Ahead of this week’s public consultations on the new rules governing the entry of third telco, an infrastructure-oriented think-tank has labeled the recently issued auction guidelines as ‘prejudicial to public interest and reeks of regulatory capture.’

“The auction mode for the entry of the third telco player smacks of a patent policy confusion on what the entry of the third telco is all about. The auction as proposed is not a bidding for the highest amount of investment commitment but a bidding for the highest amount of spectrum user fees to be paid to the government. We are utterly confused on what government really wants: to improve the level of telco services or to simply raise funds?”

This was the statement of Terry Ridon, convenor of Infrawatch PH, and former member of the congressional committees on legislatives franchises and information communications technology.

Ridon said an auction based on spectrum user fees does not address the concern of the Department of Finance ‘to ensure that its entry will result to rendering of better services to the consumers at the lowest possible cost.’

“We probably should ask the President: can we actually break the telco duopoly by raising funds through spectrum user fees, or by getting the best and highest investment commitment from competing bidders.

Ridon said insisting on an auction for spectrum user fees exhibits regulatory capture as it seems not to advance public’s interest for lower costs and better services.

“We are conveniently forgetting that the highest bidder for the spectrum user fees will ultimately charge this premium to the public, resulting only in either higher service costs or poor quality services,” Ridon said.

Ridon also supported the view of DICT secretary Eliseo Rio Jr. that subjecting the entry of the new major player to an auction is ‘patently anticompetitive.’

Previously Rio said that the auction is anti-competitive because the incumbent telcos never bought their frequencies from the government.

The DICT secretary also said it will put a big burden on a new player by (forcing it to) put up a huge amount up front that has nothing to do with putting up an infrastructure and improving telecommunications services.