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DICT chief: Auction cost to be borne by consumers

The country’s acting Information and Communications Technology chief is not letting up on his criticism of an auction-based search for a new telco player, taking to Facebook to claim that this will lead “more expensive” services and only benefit the PLDT-Globe duopoly.

“Some argue that auctioning the frequencies … would be beneficial to the Filipino people for it would monetize the spectrum that they own,” said Eliseo Rio, officer-in-charge of the Department of Information and Communications Technology (DICT), in a post on Tuesday.

“But from whom shall the winning telco recover this auction expense that has nothing to do with rolling out its infrastructures and nothing to do with improving telecommunications services? From the Filipino people, of course!,” he added.

“In effect, the Filipino people will gain nothing from the auction of frequencies for they will pay for it in the long run, as it will only be passed on to them by the winning bidder to recover the amount it paid.


“It will in fact just make … telco services more expensive…, [and]make the winning telco uncompetitive to the duopoly that never paid the Filipino people for their frequencies.”

In a Sunday post , meanwhile, Rio likened the proposed auction to punishing the new player for the “sins of these incumbent telcos”.

Referring to a claim that an auction could lead to the winning bidder just holding on to the frequencies and then selling to the duopoly, Rio noted that previous transactions, such as the sale of Digitel and CURE to PLDT, had occurred prior to the DICT’s creation.

If the public was short-changed during those deals, including San Miguel’s decision to sell its telco assets to Globe and PLDT, he said that “proposing an auction for a new player to recover what is due the Filipino people from failures of past administrations is not only illogical but really unfair”.

The government can still go after the parties involved if proper taxes were not paid “and it is not the task of DICT to get it from a new player whom we are trying so hard to attract to give better and less expensive ICT services”.

At the center of the issue are two draft terms of reference (TOR) recently released by the DICT, the first proposing a points-based system based on commitments to coverage, broadband speeds and capital/operational expenditures, and the second calling for a spectrum users fee (SUF) auction.

Rio said the SUF should instead be used as a means to “punish telcos who are not efficiently using the spectrum awarded to them by making them pay more than those who are more efficient.”

“This will force the inefficient ones to return frequencies, as it would no longer be economical to retain them,” he added.

Prospective third telco players overwhelmingly chose the point-based system as their preferred selection process during a consultation last week, a result that Finance Secretary Carlos Dominguez 3rd has said came as “no surprise”.

“Why should anyone reject something offered for free, only promises?” he said.

Rio last week tagged the Finance department — which is represented in an oversight committee created to facilitate the telco selection process — as insisting on the auction-based system.

He said the DICT was not against auctioning off frequencies, saying that this would be the method used for 5G, “but in a level playing field.”

“We will strongly advocate for new laws that would equitably distribute spectrum for the greatest good and not treat it as a commodity”.

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