FINDING no merit to their appeal, the selection committee for the third telco search has denied the motions for reconsideration filed separately by the two disqualified bidders, who still has more legal options to overturn the regulator’s decision for their disqualification.
Sear Telecommunications Inc. and Philippine Telegraph and Telephone Corp. (PT&T) confirmed that they both received the notices from the National Telecommunications Commission (NTC) for their disqualification for being noncompliant with the auction rules.
They now have three days to file for an appeal before the regulator on a regular session, a costly appeal that amounts to P10 million.
“They are given three days to appeal, and the regulator will have three days to resolve the appeal. If they do not receive any appeal, then they can proceed with the post qualification process for the winning bidder,” Acting Secretary Eliseo M. Rio Jr. of the Department of Information and Communications Technology (DICT) said via phone interview.
Should their appeals be denied, they can avail themselves another legal relief—bringing their cases to the courts.
“Disqualified bidders also have the option to bring this to court, but it will not stop the NTC from proceeding with the post qualification proceedings. Only a court decision can do that,” Rio explained.
To recall, Sear was disqualified from the bidding for failing to include the P700-million participation security requirement in its bid. PT&T, on the other hand, was out of the running for the third telco license after it failed submit its certificate of technical capability, which is a document that only telco regulators in any territory can issue.
Sear sought for the consideration of the letter of credit that was not included in its bid due to “clarifications made by the issuing bank,” claiming that this has no substantial affect in the proposal submitted by the consortium.
It also asked the selection committee to declare the bid of Mislatel Consortium—the only compliant party in the bidding—for committing alleged “fraudulent and obstructive practices” of Mindanao Islamic Telephone Corp., the franchise holder of the group.
However, the selection committee denied this, citing provisions on the terms of reference pertaining to the bid security provisions, which required parties to submit a participation bond that should be in the form of “cash, check, draft, or irrevocable letter of credit issued by a universal or commercial bank in the Philippines.”
The committee, likewise, denied Sear’s motion against Mislatel, as it, as a body created under the terms of reference for the third telco, has no jurisdiction over business agreements.
Mislatel, according to Sear, has an outstanding exclusive agreement with Digiphil Technology Inc., an affiliate of TierOne Communications International Inc., a member of Sear.
The congressional franchise of Mislatel was used by Udenna Corp., Chelsea Logistics Holdings Corp. and China Telecom Corp. Ltd. to clinch for the third telco license.
PT&T’s motion, on the other hand, sought for the reconsideration of its bid, claiming that the selection committee “erred” in its interoperation of the term “regional operations” in the terms of reference for the this telco.
According to the listed company’s motion, “regional operations” should also apply to Filipino companies, not just foreign telcos.
It also sought for the disqualification of Mislatel for having a “revoked” franchise.
In denying its motion, the selection committee said PT&T was the one who misinterpreted the provision on “regional operations,” as it was already clarified in a bid bulletin that regional operations only apply to foreign telcos.
Having a 10-year experience in the telco space in a national scale is a requirement for a party to qualify as a participant to the bidding process. However, it allowed for the participation of telco groups with regional operations “as geographically designated by the telecommunications authority of that country.”
On the issue of the revoked franchise, the selection committee ruled that reviewing the franchise is part of the “document verification phase after its deflation as the provisional new major player.”
“It is a matter that should not be resolved in a motion for reconsideration filed by any of the participants in the just concluded new major player selection process,” the decision read.
According to Raoul C. Creencia, the legal counsel of Sear, the consortium will be studying its legal options, but noted that the decision of the selection committee was a “rushed resolution,” accusing it of “washing its hands and simplistically regarding our grounds as a private dispute.”
“This ruling unmasks the selection committee’s insensitivity and total lack of appreciation of the level of diligence required in meticulously choosing a new major player,” he said.
Creencia added: “Clearly, the selection committee completely missed the very point and purpose of the selection process—which is to choose a new major player that is fully qualified, undoubtedly eligible, and one that had no hindrance or limitation in its ability to participate in the bidding.”
He also accused the committee of having an “intent of letting Mislatel off the hook” by “consciously” adopting a “myopic and limited scope of what is deemed corrupt, fraudulent, collusive and coercive practices.”
“It forced a liberal and wrong interpretation of what constitutes a violation of its rules, forgetting that the selection process is imbued with public interest, and hence should have been more strictly enforced. Instead of purposively controlling the fate of its selection process, the selection committee opted to passively wait for the courts to rule on a clear violation of their own formulated rules,” Creencia said.
Sadly, he said, the “wrongly chosen” provisional third telco “will imperil and waste the whole selection process, and cause great injury to the general public.”
For its part, a PT&T spokesman said the group will still “review” the denial of the motion for reconsideration to determine its next course of action. Barring any more delays, the new major player license is expected to be awarded within the month.