RA 7925

Public Telecom Policy Act of 1995

`
 State of the Telecom
Industry in the Philippines

 Before the era of competition, the

telecommunications industry has long
been dominated by the private sector.

 From a monopoly, it became one of the

most competitive industries in the country.
PHILIPPINE TELECOM INDUSTRY STRUCTURE
 
 Local telephone service was virtually a private monopoly of
the Philippine Long Distance Telephone Co. (PLDT) until
1995.
 For close to five decades, PLDT owned 94% of telephone
exchanges and the only nationwide backbone transmission
network.
 It also dominated the international long distance market, even
as two other carriers, Eastern Telecommunication Philippines
Inc. (ETPI) and Philippine Global Communications, Inc.
(PhilCom), were also authorized to carry international voice
traffic.
 The market for cellular telephone service was a duopoly,
shared by PLDT’s subsidiary, Pilipino Telephone Corp. (Piltel),
with Express Telecommunications Co., Inc. (Extelcom).
PHILIPPINE TELECOM INDUSTRY STRUCTURE
The industry structure can be briefly
described as follows:

Philippine carriers are privately-owned except for three (3) government-

owned local exchange carriers:

 Telecommunications Office (TELOF)

 Misamis Oriental Telephone System owned and operated by the
Misamis Provincial Government and
 the Basilan Telephone system.

Policies emanate from Congress of the Philippines and the National

Telecommunications Commission (NTC) is the industry regulator. It has
been operating under Public Service Act of 1935 and was created by
EO 546.
PHILIPPINE TELECOM INDUSTRY STRUCTURE

 The anti-monopoly provision of the 1987

constitution provided for liberalization and created a
competitive environment for the telecommunications
industry.

 E.O. No. 59 and 109 provided the conditions for the

liberalization of the industry such as mandatory
interconnection and obligation for IGF and CMTS
operators to provide local telephone service to
achieve the basic telephone universal service.
PHILIPPINE TELECOM INDUSTRY STRUCTURE
In 1995, R.A. 7925 was enacted, known as the
Public Telecommunications Policy Act of the
Philippines.

This policy was aimed to address the need for

a viable and workable legal and regulatory
framework to support the dynamic changes in
the telecom industry.

 The NTC is the principal administrator of this law.

 1987 Policy of Regulated National
Telecommunicatio
Competition ns Commission

 Supports limited market entry

in profitable services
 maintains virtual monopoly in
the local telephone service
1982 Policy of
Integration
 Supports virtual
monopoly in telephone
service
 supports oligopoly in
telex and data services

1995 Policy of Competition

Market entry requirements
 Network Providers: franchise, financial and
technical capability to install, operate and maintain
the network
Service Providers: at least 60% Filipino ownership
Market entry is limited only by
Evolution of Regulations (1)
Prior to 1987
Market Structure Integration, virtual monopoly

Network Separate networks for voice, telegraph and telex

Structure

Regulatory Heavily regulated

Regime

Universal Imposed on the national voice carrier

Service/Access

Result Very slow expansion of networks and infrastructure

specially in rural areas

Commission on Information and Communications Technology

NATIONAL TELECOMMUNICATIONS COMMISSION
Evolution of Regulations (2)
1987 to 1995
Market Structure Regulated competition

Network Separate networks for voice, telegraph, telex, radio

Structure paging and mobile networks
Regulatory Heavily regulated
Regime
Universal Imposed on the national voice carrier
Service/Access
Result Very slow expansion of LEC networks and
infrastructure specially in rural areas. Moderate
expansion in national and international networks

Commission on Information and Communications Technology

NATIONAL TELECOMMUNICATIONS COMMISSION
Evolution of Regulations (3)
1995 to present
Market Structure Competition, liberalization
Network Separate networks for voice, data, radio paging
Structure and mobile networks. Introduction of softswitches
Regulatory Heavily regulated local voice service. Deregulation
Regime of value added and paging services. Light
regulation on all other services
Universal Imposed on the international carriers and radio
Service/Access mobile network operators
Result Rapid expansion of LEC networks until 1997.
Rapid expansion of mobile, national and
international networks

