Repubite of the Philippines
HOUSE OF REPRESENTATIVES
Guzen City

_\» FIFTEENTH CONGRESS
First Regular Session

HOUSE BILL No. 1802
Introduced by HONORABLE LUIS R. VILLAFUERTE
and HONORABLE FERDINAND MARTIN G. ROMUALDEZ

The rapid development of the information and communications
technology sector has defined seamless geographical boundaries across
nations in the exchange of information through various
telecommunications facilities and services. The importance of the
products and services offered by this sector is evident in every facet of
our society. The emerging digital global economy has integrated into the
delivery of business services the use of information and communications
technology infrastructures to boost competitiveness of our businesses and
enhance the efficiency of our industries. Also, governments throughout
the world have devoted efforts towards the development and
management of information systems to streamline and improve efficiency
in the delivery of basic services to the people. Computer literacy of the
labor force has not become a necessity to be participate in the labor
market, particularly in industries which heavily utilize electronic
equipment and technological machineries.

In the Philippines, Executive Order No. 546 was issued in 1979 to
integrate the Board of Communications and the Telecommunications
Control Bureau into the National Telecommunications Commission (NTC)
under the administrative supervision of the Ministry of Transportation and
Communications. The NTC then was mandated “to develop an integrated
nationwide transmission system by itself or though or together with other
entities in accordance with national and international telecommunications
standards to meet all telecommunications requirements.”

Since its creation, advancement in the level of new technologies has
changed the industry from a monopolistic industry to one that provides
consumers with choices and improved access to a number of information
and communications technology services. As a number of “new” industry
players have emerged in the past years, it has become imperative for the
government to provide a regulatory environment to: 1) develop a viable,
adequate, efficient, and universal information and communications sector
using the best available and affordable technologies; 2) foster a
competitive business environment, and fair and efficient market conduct


among industry players; 3) ensure universal access to reliable and
affordable services; and, 4) protect the interests and welfare of both of
the industry players and the consuming public. This bill seeks to
reorganize the NTC by strengthening its existing powers and functions for
the agency to cope with the evolving information and communications
technology landscape.

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

ENN
LUIS R. VILLAFUERTE

io! Ae



v

Republic of the Philippines
HOUSE: OF REPRESENTATIVES
‘Quezon City

FIFTEENTH CONGRESS
First Regular Session

HOUSE BILL NO. ui

AN ACT REORGANIZING THE NATIONAL TEL! NS
COMMISSION, DEFINING ITS POWERS “AND FUNCTIONS,
APPROPRIATING FUNDS THEREFOR, AND FOR OTHER
PURPOSES

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

Section 1. Title. - This Act shall be kn as the “National

Telecommunications Commission Reorganization Act of 2010.”

Sec. 2. Declaration of Policy.- The State

development of high quality information and communications

infrastructures and services as vita! tool:

for economic development,
nation building and global competitiveness. Towards this end, it is hereby

a declared policy of the State to develop 2 regulatory

nt and unive:



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services; and protect the interests and welfare of both of the industry

players and the consuming publi

Sec. 3. Definition of Terms. - For purposes of this Act, the

following terms are hereby defined:

a.

“Authorization” refers to any certificate, permit, license,
accreditation, registration, recognition or similar permission
granted to a person or entity to lawfully engage in the
activities falling under the jurisdiction of the Commission;
“Certificate of Public Convenience and/or Certificate of
Authority” (CPC/CA) and “Certificate of Public Convenience
and Necessity” (CPCN) both refer to a certificate issued by the
Commission in the provision of services that fall within the
jurisdiction of the Commission;

“CICT" refers to the Commission on the Information and
Communications Technology created under Executive Order
No. 269, series of 2004, or its successor agency;
“Commission” refers to the National Telecommunications
Commission;

“Frequency” refers to the number of cycles per unit time,
usually expressed in Hertz;

“Information and Communication Technology”, herein referred
to as “ICT", refers to the totality of electronic means to
collect, store, process and present information to end-users in

support of their activities. It consists, among others, of



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computer systems, office systems and consumes electronics,
as well as networked information infrastructure, the
components of which include the telephone system, the
internet, fax machines, computers, and other similar devices;

g. “Interconnection” refers to the linkage by any means of
transmission such as by wire, radio, satellite, microwave
channel of networks and services of two or more existing
services providers with one another;

h. “Legislative Franchise” refers to the franchise issued by
Congress authorizing the entity to engage in a certain type of
telecommunications, broadcast, cable TV, multimedia and
other information and communications infrastructures and
services;

i. “Radio Spectrum” shall cover radio frequencies from 9 KHz or
higher that can be used for broadcast services; and,

i. “Universal Access” shall refer to the provision of affordable,
accessible, and efficient information and communications
infrastructures and services to the widest array of consumers
possible.

