Antitrust body brings telco case to SC

April 20, 2017 at 15:00

The Philippine Competition Commission (PCC) took a defiant stand against industry giants PLDT Inc. and Globe Telecom, elevating to the Supreme Court a long-running legal row over their May 2016 joint acquisition of San Miguel Corp.’s telco assets.

The PCCs’ decision was anticipated after the 12th division of the Court of Appeals, acting on a request from PLDT, blocked the antirust body’s attempts to pursue a comprehensive review of the P70-billion transaction.

The deal allowed PLDT and Globe to corner about 80 percent of all available telco frequencies, an environment which PCC believed would hinder the entry of new competition in the Philippines’ two-player telco sector.

The PCC earlier filed an appeal but this was denied by the appellate court on Feb. 17, 2017.

“The PCC, as the country’s primary competition authority, will not back down or be intimidated by companies who have grown accustomed to unregulated business practices that hamper competition and ultimately hurt the consumers,” PCC Chair Arsenio Balisacan said in a press briefing yesterday.

He said the PCC, through the Office of the Solicitor General, filed a petition at the Supreme Court on April 18 in a bid to lift an appellate court order preventing the PCC from reviewing the sale of SMC’s Vega Telecom to PLDT and Globe.

Apart from allowing its review of the deal, the PCC wants a halt to the further consummation of the transaction. This includes the final payment of P13 billion to SMC by the end of next month and the further rollout of telco frequencies, including those in the 700 megahertz band now being pursued by PLDT and Globe.

Both telcos had argued the rollout was critical to improving mobile internet services across the country, a complex issue, which they noted was also hampered by the lack of cell sites given regulatory bottlenecks.

The 700 MHz, previously almost fully controlled by SMC, is an LTE frequency valued for its ability to efficiently cover wide areas and penetrate walls with high-speed mobile internet.

“From day one, PLDT and Globe have resisted scrutiny of the telco deal,” Balisacan said. “We must not lose sight of our main goal in pursuing the review of the acquisition. That is, to ensure the preservation of a level playing field for incumbent and prospective players in the telco industry.”

PLDT and Globe declined to respond for comment, saying they have yet to receive a copy of the filing made to the SC. The filing is the latest development in a legal battle whose main issue has yet to be resolved. This involved whether approval by the PCC, a relatively new body, was required for PLDT and Globe to proceed with the acquisition.

PLDT and Globe are holding fast to the belief that the deal should have been “deemed approved,” citing the PCC’s own memorandum circulars that were in effect when the deal was launched.

The PCC countered that the required documents submitted by the telcos, namely the transaction notice, were deficient and lacked crucial material information.

Source: https://business.inquirer.net/228016/antitrust-body-brings-telco-case-sc