Legal basis and policy objectives
- The Circular is promulgated pursuant to Republic Act No. 7925 (Public Telecommunications Policy Act of the Philippines) and Executive Order (EO) No. 546, series of 1979.
- The Circular advances competition in the telecommunications market by encouraging a “healthy competitive environment” where carriers can make business decisions and interact in providing telecommunications services while maintaining affordability.
- The Circular promotes a fair, efficient and responsive market to stimulate growth and development of telecommunications facilities and services.
- The Circular is intended to maintain and foster fair competition in the telecommunications industry and to bring the benefits of enhanced services to the general public.
- The Circular is issued consistent with a Supreme Court decision in G.R. No. 143964 dated 26 July 2004.
Value added services coverage and scope
- Value Added Services (VAS) are classified as enhanced services beyond services ordinarily provided for by local exchange and inter-exchange operators and overseas carriers through circuit switched networks.
- Enhanced services are those that improve upon the quality and/or functionality of services ordinarily offered by local exchange and inter-exchange operators and overseas carriers.
- Services ordinarily provided for by local exchange and inter-exchange operators and overseas carriers refer to voice services offered through circuit switched networks.
- The Circular applies to the value added services listed under Sec. 1 and does not apply to voice over IP (VoIP) service.
- VoIP service is covered by MC 05-08-2005.
List of value added services (Sec. 1)
- The Circular classifies the following as value added services:
- Messaging services, including:
- Short messaging service (not more than 160 characters),
- Messaging service (more than 160 characters),
- Multimedia messaging service (sending/receiving multimedia messages such as video, graphics and audio clips),
- Unified messaging service (voice messages stored in a mailbox along with email, accessible through email client or via telephone with telephone user interface).
- Audio conferencing between two (2) or more participants at different sites using networks to transmit audio.
- Audio and video conferencing between two (2) or more participants at different sites using networks to transmit audio and video data.
- Voice mail service, defined as an email system that supports audio, where users leave spoken messages and listen to them using appropriate commands in the email system.
- Electronic mail service, a store and forward method of composing, sending, storing and receiving messages over electronic communications systems.
- Information service, including information delivered to/accessed by users/subscribers (e.g., road traffic information, financial information, visa application information, and similar nature).
- Electronic Gaming Services except gambling, allowing a user to play games online.
- Applications service, including applications delivered to/accessed by users/subscribers (e.g., mobile banking, electronic payments, point of service, etc.).
- Content and Program service, including content delivered to/accessed by users/subscribers (e.g., music, ring tones, logos, video clips, and similar nature).
- Audiotext service, where consumers dial a phone number and navigate a voicemail-like system to obtain information (e.g., forecast, horoscope, and similar nature).
- Facsimile service, allowing a consumer to send and receive documents through the electronic communications network.
- Virtual Private Network (VPN) service, defined as a communications network tunneled through another network and dedicated for a specific network (including secure communications through the public internet).
- Hosting service, allowing a service provider to host in its facilities websites and private branch exchanges (PBX).
- Messaging services, including:
- The list of VAS may be revised, modified, expanded, or shortened by the Commission after due public consultation.
Leased line access for PTEs
- Public telecommunications entities (PTEs) must offer leased line service to VAS providers at the same quality and at a price not higher than the prevailing leased line prices offered by PTEs to the public.
- PTEs must not deny requests by VAS providers for leased line service.
- If a PTE is unable to provide leased line to a VAS provider, the PTE must inform in writing the requesting VAS provider of the reasons for denial and must simultaneously furnish the Commission a copy of the reasons.
- The Commission may require the PTE to further substantiate its denial of a leased line request.
Registration requirements and certificate validity
- No entity may provide any value added service without a valid certificate of registration from the Commission.
- The application for registration must be filed and acted upon by the Commission not later than seven (7) working days from the date of application with complete requirements.
- Registration applications must include:
- Valid registration from the Securities and Exchange Commission or from the Department of Trade and Industry and Articles of Incorporation;
- System configuration and mode of operation;
- List of services to be offered;
- Facilities lease agreement with a duly enfranchised and certificated PTE; and
- A written undertaking that the applicant will not discriminate other VAS providers’ terms of rates and service quality for similar facilities leased to them by a duly enfranchised and certificated PTE.
- The Certificate of Registration is valid for a maximum period of five (5) years.
- Applicants may opt for shorter registration periods of not less than one (1) year.
- Certificates of Registration are renewable.
- Late filing of renewal is subject to the surcharge rules stated under the Circular’s fees and charges.
Permitted operations and service standards
- An duly registered VAS provider may utilize its own equipment capable only of processing, routing and storing messages in whatever format.
- A duly registered VAS provider must strictly comply with service performance standards under NTC MC No. 10-17-2000, NTC MC No. 19-12-2004, and other applicable standards prescribed by the Commission.
Rates policy, notice, and consumer-protection limit
- The rates for value added services are deregulated.
- A VAS provider must inform the Commission of the rates for each value added service at least seven (7) days prior to offering such value added service.
- A VAS provider seeking increases in rates for existing VAS must inform the Commission of the details of such increases at least seven (7) days prior to implementation.
- The Commission, in its consumer-protection mandate, may not allow the increase.
- If the Commission does not act on the information within seven (7) days from receipt of the same, the VAS provider may impose the new rates.
Fees, charges, and penalties for late renewal
- The Circular imposes the following fees and charges:
- Filing Fee: PhP 300.00
- Annual Registration Fee:
- 6,000.00 for the first 5 services registered
- 1,000.00 for each additional service registered
- Surcharge for late filing of application for renewal:
- 50% of the annual registration fee if filed within six (6) months from date of expiry
- 100% if filed after six (6) months from date of expiry
Grounds for revocation and legal enforcement
- Any violation of any provision of the Circular is a ground for revocation or cancellation of registration as a VAS provider.
- Any violation of the Circular must be dealt with in accordance with law.
Repeal, inconsistency, and implementation finalities
- All circulars, orders, memoranda, or parts thereof inconsistent with the Circular are deemed repealed or amended accordingly.