13TH CONGRESS OF THE REPUBLIC ) 
1 
First Regular Session 
) 
'0.4 
dl118 -6 
411 :53 
OF THE PHILIPPINE§ 
U
I
 
S E N A T E  
S. BILL NO. 
3 
Introduced by SENATOR RALPH G. RECTO 
Explanatory Note 
Through Republic Act No. 7925, the government further strengthened the 
telecommunications 
industry 
otherwise 
known 
as 
the 
"Public 
Telecommunications Policy Act of the Philippines". 
The progress in the 
telecommunications industry can readily be seen in the entry of more players in 
the industry. 
This bill seeks to guarantee that all subscribers of the different public 
telecommunications entities have access to all other users wherever they may be 
within the Philippines. In this regard, interconnection among the industry players 
plays a most crucial role in achieving the desired state. 
At the end of the day., it is the interest of the public that is of primordial 
importance 
most 
especially 
in an 
industry as 
far-reaching 
as 
the 
telecommunications industry. It is incumbent upon the Legislative Branch of 
government to balance the interests of both the public (end-users) and the 
industry players. 
In view of the foregoing, approval of this bill is earnestly requested. 
n 


13TH CONGRESS OF THE REPUBLIC ) 
OF THE PHILIPPINES 
) 
First Regular Session 
1 
S. BILL NO. 
Introduced by SENATOR RALPH G. RECTO 
AN ACT 
STRENGTHENING THE MANDATE ON THE INTERCONNECTION BETWEEN 
AND AMONG PUBLIC TELECOMMUNICATIONS ENTITIES, PROVIDING 
PENALTIES FOR ITS VIOLATION AND FOR OTHER PURPOSES 
Be if enacted by the Senate and House of Representatives of the Philippines in 
Congress assembled: 
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SECTION 1. Declaration 
of Policy. - Recognizing the 
vital 
role 
of 
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communications and information in nation-building and economic development, 
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the State in its desire to attain universal access, shall promote the rapid 
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expansion of telecommunications facilities, and ensure that every user of the 
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public telecommunications service shall have access to such facilities at a 
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mandated standard of service and at reasonable cost. 
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Pursuant thereto, every authorized public network operator shall 
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interconnect with other providers of telecommunications services in a speedy, 
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efficient, fair, transparent and nondiscriminatory manner. 
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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 
interconnection), 
any 
information 
and 
services 
as 
the 
National 
'
.
 
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Telecommunications Commission (NTC) may determine to be un the interest of 
the public. 
SEC. 2. 
Matters to be Covered by the Interconnection 
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) 
(c) 
(d) 
period to implement; 
(e) 
point(s) of interconnection and technical configuration; 
period of capacity (interconnection circuits); 
technical, performance and quality standards and grade of service, 
as well as measurement and monitoring thereof; 
measurement of calls, settlement and dispute resolution procedure; 
(f) 
(9) 
interconnection charge/ compensation scheme; 
(h) 
maintenance procedure; 
(i) 
(j) 
duration 
and 
renegotiation of 
agreement, 
and 
arbitration 
fault reporting and clearing procedures; 
arrangement as may be directed by the NTC; and 
arbitration agreement as may be directed by the NTC. 
(k) 
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 establish 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. 
lnferconnection Parameters. - The following shall be 
the minimum parameters: 
(1) 
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. 
strictly observed to 
lnterconnection Procedure. - The following shall be 
ensure interconnection between or among the parties: 
(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 initiation 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, motu 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 
negotiations. 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) days, determine and fix the equitable terms and 
conditions for interconnection and draw up to the lnterconnection 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 the 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 the receipt of the NTC order. 
SEC. 6. 
Grounds 
for 
the 
Disrupfion 
or 
Termination 
of 
Inferconnection.- 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 (30) 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 futher to Section 6; or 
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(iv) 
is using or allowing the use of interconnection facilities for 
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uncompensated toll bypass through the use of schemes such as, but not limited 
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to, callback, unauthorized audiotex, international simple resale (ISR), and other 
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analogous services or any alternative calling procedures (ACP) which are 
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prohibited in the Philippines; or 
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(v) 
has violated the rules and regulations of the NTC. 
The NTC shall, within thirty (30) days, resolve any of the aboce 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 may 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 affected 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) 
(ii) 
(iii) 
earthquake, lightning or other natural disaster or calamity; 
act of public enemy in war, whether international or civil; and 
order or act of competent public authority for reason of national 
security. 
SEC.7. 
Reconnection Procedure - The following shall be strictly 
observed to ensure interconnection at all times, between or among parties. 
(a) 
The NTC shall, within five (5) days from receipt of notice from a 
public telecommunications entity whose services were arbitrarily disrupted or 
terminated by another public telecommunications entity, order the parties to 
reestablishlresume interconnection services within five (5) days from receipt of 
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 (1) 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) yer. 
SEC. 9. 
Administrative Penalties. - 
(1) 
The following fines shall be imposed by the NTC on any public 
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telecommunications entity and its President or Chief Executive Officer for willful 
and deliberate failure to interconnect or reestablishlresume interconnection within 
the period stated in the order of the NTC: 


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(a) 
From one (1) to ten ( I O )  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 (1 I )  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. 
(c) 
From the twenty-first day onward after the lapse of the period to 
comply as stated in the NTC order, a fine Five million pesos (P5,000,000.00) 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 07 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 telecommunication 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 andlor 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 (1 1) 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,OOO.OO) per day shall be imposed; and 
(c) 
From the twenty-first day after the lapse of the period to comply as 
stated in the NTC order, a fine of One million pesos (Pl,OOO,OOO.OO) per day 
shall be imppsed. 
(4) 
Compensation Payable to Aggrieved Public Telecommunication 
Entity - The erring public telecommunications entity shall also pay the aggrieved 
public telecommunications entity compensation in the amount of not less than 
One million 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 of 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. I O ,  . 
Prohibition Against the Issuance of Restraining Orders and 
lnjunctions Against NTC Decisions and/or Orders. -.The deiision of the NTC on 
interconnection and on matters pertaining to Sections 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. 
Implementing Rules and Regulations. - 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 or regulation or circular inconsistent with the provisions of this Act is 
hereby modified or repealed accordingly. 
SEC. 14. 
Approved, 
Effectivity. - This Act shall take effect upon approval. 
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