Commission on Information and Communications Technology NATIONAL

TELECOMMUNICATIONS COMMISSION
Evolution of Regulations (4)
Future
Market Structure Full competition and liberalization
Network Converged broadband networks. Packet-based
Structure networks. Next Generation Networks
Regulatory Deregulation, light touch approach, intervention
Regime only when there is market failure
Universal Universal access fund
Service/Access
Result Installation of more BB wireless access networks.
Applications, contents and virtual network service
providers will increase. Consumers demand for
new an innovative services will increase

Commission on Information and Communications Technology NATIONAL

TELECOMMUNICATIONS COMMISSION
 R.A. 7925

PUBLIC TELECOM POLICY ACT OF

1995
REPUBLIC ACT NO. 7925

AN ACT TO PROMOTE AND GOVERN THE DEVELOPMENT 
OF PHILIPPINE TELECOMMUNICATIONS AND THE 
DELIVERY OF PUBLIC TELECOMMUNICATIONS SERVICES 

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
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.
SEC. 3. Definitions and Interpretations
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.
SEC. 3. Definitions and Interpretations

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 –

The growth and development of

telecommunications services shall be
pursued in accordance with the following
policies:
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.
 POLICY on the DEVELOPMENT of          
TELECOMMUNICATIONS INFRASTRUCTURE    
              

Sec. 4(a):
A fundamental objective of government
is to develop and maintain a viable,
efficient, reliable and universal
telecommunications infrastructure
using the best available and affordable
technologies, as a vital tool to nation
building and development.
 National
Telecommunicatio
ns Commission

Objectives of RA7925
Sec. 4(b). The expansion of
telecommunications network shall
give priority to improving and
extending basic services to areas
not yet served (Universal
Service/Access)
Sec. 4(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
viability while maintaining
affordable rates (Competition)
 POLICY on INTERCONNECTION

Sec. 4g – 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.
Sec. 5c – The National Telecommunications Commission shall
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 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.
 POLICY on INTERCONNECTION

Sec. 18 – 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.
POLICY on CONSUMERS WELFARE and
PROTECTION (RA 7925)

Sec. 5c: The National Telecommunications

Commission shall promote consumers welfare by
facilitating access to telecommunications services
whose infrastructure and network must be geared
towards the needs of individual and business users
Sec. 5f: The National Telecommunications
Commission shall protect consumers against
misuse of a telecommunications entity’s
monopolistic or quasi-monopolistic powers by, but
not limited to the investigation of complaints and
exacting compliance with service standards from
such entity
RATES and TARIFFS (RA 7925)

Sec. 18: The National Telecommunications Commission

shall exempt any specific telecommunications service
from its rates 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 monopoly or 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.
 RATES and TARIFFS

 Rates and tariffs must be fair and reasonable

considering the cost of capital in the
domestic and international markets
 Rate of Return Regulations
 Price ceiling
 If the service has sufficient competition such
service shall be exempted from rates and
tariffs regulations
 When there is ruinous competition or
cartel or combination in restraint of free
competition the Commission shall exercise
its residual power and shall set price floor or
ceiling.
 POLICY on NATIONAL RADIO SPECTRUM 

Sec. 4c – The radio 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

Sec. 15 – 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 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 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.
ARTICLE IV. TELECOMMUNICATIONS ENTITIES 

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.

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.
ARTICLE IV. TELECOMMUNICATIONS ENTITIES 

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.

