IP peering is the voluntary interconnection among telecommunication firms to exchange traffic between customers of each network. It is like the interconnection among local telephone companies for calls and texts as it involves connecting subscribers and applications of one internet service provider (ISP) to another.
NTC deputy commissioner Jose Carlo Martinez said domestic peering accounts for only 3 percent of the traffic in the Philippines.
Edgardo V. Cabarios, NTC director of the common carrier and authorization department, said IP peering policy will encourage foreign internet service providers to set up offices in the Philippines to address local demand.
Cabarios said as domestic peering is only 3 percent of traffic, local telecom providers have been investing heavily on international interconnections.
Early this month, Globe Telecom asked the NTC to put in place an official domestic IP peering policy that would help improve the quality of internet services and bring down access costs.
Without this policy, IP traffic takes longer to route as data is sometimes sent overseas before reaching its target Philippine destination. To customers, the penalty is sluggish response time and lower service quality.
To ISPs, it is a waste of international capacity and resources when the transmission could be direct when both the origin and destination are located in the Philippines.
The circuitous data routing also means added costs as the peering partner can charge a fee for transmitting data.
Globe Telecoms said domestic IP peering can be free of charge as data need not be pushed out of the country.
In the same way that landline calls made within the same calling area are free calls that are covered by the monthly service fee, peering costs for domestic data transmission can be offered free to help reduce internet access rates.
"As internet penetration grows, we must continue to improve the way we serve customers by providing them with faster and better internet experience. The absence of a domestic IP peering policy today stifles healthy competition as a subscriber of an ISP will experience unsatisfactory interlinking with another ISP if the latter refuses to leverage efficient domestic IP peering," said.
At present, the Philippines has more than 3 million broadband subscribers, but internet users stand at 30 millions as more users access the net via internet cafes.
