In the third hearing on the issue, Rep. Danilo Suarez (Quezon, 3rd district, LP), chairman of the oversight committee, agreed with former NTC commissioner Rep. Simeon Kintanar (Cebu, 2nd district, NPC), head of the ICT committee, and other members of their respective committees, to submit a congressional committee report giving NTC a 30-day ultimatum to nullify the 3G licenses of four telecommunication companies -- Smart Communications Inc., Globe Telecoms, Digital Telecommunications Phils. Inc., and Connectivity Unlimited Resources Enterprise Inc.
The two panels also proposed a new payment scheme for telecommunications companies in acquiring 3G licenses.
Suarez said they would only ask NTC to nullify the licenses since Congress has no power to nullify them, but warned that if the commission does not do so, they would subject it to an anti-graft case. 'We would only ask them (to void the licenses) because we don't want to charge them with conspiracy. The worst scenario will be to go to court,' he said.
The move, according to the two lawmakers, is aimed at preventing the government from losing P15 billion to P26 billion in revenues as a result of NTC's failure to conduct a public bidding on 3G licenses to acquire the required frequencies. By law, frequencies are considered government property.
NTC reportedly earned P2.3 billion (US$38 billion) in the awarding of the four licenses, which lawmakers described as 'minuscule' compared to the revenues earned by countries with smaller populations like Italy and the United Kingdom which reportedly earned $10 billion and $30 billion respectively, by openly bidding out the use of available frequencies devoted to 3G technology.
Also, the two committees are recommending that other players be allowed to participate in the bidding for 3G licenses.
In the same hearing, Kintanar advised NTC commissioner Roland Solis to revise the fee structure for telecom firms in acquiring frequencies for 3G.
The Cebu congressman proposed an "installment' scheme that would spread out the payment of the fees to be collected from 3G awardees over a 25-year period -- the lifetime of the authorization of 3G networks.
Suarez said their committees would conduct a study to come up with a reasonable amount that telcos would pay for 3G frequencies on a yearly basis. Meanwhile, Kintanar advised Solis to also figure out a reasonable amount under such a payment scheme.
Kintanar said the proposed installment payment scheme for 3G frequencies would already be a big boost for telcos.
'One of the arguments against bidding is so much money will be put upfront,' he said. 'But you have already done so much for the players by spreading it out, so there's no need to make it very small provided it is still reasonable.'
However, in spite of the warning by the congressmen, Solis remained firm in his decision not to conduct a bidding, reiterating NTC's previous position that bidding can only happen if there are more qualified applicants than available frequencies.
'Based on our determination, there are just four qualified applicants and there are five available frequencies, therefore there is no need for a bidding,' Solis said. 'We don't have taxing power. These are regulatory fees only and the law says that in imposing regulatory fees it must be in reasonable amounts.'
NOT A TAXSuarez, however, contended that they are not asking NTC to impose a tax. 'It's a fee and there is no limitation in any government action whether the government pays or collects. The issue here is what is advantageous for the government.'
Yet in calling for a new fee structure, Suarez said they are also being careful in claiming that they do not want carriers in the Philippines to experience what happened to telcos abroad which spent so much in acquiring 3G licenses and then failed to roll out their networks, causing them to end up deeply in debt.
'In England, Vodaphone bid $32 billion, that is P1.5 trillion. One player in Germany alone made a bid for a trillion pesos, which is the equivalent of our national budget,' he said. 'But they had problems in rolling out their networks and we don't want that to happen in our country.'
Kintanar said the governments of other countries have raised much needed revenues by conducting 3G biddings and it would be unfair if the Philippine government could not benefit from a similar process.
'It is only a matter of imposing what is reasonable compared to what other countries are charging and we're not going to impose something unusual,' he noted. 'I'm thinking that if we annualize the overall amount over 25 years -- the way we pay installments for a car -- at the end of the period, the government could collect a much bigger amount than what we could reasonably charge upfront.'