1.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.
2.The international carrier shall also comply with its obligation to provide the
local exchange service in unserved or undeserved areas within three (3)
years from the grant of the authority as required by existing regulations:

 Provided, however, That said carriers 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.
ARTICLE IV. TELECOMMUNICATIONS ENTITIES 

SEC. 11. Value-added Service Provider

Provided that it does not put 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.
Mobile Radio Services
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
undeserved 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.
Radio Paging Services

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 Spectrum. –
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)

1. may impose such conditions as to duration and termination of the privilege,

concession, or
2. 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.
ARTICLE VI.
FRANCHISE, RATES AND REVENUE DETERMINATION

SEC. 16. Franchise. -

Technology Neutral Policy: 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.
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 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. 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: March 1, 1995

 TELECOMS SERVICE PROVIDERS

Local Exchange Service Providers Regulated 73

Inter-Exchange Service Providers Regulated 14

International Service Providers Regulated 11
Cellular Mobile Radio Service Providers Regulated 7
Radio Paging Service Providers Deregulated 0
Value Added Service Providers Deregulated 536
 National
YEAR CMTS LOCAL INTERNET Telecommunicatio
Suppliers/Subs Suppliers/Subs Suppliers/Subs ns Commission

2005 6/34,778,995 73/3,367,252 177 /1,700,000

The
2006 6/42,868,911 73/3,616,595 156/1,950,000 Industry
2007 6/57,344,815 73/3,633,188 260/2,500,000
at
Broadcast 2005 2006 2007 a
Stations

Radio (AM/FM) 375/596 375/596 382/628

Glance
TV 232 233 250

CATV 1,480 1,492 789

Type of Access 2006 2007

Suppliers/Subs Suppliers/Subs
DSL 8 / 264,136 8/478,051

Wireless 2/131,790 5/278,085

Broadband
Cable Modem 12/894 15/18,100
INTERNATIONAL BROADBAND CONNECTIVITY
International connectivity currently in three (3) physically diverse Cable Landing Stations, operated by Globe Telecom, PLDT, and Digitel.

Two new additional stations by Globe and PLDT) have been operational.

Submarine System System Capacity Philippine Capacity

APCN1 10 Gbps 4 Gbps

APCN2 160 Gbps 10 Gbps

SEA-ME-WE-3 8 Gbps 5 Gbps

G-P 3Gbps 1 Gbps

C2C 160 Gbps 2 Gbps

EAC 80 Gbps 1 Gbps (est.)

TGN-1A (2008) 3,840 Gbps 460 Gbps (2008)

AAG (2009) 1,920 Gbps TBA

EXISTING CABLE LANDING STATIONS IN THE PHILIPPINES

Location Cable Network Terminations Philippine Carrier

Nasugbu, Batangas Asia Pacific Network 1  Phil. Long Distance 
(APCN1) Tel. Co. (PLDT)
Asia Pacific Network 2  China, Hong Kong, Japan,  PLDT
(APCN2) Korea, Malaysia, 
Philippines, Singapore, 
Taiwan
Guam-Philippines Cable  PLDT
(GP)
South East Asia, Middle  PLDT
East, Western Europe
C2C
Naic, Cavite East Asia Crossing Digital 
Telecommunications 
Phils., Inc.
Pending Applications
La Union America-Asia Gateway  Malaysia, Singapore,  PLDT
(AAG) Thailand, Brunei 
Darussalam, Vietnam, 
Hong Kong, Philippines, 
Guam, Hawaii, California
Batangas International Cable  Bayan 
Landing Station Telecommunications, 
Inc. (Bayan Tel)
REACTIONS?

What is the impact of this law in the following:

1. your profession
2. employment opportunities
3. industry & economy
4. society & way of living
5. as a student
REGULATORY STRUCTURES
UNIVERSAL SERVICE/ACCESS

Commission on Information and Communications Technology

NATIONAL TELECOMMUNICATIONS COMMISSION
RA7925, Public Telecommunications Policy
Act of 1995 provides:

Universal  Service  Obligation  is 

imposed  on  the  international  carriers 
and  cellular  mobile  telephone  service 
providers.