Sec. 4. Reorganization of the Commission. - The Commission

is hereby reorganized to strengthen its existing organizationa! structure

6 meet the rapid developments of emerging technologies

in the fields of information, communications, broadcast,

other multi-media infrastructure and services.



The Commission shall be attached to the CICT for policy and
program coordination, and shall be under the administrative supervision
of the same. The Commission shall independently exercise its powers
and functions and no other agency shall influence or effect a review or
modification of its decisions as a quasi-judicial body. Provided, however,
that the decisions of the Commission as a quasi-judicial entity shall be
appealed only to the Court of Appeals and the Supreme Court, as
provided for by law.

Sec. 5. Jurisdiction. - The Commission shall have jurisdiction
over all persons and entities engaged in the operation and/or provision of
information and communications, telecommunications, broadcast, cable
TV and other multi-media infrastructures and services. Pursuant thereto,
the Commission shall exercise supervisory and regulatory powers over
such persons and entities, including program, content and application
providers in such infrastructures and services, radio stations and radio

training schools, maritime point of service activation, networks or system

services, franchise, equipment and other properties, and/or any person
using the radio spectrum and other limited resources in communications
and information e.g. numbering systems, domain name systems and

other related concerns. Provided, That telecommunication stations owned

and operated by the Armed Forces of the Philippines (AFP) shall be
subject to the jurisdiction of the Committee only to the extent that the
AFP shall first secure authorization from the Commission to use

frequencies relative to the operation of such stations.



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Sec. 6. Powers and Functions. - In addition to the powers

already provided for by existing laws, not inconsistent with this Act, the

Commission shall have the following powers and functions:

(a)

(b)

(c)

(a)

(e)

Establish standards, specifications, measures, guidelines,
rules and regulations that will govern the operations of service
providers in the areas of information and communications
technology, broadcast, cable TV, and other multi-media
infrastructures/services;

Issue CPCs/CAs and/or CPCNs to qualified ICT companies,
radio and televisions broadcast networks, cable TV operators
and other multi-media service providers;

Recommend policies for the promotion of ICT, broadcast
media or other technologies, as well as any related fields
thereto;

Administer and implement the Public Telecommunications
Policy Act, as amended, and other relevant laws that the
Commission is mandated to enforce, including those pursuant
to international treaties, conventions and/or agreements
which the Philippine government has entered or will enter
into;

Adopt an administrative process to facilitate the entry of
qualified service providers, taking into consideration the
competition policies of the government thus enabling the

public to gain access to information and communication



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(9)

(h)

@)

services and, at the same time, enabling service providers to
generate sufficient returns to promote and sustain industry
growth;
Formulate plans and implement programs to provide better
access to ICT, broadcast and other similar services in un-
served and/or underserved areas at affordable rates;
Provide rules, regulations, guidelines, measures and
specifications in accordance with acceptable standards to
ensure quality, safety, liability, security, compatibility and
interoperability of ICT companies, radio and television
broadcast networks, and other multi-media systems and
facilities in conformity with national standards and
specifications and those set by international radio and
telecommunications bodies which the Philippines is a party of;
Formulate and implement regulatory policies for the
establishment, operation and maintenance of ICT facilities of
new and converged services;
Prescribe rules, regulations, guidelines, measures and
specifications for the following:
@ The setting and imposition of appropriate fees and
charges over persons and entities within its jurisdiction,

such as:



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(ii)

1) Spectrum user fees for all assignees except
those assigned to military and public safety
services;

2) ~ Permits, certificates, registration and license
fees;

3) Supervision and regulations fees; and,

4) Other administrative fees and charges fines and
sanctions;

Determination and prescription of fair and reasonable

charges or rates pertinent to the operation of public
utility facilities and services, after conducting public
hearings or hearings on applications, except when these
rates and tariffs are deregulated or established by
international bodies or associations where the

Philippines is a participating member of, or by bodies

recognized by the Philippine government as the proper

arbiter of such rates and tariffs.

