Olongapo Telecom & Information Technology

Friday, April 01, 2005

BIR charges Telecom company with tax evasion

Making good on its promise to go after big tax evaders every week, the Bureau of Internal Revenue on Thursday charged a telecommunications company  with not paying a total of P560 million in taxes.
The BIR filed the cases with the Department of Justice against the Philippine Telephone and Telegraph Corp.
Named respondents for PT&T were its president Jose Luis Melo Santiago, vice president and treasurer Alicia Arogo and comptroller Arturo Falco.
Revenue Commissioner Guil­lermo Parayno said PT&T has been evading taxes for several years. The evasion was discovered through the BIR’s electronic filing and payment system.
The BIR alleged that PT&T, after being informed of its liability, filed its returns through the Integrated Tax System but failed to pay the corresponding taxes and remit the taxes it withheld.
In January PT&T had unremit­ted taxes of more than P560 million. These consist of unpaid withholding taxes, value-added tax, percentage taxes and income taxes.
“We intend to continue putting pressure on tax evaders,” Purisima said. “Tax evaders must realize that sooner or later we will get them.”
Cases were filed against Cristina Aboitiz-Juan and other officers of her firm Fitness by Design, Inc.; Dr. Joel Cortez Mendez of the Mendez Medical Group; professional basketball star Paul Asi Taulava; and the former Armed Forces comptroller, Maj. Gen. Carlos F. Garcia and his wife, Clarita.
The DOF and the BIR also ran newspaper advertisements offering rewards of up to P1 million for information that would lead to the recovery of uncollected taxes and the prosecution of tax evaders

NTC cracks down on text spammers

The days of mobile spammers are numbered as the National Telecommunications Commission (NTC) issued the rules and regulations on broadcast messaging services.

The rules were crafted after a series of consultations and a hearing attended by telecom service providers, content providers and other interested parties in response to numerous consumer complaints received by NTC.

Under the rules, NTC has adopted the "opt-in regime" where it is prohibited to send unsolicited commercial messages or spam by SMS or MMS unless the subscriber has given permission or consent.

A subscriber who has not opted-in shall not be charged for received spams.

Subscribers who do not reply to these broadcast or push messages shall be considered to have optedout and such broadcast should be stopped or subscribers may opt-out without being charged.

Except on paid subscription services, broadcast or push messages shall not be sent between 9:00 pm to 7:00 am.

NTC also requires broadcast messages to display the names of the senders as well as valid addresses or numbers to which subscribers can send their requests to cease broadcast messages.

Mobile companies are to act on spam-related complaints within 30 days after they are received from consumers.

NTC will impose appropriate administrative and penal sanctions in accordance with law.

It is also preparing rules and guidelines for public hearings to address other complaints such as e-loads. (Edu H. Lopez)

Thursday, March 31, 2005

VoIP a value-added service

New NTC draft rules say VoIP a value-added service
Lets ISPs offer commercial VoIP services

Posted 11:06am (Mla time) Mar 30, 2005
By Alexander Villafania, Erwin Lemuel Oliva

(UPDATE) THE VOICE over Internet Protocol (VoIP) is a value-added service and not a voice service, the National Telecommunications Commission (NTC) has said in new draft rules it issued Wednesday, paving the way for Internet Service Providers (ISPs) to begin providing VoIP services commercially.
VoIP routes phone calls through the Internet instead of through traditional public switched telephone networks. Its lower cost has made it a popular alternative to traditional voice calls.

Prior to the new rules, VoIP was classified as a voice service.
Under the Telecommunications Act, this classification meant that only telecommunications companies with a government franchise to carry voice calls were permitted to offer VoIP commercially, though companies were permitted to make use of VoIP for private networks.

The classification had placed ISPs and traditional telecommunications companies at loggerheads.

The new rules identify the parties that are allowed to offer VoIP services, as well as standard agreements between telecommunications carriers and ISPs regarding service performance standards, interconnection charges, access costs, as well as consumer security and privacy.

The rules also outlined the NTC's mandate to intervene in cases of failure of negotiations between the carriers and ISPs.

At a press conference on Wednesday, NTC Commissioner Ronald Olivar Solis said that both carriers and the ISPs were likely to accept the draft rules as they were based on the position papers submitted by different stakeholders.

