On the Illegal and Monopolistic PLDT-Digitel Merger

Privilege Speech delivered before the House of Representatives
by Bayan Muna Rep. Teddy A. Casino
June 6, 2011


Mr. Speaker, dear colleagues.

I rise on a matter of personal and collective privilege to protect the integrity of the House and help prevent the re-emergence of a monopoly in the telecommunications industry.

Around two months ago, telecommunications giant PLDT, which owns mobile phone leader SMART Communications, managed to buy into and gain control of Digital Telecommunications Inc., which in turn owns Sun Cellular, the third biggest mobile service provider. The merger created major tremors in the industry, the business community and mobile phone consumers.

Nagulat po ang lahat nang mabalitaan na ang PLDT-Smart, na nagmamay-ari na ng Red Mobile at Piltel Talk ‘n Text at kumokontrol ng 58% ng telecommunications industry, ay binili ang Digitel-Sun Cellular, na may hawak naman ng 13% ng maket.

Ibig sabihin, sa isang iglap, napunta sa kamay ng PLDT-Smart ang 71% ng  buong telecommunications market.

Ang unang reaksyon ng marami, paano na ang unlimited text and call plans na pinauso ng Sun Cellular at matagal nang sakit ng ulo at gustong ipatigil ng Smart at Globe? Isang tanong din, kung ang sarili ngang serbisyo ng PLDT at Smart hindi nila maayos-ayos, iyon pa kayang sa Digitel at Sun?

Hindi kataka-taka ang ganitong reaksyon. May karanasan na kasi tayo sa monopolyo sa telecommunications industry. Noong araw, kontrolado rin ng PLDT ang telekomunikasyon sa Pilipinas. Ang resulta, mataas na presyo at masamang serbisyo. Ayaw na nating bumalik sa ganitong nakaraan.

In fact, Mr. Speaker, dear colleagues, this abhorrence of monopolies is enshrined in the Constitution. Section 19, Art. XII of the 1987 Constitution states: “The State shall regulate or prohibit monopolies when the public interest so requires. No combinations in restraint of trade or unfair competition shall be allowed.”

In the mid 1990s, the telecommunications industry was de-monopolized and telecommunications franchises granted to several companies with a built-in safeguard against any unintended reconsolidation of the industry. Among the said franchises was the one of Digitel, Republic Act 7678, which under Sec. 15 stated that Digitel “…shall not lease, transfer, grant the usufruct of, sell nor assign this franchise or the rights and privileges acquired thereunder to any person, firm, company, corporation or other commercial or legal entity, nor merge with any other corporation or entity without the prior approval of the Congress of the Philippines. Neither shall the controlling interest of the grantee be transferred, whether as a whole or in parts and whether simultaneously or contemporaneously, to any such person, firm, company, corporation or entity without the prior approval of the Congress of the Philippines.”

Essentially the same provisions can be found in the franchises of PLDT, RA 7082 renewed in 1991, Globe Telecom RA 7229 granted in 1992, and Smart Communications RA 7294 also in 1992. This provision was also reiterated in the franchise granted by Congress in 2002 to Digitel Mobile Philippines, Inc., which owns Sun Cellular. Under the said franchises, Digitel, PLDT and Globe – the top three telecommunications companies – are required to get congressional approval before any lease, transfer, grant of usufruct, sale, and transfer of rights and privileges of their franchise.

Bakit po nilagay ng Kongreso ang ganitong mga probisyon? Sa tingin ko’y upang matiyak na hindi basta-bastang malilipat ang prankisa ng mga kumpanyang ito sa kung sinu-sino lang. Na hindi ito mapupunta sa mga fly-by-night operations o kaya’y sa mga nagtatangkang magtatag ng monopolyo sa industriya.

Precisely, Mr. Speaker, this is what happened in the PLDT-Digitel merger. Kinain ng PLDT-Smart ang Digitel-Sun Cellular. The merger now controls 71% of the market. What is wrong with this?

First thing’s first. The merger is illegal because such a buyout or swap and share deal, whatever you call it, requires congressional approval. This is explicit in Digitel’s and Digitel Mobile’s franchises. Proponents of the merger say congressional approval of such mergers and acquisitions have already been waived by virtue of the 1995 Public Telecommunications Policy Act (RA 7925), which ensures equality of treatment for franchise holders. The argument is that since the requirement for congressional approval of such mergers among telecom franchise holders have already been removed in two other franchises, that of RCPI and Sear, then under the principle of equal protection, the same should be waived for the merger involving PLDT-Smart and Digitel-Sun.

