REPUBLIC
ACT NO.7925
March 1, 1995
AN ACT TO PROMOTE AND GOVERN THE DEVELOPMENT OF
PHILIPPINE TELECOMMUNICATIONS AND THE DELIVERY OF PUBLIC TELECOMMUNlCATIONS
SERVICES
ARTICLE I. GENERAL PROVISIONS
Sec. 1. Short Title. This Act shall be known as the “Public
Telecommunications Policy Act of the Philippines.”
Sec. 2. Scope and Application. This Act shall apply to all
public telecommunications entities in the Philippines.
Sec. 3. Definitions and Interpretations. For purposes of
this Act, the following terms shall be used:
a) Telecommunications any process
which enables a telecommunications entity to relay and receive voice, data,
electronic messages, written or printed matter, fixed or moving pictures,
words, music or visible or audible signals or any control signals of any design
and for any purpose by wire, radio or other electromagnetic, spectral, optical
or technological means.
b) Public telecommunications entity any person, firm, partnership or
corporation, government or private, engaged in the provision of
telecommunications services to the public for compensation.
c) Broadcasting an undertaking the object of which is to transmit
over-the-air commercial radio or television messages for reception of a broad
audience in a geographic area.
d) Franchise a privilege conferred upon a telecommunications entity
by Congress, authorizing that entity to engage in a. certain type of telecommunications
service.
e) Local
exchange operator an entity providing transmission and switching of
telecommunications services, primarily but not limited to voice-to-voice
service, in a geographic area anywhere in the Philippines.
f) Inter-exchange carrier an
entity, sometimes referred to as carrier’s carrier or national backbone network
operator, authorized to install, own and operate facilities which connect local
exchanges within the Philippines and to engage in the business of inter-exchange
national long distance services.
g) International carrier an entity primarily engaged in the business
of providing transmission and switching of any telecommunications service
between the Philippines and any other point of the world to which it has an existing
corresponding or prospective interconnection agreements..
h) Value-added service provider (VAS) an entity which, relying on
the transmission, switching and local distribution facilities of the local
exchange and inter-exchange operators, and overseas carriers, offers enhanced
services beyond those ordinarily provided for by such carriers.
i) Public toll calling station a non-exclusive facility at which the
public may, by the payment of appropriate fees, place as well as receive
telephone calls and/or telegrams or other messages.
j) Mobile radio telephone system a 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.
k) Interconnection the linkage, by wire, radio, satellite or other
means, of two or more existing telecommunications carriers or operators with
one another for the purpose of allowing or enabling the subscribers of one
carrier or operator to access or reach the subscribers of the other carriers or
operators.
ARTICLE II. POLICY AND OBJECTIVES
Sec. 4. Declaration of National Policy. Telecommunications
is essential to the economic development, integrity and security of the
Philippines, and as such shall be developed and administered as to safeguard,
enrich and strengthen the economic, cultural, social and political fabric of
the Philippines. The growth and development of telecommunications services
shall be pursued in accordance with the following policies:
a) A fundamental objective of
government is to develop and maintain a viable, efficient, reliable and
universal telecommunication infrastructure using the best available and
affordable technologies, as a vital tool to nation building and development;
b) The expansion of the
telecommunications network shall give priority to improving and extending basic
services to areas not yet served. For this purpose, government shall promote a
fair, efficient and responsive market to stimulate the growth and development
of the telecommunications facilities and services, with emphasis on the
accessibility by persons to basic services in unserved and underserved areas at
affordable rates;
c) The radio frequency spectrum is
a scarce public resource that shall be administered in the public interest and
in accordance with international agreements and conventions to which the
Philippines is a party and granted to the best qualified. The government shall
allocate the spectrum to service providers who will use it efficiently and
effectively to meet public demand for telecommunications service and may avail
of new and cost effective technologies in the use of methods for its
utilization;
d) Rates and tariff charges shall
be fair, just and reasonable and for this purpose, the regulatory body shall
develop tariff structures based on socioeconomic factors and on financial,
technical and commercial criteria as measures to ensure a fair rate of return and
as a tool to ensure economic and social development;
e) Public telecommunications
services shall be provided by private enterprises. The private sector shall be
the engine of rapid and efficient growth in the telecommunications industry;
f) A healthy competitive
environment shall be fostered, one in which telecommunications carriers are