Officials from Globe Telecom, Philippine Long Distance Telephone Co., and Bayantel have deferred comment until they see a copy of the draft rules.

The Philippine Internet Service Organization (PISO), an organization of ISPs that has long sought VoIP's reclassification, was elated, saying the reclassification is a welcome development for the local industry and consumers as well.

"If [the rules] are going to treat VoIP as a value-added service then that's good news for us and the general public," said Joji Yap, PISO president and general manager of Pacific Internet Philippines.

Solis said that the NTC will conduct its first public hearing on the draft rules on May 3.

The NTC officials said that they expect few changes to the first draft following the public hearings.

"Only the agreement of the carriers and the ISPs is necessary to make this happen," Solis said, adding that the NTC expects the rules to be implemented within the year.

Solis stressed that VoIP is a cheaper communications alternative to the public, and it can also provide additional features not commonly found in traditional voice services.

The NTC official said the local carriers are expected to respond to the deregulation of VoIP by introducing better and more cost-effective services to offset potential losses stemming from increased competition with ISPs.

Investments are also expected to increase from carriers and ISPs as they introduce other value-added services related to VoIP, Solis said.

The NTC said that National Economic Development Authority Director General Romulo Neri had proposed that government use VoIP to reduce telecommunication costs.

Solis said that Congress, through Representative Simeon Kintanar, information and communications technology committee head, is also working on a law on the implementation of VoIP nationwide.

"Right now, a memorandum makes for a good start, but a law, as proposed in Congress, will give more teeth to VoIP implementation," Solis said.

A copy of the NTC memorandum on the draft VoIP rules can be viewed at ntc.gov.ph.

New survey shows HK, India and RP businessmen spend most time on e-mail

"E-mail is almost universally being used by business owners right across the world," according to Grant Thornton’s 2005 International Business Owners Survey (IBOS). However, business owners in different countries are usinge-mail to differing degrees. On average, business owners spend one and a half hours per day dealing with e-mail with those in the Philippines (2 hours, 6 minutes), Hong Kong, India and the US (all 2 hours) spending most time. Business owners in Greece and Russia spend least time dealing with e-mail with a daily average of just 48 minutes.

The average time spent on e-mail in Russia is one of the lowest because 15 per cent of business owners there do not have e-mail compared to a global average of only two per cent. Russia has a very low internet penetration in general with only around five per cent of people having access. More surprising is the fact that Russia is followed by technology-loving Japan and Taiwan where seven per cent of business owners do not use e-mail. In Australia, Italy and the US, 100 per cent of the business owners surveyed use e-mail.

Business owners in 24 countries around the world were also asked a series of questions about e-mail and e-commerce to ascertain the differing approaches in different countries. Main findings, presented as positive or negative balances, are:

Businesses in the Philippines (+76), India (+70) and Spain (+53) say that the internet has helped to increase business turnover most. Those in France are by far the most sceptical about the internet with a balance of -61.

On the whole, businesses around the world take internet and e-mail security very seriously. When asked if these areas are carefully managed to avoid the risk of viruses and security breaches, the Netherlands is most careful (+91) followed by the US and Germany (both +90), Taiwan (+43) and Russia (+48) are most lax, while the global average is +78.

Online advertising and marketing is not yet essential to business owners, with a global average of 24. Those in Turkey (+39) and Germany (+17) are most dependent on internet advertising.

_Businesses are generally dependent on the internet for research with a global average of +26. Turkey (+79), the Philippines (+57) and the US (+50) agree most while France (-10) and Japan (38) disagree most.

On a worldwide basis, businesses are generally not dependent on the internet for ordering supplies (21) or taking orders online (-27). Those in the Philippines (+27) and Turkey (+25) are most dependent on ordering supplies online. Those in Turkey (+22) and Mexico (+15) are most dependent on taking orders online.

"There is no doubt that e-mail and the internet are a way of life for business owners across the world and most of these results come as no surprise," comments Wendy Hart, Corporate Finance Partner and Head of Grant Thornton UK’s Technology Industry Group.

"However, in some countries there are marked differences. In Russia, where internet penetration remains very low, only fifteen per cent of business owners use e-mail – whereas it is the norm in most countries. In the Philippines, India and Hong Kong, technology has been embraced by entrepreneurial businesses who spend most time on e-mail.

