Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

SEVENTEENTH CONGRESS
First Regular Session

3876

HOUSE BILL No.

Introduced by BAYAN MUNA Rep. CARLOS ISAGANI T. ZARATE

AN ACT
EXPANDING THE POWERS OF THE NATIONAL TELECOMMUNICATIONS
COMMISSION CLASSIFYING SHORT MESSAGING SERVICE,

AND INTERNET SERVICES AS UTILITIES IMBUED WITH PUBLIC INTEREST
AND PROVIDING PENALTIES THEREOF, AMENDING REPUBLIC ACT 7925
OTHERWISE KNOWN AS THE “PUBLIC TELECOMMUNICATIONS
POLICY ACT OF THE PHILIPPINES” FOR ITS PURPOSE

EXPLANATORY NOTE

Internet and SMS has been part of our daily lives, it now plays a crucial role in many
aspects of society, from media and information, entertainment, education, governance and the
economy. The “bayanihan” spirit has extended online where people send support for those
affected by calamities and disaster, and government agencies use the internet for relevant alerts.
As such the Philippines has been dubbed as the Text Capital, Social Media and even the BPO
Capital of the World which shows a very high demand for the use of such services. United
‘Nations Special Rapporteur on the Promotion And Protection Of The Right To Freedom Of
Opinion And Expression Frank La Rue submitted a report to the UN Human Rights Council
last May 2011 stating that “.,.internet access facilitates economic development and the
enjoyment of a range of human rights, marginalized groups and developing States remain
trapped in a disadvantaged situation, thereby perpetuating inequality both within and between
States.”

However with all the recognition that the Filipinos are SMS and internet savvy, there
still lies the fact that the country has been lagging behind in terms of average internet speed
and total internet penetration hovers around 35-40% only of the Philippine population, with
majority of the activity coming from urban centers. In this crisis, the problem lies with the
country’s lack of infrastructure to deliver reliable internet connection as it was left to the hands
of private telecommunications companies that would only construct facilities that would be
financially-viable and the current Telecommunications Act, rendered the NTC as toothless
when it comes to regulating internet and text messaging services, which is considered only as
a “value-added service” and therefore is outside the jurisdiction of the Commission,
notwithstanding the reality that it has been very long since the first connection of our country
to the Internet in March 1994 which was only used by enthusiasts and educational institutions
back then. The lack of spending of telecommunications investment by the private sector is


evident as it consists only 0.014 % of the GDP. While the sectors that provide relying internet
and other telecommunication services such as Business process outsourcing (BPO),
Information Technology Outsourcing (ITO), Knowledge process outsourcing (KPO) and other
outsourcing industries have contributed USD 11 billion in export revenues, or an estimated
5.4% to the country’s GDP in 2011.

While access to internet is now largely considered a human right, this right is hardly
realized, ironically by a country that claims to be the freest in Asia. The country is experiencing
a slow but expensive intenet service. According to a study by Ookla, an internet metrics
provider, the Philippines has the second-slowest average download speed among 22 countries
in Asia. As of May, the country’s average download speed reached 3.64 Mbps, ranking 176th
out of 202 nations around the world. It is eight times slower than the global average broadband
download speed of 23.3 Mbps. Aggravating this slow internet service is the fact that we are
paying more than our neighbors who are experiencing better internet services than ours, with
the Philippines having an average user spending of $18.19 per Mbps versus the global average
of $5.21 per Mbps.

Its by this plight of the public ~ the need for internet to be considered a basic necessity
for living and therefore be subject to regulation -- that this bill was originally filed by Bayan
Muna Reps. Neri Colmenares and Carlos Zarate during the 16" Congress.

This bill echoes the call of consumers that the government should lead the creation of
a national telecommunications and internet infrastructure in order to interconnect the different
islands of the country, which is a very monumental task and shall need government resources
as it would cover areas unprofitable for the telecommunication companies to build its facilities.
Moreover, it seeks to rationalize government regulation of the industry by clearly defining the
powers of the National Telecommunications Commission through the formulation of
provisions specific and categorical to the industry and increasing the fines to be imposed which
is also allowed to be adjusted with inflation to ensure maximum compliance on the side of
telecommunication companies and internet service providers.

In order to end our plight of experiencing slow internet at the mercy of private
telecommunication networks, swift passage of this bill is sought

Approved,

Rep. ‘xe ISQGANI T. ZARATE.

