TXTPower's Opposition pleading

8/6/2019 TXTPower's Opposition pleading

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REPUBLIC OF THE PHILIPPINES

NATIONAL TELECOMMUNICATIONS COMMISSION

Quezon City

In Re: Application for the sale andtransfer to the Philippine LongDistance Telephone Company ofinitially approximately 51.55% equityin Digital TelecommunicationsPhilippines, Inc. Pursuant to Section20(h) of Commonwealth Act No. 146(Public Service Act) with a prayer forProvisional Authority.

PHILIPPINE LONG DISTANCETELEPHONE COMPANY ANDDIGITAL TELECOMMUNICATIONSPHILIPPINES, INC. ,

Applicants.

NTC Case No. 2011-072

x---------------------------------------------------------x

OPPOSITION

Oppositor TXTPOWER.ORG INC. (hereinafter referred to as

TXTPower), through the undersigned, respectfully states:

1. Section 4 of the Public Telecommunications Policy Act of the

Philippines (Republic Act No. 7925), declares that telecommunications is

essential to the countrys economic development, integrity and security of the,

and as such shall be developed and administered as to safeguard, enrich and

strengthen its economic, cultural, social and political fabric.

2. The importance and crucial value of telecommunications in the

life of a nation, as well as the Governments role in harnessing its full

potential, was highlighted by the Supreme Court in the case of Globe


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Telecom, Inc. v. National Telecommunications Commission, 435 SCRA

110 (2004), wherein it stated that:

Telecommunications services are affected by a highdegree of public interest. Telephone companies have historically

been regulated as common carriers, and indeed, the 1936 Public

Service Act has classified wire or wireless communications

systems as a public service, along with other common carriers.

Yet with the advent of rapid technological changes

affecting the telecommunications industry, there has been a

marked reevaluation of the traditional paradigm governing state

regulation over telecommunications. For example, the United

States Federal Communications Commission has chosen not to

impose strict common regulations on incumbent cellular

providers, choosing instead to let go of the reins and rely on

market forces to govern pricing and service terms.

In the Philippines, a similar paradigm shift can be

discerned with the passage of the Public Telecommunications

Act of 1995 (PTA). As noted by one of the laws principal

authors, Sen. John Osmea, under prior laws, the government

regulated the entry of pricing and operation of all public

telecommunications entities. The new law proposed to dismantle

gradually the barriers to entry, replace government control onprice and income with market instruments, and shift the focus

of governments intervention towards ensuring service

standards and protection of customers. Towards this goal,

Article II, Section 8 of the PTA sets forth the regulatory logic,

mandating that a healthy competitive environment shall be

fostered, one in which telecommunications carriers are free to

make business decisions and to interact with one another in

providing telecommunications services, with the end in view of

encouraging their financial viability while maintaining

affordable rates. The statute itself defines the role of the

government to promote a fair, efficient and responsive marketto stimulate growth and development of the telecommunications

facilities and services.

xxx xxx xxx

The NTC is at the forefront of the government response to

the avalanche of inventions and innovations in the dynamic

telecommunications field. Every regulatory action it undertakes

is of keen interest not only to industry analysts and players but

to the public at large. The intensive scrutiny is understandable

given the high financial stakes involved and the inexorable

impact on consumers. xxx


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3. Pursuant to Section 4 of R.A. No. 7925, the following principles

and policies shall guide the Government as it shepherds the growth and

development of telecommunications services in the country:

a) A fundamental objective of government is to

develop and maintain a viable, efficient, reliable and universal

telecommunication infrastructure using the best available and

affordable technologies, as a vital tool to nation building and

development;

b) The expansion of the telecommunications network

shall give priority to improving and extending basic services to

areas not yet served. For this purpose, government shall

promote a fair, efficient and responsive market to stimulate the

growth and development of the telecommunications facilities

and services, with emphasis on the accessibility by persons to

basic services in unserved and underserved areas at affordable

rates;

