Instead, the group batted for the immediate passage of the Freedom of Information Act which has been languishing in Congress for many years now.

In an initial statement, TXTPower’s board of trustees said that “both the Senate and House versions of the cybercrime bills contain dangerous and draconian provisions that have the huge potential of doing more harm than good. They look less about preventing so-called cybercrimes, and more like an orchestrated attempt to control and limit internet use.”

“Under the bills, government would have the power to take down, sans a court order, websites at any time and anywhere if authorities find alleged prima facie evidence of offenses. This is not unlike the lamentable PIPA/SOPA of the United States being applied by our own Congress here in the Philippines,” said TXTPower.

“We urge Filipino netizens to study the bills, voice out their concerns and prepare for online and offline protest actions,” said TXTPower.

TXTPower said that the bills also pose “serious and grave threats to Filipino citizens’ right to privacy”.

“For example, under the Senate version, the government would have the power to retain all user-identifiable data for a period of six months, from as many individuals it could possibly tag as suspected cybercriminals,” said TXTPower.

The consumer group, which focuses on the rights of users of mobile phones and the internet, noted that the House and Senate did not hold nationwide public hearings and consultations on both bills: “Any and all the country’s 30 million internet users have a stake in these bills but Congress appeared to have deprived them of free, prior and informed consent before lawmakers tried to dismantle the right to privacy and the right to free expression via the proposed measures.”

The absence of meaningful consultations, says TXTPower, explains what is wrong with government’s conception of the internet in particular and information in general.

“The Aquino administrations appears to be interested in getting information about its opponents, but would conveniently cite national security when the people demand full disclosure of government actions and full participation in hammering out measures such as this one,” said TXTPower.

According to TXTPower, “what President Aquino and Congress should work on is not this so-called cybercrime measure. What the country needs and people demand is the immediate enactment of the Freedom of Information (FOI) Act.”

“That the Aquino-controlled Congress chose to pass the cybercrime bill and continue to ignore the FOI betrays the administration’s hypocrisy about moralistic paeans to good governance. Instead of opening up government to public scrutiny with the FOI, we now see the government going on the offensive with a cybercrime bill that transforms the Philippine internet into one giant place for fishing expeditions on alleged cybercriminals,” said TXTPower.

TXTPower said that the Aquino administration is solely to blame for keeping the Philippines in a list of a small minority of countries still without an FOI law.

“Aside from passing the FOI law, the government should also focus its sights on improving and expanding internet access, curbing corporate abuses by telecommunications companies, and removing taxes on end-users of telecommunications services,” it added.

We are dismayed by NTC’s approval of arguably a return to a PLDT monopoly. Consumers, netizens reserve right to appeal.

Off-hand, the so-called NTC preconditions seem like consuelo de bobo against backdrop of one group now monopolizing telco industry.

While we all accept that mergers and acquisitions are a normal business occurrence, we must not forget the fact that telecommunications is not an ordinary enterprise. It is a public utility imbued with public trust and public interest. We are of the view that the concentration of legislative franchises, frequencies, and prerogatives under one man or one corporation does not serve the public good in the long run.

As we have said in our Opposition, big does not necessarily mean good. Even prior to the NTC’s approval of this merger, PLDT as the single biggest telco group was emblematic of what’s wrong in the telco industry. Our landline, mobile and internet services are below par in terms of quality and costs – if we discount the whimsical and time-bound promotions. The situation was worse in the 1970s until 1980s when a PLDT monopoly ruled unchallenged by other companies and pampered by government.

The social networking and text messaging capital of the world deserve a better telecommunications industry. Filipinos, especially end-users, developers, social media practitioners, bloggers, online entrepreneurs, OFWs, and SMEs view telecommunications as an enabler. Monopolies or companies pretending not to be monopolies could be a big stumbling block, not an enabler.

Finally, the ruling again confirms the NTC’ obstinacy refusing to defend the interests of public and the Republic. President Aquino, under whose office the NTC is directly attached, should review the ruling and expect an appeal coming from consumers and netizens.

