Advocacy group backs ‘third player’ selection based on highest level of service commitments

AN INTERNET ADVOCACY group has expressed its support for a selection process favoring the highest committed level of service (HCLoS) to be committed by the new entrant to the telecommunications industry, the so-called “third player.”

In a letter to the Department of Information and Communications Technology (DICT) distributed to reporters Friday night, the Better Broadband Alliance (BBA) said the HCLoS draft of the terms of reference (ToRs) for third-player selection best fulfills the objective of prioritizing public service.

It cited the Public Service Act and Public Telecommunications Policy Act, which according to the group’s interpretation “prevent the government from using SUF (spectrum user fee) as the sole criterion for awarding a license to provide a telecommunications service.”

“A process that selects the (third player) only on the basis of SUF without a review of its proposed service to the public is not only legally questionable, but will also produce a result that relegates public service to the backburner,” it added.

The government is looking at two draft ToRs in the selection a third player — a draft that favors HCLoS and one that calls for an auction. The HCLoS draft assigns points to the prospective entrant’s investment and coverage over a five-year period, which is supported by the DICT. The auction draft seeks to award frequency spectrum to the highest bidder, which is supported by the Department of Finance (DoF).

The auction draft requires a minimum bid price of P36.58 billion from the interested company. The bid amount will be considered its SUF payment for its first five years of operations in the country.

The SUF is a yearly government fee based on spectrum use, type of service and economic classification of the areas covered by a telco provider.

Last week, DICT held a public hearing on the two draft ToRs with representatives from telcos, consumer groups and the public. A vote taken at the meeting showed that 75% of the participants also favor an HCLoS process.

BBA also considers the auction process “anticompetitive” because the third player would end up being penalized by paying for spectrum, putting it at a disadvantage relative to incumbents PLDT, Inc. and Globe Telecom, Inc.

It added that if the government wishes to generate revenue from spectrum fees, it must not make the third player bear them alone, but also make PLDT and Globe pay. This means, however, that customers will eventually take the burden of pricier services.

BBA also proposed to remove the power from the National Telecommunications Commission (NTC) to unilaterally terminate the selection process.

“Allowing the NTC to unilaterally terminate the process for any reason or for no reason at all, without any liability whatsoever, will lay waste to the entire process set forth in the ToR,” it said.

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