NTC may impose penalties on telecom firms for failure to meet rollouttargets

The National Telecommunications Commission (NTC) bared plans yesterday of imposing monetary and administrative penalties against local exchange carriers (LECs) which failed to fulfill their telephone roll-out obligations within the three-year period provided by law.

NTC Commissioner Joseph Santiago said they have already issued a show cause order against Isla Communications Company (Islacom), Pilipino Telephone Corp. (Piltel), Philippine Telephone Corp. (Piltel) and Philcom Corp. to explain their non-compliance to the roll-out criteria.

"We don't know yet how much we will impose. Maybe we'll look at the level of non-compliance. So for instance, you are committed to provide 700,000 lines and you were able to install 50 percent, then, we will have to fine you for the remaining 50 percent," he explained.

He added, however, that the NTC will not base its decision solely on the number of lines involved.

The NTC, he pointed out, has made it a policy that for every 10 lines laid down in an urban area, at least one line should be put up in the rural area.

Likewise, the carriers are mandated to install lines in each of the cities and municipalities under their jurisdiction.

"We have to look at the other factors also such as the rural-urban ratio and the committed areas served. So maybe we will give points to each and see their compliance to the three requirements," Santiago said.

The NTC chief, said that they will not impose the maximum penalty of cancellation of licenses for non-compliance since the carriers already have existing subscribers who would be adversely affected by such a drastic action.

"By strict interpretation of the law, zero compliance will mean cancellation. So we're really thinking of going for monetary penalty as well as a freeze in their applications for future expansion," he said.

Meanwhile, Santiago said that of the eight LECs whose roll-out deadline already lapsed in 1998, Piltel only had a 91.64 percent compliance; Islacom, 74.21 percent; PT&T, 51.8 percent; and Philcom, 22.04 percent.

Islacom's lawyers, he continued, have filed recently a motion asking for the details of the show cause order while the rest have already done so earlier.

Public hearings, he said, will begin soon to give the players a chance to explain their side.

However, Bayan Telecommunications Inc. (BayanTel), Digital Telecommunications Philippine Inc. (Digitel), Globe Telecom and Smart Communications Inc. (Smart) are not yet off the hook.

Although the four companies have achieved more than 100 percent rollout compliance, they have failed to meet the requirement to install lines in all their assigned service areas, Santiago said.