Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

EIGHTEENTH CONGRESS
First Regular Session

4726

HOUSE BILL NO." *

Introduced by Rep. Precious Hipolito Castelo

EXPLANATORY NOTE

Despite the unprecedented growth rate and rapid developments in information
telecommunications technology, the leading telecommunications companies (telcos) in the
country have failed to cope with the ever-increasing demand for quality services, and provide
its subscribers with sub-par and inadequate services. Stories of poor signal quality, choppy
or garbled voice transmission, frequent dropped calls, unexplained exorbitant charges, slow
internet connection, and vanishing load are familiar complaints that have been the subject of
several legislative inquiries, yet telcos continue to fail to present any substantial
improvement.

Section 20 of Republic Act No. 7925, otherwise known as the “Public Telecommunications
Policy Act of the Philippines’, provides that users of telecommunications service shall have
the basic right to reliable service compliant with minimum standards set by the National
Telecommunications Commission (NTC). Unfortunately, the NTC is unable to enforce this
mandate, to the prejudice of subscribers who are left with no choice but to endure the poor
services provided by telcos.

This bill seeks to protect the rights of subscribers by establishing the minimum standards
regarding the quality of telecommunications services that telcos must provide. It directs the
telcos to adopt a Mobile Number Portabilty (MNP) feature,’ mandates them to deliver a
minimum internet connection at par with the global average and establish a responsive
complaint handling system, and prohibits load expiration and unsolicited promotions.

It is the belief of this representation that by empowering consumers and ensuring that they
get the best value for their money, telcos will be forced to improve their services and
genuinely compete with each other. It will also encourage innovation, stimulate demand for
telecommunications services, and in the long run boost economic growth

The immediate consideration and approval of this proposed measure is therefore most
mestly sought.

‘ MNP is a feature that allows mobile phone subscribers to use the same mobile phone numbers even
if they switch to a different carrier. Under the current system, the first four numbers of a mobile phone
number are assigned to specific carriers, forcing mobile phone subscribers to change numbers when
‘switching to a different telco.


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

EIGHTEENTH CONGRESS
First Regular Session

HOUSE BILL NO. 726

Introduced by Rep. Precious Hipolito Castelo

AN ACT
STRENGTHENING THE RIGHTS OF MOBILE TELECOMMUNICATIONS SERVICE
SUBSCRIBERS, ESTABLISHING THE MINIMUM STANDARDS IN THE QUALITY OF
SUCH SERVICES

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

CHAPTER!
GENERAL PROVISIONS

SECTION 1. Short Title. — This Act shall be known as the “Magna Carta for Mobile
Phone Subscribers.”

SEC. 2. Declaration of Policy. - The State recognizes the vital role of communication
and information in nation-building. To maximize the full utility of available information and
communications technology (ICT) infrastructure, the State shall ensure the provision of
efficient, quality, and reliable services by mobile telecommunications service providers and
shall protect the rights and welfare of consumers. Towards this end, a minimum standard of
service quality shall be established.

SEC. 3. Definition of Terms. - As used in this Act:

(a) “Advertisement” means any direct or indirect advertising, marketing,
promotional or branding activity or any other activity which has the same
or similar effect and which is made to promote a product, service, or
person to consumers;

(b) “Bill” means an invoice from a service provider which advises a
subscriber of the total charges due for in respect of telecommunications
service provided by the telecommunications entity;

(©) “Billing” means any one, or a combination of, the following activities: (i)
calculating charges incurred by a subscriber during a billing period; (i)
applying any debits or credits outstanding or discounts due against the
charges, and calculating the net amount payable by the subscriber; (ii)
issuing and delivering bills to the billing address; (iv) handling billing
inquiries; and (v) receiving and receipting payments made by the
subscriber.

