Friday, August 17, 2007

Telecommunications in the Philippines

Republic Act No. 7925 otherwise known as the Public Telecommunications Policy of the Philippines sets the framework in the regulation of public telecommunications in the country. Among others, the law provides the following:

Sec. 3. Definitions and Interpretations. - For purposes of this Act, the following terms shall be used:

a) Telecommunications - any process which enables a telecommunications entity to relay and receive voice, data, electronic messages, written or printed matter, fixed or moving pictures, words, music or visible or audible signals or any control signals of any design and for any purpose by wire, radio or other electromagnetic, spectral, optical, or technological means.

b) Public telecommunications entity - any person, firm, partnership or corporation, government or private, engaged in the provision of telecommunications services to the public for compensation.

x x x

Sec. 16. Franchise. - No person shall commence or conduct the business of being a public telecommunications entity without first obtaining a franchise.

The Commission, in granting a Certificate of Public Convenience and Necessity (CPCN), may impose such conditions as to duration and termination of the privilege, concession, or standard or technical aspects of the equipment, rates, or service, not contrary to the terms of the franchise. In no case, however, shall the CPCN be shorter than five (5) years, nor longer than the life of the franchise. A CPCN expiring at the same time as the franchise shall be deemed to have been renewed for the same term if the franchise itself is also renewed or extended.

Limits to foreign ownership in public utilities, others

In relation to information technology, it is important to note the following sections of Article 12 (National Economy and Patrimony) of the 1987 Philippine Constitution. sets (or allows Congress to provide) limits on foreign ownership and participation in certain industries like telecommunications and broadcasting.

SEC. 10.
The Congress shall, upon recommendation of the economic and planning agency, when the national interest dictates, reserve to citizens of the Philippines or to corporations or associations at least sixty per centum of whose capital is owned by such citizens, or such higher percentage as Congress may prescribe, certain areas of investments. The Congress shall enact measures that will encourage the formation and operation of enterprises whose capital is wholly owned by Filipinos.
In the grant of rights, privileges, and concessions covering the national economy and patrimony, the State shall give preference to qualified Filipinos.
The State shall regulate and exercise authority over foreign investments within its national jurisdiction and in accordance with its national goals and priorities.

SEC. 11.
No franchise, certificate, or any other form of authorization for the operation of a public utility shall be granted except to citizens of the Philippines or to corporations or associations organized under the laws of the Philippines at least sixty per centum of whose capital is owned by such citizens, nor shall such franchise, certificate, or authorization be exclusive in character or for a longer period than fifty years. Neither shall any such franchise or right be granted except under the condition that it shall be subject to amendment, alteration, or repeal by the Congress when the common good so requires. The State shall encourage equity participation in public utilities by the general public. The participation of foreign investors in the governing body of any public utility enterprise shall be limited to their proportionate share in its capital, and all the executive and managing officers of such corporation or association must be citizens of the Philippines.