FIFTEENTH CONGRESS )
REPUBLIC OF THE PHILIPPINES —)
FIRST REGULAR SESSION

HOUSE OF REPRESENTATIVES

Introduced by Representative Rufus B. Rodriguez and
Representative Maximo B. Rodriguez, Jr.

House Bill No. 1650
EXPLANATORY NOTE

This bill seeks to regulate the disposition, distribution and sale of
cellular or mobile phone and the subscriber identity module (SIM) card and
provide penalties for violation thereof.

In this age of wireless telecommunications, everybody wants to own a
cellular or mobile phone. Using a cellular or mobile phone makes it
convenient for everyone to communicate with one another. Though most
models of these phones change fast and are expensive, still everyone wants
to own a mobile phone or two. Owning a mobile phone is a status symbol in
our present society. Likewise, the many modifications and innovations to
cellular and mobile phones have made business transactions faster and more
convenient for everyone.

Every cellular or mobile phone comes with a post-paid or prepaid
subscriber identity module (SIM) card. Purchasing a prepaid SIM card is easy
and convenient for cellphone users. Anyone can buy a prepaid SIM card from
a dealer or retailer anywhere at any time. This is being taken advantaged of,
however, by unscrupulous persons who use their cellular or mobile phones to
pursue nefarious activities like kidnapping. Criminals also commit theft,
robbery and hold-up to acquire cellular phones.

The sale or distribution of cellular or mobile phone, including the SIM
card, has to be regulated or controlled to safeguard our citizenry. In this bill,
every manufacturer, distributor, seller and owner has to register the cellular or
mobile phone and the SIM cards with the National Telecommunications
Commission. It is by registration that ownership or identity of the mobile
phone or SIM card can be ascertained.

In view of the foregoing, approval of this bill is highly recommended.

by,

RUFUS B. RODRIGUEZ

MAXIMO B. RODRIGUEZ, JR.


FIFTEENTH CONGRESS )
REPUBLIC OF THE PHILIPPINES —)
FIRST REGULAR SESSION )

HOUSE OF REPRESENTATIVES

Introduced by Representative Rufus B. Rodriguez and
Representative Maximo B. Rodriguez, Jr.

House Bill No__1650

AN ACT
REGULATING THE DISPOSITION, DISTRIBUTION AND SALE OF
CELLULAR OR MOBILE PHONES AND SUBSCRIBER IDENTIFICATION
MODULE (SIM) CARDS, PROVIDING PENALTIES FOR VIOLATION
THEREOF AND FOR OTHER PURPOSES.

Be it enacted by the Senate and House of Representatives of the Philippines
in Congress assembled:

SECTION 1. Short Title. — This Act shall be known as the “Cellular or Mobile
Phone Regulation Act of 2010."

SEC. 2. Objectives. — The objectives of this Act are as follows

a) Ensure the security of cellular or mobile phone users;

b) Protect the interests of cellular or mobile phone carriers,
retailers and the individual owners and subscribers;

¢) Deter or abate the occurrence of cellular or mobile phone
related crimes, or crimes committed using cellular or mobile phone as a tool to
sow fear and panic, cause injury and destruction of private and public
properties such as but not limited to robbery, theft, threats, text scam,
smuggling and terrorism; and

4) Ensure the proper use of cellular or mobile phone as one of the
most efficient telecommunications systems for economic development.

SEC. 3. Scope. — This Act shall provide a framework for the disposition,
distribution and sale of cellular or mobile phone and the Subscriber Identity
Module (SIM) card.

