Service Packaging
- Existing authorized IGF operators must petition for Certificate of Public Convenience and Necessity (CPCN) within 2 years to install, operate, maintain LEC services in unserved and underserved areas, including Metro Manila.
- Petition requirements: list of proposed service areas (after Commission consultation), legal, financial, technical capabilities, and implementation timeframe (not exceeding 3 years).
- IGF operators must provide minimum 300 local exchange lines per international switch termination, and at least 300,000 lines within 3 years from authority grant.
- Compliance methods include direct provision of LEC/PCO lines, equity participation in LEC/PCO operators (with restrictions), or authorization of affiliated PTCs to assume obligations.
- Increase in international switch terminations over 1,000 requires corresponding local exchange line increase.
- Minimum rural lines: at least 1 rural local exchange line for every 10 urban lines.
- PCO provision in unserved rural barangays counts as subscriber lines equal to household count divided by 10.
- PTCs that comply with sections 4 and 7 may apply and be authorized to install IGF and/or CMTS, subject to capability checks.
- New IGF applicants must prove ability to establish foreign correspondentship and provide local exchange service within 5 years.
- Subsidiaries of public telecommunications carriers operating IGF under EO 109 cannot operate other IGFs per EO 59.
Cellular Mobile Telephone System (CMTS) and Other Non-Basic Telecommunications Services
- Authorized IGFs may apply and be authorized to provide CMTS and other non-basic services that can subsidize LEC services.
- CMTS grant considers viability and ability to subsidize LEC; required to provide 4 local exchange lines per CMTS subscriber line.
- Nationwide CMTS operators must provide minimum 400,000 local exchange lines within 5 years; regional operators, 40,000 lines.
- Local exchange service provision must conform to rural/urban ratios as per service packaging rules.
- CMTS operators must file separate petitions with detailed service areas, implementation timeframe (max 5 years), and capabilities.
- Operators of non-basic services must reinvest profit exceeding 12% ROI into local exchange services, either by network establishment or equity acquisition.
Billing and Collection
- Each LEC and CMTS provider shall handle billing and collection for domestic toll service and/or IGF operators within its service territory under contracts.
- If agreement between toll carrier and local provider fails, NTC shall impose settlement within 60 days after notice and hearing.
- Payments shall be proportionally applied to local and toll services. Non-payment of toll/domestic service leads to discontinuation of both local and toll services.
Other Requirements
- Obligation to provide LEC services lasts as long as IGF, CMTS operators hold respective authorizations or until LEC prices reflect actual costs.
- Compliance with franchise, CPCN, and other legal requirements remains mandatory.
- Public telecommunications networks must interconnect nondiscriminatorily per EO 59 and guidelines.
- No new service providers for areas where compliant LECs exist and area is not underserved.
- Multiple authorized LECs in an area must interconnect networks to ensure efficient traffic conveyance.
- Numbering plan amendments to allow new LEC entries in underserved areas require Commission approval.
- Annual reports must disclose internal subsidy flows.
- Authorized carriers must deposit 20% of two-year investment in escrow and post a performance bond of 10% (max P500 million), forfeitable upon non-compliance.
- Inter-exchange carriers must link all LECs to national/international networks.
- Local service provision to conform to National Telecommunications Development Plan (NTDP).
Penal Provisions
- Violation subjects operators to penalties under EO 59 and its guidelines.
- Failure to provide required local exchange service leads to cancellation of authority after notice and hearing.
Transitory Provisions
- PTCs with pending IGF, CMTS, or non-basic service applications need not revise applications but must submit required LEC applications within 3 months after provisional authority.
- Existing providers of IGF, CMTS, and subsidy-source non-basic services must comply within 5 years from effectivity.
Final Provisions
- Invalid or unconstitutional parts shall not affect remaining provisions.
- Inconsistent memoranda, rules, regulations are repealed or amended accordingly.
- Circular effective 15 days after publication, with filing of certified copies at UP Law Center.