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Gatchalian seeks competition reforms in telco industry

PASAY CITY, Philippines – Senator Win Gatchalian gestures as he uses his mobile phone to check for updates at the Senate Session Hall, ​10​ May 2017. The committee chairman on economic affairs has called on the government to reform the telco industry by breaking duopoly and by beefing up capabilities of the state regulatory body. Photo by Mark Cayabyab/OS WIN GATCHALIAN

The telecommunications industry continues to be ruled by a duopoly because of the inability of the government to effectively foster a vibrant competitive environment, Senator Win Gatchalian said on Tuesday as he sought to give more teeth to the National Telecommunications Commission (NTC) to regulate telecommunication firms.

Gatchalian, who is the chairman of the Senate Committee on Economic Affairs, likewise stressed the need to overhaul the government’s spectrum allocation system, which giant telcos have successfully maneuvered to allow them to retain their monopoly of the telecoms industry.

“To open the telecommunications industry to competition and give way to a viable third player, we need a more transparent system of spectrum allocation, assignment, re-allocation and re-farming, as well as the development, promotion and deployment of a competitive selection process in the allocation of our publicly-owned spectrum,” Gatchalian said as he sponsored the first of a series of legislative measures, as contained under proposed Senate Resolution No. 213, that seek to formulate a legislative policy that would protect consumer interests and make the industry more robust.

“There seems to be no other visible way. Our efforts at relaxing constitutional restrictions to allow foreign firms to enter the telecommunications industry will be merely illusory if these firms do not have enough frequencies that will enable them to offer real competition and give consumers the best value for their money, ” Gatchalian added.

The senator noted the present spectrum allocation system has permitted Globe Telecoms and Smart Telecommunications to cunningly engage in ‘spectrum trading’ in relation to their Co-Use Agreement of the 700-Megahertz spectrum.

“The damage caused by such ‘spectrum trading’ to the industry is immense. Such failure of the NTC in the past to properly govern our publicly-owned spectrum has resulted in the private trading of frequencies. Private corporations have treated spectrum allocations as their property, resulting in relatively easy and effective ‘spectrum trading’ via corporate mergers and acquisitions – as in the recent case of the joint acquisition of the 700Mhz frequencies,” he pointed out.

The NTC being “organizationally handicapped as a regulator” of the telecoms industry, Gatchalian said it should be “reorganized and given fiscal autonomy to enable it to freely create an environment of regulatory certainty and operational conditions that are necessary to promote the welfare of consumers.”

Gatchalian also proposed that NTC commissioners be given fixed terms of office to “depoliticize” the Commission. “The NTC must be empowered and strengthened to be able to shield its officers from (such) threats of litigation and harassment,” he added.