c) The radio frequency spectrum is a scarce public

resource that shall be administered in the public interest and in

accordance with international agreements and conventions to

which the Philippines is a party and granted to the best

qualified. The government shall allocate the spectrum to serviceproviders who will use it efficiently and effectively to meet

public demand for telecommunications service and may avail of

new and cost effective technologies in the use of methods for its

utilization;

d) Rates and tariff charges shall be fair, just and

reasonable and for this purpose, the regulatory body shall

develop tariff structures based on socioeconomic factors and on

financial, technical and commercial criteria as measures to

ensure a fair rate of return and as a tool to ensure economic and

social development;

e) Public telecommunications services shall be

provided by private enterprises. The private sector shall be the

engine of rapid and efficient growth in the telecommunications

industry;

f) A healthy competitive environment shall be

fostered, one in which telecommunications carriers are free to

make business decisions and to interact with one another in

providing telecommunications services, with the end in view of

encouraging their financial viability while maintaining

affordable rates;

g) A fair and reasonable interconnection of facilities of

authorized public network operators and other providers of

telecommunications services is necessary in order to achieve a


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viable, efficient, reliable and universal telecommunications

services;

h) The government shall give all the assistance and

encouragement to Philippine international carriers in order to

establish interconnection with other countries so as to provideaccess to international communications highways on a

competitive basis;

i) For efficiency, practicability, and convenience, but

with due regard to the observance of due process at all times,

regulation of telecommunications entities shall rely principally

on an administrative process that is stable, transparent and

fair, giving due emphasis to technical, legal, economic and

financial considerations;

j) No single franchise shall authorize an entity to

engage in both telecommunications and broadcasting, either

through the airwaves or by cable;

k) Ownership of public telecommunications entities to

as wide a number of people as possible, preferably to its

customers, in order to encourage efficiency and public

accountability and to tap personal savings shall be encouraged;

l) The development of a domestic telecommunications

manufacturing industry to meet the needs of the Philippinesand to take advantage of export opportunities shall be promoted

without preventing, deterring or hampering the goal of full

universal service; and

m) Human resources skills and capabilities must be

harnessed and improved to sustain the growth and the

development of telecommunications under a fast changing

telecommunications environment.

4. As the agency mandated to administer the Governments

telecommunications policy and regulate the allocation and assignment of

available frequencies, the Honorable Commission shall exercise the following

powers and functions Pursuant to Section 5 of R.A. No. 7925:

a) Adopt an administrative process which would

facilitate the entry of qualified service providers and adopt a

pricing policy which would generate sufficient returns to

encourage them to provide basic telecommunications services in

unserved and underserved areas;

b) Ensure quality, safety, reliability, security,

compatibility and inter-operability of telecommunications


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facilities and services in conformity with standards and

specifications set by international radio and telecommunications

organizations to which the Philippines is a signatory;

c) Mandate a fair and reasonable interconnection of

facilities of authorized public network operators and otherproviders of telecommunications services through appropriate

modalities of interconnection and at a reasonable and fair level

of charges, which make provision for the cross subsidy to

unprofitable local exchange service areas so as to promote

telephone density and provide the most extensive access to basic

telecommunications services available at affordable rates to the

public;

d) Foster fair and efficient market conduct

through, but not limited to, the protection of

telecommunications entities from unfair trade practices

of other carriers;

e) Promote consumers welfare by facilitating

access to telecommunications services whose

infrastructure and network must be geared towards the

needs of individual and business users;

f) Protect consumers against misuse of a

telecommunications entitys monopoly or quasi-

monopolistic powers by, but not limited to, theinvestigation of complaints and exacting compliance

with service standards from such entity; and

g) In the exercise of its regulatory powers, continue to

impose such fees and charges as may be necessary to cover

reasonable costs and expenses for the regulation and supervision

of the operations of telecommunications entities.

