THIRTEENTH CONGRESS 
1 
OF THE PHILIPPINE 
1 
First Regular Session 
1 
S. No. 
, , ., 
. ..._ . 
Introduced by Senator S. R. Osmefia 111 
EXPLANATORY NOT 
Prior to 1986, the policy of the government on telecommunications was 
integrated. Consequently, only once carrier provided all national and international 
voice network and services. However, in 1987, the government saw the wisdom of 
allowing the entry of competition in the industry, although regulated. Other carriers, 
aside form the Philippine Long Distance Telephone Company (PLDT) were authorized 
to provide national and international long distance services. Two cellular mobile 
telephone service operators, three radio paging service operators and five domestic 
satellite service operators were likewise authorized to operate. 
With the entry of new players in the telecommunications field, government 
issued Executive Order NO. 59 mandating the compulsory interconnection of all public 
telecommunications 
networks 
in 
order 
to 
ensure 
universally 
accessible 
telecommunications facilities and services. 
The deregulation policy of the government resulted in the rapid expansion of 
the telecommunications networks. From less than one million lines, the number of 
installed telephone lines increased to more than six million. Subscribed capacity 
increased from one million to three million. And the number of cellular mobile phone 
subscribers increased from one hundred thousand to more than ten million. 
However, with the entry of more competition, numerous disputes arose dealing 
with commercial terms, quality of service and the number of additional interconnect 
trunks, among others. 
This bill proposes to address interconnection problems and concerns to ensure 
expeditious interconnection between and among parties. 
In view of the foregoing, early approval of the bill is earnestly requested 
0 a 
SERGIO OSMEfiA 111 
Senator 


THIRTEENTH CONGRESS OF THE REPUBLIC 
) 
OF THE PHILIPPINES 
) 
First Regular Session 
, 
I
.
 
S. No. 2 
Introduced by Senator S. R. OsmeAa 111 
AN ACT 
STRENGTHENING THE MANDATE ON THE INTERCONNECTION BETWEEN AND 
AMONG PUBLIC TELECOMMUNICATIONS ENTITIES, PROVIDING PENALTIES 
FOR ITS VIOLATION AND FOR OTHER PURPOSES 
Be it enacted by the Senate and House of Representatives of the Philippines in 
Congress assembled: 
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SECTION I. 
Declarafion of Policy - 
Recognizing the vital role of 
communications and information in nation-building and economic development, 
the State in its desire to attain universal access, shall promote the rapid 
expansion of telecommunications services in all areas of the Philippines, 
maximize the use of all available telecommunications service shall have access 
to such facilities at a mandated standard of service and at a reasonable cost. 
Pursuant thereto, every authorized public network operator shall 
interconnect with other providers of telecommunications services in a speedy, 
efficient, fair, transparent and nondiscriminatory manner. 
Interconnection between or among public telecommunications companies 
(PTCs) shall be mandatory and compulsory, and, such interconnection shall 
encompass other telecommunications services such as, but not limited to, 
value-added services or radio paging, trunked radio, short messaging system, 
other store and forward systems of facsimile or messaging (voice or data), 
packet switching and circuit data switching (including conveyance of messages 
which have been or are to be transmitted or received at such points of 


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interconnection), 
any 
information 
and 
services 
as 
the 
National 
Telecommunications Commission (NTC) may determine to be in the interest of 
the public. 
SEC. 2. Matters to be Covered by fhe lnferconnecfion Agreement- 
The interconnection arrangement between the public telecommunications 
entities shall be nondiscriminatory and shall contain, but not limited to, the 
following matters: 
(a) scope of agreement; 
(b) point(s) of interconnection and technical configuration; 
(c) provision of capacity (interconnection circuits); 
(d) period of implement; 
(e) technical, performance and quality standards and grade of service, as 
well as measurement and monitoring thereof; 
(9 measurement of calls, settlement and dispute resolution procedure; 
(g ) interconnect ion c ha rg ekompensat ion scheme; 
(h) maintenance procedure; 
(i) fault reporting and clearing procedures; 
(j) duration and re-negotiation of agreement, and arbitration arrangement 
as may be directed by the NTC; and 
(k) arbitration agreement as may be directed by the NTC. 
