NTC VoIP memo may be unconstitutional — PLDT exec

A draft circular of the National Telecommunications Commission (NTC) on Voice over Internet Protocol or VoIP may run afoul of a constitutional provision that limits the operation of public utilities only to Filipino nationals.

Rogelio Quevedo, head of regulatory affairs of the Philippine Long Distance Telephone Co. (PLDT), cited Section 11, Article 12 of the Constitution which provides that "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 60 per centum of whose capital is owned by such citizens..."

As public utilities offering basic telecom services, telecommunications companies are required to abide by this nationality requirement, he said.

However, last month, the NTC issued a draft memorandum that defines VoIP as a valued-added service (VAS). As a result, the draft memo would effectively allow even entities without Congressional franchises to offer the service.

By doing so, "the NTC might unwittingly allow the entry of foreign players by circumventing the constitutional provision which limits the operation of public utilities to Filipino citizens or corporations at least 60 percent owned by Filipinos," he said.

"There is a fundamental confusion over what VoIP actually is. The NTC draft considers VoIP a value-added service. But VoIP is more correctly seen as a technology that allows operators to deliver various services, including a basic telecommunications service like voice," Quevedo said.

"Just like different cellular technologies like GSM, CDMA or analog technologies like TACS can deliver various services including voice. The confusion stems from the fact that VoIP is being interchanged with the Internet," Quevedo added.

"What matters is that under the Constitution, only Filipino nationals and corporations at least 60 percent owned by Filipinos granted a congressional franchise can provide basic telecommunications services like voice," he added.

Quevedo stressed that in proposing that any person or entity can provide VoIP to the public for a fee provided only that they register with the commission, the NTC draft memo would contravene both the Constitution and Republic Act 7925 or the Public Telecommunications Policy Act of the Philippines," Quevedo said.

Under RA 7925, only entities granted a franchise by Congress can offer telecommunications services. The NTC draft memorandum will be the subject of a public hearing on May 3.