The elephant, Your Honors, honorable senators, is the same elephant that once ruled the telecommunications jungle, destroying everything in its path.

The Senate and the House of Representatives acted like a lion in 1995, saw this elephant, corralled it and let other animals roam and multiply in the telecoms jungle.

Your Honors, no Juris Doctor, ECE or zoology degree is needed for anybody to see this elephant for what it really is. We consumers do.

We are expecting the lion of Congress, the Senate of the Philippines, to find this elephant which is arrogantly playing around the country, flouting our laws and acting as if it is the king. The elephant is here, Your Honors, and it is called PLDT. Malinaw pa po sa sikat ng Sun, Your Honors, elepante po talaga ito.

For the past few years, the elephant that is PLDT has managed to acquire a string of telecom companies, including three mobile carriers: Smart, CURE and now Digitel. All combined, the elephant’s network controls a commanding lead and control of the market. The only difference from the PLDT monopoly of before, and the PLDT monopoly of today is that it is a 4G-powered elephant, but elephant just the same.

If the PLDT-Digitel Deal will be approved, PLDT will have control over three (3) out of the five (5) Third-Generation Wireless Communications Technology (“3G”) Frequencies bidded out pursuant to NTC’s Memorandum Circular No. 07-08-2005 or the Rules and Regulations on the Allocation and Assignment of 3G Radio Frequency Band, namely: Smart, Digitel and CURE. With this arrangement, the PLDT empire now controls a whooping 45 MHz out of a total of 55 MHz of the designated 3G spectrum frequencies. The looming monopoly of PLDT over the country’s telecommunications industry is clear, undeniable and unacceptable.

Article XII, Section 19 of the 1987 Constitution states:

Sec. 19. 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.

Clearly, monopolies are not per se prohibited by the Constitution but may be permitted to exist to aid the government in carrying on an enterprise or to aid in the performance of various services and functions in the interest of the public. Nonetheless, a determination must first be made as to whether public interest requires a monopoly. As monopolies are subject to abuses that can inflict severe prejudice to the public, they are subject to a higher level of State regulation than an ordinary business undertaking. (Agan vs. Piatco 402 SCRA 612, 2003.

It does not appear from the records that PLDT and/or Digitel has applied for, much less obtained, approval from the Congress of the Philippines in favor of the PLDT-Digitel Deal. This is a crucial matter – a prejudicial question even – that this Committee and the NTC Honorable Commission should not gloss over.

Sections 16 and 20 of Republic Act No. 9180, which granted a legislative franchise to Digitel to install, operate and maintain telecommunications systems in the country, provides a similar injunction and/or limitation on said franchise:

“SECTION 16. Sale, Lease, Transfer, Usufruct, Etc. — The grantee 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 the prior approval of the Congress of the Philippines. Any person or entity to which this franchise is sold, transferred or assigned, shall be subject to the same conditions, terms, restrictions and limitations of this Act.

SECTION 20. Repealability and Nonexclusivity Clause. — This franchise shall be subject to amendment, alteration or repeal by the Congress of the Philippines when the public interest so requires and shall not be interpreted as an exclusive grant of the privileges herein provided for.”

As required by their respective legislative franchises, PLDT and Digitel should first obtain congressional approval for the transfer, sale and/or assignment of the rights and privileges under said franchises before the PLDT-Digitel Deal may enter into force. Without congressional fiat, any such transfer, sale and/or assignment is illegal and unlawful.

We also ask the Senate, specifically this Committee to inquire, among others, as to the status of Smart, Piltel and CURE – which were once independent from PLDT – particularly whether they have complied with the injunctions and limitations in respect of their own legislative franchises and/or provisional authorities.

