NTC to review bidding policy on frequencies

The National Telecommunications Commission is seeking a review of a government policy to bid out radio frequencies reviewed.

This developed after the NTC discovered that Executive Order no. 307 which was signed by former President Estrada on Oct. 31, 2000 and directs the bidding out of frequencies, including the much-sought after third generation (3G) spectrum frequencies, has not taken effect.

NTC Commissioner Eliseo Rio told The STAR that the said EO, which provides for a national policy on the allocation and use of radio frequencies, has not complied with the legal requirement on publications, either in two newspapers of general circulation, or in the Official Gazette.

EO 307 was supposed to be the basis of the plan under former NTC Commissioner Joseph Santiago to bid out the 3G frequencies in June of this year.

According to this order, radio frequency spectrum "is a scarce public resource and there is a need for a transparent, fair, and economically efficient procedure that shall expedite its allocation to service providers who will use it efficiently and effectively to meet public demand for telecommunications services."

It also said that spectrum auctions in other countries show that well-designed auctions offer a more transparent, fair, and economically efficient option for allocating select frequencies.

However, even during its early days, EO 307 was already generating criticisms from the private sector. This is because Republic Act no. 7925 which is the Act to Promote and Govern the Development of Philippine Telecommunications, in particular Section 15 provides that it is only when demand for specific frequencies exceeds availability that the NTC shall hold open tenders to ensure wider access for this limited resource.

An official from one of the leading telecommunications firms said that EO 307 being an executive issuance cannot supersede RA 7925 which is a law.

He added that there is also no proof that demand for 3G in the country will be more than the frequencies that will be available. "There will only be two or three companies that will have the capability to offer 3G, so why not just allocate it instead of bidding it," he said.

Rio agrees that bidding out the 3G frequencies, as well as other frequencies, may just unnecessarily drive up prices, forcing the service providers to pass them on to the users.

"We have seen the experience in other countries where the bid prices were unreasonably high. And since there is no real urgency to allocate the 3G frequencies, we have decided to slow down and review the matter," he said.