But, Mr. Speaker. I don’t think the framers of RA 7925 or other franchises that waived congressional approval ever imagined a situation where PLDT or any entity would once again control 71% of the market. Ang iniisip siguro ng Kongreso noon, kainan ng maliliit na isda, hindi ng mga dambuhala. A deal that would reverse the policy of demonopolization in the telecommunications industry was certainly not contemplated by previous Congresses and should not be tolerated by the 15th Congress. The fact is, congressional approval is explicitly required in the franchises of Digitel, Digitel Mobile, PLDT, Smart Communications and Globe Telecom.

Second, not only is the deal illegal, it will foster a monopoly in the sector and all the ills that come with overwhelming market power.  Ngayon pa lang nga, hindi na magawang matino ng PLDT-Smart ang kanilang serbisyo, bibigyan pa natin ng dagdag na negosyo? We are all victims of dropped calls, spam texts, questionable billings, unreliable and slow internet connections from the major players. Shouldn’t they improve their services first before gobbling up the competition?

Let’s be honest for a minute. What will stop PLDT from discontinuing or even disrupting Sun Cellular’s unlimited text and call plans? And with Sun out of the way, what will stop PLDT-owned Smart Communications from conniving with Globe Telecom in raising rates the way they always wanted it to happen?

Unfortunately, the body that is supposed to regulate monopoly practices in the industry, the National Telecommunications Commission (NTC), cannot be expected to protect the consumer or national interest. Our experience with the NTC is that it is afraid of the giant telcos. Sa halip na pangalagaan ang interest ng publiko, inuuna pa nito ang interes ng malalaking kumpanya sa telekomunikasyon.

I have yet to recall of an instance when the NTC exercised its regulatory powers to rein in the profiteering and abusive practices of the telcos. Palagi hong pinagbibigyan ang telco - pinapalusot ang lousy services at hinahayaan ang mataas na singil - on the pressumption that there is healthy competition.

There are persistent rumors that our NTC commissioners are on the payroll of the telcos. In this light, maybe its about time that we conduct lifestyle checks on the NTC commissioners.

In any case, Mr. Speaker, my fear is that the NTC and SEC will act to approve the PLDT-Digitel deal during our upcoming break. Kung magkabulilyaso sa deal na ito, tayo po, sa kahuli-hulihan, ang masisisi dahil sa atin nanggaling ang prankisa ng PLDT at Digitel.  Hindi tayo dapat pumayag na basta-basta na lang itong lalabagin at manunumbalik ang monopoloyo sa industriya ng telekomunikasyon.

Dapat ho magdahan-dahan ang NTC at SEC sa pag-apruba ng merger na ito. Dapat sundin ang nasa batas – na kailangang dumaan ito sa isang transparent na proseso, may public hearing, at dapat dumaan din sa Kongreso para mabusisi natin kung talagang makikinabang dito ang mga konsyumer at ang interes ng publiko.

Yun lang po muna. Maraming salamat po. 

***

Source URL: http://www.bayanmuna.net/ps.php?subaction=showfull&id=1307352885&archive&start_from&ucat=1&

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SLaM for the sake of the People!

SLaM calls all people and groups to participate in a united call to action, the SLaM Hour:  No call or text for 1 hour, from 12:00 noon to 01:00 PM in July (exact date to be announced later).  This call to action loudly asserts that true, authentic power and authority comes from the people and is accorded by the people to whomever they freely choose.  On the SLaM Hour, all people and groups nationwide are enjoined to express the voice of the people by turning off their cellular phones for 1 hour, thus, no calls or text nationwide for 1 hour at the agreed date and time.

Cebuanos protest PLDT-Smart takeover of Digitel franchise, telecomm monopoly

Consumer, civil society, religious, and youth and student groups in Cebu launched today a movement to stop monopoly in the telecommunication sector in a People’s Forum that also warned of a looming return of PLDT’s monopoly during the days of the Marcos regime.

