Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

EIGHTEENTH CONGRESS
First Regular Session

House Bill No. 4110

Introduced by Hon. Francis Gerald Aguinaldo Abaya

EXPLANATORY NOTE

Telecommunications undoubtedly plays a crucial role in the fundamental
operations of our society. In this information age where each aspect of our lives can be
affected by the speed with which data is transmitted from one point to another, improving
our telecommunications will undoubtedly improve the quality of life for every Filipino

Republic Act No. 7925 was passed on February 20, 1995 — over 20 years ago.
The telecommunications landscape in the Philippines has dramatically changed since
then. To adapt to these changes, this bill aims to bolster the powers of the National
Telecommunications Commission (NTC) in regulating the industry. This bill seeks to do
so by empowering the NTC to impose fines to violators of R.A. No. 7925 as well as require
entities determined to be significant market powers to provide timely access to its
network, facilities, or equipment

The strengthening of the NTC is a necessary step towards the improvement of the
country’s telecommunication industry and the services they provide to the Filipino people.

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

Manes GERALD AGUII (0 ABAYA

Representative, Fi istrict, Cavite


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

EIGHTEENTH CONGRESS
First Regular Session

House Bill No. 4110

Introduced by Hon. Francis Gerald Aguinaldo Abaya

AN ACT STRENGTHENING THE POWERS OF THE NATIONAL
TELECOMMUNICATIONS COMMISSION, AMENDING FOR THE PURPOSE
REPUBLIC ACT NO. 7925, OTHERWISE KNOWN AS THE PUBLIC
TELECOMMUNICATIONS POLICY ACT OF THE PHILIPPINES

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

SECTION 1. Section 3 of Republic Act 7925, otherwise known as the “Public
Telecommunications Policy Act of the Philippines’, is hereby amended to read as
follows:

“Sec. 3. Definitions and Interpretations. — For purposes of this Act, the
following terms shall be used:

XXX

(L) SIGNIFICANT MARKET POWER - THE ABILITY OF A PUBLIC
TELECOMMUNICATIONS ENTITY TO AFFECT PRICE, SUPPLY OR
INNOVATION IN THE TELECOMMUNICATIONS INDUSTRY OR ANY PART
THEREOF, AS A RESULT OF EITHER ITS CONTROL OVER ESSENTIAL
FACILITIES OR THE USE OF ITS POSITION IN ANY MARKET IN THE
TELECOMMUNICATIONS INDUSTRY OR ANY MARKET RELATED
THERETO.

FURTHER, THE COMMISSION IS MANDATED TO ADOPT STANDARDIZED
DEFINITIONS OF 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 THE INTERNET AND INFORMATION AND
COMMUNICATIONS TECHNOLOGY, SUBJECT TO REFINEMENTS OF THESE
INTERNATIONAL STANDARDS AS MAY BE PRESCRIBED BY REGIONAL
TELECOMMUNICATION BODIES TAKING INTO CONSIDERATION THE SPECIAL
CIRCUMSTANCES APPLICABLE ONLY TO THE REGION.” S


SECTION 2. Section 5 of the same Act is hereby amended to read as follows:

“Sec. 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

(c) Mandate a fair and reasonable interconnection of facilities of
authorized public network operators and other providers of telecommunications
services through appropriate modalities of interconnection and at a reasonable
and fair level of charges [, which make provision for the cross subsidy to
unprofitable local exchange service areas so as to promote telephone density
and provide the most extensive access to basic telecommunications services
available at affordable rates to the public];

XXX

(f) Protect consumers against misuse of a telecommunications enti
monopoly or quasi-monopolistic powers by, but not limited to, the investigation
of complaints and exacting compliance with service standards from such entity;
[and]

(g) In the exercise of its regulatory powers, continue to impose such fees
and charges as may be necessary to cover reasonable costs and expenses for
the regulation and supervision of the operations of telecommunications entities
[; AND

(H) IN THE EXERCISE OF ITS REGULATORY POWERS, IMPOSE
FINES AGAINST PUBLIC TELECOMMUNICATION ENTITIES 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 OR REGULATION OF THE
COMMISSION.

THE ERRING PUBLIC TELECOMMUNICATION ENTITY 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, OR IF
IT IS NOT FEASIBLE TO QUANTIFY THE OFFENSE, TO A FINE
AMOUNTING TO ONE MILLION PESOS (PHP1,000,000.00) FOR EVERY
DAY DURING WHICH SUCH DEFAULT OR VIOLATION CONTINUES UNTIL
THE AMOUNT IS FULLY PAID: PROVIDED, THAT, IF THE
TELECOMMUNICATION ENTITY HAS A GROSS ANNUAL INCOME NOT
EXCEEDING TEN MILLION PESOS (PHP10,000,000.00), THE PENALTY
THAT MAY BE IMPOSED SHALL BE EQUIVALENT TO ONE PERCENT (1%)



TO TWO PERCENT (2%) OF ITS GROSS ANNUAL INCOME. THE
COMMISSION IS HEREBY AUTHORIZED AND EMPOWERED TO IMPOSE
SUCH FINE, AFTER DUE NOTICE AND HEARING. THE ERRING
TELECOMMUNICATION ENTITY IS ALSO MANDATED TO REFUND TO
CONSUMERS THE CHARGES IT ERRONEOUSLY IMPOSED TO ITS
SUBSCRIBERS.