free to make business decisions and to interact with one another in providing
telecommunications services, with the end in view of encouraging their
financial viability while maintaining affordable rates;
g) A fair and reasonable
interconnection of facilities of authorized public network operators and other
providers of telecommunications services is necessary in order to achieve a
viable, efficient, reliable and universal telecommunications services;
h) The government shall give all
the assistance and encouragement to Philippine international carriers in order
to establish interconnection with other countries so as to provide access to
international communications highways on a competitive basis;
i) For efficiency, practicability,
and convenience, but with due regard to the observance of due process at all
times, regulation of telecommunications entities shall rely principally on an
administrative process that is stable, transparent and fair, giving due
emphasis to technical, legal, economic and financial considerations;
j) No single franchise shall
authorize an entity to engage in both telecommunications and broadcasting,
either through the airwaves or by cable;
k) Ownership of public
telecommunications entities to as wide a number of people as possible,
preferably to its customers, in order to encourage efficiency and public
accountability and to tap personal savings shall be encouraged;
l) The development of a domestic
telecommunications manufacturing industry to meet the needs of the Philippines
and to take advantage of export opportunities shall be promoted without
preventing, deterring or hampering the goal of full universal service; and
m) Human resources skills and
capabilities must be harnessed and improved to sustain the growth and the
development of telecommunications under a fast changing telecommunications
environment.
ARTICLE III. ADMINISTRATION
Sec. 5.Responsibilities of the National Telecommunications
Commission. The National Telecommunications Commission (Commission) shall be
the principal administrator of this Act and as such shall take the necessary
measures to implement the policies and objectives set forth in this Act.
Accordingly, in addition to its existing functions, the Commission shall be
responsible for the following;
a) Adopt an administrative process
which would facilitate the entry of qualified service providers and adopt a
pricing policy which would generate sufficient returns to encourage them to
provide basic telecommunications services in unserved and underserved areas;
b) Ensure quality, safety,
reliability, security compatibility and inter-operability of telecommunications
facilities and services in conformity with standards and specifications set by
international radio and telecommunications organizations to which the
Philippines is a signatory;
c) Mandate a fair and reasonable
interconnection of facilities of authorized public network operators and other
providers of telecommunications services through appropriate modalities of
interconnection and at a reasonable and fair level of charges, which make
provision for the cross subsidy to unprofitable local exchange service areas so
as to promote telephone density and provide the most extensive access to basic
telecommunications services available at affordable rates to the public.
d) Foster fair and efficient
market conduct through, but not limited to, the protection of
telecommunications entities from unfair trade practices of other carriers;
e) Promote consumers welfare by
facilitating access to telecommunications services whose infrastructure and
network must be geared towards the needs of individual and business users;
f) Protect consumers against
misuse of a telecommunications entity’s monopoly or quasi-monopolistic powers
by, but not limited to, the investigation of complaints and exacting compliance
with service standards from such entity; and
g) In the exercise of its
regulatory powers, continue to impose such fees and charges as may be necessary
to cover reasonable costs and expenses for the regulation and supervision of
the operations of telecommunications entities.
Sec. 6. Responsibilities of and Limitations to Department
Powers. The Department of Transportation and Communications (Department) shall
not exercise any power which will tend to influence or effect a review or a
modification of the Commission’s quasi-judicial functions.
In coordination with the Commission, however, the Department
shall, in accordance with the policies enunciated in this Act, be responsible
for:
a) the development and maintenance
of a long-term strategic national development plan for telecommunications to
serve as a guide to the industry and potential investors as well as to the
Commission;
b) the coordination of research
and development activities in government with the work of other institutions in
the field of telecommunications;
c) the representation and
promotion of Philippine interests in international bodies, and the negotiation
of the nation’s rights and obligations
ARTICLE IV. TELECOMMUNICATIONS ENTITIES
Sec 7. Categories of Telecommunications Entities. A
telecommunications entity shall be authorized to operate in one or more of the
telecommunications categories mentioned in this Act provided each category is
covered by its franchise.
