LINE TO HEAVEN: SENDING SIGNALS TO THE TELCO PLAYERS
Second of a Two-Part Series
In the first part of the series, we have highlighted how the Ease of Doing Business Law may not be used as basis to assail the inability of the two Telcos to provide better services.
While it cut the days within which an application for a permit should be acted upon, it did not streamline the process for the Telcos to build and commission cellular sites nationwide.
According to the think tank Infrawatch, there is a backlog of 30,000 towers in the country.
Even in the case of the third player, Dito Telecommunity, it was only able to build 300 towers out of its 1,300-target last month. Dito had to ask for an extension from the Government until December to meet its commitment and be allowed technical launching.
Because of the recent closure of ABS-CBN by non-renewal of its franchise, the two Telcos cannot feel complacent even if they have remaining years in their respective franchises.
The Office of the Solicitor General may file Quo Warranto petitions anew to end their reign early arguing that the duopoly failed to meet technical obligations by not being able to provide better services to their clientele.
The problem of this route is this move will be met with vigorous opposition arguing that this is violation of Republic Act No. 10667, otherwise known as the Philippine Competition Law. To cancel the franchise of these two Telcos will produce a monopoly in favor of Dito.
Moreover, Globe and Smart can easily present, and in fact, presented investment rollouts to the tune of billions of pesos not to mention their pending permitting applications for additional towers in the countryside.
Furthermore, the value of these two Telcos, according to Infrawatch, is Php553 Billion which is equivalent to 13% of our national budget and 3.2% of our Gross Domestic Product (GDP).
Finally, after leaving 11,000 workers of ABS-CBN jobless during this pandemic, the Government cannot just take away the jobs of these 25,000 Telco workers: 7,700 for Globe and 18,784 for Smart.
If the Government, through the Department of Information and Communications Technology, cannot bring to fruition the dream of so-called “Common Towers”, there is a possibility of Globe and Smart being directed to host the cell sites of Dito.
But what is the legal basis of this move without being accused of effectively expropriating the towers of Globe and Smart? The Government may invoke the ruling in Philippine Long Distance Telephone Co. vs. National Telecommunications Commission, G.R. No. 88404 (18 October 1990), wherein the Supreme Court upheld the order of the National Telecommunications Commission (NTC) for a small player to interconnect with the telephone giant PLDT.
The Supreme Court invoked Republic Act No. 6849, or the Municipal Telephone Act of 1989, which provides that “all domestic telecommunications carriers or utilities shall be interconnected to the public switch telephone network.” The Court also invoked Section 6, Article XII of the 1987 Philippine Constitution, which provides:
“SEC. 6. The use of property bears a social function, and all economic agents shall contribute to the common good. Individuals and private groups, including corporations, cooperatives, and similar collective organizations, shall have the right to own, establish, and operate economic enterprises, subject to the duty of the State to promote distributive justice and to intervene when the common good so demands.”
In PLDT vs. NTC, supra, the Supreme Court justified the so-called “intervention on proprietary rights” since telecommunications is vital to nation-building and “to ensure that all users of the public telecommunications service have access to all other users of the service wherever they may be within the Philippines at an acceptable standard of service and at reasonable cost.”
It is also worth underscoring that in PLDT vs. NTC, supra, the Court held that PLDT and the small player can discuss the terms and conditions of the agreement.
This may be used as a defense against the argument of “expropriation without just compensation” as the bigger player may impose fees on the smaller player. Finally, in PLDT vs. NTC, supra, the Court shut down the argument that the smaller player will have a “parasitic dependence” on PLDT in this light:
“As disclosed during the hearing, the interconnection sought by ETCI is by no means a ‘parasitic dependence’ on PLDT. The ETCI system can operate on its own even without interconnection, but it will be limited to its own subscribers.
What interconnection seeks to accomplish is to enable the system to reach out to the greatest number of people possible in line with governmental policies laid down.
Cellular phones can access PLDT units and vice versa in as wide an area as attainable. With the broader reach, public interest and convenience will be better served.
To be sure, ETCI could provide no mean competition (although PLDT maintains that it has nothing to fear from the ‘innocuous interconnection’), and eat into PLDT’s own toll revenue cream PLDT revenue,in its own words), but all for the eventual benefit of all that the system can reach.”
The problem of NTC directing the two Telcos to accommodate Dito in their existing towers would mean that it will not solve signal problems since the Dito cell sites will be installed in existing service areas of Globe and Smart. If this scheme will allow Dito to concentrate and focus on areas without towers, this will be anti-competitive and virtually handed to Dito easier business life, if not total dominance in the industry.
This will be against capitalist, non-interventionist economic policy and may even be branded as neo-cronyism.
As a compromise, if Dito will be allowed to piggyback in the existing towers of Globe and Smart, since the existing duopoly are lobbying for so-called “Common Towers” built and operated by the Government, Globe and Smart can lobby to be allowed to piggyback in towers Dito will build in missionary areas.
This might be the modus vivendi needed to improve Telco services which is long overdue.