5. In particular, Section 5(d), (e) and (f) of R.A. No. 7925 highlight

the Honorable Commissions role in fostering fair and efficient market

conduct, promoting consumer welfare and protecting consumers against

monopolies. Stated otherwise, the Honorable Commission is mandated to

safeguard the interests of consumers by regulating the actions of and services

provided by public telecommunications entities (hereinafter referred to as

PTEs).


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6. Premises considered, oppositor TXT Power is therefore alarmed

by the acquisition by Philippine Long Distance Telephone Company

(hereinafter referred to as PLDT) of the ownership interest of JG Summit

Holdings, Inc (hereinafter referred to as the JGS Group) and that of certain

other parties in Digital Telecommunications Philippines, Inc. (hereinafter

referred to as Digitel) due to its grave impact on the balance of interests

and robust competition within the telecommunications industry and its far-

reaching consequences on consumer services and welfare.

7. Pertinent records reveal that said commercial transaction

between PLDT and Digitel (hereinafter referred to as the PLDT-Digitel

Deal) comprises the following: (i) 3,277,135,882 common shares in Digitel,

representing a 51.55% equity stake; (ii) zero-coupon convertible bonds issued

by Digitel and its subsidiaries to the JGS Group which are assumed to be

convertible into approximately 18.6 billion shares of Digitel by 30 June 2011;

and (iii) intercompany advances of P34.1 Billion made by the JGS Group and

certain of such parties to Digitel and its subsidiaries.

8. If the PLDT-Digitel Deal will be approved, PLDT will reportedly

have an estimated wireless mobile market share of up to 70%, thus raising

serious concerns about provisions for adequate consumer services and

welfare. Moreover, pursuant to the PLDT-Digitel Deal, the JGS Group will

further sell the 2.8% stake it will receive from PLDT (out of its total 12.8%

stake) to Japanese telecommunications giant NTT DoCoMo, thus

emphasizing the need to protect the interests of consumers and end-users

above those of PTEs.


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9. Further, if the PLDT-Digitel Deal will be approved, PLDTs vast

telecommunications empire will have control over almost all of the countrys

wireless mobile services and/or brands reportedly amounting to as much as

70% wireless mobile market share, as previously indicated namely: Smart

(owned by PLDT), Talk N Text (previously owned by Pilipino Telephone

Corporation, hereinafter referred to as Piltel), Red Mobile (previously

owned by Connectivity Unlimited Resources Inc., hereinafter referred to as

CURE) and Sun (previously owned by Digitel). The remaining wireless

mobile market share a meager 30% by industry estimates belongs to the

stable of Globe Telecom, Inc. (hereinafter referred to as Globe), with two (2)

services and/or brands, namely: Globe and Touch Mobile.

10. Moreover, if the PLDT-Digitel Deal will be approved, PLDT will

have control over three (3) out of the five (5) Third-Generation Wireless

Communications Technology (3G) Frequencies bidded out pursuant to the

Honorable Commissions Memorandum Circular No. 07-08-2005 OR the

Rules and Regulations on the Allocation and Assignment of 3G Radio

Frequency Band, namely: Smart, Digitel and CURE. The other active 3G

frequency was granted to Globe, while the last 3G frequency remains

unawarded pending litigation. With this arrangement, the PLDT empire now

controls a whooping 45 MHz out of a total of 55 MHz of the designated 3G

spectrum frequencies. The looming monopoly of PLDT over the

countrys telecommunications industry is clear, undeniable and

unacceptable.

11. In this regard, Section 19 of Article XII of the Constitution of the

Philippines provides in no uncertain terms: The state shall regulate or


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prohibit monopolies when the public interest so requires. No combinations in

restraint of trade or unfair competition shall be allowed.

