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Public Telecommunications Policy Act of the Philippines

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Be it enacted by the Senate and House of Representatives of  the Philippines in Congress assembled:

Section 1. Short Title. - This Act shall be known as the  "Public Telecommunications Policy Act of the Philippines."
 
Sec. 2. Scope and Application. - This Act shall  apply to all public telecommunications entities in the  Philippines.

Sec. 3. Definitions and Interpretations. - For  purposes of this Act, the following terms shall be used:

a) Telecommunications - any process which enables a  telecommunications entity to relay and receive voice, data,  electronic messages, written or printed matter, fixed or moving  pictures, words, music or visible or audible signals or any  control signals of any design and for any purpose by wire, radio  or other electromagnetic, spectral, optical, or technological  means.
 
b) Public telecommunications entity - any person, firm,  partnership or corporation, government or private, engaged in  the provision of telecommunications services to the public for  compensation.

c) Broadcasting - an undertaking, the object of which is to  transmit over-the-air commercial radio or television messages  for reception of a broad audience in a geographic area.
 
d) Franchise - a privilege conferred upon a  telecommunications entity by Congress, authorizing that entity to engage in a certain type of telecommunications service.

e) Local exchange operator - an entity providing  transmission and switching of any teiecommunications  services, primarily but not limited to voice-to-voice service, in  a geographic area anywhere in the Philippines.

f) Inter-exchange carrier - an entity, sometimes referred  to as carrier's carrier or national backbone network operator,  authorized to install, own and operate facilities which connect  local exchanges within the Philippines and to engage in the  business of inter-exchange national long distance services.

g) International carrier - an entity primarily engaged in  the business of providing transmission and switching of any  telecommunications service between the Philippines and  any other point of the world to which it has an existing  correspondent or prospective interconnection agreements.

h) Value-added service provider (VAS) - an entity which,  relying on the transmission, switching and local distribution  facilities of the local exchange and inter-exchange operators,  and overseas carriers, offers enhanced services beyond those  ordinarily provided for by such carriers.

i) Public toll calling station - a non-exclusive facility at  which the public may, by the payment of appropriate fees,  place as well as receive telephone calls and/or telegrams or  other messages.

j) Mobile radio telephone system - a wide area mobile radio  telephone system with its own switch, base stations and  transmission facilities capable of providing high capacity  mobile telecommunications by utilizing radio frequencies.

k) Interconnection - the linkage, by wire, radio, satellite or  other means, of two or more existing telecommunication carriers or operators with one another for the purpose of  allowing or enabling the subscribers of one carrier or operator  to access or reach the subscribers of the other carriers or operators.

a) A fundamental objective of government is to develop  and maintain a viable, efficient, reliable and universal  telecommunication infrastructure using the best available  and affordable technologies, as a vital tool to nation building  and development;

b) The expansion of the telecommunications network  shall give priority to improving and extending basic services to  areas not yet served. For this purpose, government shall  promote a fair, efficient and responsive market to stimulate  the growth and development of the telecommunications  facilities and services, with emphasis on the accessibility by  persons to basic services in unserved and underserved areas at  affordable rates;

c) The radio frequency spectrum is a scarce public resource  that shall be administered in the public interest and in  accordance with international agreements and conventions to  which the Philippines is a party and granted to the best  qualified. The government shall allocate the spectrum to  service providers who will use it efficiently and effectively to  meet public demand for telecommunications service and may  avail of new and cost effective technologies in the use of  methods for its utilization;

d) Rates and tariffcharges shall be fairJust and reasonable  and for this purpose, the regulatory body shall develop tariff  structures based on socioeconomic factors and on financial,  technical and commercial criteria as measures to ensure a fair  rate of return and as a tool to ensure economic and social  development;

e) Public telecommunications services shall be provided  by private enterprises. The private sector shall be the engine  of rapid and efficient growth in the telecommunications  industry.

f) A healthy competitive environment shall be fostered,  one in which telecommunications carriers are free to make  business decisions and to interact with one another in providing  telecommunications services, with the end in view of  encouraging their financial viability while maintaining  affordable rates;

g) A fair and reasonable interconnection of facilities of  authorized public network operators and other providers of  telecommunications services is necessary in order to achieve  a viable, efficient, reliable and universal telecommunications  services;

h) The government shall give all the assistance and  encouragement to Philippine international carriers in order to  establish interconnection with other countries so as to provide  access to international communications highways on a  competitive basis;

i) For efficiency, practicability, and convenience, but with  due regard to the observance of due process at all times,  regulation of telecommunications entities shall rely principally on an administrative process that is stable, transparent and  fair, giving due emphasis to technical, legal, economic and  financial considerations;

j) No single franchise shall authorize an entity to engage  in both and broadcasting, either through  the airwaves or by cable;

k) Ownership of public telecommunications entities to as  wide a number of people as possible, preferably to its customers,  in order to encourage efficiency and public accountability and  to tap personal savings shall be encouraged;

1) The development of a domestic telecominunfeations manufacturing industry to meet the needs of the Philippines  and to take advantage ofexport opportunites shall be promoted  without preventing, deterring or hampering the goal of full universal service; and

m) Human resources skills and capabilities must beharnessed and improved to sustain the growth and the  development of telecommuncations under a fast changing  telecommunications environment.

