Mobile TV operator in franchise storm

Philippine operator Smart Communications is under congressional probe for alleged irregularities concerning how it managed its mobile TV franchise.
Written by Melvin G. Calimag, Contributor

MANILA--It has yet to commercially deploy its mobile TV service, but local operator Smart Communications has had to deal with legislative and regulatory inquiries about alleged violations in the acquisition of its mobile TV franchise.

In statements issued to the media over the last two weeks, House of the Representatives members Rodolfo Plaza--who represents the district of Agusan del Sur--and Joseph Santiago--for the district of Catanduanes--have demanded that Smart Communications-owned MediaScape be stripped of its congressional franchise.

Plaza introduced a bill in the Lower House calling for the revocation of the franchise of MediaScape, which operates Smart's mobile TV offering, while Santiago launched an inquiry as head of the chamber's information and communications technology committee to probe alleged wrongdoings.

According to the legislators, MediaScape's franchise was illegally sold on at least two occasions without the prior approval of Congress. Under local laws, franchised entities cannot lawfully transfer ownership or control of a franchise without the consent of Congress.

Plaza also accused former National Telecommunications Communications (NTC) chair Ponciano "Jacky" Cruz Jr. of "self-dealing", when he irregularly granted a "midnight" satellite TV license to MediaScape during his short six-month stint in the agency, under the now-deposed president Joseph Estrada.

According to Plaza, Cruz was one of five members on the board of directors at SATVentures, which is the controlling stakeholder of GV Broadcasting System. MediaQuest Holdings, a wholly-owned unit of Smart's mother company and carrier PLDT, acquired GV Broadcasting for 450 million pesos (US$9.6 million) last year and subsequently renamed it MediaScape.

Asked to comment, a spokesperson for Smart said the company has yet to make a statement regarding the issue.

The NTC, the Philippine telecom regulatory body, sent a letter to MediaQuest President Orlando Vea demanding an explanation on why its congressional franchise is under probe by Congress.

"You are hereby directed to submit to the commission, your explanation on the issues raised in [the House bill], and on whether or not the sale of GV (MediaScape) as well as its franchise to MediaQuest was done in violation of Section 20 of the Public Service Act, as amended, and other relevant issues on the matter," NTC's chair Ruel Canobas, told Vea in the letter. Santiago had obtained a copy of the letter.

Himself a former head of the NTC, Santiago is now urging Smart's parent company PLDT to seek a new congressional franchise for its mobile TV and planned satellite (or direct-to-home) ventures.

The legal hubbub is threatening to further delay Smart's mobile TV service, which has been offered free to the public for more than a year, due to the lack of a regulatory framework governing the market segment.

Melvin G. Calimag is a freelance IT writer based in the Philippines.

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