nuedi WF REPRESENTATIVES:
SEVENTEENTH CONGRESS Yoorer =
OF THE REPUBLIC OF THE PHILIPPINES RECEIVED

First Regular Section yoare. 71 AUG 2016
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TN
HOUSE OF REPRESENTATHVES |.)

House Bill No. 2E°7.

Introduced by Representative Victor A. Yap

EXPLANATORY NOTE

Due to increased competition and consumer choice, the Philippines has a much
improved telecommunications infrastructure that has also been developed by rapid
technological change. Landlines havebeen overtaken by mobile phones, and postpaid
telephone accounts by prepaid. Digital fiber connects the Philippines inexpensively to
the far corners of the globe. Voice over Internet Protocol (VoIP) telephone service via
computers has brought the cost of communicating on the Internet almost to zero.

Data transmission is a key factor in telecommunications, now more than ever, as
the Philippines struggles with the limitations of infrastructure, it is necessary to ensure
open access allowing every option to improve data transmission to be explored. This
measure seeks to establish a regulatory framework to develop efficient and effective
data transmission in the long term.

The bill likewise increases the powers of the National Telecommunications
Commission allowing it to promote a conducive environment for data networks and
associated industries to thrive and innovate in thus redounding, to the benefit of
Filipinos through increased information access. We acknowledge that Sen. Paolo
Benigno “Bam” Aquino filed this proposed measure in the Senate.

In view of the foregoing, the swift passage of this bill is ardently sought.

Representative, 2nd District of Tarlac


a

SEVENTEENTH CONGRESS OF THE REPUBLIC)
OF THE PHILIPPINES )
First Regular Session )

HOUSE OF REPRESENTATIVES

House Bill No. 2871

Introduced by Representative Vietor A. Yap

AN ACT
PROMOTING OPEN ACCESS IN DATA TRANSMISSION, PROVIDING
ADDITIONAL POWERS TO THE NATIONAL TELECOMMUNICATIONS
COMMISSION, AND FOR OTHER PURPOS!

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

assembled:
CHAPTER IL
TITLE AND DECLARATION OF POLICY
1 SECTION L.Title. — This Act shall be known as the “Open Access in Data Transmission

2 Act of 2016"

3 SEC. 2. Declaration of Policy. ~ It is hereby declared the policy of the State:

4 a. To ensure and accelerate the narrowing of the digital divide in the country:

5 b. To ensure that reliable, affordable, open, and accessible data networks transmit
6 information at speeds, and with quality comparable to the best in the world and
7 alignment with modern global practices;

8 c. To create an entrepreneurial ecosystem where persons who wish to engage in the
9 data transmission industry compete openly and freely in the spirit of fair competition
10 and permission-less innovation;

ul d. To encourage investment in the digital infrastructure of the country:

12 e. To protect the public interest as it is affected by its ability to access data networks;
13 f. To adopt the core values of the Open Access approach to building the country’s data
14 infrastructure, namely:

15 i, Adoption of technology-neutral framework that encourages innovative, low-
16 cost delivery to users:

7 ii, Fair and open competition at all the multiple layers of the data transmission

18 network, allowing a wide variety of physical networks and applications to


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interact in an open architecture;

iii, ‘Transparency to ensure fair trading within and between layers that allows
clear, comparative information on market prices and services;

iv. The creation of circumstances where everyone can connect to everyone else
at the various layers 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:

v. Devolved and distributed local solutions rather than centralized ones,

encouraging services that are closer to the user.

To establish a strong and independent regulatory body and system to ensure fair

competition and enhance the competitive operation of the data transmission sector;
and
To protect and promote the Internet as an open platform enabling consumer choice,

ion, and the freedom to innovate

freedom of expression, end-user control, competi
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.

a

e

Core/Backbone network ~ the main line (or 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.

Data transmission — the process of sending digital or analog data over a
communication medium to one or more computing network/s, communication or
electronic device/s. It enables the transfer and communication of devices in a point-
to-point, point-to-multipoint, and multipoint-to-multipoint environment

International gateway / landing —segment of data transmi

sion 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.

Last mile ~ segment of data transmission from the network to the end-users

Middle mile — segment of data transmission that carries data from the backhaul
network to the nearest aggregation point, then from the aggregation point to the
nearest point of presence (PoP).

National Telecommunications Commission (NTC) ~the entity defined and created
pursuant to the Public Telecommunications Policy Act (Republic Act No. 7925, as
amended).

Open Access ~ the system of allowing any data transmission participant the use of


te ———————————

data transmission and/or distributions system, and associated facilities subject to
fair, reasonable and non-discriminatory terms in a transparent market.

h. Paid prioritization ~ the management of a data transmission participant to directly

techniques such as traffic shaping. prioritization, resource reservation, zero-rati

or other forms of preferential traffic management, either: (1) in exchange for

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4 or indirectly favor some traffic over other traffic, including through use of
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affiliated entity.

9 CHAPTER I
10 DEFINITION, ORGANIZATION AND OPERATION OF THE DATA TRANSMISSION
i INDUSTRY

12 SEC.

13 transmission industry. For this purpose, any person or entity whose business deals substantially

4. Scope. ~ This applies to all persons wishing to participate in the data

14 with the transmission of data shall be governed by the provisions of this Act.

