Senate OKs DITO franchise bill on 3rd reading

The Senate on Wednesday approved on third reading the measure seeking to renew for another 25 years the franchise of Mindanao Islamic Telephone Co. Inc., now known as the DITO Telecommunity Corporation, the third telco player in the country.

With 17 votes in the affirmative, two in the negative, and one abstain, the chamber approved House Bill 7332 renewing the franchise of DITO to "construct, establish, install, maintain and operate wire and/or wireless telecommunications system in the Philippines."

Senators Risa Hontiveros and Francis Pangilinan voted against the approval of the bill.

The measure prohibits DITO to lease, transfer, sell, grant the usufruct or assign the franchise, rights or privileges, or its controlling interest without prior Congress approval.

It also authorizes the President the right to temporarily take over and operate the company's stations or facilities, temporarily suspend its operation in the interest of public safety, security and welfare, as well as to grant its temporary use and operation by any government agency in times of war, rebellion, public peril, calamity, or disturbance of peace and order.

Likewise, the measure requires the company to offer at least 30% of its outstanding stock to Filipino citizens in any security exchange in the Philippines or through other methods encouraging public participation.

DITO's original franchise under Mindanao Islamic Telephone Co. is set to expire in April 2023. The measure requires it to renew its franchise three years after its next expiration.

Senate Minority Leader Franklin Drilon had introduced an amendment to the measure requiring DITO to make a full report to the President and Congress any form of disclosure of any data or information, assistance, support or cooperation made to a foreign government, its instrumentalities or agents.

"Failure to make such disclosure shall be a ground for the revocation of the franchise," his amendment added.

Hontiveros also introduced amendments in the measure so that the assignment of frequencies to DITO will be subject to review, and that the National Telecommunications Commission will be authorized to allocate redundant frequencies held by the company.

Her amendment also mandates DITO to submit regular security audits of its network and facilities to Congress of the Philippines as part of its reportorial requirements.

DITO was awarded its permit to operate as the third telecommunications player of the country on July 8, 2019.

The consortium is made up of Davao businessman Dennis Uy’s Udenna Corporation, Udenna's subsidiary Chelsea Logistics Holdings Inc., and Chinese state-owned China Telecommunications Corporation.

Opposition

In opposing the approval of the measure, Hontiveros said while she welcomes more competition in the telecommunications sector, "this should not come at the expense of vital national security interests."

"DITO seems merely the Filipino mask over China Telecom and true face of what we call the 3rd Telco. A company that has been described as 'indirectly and ultimately owned and controlled by the government of the People’s Republic of China.' The same country that has engaged in a deliberate campaign of malicious cyber intrusion here and elsewhere," she said.

"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.

Pangilinan made the same remark in opposing the approval of the measure.

"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.

In August last year, the House of Representatives approved DITO's franchise renewal bill.

On March 8, DITO launched its commercial services in 15 key areas in the Visayas and Mindanao, saying that Metro Manila will have to wait a few more weeks to avail of its services. —LBG/RSJ, GMA News