The Philippine Long Distance Telephone Co. (PLDT) is questioning the constitutional implications of the draft memorandum released by the National Telecommunications Commission (NTC) concerning the commercial roll-out of Voice over Internet Protocol (VoIP) service.
Rogelio Quevedo, PLDT head for regulatory affairs, pointed out that the NTC?s draft circular "might run afoul of a constitutional provision that limits the operation of public utilities only to Filipino nationals." He cited Section 11, Article 12 of the Constitution stating 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 sixty percent of whose capital is owned by such citizens . . ."
VAS
Quevedo is questioning the provision in NTC?s draft memorandum which defines VoIP as a value-added service (VAS). This definition will automatically allow even "non-traditional" telecommunications carriers - those entities without congressional franchises to offer the service - to commercially deploy the service, he said.
"As public utilities offering basic telecommunications services, telecommunications companies are required to abide by this nationality requirement but with NTC?s definition of VoIP as VAS, the commission 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 explained.
NTC pointed out that the issue as to who may or may not offer VoIP services to the public for compensation would be settled by determining whether the term value-added services also applies to VoIP.
An excerpt from the draft circular signed by NTC commissioner Ronald Olivar Solis states that since "VoIP by definition is not offered via circuit-switched networks, it cannot be considered to have ordinarily been offered by LECs (local exchange carrier), IECs (inter-exchange carrier), and overseas carriers. As such, it is a value-added service."
Quevedo, however, argues that there remains 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. 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," he said.
"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. "By 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 will contravene both the Constitution and Republic Act No. 7925, the Public Telecommunications Policy Act of the Philippines," Quevedo pointed out.
Under RA No. 7925, only entities granted a franchise by Congress can offer telecommunications services.
However, the NTC circular maintained that "the commission strongly believes that because traditional voice and VoIP services are not the same, the traditional voice regulations and licensing requirements should not apply to VoIP." The NTC draft memorandum will be the subject of a public hearing on May 3.