15 SEC. 5. Segments. — The data transmission industry shall be divided into four
16 segments: (a) International Gateway/Landing, (b) Core/Backbone Network, (c) Middle Mile,

17 and (d) Last Mile.

18 All four segments, involving businesses affected with public interest, shall be competitive
19 and open. Any law to the contrary notwithstanding, participants in any of the four segments shall

A person who wishes to be a participant in any of the four

20 not be considered as public utilities.
21 segments shall not be required to secure any other license, approval, franchise, or certificate

22 other than those expressly provided for in this Act.

23 A participant in any of the four segments shall, before it operates, secure from the NTC a
24 — Certificate of Compliance certifying that it has completed all that is required of it under this Act,
25 and that it has obtained all the necessary business permits and health, safety, and environmental

26 clearances from the appropriate government agencies under existing laws.

27 CHAPTER IIL
28 REGULATION OF THE DATA TRANSMISSION INDUSTRY
29 SEC. 6. Additional Powers and Functions of the NTC. ~ The NYC shall have the

30 additional powers and functions:


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Resource Allocations. - The NTC shall, upon due consultation on how to maximize
the return for the allocation of finite resources used in the transmission of data,
promulgate such rules and regulations by which it may obtain such maximum value
for every technological wave under its management.

Setting Performance Standards. - The NTC shall set and measure reporting and
performance standards for participants in the data transmission industry. Such
standards shall take into account speed, packet loss, jitter, and latency. The NTC
shall regularly publish the results of these measurements in an open data format
accessible to the general public.

Recovery of Resources. ~ If the NTC finds, on its own initiative or upon complaint,
that any right, license, or franchise granted to any data transmission industry
participant is not being used in accordance with the covenants it requires of the
person developing that resource, and upon due hearing, it may revoke the license
without the need of compensation, franchise, or right, and set the same for

acquisition by any qualified party, at auction.

7. Prohibited Acts. ~
Plug and Play. ~ Any person engaged in the data transmission industry, insofar as
such person is so engaged, shall not refuse access to infrastructure to any person

also engaged in the data transmission industry, except for failure to pay open

market fees for the access to the service.

Data transmission providers 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 before.

Paid prioritization. — A person engaged in the data transmission industry, insofar as

such person is so engaged, shall not engage in paid prioritization for monetary or
other consideration: Provided, That the NTC may waive the ban on paid

prioritization only if the participant demonstrates that the practice would provide


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some significant public interest benefit and would not disadvantage content and

applications that are not prioritized otherwise harm the open nature of the Internet.

c. Throttling, — Providers of data transmission services shall treat all traffic equally
when providing data access services without discrimination, restriction or
interference, regardless of the sender and receiver. the content accessed ot
distributed, the applications or services used or provided, or the terminal equipment

used.

The hindrance or slowing down of services or applications on the Internet by ISPs

ind network owners is prohibited. Deviation from this rule is only allowed: (a) to
reduce congestion, while treating similar traffic equally; (b) to preserve the integrity
and security of the network and service of the provider or the equipment of the end-
user - 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 give them sufficient time to

rectify the situation; (c) to block the transmission of unwanted communications

(e.g. spam) to an end-user, only if the end-user has given consent beforehand; or (d)

to comply with the law or a warrant.

d. Vertical Ownership. ~ The direct or indirect ownership of any participant of: (1)
any business engaged with any sector in the data transmission industry, except the

the last mile/retail sector

last mile/retail sector; and (2) any business engaged i
shall be considered unlawful. It shall also be considered unlawful for any data

transmission participant to own any interest, directly or indirectly, in any business

that generates revenue from content being transmitted or applications being served

over the data network.

SEC. 8. Arms-length Transactions and Transparency. ~ The NTC shall promulgate
rules requiring all data transmission industry participants to include in their annual report a fair

and accurate statement regarding their market prices and their services

SEC. 9. Fair competition. — (a) The Philippine Competition Commission (PCC) and
the NTC shall ensure that for those providing services at any given layer, there are at least two

significant providers: and (b) when there are less than four significant providers of any particular

service, the PCC and the OFC should serutinize any act made by the remaining providers for

anti-competitive behavior under the Philippine Competition Act.


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CHAPTER VI
PENALTIES,

SEC. 10. Administrative Penalties. — A data transm

sion industry participant violating

sued to it that

any provision of this Act shall forfeit all certificates, licenses, rights, and awards

enables its participation in the data transmission industry.

SI

11, Adjustment for Inflation, — The fines mentioned herein shall be adjusted, year-

on-year, according to the prevailing Consumer Price Index.

CHAPTER VIL
FINAL PROVISIONS

SEC. 12. Technological Neutrality. ~The NVC 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. 13. Expedited Processing. — In all instances where a participant in the data

transmission industry shall require a form, certificate, or request, there should be no more than

two public officers involved in processing the form, certificate, or request.

SEC. 14. Implementing Rules and Regulations. — Within sixty (60) days from the
effectivity of this Act, the NTC shall promulgate the necessary rules and regulations for the

effective implementation of this Act.

SEC. 15. Separability Clause. —Should any provision herein be declared

unconstitutional, the same shall not affect the validity of the other provisions of this Act.

SEC. 16. Repealing Clause. — All 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. 18. Effectivity. — This Act shall take effect fifteen (15) days after its publication in

the Official Gazette or in any two (2) newspapers of general circulation in the Philippines.

Approved,