February 20, 2017
Transcript of Sen. Grace Poe's Opening Statement
Magandang umaga po sa inyong lahat. This public hearing is called with regard to the application of Smart Communications to extend their franchise to operate for another 25 years. We have invited all stakeholders to air their views as these would aid the Committee in crafting the bill that will be endorsed to the plenary for debate by the Senate as a whole.
A franchise to operate a public utility is granted by legislative grace - hindi ko po salita yon pero isang terminong sinabi ni Senator Lorenzo Tanada - but only after establishing that there is a public need for such a service and that the applicant has the means to adequately provide it.
So today we have summoned the applicant, so they can explain to us why they deserve to receive such authorization.
We have also invited the regulators--the government agencies--to ask them if the grantee has faithfully complied with all the duties and the deliverables which were attached as conditions for the enjoyment of the existing franchise.
Also in attendance, and I would like to thank them for coming, are public interest groups - Smart's subscribers - because more than company and regulator reports and glitzy ads, customer feedback is a more accurate gauge of good service and client satisfaction.
Let me stress that we are inviting you not because your presence provides good optics that people are being consulted but because we believe that your inputs will help the bill evolve into a better piece of legislation.
The fact that Smart has 70 percent of the country as customers does not mean that we in the Senate have no other option but rubberstamp our conformity with the bill that was passed by the House. Smart may have 70 million subscribers but it must also subscribe to our laws.
I have mentioned how large Smart's footprint is to underscore its status that approximates that of a vital industry.
After power and water, broadband has become the third utility. Its penetration can be seen in the fact that there are more phones than people, and more SIM than the population.
While one can opt to light a candle, or dig a well, you cannot go off the grid to surf the net for your daily dose of fake news, trolls , or relive kilig moments with the newest burger commercial.
And while the archipelago is crisscrossed by electrical lines from hundreds of power distributors, and there are over a thousand water districts and companies piping in water to homes, cellular phone service is dominated by two players, with Smart as the bigger one .
While we may be pluralist in our political views, or ecumenical in our religion, and be a member of many tribes, when it comes to phone service, dalawa lang ang pwedeng pag-pilian, Smart o Globe. Buti pa yung iba, noong Valentine's Day, mas marami silang choices.
The privilege, however, of cornering this market, and making money out it, and of using publicly-owned airwaves, comes with the non-negotiable condition that business will be conducted in an honest and honorable way that satisfies the individual customer, the common good, and national development goals.
So before we are told of what Smart's plans are for the next 25 years, it would be better if they first tell us what they had done in the past 25 years.
Franchise extension is both a looking-forward and looking-back exercise. Halimbawa, kamusta na ang internet speed sa Pilipinas? Mas mabilis na ba kesa sa Aleppo or Afghanistan? O kasing bagal pa rin ng traffic sa EDSA?
Speaking of EDSA, pwede ka na bang tumawag habang ikaw ay bumabaybay ng EDSA, na mas kaunti ang dropped calls kesa sa mga istasyon ng MRT.
Kamusta na ang rollout ng cellular sites? Gaano ba kalaki ang unserved at underserved areas? Ano na ba ang status ng interconnection ng mga major players? O tuloy pa rin ba ang kanya-kanya tayo at hindi pwedeng gumamit ng ibang linya?
These are valid questions because the grant of franchise was anchored on the guarantee of consistent good service.
Alam nyo po ang existing legislative franchise ng Smart ay pwede ring magsilbi nang checklist kung nagawa ba nito ang kanyang mga obligasyon.
On this, many in this room would like to be apprised as to what had happened to the requirement for Smart to go public, or if the reasons invoked for evading this rule, if any, are indeed legal and valid. The Public Telecommunications Policy Act, states that a telco shall make a bona fide public offering through the stock exchange within a period of 5 years from the date the law became effective, or from telco's first year of commercial operations. Have you complied with this requirement?
I understand, too, that that the bill approved by the House contains a raft of fiscal incentives and tax breaks. They say that corporations breathe through tax loopholes, perhaps in a scale that will plow back profits to improve service but not massive enough that they already choke tax payments to the government.
If taxes are foregone, then what are the better services, like faster internet service and cheaper cost of calls that you have to return to the public.
Bakit pa namin kayo bibigyan ng additional tax exemptions when for the past 25 years, Smart has had the privilege of growing its telecommunications infrastructure without having to pay customs duties and tariffs for its imported equipment? And yet, in these 25 years, there are still many locations where Smart has not delivered fast service.
Alalahanin po natin na, normally, kaya nagbibigay ng tax exemptions ang Kongreso ay para ma-level ang playing field--para makapasok naman ang ibang mga competitor sa industriya. Pero malaki na ang Smart.
I also want to know why the new franchise now allows for "co-use", which could effectively allow future collusion and anti-competitive practices? For the information of our colleagues and the people here, "co-use", from what I understand, means that Smart will be allowed to use the telecommunication services and facilities of Globe and other service providers, as it may consider necessary and reasonable. What do we mean by "reasonable"? If it's a cooperation between telcos to deliver service then we would like to clarify that if it will be to the advantage also of the consumers.
I wish Smart can provide better service, as, I have repeatedly said, solving the traffic crisis will be a technology-aided enterprise. In particular, ICT will be supplying many of the most effective cures, from street level equipment like camera banks and CCTVs, to central traffic control systems and smart traffic signs.
Smart is one information highway people can detour to when it would be impossible for them to physically go from one place and another.
But we can only create an army of happy telecommuters if internet speed is fast and reliable.
On the part of the government, seamless and speedy online transactions can only cut red tape, and long physical lines, once downloading speed increases.
Mas mabilis po magagawa natin ang transaction sa gobyerno kung alam natin na mas mabilis ang download ng mga application forms at hindi mapuputol ang ating transaksyon.
Nonetheless, we also want to make sure that other companies can enter the telco playing field as to encourage competition and drive companies to provide better service.
So today, to answer these questions, and also to ask them, are members of this Committee, my colleagues, invited resource persons, and other guests, let me acknowledge each of you.
Tuesday, March 28
Monday, March 27