A> RECEIVED

EIGHTEENTH CONGRESS )
REPUBLIC OF THE PHILIPPINES __)
First Regular Session )
HOUSE OF REPRESENTATIVES
HouseBitt No,_°93

Introduced by Representative VICTOR A. YAP

EXPLANATORY NOTE

Radio frequency spectrum is a scarce public resource on which telecommunication operators
develop their respective network to deliver services to customers. The amount of spectrum assigned to a
telco has an impact on the cost to build capacity, overall network performance, ability to offer new
multimedia services, and general customer experience of wireless services. Thus, it is imperative that
spectrum be administered in the interest of the public, and in accordance with international agreements and
conventions to which the Philippines is a party.

Assigning spectrum to service providers capable of efficiently and effectively using it to meet public
demand is key to ensuring better wireless telecommunications, broadcast, and data transmission services in
the country. To achieve this, under this bill, the function of radio spectrum management shall be a joint
undertaking of the Department of Information and Communications Technology (DICT), for policy and
planning aspects, and the National Telecommunications Commission (NTC), for regulatory matters,
particularly spectrum allocation and assignment.

This bill mandates the NTC to make the spectrum allocation, assignment, reclassification, recall, and
re-assignment transparent in order to ensure that the rights of all stakeholders are fully protected. The NTC
and DICT are also tasked to establish a competitive bidding methodology for the assignment of spectrum.

Under this measure, the NTC shall assign spectrum to qualified entities for an initial period of not
more than three years. On the last year, the NTC shall review the assignment to determine if it is being
optimally used, and if there is a need to renew or increase, or decrease or recall the assigned spectrum.
Subsequent renewals of spectrum assignment shall be for periods of up to five years, and would be again
subject to review on the last year. This way, the use of spectrum would be treated as a privilege which may,
afier due process, be withdrawn any time when the greater good of the public demands it.

To ensure efficient and equitable distribution of spectrum, no entity may hold more than 25% of the
licensed radio frequency spectrum in any given band. The sale, lease, transfer, usufruct and assignment of a
license shall be prohibited, as well as mergers and acquisitions without prior approval of the NTC and the
Philippine Compet Commission.

The use of spectrum shall be subject to reasonable spectrum user fees, based on the use and the
amount of spectrum, the type of service being offered, and the economic classification and geographic
coverage or scope of the spectrum used.

This measure ultimately aims to ensure proper allocation of spectrum that would promote the
adoption of appropriate technologies, best practices, and the highest service standards.

In view of the foregoing, the passage of this bill is earnestly sought.

tive, 2nd District of Tarlac


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EIGH PH CONGRE!
REPUBLIC OF THE PHILIPPINES)
First Regular Session )

HOUSE OF REPRESENTATIVES

House Bill No,_.299

Introduced by Representative VICTOR A. YAP

AN ACT.
PROVIDING FOR POLICIES TO ENHANCE EFFICIENCY AND TRANSPARENCY IN.
THE ALLOCATION, ASSIGNMENT, AND MANAGEMENT OF
FREQUENCY SPECTRUM 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 “Philippine Spectrum Management
Act.”

SEC. 2. Declaration of Policy. — The radio frequency spectrum is a scarce public resource that
shall be administered in the public interest and in accordance with international agreements and
conventions to which the Philippines is a party. To this end

(a) The government shall allocate the radio frequency spectrum to promote the adoption of
appropriate technologies, an interference-free environment, best practices, and the highest
service standards.

(b) The government shall assign spectrum to service providers capable of efficiently and
effectively using it to meet public demand for telecommunications and data transmission
services

(©) The allocation and assignment of spectrum shall be done in a manner that promotes
transparency, competition, and universal service.

(d) The State recognizes that spectrum allocation and assignment bear significant economic
impact on multiple sectors, and therefore the state shall institute in this Act a spectrum
allocation and assignment process that is transparent and considers the inputs and needs of
various stakeholders, and properly allocates amongst stakeholders the responsibility for
spectrum management.

(e) The use of any portion of the radio frequency spectrum is a privilege conferred by the State
which may, after due process, be withdrawn any time when the greater good of the public
demands it.

