DoF questions ‘third player’ selection via ‘beauty contest’
FINANCE Secretary Carlos G. Dominguez III said the selection of the third entrant to the telecommunications industry must be “fair” to the public by making telcos pay to use the frequency they are allocated.
“Why should we allow a system where we give it for free and the private sector makes money out of it? Why should we have a system where the public is denied fees? It’s a matter of fairness for the Filipino people,” Mr. Dominguez said yesterday during a media briefing after the Development Budget Coordination Committee meeting.
“If you look at the past way that the telcos were chosen, it was by ‘ beauty contest.’ And what is the result of that? Look at the situation we have now. That is the result of how it was allocated in the past... people who were allocated these resources for free, turned around and sold them for enormous amounts of money,” he added.
“So obviously there is a value to the frequencies.”
The Department of Finance (DoF) is on the committee that will determine the selection criteria for the “third player,” where a debate has apparently broken out whether the selection should be based on a “beauty contest” — in which the most attractive proposal is selected.
In a beauty contest, the winner with the proposal judged to be the most attractive will be selected and allocated spectrum by the government.
Mr. Dominguez’s remarks suggest that he wants spectrum used by phone companies — which are considered state property under the Constitution — to be paid for, which could add to the potential expense of the potential new entrant and possibly the incumbents.
The Department of Information and Communications Technology (DICT) released on Friday draft guidelines for the selection of the third player. The draft proposes to evaluate applicants under a points system that grades their proposals over a five-year period.
“If you ended up in a situation like this in that [the current] method, why would you use it again? Don’t you want to correct it?” Mr. Dominguez added, referring to changes to the “beauty contest” selection process.
The DICT has said that auctioning frequency would be anti-competitive as it would force the third player to pay for its frequency, which the incumbents did not.
“By auctioning it out, there’s less chance for corruption. There’s more chance for transparency. So those are the reasons that I think is important to the public,” Mr. Dominguez added.
“Why should we allow a situation where we give it for free? It’s in the billions of pesos. Why do we have a system where the public is denied real revenues of them because the fees are relatively really small? It’s a matter of fairness for the Filipino people,” he added.
The DICT will hold a public consultation for the guidelines on Friday.
Mr. Dominguez said: “I’m not going to commit myself in advance,” when asked whether he accept the draft in its current form.