• Telcos seek TRO against review of P69.1-B deal

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    PCC ‘disappointed’ by PLDT, Globe resort to lawsuit

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    TELECOM giants PLDT and Globe on Tuesday filed a petition with the Court of Appeals (CA) to stop the Philippine Competition Commission’s (PCC) review of the P69.1-billion telecommunications deal between PLDT Inc., Globe Telecom Inc. and San Miguel Corp. (SMC).

    PLDT’S petition for certiorari and prohibition and application for a temporary restraining order (TRO) was to stop PCC’s review of the buyout of SMC’s telecommunications assets, which included the latter’s control of the valuable 700 MHz broadcast. PLDT and its competitor Globe each purchased 50 percent of SMC’s holdings, solidifying the hold of the duopoly on the country’s telecom sector.

    In a statement, the PCC said it was “disappointed” that the two telecom giants preferred to resort to legal action rather than wait for the review and evaluation to finish.

    “The PCC confirms that today, PLDT filed a Petition for Certiorari and Prohibition with an application for a temporary restraining order (TRO) against the PCC with the Court of Appeals. We received a copy of the petition today and will take action immediately. PLDT is seeking to prevent the PCC from exercising its mandate to review this transaction,” the PCC said.

    “We are disappointed that they have decided to resort to a lawsuit against the PCC to prevent a comprehensive review of this deal,” the commission said.

    The PCC said the legal action would only “delay” the review, and expressed confidence that the CA would favor permitting the commission’s evaluation of the telco deal to move forward.

    “While the PCC is working on an expedited basis to complete the review as quickly as possible, PLDT in their recent action have now sought to delay resolution of an issue which is of great importance to public interest and welfare,” the PCC said.

    “We are confident that our courts will recognize the significance of protecting consumers and promoting competition in the market, and the authority of the PCC to independently exercise its mandate,” it added.

    ‘Not deemed approved’
    The legal complaints stem from the PCC’s position that the P69.1-billion telco deal is “not deemed approved,” which could subject PLDT and Globe to penalties of P691 million to P3.45 billion, or between one percent and five percent of the value of the transaction, for pressing ahead with the acquisition of SMC’s assets despite the PCC’s mandate to review the transactions first for cases of anti-trust practices and abuse of market dominance.

    PLDT and Globe, however, have claimed that the deal was “deemed approved” according to the terms of PCC’s second memorandum circular, MC 16-002, that permits consummation of deals “after the effectivity of this Memorandum Circular but before the effectivity of the implementing rules and regulations [IRR].”

    PLDT and Globe’s notification of the acquisition of SMC’s assets to the PCC was made May 30, a day before the approval of the final IRR on May 31.

    PLDT, Globe statements
    PLDT Regulatory Affairs Head Ray Espinosa said in a statement that, “We were constrained to file the Petition to uphold the deemed approved status of the transaction under the terms of the PCC’s transitory circulars.”

    Espinosa stressed that to reverse or undo the transaction would result in irreparable and incalculable injury to the public service. He also explained, “the use of the new frequencies is also in compliance with the order and directive of the National Telecommunications Commission, when it approved the specific frequency co-use arrangement between Smart and BellTel Telecommunications Philippines, Inc., that such co-use arrangement be implemented immediately.”

    He added, “The transaction has been deemed approved by operation of law. The transitory circulars issued by the PCC have the force and effect of law. We complied fully with the terms of the circulars. The legal effects and consequences of such compliance cannot be reversed or undone by the PCC.”

    For its part, Globe Telecom said in a statement that, “Under the own rules of the PCC, the transaction is already ‘deemed approved,’ and the PCC cannot by whim or caprice state that it wants a review without any legal basis. The PCC cannot withhold and block the transaction out of a process not found in their own rules, and not disclosed to the public.”

    Globe further stressed, “There is nothing anti-competitive with the transaction to warrant its disapproval. In fact, the immediate use of the underutilized frequencies have spurred a series of competitive data offers that drastically brought down prices of mobile data for prepaid customers.”

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