President Aquino has ordered the Department of Science and Technology and the National Telecommunications Commission to study the recent Philippine Long Distance Telephone (PLDT)-Digitel deal and determine if it would result in a monopoly of the telco industry.

The presidential directive actually heeds what Globe, the second-biggest telco in the country, has been claiming all along—that the PLDT-Digitel combine would kill competition in the telco business and inflict higher prices and poor service on consumers. 

But I don’t think that the P74.1-billion megadeal is likely to kill competition.   

We have PLDT Chairman Manuel V. Pangilinan’s word  that the company would keep Digitel’s Sun Cellular as a separate company and continue to offer and improve Sun’s unlimited voice-call and text-messaging services. For his part, PLDT president Napoleon Nazareno has said “unli” services pioneered by Sun are here to stay and that PLDT wants to be the best in “unli” services.

PLDT officials have also said they will use the combined resources of PLDT and Digitel to roll out broadband
Internet infrastructure more extensively and more rapidly than would otherwise be possible. The plan is to extend broadband Internet coverage up to 95 percent of the country’s population in the next three years. This acknowledges the reality that high-speed Internet is important not just for business, but also for the many Filipinos living and working abroad, for whom the Internet has become a vital link to family and friends at home.

But Globe is apparently unconvinced by PLDT’s pronouncements.  According to lawyer Rudy Salalima, the PLDT-Digitel merger would have an overwhelming superiority vis-a-vis Globe in terms of radio frequency which is measured in terms of megahertz (MHz). Globe is particularly concerned about the frequencies used for 3G, where the ratio would be 1:4.5 in favor of PLDT. In other words, PLDT’s highways for 3G services would be 4.5 times bigger than Globe’s.

PLDT director Ray Espinosa says to get an accurate picture of the situation you have to take into account all of the spectrum assigned to an operator, not just a portion of it, and then ask if the operator is maximizing the use of that frequency.

PLDT’s math is different. Smart has a total of 113 MHz of radio spectrum, Globe has 90 MHz and Sun 42.5 MHz. As of end-2010, Smart had 45.6 million subscribers, Globe 26.5 million and Sun 14 million.  An operator’s efficiency of frequency use can be calculated by dividing the number of subscribers by the number of MHz of spectrum. The results: Smart has 403,000 per MHz, Sun has 330,000 subscribers per MHz and Globe has 294,000 subscribers per MHz.

Based on this formula, Smart is the most efficient operator, followed by Sun and finally Globe. By insisting on the transfer for free of 22 MHz frequencies of PLDT in its favor, PLDT’s Espinosa says Globe is pushing the government to penalize the most efficient operator and to reward the most inefficient one.  Espinosa argues that if Globe is asking for a “level playing field,” it seems Globe considers itself more “equal” than the others.

For PLDT, this is tantamount to “regulatory blackmail.”  The firm says Globe is raising false charges in an effort to extract “special privileges” from the government, such as the free transfer of radio spectrum to itself.

But while the question of radio spectrum is important to operators, and monopoly and antitrust issues are crucial concerns for government officials, people are really concerned over what the PLDT-Digitel deal means for them in terms of better services at better prices. The 15 million or so Sun subscribers would want the unlimited services they enjoyed with Digitel/Sun to continue.

As I see it, PLDT’s position on the issue looks reasonable. Let’s hope the National Telecommunications Commission makes a sound decision on PLDT’s application to have the deal approved.

Senate should junk ARMM poll reset plan

The Senate should really not waste precious time discussing the administration-backed plan to postpone the election in the Autonomous Region in Muslim Mindanao (ARMM) scheduled by law on August 8. 

Why? Postponement of the polls to 2013 and the appointment of officers in charge (OIC) in the interim is not only unconstitutional but would also deprive Muslim Filipinos of their right to choose their own leaders and shape their own future through the ballot.

It is well to remember that Muslim autonomy was hatched during the Cory administration. The ARMM was created specifically to make Muslim Mindanao—which comprises the provinces of Basilan, Lanao del Sur, Maguindanao, Sulu, Tawi-Tawi and the city of Marawi—autonomous and capable of deciding for itself. Now the Aquino administration is calling ARMM a “failed experiment” and says it wants to implement reforms in the region to achieve long-term political stability. Postponing the election is actually a step backward as it would make a mockery of Muslim autonomy and self-determination.

The Palace claims that postponing the polls would help make significant progress in the ongoing peace talks with the Moro Islamic Liberation Front. But with talks proceeding at a snail’s pace, it isn’t likely that any comprehensive peace agreement could be realized by 2013.

Malacañang’s plan to defer the elections, which would be the eighth postponement if it pushes through this year, actually faces stiff opposition from various sectors in the ARMM on constitutional, political and moral grounds. These groups assert that postponing the election “would rob us of our right to elect our leaders” and also violate the ARMM Organic Law, as well as the Constitution, which prescribes a term of three years for local officials. “We deplore the administration’s flimsy excuses in support of poll postponement. They are an insult to us because they picture us as lacking the political maturity to select our own leaders,” they said.

Former senator Aquilino Pimentel Jr., who hails from Mindanao and is the principal author of the ARMM Organic Act, asserts that the framers of the law specifically separated the date of the holding of the elections in the region from other national and local polls in keeping with the autonomous nature of the ARMM. 

The former senator also warned that the Palace-backed plan is a sinister move to secure for the administration the votes it needs in the ARMM to win big in Mindanao in the elections of 2013 and 2016.  Moreover, replacing elective ARMM officials with Palace appointees would give Malacañang full control of the substantial ARMM budget, which is around P11 billion yearly, or a whopping P33-billion political war chest for the administration if it succeeds in junking the ARMM elections.

What’s objectionable in the plan to appoint OICs is that Malacañang’s handpicked officials would be answerable only to their appointing authority. Thus they would be able to wield vast political power over the region, with no one preventing them from using their posts to consolidate their political resources. It is not far-fetched to think that the OICs could even be used to revive dagdag-bawas in the midterm polls for the administration-backed senatorial bets in 2013.

As things now stand, senators barely have barely a week left before the chamber goes into its sine die adjournment to decide the fate of the proposed law postponing the ARMM election.

Fortunately, Sen. Ferdinand “Bongbong” Marcos Jr., chairman of the Senate Committee on Local Government, has proved to be his own man and a judicious legislator intent on defending the Senate’s traditional role as a bastion of independence and democracy.  Instead of bending to Palace pressure, Marcos has demonstrated that he is a genuine advocate of constitutional rule and Muslim autonomy. He is on the right track in holding another consultation with the people of the ARMM to determine their true sentiments on the planned cancellation of the election.

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