Problem-plagued NTC

HIDDEN AGENDA By Mary Ann Ll. Reyes
The Philippine Star

My heart bleeds for the National Telecommunications Commission (NTC).

Here we have a government body that is supposed to regulate a very powerful and rich industry. Yet it doesn’t have the teeth, nor the financial resources, to effectively regulate a sector whose pervasiveness and influence across all classes of society are beyond question. Irony of ironies.

Result? We have an NTC that merely proposes and suggests policies to the industry. Violations of NTC regulations are supposed to be dealt with by suspension, if not cancellation of license to operate, but do we really think that our government has the political will to go after the likes of PLDT, the Ayalas of Globe, or the Gokongweis of Digitel. C’mon. That’s the reality of business and politics.

According to the NTC, it will exert maximum effort for the legislative body to consider its proposed law that aims to strengthen the regulatory capacity of the commission. The NTC bill has sought, among others, fixed term of office for the commissioners to shield them from political intervention, financial autonomy, and strengthening of quasi-judicial power.

We’ve seen how inutile the NTC has become. It came out with a memorandum circular that required mobile phone service providers to abide by certain minimum quality of standards. Unfortunately, the commission does not have the equipment, nor the financial resources, to do an independent test. It has to rely on data submitted by the telcos. When one of the cellular operators was accused of not meeting the required standards, the NTC could not find an independent body that would verify the claims against said operator.

So now we understand why the NTC is practically begging Congress to give it more teeth in order to more effectively regulate the industry.

In its proposed competition framework policy, the NTC noted that its difficulty in offering immediate and effective response to industry developments that are threatening competition can be traced to a number of handicaps. At least four of these constraints stand out, namely: resources, legacy of past lapses, regulatory powers and information.

First, the commission stressed that it lacks the resources to govern effectively and achieve its mandated goals. After all, the NTC is constrained to a single source of funding, namely government appropriation, and none of the supervision and license fees that it collects is retained in the agency.

While the commission’s collection of fees has increased 12- fold over the decade since 1992, its budget has only doubled in the same period. Given that the complexity of regulatory issues grows proportionately with the size of the industry, the growing disparity between the demands on the commission and its capacity to respond can no longer be ignored, it said.

The second handicap, the NTC emphasized, is that past regulatory lapses and policy flaws are undermining the credibility and effectiveness of the commission as regulator.

In the past, the commission has taken a mediatory stance on most issues brought to its attention, a response which some stakeholders view as inadequate from a regulator whom they expect to check against abuses of market power.

Take the case of the service area scheme or SAS. The NTC’s forbearance on infractions of some licensees has greatly eroded its credibility as a regulator. When the SAS participants defaulted in their obligations, the commission had the recourse of revoking their provisional authority to operate, but it did not.

Another problem facing the NTC are the significant limitations imposed by the Constitution and by the law on its powers.

The NTC noted that the commercialization of new technologies, particularly those built around data and Internet protocol technologies, are delayed if not actually proscribed, by unclear or technology-specific rules, often frustrating government’s desires to further promote competition.

Some constitutional provisions worth reviewing are Article 12, Section 11 which states that "no franchise, certificate, or any other form of authorization for the operation of a public utility shall be granted except to citizens of the Philippines or to corporations or associations organized under the laws of the Philippines at least sixty per centum (60 percent) of whose capital is owned by such citizen and Article 16, Section 11 which provides that "the ownership and management of mass media shall be limited to citizens of the Philippines, or to corporations, cooperatives or associations, wholly-owned and managed by such citizens."

These provisions, the NTC correctly pointed out, reflect the traditional legal provisions that regulate different ICT-related industries (i.e., telecommunications, cable, broadcast, value-added service, mass media companies, and arguably even power) separately and differently.

Technology, however, has not been limited by such artificial separations, and has now blurred the differences between those industries. It is now technically, if not legally, possible for players from these various industries to compete among and between each other. Telecommunications companies could, for example, provide mass media services and content, just as cable companies can now easily provide internet-related services, including voice over IP telephony.

According to the NTC, these ownership limitations prescribed by the Constitution effectively limit, or at least cloud the business and investment possibilities that are now possible in this era of convergence.

ICT, as we knew it, has changed drastically. It’s about time that government and the laws treat it differently. The reason why our laws are not engraved in stone is because they are supposed to be dynamic and reflect the needs of the times