The DICT as Indirect Regulator

startup-photosA Look into the Department’s Potential for Impact on Telecommunications, Government Procurement and Coordination Among Agencies

On May 20, 2016, Republic Act No. 1084, otherwise known as the “Department of lnformation and Communications Technology Act of 2015”, was signed into law. The Act’s Implementing Rules and Regulations have since been released as of October 15, 2016.

Composed of administrative agencies formerly under the Department of Transportation and Communications (DOTC) and the Department of Science and Technology (DOST), and which will remain autonomous, the DICT has several roles to play, among which are to ensure an increase in cyber security and monitor cybercrime cases, to improve public access to ICT[1], and indirectly, to administer the regulation of ICT in the country. This role is congruent with its resource sharing and capacity building functions, one of which is to “ensure the development and protection of integrated government infrastructures and designs”.[2]

Another function of the DICT is to “assess, review and support ICT research and development programs of the government in coordination with the DOST and other institutions concerned.”[3]

The impact of the DICT’s function as regulator must not be downplayed as such will have a sizeable effect on the nation as a whole.

The DICT as indirect regulator

Telecommunications sector

The DICT has indirect control over telecommunications policy, which benefits attached agency National Telecommunications Commission (NTC).

During the panel discussion on its draft IRR, it was stated that the department will be involved with the communications aspect of the new national emergency hotline 911, which will make use of a Public Safety Answering Point (PSAP) technology.

Although such was not explicitly stated in the law, the final IRR provides that the DICT shall promote policies with due consideration to emerging forms of ICT and convergence [4], which is the interface among various forms of media enabling users to communicate with one another [5].

Meanwhile, one of the other two attached agencies, the National Privacy Commission (NPC), is in charge of the privacy aspect of telecommunications.

The NTC and NPC, together with the Cybercrime Investigation and Coordination Center (CICC), still operate as independent entities.[6]

Government procurement

The government has the right to regulate and specify standards. At a glance, the significance of such regulation is not too apparent. However, the government has a subtle but real influence on how the private sector moves in terms of their purchases.

Under the law, the DICT is authorized to prescribe the personnel qualifications [7] and to “establish guidelines for public-private partnerships in the implementation of ICT projects for government agencies.”[8] In addition, the Secretary of Information and Communications Technology will serve as a member of the Government Procurement Policy Board (GPPB)[9]. As such, there is indirect regulation by the DICT through the directing of government procurement of ICT.

The government may decide to include open standards as part of the DICT’s prescribed qualification standards. As a result, technologies which decline to use these standards may not flourish in the Philippines. For instance, if the government imposes a certain required format for a document, a private company which does not use the same format cannot sell its software to the government. This subtle means of regulation by the government sets the tone for how the private sector will act.

Proprietary software in the Philippines might survive because it has its own market, but at the same time, the open source software community is likely to explode. The latter is known as free open software (FOS). Open source companies will serve the Philippines’ needs on a large scale by serving the government, when before, they served established private institutions such as Hewlett Packard (HP).

As the market for FOS software goes up, the market for proprietary software will inevitably go down. Evidently, the DICT’s indirect form of regulation produces understated but powerful effects.

Coordination across government agencies

The DICT looks at what will benefit the country as a whole. One of the specific functions of the DICT provided for in the law is to “harmonize and coordinate all national ICT plans and initiatives to ensure knowledge, information and resource-sharing, database-building and agency network linkages among government agencies, consistent with E-commerce objectives in particular, and national objectives in general”[10]. In addition, the department is mandated to provide technical expertise to government agencies in order for them to formulate guidelines enforcing ICT-related laws [11].

Certain administrative agencies may be quick to shut down emerging forms of technology without looking at their potential long-term benefits. Like the story about four blind men touching different parts of an elephant, one can be looking at the same thing but draw different conclusions due to his or her limited perspective. The DICT now steps in and plays the role of broadening the perspective of these different agencies by lending to them its technical expertise and ensuring that coordination and resource-sharing is present among them. This is best explained by an example of an existing FOS technology: BitCoin.

BitCoin, an application that is installed on mobile phones and computers, makes use of peer-to-peer technology as a means of exchanging money in order to facilitate a variety of transactions [12]. One might get the impression that BitCoin is a technology which is regulated by the Department of Finance and the Bangko Sentral ng Pilipinas (BSP) because it is a form of currency. BSP even released a warning advisory [13] in 2014 expressing its concern over the use of virtual currencies.

BSP spoke of BitCoin’s nature as a currency but not as a technology. However, the application has a third and overlooked nature: software.

Agencies such as the Intellectual Property Office (IPO), Department of Trade and Industry (DTI) and Securities and Exchange Commission (SEC) might be interested in Bitcoin as a software or protocol. The technology can provide information right now about who uses Bitcoin, but later on it might reveal who owns a car or a share of stock. As such, the mentioned agencies are bound to have an interest in the regulation of this protocol.

Given this impending scenario, the DICT’s function is to look at such new forms of technology from a different standpoint in order to encourage investments. BitCoin is a Philippine-born technology that has the potential to attract professionals and investors to aspects of it which have nothing to do with currency. This will stimulate innovation and economic growth, which is undoubtedly a national objective and in lie with one of the DICT’s powers of “support[ing] the promotion of trade and investment opportunities in the ICT and ICT-ES sectors, in coordination with the DTI and other relevant government agencies and the private sector” [14].

In sum, the DICT steps in and encourages the government and various potential regulators to have a rational perspective of things. According to Atty. JJ Disini, Managing Partner of Disini & Disini Law Offices and a professor at the UP College of Law, some technologies “[don’t] fall neatly into regulations [or] social norms.” The DICT espouses the view that it might not make sense to implement the law so strictly.

“The moment you regulate sometimes, it kills the industry and allied potential. If the government takes the [DICT’s] advice, it creates opportunities and allows us to compete on a global scale.

“You need a champion; hence, the DICT, which just needs a clear idea of which sectors to promote.”

The government’s road to creating opportunities

The government’s goal is not to discover opportunities, but to prevent barriers to opportunities from arising. For instance, the BPO sector was not discovered by the government but by the private sector. The government intervened only when BPOs were already in the country; Uber and other similar platforms received the same treatment.

With the enactment of the Act Creating the DICT and its Implementing Rules and Regulations, the government has declared that part of its policy as of late is “to ensure the provision of a strategic, reliable, cost-efficient and citizen-centric ICT infrastructure, systems and resources as instruments of good governance and global competitiveness” [15]. Moreover, it has bound itself “to promote the development and widespread use of emerging ICT and foster and accelerate the convergence of ICT and ICT-enabled facilities” [16].

As aptly stated by Atty. Disini, the government must put its vision into concrete action and aim to “create an environment where you know you won’t get slapped down.”

[1] Sec. 6, II., RA 1084

[2] Sec. 6, III(g)., RA 1084

[3] Sec. 6, III(i)., RA 1084

[4] Sec. 5, I(a), RA 1084 IRR

[5] Sec. 2(b), RA 1084 IRR

[6] Sec. 15(b), RA 1084

[7] Sec. 6, III(j)., RA 1084

[8] Sec. 6, IV(p)., RA 1084

[9] Sec. 8(h)., RA 1084

[10] Sec. 6, III(f)., RA 1084

[11] Sec. 6, III(h)., RA 1084



[14] Sec. 6, IV(o)., RA 1084

[15] Sec. 2(b), RA 1084

[16] Sec. 2(d), RA 1084

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