Sec. 8. Local Exchange Operator. A local exchange operator
shall:
a) provide universal basic
telephone service to all subscribers who applied for such service, within a
reasonable period and at such standards as may be prescribed by the Commission
and at such tariff as to sufficiently give it a fair return on its investments.
b) be protected from uncompensated
by pass or overlapping operations of other telecommunications entities in need
of physical links or connections to its customers in the area except when it is
unable to provide, within a reasonable period of time and at desired standard,
the interconnection arrangements required by such entities.
c) have the first option to
provide pay telephone services or public calling stations in the area covered
by its network.
d) be entitled to a fair and
equitable revenue sharing arrangement with the inter-exchange carrier or such
other carriers connected to its basic network.
Sec. 9. Inter-Exchange Carrier. The number of entities
allowed to provide inter-exchange national long distance services may be
limited, but as a maffer of policy, where it is economically viable, at least
two (2) carriers, shall be authorized: Provided, however, That a local exchange
carrier shall not be restricted from operating its own inter-exchange carrier
service if its viability is dependent thereto. Such inter-exchange carrier
shall have the following obligations:
a) It shall interconnect with
other networks in the same category and with local exchange carriers or other
telecommunications entities, upon application and within a reasonable time period,
and under fair and reasonable level of charges, in order that domestic and
international long distance services are made possible; and
b) It shall have the right to
establish and operate its own tandem switching facilities to which
international calls or overseas carriers have to course their messages or
signals.
Sec. 10.
International Carrier. Only entities which will provide local exchange
services and can demonstrably show technical and financial capability to
install and operate an international gateway facility shall be allowed to
operate as an international carrier.
The entity so allowed shall be required to produce a firm
correspondent or interconnection relationships with major overseas
telecommunications authorities or carriers within one (1) year from the grant
of the authority.
The international
carrier shall also comply with its obligation to provide the local exchange
service in unserved or underserved areas within three (3) years from the grant
of the authority as required by existing regulations: Provided, however, That
said carrier shall be deemed to have complied with the said obligation in the
event it allows an affiliate thereof to assume such obligation and who complies
therewith.
Failure to comply
with the above obligations shall be a cause to cancel its authority or permit
to operate as an international carrier.
Sec. 11.
Vall4e-added Service Provider. Provided that it does not put up its own
network, a VAS provider need not secure a franchise. A VAS provider shall be
allowed to competitively offer its services and/or expertise, and lease or rent
telecommunications equipment and facilities necessary to provide such
specialized services, in the domestic and/or international market in accordance
with network compatibility.
Telecommunications entities may provide VAS, subject to the
additional requirements that:
a) prior approval of the
Commission is secured to ensure that such VAS offerings are not
cross-subsidized from the proceeds of their utility operations;
b) other providers of VAS are not
discriminated against in rates nor denied equitable access to their facilities;
and
c) separate books of accounts are
maintained for the VAS.
Sec. 12. Mobile
Radio Services. In a local telephone exchange area, more than one duly
enfranchised provider of mobile radio services, distinct and separate from the
local exchange carrier, may be allowed to operate. However, such entities shall
secure prior authority from the Commission and, in addition, comply with the
conditions imposed on VAS and with the norms on radio frequency spectrum
utilization.
The operator of a mobile radio telephone system shall comply
with its obligations to provide local exchange service in unserved and
underserved areas in accordance with existing regulations. Failure to comply
with this obligation within three (3) years from the grant of the authority
shall be a cause to cancel its authority or permit to operate a mobile radio
telephone system.
Sec. 13. Radio
Paging Services. Duly enfranchised radio paging services involving either voice
or data messages, shall be allowed to compete freely in rates, number of
operators, or variety of operating modalities, subject only to the norms on
radio frequency spectrum utilization.
