Globe asks NTC to revoke Smart licenses, permits

MANILA, Philippines - Globe Telecom subsidiary Innove Communications and Altimax Broadcasting Communications have asked the National Telecommunications Commission (NTC) to divest Smart Communications of all its frequencies and to revoke all its licenses and permits on the ground that the latter, a wholly owned subsidiary of Philippine Long Distance Telephone Co. (PLDT), is a foreign corporation.

In their joint answer to a complaint filed by Smart, Innove and Altimax said that Smart’s complaint should be dismissed for lack of merit. They also sought the redistribution of Smart’s frequencies to qualified Philippine public telecommunications entities

Smart earlier asked the NTC to revoke Altimax’s licenses and frequencies which have been illegally “leased” to Innove.

According to Innove and Altimax, Smart is a foreign corporation, not a Philippine public utility or Philippine national, and is therefore not qualified to engage in telecommunications services in the country owing to it being a 100- percent subsidiary of PLDT, company declared by the Supreme Court in the Gamboa case as a 64-percent foreign owned and controlled corporation. The SC’s decision is still the subject of a motion for reconsideration.

They note that Altimax was granted a provisional authority to install, operate, and maintain a multichannel multipoint distribution system (MMDS) as well as a nationwide direct broadcast service (DBS) by the NTC through its orders both dated Dec. 29, 2000 but denied Smart’s claim that Altimax was granted nationwide frequencies (2596-2644 MHz) within the same orders bestowing its provisional authorities.

They said that no specific frequencies were granted to Altimax at the time said PAs were issued, that in fact, the same orders directed Altimax to apply for the necessary frequency subject to availability, and that nothing in said orders state that the PAs were for the sole purpose of carrying out its MMDS and DBS service.

The respondents also denied claims that Altimax had to commence and complete the proposed MMDS station within the period fixed by the NTC since the order dated Dec. 29, 2000 did not specify what kind of station Altimax must commence and complete within the period provided therein, as well as Smart’s allegation that said commencement and completion were a condition to the grant of Altimax’s PA since the PA was already granted in the same order dated Dec. 29, 2000.

They likewise denied Smart’s claim that Altimax was prohibited from alienating its PA or any rights or privileges therefrom, including the nationwide frequencies assigned to it. “As the very provision in the PA quoted by Smart itself indicates, what Altimax was prohibited from alienating or disposing of was the PA or any rights or privileges acquired thereunder. No nationwide frequencies were as yet granted under the PAs contained in the order dated Dec. 29, 2000... as Altimax had still to apply for the necessary frequency subject to the availability of the same,” Innove and Altimax stressed.

They noted that Altimax was only supposed to commence the construction/installation of its station and finish the same within six months thereafter, and not to roll out its MMDS service within the same period, as Smart mistakingly claims.

Innove and Altimax also denied allegations that Altimax’s PA for MMDS was extended despite a clear finding that it failed to comply with the condition of its PA to construct/install the MMDS station insofar as it insinuates that the extension was improper and that the NTC knowingly granted an improper extension. They cited a recommendation of the NTC’s Broadcast Service Division for a three-year extension on the grounds that Altimax had been issued a permit to purchase broadcast equipment and that it was renewed and the applicant failed to construct/install due to fortuitous events.

They likewise said that all these issues have been mooted by NTC’s issuance of its orders dated Aug. 14, 2009 and June 23, 2009 extending Altimax PAs for DBS and MMDS services, respectively until June 29, 2012 which granted the reconsiderations based on the entry of a new investor in Bethlehem Holdings Inc. and alliance with the Globe Telecom Group of Companies that will augur well for the rollout of the MMDS service of Altimax.

The respondents also took exception to Smart’s claim that notwithstanding the prohibition, Altimax entered into a memorandum of agreement with Innove for the lease of the former’s frequencies. “For one, there were no frequencies granted to Altimax in either its congressional franchise or its PA and so there could not have possibly been any prohibition against leasing the same...For another, Altimax and Innove did not actually enter into any frequency lease agreement, but into a simple co-use agreement... Frequency co-sharing or co-use is not prohibited but is in fact encouraged and legally mandated,” they said.