PCC can finally live up to its mandate
Credit to Author: BEN KRITZ, TMT| Date: Wed, 10 Apr 2019 16:21:46 +0000
THE underlying concept of the Philippine Competition Act and its operative body the Philippine Competition Commission (PCC) is the protection of consumer choice. Until now, however, the PCC has had very little opportunity to demonstrate its value in a way ordinary consumers can understand.
Over the weekend, the PCC announced it had served notice on mass housing developer 8990 Holdings and its massive Urban Deca Homes Manila condominium property that they have been accused of violating the competition act for mandating the use of sole internet service provider (ISP) by residents of the complex in Tondo. The specific violation is of Article 15 of the Act, using a “dominant position” to prevent competition.
In its press statement, the PCC said it was acting on numerous complaints from residents that the ISP they were obliged to subscribe to was grossly overpriced.
“Residents complained that ‘Fiber to Deca Homes’ charges P1,249 for 2 Mbps (megabits per second), which is almost equivalent to a 5 Mbps plan from other service providers, while its 5 Mbps monthly plan of P2,599 only costs P1,299 from other networks,” the PCC said. “Its 6 Mbps service costs P2,949 which is equivalent to 50 Mbps from one ISP and almost the same price for 100Mbps from another ISP,” it added.
The fiber network is being provided by Cebu-based iTech-RAR Solutions. The firm provides a number of digital infrastructure services and has an impressive list of clients, of whom 8990/Deca Homes is evidently the largest.
Although iTech’s capabilities appear to be unquestionable, the prices they are charging for the services they offer the Deca Homes residents, if the PCC statement is accurate, are frankly atrocious. As fiber internet is not exactly a vital utility like water or electricity, there is no justification apart from the developer’s convenience (which is of course not sufficient justification at all) for limiting it to a single provider.
“This ISP or none at all” is not choice, from the consumer point of view, and it is exactly that sort of nonsense that the PCC is mandated to correct and prevent.
Assuming that 8990 Holdings cannot present a valid reason why iTech-RAR Solutions is the only ISP that can be offered to the Deca Homes Manila residents – and it certainly seems unlikely that it can – it stands to be hit with a hefty fine by the PCC, and of course will be ordered to allow other ISPs to offer their services to the residents.
Besides providing the needed direct relief to the Deca Homes residents, that outcome will send an important message to companies of all kinds here about the need to change the way business is done.
From the developer’s point of view, having a single ISP is practical. The Deca Homes Manila development is a huge property – 13 towers, and a total of about 13,000 individual housing units – and installing and maintaining any sort of utility service is a significant engineering challenge. Providing for multiple ISPs simply multiplies the cost and management effort required.
It has been always the tendency of businesses here, when faced with a situation that will require effort to offer choice to a naturally captive market, to take the low road and take unfair advantage of it. It is disappointing to see 8990 Holdings falling into the same unethical pattern, because until now it has distinguished itself as being more consumer-oriented than most developers as a result of its focus on the mass housing market.
8990’s designated service provider iTech-RAR is just as guilty, if not more so. Based on the information about itself the company provides on its website, the Deca Homes account is obviously iTech’s biggest undertaking; the number of staff dedicated solely to the Fiber to Deca Homes business outnumbers those handling all the rest of the company’s business.
Yet the current complaint indicates that iTech is either unaware or is pointedly ignoring the natural competitive advantage it has even without being unfairly coddled by 8990. It can offer the Deca Homes residents the benefits of built-in infrastructure and almost instant connection (PLDT fiber internet, by contrast, is a four- to six-month wait or longer), and dedicated support. Even if its prices were a bit higher than its competitors, it could probably still count on a virtual monopoly just by virtue of being conveniently available on demand.
Unless, of course, iTech-RAR’s capabilities simply prevent it from offering ISP options at competitive prices, in which case it probably shouldn’t be in that business in the first place.
The entire situation is a blessing for the PCC; the required response on its part is simple and obvious and easily relatable to the average consumer. After all, cursing the limited choices, bad service and high costs of telecom services have virtually become a national pastime.
Doing the right thing will pay enormous dividends for the PCC’s credibility, and set a long-overdue precedent about providing public services at reasonable prices.
Email: ben.kritz@manilatimes.net
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