The groups assailed the impending control of PLDT-Smart of 70% of the contested franchise of frequency and bandwidth in the telecommunications sector as the company acquired Digitel, owner of Sun Cellular.

“In the light of all this, it is the responsibility of the government to act swiftly and ensure that public interest is upheld. The Senate has already waived its duties to the people and brought the issue back to the NTC. At the end of the day, we look up to the government for intervention and ensure that our right to fair and quality services and our right to choose as consumers are not violated,” said Jess Sandow, Convenor of Samahan Laban sa Monopolyo (SLaM).

The forum, organized by SLaM together with Freedom from Debt Coalition-Cebu, Sanlakas Sugbu and University of San Carlos Lex Circle (Law Student Council) gathered about 50 representatives of different cause-oriented groups in the province. In a resolution passed during the forum, the participants agreed to intensify the campaign nationwide to defend any attempt of maintaining monopoly in the country’s strategic industries, such as telecommunication.

“The telecommunication airwaves or frequency is a public domain that should be the subject of government regulation. This is an important infrastructure to safeguard the people against corporate greed. It should not be controlled by any single company to ensure true and fair competition among the different players while the consumers’ welfare are duly protected,” explained Sandow.

The other groups that attended the forum are the Cebu Bloggers Society Incorporated (CBSI), Youth Against Debt-Cebu, Piglas Kabataan, Youth for Rights (Y4R) Sibonga, Union of Progressive Students, University of Southern Philippines Foundation, UP Cebu, Kongreso ng Pagkakais ng Maralita ng Lungsod (KPML), Philippine Earth Justice Center, Redemptorist Center for Social Concerns, United Church of Christ in the Philippines (UCCP), Action for Nurturing Children and Environment (ANCE), Save Sibonga Movement, Task Force Detainees of the Philippines, Human Rights Defenders, Cebu Chamber of Commerce, NAPNACI-Naga, CASE-Naga, USREP-D, KLARAI-Carcar, CNU-SSG, SIFPO and Padilla Review Center.

Sa Ganang Akin

Ayon sa mga sabi-sabi, ang nagbabadyang pagsasanib ng PLDT / Smart at DIGITEL / Sun ay magreresulta sa mas malawak na saklaw ng serbisyo nila, at kung gayo’y sa mas malaking porsyentahe na mapaglapit pang lalo ang mga magkakapamilya at magkakaibigan, gaano man ang mga ito kalayo sa bawat isa.

Ayon sa mga sabi-sabi, lohika na raw ang nagsasabi na pag natuloy ang pagsasanib ng dalawang higante sa telekomunikasyon, mas bibilis ang konenksyon sa internet, mas lalawak ang saklaw ng mga unlicalls at unlitext, mas magiging masigla at walang patid ang daloy ng komunikasyon sa pagitan ng mga magkakakilala at magkakamag-anak.

Ayon sa mga sabi-sabi, ang ganitong sigla ng komunikasyon, kung matuloy ang pagsasamang PLDT-DIGITEL, ay magaganap din sa loob ng hanay ng negosyo.  Mas masiglang business deal via telephone conversations, mas malakas na trapiko sa internet.

Ayon sa mga sabi-sabi, magreresulta ito sa mas murang halaga ng text at tawag, at maging sa per oras na singil sa koneksyon sa internet.

Pero sa ganang akin, ang PLDT/Smart at DIGITEL/Sun ay parehong dambuhalang negosyo na ang pangunahing layunin ay magkamal ng sandamakmak na kita.

Sa ganang akin, ang ganitong klase ng mga negosyo ay may mga espisipikong corporate plans na nakasandig sa prinsipyo ng pagkamal ng malaking kita sa pinakamaliit nitong gastusin.

Sa ganang akin, ang prinsipyong ito ang kadalasang dahilan ng mga merdyer ng mga kompanya.  (Maliban syempre sa obyus na dahilan ng nagbabantang pagkalugi kaya naibebenta sa malaki ang isang maliit na kompanya.)

Sa ganang akin, kahit pa makuha ng pinagsamang PLDT/Digitel ang 70% ng telephone frequency ng bansa, hindi pa rin uunlad ang klase ng serbisyo nilang nakaasa dito dahil kasamang makukuha ng PLDT, obviously, ang milyun-milyon ding subscriber ng Digitel/Sun.  Sa maikling salita, the same banana pa rin ang magiging kalagayan, naiba lang ang pagmamay-ari pero pareho lang ang kabuuang bilang ng subscriber na mag-aagawan sa napakaliit na porsyentahe ng telephone frequency.

