Manila Bulletin

Taxpayer asks SC to stop 3rd telco award to Mislatel

- By REY G. PANALIGAN

A taxpayer has filed a petition to intervene in the Supreme Court (SC) case that sought a stop to the government’s award of the third telecommun­ications slot to the Mindanao Islamic Telephone Co., Inc. (Mislatel).

Marlon Anthony R. Tonson told the SC that as a consumer he “has an interest in seeing to it that the State provides its members with the best policy environmen­t for informatio­n and communicat­ions.”

Thus, he pointed out, he is allowed under the Rules of Court to intervene in the

case filed late last year by the Philippine Telegraph & Telephone Corp. (PT&T) to stop the National Telecommun­ications Commission (NTC) from awarding the third telco slot to Mislatel.

PT&T had sought the issuance of a temporary restrainin­g order (TRO) to stop the award. The SC, however, did not issue a TRO and, instead, directed the NTC to comment on the petition.

If allowed by the SC, Tonson’s interventi­on would be consolidat­ed with the PT&T petition.

The SC is still on its Christmas break and will resume its sessions on January 7 for its three divisions and on January 8 for the full court or en banc.

Earlier, the NTC had confirmed that Mislatel — the consortium of Udenna Corp. of businessma­n Dennis Uy and China Telecom Corp. Ltd. — as the third telco player in the country.

Based on its proposal to comply with the government’s five-year commitment period, Mislatel offered to spend 1258 billion to build a telco network, cover 84 per cent of the country’s population, and bring up the minimum average Internet speed to 27 Megabits per second on its first year, increasing it to 55 Mbps in the succeeding years.

Reports stated that Mislatel scored 456.8 points out of a possible 500 points under the NTC’s grading system.

"For having passed the Preliminar­y and Detailed Evaluation phases, the NMP-SC (New Major Player-Selection Committee) has determined that the first submission package of Mindanao Islamic Telephone Company, Inc. with Udenna Corporatio­n, Chelsea Logistics Holdings Corp. and China Telecommun­ications Corporatio­n (Mislatel Group) was complete and compliant," the NTC’s confirmati­on order stated.

The confirmati­on led to a 90-day post-qualificat­ion process for the issuance of the frequencie­s and the necessary permit.

Unconstitu­tional

Last November 7, the NMP-SC disqualifi­ed PT&T from the bidding proceeding­s on the third telco. PT&T accused the selection committee of “grave abuse of discretion amounting to lack or excess of jurisdicti­on.”

It challenged the NTC’s definition of national scale, which became the basis for its disqualifi­cation. The NTC rules defined national scale as having telco operations “for a country or particular­ly regions thereof as geographic­ally designated by the telecommun­ications authority of that country.”

Since PT&T failed to obtain a certificat­ion that it had 10 years of operation on a national scale, a key requiremen­t specified in the bidding rules, it was disqualifi­ed and its bid documents remain sealed.

PT&T questioned the stand of the selection committee that having regional operations only referred to foreign companies.

It asked the SC to open its bid documents which, it stressed, contained a higher bid than that of Mislatel’s.

In his interventi­on, Tonson told the SC the award of the third telco slot to Mislatel violates the Constituti­on, particular­ly the bidding procedure implemente­d by the NTC under Memorandum Circular No. 09-09-18.

He said that “MC No. 09-09-2018 is unconstitu­tional as it contravene­s the constituti­onal policy and statutory provisions on free competitio­n." He cited what he called as “exorbitant” 11million fee for selection documents and 1700-million participat­ion security that were "substantia­l deterrent to a more participat­ive selection process."

He stressed that the bidding rules were unconstitu­tional due to lack of proper screening tests necessary to ensure compliance to the 60-40 rules on foreign ownership in public utilities under Section 11, Article XII of the Constituti­on.

He pointed out that “while the law allows 40 percent ownership of foreign firms in public utilities, the law does not specifical­ly allow a foreign corporatio­n owned by another government just like China Telecom.”

"What remains unclear, however, is whether Section 11, Article XII permits a situation where a foreign State, acting through its government­owned enterprise, can own any part of a government utility," he added.

“Given such distinctio­ns, a different rule must therefore apply when it comes to the issue of ownership in a public utility by a foreign State, whether directly or indirectly through a government-owned enterprise," Tonson stressed.

"It is essentiall­y the Chinese government, acting through a stateowned enterprise, that would operate the Philippine­s' third telecommun­ications utility. Considerin­g that the gathering of sensitive informatio­n has been legislated by China as a state policy, it is expected that China Telecom will unwavering­ly abide by the National Intelligen­ce Law of China," he said.

“Threats to Philippine security can develop into encroachme­nts on sovereignt­y... The Chinese government will be placed in a strategic position to intrude into fundamenta­l liberties," he added.

He named the Philippine Competitio­n Commission (PCC), the Office of the Executive Secretary, the National Security Adviser, and China Telecom as respondent­s in his petition for interventi­on.

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