Philippine Proposal Requires License of Bloggers (Full Text)

Is the Philippine government trying to tax bloggers?

That seems to be the case, judging from an inconspicuous proposal posted on the National Telecommunications Commission (NTC) website. Here is the crux of the matter. They want everyone on the Internet to register through them…

Contents, Information, Applications and/or Electronic Games Providers, Contents Developers, Information Sources, Applications Developers, and Electronic Games Developers are required to have commercial presence in the country and shall secure Certificate of Registration (COR) from the Commission.

…and then pay fees. A filing fee of Php300 ($7) and an annual registration fee of Php6000 ($133). Whoa!!! I haven’t even made that much from Google Adsense in five years, and I have to pay that amount EACH YEAR just to be able to place a banner ad over my blog??? That’s just crazy!

Stop right there, you say. How do we know if we really are part of this proposal? Well, firstly let’s take a look at what is addressed by the proposal:

Content – refers to all types of contents delivered to/accessed by the users/subscribers such as music, ring tones, logos, video clips, etc.

Information – refers to all types of information delivered to/accessed by the users/subscribers, e.g. road traffic information, financial information, visa application information, etc.

Now that we know, let us ask ourselves whether we, as bloggers, offer either content or information. And the answer is yes, on both counts. Content is definitely an area that some, if not most, bloggers have ventured in. Who hasn’t tried to upload a Youtube video or two? Information, on the other hand, is most definitely blogger territory. That’s what we offer our readers everyday, that’s everything we do.

So we know the kind of data addressed by the proposal. The next step is to analyze whom the proposal really pertains to. Are we actually involved? Well, here are the affected, and my comments in brackets:

Contents Providers – are persons or entities offering and providing contents to the public for compensation through the networks, systems and/or facilities of authorized networks, systems and/or facilities providers [If you place advertisements on your Youtube videos, you’re a content provider. Or if you sell graphic designs or web templates, you’re also a content provider.]

Information Providers – are persons or entities offering and providing information to the public for compensation through the networks, systems and/or facilities of authorized networks, systems and/or facilities providers. [Okay, we’re talking about the paid bloggers here. In fact, anybody with an ad network like Google Adsense falls under this sweeping definition, and that’s like, almost the entire blogging community.]

Contents Developers – are persons or entities creating contents. [Uhhh. The only thing differentiating this term from a content provider is the issue of compensation. Meaning, a content provider is a subset of a content developer. So why even make up a “content provider” if they’re gonna tax all content developers anyway? Or do the content providers get taxed TWICE??]

Information Sources – are persons or entities providing information to Information Providers. [Rest assured that if you have any original thought in your body, share it and get taxed.]

Applications Developer – are persons or entities creating applications. [Oh, are you a programmer like me? Too bad, we’re getting taxed. Say goodbye to the opensource movement.]

Electronic Games Developer – are persons or entities creating electronic games. [My, my. As though electronic games were not applications. I wonder how many times I will have to get taxed here.]

Man, that’s a whole lot of people the NTC wants to tax. The entire Internet fits in there! In fact, I alone, fit in five categories of people the NTC wants to tax. I am a content provider, an information provider, a content developer, an information source (sometimes), an applications developer and an electronic games developer. So, I guess I should pay NTC a filing fee of Php 1500 ($33) upfront and a registration of Php 30,000 ($667) from now and each year thereafter.

Then, on the matter of scope. How can we be sure that we’re talking about the Internet here? Maybe we are just simply discussing the mobile networks in the country? Well, that’s where the ambiguity of the entire document comes in. While the data and the persons addressed by this document are defined clearly, the scope is not defined at all, only the goals are:

• Promotion of competition in the telecommunications market, where telecommunications carriers are free to make business decisions and interact with one another in providing telecommunications services, with the end in view of encouraging their financial viability while maintaining affordable rates.
• To further encourage the development of contents, information applications and electronic games, the prevailing access charge regime between the contents, information, applications and electronic games providers and the networks providers which is revenue sharing should be replaced by fixed access charge.

Telecommunications is mentioned in the goals, but does the term “telecommunications” solely pertain to the mobile carriers like Smart and Globe? And then, these companies do not serve only the mobile market, but also the data market (they are Internet Service Providers as well), and so if these companies are involved, then are we, as data consumers of these companies, not part of them as well?

