by Mary Ann Ll. Reyes
Philippine Star, 05 September 2011
(Original article available here)
"MANILA, Philippines - Globe Telecom has urged the Department of Justice (DOJ), which has recently been named by President Aquino as Competition Authority, to follow the lead of its US counterpart in opposing a planned merger that will create a monopoly in the telecommunications market.
According to Globe corporate communications head Yoly Crisanto, “government intervention is necessary to ensure that there is a level playing field and allow healthy competition to boost the quality of services for the benefit of consumers.”
But PLDT dismissed Globe’s assertion, saying that the legal and factual contexts of these cases are different. “Our view is the Digitel transaction complies with Philippine law and will serve the public interest through better and more affordable telecom services in more areas of the country,” PLDT spokesperson Ramon Isberto said.
The US Justice Department has filed a civil antitrust lawsuit at the US District Court in Washington against AT&T for its $39 billion purchase of T-Mobile USA, a move described by industry observers as raising the stakes in antitrust jurisprudence.
Crisanto said this development is seen as a welcome input to the Aquino administration’s strong anti-monopoly stance which is incidentally aligned with his “matuwid na daan” or a straight path approach to issues involving corruption and the protection and promotion of public interest.
Based on Associated Press reports, the US Justice Department believed that the proposed merger would “stifle competition and lead to higher wireless prices, less innovation and fewer choices for consumers” and these were reiterated in a news conference by Deputy Attorney General James Cole, saying that the merger would result in “tens of millions of consumers all across the United States facing higher prices, fewer choices and lower quality products for mobile wireless services.”
Globe said the AT&T, T-Mobile merger, under review by the Federal Communications Commission, bears a striking resemblance to the local PLDT-Digitel merger which is likewise under review by the Philippine regulator, the National Telecommunications Commission (NTC).
Between AT&T and T-Mobile, the merger will compete nationwide in 97 of the 100 largest cellular marketing areas.
Globe noted that the PLDT-Digitel merger, on the other hand, will give it 70 percent of the total market and excess frequencies at a ratio of 4.5 vs. 1 of Globe.
AT&T is being accused of “hoarding spectrum”, sitting on top of a 700MHz spectrum acquired in 2008 auctions and its Advanced Wireless Services spectrum to roll out 4G LTE service. AT&T is said to be planning to cover 97 percent of the US population with 4G service if the merger is approved.
The AT&T purchase of T-Mobile, however, was alleged to have been a move to solve its spectrum issues brought about by the surge in mobile broadband use. In fact, this issue of acquiring additional frequencies by merging is the target of investigation set by one of the famous ’50 questions’ asked by the FCC of AT&T.
Globe pointed out that consistent with his anti-monopoly position, President Aquino said, when asked in an interview about the PLDT case at the NTC, that “our interest here is to ensure that there is no monopoly and that we promised a level-playing field, and about 85 million mobile-phone users can’t be tied to one provider.”
Last June 9 this year, President Aquino signed Executive Order 45 designating the DOJ as the Competition Authority.
He created the Office for Competition under the Office of the Secretary of Justice “to carry out duties and responsibilities such as the investigation of all cases involving violations of competition laws and the prosecution of violators to prevent, restrain and punish monopolization, cartels and combinations in restraint of trade as well as enforce competition policies and laws to protect consumers from abusive, fraudulent or harmful corrupt business practices.”