Policy Objective
- To enhance local exchange service provision, especially in unserved and underserved areas.
- Promotion of universal access to basic telecommunications services.
General Policy on Telecommunication Ownership
- Government supports democratization of ownership and operation of telecommunication facilities and services.
Cross-Subsidy Mechanism
- Local exchange service will continue to be cross-subsidized by other profitable telecommunications services within the same company until universal access and cost-reflective pricing are achieved.
Obligations for International Gateway Operators
- Must provide local exchange service in unserved and underserved areas, including Metro Manila, within three years from NTC authority grant.
- Minimum three hundred local exchange lines per international switch termination required.
- At least one rural exchange line must be provided for every ten urban lines installed.
- Rural barangay-level Public Calling Offices establishment credited toward local exchange service obligations.
- Permit for international gateways contingent upon proof of establishing necessary foreign correspondences.
- Existing local exchange service providers meeting requirements may be authorized to operate international gateways.
Restrictions on Subsidiaries of Public Telecommunication Carriers
- Subsidiaries of carriers operating an international gateway cannot operate another gateway under Executive Order No. 59 (1993).
- Subsidiary defined by shared key personnel, majority shareholdings, or significant financial exposure between companies.
Authorization for Cellular Mobile Telephone Service
- International gateway operators may be authorized to provide Cellular Mobile Telephone System (CMTS) and other non-basic services as potential subsidy sources.
Requirements for Non-Basic Service Providers
- Providers offering non-basic telecommunications services that can subsidize local exchange must comply with NTC guidelines to provide local exchange services.
Duration of Local Exchange Service Obligations
- Providers' obligation to offer local exchange services is tied to the duration of their authorization to operate non-basic services.
Compliance with Franchise and CPCN Requirements
- Compliance with this policy does not supersede other franchise and Certificate of Public Convenience and Necessity prerequisites.
Interconnection Mandate
- All telecommunications networks must be interconnected non-discriminatorily per Executive Order No. 59 (1993) and its rules.
Financial Transparency
- Telecommunications providers must explicitly report internal subsidy flows within their financial systems.
Implementation Directive
- National Telecommunications Commission (NTC) tasked to issue implementing rules and guidelines within 30 days of the order’s effectivity.
Penalties for Violations
- Violations subject to penalties aligned with those in Executive Order No. 59 (1993), Section 13.
Compliance Period for Existing Providers
- Providers covered under Sections 5, 7, and 8 granted five years to meet local exchange service requirements.
Treatment of Pending Applications
- Providers with existing or pending applications for International Gateway, CMTS, or other VAS are not required to revise applications.
- Upon provisional authority or CPCN issuance, they have three months to submit local exchange service applications per policy.
Repealing Clause
- All inconsistent executive orders, administrative orders, or other issuances are repealed or amended accordingly.
Effective Date
- The Executive Order takes immediate effect upon issuance.