Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

NINETEENTH CONGRESS
First Regular Session

HOUSE BILL No.__70

Introduced by REP, JOSE FRANCISCO “KIKO” B. BENITEZ, Ph.D.

EXPLANATORY NOTE

The COVID-19 pandemic has highlighted the need to accelerate the digital transformation of
our economy, bureaucracy and education system.

Digital revolution, however, must then be complemented with a reskilling revolution. The
digitalization of economic activities does require new skill sets.

The shift of responsibilities from humans to machines and algorithms threatens to make certain
jobs obsolete and displace workers. Our workers must not be left behind. Our workforce must,
bbe able to transition from manual to digital jobs.

We must therefore establish more digital learning and incubation hubs to enable our learners,
entrepreneurs and workers to cope with the demands of digital learning, digital economy and
digital jobs.

Digital transformation is our ticket to full economic recovery, and key to sustained economic
growth. Innovating business processes, using digital technologies, and developing digital skills,
have provided many businesses and workers a lifeline in the pandemic, and will enhance their
competitiveness in the new normal. To do this, we need to build the necessary ICT
infrastructure and digital hubs to ensure our workforce adapts to and flourishes in the midst of
disruptions brought about by the Fourth Industrial Revolution.

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

Zz ~
J RANCISCO

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“xk ere, Ph.D.


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

NINETEENTH CONGRESS
First Regular Session

HOUSE BILL NO. 70

Introduced by REP. JOSE FRANCISCO “KIKO” B. BENITEZ, Ph.D.

AN ACT
ESTABLISHING INFORMATION AND COMMUNICATIONS TECHNOLOGY
HUBS NATIONWIDE.

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 “Online Network Philippines
Act”.

SEC. 2. Declaration of Policy. - The State recognizes the vital role of information and
communication in the development and in promoting growth in the countryside. To this end,
the State shall encourage the expansion of information and communications technology (ICT)
and infrastructure throughout the country to facilitate the access of the citizenry to goods and
services. Pursuant thereto, the State shall establish ICT hubs throughout the country in
accordance with the National ICT Roadmap and National ICT Plan.

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

(a) Bandwidth refers to the amount of data that can be transmitted over a network
connection over a period of time:

(b) Broadband refers to a high capacity transmission technique using a wide range of
frequencies which enables a large number of messages to be communicated
simultaneously. In the context of internet access, it refers to access that is
continuing and unhindered, and faster than the traditional dial-up mode;

(c) Broadband network refers to a network able to transmit signals with a high bit
rate and a transmission channel being equal to or greater than two megabits per
second (2 mbps);

(4) Committed information rate refers to the information rate guaranteed by a public
telecommunications entity (PTE). The bandwidth cannot fall below the
committed rate of ninety-eight point five percent (98.5%) of the time;

(6) Cyber skills learning hub or Digital transformation center refers to a facility
specifically designed for cyber-education and digital literacy, and that provides


knowledge. skills, theoretical and practical experiences, and access to
technologies for all learners to become information and technology proficient;

(®) Data farm refers to a physical facility that houses servers, network equipment,
personnel like information technology specialists and network technicians
for business-critical support such as online data storage, data processing, core
‘computing services, data and application backup services, and distributing large
amounts of data from remote data facilities. The operation and management
thereof shall be subject to pertinent laws and policies on data security to prevent,
detect and intercept unauthorized access of data, specially on matters of national
security;

(g) Digital innovation hub refers to a specialized business incubation and
acceleration facility offering physical workspace, mentoring and coaching, and
devices for technical application testing or experimenting, and training. [t is a
one-stop-shop, usually but not always affiliated with educational institutions, that
helps companies including start-ups to become more competitive with regard to
their business production processes, products or services using digital
technologies by providing access to the latest knowledge, expertise and
technology to support them;

(h) Information and communications technology (ICT) refers to the totality of
electronic means to access, create, collect, store, process, receive, transmit,
present, and disseminate information;

(i) Information and communications technology hub (ICT hub) refers to a location
where ICT services may be provided by a PTE with at least the minimum internet
speed required by the National Telecommunications Commission (NTC). Such
services may include telecommunications services, broadband and convergence
services, business processing and data management;

(i) Information technology and business processing management hub refers to a
location that caters to and offers support mechanisms for companies and
enterprises engaged in IT services and business process management and
operations;

(k) Public telecommunications entity (PTE) refers to any person, natural or juridical,
government or private engaged in the provision of telecommunications services
to the public for compensation.

