Question & AnswerQ&A (NTC MEMORANDUM CIRCULAR NO. 11-9-93)
The circular sets guidelines for the obligatory provisioning of local exchange carrier (LEC) services by operators of international gateway facilities (IGF), cellular mobile telephone service (CMTS), and other non-basic telecommunications services considered sources of subsidy.
An Urban local exchange service area is where telephone density is more than 1 per 100 inhabitants, based on targets from the National Telephone Development Plan (NTDP).
Authorized IGF operators must provide a minimum of 300 local exchange lines per one international switch termination and a minimum of 300,000 local exchange lines within three years from the date of authority to operate LEC service.
IGF operators must provide at least one rural local exchange line for every ten urban local exchange lines installed.
Violators are subject to penalties under Executive Order No. 59 and its implementing guidelines, including possible cancellation of authorizations after due notice and hearing.
An IGF operator can comply by providing LEC service or PCOs directly, as a part-owner of LEC/PCOs based on equity exposure, or through affiliated PTCs authorized to assume the obligation.
Authorized CMTS providers must provide four local exchange lines per one CMTS subscriber line and meet minimum local exchange line provisioning (400,000 lines nationwide, 40,000 lines regionally) within five years.
They must deposit 20% of the first two years' investment in escrow at a reputable bank and post a performance bond of 10% of that investment, not exceeding P500 million.
Applicants must show substantial evidence of establishing necessary foreign correspondentship and capability to provide local exchange service as required within five years, ensuring viability and subsidy provision.
LEC and CMTS providers must perform billing and collection on behalf of domestic toll service and IGF operators with customers in the local service territory, with contracts negotiated between carriers.