Truth be told, even prior to its deal with Digitel, PLDT was already the country’s dominant carrier yet its services are known to be among the slowest, least reliable and most expensive in the southeast Asian region. Up until this time, the status quo in Philippine telecommunications is marked by the following:

• Unstable, unreliable calls, text and internet services;

• One of the slowest internet in the world, with countries such as Rwanda and Tunisia able to provide faster internet speeds;

• High nominal prices which are hidden behind capricious but enticing promotions;

• Below-par customer service, tiny business offices, incompetent customer service personnel;

• Interconnection fees continue to keep most telecommunications rates high;

• Iron-clad contracts that jail many unsatisfied customers to bad telecommunications services for up to three (3) years, with no clear escape clause for instances where PTEs don’t deliver their side of the deal; and

• Imposition of Value-Added Tax and Overseas Communications Tax.

We also implore the Senate, to use its powers and prerogatives, to seek answers to consumers’ questions questions about this elephant:

• In the case of CURE, has it already been granted a legislative franchise and/or provisional authority to roll out a Second-Generation Mobile Telecommunications Technology (“2G”) Frequency? Why is it providing 2G Services under the PLDT telecommunications empire when its license only allows it to roll out 3G Services?

• PLDT undertakes to keep mobile operations of Digitel separate and intact from that of its other mobile services and/or brands. Why is there no such undertaking insofar as CURE is concerned?

• Should PLDT take over Digitel’s fixed-line operations, will Digitel no longer pay interconnection fees? How about other non-PLDT PTEs? Would discounts and removal of interconnection fees only occur if and when PLDT acquires or buys them out?

Finally, we highly recommend the enactment of anti-trust and anti-monopoly legislation to protect citizens and to prevent elephants from making a killing at the expense of the public interests.

Submitted May 25, 2011 at the National Telecommunications Commission, this pleading outlines TXTPower’s views on why the NTC should deny the Joint Application of PLDT-Digitel seeking the agency’s blessings for its questionable transaction.

TXTPower may file a supplemental pleading.

The above is the first five of an eight-page verified urgent motion. We removed the verification pages which contain personal information of oppositor/s.

The pleading’s paragraph No. 5, page 3, refers to the following documents Annex 1-TXTPower and Annex 2-TXTPower.

We are country made up of islands, a nation of people endlessly migrating from one island to another, and the home of the great Filipino diaspora. We are also a creative, inventive and dynamic people who always cross unwritten boundaries to get by and especially to excel. As such, Filipinos know fully well the uses, value and importance of telecommunications in the long-running and ongoing narrative of Filipinos aspiring for substantive freedom and democracy for the country and prosperity and peace for our people.

It is in this context that I wish to speak on the importance of affordable, free and inclusive telecommunications as an enabler for our personal objectives and our national aspirations, and why a monopoly or a duopoly does not in any way serve our interests.

Soon after PLDT announced its entry into Digitel, some Filipinos showed their fixation for and veneration of size – maybe an unwitting expression of the subconscious – but size has not mattered much in the history of telecommunications, especially in making this important public utility work for the national, social good.

Up until the mid-1990s, Philippine telecommunications was dominated by the monopoly of the PLDT. It was the single biggest telco which, despite its bigness, denied the Philippines the adequate number of landlines and other telecommunications services that we needed. It took months and sometimes years, and tens of thousands of pesos, before PLDT landlines were installed. The landline shortage was so severe that a black market for “landline rights” emerged.

As far as I know, PLDT continues to throw its weight around until today. There are areas such as the former Clark Special Economic Zone and the rest of Pampanga where PLDT still refuses to interconnect with other telcos there. We leave it to the PLDT to spin this issue, but the fact is that its PLDT subsidiary in ClarkTel still charges tolls for local calls from other telcos’ landlines within the same area. Hello, PLDT?

PLDT’s initial foray into wireless, mobile telecommunications was a dud. Piltel’s Mobiline used an old, dead-end analog technology. Ditto for Smart which used ETACS up to the late-1990s. The public paid dearly for those wrong corporate decisions. Through the high rates for calls, text messages and other mobile services, we paid all the debts of Piltel, Smart, and later CURE and gave the mother company billions in net income and bragging rights for being the biggest.

