With the selection process of the third telecommunications company (telco) in full swing, Department of Information and Communications Technology (DICT) Secretary Eliseo Rio, Jr. is planning ahead on equitable spectrum management. Rio has stated that he would lobby for laws that would ensure that spectrum is not treated as a commodity.
Citing examples from the past, Rio recalls the time when some companies such as San Miguel Corporation and Digitel Mobile Philippines Inc. sold the frequencies allotted to them to either Smart or Globe or both. Smart is a subsidiary of PLDT, Inc.; PLDT and Globe have maintained a duopoly on telecommunication services in the Philippines for several years now. The third telco, the entry of which has seen numerous delays, is expected to challenge that duopoly.
The DICT had drafted two sets of Terms of Reference (TOR) on which to base the selection of that third telco. In a public consultation held on July 6, prospective bidders and the general public both favored the first TOR draft, entailing a points-based system taking into account the Highest Committed Level of Service (HCLoS) formula.
However, the Department of Finance (DOF),as represented by its Secretary Carlos Dominguez III, and in its capacity as a member of the oversight committee mandated to oversee the entry of the third telco, saw the first TOR as “weak.” Dominguez also gave his informed opinion that the third telco would need P200 billion to have a chance of competing with PLDT and Globe.
Dominguez also expressed his concern, recalling examples from the past, that the third telco could only try to get rich by utilizing government assets. Taking that into account, the DOF favors the second TOR drafted by the DICT, which auctions the spectrum frequencies with a minimum bid of PhP36. 58 billion.
For the highest bidder, a total of 225 megahertz (MHz) of frequencies will be allocated in the 3.3 GHz, 3.5 GHZ, 700 MHz, 2100 MHz, and 2.5 gigahertz (GHz).
For his part, Rio plans to push for the HCLoS-based TOR when he submits his report to the oversight committee. He reminded everyone, however, that the final decision on which TOR will be used in the selection process still depends on President Rodrigo Duterte.
Once the winning bidder has been named, Rio plans to lobby for legislation that will mandate the payment for Spectrum User Fees (SUF), whereby the third telco will be bound by law to pay penalties if it does not make optimal use of the awarded frequencies. In that eventuality, the telco would then return the frequencies rather than be penalized heavily.
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