Aren’t they all cronies?

It is a sign of our times that the result of the third telco bidding is considered by some, lutong makaw. How can this be when the impression is given that most of the bidders are cronies of the President? Or think they are?

In that sense, it was a contest among equals. Of course, as in all things, some are more equal than others. And here is where the conduct of the bidding becomes important.

I thought this was one of the most transparent public biddings in recent memory. There was a lot of public consultation. The rules were out there for several months for participants to study and comment on.

The participants had almost a year to make their voices heard on the fairness of the rules, the heavy financial requirements, or anything else that may make the bidding questionable. Nothing much was heard until towards the homestretch.

First of all, the bidding was designed for the big boys, the ones with a lot of money to invest to compete with the duopoly. That’s why the financial commitments sought seem to be “extortionate” as one of the bidders put it, a couple of weeks before the deadline.

An industry analyst I trust for competence and honesty told me that she “witnessed a fairly transparent and consultative process from the start--from the drafting of the terms of reference down to the opening of the bids.

“If anything, the NTC included requirements that may seem tailor-fit for particular prospective bidder(s), like the telecom experience on a national scale for the last 10 years. That already disqualifies the potential local telco bidders because only PLDT and Globe have that experience.

“However, it does not preclude a local telco partnering with a foreign telco who has that amount of experience in its country of operation. It simply required a certification from the regulatory agency (equivalent of NTC) in the country where that experience is relevant.

“All it took was for a potential local bidder to partner with such a foreign telco. There was no rule barring anyone from doing so. Unless NTC knew from the start that the other bidders (such as PT&T) did not have a foreign partner, then it’s difficult to say that, indeed, there was an effort to pick China Telecom.”

I found curious the last minute withdrawal of the Pampanga Dennis Uy’s Converge and Korea Telecom. I read their explanation and I can’t believe they only belatedly saw how difficult the business model sought by the bidding rules is.

Given how conspiracy theories abound in this country, it is easy to cast doubts on the result of the bidding process. There is loose talk that a bidder colluded with the other bidders to submit incomplete requirements to throw a monkey wrench into the process.

The winner, the Davao Dennis Uy and China Telecom comes as no surprise to many. The Davao Dennis Uy has been visibly expanding his business empire as if President Duterte’s term will end tomorrow.

It does not help that President Duterte was reported to have offered the third telco slot to China Telecom in one of his China visits.

I don’t personally know the Davao Dennis Uy, but it seems only his group complied with all the published rules. Adherence to these rules is a pre-requisite to the opening of the second envelope containing the technical commitment.

 I am curious about the bid of Chavit Singson which proposed the use of satellites and promised 100 percent coverage within a short time. But Chavit’s group failed to submit the P700 million LC to cover the required participation security. 

Chavit told us at the Tuesday Club that he had the amount required in the form of BDO and Metrobank cashier’s checks and two LCs from the Industrial Bank of Korea. It was NTC’s failure to respond to their bank’s request for “proper language” for forfeiture that caused them to fail to provide the performance guarantee in the proper form. 

Chavit also complained about the local telecoms partner of Dennis Uy. He said NTC should have disqualified the bid because Mislatel has a contract with them among other reasons.

The other bidder—PT&T (Zamora Group) failed to prove that it was operating on a national scale for the past 10 years. PT&T had been in operation for decades, but it didn’t meet NTC’s requirement. 

They sought what amounted to a midnight definition from a court when this should have been clarified months before with the NTC and DICT.

The rules PT&T and Chavit’s group failed to comply with are not mere technicalities. Those were clearly in the Terms of Reference (TOR) that contrary to claims, were not changed at the last minute.

Because of the growing anti-Chinese sentiment in the country, many are wary about China Telecom. But paranoia aside, China Telecom has the advanced technology and the deep pockets to make a difference as a third telco fast.

As for the fear of China being able to monitor our messages, both Globe and Smart are already using advanced telecom hardware from Huawei, a Chinese company.

The remaining way left is for us to pressure Congress to pass the Open Access in Data Transmission bill. That will allow ownership and operation of infrastructure for and delivery of Internet services by entities that don’t have to be telcos and thus, provide more competition in broadband delivery.

A redistribution of spectrum now over 70 percent controlled by the duopoly will also allow for more than just the third telco. While the NTC has the power to audit and reassign spectrum, it is afraid to do so on its own. They want a law that will more clearly empower them.

For now, I think Acting Secretary Eliseo Rio, Jr. did as good a job of a transparent bidding as is possible. But in a battle of cronies, the losing cronies are expected to be noisily disappointed. 

Boo Chanco’s e-mail address is [email protected]. Follow him on Twitter @boochanco