"E-commerce, in its strictest sense is still nowhere near its potential on a global basis. Business owners in general remain sceptical about advertising, marketing, buying and selling online. Some emerging economies like the Philippines, Turkey and Mexico, are leading the way."

Tuesday, March 29, 2005

7th Telecom Board Meeting

Republic of the Philippines
Olongapo City

7th Telecom Board Meeting
March 28, 2005, 9:00 AM
Session Hall


Hon. Edwin J. Piano Chairman
Mr. Leonardo C.Perez Member (Telecommunications Expert)
Engr. German E. Ebue Member (Electronics & Communications Expert)
Mr. Danilo J. Piano Member (IT Expert)
Arch. Tony-Kar Balde III Head, City Planning Office
Atty. Angelito R. Orozco Head, City Legal Office
Engr. Eduardo M. Santos City Engineering Office
Ms. Weng Legaspi City Council Office / Office of Kgd. Gina G. Perez Mr. Jerico Ballon Secretariat


1. The meeting was called to order 9:45 Am.

2. Minutes of last Board meeting was adopted

3. With regards to letter of complaints of residents of Cava St. and Federico St., Gordon Heights regarding Cellsite Towers in their Area. Engr. Santos inform the board that Cellsite Tower in Federico St. have gone thru the process and secured necessary permits and clearances.

4. In this connection, the Chairman requested Engr. Santos to provide a written report regarding the matter so that the Board can act accordingly.

5. Mr. Danny Piano suggests that to conduct ocular inspection of the sites and inform the residents that their concerns are being addressed. The board agrees to conduct the ocular inspection on 29 March 2005.

6. With regards to the software license requested by CPDO Mr. Danny Piano inform Arch. Balde that he have lists of quotations for the said software and still conducting review for the best deal that the city can get for the said license amounting to more than P200 Thousand Pesos.

7. Engr. Santos reported to the body that as per their 2004 records only six (6) Telecom Towers pay for Building permit to wit :

 Digital Telecom Philippines located in No. 211 upper Kalaklan (BLOOM Rooftop) with Permit No. 0406101161 release last June 10, 2004 in the Amount of P5,420
 Digital Telecom Philippines located in No. 06 20th ST. East BAjac-Bajac (near RC Bldg.) Permit No. 0407101176 release July 30, 2004 in the Amount of P 6,108.80
 Digital Mobile Philippines located in Federico St. Gordon Heights released January 17, 2005 in the amount of P18,500
 Digital Mobile Philippines located in Cabalan

8. The Chairman inquires why the fees for Building permit varies. Engr.. Santos informs the body that building permit fees depends on line and grade of the Lot Plan and actual area covered.

9. Engr. Ebue inquires if Building permit issued by Engineering is for one time installation only or for multiple antennas because he observes that existing towers have multiple antennas like the one in Riza Building and Ridgecrest Hotel in Magsaysay. He also inquires if the permit is being computed per antenna or per tower?

10. Mr. Santos replied that they are computing permit fees on height of the structure and guide wire and other structures any additional is not included in the permit. He also reported that the tower in Ridgecrest Hotel did not secure Building permit. He also informs the body that they can compel the operators of said towers to secure building permit.

11. In this connection, the Chairman suggest to that the board conduct a tower inspection in Riza Bldg, Ridgecrest hotel and other roof top towers.

12. Mr. Santos also informs the body that some of the tower did not secure permit because they are having problem with their lot document, which is one of the requirements for the issuance of permit. He suggests that a special permit be issued until such time that the applicants comply with requirements in Lot Document because they will have a hard time in compelling in Lot Documents requirements.

13. The body has the same opinion with Mr. Santos because the board has observed that permit applicants are having a hard time securing clearances because of copious requirements.

14. Engr. Ebue suggests requiring contractor to post a bond for their project. The Chairman instructed the secretariat to include said bond in the proposed Ordinance for Telecom fees.

15. Engr. Ebue reported that there are 87 PABX lines installed as of March 28, 2005 with 8 trunks available for incoming and outgoing calls. He also reports that he met with Mr. Abola of Subictel and Mr. Danoog of Piltel regarding the 2nd phase of PABX project. Current business line being used by the City will be converted to full pledge trunk with pilot Number 222-GAPO, 223-GAPO or 224-GAPO (4276). The pilot No including programming of trunk hunting cost P5,000 pesos plus one time upgrade cost of around 100 pesos per line and the monthly recurring charges per trunk will be P2,218.52 for the 1st and 2nd trunk the 3rd and above trunk will cost P1,653.90/Trunk. He also reported as per Mr. Abola Subictel/Piltel could waive the Pilot No and programming charge amounting to P5, 000 Pesos upon formal request of the mayor.

