Subic now a free zone for telecom services
BY PHILIP M. LUSTRE JR.
The Subic Bay Freeport community has all the reason in the world to rejoice. Very recently, the Olongapo City Regional Trial Court has rejected a motion for reconsideration filed by SubicTel, a Philippine Long Distance Telephone Co. wholly owned subsidiary, on its decision dismissing an earlier petition for temporary restraining order on the entry of Innove Communications in the Subic Bay Freeport Zone. The decision has finally lifted all legal impediments on Innove’s entry, thus, allowing competition in the industrial enclave and its adjoining areas.
We do not know where in the world PLDT has taken the idea that it has the ultimate right to monopolize telecommunications services in the Subic Bay Freeport Zone. In this era of open, free, and unimpaired competition, competitiveness assumes an ideological dimension. Every self-respecting nation takes competition at heart, developing its comparative advantage, and taking as virtual dogma the assertion that monopolies are anathema for its economic health. This is why every business entity must now learn to adapt and compete because this is how the world moves. Forget competition and you’ll get waylaid along the road.
To prove this point, let’s review SubicTel’s emergence.
It was in 1994 when the PLDT, Subic Bay Metropolitan Authority, and AT&T entered into a joint venture agreement to create SubicTel to provide telecommunications services in the Subic Bay Freeport Zone. Under the joint venture pact, SubicTel would have exclusive rights for 10 years to provide services in the Freeport Zone. Later, SBMA and AT&T sold their equity interests to PLDT, making SubicTel a wholly-owned PLDT subsidiary. SubicTel, however, has failed to provide the promised state-of-the-art technology to cater to the needs of the locators there. Worse, its telecommunications charges are among the highest in the country.
After the lapse of the 10-year exclusivity right, SBMA was left with no other choice but to entertain applications from other carriers. Among the first to apply was Innove Communications, the wireline subsidiary of Globe Telecom, the smaller half of the ruling duopoly. SubicTel had opposed Innove’s application, citing the prior-operator rule and a joint venture accord provision, which, SubicTel has claimed, allows it to exercise the option to renew its exclusivity privilege for three more five-year periods.
Under a resolution, the SBMA has welcomed the project proposals of other carriers, believing that the presence of carriers other than SubicTel “has been determined to be advantageous in the Subic Bay Freeport community as evidenced by the results of the public hearings and surveys conducted.” Moreover, the SBMA believes that “the entry of a new and proven player in the industry will not only improve the quality and cost of telecommunications services, but will make Subic Freeport a more attractive investment area.”
On the claimed SubicTel’s option to renew exclusivity rights, the Office of the Government Corporate Counsel has come out with a legal opinion that the supposed exclusivity refers not to exclusivity of operations but to the no-competition clause of the joint venture pact, which prohibits SBMA and any of its affiliates from competing with SubicTel. SBMA is not engaged in the telecommunications business and, in fact, has ceased to be part of SubicTel. Moreover, the OGCC has acknowledged the fact that SBMA does not only administer the Freeport Zone, but grants franchises to business locators as well.
The OGCC has also ruled that SubicTel’s position of exclusivity would effectively grant SubicTel a monopoly of telecommunications services in the Freeport Zone. This is not consistent with the policy on free enterprise, it ruled. Moreover the Constitution mandates that the operations of a public utility shall not be exclusive.
After a series of public hearings, SBMA has granted early this year Innove a provisional authority to operate in Freeport Zone. In May, SubicTel asked the Olongapo City RTC to issue a restraining order against the provisional authority. The RTC subsequently denied the petition and sustained Innove’s position that SubicTel is guilty of forum shopping and litis pendentia (“pendency of another action”). The RTC said the jurisdiction on this case is with SBMA and that the SBMA’s earlier ruling stands.
SubicTel filed a motion for reconsideration but Innove asked for a dismissal, saying that SubicTel’s motion was but a rehash of its old arguments and that the court already resolved them. The RTC likewise dismissed the motion for reconsideration.
***
Tidbits: Cure Telecoms, one of the country’s 3G four licensees, is raising its authorized capital to P2 billion to prepare itself for 3G rollout. Cure has until December to prove it has the capacity to provide 3G services. Otherwise, it’s just one of those engaged in frequency hoarding and the National Telecommunications Commission would have no choice but to cancel its license. The rules say a licensee has one year to show it can roll out its 3G network. It cannot piggyback on the network of any telecommunications entity... The commission is revisiting its “must-carry rule,” which obliges all cable TV firms to carry the major free TV networks like ABS-CBN, GMA-7 and ABC-5. The commission feels that only those networks that show the government programs and are active for a certain number of hours should have the first slots.
Those networks, which are only active for few hours, would be relegated to higher slots... Telecommunications commissioner Ronald Solis is now in Amsterdam to study the details and intricacies of digital broadcasting. The commission chief wants to find out which TV digital broadcasting standards—American or European—it would adopt... How true are reports that several banks are closing the financial faucet on ABS-CBN? Gabby Lopez must be having a hard time coping with the competition, especially now that ABC has finally found niche of its own... Within this year, the total global wireless connections will reach the 2.5-billion mark, according to Ovum Research. China has contributed a great deal to the increase. India, Russia, and Brazil are the countries, where a wireless explosion is taking place...