Sa ganang akin, malaki ang posibilidad na hindi ito tumungo sa mas murang halaga ng text, tawag at surfing time, maliban na lang kung tatapatan sila head-on ng natitirang malaking kompanya ng telekomunikasyon.  Kung bababa nga ang halaga, hindi ito magiging pangmatagalan.  Magaganap lang ito sa mga unang bahagi ng inaasahang mainit na tunggalian ng pinagsamang PLDT/Digitel laban sa Globe.

Sa ganang akin, ang anumang magaganda umanong epekto ng merdyer ng PLDT at Digitel ay puro lang press release. PR. Hawshaw.  Ampaw.  Walang laman.

Dahil sa ganang akin, wala sa hinagap ng merdyer na ito ang kapakanan ng mga subscriber.  Ang tanging halaga natin sa merdyerna ito ay ang pisong manggagaling sa ating mga bulsa na nais kamkamin ng PLDT/Digitel.

Ding Loguibis

Kontribyutor

Delay mars PLDT buyout of Digitel

PHILIPPINE Long Distance Telephone Company is unlikely to meet its deadline to get regulatory approval for the acquisition of Sun Cellular after the National Telecommunications Commission extended the hearing at the instance of second-ranked Globe Telecom Inc.

“We are giving Globe the opportunity to cross examine our witness because we have nothing to hide. It was Globe who asked for this because their legal counsel said he will be out of the country,” Ray Esipinosa, PLDT head of Regulatory Affairs and Policy told reporters after the hearing.

PLDT had wanted to secure regulatory approval for its acquisition of Digital Telecommunications Phils. Inc. on June 30. The NTC set the next hearings on July 5, 7, 12 and 14.

“We will just play it by the ear. This is not a difficult case. It’s a simple matter of transaction. The decision making policy should not take a long time because this is not like applying for a Provisional Authority, Certificate of Public Convenience and Necessity, which all takes a long time,” Espinosa said.

Amid the delays, PLDT wants the Department of Trade and Industry to look into the unfair trade practices of Globe in properties of the Ayala group.

“It’s a violation of the law . . . its a public crime. The DTI and the Department of Justice should look into the restraint of trade,” Espinosa said.

“Globe cannot be a guardian of free competition. It is the beneficiary of a combination and arrangement in restraint of trade—it has exclusivity in the Ayala malls, which is owned and controlled by the majority owner of Globe,” the PLDT lawyer said.

He said that PLDT, Digitel and other providers cannot provide basic telecommunication services to tenants of these malls even if they want to because of the exclusivity bestowed upon Globe by its majority owner.

“This egregious behavior is what falls squarely within the scope and mandate of EO 45, and the DOJ should investigate and stop this illegal practice to more free competition in domestic trade,” Espinosa said.

“Globe is stepping up the pressure on government so that it will bestow upon Globe, as if as a matter of entitlement, state sponsored concessions which will change the market driven advantages of its rival, particularly PLDT and Digitel,” he added.

PLDT earlier opposed the clamor of Globe for the DOJ to investigate and stop the acquisition of Digitel. PLDT will acquire a 51.5 percent stake in Digitel owned by JG Summit Holdings Inc. for P69.2 billion.

President Benigno Aquino 3rd had ordered the NTC and other agencies to look into the matter. The President also issued Executive Order 45, appointing the DOJ as the lead agency that would investigate monopolies and cartel behavior to protect consumers.

Besides Globe, other telcos such as Eastern Telecommunications Philippines Inc. and Sealand Telecommunications Inc. as well as consumer groups TXTMate, SLaM and TXTPower are opposing PLDT’s acquisition of Digitel because of the negative repercussions on industry competition and consumer interest.

State-run Philippine Institute for Development Studies earlier said the PLDT-Digitel deal may affect competition because of high entry barriers and the absence of effective competition.

By Darwin G. Amojelar, Senior Reporter

Source URL: http://www.manilatimes.net/business/delay-mars-pldt-buyout-of-digitel/