16. Engr. Ebue also reported that concerning DSL connection in Gordon College Mr. Abola wish to inspect said connection for the renewal/upgrade of said connection. Said inspection is scheduled on the March 30, 2005. Further, more during the same meeting Mr. Abola said that Subictel could provide a Hotline to SBMA Chairman free of charge upon written request of the mayor. With regards to lease line to be use in Gordon College, Museum, City Mall and JLGMH, PABX line will cost P250 per circuit Kilometer.

17. Lastly, he reported that currently PABX are using temporary SNDR to capture data so he reiterated the pending request for PC, Printer and UPS.

18. The Chairman reported to the body that the mayor request for the transfer of JLGMH PABX to KBG complex. He suggests that the body conduct preliminary study on the matter to determine the scope of work and materials needed.

19. Concerning the draft City Ordinance No. 05 Series of 2005 atty. Orozco suggest to the board that said resolution must be clear and categorical in the nature. In addition, based on the suggested fees, said ordinance must be clear weather it is for revenue generation or for supervision or regulation. If it is for regulation, Atty. Orozco suggests that the Ordinance must be specific and categorical on what the Ordinance trying to regulate. He further said that under the Local Government Code especially on the General Welfare Clause, the City has all the compassing power to regulate but it must be specific. He then suggests for further study of the draft Ordinance if it is for regulation and justifies it not only the purpose but also the fees involve.

20. About Telecom Board duplicating the duty and power of NTC Atty. Orozco, suggest amending the Ordinance creating the Telecom Board. He said that though the City has all the reason to regulate under the Local Government Code Telecom Board power to regulate must be specific on what to regulate.

21. The Chairman for his part states that the Telecom Board is not a duplication of engineering or CPDO but a body compose of different department for a collective effort to oversee the Telecommunications Industries in the City to ensure the safety of the people and correct revenues are collected.

22. Atty. Orozco suggest to the board consider that one of the boards function is to fill in the gaps and ensure seamless coordination between and among Engineering, CPDO and other departments regarding the Telecommunication Industries. These gaps must be identified and to be included in the amendments of the Ordinance to justify why we are enforcing additional fees on top of the fees for locational clearance and building permit.

23. The Chairman added one of the functions of the Board is to provide technical assistance to the City Council to any proposed resolutions or Ordinance regarding Telecom and IT. Its power is recommendatory only and the Mayor has the last say on any action that the board may suggest.

24. Atty. Orozco said that the board could not use the premise that one the board functions is to help for the collection of RPTA or other tax due concerning Telecommunication because such functions are mandated to Business permit Office, Assessors Office and Treasurer’s Office. He further suggests the board recommend some certain amendments on the collection of RPTA and other permits. He also suggests giving more power to assessor’s office or treasurer’s office by way of Ordinances.

25. Engr. Ebue for his part said one of the function of the board is to help Telecom Providers in their application to operate in the City and at the same time ensure the safety of the people and due revenues are collected.

26. The board agrees to amend draft Ordinance No. 5, Series of 2005 and submit said amendments to Atty. Orozco for further study and suggestions.

27. The Chairman asks Atty. Orozco on his opinion regarding the Equal Protect law cited by Globe Telecom in their position paper. Atty. Orozco replied that it would depend in the nature and purpose of the Ordinance. In Globe’s position paper he believe that their idea is we are just referring to the structure, he suggest not to limit said Ordinance on physical structures if it is for regulation and he further suppose that there other to regulate aside from physical structure themselves and make clear in the Ordinance why such Ordinance is referring solely for Telecom and IT.

28. On the issue of imprisonment penalty, the Chairman states that the Ordinance did not intend to imprison Telecom provider just because they did not pay necessary fees but it is to ensure that public safety will not be jeopardized. Atty. Orozco agrees that the Ordinance if for regulatory it can have imprisonment penalty provided that it will contain Separability Clause.