It’s nice that the NTC would like the telecommunications market to be more competitive. It’s nice that they think that by enforcing more fees from everybody, that somehow everybody else would experience lower fees (where is the logic in that?). But goals are just goals and not often the end result, especially not from such an ambiguous, all-encompassing proposal such as this.

So, is the Internet involved? Are we, bloggers, involved? Scope is not spelled clearly in this document, but if we forget that for a moment and say that yes the Internet is involved, then yes, we bloggers are definitely involved and are definitely taxable.

So let us not let this proposal be passed into a bill, in its very ambiguous state. Because if it does pass, then only a tiny misinterpretation of the law is needed to spell disaster for bloggers.

It’s the best way to curtail free speech in a third world country. Don’t let this happen.

* * * * *

Here is the full text of the proposal:

2 December 2008 draft

MEMORANDUM CIRCULAR
No. ______________________

SUBJECT: GUIDELINES ON THE PROVISION OF CONTENTS, INFORMATION, APPLICATIONS, AND ELECTRONIC GAMES

WHEREAS, the 1987 Constitution fully recognizes the vital role of communications in nation building and provides for the emergence of communications structures suitable to the needs and aspirations of the nation;

WHEREAS, the promotion of competition in the telecommunications market is a key objective of Republic Act No. 7925 (RA7925, for brevity), otherwise known as The Public Telecommunications Policy Act of the Philippines, which mandates that “a healthy competitive environment shall be fostered, one in which telecommunications carriers are free to make business decisions and interact with one another in providing telecommunications services, with the end in view of encouraging their financial viability while maintaining affordable rates.”

WHEREAS, RA7925 further defines the role of the government to “promote a fair, efficient and responsive market to stimulate growth and development of the telecommunications facilities and services”;

WHEREAS, the provision of contents, information, applications, and electronic games to the consumers creates demand for telecommunication networks and services – the development of contents, information, applications, and electronic games should therefore be encouraged and facilitated;

WHEREAS, the entry of more contents, information, applications and/or electronic games providers in the market will result to lower prices benefiting the consumers;

WHEREAS, to further encourage the development of contents, information applications and electronic games, the prevailing access charge regime between the contents, information, applications and electronic games providers and the networks providers which is revenue sharing should be replaced by fixed access charge;

WHEREAS, in the power sector the consumers can purchase their power requirements from independent power producers – power producers are not subject to nationality requirement;

NOW, THEREFORE, pursuant to RA7925, Executive Order (EO) No. 546 series of 1979, and in order to encourage and facilitate the development of contents and the provision thereof to the consumers, the National Telecommunications Commission (Commission) hereby promulgates the following guidelines:

A DEFINITIONS
1. The following terms as used in this Circular shall have the following definitions:
a. Content – refers to all types of contents delivered to/accessed by the users/subscribers such as music, ring tones, logos, video clips, etc.
b. Information – refers to all types of information delivered to/accessed by the users/subscribers, e.g. road traffic information, financial information, visa application information, etc.
c. Application – refers to all types of applications delivered to/accessed by the users/subscribers, e.g. mobile banking, electronic payments, point of sale service, etc.
d. Electronic Game – refers to games played online except gambling.
e. Contents Providers – are persons or entities offering and providing contents to the public for compensation through the networks, systems and/or facilities of authorized networks, systems and/or facilities providers.
f. Information Providers – are persons or entities offering and providing information to the public for compensation through the networks, systems and/or facilities of authorized networks, systems and/or facilities providers.
g. Applications Providers – are persons or entities offering and providing applications to the public for compensation through the networks, systems and/or facilities of authorized networks, systems and/or facilities providers.
h. Electronic Games Providers – are persons or entities offering and providing electronic games to the public for compensation through the networks, systems and/or facilities of authorized networks, systems and/or facilities providers.
i. Contents Developers – are persons or entities creating contents.
j. Information Sources – are persons or entities providing information to Information Providers.
k. Applications Developer – are persons or entities creating applications.
l. Electronic Games Developer – are persons or entities creating electronic games.