The NTC shall within ninety (90) days from the approval of this Act, 
prepare a pro forma Interconnection Agreement, covering the above matters 
and 
provide 
guidelines 
which shall be 
used as 
basis 
for 
public 
telecommunications entities in arriving at an agreement to effect a timely, fair 
and efficient interconnection. 
The NTC shall also, within ninety (90) days from the approval of this Act, 
prescribe 
revised 
technical 
and 
service 
performance 
standards 
for 
interconnection and established a performance monitoring system to ensure 
compliance therewith; 
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The NTC shall, upon request of a carrier and within a period of thirty (30) 
days: 
(a) Decide a dispute relative to the implementation of the interconnection 
agreement and of the amounts due from and payable by a party thereunder. 
Any uncontested amount shall immediately be payable to the parties; and 
(b) In the absence of a carry-over clause, the NTC shall, in case of an 
impasse between the interconnected carriers, determine and fix the terms and 
conditions, of the renewal or extension of an interconnection agreement, to 
include the compensation scheme thereof. 
SEC. 3. Interconnection Parameters. - The following shall be the 
minimum parameters: 
(I) The parties shall jointly and equally provide and share the costs of 
interconnection facilities necessary to interconnect the systems of both parties: 
Provided, That in an interconnection between an Inter Exchange Carrier (IXC) 
and a Local Exchange Carrier (LEC) with less than five thousand (5,000) total 
system-wide line capacity and does not offer or provide any other telecom 
services, except value-added service (VAS), the former shall shoulder the costs 
of interconnection ; 
(2) The point(s) of interconnection (POI) shall be made at a technically 
feasible point: 
(3) The quantity of interconnection circuits shall be based on traffic 
studies or interconnecting parties. In case of disagreement, the NTC shall, 
within a period of thirty (30) days from the request of either party, decide on the 
quantity of interconnection circuits; 
(4) The underwriting of interconnection costs as may be determined by 
the NTC; and 
(5) The determination of interconnection charges by the NTC in 
compliance with law 
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SEC. 4. lnterconnection Procedu . - The following shall be strictly 
observed to ensure interconnection between or among the parties: 
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(a) Parties shall negotiate and enter into an interconnection agreement 
within a non-extendible period of sixty (60) days commencing from notice to 
NTC of the ipitiation of negotiation for interconnection. During the sixty (60) day 
period, upon the request of any of the parties negotiating for interconnection, the 
NTC shall ,intervene and take an active role to facilitate and expedite 
interconnection. The NTC may, in the interest of the State, mufo propio 
intervene in the negotiation or direct parties, as may be appropriate, to submit to 
compulsory (arbitration at party cost after the lapse of thirty (30) days from the 
start of negdtiations. The arbitration shall be terminated and decided upon within 
a period of thirty (30) days; 
(b) Despite absence of notice to it by any party to a proposed 
interconnection, the NTC in the exercise of police power, may initiate on its own, 
the interconnection of two or more telecommunications carriers if the public 
interest will be served thereby: Provided, That such interconnection must be 
arrived at within a sixty (60) day period from the commencement of NTC’s 
action; and 
(c) Should the parties fail to enter into an interconnection agreement after 
the lapse of the sixty (60) day period, the NTC shall, within thirty (30) days, 
determine and fix the equitable terms and conditions for interconnection and 
draw up the Interconnection Agreement and direct the parties, under pain of 
sanctions prescribed hereunder, to strictly comply therewith. 
SEC. 5. Prohibited Acts or Omissions. - The following shall be 
considered prohibited acts or omissions: 
(a) Refusal or neglect of any public telecommunications entity to 
interconnect, after having been so directed by written order of the NTC within 
the period fixed, and, under such terms and conditions as expressly set forth; 
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(b) Willful disruption or termination of interconnection by any public 
telecommunications entity, except for any of the reasons stated in Section 4 
hereof, or for any other lawful cause; 
(c) Refusal or neglect of any public telecommunications entity, after 
having been required by written order of the NTC, to re-establish/resume 
interconnection within a period of five (5) days from receipt of the NTC order; 
and 
(d) Refusal or neglect of any public telecommunications entity, after 
having been required by written order of the NTC, to comply with any of the 
technical and service performance standards set by the NTC or with any of the 
terms and conditions of the interconnection agreement entered into by the 
parties, within a period of five (5) days from receipt of the NTC order. 
SEC. 
