The Constitutionality of the VoIP Guidelines

April 5, 2005

Atty. Rudy Salalima, Globe’s Senior VP and General Counsel, made an interesting remark in an INQ7 story on the VoIP draft rules issued by the NTC.

“The Constitution requires that a public utility must have a [Congressional] franchise,” he said. The NTC draft rules indicate however that prospective VoIP providers will not be required to apply for a Congressional franchise before offering the service.

So I checked the Constitution in particular Art. XII on National Economy and Patrimony and Section 11 which deals with public utilities. It reads:

Section 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.

Is he correct? (more…)