Benefits, risks of Konektadong Pinoy Law

The Konektadong Pinoy Law, or Open Access in Data Transmission Act, recently lapsed into law and is set to reshape the country’s digital landscape. By removing the outdated franchise requirement for internet service providers, streamlining permits, and mandating infrastructure sharing, it seeks to lower entry barriers, attract broadband investments, and cut internet costs for households and businesses alike. For the business community, the law holds great promise but also raises concerns that must be addressed in the Implementing Rules and Regulations (IRR), due within 90 days of effectivity.

The most immediate benefit of the Konektadong Pinoy Law is the removal of outdated entry barriers. For decades, smaller internet service providers were excluded by the need for a legislative franchise or a Certificate of Public Convenience and Necessity (CPCN). By scrapping these requirements, the law allows thousands of small ISPs and cable operators to build and operate infrastructure legally. This influx of new players can expand connectivity in underserved regions, particularly in the Visayas and Mindanao, and give micro, small, and medium enterprises (MSMEs) access to more affordable, localized services that could transform how they do business.

Equally important is the promise of stronger competition. For years, PLDT and Globe’s control of submarine cable landing stations and backhaul networks created costly choke points for smaller providers. Backhaul alone can account for 75 percent of bandwidth expenses, with prices jumping from US$3–6 per Mbps abroad to US$20–105 locally, and up to US$200 in some towns. By mandating infrastructure sharing and fair access, the law seeks to break these monopolistic practices, create space for new entrants, and ultimately lower internet costs for both businesses and consumers.

For businesses, particularly those dependent on digital tools and online platforms, the expected reduction in internet costs is a welcome development. Connectivity is no longer a luxury—it is the backbone of modern commerce. Lower bandwidth costs will reduce operating expenses, expand digital adoption among MSMEs, and enable more competitive products and services. In addition, streamlined permitting processes under the law promise to accelerate the rollout of new infrastructure, eliminating bureaucratic bottlenecks that previously discouraged investment and delayed expansion projects.

Yet the law also carries risks. A central concern is weak regulatory oversight. The National Telecommunications Commission (NTC) has long operated with outdated powers and minimal penalties, raising doubts about its ability to police anti-competitive behavior in a more open and crowded market. Small ISPs could remain vulnerable to the same pricing pressures they face today.

National security and cybersecurity are further challenges. Opening the sector to new, possibly foreign-backed players without a franchise could expose vulnerabilities unless strict safeguards are in place. While the DICT has promised mandatory cybersecurity standards and international certification within two years, these requirements must be clearly defined in the IRR and strictly enforced to close potential gaps.

Market stability is another risk. While the law may pave the way for more than a thousand small ISPs to enter the market, not all of them may have the financial or technical capacity to sustain reliable operations. A flood of undercapitalized providers could lead to service instability, frequent business disruptions, or even sudden closures. Since enterprises rely on stable and predictable connectivity, the IRR must establish minimum technical and financial requirements for new entrants to safeguard reliability.

Lastly, the enduring problem of backhaul bottlenecks must be addressed. Even with open access, the dominance of PLDT and Globe over submarine landing stations and backhaul infrastructure remains a structural challenge. Unless the IRR mandates transparent pricing and non-discriminatory interconnection rules, smaller ISPs will continue to face inflated costs, undermining the goal of lower internet prices for businesses and households alike.

The Konektadong Pinoy Law is a landmark reform that promises cheaper connectivity, stronger competition, and faster infrastructure rollout—all crucial to business competitiveness in the digital economy. Yet these gains come with risks: weaker regulatory oversight, potential cybersecurity gaps, and market instability if safeguards are not in place. This is why the 90-day window for drafting the IRR is so critical.

The business community must actively engage in this process and advocate for rules that strengthen regulatory powers, mandate transparent backhaul pricing, enforce cybersecurity compliance, and secure market stability. By doing so, enterprises can help ensure that the law delivers on its promise—transforming Konektadong Pinoy from a bold idea into a sustainable engine of digital growth.

Read More at: https://www.manilatimes.net/2025/09/09/business/top-business/benefits-risks-of-konektadong-pinoy-law/2180864 

Severo C. Madrona Jr. is a Professional Lecturer at the Department of Commercial Law, RVR College of Business, De La Salle University. With a public policy and business development background, he writes about strategic leadership, labor economics, and fiscal policy.