Senate begins deliberations on Smart franchise extension

Should Smart Communications, Inc.'s franchise be extended to another 25 years?

During the first Senate hearing on on Senate Bill No. 1302, which seeks to extend the legislative franchise of PLDT, Inc.’s wireless subsidiary by another 25 years, Senate committee on public services Chair Senator Grace Poe said the grant of franchise will be anchored on the guarantee of consistent good service, and expressed hope that the telco could provide people with even better service in the coming days noting that it is also a solution to the country’s traffic crisis.

She also asked Smart several questions including whether the country’s internet speed has improved or whether it remained stuck in limbo like “traffic in EDSA”, and sought for updates on the rollout of cellular sites."Franchise extension is both a looking-forward and looking-back exercise. Halimbawa, kamusta na ang internet speed sa Pilipinas? O kasing bagal pa rin ng traffic sa EDSA?" Poe asked.

Meanwhile, Senator Juan Miguel F. Zubiri, the bill’s author, said there were discussions on expediting the approval of Smart’s franchise during a Senate caucus. Senator Zubiri said that some Senators are seeking amendments to the House of representatives version which was approved on January 16.

Zubiri shared that some of the items under review have been the existing exemption of taxes on the importation of certain equipment like radio telecommunications and electronic communications equipment, machinery and spare parts. Another issue being discussed is the exemption of Smart from a rule that required it to sell 30 percent of its authorized capital stock to the public via an initial public offering. The current version of the bill provides an exemption to the rule if the company “is wholly owned by a publicly listed company.” Smart would then be exempted from this requirement since it is 100 percent owned by PLDT, which is listed on the Philippine Stock Exchange.

With Smart’s franchise due to expire on March 17, Senator Zubiri said there is increased urgency on passing the measure.

Also present in the hearing were stakeholders who aired their views, regulators who were asked if Smart has indeed complied with its duties which were part of the conditions to be given their existing franchise, and public interest groups or subscribers to gauge the telco’s service. Senator Poe said welcomed their comments and suggestions saying it would help the committee in crafting the bill that will be eventually be endorsed to the plenary for debate.

The Senate hearing will resume on February 23, Thursday to further discuss the issue with stakeholders from Department of Information and Communications Technology (DICT) and Department of Finance (DOF).