NTC under fire from lawmakers for 3G license award, number portability

By MELVIN G. CALIMAG, Manila Bulletin

Congress is set to tackle in a public hearing this March 1 two resolutions deploring the National Telecommunications Commission (NTC) for granting 3G licenses without public bidding and another two bills calling for the implementation of number portability among cellular phone subscribers in the country.

The hearing will be conducted by the Committee on Information Communications Technology chaired by Cebu Rep. Simeon Kintanar, himself a former NTC chief.

In separate resolutions filed by Taguig Rep. Alan Peter Cayetano and Quezon City Rep. Danilo Suarez, the solons called for the nullification of the 3G (third generation) licenses given to four local operators because the manner they were awarded was unlawful and disadvantageous to the public.

The NTC did not use open bid to award the 3G license as provided under RA 7925, also known as the Public Telecommunications Policy Act of 1995, but the New Rules on the 3G and Broadband Wireless Networks it issued in August of 2005.

In Cayetano’s resolution, he urged the Lower House to conduct an investigation to prevent the government from losing R15 billion to R26 billion in revenues because of the NTC’s "blatant disregard of the required public bidding or tender process."

The Taguig lawmaker pointed out that in most parts of the world 3G licenses are put up for auction. He stressed that radio frequency spectrum is precious scarce public resource that should administered for public interest, especially with the Philippines being considered a prime market for any new telecommunications technology by virtue of its unofficial title as the text messaging capital of the world.

Cayetano said the NTC did not protect the interest of the Philippine government when the agency "manipulated the qualification requirements" to "provide a legal justification for giving 3G licenses for free, in disguise as a tangible legal interpretation of the law."

The lawmaker said the NTC violated Section 15 of RA 7925 which mandates that "where demand for specific frequencies exceeds availability, the Commission shall hold open tenders for the same and ensure wider access to this limited resource."

He said there is nothing in the said law that rules out public bidding as a method with which the NTC may assign frequency bandwidths. "Section 4(c) of RA 7295 merely declares the policy that the radio frequency spectrum should be granted to ‘to the best qualified’", he stated.

Suarez’s resolution echoed Cayetano’s sentiment, although he did not call for the investigation of the NTC but only for the regulatory body to voluntarily nullify the 3G licenses it awarded for Smart Communications, Globe Telecom, Digitel Philippines,and CURE.

The Quezon City solon said the "condition under Article V, section 15 of RA 7925 to hold open tenders where demand for specific frequencies exceed demand has already been met when the available five frequencies devoted to 3G have been outnumbered by nine applications."

Suarez also lamented the measly amount that the NTC was able to fetch from the 3G deal compared to some 26 other countries which earned 6 billion from open bids.

"R2.3 billion NTC got using the selection process under the new rules is so miniscule compared to countries with smaller population like Italy and the UK, whose governments earned billion and billion, respectively, out of the proceeds from openly bidding out the use of available frequencies devoted to 3G technology," he stated.

Also to be discussed in the public hearing are two proposed laws introduced in the chamber by Catanduanes Rep. Joseph Santiago and Albay Rep. Joey Salceda that deal with the lack of number portability in the country.

With the NTC not wanting to touch the issue, both Santiago and Salceda, through HB 3408 and 1098, have resorted to legislative enactment that would compel mobile phone service providers to give their subscribers the option to retain their numbers even if they switch to another service provider.

Salceda said the lack of number portability is a barrier to competition in the market for cellular mobile telephone service. "The lack of number portability acts as disincentive to cellular mobile telephone service providers to improve the quality of their cellular mobile telephone service. On the other hand, it is also a deterrent for customers to switch from their existing service providers even if they have to bear with unsatisfactory service."

If the two bills are consolidated and passed into law, Santiago, the NTC chair during the Estrada administration, said "service providers will be under constant pressure to enhance network coverage and minimize dead spots. They will become more aggressive in satisfying subscribers more value for their money."