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Republic of the Philippines
HOUSE OF REPRESENTATIVES

Quezon City
&
EIGHTEENTH CONGRESS 28 pe OS
First Regular Session DEX

HOUSE BILL NO. 1311

Introduced by Honorable Wes Gatchalian

AN ACT
PROMOTING CONSUMER PROTECTION AND FOSTERING COMPETITION
IN THE TELECOMMUNICATIONS INDUSTRY BY MANDATING THE
UNLOCKING OF MOBILE WIRELESS DEVICES

EXPLANATORY NOTE

Switching to another service provider for improved wireless services
and better options is a consumer right which is impaired by public
telecommunications entities when they lock mobile wireless devices to their
respective networks. Such device locking makes it difficult for consumers to
take advantage of competitive and better offers available in the market.
Although there exist independent devices or services from third parties that
unlock the mobile device, this process would normally void its warranty.

Locking does not only deprive consumers the easy movement - using
the same device — from their current telecommunications service provider to
the one that best fits their needs and preferences. It also limits competition
between and among industry players who are able to reduce subscriber
turnover by using device locking as a deterrent, or even an irritant, to
subscribers from switching providers.

While the National Telecommunications Commission has mandated
the unlocking of mobile phones and devices under Memorandum Circular
01-05-2019 dated May 31, 2019, its applicability is limited to (1) postpaid
devices after having complied with the contract period contained in the



subscription agreements; and (2) prepaid devices after having complied with
usage requirements or agreed terms and conditions.

This legislative proposal mandates the unlocking of mobile wireless
devices within definitive six- and nine-month periods from the date of
purchase of the device. Under this bill, the eligibi
unlocking does not depend on the imposition of different lock-in periods that

ity of such devices for

unduly binds the consumer to the public telecommunications entity that no
longer provides quality services.

It also mandates unlocking of subsidized units or those mobile
wireless devices with accompanying subscription contracts before the lapse
of the mandated nine-month period - on-demand and for a fixed and
reasonable unlocking fee without voiding their warranties. This allows
consumers to effectively have their devices officially unlocked at any time
without having to resort to third parties for unlocking and risking possible
warranty issues.

Furthermore, the bill requires every public telecommunications entity
or retailer of mobile wireless devices to provide every consumer sufficient
information on (1) official channels for unlocking mobile wireless devices
without voiding their warranties; and (2) the manner, method or fee
associated with the process of unlocking these devices.

Existing business services and products affected by the
implementation of this Act are given six (6) months transitory period from
the effectivity of the implementing rules and regulations to comply with its
requirements.

This legislation will contribute to the evolution of a more dynamic
marketplace in the telecommunications industry where consumer choice is
dictated by quality, price, and best value for money. Its immediate approval
is earnestly sought.

WES GATC! IAN


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Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

EIGHTEENTH CONGRESS
First Regular Session

House Bit No, 1311

i
Introduced by Honorable Wes Gatchalian
ree

AN ACT
PROMOTING CONSUMER PROTECTION AND FOSTERING COMPETITION
IN THE TELECOMMUNICATIONS INDUSTRY BY MANDATING THE
UNLOCKING OF MOBILE WIRELESS DEVICES

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

Section 1. Short Title. - This Act shall be known as the “Unlock My
Mobile Act.”

Sec. 2. Declaration of Policy. - The State recognizes the vital role of
information and communications technology in nation-building. Under
Article 2, Title I of Republic Act No. 7394, otherwise known as the
“Consumer Act of the Philippines,” the State shall protect the interests of the
consumer, promote his or her welfare, and establish the standards of
conduct for business and industry. Towards this end, the State shall
implement measures to achieve the following objectives: (a) protect the
consumer against deceptive, unfair, and unconscionable sales act and
practices; and (b) provide information and education to facilitate sound

choice and proper exercise of consumer rights.

Sec. 3. Definition of Terms. - As used in this Act:
a. Mobile Services Subscription Contract refers to an agreement

between a public telecommunications entity and a consumer for a


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postpaid subscription on the use of such entity’s network for
wireless communications and other telecommunications services
covering a particular period of time.

b. Lock-in Period refers to the duration of the mobile services
subscription contract between the public telecommunications
entity and the consumer within which the latter agrees to
exclusively maintain a monthly postpaid subscription with such
entity.

