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A collection of Philippine laws, statutes and codes
not included or cited in the main indices
of the Chan Robles Virtual Law Library.
 
This web page contains the full text of
Republic Act No. 7925
Public Telecommunications Policy Act of the Philippines
 

 
  REPUBLIC ACT NO. 7925
 
AN ACT TO PROMOTE AND GOVERN THE DEVELOPMENT OF  PHILIPPINE TELECOMMUNICATIONS
AND THE DELIVERY OF PUBLIC TELECOMMUNICATIONS SERVICES.
 
 

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

ARTICLE I.
GENERAL PROVISIONS

Section 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 any teiecommunications  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  correspondent 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 telecommunication 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 tariffcharges shall be fairJust 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 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;

1) The development of a domestic telecominunfeations manufacturing industry to meet the needs of the Philippines  and to take advantage ofexport opportunites 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 telecommuncations 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 changes, 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 (DOTC) 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  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 in international telecommunications  matters; and

d) the operation of a national consultative forum to  facilitate interaction amongst the telecommunications  industries, user groups, academic and research institutions in  the airing and resolution of important issues in the field of  communications.  


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 the  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 bypass 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 matter 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 message 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 (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 (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. Value-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.

Telecommunication 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  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 1ocal 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 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  data messages, shall be allowed to compete freely in  such 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 Spectrum. - The radio  frequency spectrum allocation and assignment 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 facilities, 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 rates and tariffs which are fear and reasonable and  which provide for the economic viability of telecommunications  entities and a 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 suffident 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  operator or inter-exchange carriers interconnecting with  them.

Sec. 19. Uniform System of Account. - The  Commission shall require telecommunications entities to set  up a uniform system of accounts which shall be one of those  bases in establishing rates and tariff. Where a single entity  spans more than one category of service,  a separate book of accounts shall be maintamed for each  category or specialized classification. 

ARTICLE VII.
RIGHTS OF TELECOMMUNICATIONS  USERS
 
Sec. 20. Rights of End-Users. - The user  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 a quality business offices and 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 bonafide public offering through  the 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 fianchise, 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 contained in Sec. 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. - All 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:

 
    (SGD.) EDGARDO J. ANGARA
    President of the Senate

 
    (SGD.) JOSE DE VENECIA, JR.
    Speaker of the House of Representatives


 
This Act which 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.

 
 

    (SGD.) EDGARDO E. TUMANGAN
    Secretary of the Senate

 
    (SGD.) CAMILO L. SABIO
    Secretary General
    House of Representatives

 

    Approved: March 1, 1995

 
 


    (SGD.) FIDEL V. RAMOS
    President of the Philippines

 


 
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