(Last of three parts)
In Monday’s hearing at the National Telecommunications Commission (NTC) where the telco competitors faced off, Philippine Long Distance Telephone Co. (PLDT) emphasized that the hoopla generated by the deal between PLDT and Digital Telecommunications Philippines Inc. (Digitel) was not actually to serve consumer interest, as is being pointed out.
Ray Espinosa, PLDT director and head of its regulatory affairs and policy office, said the opposition was meant to convince the NTC to allow Globe Telecom Inc. to have a “freebie,” meaning a free allocation of the spectrum, which PLDT would now dominate after its acquisition of Digitel for almost P70 billion.
“That is what this noise is all about,” Espinosa said, referring to the charges that Globe leveled against the PLDT-Digitel deal—principally the accusation that the control of more spectrum, radio frequencies that are used in delivering services to telco clients, would result in an imbalance heavily favoring PLDT.
“Globe’s opposition to the Digitel investment is not based on principle or out of concern for consumer interest. It wants to hold hostage the Digitel deal so that it can get free radio frequencies that PLDT and Digitel are already using to serve their customers. These frequencies are being used properly and efficiently to serve millions of their subscribers,” Espinosa said.
PLDT officials also described as a case of sour grapes the issues Globe raised against the deal since the
Ayala-led telco also bidded for Digitel. But Globe pointed out that even if it won over Digitel, the imbalance that now exists would not be there. Globe said that when it sought to bring Digitel into its fold, it was to ensure that the move would enhance its market position and thereby provide the best products and services to its customers.
The current battle royale between PLDT and Digitel, on the one hand, and Globe on the other, is expected to hog much media space for some time and result in a lively discussion of the issues involved. Already, the possible return of a monopoly as a result of the PLDT-Digitel deal has generated heated discussions in the media.
The discussions are expected to spawn sub-issues that would have to be resolved, such as a domestic IP-peering policy that NTC should have a handle on. Before the mega-fight, Internet users who used to experience delays in their access to cyberspace were not aware that the supposed domestic link-up between two points in the Philippines was actually being routed internationally before going back to the country.
Globe had raised this subsidiary issue before the NTC. It said the high cost of Internet traffic was principally due to the way PLDT routed the connection outside the country. It is an extra leg that could only mean extra costs, Globe said.
One good thing that could come out of this battle is that other side issues will get ventilated and, hopefully, will be resolved for the benefit of everybody.
The issue raised, for instance, by Bayan Muna Rep. Teddy Casiño is seen to enrich jurisprudence in the country. The legislator considers the deal an illegal act that is frowned upon by Congress.
Casiño cited the Constitution in protesting the deal, a development that is seen to provide a healthy atmosphere as the issues are synthesized.
In an e-mail to this paper on Monday, Casiño said the deal “is not only illegal on its face, but will lead to noncompetition and essentially higher prices for telecommunication services.”
“Digitel is not Mang Inasal that can be sold to any Tom, Dick and Harry. It is always subject to the limitations of its congressional franchise and the national interest. PLDT already owns Smart Communications Inc., Red Mobile and Piltel [Pilipino Telephone Corp.]. If it is allowed by the NTC to acquire Digitel, that would give PLDT 70 percent of the cellular-mobile market, leaving Globe Telecom with a mere 30 percent.
“This is clearly a monopoly and this is not allowed under the 1987 Constitution as this will negatively impact on the public interest with regard to prices of cellular-phone services. The government cannot allow any monopoly by any telecommunications company if it wants real competition to happen,” Casiño said.
Article XII, Section 19 of the Constitution clearly says that “the State shall regulate or prohibit monopolies when the public interest so requires. No combinations in restraint of trade or unfair competition shall be allowed,” Casiño said.
He also cited Section 16 of Republic Act 9189, which states that Digitel “shall not lease, transfer, grant the usufruct of, sell nor assign this franchise or the rights and privileges acquired thereunder to any person, firm, company, corporation or other commercial or legal entity, nor merge with any other corporation or entity nor shall the controlling interest of the grantee be transferred, whether as a whole or in parts and whether simultaneously or contemporaneously, to any such person, firm, company, corporation or entity without prior approval of Congress.”
To Casiño, the sections mentioned should be a no-brainer for the NTC to deny the PLDT-Digitel deal in the name of public interest.
