Under the draft Memorandum Circular on Domestic IP Peering, the NTC ordered Internet service providers to deliver and receive traffic between domestic end-points without passing such traffic across the national border.
At present, the Internet Protocol traffic takes longer to route as data is sometimes sent overseas before reaching its target destination because of lack of interconnection among ISPs.
This results in a waste of international capacity and resources for ISPs and a sluggish response time, lower service quality and expensive rates for consumers.
The regulator said the guidelines on domestic IP peering would ensure efficient use of international bandwidth, reduce domestic Internet rates for consumer and encourage developers of content and applications to establish their presence in the country.
Given this, the NTC ordered all ISPs in the Philippines to deliver and receive traffic between domestic end-points without passing the traffic across the national border.
"For this purpose, all ISPs in the Philippines with a direct connection to a foreign ISP must connect to the IP exchange of the Advance Science and Technology Institute of the Department of Science and Technology," the draft MC said.
The MC further said that all ISPs with direct connection to a foreign ISP should provide, at their own expense, their own links to DOST-ASTI IP exchange.
The NTC said such ISPs shall be responsible for the operation and maintenance of their respective links to DOST-ASTI IP exchange.
It added that such ISPs shall negotiate with the DOST-ASTI the terms and conditions of the interconnection.
"Upon request of any party to an interconnection negotiation, the Commission shall intervene in the negotiation through mediation and arbitration, if necessary," the NTC said.
Edgardo Cabarios, NTC director for the Common Carrier Authorization Department said only 3 percent of the Internet traffic is directly transmitted within the country while 97 percent is rerouted outside the Philippines.
The regulator's move came after Globe Telecom urged the NTC to put in place an official domestic IP peering policy.
Globe said IP peering is similar to interconnection among local telcos for calls and text messages, as it involves connecting subscribers and applications of one ISP to another.
Globe said domestic IP peering can be free-of-charge as data need not be pushed out of country.
To date, Globe has been able to establish IP peering with other telcos and ISPs with sufficient bandwidth, but PLDT has refused to allow connection upgrades.
