• PCC endorses policy reforms for National Broadband Plan

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    THE Philippine Competition Commission (PCC) has recommended some measures to make the National Broadband Plan (NBP) more effective, including imposing higher penalties on erring telco players and removing government regulations that restrict healthy competition in the industry.

    The NBP aims to upgrade the quality of broadband services in the country, widen its reach, and link all government agencies, public institutions, and local government units through the internet and is being spearheaded by the Department of Information and Communications Technology (DICT).

    To ensure that the NBP is effective in attaining its goals, the antitrust watchdog said on Thursday that it is recommending several measures that include giving regulators such as the National Telecommunications Commission (NTC) more teeth to enforce their mandates.

    One of the recommendations is to amend Republic Act (RA) 7925 that would allow NTC to impose higher penalties on telco players that are violating the country’s laws and regulations.

    “When penalties are low and enforcement unlikely, operators will tend to choose to violate rules rather than sacrifice profits,” the PCC said.

    There is also a need to remove regulations that create barriers to competition. The PCC identified three major types of government interventions that restrict competition and facilitate anti-competitive practices.

    These interventions are 1) Regulations that reinforce market dominance or limit the entry of new players; 2) Regulations that are conducive to collusion or that increase costs to compete in the market; and 3) Regulations that discriminate against specific players, distort the level playing field, or protect vested interests. These include limiting the entry of foreign equity ownership in telcos, which is capped at 40 percent under the Constitution. This effectively protects the existing players from competing with technologically advanced and efficient potential players, the PCC said.

    The anti-trust watchdog also bats for the creation of an effective interconnection regime and agrees with the NBP’s suggestion of an open access policy, where players are provided with wholesale capacity from existing national backbone network operators under terms that are non-discriminatory and transparent, and at prices that are cost-oriented and subject to the NTC’s regulatory oversight.

    In formulating the rules for interconnection, the PCC proposed that: a) Detailed regulatory guidelines should be provided on critical aspects of interconnection; b) Focus should be given on interconnection obligations for the existing dominant operators; c) Mechanisms for the identification and resolution of discriminatory interconnection arrangements should be developed; and, d) Interconnection charges should be regulated to ensure that they approximate actual costs.

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