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Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

EIGHTEENTH CONGRESS
Second Regular Session

HOUSE BiLL no.8388

Introduced by HON. JOY MYRA S. TAMBUNTING

EXPLANATORY NOTE

Philippines is dubbed to be social media capital of the world in 2017 with around 76 million social
media users spending more then four hours daily on social media platforms, particularly Facebook.
Philippines, however, lags behind its Southeast Asian neighbors in terms of accessibility and
speeds. The COVID-19 pandemic exemplified the country’s inadequate capacity for heavjer usage.
Since the implementation of strict quarantine measures in Metro Manila and later on Luzon, there
have been numerous complaints of slow internet speeds from users due to a sudden spike in
internet usage due to work-from-home setups and online classes. As such, there is really the
need to issues such as these which impede Filipinos from accessing this essential service.

The problem of slow internet speed in the Philippines can be traced back to a myriad of problems
including the lack of competition in the sector and outdated laws. On top of this, Philippines’
geographic characteristics as an archipelagic country, hinders the construction of ICT
infrastructures which are very costly for one industry player to solely shoulder.

In this note, this proposed measure aims to bring in more competition in data transmission and
telecommunications services by maintaining an open-access approach in the regulation of the
industry. This would involve streamlining certain processes in the industry to attract qualified
participants, mandating transparency and promoting open and fair competition, and promotion
localized solutions than centralized ones to address the uneven access to internet in rural areas,
among others. This measure also sets the performance standard of a minimum download speed
for mobile broadband and fixed wireless/broadband access within one year from the effectivity of
this measure.

On behalf of the people of Parafiaque City’s Second District, and for the common good of the
Filipino people, the approval of the said measure is earnestly sought.

REP, A | fly
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Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

EIGHTEENTH CONGRESS
Second Regular Session

HOUSE BILL NO. 8383.

Introduced by HON. JOY MYRA S. TAMBUNTING

‘AN ACT
PROMOTING OPEN ACCESS IN DATA TRANSMISSION, PROVIDING ADDITIONAL
POWERS TO THE NATIONAL TELECOMMUNICATIONS COMMISSION

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 "Open Access in Data Transmission
Act".

SEC. 2. Declaration of Policy. — It is the policy of the State to narrow the digital divide in the
‘country by encouraging the development of data transmission infrastructure and removing any
barrier to competition in data transmission services. Moreover, the State shall implement
measures to require data transmission service providers to adhere to telecommunications
standards suitable to the needs and aspirations of the nation and ensure that internet users enjoy
the best quality of data transmission service. The State shall:

(a) Promote the construction and development of reliable, affordable, open and accessible
data networks that transmit information at speed and quality comparable to the best in
the world;

(b) Create an entrepreneurial ecosystem where persons who wish to engage in the data
transmission industry can compete openly and freely in the spirit of fair competition and
permission-less innovation;

(©) Encourage investment in the digital infrastructure of the country;

(d) Adopt and ensure open access in the regulation of the data transmission sector;

(e) Protect the public interest as itis affected by its ability to access data networks,

(f) Establish a strong and independent regulatory body and system to Cisure and enhance
fair competition in the data transmission sector; and

(g) Protect and promote the internet as an open platform enabling consumer choice, freedom
of expression, end-user control, competition and the freedom to innovate without
permission, and thereby encouraging the development of advanced telecommunications
capabilities and the removal of barriers to infrastructure investment.

