NATIONAL TELECOMMUNICATIONS COMMISSION I. History of the NTC A. Several agencies were created before the NTC. a.

Way back in 1927, Act 3396, the Ship Radio Station Law, charged the Radio Construction and Maintenance section to enforce the said law. This is the first radio regulatory office. b. In 1931, the Radio Control Law was enacted, which led to the creation of the Radio Control Division by the Secretary of Commerce and Communications, pursuant to section 8 of said law. c. Later in 1939, the Radio Control Division was transferred to the Department of National Defense pursuant to an executive order, and was later transferred to the Department of Commerce and Industry in 1947, again pursuant to an executive order. d. In 1962, Department Order 51 was issued and it changed the name of the Radio Control Division into the Radio Control Office. B. In 1972 came the Integrated Reorganization Plan, which created the Board of Communications, the first quasi-judicial body with adjudicatory powers on matters involving telecommunications services. a. Later on, the Radio Control Office was renamed to the Telecommunications Control Bureau, one of the direct predecessor entities of the NTC. b. In 1979, the NTC was created, along with the Ministry of Transportation and Communications, which had jurisdiction over the NTC. i. The National Telecommunications Commission came to existence when EO 546 integrated the Board of Communications and the Telecommunications Control Bureau into a single entity under Section 14, the NTC. ii. Executive Order 125, series of 1987, attached the NTC to the DOTC. iii. In 2004, President Gloria Macapagal-Arroyo issued EO 269 which created the Commission on Information and Communications Technology and transferred NTC to such Commission, in section 3 of such law. iv. A year later, NTC was transferred back to the DOTC. In 2008, President Arroyo issued EO 648 which, once again, transferred NTC back to the CICT. v. In 2011, EO 47 dissolved the CICT, and the NTC was again back under the supervision and control of the DOTC as an attached agency. C. Radio communications was regulated by the Radio Control Section. Then came Radio Control Office. Then, it became Telecommunications Control Bureau in 1972. This was part of the General Reorganization of the Government. (G.O.1). D. In the G.O. 1 hiniwa-hiwalay, there came the Board of Communications, Board of Transportation, Board of Energy. They called this specialized regulatory boards. Public Service Commission branched into various boards. E. In 1979, pinagsama yung Telecommunications Bureau and Board of Communication. This became the NTC. F. NTC is regulating radio communications under the Radio Control Law and public services, including broadcast, under the Public Service Act. G. Single office regulating telecommunications and public services, including broadcast. II. Regulatory powers of the NTC

Global trend kasi yan. In-open ang telecoms into competition. Actually, nauna pa tayo as US because the law opening the telecoms industry was enacted in 1995. While sa US, 1996. Opening the entire

telecoms market to competition. Noon kasi, before the telecoms law, open lang ang competition to international, national long distance services. Yung local services, hindi. The market is free. We just have to ensure na market forces are played. Otherwise, kung may indication of market failure, then may residual powers ang Commissioner to enter and set the price ceiling to protect consumers. Or if there is predatory pricing, cutthroat competition, we can set the floor. Normally, theres no such thing as predatory pricing especially when supply ay hindi restricted. Theres no such thing as cutthroat competition kasi ang shareholders mo would not want prices to be below cost. Now, prices are going down, lalo na sa telecomm. Services are doing great as a result of expanded capacity. What is good in telecoms kasi ay fixed cost is around 90%. Kung variable cost mo is masyadong mababa, kung marami kang subscribers sharing the fixed cost eh mababa per subscriber ang share niya. Habang ineexpand mo ang capacity, bumababa ang presyo, unlike other industries na mataas ang variable cost mo. Ang variable cost mo sa power ay mataas mataas ang fuel. Sa power kasi monopoly, generation hindi. Water, walang gaanong variable cost sa water. Habang dumadami ang customers mo, ang nangyayari tumataas eh. I dont know. Yan ang mali sa monopoly. Kasi wala kang control sa cost mo eh. Samantalang if there is competition marketplace, if you are the company, you are aware of the cost. Pag monopoly ka, you do not care kasi you can recover your cost. Sa competition, hindi guaranteed na marerecover mo ang cost mo. Tendency is ibaba mo ang cost mo. Sa monopoly, hindi. Who cares? Kaya tumataas ang presyo. This is what is good in telecommunications. NTC is the sole regulatory agency for telecommunications and broadcast. CATV is broadcast. Sa Pilipinas kasi, CATV is classified as broadcast. In the US, sa telecoms law of 1996, yung CATV is classified as telecomm. Sa Pilipinas, wala pang ganoong law that declares CATV as telecomm. There was an EO 205, 1987 issuance, it has the force of law. Sinabi dun na CATV is mass media. Sa mga whereases niya. Because of that, CATV is broadcast kasi mass media. Unless another law is passed, classifying CATV as telecomm, it will remain broadcast. Broadcast basta it is offered in a broadcast mode. Yung pang-maramihan. Ang distinction nalang ngayon because of technology what broadcast is and what is entertainment. Pag content mo ringtone, horoscope, telecoms yan, pag entertainment broadcast yan. Malawak talaga ang telecoms even intl telecoms union is more than 100 years, still telecomm ang tawag sa kanya; the definition of telecoms encompasses everything, generic masyado, sa lahat. Bastat may communication by a distance, it becomes telecomm. A. The NTC regulates the installation, operation and maintenance of radio stations both for private and public use (Act. No. 3846, as amended). a. Public telecommunications is the provision by any person, firm, partnership or corporation, government or private, of telecommunications services to the public for compensation. (Sec. 3-b, RA 7925). b. Private telecommunications (not defined by the law but according to the interview, it has no payment). c. The NTC regulates radio stations through registration and licensing. Station or radio station as used in Act No. 3846 shall refer to a radio transmitting station and its receiving equipment, a radio receiving station used for commercial purposes, or a radio broadcasting station. (As amended by Com Act No. 365 and by Com. Act No. 571, approved June 17, 1940.) d. Granting licenses is administrative in nature. It becomes the ministerial duty of the NTC to grant authorization when a franchise is granted already. e. CPCN usually takes longer to be granted. -Bastat may Radio, it is NTC.