Manila Standard Today
The Subic Bay Freeport community has all the reason in the world to rejoice. Very recently, the Olongapo City Regional Trial Court has rejected a motion for reconsideration filed by SubicTel, a Philippine Long Distance Telephone Co. wholly owned subsidiary, on its decision dismissing an earlier petition for temporary restraining order on the entry of Innove Communications in the Subic Bay Freeport Zone. The decision has finally lifted all legal impediments on Innove’s entry, thus, allowing competition in the industrial enclave and its adjoining areas.
We do not know where in the world PLDT has taken the idea that it has the ultimate right to monopolize telecommunications services in the Subic Bay Freeport Zone. In this era of open, free, and unimpaired competition, competitiveness assumes an ideological dimension. Every self-respecting nation takes competition at heart, developing its comparative advantage, and taking as virtual dogma the assertion that monopolies are anathema for its economic health. This is why every business entity must now learn to adapt and compete because this is how the world moves. Forget competition and you’ll get waylaid along the road.
To prove this point, let’s review SubicTel’s emergence.
It was in 1994 when the PLDT, Subic Bay Metropolitan Authority, and AT&T entered into a joint venture agreement to create SubicTel to provide telecommunications services in the Subic Bay Freeport Zone. Under the joint venture pact, SubicTel would have exclusive rights for 10 years to provide services in the Freeport Zone. Later, SBMA and AT&T sold their equity interests to PLDT, making SubicTel a wholly-owned PLDT subsidiary. SubicTel, however, has failed to provide the promised state-of-the-art technology to cater to the needs of the locators there. Worse, its telecommunications charges are among the highest in the country.
After the lapse of the 10-year exclusivity right, SBMA was left with no other choice but to entertain applications from other carriers. Among the first to apply was Innove Communications, the wireline subsidiary of Globe Telecom, the smaller half of the ruling duopoly. SubicTel had opposed Innove’s application, citing the prior-operator rule and a joint venture accord provision, which, SubicTel has claimed, allows it to exercise the option to renew its exclusivity privilege for three more five-year periods.
Under a resolution, the SBMA has welcomed the project proposals of other carriers, believing that the presence of carriers other than SubicTel “has been determined to be advantageous in the Subic Bay Freeport community as evidenced by the results of the public hearings and surveys conducted.” Moreover, the SBMA believes that “the entry of a new and proven player in the industry will not only improve the quality and cost of telecommunications services, but will make Subic Freeport a more attractive investment area.”
On the claimed SubicTel’s option to renew exclusivity rights, the Office of the Government Corporate Counsel has come out with a legal opinion that the supposed exclusivity refers not to exclusivity of operations but to the no-competition clause of the joint venture pact, which prohibits SBMA and any of its affiliates from competing with SubicTel. SBMA is not engaged in the telecommunications business and, in fact, has ceased to be part of SubicTel. Moreover, the OGCC has acknowledged the fact that SBMA does not only administer the Freeport Zone, but grants franchises to business locators as well.
The OGCC has also ruled that SubicTel’s position of exclusivity would effectively grant SubicTel a monopoly of telecommunications services in the Freeport Zone. This is not consistent with the policy on free enterprise, it ruled. Moreover the Constitution mandates that the operations of a public utility shall not be exclusive.
After a series of public hearings, SBMA has granted early this year Innove a provisional authority to operate in Freeport Zone. In May, SubicTel asked the Olongapo City RTC to issue a restraining order against the provisional authority. The RTC subsequently denied the petition and sustained Innove’s position that SubicTel is guilty of forum shopping and litis pendentia (“pendency of another action”). The RTC said the jurisdiction on this case is with SBMA and that the SBMA’s earlier ruling stands.
SubicTel filed a motion for reconsideration but Innove asked for a dismissal, saying that SubicTel’s motion was but a rehash of its old arguments and that the court already resolved them. The RTC likewise dismissed the motion for reconsideration.
***
Tidbits: Cure Telecoms, one of the country’s 3G four licensees, is raising its authorized capital to P2 billion to prepare itself for 3G rollout. Cure has until December to prove it has the capacity to provide 3G services. Otherwise, it’s just one of those engaged in frequency hoarding and the National Telecommunications Commission would have no choice but to cancel its license. The rules say a licensee has one year to show it can roll out its 3G network. It cannot piggyback on the network of any telecommunications entity... The commission is revisiting its “must-carry rule,” which obliges all cable TV firms to carry the major free TV networks like ABS-CBN, GMA-7 and ABC-5. The commission feels that only those networks that show the government programs and are active for a certain number of hours should have the first slots.
Those networks, which are only active for few hours, would be relegated to higher slots... Telecommunications commissioner Ronald Solis is now in Amsterdam to study the details and intricacies of digital broadcasting. The commission chief wants to find out which TV digital broadcasting standards—American or European—it would adopt... How true are reports that several banks are closing the financial faucet on ABS-CBN? Gabby Lopez must be having a hard time coping with the competition, especially now that ABC has finally found niche of its own... Within this year, the total global wireless connections will reach the 2.5-billion mark, according to Ovum Research. China has contributed a great deal to the increase. India, Russia, and Brazil are the countries, where a wireless explosion is taking place...
Manila Standard Today
posted by OlongapoCity Zambales at
6:42 AM
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