Subject to the provisions of R.A. No. 7925 and
such other laws as may be promulgated, except where
deregulation has been authorized, rates and other
charges of public services shall be submitted to the
Commission for its approval and the Commission shall,
after public hearing, render a decision, ruling or order

on said rates by:



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ii)

(iv)

1) Approving the proposed rate and charges or any
part thereof with our without alterations;

2) Rejecting the proposed rates and charges or any
part thereof without prejudice to the submission
of a new proposal for new schedules of rates and
charges; or,

3) In the interest of the public, prescribe rates after
due notice and public hearing for the use of
facilities/networks and services offered other
than those proposed by the service providers:

Provided, that the Commission shall have
the original and exclusive jurisdiction over all
cases contesting rates, fees, fines and penalties
imposed by the Commission;

The accreditation and registration of radio and
telecommunications equipment dealers, suppliers,
manufacturers, repair shops, and the purchase, sale,
lease, rental, possession and type approval/acceptance
of radio and telecommunications equipment;

The fostering of fair and efficient market conduct
through, but not limited to the protection of
information, communication, radio, broadcast, cable TV

and other multi-media facilities, systems of networks


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G)

(k)

and services entities form unfair practices or other
barriers;

(v) The implementation of a responsive and more effective
use of information and communications facilities and
services taking into consideration existing and emerging
technologies; and,

(vi) The protection of consumers against inadequate
satisfactory service, any illegal activity and/or the
misuse or abuse of any entity's monopolistic or quasi-
monopolistic powers and anti-competitive practices
through, but not limited to, the conduct of
investigations of complains and the exaction of
compliance from the providers to conform with service
standards.

Establish, prescribe and regulate areas of operation of public

services/utilities, their equipment and other properties in

accordance with their legislative franchise and their
certificates, licenses, registration, accreditation and other
authorizations;

Require, consistent with due process, any public service to

Provide access to and the use of its facilities and services,

including the interconnection with or the attachment to its

facilities or equipment, on such terms and conditions and the


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10}

(m)

(n)

(0)

payment of compensation, as the Commission may determine
and approve;

Allocate, sub-allocate and reallocate radio frequencies, and
adopt frequency plans and standards based on the
International Telecommunications Union regulations to
Promote growth and development of the sector;

Assign radio frequencies, grant permits and licenses for the
use of the radio spectrum or such other limited resources to
authorized person or entity essential for the efficient
operation of any facility, station, networks and services:
Provided, That any application under this subsection shall be
acted upon by the Commission within ninety (90) days from
the time of filing thereof;

Maintain a complete, and ensure the safety and integrity of,
records of issued certificates, licenses, permits, registers,
allocated and assigned frequencies and such other
authorizations or activities of the Commission essential to
planning, monitoring and enforcement of the powers of the
Commission;

Ensure and monitor the compliance by persons and entities of
their franchises, certificates, permits, accreditations,
registrations, certifications, licenses and other existing laws,
rules and regulations, technical programs and performance

standards, or terms and conditions of their authorizations;


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(p)

(a)

Impose fines and penalties on persons and entities that
operate without authorization or violate the terms and
conditions of any authorization issued by the Commission:
Provided, that the fine may be in an amount as may be
deemed appropriate by the Commission but shall not exceed
Fifty Million Pesos (P50,000,000.00);

Upon the issuance of proper notice and the conduct of public
hearings, suspend, cancel or revoke any authorization of
service providers who violate the rules and regulations set by
the Commission: Provided, that, when national security,
public safety, welfare or interest so requires, the Commission
may order immediate suspension of operations, and
subsequently hold a hearing within five (5) days from the
promulgation of the order of suspension;

Monitor and enforce rules and regulations including the
investigation of all persons or entities under the jurisdiction of
the Commission: Provided, that in the exercise of its police
Powers and in accordance with due process, the Commission
may confiscate equipment and/or effect closure of any office,
station or sub-station whose operations are found to be in
violation of existing laws, rules and regulations or its
franchises: Provided, further, that, in case of closure, the