SEC. 3. Definition of Terms. — As used in this Act:


(a) Basic telephone service refers to the local exchange telephone service for residence and
business establishments provided via the circuit switched telephone network;

(b) Cellular Mobile Telephone Service (CMTS) refers to the wide area mobile radio telephone
system with its own switch, base stations and transmission facilities capable of providing
high capacity mobile telecommunications by utilizing radio frequencies;

(©) Content refers to, among others, texts, images, audios, videos, and animations that are
carried over the broadband/internet network;

(d) Core/Backbone network refers to the mam line (or connection) including international
connection that ties networks, delivers routes to exchange information among various
subnetworks, connects regional distribution networks and, in some instances, provides
connectivity to other peer networks;

(e) Data transmission refers to the process of sending digital or digitized analog signal over
a communication medium to one or more computing network/s, communication or
electronic device/s. It enables the transfer and communication of devices in a point-to-
point, point-to- multipoint and multipoint-to-multipoint environments. The term data
transmission includes the provision of Voice over Internet Protocol (VoIP) services but
does not include the provision of basic telephone services;

(f) Data transmission industry participant refers to any person, firm, partnership or
corporation, government or private, engaged in the provision of data transmission
services to the public. This includes public telecommunications entities (PTEs) that offer
data transmission services as defined under Republic Act No.7925, otherwise known as
the «Public Telecommunications Policy Act of the Philippines";

(@) International gateway landing refers to a segment of data transmission that consists of
any facility that provides an interface to send and receive data traffic between one
country's domestic network facilities and those in another country;

(h) Last mile refers to the segment of data transmission network that connects end users;

(i) Middle mile refers to the segment of data transmission network that links the last mile
network to the core/backbone network;

(i) Open access refers to the system of allowing the use of data transmission and/ or
distribution systems and associated facilities subject to fair, reasonable, and
nondiscriminatory terms in a transparent market;

(k) Paid prioritization refers to the management of a data transmission network to directly or
indirectly favor some traffic over other traffic, through the use of techniques such as traffic
shaping, prioritization, resource reservation, zero-rating, or other forms of preferential
traffic management, either:

(1) In exchange for consideration (monetary or otherwise) from a third party, or
(2) To benefit an affiliated entity; and

(l) Voice over Internet Protocol (VoIP) service refers to the provision of voice communication

using Internet Protocol (IP) technology.

CHAPTER II
ORGANIZATION AND OPERATION OF THE DATA TRANSMISSION INDUSTRY

SEC. 4, Scope. — This Act applies to all persons who participate in the data transmission industry.
For this purpose, any person or entity whose business deals substantially with the transmission
of data, including VoIP service provider, internet service providers (ISPs), and data center service
providers, shall be governed by the provisions of this Act. PTEs principally engaged in the
provision of basic telephone services, such as international carrier, interexchange carrier, local


‘exchange operator, and mobile radio services provider, as these entities are defined in Republic
Act No. 7925, which also provide data transmission services, shall likewise be subject to the
provisions of this Act with respect to the data transmission services they provide and the
interconnection to their networks that they extend to data transmission industry participants.

SEC. 5. Segments. - The data transmission industry shall be divided into four (4) segments:
(a) International gateway/landing; (b) Core/Backbone network; (c) Middle mile; and (d) Last mile.

All four (4) segments shall be competitive and open. Any law to the contrary notwithstanding,
data transmission industry participants in any of the four (4) segments shall not be required to
secure a franchise from Congress or a Certificate of Public Convenience and Necessity (CPCN) or
Provisional Authority (PA) from the National Telecommunications Commission (NTC), to construct,
install, and operate networks and facilities for the data transmission services they provide. Neither
shall they be required to secure a CPCN or a PA for the data transmission services they provide
to the general public. Participants in the data transmission industry shall, however, be required
to register with the NTC stating the segment they are participating in .and provide the NTC with
their schedules of rates.

CHAPTER III
REGULATION OF THE DATA TRANSMISSION INDUSTRY

SEC. 6. Open Access Approach to Regulation of the Data Transmission Industry. - The
NTC shall ensure that the data transmission sector remains open and accessible to all qualified
participants. Specifically, it shall;

(a) Implement an efficient and speedy administrative process in the authorization and
registration of data transmission sector participants;

(b) Adopt a technology-neutral framework that allows data transmission industry participants
to use any available technology to provide service;

(©) Promote fair and open competition at all the multiple layers of the data transmission
network, allowing a wide variety of physical networks and applications to interact in an
open architecture;

(d) Mandate transparency in pricing and the publication of pricing information to ensure fair
trading within and between each data transmission segment so as to allow clear,
comparative information on market prices and services;

(e) Mandate interconnection so that data transmission industry participants can connect to
each other at the various segments and interfaces, such that entities of any size may
freely enter and exit the market, and dominance by any single player or group of players
is avoided;

(f) Promulgate policies that will encourage distributed local solutions rather than centralized
cones, encouraging services that are closer to the user;

(g) Publish the list of registered data transmission industry participants at least once a year;
and

(h) Promulgate rules defining and regulating entities with substantial market power.