12. In the case of Tatad v. Secretary of the Department of

Energy, 281 SCRA 330 (1997), the Supreme Court defined a monopoly and a

combination in restraint of trade as follows:

Amonopoly is a privilege or peculiar advantage vested

in one or more persons or companies, consisting in the exclusive

right or power to carry on a particular business or trade,

manufacture a particular article, or control the sale or the whole

supply of a particular commodity. It is a form of market

structure in which one or only a few firms dominate the

total sales of a product or service. On the other hand, a

combination in restraint of trade is an agreement or

understanding between two or more persons, in the form of a

contract, trust, pool, holding company, or other form of

association, for the purpose of unduly restricting

competition, monopolizing trade and commerce in a

certain commodity, controlling its production,

distribution and price, or otherwise interfering withfreedom of trade without statutory authority. Combination

in restraint of trade refers to the means, while monopoly refers

to the end. [Emphasis supplied]

13. Further, in the case ofAgan v. Philippine International Air

Terminals Co., Inc., 402 SCRA 612 (2003), the Supreme Court discussed

the regulation of monopolies in this manner:

A monopoly is a privilege or peculiar advantage vested

in one or more persons or companies, consisting in the exclusive

right (or power) to carry on a particular business or trade,

manufacture a particular article, or control the sale of a

particular commodity. The 1987 Constitution strictly regulates

monopolies, whether private or public, and even provides for

their prohibition if public interest so requires. Article XII,

Section 19 of the 1987 Constitution states:

Sec. 19. The state shall regulate or prohibit

monopolies when the public interest so requires.

No combinations in restraint of trade or unfair

competition shall be allowed.


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Clearly, monopolies are not per se prohibited by the

Constitution but may be permitted to exist to aid the

government in carrying on an enterprise or to aid in the

performance of various services and functions in the interest of

the public. Nonetheless, a determination must first be made as

to whether public interest requires a monopoly. As monopoliesare subject to abuses that can inflict severe prejudice to the

public, they are subject to a higher level of State regulation than

an ordinary business undertaking.

14. In this connection, former National Economic and Development

Authority Director-General Cielito F. Habito discussed the looming monopoly

in light of the PLDT-Digitel Deal:

THERE ARE remarkably parallel developments

transpiring on both sides of the Pacific in two very different

economies: the Philippines and the United States of America.

Heres the general scene: A giant telecommunications

company has moved to acquire (and thus merge with)

another competitor, threatening to achieve a commanding

share of the industry, thereby reducing competition

therein.

In the US, American Telephone & Telegraph (AT&T) has

announced a $39-billion takeover of T-Mobile USA, in a merger

that would make the company the dominant player in an industry

that has heretofore had four major players. Industry rival Sprint

Nextel Corp. is fighting the move, claiming that the merger

threatens its very existence as a standalone company, which could

bring back the old telephone monopoly (of the then giant AT&T)

that US regulators broke up in 1984. Since the AT&T-led

American Bell Telephone Co. opened the first telephone exchange

in 1877 in New Haven, Connecticut, this single firm had controlled

the American telephone industry. The forced break-up led to alively competition that resulted in lower costs and wider choices for

American consumers.

In a parallel development here at home, the Philippine

Long Distance Co. (PLDT) has acquired a controlling stake

in Digitel Corp. which operates Sun Cellular, whose entry

into the erstwhile duopoly of PLDT/Smart and Globe had

dramatically transformed the nature of pricing in the

industry, to the benefit of consumers. Just as Sprint Nextel

is unhappy in the US, so is Globe in the Philippines as itfaces the prospect of being relegated to a small minority

share (30 percent) of a two-player market. It is arguing for

a more level playing field with the National

Telecommunications Commission, inasmuch as PLDT

would now own a disproportionate share of the


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telecommunications frequencies on which the companies

may transmit their phone services.