(4) “Commission” means the National Telecommunications Commission
(NTC);

(e) ‘Committed Information Rate” is the bandwidth for a virtual circuit
guaranteed by an internet service provider to work under normal


conditions. This is the minimum speed that a service provider is
compelled to provide;

() ‘Consumer’ means’ any person, whether natural or juridical, which
consumes or may consume a Public Telecommunications Service
provided by a service provider, altematively referred to as “Subscriber’,

(a) “Consumer Complaint” means an expression of dissatisfaction made to a
service provider in relation to its telecommunications products or services
registered by any reasonable means at any place authorized by the
service provider for such purposes;

(h) “Consumer Dispute” means any correspondence or communication
accepted by the NTC from a subscriber expressing dissatisfaction or
grievance on the outcome of a Consumer Complaint or on matters within
the direct scope of a service provider's business and on which matter the
Subscriber has some legitimate interest;

() ‘Customer Service” means services, other than telecommunications
services, provided by a telecommunications entity to a subscriber, in
connection with the subscriber's use of the entity's services and the
subscriber's contract with the entity;

() ‘Load credits” refers to the monetary value or the consumable amount
loaded to a mobile number via prepaid call and text card that enable a
subscriber to use telecommunication services;

(«) “Mobile Number Portability (MNP)” refers to a feature that allows a mobile
phone subscribers to use the same mobile phone numbers even if they
switch to a different telecommunications service provider;

() ‘Mobile Phone Service Provider, Supplier, or Telecommunications
Company” means any person, firm, partnership, or corporation,
government or private, granted a legislative franchise to engage in the
provision of mobile telecommunications services to the general public for
‘compensation;

(m) ‘Post-Paid” means a type of account wherein telecommunications service
can be used fully or in part prior to being paid for by the subscriber;

(n) ‘Prepaid’ refers to the type of account that requires the subscriber to
purchase load credits before telecommunications services can be used;

(0) “Prepaid call and text card” refers to any device, in the form of a card,
certificate, coupon, document, record, code, electronic serial number,
identification code or number, or any other transaction denominated by a
reference number, with a corresponding peso value that has to be
purchased to enable a subscriber to use telecommunication services;

() “Subscriber Contract” means an arrangement or agreement between a
service provider and a subscriber for the supply of a telecommunications
services to that subscriber;

(q) “Subscriber Identity Module (SIM) refers to a pocket-sized card with
embedded integrated circuits, which securely stores the key data
identifying a subscriber, as well as subscription information and
subscriber preferences; and

(f) “Subscriber Information” means any personal data relating to a specific
subscriber and includes, but is not limited to, that person's name,
address, mobile phone number, bank account details, credit card details,
service usage details, call records, message records, any information
derived from a subscriber's use of telecommunications services, account
status, and payment history.

CHAPTER Il
ESTABLISHMENT OF STANDARDS REGARDING QUALITY OF SERVICE


SEC. 4. In General. Within two (2) years from the effectivity of this Act, all mobile
phone service providers shall take steps to comply with the minimum standards of service
quality established hereunder. The Commission shall ensure, through the appropriate
regulatory measures, that these minimum standards are complied with to promote and
protect the rights of mobile telecommunications subscribers.

SEC. 5. Truth in Advertising. Mobile service providers shall ensure that any
information provided or made available to subscribers, including but not limited to offers,
advertisements, and any other promotional materials, is communicated in plain language,
clear, accurate, timely, and free of material omissions.

SEC. 6. Telecommunications Offers. Mobile service providers shall provide a
‘summary of each of its current standard plans or services being offered, to allow subscribers
to compare and determine which offer best suits their needs. The summary shall include the
following information: description of the service; minimum and maximum monthly charge
payable, where calculable; inclusions, exclusions, and any important conditions, limitations,
restrictions, or qualifications for the offer.

SEC. 7. Customer Service. Mobile service providers shall ensure that its customer
service system is receptive and responsive, and its representatives deal with subscribers
courteously and in a fair and accurate manner. They shall ensure that appropriate action is
taken against employees who are rude or harassing to, or engage in misleading conduct,
with subscribers.

