"He will not survive the competition."
"He will not survive the competition."
President Duterte’s adviser for information and communication technology and economic affairs Ramon P. Jacinto must have known that his shared-cell-towers proposal, when announced, would put him on a collision course with the two existing telecommunications companies—Smart Telecommunications Inc. and Globe Telecoms—and the PCC (Philippine Competition Commission).
Mr. Jacinto—RJ to his legion of music-loving admirers—is proposing (1) that the telecommunication industry players (telcos) be prohibited from building cell towers, (2) that the building of cell towers be restricted to two companies selected by DICT (Department of Information and Communication Technology), (3) that the soon-to-be-three telcos share the estimated 25,000 cell towers that the two selected companies would build and (4) that the two companies enjoy a duopolistic status in the next four years.
That Presidential adviser Jacinto is on a collision course with Globe Telecoms and Smart Telecommunications is obvious from the foregoing citation of the terms of Mr. Jacinto’s proposal. These entities, which have been the mainstays of this country’s telecom industry for decades and have Congressional franchises, will be either restricted from doing things or forced to do things. That is the kind of language on which lawyers thrive: it is the language of violation of rights—in this case, violation of contract rights. A franchise is a contract between the government and a citizen.
The franchises of Smart and Globe allow them to perform any and every legal act that will be beneficial to their operations. There is nothing in their franchises that compels them to do anything against their corporate will. They may put up their own cell towers whenever and wherever they please; nothing in their franchises requires them to share facilities with other entities, least of all their competitors.
DICT can expect lawsuits from Globe and Smart—and maybe newcomer Mislatel?—the moment it makes a move to effectuate Mr. RJ’s proposal.
Additionally, there is the high likelihood of a collision with PCC. Competition is what PCC is all about; the establishment and maintenance of competition is PCC’s mission in life. Words like ‘limit’, ‘restrict’, ‘ban’, and ‘prohibit’ are anathema to PCC. The ones it favors are words like ‘open’, ‘fair’, ‘free’ and ‘unlimited’.
Verily, Mr. Jacinto is on a collision course with PCC. As between an agency that was created specifically to deal with non-competitiveness and an agency that lays down competition-restricting agency that lays down competition-restricting regulations, which is likely to be favored by the courts? The answer is—to borrow one of Mr. RJ’s favorite phrases—a no-brainer.
Yes, the Philippine telecommunications industry needs a lot of additional cell towers, and, yes, Smart and Globe should have done much more in this regard than they have. But the thing for DICT to not do is to take legal and competition-related shortcuts.
Presidential adviser RJ has embarked on one big collision course with the telcos and with PCC. RJ will not survive the collision.