SEC. 4. Definition of Terms. - As used in this Act:

a) “Carrier refers to a cellular or mobile phone service provider, or
a reseller of service provided by cellular or mobile phone service providers;
b) “Cell Site” refers to the location where the wireless antenna and

network communications equipment is located consisting of a transmitter or
receiver, antenna tower, transmission radios and radio controllers;

©) “Clone or Cloning’ refers to a wireless phone programmed with
stolen or duplicated Electronic Serial Number (ESN) and Mobile Identification


Number (MIN) through the utilization of any equipment designed to defeat the
aforementioned security features embedded in the cellular or mobile phone;

d) “Cloning Equipment refers to any electronic device, hardware
or software, capable to reprogram, alter and defeat the security features in a
lost, stolen or illegally acquired cellular or mobile phone;

e) “Cloner’ refers to an individual or group of persons who use a
cloning equipment to reprogram and alter the security features of a lost, stolen
or illegally acquired cellular or mobile phone;

f) “Cellular or Mobile Phone’ refers to a wireless phone that
sends and receives messages using radio frequency energy in the 800-900
megahertz portion of the radio frequency (RF) spectrum;

9) “Cellular’ refers to a wireless phone network that connects radio
frequencies from a mobile phone to a system of multiple cell sites, each
consisting of an antenna and a base station, to a mobile phone switching
office, and ultimately to the public wire line telephone system;

h) “Global System for Mobile Communications’ (GSM) refers to
a digital cellular phone technology based on Time Division Multiple Access
(TDMA) using narrow band that allows eight simultaneous calls on the same
radio frequency;

i) “Mobile Identification Number’ (MIN) refers to a number that
identified a cellular or mobile phone within a wireless carrier's network which
can be dialed from other wireless or wire line networks;

j) “Person” refers to any individual, business establishment, or
other legal entity;

k) “Sale” means the purchase and delivery of cellular or mobile
phone either through wholesale or retail from a duly licensed foreign or local
manufacturer or its exclusive distributor or retailer, as the case may be;

!) “Subscriber Identity Module" (SIM) refers to a card inserted
into a GSM, TDMA or GSM-only handset containing subscriber-related data;

m) | “SIM Card refers to a printed circuit board that must be inserted
in any GSM-based cellular or mobile phone when signing on as a subscriber
which contains subscriber details such as security information, internal
memory directory of numbers and similar data that identifies the caller to the
network service provider; and

n) “Time Division Multiple Access" (TDMA) refers to a method of
digital wireless communications transmission allowing a large number of
users to access a single radio-frequency channel without interference.

SEC. 5. Submission of Proof of Identification. - Public
Telecommunications Entities (PTEs) are hereby required to ensure that the
users or purchasers of their pre-paid SIM cards and cellular or mobile phone
is properly identified and his or her address is verified through the
presentation of valid identification cards. If the sale of the pre-paid SIM card
and cellular or mobile phone is done through an agent, PTEs shall ensure that
said agent submit the verified names and addresses of the buyers of pre-paid

SIM cards and cellular or mobile phone within fifteen (15) days from date of
sale.

SEC. 6. Submission of Verified List of Dealers or Agents. — Public
Telecommunications Entities shall submit to the National Communications


Commission (NTC), within thirty (30) days from the date of effectivity of this
Act, a verified list of their current authorized dealers or agents nationwide.
PTEs shall submit to the NTC, every quarter of each year, an updated list of
the same.

SEC. 7. Registration Period. — Existing pre-paid subscriber of any cellular
network company in the Philippines is hereby required to register his or her
active pre-paid SIM cards and the serial number of his or her cellular or
mobile phone to the respective PTE servicing him or her within three (3)
months from the date of effectivity of this Act.

Any subscriber, who fails to register his or her existing pre-paid SIM
card and serial number of the cellular or mobile phone to the respective PTE
within the prescribed period stated in this Act, shall have his or her current
account immediately deactivated or otherwise rendered ineffective by the
concerned PTE.

After the period of registration as prescribed in this Act, PTEs are
directed to keep an updated data base listing or record of all their subscribers
containing the respective data gathered from users or purchasers of their
prepaid SIM cards and cellular or mobile phone and submit the same to the
NTC within sixty (60) days from the end of the prescribed period. PTEs shall
submit to the NTC, every quarter of each year, an updated list of the same.

SEC. 8. Responsibilities of Wholesaler and Retailer. - a) All interested
Parties shall, before engaging in the trade of cellular or mobile phone, register
the name of its firm before the Department of Trade and Industry (DTI) and
secure the required business permit before engaging in the trade of the same.

