PCTO blindsided by Konektadong Pinoy bicam version

The Philippine Chamber of Telecommunication Operators (PCTO) was basically blindsided by the Bicameral Conference Committee on the Konektadong Pinoy bill that will now either be signed into law by President Marcos before July 11, or if no presidential action is taken – will automatically lapse into law by that date.

The PCTO, however, is understandably alarmed by the seeming bait and switch move of the Bicameral Conference Committee after completely revising and coming out with what the PCTO deems as a version of the Konektadong Pinoy bill that “will create more problems than it solves,” according to two veteran lawyers.

In a briefing for members of the Monday Circle at the Westin Manila Hotel in Ortigas, PCTO president Roy Ibay, vice president of Smart Communications Inc.’s regulatory affairs department and lawyer Ariel Tubayan for Globe Telecom, expressed their alarm and concern over the Bicam version of the Konektadong Pinoy bill that was originally filed as the Open Access and Data Transmission Act in the 19th Congress.

The PCTO is supportive of the original intent of the renamed bill that envisioned a digitally connected Philippines that would give Filipinos fast, affordable and reliable internet. The PCTO had participated in the hearings and deliberation of both the House of Representatives and the Senate and submitted their concerns and input.

According to Ibay and Tubayan, the PCTO had generally agreed with the ratified Senate version of the bill. Unfortunately, following the deliberation of the Bicameral Conference Committee, an almost totally different Bicam version was submitted to Malacañang last month, prompting the telco group to appeal to President Marcos to veto the Bicam version of the bill.

In their letter, the PCTO acknowledged that “the proposed law is well-intentioned, but in its current form it risks creating more problems than it solves. It may weaken investment, introduce unfair rules and compromise the long-term security and sustainability of our digital infrastructure.”

The telco chamber, in their letter to President Marcos, assured that they welcome competition and reforms. However, they point out that competition rules must be the same for all players and provide safeguards for all Filipinos.

The Bicam bill version, the PCTO warned, could undermine national security, disrupt fair competition and discourage investments in the country’s telecommunications sector.

They had assured President Marcos that competition at all levels of the internet ecosystem already exists. The landscape already includes point-to-point (P2P) service providers offering lower-cost alternatives – many of whom rely on infrastructure built by more established companies.

The PCTO pointed out that “small players are often focused on sales, not on building or maintaining infrastructure, nor providing long-term support. In many provinces they plug into the networks built by franchised telcos. But as they sell data access without sharing in the burden for infrastructure investments, many communities are left settling for the packages of ruinous competition and a fragmented, unstable market.”

The PCTO cautioned that the “current infrastructure builders, too, will be disincentivized. Precisely because the current framing creates an uneven playing field. It would create a new category of providers exempt from obligations that existing telcos must meet – franchises, infrastructure and compliance standards – without offering commensurate accountability. This is preferential treatment that any investor would see as a red flag.”

They cited the fact that the Philippines is the only country in the world that requires a legislative franchise to operate as a telecom.

Furthermore, the PCTO explained, the Bicam version of Konektadong Pinoy, while promising technology neutrality, instead “creates a clear bias for satellite-based services – the technology for which is so specialized and prohibitively expensive, that bias is practically a bias for foreign players. Never mind that satellite offers no guaranteed mechanism for lowering costs for consumers. Unlike current franchise holders, these new, largely foreign, operators will not be required to build infrastructure, not be required to service or in fact subsidize underserved rural areas, nor support government in times of national emergency.”

PCTO president Ibay and Globe’s Tubayan warned that even Philippine Offshore Gaming Operators (POGOs) could resume their operations in the country without having to get a license to operate. Similarly, scam and fraud operators could also have access to existing Philippine telco infrastructure.

The current controversy over online gambling would thus be aggravated by the Konektadong Pinoy bill from which POGOs could latch on to and continue to operate without paying the proper taxes to the Philippine government.

The PCTO letter emphasizes that the Konektadong Pinoy bill “doesn’t reform an uneven system. It creates another ‘only in the Philippines’ scenario – one where foreign satellite providers are allowed to offer services directly to communities without going through any locally regulated entity.”

Ibay and Tubayan warned that government regulators would basically be relegated as registrars. “Nowhere else in the world is such a model implemented without safeguards.”

The PCTO assures that it supports reform. However, it is appealing that such reforms “must be designed to strengthen, not weaken, our infrastructure, resilience and sovereignty.”

The telco group wants to work with Congress and all stakeholders to improve the bill.

Another aspect of this controversy that is not being highlighted is the fear of most foreign investors in the Philippines — changing the rules in the middle of the game with a fickle legislative body and a government that fails to preserve and protect its institutions, and leaves foreign investors to seek justice from a legal system whose judicial wheels grind ever so slowly.