REPUBLIC OF THE PHILIPPINES {2
HOUSE OF REPRESENTATIVES
Quezon City, Metro Manila \

SIXTEENTH CONGRESS
First Regular Session

House Bil No,__ 4380

Introduced by Kabataan Party-list Representative Terry L.

EXPLANATORY NOTE

The telecommunications industry, being imbued with great public interest, should be
strictly regulated to ensure that consumers will not be compelled to pay exorbitant prices for
basic communication services, while at the same time ensuring that telecommunications
companies are given appropriate room to maintain economic viability

Republic Act No. 7925, otherwise known as the “Public Telecommunications Policy
Act of the Philippines” was enacted to provide policy and regulatory framework in the
governance of telecommunications development. The law provides for a provision to
dismantle telecommunication monopoly and encourages the entry of new
telecommunications entities, thus resulting in the drastic change in the improvement of
telecommunications services in the country. However, with the advent of improvement
comes a substantial increase in service fees that might not be affordable to everyone thus
pointing out the necessity for a regulation of fees that would be beneficial for both the
consumer and telecommunications service provider in which they would have a fair return of
their investments.

Even as existing executive orders and regulations empower the National
‘Telecommunications Commission (NTC) to regulate mobile service rates, the NTC still needs
essential legislation to further empower it to impose sanctions against telecommunications
companies that do not adhere to the commission's regulations. Testament to this situation is
the way telecommunication giants for the large part ignored a memorandum circular issued
by the NTC in 2011 that reduced the interconnection fees for text messaging from 35
centavos to 15 centavos per text, thus bringing down the cost of each text message by 20
centavos.

This bill seeks to lower the cost of mobile phone services by implementing a standard
rate of fees for mobile phone services and requiring cellular mobile telecommunications


service (CMTS) providers to file a petition to the NTC whenever price adjustments on mobile
phone service fees are proposed.

Further, this bill abolishes in totality the charging of interconnection fees for mobile
phone services, as it has been clearly established that over the years, telecommunications
companies have already recouped their expenses for infrastructure and equipment that
enable interconnectivity. Abolishing interconnection charges would greatly contribute to
lowering mobile phone rates without harming the economic viability of telecommunication
‘companies,

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

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Répresentative, Kabataan Party-list


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REPUBLIC OF THE PHILIPPINES
HOUSE OF REPRESENTATIVES
Quezon City, Metro Manila

‘SIXTEENTH CONGRESS
First Regular Session

4380

House Bill No.

Introduced by Kabataan Party-list Representative Terry L. Ridon

ANACT
PROVIDING FOR AFFORDABLE RATE OF FEES FOR MOBILE PHONE SERVICES
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 “Affordable Mobile Service
Rate Act of 2014."

SECTION 2. Declaration of Policy—The State recognizes the vital role of
communications in nation-building, and thus is committed to protect the welfare of Filipino
consumers by enforcing reasonable supervision and regulation of the telecommunications
industry, Towards this end, the State shall regulate the rates of mobile phone service fees
being charged to subscribers and require cellular mobile telecommunications service
(CMTS) providers to file a petition to the National Telecommunications Commission (NTC)
whenever price adjustments on mobile phone service fees are proposed.

SECTION 3. Definition of Terms. For purposes of this Act, the following are hereby
defined as follows:

(a) ‘Mobile phone services’- are services that include, but are not limited to,
standard local and international voice calls, video calls, standard local and
international text messages, multimedia text messages, and mobile data
connection;

(b) ‘Cellular mobile telecommunications service providers” - shall pertain to any

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person, firm, partnership or corporation engaged in providing cellular mobile
telecommunications services to the public for compensation

(c) “interconnection charges" ~ shall refer to the rate levied by service providers to
subscribers for services that involved linkage, by wire, radio, satellite or other
means, of two or more existing telecommunications carriers or operators with one
another for the purpose of allowing or enabling the subscribers of one carrier or
operator to access or reach the subscribers of the other carriers or operators.

SECTION 4. Mobile Phone Service Fees, ~ All CMTS providers shall charge a
standard rate of fees for mobile phone services to its subscribers in accordance with the
rates established by the NTC which shall be fair and reasonable and which provide for the
economic viability of telecommunication entities and a fair return on their investments
considering the prevailing cost of capital in the domestic and international markets.

SECTION 5. Adjustment in the Rate of Fees for Mobile Phone Services. - CMTS
providers are hereby required to file a petition with the NTC on any proposed adjustment in
the approved ceiling rates of mobile phone ser

es.

SECTION 6. Abolition of Interconnection Charges. — All types of interconnection
charges, including interconnection usage charges such as termination charges and carriage
charges for mobile phone services shall hereby be abolished. The abolition of
interconnection charges shall in no way affect the quality of connection and services
rendered by CMTS providers. Upon the effectivity of this law, mobile phone service rates
shall hereby be revised to reflect the deduction brought about by the removal of
interconnection charges. The removal of interconnection charges shall not be a valid reason
for future increases in the rate of fees for mobile phone services.

SECTION 7. Penalties. - In the implementation of this law, the NTC may, after due
notice and hearing, impose the following penalties in case of violation of any of the
provisions hereof:

(a) Imposition of such administrative fines, penalties and sanctions as may be
prescribed by the NTC;

(b) Suspension of further action on all pending and future applications for the
adjustment of the rate of fees for mobile phone services of CMTS providers

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during the period for the disposition of their cases before the NTC;

(c) With the approval of the President, directive to the appropriate government
financial or lending institutions to withhold the releases on any loan or credit
‘accommodation which the violating CMTS provider may have with them;

(d) Disqualification of the employees, officers or directors of the violating CMTS
provider from being employed in any enterprise or entity under the supervision of
the NTC; and

(e) In appropriate cases, suspension of the authorized rates for any service or
services of the violating carrier or operator without disruption of its services to the
public.

SECTION 8. Implementing Rules and Regulations. - Within sixty (60) days after the
effectivity of this Act, the Commissioner of the NTC shall issue the necessary rules and
regulations for the implementation of this Act.

SECTION 9. Separability Clause. — If any provision or part thereof is held invalid or
unconstitutional, the remainder of the law or the provision not otherwise affected shall
remain valid and subsisting

SECTION 10. Repealing Clause. - Any law, presidential decree or issuance,
executive order, letter of instruction, administrative order, rule of regulation contrary to or
inconsistent with, the provision of this Act is hereby repealed, modified or amended
accordingly.

SECTION 11. Effectivity Clause, ~ This Act shall take effect fifteen (15) days after its
publication in the Official Gazette or in two (2) national newspapers of general circulation.

Approved,