SEVENTEENTH CONGRESS OF THE ) ~ .

REPUBLIC OF THE PHILIPPINES ) 18 MAR 21
Second Regular Session )
RECEN 7 y, ~
SENATE
S.No._1763

(In Substitution of Senate Bill Nos. 171, 1644 and House Bill No. 6557)

Prepared by the Committee on Science and Technology joint with the Committee on Public
Services with Senators Aquino IV and Gatchalian, as authors thereof.

AN ACT
PROMOTING OPEN ACCESS IN DATA TRANSMISSION, PROVIDING
ADDITIONAL POWERS TO THE NATIONAL TELECOMMUNICATIONS
COMMISSION, AND FOR OTHER PURPOSES
Be it enacted by the Senate and House of Representatives of the Philippines in

Congress assembled:
1 CHAPTER I
2 INTRODUCTORY PROVISIONS
3 Section 1. Short Title. — This Act shall be known as the “Open Access in Data

4 Transmission Act.”

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

12 a. Promote the construction and development of reliable, affordable, open
13 and accessible data networks that transmit information at speed and quality comparable
14 _ 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;

c encourage investment in the digital infrastructure of the country;

d. adopt and ensure open access in the regulation of the data transmission
industry;

e Protect the public interest as it is affected by its ability to access data
networks;

f. establish a strong and independent regulatory body and system to ensure
and enhance fair competition in the data transmission industry; 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, the following terms shall

mean:

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;

CG Content refers to, among others, texts, images, audios, videos, and
animations that are carried over the broadband or internet network;

d. Core/Backbone Network refers to the main line or connection including
international connection that ties networks, delivers routes to exchange information
among various sub-networks, connects regional distribution networks, and in some
instances, provides connectivity to other peer networks;



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e. Data Transmission refers to the process of sending digital or digitized
analog signal over a communication medium to one or more computing networks,
communication or electronic device. It enables the transfer and communication of
devices in a point-to-point, point-to-multipoint and —multipoint-to-multipoint
environment. 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,

g. 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;

A 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;

j 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
non-discriminatory terms in a transparent market;

kK 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;

m. Voice over Internet Protocol (VoIP) Service refers to the provision of voice
communication using Internet Protocol (IP) technology.

CHAPTER II

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ORGANIZATION AND OPERATION OF THE DATA TRANSMISSION INDUSTRY

Sec. 4. Scope. —This Act applies to all duly qualified persons who participate in
the data transmission industry subject to domestic regulations and existing laws. 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, inter-exchange 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 interconnection to their networks
that they extend to data transmission industry participants.

Sec. 5. Segments. — The data transmission industry shall be divided into four
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. Notwithstanding the
provisions of this Act or any other law, data transmission industry participants in any of
the four (4) segments shall not be required to secure a Certificate of Public
Convenience and Necessity (CPCN) or Provisional Authority (PA) from the National
Telecommunications Commission (NTC), or a congressional franchise, 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 from the NTC for the
data transmission services they provide to the general public. ISPs and value-added
service (VAS) providers that offer data services only shall be allowed to build and
Operate their own network. Notwithstanding the provisions of this Act or any other law,
no congressional franchise or PA from the NTC shall be required for the acquisition and
operation of a satellite or the sale or lease of satellite capacity within the Philippines.
Participants in the data transmission industry shall, without need of congressional
franchise or PA from the NTC, have direct access to any satellite with a Philippine



footprint. 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 schedule 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 adopt and ensure that the data transmission industry
remains open and accessible to all qualified participants. Specifically, the NTC 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;

om promote fair and open competition in all the segments 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 ones, encouraging services that are closer to the user;

g. publish the list of registered data transmission industry participants at
least once a year;

h. promulgate, together with the PCC, rules defining and regulating entities
with substantial market power; and



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i, publish a spectrum management framework to be developed together
with the Department of Information and Communications Technology (DICT) and the
PCC.

