THIRTEENTH CONGRESS OF THE 
1 
REPUBLIC OF THE PHILIPPINES 
) 
Second Regular Session 
1 
. 
'5 NOV 21 
:32 
. .  
,,,, !'*., . 
S E N A T E  
INTRODUCED BY THE HONORABLE MAR R O U S  
EXPLANATORY NOTE 
This bill seeks to promote the widespread use and deployment of voice over internet 
protocol (VOIP) as an aid in lowering communication costs so that overseas Filipino workers 
( O m s )  can easily and more frequently contact their families and so that local companies 
such as business process outsourcing (BPO) firms can enhance their competitiveness in the 
global economy. 
Voice over internet protocol (VOIP) has emerged as a welcome enhancement to 
traditional voice service in the early 2lSt century. VOIP is a generic term that refers to all 
types of voice communication using internet protocol (IP) instead of the traditional circuit 
switched technology. This includes use of packet technologies by telecom companies to carry 
voice at the core of their networks. Based on a global research by industry consu1tants'Fros.t 
and Sullivan, about 75% of global voice traffic will be done through VOIP by year 2007 a n i  
by then, sales of VOIP equipment will hit US $2.7 billion, with Southeast Asia alone 
achieving US $1.2 billion during the same period. 
VOIP enables users from different parts of the world to engage in voice conversations 
without having to pass through part or all circuit switched facilities of telecom companies. In 
effect, people can engage in international voice conversations withsut having to pay for the 
use of the international gateway facilities of telephone companies who charge much higher 
fees for the use of their networks. In the end, this would translate to lower communication 
costs on the part of the consumer, value for their money on the part of O m s ,  and lower 
costs of communicating with overseas clients on the part of exporters and BPOs. On the part 
of the telecommunication industry, the VOIP technology will increase competition and 
competitiveness and introduce borderless technology. 
VOIP falls within the definition of telecommunications as defined Republic Act No. 
7925, otherwise known as the Public Telecommunications Act of the Philippines. In that 
law, telecommunication is defined as any process which enables a telecommunication entity 
to relay and receive voice, data, electronic messages, written or printed matter, fuced or 
moving pictures, words, music or visible or audible signals or any control signals of any 
design and for any purpose by wire, radio or other electromagnetic, spectral, optical or 
technological means. 
In a Memorandum dated 29 March 2005, the National Telecommunications 
Commission (NTC) set the regulatory status of VOIP and concluded that it i s  a value-added 


service. As such, internet service providers (ISPs) and other non-public telecommunication 
entities may also offer VOIP. 
With this measure in place, the relationship between an internet sewice provider 
(ISP) and public telecommunication entities with regard to VOIP is established and clarified 
by requiring any value-added service provider who wishes to offer VOIP services that 
require access to and/or use of a network provider’s network, facilities and/or equipment to 
enter into an agreement with such network providers as to the terms and conditions of fair 
and reasonable access, interconnection charges for such access, and/or use prior to offering 
VOIP services to the public for compensation. 
Interner telephony is a specialized form of VOIP in which a regular voice telephone 
call is transmitted via the public internet, bypassing all or part of the public switched 
telephone network (PSTN). From the country’s 129 service providers and 400,000 subscribers 
in 2000, the number has grown to 295 internet service providers and 1.5 million subscribers 
in 2004. Since this trend is expected to increase and because it is easier to access the internet 
rather than to apply for a traditional telephone line, the demand for internet telephony using 
VOIP technology is not trivial. 
. 
While it is imperative to enhance the innovation, development and deployment of 
VOIP by promoting free and equitable competition and encouraging investments and 
innovation in the ICT sector, there is a need to protect consumers, provide them wider 
choices and promote their welfare. This bill seeks to address that need by requiring any 
person or entity seeking to provide VOIP for public use and for compensation to first register 
as such with the National Telecommunications Commission. 
Other applications using VOIP remains undiscovered and their benefits continuously 
evolve with the advances in technology. With the growing popularity and the obvious 
potential of VOIP to make voice communication highly reliable and more efficient at a lower 
cost, especially for our business sector and overseas Filipino workers, the passage of this bill 
is earnestly sought. 


THIRTEENTH CONGRESS OF THE 
REPUBLIC OF THE PHILIPPINES 
Second Regular Session 
S E N A T E  
S. No. 2166 
INTRODUCED BY THE HONORABLE MAR ROXAS 
AN ACT TO PROMOTE AND GOVERN THE DEVELOPMENT 
OF VOICE OVER INTERNET PROTOCOL IN THE PHILIPPINES 
Be it enacted by the Senate and the House OfRepresentatives in Congress assembled: 
ARTICLE 1 - GENERAL PROVISIONS 
SECTION 1. Short Title. - This Act shall be known as the “Philippine VOIP Act of 
2005”. 
SEC. 2. Scope and Application. - This Act shall apply to any person or entity 
seeking to provide Voice Over Internet Protocol (VOIP) services to the public for 
compensation. 
SEC. 3. Definitions. - For purposes of this Act, the following terms, where used, 
shall have the following meaning: 
Public telecommunications entity (PTE) - any person, firm, partnership or 
corporation, government or private, engaged in the provision of 
telecommunications services to the public for compensation; 
Value-added service (VAS) - enhanced services beyond those ordinarily 
provided for by local exchange and inter-exchange operators, and overseas 
carriers, where “ordinarily provided” services shall mean voice services offered 
through circuit switched networks; 
Voice Over Internet Protocol (VOIP) - provision of voice communication 
using Internet Protocol (IP) technology, instead of traditional circuit switched 
technology: 


