First of three parts
Globe Telecom Inc. raised the bogey of a possible return of monopoly with Philippine Long Distance Telephone Co.’s (PLDT) share-swap deal with Digital Telecommunications Philippines Inc. (Digitel).
In particular, Globe raised the issue of spectrum, which is, effectively, the roadway on which telecom firms deliver their services to their subscribers.
To the Ayala-controlled telco, PLDT’s purchase of 52 percent of Digitel effectively allots it with more spectrum, a radio frequency that is similar to lanes along an expressway, enough to ease out competition in much the same way that PLDT blanked out the connectivity of other telcos, rendering them unable to deliver their service to their subscribers.
It was this refusal of PLDT to allow access through its telecom lines that prevented the country’s takeoff as foreign investors locating outside the service area of PLDT could not have their own communication linkage. With no communication link-up with its stakeholders, investors shied away.
The long history of PLDT’s monopolistic tendencies made the Philippines the butt of jokes. For instance, Lee Kuan Yew, then the Prime Minister of Singapore, in the presence of then-President Fidel V. Ramos, jestingly prefaced his speech, thus: “In the Philippines, 95 percent of the population have no telephone, while the remaining 5 percent are waiting for the dial tone.”
Because of the monopolistic thrust of PLDT, Ramos let loose a series of legal issuances meant to liberalize and de-monopolize the telecommunications industry. Thus were born Executive Order (EO) 109 on July 12, 1993, or the Policy to Improve the Provisions of Local Exchange Carrier Service; EO 59 on February 23, 1993, or the Mandatory Interconnection of Public Telecommunications Carriers; and Republic Act 7925 in March 1995, or An Act to Promote and Govern the Development of Philippine Telecommunications and the Delivery of Public Telecommunications Services.
These were “all designed to de-monopolize and promote free competition to the fullest in this country,” according to Globe legal counsel Rodolfo Salalima.
“Very significantly, RA 7925 [the new Telecoms Policy Act] was precisely introduced and enacted into law because of the need for the country to liberalize and de-monopolize, and to veer away from the monopoly or the dominant carrier which, because of its dominant clout, power and influence, constricted and stifled, instead of led, the growth and expansion of public telecommunications services in this country,” Salalima said in his petition against the PLDT deal with Digitel before the National Telecommunications Commission (NTC).
The NTC, with the passage of RA 7925, saw through the crumbling of barriers owing to, among other things, interconnection among telcos that allowed other telco carriers to survive.
It is set to hear the petition of Globe Telecom on Monday at its offices.
Skewed spectrum allocation
For Globe, though, the new issue, which it warned could result in the return to the “dark days” of the monopoly of PLDT, is the assignment of spectrum. With the combined spectrum allocation of PLDT and Digitel, Globe said it is expected that PLDT may prevent other telco carriers to the lanes that they own along the telecom highway.
As pointed out by Salalima, the dominant carrier, this time, the PLDT-Digitel combo, “has every incentive to delay the establishment of connections through its wide swath of spectrum allocation, and to impose ridiculous access charges.”
By letting PLDT control more than majority of the lanes in the telecom highway, Globe is put at a disadvantage and it faces considerable costs just to stay afloat, it said.
The PLDT-Digitel tandem will have 372 megahertz (MHz) of spectrum as against Globe’s 99 MHz. This is a skewed allocation of spectrum, a scarce resource, which is supposed to be regulated by the government, according to Globe.
Theoretically, PLDT needs only 224 MHz of spectrum so the additional allocation leaves Globe to the tender mercies of the telephone behemoth. And this could lead then to the dark days of the Ramos era, the Ayala-controlled firm said.
“More than simply hope, we sincerely expect the government, particularly its regulatory body that is the NTC, to act now on the PLDT/Digitel deal, by among other things, implementing preemptive moves and regulations to protect the gains of RA 7925, the fair and free competition in the market place and, ultimately, the public good and welfare,” Globe said.
“Otherwise, by default or nonaction, this Honorable Commission will throw this country back to the dark ages of the now-abandoned monopoly.
“From the past, we must learn, lest that lamented and unwarranted period in our nation’s history repeats itself,” Globe added.
To be continued.
IN PHOTO -- SMART Communications Inc. holds a broadband event for its Smart Bro product in this file photo.
