National policy and purpose
- The State must pursue and foster, in an orderly, purposive, and vigorous manner, the interconnection of all municipalities through the establishment and early realization of a nationwide network of public calling stations.
- The State recognizes that modern communication and technology are as important to rural development as to urban areas.
Municipal Telephone Projects Office (DOTC)
- Section 3 creates the Municipal Telephone Projects Office in the Department of Transportation and Communications (DOTC) to administer the Act.
- The Projects Office must coordinate with all other agencies to develop a plan for providing public calling stations capable of voice and data transmission in every municipality.
- When feasible, the plan must cover barangays not otherwise served by an existing telephone exchange using appropriate technology.
- The Projects Office must formulate or cause to be formulated engineering studies and administer implementation through contracts subject to existing laws and regulations for procurement of equipment, construction of facilities, and installation of the system.
- The Projects Office must arrange funding from any source—private, government, foreign or domestic—including official development assistance, bilateral and multilateral loans, subject to applicable laws and regulations.
- The Projects Office must prescribe and ensure compatibility with minimum standards and regulations for municipal telecommunications operators covering: construction, maintenance, operation, personnel training, and accounting and fiscal practices.
- The Projects Office must furnish technical assistance and personnel training programs to municipal telecommunications operators.
- The Projects Office must monitor and evaluate local telecommunications and effect system integration and operations whenever economically and technically feasible.
- The approval of the provincial government is required before any or all of the functions in Section 3 are discharged in the province where they will be performed.
Projects Director: appointment and powers
- Section 4 provides for a Projects Director appointed by the President upon the recommendation of the Secretary of Transportation and Communications.
- The Projects Director must be a person of integrity, competence, and experience in technical fields related to the Act’s purposes.
- The Projects Director holds the rank, position, and emoluments of an undersecretary.
- The Projects Director must execute and administer plans and projects to realize the Act’s policy.
- The Projects Director must direct and supervise the operation and internal administration of the Projects Office and may delegate powers and duties to subordinate officials.
- Subject to guidelines and policies of the Secretary of Transportation and Communications, the Projects Director must appoint and, in coordination with the Department of Budget and Management, fix the number and compensation of officials and employees of the Projects Office, subject to the Civil Service Law.
- The Projects Director must prepare an annual report on Projects Office activities on or before the end of the first quarter after the fiscal year completed, and submit copies to the President and the Congress of the Philippines.
- The Projects Director may exercise other powers and duties proper or necessary to carry out the Act as vested by the Secretary of Transportation and Communications.
Rights of first option for qualified carriers
- Section 5 grants domestic telecommunications carriers or utilities that existed at the effectivity of the Act and are franchised to service a province or region certified by the National Telecommunications Commission (NTC) as rendering satisfactory and competent service the first option to provide, install, and operate public calling stations.
- The public calling stations must be capable of voice and data transmission and must be interconnected to the public switched telephone network or other national transmission facilities.
- The intention to exercise the option must be made specifically in writing to the Projects Office within six (6) months of the Act’s effectivity.
- The written intention must indicate the preferred province and the time frame of development.
- Private operators or franchisees of such public calling stations must receive the same benefits and privileges enjoyed by government-installed and operated stations, insofar as tax concessions and/or incentives are concerned.
Frequency allocation authority (NTC)
- Section 6 authorizes the NTC to assign or reassign, when necessary, existing radio frequency users currently operating in order to accelerate implementation of the project.
Rates and mandatory toll revenue sharing
- Section 7 requires the NTC, subject to its standard guidelines and in consultation with the regional development councils concerned, to fix an equitable, reasonable, and uniform rate of charges for every type of call.
- Section 7 mandates a rate schedule for municipal telephone calls under these classifications:
- Municipal to International;
- Municipal to Metro Manila, and other domestic long distance calls;
- Municipal to Provincial Capital;
- Municipal to Municipal of the same province; and Municipal to Municipal of different provinces, other than domestic long distance.
- The NTC, in consultation with toll network operators or interchange carriers and the provincial government concerned, must authorize and cause implementation of an equitable toll revenue sharing and collection scheme.
- The share of local exchange operators in toll revenues must be remitted by interchange carriers to them within ninety days (90) from receipt.
Implementation timetable and interconnection
- Section 8 requires the Projects Office to install all public calling stations for provinces and municipalities not covered by private communication utilities under Section 5.
- Section 8 mandates that each municipality in the Philippines that was unserved by telephone at the Act’s effectivity must have at least one (1) public calling station or public telephone by the third year of the Act’s effectivity.
- Where resources permit, the Projects Office must extend services concurrently or subsequently to other remote barangays of the country.
- Public calling stations must be interconnected to the public switched telephone network or other national transmission facilities, subject to the technical interconnection standards prescribed by the NTC.
Operation by provinces and municipalities
- Section 9 authorizes provinces and municipalities to set up, operate, and maintain their respective public calling stations or public telephone systems.
- Section 9 also authorizes provinces and municipalities to grant franchise to private entities for operation and maintenance of telephone systems and/or public calling stations.
- Before a proposed grantee is granted authority, the NTC must certify that the proposed grantee is technically and financially capable of complying with all requirements of public service.
Appropriations and funding sources
- Section 10 appropriates two hundred million pesos (P200,000,000.00), or so much thereof as may be necessary, taken from appropriations under Title I-Telecommunications of Executive Order No. 182.
- Section 10 further provides that an additional three hundred million pesos (P300,000,000.00) or so much thereof in equivalent foreign currencies as may be necessary must be sourced in the following order of preference:
- foreign grants;
- concessional loans;
- official development assistance;
- commercial loans; and/or
- export credits.
- The additional funding is intended to meet the objective of the Act.
Official development assistance eligibility
- Section 11 provides that, notwithstanding Executive Order No. 230 of 1986 on the power of the NEDA Board and the rules and regulations governing evaluation and authorization for availment of Official Development Assistance, the municipal telephone program under the Act is eligible for foreign loans and grants without further evaluation by the NEDA Board.
- Eligibility under Section 11 is still subject to Section 21, Article XII of the Constitution.
Transitory provisions: sunset and transfer
- Section 12 imposes a sunset limit: the Projects Office must not have a life exceeding ten (10) years from the date of approval of the Act.
- Extension of the Projects Office’s life requires an act of Congress.
- At the option of the provincial government, systems operating in each province must be turned over to it, except systems operating under Section 5.
Separability, repeals, and effectivity
- Section 13 contains a separability rule: any portion declared unconstitutional or invalid does not nullify other portions so long as remaining portions can still subsist and be given effect in their entirety.
- Section 14 repeals or modifies all acts or parts of acts inconsistent with the Act.