NEDA move to scrap telcos’ legislative franchises slammed

The National Economic and Development Authority. INQUIRER FILE PHOTO

House Minority Leader Marcelino Libanan of the 4Ps party list group on Sunday dismissed a National Economic and Development Authority (Neda) recommendation to scrap the required congressional franchise grant for telecommunications (telco) firms.

In a statement, Libanan maintained that Congress’ power to grant franchises had no link to discouraging the entry of new small telcos in the country.

“There is absolutely no way that Congress will give up its power to closely supervise the telecommunications sector, which is heavily imbued with public interest,” said the lawmaker.

“We are determined to exercise our oversight powers to ensure the supply of dependable and affordable telecommunications services, including internet services, to the public at all times,” he said, adding that Philippine radio airwaves belong to the State and to the public.

Neda issued on Feb. 7 a policy note on Open Access in Data Transmission which stated: “The current legislative franchise requirement for telecommunications service providers presents a major barrier to market entry, hindering innovation and competition. By removing this requirement and transitioning to a general authorization regime, the sector can attract more investment and encourage new entrants.”

Stimulate growth

The policy note explained that the move would “stimulate growth and development in the telecommunications industry.” Neda explained the need to secure licenses from both Congress and the National Telecommunications Commission (NTC) “introduces an increased administrative and financial burden, particularly affecting new and smaller market entrants” and claimed it “could have a disproportionate negative impact on these smaller players, potentially influencing market entry dynamics.”

Telecommunications companies need to obtain a franchise from Congress, which also has the power to amend, extend or revoke the franchises it grants.

Libanan pointed out that Congress and the NTC merely assign frequencies to telcos subject to user fees.

The lawmaker pointed out that Congress has granted dozens of franchises to new telecommunications firms over the years.

“Instead of raising more capital to grow their businesses, many of these telecommunications firms merely sold themselves,” he said.

READ: Scrap Congressional franchise requirement for telcos–Neda

He cited other small telcos acquired by the Philippine Long Distance Telephone Co. (PLDT), including Digital Telecommunications Philippines Inc. of the Gokongwei family and Connectivity Unlimited Resource Enterprise Inc. of the late businessman Roberto Ongpin. Globe, on the other hand, acquired Bayan Telecommunications Inc. or Bayantel and Isla Communications Inc. or Islacom.

He pointed out that San Miguel Corp. also ended up selling in 2016 its telecommunications assets under Vega Telecom Incto the PLDT and Globe. INQ