Exclusive: Meralco ‘frequency’ bared

MONDAY, 06 JUNE 2011 00:19 LITO U. GAGNI / SPECIAL TO THE BUSINESSMIRROR

The government should take back the frequency it had allotted to Manila Electric Co. (Meralco) because the power firm, now under the business group headed by Philippine Long Distance Telephone Co. (PLDT) top honcho Manny V. Pangilinan, can use it to further its already dominant presence in the telco industry.

This is what an official of the  Department of Transportation and Communications (DOTC) told the BusinessMirror as he intimated that, apparently, PLDT made a bid for the control over Meralco because of this frequency.

“Two irregularities immediately stand out,” the source said. “One is that Meralco, being a nontelco player, is not entitled to own a frequency, which has become one of the battlegrounds among telco companies.

“Another is that the frequency given to the power firm is a government band, and a very powerful one at that. And as we all know, Meralco is not a government corporation.”

Data show that Meralco was granted a 2.4-gigahertz band by the National Telecomunications Commission (NTC) way back during the Ramos administration. Since then, the power firm has apparently been using the bandwidth for effective communications among its various offices in its franchise area—Metro Manila, and Southern and Central Luzon.

The bandwidth is said to be so powerful that it interferes with other frequencies, such as those used by  ham- radio operators. Another source told the Mirror that a frequency that powerful is granted only to sensitive national security offices of the government.

In another unexplained move, the NTC subsequently prohibited the use of radio equipment in the 2.4-gigahertz radio frequency because of complaints from Meralco.

But sometime in August 2003, the NTC, under the Arroyo administration, lifted the ban on the use of the bandwidth, which has now come to be an important cog in Wi-Fi technology, a wireless networking route that lets users connect their laptops, netbooks and other PDAs to the Internet without the need for the wires.

This bandwidth is said to be so powerful that PLDT can use the same to connect Internet users to its Wi-Fi devices up to a range of 15 kilometers and with a radius of 400 meters.

Internet connectivity is now the looming battleground for telco firms since this is considered a growth area. This is why there are broadband sticks that PLDT, Globe Telecom Inc., Digital Telecommunications Philippines Inc. (Digitel) and even the Lopez-led Bayan Telecommunications Inc. are selling to the Internet generation.

The discovery of Meralco’s bandwidth is expected to further spice up the word war between PLDT and Globe relative to PLDT’s acquisition of Digitel.

PLDT has been buying companies with their frequencies. This includes Connectivity Unlimited Resource Enterprise Inc., now a wholly owned subsidiary of Smart Communications, the Philippines’ largest.

CURE, which used to be owned by the group identified with former Marcos minister Roberto V. Ongpin, won one of 3G licenses and which later sold the company to the Pangilinan group for more than P400 million even without rolling out its committed telco infra as per its agreement with the NTC.

It could not be ascertained whether NTC allowed the substitution of PLDT and Smart’s own telco infra facilities to qualify for the required rollout of facilities.

“In fairness,” the source said, “we are not sure if PLDT is now using the frequency for purposes other than it was originally intended for. But we have to go back to the original questions about the preferential treatment granted by the NTC to Meralco during Ramos’s presidency—why it was given a powerful government band despite the fact that it is a nongovernment firm and why it was given a frequency in the first place, when it was not entitled to one, being a nontelco.”