ARTICLE V. OTHER SERVICES AND FACILITIES
Sec. 14. Customer
Premises Equipment. Telecommunications subscribers shall be allowed to use
within their premises terminal equipment, such as telephone, PABX, facsimile,
data, record, message and other special-purpose or multi-function
telecommunication terminal equipment intended for such connection: Provided,
That the equipment is type-approved by the Commission,
Sec. 15. Radio
Frequency Spectri4m. The radio frequency spectrum allocation and assignment
shall be subject to periodic review. The use thereof shall be subject to
reasonable spectrum user fees. Where demand for specific frequencies exceed
availability, the Commission shall hold open tenders for the same and ensure
wider access to this limited resource.
ARTICLE VI. FRANCHISE, RATES AND REVENUE DETERMINATION
Sec 16. Franchise.
No person shall commence or conduct the business of being a public
telecommunications entity without first obtaining a franchise.
The Commission, in granting a Certificate of Public
Convenience and Necessity (CPCN), may impose such conditions as to duration and
termination of the privilege, concession, or standard or technical aspects of
the equipment, rates, or service, not contrary to the terms of the franchise.
In no case, however, shall the CPCN be shorter than five (5) years, nor longer
than the life of the franchise. A CPCN expiring at the same time as the
franchise shall be deemed to have been renewed for the same term if the
franchise itself is also renewed or extended.
Expansion and financing of network and services, utilizing
equipment compatible with or homologous to existing or previously approved
plant and facilities in order to service additional demand in the same areas
where the previously approved network and services have been installed, shall
not require any approval by the Commission.
The upgrading of existing plant and network facilities
including the financing thereof, for the purpose of retiring or replacing
obsolete or outmoded equipment with state of the art equipment and technology
in order to improve the quality or grade of service being rendered to the
public within the same areas covered by the existing plant and facilities previously
approved, shall likewise not require the approval of The Commission.
The Commission, however, shall not grant a subsequent CPCN
for another segment of service or extend the area service coverage of an entity
which has failed to satisfactorily comply with its commitments to the
Commission to provide a particular service in the original area coverage under
an earlier authorization.
Sec. 17. Rates and
Tariffs. The Commission shall establish fair return on their investments
considering the prevailing cost of capital in the domestic and international
markets.
The Commission shall exempt any specific telecommunications
service from its rate or tariff regulations if the service has sufficient
competition to ensure fair and reasonable rates or tariffs. The Commission
shall, however, retain its residual powers to regulate rates or tariffs when
ruinous competition results or when a monopoly or a cartel or combination in
restraint of free competition exists and the rates or tariffs are distorted or
unable to function freely and the public is adversely affected. In such cases,
the Commission shall either establish a floor or ceiling on the rates or
tariffs.
Sec. 18. Access
Charge Revenue Sharing. The access charge/revenue sharing arrangements between
all interconnecting carriers shall be negotiated between the parties and the
agreement between the parties shall be submitted to the Commission. In the
event the parties fail to agree thereon within a reasonable period of time, the
dispute shall be submitted to the Commission for resolution.
In adopting or approving an access charge formula or revenue
sharing agreement between two or more carriers, particularly, but not limited
to a local exchange, interconnecting with a mobile radio, inter-exchange long
distance carrier, or international carrier, the Commission shall ensure equity,
reciprocity and fairness among the parties concerned. In so approving the rates
for interconnection between the telecommunications carriers, the Commission
shall take into consideration the costs of the facilities needed to complete
the interconnection, the need to provide the cross-subsidy to local exchange
carriers to enable them to fulfill the primary national objective of increasing
telephone density in the country and assure a rate of return on the total local
exchange network investment that is at parity with those earned by other
segments of the telecommunications industry: Provided, That international
carriers and mobile radio operators which are mandated to provide local
exchange services, shall not be exempt from the requirement to provide the
cross-subsidy, when they interconnect with the local exchanges of other
carriers: Provided further That the local exchanges which they will
additionally operate, shall equally be entitled to the cross-subsidy from other
international carriers, mobile radio operators, or inter-exchange carriers
interconnecting with them.
Sec. 19. Uniform
System of Accounts. The Commission shall require telecommunications entities to
set up a uniform system of accounts which shall be one of the bases in
establishing rates and tariffs. Where a single entity spans more than one
category of telecommunications service, a separate book of accounts shall be
maintained for each category or specialized classification.
