Malice

There has to be some malice among those responsible for the rumor that Smart Communications would be shut down by March for want of a franchise. The telecommunications company enjoys the patronage of 60 percent of all mobile phone users in the country.

Smart’s 25-year franchise was issued in 1992 and is due for another 25-year extension in a few months. Those peddling the irresponsible rumor claimed the franchise renewal was in jeopardy either because the company failed to meet the requirement for publicly listed shares or because the corporation had fallen out of favor with the new administration. Neither is true.

What is true is that the committee on legislative franchises of the House of Representatives, after extensive deliberations through the month of November, agreed that Smart already complied with the public ownership provision under its franchise because its parent firm PLDT is a listed company at the PSE. For this reason, Smart’s revenues and profits are consolidated with those of PLDT in regular disclosures to the stock exchange.

The consolidated measure renewing Smart’s franchise, HB No. 4637, was passed on first reading last December 7. The week after, shortly before the Christmas break, the bill was passed on second reading. It will be put before the plenary for third and final reading when the House resumes its sessions after the holidays.

After the bill passes third reading at the House, it will be transmitted to the Senate. On the matter of franchises, according to the rules of both chambers, Senate action is almost ministerial.

Our Congress has shown capacity to act swiftly when it needs to.

In the case of the Seafarer’s Protection Act (RA10706), the Senate version was approved on September 21, 2015 and was adopted as an amendment to the counterpart House bill on September 30, 2015. Former President Benigno Aquino signed it into law on November 30, 2015.

The Anti-Distracted Driving Act (RA10913) moved through the legislative mill even more quickly. It was passed last May 30 by the Senate and then approved by the House last June 30. In this case, the congressmen simply adopted the Senate bill.

The second element peddled by the rumormongers, the one about the company falling out of graces with the Duterte administration, is entirely baseless. The speculation is, in fact, a disservice to the administration.

To begin with, the President leaves legislative matters to the legislature. There is no reason for the President to petulantly pick on the telecommunications company. Shutting down a service provider that caters to more than half of mobile phone users will deal the economy a debilitating blow. Doing so will blind not only half of our phone users but disable nearly our entire business process outsourcing industry, the second biggest source of foreign exchange after migrant worker remittances.

President Duterte is simply not the sort of person who will imperiously scuttle half of our already scarce digital infrastructure out of whim. At any rate, doing so will take down the nation’s economy and will be ultimately self-defeating. The rumormongers are doing the President an injustice by peddling baseless scenarios.

Even if we assume the worst-case scenario – where the franchise renewal remains pending in the Congress when the March expiry arrives – nothing in the law requires Smart to immediately shut down and terminate its services.  Smart is, after all, a public utility with existing services nationwide. It is not to the public’s interest for it to abruptly terminate operations. Doing so will cause public panic and scuttle entire sections of the national economy.

Then there is the last resort if things get really bad with the process of franchise renewal: Smart may simply transfer its mobile telecommunications business to Digitel Mobile Services, Inc. Digitel is a duly enfranchised telecommunications company acquired by PLDT, Smart’s parent company.

But it is unlikely that things will go that far. Suffice it to say that the mobile communications company is in no danger of abruptly shutting down its services.

To the contrary, the company is investing billions to lay down more fiber-optic cables to improve speed and efficiency. It is moving as fast as it can to quickly deploy the bandwidth recently acquired from San Miguel Corporation and modernizing its facilities to offer 5G LTE Advanced (LTE-A) services to all its 25,000 cellular and broadband stations across the country.

The 700 megahertz band now jointly used by Smart and Globe is capable of delivering speeds of up to 100 megabits per second (mbps).  When fully deployed, this will bring our voice and data infrastructure to par with the best in the world.

The hybrid fiber technology PLDT will be laying down over the next three years is capable of delivering “super-fast” broadband service with data speeds of up to 600 to 700 mbps per user through regular phone lines. This will be a boon to our burgeoning BPO sector.

All the facts bring up the question: What sinister motive could be behind the baseless claim that Smart will close down in March?

One could imagine the worst: these rumormongers want to sabotage our economic performance or are at least trying hard to imagine a situation where the current high growth will slow to a crawl. In which case, they want the nation to fail.

There is probably a more mundane reason for the baseless speculation: stock manipulation. The speculators hope the PLDT’s stocks will fall as a result of the rumor with the perfectly normal intent of buying low and then selling high. In which case, it all boils down to greed.