Telecom firms buck clearing house

The telecommunications industry strongly opposed yesterday the proposed establishment of a "monopoly backbone" that will serve as a central interconnection facility and clearing house for all landline, cellular, Internet, paging and trunk radio companies operating in the Philippines.

President Arroyo last April vetoed House Bill No. 12671 which was passed by the 11th Congress granting a congressional franchise to the Philippine Communications Clearinghouse, Inc. (PCCI) to "construct, install, establish, operate, and maintain wire and/or wireless telecommunications systems throughout the Philippines."

There are persistent reports that some legislators are planning to file a similar bill under the newly opened 12th Congress. PCCI, a firm identified with Estrada telecommunications crony Jaime Dichaves, has also asked the President to reconsider her decision.

PCCI’s business plan, which was submitted to Malacañang, was to "complement and enhance the existing telecommunications infrastructure by establishing a clearing house for the telecommunications industry that would address concerns and provide solutions to issues such as interconnection and traffic management, easy customer access, seamless connectivity, and other value-added services."

Under the plan, all telephone calls (both landline and cellular) both local and international, Internet connections, paging message, text messages, trunk radio transmissions, cable transmissions, among others, will have to pass through PCCI. Such a plan, industry players pointed out, would make PCCI a monopoly backbone and a virtual replacement of the National Telecommunications Commission.

The telecom industry, consisting of Philippine Long Distance Telephone Co., Globe Telecom, Smart Communications, Isla Communications, Pilipino Telephone Inc., Digital Telecommunications Inc., Bell Telecommunications Phils. Inc., Capwire Telecommunications, Express Telecommunications, and the Philippine Association of Private Telecommunications Companies (Paptelco) grouping more than 50 rural-based telephone companies, supported the President’s veto of the bill, even as they expressed alarm over the fact that they were neither notified nor consulted when the bill underwent congressional hearing.

Under the bill PCCI, a private company, will be authorized to connect or demand connection to its network the telecom systems of those owned by other carriers.

Globe senior vice president Rodolfo Salalima said the proposed clearinghouse is monopolistic and against the government policy of liberalization and the industry’s move towards direct interconnection among the players. Due to the huge amount needed to establish the clearinghouse, he said PCCI’s plan would require another layer of cost that will ultimately be borne by the consumers.

For his part, Smart and Pitel head for legal affairs and carrier relations Rogelio Quevedo noted that telecom companies and the public should be spared the additional burden PCCI’s plan would entail.

Conspicuously absent during the telecom industry-initiated news conference was Bayan Telecommunications (BayanTel) of the Lopez group, further fanning rumors in the industry that the Lopezes were allegedly part of the group ‘pressuring’ the President to approve PCCI’s business plan.

Telecom industry officials revealed that Telicphil, which owns and operates a national digital telecom network and is 82-percent owned by the Lopez group, is already in the middle of discussions with Philippine Communications Clearinghouse, Inc. (PCCI) for the sale of PCCI to the Benpres group owned by the Lopezes.

The PLDT and Ayala group have minor shares in Telicphil of less than 10 percent each, but its officials said they were not informed by the Lopez group of any plan to buy PCCI.

Telicphil spent around $100 million to establish a nationwide optical broadband fiber system while a similar facility, Difon of PLDT cost more. Since it would cost PCCI at least $40 million to put up another backbone, it decided that selling out to Telicphil or getting the Lopez group as a partner would make better business sense, sources said.

PCCI, in a letter to the President, admitted that it was in talks with ‘several foreign investor groups and major local carriers who have signified serious interst in entering into joint venture arrangements.’

BayanTel vice president for legal Edgardo Balbin, in a statement to the media said that "the establishment of clearing house in the telecommunications industry like the one sought by the PCCI beneficial, considering the current settlement and interconnection problems among carriers."

Balbin added, however, that such an arrangement should be voluntarily participated in by all players themselves and should not be left in the hands of a single company. "We are one with the industry in opposing any arrangement which could create a monopoly in any aspect of telecommunications," he said.

The NTC, through its commissioner Eliseo Rio, proposed the veto of the bill but PCCI executive vice president and chief operating officer Voltaire Alcantara, in a letter last June 14, asked the NTC to furnish the company with a copy of the recommendation to the President "to serve as reference and basis for whatever action we may further opt to take."