This was contained in a position paper filed by Eastern Telecommunications Philippines Inc. before the NTC. In an opposition letter against the planned acquisition by Philippine Long Distance Telephone Company of Digital Telecommunications Philippines Inc., Eastern said the NTC should impose conditions to ensure the prevention of “anti-competitive” behavior.
Eastern said that the NTC’s Competitive Policy stated that market share is widely considered as the most transparent indicator of dominance or significant market power.
It cited that, a market share of 40 percent gives rise to a presumption of significant market power while a market share of less than 25 percent is deemed insufficient for a player to behave as if it were unaffected by market forces.
Eastern said the transaction will result in the PLDT group having dominance and significant market power by virtue of its control over Smart Communications, Smart Broadband Inc., Connectivity Unlimited Resource Enterprise Inc., Digitel and Digitel Mobile Philippines Inc.
It noted that the group “will acquire a commanding 70 percent market share of the entire suite of telecommunications services currently being offered on the Philippine market.”
“Likewise of importance is the control of the PLDT combine, its related companies and affiliates of various other companies and facilities and government infrastructure concessions,” Eastern said.
It cited Manila Electric Company and its subsidiary, eMeralco Ventures, Inc. (which own and lease out significant fiber optic cables in areas where Meralco operates as well as telecommunications-related assets such as poles) and the Subic-Clark-Tarlac Expressway and North Luzon Expressway.
“Related companies and affiliates of the PLDT combine will, therefore, be in a position to restrict access by competitors of the PLDT combine to such telecommunications -related facilities,” Eastern said.
Eastern also pointed out that the PLDT group will effectively control six out of the existing seven international cable systems that carry outbound voice and data traffic, and four out of the current five cable landing stations where such undersea cable systems terminate on Philippine land.
“As a result, the PLDT combine will be in a position to discriminatorily price the capacities of its international cable landing stations and restrict access to the landing stations or charge discriminatory prices for such access,” Eastern said.
It added that the PLDT group’s dominance will also extend to a commanding control of Internet Exchanges and local Internet peering which is an arrangement of traffic exchanges between ISPs.
As a result of the transaction, Eastern said the PLDT group will have the largest Internet Exchange in the country in terms of membership and, with its command of very extensive telecommunications facilities, “will be in a position to restrict access to locally hosted content by deliberately disallowing traffic from competitors to pass through its network.”
Already, Globe Telecom has complained that its landline customers in 31 provinces and cities are still not interconnected to date, hence, they are still being charged long distance rates for calls made to a different operator although they are in the same area.
Globe Telecom said that its customers still cannot make local calls when connecting to Philippine Long Distance Telephone Co. (PLDT) landlines in Benguet, Pangasinan, Ilocos Norte, La Union, Isabela, Cagayan, Nueva Vizcaya, Quirino, Bulacan, Pampanga, Nueva Ecija (Cabanatuan), Zambales, Tarlac, Bataan, Quezon (Lucena), Laguna, Oriental Mindoro, Palawan, Marinduque, Albay, Camarines Sur (Naga), Camarines Norte (Daet), Zamboanga, Misamis Oriental, Davao del Sur, Davao del Norte, Davao Oriental, North Cotabato, South Cotabato (General Santos), Saranggani and Sultan Kudarat.
Despite laws mandating interconnection, PLDT "refuses" to interconnect in 31 localities, according to Globe. The carrier maintains it has been requesting PLDT for interconnection since 2006.
The NTC Memorandum Circular (MC) 09-09-2007 states that “there shall be no interconnection and access charges between interconnected LECs within a local calling area.” Interconnection is also mandated by Republic Act 7925 and Executive Order 59.
Without interconnection, a Globe customer calling a PLDT subscriber just next door or down the road has to pay NDD (national direct dialing) charges and vice versa.
The telco industry average for interconnection charge for a call made between provinces is around P3. Without interconnection, customers have to pay long distance charges of about P5 to P6 when calling a different operator’s landline although both calling parties are within the same area.
The carrier urged regulators to maintain a level playing field to safeguard healthy competition in the industry and to enforce the rules on interconnection to provide the service that the calling public deserves.
Meanwhile, Globe also asked (NTC) to put in place an official domestic IP peering policy to improve the quality of internet services and lower access costs in the country.
IP peering is similar to interconnection among local telcos for calls and texts, as it involves connecting subscribers and applications of one internet service provider (ISP) to another.
Without this policy, IP traffic takes longer to route as data is sometimes sent overseas before reaching its target destination. To customers, the experience is sluggish response times and lower service quality.
To ISPs, it is a waste of international capacity and resources when the transmission should be direct and not routed outwards especially when both the origin and destination are located in the Philippines.
The circuitous data routing also means added costs as the peering partner can charge a fee for transmitting the data. Globe said domestic IP peering can be free-of-charge as data need not be pushed out of country. It should ply and
