The Philippine Chamber of Telecommunications Operators (PCTO) on Monday, Feb. 3, expressed concern over certain provisions of the Konektadong Pinoy bill, a priority measure that aims to expand Internet access in the country and ease the entry of new players in the data transmission industry.
The PCTO, whose members include the country’s largest telcos, warned that the proposal in its current form would be detrimental to the telco business, saying it undermines constitutional provisions on the grant of a congressional franchise and the protection of national security and interest, and violates principles on fair competition.
“We believe in fostering a competitive environment that encourages innovation and makes connectivity more accessible and affordable to Filipinos. Unfortunately, despite its good intentions, the Konektadong Pinoy bill disregards Constitutional provisions, undermines fair competition, and could stifle investment in the telecommunications sector. We hope to work with lawmakers towards reworking the bill into a version that will be a win-win for all,” the PCTO said in a statement.
The PCTO also said it believes the bill is “unnecessary and superfluous,” as the existing Amended Public Service Act or RA 11659 already provides a clear framework for new players to enter the telecommunications market, including data transmission providers.
“The Konektadong Pinoy bill’s provisions are therefore redundant and could create confusion and regulatory overlap,” it said.
The telco operators narrated the following concerns against the bill:
- An Unconstitutional Rider on Spectrum Allocation: One of PCTO’s strongest objections is the inclusion of spectrum management provisions in a bill ostensibly focused on data transmission. The Constitution’s “one bill, one subject” rule requires that every legislative measure be limited to a single subject matter, which must be clearly expressed in its title. By incorporating broad spectrum allocation policies — extending beyond data transmission to include broadcast frequencies — the bill introduces a rider provision that is unrelated to its core objective, rendering it unconstitutional. The spectrum management provisions are too broad and unrelated to the main focus of the bill, as they encompass frequencies beyond data transmission, including broadcast frequencies. Many stakeholders in the telecom and broadcast industries were either unaware of or not involved in consultations regarding this issue.
- Violation of the Equal Protection Clause: The bill’s exemption of data transmission providers from securing a congressional franchise and a Certificate of Public Convenience and Necessity (CPCN) creates an unequal regulatory environment, violating the principle of fair competition. This disparity could discourage investment from existing players, ultimately achieving the contrary effect to what the bill intends and might hinder the growth of the telecommunications sector. Further, the removal of the franchise and CPCN requirements eliminates crucial safeguards that protect public interest by ensuring that telecommunications providers meet specific standards and obligations in order to provide quality and reliable services. It may also compromise national security by granting access to critical infrastructure to potentially unregulated entities, both foreign and domestic.
- Undermines Constitutional Policy for Protection of Natural Resources: The removal of the congressional franchise requirement and the reduction of the NTC’s powers could lead to the unchecked exploitation of the country’s finite spectrum resources, a vital part of the national patrimony.
- Threat to National Security: The relaxation of regulatory scrutiny of data transmission participants could potentially lead to an explosion of cybersecurity incidents that threaten national security. Given the growing use of over-the-top services or chat apps, which have led to the decline of voice and SMS, the bill could further stifle the growth of local telecommunications companies and reduce their ability to compete effectively. The bill also seems to discriminate against existing telecommunications service providers who have invested heavily in building critical infrastructure under the existing regulatory framework. This could lead to legal challenges and uncertainty in the market. Telecommunications is a critical industry and losing oversight is a threat to national security.
- Erosion of Domestic Business: The removal of barriers to entry could lead to an influx of new players, many of whom may not be subject to the same level of regulatory scrutiny as existing telecommunications companies. This could create an environment where local companies struggle to compete, potentially harming the overall development of the telecommunications sector in the Philippines.
- Access List Provisions Offend Due Process: The bill’s access list provisions, which grant the government broad powers to mandate access to private property for infrastructure development, raise concerns about potential violations of due process and property rights.
- “Dig Once” Policy Increases Risks: The “dig once” policy, mandating shared underground infrastructure, raises concerns about increased vulnerability to sabotage and potential disruptions in emergency situations due to the lack of redundant systems.