¢. Mobile Wireless Device refers to any wireless telephone handset,
tablet, or any other wireless device that operates on a wireless
telecommunications network.

d. Public Telecommunications Entity or PTE refers to any duly
enfranchised and authorized public telecommunications entity that
offers voice, short messaging system (SMS) or text, mobile data,
value added services (VAS), or any other mobile

telecommunications services to the public for a fee.

Sec. 4. Mandating the Unlocking of Unsubsidized Mobile Wireless
Devices within Six Months from Date of Purchase. - A PTE or retailer of
mobile wireless devices may sell such devices as unsubsidized units or
without any accompanying mobile services subscription contract while
locked to a specific network: Provided, That these devices shall be
automatically unlocked on or before the sixth month from the date of
purchase: Provided, further, That it shall be the obligation of the PTE or
retailer of mobile wireless devices to provide official channels for unlocking
mobile wireless devices without voiding their warranties in accordance with
Sec. 6 of this Act.

Sec. 5. Mandating the Unlocking of Subsidized Mobile Wireless Devices
within Nine Months from Date of Purchase; No Extension of Lock-in Period for
Subsidized Devices without Prior Approval of the National Telecommunications
Commission; Unlocking on-Demand; Warranty Coverage. - A PTE or retailer
of mobile wireless devices may sell such devices as subsidized units or with


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accompanying mobile services subscription contract while locked to a
specific network: Provided, That the total lock-in period for subsidized
devices shall in no case exceed the period of nine (9) months: Provided,
further, That there shall be no extension of the lock-in period for subsidized
devices without prior approval of the National Telecommunications
Commission: Provided, furthermore, That after the completion of the lock-in
period or upon full payment of the device, the PTE shall unlock the device,
or give the consumer the means to unlock the same, on-demand, and
completely free of charge: Provided, finally, That before the completion of the
lock-in period, the PTE shall unlock the device, or give the consumer the
means to unlock the same, on-demand, and for a fixed and reasonable
unlocking fee.

Mobile wireless devices that have been unlocked under this section

shall continue to be covered by their respective warranties.

Sec. 6. Obligation of Public Telecommunications Entities or Retailers to
Provide Official Channels for Unlocking Mobile Wireless Devices Without
Voiding Warranties. - Every PTE or retailer of mobile wireless devices shall,
following the terms and conditions under the implementing rules and
regulations of this Act, provide official channels for unlocking mobile
wireless devices without voiding their warranties.

For purposes of transparency, sufficient information on the manner,
method or fee associated with the process of unlocking these devices shall
be provided to every consumer, stipulated in writing, and made an integral

part of the mobile services subscription contract.

Sec. 7. Administrative Penalties. - For every failure to comply with, or
for every instance of violation of any provision of this Act, the PTE shall pay
a fine of not less than One Hundred Thousand Pesos (P100,000.00) up to
Three Hundred Thousand Pesos (R300,000.00) for the first offense, and a
fine of not less than Four Hundred Thousand Pesos (P400,000.00) up to Six
Hundred Thousand Pesos (P600,000.00) for the second offense. In case of a

subsequent offense, the penalty shall be a fine of not less than Seven


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Hundred Thousand Pesos (P700,000.00) up to One Million Pesos
(P1,000,000.00) and revocation of the PTE’s franchise to operate.

Sec. 8. Implementing Rules and Regulations. - The National
Telecommunications Commission, in coordination with the Department of
Trade and Industry, the Department of Information and Communications
Technology, the Philippine Competition Commission, and other concerned
agencies shall, within sixty (60) days from the effectivity of this Act,
promulgate and submit the implementing rules and regulations (IRR) for its
effective implementation. The IRR shall not preclude the NTC from issuing
subsequent circulars, rules and regulations to make the unlocking process

more convenient for the consumer.

Sec. 9. Transitory Provision. - Existing business services and products
affected by the implementation of this Act shall be given six (6) months
transitory period from the effectivity of the IRR to comply with the

requirements of this Act.

Sec. 10. Separability Clause. - If any provision of this Act is held
invalid or unconstitutional, the other provisions not affected thereby shall

remain in full force and effect.

Sec. 11. Repealing Clause. - All laws, decrees, executive orders,
proclamations, rules and regulations, and issuances, or parts thereof which
are inconsistent with the provisions of this Act, are hereby repealed,

amended, or modified accordingly.

Sec. 12. Bffectivity Clause. - This Act shall take effect fifteen (15) days
after its publication in the Official Gazette or in any newspaper of general
circulation.

Approved,