Both mergers have yet to be cleared by their respective

governments, even as their merits and demerits have been the

subject of active public policy debate. But theres a key differencebetween the two stories: the legal and institutional framework

within which government clearance for the mergers is being

deliberated is quite different in the US from the Philippines. In the

US, there has long been a strong law against cartels and

monopolies, through the Sherman Antitrust Act of 1890, later

reinforced by the Clayton Antitrust Act of 1914. The purpose of the

law is to prevent the combination of business entities that could

potentially harm competition, such as monopolies or cartels. At the

time of its passage, trust was synonymous with monopolistic

practice (which is no longer necessarily the case today). This was

because the trusta centuries-old form of contract whereby one

party entrusts its property to a second partywas a popular way

for monopolists to hold their businesses, and a way for cartel

participants to create enforceable agreements. Internationally, the

more common name now for such laws is competition law or

competition policy.

US antitrust laws declare it a felony for any person to

monopolize or attempt to monopolize any part of trade or

commerce, or to combine or conspire with any other person or

persons to restrain trade or commerce, whether in domestic orforeign markets. Other practices deemed illegal include price

discrimination between different buyers if such discrimination

tends to create a monopoly; exclusive dealing agreements; tying

arrangements; and mergers and acquisitions that substantially

reduce market competition. The AT&T and T-Mobile merger could

fall under the last, giving the US government explicit basis to stop

it if it can be established that this will indeed reduce market

competition.

The US Senate is currently deliberating on the issue, and

some lawmakers have indicated public skepticism over AT&Tsclaim that T-Mobile was not an important competitor, in an

apparent attempt to play down the significance of its move. The

US legislators have noted, for example, that T-Mobile often

undercuts the prices of AT&T and current industry leader Verizon

Wirelesssomething anyone of us roaming with our cell phones in

the US can readily confirm (check your bill: a text message sent

home from the US via T-Mobile costs P20, but one sent through

AT&T costs P25).

In a similar manner, Sun Cellular had constantly been

undercutting the prices of PLDT-Smart and Globe, forcing the

latter two into offering the unlimited packages that it first

introduced.

Whether in the US or here, it seems that the strategic

response of the more dominant player was to buy out the


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underpricing competitor. And just as bystander Verizon in the US

must privately welcome the elimination of a price-spoiler, Globe

must also find some private satisfaction in the elimination of a

player that had spoiled the profitable party (i.e., before Sun

entered the picture years ago).

Still, the Philippines does not have the

comprehensive competition policy that the US has long

had, to give it a strong legal basis to stop the PLDT-Digitel

merger. What it has are piecemeal laws and executive

issuances that had opened previously monopolized or

protected markets, especially those introduced by

President Fidel V. Ramos in the 1990s to break open

prominent monopolies and cartels, notably in telecoms and

domestic airlines. But many remain, such as in cement,

domestic shipping, port handling services, and other key

industries. It is high time Congress acted to correct the glaring

deficiency. [ A tale of two telecom industries (24 May 2011),

available at http://opinion.inquirer.net/5383/a-tale-of-two-telecom-

industries; emphasis supplied]

15. One need not be learned in the intricacies and

peculiarities of the telecommunications industry to conclude that

the alarming trend exhibited by the PLDT-Digitel Deal appears to be

a looming monopoly through a combination in restraint of trade

within the countrys telecommunications industry that is prejudicial

and detrimental to the interests of consumers and end-users as it

leads to industry domination and higher prices for basic

telecommunication services, thus stifling real, robust and healthy

competition among PTEs. On this score alone, the instant Joint

Application for the approval of the PLDT-Digitel Deal should be

denied and/or disapproved by the Honorable Commission.

16. Moreover, to date, it does not appear from the records

that PLDT and/or Digitel has applied for, much less obtained,

approval from the Congress of the Philippines in favor of the PLDT-

Digitel Deal. This is a crucial matter a prejudicial question even


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that the Honorable Commission should not gloss over in determining

whether the instant Joint Application for the approval of the PLDT-

Digitel Deal should be denied and/or disapproved.