Commission may take remedial action to allow for temporary


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(s)

®

(u)

operations by a qualified service provider in the interest of
public service;

Regulate radio training schools, the conduct of qualifying
examinations and issue certification for qualified radio
technicians and operators in accordance with laws,
international conventions and treaties, or regulation where
the Philippines is a signatory;

Establish and administer appropriate human _ resource
programs, including the establishment of training centers to
enhance human resources capacity building initiatives;

Direct, authorize or order another grantee of a certification or
authorization to temporarily operate the business of a grantee
whose certificate has been suspended, cancelled or revoked
for cause: Provided, that the certificate of a grantee who
unjustifiably discontinues or abandons his service for
whatever reason for a period longer than thirty (30) days,
causing irreparable damage or serious inconvenience to the
public shall be suspended: Provided, further, the
Commission may take appropriate action to address such
situation and, in accordance with due process, may approve
or award new applications for certification or authorization:
Provided, furthermore, that, in case of mere suspension, and
the grantee has effected remedial measures within six (6)

months from the suspension, the Commission may reverse its


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(v)

(w)

so)

decision to suspend and thereafter reinstate its prior
authorization to allow said grantee to operate the business
again: Provided, furthermore, that if the period of six (6)
months has lapsed and no remedial measures have been
effected, the certificate of authorization shall be permanently
revoked: Provided, finally, that a grantee whose certificate
has been revoked may re-apply but shall be treated as a new
applicant;

Mandate a fair and reasonable interconnection of systems,
stations, networks, facilities and/or services of authorized
network operators and other providers through appropriate
modalities of interconnection that provides a reasonable and
fair level of charges, so as to provide the most extensive
access, availability and affordability to the public, and ensures
that no single player interest controls access to facilities and
services;

Directly intervene, enjoin speedy settlement through
alternative dispute resolution mechanisms and impose
judgment on on-going and protracted disputes involving
interconnection among service providers, including the final
approval of any interconnection agreements;

Promulgate rules and procedures for the conduct of its

Proceedings and in arriving at decisions or orders;


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Y)

@

Summarily punish for contempt by a fine not exceeding five
thousand pesos (P5,000.00) or by imprisonment not
exceeding thirty (30) days or both, any person guilty of
misconduct in the presence of the Commission or seriously
interrupting any hearing or session or any proceeding before
it, including cases in which a person wilfully fails or refuses,
without just cause, to comply with summons, subpoena ad
testificandum, subpoena duces tecum, injunctions, decisions
or orders, rules and regulations legally issued or promulgated
by the Commission, or being present at a hearing, session or
investigation, refuses to be sworn as a witness or to answer
questions when lawfully required to do so, or to furnish
information required by the Commission. The police agencies
of the place where the hearing or investigation is conducted
shall, upon the request of the Commission, assist in enforcing
the provisions of this section;

Require any public service or utility to produce before the
Commission any and all records, data, statistics and
documents deemed proper or necessary in the exercise of its
powers and functions, and cite for contempt, direct or
indirect, any person who fails or refuses to comply with any

lawful order of the Commission;



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(aa)

(bb)

(cc)

Enlist the aid and support of any and all enforcement agencies
of the Government, as well as the private sector in the
implementation of its powers and functions under this Act;
Motu propio inspect, or through duly authorized
representatives, the operations, premises, books of accounts
and records of any person or entity at any reasonable time, in
the exercise of its quasi-judicial power for purposes of
determining the existence of any anti-competitive behavior
and/or market power abuse and any violation of rules and
regulations issued by the Commission;
Approve the application for relevant authorization or
certification by all the operators of information and
communications, radio, broadcast, cable TV and other multi-
media facilities, stations, systems or networks and services
including radio schools after the submission of the following:
(i) | The amount, terms and conditions of each proposed
issue, sale or other disposition of its capital stocks if the
issuance, sale or disposition would result in:
1) A sale to any other public service or any
Corporation, domestic or foreign which vest in
such one person or entity, more than forty

percent (40%) of its subscribed capital stock; or,


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i)

(iv)

2) Asale or transfer to any alien which results to a
reduction to less than sixty percent (60%) of the
capital stock belonging to Philippine citizens.

