Yuchengco-owned Rizal Commercial Banking Corp. (RCBC) has asked the Regional Trial Court in Makati to summon the National Telecommunications Commission (NTC) in a hearing this Friday to determine if the regulator awarded Smart Broadband Inc. (SBI), the wireless broadband unit of Smart Communications Inc., the frequency spectrum owned by debt-ridden Liberty Telecoms Holdings Inc. (LTHI).

RCBC is a creditor-bank of LTHI, which, according to court filings, was awarded by the NTC the same frequency bandwidth SBI is now applying for.

“We have obtained several documents which we would want the NTC to validate if it had indeed awarded to SBI the very same frequencies which were given to Liberty in 1995. We have been inquiring from the NTC about this, but they could not give us any official reply,” Sixto Jose Antonio, RCBC legal counsel, told the BusinessMirror in a phone interview.

A check with the NTC revealed that the commission, according to sources, has yet to approve the SBI application.

Piltel president Napoleon Nazareno, in a separate interview, affirmed this information, saying that SBI’s application remains pending before the NTC. “As far as I know, it is still with the NTC. It has not yet been approved,” he said.

SBI is applying for a total of 96 megahertz (MHz) of frequencies in the 758- to 806-MHz spectrum. The frequency band, SBI said in its March application, is necessary for it to offer wireless broadband services such as WiMax. “It is SBI’s objective to offer quality yet affordable wireless broadband services not only to urban areas but, more important, to subscribers in remote and unserved areas as well. This is in active pursuit of the government’s policy on the efficient and effective use of the frequency spectrum to meet public demand for telecommunications service and on availing new and cost-effective technologies in the use of methods for the utilization of the said frequency bandwidth,” said Smart legal counsel Enrico Español in a letter to commissioner Ruel Canobas of the NTC.

The RCBC lawyer said the NTC chief asked SBI to submit documents to support its claim that the frequency spectrum it seeks for is necessary to enable the company to offer various services using WiMax technology.

“Requesting SBI to submit brief descriptions of the broadband services it intends to offer means that the NTC is entertaining the application of SBI. The NTC should not have done this, because it knows that the frequency being applied for by SBI was already allocated to Liberty,” said Antonio.

The RCBC lawyer also said he filed the request for subpoena on May 15, the same day when RCBC asked the same court to terminate the rehabilitation proceedings of LTHI and its subsidiaries for failure to implement a court-approved rehab plan.

LTHI is owned by businessman Raymund Moreno and is the holding company of Liberty Broadcasting Network Inc. (LBNI) and Skyphone Logistics Inc. LBNI holds a congressional franchise to provide telecommunications and broadcast services, while the latter performs the marketing, distribution and logistics support services.

RCBC also asked the court to proceed with its liquidation to settle P1.7 billion in obligations. To finance its operations, court records showed that LTHI promised it will operate a nationwide voice-and-data network called WiMax, which, it claimed, will be the main service or product in the 10-year rehab plan.

The WiMax network is expected to contribute more than 90 percent to LTHI’s total projected revenues.

According to the business plan submitted by LTHI to the court, the wireless broadband service will provide very high revenues and earnings due to its tremendous potential using the existing technology and the required frequencies. 

“The next 10 years will see the increasing demand for this very promising service, and Liberty would not want to lose the opportunity to supply the needed demand because of its capability, existing technology and frequencies required of the service,” said LTHI.

RCBC fears that if frequency spectrum in which LTHI will operate its wireless broadband service will be reallocated to SBI, it will be detrimental to the liquidation proceedings.

“Based on records of the NTC, it appears that the proposed WiMax network under the 700Mhz frequency which was claimed by the petitioners to be their existing frequency allocation…cannot be said to be feasible, even possible now. Specifically, it appears based on NTC records that SBI has applied for and reportedly been allocated and granted the 700MHz frequency,” RCBC said in its motion.

“Accordingly, possession, disposition and control of the 700MHz frequency is indispensable as without it, petitioners cannot set up, maintain and operate the proposed WiMax network considered by the court as in approving the rehab plan. It is inevitably clear that petitioners cannot comply with their obligations,” said RCBC.

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Liberty frequency reallocation questioned

Yuchengco-owned Rizal Commercial Banking Corp. (RCBC) has asked the Regional Trial Court in Makati to summon the National Telecommunications Commission (NTC) in a hearing this Friday to determine if the regulator awarded Smart Broadband Inc. (SBI), the wireless broadband unit of Smart Communications Inc., the frequency spectrum owned by debt-ridden Liberty Telecoms Holdings Inc. (LTHI).

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