Big, especially, single biggest does not necessarily translate into leadership. PLDT today dishes out the most expensive landline services in the country, whether the wired landline or the modern wireless landline. In the past decade, it has gobbled up Smart, CURE and now Digitel. But despite its growing size and its unrivalled market leadership, we see no marked improvements in pricing. Digitel, thru Sun Cellular, has rolled out wireless landline services, for as low as P249 per month.

It is a spin, a fabrication that we Filipinos ought to reject, the claim that a bigger PLDT is good for the Philippines. PLDT was already the biggest telco even prior to its entry into Digitel, but up until this time, the status quo in Philippine telecommunications are marked by the following:

• Unstable, unreliable calls, text and internet services
• One of the slowest internet in the world, with countries such as Rwanda and Tunisia able to provide faster internet speeds.
• High nominal prices which are hidden behind capricious but enticing promotions
• Below-par customer service, tiny business offices, incompetent customer service personnel
• Interconnection fees continue to keep most telecommunications rates high
• Iron-clad contracts that jail many unsatisfied customers to bad telco services for up to three years, with no clear escape clause for instances where telcos don’t deliver their side of the deal
• Imposition of VAT and Overseas Communications Tax

In other countries, self-respecting market leaders actually lead. But not in the Philippines, where telcos have benefitted immensely from the policy and legal framework of deregulation, which provided them the widest latitude and a free rein to exploit the telecommunications sector for private gain. For many years now, despite downturns in the economy due to domestic and global factors, telecommunications remains a very profitable business.

We do not deny that we Filipinos benefitted too from the burgeoning telecommunications industry. But what the telcos cannot deny is that our patronage of their expensive, substandard and unreliable services made all those billions of profits and returns of investment possible. We simply made do and continue to make do with what’s available.

The deregulation regime needs a second-look because both the policy and law governing it have been used as a blanket license to gouge consumers. If ever we complain against pricing or after-sales, the National Telecommunications Commission is very apologetic because, it says, its hands are tied by the deregulation policy and law. Consumer rights are thrown out of the window under the deregulation regime.

While the consumer angle is important, there are other angles more that need to be addressed.

Up to now, the Philippines has no official, national plan or roadmap for telecommunications going into the future. We have heard attempts to come up with such a plan or roadmap but the process has not been open or transparent.

More and more countries today have such a plan or roadmap for telecommunications. They do because telecommunications is not just a commodity or product that telcos sell. Telecommunications are a public utility, an enabler for consumers and all sorts of users especially businesses. Do we want nationally-interconnected government agencies? Do we want more online, graft-free government transactions? Do we wish to make full use of technology towards a better and technology-savvy education? Should telecommunications graduate from being a big expense into an enabler for microenterprises and SMEs?

The Republic of the Philippines should have a plan or roadmap that answers each of these questions and more. With such a plan or roadmap, the telecommunications companies would have something to guide their expansion plans where their services may be most needed. Para di lang sila ang yumayaman, kundi lalo na ang mga nagsusumikap na mga Pilipino at entreprenor na Pilipino na gusting makinabang mula sa internet.

Take e-commerce, for example. We already have an e-commerce law for several years now but e-commerce has yet to blossom as they’ve been blossoming in many other countries. Now, this is not a simple problem. Entrepreneurs who wish to do business online need capital, first of all. Telcos in the country ought to enable e-commerce through a wider range of affordable and reliable services. If internet access is limited to highly-urbanized or urbanizing areas, where economic activity already concentrated, and the same internet access is unreliable and too slow, imagine the frustration of budding and aspiring entrepreneurs.

The Philippines is now a social media capital in this side of the world. We Filipinos lead in social networking, video and photo uploads, and in other social media areas as well. One area which is rather silent – neglected by government and telcos – are the developers of applications, software and hardware. If given adequate attention, support from government and the private sector, and the requisite internet needs, we could be sure that Filipino developers would be able to affect the social media and IT world in a big way.