Sec. 7. Spectrum Allocation and Assignment. — The NTC shall maximize
the allocation and assignment of finite radio spectrum resources used in the
transmission of data by ensuring that spectrum is made available for the use of all
registered data transmission industry participants. To this end:

a. the procedure for radio spectrum allocation, re-allocation, assignment, re-
assignment, re-classification, joint use or co-use, and recall shall be made transparent
to the public. All applications, including letter-requests, allocation, re-allocation,
assignment, re-assignment, re-classification, joint use or co-use, and recall 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 allocation, re-allocation, assignment, re-assignment, re-
Classification, joint use or co-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 allocation, re-allocation, assignment, re-assignment,
re-classification, joint use or co-use, and recall. The NTC shall not allocate, reallocate,
assign, reassign, reclassify, allow joint use or co-use, or recall 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 spectrum, radio frequency allocation, re-allocation, assignment,
re-assignment, re-classification, joint use or co-use, and recall 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) shall not apply to applications
for frequency assignments for fixed point-to-point radio links, Wi-Fi and satellite
networks;

c. the NTC shall ensure that the allocation, re-allocation, assignment, re-
assignment, re-classification, joint use or co-use, and recall of spectrum does not result
in the concentration of spectrum resources which promote, establish, or perpetuate the

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significant market power of PTEs or of only a limited number of participants. In
instances where the resulting assignment of spectrum for mobile and point-to-
multipoint networks will give an assignee or entities it controls, jointly or singly, or
under common control, either by virtue of that request or in combination with other
Previous requests by that party or its affiliates, fifteen percent (15%) or above of
assignable spectrum in the same band, the party requesting for an assignment of
spectrum or a joint use of spectrum shall be required to serve notice to the Philippine
Competition Commission (PCC) and secure a no-objection notice from the PCC. The PCC
shall issue a no-objection notice within thirty (30) working-days upon its receipt of
pertinent information necessary for the review and issuance of the notice: Provided,
That PCC may once extend such period for an additional fifteen (15) working-days upon
their notification of the NTC and the concerned party or parties to a spectrum
allocation, re-allocation, assignment, re-assignment, re-classification, joint use or co-
use, and recall. Any person or 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
PCC to determine the dominance of a data transmission industry participant and act on
anti-competitive conduct in accordance with its mandate under Republic Act No. 10667,
otherwise known as the Philippine Competition Act;

d. 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; and

e 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.

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 two megabits per second (2

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Mbps) or as mandated by the National Broadband Plan, whichever is higher, for mobile
broadband and for fixed and 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 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 non-
compliance; and

f. 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 online 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 NTC’s website and to any person who
requests the same, upon written request; and

b. 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 venues to the

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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 will 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.

Sec. 10. Fair Competition. — The PCC and the NTC shall ensure that the
principles and policies enshrined under Republic Act No. 10667, are strictly adhered to
in the data transmission industry. The PCC and NTC shall ensure that all industry
players shall observe fair, reasonable and non-discriminatory treatment in all their
dealings, and that barriers to entry are eliminated to make the industry highly
competitive. To this end, the PCC and NTC shall foster and develop interagency
cooperation mechanisms, including information-sharing tools, that will guide them in
the performance of their respective mandates, and in the promotion of fair competition
in the data transmission industry.

Sec. 11. Technological Neutrality. — The NTC shall promulgate the
necessary rules and regulations to ensure that the provisions of this law apply, mutatis
mutandis, to ensure that the provisions herein apply to future technologies in data

transmission.

Sec. 12. Expedited Processing. — \n all instances where a participant in 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 LGUs and national government agencies 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.

