Congress can’t redefine public utilities, pro-Charter law advocates opine

A group of lawyers seeking to uphold the Constitution said Monday Albay 2nd District Rep. Joey Salceda has misunderstood past Supreme Court decisions when he argued that Congress can pass a bill excluding certain sectors from the minimum requirement of 60-percent Filipino ownership for “public utilities” and that radio frequencies are not “natural resources” subject to the same foreign equity cap.

Tagapagtanggol ng Watawat, the lawyers’ advocacy group, agreed with retired Senior Associate Justice Antonio Carpio’s opinion that House Bill No. 78 would be unconstitutional for amending the Constitution through ordinary legislation and for usurping the power of the Supreme Court to interpret the scope of its provisions.

HB 78 is Salceda’s bill proposing the exclusion of telecommunications companies from the term to allow their full foreign control.

“Whether or not one is a public utility is a matter of judicial, not legislative determination,” stressed the group’s president, Atty. Arnel Victor Valeña, in a statement.

Carpio expressed his opinion during the Philippine Bar Association’s webinar just recently. This prompted Salceda to reportedly issue a statement claiming that “the Supreme Court already sanctioned the declassification of public utilities” in decisions which upheld the exclusion of shipyards and which “no longer considered” power generation to be a public utility operation.”

Rebutting this, Valeña said the SC decisions cited by Salceda were inapplicable to telecommunications because they did not involve the issue of whether Congress could narrow down the terms in the Constitution to avoid certain restrictions.

Unlike telecommunications, Valeña said shipyards—where ships are built or repaired—only serve a limited clientele and not the public in general. Contrary to Salceda’s claim, he said the SC was enforcing the definition of ‘public utility’ in its 2003 decision on JG Summit Holdings, Inc. vs. Court of Appeals.

Valeña explained that shipyards were only classified as a “public utility” under ordinary laws, such as Act No. 2307 in 1913, the Public Services Act in 1936, and Batas Pambansa Blg. 391 in 1983. Currently, the inclusion of shipyards is repealed by Executive Order No. 226 in 1987.

In other words, shipyards were treated as a “public utility” only by “legislative declaration,” not by the Constitution. This was unlike telecommunications companies, which the framers of the Constitution explicitly declared to be a “public utility” during their deliberations, he said.

“The framers of the 1987 Constitution were categorical that public utilities included telecommunications.  No amount of legislative declaration can remove a certain business from the definition of a public utility if, in fact, the business as conducted is impressed with public use or carried on for the public benefit,” Valeña said.

“The intent of the framers of the 1987 Constitution when they included a provision on public utilities and the 60-40 foreign equity limit should be considered,” he added.

Valeña also clarified that the treatment of power generation as not a ‘public utility operation’ is not the same as removing it from the scope of ‘public utility’ under the Constitution.

It only meant that under the Electric Power Industry Reform Act upheld by the Supreme Court, interested parties were not required to secure a congressional franchise to operate a power generation company.

The EPIRA merely authorized the Philippine government to privatize and deregulate the industry, but not exempt it from the foreign equity cap, Valeña explained.

He added that the framers of the Constitution consistently defined electricity distributor Meralco as a “public utility,” and the Supreme Court, even in cases decided after the enactment of EPIRA, always recognized power companies as “public utilities.”

“Electricity ever since and to date still falls under “public utilities.”  Regulation—or in this case, deregulation—does not equate to declassification,” he said.

Valeña also addressed Salceda’s doubts regarding Carpio’s treatment of airwaves as a “natural resource” which is owned by the State and may be utilized only by corporations that are at least 60-percent Filipino-owned under a separate constitutional provision.

Salceda claimed Justice Carpio’s interpretation could lead to “several absurdities,” such as foreigners being banned from using cellular phones and laptops. He also found it “odd” to put radio frequencies in the same class as exhaustible natural resources such as water.

But Valeña pointed out that the radio frequency is “extremely limited” because of its use not just by telecommunications companies, but also television, radio, Bluetooth, Wi-Fi, and defense and emergency services. This precisely led governments worldwide to allocate the use of the various bands and frequencies and regulate access to realize maximum economic and social benefits, he said.

He noted that the International Telecommunications Union was founded in 1965 to coordinate and standardize the allocation because having too many users would make the radio spectrum unsustainable and prone to interference.

Valeña again pointed to the deliberations of the 1986 Constitutional Commission, whose members considered airwaves to be part of the airspace.

“Even with the big question as to how ‘airwaves’ can be defined, the Commissioners resigned to the fact that airwaves, frequencies, and radio frequencies are impliedly included as natural resources, the allocation of which should be regulated by the State,” he said.

Even Congress, he said, recognized through the Public Telecommunications Act of 1995 that the radio frequency spectrum is a “scarce public resource that shall be administered in the public interest.” As recently as April 27, 2018, the House Press and Public Affairs Bureau said in a press release that the “radio frequency spectrum is a scarce natural resource.”

Valeña added that several Supreme Court decisions already recognized the scarcity of the spectrum that required greater regulation of broadcast media, to the point that they enjoy less constitutional protection than print or online media.

He cited Divinagracia vs. Consolidated Broadcasting System, Inc., which recognized that even if advances in technology led to the more efficient use of the spectrum, its uses have also quickly grown these days.

“Contrary to Congressman Salceda’s notion, both the legislature and the judiciary are actually in agreement that the spectrum is scarce in relation to the number of possible uses and devices that can make use of it,” Valeña said.

Topics: Joey Salceda , Antonio Carpio , Supreme Court , Tagapagtanggol ng Watawat
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