Broadband cure: Treating symptoms or chronic disease?

 

From Mohamed Awang Lah

When a student had to climb a tree, as reported on June 16, 2020, just to get wireless broadband signal for her online exam, it became international news. It woke people up to the fact that something is still badly wrong with our broadband services. Accelerated plans were carved out to tackle such problems. But was it a disease by itself or just a symptom of a chronic disease?

My recent letter “Finding a cure for Malaysia’s broadband illness” was very much related to this issue.

To better understand the situation, I refer to the most recent Malaysian Communications and Multimedia Commission’s Universal Service Provision (USP) Annual Report for the year 2020.

All licensed service providers must contribute 6% of their annual revenue to the USP fund.

Collected USP contributions in the year 2020 were RM1.5 billion. As of Dec 31, 2020, the total accumulated funds was RM10.09 billion with a total commitment for approved and awarded projects of RM9.05 billion. Surprisingly, the approved (but not awarded) allocation increased 16-fold from RM290 million in 2019 to RM 4.63 billion in 2020. A total of RM9.43 billion was deposited in licensed banks and earned interest income of RM298 million.

The more interesting parts were about the initiatives, with total claims of RM488 million in 2020.

	Initiatives	Description
1.	National Fiberisation and Connectivity Plan (NFCP)	Overall plan
2.	The National Fiberisation and Connectivity Plan 1 (NFCP 1)	152 towers, for public cellular by EDOTCO, Prodata, Maxis, U-Mobile
3.	The National Fiberisation and Connectivity Plan 5 (NFCP 5)	Migration of TM streamyx customers: copper to fibre. 22,398 of 377,360 subscribers completed in 2020.
4.	Commercialisation of Sites Under the Time 3 Extension Phase 1 (Part 2) Project	47 sites for towers by OCK and Prodata.
5.	Communications Towers and Upgrading of Base Stations	243 new towers, 461 towers upgraded
6.	Fixed Broadband Deployment (Suburban and Urban Broadband)	3,712 ports (assumed by TM)
7.	Rural Broadband	146,280 ports (TM)
8.	Fiberisation of Towers	66.46 km in 2020, 2,473 km total
9.	Smart Devices with Internet Packages	Cheaper devices, 14,010 activated in 2020, 2,512,342 in total
10.	Community Internet Centres (Pusat Internet Komuniti)	Total of 873 sites operational since 2007.
11.	Community WiFi Hotspots	Total of 743 hotspots.

 

A common feature of these initiatives is that they were related last-mile infrastructure. They were all for the treatment of symptoms.

If the purpose was for sharing, the towers should be built and operated by independent parties, not handed over to the designated retail service providers. It is not fair for tower operators to compete against their own customers who are also retail cellular operators.

We have NFCP but, despite the name, there was no plan for a national fibre network. What was planned was short-haul fibres to link up some towers. Total distance built in 2020 was only 66km, totaling 2,473km since 2014.

In my view, it is also not right to use the USP fund for network upgrading of specific providers – items 3, 6 and 7. It may be true that fibre ports provided by a retail provider can be leased by other retail providers. But it means the lessees must compete against the lessor. There is nothing to stop the lessor from behaving like a monopoly.

Providing smart devices (item 9) without ensuring adequate network infrastructure was also not wise. How effectively were these devices used? Was there any independent survey or audit?

I am sure this has been the practice on how the USP fund was spent over the past decades. We have spent many billions of ringgit. Are we happy with the results? Was there any transformation?

The name NFCP was changed to Jendela (Jalinan Digital Negara) in 2020. In 2010, the National Broadband Initiative (NBI) was launched by the prime minister on Jan 30, 2010, with the promise “Every citizen, no matter where they may be, should and will enjoy the benefits of broadband and ICT to enable Malaysia to become a high-income economy”. In 2006, the Malaysian Information, Communications and Multimedia Services (MyICMS) 886 was launched with eight services, eight hard and soft infrastructure and six growth areas. We did have other plans too over the years. I think we must stop inventing new names, just focus on the real substances and be clear on the targeted outcomes. Independent audits should be done in a timely manner.

What should be done? We need to address the chronic disease rather than the symptoms. Problems at the last mile are just symptoms. The root cause is inadequate backhaul. This is a chronic disease. It is like blocked arteries and veins in the human body, but we are treating symptoms manifested in the capillaries.

The USP fund should be used to build fibre backhaul infrastructure to reach all populated areas. In every square kilometre, there should be a point of presence (POP). Every POP should be readily linked with backhaul fibre to the central switching centre belonging to retail providers as well as to the internet exchanges. Any retail service provider can use a POP as a transit point to provide broadband services (wired such as FTTx or wireless such as 4G, 5G, WiFi or fixed links) for the end-users in the surrounding areas. These are relatively small investments compared to building their own fibre backhauls. Let them compete. The government can choose to provide subsidies to certain groups of users who cannot afford basic services.

In summary

Let the users decide the winners for the last-mile retail services (such as 4G, 5G, WiFi, FTTx), and not selected by the government through contracts. This is to ensure fair competition so that end-users have more choices and better quality of services.

The government should build passive infrastructure (such as fibre, towers, poles) that need to use Right-of-Way (which is a national asset) and lease them to retail providers on a not-for-profit basis, in all populated areas. This is to ensure high-cost, low value-added, infrastructure can be fairly shared. Perhaps Digital National Berhad (DNB) can take on this role. Another option is to split TM into two independent entities – one to provide infrastructure and the other to do the usual retail services. The third option is to create a new entity. The USP fund can be utilised to complement other sources of funding. All funding may be treated as loans.

MCMC should determine the minimum level of service quality and provide a mechanism for users to verify themselves. The so-called best-effort services should not be acceptable.

We should be looking forward to real world-class services for every citizen. - FMT

Mohamed Awang Lah has been involved in internet services since its inception in the mid-1980s. Prior to retirement, he was the CEO of Jaring Communications Sdn Bhd.

The views expressed are those of the writer and do not necessarily reflect those of MMKtT.