We also need a graft-free broadband network to bridge our islands and our people. Most countries want one and many are now trying their best to build one. We citizens ought to make sure we have a Filipino-controlled, secure, reliable and stable broadband network.

Which brings me to the issue of franchises sought by and granted to telcos by Congress. All telcos, including PLDT and the telcos it has gobbled up, have congressional franchises that govern their operations and include a provision stating that the Philippines could call on them to provide their services and infrastructure towards national goals.

Unfortunately, Congress and the NTC have not been watchful and vigilant on the issue of franchises and permits. For instance, the NTC bidded out 3G licenses to five telcos, with the view that the five telcos would invest in 3G networks and blanket the country with mobile broadband and high speed internet access. Today, only two companies, PLDT and Globe Telecom control all 3G licenses. I leave it up to you to judge 3G coverage, price, speed and service quality.

Big has not meant good or great. It has meant huge profits for the telcos, yes. It has meant that the Philippines now has only two GSM/3G networks operating across many parts of the country. Despite the multiple franchises and 3G licenses that they have gobbled up, PLDT and Globe Telecom could only share their marginally-growing infrastructure to their network members. Talk N’ Text and CURE are mere virtual mobile networks. They don’t have their own cellsites. They ride on the Smart network. Ditto for TM, which rides on Globe Telecom network. Whether this has been good for the public, the public would decide.

The consolidation in the telecom sector has produced a duopoly, period. For us in TXTPower and most of the netizens and consumers that we’ve talked to, this situation is not good.

Perhaps a relevant example of the perils of a monopoly or a duopoly is the imposition of broadband data caps. Globe Telecom has recently formalized its so-called Fair Usage Policy or broadband data cap. Why put a cap on internet use? Simply because the telcos want to and they can, because the NTC always looks the other way. The broadband cap is an anomaly in this social media age when telcos themselves encourage netizens to do livestream, watch videos, upload photos and keep connected 24/7. It looks like Globe Telecom just wants to mess with consumers because even before you reach the daily limit, you lose internet access, period. Globe Telecom is so stupid that it did not provide its subscribers an option to buy or pay for extra bandwidth – and this absurd setup provides more reasons for the public to suspect telcos that impose data caps have network problems all along. Data caps hide those network problems. Meanwhile, there is no government inspection, inventory and assessment on the network infrastructure and their current capacity.

Come to think of it, the telecommunications duopoly seems to be worse than the power companies. At least, there’s an Energy Regulatory Commission that goes thru the motions of tempering power companies’ greed despite the deregulation of the power industry. For telecommunications, it seems like a wild, wild west, and we’re left to fend for ourselves and flee from monthly highway robbery.

In closing, please allow me to address this question: What should Filipinos do?

There are many things to do, I tell you. First off, let’s permanently delete the thought that we owe telcos a huge favor for bringing the internet and advanced telecommunications to the country. Others would have invested just the same. In short, wala po tayong utang na loob sa PLDT, Globe at iba pang telcos. Veering away from this mindset of having a debt of gratitude to telcos would lead us to realize something else, something more important.

We Filipinos have rights as 1) citizens, 2) netizens, and 3) consumers as we interact and transact with telcos and demand protection and a long-term vision from government. Telecommunications should enable us in exercising those rights. Telecommunications are a public utility. Telecommunications are important to be left to the telcos alone.

Third, as this public forum shows, we now have better tools to come together as citizens, netizens and consumers, to study telecommunications issues and map what we could do as we confront problems in the horizons and roadblocks to our personal objectives and to our national aspirations.

Finally, let us reject self-doubt and cynicism which embolden telcos to continue to abuse us and for the government to continue to neglect us. Call, text or tweet your senator or congressman. Email the NTC. File written complaints at your telco’s business center. Take action. Better yet, take action together with the many other who feel that we Filipjnos deserve better. Let us make full use of social media, and combine these with effective offline activities, and transform our himutok into a movement for #betterinternet, better teleccomunications for the Philippines.

Thank you.

