Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

FIFTEENTH CONGRESS
‘Second Regular Session

4958

Introduced by HON. JOSEPH F. VIOLAGO.

House Bill No.

Explanatory Note

In a much-remembered appropriations hearing in 2008 involving the issue of access or

interconnection charges by telecommunication companies, it was clearly established that there should be no
more imposition of such charges for both short messaging services and mobile voice services.

An excerpt of it is hereby printed for easy reference:

Rep. Rufus Rodriguez... believe that the equipment for interconnection has been fully
paid over the years, over a period of so many years where telecoms have been receiving
billions and billions while we pay for also billions of money, millions, in terms of
interconnection charges which have already been paid for by the Filipino people. There
should be no more interconnection charge because these particular equipment and
other systems have been paid for by the billons of income by the telecommunication
companies. May we know from you whether you are....you will favor the removal of
interconnection charges of 15 centavos to 35 centavos for text messages and will lower
down the text messages payment and the calling...the charges for calls which is from P
4,00 to P 6.50 interconnection per minute? Don't you think, Mr. Secretary, that the telecom
companies have been raking a lot of profts and they are already fully paid for, they have a
retun that so much has been given to them? May we know the Honorable Secretary's
stand on the removal of these interconnection charges, both text and calls by these
cellphones? (underscoring supplied)

Secretary Leandro Mendoza: Thank you, Your Honor, Mr. Chairman. The position of the
Department is we agree to the reduction of rates, including the removal or reduction of the
interconnection rates, Mr. Chairman, Your Honor.

At the plenary hearing, for the same year, a relevant exchange was also recorded:

Rep. Rufus Rodriguez......1 informed the DOTC and the NTC that I have a pending bill in
the House of Representatives to remove all interconnection charges, both SMS and
Cellphone calls, in view of the fact that, number one, itis the belief ofthis Representation
that teleos, the telecommunication companies, especially Smart and Globe, which have
been reporting billions of income, P 38 B, P 40 B, have been fully compensated with al the
equipment and other expenses relative to text messages and phone calls interconnection.
Through the years, they have recovered these by their billions of income. And so, | asked
the Honorable Canubas, the Chairman of the NTC, to fasttrack its study on whether we
Should continue paying interconnection charges when we text, for example, from Smart to
Globe and vice versa. The interconnection charge of SMS stands now at 35 centavos. The
interconnection charge for conversations by cellphones is now at P 4.00 call charges. May
wwe know from the distinguished sponsor, Madam Speaker, if there has been a development

in relation to the study of NTC as to our proposal to remove all interconnection charges,
‘SMS and calls...



Rep. Edcel Lagman: Your honor, your suggestions are favorably considered by the NTC, and
there are now ongoing public hearings towards the reduction of the fees, and your suggestions
are considered favorably.

XxX xX XK x

Rep. Rodriguez: So, we expect that we will be able fo reduce already our SMS expense from
what we now have of about P .80 to P 1.00, a reduction of P 0.20 interconnection charge, it will
‘become only P 0.15 instead of P 0.35?

Rep. Lagman: That is the tenor ofthe draft memorandum circular, Your Honor.
Rep. Rodriguez......Thank you, Madam Speaker. | thank, therefore, the NTC Chairman and the

Secretary of the DOTC whose idea to really remove the texts in interconnection charges really
‘came from and that is the Horonable Secretary Mendoza,

| now go to the study of the NTC in relation to the calls of cellphones interconnection
‘charges. ....S0, we are now stating that soon the NTC will make a memorandum circular that
instead of P 4.00, as interconnection for voice messages, we are now going to allow only P 1.50
for the voice messages. Is that confirmed, distinguished Sponsor?

Rep. Lagman: That is confirmed, your Honor, per draft memorandum circular.

Rep. Rodriguez: So, NTC would now be able to promote the welfare of the Filipino
people, especially the subscribers, because there is a lowering of the interconnection
Charge now of P 4.00 to P 1.50 or a reduction of P 2.50, is that correct, dstiniguished Sponsor?
(underscoring supplied)

Rep. Lagman.: You are correct, Your Honor.

It’s been almost three (3) years and such assurances went for naught, as it seems that the
position favored by the telecoms and their bloated coffers have always prevailed over that of the
interest of the consumers.

Furthermore, it is also worthy to mention that the interconnection charges in other Asian
countries are considerably much lower.

Again, needless to stress, the replete excuses of telecoms in setting up interconnection
facilities had long been debunked.

It is high time to make both short the SMS (short messaging service or text messages) and
voice calls be made affordable to the genral public.

Approval of this proposed measure is, therefore, earnestly sought.

aA Ser"

JOSEPH F. VIOLAGO


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

FIFTEENTH CONGRESS
Second Regular Session

House Bill No. 4958

Introduced by HON. JOSEPH F. VIOLAGO

AN ACT
PROVIDING FOR A MORE AFFORDABLE VOICE CALL
AND TEXTING SERVICE IN THE PHILIPPINES.

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

SECTION 1. The interconnection charge for voice calls between two (2) separate networks shall be
as follows:

First year from effectivity
Second year from effectivity:
‘Third year from effectivity:
Fourth year from effectivity:

---not higher than P 1.50 per minute
not higher than P 1.00 per minute
not higher than P 0.50 per minute
not higher than P 0.00 per minute

SEC. 2. The interconnection charge for SMS between two (2) separate networks shall be as follows:

First year from effectivity—--—-not higher than P 0.20 per SMS
Second year from effectivity----—-not higher than P 0.10 per SMS
‘Third year from effectivity—---—-not higher than P 0.00 per SMS

SEC. 3. The National Telecommunications Commission, in coordination the Senate
Committee on Public Services and the House Committee on Information and Communications
‘Technology, shall issue the necessary rules and regulations for the effective implementation of this
Act within sixty (60) days from its approval.

SEC. 4, If any provision of this Act is held invalid, any other provision not affected thereby
shall continue to be valid and effective.

SEC, 5. Any law, presidential decree, executive or departmental circular, letter of instruction
or any order which are inconsistent with any provisions of this Act are hereby repealed or amended
accordingly.

SEC. 6. This Act shall take effect fifteen (15)days after its publication in any newspaper of general
circulation.

Approved.