SEC 3. Objectives. ~ The objectives of this Act are, as follows

(a) Encourage the development and rapid deployment of new technology and improvement of
service standards to make wireless services in the Philippines competitive and at par with
global standards

(b) Ensure better wireless telecommunications, broadcast, and data transmission services and
extend service coverage by preventing excessive concentration and consolidation of
spectrum licenses;



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(©) Recover a greater portion of the economic value of the radio frequency spectrum for the
public;

(d) Promote more efficient and effective use of radio spectrum; and

(©) Promote the entry and development of new players for telecommunications and data
services

SEC. 4. Definitions. — As used in this Act, the following terms are defined as follows:

(a) “Allocation” refers to an entry in the National Radio Frequency Allocation Table (NRFAT)
of a given frequency band for the purpose of its use by one or more telecommunications or
data transmission services

(b) “Assignment” refers to an authorization given to a Licensee to use specific frequencies or
channels;

(©) “Block” refers to a portion of the radio frequency spectrum allocated to a Licensee pursuant
to this Act.

(d) “License” refers to a license to be granted pursuant to this Act to establish or use a radio
base station or install or use radio base station apparatus in the Philippines at frequencies
comprising a portion or several portions of the radio frequency spectrum;

(©) “Licensee” refers to a natural or juridical person issued a License pursuant to this Act; and

(f) “Material Interest” refers to any interest, whether direct or indirect, in any share which
carries, or any shares which together carry, more than twenty-five percent (25%) of the
votes entitled to be cast at a general meeting of a Licensee; or any share or shares in the case
where the consent of the holder of that share or those shares is required for the conduct of
any business of a Licensee: or the right to appoint or remove a majority of a Licensee’s
board of directors or trustees.

SEC. 5. Mandate for Spectrum Management. ~ The function of radio spectrum management shall
be a joint undertaking of the Department of Information and Communications Technology or DICT,
for policy and planning aspects, and the National Telecommunications Commission or NTC, for
regulatory matters, in consultation with other key relevant government agencies and concemed
stakeholders.

(a) Spectrum allocation and assignment shall be performed by the NTC strictly in accordance
with the recommendations of the Radio Frequency Consultative Committee (RFC) to be
organized by the DICT. The RFC shall be composed of:

i, The Secretary of the DICT, who shall also act as Chairman;
ii, The Commissioner of the NTC:

i. The Commissioner of the Philippine Competition Commission (PCC):
iv. The Secretary of the Department of Science and Technology (DOST)
iv. The National Security Adviser
v. One representative each from the following private sector groups:

(a) Telecommunications entities
(b) Broadcasters’ associations:
(c) Cable TV operators” associations; and

(d) Telecommunications and data services consumer and advocacy groups.

ssoc

tions;



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The private sector groups shall nominate their representatives to the RFCC within
forty-five (45) days from the effectivity of this Act, and every two (2) years
thereafier. The private sector representatives shall be appointed by the President of
the Philippines (Secretary of the DICT?) for a term of two years.

(b) Within sixty (60) days from the creation of the RFCC, the RFCC and the NTC shall jointly

promulgate a Memorandum Circular to cover the follo

iv.

The definition of, and criteria for determining, efficient and effective spectrum use;
The procedure for:
a. review, allocation, assignment, recall, and re-assignment of the radio spectrum,
and the reclassification of spectrum from one classification to another (i.e., broadcast
to telecom, and vice versa) which shall incorporate the Transparency Rule set forth
in Section 6 of this Act;
b. determining license-exempt spectrum, spectrum-sharing techniques, and
dynamic spectrum access (DSA) bands; and
¢. for determining the spectrum for review;
Appropriate measures to minimize the impact of recall and re-assignment on active
users of services utilizing the recalled or re-assigned spectrum
The procedure on how to calculate the reasonable spectrum users’ fees and the amount
to be paid for the use of the spectrum
The determination of situations where the demand for a particular radio frequency
band exceeds availability and the manner by which spectrum shall be subject to open
tender in case the demand for a specific band of radio frequencies exceeds availability.

(c) The RFC shall promote policies for the proper management of radio spectrum in order to
assure its availability for all existing and potential competitors in the market, for all present
and future telecommunications, data transmission, and broadcast services.

(d) The DOST shall support the DICT and NTC in carrying out their spectrum management

functions by conducting spectrum monitor

ng, research, and analysis:

(e) The NTC shall be responsible for other aspects of spectrum management, including:

iii.

iv.

v

vi.

