NTC elevates 3G award row with Bayan to Supreme Court

MANILA, Philippines - The National Telecommunications Commission has asked the Supreme Court to set aside a decision of the Court of Appeals preventing the telecom regulator from bidding the last remaining third generation mobile communications (3G) technology.

In its petition, the NTC asserted the legality and validity of the point system it used in awarding 3G licenses in 2006 to Smart Communications, Globe Telecom, Digital Telecommunications Philippines, and Connectivity Unlimited Resources Enterprise (CURE).

“The NTC validly exercised its judicially-recognized prerogative to interpret (its rules), considering that the criteria against which the qualifications of the applicants were judged were founded on reasonable standards previously made known to all concerned,” the NTC said.

It added that the appellate court committed grave error when it awarded Lopez-owned Bayan Telecommunications a 3G frequency band since Bayan has been conclusively shown to be unqualified for a 3G frequency assignment.

The NTC also said that CA’s decision to nullify the commission’s evaluation process that disqualified Bayan in the 2005 allocation will consequently result to invalidation of the entire 3G awarding.

“The invalidation of the 30-point system and 20-point qualification threshold will necessarily result to a vacation of the entire qualification process conducted by (the NTC) and the consequent recall of the frequency assignments of the successful applicants,” the NTC warned.

The regulator explained that the point system used for Bayan was the same system used to award 3G frequencies to the four qualified telecom firms. In its decision granting Bayan’s petition for the reversal of NTC’s decision to disqualify it from the award of a 3G slot, the CA not only said 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 Bayan the fifth and last 3G slot.

One of the reasons why Bayan 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 Bayan 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 Express Telecommunications, and the corporate rehabilitation case instituted by Bayan’s creditors.

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

The CA noted that assuming that NTC’s rating system was validly applied, Bayan could not possibly be outranked by CURE, now a subsidiary of Smart Communications.

In its decision, it said the regulator has committed grave error in setting aside Bayan’s right to due process when it adopted the 30-point rating system and the 20-point threshold without the new rules being published first.

Observers noted that the CA decision not only disregarded the petitions still pending with the SC filed by at least three companies, namely Next Mobile Inc., Multi Media Telephony Inc. and AZ Communications, that questioned their disqualification from the 2005 award, but also an earlier CA decision granting Multi Media’s application to restrain the NTC from awarding the last 3G slot.

Last month, the NTC issued a memorandum circular that calls for the disposition of the last 3G frequency either through an allocation process or through bidding if there is more than one applicant. The minimum bid price has been set at P65 million.

However, the implementation of the circular was stopped after the CA issued a permanent injunction against the NTC perpetually enjoining it from resolving any application for and from awarding the remaining 3G frequency bandwidth.