THE FINANCE department has warned against rushing into a decision to select the third major entrant to the telecommunications industry, or “third player,” before the proper regulatory groundwork is laid.
“A better regulatory environment I think is the priority rather than having a third telco. The third telco is just a means to an end,” Finance Secretary Carlos G. Dominguez III said during the Kapihan sa Manila Bay forum on Wednesday.
“What the public is getting is inferior to what the public is getting elsewhere. That is the job of the regulators. Are we asking the right questions or are we rushing into something that may not help the long run because the regulatory environment is not sufficient?”
He said the ultimate objective is “better, more affordable, faster… more access to communications. That is the goal.”
“If you have a third telco and the regulation is ineffective, what’s the point,” he added.
The Department of Information and Communications Technology (DICT) has said that a third player will be selected before the end of the year, in time to start operations by 2019.
The Department of Finance (DoF) lost a standoff with the DICT after earlier insisting on largely financial criteria as the main basis for picking the third player. After industry consultations, the DICT found that stakeholders preferred to select on the basis of Highest Committed Level of Service (HCLoS), a scheme that assigns weights and awards points based on the third player’s promised investment levels, population coverage, and speeds achieved over a five-year period.
Regulatory concerns he cited include access to the government’s “dark fiber” network, the availability of frequency, a common tower policy, and interconnection rates.
Mr. Dominguez also noted an OpenSignal survey that found that the Philippines had the lowest 4G availability in East Asia.
“What does that tell you? It tells me that the regulation of the telco industry, for whatever reason, is not up to par with the region. Either it’s the law or the regulators. So maybe that is one of the issues we have to assess first,” he said.
“Are you going to force the third telco to build its own towers or are you going to make it an even playing field where everybody has towers, and must be available to everybody else. I’m not saying they should be free. Rent them out, make them available,” Mr. Dominguez said.
“Is it possible for the third telco to build its own fiber optics network? Will the frequencies available to the third telco be sufficient for them to compete on a fair basis?” he added.
The latest selection criteria, laid out in a draft Terms of Reference (ToR), requires the prospective third player to commit to at least five Megabits per second of Internet speed and P40 billion worth of capital expenditure over five years.
The DICT is set to conduct another public consultation on the draft ToR next week, to be followed by a meeting of the selection oversight committee, which is composed of representatives from the DICT, DoF, the National Telecommunications Commission, the Office of the Executive Secretary and the National Security Adviser. — Elijah Joseph C. Tubayan