17. To protect consumers and end-users from the misuse by a

telecommunications entitys of its potentially monopolistic powers, the

respective legislative franchises of PLDT and Digitel provided certain

safeguards. Sections 16, 17 and 18 of Republic Act No. 7082, which amended

and consolidated the legislative franchise granted to PLDT to install, operate

and maintain telecommunications systems in the country, provides the

following injunction and/or limitation on said franchise:

"SEC. 16. The grantee shall not lease, transfer, grant the

usufruct of, sell or assign this franchise, nor the rights or

privileges acquired thereunder to any person, firm, company,

partnership, corporation or other commercial or legal entity, normerge with any other person, firm, company, partnership or

corporation organized for the same purpose except where the

grantee is the surviving corporation, without the prior approval

of the Congress of the Republic of the Philippines.

Any corporation to which this franchise may be sold,

transferred, or assigned shall be subject to the corporation laws

of the Philippines now existing or hereafter enacted, and any

person, firm, company, partnership, corporation or other

commercial or legal entity to which this franchise is sold,

transferred or assigned shall be subject to all conditions, terms,restrictions and limitations of this franchise as fully and

completely and to the same extent as if the franchise had been

originally granted to said person, firm, company, partnership,

corporation or other commercial or legal entity.

SEC. 17. In adherence to the constitutional mandate, the

herein grantee shall comply with the enabling law implementing

the democratization of ownership of all public utilities.

SEC. 18. This franchise shall not be interpreted to mean

as an exclusive grant of the privileges herein provided for.

18. In the same manner, Sections 16 and 20 of Republic Act No.

9180, which granted a legislative franchise to Digitel to install, operate and


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maintain telecommunications systems in the country, provides a similar

injunction and/or limitation on said franchise:

SECTION 16. Sale, Lease, Transfer, Usufruct, Etc. The grantee shall not lease, transfer, grant the usufruct of, sell

nor assign this franchise or the rights and privileges acquired

thereunder to any person, firm, company, corporation or other

commercial or legal entity, nor merge with any other corporation

or entity, nor shall the controlling interest of the grantee be

transferred, whether as a whole or in parts and whether

simultaneously or contemporaneously, to any such person, firm,

company, corporation or entity without the prior approval of the

Congress of the Philippines. Any person or entity to which this

franchise is sold, transferred or assigned, shall be subject to the

same conditions, terms, restrictions and limitations of this Act.

SECTION 20. Repealability and Nonexclusivity Clause.

This franchise shall be subject to amendment, alteration or

repeal by the Congress of the Philippines when the public

interest so requires and shall not be interpreted as an exclusive

grant of the privileges herein provided for.

19. Thus, as required by their respective legislative franchises,

PLDT and Digitel should first obtain congressional approval for the transfer,

sale and/or assignment of the rights and privileges under said franchises

before the PLDT-Digitel Deal may enter into force. Without congressional

fiat, any such transfer, sale and/or assignment is illegal and unlawful.

20. Moreover, being mere privileges, the legislative franchises of

PLDT and Digitel are subject to amendment, alteration or repeal by the

Congress of the Philippines when the common good so requires, as held by

the Supreme Court in Telecommunications and Broadcast Attorneys of

the Philippines v.Commission on Elections,289 SCRA 337 (1998).

21. Recognizing the potential ramifications on both the

telecommunications industry and its consumers and end-users if the PLDT-

Digitel Deal is allowed to proceed and as proof that neither PLDT nor Digitel


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has obtained approval for the transfer, sale and/or assignment of the rights

and privileges under their respective franchises, as required by R.A. No. 7082

and R.A. No. 9180 Senator Joker P. Arroyo filed Senate Resolution No. 477

seeking to direct the Senate Committee on Public Services to conduct a review

in the exercise of its oversight powers, or an inquiry in aid of legislation, of the

share-swap deal and related transactions between PLDT and Digitel with

the end in view of determining whether it is consistent with and not in

violation of certain provisions of their respective legislative franchises and that

the arrangement would be to the public interest.