») Upon order and payment of a cellular or mobile phone by a
customer, the authorized retailer shall, prior to the handover of the purchased
unit to the buyer, cause the issuance of an official receipt and write thereon
the full name of the buyer, home and business address, valid identification
card number, Electronic Serial Number (ESN) and Battery Identification
Number (BIN), and the NTC assigned registry number of said purchased unit.
The retailer shall keep his duplicate copy of the receipt evidencing the sale for
Posting and for record purposes and report the same to the distributor from
where he acquired his stock. The latter shall report on a bi-monthly basis to
the NTC, and the law enforcement agency, a list of persons whom the NTC
issued appropriate registry number has been assigned to for record
reconciliation purposes, and speedy tracking and pursuit of criminals and
other lawless elements.

SEC. 9. Regulatory Fees. - a) For brand new cellular or mobile phone,
there is hereby imposed a registration fee of Four Hundred Pesos (P400,00)
to be paid by the cellular or mobile phone manufacturer or its authorized
distributor or importer, upon registering the same pursuant to Section 8(a) of
this Act.

b) __ For used cellular or mobile phone owned by any person, there is
hereby imposed a registration fee of Two Hundred Pesos (P200.00) which
may be paid upon registration.

c) For a brand new SIM card, there is hereby imposed a
registration fee of One Hundred Pesos (P100.00), which shall be paid by the


manufacturer or its exclusive distributor to the NTC, in the same manner as
the registration of the cellular or mobile phone is made.

d) For SIM card already owned, possessed and used by an
individual person before the effectivity of this Act, there is hereby imposed a
registration fee of Fifty Pesos (P50.00) which shall be paid at the nearest
NTC office.

SEC. 10. Issuance of Official Receipt. - The sale of a brand new or used
prepaid SIM card or cellular or mobile phone shall be accompanied by an
official receipt or a deed of sale notarized and thereafter registered with the
PTE.

SEC. 11. Information Sheet. — A certified true copy of the information sheet
containing the name and address of the buyer shall be forwarded by the
corporation, partnership and single proprietorship to the Telecommunications
Service Provider for filing and for record purposes.

SEC. 12. Persons Liable and Prohibited Acts. —

a) Any cellular or mobile phone manufacturer or its exclusive
distributor who knowingly delivers its unit to the retailers for sale to the same
market without first obtaining the Certificate of Registration (COR) and the
corresponding NTC registry number (RN) with the NTC;

b) Any SIM manufacturer or its exclusive distributor who willfully
delivers its product to its accredited retailer for sale to the public without
registering the same with the NTC;

) Any person who deliberately fails to renew the registration of his
cellular or mobile phone and the SIM card number,

d) Any NTC official who wilffully fails to prepare and issue the
guidelines governing the registration of cell or mobile phone and the
prescribed accountable registration form within the reglamentary period;

) Any person who copies in his phonebook the MIN of other
persons and gives or passes the same to a third party;

f) Any person who knowingly uses or attempts to use wireless
emergency telephone service or information for a purpose other than
obtaining public safety assistance;

9) Any person, under the age of eighteen (18) years, who operates
or uses a cellular or mobile phone or any additional technology associated
with it while driving a motor vehicle;

h) Any person who uses profane, indecent or threatening language
to any person over his cellular or mobile phone, annoys or harasses by
repeated calling or sending text messages or making false statements over
the cellular or mobile telephone unit;

i) Any person or group of persons who knowingly: (1) acquires,
Possesses or owns any cloning equipment as defined in Section 4(d) of this
Act; (2) uses the cloning equipment mentioned in Section 4(d) of this Act; (3)
conceals, or assists another to conceal, from any unlawful authority the
source of a particular cloning equipment, or the source of cellular or mobile
phone, which are not covered with the required documents; and (4) sells the
cloned cellular or mobile phone to the public or knowingly purchases the
same from an illegal source;



