NTC proposes anti-monopoly policy for RP ICT industry

By Erwin Lemuel Oliva, INQ7.net

THE NATIONAL Telecommunications Commission (NTC) has finally drafted a long overdue proposed competition policy on the convergence of telecommunications with information and communications technology.

Posting the 32-page consultative document in the agency's website (www.ntc.gov.ph), the proposed policy aims to set regulatory policies for the evolving Philippine telecommunications industry.

The lengthy "consultative" document said that the NTC is now taking a more pro-active stance as it attempts to propose four major policies promoting more competition while keeping incumbent players happy.

Apart from outdated regulations, the NTC document noted that recent technological innovations, such as voice over Internet protocol (VoIP), have prompted it to revisit its own policies to suit the changing telecom industry.

The NTC also said that the current regulatory environment is giving unfair advantage to dominant players who have engaged in "unchecked behaviors" like predatory pricing, vertical price squeezes, and other unfair market practices that have killed or silenced competitors.

The NTC however poses questions to explain its proposed policies on competition. The agency asked, for instance, whether or not it should encourage more competition or strike a balance of power in an industry that has become cutthroat.

One interesting policy posed by NTC is the unbundling of the so-called last mile or "network elements." This proposal was first made in 2000, the agency noted.

As telephone companies have engaged in the same business as Internet service providers, dominant carriers now have control over the last mile and have in most instances favored affiliates over independent Internet service providers, the NTC said.

Unbundling or opening access to carrier networks is relevant at this time with the emergence of VoIP now allowing value added service (VAS) providers to offer voice services, the NTC document said.

"Without an unbundling mandate that would open access to VAS providers to carrier networks, there is a risk that the VoIP rules [of the NTC] will only be rendered inutile," it said.

The agency however acknowledged that the move to "un-bundle" the carrier's network would inhibit development of the industry, which ironically depends now on large investments made by dominant players.

The NTC also proposed to impose stricter policies on dominant players versus non-dominant players. The agency said such a regulatory practice is now accepted in countries like Singapore, Malaysia, Hong Kong, and European Union countries.

"The additional burdens imposed on dominant licensees [players] are designed not only to promote competitive safeguards to non-dominant licensees, but also to facilitate entry of new service providers," the NTC said.

It also proposed to allow "resale of services" in the Philippines, a practice in the United States. Resale of services will allow the entry of newer players that lack the capital to build their own networks. At this time, carriers themselves sell services to local clients at wholesale or discounted rates.

Finally, the NTC said that it intends to also enforce a different pricing regulation that would require dominant players to seek approval from it any discount or pricing promotion. Non-dominant players, on the other end, are only required to give the agency advance notice.

The proposed changes to NTC's policies are aimed at addressing its lack of resources to effectively act as a regulator of a changing industry. Past regulatory lapses in policy flaws have undermined its job as a regulatory body, the NTC said.

Win Subik