The National Economic and Development Authority (NEDA) supports the abolition of outdated requirement of legislative franchise for telecom companies to attract more players and further improve the broadband service in the country.
“The current legislative franchise requirement for telecommunications service providers presents a major barrier to market entry, hindering innovation and competition,” NEDA said in a statement.
“By removing this requirement and transitioning to a general authorization regime, the sector can attract more investment and encourage new entrants,” it said.
The plan, according to NEDA, is in line with global best practices and is expected to stimulate growth and development in the telecommunications industry.
“The Philippines is the only country in the world, and the only one in the ASEAN region that requires a legislative franchise for the set-up of a telecommunications entity or a data transmission entity,” NEDA said.
“Securing a legislative franchise is costly and creates uncertainty for businesses which can deter investments,” it said.
NEDA said regulators in other countries merely grant licenses as a matter of course and the payment of a modest licensing fee, or perhaps based on a technical evaluation of network and business plans.
The NEDA is supporting the passage of the Open Access in Data Transmission Bill to improve the internet service in the country.
The bill aims to establish an open access policy, create a comprehensive spectrum management framework and revamp the franchise and licensing regime for potential market players.
It promotes more competition in the telecommunications sector by removing the requirement of a legislative franchise for players seeking to build their networks. Another proposed reform is to rationalize access and use of the country’s scarce spectrum resources.
The reforms are crucial to accelerating digitalization and creating a dynamic innovation ecosystem as key elements of the country’s transformation agenda, as outlined in the Philippine Development Plan (PDP) 2023-2028, it said.
The measure forms part of the common legislative agenda (CLA) of the Legislative-Executive Development Advisory Council (LEDAC) chaired by President Ferdinand Marcos Jr.