OPINION NO.

040, Series of 1998

March 19, 1998

Mr. Perfecto R. Yasay, Jr.

Chairman
Securities and Exchange Commission
SEC Building, EDSA, Greenhills
Mandaluyong City

Sir: chanroblesvirtuallawlibrary

This has reference to your request for a “definite ruling” on whether the
Internet business constitutes mass media which should not be given to
foreign investors pursuant to Section II (1), Article XVI of the 1987
Constitution.

The aforesaid constitutional mandate pertinently provides, to wit: chanroblesvirtuallawlibrary

“SEC.II. (1) The ownership and management of mass media shall be limited
to citizens of the Philippines, or to corporations, cooperatives or
associations, wholly-owned and manages by such citizens.
…” (Art. XVI, 1987 Constitution) (Emphasis supplied)

The request, it appears, is raised in connection with the implementation of

the Second Regular Foreign Investment Negative List (E.O. No. 362, s.
1996).

In Opinion No. 24 s. 1986, this Department, construing and identical

provision in the 1973 Constitution said: chanroblesvirtuallawlibrary

“The term ‘mass media’ in the Constitution refers to any medium of

communication, a newspaper, radio, motion pictures, television, designed to
reach the masses and that tends to set standards, ideals and aims of the
masses (Op. No. 163, s. 1973) . The distinctive features of any mass media
undertaking is the dissemination of information and ideas to the public, or a
portion thereof (Op. No. 120, s. 1982) …” (reiterated in Op. No. 10, s. 1996)
An almost identical definition of “mass media” is found in the Rules and
Regulations for Mass Media in the Philippines adopted by the Media Advisory
Council and approved by the President of the Philippines (See De Leon, Textbook
on the Philippine Constitution, 1994 ed., p. 579) . According to said RR, the term “mass
media” embraces means of communication that reach and influence large
numbers of people including print media (especially newspapers, periodicals
and popular magazines) radio, television, and movies, and involved the
gathering, transmission and distribution of news, information, messages,
signals and all forms of written, oral and visual communications (see also, DOJ
Opinion No. 163, s. 1973)

Upon the other hand, the “Internet” is a “giant network which

interconnects innumerable smaller groups of linked computer networks"
(American Civil Liberties Union vs. Reno, 929 F. Supp. 824,830, cited in
“Purging Pornography in the Internet”, which virtually covers the entire
globe, can either be through the use of a computer or computer terminal
that is directly (and usually permanently) connected to a computer network
that is itself directly or indirectly connected to the Internet, or through the
use of a “personal computer” with “modem” to connect over a telephone
line to a larger computer network that is itself directly of indirectly
connected to the Internet (id., at p 97).

Considering the nature and function of an Internet and the fact that it offers
three broad types of services, i.e., (1) electronic mail (e-mail) which is the
computer version of the post office as it can transmit both text and still or
moving visual messages to an addressee or multiple addresses in a mailing
list; (2) Bulletin Board System (BBS) which emulates an ordinary bulletin
board and; (3) World Wide Web (WWW) which consists of documents (with
their respective addresses) stored in the Internet containing varied
information in text, still images or graphics (see, ACLU case, supra, at pp. 836-838) ,
it may be safely said that an Internet access provided is one engaged in
offering to the owner of a computer the services of inter-connecting the
latter’s computer to a network of computers thereby giving him access to
said services offered by Internet.

Construed in light of the earlier definition of “mass media” which involves

not only the transmittal but also the creation/publication, gathering and
distribution of the news, information, messages and other forms of
communications to the general public, it appears indubitable that the
Internet business does not constitute mass media. Accordingly, it cannot
fall within the coverage of the constitutional mandate limiting ownership
and management of mass media to citizens of the Philippines or wholly-
owned and managed Philippine corporations.

The rationale is because in Internet business, the Internet access provided

merely serves a carrier for transmitting messages. It does not create the
messages/information nor transmit the messages/information to the
general public, as mass media do, and the publication of the messages
/information or stories carried by the Internet and transmitted to the
computer owner, thru the access provider, is decided by the sender or the
inter-linked networks.

The foregoing considered, your query is answered in the negative.

Very truly yours,

(Signed)
SILVESTRE H. BELLO III
Secretary