29. Calendar of next meeting ? ? ?

30. With no other matter to discuss, the meeting adjourned at 11:15 am.

Prepared by:
Jerico Ballon

Monday, March 28, 2005

Promo text messages an invasion of privacy

A SENATOR has sought a Senate inquiry into the practice of telecommunications companies of sending a barrage of "unsolicited promotional messages" to cell phone subscribers, saying this could be considered an invasion of privacy.

Senator Manuel "Mar" Roxas II has filed Resolution 169 urging the Senate committee on public services to look into the random sending of "uninvited promotional messages." by telecom companies and third-party content providers.

"The mobile telephone is a personal communication device. We are duty bound to safeguard the right of subscribers to privacy of communication,'' he said in a statement.

The National Telecommunications Commission has recently issued new guidelines to telecom companies and third-party content providers that bar them from sending out commercial text messages without first securing the consent of the recipient.

PLDT might make cheap call promo permanent

PHILIPPINE Long Distance Telephone Co. (PLDT) will extend its flat rate call promotion to June 11 and might continue it indefinitely as it has proved to be a runaway success, an official of the telephone giant said last week.

The telephone company said the number of callers as well as the total number of calls made using the service has continued to increase since its introduction on February 14, 2005.

The promo allows PLDT landline subscribers to call other PLDT subscribers nationwide for a flat rate of 10 pesos for each call instead of the usual per-minute rate.

Butch Jimenez, head of PLDT's Retail Business Group, said that customer requests have encouraged the comapany to extend the promo.

Calls to PLDT's customer service hotline, 171, have increased from 5,000 calls per day to over 35,000 calls per day. Most inquiries are related to the 10-peso per call promo, the executive said.

Jimenez said PLDT might make the promo permanent.

The promo of PLDT is open to the 20 million subscribers of Smart and Talk ' N Text, apart from the two million landline subscribers of PLDT.

PLDT said earlier that the promo had increased demand for its landlines.

"We hope to end the year with a net station gain, as against a net station loss that PLDT has experienced over the last five years, " Jimenez said.

NTC pushes 6-second billing scheme for mobile phones

THE NATIONAL Telecommunications Commission (NTC) is requesting the Office of the Solicitor General to help resolve a five-year-old legal impasse on a policy that would require mobile phone companies to bill customers on a six-second pulse cycle.

An NTC circular issued in 2000 directed phone companies to bill by the six-second pulse instead of rounding off charges to the higher minute. But the major players obtained an injunction from the Quezon City Regional Trial Court.

The circular also ordered the telecom firms to register the SIM (Subscriber Identity Module) cards of prepaid customers to help regulate the industry by preventing text scams and discouraging phone theft. The billing circular never got implemented.

"We have asked the OSG to help us expedite and find a favorable resolution to this billing circular. It would be to the interest of the consumers," NTC chairman Ronald Solis said.

Solis said the regulator would immediately implement the billing circular once the court lifts the restraining order.

The TRO issued by the Quezon City court was questioned by the NTC before the Court of Appeals. It was brought to the Supreme Court, which remanded the case to the Quezon City court in 2003.

Isabela Representative Rodolfo Albano said the billing circular should be resolved immediately.

"It has been four years since that injunction. There should be moves to lift that because the billing circular would be good for consumers," Albano said.

The shift to a six-second pulse scheme would make it cheaper for consumers to make calls. The billing measure was originally meant to address a pervasive problem with dropped calls starting in the late 1990s.

Mobile companies said they have solved the problem of dropped calls or those that were prematurely terminated by the network but were still charged to subscribers.

Albano said the major players should refund consumers or at least pay more taxes to the government out of the billions in pesos they were making from network inefficiency.

He claimed that phone giants that have been earning billions each year must be ordered to pay back consumers or at least the government the amount they had overcharged in the past due to their poor network service.

Albano said he would initiate moves in Congress to revive plans of the NTC to revise the billing structure of telephone companies.

Representative. Danilo Suarez, vice chair of the House ways and means committee, earlier estimated that mobile phone operators make between seven billion and 10 billion pesos each year from dropped calls.

Suarez authored a bill calling for the imposition of a franchise tax on telecom firms for the use of the airwaves and also for poor service.

Suarez said telecom firms must adopt the six-second billing cycle or to start billing a call only after the first minute to ensure that subscribers were not paying more than what they should for a call that may be cut within a one-minute billing period.