CHAPTER IV
PROHIBITED ACTS

Sec. 13. Prohibited Acts. —The following acts shall be prohibited:



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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 industry participant 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 participants demonstrates that the practice would provide
significant public interest benefit and will not disadvantage content and applications
that are not prioritized nor otherwise harm the open nature of the Internet.

c Throttling — Data transmission industry participants 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 on the internet except
where (a) access to such sites, services or applications are prohibited by law; (b) it is
necessary to preserve the integrity and security of the provider and 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 provide the
end-user sufficient time to rectify the situation; or (c) it is necessary to block the
transmission of unwanted communications to an end-user, on the application or
complaint of the end-user or the data transmission industry participant, and upon lawful
order of the court.

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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 fail to make available, on a timely basis, to suppliers of data
transmission services, technical information about its essential facilities or network
facilities and commercially relevant information that are necessary for them to provide

services.

€.  Anti-competitive Cross-subsidization - The NTC shall require separate
books of account between different data transmission segments in order to allow
identification of costs and revenues for each segment. Any violation of this provision
shall give rise to a presumption of anti-competitive cross-subsidization, which shall then
be referred to the PCC for proper determination and action, in accordance with the
provisions of Republic Act No. 10667. Nothing herein shall prevent interconnecting
networks from charging the appropriate cost-based compensation for the use of
interconnect facilities.

CHAPTER V
PENALTIES

Sec. 14. Administrative Penalties. —The NTC shall require data transmission
industry participants and PTEs providing data transmission services to comply with the
prescribed performance standards and shall impose penalties for failure to comply with
such performance standards.

a. Any data transmission industry participant that engages in the prohibited
acts under Section 13 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 (Php 300,000.00) but not more than Five Million Pesos (Php
5,000,000.00) 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, (10,000,000.00), the penalty that may
be imposed shall be equivalent to one percent (1%) to two percent (2%) of its gross
annual income. In cases of anti-competitive cross-subsidization, which is prohibited
under Section 13 (e) of this Act, the imposable penalties are those provided for under
Republic Act No. 10667. The NTC is hereby authorized and empowered to impose such
fine, after due notice and hearing.



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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.

c 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.

d. Any other violations of this Act shall be sanctioned with a fine of not less
than Fifty Thousand Pesos (Php 50,000.00) and but not more than Two Million Pesos
(Php 2,000,000.00).

Sec. 15. Adjustment for Inflation. — The fines imposed under this Act shall
be adjusted by the NTC, year-on-year, considering the prevailing cost of money based
‘on the current consumer price index, and subject to publication of such adjustments.

CHAPTER VI

RIGHTS OF DATA TRANSMISSION SERVICE USERS AND RESPONSIBILITIES
OF DATA TRANSMISSION SERVICE PROVIDERS

Sec. 16. Rights of End-Users. — The user of data transmission services shall
have the following basic rights:

a. entitlement of data transmission service which is non-discriminatory,
reliable, and conforming with minimum standards as provided by the appropriate
national government agencies;

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

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any means convenient to the end-user, including voice calls, post, short messaging
service (SMS), multi-media 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 fees or charges 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 VII
FINAL PROVISIONS

Sec. 17. 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 (JCOCOADT) 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
or bloc.

The Chairperson 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 Vice co-Chairpersons.

The Secretariat of the JCOCOADT shall come from the existing Secretariat
Personnel of the Senate Committee on Science and Technology and the House of



Representatives Committee on Information and Communications Technology. The
JCOCOADT shall have its own independent counsel.

The JCOCOADT shall exist for the 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. 18. Implementing Rules and Regulations. —Within sixty (60) days
from the effectivity of this Act, the Department on Information and Communications
Technology (DICT), in coordination with the National Telecommunications Commission
(NTC) and the Philippine Competition Commission (PCC), and other relevant
government agencies, shall promulgate the necessary rules and regulations for the
effective implementation of this Act.

Sec. 19. Separability Clause. —Should any provision herein be declared
unconstitutional, the same shall not affect the validity of the other provisions of this Act.

Sec. 20. Repealing Clause. —A\\ laws, decrees, orders, rules, and regulations
or other issuances or parts inconsistent with the provisions of this Act are hereby
repealed 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 in the
Philippines.

Approved,