Nbtc Had Legal Obligation To Ensure Fair 3G Bid: Interview

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EXCLUSIVE INTERVIEW

NBTC had 'legal obligation' to ensure fair 3G bid

The Nation

BANGKOK: -- Since the auction of third-generation (3G) telecom operating licences last month, those involved in the bidding have faced heavy scrutiny from the National Anti-Corruption Commission (NACC), the Ombudsman's Office and the Department of Special Investigation (DSI).

Former NACC member Prof Methi Krongkaew gives The Nation his perspective on the auction.

Q : What is your view in terms of the legal aspects of this auction?

Though I have no information about the procedures and preparation for this auction, I have learned that foreign countries such as India carried out auctions that allowed all bidders to truly compete to secure licences. But in our country, the number of licences offered for auctioning was the same as the number of bidders, so everyone got what they wanted. It is difficult to judge if there has been collusion. I cannot tell until an investigation is carried out. According to Article 11 of the Price Collusion Act 1999, if state officials believe bidders have colluded on pricing, they could be held responsible for failing to stop it.

Q : What do you feel about the criticism of the fact that the number of bidders was the same as the number of licences offered?

It could be interpreted that every bidder had the same idea of taking three - and not four - slots, so we cannot be sure that there was any competition, or if it was actually an allocation. We have to scrutinise whether the state officials committed any offence according to the price-collusion law.

Some people believe there was actually no competition because some bidders secured licences at the minimum reserve price of Bt4.5 billion, and another offered a little bit more than the starting price.

Chulalongkorn University lecturers suggested that the standard price should be Bt6 billion, but the National Broadcasting and Telecommunications Commission (NBTC) believed the starting price should be set at two thirds of the standard price. If the price offered by bidders is lower than the standard price, the auction should be cancelled and new bids should be sought.

Q : If the NBTC knew that there would be price collusion, they had to cancel the auction?

Correct. To comply with the Price Collusion Act, state officials must be vigilant and if they are suspicious about anything and do not suspend the auction, they could be held responsible for violating the law.

Q : What is the punishment as stipulated in the Price Collusion Act?

Both the state officials and private companies can be punished. State officials found guilty of committing price collusion offences will be subject to action for malfeasance in violation of Article 157 of the criminal code.

Q : The NACC does not have the authority to suspend or revoke licences that have already been granted to operators?

I believe not.

Q : The NBTC claimed that its auction was carried out under the Frequency Allocation Act and not the E-auction Law.

The court will decide if they were right or wrong.

The NBTC also claimed that it could not cancel the auction because it could be sued by the bidders.

I totally disagree. According to the Price Collusion Act, if the NBTC thinks that there is a possibility that the bidders may collude, they must cancel the auction. They must decide if they want to face suits from the bidders or from the NCCC.

The NBTC claimed it could not cancel the auction, because it had already called for bids.

That's not the point. The claim is not justified.

Another NBTC claim was that the starting price was set at Bt4.5 billion and not Bt6.4 billion as recommended because a high starting price would discourage smaller operators from participating, and would benefit only bidders with deep pockets - thereby making the agency vulnerable to accusations of enabling collusion.

If the starting price is too high and no bidders join the auction, they will see this and can call for new bids. Calling for bids twice, they will know the appropriate price or the market price. The claim that a high starting price would block small operators is not true because small operators do not want to bid anyway.

-- The Nation 2012-10-26

[fareastguy]

[asiawatcher]

Precisely - boring...