Officials of Smart Communications and Globe Telecom, the country's two largest mobile phone firms, have said they now offer seamless connections and that their systems can now distinguish between a network drop and those calls deliberately terminated by subscribers.

Globe has almost 4,000 cellular sites nationwide while Smart has about 5,000 all over the country. Third player Sun Cellular has about 1,300 cellular sites and said it would expand its network to about 2,000 this year so it could accommodate six million custome

NTC pins hope on Congress for new billing rules on calls

The National Telecommunications Commission (NTC) strongly urged lawmakers to legislate a bill that will revise, among others, the billing rules on cellular calls.

"If we are restrained from implementing the rules we crafted, then we might as well endorse favorably the Congressional bills filed by some lawmakers supporting the NTC’s new billing regulations on cellular and fixed-line services," NTC chief Ronald Solis said in an interview.

The NTC was supposed to enforce a new set of billing rules in 2000 but the telecom firms successfully secured a temporary restraining order from the Quezon City Regional Trial Court (QCRTC) in November 2000.

The NTC later went to the Court of Appeals (CA) after its motion for reconsideration was denied by the Quezon City court. The CA granted the NTC’s petition for certiorari and prohibition, as it nullified and set aside the preliminary injunction granted by the regional trial court. It also dismissed the petitioners’ complaints and referred them back to the NTC, which it said had jurisdiction over the case.

But the telecom firms filed a petition for review before the Supreme Court, saying the CA erred in its ruling. The High Tribunal then remanded the matter to the Quezon City Regional Trial Court Branch 77.

The NTC, through the through the Office of the Solicitor General (OSG), asked the Supreme Court to reverse, set aside and issue a new order affirming the CA’s decision dated October 9, 2001 and resolution dated January 10, 2002.

"We have been asking the OSG since then to expedite the case," Solis said. "We are in close coordination with the OSG. We recently filed a motion to expedite the case remanded to the QCRTC. The issue here is not the new billing rules but whether the NTC has the jurisdiction to enforce the new billing rules."

The billing circular of the NTC states that the unit of billing for prepaid and postpaid subscribers shall be reduced from one minute per pulse to six seconds per pulse, with authorized rates per minute thus being divided by 10.

The rules also stated that the validity of all prepaid cards and SIM packs sold from October 2000 and beyond shall be valid for at least two years from the date of first issue. At present, a validity of six months is being imposed.

Holders of prepaid SIM cards shall be given 45 days from the date the prepaid SIM card is fully consumed but not beyond two years and 45 days from the date of first issue to replenish the SIM card; otherwise the SIM card shall be rendered invalid.

The circular added that the validity of an invalid SIM card, however, should be installed upon the request of the customer at no additional charge except the presentation of a valid prepaid call card.

Also, the NTC wants the telecom firms to update their subscribers of the remaining value of their cards before the start of every call using the cards.

Globe Telecom, Philippine Long Distance Telephone Co., Smart Communications Inc., Pilipino Telephone Corp. and Isla Communications Inc. said the NTC has no jurisdiction to regulate the sale of consumer goods, arguing that this function belongs to the Department of Trade and Industry, under the Consumer Act of the Philippines.

They also said that the billing circular would result in the impairment of the viability of the prepaid cellular service by unduly prolonging the validity and expiration of the prepaid SIM cards and call cards.

The NTC, which argued that it has the sole supervision, regulation and control of the telecommunication industry, said in its motion for reconsideration that the Supreme Court should instead assume jurisdiction in deciding the case instead of remanding it to the trial court as this would only "unduly delay the implementation of the assailed circular to the detriment of the public who are awaiting for its enforcement."

"To allow the trial court to interfere into a purely regulatory function, which, by law, is vested in the herein respondent, would be tantamount to allowing the judicial system to exercise regulatory powers over the telecommunication industry which is not part and parcel of its functions," it said.

"Put differently, we admit that the courts may exercise their prerogative and power over purely judicial issues which however the case on hand is not. The herein respondent should therefore be given the power and authority to regulate the telecommunication industry by issuing such circulars as it may deem appropriate, including but not limited to the assailed circular."

"The interference of the trial courts should be rightly struck down by this Honorable Court for being in excess of their rightful functions. Hence, the reconsideration sought should therefore be granted," the NTC stated