SEC. 7. Spectrum Allocation, Recall, and Reallocation. - The NTC shall maximize the
allocation and assignment of finite radio spectrum resources used in the transmission of data by
ensuring that the spectrum is made available for the use of all registered data transmission
industry participants. To this end;


(a) The procedure for radio spectrum assignment, joint use and recall shall be made
transparent to the public. All applications, including letter requests, spectrum assignment,
joint use, recall, and reallocation shall be posted in the NTC's website and in a
conspicuous place in the offices of the NTC for at least three (3) consecutive months.
The notice shall specifically indicate the names of the applicants for spectrum assignment,
joint use and recall, including where the NTC itself is the proponent of any such action,
the affected spectrum, and the applicant's or NTC’s reasons for the proposed spectrum
assignment, joint use and recall. The NTC shall not assign, recall or allow co-use or joint
use of any radio frequency band or bands without conducting at least one (1) public
hearing and allowing public comment for a period of fifteen (15) days from the date of
the public hearing, prior to approval and/ or disapproval of the same. This applies to all
spectrum, whether used for data transmission or not;

(b)

All radio spectrums, radio frequency assignments, recalls, and joint use decisions of the
NTC shall be published in the NTC’s website and in a conspicuous place in the offices of
the NTC for at least three (3) consecutive months. The recall of frequency for purposes
of free public use shall be given priority.

The immediately preceding paragraphs (a) and (b) herein shall not apply to applications
for frequency assignments for fixed point-to-point radio links, Wi-Fi, and satellite
networks;

(©

The NTC shall avoid the concentration of spectrum resources in the hands of a few
players and shall not assign, or allow joint use of radio spectrum in a manner that
establishes, promotes or perpetuates the dominance of PTEs. Any entity who believes
that any one or more of the NTC's decisions for the assignment of radio spectrum,
whether past or present, will promote the dominance of any entity and hinder competition
may file a complaint before the Philippine Competition Commission (PCC) to determine
the dominance of a data transmission industry participant and deal with anti-competitive
conduct in accordance with its mandate under Republic Act No.10667, otherwise known
as the "Philippine Competition Act"

iG)

The NTC shall promptly act on applications of data transmission industry participants for
permits to import equipment. Any application for permit to import equipment that is not
acted on by the NTC within seven (7) days shall be deemed approved;

(O

If the NTC finds, on its own initiative or upon complaint, that any right, license or radio
spectrum assignment to any data transmission industry participant or PTE is not being
used, or is not being maximized by the user thereof, or that the grantee has violated the
provisions of this Act, it may, motu proprio or upon petition by any person, subject to
due process, recall the radio spectrum assignment of the data transmission industry
participant or PTE. The NTC shall, where required and appropriate, make provisions for
substitute frequency to address the needs of active users of the spectrum recalled from
the data transmission industry participant or PTE; and

(f) For applications for frequency assignments for mobile and point-to-multipoint networks
that will involve the assignment of at least fifteen percent (15%) of the. total frequencies
in a particular frequency band, e.g., 2100MHz (3G), 1800MHz, 800MHz, 700MHZ etc., a


technical working group (TWG) shall be created to be composed of representatives from
the Department of Information and Communications Technology (DICT), NTC, PCC and
consumer groups, to study and recommend to the NTC whether to approve, approve
with modification, or deny the application. The TWG shall submit its recommendation not
later than thirty (30) days from the date of application.

