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EXECUTIVE ORDER NO.

59

PRESCRIBING THE POLICY GUIDELINES FOR COMPULSORY INTERCONNECTION OF


AUTHORIZED PUBLIC TELECOMMUNICATIONS CARRIERS IN ORDER TO CREATE A UNIVERSALLY
ACCESSIBLE AND FULLY INTEGRATED NATIONWIDE TELECOMMUNICATIONS NETWORK AND
THEREBY ENCOURAGE GREATER PRIVATE SECTOR INVESTMENT IN TELECOMMUNICATIONS

WHEREAS, in recognition of the vital role of communications in nation-building, it has become the objective of
government to promote advancement in the field of telecommunications and the expansion of telecommunications
services and facilities in all areas of the Philippines;

WHEREAS, there is a need to enhance effective competition in the telecommunications industry in order to promote the
State policy of providing the environment for the emergence of communications structures suitable to the balanced flow of
information into, out of, and across the country;

WHEREAS, there is a need to maximize the use of telecommunications facilities available and to encourage investment in
telecommunications infrastructure by service providers duly authorized by the National Telecommunications Commission
(NTC);

WHEREAS, there is a need to ensure that all users of the public telecommunications service have access to all other
users of the service wherever they may be within the Philippines at an acceptable standard of service and at reasonable
cost;

WHEREAS, the much needed advancement in the field of telecommunications and expansion of telecommunications
services and facilities will be promoted by the effective interconnection of public telecommunications carriers or service
operators;

WHEREAS, the Supreme Court of the Philippines, in the case of Philippine Long Distance Telephone Co. v. The National
Telecommunications Commission [G.R. No. 88404, 18 October 1990, 190 SCRA 717, 734], categorically declared that
"Rep. Act No. 6849, or the Municipal Telephone Act of 1989, approved on 8 February 1990, mandates interconnection
providing as it does that 'all domestic telecommunications carriers or utilities . . . shall be interconnected to the public
switch telephone network.'";

WHEREAS, under Executive Order No. 546 dated 23 July 1979, as amended, the NTC has the power, as the public
interest may require, "to encourage a larger and more effective use of communications facilities, and to maintain effective
competition among private entities whenever the NTC finds it reasonably feasible"; and

WHEREAS, there is a need to prescribe the consolidated policy guidelines to implement Rep. Act No. 6849 and Executive
Order No. 546, as amended.

NOW, THEREFORE, I, FIDEL V. RAMOS, President of the Republic of the Philippines, by virtue of the powers vested in
me by law, do hereby order:

Section 1. The NTC shall expedite the interconnection of all NTC authorized public telecommunications carriers into a
universally accessible and fully integrated nationwide telecommunications network for the benefit of the public.

Section 2. Interconnection between NTC authorized public telecommunications carriers shall be compulsory.
Interconnection shall mean the linkage, by wire, radio, satellite or other means, of tow 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.

Section 3. Interconnection shall be established and maintained at such point or points of connections, preferably at the
local exchanges level and at the junction side of trunk exchanges as are required within a reasonable time frame and shall
be for sufficient capacity and in sufficient number to enable messages conveyed or to be conveyed to conveniently meet
all reasonable traffic demands for conveyance of messages between the system of the parties involved in the
interconnection.

Section 4. Interconnection shall permit the customer of either party freedom of choice on whose system the customer
wishes his call to be routed regardless which system provides the exchange line connecting to the local exchange. Such a
choice may be done initially through the use of distinct carrier access code assigned to the relevant connectable system
and ultimately, as the local exchange providers upgrade to stored-program-controlled (SPC) exchanges, comparatively
efficient interconnect (CEI) or equal access pre-programmed option.

Section 5. Interconnection shall be mandatory with regard to connecting other telecommunications services such as but
not limited to value-added services of radio paging, trunking radio, store and forward systems of facsimile or messaging
(voice or data), packet switching and circuit data switching (including the conveyance of messages which have been or
are to be transmitted or received at such points of connection), information and other services as the NTC may determine
to be in the interest of the public and in the attainment of the objective of a universally accessible, fully integrated
nationwide telecommunications network.

