Law Summary

Introduction

The National Telecommunications Commission (NTC) issued this memorandum circular to regulate value added services (VAS) in the telecommunications industry, ensuring compliance with the Public Telecommunications Policy Act of the Philippines (RA 7925) and promoting fair competition.

Scope of Value Added Services

• Definition and Classification:
  • Value added services include enhanced telecommunications services beyond standard offerings, such as:
    • Messaging Services: Short and multimedia messaging.
    • Audio Conferencing: Allows multiple participants to connect via audio.
    • Video Conferencing: Enables video and audio connections for multiple participants.
    • Voice Mail Service: Audio message system integrated with email.
    • Electronic Mail Service: Composing and managing electronic messages.
    • Information Services: Various informational content accessible by users.
    • Electronic Gaming Services: Online gaming (not gambling).
    • Applications Services: Mobile banking, electronic payments, etc.
    • Content and Program Services: Music, videos, ringtones, etc.
    • Audiotext Services: Information via a voicemail-like system.
    • Facsimile Services: Sending and receiving documents electronically.
    • Virtual Private Network Services: Secure communication networks.
    • Hosting Services: Providing website hosting and PBX services.
• Modifications: The list of VAS may be revised by the NTC after public consultation.
• Exclusions: These guidelines do not apply to Voice over IP (VoIP) services.

Registration Requirements

• Mandatory Registration:
  • No entity may provide VAS without a valid certificate of registration from the NTC.
• Application Contents:
  • Required documents include:
    • Valid SEC or DTI registration and Articles of Incorporation.
    • System configuration and operational mode.
    • List of services to be offered.
    • Lease agreements with certified public telecommunications entities.
    • Written commitment not to discriminate against other VAS providers.
• Processing Timeframe:
  • The NTC must act on the registration application within seven (7) working days.
• Registration Validity:
  • Certificates are valid for up to five (5) years, with an option for renewal.

General Provisions

• Compliance Requirements:
  • Registered VAS providers must utilize equipment compliant with NTC service standards.
• Rate Deregulation:
  • VAS providers must notify the NTC of service rates at least seven (7) days prior to offering new services or rate increases.
  • If the NTC does not act within seven (7) days, the new rates may be implemented.

Fees and Charges

• Applicable Fees:
  • Filing Fee: PhP 300.00
  • Annual Registration Fee:
    • PhP 6,000.00 for the first five services.
    • PhP 1,000.00 for each additional service.
  • Late Filing Surcharge:
    • 50% of the annual fee if filed within six months post-expiry.
    • 100% if filed after six months post-expiry.

Sanctions

• Consequences of Violations:
  • Violations of the Circular can lead to revocation or cancellation of registration as a VAS provider.
• Legal Compliance:
  • Any violations will be addressed according to applicable laws.

Final Provisions

• Repeal of Inconsistent Regulations:
  • Any previous circulars or orders inconsistent with this Circular are repealed or amended.
• Effective Date:
  • The Circular takes effect fifteen (15) days after publication and upon submission of three certified copies to the UP Law Center.

Key Takeaways

• The NTC Circular establishes comprehensive regulations for the provision of value added services in the telecommunications sector.
• Mandatory registration with defined requirements is crucial for compliance.
• Providers must adhere to rate notification procedures, with potential penalties for violations.
• The Circular emphasizes the promotion of a competitive telecommunications environment while safeguarding consumer interests.