-Public use may bayad -Private walang bayad Halimbawa, Meralco, a private company , may mga istatsyon ng radio ang mga yan, for their own news, yung mga taxi diba may radio yang mga yan private yan. Definition of public telecomm service is a service offered for compensation. Telecomm service becomes public if it is offered for compensation. -administrative kasi ang lisensya, kasi kung may authority ka na, mabilis na. Ministerial ang duty to grant authorization, cell site, etc. So, pagkaapply nagagrant agad. -CPCN ang matagal! Kasi quasi-judicial yan eh; once a CPCN is granted, for them to implement the authority granted to them, they need to operate radio stations, you have to support it. Kasi binigyan mo sila ng authority to install eh, eh bakit di ka susuporta. Hindi po puwede yun. How can you implement something na di mo susuportahan? B. The NTC regulates and supervises the provision of public telecommunications services (RA 7925, CA 146, as amended) a. No person shall commence or conduct the business of being a public telecommunications entity without first obtaining a franchise. (Sec. 16, RA 7925). i. The NTC, granting CPCN, may impose conditions as to duration and termination of the privilege, concession, or standard or technical aspects of the equipment, rates, or services, not contrary to the franchise. ii. The CPCN shall not be shorter than 5 years, nor longer than the life of the franchise. iii. Expansion and financing of networks 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. iv. 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. The NTC is empowered to establish fair and reasonable rates and tariffs. (Sec. 17, RA 7925) i. 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. ii. 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. iii. 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

b.

of accounts shall be maintained for each category or specialized classification. (Sec. 19, RA 7925) c. In the event the parties fail to agree on the access charge/ revenue sharing arrangements, the dispute shall be resolved by the NTC (Sec 18, RA 7925). i. 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 local exchange network investment that is at parity with those earned by other segments of the telecommunications industry; ii. The 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; iii. 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.

C.

The NTC regulates and manages the radio spectrum (Act No. 3846, as amended and RA7925)

How does the NTC allocate radio spectrum? -pinag-aaralan yan; we are a member of the intl community. Ang frequency kasi ay limited resource. Hindi puwedeng ioperate ito nang di coordinated with other countries kasi may interference. Every 4 years, may world radio conference which all countries attend pinaguusapan ito, allocation, para hindi mag-interfere what the the others use; the NTC complies with the world radio conference decisions a treaty D. The NTC regulates and supervises radio and television broadcast stations, cable television (CATV) and pay television (EO546 and EO205) a. Functions of the Commission. The Commission shall exercise the following functions (Sec. 15, EO 546): i. Issue Certificate of Public Convenience for the operation of communications utilities and services, radio communications systems, wire or wireless telephone or telegraph systems, radio and television broadcasting system and other similar public utilities; ii. Establish, prescribe and regulate areas of operation of particular operators of public service communications; and determine and prescribe charges or rates pertinent to the operation of such public utility facilities and services except in cases where charges or rates are established by international bodies or associations of which the Philippines is a participating member or by bodies recognized by the Philippine Government as the proper arbiter of such charges or rates; iii. Grant permits for the use of radio frequencies for wireless telephone and telegraph systems and radio communication systems including amateur radio stations and radio and television broadcasting systems;