ARTICLE VII. RIGHTS OF TELECOMMUNICATIONS USERS
Sec. 20. Rights of
End-Users. The user of telecommunications service shall have the following
basic rights:
a) Entitlement of utility service
which is non-discriminatory, reliable and conforming with minimum standards set
by the Commission;
b) Right to be given the first
single-line telephone connection or the first party-line connection within two
(2) months of application for service, against deposit; or within three (3)
months after targeted commencement of service in the barangay concerned per the
original schedule of service expansion approved by the Commission, whichever
deadline comes later;
c) Regular, timely and accurate
billing, courteous and efficient service at utility business offices and by
utility company personnel; and
d) Thorough and prompt
investigation of, and action upon complaints. The utility shall endeavor to allow
complaints to be received over the telephone and shall keep a record of all
written or phoned-in complaints.
ARTICLE VIII.
TELECOMMUNICATIONS DEVELOPMENT
Sec. 21. Public
ownership. In compliance with the Constitutional mandate to democratize ownership
of public utilities, all telecommunications entities with regulated types of
services shall make a bona fide public offering through the stock exchanges of
at least thirty percent (30%) of its aggregate common stocks within a period of
five (5) years from effectivity of this Act or the entity’s first start of
commercial operations, whichever date is later. The public offering shall
comply with the rules and regulations of the Securities and Exchange
Commission.
Sec. 22.
Privatization of Existing Facilities. The Department shall, within three
(3) years from effectivity of this Act, privatize all telecommunications
facilities currently owned and/or operated by the government for public use,
plus those facilities currently being planned under various bilateral funding
arrangements. Unless otherwise authorized by law, privatization of
telecommunications facilities as well as construction of telephone
infrastructure shall be made through public bidding.
Sec. 23. Equality
of Treatment in the Telecommunications Industry. Any advantage, favor,
privilege, exemption, or immunity granted under existing franchises, or may
hereafter be granted, shall ipso facto become part of previously granted
telecommunications franchises and shall be accorded immediately and
unconditionally to the grantees of such franchises: Provided, however, That the
foregoing shall neither apply to nor affect provisions of telecommunications
franchises concerning territory covered by the franchise, the life span of the
franchise, or the type of service authorized by the franchise.
ARTICLE IX. FINAL PROVISIONS
Sec. 24.
Transitory Provision. All telecommunications services deregulated hereby
and which are operating at the effectivity of this Act, may continue to have
their rates and tariffs approved by the Commission until the end of the
calendar year of the effectivity of this Act.
Existing franchises that are not operating or without
pending applications for certificates of public convenience at the time of
effectivity of this Act are deemed revoked.
All interconnection agreements previously entered into
between telecommunications carriers shall remain in full force and effect but
the parties shall, within six (6) months from the effectivity of this Act,
review their access charging/revenue sharing formula and submit to the
Commission an amendment thereof if necessary, in order to comply with the
guidelines on the access charging/revenue sharing formula contained in Section
18 of this Act.
Sec. 25.
Separability Clause. Any portion or provisions of this Act that may be
declared unconstitutional or invalid shall not have the effect of nullifying
other portions or provisions hereof as long as such remaining portions or
provisions can still subsist and be given effect in their entirety.
Sec. 26. Repealing
Clause. Ml laws, ordinances, rules, regulations, and other issuances or parts
thereof which are inconsistent with this Act are hereby repealed or modified
accordingly.
Sec. 27.
Effectivity Clause. This Act shall take effect fifteen (15) days from
the date of its publication in at least two (2) newspapers of general circulation.
Approved,
EDGARDO J. ANGARA
President of the Senate
JOSE DE VENECIA, JR
Speaker of the House of Representatives
This Act is a consolidation of Senate Bill No.11 and House
Bill No.14028 was finally passed by the Senate and the House of Representatives
on February 20, 1995.
EDGARDO E. TUMANGAN - Secretary of the Senate
CAMILO L. SABIO- Secretary General/House of Representatives
Approved: March 1, 1995
FIDEL V. RAMOS - President of the Philippines