Verification of the correct use of frequency assignment and of station characteristics;
Spectrum monitoring, inspection, investigation and elimination of interference;
Gathering and reporting of data for quantitative estimation of spectrum utilization
factors such as ambient radio noise, emission parameters, etc., and for local and
international reporting:

Promulgation of regulations for consumer protection against misuse of a
telecommunications entity's monopoly, quasi-monopolistic or oligopolistic powers by
investigation of complaints and exacting compliance with service standards from such
entity;

Recommendation to the RFCC of the allocation of spectrum for a particular purpose or
use, in accordance with the international conventions to which the Philippines is a
party;

In the exercise of its regulatory powers, impose fines against. Pubic
Telecommunications Entities (PTEs), data transmission providers, and broadcasting
companies within the scope of its regulation, which are found to have violated,
violating or {those which] have failed or are failing to comply with the terms and
conditions of this Act, any certificate. or any order, decision, regulation or required
performance standards of the NTC.



SEC. 6. Transparency Policy. — The NTC shall make the spectrum allocation, assignment,
reclassification, recall, and re-assignment transparent in order to ensure that the rights of all
stakeholders are fully protected.

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(a) The NTC shall publish and make available in print and online formats the National Radio
Frequency Allocation Table (NRFAT), indicating therein the purpose or use to which each
frequency band is allocated. For frequency bands allocated for public use, the NTC shall
likewise make available in print and online formats the frequency band, frequency range in
each band, the services and/or technology the frequency band is used for, the total
assignable channels/bandwidth in a particular frequency band, the name of the person and/or
entity to whom each particular frequency is assigned, the bandwidth assigned to a person
and/or entity from a particular frequency band, as well as the date each bandwidth
assignment was made. The NRFAT and updated radio spectrum use information shall be
made available on the NTC’s website and to any person who requests the same, upon
written request. The NRFAT shall be updated at least once every quarter to reflect changes
in allocation and assignments.

(b) The NTC shall publish the results of the review of spectrum assignment and use on its
website.

(c) The NTC shall be responsible for responding to Requests for Information (RFOIs) relative
to spectrum. The NTC shall be responsive and transparent in replying to RFOIs on
spectrum, including requests for information on spectrum assignments, which is hereby
declared as public information available to all.

(d) All proposed allocation of spectrum, requests for new spectrum assignments, changes in
spectrum assignment, and requests for approval of spectrum co-use between entities,
whether initiated by an interested private party or by the NTC, shall be submitted to the
RFCC for its review and recommendation. All applications for such actions, including those
initiated by the NTC motu propio shall -

i, Be published in a newspaper of general circulation at least once a week for
three consecutive weeks

Posted in a publicly accessible place within the premises of the NTC.

Subjected to at least one (1) public hearing to be held within seven (7) days

from the completion of publication.

Thereafter, the RFC shall, within seven (7) days from the last public hearing, submit its
recommendation on the proposed action to the NTC, for the implementation of the NTC.
The NTC shall publish all decisions on spectrum permits, allocations, re-allocations,
assignments, re-assignments, and co-use in a newspaper of general circulation and in a
prominent place within the premises of the NTC. ‘The decision shall become effective
within 15 days from publication if no appeal is received therefrom. Any appeal shall be
addressed to the NTC Commission en bane, which shall dispose of the same in a quasi-
judicial proceeding

The recall of frequency for purposes of free public use shall be given priority.

The immediately preceding paragraphs shall not apply to applications for frequency
assignments for fixed point-to-point radio links, Wi-Fi, and satellite networks, and another
spectrum declared to be license-exempt.

(e) Any proposal of the NTC to reclassify. recall, and/or re-assign spectrum shall likewise be
published and subjected to public hearing by the NTC in the manner stated in Section 6 (c)
above, and shall likewise require the recommendation of the RFC, without prejudice to the


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conduct of quasi-judicial recall proceedings where spectrum is being recalled from a current
assignee.

(®) The NTC shall not issue a test or demonstration permit or allow joint use or co-use on a
spectrum assigned to an entity other than the applicant of the test, demonstration or co-use
permit, The NTC shall require the applicant for a test, demonstration or co-use permit on a
spectrum assigned to another entity to submit the written consent of the spectrum’s assignee
‘on record.

(g) The NTC shall promptly act on applications for permits to import equipment. Any
application for permit to import equipment that is not acted on by the NTC within seven (7)
days shall be deemed approved.

