Broadband Cure: Treating Symptoms or Chronic Disease? – Dr Mohamed b Awang Lah

When a student had to climb a tree, as reported on 16 Jun 2020, to get wireless broadband signal for her online exam, it became an international news. It woke up people 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?

In the process to better understand the situation, I refer to the most recent MCMC’s (Malaysian Communications and Multimedia Commission) Universal Service Provision (USP) Annual Report for the year 2020 (https://www.mcmc.gov.my/skmmgovmy/media/General/pdf/MCMC-USP-AR2020_Eng.pdf). All licensed service providers must contribute 6% of their annual revenue to USP fund.  Collected USP contributions in the year 2020 was RM1.5 billion. As of 31 December 2020, total accumulated fund was RM10.09 billion with total commitment for approved and awarded projects of RM9.05 billion. Surprisingly, the approved (but not awarded) allocation increased 16 folds from RM290 mil in 2019 to RM 4.63 billion in 2020. 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 mil in 2020.

A common feature of these initiatives is that they were related lastmile infrastructure. They were all for 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 towers 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 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 effective were these devices used?  Was there any independent survey or audit?

In general, I am sure this has been the practice on how USP fund was spent over the past decades. We have spent many billions of Ringgits. Are we happy with the results?  Was there any transformation?  The name NFCP was changed to JENDELA (Jalinan Digital Negara) in 2020. In 2010 National Broadband Initiative (NBI) was launched with a 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” by the Prime Minister on 30^th January 2010. In 2006 Malaysian Information, Communications and Multimedia Services (MyICMS) 886 was launched with 8 services, 8 hard and soft infrastructure and 6 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 audit should be done in a timely manner.

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

USP fund should be used to build fibre backhaul infrastructure to reach all populated areas. In every square km, 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. Government can choose to provide subsidies to certain group of users who cannot afford basic services.

In summary:

1. Let the users decide the winners for lastmile retail services (such as 4G, 5G, WiFi, FTTx), 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;
2. Government should build passive infrastructures (such as fibre, towers, poles) that need to use Right-of-Way (which is a national asset) and lease them to retail providers on not-for-profit basis, in all populated areas. This is to ensure high-cost, low value-added, infrastructure can be fairly shared. Perhaps DNB (Digital National Berhad) can take this role. Other 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. USP fund can be utilised to complement other sources of funding. All funding may be treated as loans.
3. MCMC should determine minimum level of service quality and provide mechanism for users to verify themselves. The so called best effort services should not be acceptable.

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

Dr Mohamed b Awang Lah
2nd June 2022

Dr Mohamed b Awang Lah has been involved in Internet services since its inception in mid 1980’s. Prior to retirement, he was the CEO of JARING Communications Sdn Bhd, the first Internet service provider in Malaysia. He can be reached on Facebook.

The views/comments/opinions expressed here are those of the writer and do not necessarily reflect the view of MalaysianWireless.