 
a) Adopt an administrative process which would facilitate  the entry of qualified service providers and adopt a pricing  policy which would generate sufficient returns to encourage  them to provide basic telecommunications services in unserved  and underserved areas;

b) Ensure quality, safety, reliability, security, compatibility  and inter-operability of telecommunications facilities and  services in conformity with standards and specifications set by  international radio and telecommunications organizations to  which the Philippines is a signatory;

c) Mandate a fair and reasonable interconnection of  facilities of authorized public network operators and other  providers of telecommunications services through appropriate  modalities of interconnection and at a reasonable and fair level of changes, which make provision for the cross subsidy to  unprofitable local exchange service areas so as to promote  telephone density and provide the most extensive access to  basic telecommunications services available at affordable rates  to the public;

d) Foster fair and efficient market conduct through, but  not limited to the protection of telecommunications entities  from unfair trade practices of other carriers;

e) Promote consumers' welfare by facilitating access to  telecommunications services whose infrastructure and network  must be geared towards the needs of individual and business  users;

f) Protect consumers against misuse of a  telecommunications entity's monopoly or quasi-monopolistic  powers by, but not limited to, the investigation of complaints  and exacting compliance with service standards from such  entity; and

g) In the exercise of its regulatory powers, continue to  impose such fees and charges as may be necessary to cover  reasonable costs and expenses for the regulation and  supervision of the operations of telecommunications entities.

 
Sec. 6. Responsibilities of and Limitations to Department Powers. - The Department of Transportation  and Communications (DOTC) shall not exercise any power  which will tend to influence or effect a review or a modification  of the Commission's quasi-judicial functions.

In coordination with the Commission, however, the  Department shall, in accordance with the policies enunciated  in this Act, be responsible for:

a) the development and maintenance of a long-term  strategic national development plan for  to serve as a guide to the industry and potential investors as  well as to the Commission;

b) the coordination of research and development activities  in government with the work of other institutions in the fieldof telecommunications;

c) the representation and promotion of Philippine interests  in international bodies, and the negotiation of the nation's  rights and obligations in international telecommunications  matters; and

d) the operation of a national consultative forum to  facilitate interaction amongst the telecommunications  industries, user groups, academic and research institutions in  the airing and resolution of important issues in the field of  communications.  

Sec. 8. Local Exchange Operator. - A local  exchange operator shall:

a) provide universal basic telephone service to all  subscribers who applied for such service, within a reasonable  period and at such standards as may be prescribed by the  Commission and at such tariff as to sufficiently give it a fair  return on its investments.

b) be protected from uncompensated bypass or overlapping  operations of other telecommunications entities in need of  physical links or connections to its customers in the area  except when it is unable to provide, within a reasonable period  of time and at desired standard, the interconnection  arrangements required by such entities.

c) have the first option to provide pay telephone services or  public calling stations in the area covered by its network.

d) be entitled to a fair and equitable revenue sharingarrangement with the inter-exchange carrier or such other  carriers connected to its basic network.

Sec. 9. Inter-Exchange Carrier. - The number of  entities allowed to provide inter-exchange national long  distance services may be limited, but as a matter of policy,  where it is economically viable, at least two (2) carriers, shall  be authorized: Provided, however, that a local exchange carrier  shall not be restricted from operating its own inter-exchange  carrier service if its viability is dependent thereto. Such inter-exchange carrier shall have the following obligations:

a) It shall interconnect with other networks in the same  category and with local exchange carriers or other  telecommunications entities, upon application and within a  reasonable time period, and under fair and reasonable level of  charges, in order that domestic and international long distance  services are made possible; and

b) It shall have the right to establish and operate its own  tandem switching facilities to which international calls or  overseas carriers have to course their message or signals.

Sec. 10. International Carrier. - Only entities  which will provide local exchange services and can  demonstrably show technical and financial capability to install  and operate an international gateway facility shall be allowed  to operate as an international carrier.

The entity so allowed shall be required to produce a firm  correspondent or interconnection relationships with major  overseas telecommunications authorities or carriers within (1) year from the grant of the authority.

The international carrier shall also comply with its  obligation to provide the local exchange service in unserved or  underserved areas within (3) years from the grant of the  authority as required by existing regulations: Provided,  however, that said carrier shall be deemed to have complied  with the said obligation in the event it allows an affiliate  thereof to assume such obligation and who complies therewith.

Failure to comply with the above obligations shall be a  cause to cancel its authority or permit to operate as an  international carrier.

Sec. 11. Value-Added Service Provider. - Provided  that it does not put up its own network, a VAS provider need  not secure a franchise. A VAS provider shall be allowed to  competitively offer its services and/or expertise, and lease or  rent telecommunications equipment and facilities necessary  to provide such specialized services, in the domestic and/or  international market in accordance with network compatibility.

Telecommunication entities may provide VAS, subject to  the additional requirements that:

a) prior approval of the Commission is secured to ensurethat such VAS offerings are not cross-subsidized from the  proceeds of their utility operations;

b) other providers of VAS are not discriminated against  rates nor denied equitable access to their facilities; and