iv. Sub-allocate series of frequencies of bands allocated by the International Telecommunications Union to the specific services; v. Establish and prescribe rules, regulations, standards, specifications in all cases related to the issued Certificate of Public Convenience and administer and enforce the same; vi. Coordinate and cooperate with government agencies and other entities concerned with any aspect involving communications with a view to continuously improve the communications service in the country; vii. Promulgate such rules and regulations, as public safety and interest may require, to encourage a larger and more effective use of communications, radio and television broadcasting facilities, and to maintain effective competition among private entities in these activities whenever the Commission finds it reasonably feasible; viii. Supervise and inspect the operation of radio stations and telecommunications facilities; ix. Undertake the examination and licensing of radio operators; x. Undertake, whenever necessary, the registration of radio transmitters and transceivers; and xi. Perform such other functions as may be prescribed by law. b. The NTC regulates Cable Antenna Television (EO 205) i. A Certificate of Authority to operate Cable Antenna Television (CATV) system shall be granted by the Commission on a nonexclusive 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. ii. The regulation and supervision of the cable television industry in the Philippines shall remain vested solely with the National Telecommunications Commission (NTC) (Sec. 2, EO 436). 1. Only persons, associations, partnerships, corporations or cooperatives granted a Provisional Authority or Certificate of Authority by the Commission may install, operate and maintain a cable television system or render cable television service within a service area. (Sec. 3, EO 436). 2. 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 by the NTC (Sec. 3, EO 436). 3. 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

III. A. B. C. D. E. F. G. H. I. J. K.

the prior cable television operator has not, without sufficient justification, substantially complied with the terms and condition of his authorization; the cable television service currently provided by the operator to its subscriber is grossly inadequate; and 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. 4. A cable television operator may, with prior approval from the Commission, lease or sub-lease any excess capacity of its cable television system to a third party. (Sec. 6, EO 436) Powers of the NTC (according to RA 7925) To authorize, supervise, regulate and monitor the operation of public telecommunications services and broadcast services. To authorize service rates for public telecommunications services. To undertake frequency management activities and ensure effective use of the radio spectrum which is a limited natural resource. To undertake the registration and licensing of radio transceivers and stations including radio stations for commercial maritime, aeronautical, broadcast, common carrier, amateur, personal and government radio communication services. To establish, promulgate, implement and enforce technical standards as well as rules and regulations for the effective use of telecommunication and broadcast facilities. To provide technical advisory assistance to other government agencies and other entities on matters regarding telecommunications. Foster a healthy competitive environment in the telecom-medications sector. Establish a stable, transparent, speedy and fair administrative process, giving due regard to the observance of due process. Manage and administer the radio frequency spectrum, including the imposition of reasonable spectrum usage fees. Deregulate rates when the market is highly competitive and move towards cost-based rates. Democratize ownership of telecommunications and broadcast services. Register value-added service providers.

Powers of NTC -to grant CPCN under Public Service Act. (sec. 16). Gano katagal magapply ng CPC? -because it requires formal hearing, parang korte, you cannot give a timeframe. All the parties should be given time. Due process. -there are cases na walang oppositor, in 3-4 months, tapos. -pag maraming oppositors, inaabot ng 2 or 3 years. Lalo na kung postpone nang postpone yung oppositor. Lalong tumatagal pag umabot sa SC. NTC appeal to? -NTC Commission appealable to CA; they can go directly to SC -NTC Decisions are not reviewable by DOTC, as far as quasi-judicial decisions are concerned; even the President cant interfere. -NTC Commissioner has no security tenure; no fiscal autonomy; no fixed tenure <- ito ang catch ng pagigigng independent ng NTC;

