With all due respect to the honorable president of the Senate, consumers nationwide were surprised when the venerable Juan Ponce Enrile allegedly said that there may be no elephant after all, when everyone else could see it, and when everyone could feel it.
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.