(d) 
Customer Premises Equipment (GPE) - equipment located in the premises of a 
customer which is not part of but connected to the system or network of the 
PTE. 
ARTICLE 11: POLICY AND OBJECTIVES 
SEC. 4.Declaration of National Policy. I It is the policy of the State to recognize the 
role and contribution of communications in nation building. It is likewise the policy of the 
State to recognize the need to (1) provide for the emergence of communications structure 
suitable to the needs and aspirations of the nation, and (2) encourage the development of 
new applications and services that can enhance Philippine competitiveness in the global 
information and communications technology (ICT) market 
The growth and development of voice over internet protocol shall be pursued in 
accordance with the following objectives: 
To protect, promote and develop any and all modes, means and forms of 
communications, and make the same available and accessible to the general 
public, 
To encourage the growth, development and sustenance of VOIP as an 
alternative mode of communications; and 
To foster a healthy competitive environment in which telecommunication 
companies and internet service providers are free to interact with one another 
in providing VOIP while maintaining affordable rates and ensuring their' 
financial viability. 
ARTICLE I11 ADMINISTRATION 
SEC. 5. Responsibilities of the National Telecommunications Commission (NTC). - 
The National Telecommunications Commission (NTC) 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. 
SEC. 6. Registration. - Any person or entity seeking to provide VOIP for use by the 
public for compensation shall register as such with the NTC prior to operation as VOIP 
provider. 
SEC. 7. Interconnection. - No value-added service provider shall provide VOIP 
services which require access to and/or use of a network provider's network, facilities and/or 
equipment unless it has entered into an agreement with such network provider as to the 
term and conditions of fair and reasonable access andlor interconnection charges for such 
access and/or use. 
In cases where the VAS provider and network provider refuse to negotiate or are 
unable to come to an agreement on the interconnection of their network, the NTC shall, 
upon the complaint of any interested party or upon its own initiative, intervene and assume 
jurisdiction over the matter and immediately direct physical interconnection of the network 
of the parties under such terms and conditions it may deem proper under the circumstances. 


Nothing in this Act shall, however, prevent the parries from negotiating and 
executing an interconnection agreement and submitting the same to the NTC for approval. 
For this purpose, the parties shall be given a period of ninety (90) days from receipt of notice 
of the filing of the complaint within which to negotiate and execute an interconnection 
agreement, provided, that until an interconnection agreement is executed the 
interconnection mandate adverted to in the immediately preceding paragraph shall remain 
in full force and effect. 
SEC. 8. Equal Access. - Network providers shall .ensure equal access in terms of 
quantity and quality, at the same prices for substantially similar service to VAS providers, 
and shall not discriminate between VAS providers. The parties shall submit a copy of their 
agreements on these matters for purposes of monitoring and supervision by the NTC. 
No public telecommunications entity, network provider or other entity providing 
internet access to subscribers and VAS providers shall impede or degrade the access of such 
subscribers and VAS providers to the internet content of another application or service 
providers, except where such access demonstrably threatens the integrity of their network or 
facilities. 
SEC. 9. Customer Premises Equipment. - The sale, lease, importation, distribution 
and/or provision of CPE designed to enable or ease the use of VOIP shall be governed by the 
existing rules and regulations on CPEs. 
CPEs and/or accessories designed to enable or ease the use of VOIP not directly 
connected to the networks of PTEs shall not require type approval or acceptance except 
when the VOIP equipment and/or accessories use radio spectrum. 
SEC. 10. Subscribers’ Rights. - Network and/or internet service providers shall not 
require subscribers to purchase or use or to refrain from purchasing or using any IP-enabled 
service as a precondition to obtaining their broadband service. 
SEC. 11. Separability Clause. - If any part or provision of this Act shall be held 
unconstitutional or invalid, other provisions hereof that are not: affected thereby shall 
continue to be in full force and effect. 
SEC. 11. Repealing Clause. - All laws, presidential decrees, executive orders, rules and 
regulations, or parts thereof, which are not consistent with this Act, are hereby repealed, 
amended or modified accordingly. 
SEC. 12. Effectivity Clause. - This Act shall take effect fifteen (15) .days after its 
publication in at least two (2) newspapers of general circulation. 
Approved.