SC asked to revoke PLDT-Globe deal on use of 700-MHz band

Updated @ 12:33 a.m., Oct. 29, 2018

Three weeks before the government chooses a company that would challenge the duopoly of PLDT Inc. and Globe Telecom, the Supreme Court has been asked to revoke the agreement between the two giants for the use of the 700-megahertz (MHz) band and four other frequencies.

PLDT and Globe jointly bought the 700-MHz broadcast frequency from San Miguel Corp. for P70 billion.

READ: SMC sells telco assets to PLDT, Globe

In a petition, lawyers Joseph Lemuel Baligod Baquiran and Ferdinand Tecson appealed to the high court to require the National Telecommunications Commission (NTC) to revoke the couse agreement between PLDT and Globe involving the 700 MHz and 2540-2545 MHz, 2580-2595 MHz, 2535-2540 and 2565-2580 MHz frequencies.

According to Baquiran and Tecson, the purchase of the frequencies violates Section 19, Article XII of the 1987 Constitution, which prohibits “monopolies when the public interest so requires.”

Anticompetitive

“This acquisition is undeniably anticompetitive and, worse, unconstitutional,” said the pair’s petition for mandamus dated Oct. 23.

“[T]he duopoly (of PLDT-Smart and Globe) owns a staggering volume of the scarce public resource of radio spectrum, which prevents, restricts or lessens free competition in the telecommunication and broadband/internet industry,” Baquiran and Tecson added.

They described the 700-MHz band as a “highly valuable and very scarce public resource since it is able to travel longer distances, requiring fewer cell towers and penetrating through building walls, elevators and even through underground parking lots.”

The petitioners urged the high court to make the frequencies available to the “best qualified” telco players.

The two lawyers filed the petition in the Supreme Court five days after President Rodrigo Duterte signed a law granting a 25-year congressional franchise to Villar-owned Streamtech Systems Technologies.

Third player selection

The Department of Information and Communications Technology (DICT) will choose on Nov. 7 the country’s third telco player that will break the PLDT and Globe duopoly.

The President has threatened to assume control of the selection process should the DICT fail to find a winner by next month.

He is opening the telco industry to a third player to improve the poor internet service in the country.

The President has invited foreign companies to partner with a local business so they can participate in the country’s telecommunication industry to stir up competition.

Among the local businesses that want to be the third player is Streamtech.

The petitioners noted that the assignment of the 700 MHz and other frequencies to San Miguel Corp.’s telecommunications unit—Liberty Broadcasting Network Inc. and now Tori Spectrum Telecom Inc.—and later to Bell Telecommunications Inc. was void and illegal.

Bell is a subsidiary of Vega Telecommunications Inc.

Vega Telecom

PLDT and Globe earlier acquired the broadcast and telecommunication frequencies after purchasing, on 50-50 basis, all the issued and outstanding shares of stock of San Miguel’s Vega Telecom for about P70 billion.

The sale came months after partnership talks between San Miguel Corp. and Australian telco giant Telstra Corp. collapsed.

PLDT and Globe completed the acquisition of Vega Telecom in May last year after making their final joint payment to San Miguel of the remaining P13-billion installment.

80-percent control

The deal allowed PLDT and Globe to corner about 80 percent of all available frequencies, which the Philippine Competition Commission believed would hinder the entry of new competition in the telecommunication industry.

Baquiran and Tecson also questioned the constitutionality and validity of the NTC’s approval of the assignment of the 700 MHz and four sets of frequencies to PLDT and Globe due to unlawful acts allegedly committed by San Miguel’s telco unit before the acquisition of Vega Telecom.

The petitioners argued that under the legislative franchise given to Liberty Broadcasting in 2012, the frequency was intended for television broadcasting and not for telecommunications.

‘Illegal hoarding’

Moreover, they said “Liberty was no longer engaged in [the] broadcasting business” but it “continued to illegally hoard the said 700 MHz broadcast frequency.”

“Worse, respondent NTC unlawfully neglected to recall the said frequencies conditionally and illegally assigned to respondent Liberty,” they added.

Baquiran and Tecson also asked the high court to prohibit the NTC from bidding out or awarding some frequencies purportedly returned by PLDT and Globe until the Supreme Court resolved with finality the constitutional and legal issues raised by the petitioners. —With a report from Inquirer Research

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