Telcos join forces vs NTC plan on 3G frequency

MANILA, Philippines - The country’s telecommunications companies have banded together to oppose a plan of the National Telecommunications Commission (NTC) to bid out at a minimum price of P65 million the last remaining third generation of mobile communications (3G) frequency.

This, as the said telcos warned the NTC that under RA 9006 or the Fair Election Act, the issuance or grant of a franchise or permit to operate a television or radio station during the election period is prohibited.

NTC deputy commissioner Douglas Michael Mallilin said that they might ask the Commission on Elections (Comelec) for a legal opinion on whether or not the ban covers not only broadcast but telecommunications.

At yesterday’s public hearing conducted by the NTC on its proposed rules on the assignment of the remaining allocated 3G radio frequency band, the telco industry, particularly Smart Communications, Globe Telecom, Digital Telecommunications Philippines Inc., Bayan Telecommunications (BayanTel), and Multimedia Telephony Inc. (Broadband Philippines) questioned, among others, NTC’s plan to bid out the last 3G frequency available to all telco entities who qualify under the new rules.

Smart said that preference should be given to existing 3G operators who have already proven that they are capable of rolling out 3G networks. “Instead of considering the proposed memorandum circular as a new set of rules, it should be merely a continuance of the earlier 3G circular of the NTC, and therefore, previous conditions should be in force and those already qualified under the earlier circular should still be qualified to apply,” he emphasized.

Globe Telecom, for its part, questioned why the NTC would disqualify under the proposed MC those who are already grantees of 3G frequencies and their affiliates from applying for the assignment of the 3G frequency paired band 1965-1975 MHz/2155-2165 MHz or 1890-1900 MHz/1970-1980 MHz.

The proposed new rules disqualifies Smart, Globe, Digital Telecommunications, and CURE and their subsidiaries from applying for assignment of the last 3G frequency band and provides for a minimum bid price of P65 million (equivalent to the annual spectrum users fees) for the paired 10MHz bands.

Globe regulatory affairs head Froilan Castelo said the last 3G frequency should be awarded to them not only for commercial reasons but for reasons of public service, since Republic Act no. 7925 or the Public Telecommunications Act requires that telco frequencies should be granted only to those who are most qualified.

Smart, together with Globe, Digital Telecommunications, and Connectivity Unlimited Resources Enterprise (CURE), were earlier granted 3G frequencies under the old NTC 3G circular. At that time, the spectrum users’ fee (SUF) for each frequency was pegged at P65 million and the frequency was merely assigned, not bidded out. CURE was later on sold to Smart.

Castelo emphasized that auction of frequencies should only be resorted to when the demand is more than the supply.

For its part, Digital Telecommunications said it is adopting the concerns raised by Smart and Globe on the disqualification of present 3G assignees. “We have shown our competence and ability to rollout 3G networks, and therefore we should not be disqualified. As for Sun Cellular, we ask the NTC to strengthen the proposed provisions against grantees later on selling their frequencies,” it pointed out.

Meanwhile, Bayantel, through counsel Ariel Tubayan, filed a motion urging the NTC to defer any action towards the promulgation of the proposed new 3G rules until a final determination has been made by the courts on the company’s entitled to the fifth 3G frequency.

Tubayan pointed out that the matter of the assignment of the remaining 3G frequency band is the subject of litigation. Bayantel has filed a petition with the Court of Appeals for a review of the NTC’s decision not to award the company a 3G frequency during the first round of bandwidth assignments.

“By taking steps towards the adoption of the proposed new 3G rules, the NTC is obviously showing utter disregard to the CA as it attempts to render said litigation nugatory and cause prejudice to the parties who participated in the proceedings the commission conducted under MC 07-08-2005 (old NTC 3G rules,” Bayantel told the NTC.