March 27, 2017, 8:32 pm
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Public utilities redefined

SOMETIMES people wonder what Congress is doing, devoting much of its time to sensational investigations while the nitty-gritty task of legislation plods along. There are, for instance, decades-old laws that need amendments but Congress seems too busy to notice.

One such law is the Public Service Act.

This law empowers the then Public Service Commission to supervise and control public services and their franchises, equipment and other properties. Enacted in 1936, it is officially known as Commonwealth Act No. 146.

Now 81 years old, this law is so outdated that it still considers ice plants and canals as public utilities, and obviously would not have anticipated the needs of modern-day Philippine society, such as telecommunications.

Recently, the Philippine Competition Commission (PCC) pointed out that the Public Service Act is not only old but also restrictive. The commission said it is about time to redefine public utilities and pursue other amendments, such as lifting the foreign equity cap on certain industries, including telecommunications and transportation. 

Because the Constitution limits ownership by foreign companies and individuals of public utilities to only 40 percent, and it would take years before the Constitution is amended, the practical thing to do is pass legislation streamlining the list of activities to be considered public utility under the Charter.

The PCC proposed to change the definition of public utility to “a person who operates, manages and controls for public use the following: electricity transmission; electric distribution; water pipeline distribution systems; gas or petroleum pipeline distribution systems, and sewerage systems.” The sectors to be removed from the constitutional restriction are telecoms and transportation.

The amendment, however, will not erase the essence of telecoms and transport as business affected with public interest and will continue to be regulated as such by the relevant sector regulators.

If passed, this economic legislation will ease the entry of foreign investors in the important, capital intensive sectors of the economy, and will probably speed up the internet service along with a more reliable mass transit system.
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