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AMENDMENTS TO PUBLIC SERVICE ACT WILL EASE ENTRY OF MORE PLAYERS IN THE TELCO INDUSTRY – POE

Senator Grace Poe believes that the much-awaited entry of a third telco player that will directly compete against the telco giants and break the virtual duopoly will go on full blast as she endorsed a measure that effectively liberalizes the sector.

Poe, chairperson of the Senate Committee on Public Services and principal author and sponsor of Senate Bill No. 1754 seeking to amend Commonwealth Act No. 146 or the 82-year-old Public Service Act of 1936, said there would be “meaningful competition” in the telco sector once the bill becomes a law.

“Sa mga sinabi rin ng ating Pangulo na 3rd telco player, 4th o 5th, kung meron man, kailangan ng batas na magbibigay awtoridad para ito ay maging isang realidad. Napakinggan na po natin kung paano paginhawahin at pagandahin ang estado ng ating mga kababayan. Oras na po upang tayo ay tumugon at umaksyon,” the legislator said in sponsoring the proposed measure recently.

The lawmaker said she expects immediate Senate action when sessions resume in May.

“Inaasahan po nating ang karamihan ng public services ay magiging bukas sa malawakang kompetisyon. A meaningful competition will allow more players, domestic and foreign, to slug it out to win the satisfaction of the Filipino people. Sa ganitong paraan, magpapaligsahan ang mga ito sa pagbibigay ng de-kalidad na serbisyo at produkto sa pinakamababang presyo para sa mga Pilipino. Inaasahan nating burahin na ang ‘take it or leave it’ attitude ng mga nagpakasasa sa monopolya nitong mga nakaraang dekada o siglo,” the lady senator added.

The 1987 Philippine Constitution restricts operation of a public utility to companies whose ownership is at least 60-percent Filipino-owned. The antiquated Public Service Act, however, only provides a list and not a definition of public services and no definition of a public utility. Thus, foreign equity restrictions also apply to public utilities like telecommunications, electricity, water and transportation, among others.

Currently, electricity (distribution and transmission), water, transportation, telecommunications and other essential services fall under the foreign equity rule mandated by the Constitution. Once the measure is approved, only the electric power distribution and transmission, water pipeline distribution and sewerage pipeline system are restricted.

“Ang natural na epekto ng ating panukalang depenisyon ng ‘public utility’ ay ang ‘paglaya’ ng lahat ng public services na hindi kabilang sa tatlong nailistang public utilities. ‘Paglaya’, sapagkat ang mga hindi nabanggit na public services ay mawawala na sa mahigpit na Constitutional restrictions patungkol sa foreign ownership, equity at operation, at iba pa,” Poe explained.

She said the measure seeks to improve the quality of the goods and services of public service providers and lower the costs of their goods and services at the same time.

Once the measure is approved, only the electric power distribution and transmission, water pipeline distribution and sewerage pipeline system are restricted.

Companies are expected to provide better services or they will face a fine of up to P5 million per day of violation plus “disgorgement of profits” and additional “treble damages.” The existing law only imposes a measly fine of P200 per day of violation.

The measure complements Senate Bill 1755 or An Act Strengthening the National Telecommunications Commission that Poe also endorsed for immediate approval.

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