PLDT to contest NTC order

Philippine Long Distance Telephone Co. (PLDT) will pursue the necessary legal remedies, including the filing of a motion for reconsideration, against a recent order from the National Telecommunications Commission (NTC) allowing a competitor, Globe subsidiary Innove Communications, from providing telecommunications services in Bonifacio Global City (BGC).

In an interview, PLDT regulatory affairs head Ray Espinosa said the NTC has no authority to set aside the contract entered into in 1998 between Fort Bonifacio Development Corp. (FBDC) and Bonifacio Communications Corp. (BCC) that gave the latter the exclusive right to provide communications infrastructure and services within the BGC.

Another agreement was later entered into between FBDC and PLDT for the acquisition of FBDC’s shares in BCC, which in effect made PLDT the sole provider of telco and related value-added services in the area.

The NTC issued Memorandum Circular 05-05-2002 in 2002 declaring the BGC and other information technology hubs as free zones where any duly enfranchised public telco entities shall be allowed to provide high speed networks and connectivity.

The rift between PLDT and Globe started when Innove last year sought to provide landline and data services as well as Internet connectivity to three buildings within eSquare, an area inside BGC. Globe reclaimed the agreements between FBDC, BCC and PLDT excluded the eSquare area comprising about 20 to 25 hectares from the exclusivity agreement since other carriers were already servicing it at that time.

Globe pointed out the infrastructure and service exclusivities are contrary to law and unconstitutional and public interest requires that redundant infrastructure and competition in service provisioning be allowed within the BGC.

The NTC, in an order issued on Oct. 28, ordered FBDC, BCC and PLDT to comply with the provisions of MC 05-05-2002 and to cease and desist from performing further acts that will prevent Innove from implementing and providing telco services in the BGC.

Espinosa explained that only the courts can set aside the contract legally entered into between FBDC, BCC and PLDT. “We are talking about the rights of a property owner, in this case, FBDC, to decide what to do with its property. If it wants to give PLDT the exclusive right to provide telco services inside is private property, then that is FBDC’s right. The provisions against monopolies and combinations do not apply,” he said.

He also pointed out that while the NTC can implement its own circular, it cannot in the process set aside a private contract which only the courts can do.

He added that Innove in this case is “coming to court with unclean hands” since Globe itself has exclusive right to provide telco services inside many Ayala-owned properties.

PLDT earlier filed a complaint with the Quezon City Regional Trial Court to declare the said NTC circular as null and void and to prevent the telecom regulator from taking cognizance of Globe/Innove’s cease and desist order petition.

Globe earlier filed its opposition and asked the RTC to dismiss PLDT’s complaint. Espinosa said the matter pending with the court will continue even with the NTC order.

Also, PLDT, in a filing with the NTC, has said Globe can provide telco services in the BGC as long as it enters into an interconnection agreement with the former. 

PLDT said its exclusivity in providing telecom services within the BGC does not bar Innove or any other telco from providing redundant services. 

“Our service exclusivity is simply a private marketing arrangement that gives it a preference within the BGC,” PLDT said, adding that Innove can can still come in offer and provide telecom services within the area. 

It also pointed that since the company and BCC were the first to set up valuable installations for telecom services in the BGC, Innove should enter into interconnection and bilateral agreements with BCC and PLDT. 

PLDT emphasized that its offer to Globe is “fair” to protect the company’s investment as a competitor and that of BCC as a private corporation. 

PLDT obtained “exclusivity” in the BGC area when it entered a memorandum of agreement with FBDC in 2002. BCC is 75 percent owned by PLDT and 25 percent by state-run Bases Conversion and Development Authority (BCDA).

In April, however, the Department of Justice ruled that the BGC is a “free zone” and all telcos can operate in the area. The decision came after the NTC sought a legal opinion on PLDT’s exclusivity in the area.

Espinosa, however, noted that even the DOJ opinion did not mention the private contract entered into among FBDC, BCC and PLDT, in effect recognizing the agreement’s validity.