Press Release
October 2, 2011

Govt deprived of revenues in Altimax-Globe deal

Senator Antonio F. Trillanes IV has asked the National Telecommunications Commission (NTC) to look into how it can recover revenues lost by the government as a result of Globe Telecom's "unauthorized" lease of radio frequencies assigned to Altimax Broadcasting Incorporated.

"Globe has not been paying Spectrum Users Fees (SUFs) to the NTC for its use of the 30 megahertz assigned to Altimax," Trillanes said.

"If the NTC finds that this arrangement is indeed in violation of existing laws, then the commission should not only stop the illegal use of these frequencies; it should also try to recover the uncollected fees," the Senator added.

Trillanes' comments followed the privilege speech last week of Senate president pro tempore Jinggoy Estrada questioning the Altimax-Globe 2009 lease agreement.

Estrada criticised Altimax for allegedly violating its Congressional franchise by failing to operate a nationwide direct broadcast satellite service (DBS) and a multichannel multipoint distribution system (MMDS), as required by the said franchise.

He also slammed the broadcasting company for leasing its frequencies to Globe for use in providing wireless broadband internet services, saying this too was "a flagrant violation" of its franchise which requires that radio spectrum be used only for the purpose approved by Congress.

For his part, Trillanes noted that under the 1995 Telecoms Act the government through the NTC levies an annual spectrum user's fee on telecom companies using radio frequencies assigned to them by the commission.

Broadcast companies, in contrast, are generally not required to pay SUF. In the case of Altimax, however, the company appears to have been doubly favored, according to Trillanes.

The senator pointed out that in 2005, under its Memorandum Circular No. 06-08-2005, the NTC reallocated several frequency bands for Broadband Wireless Access (BWA), a service provided exclusively by telecom companies.

These companies pay the NTC anywhere from P10 million to P40 million annually for the radio frequencies used in providing this service.

The frequencies assigned to Altimax, which were in the 2596-2644 Mhz bandwidth, were covered by the NTC memo circular and should have been re-allocated for BWA.

Instead of doing so, however, the NTC issued an order in June 2009 giving Altimax a license to engage in an MMDS broadcast service with a 30 Mhz spectrum allocation, even though the firm had failed to roll out that service for nearly a decade. Moreover, Altimax was not required to pay spectrum fees.

Altimax then turned around and leased its assigned frequencies to Globe in exchange for an annual fee of P70 million and P90 million in 2009 and 2010, respectively, as stated in the Audited Financial Statements for 2009 that Altimax filed with the SEC. "It appears that Altimax and Globe have unduly benefitted from this arrangement at the expense of government," Trillanes said.

He called on the NTC to look into the lease agreement and to determine how much did the government lose in the form of unpaid SUFs under the Altimax-Globe deal.

The senator also asked the NTC to explain why it allowed Altimax to engage in a supposed hybrid MMDS broadcast/broadband service and not require Altimax to pay SUF while other broadband (BWA) companies were made to pay SUF.

He also asked how much does the Government stand to earn if the Altimax frequencies are recalled, be made part of the unallocated BWA/3G frequencies and awarded to duly interested and authorized telcos.

"Recalling these frequencies and reassigning them to companies that will pay the proper fees is the way to correct this situation. Beyond that, the NTC should also consider how to recover the fees that should have been collected but were denied the government," Trillanes pointed out.

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