AN academic discussion of a relatively obscure trade agreement last week turned into a springboard for exposing the anti-competitive practices of the telecommunications industry and for highlighting the urgent need for reforms.
The Philippines isn’t a member yet of the Trans-Pacific Partnership (TPP) among 12 Pacific Rim countries (Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the United States and Vietnam), but it has expressed an interest in joining it, participants at the TPP Seminar Series on Competition Policy and Telecommunications were told.
The seminar series, organized by the Ateneo Center for Economic Research and Development (ACERD) and Ateneo School of Government (ASoG), focused on what the Philippines needs to do to comply with some 30 chapters of the agreement that spell out the legal and regulatory requirements in various areas, including trade and trade-related issues, investment, government procurement, labor, the environment, intellectual property—and competition policy and telecommunications, the focus of last week’s seminar.
Two researchers from the Philippine Competition Commission, Krystal Lyn Uy and Isabela Villamil, spoke on possible gaps between Philippine law and the TPP requirements, particularly in competition policy and telecommunications.
In particular, Uy said the passage of Republic Act 10667 of the Philippine Competition Act, effectively met all the regulatory requirements under the TPP.
Villamil, on the other hand, said gaps remained between the telecommunications environment and the TPP requirements.
While most of the TPP requirements for the telecommunications industry are ostensibly met by existing laws and regulations, Villamil said, the enforcement of these has been poor, at best, and non-existent in some cases.
As an example, she cited a National Telecommunications Commission (NTC) circular on the unbundling of network elements issued in the year 2000 that has not been implemented 16 years later.
Another area where local carriers fall short is the TPP requirement of number portability, which refers to a consumer’s ability to retain his or her phone number even when changing service providers. Number portability is considered important because it makes it easier for consumers to switch service providers
Under the TPP, interconnection agreements between service providers must be transparent; in the Philippines, these are undisclosed and are negotiated privately between companies, with no regulation from the government.
The biggest gap in telecommunications, however, was the constitutional restriction limiting foreign ownership of utilities to a maximum of 40 percent, Villamil said. This contradicted the TPP requirement that all parties be given equal market access, she noted.
While Uy and Villamil were cautious not to discuss the PLDT-Globe buyout of the SMC telecommunications assets thaat the PCC says it will review for anti-competitive behavior, it was clear from the open forum that the issue was foremost in the minds of many who were in the audience.
In particular, concerns were once again raised about how the buyout would reinforce the PLDT-Globe duopoly by giving them control of the 700MHz spectrum and making it difficult for new competitors to enter the market. This anti-competitive behavior, in turn, does not bode well for consumers, who have had to suffer the double whammy of high prices and poor service under the PLDT-Globe duopoly.
There also seemed to be a fair amount of scorn in the room for the NTC and its commissioner, who has served three Presidents, the telecommunications industry—but never the consumers since he was first appointed in 2009.
One participant observed that it was about time that the government, particularly the NTC, enunciate what the country’s spectrum management policy, given that most countries allocate scarce radio frequencies competitively to promote efficient use and gain a net social benefit.
Among those who had been in the telecommunications industry during the post-PLDT monopoly years, there seemed to be a deep distrust about enabling foreign companies to own more than 40 percent of public utilities.
Finally, one seminar participant questioned the wisdom of tailoring our laws and regulations to a foreign trade agreement that we did not draft, and said perhaps we should not even be joining the TPP after all.
There is more to this than meets the eye, as we’ll se next week when we examine what the TPP could do to our digital rights, transparency, intellectual property restrictions and even free speech. Chin Wong
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