The terms and conditions of each proposed contract or
agreement for the interconnection of systems, facilities,
networks and services;

Any contract or arrangement entered into between
operators and program/content providers which tends
or aims to exclude, inhibit and frustrate the ability to
offer diverse programs for a wider variety of choices
and diversity of programming to the subscribing public;
and,

Any contract, agreement, reports as may be prescribed

by the Commission from time to time;

Require public service time through broadcasting stations,

including cable TV, operators, to assist the government on

public information and education;

Perform such other powers and functions as may be

Prescribed by law, as well as those that which may be implied

from or are incidental to the carrying out of the powers

granted to the Commission; and,

Issue orders, rules and regulations and other issuances as

may be necessary to ensure the effective implementation of

the provisions of this Act.



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SEC.7. Composition. - The Commission shall be a collegial body
of three (3) Commissioners, composed of a Chairperson and two (2)
Commissioners, all of whom shall be appointed by the President of the
Philippines upon the recommendation of the Chairman of the CICT.

(a) Tenure of Commissioners. The Commissioners shall have a fixed
term of five (5) years with an option to be reappointed for
another term of five (5) years: Provided, that for the first set of
appointees, the Chairperson shall hold office for five (5) years,
one (1) Commissioner shall serve for three (3) years, and the
other Commissioner for one (1) year: Provided, further, That
any appointment to any future vacancy shall only be for the
unexpired terms of the predecessor: Provided, finally, That in
no case shall any Commissioner serve for more than two (2)
terms in the Commission.

The Commissioner shall enjoy security of tenure and shall
neither be suspended nor removed except for just cause in
accordance with the law.

(b) Remuneration of Commissioners. The Commissioners shall be
entitled to the same salary, allowance and benefits, including
retirement, as those of the Justices of the Court of Appeals,
except for the Chairperson who shall have the rank of the
Presiding Justice of the Court of Appeals.

(c) Qualifications of Commissioners. The Commissioners must be

residents and citizens of the Philippines, at least 35 years of age,


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of good moral character, of known probity and unquestionable
integrity, with recognized competence in the field of the
information and communications technology and, with at least
five (5) years of actual and distinguished experience in the
respective fields of expertise: Provided, that one of the
Commissioners shall preferably be a member of the Philippine
Bar, another a licensed electronics and communications engineer
(ECE), and the third an economist or a graduate of any relevant

profession.

(d) Powers of the Commissioners. All powers vested upon the

Commission shall be vested on the Commissioners sitting as
collegial body. Hearings may be conducted by any of the
Commissioners, individually or jointly, or by Hearing Officers
duly authorized or delegated to hear such cases. A majority
vote shall be required to reach a decision, ruling or order of the
Commission.

Notwithstanding the foregoing provision, the Chairperson may
provisionally approve or decide on immediate cases involving the
fixing of rates or charges: Provided, that hearing will be
scheduled within thirty (30) days from the grant thereof.

The Chairperson shall also be the Chief Executive Officer of
the Commission and shall provide the general executive
direction and supervision of the operations and activities of the

Commission, its bodies, boards, offices, and personnel.


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Sec. 8. Regional Offices. - The Commission shall be authorized

to establish, operate, and maintain Regional Offices as the need arises.

The regional office shall be headed by a Regional Director, who shall be

appointed by the President of the Philippines upon the recommendation of

the CICT.

Such regional offices shall function as line organization which shall

be responsible for the following:

(a)

(b)

(c)

(d)

(e)

(0)

Sec.

autonomy.

implementation of laws, policies, projects, plans, rules and
regulations of the Commission;

supervision and inspection of the operation of radio,
television, cable TV and telecommunication networks, station,
systems, facilities and services;

Regulation and control of communications, CABLE TV and
broadcast services;

Conduct of hearings on consumers’ complaints and
administrative cases;

Issuance of permits, licenses and certificates, including the
conduct of examination and licensing of qualified operations;
and,

Such other functions as may be assigned to them.

9. Fiscal autonomy. - The Commission shall enjoy fiscal

Its appropriation may not be reduced below the amount

appropriated for the previous year and after approval, shall be

automatically and regularly released. The Commission may re-align


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allocations to supplement any insufficient or inadequate appropriation as
may be necessary to effectively discharge its duties.

