Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

18TH CONGRESS
First Regular Session
990,

HOUSE BILL NO.

Introduced by Representative MICHAEL L. ROMERO

EXPLANATORY NOTE

In the Republic of the Philippines, it’s a common practice among all
telecommunications company (service providers) to charge and collect advance
monthly service fees, other monthly recurring fees and handset cost upen u.e
availment of a postpaid plan (contract).

However this billing scheme proves to be deceiving and misleading the actual
charges that a subscriber is consummating on a monthly basis.

The Statement of Account (SOA) itself is an important component of the services
which acts as an envoy of the service provider and serves an evidence of the
service itself.

This House Bill seeks to uphold the ,.otection and interests of the consumer,
foster general welfare and to establish fair standards of conduct for all business
and industry.

‘Towards this end, the State shall implement measures to achieve these noble
objectives.

‘Yhus, the early %Ssage of this bill is earnestly requested.

MXCHAEL L. ROMERO Ph.D.


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

18TH CONGRESS
First Regular Session

HOUSE BILL No, 999

Introduced by Representative MICHAEL L. ROMERO

AN ACT

PROHIBITING ALL TELECOMMUNICATIONS COMPANY (SERVICE
PROVIDER) TO CHARGE AND COLLECT ADVANCE MONTHLY
SERVICE FEES / MONTHLY RECURRING FEES / HANDSET
COSTS FROM ALL SUBSCRIBERS AVAiLING FOR A POSTPAID
SUBSCRIPTION, TO PROMOTE CONSUMER PROTECTION UNDER
ITS SERVICE CONTRACT, PROVIDING PENALTIES AND
SANCTIONS, AND FOR OTHER PURPOSES

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

SECTION 1. DECLARATION OF POLICY - it is hereby declared a policy
of the state to:

a. Foster the interests of the consumers;

b. Promote the general we.‘are and create justifiable standards of protocol
for all business and industries;

c. Protect the consumer against all forms of deception, unfair and
unethical practices and schemes;

d. Uphold the proper implementation of the rights of the consumer; and


e. Hasten the imposition of all existing policies and guidelines of RA7394
(Consumer act of the Philippines).

SECTION 2. DEFINITION OF TERMS:

Monthly Service Fee - A type of fee collected to pay for services related to the
primary product or service being purchased on a monthly basis.

Service fees are often levied when human interaction between a consumer and
the company is involved, with services beyond the physical good itself considered
extra, Service charges go by a number of different names depending on the
industry, including booking fees (hotels), security fees (travel), maintenance fees
(banking) and customer service fees.

Monthly Recurring Fee - Recurring fee is when a merchant automatically
charges a subscriber for specified goods or services on a prearranged schedule.
Recurring fees requires the merchant to get the subscribers permission one time

up front for recurring charges, then continues with scheduled charges until the
subscriber withdraws permission.

Any goods or services that a customer purchases repeatedly and regularly might
be a good candidate for recurring billing. (cell phone bills, membership fees and
utility bills).

Handset Cost - handset repayments that are charged per month to cover
the cost of your device over time, amortized evenly.

SECTION 3. PROHIBITING THE CHARGIi.G AND COLLECTION OF
ADVANCE MONTHLY SERVICE FEES / MONTHLY RECURRING FEES /
HANDSET COSTS:

a. All telecommunications company / service provider shall be prohibited
from charging and collecting advance monthly service fees, monthly
recurring fees and handset costs from all subscribers availing for a
postpaid contract/ subscription; and


b. This prohibition shall apply to all postpaid subscriptions under a
service contract, regardless of the duration of its contract;

c. This prohibition shall apply regardless of a handset bundle or not.

SECTION 4. PENALTIES AND SANCTIONS:
For every violation of this act; or for very failure to comply with;

The Telecommunications company /Service provider shall pay a fine of not less
than Two hundred thousand pesos (P200,000.00) for the first offense; a fine of
not less than Five hundred thousand pesos (P500,000.00) for the second

oifense,
In case of subsequent offenses;

The penalty shall be a fine of not less than One million pesos (P1,000,000.06),

and revocation of the franchise to operate.

SECTION 5. TRANSITORY PROVISION - Existing industries, businesses
and offices affected by the impiementaticn of this Act shall be given six (6)
months transitory period from the effectivity of the IRR or such other

period as may be determined, to comply with the requirements of this Act.

SECTION 6. IMPLEMENTING RULES AND REGULATIONS - The
departments and agencies charged, to be led by the Bureau of
Communication Services (BCS) of the PCOO, Department of Trade and
Industry (DTI), Department of Information and Communications
Technology (DICT) and the National Telecommunication Commission
(NTC) with carrying out the provisions of this Act, shall within sixty (60)
days after the effectivity of this Act, formulate the necessary rules and
regulations for its effective implementation.


SECTION 7. REPEALING CLAUSE - All laws, decrees, executive orders,
rules and regulations, or parts thereof inconsistent with the provisions of

this Act are hereby repealed or modified accordingly.

SECTION 8. SEPARABILITY CLAUSE - If, for any reason, any section or
provision of this Act is held unconstitutional or invalid, the other sections
or provisions hereof shall not be affected thereby.

SECTION 9, EFFECTIVITY CLAUSE - This Act shall take effect after
fifteen (15) days from its publication in the Official Gazette or in at least

two (2) national newspapers of general circulation whichever comes earlier.

Approved,