Senate approves DITO franchise on final reading


THE Senate on Wednesday approved on third and final reading the measure granting franchise renewal to third telco player DITO Telecommunity Corp. for another 25 years.

With 17 affirmative votes, two negative votes and one abstention, the senators approved House Bill No. 7332 or the franchise renewal application of Mindanao Islamic Telephone Company Inc., now known as DITO.

Senators Risa N. Hontiveros-Baraquel and Francis N. Pangilinan voted against the franchise renewal of DITO, while Senator Panfilo M. Lacson, Jr. abstained.

The measure allows the company to “construct, establish, install, maintain and operate wire and/or wireless telecommunications systems in the Philippines.”

It also calls for the firm to offer 30% or higher of its common stocks to Filipinos within five years. Failure to do so will render the franchise revoked.

The company is required to submit an annual report on compliance with terms and conditions of the franchise to the Congress on or before April 30. DITO will be penalized with a P1 million fine each day it fails to comply with the annual report to Congress.

The senators last week approved the inserted provision of Senate Minority Leader Franklin M. Drilon requiring the company to report to the President and the Congress any disclosure of data, information, assistance, support or cooperation to foreign government and its instrumentalities. Failure to report will be a ground for franchise revocation.

They also approved the amendments of Ms. Baraquel to require DITO to submit regular security audits of network and facilities to the Congress and subject its frequencies to review at regular intervals.

Ms. Baraquel said she welcomes more competition in the telecommunication sector, but “this should not come at the expense of vital national security interests, and against a rival claimant in the West Philippine Sea.”

“DITO seems merely the Filipino mask over China Telecom and true face of what we call the third Telco,” she said, referring to DITO’s partner China Telecommunications Corp.

“A company that has been described as ‘indirectly and ultimately owned and controlled by the government of the People’s Republic of China,'” she said in the explanation of her vote.

“Allowing it to interconnect to our existing networks and to use our radio spectrum at a point in time when we are estimated to be some 25 to 30 years behind other countries in cybersecurity and cyber-defense is, I would say with great respect, a risk we cannot afford to take,” she added.

Mr. Pangilinan also raised concerns over national security issues, while recognizing the need for more telecommunications providers.

“We understand that a third telco or a fourth or a fifth or a sixth telco, these are vital to improve our telco industry, but we should not close our eyes to the national security issues as well as the threats to our sovereignty surrounding this particular telco,” he said.

He noted that DITO is 40% owned by state-owned China Telecom and the Chinese government has the power to compel China Telecom “to monitor and investigate foreign individuals and institutions and conduct espionage activities on them” under China’s intelligence and counter-espionage laws.

DITO’s franchise will expire on April 24, 2023. It launched its services on March 8 in Metro Cebu and Metro Davao. — Vann Marlo M. Villegas

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