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:

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:

“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:

“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