Honasan replaces Info and Communication Tech chief; Rio posts how 3rd telco was chosen

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By Lara Climaco i FilAm Star Correspondent

Malacañang’s sudden appointment of Sen. Gregorio Honasan as the next secretary of the Department of Information and Communications Technology (DICT) is puzzling to many, inviting unkind comparisons between the Senator and DICT Acting Sec. Eliseo Rio Jr.

Hailed as the mastermind behind the successful bidding for the New Major Player (NMP) in Philippine telecommunications, a most significant exercise considering its denomination at PHP 257 billion and the sector’s massive economic impact once unleashed, Rio is widely praised for his brilliance.

He is after all a double engineering degree holder, ECE board top-notcher, academic, and ex-general who had had 50 years of telecom experience. He also stood his ground on the industry’s preferred method of NMP selection, the Highest Committed Level of Service (HCLoS) point system, despite criticisms from Finance Sec. Carlos Dominguez III (a childhood friend of Duterte) who leads the Cabinet’s economic development cluster and is a member of the oversight committee created by Malacañang for the third telco slot bidding.

Except for expressing his desire to finish the job, Rio has remained silent about his impending replacement at the helm of DICT. Last November 24 however, he revealed some details on why Philippine Telegraph and Telephone (PT&T) and the SEAR Telecom-led consortium were disqualified from the bidding.

“I think it’s time to speak up,” was his opening salvo. He then described how the bidding happened last November 7, which has been widely reported — three bidders showed up, two were disqualified, the lone compliant bidder won the slot with 456.80 points out of 500. And thus did the Mislatel consortium become the official NMP with a promise to raise internet speeds to 55 Mbps over the next five years, covering 84 percent of the population.

Over three successive and lengthy posts on Facebook, Rio countered PT&T and SEAR’s claims of irregularities. The gist is that PT&T failed to make the grade on the technical side: it has not operated on a national scale nor been operational for the required 10 years, based on records of the National Telecommunications Commission (NTC).

“Apart from internet/broadband services in NCR from 2008 to present, all other NTC regional offices reported that PT&T did not operate for the past 10 years in their regions,” Rio said. Citing PT&T’s own disclosures, the DICT chief noted that the company also stopped providing landline services in 2008 because it underwent corporate rehabilitation.

PT&T is also missing the point when it alludes to Mislatel being unfit on the same technical grounds.

“PT&T insists that in spite the above facts, its regional operations would qualify it to compete with Globe and PLDT/Smart on a national scale. It compares itself with Mislatel but forgot that the Mislatel group has ChinaTel as a member. ChinaTel’s operations is definitely much bigger than Globe and Smart combined,” Rio said as he concluded his first post.

PT&T has taken its case before the Supreme Court, which did not issue an injunction that would have halted the confirmation of Mislatel as the official NMP last November 19.

Meanwhile, SEAR’s motion for reconsideration was denied because the guidelines were clear that disqualification is automatic if a bidder fails to post the PHP 700 million participation security.

“SEAR was disqualified because it did not have the required participation security in its first envelope. It even went on to blame NTC — that NTC did not respond to its inquiries pertaining to the letter of credit they intend to use as their participation security,” Rio said, noting that SEAR’s letter of inquiry was dispatched to the NTC at around 8:20 a.m. of November 7 or less than two hours from the 10 a.m. deadline.

“In its motion for reconsideration, SEAR Telecoms alleged that: 1.) their failure to submit a participation security does not affect the substance and validity of their proposal; 2.) they have a pending inquiry with the NTC as to the form and wordings of the irrevocable letter of credit; and 3.) they be allowed to submit their participation security,” Rio revealed in his second post.

This appeal was rejected by the NMP selection committee because the guidelines were clear about this requirement and accepting SEAR’s participation security after the bids had been opened was expressly prohibited, he explained.

Rio stressed that any contractual dispute among telcos is beyond the scope of the NMP selection committee or the NTC en banc. SEAR had sought Mislatel’s disqualification for allegedly breaching an exclusivity arrangement with one of its consortium members.

The DICT chief also described SEAR’s proposal as “too good to be true” in his third post.

“SEAR presented their commitments to the public to show that they have a higher level of committed services than Mislatel by garnering a perfect 500 points. On the first year alone SEAR promise to provide all 42,000 barangays in the Philippines with 56Mbps speed, using a satellite network. However, it bears stressing that the claim of SEAR might just too good to be true. An ICT practitioner would even say that technically and financially, it would be a promise impossible to fulfill,” Rio said.

He then presented a link to a 2004 fraud ruling by the United States Securities and Exchange Commission against David Kirk and Jonathon Bentley-Stevens — who has been identified in press reports as the chairman of TierOne Communications International, a member of the SEAR consortium.

“A careful reading of an article linked below may reveal contradictions. However, I advise the reader to render her/his own judgment after perusing such article which I find interesting and relevant to the matter at hand,” he said in connection to the 2004 fraud ruling.

“Dapat din malaman ni Gov. Chavit [Singson] na ‘yong partner niya sa TierOne ay nahatulan ng fraud sa US,” Rio added in reply to a netizen who criticized him for being crafty.

Pointing out the fast turn-over at DICT where Honasan would be the third head in as many years, Sen. Ralph Recto has issued a statement calling on Honasan and Rio to work together at the DICT.

Malacañang released Honasan’s nomination papers last November 22 and it is unclear whether Rio will stay on as DICT undersecretary, which was his original appointment.

“(Rio) is good for one last tour of duty, at a crucial point in our nation’s life when important developments in the ICT sector are happening, including the authorization of a third telco — which must, like any public utility, be subjected to oversight and held to its promised deliverables,” Recto said in his statement.

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