Commission on Information and Communications Technology

NATIONAL TELECOMMUNICATIONS COMMISSION
INTERCONNECTION AND ACCESS

Commission on Information and Communications Technology

NATIONAL TELECOMMUNICATIONS COMMISSION
 RA7925, Executive Order 59
series of 1993 and NTC
Memorandum Circular No. 14-7-
2000 provide:

Interconnection is mandatory

Commission on Information and Communications Technology

NATIONAL TELECOMMUNICATIONS COMMISSION
DISPUTE RESOLUTION AND APPEAL

Commission on Information and Communications Technology

NATIONAL TELECOMMUNICATIONS COMMISSION
Mediation : At any stage of the negotiation the
Commission may, on its own or upon request by any of
the parties, intervene and mediate between the
parties.
Compulsory Arbitration : May be initiated by the
Commission, on its own or by any formal petition by
any person, where parties fail to reach an
interconnection agreement within 90 days. The
Commission shall assume jurisdiction over the case
and immediately direct the provisional interconnection
of the networks and set the terms and conditions that
shall govern the interconnection. The decision of the
Commission is immediately executory unless
restrained by a competent court.
Appeal : A party may file an appeal before the Court of
Appeals. Resolution by the court may take time.

Commission on Information and Communications Technology

NATIONAL TELECOMMUNICATIONS COMMISSION
 POLICY on INTERCONNECTION

RA7925  Sec.  4g  – 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.
Sec. 5c – The National Telecommunications Commission 
shall  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  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.
 POLICY on INTERCONNECTION

Sec. 18 – 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.
POLICY on CONSUMERS WELFARE and
PROTECTION (RA 7925)

Sec.  5c:  The  National  Telecommunications 

Commission  shall  promote  consumers  welfare  by 
facilitating  access  to  telecommunications  services 
whose  infrastructure  and  network  must  be  geared 
towards the needs of individual and business users
Sec.  5f:  The  National  Telecommunications 
Commission  shall  protect  consumers  against 
misuse  of  a  telecommunications  entity’s 
monopolistic or quasi-monopolistic powers by, but 
not  limited  to  the  investigation  of  complaints  and 
exacting  compliance  with  service  standards  from 
such entity 
SERVICE PERFORMANCE STANDARDS

The Commission has prescribed service

performance technical standards to be strictly
observed and complied by the public
telecommunications entities. The standards
cover, among others
- grade of service
- dropped calls
- terminal equipment technical standards
- interconnection technical standards
Telecom laws, rules and
regulations
By: Engr. S. Sabile
Telecom laws, rules and regulations

MEMORANDUM CIRCULAR NO. 14-07-2000

SUBJECT : IMPLENTING RULES AND 
REGULATIONS (IRR) FOR THE 
INTERCONNECTION OF  AUTHORIZED 
PUBLIC TELECOMMUNICATIONS ENTITIES
 R.A. 7925