22. Clearly, oppositor TXTPower respectfully submits that

the Honorable Commission cannot act on the instant Joint

Application considering that no prior congressional approval has

been obtained by PLDT and Digitel insofar as the PLDT-Digitel Deal

is concerned, pursuant to R.A. No. 7082 and R.A. No. 9180. In this

respect, any act of the Honorable Commission at this stage would be

premature and contrary to law. It is further respectfully submitted

that the Honorable Commission suspend and hold in abeyance any

and all proceedings in connection with the PLDT-Digitel Deal until

after the Congress of the Philippines shall have passed upon the

propriety and/or lawfulness of the transfer, sale and/or assignment of

the rights and privileges under the respective franchises of PLDT

and Digitel in light of said PLDT-Digitel Deal.

23. Assuming for the sake of argument that PLDT and Digitel

are able to obtain congressional approval for the transfer, sale

and/or assignment of the rights and privileges under their respective


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franchises pursuant to R.A. No. 7082 and R.A. No. 9180, oppositor

TCTPower respectfully submits that the PLDT-Digitel Deal should be

scrutinized with surgical precision. Considering that the issue

before the Honorable Commission is imbued with public interest,

anything less would be a disservice to stakeholders, mobile

technology consumers and end-users and the general public and

contrary to the Honorable Commissions mandate.

24. To this end, there is a need to inquire, among others, as to the

status of Smart, Piltel and CURE which were once independent from PLDT

particularly whether they have complied with the injunctions and

limitations in respect of their own legislative franchises and/or provisional

authorities.

25. To bolster the instant Joint Application, PLDT claims that its

investments in Digitel is allegedly expected to achieve substantial benefits for

the consumers, the general public and the shareholders of both PLDT and the

JGS Group in the form of higher quality and even more affordable services.

However, with all due respect, this is nothing more than a self-serving and

convenient platitude that is detached from reality. Truth be told, even prior

to its deal with Digitel, PLDT was already the countrys dominant carrier yet

its services are known to be among the slowest, least reliable and most

expensive in the southeast Asian region. Up until this time, the status quo in

Philippine telecommunications is marked by the following:

Unstable, unreliable calls, text and internet services;


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One of the slowest internet in the world, with countriessuch as Rwanda and Tunisia able to provide faster

internet speeds;

High nominal prices which are hidden behind capriciousbut enticing promotions;

Below-par customer service, tiny business offices,incompetent customer service personnel;

Interconnection fees continue to keep mosttelecommunications rates high;

Iron-clad contracts that jail many unsatisfied customersto bad telecommunications services for up to three (3)

years, with no clear escape clause for instances where

PTEs dont deliver their side of the deal; and

Imposition of Value-Added Tax and OverseasCommunications Tax.

26. More questions arise as a result of the instant Joint

Applications, to which the Honorable Commission should demand forthright

answers. Among the lingering questions are, but not limited to:

In the case of CURE, has it already been granted alegislative franchise and/or provisional authority to roll


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out a Second-Generation Mobile Telecommunications

Technology (2G) Frequency? Why is it providing 2G

Services under the PLDT telecommunications empire

when its license only allows it to roll out 3G Services?

PLDT undertakes to keep mobile operations of Digitelseparate and intact from that of its other mobile services

and/or brands. Why is there no such undertaking insofar

as CURE is concerned?

Should PLDT take over Digitels fixed-line operations, willDigitel no longer pay interconnection fees? How about

other non-PLDT PTEs? Would discounts and removal of

interconnection fees only occur if and when PLDT

acquires or buys them out?

27. From the foregoing, it is evident that the PLDT-Digitel

Deal is prejudicial and detrimental to the interests of consumers

inasmuch as it encourages the reemergence of the PLDT monopoly.

28. Considering the telecommunications monopoly that

would result if the PLDT-Digitel Deal is given due course, the same

should, therefore, be denied and/or disapproved by the Honorable

Court. Otherwise, the Honorable Commission will pave the way for

the rebuilding of cartels that have already been dismantled and

broken down in the name of competition, fair play and consumer

welfare.