SEC. 8. Unsolicited Promotions. A consumer or subscriber cannot be deemed to be
charged for, subject to, or part of any service or promotion thereof prior to his express
agreement, which shall be in written form if practicable, to participate, join, use, subscribe to
or avail of such service or promotion.

‘SEC. 9. Prepaid Load Expiration. The following acts are hereby declared unlawful:

(a) Imposition of an expiration period on the validity of unused prepaid call and text
cards;

(b) Forfeiture of load credits stored on an active prepaid phone account via prepaid
call and text card; or

(c) Refusal to give a refund to any prepaid subscriber whose load credits were
forfeited without any valid cause.

SEC. 10. SIM Card Expiration. Prepaid SIM cards shall only expire after a year of
inactivity. For purposes of this Act, a SIM card shall be considered inactive if it has not been
loaded with load credits one (1) year after the load credits in its last prepaid card have been
fully consumed.

SEC. 11. Billing. A post-paid subscriber shall have the right to regular and accurate
billing, timely correction of errors therein, if any, and the immediate provision of rebates or
refunds by the service provider upon determination of the subscriber's entitlement thereto,
without need for demand. Service providers shall be required to establish a system where
prepaid subscribers can track the usage of their load credits, at no cost to the subscriber.

In case of complaints related to billing for post-paid or loss of load credits for prepaid,
the service provider has the burden of proving that the complainant made or authorized an
unverified charge for a product or service. Pending investigation on a complaint, the
complainant shall not be required to pay the disputed charge(s) and the service provider
may not suspend the service for the non-payment thereof.


SEC. 12. Intemet Speed. All mobile telecommunications service providers shall
provide a committed information rate or minimum internet download speed of 10 Megabits
per second (Mbps) for mobile broadband/internet access.

Every two (2) years after the effectivity of this Act, the Commission shall review the
abovementioned standard, and may adjust the same, taking into consideration industry
trends and developments in information and communications technology; Provided, that the
minimum speed shall be above the global average.

SEC. 13. Number Portability. It shall be the obligation of service providers to provide
mobile number portability (MNP) to all subscribers, whether prepaid or postpaid. They shall
ensure that subscribers can change, in one (1) working day, their mobile operator while
keeping their old phone number. Every mobile service provider shall, within the period stated
in the implementing rules and regulations of this Act, set up a mechanism to implement
MNP.

SEC. 14. Protection of Subscriber Information. Any data supplied by the subscriber
shall be treated as confidential by the service provider and shall not be used for purposes
not authorized by him/her, nor be disclosed to a third party without prior written consent by
the subscriber. Upon subscription, the subscriber shall be informed of his/her right to privacy
and the manner by which his/her data would be protected.

SEC. 15. Complaint Handling. A complaint handling system shall be established to
address subscriber complaints as follows:

(a) Mobile service providers. -- The mobile service providers shall endeavour to allow
complaints to be received by mail and other means using telecommunications
facilities or the intemet, which shall include but shall not be limited to voice calls,
short messaging service (SMS), multimedia messaging service (MMS), electronic
mail, or social media accounts. They shall acknowledge a complaint by providing
a subscriber with the following:

1) unique reference number or such other means as will ensure the service
provider's ability to subsequently identify the complaint and its subject matter;
and

2) an indicative timeframe for the resolution of the complaint, which shall not be
more than thirty (30) days.

The service providers shall keep a record of all complaints made pursuant to
the system established under this provision and submit the same to the
‘Commission as required by Section 17 of this Act.

(b) National Telecommunications Commission. -- The Commission shall likewise
establish and administer a system that makes available a procedure for the
resolution of consumer disputes, as defined in this Act. The Commission shall
acquire jurisdiction over complaints filed with the service provider upon
notification from the aggrieved subscriber that his complaint is denied in whole or
in part, or is not acted upon within thirty (30) days from filing thereof.