Sabi po sa law, NTC has the power to approve radio communications equipment. Type approval siguro. Type approval is a separate issue. The NTC maintains its sovereignty itetest yan if it complies with Philippine standards. But of course, may global trend na if you sign a mutual recognitition arrangement whatever equipment that country has is considered type-approved in the Philippines, if you sign. Ano po yung tinetest pag nagtatype-approve? Lahat. Standards for emission, etc. Parang sa DTI yung mga product na tinetest mo. NTC also has the power to conduct radio examinations. Actually, ang examination na yan ang tinitignan ay yung those involved sa barko, as eroplano, mga piloto, ayan nageexamine yan because you cannot compromise safety. Actually, automatic na lahat. You do not need to test the special skills pagdating sa examination. Ang tinetest ay ang taong nag-o-operate. E-verification in website: intl shipping, hindi ka papayagan na dumaong sa port kung wala kang lisensya. And what they do normally is verify from the issuing authority like NTC. Para maiwasan yung mga fake. Safety can never be compromised. Kaya very strict ang Intl Maritime Org. Power of NTC to monitor telecoms- lahat yan; Examples ng pag-monitor: If you are operating within the parametrs of license, ichcheck ka. Kung you go beyond, huhulihin ka. Illegal ang operation mo. Iba naman ang content. Sa NTC ay technical, we do not have any mandate as far as content is concerned. NTC monitors the operation but not content. So there is no coordination po between MTRCB and NTC? Meron naman, because if mtrcb finds that a radio station is violating mtrcb rules, sasabihin sa NTC na i-istop yung station nay un, yung operation ng station nay un. Pano masstop ng NTC yung operation? Pupuntahan. Isasara. NTC has that power; it can seek the assistance of police. Law-enforcement agencies. Puwede rin daw po mag-act on user complaints yung NTC? Yes. May One Stop Public Assistance kami sa ground floor. ALL complaints. Centralized yun para di na mailto yung tao where to go. Bastat may reklamo, punta ka dun. Anything, magreklamo ka. Yung number na nagpapadala ng scam text, ibblock yun. NTC calls the attention of telcos to improve their service, otherwise, they will be penalized. Yun nga lang you cant just penalize them. It has to undergo judicial process. Kasi due process yan eh. Kung malaki ang penalty, sure diretso yan sa SC. Case in point: pinagrerefund sa text na mahigit 1 billion yung isang company. Most of NTC complaints are mobile. Kung icocompare mo sa total number of complaints, maliit ang mobile complaints. We have to attend to all of these, because we think for one complaint, may 10 na hindi na nagrereklamo. Power of NTC to issue license to operate land, maritime, aeronautical. Safety yan lahat. You cannot compromise safety. Pinakamadali at pinakamahirap to regulate? Regulating the industry noon when it was virtual monopoly. Madaling iregulate ang virtual monopoly. Probleem is, napakahirap na controlin ang presyo because monopoly kasi promotes inefficiency eh. Because cost recovery yan eh. So whatever cost they have they cant recover. Wala silang control. They spend anywhere kasi narerecover naman eh. Saan sila bumibili ng equipment nila? Eh di subsidiary. Mag-create ka ng subsidiary mo. Halimabwa, construction, mag create ka ng construction company. Eh sinong maglalagay ng pipe, ichcharge mo ngayon yan, sinong kumita? Yung may ari. Thats how it is. Eh hindi naman yan p inapa-bid. Di tulad ng gobyerno. Pinapabid. Pag private, no bidding. Baka may dummy na may ari yung contractor. Ganyan ang nangyayari ebfore nung monopoly status sa telecomm. Kasi san bumibili ang mga yan? Trading

company. Who was the trading company? Sila din. They create companies dun sila bumibili. Pag nagpresyo yun, 200% o 400% higher than the market, eh recoverable yun eh. Ngayon, wala na. Hindi na puwede silang bumili nang napakamahal, otherwise, magagalit sa kanila yung shareholders, bababa ang margin nila. So, telecoms industry in the Phils is doing well. They are working efficiently. Otherwise, magagalit ung kanilang shareholders. Dating Common Carriers Division. Regulation branch na ang tawag ngayon. Ah, ang common carrier at that time can be transport, communication. Sa US, di nila pinalitan, still common carrier bureau. Yung office na nagrergulate ng public telecomm sa US ay still called Common Carrier Bureau, under the Federal Commission. Dito naman, from Common Carrier, nagging Regulations branch noong May 10, 2013. Financial statements of NTC can be accessed through the NTC website. The NTC has been complying religiously with transparency mandate. These telecomm companies are wary pag humingi ng data and they think this data will affect their competitive edge. Anything you submit to NTC is considered public document. Mahirap din. If you want info, you cant guarantee to them na secret yung file since NTC is a public office. 2015 Vision of NTC. Ang tinitignan kasi rito is the role of NTC in ensuring that the Philippines will become an ICT-driven economy where ICT is used everywhere. It will improve effiencey and makes things faster. Mission ay continuous. Globe po ba kayo o Smart? We let the people judge the services. Wala naman kaming pinapanigan.