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PRAYER

WHEREFORE,it is respectfully prayed that the Honorable Court:

1. Suspend and hold in abeyance any and all proceedings in

connection with the PLDT-Digitel Deal until after the Congress of the

Philippines shall have passed upon the propriety and/or lawfulness of the

transfer, sale and/or assignment of the rights and privileges under the

respective franchises of Philippine Long Distance Telephone Company and

Digital Telecommunications Philippines, Inc. in light of said PLDT-Digitel

Deal; and

2. Deny and/or disapprove the instant Joint Application for the

approval of the PLDT-Digitel Deal for being prejudicial to the interests of

consumers and the public in general.

Other reliefs just and equitable are likewise prayed for.

Quezon City, Metro Manila, May 25, 2011.

ANTHONY IAN M. CRUZPresident

TXTPower.org Inc.


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COPY FURNISHED:

(By Registered Mail)

ATTY. FERNANDO M. SOBIERRA and

ATTY. AILEEN D. REGIO

Counsel for Philippine Long Distance Telephone Company3rd Floor Ramon Cojuangco Bldg.

Makati Ave., Makati City

ATTY. WILLIAM S. PAMINTUAN

Counsel for Digital Telecommunications Philippines, Inc.

16th Floor, Robinsons Cybergate Tower 3

Pioneer St., Mandaluyong City

ATTY. RODOLFO A. SALALIMA

Salalima Castelo and Ungos

Counsel for Globe Telecom, Inc.

5th Floor, Globe Telecom Plaza

Pioneer cor. Madison Sts., Mandaluyong City

THE SECRETARY OF JUSTICE

Department of Justice

Padre Faura St., Ermita

Manila

THE SOLICITOR GENERAL

Office of the Solicitor General134 Amorsolo St., Legaspi Village

Makati

COMMITTEE ON PUBLIC SERVICES

Senate of the Philippines

GSIS Bldg., Financial Center

Roxas Blvd., Pasay City

COMMITTEE ON LEGISLATIVE FRANCHISES

House of Representatives

Batasan Pambansa ComplexQuezon City


20/21

20

WRITTEN EXPLANATION

FOR SERVICE BY REGISTERED MAIL

THE DOCKET CLERK

National Telecommunications CommissionQuezon City

Greetings:

Please be informed that the undersigned caused the service of copies of

the foregoing Opposition upon the above-mentioned counsel by registered

mail. The undersigned counsel was unable to personally serve copies of the

foregoing Opposition upon the above-mentioned counsel considering the

distance involved.

ANTHONY IAN M. CRUZ


21/21

VERIFICATION

I,ANTHONY IAN M. CRUZ, of legal age, Filipino, with office address

at 10-B P. Burgos Street corner Calderon Street, Project 4, Quezon City,

Metro Manila, after having been duly sworn in accordance with law, herebydepose and state that:

1. I am the President of TXTPower.org Inc.;2. I have been duly authorized by TXTPower.org Inc.

to cause the preparation and filing of the instant Opposition, as

evidenced by a Secretarys Certificate dated May 20, 2011, a

copy of which was previously furnished the Honorable

Commission; and

3. I have read and understood the contents of the

instant Opposition and attest that all the allegations contained

therein are true and correct based on my own personal

knowledge and/or based on authentic records.

ANTHONY IAN M. CRUZ

Affiant

SUBSCRIBED AND SWORN to before me this 25th

day of May 2011at Quezon City, affiant exhibiting to me his Philippine passport with number

XX3994225 issued in Manila by the Department of Foreign Affairs on June

19, 2009 and which expires on June 18, 2014, bearing his photograph and

signature.

Doc. No. _____;

Page No. _____;

Book No. _____;

Series of 2011.

TXTPower's Opposition pleading

Documents

Transcript of TXTPower's Opposition pleading