PHILIPPINE Long Distance Telephone Co. (PLDT) said rival firm Globe Telecom cannot force its way into Bonifacio Global City (BGC) because the justice department does not have the legal authority to rule on disputes arising from contracts between private companies.

In an interview, PLDT head for regulatory affairs and policy, Ray Espinosa, the legal opinion signed by Justice Secretary Raul Gonzalez on April 18 clearly stated that his department does not render opinion on issues involving private contracts.

“The DOJ [Department of Justice] ruling is very clear. The DOJ does not have the authority to opine on such disputes especially if the contract is entered into between private companies,” said Espinosa.

While the department affirmed the stand of the National Telecommunications Commission (NTC) that the Constitution prohibits any carrier from claiming exclusivity in the operation of public utilities within any given service area, Espinosa said the opinion is not binding because the issue involves substantive rights of private parties.

“The DOJ opinion, as correctly emphasized in the opinion itself, cannot negate or undermine rights arising under a contract between private parties,” he said.

The PLDT lawyer pointed to paragraph six on the third page of the opinion as saying that: “Since the opinion of the Secretary of Justice is merely advisory in nature, such opinion would not be binding upon the private parties who may be adversely affected thereby and who may, in all probability, take issue therewith and contest the same before the courts. As a matter of policy, the Secretary of Justice has consistently refrained from rendering opinion on questions that are justifiable in nature or can be the subject of litigation before the courts.”

“That is precisely why DOJ declined to render the opinion requested by the NTC. This is not a dispute between two phone firms on interconnection issue. This is simply a private contract entered into between private companies which makes the contract valid and legal. It is as simple as that,” said Espinosa.

For its part, Globe said it will not comment on the matter in deference to sister-firm Ayala Land Inc., which is handling the issue. “Globe is merely just the beneficiary of this case. But this is really a project of the Ayala group. The plan is to transfer Globe headquarters within the BGC,” said a source.

Globe and its wireline unit, Innove Communications Inc., asked NTC last March for a clarification on their legal capacities to provide telco services within BGC. The commission, in turn, referred this to DOJ.

In its opinion, Gonzalez reiterated that Section 11, Article XII of the Constitution provides that the operation of a public utility shall not be exclusive. “Our reservations notwithstanding, the NTC can enforce and validly maintain that the Global City is a ‘free zone’ within which all enfranchised public telecommunications entities so authorized by the NTC can provide high-speed networks and communications connectivity.”

On the regulatory aspect, Espinosa argued that the NTC is not empowered to determine who can or cannot operate in a certain area.

“Similarly, the NTC does not have the power nor authority to disregard rights and obligations arising under a valid contract between Fort Bonifacio Development Corp. (FBDC) and PLDT. Otherwise, it would be like saying that the NTC can mandate an owner-developer of private property  like Ayala Land, for instance, to allow PLDT to install its facilities in all its horizontal and vertical developments even if Ayala Land had already entered into valid contracts with Globe,” said Espinosa, also a PLDT board member.

The right to develop the BGC was awarded to FBDC. In 1998, FBDC and Bonifacio Communications Corp. (BCC), the sole provider of telco services within certain areas of the BGC, entered into a memorandum of agreement granting BCC “the exclusive right to install, construct, own and maintain all the necessary communications infrastructure and provide the related services, including but not limited to value-added services within the service area.”

BCC was previously owned principally by Smart Communications, BCDA (Bases Conversion development Authority) and FBDC until 2002. Subsequently, Smart was acquired by PLDT and it later acquired the shares of Smart in BCC.

In the same year, PLDT acquired all the shares of FBDC in BCC, so that BCC is 75-percent owned by PLDT and the remaining 25 percent by BCDA.

The agreement between FBDC and PLDT for the acquisition of the former’s shares in BCC provides that it will be the sole provider of basic telecommunications and related services and will have exclusive access to the communications infrastructure of BCC.

“PLDT is prepared to fully protect its contractual rights with FBDC should the latter disregard the exclusivity it granted to it,” added Espinosa.

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PHILIPPINE Long Distance Telephone Co. (PLDT) said rival firm Globe Telecom cannot force its way into Bonifacio Global City (BGC) because the justice department does not have the legal authority to rule on disputes arising from contracts between private companies.

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