Time to review telecoms policies

The decision of PLDT to defer (forget?) its investment in television network GMA-7 officially marks the end of an era of "irrational exuberance" in the country's telecoms sector. There was a time when this sector was deemed a gold mine of sorts, where even an idiot couldn't fail to make money. Now, we all know better.

I suppose the inability of the old Cojuangco era-PLDT monopoly to satisfy demand, evidenced by a long backlog of applications for phone service, made people think the gold mine is practically inexhaustible in the short to middle term. Government was also obsessed with being able to report a more decent telephone density ratio. When the Ramos administration took the reins of power, our teledensity ratio was embarrassingly and typically third world.

Deregulating the industry, at least in appearances, was deemed the solution to the problem. But it didn't take long for politics to take front seat. When FVR finally promulgated Executive Order 109, his administration tried to please too many supporters so that we ended with more players than necessary to make the industry viable. Not only that, the old monopoly, PLDT was left pretty much able to screw the new participants by denying them supposedly mandated interconnection.

I received an e-mail from reader Ben Tesoro, an industry pioneer and former president of the industry group, PETEF. Here is his front row view of what happened, what went wrong and what we should do now.

On EO 109, which effectively started telecom deregulation under FVR, this decree was a palace initiative, and the telecom industry was only consulted in the preparation of Implementing Rules and Regulations [IRR]. While the objective of deregulation was laudable, the government thru the NTC opened up the telecom service industry in full throttle, without considering the ability of the economy to support so many players.

During my incumbency as president of PETEF, in the 92-93 timeframe, when the idea of deregulation was still being discussed, I took the position that the economy can support at most two to four service carriers. EO 109 allowed more than 10 carriers under SAS concept or the Service Area Scheme.

As of today there are around seven million lines installed capacity but only 50 to 60 percent of the fixed line system are subscribed. Major players like PLDT and Globe have slowed down in fixed line expansion and instead concentrated on their wireless telephony services.

A major portion of these unsubscribed fixed wireline services are in urban areas, where there are now two or even three service carriers duplicating or triplicating services. In other words, there is an over abundance of telecom services in urban areas but almost none in less urban and or remote barangays. This is an anomaly created by EO 109. It is estimated that there is an idle investment by the carriers in terms of installed equipment valued anywhere between two to three billion US$ at the time of procurement, which is now worth 100 to 150 billion in devalued pesos.

If you look at the financials of the participating carriers, most of them are in the red, PLDT while not included in the EO 109 scheme, has also suffered financially.

Eventually, the consolidation of these service companies will come into play, resulting to perhaps, to three or four surviving carriers. This is now happening in the cable TV services.

While I was still with the PETEF board in the year 2000, I suggested reviewing the effects of EO 109 with the end in view of suggesting revisions or discontinuance of the program. We were overtaken by events of 2001 and one may consider this matter now in limbo.

In fairness to the National Telecommunications Commission (NTC), it has started to review the rules governing the telecoms sector. The one good thing President GMA did was to depoliticize the appointment of NTC's chairman and members. Both FVR and Erap had politicians or those aspiring to be politicians on top of NTC, thereby making their decisions suspect.

The new and more professional NTC leadership has made noises about reviewing the relevance of EO 109 to today's market and industry conditions. The action taken by NTC on the surety bonds to cover compliance with the line installation requirement is an example of the commission's readiness to be fair and realistic. But much must be done and quickly to save the industry.

Now, if only the DOTC leadership shifts some of its attention from such stupid but money making ventures as a universal drug test for all applicants for drivers licenses and those renewing, maybe just maybe, we can address the telecom industry's problems more proactively.

Pilot-victims

Whoever is responsible for that anthrax hoax that caused two Filipino pilots to suffer that nightmarish experience in Seattle ought to feel extreme shame at this idiotic and inhuman act. Better yet, hang his head in shame from the nearest tree. The career, livelihood and lives of these two pilots have been changed drastically because of what happened.

But as the pilots themselves told media, they do not blame the US government agents for doing what they are mandated to do. The terrorist scare in the US is very real and if I am living there now, I am sure I would be as paranoid as the typical American.

The American government, however, can show some amount of compassion and magnanimity. Those pilots were victims themselves in this war on terrorism. They were doing nothing more than pursuing a livelihood. Their travel to the US was part of a training exercise prior to assuming their jobs in Africa. Canceling their 10-year visas is a bit too harsh.

True, there was a justification for this harsh action because the pilots didn't have return tickets, but that was explained. The failure was on the part of their employers. Maybe, after the excitement has died down somewhat, the US government will show it isn't the heartless superpower that many third world countries feel it is.

Maybe too, President GMA will use her new found influence in the Bush administration to plead for these pilots. A British newspaper called GMA the second most supportive international leader to Dubya's war on terrorism, second only to the British prime minister Tony Blair. Maybe that goodwill could be used to touch the lives of two ordinary Filipinos seeking employment abroad because they are unable to get a decent one at home.

Veto power

Dr. Ernie E highlights who has the veto power at home.

Bill meets Doug after work at the bar for a drink. Bill says, "I would like so much to buy a small cottage in the country and spend the rest of my life there with the woman I love."

Doug asks, "And why don’t you do it?"

Bill replies "My wife is against it."

(Boo Chanco's e-mail address is [email protected])