Bayan Muna Party-List

+ hnttp://www-businessmirror.com.ph/phls-slow-but-expensive-internet-service/


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

SEVENTEENTH CONGRESS
First Regular Session

3876

HOUSE BILL No.

Introduced by BAYAN MUNA Rep. CARLOS ISAGANI T. ZARATE

AN ACT
EXPANDING THE POWERS OF THE NATIONAL TELECOMMUNICATIONS
COMMISSION CLASSIFYING SHORT MESSAGING SERVICE,

AND INTERNET SERVICES AS UTILITIES IMBUED WITH PUBLIC INTEREST
AND PROVIDING PENALTIES THEREOF, AMENDING REPUBLIC ACT 7925
OTHERWISE KNOWN AS THE “PUBLIC TELECOMMUNICATIONS
POLICY ACT OF THE PHILIPPINES” FOR ITS PURPOSE,

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

SECTION 1 - CLASSIFICATION OF SMS AND INTERNET UNDER NTC’S.
REGULATION. Section 3 of Republic Act 7925, otherwise known as the “Public
Telecommunications Policy Act” is hereby amended to read as follows:

Section 3. Definitions and Interpretations, - For purposes of this Act, the following
terms shall be used:

XXX

(c) Short messaging services ~ is a text messaging component of mobile
communication systems that are transmitted to and from a mobile phone,
fax machine and/or IP address.

(a) Internet ~ a communication network that allows connection among
computers and devices worldwide via the internet protocol (IP).

(e) Internet service provider — an entity that provides internet access
through existing network infrastructure including but not limited to
telephone lines, cell sites, Ethernet, satellite, cable television lines, and
radio frequency; or through new technologies delivering internet services
that may emerge after the passage of this act.

XXX


Furthermore, the NTC is mandated to adopt standardized definitions the
International Telecommunications Union (ITU), the Internet Engineering Task
Force (IETF), the World Wide Web Consortium (WWWC), and the Internet
Corporation for Assigned Numbers and Names (ICANN), and other
international and transnational agencies governing the development, use, and
standardization of information and communications technology and the
Internet,

SECTION 2. INTRODUCTION OF PENALTIES, Section 5 of Republic Act 7925,
otherwise known as the “Public Telecommunications Policy Act” is hereby amended to read
as follows

Section 5. Responsibilities of the National Telecommunications Commission. - The
National Telecommunications Commission (Commission) shall be the principal
administrator of this Act and as such shall take the necessary measures to implement
the policies and objectives set forth in this Act. Accordingly, in addition to its existing
functions, the Commission shall be responsible for the following:

XXX

(h) In exercise of its regulatory powers, the Commission shall be
given the power to impose fines against telecommunication service
providers within the scope of its regulation that is found violating or
failing to comply with the terms and conditions of any certificate or any
orders, decisions or regulations of the Commission shall be subject to a
fine amounting to the total actual loss or overcharging as determined by
the Commission for every day during which such default or violation
continues; and the Commission is hereby authorized and empowered to
impose such fine, after due notice and hearing. The erring service
providers are also mandated to refund to consumers the charges they
erroneously imposed to their subscribers.

SECTION 3. Development of a National Telecommunications Network. — Section 6 of of
Republic Act 7925, otherwise known as the “Public Telecommunications Policy Act” is
hereby amended to read as follows:

Section 6, Responsibilities of and Limitations to Department Powers. - The
Department of Transportation and Communications (Department) shall not exercise
any power which will tend to influence or effect a review or a modification of the
Commission's quasi-judicial functions.

In coordination with the Commi:
with the policies enunciated in thi

XXX

n, however, the Department shall, in accordance
Act, be responsible for:

a.) In coordination with the Department of Science and Technology and
other related agencies, they are given the mandate to develop a National
Telecommunications and Internet Infrastructure in order to pro
nationwide network that would provide interconnection among different
government offices and Local Government Units. Al
providers shall be required to connect to the said infrastructure.



SECTION 4. Repealing Clause. - All laws, orders, issuances, rules and regulations or part
thereof inconsistent with the provisions of this Act are hereby repealed, amended or modified

accordingly.
SECTION 5. Effectivity Clause. - This Act shall take effect within fifteen (15) days after its

publication in the Official Gazette or in at least two (2) newspapers of general circulation,
whichever comes earlier.

Approved,