Scrap Congressional franchise requirement for telcos–Neda

MANILA, Philippines  —Dismantling the legislative franchise requirement for telecommunication firms would help attract more players, creating healthy competition that could boost services, the government’s socioeconomic planning agency said on Wednesday.

In a policy note, the National Economic and Development Authority (Neda) said the removal of such a tedious and costly requirement would be in line with global standards, noting that the Philippines is the only country in the world that requires telcos to secure a license both from Congress and the telco regulator before operating.

“The mandate to secure licenses from both Congress and the regulator introduces an increased administrative and financial burden, particularly affecting new and smaller market entrants,” Neda said.

“This dual licensing process could have a disproportionate negative impact on these smaller players, potentially influencing market entry dynamics,” it added.

During the Duterte administration, the government started a search for a new telco player that saw Dito Telecommunity as the winner.

Dito, a company founded by Duterte ally Dennis Uy and backed by state-run China Telecom, wanted to break the longstanding duopoly of PLDT Inc. and Globe Telecom.

READ: Duterte pal is 3rd telco player

Apart from introducing a new player to the sector, former President Rodrigo Duterte also signed a law that allowed full foreign ownership in industries once deemed off-limits to foreign capital, including the telco industry.

Digital divide

Those recent measures were meant to address the longstanding problems of the local telco industry as Filipinos grappled with expensive service, slow internet speed and limited coverage. These woes, Neda said, have far-reaching implications on other sectors like education, business process outsourcing, health care and disaster response.

“A significant concern is the growing digital divide, especially among lower-income groups, signaling an urgent need for policy interventions,” the agency said.

READ: Groups urge passage of internet open access law

At present, Neda is pushing for the passage of Open Access in Data Transmission Bill which, if enacted into law, would not only revamp the franchise and licensing regime for potential market players but also create a “comprehensive management framework” for the country’s scarce spectrum resources.

The other reforms included in the bill are: enhancing regulatory oversight and transparency in interconnection process; more infrastructure sharing among telco operators; and revising spectrum user fees and introducing competitive auctions for spectrum allocations.