The passage of Republic Act No. 7925, the

Philippines has effectively liberalized the
telecommunications services and has demonstrated
its commitment to healthy and sustainable
competition by allowing multiple operations by local
service providers in partnership with firms of varying
nationalities in most segments of the domestic and
international telecommunications markets.
Article I
APPLICABILITY OF THE PROVISIONS
These rules shall be applicable to all duly
authorized public telecommunications entities as
defined hereunder.
 Terms and Definitions
Access Charges – remuneration paid to a PTE by an interconnecting PTE for
accessing the facilities and/or customer base of such PTE, which are
needed by the interconnecting PTE for the origination, termination
and/or transiting of all types
Access Provider – a PTE that is requested to provide access to its network,
system, facilities and./or customer base by an access seeker.
Access Seeker – a PTE that requests access to the network, system, facilities or
customer base of another PTE.
Access Service – service given by access provider to enable the access seeker to
avail of any or all of its services of traffic derived from the
interconnection.
Customer Premises Equipment (CPE) – equipment located in the premises of a
customer which is not part of but connected to the system or network of
the PTE.
Direct Access – the situation where a customer is directly connected to a
telecommunications operator by a wire, fiber-optic or radio link to
connect that customer to the public telecommunications network.
Terms and Definitions
Indirect Access – is a situation where a customer’s call is routed and
billed through the network of a PTE even though the call
originated from the network of another PTE.
Interconnection – the linkage, by wire, radio, satellite or other means,
of two or more existing PTEs with one another for the purpose of
allowing or enabling the subscribers or customers of one PTE to
access or reach the subscribers or customers of the other PTE.
Interconnection Links or Facilities – facilities consisting of, but not
limited to, equipment, devices and materials required to
interconnect two telecommunications systems or networks of
two (2) PTEs for the interchange of traffic between them.
Interconnect Services – network interconnects services, access
services or access facility services.
Interconnect Usage Charges – the network usage charges
applicable to direct and indirect interconnections between
networks for call origination, call termination and call transit, as
the case may be.
Terms and Definitions
Inter-Exchange  Carrier  (IXC)  – a PTE providing transmission and
switching facilities which connect the networks of two (PTEs) that
are not located within the same numbering plan area (NPA) or even
if located within the same NPA, are not located within the common
or overlapping service area, enabling them to offer
telecommunications services of any type, whether of voice, data or
images, to each other’s subscribers or customers.
International  Gateway  Facility  (IGF)  –  a facility consisting of
international transmission, switching and network management
facilities that serves as point of entry and exit in the Philippines of
international traffic between a PTE’s network and point/s outside the
Philippines.
International  Gateway  Facility  Operator  –  a telecommunications
carrier providing IGF services.
Interoperability  -  the technical features of a group of interconnected
systems, which ensure end-to-end provisions of a given service in a
consistent and predictable way.
 Terms and Definitions
Local Calling (Service) Area – the province within which
telecommunications services are furnished subscribers
under specific scheduled rates and without toll charges.
Local Calls – Calls originating and terminating from one and
the same PTE, or two (2) separate PTEs within the same
local calling area.
Local Exchange Carrier (LEC) – a PTE providing
transmission and switching of telecommunications
services, primarily but not limited to voice-to-voice service,
in a geographic area anywhere in the Philippines.
Numbering Plan Area (NPA) – a geographic area in the
country, which has been given a specific area code by the
Commission.
Article III
GENERAL PRINCIPLES OF INTERCONNECTION
1. Interconnection should enable subscribers or customers of
two (2) PTEs to communicate with each other. (any-to-any).
2. Interconnection should be across interfaces of sufficient
functionality (end-to-end interoperability)
3. Interconnection should directly follow the principle of fair
compensation, compliance on commercial obligation (timely
settlement, including payment) and service specific usage
of interconnect facilities (no irregular and/or illegal traffic
access or bypass).
4. PTEs should have equal responsibility to interconnect and
should ensure that interconnection is carried out and in a
swift and efficient manner (equal responsibility).
5. A request for interconnection should be satisfied in a timely
fashion (interconnection on request).
6. Interconnection should be prompt, efficient and seamless to
the subscriber or consumer of both of the interconnecting
PTEs (prompt, efficient and seamless).
Article III
GENERAL PRINCIPLES OF INTERCONNECTION
Interconnection Agreements between PTEs should
satisfy the government’s telecommunications
policies and its commitments or obligations under
international agreements.
Section 4. It is mandatory for all duly authorized
PTEs to interconnect with one another.
Section 5. Interconnection should be ensured to any
technically feasible point in the network.
Article VI
MEASUREMENT OF CALLS AND COLLECTION OF 
CHARGES
Section 16. The parties shall measure both outgoing and
incoming calls from their respective networks.
Section 17. Each party shall undertake the billing and
collection of payments for all outgoing paid calls made
by its own subscriber or customer and, if agreed upon
by the parties, incoming collect calls made by a
subscriber of customer of another party.
Section 18. The parties shall submit to each other
settlement statements within sixty (60) days from the
end of the month to which the statement pertains.
Section 29. Unless specified by the Commission,
the point of interconnection (POI) shall be as
follows:
LEC to LEC
 Single-switch LEC to Single-switch LEC within a
local (calling) service area. The LECs shall
interconnect their local switches directly.
 Single-switch LEC to Multi-switch LEC within a
local (calling) service area. The switch of the single-
switch LEC shall be interconnected to at least one
(1) tandem switch of the Multi-switch LEC.
 Multi-switch LEC to Multi-switch LEC within a local
(calling) service area. At least one (1) tandem
switch of both LECs shall be interconnected.
Section 29. Unless specified by the Commission,
the point of interconnection (POI) shall be as
follows:
LEC to IXC
The LEC network shall be interconnected to the
nearest point in the IXC network, provided that
the POI is established within the LECs service
area.
LEC to IGF
The LEC network shall be interconnected to the
IGF network directly or indirectly through the IXC
network, provided that the POI is established
within the LECs service area.
Section 29. Unless specified by the Commission,
the point of interconnection (POI) shall be as
follows:
 LEC to CMTS
Single-switch LEC to CMTS
The LEC switch shall be interconnected to the CMTS
network or through an IXC at the nearest point in the
CMTS network, provided that the POI is established
within the LEC’s service area.