6, 
Grounds for the 
Disruption 
or 
'Termination of 
hferconnecfion. - The following shall be the grounds for the disruption or 
termination of interconnection: 
(a) Notwithstanding a receipt of a written notice or demand to cure or 
remedy a breach to pay an undisputed amount due, and/or desist or cease from 
committing such activities or violations of interconnection, as the case may be, 
within a period of thirty (3) days from receipt, of such notice or demand, a public 
telecommunications entity may, upon prior hearing and approval by the NTC, 
terminate, 
or 
disrupt 
any 
interconnection 
when 
the 
other 
public 
telecommunications entity: 
(i) is not duly licensed, or has lost its certificate, license or authorization 
by revocation, cancellation or suspension of its right to operate as a public 
telecommunications entity; or 
(ii) has committed material breach of the terms and conditions of the 
interconnection agreement between the parties; or 
(iii) is in default of any amount due and payable under the Interconnection 
Agreement subject further to Section 6; or 
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(iv)is using or allowing the use of interconnection facilities for 
uncompensated toll bypass through the use of schemes such as, but not limited 
to, callback, unauthorized audiotex, international simple resale (ISR), and other 
analogous services or any alternative calling procedures (ACP) which are 
prohibited in the Philippines; or 
(v) has violated the rules and regulations of the NTC. 
The NTC shall, within thirty (30) days, resolve any of the above issues. 
(b) Where it is necessary for a public telecommunications entity to 
maintain, repair, upgrade or expand any of its interconnection facilities or 
network: Provided, That prior written notice of the planned maintenance, repair, 
upgrade or expansion activity is served on the NTC, and other public 
telecommunications entities that my be affected thereby. Fifteen (1 5) days prior 
to any expansion or upgrades, the NTC shall be notified and notice to the public 
shall be effected by publication. 
(c) By reason of force majeure, being the proximate and only cause of 
failure to maintain the existing interconnection relationship between the parties, 
such as any of the following circumstances: 
(i) earthquake, lightning or other natural disaster or calamity; 
(ii) act of public enemy in war, whether international or civil; and 
(iii)order or act of competent public authority for reason of national 
security. 
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SEC. 7. Reconnectjon Procedure. - The following shall be strictly 
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observed to ensure interconnection at all times, between or among parties: 
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(a) The NTC shall, within five (5) days from receipt of notice from a public 
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telecommunications entity whose services were arbitrarily disrupted or 
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terminated by another public telecommunications entity, order the parties to 
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reestablish/resume interconnection services within five (5) days from receipt of 
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said order: 


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(b) During the five (5) day period, in the public interest and in the exercise 
of police power, the NTC may at any time, intervene at any stage of the 
negotiation and take an active role therein to ensure, facilitate and expedite 
resumption of interconnection; 
(c) The NTC shall, in the exercise of police power and in the interest of 
public welfare, despite the absence of notice from any telecommunications 
entity 
whose 
services 
were 
disrupted 
or 
terminated 
by 
another 
telecommunications 
entity, 
order 
the 
parties 
to 
reestablish/resume 
interconnection within a period of five (5) days from receipt of said order; and 
(d) Within five (5) days after issuing the order adverted to in the 
preceding 
paragraphs directing 
the 
reestablishmenthesumption of the 
interconnection, the NTC shall commence an investigation to find out the cause 
of the disruption or termination and, within a period of thirty (30) days, issue its 
resolution imposing appropriate penalties and fines on the erring party. 
SEC.8. Criminal Penalties. - (1) The President or Chief Executive 
Officer and the Board of Directors of the public telecommunications entity who 
fail to comply with the written order of the NTC directing the interconnection or 
reconnection shall be liable for imprisonment of not less than one (I) year but 
not more than two (2) years. 
(2) The President or Chief Executive Officer and the Board of Directors of 
a public telecommunications entity who shall illegally disrupt or, terminate its 
existing interconnection with another public telecommunications entity, as may 
be determined by the Commission after due notice and hearing, shall be liable 
for imprisonment of not less than six (6) months but not more than one (1) year. 
