Suspension of Nextel license looms

The suspension of the provisional authority to operate of beleaguered trunk radio firm Nextel Communications Philippines, Inc. became imminent last week as the National Telecommunication Commission (NTC) said it found prima facie evidence that the company had committed a violation of certain provisions of the Philippine Constitution.

At a hearing last week, the NTC said it "may issue an order suspending the provisional authority of the respondent (Nextel)" in view of the finding.

The warning of an impending license suspension followed an earlier order by the NTC for Nextel to explain alleged constitutional violations in its ownership structure based on complaints filed by a leading lawyer of the Telecommunications Bar Association of the Philippines (TELEBAP).

TELEBAP lawyer Winston Abuyuan alleged that Nextel’s mother company — Nextel International, Inc. (NII) of the United States — acquired close to 60 percent of the local company through its subsidiaries.

Based on Abuyuan’s complaint, the NTC, in a show cause order, said "it appears that (Nextel) has committed administrative offenses consisting of violations of certain provisions of the Constitution; the Public Service Act, as amended; the Foreign Investments Act, as amended; the Rules and Regulations of this (NTC) Commission, as well as certain conditions of its provisional authority.

The Constitution has a 40-percent cap on the ownership by foreign entities of vital utilities, including telecommunications.

Earlier, the Department of Transportation and Communications had asked the NTC to look into a similar complaint filed by a constitutional lawyer against Nextel. The complaint said, among others, that NII had admitted in its mandatory report to the United States Securities and Exchange Commission that it has acquired some 59.08 percent of the local Nextel.

Nextel denied the allegations, saying the charges are "old hat". Nextel lawyer Rudolph Jularbal challenged the NTC, saying Nextel shareholders "are ready to face the Commission on this issue."