B REGISTRATION
1. Contents, Information, Applications and/or Electronic Games Providers, Contents Developers, Information Sources, Applications Developers, and Electronic Games Developers are required to have commercial presence in the country and shall secure Certificate of Registration (COR) from the Commission.

2. There shall be no nationality requirement for contents, information, applications and/or electronic games providers, contents, applications and/or electronic games developers and information sources.

3. The application for registration shall be filed and acted upon by the Commission not later than seven (7) working days from date of application.

4. The application shall include the following documents:
a. Valid registration from the Securities and Exchange Commission or from the Department of Trade and Industry and Articles of Incorporation;
b. Facilities lease agreement with duly enfranchised and certificated public telecommunications entity; and

5. The Certificate of Registration shall be valid for a maximum period of five (5) years. Applicants for registration may opt to apply for shorter period not shorter than one (1) year. Certificates of Registration shall be renewable.

D FEES AND CHARGES
1. The following fees and charges shall be imposed:

a. Filing Fee : PhP 300.00
b. Annual Registration Fee: 6,000.00
c. Surcharge for late : 50% of the annual registration fee if application
filing of application is filed within six (6) months from date of expiry
for renewal 100% if filed after six (6) months from date of expiry

E RATES
1. The rates shall be deregulated. The contents, information, applications and/or electronic games provider shall inform the Commission of the rates for each of the content, information, application or electronic game offered at least three (3) days prior to the offering of such content, information, application or electronic game. Contents, information, applications and/or electronic games providers seeking increases in rates shall inform the Commission of the details of such increases at least five (5) days prior to the implementation of the increase. The Commission in the exercise of its mandate to protect consumers may not allow the increase. If the Commission does not act on the information within five (5) days from receipt of the same, the contents, information, applications and/or electronic games provider can impose the new rates.

F ACCESS CHARGES
1. Networks, systems and/or facilities providers shall provide access to contents, information, applications and/or electronic games providers upon request and based on an access agreement. Access to the networks, systems and/or facilities of duly authorized providers by registered contents, information, applications and/or electronic games providers shall be mandatory.

2. The access charge shall be negotiated. The access charge shall be cost-oriented and shall not be higher than the prevailing retail rates, not promotional rates, for the service where the contents, information, applications and/or electronic games are offered/provided.

G CONSUMER WELFARE AND INTEREST
1. Contents, Information, Applications and/or Electronic Games Providers shall strictly comply to the provisions of MC No. 05-06-2007 (Consumer Protection Guidelines), MC No. 04-06-2007 (Data Log Retention of telecommunications traffic), and MC No. 03-03-2005 (Rules and Regulations on Broadcast Messaging Service) and its amendments.

2. Complaints from the subscribers/users shall be presumed to be valid. The burden of proof shall be upon the contents, information, applications and/or electronic games providers.

H Sanctions
1. Violation of any of the provisions of this Circular shall be a ground for the revocation or cancellation of the registration as Contents, Information, Applications and/or Electronic Games Provider.

2. The Commission may direct the disconnection of the access to the networks, systems or facilities of authorized providers pending the investigation of a complaint filed by a subscriber/user if the Commission finds that there is strong evidence against the contents, information, applications and/or electronic games provider.

3. Any violation of this circular shall be dealt with in accordance with law.

E Final Provision
1. Any circular, order, memoranda or parts thereof inconsistent herewith are deemed repealed or amended accordingly.

2. This Circular shall take effect fifteen (15) days after publication in a newspaper of general circulation and three (3) certified true copies are furnished the UP Law Center.

Quezon City, Phlippines _________________________.

RUEL V. CANOBAS
Commissioner

JORGE V. SARMIENTO
Deputy Commissioner

JAIME M. FORTES, JR.
Deputy Commissioner

* * * * *

This is not a law yet. This is just a proposal, and in fact there was a public hearing earlier this afternoon, at the NTC Executive Conference Room (3rd Floor NTC Building, BIR Road, Quezon City). (Will update you on the outcome of that.) Apparently, the hearing was cancelled. No news on whether it will be resumed later.

Please blog about this topic and air your thoughts. Let us not let the Philippines government take away our right to free speech.

Other bloggers reporting on this story:
Mike Abundo
Tech At Hand

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