SEC. 8. Setting Performance Standards. — The NTC shall:

(a) Mandate that, within one (1) year from the effectivity of this Act, all last mile providers
shall provide a minimum download speed of 2 Mbps or as mandated by the National
Broadband, whichever is higher, for mobile broadband and for fixed wireless/broadband

access;

(b) Prescribe performance standards after public consultation and hearings within six (6)
months from the effectivity of this Act;

(©) Upgrade performance standards imposed on the data transmission industry regularly to
ensure that performance standards shall, at a minimum, be at par with service levels
established in regional data network performance indices and aligned with international
best practices. Such standards shall take into account speed, packet loss, jitter, and
latency;

(d) Regularly review performance standards at least once a year and shall publish new
performance standards at least thirty (30) days before they take effect. The publication
of the results of the performance measurements shall be done in an open data format
accessible to the general public;

(e) Any person, or the NTC itself, may, motu proprio, file a petition to penalize any data
transmission industry participant for failure to deliver service according to the NTC's
published performance standard and to require rectification of such noncompliance; and

(A) Measure the performance of the data industry participants and publish the results of its
measurements in its website.

SEC. 9. Arms-length Transactions and Transparency. ~ The NTC shall:

(a) Publish and make available in print and oniine formats all aspects of spectrum use
information, including the National Radio Frequency Allocation Table (NRFAT), indicating
therein the purpose or use to which each frequency band is allocated, and, for frequency
bands allocated for public use, the persons and/or entities to whom each particular
frequency is assigned. The NRFAT and updated radio spectrum use information shall be
made available on the NTCs website and to any person who requests the same, upon
written request; and

Promulgate rules requiring all data transmission industry participants to file an annual
report and include therein a fair and accurate statement regarding their market prices
and their services. The annual report shall include all costs and charges relevant to the
data transmission network segment where the participants operate. The rates shall be
made available online, in print, and in any other viable venue to the public. Any person
can file a complaint pertaining to these rates within thirty (30) days of posting. Each
player at each segment shall submit a copy of their rates to the NTC and the PCC. The
rates shall be published, including a historical record, in a consolidated manner. The data
transmission industry participants are required to keep a publicly accessible archive of
their rates.

(b}


SEC. 10. Fair Competition. - The NTC and the PCC shall ensure that for those providing
services at any given segment, there are at least two (2) providers.

SEC. 11. Restriction on the Issuance of Temporary Restraining Order or Writ of
Preliminary Injunction. — No temporary restraining order or writ of preliminary injunction shall
be issued by a Regional Trial Court against any order, decision, rule or regulation promulgated
by the NTC unless there is prima facie evidence that the said order, decision, rule or regulation
was promulgated with evident bad faith or grave abuse of authority: Provided, That whenever
such temporary restraining order or writ of preliminary injunction is issued, the court that issued
the same shall, within ten (10) days from such issuance, submit a report to the Supreme Court
setting forth in detail the grounds or reasons for the same.

CHAPTER IV
PROHIBITED ACTS

SEC. 12. Prohibited Acts. - The following acts are prohibited:

(a) Refusal to Plug and Play. — Any data transmission industry participant, insofar as such
person is so engaged, shall not refuse access to infrastructure to any other data
transmission industry participant, except for failure to pay open market fees for the access
to the service.

Data transmission providers shall not impede the end-user's right to access and distribute
information and content, use and provide applications and services and use terminal
equipment of their choice, regardless of the end user's or provider's location or the
location, origin or destination of the information, content, application or service via their
data transmission service.

Agreements between data transmission providers of data services and end users on
commercial and technical conditions and the characteristics of data access services such
as price, data volume or speed, and any commercial practices conducted by providers of
internet access services shall not limit the exercise of the rights of end users laid down in
the preceding paragraph;

(b) Paid Prioritization. — A data transmission industry participant shall not engage in paid
prioritization for monetary or other consideration except when allowed by the NTC after
such participant demonstrates that the practice will provide significant public interest
benefit and will not disadvantage content and applications that are not prioritized or harm
the open nature of the internet;

(©) Throttling. — Providers of data transmission services shall treat all traffic equally when
providing data access services without discrimination, restriction or interference,
regardless of the sender and receiver; the content accessed or distributed, the applications
or services used or provided, or the terminal equipment used.

