The Road to Third Major Telco (PART 2: power plays, and the Filipino people in the middle)

“Can the mayor from the South make the Philippines into the network hub of Asia?” – Ma. Lourdes Tiquia, “Is Duterte the ICT president?” The Manila Times, March 20, 2018

In our previous column, we talked about how the Department of Finance (DOF) and the Department of Information and Communications Technology (DICT) are at loggerheads over the Terms of Reference (TOR) of the third telco initiative, where the DICT (and the National Telecommunications Commission – NTC) is pushing for what the President wants and the DOF is opposing them. We talked about why the highest committed level of service (HCLOS) model of the DICT is more sensible and less prone to corruption than the highest committed investment (HCI) model of the DOF. We also talked about why it will be foolish to allow those with millions and billions of liabilities – whether contested or uncontested – to join the third telco selection process.

Today, let’s talk about some other issues that have been hindering the release of the TOR.


It is well-known that in the Cabinet of this administration, there are two types of seats – “inner cabinet” (those President Rodrigo Duterte knows personally and has a high level of trust and confidence), and “outer cabinet”. Secretary Carlos Dominguez III of the DOF is “inner cabinet,” having been a confidant of the President for decades. Officer-in-Charge Undersecretary Eliseo Rio, Jr of the DICT is “outer cabinet”, having been appointed in a caretaker capacity after President Duterte reportedly fired then-Secretary Rodolfo Salalima.v As such, the conflict we discussed previously is skewed against the DICT and for the DOF-it doesn’t much matter that the DOF is the one going the wrong direction.

Even worse, the lack of a DICT Secretary means that there is nobody of the same rank who enjoys the President’s confidence enough to effectively argue for and on behalf of the department. As such, Usec. Rio, competent though he is, cannot effectively put the case for the HCLOS properly before the President; he cannot argue that the HCLOS model is aligned with the President’s vision, he cannot demonstrate the math to show that the HCLOS model will result in the prioritization of Visayas and Mindanao, he cannot prove that the HCLOS model is more transparent and therefore less prone to corruption than the HCI model. In fact, Usec. Rio can be treated shabbily by “inner cabinet” counterparts choosing to not attend decision meetings and for underlings to try to bully the DICT into submission.

While this is the reality of politics, it is no less disappointing. OIC Rio is one of the few ICT-related officials to have listened and engaged with ICT advocates, and his credentials are as impeccable as his integrity and work ethic. If President Duterte loses the services of Usec. Rio, he will be hard-pressed to find someone of similar caliber and drive. If that happens, the President could very well fail in ICT reforms and initiatives – including the third telco initiative – and it will be unlikely that Duterte will ever be considered an ICT president. (Sorry, Malou, but that’s the way it is).

All is not lost, however. ICT reforms advocates are learning that the President has been paying attention to some key ICT issues, such as spectrum management (which he calls “frequency”), and has spoken of these in various fora. Should the President pay attention to the issues of the third telco initiative a little more closely, there is a chance that the HCLOS model will be adopted for the selection process.

And still, all of this remains to be conjecture until the TOR is published formally. Unless the TOR is released soon, and the HCLOS model is adopted by the TOR, we will have no confidence that the third telco initiative will succeed.

(Next up: Opportunities)

v "Duterte admits he fired DICT chief Salalima." SunStar Manila.