j) Any person who stands as a look out and uses his cellular or
mobile phone to monitor and relay the whereabouts and the activities of a
prospective victim to the principal criminal elements in the commission of a
crime such as but not limited to assassination, kidnapping, robbery,
abduction, homicide, murder, rape, and other heinous crimes;

k) Any person who gives false statement through text messages
that a subscriber won a prize from a particular raffle draw sponsored by an
alleged business entity, government agency or government-owned and
controlled corporations (GA/GOCCs), non-government organizations (NGOs)
or charitable institutions, and consequently asking the victim (a) to give his
bank account number where the prize money will be allegedly transferred, or
(b) to purchase several SIM cards and load the same to his MIN, or (c) to put
on the caller's phone a prepaid amount to ensure that he can call the victim
anytime while the alleged processing for the release and transfer of the prize
won to the victim's account is ongoing;

1) Any person who makes, distributes, possesses and conceals
unlawful telecommunication device that is capable, or has been altered,
modified, programmed or reprogrammed alone or in conjunction with another
access device or other equipment so as to be capable of acquiring or
facilitating the acquisition of any electronic serial number, mobile identification
number, personal identification number or any telecommunication service
without the consent of the telecommunication service provider, tumbler
phones, counterfeit or clone microchips, scanning receivers of wireless
telecommunication service provider and other instruments capable of
disguising identity or location or of gaining access to a communications
system operated by a telecommunication service provider;

m) Any person who uses a cellular or mobile phone to commit any
act of eavesdropping into the conversation between a government official and
a private person, or a conversation between private persons, without first
securing a court order, eavesdropping into the conversation of persons who
are alleged to be members of a terrorist organization, drug and human
traffickers, smugglers who are operating in the Philippines and election
cheating operators who subvert the sovereign will of the Filipino electorate;
and

n) Any person who uses his cellular or mobile phone unit in
detonating a bomb that explodes causing damage to life and properties.

SEC. 13. Penalties. — Any corporation, partnership or single proprietorship
which shall violate the registration requirement provided hereof shall be
imposed the following penalties:

a) Fine of Fifty thousand pesos (P50,000.00) for the first offense;

b) Fine of One hundred thousand pesos (P100,000.00) for the
‘second offense;

¢c) Imprisonment ranging from one month to six months and a fine
‘of One hundred thousand pesos (P100,000.00) for the third offense; and

d) — Revocation and cancellation of the business license of the
corporation, partnership or single proprietorship and a fine of Five hundred
thousand pesos (P500,000.00) for the fourth offense.


The penalty of imprisonment shall be imposed on the president,
general manager, treasurer or other duly appointed officer of the corporation,
partnership or single proprietorship.

Any responsible officer of the Telecommunications Service Provider,
who shall refuse to reveal the identity and personal circumstances of the
cellular phone number user after a proper court order is presented, or refuse
to cooperate with the requesting law enforcement agency after the latter has
shown proof that the cellular phone number was used in the commission of a
crime, harassment or illegal purpose shall, in addition to the penalties
provided for under the Revised Penal Code, suffer the following additional
penalties:

a) Fine of One hundred thousand pesos (P100,000.00) for
the first offense;

b) Fine of One hundred fifty thousand pesos (P150,000.00)
for the second offense;

) _ Imprisonment ranging from six months to one year and a
fine of One hundred fifty thousand pesos (P150,000.00) for the third
offense;

SEC. 14. Implementing Rules and Regulations. — The Department of
Transportation and Communications shall, in coordination with the National
Telecommunications Commission, issue the necessary rules and regulations
for the effective implementation of this Act.

SEC. 15. Separability Clause. — If for any reason, any part or provision of
this Act is declared invalid or unconstitutional, the remaining parts or
provisions not affected shall remain in full force and effect

SEC. 16. Repealing Clause. - All laws, decrees, executive orders,
proclamations, rules and regulations, and issuances, or parts thereof, which

are inconsistent with the provisions of this Act are hereby repealed or
amended accordingly.

SEC. 17. Effectivity. - This Act shall take effect fifteen (15) days after its
Publication in at least two (2) national newspapers of general circulation.

Approved,