SEC. 4. Establishment of Information and Communications Technology Hubs.
There shall be established ICT hubs all over the country in accordance with a National ICT
Plan to be prepared by the Department Information and Communications Technology
(DICT).

‘The ICT Plan shall assess the needs of every province in the country and identify the
appropriate types and the number of ICT hubs to be developed therein. Every province shall
have at least one (1) of the following classifications of ICT hubs based on the type of activity
that it hosts:



(a) Data Farms;
(b) Information Technology (IT) and Business Processing Management (BPM) Hub;
(c) Cyber Skills Learning Hub and Digital Transformation Center (DTC);

(d) Digital Innovation Hub; and

(e) Any other ICT hub that may arise in the future.

Pursuant to the ICT Plan and the national, provincial, city, or municipal spatial
development plans, the DICT and the local government units (LGU) shall identify the areas
where the ICT hubs shall be established based on geographical area and population: Provided,
That [CT hubs shall be developed in geographically equitable and accessible locations
throughout the province: Provided, further, That the area or site of an ICT hub shall be on a
property owned by an LGU.

The private sector shall be encouraged to establish ICT hubs in accordance with the
standards set forth by the DICT. The DICT shall employ the latest and emerging technologies
available to serve commercially unviable areas.

SEC. 5. Role of the Department of Information and Communications Technology
(DICT). ~The DICT shall formulate a National [CT Plan, based on the National ICT Roadmap,
which shall include the development of a national broadband network, provision of incentives
to encourage private sector participation and promotion of competition. The Cybercrime
Investigation and Coordinating Center of the DICT shall formulate, oversee and validate the
ICT cyber plan of the ICT hubs.

The DICT shall update the National ICT Plan and shall submit the same on or before the
15" of April of every year to the Office of President of the Republic of the Philippines, the
National Economic and Development Authority (NEDA), and the ICT Joint Congressional
Oversight Committee established under this Act.

SEC. 6. Advisory Committee. ~ There is hereby created an Advisory Committee that
shall solicit inputs towards the shaping of policy directions of the National [CT Plan, including
the supervision of ICT hubs and the coordination to be undertaken with the private sector and
other agencies and instrumentalities of the government. The DICT shall determine the
composition of the Advisory Committee and ensure the equal representation of the (a)
government, (b) the service providers, (c) the end users, and (d) other industry stakeholders.

SEC. 7. Role of the National Telecommunications Commission (NTC). - The NTC.
through the exercise of its quasi-legislative and quasi-judicial powers, shall be the primary
infrastructure regulator to ensure the monitoring and implementation of this Act. The NTC
shall approve proposed ICT hub telecommunications projects through an administrative
process prescribed for the purpose and shall ensure the compliance of PTEs with the required
and committed information rate and quality of service. All PTEs shall regularly submit the
necessary data and reports as required by the NTC.

SEC. 8. Incentives. - Any registered business enterprise in the ICT hub may be granted
incentives provided under Title XIII of the National Internal Revenue Code of 1997, as
amended: Provided, That, these incentives shall be granted in addition to the incentives given
by the LGU where such ICT hubs are located.

The eligibility of the ICT hubs for the incentives provided herein should be within the
boundaries of a performance-based, time-bound, and transparent system of incentives tailor-fit


for highly desirable ICT investments and shall be subject to compliance monitoring by the
Fiscal Incentives and Review Board and the LGU _ where such ICT hubs are located.

SEC. 9. Digital Skills Development, — The DICT, together with the Department of
Education, Commission on Higher Education, and the Technical Education and Skills
Development Authority, shall establish a program on digital skills development for all learners
to enhance their competitiveness, adaptability and employability in the emerging digital
economy, which shall be integrated into the pertinent programs of the ICT hubs.

SEC. 10. Digital Network Infrastructure. — A digital network infrastructure shall be
established to connect the local ICT hubs to the National Broadband Program through a core
backbone network of the DICT, to be funded from the spectrum users’ fees.