It shall be prohibited for a data transmission industry participant to hinder or slow down
services or applications or access to specific sites in the internet except where (1) access
to such sites, services or applications are prohibited by law; (2) it is necessary to preserve
the integrity and security of the network and service of the provider or the equipment of


the end user: Provided, That if the breach of integrity or security is caused by the
equipment of the end user, the provider has to notify the end user first and give the
former sufficient time to rectify the situation; (3) it is necessary to block the transmission
of unwanted communications (e.g. spam, child pornographic materials) to an end user,
on application or complaint of the end user or the data transmission industry participant;

(d) Refusal to Give Information. - It shall be prohibited for any data transmission industry
participant, including PTEs with regard to its network and facilities, to refuse or fall to
make available, on a timely basis, to suppliers of data transmission services the technical
information about its essential facilities or network facilities and commercially relevant
information that am necessary for them to provide services; and

(e) Anti-competitive Cross-subsidization. - The NTC shall require separate books of accounts
between different data transmission segments in order to allow identification of costs and
revenues for each segment. Nothing herein shall prevent interconnecting networks from
charging the appropriate cost-based compensation for the use of interconnection facilities.

SEC. 13. Administrative Penalties. - The NTC shall require data transmission industry
participants and PTEs providing data transmission services to comply with prescribed performance
standards and shall impose penalties for failure to comply with such performance standards.

(2) Any data transmission industry participant who fails to comply with the minimum service
standards set by the NTC shall be imposed a minimum penalty of a fine of not less than
three hundred thousand pesos (P300,000,00) but not more than five milion pesos
(P5,000,000.00) per day for every day during which such default or violation continues
until the participant fully complies: Provided, That if the data transmission industry
participant has a gross annual income not exceeding ten million pesos (P10,000,000.00),
the penalty that may be imposed shall be equivalent to one percent (1%) to two percent
(2%) of its gross annual income. The NTC is hereby authorized and empowered to impose
such fine, after due notice and hearing.

(b) An entity who fails to substantially comply with the NTC's performance standards for three
(3) consecutive years shall, subject to due process, be removed from the registry of
registered data transmission industry participants and shall be prohibited from rendering
data transmission services.

(©) Any data transmission industry participant who engages in the prohibited acts under
Section 12 of this Act or fails to comply with the obligations under Section 8 of this Act
shall suffer a minimum penalty of a fine of not less than three hundred thousand pesos
(300,000.00) but not more than five million pesos (P5,000,000.00) for every day that
the violation continues until the participant fully complies: Provided, That if the data
transmission industry participant has a gross annual income not exceeding ten million
pesos (P10,000,000.00), the penalty that may be imposed shall be equivalent to one
percent (1%) to two percent (2%) of its gross annual income.

(d) A data transmission industry participant violating any provision of this Act shall forfeit all
certificates, licenses, authorizations, rights, and awards issued to it in relation to its
participation in the data transmission industry.

(e) Any other violations not specifically penalized under the relevant provisions of this Act
shall be penalized by a fine of not less than fifty thousand pesos (P50,000.00) and not
more than two million pesos (P2,000,000.00).


SEC. 14, Adjustment for Inflation. — The fines imposed under this Act shall be adjusted, year-
on-year, considering the prevailing cost of money based on the current consumer price index,
and subject to publication of such adjustments.