The forum will be held on April 11, 1:00 to 5:00 pm at the Case Room, National College of Public Administration and Governance, University of the Philippines, Diliman, Quezon City.

Working together to make this event happen are: Foundation for Media Alternatives, LIRNEasia, NCPAG, Philippine Cyber Party, Philippine ICT Researchers Group, Pro Pinoy Project and TXTPower.

Speakers and topics include:

Dr. Erwin Alampay, UP NCPAG/LIRNEasia (Telecoms Regulation Environment Survey)
Ms. Mary Grace P. Mirandilla-Santos, Independent ICT/telecoms researcher (Telco Mergers and Acquisitions: Past and Present)
Atty. Geronimo L. Sy, Department of Justice assistant secretary (PLDT-Digitel deal: Anti-trust and competition issues)
Mr. Tonyo Cruz, TXTPower president (#betterinternet and other Citizens’ Concerns on Telecoms)

Reactors include:

Atty. Rodolfo Salalima, Globe Telecom senior vice president and Philippine Chamber of Telecom Operators president
Rep. Jesus Crispin Remulla, Deputy House speaker
Rep. Fatima Aliah Q. Dimaporo, House ICT Committee member
Dr. Raul V. Fabella, U.P. School of Economics
Mr. Ernest Leung, former Deparment of Finance secretary

Adequate time is allotted for questions and discussions.

Everyone is invited to join.

Globe Telecom’s data caps which allegedly target the abusive five percent of its subscribers actually cover 100 percent of all of Globe Telecom subscribers. Is that fair? No.

Telcos such as Globe Telecoms should be careful in referring to any of its subscribers as “abusers” especially in this age of the internet and social media. Those same abusers may actually be small and medium-scale businesses, home-based online entrepreneurs, OFW families keeping constant touch or netizens in the cutting-edge of surging social media in the Philippines.

We call on President Aquino to direct the National Telecommunications Commission to perform its functions as telecom regulator. It should check whether Globe Telecom has sufficient network infrastructure and bandwidth for its 26.5 million mobile subscribers and 1.1 million broadband subscribers. There is a growing suspicion that Globe Telecom imposed the data caps not so much because of user abuse, but maybe due to the network’s oversubscription and insufficient network capacity for both current and future subscribers. All telcos should be covered by this NTC appraisal and inventory.

Globe Telecom’s data cap announcement claims that five percent of its mobile internet and broadband users purportedly corner 80 percent of available bandwidth. This “figure” is no different and may be the same figure cited in late 2010 by the Philippine Chamber of Telecom Operators. Both are at the very least suspect. But something should come out because of these claims by Globe Telecom and PCTO: These so-called “studies” ought to compel the NTC to perform its own, independent checks covering usage, current network infrastructure and both ongoing and future investments to expand both reach and bandwidth capacity. NTC should penalize telcos that underdeliver and let their services to be oversubscribed or to be falsely advertised.

Before Globe Telecoms and other PCTO members point to telcos in countries as models for their data caps, we should remind them that many of those countries have fast and reliable internet in the first place. That cannot be said for telcos in the Philippines which cannot provide true 3G, 3.5G and 4G connections. Telcos led by PLDT and Globe Telecom are pulling the Philippines to the bottom of lists of countries in terms of internet speeds.

Globe Telecom argues that there’s no law or regulations stopping it from imposing data caps. That is not true. It was among the telcos which helped put out the draft NTC memorandum-circular on minimum broadband speed. Bowing to consumer protests, the NTC has already decided against the provision on data caps. We hope the NTC stands by its decision and that telcos, led by Globe Telecom would abide by it.

President Aquino should keep an eye on internet speeds and service quality because more and more Filipinos are going online for business and work, education, advocacy and causes, and other important purposes. Internet access ought to be an open, affordable and reliable enabler. The irony is that while more and more governments worldwide have realized this and are moving towards greater and universal access, telcos in the Philippines are out to curtail usage and are allowed to gouge the public with their substandard and unreliable services.

Reference:
Tonyo Cruz
President
TXTPower