Supreme Court affirms disqualification of 4 telco players from 3G frequency bid

MANILA, Philippines – Three telecommunication companies are disqualified from applying for third-generation mobile communications technology (3G) radio frequency after the Supreme Court affirmed two orders from the National Telecommunications Commission (NTC). 

In a 44-page decision, the High Court’s Second Division denied the petitions filed by Next Mobile Incorporated (NOW Telecom), Bayan Telecommunications (BayanTel), Multi-Media Telephony Incorporated (MTI), and AZ Communications Incorporated against orders issued by NTC in December 2005 and August 2008.

The NTC handles the allocation process of frequencies to ensure quality. Republic Act No. 7925 tags radio frequency spectrum as a “scarce public resource,” and that the government should allocate frequencies to providers “who will use it efficiently and effectively to meet public demand.” 

The SC, in the decision penned by Senior Associate Justice Marvic Leonen, said that the NTC “has full discretion to assess and evaluate applicants to these frequency spectrums.”

“In view of its expertise in technical matters, and institutional experience, its factual findings are entitled to great weight before this Court and will not be reversed ‘saved upon a very clear showing of serious violation of law or of fraud, personal malice or wanton oppression,” the Court said.

The case stems from the NTC orders that disqualified several companies, including Next Mobile over unpaid supervision and regulation fees (SRFs), and spectrum use fees (SUFs) worth P135.6 million. AZ, meanwhile, failed to pass the first stage of qualifications.

The High Court pointed out that Next Mobile “did not pay these fees even under protest,” and said it found no merit in the company’s argument that the commission should not have considered additional paid-in capital in the assessment of its SRFs. 

“It is erroneous for Next Mobile to argue that this could not be considered as part of the capital stock since no payment was received when the liabilities were converted into equity,” the SC said.

The companies filed the petition before the Court of Appeals following NTC’s decision to award Smart, Globe, Digitel, and Connectivity Unlimited Resources  Enterprise four out of the five 3G frequency slots. 

The CA affirmed the NTC’s orders, but said that Bayantel was qualified for the fifth slot. The SC, however, said that the appellate court erred in allowing BayanTel to get the last slot since NTC gave the company zero points for not meeting obligations as service provider. It added that failing to comply affects the quality of service and compromises public interest. – Rappler.com