MANILA—(UPDATE) Mislatel is not eligible to be the country's third telco player because its franchise is "deemed revoked," a lawmaker said Thursday as the Senate examined its qualifications.
Mislatel violated the conditions of its franchise when it failed to operate a year after it was granted the license and when it opted not to seek lawmakers' approval when it sold majority of its shares to 3 businessmen, Senate Minority Leader Franklin Drilon said.
Mislatel received its congressional franchise to operate in Mindanao in 1998, but the company has yet to start operations a decade since. Company president Nicanor Escalante said "peace and order" concerns scuttled plans to set up operations in Parang, Maguindanao.
"The franchise of Mislatel is deemed revoked because of your failure to comply with the conditions of the franchise," Drilon said in a hearing where tycoon Dennis Uy was present.
Uy, China Telecom and Mislatel are part of a consortium, also named Mislatel, which won the bidding for the third telco.
"There is no valid franchise. A valid franchise is a requirement under the NTC guidelines," Drilon said.
Senator Grace Poe, meanwhile, insisted that the issue on Mislatel's franchise should be settled as soon as possible so that the search for a third telco player can move forward.
“Dapat sa umpisa pa lamang noong sila ay napili, dapat mayroon na silang lehitimong prangkisa," Poe told reporters.
Poe added that her committee would release an opinion on the franchise validity of Mislatel.
“Para sa interes ng publiko, talagang mamadaliin namin na magkaroon ng opinyon ukol dito, kung ano ba ‘yung posisyon ng Senado, sana bago ang ika-17 ng Pebrero [deadline],” she said.
Mislatel's provisional status may be cancelled should post qualification assessments find that its franchise is invalid, Information and Communications Technology chief Eliseo Rio told lawmakers.
"If you do not pass the post qualification, you will simply not be given a franchise," Rio said.
Mislatel legal counsel Adel Tamano told lawmakers that the franchise can only be revoked should the state file a quo warranto petition against it.
"The Supreme Court made a very simple decision here that since a franchise is a property right, there is a due process requirement for it to be revoked and a direct action for a quo warranto is the proper action to take," Tamano said.
"So until such action is undertaken by the state, collateral attacks on a franchise are not permitted," he said.
Decisions on franchises belong to the legislative branch as the Congress is the authority who issues these "privileges" that are "subject to conditions," Drilon said.
"There is nothing that would prevent us from revoking the franchise," Drilon said.
"We need not do any action because it is ipso facto revoked. That means we did not do any actions, it is just revoked," he said.