THE COMMISSION IS FURTHER AUTHORIZED TO IMPOSE A FINE
OF ONE MILLION PESOS (PHP1,000,000.00) FOR EVERY DAY THAT A
VIOLATION OF SECTIONS 18 AND 19 HEREOF IS COMMITTED, AND
UNTIL SUCH TIME THAT THE ERRING TELECOMMUNICATION ENTITY
FULLY COMPLIES WITH THE TERMS AND CONDITIONS OF THE ACT, ANY
CERTIFICATE, OR ANY ORDER, DECISION, OR REGULATION OF THE
COMMISSION: PROVIDED, THAT, IF THE TELECOMMUNICATION ENTITY
HAS A GROSS ANNUAL INCOME NOT EXCEEDING TEN MILLION PESOS.
(PHP10,000,000.00), THE PENALTY THAT MAY BE IMPOSED SHALL BE
EQUIVALENT TO ONE PERCENT (1%) TO TWO PERCENT (2%) OF ITS
GROSS ANNUAL INCOME.

() THE COMMISSION SHALL REQUIRE PUBLIC
TELECOMMUNICATION ENTITIES WITH SIGNIFICANT MARKET POWER
AS DETERMINED BY THE PHILIPPINE COMPETITION COMMISSION (PCC)
TO PROVIDE TIMELY ACCESS TO ITS NETWORK, FACILITIES OR
EQUIPMENT TO ACCESS SEEKERS ON A FAIR, REASONABLE AND NON-
DISCRIMINATORY TERMS AND CONDITIONS.”

SECTION 3. Sections 10 of the same Act is hereby amended to read as follows:

“Sec.10. International Carrier. - Only entities which [will provide local
exchange services and] can demonstrably show technical and financial
capability to install and operate an international gateway facility shall be allowed
to operate as an international carrier.

[The entity so allowed shall XX grant of authority.]

[The international carrier shall XXX complies therewith.]

[Failure to comply with XXX international carrier.]”

SECTION 4. Section 12 of the same Act is hereby amended to read as follows:

“Sec. 12. Mobile Radio Services. — [In a local telephone exchange area,
m] More than one duly enfranchised provider of mobile radio services, distinct
and separate from the local exchange carrier, may be allowed to operate.
However, such entities shall secure prior authority from the Commission and,
in addition, comply with the [conditions imposed on VAS and with the] norms
‘on radio frequency spectrum utilization.

[The operator of a XXXa mobile radio telephone system.]”


SECTION 5. Section 15 of Republic Act 7925 is hereby amended to read as
follows:

1
2
3
4 “Sec.15. [Radio Frequency Spectrum] USE OF AVAILABLE OR
5 UNASSIGNED SPECTRUM. - The radio frequency spectrum allocation and
6 assignment shall be subject to AN ANNUAL REVIEW. THE USE THEREOF
7 SHALL BE SUBJECT TO reasonable spectrum user fees. Where demand for
i$ specific frequencies exceed availability, the Commission shall hold open

9 tenders for the same and ensure wider access to this limited resource.

10 WITHIN ONE (1) YEAR FROM THE EFFECTIVITY OF THIS ACT, THE
ul DEPARTMENT OF INFORMATION AND COMMUNICATIONS
12 TECHNOLOGY (DICT), IN CONSULTATION WITH THE COMMISSION AND
13 THE PCC, SHALL ISSUE THE GUIDING PRINCIPLES AND POLICY
14 DIRECTION FOR THE USE OF SPECTRUM.”

15

16 SECTION 6. Section 18 of the same Act is hereby amended to read as follows:

7

18 *Sec.18. Access Charge/Revenue Sharing. - The access charge/revenue
19 sharing arrangements between all interconnecting carriers shall be negotiated
20 between the parties and the agreement between the parties shall be submitted to the
21 Commission FOR REVIEW AND APPROVAL. In the event the parties fail to agree
22 thereon within a reasonable period of time, the dispute shall be submitted to the
23 Commission for resolution.

24 In adopting or approving an access charge formula or revenue sharing
25 agreement between two or more carriers, particularly, but not limited to a local
26 exchange, interconnecting with a mobile radio, interexchange long distance carrier, or
BT international carrier, the commission shall ensure equity, reciprocity and fairness
28 among the parties concemed. [In so approving the rates for XXX interconnecting with
29 them"
30
31 SECTION 7. A new Section shall be inserted after Section 18 of the same Act
32 to read as follows:
33
34 “SEC. 18-A TRANSPARENCY. = ALL INTERCONNECTING CARRIERS,
35 SHALL PROVIDE TO THE COMMISSION ALL TERMS AND CONDITIONS,
36 INCLUDING RATES, OF ACCESS CHARGE/REVENUE SHARING
37 ARRANGEMENTS SUCH CARRIERS HAVE ENTERED INTO.
38 ALL TELECOMMUNICATIONS SERVICE PROVIDERS SHALL OPEN
39 THEIR BOOKS OF ACCOUNT TO THE COMMISSION, WHO IS
40 EMPOWERED TO DEMAND COPIES THEREOF.”
41
42 SECTION 8. Separability Clause. — Should any provision herein be declared

43 unconstitutional, the other provisions not affected shall remain in full force and effect.


SS cworudsaHson—

SECTION 9. Repealing Clause. — Section 23 of Republic Act 7925 Equality
of Treatment in the Telecommunications Industry is hereby repealed. All laws, orders,
issuance, rules and regulations or part thereof inconsistent with the provisions of this
Act are hereby repealed, amended or modified accordingly.

SECTION 10. Effectivity. - This Act shall take effect fifteen (15) days after its
publication in the Official Gazette or in any newspaper of general circulation.

Approved,