The DICT is hereby authorized to classify the said funds for capital outlay, which
classification shall be furnished to and duly reflected by the Department of Budget and
Management in its records. The release of funds shall be subject to applicable laws and existing
budgeting, accounting and auditing rules and regulations.

SEC. 11. Local Government Responsibility. - The issuance of licenses and permits for
ICT-related activities and infrastructure construction projects shall not be delayed and
hampered, and shall further be prioritized, subject to the provisions of Republic Act No. 11032,
otherwise known as the Ease of Doing Business and Efficient Government Service Delivery
Act of 2018.

The Department of the Interior and Local Government (DILG) shall include ICT
competitiveness and ICT integration as a criterion of governance under the Seal of Good Local
Governance program.

SEC. 12. Private Sector Support and Public-Private Partnership. — The LGUs may
engage the private sector through PPP agreements targeted towards financing, designing,
implementing and operating infrastructure facilities and services for the ICT hub to maximize
costs and allow for sharing of revenue, subject to the provisions of Republic Act No. 6957,
otherwise known as “An Act Authorizing the Financing, Construction, Operation and
Maintenance of Infrastructure Projects by the Private Sector and for Other Purposes”, as
amended.

SEC. 13. Prohibition Against Exclusivity. - AI ICT hubs established under this Act are
hereby declared free zones within which any PTE may operate. Any agreement or arrangement
designating a PTE, or any of its subsidiaries or affiliates as an exclusive PTE within an ICT
hub shall be void and unenforceable. The domestic internet exchanges shall be interconnected.
The interconnection agreement between the PTEs shall be submitted to the NTC for its
approval. If the parties fail to reach an agreement within ninety (90) days from the start of
negotiation, the NTC shall intervene and prescribe the terms and conditions of the
interconnection.

SEC. 14. Penalties. — In the exercise of its quasi-judicial power, the NTC shall impose a
fine of Five hundred thousand pesos (Php500,000.00) for (a) non-disclosure, (b) non-
interconnection, or (c) non-compliance with the committed information rate and quality of
service.


The NTC shall increase the amount of fine every five (5) years subject to a certification
from the NEDA on the computation of the cost of money based on the current consumer price
index.

SEC. 15. Implementing Rules and Regulations. — Within sixty (60) days from the
effectivity of this Act, the DICT as the lead agency, together with NEDA, DILG, the League
of Provinces and the Leagues of LGUs, the Board of Investments, the Philippine Economic
Zone Authority, and the Advisory Committee, shall issue the necessary rules and regulations
for the effective implementation of this Act.

SEC. 16. ICT Joint Congressional Oversight Committee. — An \CT Joint Congressional
Oversight Committee (ICTICOC) is hereby created to monitor the effective implementation of
this Act, recommend the necessary remedial legislative or administrative measures and perform
such other duties and functions as may be necessary to attain the objectives of this Act.

It shall be composed of the Chairpersons of the House Committee on Information and
Communications Technology and Senate Committee on Science and Technology and two (2)
members from each of the Senate and the House of Representatives who shall be designated
by the Senate President and the Speaker of the House of Representatives, respectively:
Provided, That one (1) member from each House shall be nominated by their respective
Minority Leaders.

The Chairpersons of the House Committee on Information and Communications
Technology and the Senate Committee on Science and Technology shall serve as Chairperson
and Vice Chairperson or vice versa of the ICTICOC ona rotational basis every six (6)
months. The Secretariat of the ICTJCOC shall be the existing secretariat personnel of the
concerned Committees of the House of Representatives and the Senate.

SEC. 17. Separability Clause. - If any provision of this Act shall be declared
unconstitutional or invalid, the other provisions not affected shall remain in full force and
effect.

SEC. 18, Repealing Clause. — All laws, presidential decrees, executive orders, rules and
regulations or parts thereof which are inconsistent with or contrary to the provisions of this Act
are hereby amended, repealed or modified accordingly.

SEC. 19. Effectivity. ~ This Act shall take effect fifteen (15) days after its publication in
the Official Gazette or in a newspaper of general circulation.

Approved,