Review of telecom spectrum allocation pushed

A group of prominent economists has urged the incoming Duterte administration to review telecom spectrum allocation in the country to benefit consumers.

The Foundation for Economic Freedom (FEF)—an organization advocating market-friendly reforms, good governance and economic and political liberty—also urged the incoming Congress to conduct and investigation in aid of legislation to repeal franchises of public utility operators “when the public good requires.”

In light of the recent P70-billion deal to sell the telecommunication assets of San Miguel Corp. to Philippine Long Distance Telephone Co. and Globe Telecom, the FEF also urged that the review by the newly created Philippine Competition Commission (PCC) be done “immediately” and “expeditiously” and that appropriate action be taken as warranted.

“The PCC should take into account that it is mandated by Republic Act No. 10667 or the Philippine Competition Act to implement the national competition policy and prohibit anti-competitive agreements, abuse of dominant position and merger or acquisition agreements that substantially prevent, restrict or lessen competition in the market,” FEF said.

San Miguel’s sale of the telecom assets has eliminated prospects of any third-party player challenging the telecom duopoly in the country for now.

Duterte, however, has warned telecom firms to “shape up” or face stiffer competition.

Prior to the agreement to sell out, San Miguel enjoyed a monopoly of the much-coveted 700 MHz spectrum, described as one of the highest quality wireless frequencies—capable of traveling longer distances, requiring fewer cell towers and enjoying stronger indoor penetration. This is on top of San Miguel’s 800MHz, 1.8GHz and 2.3GHz spectrums alongside 1,800 base stations in key cities. This is as a result of its acquisition of a string of telecom companies with unused spectrum in previous years.

The incumbent players PLDT, which operates Smart, and Globe Telecom have a significant amount of spectrum but they were limited to the high-frequency spectrum.

FEF said that “in as much as the telecommunications spectrum is a public and scarce resource that is allocated by the National Telecommunications Commission (NTC), we also call on the incoming NTC commissioner of the Duterte administration to review its spectrum allocation to serve the common good.”

The group also reiterated calls on Congress to liberalize key sectors of the economy and lift foreign ownership restrictions in the Constitution, the Public Services Act and sector-specific laws such as the Public Telecommunications Policy Act “to provide consumers the benefits of the efficiency of market competition.”

FEF is chaired by former Finance Secretary Roberto de Ocampo. Its vice chair is Romy Bernardo while the president is Calixto Chikiamco. Its senior advisers are former Prime Minister Cesar Virata and UP Economics Professor Emeritus and former Economic Planning Minister Gerardo Sicat. Board members include Anthony Abad, Art Corpuz, Eduardo Gana, Felipe Medalla, Vaugh Montes, Simon Paterno, Perry Pe and Gloria Tan-Climaco.