NTC asserts legality of planned bidding for last 3G frequency

MANILA, Philippines - The National Telecommunications Commission (NTC) asserted yesterday the legality and urgency of its planned award of the last remaining 3G radio band, saying this move would benefit Filipino consumers by way of better services and cheaper rates from competing telecommunications companies.

NTC deputy commissioner Douglas Mallillin said the commission had sought the opinion of the Office of the Solicitor General (OSG) regarding the proceedings it planned to undertake to auction the last remaining 3G frequency band and issue a memorandum circular (MC) to that effect, which has been dormant for the past five years.

In response, the OSG said the NTC, in the exercise of its administrative discretion, is well within its authority to adopt and issue the proposed memorandum circular. Under the MC, the NTC will bid out the last 3G frequency at a minimum bid price of P65 million to qualified public telecommunications entities.

Mallillin cited the need to assign the last frequency as soon as possible as the government has been losing P65 million a year on spectrum user’s fee, or P325 million in foregone revenues over the past five years. 

“The frequency’s five long years of dormancy is just way too wasteful for such a scarce resource,” he said. 

Mallillin added that this planned auction would ultimately benefit the Filipino consumer through the services that can be offered with the use of another frequency. 

“It will also result in better service and more competitive rates as service providers try to outdo each other to grab market share,” he added.

In January 2006, the NTC awarded four of the five 3G frequencies after evaluating the applicants’ legal, financial and technical qualifications under the standards set in MC 07-08-2005, using a point system to quantify it.

Only Smart Communications, Globe Telecom, Digital Telecommunications Phils. and Connectivity Unlimited Resources Enterprises (CURE) were found to be compliant with the qualifications and requirements and were assigned 3G frequencies. 

With still one frequency band left unassigned, Bayan Telecommunications and the other non-qualifying applicants, namely Multi-Media Telecom, AZ Communications and Next Mobile, filed motions for reconsideration, claiming to be qualified for the assignment of the last frequency.

The NTC subsequently denied these motions, pointing out that it can no longer use the MC to award the last frequency as it was intended as a one-time evaluation of the applications for the five available frequencies, after which it had served its purpose and was no longer in effect on the aspect of evaluation.

“It was never intended as a continuing process for making repeated evaluations of applications, much less those that the commission had already determined to be non-qualified,” the NTC said.

The denial of these motions led to the filing of various petitions with the Court of Appeals but all remain pending. Currently, there is no effective restraining order against the NTC.

The NTC had also asked the OSG’s opinion in view of the pending cases filed by non-qualifying applicants before the Court of Appeals who failed to get four of the five 3G frequencies awarded by the NTC in 2005.

Pointing out that the NTC regulates a dynamic industry where changes and technological developments and advances are taking place at a previously unheard of pace, the OSG said: “We cannot subscribe to the idea that the development of the telecommunications sector can be indefinitely held hostage to protracted litigation.”

The OSG noted that MC 07-08-2005, which outlined the procedure for the previous awarding of 3G frequencies, is no longer in effect and that the frequency, which was not assigned to any applicant, is no longer subject to the allocation under the old MC.

With the need to award the last 3G frequency, and since the old MC can no longer be used, the NTC published MC 01-03-2010 on March 13, 2010, which made the application process more stringent and included provisions that will ensure the capability of the applicant to roll-out a 3G network and prevent competition stifling by frequency hoarding and speculation.