SOLOMONIC NOT SOMORONIC SOLUTION

By Philip M. Lustre jr.

CONGRESSIONAL leaders knew it was patently wrong. Rodrigo Duterte could not expropriate the assets of the two major telcos – PLDT Group and Globe Telecom – and give them to the favored third telecom – Dito Telecommunity.

While the cash register kept on ringing in their ears over the possibility of bigger takes from the two telcos, the more cerebral congressional leaders have understood it would be untenable, or even suicidal, for Congress to legislate the demise of two telcos to favor an upstart, which has yet to establish a track record in the local market.

In brief, Congress could not enact an expropriation law to take away the assets of the two telcos and give them to Dito Tel. A robust and competitive telecommunications industry does not operate on the basis of presidential rants that when the two telcos could not provide what Duterte perceives as sufficient service, he could take away their assets and give them to another telecommunications player.

To enable Duterte to escape from the sticky and embarrassing situation, congressional leaders have added a provision in the proposed Bayanihan To Heal as One Act – Part 2, suspending for three years the submission of most permits needed to build new cell towers nationwide to improve telecommunications services. According to Senate Minority Leader Franklin Drilon between 29 to 35 permit and documentary requirements have to be issued by local government units (LGUs) before a telco could get a permit to build a cell tower.

The relaxation of the regulatory environment under the Bayanihan Act -2 opens the burgeoning cell tower construction business to open competition, enabling private non-telco firms to join and build cell towers for rent to telcos. It gives the third telco the chance to catch with the rollout of its infrastructures to start its commercial operations in March 2021 and slug it out in the open telecommunications market. It does away the planned expropriation law, which has become irrelevant.

Lawmakers have said Congress would ratify on Monday (Aug. 24) the proposed Bayanihan Act -2, putting in place the second law to enable the Duterte administration to respond adequately to the pandemic caused by the China-Duterte Virus. It provides a total budget of P140 billion to include doleout to poor families, mass testing and contact tracing, and doleout to affected tourism-related businesses, among others.

In his July 26 SONA, Duterte has threatened the two telcos of expropriation mainly because of “poor service” and indicated he would give their assets to his Chinese friends, who are having a hard time putting up Dito Tel.

Camouflaging his intention of their expropriation by saying “the people wanted improvement of the services” of the two telecommunications giants, Duterte appeared bent to deliver the coup de grace in 2021 by strongly hinting to Congress that it would play a role in the enactment of a major legislation that could lead to their expropriation.

Expropriation is the act of a government to claim privately owned property against the wishes of the owners, ostensibly to be used for the benefit of the general public.

Dito Tel is behind schedule on the rollout of its infrastructure. It is near to impossible to meet its obligations, commitments, and requirements in its Certificate of Public Convenience and Necessity (CPCN), which serves as the contract between the government and the telco.

Addressing a Senate public hearing on July 1, Adel Tamano, chief administrative officer, said Dito Tel was having a hard time fulfilling its CPCN. Tamano cited the adverse effects of the pandemic caused by the novel coronavirus for Dito Tem’s inability to meet its commitments in the CPCN. He blamed the delay to movement restrictions caused by strict lockdown measures from mid-March until the end of May 2020.

“The COVID-19 and lockdowns prevented us from our full rollout. With the subsequent easing of different lockdown situations, we are doing our best to get back on track,” Tamano said. Also, the pandemic has affected China, which is Dito Tel’s main source of technological knowhow and raw materials, including the rolling stocks for its construction and infrastructure works.

Under its CPCN, Dito Tel’s “technical launch” was scheduled on July 7 this year, but it has to be postponed in November this year. No date has been fixed. Its CPCN requires Dito Tel to build initially at least 1,300 cell towers nationwide and provide digital service at a speed of 27 Mbp. According to Tamano, Dito Telecom has built 300 cell towers, or a backlog of 1,000 cell sites.

Concerning the legal basis of the envisioned expropriation of Globe and PLDT assets , the 1987 Constitution allows expropriation of private landholdings and ill-gotten assets, but is quiet on private assets to be given to another private entity, specifically a favored one.

The Constitution allows expropriation proceedings on landholdings for public use under its power of eminent domain. In fact, RA 10729, or the Right of Way Act, has been enacted during the incumbency of Benigno Aquino III mainly to hasten construction of road projects and other infrastructures.

Expropriation proceedings for PLDT and Globe Telecom assets could not be invoked because they have been rightfully acquired and do not in any way constitute ill-gotten wealth. Acquiring their assets mainly because they have failed to provide “adequate services” is a weak argument and does not rest on solid legal, albeit moral, grounds.