Multi-switch LEC to CMTS

 The tandem switch of the multi-switch LEC shall be
interconnected to the CMTS network or through an IXC
at the nearest point in the CMTS network, provided that
the POI is established within the LEC’s service area.
Section 29. Unless specified by the Commission,
the point of interconnection (POI) shall be as
follows:
LEC to Trunk Radio Network (TRN)
Single-switch LEC to TRN
 The LEC switch shall be interconnected to the TRN
network or through an IXC at the nearest point in the
CMTS network, provided that the POI is established
within the LEC’s service area.

Multi-switch LEC to CMTS

 The tandem switch of the multi-switch LEC shall be
interconnected to the TRN network or through an IXC at
the nearest point in the TRN network, provided that the
POI is established within the LEC’s service area.
Section 29. Unless specified by the Commission,
the point of interconnection (POI) shall be as
follows:
LEC to Radio Paging Network (RPN)
Single-switch LEC to the RPN
The switch of the single-switch LEC shall be
directly interconnected to RPN.

Multi-switch LEC to the RPN

The RPN shall be interconnected to the nearest
tandem or local switch of the multi-switch LEC.
Section 29. Unless specified by the Commission,
the point of interconnection (POI) shall be as
follows:
IXC to IXC
The IXC networks shall be interconnected at all regions if technically
feasible. Regions shall refer to political, autonomous and/or
administrative regions.
IXC to IGF
The IGF shall be interconnected to the nearest point in the IXC
network.
CMTS and CMTS
The CMTS networks shall be interconnected at all technically
feasible points in their networks or through an IXC.
TRN to CMTS
Their networks shall be interconnected at all technically feasible
points.
Article X
EFFICIENT PROVISIONIONING OF CAPACITY 

Interconnection shall be affected

for sufficient capacity and in
sufficient number to meet all
reasonable traffic demands for
conveyance of messages between
the systems of the PTEs involved,
and shall be implemented within a
reasonable time frame.
End of presentation..

QUESTION
What is the significance of these rules to the
industry? To the electronics engineers?
Broadcast laws, rules and regulations...
 EO-205,S. 1987 Regulating the Operation of Cable
Antenna (CATV) in the Philippines, and for other
Purposes
 EO-467 Providing for International Policy on the
Operation and Use of International Satellite in the
Country
 EO-205 Regulating the Operation of Cable Antenna
Televisions (CATV) Systems in the Philippines and for
other Purposes.
 EO-436 Prescribing Policy Guidelines to Govern the
Operations of Cable Television in the Philippines
 EO-205,S. 1987 Regulating the Operation of Cable
Antenna (CATV) in the Philippines, and for other Purposes

