas?

 
At 11:25 AM, September 22, 2007, Blogger Ellen said...

I like the layout of your blog. Clean and sleek and techie.

 
At 10:50 AM, September 23, 2007, Blogger Tongue's Wrath said...

Thanks, Diego, my first response ever since I shutdown my old blog.

I've read somewhere of some sidelights of THAT law somewhere. It speaks of exceptions that apply to JDV3. First, the law does not cover persons who have been in the same line of business prior to the relative's assumption of any of the 4 positions mentioned. Secondly, it also exempts transactions that will not require the discretion or approval of the official. JDV3 claims to have been in telecoms since 1989. The father became Speaker the first time in 1992, he was out of congress again in 2001-2004. If JDV3 can prove he was into telecoms during those times or tha the got franchises during the same period, he's clean!

 
At 10:51 AM, September 23, 2007, Blogger Tongue's Wrath said...

Thanks, Ellen. Blog ng tamad ito. Layout-in-can lang yan. I just wanted to publish some writings that blog readers like those in your blog would not have noticed or wasted their time on because of the details. Those like DKG and you who are willing to learn a thing or two are very very welcome. This IS a boring blog actually, heheh.

 
At 6:42 PM, September 25, 2007, Blogger mschumey07 said...

Hi Tongue,

Finally caught up with you. I'll link you to mine.

 
At 6:20 AM, September 26, 2007, Blogger Tongue's Wrath said...

Schumey,
Thanks for the link. I still don't know many of the features in Blogspot. I'd rather write the whole HTML code myself and have a dotcom blog instead.

I'd like to link those of the others in the gang, too. For now, it still looks like a boring blog, no bells and whistles until I find out how I can override the in-house formatting.

Welcome!

 

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