PCC proposes criteria in selection of 3rd telco

The Philippine Competition Commission (PCC) has proposed to address competition issues in the terms of reference (TOR) for the selection of a third telco player, including the automatic return of unused frequency, mandatory return of spectrum in the event the firm becomes a related party to a dominant player, and information sharing on reportorial requirements.

Should competition issues be addressed in the TOR, the PCC said notification and review of the transaction would no longer be necessary.

PCC’s recommendations are for the Aug. 8 draft TOR released by the Department of Information and Communications Technology (DICT).

Among PCC’s recommendations is the automatic recall of unused frequency by the new major telco player.

“Should the participant fail to use any radio frequency spectrum awarded to it beyond the timeframe stated in its rollout plan, the subject radio frequency spectrum shall automatically revert to the government,” the PCC said.

Under the draft TOR, the new major player (NMP) would be allowed a period of six months to remedy its breach or failure to comply with any of its commitments.

The PCC is also pushing for the mandatory return to the National Telecommunications Commission (NTC) of the assigned frequencies without condition, in the event the NMP becomes a related party to any dominant telco player even after the commitment period.

In the draft TOR, the NMP shall voluntarily return to the NTC the assigned radio frequencies without any condition.

Should the NMP merge or enter into any joint venture to a related party to any dominant telco company or acquire directly or indirectly in stages, at least 20 percent of the shares of a related party, the PCC said it should be notified of the transaction, in accordance with applicable rules and regulations.

The draft TOR states the NMP will have to amend its articles of incorporation to prohibit it from merging or combining with or becoming a related party to any dominant telco firm.

For the monitoring and performance evaluation of the NMP, the PCC has recommended requiring the firm to provide the number of subscribers (disaggregated per region; per types of service; semi-annual basis); rollout of the service and or spectrum; actual usage of spectrum; geographic location for infrastructure; list of cell towers, base stations and gateway facilities; annual reports; agreements with third parties for any telco services; and co-use agreements in their quarterly reports to the NTC.

The PCC also recommended for the quarterly reports to be available for sharing with other agencies such as the antitrust body and the DICT.

In the draft TOR, the NMP’s quarterly report shall include total number of fixed and mobile subscribers and other items required by the NTC.

“PCC recommended the foregoing inputs to address the competition concerns in the TOR for the selection of the NMP. With these, notification and review of the transaction could be dispensed with, in accordance with PCC’s power to exempt entities from review,” the antitrust body said.

In the absence of the inputs in the TOR, PCC said it would have to pursue a regular review of the transaction in line with its mandate.

The search is on for a third telco player as President Duterte wants a new firm to compete with existing firms and allow customers to have more options and have better service.

A public hearing on the rules and regulations for the selection of a new telco player is set to be conducted by the DICT on Thursday.