 SECTION 1 The operation of Cable Antenna Television (CATV) system

in the Philippines shall be open to all citizens of the Philippines, or to
corporations, cooperative or associations wholly owned and managed
by such citizens under a Certificate of Authority granted by the National
Telecommunications Commission, hereinafter referred to as the
Commission.
 SECTION 2 A Certificate of Authority to operate Cable Television
(CATV) system shall be granted by the Commission a non-exclusive
basis and for a period not to exceed fifteen (15) years, renewable for
another similar period: Provided That such certificate shall be subject to
the limitation that the authority to operate shall not infringe on the
television and broadcast markets.
 SECTION 3 Subject to the limitations and procedures prescribed by law,
the grantee is hereby authorized to exercise the right of eminent domain
for the efficient maintenance and operation of Cable Television (CATV)
System.
EO-205,S. 1987 Regulating the Operation of Cable
Antenna (CATV) in the Philippines, and for other Purposes
SECTION 4

A special right is hereby reserved to the President

of the Philippines, in times of war, rebellion, public
peril or other national emergency and/or when
public safety requires, to cause the closure of any
grantee's Cable Antenna Television (CATV)
system or to authorize the use of possession
thereof by the government without compensation.
EXECUTIVE ORDER NO. 436 - PRESCRIBING POLICY GUIDELINES TO 
GOVERN THE OPERATIONS OF CABLE TELEVISION IN THE 
PHILIPPINES

SECTION 1
 The operation of cable television systems, as a
subscriber service undertaking with a unique
technology, shall be maintained separate and distinct
from telecommunications or broadcast television.
SECTION 2.
The regulation and supervision of the cable television
industry in the Philippines shall remain vested solely
with the National Telecommunications Commission
(NTC).
 EXECUTIVE ORDER NO. 436 - PRESCRIBING POLICY 
GUIDELINES TO GOVERN THE OPERATIONS OF CABLE 
TELEVISION IN THE PHILIPPINES

SECTION 5.
The Commission may grant an applicant an authority to operate a
cable television system within the same franchise area covered by
any Provisional Authority or Certificate of Authority issued by the
Commission two (2) years earlier only upon the determination by
the Commission that –

a) the prior cable television operator has not, without sufficient

justification, substantially complied with the terms and condition of
his authorization;
b) the cable television service currently provided by the operator to
its subscriber is grossly inadequate; and
c) the grant of the authority to the applicant will not result in ruinous
competition detrimental to the existing operator and incompatible
with the investment policies under this Executive Order.
EXECUTIVE ORDER NO. 436 - PRESCRIBING POLICY 
GUIDELINES TO GOVERN THE OPERATIONS OF CABLE 
TELEVISION IN THE PHILIPPINES
Cable television service may carry
advertisements and other similar paid segments
for which the cable television operator may
charge and collect reasonable fees;
Provided, that no cable television operator shall
infringe on broadcast television markets by
inserting advertisements in the programs it
carries or retransmits without the consent of the
program provider concerned.
EXECUTIVE ORDER NO. 436 - PRESCRIBING POLICY 
GUIDELINES TO GOVERN THE OPERATIONS OF CABLE 
TELEVISION IN THE PHILIPPINES

 SECTION 4. Local exchange operators and/or broadcasters, as

well as operators of direct broadcast satellite service, multi-point
distribution service, television receive-only satellite program
distribution service and other systems of providers of video
programming utilizing whatever technology, shall not operate 
cable television systems or any form of service involving the 
delivery television programs and signals, by wire or cable or
through the airwaves and other wireless video signal transmission
systems without specific permits, licenses and/or authority to
operate a cable television system as provided hereunder and
under applicable laws and rules and regulations, which permits,
licenses and/or authority shall be issued in accordance with the
provisions of this Executive Order.
End of part 2

Questions?

No questions, NO comments......QUIZ

 Quiz: 25 points each

Answer the ff. Questions briefly:

1. If you are the person in-charge of the implementation of

interconnection between your company (LEC) and other
LECs operators, what are your responsibilities to effect
interconnection?
2. Can a telecom services provider offer broadcast services
at the same time? State the existing law or rules to
support your answer.
 Thank Yo
u
an d
Good Nig
ht !

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