Telco industry raises howl

A recent decision by the Court of Appeals that reversed a ruling by the National Telecommunications Commission denying Lopez-owned Bayan Telecommunications application for a third-generation mobile communications technology or 3G frequency and license has created quite a stir among telco players for its perceived far-reaching implications and possible adverse effects on the local telecommunications industry.

For one, the CA not only said that the formula which NTC used in determining which telco deserves to get a 3G bandwidth and license is illegal and null and void for lack of due process, it also ordered the NTC to grant BayanTel the fifth and last 3G slot when it prevented the commission from awarding the last 3G frequency other than to BayanTel.

And in concluding that the formula used by NTC is invalid, the CA is also saying in effect that the grant of 3G frequencies to Smart Communications, Globe Telecom, Digital Telecommunications, and Connectivity Unlimited Resources Enterprise (CURE) is likewise invalid and should be set aside. This is in line with the legal doctrine that when an act is null and void, no legal right whatsoever could be derived from it.

One of the reasons why BayanTel got a low rating based on the NTC formula is because of its failure to roll out a cellular mobile telephone system (CMTS) network. But the CA said that NTC should have excused BayanTel from the rollout because of a number of legal reasons that prevented it from complying with its CMTS commitments, including the court injunction issued in the case of Republic vs. Express Telecommunications, and the corporate rehabilitation case instituted by Bayantel’s creditors.

According to the appellate court, all these legal reasons constitute as fortuitous events that relieved BayanTel from its CMTS obligations.

Observers however noted that the CA should have stopped in saying that the NTC formula did not meet the legal requirements for it to be effective. Instead, it continued by making its own computation using the same formula assuming it is valid and concluding that BayanTel should not have been disqualified and should have been granted the fifth 3G slot. In fact, the CA noted that assuming that NTC’s rating system was validly applied, BayanTel could not possibly be outranked by CURE, now a subsidiary of Smart Communications.

In his dissenting opinion on the CA’s grant of BayanTel’s motion for reconsideration, Associate Justice Normandie Pizzaro noted that in changing the scores given to BayanTel, “the ponencia veered off, without rhyme or reason, from the generally accepted principle that findings of facts of administrative agencies over matters falling within their jurisdiction should be accorded great respect, if not finality, by the courts.”

Pizzaro said the amended CA decision in effect assigned to Bayantel the 5th remaining 3G frequency notwithstanding the undeniable fact that Multi-Media Telephony Inc. also ranked 5th similar to that of BayanTel.

He added that permanently enjoining the NTC from awarding the last 3G frequency to any applicant other than Bayantel violates the right to due process of the four 3G frequency grantees (Smart, Globe, Digitel, and CURE) , the NTC, as well as that of all telecommunications agencies that may wish to apply therefore, since they were not made party-respondents to the case.

He warned that the impact of the amended decision is far-reaching and would create economic as well as legal turmoil and pandemonium, considering that the assignment of 3G frequencies having been made to Smart, Globe, Digitel and CURE in 2005, they have already put in place billions of pesos worth of telecommunications infrastructure, not to mention the untold number of business transactions, here and worldwide, that have been contracted and made interdependent on the four frequencies assigned.    

But more importantly, what the CA seems to have forgotten is the fact that other applicants for the last 3G license, including Next Mobile Inc. (NMI) and Multi-Media still have cases pending with the Supreme Court, also claiming to be deserving of the last 3G slot. NMI in its petition sought to reverse the NTC’s decision disqualifying it from the 3G award on the basis of alleged unpaid spectrum users fees. But NMI insisted that other applicants also have unpaid fees as well.  

The CA decision in effect made all these cases moot and academic and preempted the SC’s ruling on the matter. In fact, in one case, the CA granted Multi-Media’s petition and restrained the NTC from disposing of the last 3G slot to any party, which obviously is in conflict with the decision of the CA division of five that granted BayanTel’s petition.

And as these companies (including NMI, Multi-Media, and AZ Communications) that have filed cases with the SC are not party-respondents to the BayanTel case with the CA, the binding effect of the decision on them has become highly questionable. As pointed out by Pizzaro, these companies have been denied due process, just like the four companies that have been granted 3G frequencies, as well as other telcos that may be interested in the last 3G slot.

All-out war waged

Sugar producers have waged an all-out war against the escalating and unabated incidences of sugar smuggling into the country.

They have denounced government authorities for failure to act on this illegal practice, which is threatening to destroy the livelihood of millions of sugar farmers, their dependents, and all others who depend on the industry directly or indirectly.

Leading the fight is the Confederation of Sugar Producers’ Associations (Confed), the largest and most vocal organization of sugarcane farmers in the country, that warned that if the smuggling of sugar is left unabated, it would not be long before our sugar industry would be part of history.

Especially now that sugar milling season is still at its peak, bringing in cheap sugar from abroad without paying the proper duties is depressing domestic prices to the farmers to below cost of production. Our farmers won’t even be able to recoup their investment, which we are pretty sure they were able to raise at the expense of their children going to school or food on the table.

By government’s failure to act on sugar smuggling, it is in effect subsidizing foreign farmers at the expense of our own and foregoing much-needed revenues that could have been raised from taxes and duties.

Rampant sugar smuggling and smuggled refined sugar have reportedly been unloaded in various parts of the country, including Metro Manila, Batangas, La Union, Tarlac, Tuguegarao, Davao, and General Santos City. In fact, the smuggled sugar are still in their original packaging sacks that say they originally came from Thailand.

In January, Malaysian authorities reportedly intercepted a vessel bound for the Philippines loaded with large quantity of sugar. It is believed that the smuggled sugar is now in the country and those apprehended in Malaysia came from the same source.

Confed national president Federico Locsin III called on government authorities to promptly apprehend, prosecute and send to jail these sugar smugglers. He emphasized that these criminals are not only depriving government of much-needed revenues which would have been used to boost our economy, they are also killing an industry on which millions of Filipinos are dependent for livelihood.

He also called on all stakeholders in the sugar industry to wage an all-out-war against sugar smuggling and to be vigilant at all times and report to authorities any suspicious shipment of movement of sugar.

Thousands of sugar plantation workers and planters and their families from nearby sugarcane producing provinces are reportedly mobilizing and organizing protest actions to bring to the attention of the authorities, including those in Malacanang, the apparent inaction of government agencies in putting an immediate stop to sugar smuggling.

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