(CHAPTER V
RIGHTS OF DATA TRANSMISSION SERVICE USERS AND RESPONSIBILITIES OF
DATA TRANSMISSION SERVICE PROVIDERS

SEC. 15. Rights of End Users. — The user of data transmission services shall have the following
basic rights:

(2) Entitlement of data transmission service which 1s nondiscriminatory, reliable, and
conforming with minimum standards set by the NTC;

(b) To be given data transmission services within two (2) months from application for service;

(c) Regular, timely and accurate billing, courteous and efficient service at business offices and
by company personnel;

(d) Timely correction of errors in billing and the immediate provision of rebates or refunds by
the data transmission service provider without the need for demand by the user; and

(e) Thorough and prompt investigation of, and action upon complaints. The data transmission
service provider shall endeavor to allow complaints to be received by any means
convenient to the end user, including voice calls, post, short messaging service (SMS),
multimedia messages (MMS) and online communication, and shall keep a record of all
complaints received and the action taken to address the complaints.

Subject to the filing of a formal request to the data service provider, a user may request the
immediate termination of service without the imposition of fees or penalties, and with the refund
of any fee or charge already paid by the user, should a data service provider not consistently
comply with preceding paragraphs (a), (d), (e), or any other minimum performance standards
set by the NTC.

CHAPTER VI
FINAL PROVISIONS

SEC. 16. Expedited Processing, - In all instances where a participant m the data transmission
industry shall require a form, certificate, or request from any government agency or local
government unit (LGU), there should be no more than two (2) public officers involved in
processing the form, certificate, or request.

Processing fees and certifications required for the deployment of any segment of data
transmission networks shall be limited to those identified by the DICT. The DICT shall coordinate
with the concerned national government agencies and LGUs and conduct the necessary
consultations with civil society organizations and other stakeholder groups, for the development
of the implementing rules and policies to minimize the administrative burden of permitting and
certification processes.

SEC. 17. Implementing Rules and Regulations. - Within sixty (60) days from the effectivity
of this Act, the NTC shall promulgate the necessary rules and regulations for the effective
implementation of this Act.


The NTC shall ensure that the provisions of this Jaw apply, mutatis mutandis, to future
technologies in data transmission.

SEC. 18, Joint Congressional Oversight Committee on Open Access in Data
Transmission. ~ There is hereby created a Joint Congressional Oversight Committee on Open
‘Access in Data Transmission OCOCOAD1) which shall monitor and ensure the effective
implementation of this Act. It shall determine weaknesses and loopholes in the law, recommend
the necessary remedial legislation or administrative measures and perform such other duties and
functions as may be necessary to attain the objectives of this Act.

The JCOCOADT shall be composed of five (5) members from the Senate and five (5) members
from the House of Representatives in addition to the Chairperson of the Senate Committee on
Science and Technology and the Chairperson of the House of Representatives Committee on
Information and Communications Technology, who shall Chair the Oversight Committee in the
order specified herein: Provided, That two (2) members of each chambers’ nominees shall come
from the ranks of the minority party /bloc.

The Otairperson of the Senate Committee on Science and Technology and the Chairperson of the
House of Representatives Committee on Information and Communications Technology shall act
as co-Chairpersons of the JCOCOADT. The ranking minority members nominated by both the
Senate and the House of Representatives shall act as co-Vice Chairpersons. The Secretariat of
the JCOCOADT shall come from the existing Secretariat personnel of the Committee on Science
and Technology of the Senate and the Committee on Information and Communications
Technology of the House of Representatives. The JCOCOADT shall have its own independent
counsel.

The JCOCOADT shall exist for a period not exceeding five (5) years from the effectivity of this
‘Act. Thereafter, its oversight functions shall be exercised by the Senate Committee on Science
and Technology and the House of Representatives Committee on Information and
Communications Technology, acting separately.

SEC. 19. Separability Clause. - Should any provision herein be declared unconstitutional, the
other provisions not affected shall remain in full force and effect.

SEC. 20. Repealing Clause. - All laws, decrees, orders, rules and regulations or other issuances
or parts inconsistent with the provisions of this Act are hereby repealed, amended or modified
accordingly.

SEC. 21, Effectivity. - This Act shall take effect fifteen (15) days after its publication in the
Official Gazette or in any newspaper of general circulation.

Approved,