Sotto: Gov’t can revoke telcos’ franchises if they fail to shape up

Senate President Vicente Sotto III on Tuesday reiterated his warning to  Globe Telecom Inc. and Smart Communications Inc. not to take lightly President Rodrigo Duterte's threat of expropriation.

"If I were in the shoes of the telcos, I will really shape up because maraming puwedeng gawin, maraming puwedeng gawin ang gobyerno, baka hindi nila alam o baka hindi nila naalala," Sotto said in a virtual interview with reporters.

"We can revoke their franchise. Pag sinabi ng Presidente na i-revoke 'yung franchise niyan, mabilis na mabilis sa Kongreso 'yan. Patay na kaagad 'yun and then we can have other investors take over pagka ganyan," he added.

In a separate interview on ANC, Sotto explained that the telcos' franchises could be revoked by passing another law.

"The President can do that. There are ways of skinning the cat so to speak," Sotto said.

The Senate leader emphasized that strong connectivity and improved "digital highway" is important for distance learning and other online transactions that are emerging under the new normal.

During his fifth State of the Nation Address, Duterte threatened to make Globe and Smart disappear in the industry if they fail to improve their services before December.

Despite being excoriated himself by Duterte in the SONA, Senate Minority Leader Franklin Drilon agreed with the President that the services of the two telcos are unsatisfactory.

"Yes, I agree with the President. We must improve the services of these two telcos. Even in the Senate sometimes we have a teleconference talking about telcos and we could not hear each other, because the signals are very poor. I think there is no dispute that we need an improvement insofar as telco is concerned," Drilon said in an interview on CNN Philippines.

'Threat works'

Senator Richard Gordon said he found Duterte's threat quite unpresidential.

"The usual mayor threatens, 'Isasara ko establishment mo kapag di ka nagtino.' But the President must be presidential at all times. We must look him up as a president who is fitted, who want to do the things the proper way, and that he has the political will to do so without threatening the people. I don’t see that quite frankly," Gordon said in a virtual interview.

Senator Panfilo Lacson, on the other hand, said Duterte's style works.

"This kind of 'threat' worked in the past: Mighty’s P40-billion tax settlement; Philippine Airlines' settling a P6-billion obligation to the government; the Mile Long property taken over by government; and the rehabilitation of Boracay, to name a few cases that did not need to undergo lengthy and expensive court litigations—and I would say has therefore served its purpose, rightly or wrongly," he said in a separate statement.

"Whether the government takeover of telcos is justified and compliant with the provisions of the Constitution, given the circumstances, is another matter altogether, however," he added.

Impact on investors

Asked whether Duterte's threat could affect the business climate in the country, especially in the wake of the denial of ABS-CBN's franchise bid and some congressmen's discussion of possible takeover of its properties, Sotto said the latter has nothing to do with telcos' issues.

"I don’t think we should relate that with the ABS-CBN problem because as far as the ABS-CBN take over is concerned, that is just the fruit of the mind of a few legislators and it is not possible," he said. "The ABS-CBN issue is completely different from what the President mentioned as far as telcos is concerned."

Sotto also believes Duterte's threats to telcos would not scare new investors.

"Business is business, pagkakakitaan ng malaki, walang matatakot sa ganiyan. Pag merong opportunity, papasok sila, ganoon 'yun," he said.

"Bakit ka matatakot sa gobyerno kung kumpleto naman ang gagawin mo at maayos naman ang gagawin mo? Kasi kung takot ka sa gobyerno, eh di huwag, huwag ka magtayo, hindi ba?" he added.

Other considerations

Senate committee on public services chairperson Grace Poe said to threaten the telcos alone would not suffice as government action is also needed.

"We know that improving internet service and coverage will happen not only by obligating the telcos but government regulators as well to remove the roadblocks to building the necessary communication infrastructure," Poe said in a statement.

"Pertinent national agencies and local government units should step up so that the approval of at least 25 regulatory permits for the construction of cell towers will not take six months," she added.

Lacson also said Duterte should have issued a similar warning to local government officials who allegedly extort money from telcos in exchange for permits, licenses, and "protection" in setting up cell sites in areas where insurgencies are strong.

Globe, for its part, said it is heeding Duterte's call to improve its services, stressing that it earmarked $1.2 billion for its capital spending this year, mainly to finance its network and capacity builds.

Smart has yet to issue a statement.

The National Telecommunications Commission has a set of criteria to determine the quality of service being provided by telecommunications companies, according to the Palace. — BM, GMA News