LGUs urged to rationalize fees on digital infrastructure projects

MANILA, Philippines — Local government units (LGUs) should rationalize fees imposed on telcos’ digital infrastructure projects as current practices undermine the objectives of an executive order streamlining the permitting process for establishing connectivity infrastructure, a consumer advocacy group said.

“We have to know who ultimately suffers in the end,” said CitizenWatch Philippines co-convenor and former lawmaker Christopher Belmonte. “In this case, that would be the end-users and consumers, who have to make do with limited connectivity amid great demand for broadband services.”

LGUs currently charge fees for the construction of towers, poles and other infrastructure in their areas of jurisdiction. Belmonte said exorbitant fees that LGUs require telcos to pay add to the cost of broadband services that all consumers,  including their constituents, will eventually pay.

“Ordinances are being issued to charge regulatory fees, ranging from P500 to per pole post, per year and P50,000 per cell tower on top of other fees such as P150,000 inspection/audit and inventory fees,” he said.

“From our own probing, other fees for the building of a cell sites would include building permit, electrical permit, mechanical permit, fencing permit, plumbing permit, sanitary permit, civil/structural permit, architectural permit, and electronics permit, with amounts that differ per city/municipality. Furthermore, these fees are not published as standard fees and charged on a case to case basis with amounts ranging from P8,000 to over P70,000.”

He said these fees add to the cost of building digital infrastructure and will eventually be felt by consumers.

“Rationalizing all these fees will enable companies to allot more resources that would speed up the improvement and expansion of broadband services which would directly benefit the constituents and the local economy of all LGUs.”

Executive Order 32, or “Streamlining the Permitting Process for the Construction of Telecommunications and Internet Infrastructure,” issued by President Marcos in July 2023,  aims to make it easier for telcos to build towers and other digital infrastructure across the country. Specifically, it institutionalizes a set of streamlined guidelines for permits, licenses, clearances, authorizations, and certificates for the construction and operation of telecommunication systems, broadcast towers, facilities, and equipment and service.

“The private sector has been aggressively investing in wireless, fiber, cable, digital subscriber lines, and broadband-over-powerline networks for greater internet quality and access,” Belmonte said.

“The EO articulates the government’s commitment to reform the bureaucracy for the sake of efficiency, acknowledges this contribution of the private sector, and contemplates closer collaboration in the future.”

Unfortunately, jurisprudence from 2018, the Mandanas Ruling, allows an exploitative situation as an effect of EO 32’s objective, Belmonte said, citing that this provides LGUs the autonomy to manage finances and directly implement projects, programs, and interventions tailor-fit to the needs of their constituents. It significantly increases the tax base from which the LGUs’ share is computed.

“Basically, these give LGUs the prerogative to decide which industries or activities to collect from. This is good in the sense of fiscal devolution, but not in the strategic area of digital infrastructure when so much more needs to be done.” Belmonte said.