Bayan Muna Rep. Teddy Casiño one of the main oppositors to the merger of the Digital Telecommunications Phils., Inc. to Philippine Long Distance Telephone Co. docketed as NTC Case No. 2011-072. Reiterated his stand on the issue and laid out his 3 main reasons for opposing it.

Casiño is also author of a House resolution calling for an investigation on the deal.
The three points are as follows:

One, the share and swap deal, merger, or whatever you may want to call it between PLDT and Digitel, creates or tends to create, a monopoly and therefore is unconstitutional. Section 19, Art. XII of the 1987 Constitution states: “The State shall regulate or prohibit monopolies when the public interest so requires. No combinations in restraint of trade or unfair competition shall be allowed.”

At present, PLDT is the biggest and most powerful telecommunications company in the country. Its owners also own and control Meralco, Maynilad, Channel 5, the North Luzon Expressway, and a chain of high-end hospitals, among others. Pagmamay-ari po ng PLDT ang Smart Communications, Red Mobile, Piltel Talk ‘n Text at iba pa.

Kontrolado nito ang 58% ng merkado. Kapag pinayagan itong bilhin ang Digitel-Sun Cellular, mapapasakamay na ng PLDT ang 71% ng buong telecommunications market.

May karanasan na tayo sa monopolyo sa telecommunications industry. Noong araw, kontrolado rin ng PLDT ang telekomunikasyon sa Pilipinas. Ang resulta, mataas na presyo at masamang serbisyo. Ayaw na nating bumalik sa ganitong nakaraan.

Under this deal, nothing will stop PLDT from limiting, discontinuing or even disrupting Sun Cellular’s unlimited text and call plans, even if they say that they will not. And with Sun out of the way, nothing will stop PLDT-owned Smart Communications from conniving with Globe Telecom in raising rates the way they always wanted it to happen. There will be nothing to stop PLDT from using its enormous market power to strangle the competition or bend them to its will.

Besides the Supreme Court has earlier ruled that the ownership of PLDT is unconstitutional because majority of its shares are owned by a foreign corporation.

Also the thrust of government policy since the mid-1990s has been to break up PLDT’s monopoly, develop genuine competition and broaden the market. The deal is a reversal of that policy of de-monopolization enshrined in the Constitution. It is a threat to our consumers and our people.

My second point is the PLDT-Digitel merger violates the franchises given by Congress to Digitel Telecommunications Phils. Inc. and Digitel Mobile Phils, Inc. – franchises that were precisely designed to prevent the emergence of monopolies.

Under Sec. 15 of Digitel’s franchise, (RA 7678) which was granted in 1994, it says Digitel “…shall not lease, transfer, grant the usufruct of, sell nor assign this franchise or the rights and privileges acquired thereunder to any person, firm, company, corporation or other commercial or legal entity, nor merge with any other corporation or entity without the prior approval of the Congress of the Philippines. Neither shall the controlling interest of the grantee be transferred, whether as a whole or in parts and whether simultaneously or contemporaneously, to any such person, firm, company, corporation or entity without the prior approval of the Congress of the Philippines.”
Essentially the same provision can be found under Sec. 16 of the franchise granted by Congress in 2002 to Digitel Mobile Philippines, Inc. (RA 9180).

Why is prior congressional approval required? Because the franchise is a mere privilege granted by Congress, and as such Congress has the duty to ensure that public interest is adequately protected. How is public interest protected in this case? One, by ensuring that the sale is legal and aboveboard; two, that the franchise does not fall in the hands of fly-by-night operators; and three, that the sale or transfer does not create the very monster that we want slain – a monopoly with overwhelming market power.

Proponents of the deal say congressional approval is no longer needed by virtue of the 1995 Public Telecommunications Policy Act (RA 7925), which ensures equality of treatment for franchise holders. Ang argumento nila, inalis na sa ibang telecom franchise ang requirement na ito, tulad ng sa franchise ng RC Yulo (1997), RCPI at Sear Telecommunications (1998). Sa prinsipyo daw ng equal protection, dapat sila din pwedeng payagang magbenta kahit walang congressional approval.

It is crucial to note that Digitel Mobile’s franchise was granted in 2002, or four years after RC Yulo, RCPI and Sear. Kung talaga intensyon ng Kongreso na i-waive ang prior approval sa pagbenta ng Digitel, katulad ng ginawa sa RC Yulo, RCPI at Sear, eh bakit inilagay pa ito sa franchise ng Digitel? Bakit hindi na lang pinattern sa franchise ng RC Yulo, RCPI at Sear? Furthermore, Mr. Chairman, in other franchises, prior congressional approval is waived only if the surviving entity is the franchise holder. In this case, nilulusaw ang franchise holder at ang Digitel ay magiging minority shareholder na lang ng PLDT.

Just to stress the point, prior congressional approval is explicitly contained in the franchise not only of Digitel Mobile but of all the big players – Digitel Telecommunications, PLDT, Smart Communications, Bayantel and Globe. Why is this so?

The reason, I think, is obvious. There is a substantial distinction between small players like RC Yulo, RCPI and Sear and the big boys like PLDT, Digitel, Globe and Bayantel. What is this distinction? Size. It is the wisdom of Congress that when you eat small fry, you don’t need prior approval. But when you eat the big fish, you need prior approval.

I don’t think the framers of RA 7925 or other franchises that waived congressional approval ever imagined a situation where PLDT or any entity would once again control 71% of the market. I don’t think they contemplated allowing, without their consent, a deal that would reverse the policy of de-monopolization in the telecommunications industry. This is why congressional approval is explicitly required in the franchises of the big players – Digitel, Digitel Mobile, PLDT, Smart Communications, Globe Telecom and Bayantel. This is our only safeguard against the re-emergence of a monopoly in the industry.

My third point is that the NTC should be sanctioned for its approval of the deal, while the SEC should be cautioned against rushing approval of the PLDT-Digitel buyout. The approval was done in bad faith because Congress is on recess. Kung magkabulilyaso sa deal na ito sa kahuli-hulihan, ang masisisi ay ang Kongreso dahil dito nanggaling ang prankisa ng PLDT at Digitel. Hindi tayo dapat pumayag na basta-basta na lang itong lalabagin at manunumbalik ang monopoloyo sa industriya ng telekomunikasyon.
“Dapat sabihan ang NTC at SEC na sundin ang nasa batas – kailangang dumaan ito sa isang transparent na proseso, may public hearing, at dapat dumaan din sa Kongreso para mabusisi natin kung talagang makikinabang dito ang mga konsyumer at ang interes ng publiko,” Casiño ended. # # #

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