Policy to Improve Local Exchange Carrier Service

Enhance local exchange service delivery in unserved and underserved areas defined by the NTC.
Facilitate universal access to basic telecommunications across the Philippines.

Promote democratization of ownership and operation in telecommunications facilities and services.

Maintain cross-subsidization from profitable telecommunications services (e.g., toll, international long distance) to local exchange services until universal access is achieved and pricing reflects costs.

Provide local exchange service within 3 years of NTC authority.
Must install at least 300 local exchange lines per international switch termination.
Provide a minimum of one rural exchange line per every ten urban lines.
Establish Public Calling Offices at rural barangay level, with credits towards local exchange obligations.
No international gateway permit without proof of necessary foreign correspondenceships.
Existing local exchange carriers meeting these requirements may operate international gateways.

Subsidiaries of authorized international gateway carriers cannot operate other gateways.
A subsidiary relationship is defined by shared management, majority stock ownership, or significant financial exposure exceeding 50% of capital.

Authorized international gateway operators may provide CMTS and other non-basic services to generate subsidies for local exchange services.
Other authorized non-basic service providers must also adhere to providing local exchange services per NTC guidelines.

Obligations endure for as long as the provider holds authorization to operate non-basic telecommunications services.

Compliance with franchise and Certificate of Public Convenience and Necessity requirements remains necessary.

Mandated nondiscriminatory interconnection among telecommunications networks per EO No. 59 (1993) regulations.

Telecommunications providers must explicitly report internal subsidy flows in their financial statements.

The NTC is tasked to issue implementing rules and regulations within 30 days from the order's effectivity.

Existing providers have five years to comply with local exchange service provisioning requirements.

Providers with pending or existing permits for gateways, CMTS, or value-added services have three months from provisional authority issuance to file local exchange service applications.