Law Summary
Key Definitions
- Telecommunications: transmission and reception of voice, data, text, images, signals via wire, radio, or other technological means
- Public telecommunications entity: any person or company providing telecommunications to the public for compensation
- Broadcasting, franchise, local exchange operator, inter-exchange carrier, international carrier, value-added service provider, public toll calling station, mobile radio telephone system, and interconnection are specifically defined.
National Telecommunications Policy
- Telecommunications essential for national development, cultural, social, and political integrity
- Government objective: maintain viable, efficient, reliable universal telecom infrastructure using best affordable technology
- Prioritize network expansion to underserved areas with affordable rates
- Radio frequency spectrum treated as scarce public resource; allocated based on public interest and efficiency
- Rates/tariffs must be fair, just, and reasonable reflecting socioeconomic and financial criteria
- Telecommunications services to be provided by private sector; private sector as driver for rapid development
- Foster healthy competition among carriers, with freedom to make business decisions
- Fair interconnection arrangements to achieve universal service
- Support Philippine international carriers in competitive international interconnection
- Regulatory process to be stable, transparent, and fair with due emphasis on technical, legal, economic aspects
- No single franchise to authorize both telecommunications and broadcasting
- Promote broad ownership, preferably with customers encouraged to invest
- Develop local telecommunications industry including manufacturing and human resources
National Telecommunications Commission (NTC) Roles
- Principal regulator of telecom development and implementation of policies
- Facilitate entry of qualified providers and pricing policies stimulating services in unserved areas
- Ensure quality, safety, reliability, security, and interoperability per international standards
- Mandate fair interconnection at reasonable charges, including cross subsidies for unprofitable areas
- Protect against unfair trade practices and promote consumer welfare
- Investigate complaints and enforce service standards, impose fees for regulation cost recovery
Department of Transportation and Communications (DOTC) Roles and Limits
- Cannot influence NTC's quasi-judicial functions
- Responsible for strategic long-term planning, R&D coordination, international representation, and national consultative forum for telecom issues
Categories and Duties of Telecommunications Entities
- Each must operate only under franchised service categories
- Local exchange operators must provide universal basic service, be protected from bypass unless unable to provide interconnection, first rights to pay telephone services, and fair revenue sharing
- Inter-exchange carriers: minimum two allowed if economically viable; must interconnect fairly
- International carriers must demonstrate capability and establish international links; must provide unserved area service or delegate to affiliates
- Value-Added Service Providers (VAS) do not need franchise if no own network; must avoid cross-subsidies and maintain fair rates
- Mobile Radio Services require NTC authority; must provide unserved area service or risk permit cancellation
- Radio Paging services allowed unrestricted competition subject to spectrum norms
Other Services and Facilities
- Subscribers allowed to use type-approved terminal equipment
- Radio frequency spectrum allocation subject to review and spectrum user fees; tenders for scarce frequencies
Franchise, Rates, and Revenue
- No operation without franchise; NTC grants CPCN with conditions
- CPCN validity: at least 5 years, not longer than franchise life; renewal aligned with franchise
- Network expansions/upgrades within existing area do not require NTC approval
- NTC sets fair, reasonable rates; may exempt competitive services but retains power to regulate to prevent market abuse
- Access charges and revenue sharing between carriers are negotiated; disputes resolved by NTC ensuring fairness and cross-subsidies
- Uniform accounting system required; separate books per service category
Rights of Telecommunications Users
- Right to nondiscriminatory, reliable service meeting NTC standards
- Right to connection within prescribed deadlines upon application
- Right to timely and accurate billing and courteous service
- Right to prompt investigation and resolution of complaints
Telecommunications Development
- Public offering requirement: 30% shares offered to public within 5 years to democratize ownership
- DOTC to privatize government-owned telecom facilities within 3 years through public bidding
- Equal treatment clause: advantages in existing franchises extended to new franchises except territorial and service type
Final Provisions
- Existing deregulated services can keep NTC-approved rates until end of effectivity year
- Non-operational franchises at enactment deemed revoked
- Existing interconnection agreements remain valid but must be reviewed to comply with new access formulas
- Separability clause preserves valid portions if others invalid
- Repealing clause revokes inconsistent laws and rules
- Act takes effect 15 days after publication in newspapers