Thirty percent (30%) of the total supervisory and regulatory fees
(SRF) collected by the Commission under Section 6(i) of this Act shall
constitute receipts automatically appropriated for a period of five (5)

years from the effectivity of this Act, to be used by the Commission to

augment its resources to fund its operations and activities pursuant to its
mandate.

Provided, that all moneys appropriated and earned by the
Commission shall be utilized solely for its operations and shall be subject
to DBM budget rules and regulations.

Sec. 10. Compensation and Emoluments of Personnel. - All
positions of the Commission requiring technical proficiency and expertise
shall be governed by a compensation comparable to the private sector
and position classification systems and qualification standards approved
by the Commission, in consultation with the Civil Service Commission
(CSC) and the Department of Budget and Management (DBM) based on a
comprehensive job analysis and audit of actual duties and responsibilities.
The compensation plan shall be subject to periodic review by the
Commission, the CSC and the DBM no more than once every two (2)
years without prejudice to merit reviews or increases based on
productivity and efficiency.

The compensation and other emoluments for personnel with high

level of expertise and proficiency shall be exempted from the coverage of



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R.A. No. 6758, otherwise known as the “Salary Standardization Act.” For
this purpose, the schedule of compensation of personnel with high level of
expertise and proficiency as determined by the Commission, in
consultation with the CSC and the DBM, shall be submitted for approval
by the President of the Philippines. The new schedule of compensation
shall be implemented within six (6) months from the effectivity of this Act
and may be upgraded by the President of the Philippines as the need
arises: Provided, That in no case shall the rate be upgraded more than
once a year.

Sec. 11. Enhancement of Technical Competence. - The
Commission shall establish a rigorous training program, to include the
setting up of training center, for its personnel to enhance the technical
and regulatory competence of the Commission in the monitoring and
enforcement of laws, orders, rules and regulations of the Commission,
and the compliance thereof.

Sec. 12. Annual Report. - The Commission shall submit an
annual report to both Houses of Congress not later than April 30 of each
year, to include specific goals, objectives, accomplishments, plans and
priorities of the Commission for the next five (5) years, as well as
recommendations for legislative action to enable the Commission to
achieve its objectives; and such other data as may be required from time
to time.

Sec. 13. Funding. - In addition to the sums to be appropriated

for the Commission under the General Appropriations Act for the Fiscal


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Year following the approval of this Act, any savings in the appropriation of
the Commission and fees collected by the Commission for the current
fiscal year may also be used to implement the provisions of this Act.
Thereafter, the amount needed for such purpose shall be included in the
subsequent annual General Appropriations Acts, or through special
appropriations.

Sec. 14. Transitory Provisions.

(a) Within ninety (90) days after the approval of this Act, the
Commission shall draw the new structure and staffing pattern
necessary to carry out the powers and functions of the newly
organized Commission, in consultation with the CSC and the
DBM, to be submitted to the CICT Secretary for approval.

(b) The current Commissioners and existing personnel shall
continue to hold office until approval of the staffing pattern and
new appointments are issued.

(c) Any personnel, whose positions are not included in the new
position structure and the duly approved staffing pattern, shall
be deemed separated from the service. The officials and
employees who are or wish to be separated as a result of the
implementation of this Act shall be entitled to one and a half
month separation pay for every year of service: Provided, that
they have rendered continuous service in the Commission for at
least ten (10) years: Provided, further, that for officials and

employees with the Commission for the last five (5) years, they


shall be entitled to three (3) months separation pay for every
year of service and all other benefits accruing to them under the
laws of general application enforced at the time of their
separation.

(d) All regular and permanent employees who shall be affected by
this Act shall not suffer any loss of seniority or rank or decrease
in emoluments.

Sec. 15. Repealing Clause. - All laws, decrees, executive
orders, rules and regulations and other issuances or parts thereof which
are inconsistent with this Act are hereby repealed, amended or modified
accordingly.

Sec. 16. Separability Clause. - If any of the provisions of this
Act shall be declared unconstitutional or invalid, the other provisions not
otherwise affected shall remain in full force and effect.

Sec. 17. Effectivity Clause. - This Act shall take effect
immediately upon its approval.

Approved,