(h) If the NTC finds, on its own initiative or upon complaint, that any right, license or radio
spectrum assignment to any entity has not been used despite the lapse of an initial
authorization, or is no longer in use, or is not being maximized by the user thereof, or that
the grantee has violated the provisions of this Act, it may, motu propio or upon petition by
any person, and subject at all time to due process and securing the recommendation of the
RFCC, initiate the recall of the radio spectrum assignment of a Licensee. The NTC shall,
where required and appropriate, make provisions for substitute frequency to address the
needs of active users of the spectrum recalled from the data transmission industry participant
or PTE.

SEC. 7. Spectrum Management Plan. ~ The RFC shall meet annually to develop a spectrum
management plan for the Philippines considering, among others:

ternational conventions to

(a) Recommendations of the ITU and other bodies as required by
which the Philippines is a part;

(b) Public revenue generated from the radio frequency spectrum:

(c) Future spectrum requirements for public and private use:

(d) Spectrum allocation measures necessary to accommodate those uses; and

(e) Measures necessary to promote the efficient use of spectrum and that the allocation, re-
allocation, assignment, re-assignment, re-classification, joint use or co-use, and recall of
spectrum does not result in the concentration of spectrum resources which promote,

establish, or perpetuate the significant market power of PTEs or of only a limited number of
participants.

The Secretary of the DICT and the Commissioner of the National NTC shall lead these planning
sessions and ensure that the spectrum mans
stakeholder input gathered through public hearings and consultations.

ment plan receives public exposure and incorporates

SEC. 8. National Security Review. —

(a) The National Security Adviser and/or the Department of National Defense may, motu propio
or upon petition by any person, initiate a review of any allocation, re-allocation, assignment,
ignment, re-classification, joint use or co-use, and recall of spectrum for reasons of

national security. The DND shall have a period of thirty (30) working-days upon formal
issuance of a notice of review to submit a petition for a review to the RFC, citing the
reasons therefor. A review conducted for reasons of national security shall not require
publication and notice; however, any decision on the allocation, re-allocation, assignment,



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reassignment, re-classification, joint use or co-use, and recall shall be required to undergo
the same publication requirement in Section 6 above.

SEC. 9. Auctions. ~ The NTC and DICT shall establish a competitive bidding methodology for the
assignment of Blocks pursuant to this Act. This methodology shall include safeguards to protect the
public interest as well as measures to promote the stated objectives of this Act. Thus, the NTC and
DICT, with the recommendations of the RFCC, shall.

(a)Consider alternative payment schedules and methods of calculation, including lump sums or
guaranteed installment payments, with or without royalty payments, or other schedules or
methods that promote the objectives of this Act, and combinations of such schedules and
methods;

(b) Include performance requirements, such as appropriate deadlines and penalties for
performance failures, to ensure prompt delivery of services to the public, prevent
stockpiling or warehousing of spectrum, and promote investment in and rapid deployment
of new technologies and services;

(c)Prescribe methods for allocation and assignment that promote an equitable distribution of
licenses and services among geographical areas, economic opportunity for a wide variety of
applicants, including small businesses, and businesses owned by members of minority
groups and women, and investment in and rapid deployment of new technologies and
services; and

(d) Require such transfer disclosures and anti-trafficking restrictions and payment schedules as
may be necessary to prevent unjust enrichment as a result of the methods employed to issue
licenses.

SEC. 10. Validity of Licenses for the Use of the Radio Frequency Spectrum. —

(a) The allocation and assignment of spectrum, as embodied in the NRFAT, shall be subject to
annual review. The NRFAT shall be updated quarterly and published in a newspaper of
general circulation annually

(b) The NTC may allocate and assign spectrum either on a national or regional basis.

(c) The NTC shall assign spectrum to qualified entities for an initial period of not more than
three (3) years from the date of assignment. On the last year of the initial three-year period,
the NTC shall review the assignment to determine if the assigned spectrum is being
optimally used, and renew or increase, upon the request of the grantee, decrease or recall the
same, as necessary. In the event the NTC finds that the assigned spectrum needs to be
decreased or recalled, it shall initiate recall proceedings. Subsequent renewals of spectrum
assignment shall be for periods of up to five (5) years. The NTC shall, on the last year of
every 5-year term, review the use of spectrum and take the necessary action to ensure its
optimal use.