SEC. 9. Administrative Penalties. - 
(1) The following fines shall be imposed by the NTC on any public 
telecommunications entity and its President or Chief Executive Officer for willful 
and deliberate failure to interconnect or reestablish/resume interconnection 
within the period stated in the order of the NTC: 
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(a) From one (I) to ten (IO) days after the lapse of the period to comply 
as stated in the NTC order, a fine of Five hundred thousand pesos 
(P500,OOO.OO) per day shall be imposed; 
(b) From eleven (11) to twenty (20) days after the lapse of the period to 
comply as stated in the NTC order, a fine of Two million five hundred thousand 
pesos (P2,500,000.00) per day shall be imposed; and 
(c) From the twenty-first day onward after the lapse of the period to 
comply as stated in the NTC order, a fine of Five million pesos (PS,000,000.00) 
per day shall be imposed. 
(2) The following administrative penalties shall be imposed by the NTC 
after a determination that a public telecommunications entity has willfully, 
deliberately and unjustifiably disrupted or terminated its interconnection with 
another public telecommunications entity: 
(a) A fine of not less than Five million pesos (P5,000,000.00) but not 
exceeding Fifteen million pesos (PI 5,000,000.00); and 
(b) Disqualification of the Chief Executive Officer of the violating public 
telecommunications entity from being employed thereat and in any other entity 
under the supervision or regulation of the NTC. 
(3) Administrative Penalties for Failure to Comply with Interconnection 
Technical, Service Performance Standards - The following fines shall be 
imposed by the NTC on any public telecommunications entity for deliberate and 
willful failure to comply with an order of the NTC requiring compliance with any 
interconnection such as the technical, service performance, standard prescribed 
by the NTC and/or those agreed upon under the parties’ interconnection 
agreement: 
(a) From one (1) to ten (IO) days after the lapse of the period to comply 
as stated in the NTC order, a fine of Two hundred thousand pesos 
(P200,OOO.OO) per day shall be imposed; 
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(b) From eleven (11) to twenty (20) days after the lapse of the period to 
comply as stated in the NTC order, a fine of Five hundred thousand pesos 
(P500,000.00) per day shall be imposed; and 
(c) From the twenty-first day after lapse of the period to comply as stated 
in the NTC order, a fine of One million pesos (P1,000,000.00) per day shall be 
imposed. 
(4) Compensation Payable to Aggrieved Public Telecommunications 
Entity - The erring public telecommunications entity shall also pay the aggrieved 
public telecommunications entity compensation in the amount of not less than 
One rnillion pesos (PI ,000,000.00) but not exceeding Ten million pesos 
(PI 0,000,000.00) to be determined upon application with the appropriate court 
to cover losses and damages incurred by the latter for reason for the unjustified 
disruption or termination, of the interconnection. 
(5) Collection of Fine or Payment of Compensation - The amount of the 
fine imposed by the NTC shall be paid by the erring public telecommunications 
entity to the NTC within fifteen (15) days from receipt of the NTC order. In case 
the erring public telecommunications entity moves for a reconsideration of the 
order imposing such fine or brings the matter on appeal to the Court of Appeals 
or the Supreme Court, the payment of the fine shall be a condition for the 
perfection of the motion or appeal but the payment shall be deposited in escrow 
with the NTC until the final adjudication of the case. 
SEC. 10. Prohibition Against the lssuance of Restraining Orders and 
injunctions Against NTC Decision and/or Orders. - The decision of the NTC 
on interconnection and on matters pertaining to Section 8 and 9 of this Act shall 
be immediately executory. No court, other than the Court of Appeals and the 
Supreme Court of the Philippines, shall have jurisdiction to issue a temporary 
restraining order, preliminary injunction, or preliminary mandatory injunction 
against the implementation of interconnection of networks pursuant to the 
provision of this Act. 
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SEC. 11. lmplemenfing Rules and Regulafion. - Within ninety (90) 
days from the effectivity of this Act, the NTC shall promulgate rules and 
regulations for the effective and proper implementation of this Act. The NTC 
shall be the administrator of this Act and for this purpose, shall establish a 
performance monitoring system. 
SEC. 12. Separability Clause. - Any provision of this Act which shall be 
declared unconstitutional shall not render any other provision of this Act invalid. 
SEC. 13. Repealing Clause. - Any provision of law, executive order, rule 
and regulation or circular inconsistent with the provisions of this Act is hereby 
modified or repealed accordingly. 
SEC. 14. Effectivity, - This Act shall take effect upon approval. 
Approved, 
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