For Konektadong Pinoy to be effective in bridging the digital divide, the PCTO said it should mandate new data transmission participants to roll out their respective services in (GIDAs).
This, it said, will prevent ruinous competition with existing telcos who have built connectivity infrastructure in non-GIDAs.
“Data transmission providers should be required to build in GIDAs instead of adding redundant builds in areas where connectivity is already strong. Such provision must be added to the bill to realize the spirit and intent of Konektadong Pinoy, which is to achieve connectivity for all,” the PCTO said.
Earlier, local stakeholders have called on the Senate to immediately pass the Pinoy bill in the remaining session days of the 19th Congress.
The call was issued after Pres. Ferdinand ‘Bongbong’ Marcos Jr.’s certified the legislation as urgent last Jan. 27.
The National Economic and Development Authority (NEDA), Department of Information and Communications Technology (DICT), Bangko Sentral ng Pilipinas (BSP), and Philippine Competition Commission (PCC) have also called for the passage of the bill.
Versions of the Konektadong Pinoy bill, or the proposed Open Access in Data Transmission Act, have passed on third reading in the House of Representatives for three Congresses since the 17th Congress.
Movement of the legislation stalled in the Senate in previous years, with now representing the bill’s best chance of passage thanks to strong backing from Marcos.
With Konektadong Pinoy certified as urgent, the fate of the landmark legislation now rests in the hands of Sen. Alan Peter Cayetano, chairperson of the Committee on Science and Technology. The bill was sponsored on August 5, 2024, but has remained pending.
Stakeholders said it is looking forward to Senate president Francis “Chiz” Escudero leading the passage of the bill now that it has been certified as urgent.
Better Internet PH, a local advocacy gruop, said the bill will address the country’s growing digital divide and allow more Filipinos to enjoy the benefits of digitalization.
“It will do so by simplifying the licensing process for network providers and, following global practice, giving this mandate to the industry regulator, the National Telecommunications Commission,” it said in a statement.
The Philippines has consistently ranked poorly in global and regional ICT rankings, including the Digital Competitiveness Index and Network Readiness Index.
Philippine Internet is one of the slowest but also one of the most expensive in the world, the alliance said, adding that poor digital connectivity in the country can be attributed to outdated laws that discourage investment and prevent new players from putting up much-needed Internet infrastructure, especially in the countryside.
The stakeholders, who also previously signed a joint statement urging the President to prioritize and certify Konektadong Pinoy as urgent, are:
- Alliance of Tech Innovators for the Nation (ATIN)
- American Chamber of Commerce of the Philippines (AMCHAM)
- Analytics & Artificial Intelligence Association of the Philippines (AAP)
- Asia Open RAN Academy (AORA)
- Association for Progressive Communications (APC)
- Better Internet PH (BIP)
- Canadian Chamber of Commerce of the Philippines (CANCHAM)
- Democracy.net.ph
- Employers Confederation of the Philippines (ECOP)
- European Chamber of Commerce of the Philippines (ECCP)
- Fintech Alliance.PH
- Foundation for Media Alternatives (FMA)
- Global Digital Inclusion Partnership (GDIP)
- Institute for Social Entrepreneurship in Asia (ISEA)
- Internet Society (ISOC)
- Internet Society – Philippines Chapter (ISOC-PH)
- The Japanese Chamber of Commerce and Industry of the Philippines (JCCIPI)
- Korean Chamber of Commerce Philippines (KCCP)
- National ICT Confederation of the Philippines (NICP)
- Philippine Association of Multinational Companies Regional Headquarters, Inc. (PAMURI)
- Philippine Cable and Telecommunications Association, Inc (PCTA)
- Philippine Chamber of Commerce and Industry (PCCI)
- Philippine Exporters Confederation, Inc. (PHILEXPORT)
Konektadong Pinoy was one of two bills certified as urgent by the Office of the President. The other bill, on the postponement of BARMM elections, has already passed on second reading.