The Commission shall require each mobile service provider to include, in
each subscriber's bill, a statement informing the subscriber of its complaint
system, including the procedure of filing an appeal with the Commission.

SEC. 16. Suspension or Termination of Service. Mobile service providers shall act on
requests to suspend or terminate subscriber's contracts within five (5) days from receipt


thereof and shall not impose any other condition for the resolution of such requests, except
the payment of charges arising from the use of telecommunications services.

CHAPTER III
ENFORCEMENT

SEC. 17. Reportorial Requirement. All mobile service providers shall transmit an
annual report to the Commission regarding the complaints received pursuant to the
complaint system established under this Act, indicating the following:

(a) The number of complaints received during the period for which the report is
made;

(b) The types of complaints received during such periods, including complaints
regarding dead spots, dropped calls, and improper billing;

(c) The number of each type of complaint received during such period, and the
resolution thereof.

The Commission shall likewise keep a record of consumer disputes it received
and shall make this information readily available in its website.

SECTION 18. Disciplinary Proceedings. The Commission, after due notice and
hearing, may suspend or revoke the legislative franchise and other permits and licenses
issued to service providers if the service provider:

(a) Gives false or misleading data or information or wilfully or through gross
negligence, conceals or makes a material misrepresentation in any
investigation, inquiry, or proceeding conducted pursuant to this Act;

(b) Fails to comply with the provisions of this Act or any rule promulgated
pursuant to this Act;

(c) Fails to cooperate with the Commission, or fails to timely respond to a
request for information by the Commission, in connection with an
investigation pursuant to this Act; or

(d) Violates any other law that substantially relates to the operation of a mobile
telecommunications entity and consumer protection.

SECTION 19. Penalties. In addition to suspension or revocation of franchise or
any other action under the immediately preceding Section, the Commission may assess
against a service provider for each violation enumerated thereunder, a fine of not less
than One Hundred Thousand Pesos (100,000.00) but not more than Five Hundred
Thousand Pesos (500,000.00); Provided, that if the false or misleading data or
information shall have been under oath, the maximum penalty shall be imposed.

The Commission shall determine the amount of the administrative penalty to be
imposed on a service provider found violating the provisions of this Act, after considering
the following factors:

(a) The seriousness of the violation or failure to comply, including the nature,
circumstances, extent, and gravity of the violation, and the harm or injury that
may arise as a result of the violation;

(b) The history of contraventions of or failures to comply;

(©) The efforts made to correct the violation; and

(d) Any other factor that may be just and reasonable under the circumstances.



CHAPTER IV
FINAL PROVISIONS

SEC. 20. Effect on Consumer Protection Laws. Nothing in this Act shall be construed
as relieving any mobile service provider from the obligation to comply with any law,
‘executive issuance, rule or regulation relating to consumer protection or unfair trade or serve
to limit or impair the rights and remedies of a consumer under any other law.

SEC. 21. Public Information Campaign. The Philippine Information Agency (PIA), in
coordination with the National Telecommunications Commission, shall be responsible for
information campaigns to ensure nationwide awareness of the Magna Carta for Mobile
Subscribers and its implementing rules and regulations.

SEC. 22. Implementing Rules and Regulations. — Within ninety (90) days from the
promulgation of this Act, the Department of Information and Communications Technology
(DICT) and the National Telecommunications Commission (NTC) shall issue the necessary
rules and regulations for the proper and effective implementation of this Act.

SEC. 23. Separability Clause. — If any provision or part hereof is held invalid or
unconstitutional, the remainder of the provision not otherwise affected shall remain valid and
subsisting.

SEC. 24. Repealing Clause. - Any law, presidential decree or issuance, executive
order, letter of instruction, administrative order, rule or regulation contrary to, or inconsistent
with, the provisions of this Act is hereby repealed, modified or amended accordingly.

SEC. 25. Effectivity. — This Act shall take effect after fifteen (15) days following its
publication in at least two (2) newspapers of general circulation.

Approved,