NEDA’s bid to scrap telcos’ congressional franchise requirement opposed

MANILA, Philippines — The head of the 28-member minority bloc in the House of Representatives has opposed a proposal of the National Economic and Development Authority (NEDA) to scrap the legislative franchise requirement for telecommunications companies.

“There is absolutely no way that Congress will give up its power to closely supervise the telecommunications sector, which is heavily imbued with public interest,” House Minority Leader Marcelino Libanan said.

Libanan, who leads the official opposition bloc in the chamber, added that they are “determined to exercise our oversight powers to ensure the supply of dependable and affordable telecommunications services, including internet services, to the public at all times.”

He maintained that Philippine radio airwaves belong to the state and to the public.

At present, every telecommunications company must obtain a franchise from Congress, which also enjoys the power to amend, extend or revoke such franchise.

The state, through Congress and the National Telecommunications Commission, merely assigns certain frequencies to telecommunications firms, subject to user fees.

A lawyer by profession, Libanan previously served as chairman of the House committee on justice when he was representative of Eastern Samar’s lone congressional district.

As the sitting minority leader, he is an ex-officio voting member of the House committee on legislative franchises.

“Let’s face it. Telecommunications is an extremely capital intensive business that requires massive investments over several years. But this should not discourage resolute new players who have the wherewithal to compete,” he said.

The lawmaker cited the case of Converge ICT Solutions Inc. and DITO Telecommunity Corp., which recently forged a landmark agreement that will allow them to share select terrestrial and submarine fiber optic cable assets so that they can quickly expand coverage of their telecommunications services.

In a recent policy note, NEDA pressed for the removal of the legislative franchise requirement for telecommunications firms to attract more players and foster stronger competition that could improve services.

“The dual licensing process could have a disproportionate negative impact on these small players, potentially influencing market entry dynamics,” NEDA said.

Libanan pointed out that Congress had actually granted dozens of franchises to new telecommunications firms over the years.

“But instead of raising more capital to grow their businesses, many of these telco firms merely sold themselves to either PLDT Inc. or Globe Telecom Inc., particularly before the enactment of the law that prohibited anti-competitive mergers and acquisitions,” he noted.

Among the telecommunications firms that were acquired by PLDT in the past were Digital Telecommunications Philippines Inc. of the Gokongwei family and Connectivity Unlimited Resource Enterprise Inc. of the late businessman Roberto Ongpin.