(d) The NTC shall conduct an annual inspection of the facilities of all licensed holders of
spectrum to determine compliance with their provisional authorities. The inspection shall
include an audit of the number of subscribers using the spectrumin order to determine if,

vis the total amount of bandwidth held by the Licensee for the use of spectrum for a

particular service, the spectrum is being used adequately, effectively, and efficiently. Where

the NTC finds that frequency is unused or under-utilized, it shall initiate the appropriate
show-cause and/or recall proceedings against the Licensee.



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SEC. 11. Prohibition on Sale, Lease, Transfer, Usufruct and Assignment, ~ A Licensee shall not
lease, transfer, grant the usufruct of, sell, nor assign a License issued pursuant to this Act, or the
rights and privileges acquired there under, to any person, firm, company, corporation, or other
commercial or legal entity

SEC. 12. Mergers and Acquisitions. ~ A Licensee shall not merge with any person, firm, company,
corporation or entity, nor shall a Material Interest in a Licensee be transferred, whether as a whole
or in parts, and whether simultaneously or contemporaneously, to any such person, firm, company,
corporation or entity, without the prior approval of the RFCC, the NTC, and PCC in separate
proceedings in accordance with law

SEC. 13. Efficient and Equitable Distribution of Spectrum.

(a) No entity or group of entities sharing a Material Interest in each other, may hold more than
25% of the licensed radio frequency spectrum in any given band.

(b) Where the demand for a particular frequency exceeds supply, or the NTC deems it necessary
to introduce competition, the NIC shall conduct an open tender. It shall define and
determine the process for an open tender, taking into account the need to grant new
Provisional Authorities or CPCNs to new entrants, if any.

(©) The NTC shall not assign or re-assign any frequency that has been recalled or voluntarily
returned, either as a result of the NI'C’s annual inspection or review or the transfer of assets
of an entity to another entity due (o sales or acquisition, or whose use has been reclassified
by the NTC from broadcast to telecommunications or vice-versa, without either (i) going
through the procedure stated in Sec. 6 of this Act, or (ii) being made subject to open tender
under Sec. 9, No co-use shall be authorized or permitted in violation of this section.

(d) The NTC, in accordance with the recommendations of the RFCC, shall in accordance with
global best practice, issue rules and regulations governing shared spectrum use. The NTC
and the DICT shall likewise continuously explore and consider the adoption and application
of emerging spectrum management practices, such as dynamic spectrum allocation, in order
to make spectrum management more effective and efficient for the benefit of consumers.

SEC. 14. Spectrum User Fees. ~ The use of spectrum shall be subject to reasonable spectrum user
fees, based on the use of the spectrum, (lic amount of spectrum used, the type of service being
offered, and the economic classification and geographic coverage or scope of the areas covered by
the stations licensed to use the spectrum, The NTC shall balance its revenue-raising objectives for
spectrum against the need to make spectrum accessible to as wide a number of industry participants
as possible. It shall regularly publish the schedule of rates for spectrum.

ese

SEC. 15. Obligations of a Licensee. ~ Every Li shall be bound by the following obligations:
(a) Observe the spectrum caps stated ini this Act:

(b) Utilize assigned spectrum optimally to provide telecommunications, broadcast, and data
transmission services to the public:

(c) Comply with this Act, its implementing rules and regulations, and all other applicable
administrative issuances:

(d) Pay the lawful fees, charges, and taxes due the national government in connection with
Licenses issued pursuant to this Act: and



(©) Obtain prior approval from the RFCC, NTC, and PCC prior to any merger, acquisition, or
transfer of Material Interest in a Livensee.

SEC. 16. Implementing Rules and Regulations. ~ The Secretary of Information and
Communications Technology, upon the recommendation of the RFCC, NTC, PCC, DOST, and
National Security Adviser, shall issue the Implementing Rules and Regulations for the effective
implementation of this Act, within sixty (60) days from the approval thereof.

SEC. 17. Separability Clause. — If any provision of this Act is declared unconstitutional or invalid
by a court of competent jurisdiction, the remaining provisions not affected thereby shall continue to
be in full force and effect.

SEC. 18. Repealing Clause. - Republic Act 3846, as well as all other laws, decrees, executive
orders, department or memorandum orders and other administrative issuances or parts thereof of
which are inconsistent with the provisions of this Act, are hereby modified, superseded, or repealed
accordingly.

Section 19. Effectivity. This Act shall take effect fifteen (15) days after publication in the Official
Gazette or in at least two (2) newspapers of general circulation.

Approved,