Section 6. Interconnection shall be negotiated and effected through bilateral negotiations between the parties involved
subject to certain technical/operational and traffic settlement rules to be promulgated by the NTC; Provided, that if the
parties fail to reach an agreement within ninety (90) days from date of notice to the NTC and the other party of the request
to negotiate, the NTC shall, on application of any of the parties involved, determine the terms and conditions that the
parties have not agreed upon but which appear to the NTC to be reasonably necessary to effect a workable and equitable
interconnection and traffic settlement.

Section 7. Interconnection among public communications carriers shall be effected in such a manner that permits
rerouting of calls from an international gateway operator which is rendered inoperative, whether in whole or in part, in the
event of strikes, lock-outs, disasters, calamities and similar causes, to another international gateway operator not so
affected. A public telecommunications carrier shall be allowed such permits to operate an international gateway as may
be necessary to service its own network requirements; Provided, that its subsidiaries shall not be given a permit to
operate another international gateway.

Section 8. In prescribing the applicable technical/operational and traffic settlement rules, the NTC shall consider the
following:

8.1 The technical/operational rules should conform with the relevant recommendations of the Consultative Committee on
International Telegraph and Telephone (CCITT) and the International Telecommunications Union (ITU).

8.2 For traffic settlement rules:

(a) Either meet-on-the-air and/or midpoint circuit interconnection between parties;


(b) For local exchange point of interconnection, settlement shall be on the basis of volume of traffic on the local
connection based on per minute with day and night rate differential. In case of store and forward services for facsimile,
data and voice mail, settlement shall be on the basis of equivalent monthly trunk line charges as generally charged by the
local exchange carrier (LEC) to its customer owning their own PABX;
(c) For junction exchange point of interconnection, settlement shall be on the basis of volume of traffic carrier over:

(i) short haul connection not exceeding 150 kilometers; and


(ii) long haul connection exceeding 150 kilometers.

Similarly, a per minute rate shall be evolved with day and night differential. The determination of the per minute rate is
based on the principle of recognizing recovery of the toll related cost and fair return of the investment of the facilities
employed in making the toll call exchange between the systems.

(d) Subsidies which shall be approved on the basis of the sound public policy shall be allowed in two (2) ways:
(i) for operator assisted calls - an operator surcharge kept by the system that employs the operator; and
(ii) access charge - the principle of access charge is an assistance to the unprofitable rural telephone development,
remote pay stations, etc., thereby assuring the universal service obligation of the PSTN operators. The introduction of the
access charge may result in a charge that will be passed on to the subscribers of the PSTN.

Section 9. Interconnection shall at all times satisfy the requirements of effective competition and shall be effected in a
non-discriminatory manner.

Section 10. The Points of Connection (PC) between public telecommunications carriers shall be defined by the NTC, and
the apportionment of costs and division of revenues resulting from interconnection of telecommunications networks shall
be approved or prescribed by the NTC.

Section 12. Interconnection and revenue-sharing agreements approved or prescribed by the NTC may be revoked,
revised, or amended as the NTC deems fit in the interest of the public service.
Section 13. In the implementation of this Executive Order, the NTC may, after due notice and hearing, impose the
following penalties in case of violation of any of the provisions hereof:

13.1. Imposition of such administrative fines, penalties and sanctions as may be allowed or prescribed by existing laws;
13.2. Suspension of further action on all pending and future applications for permits, licenses or authorizations of the
violating carrier or operator and in which particular case, the NTC shall be exempted from compliance with the provisions
of Executive Order No. 26 dated 7 October 1992 on the period for the disposition of cases or matters pending before it;
13.3. With the approval of the President, directive to the appropriate government financial or lending institutions to
withhold the releases on any loan or credit accommodation which the violating carrier or operator may have with them;
13.4. Disqualification of the employees, officers or directors of the violating carrier or operator from being employed in any
enterprise or entity under the supervision of the NTC; and
13.5. In appropriate cases, suspension of the authorized rates for any service or services of the violating carrier or
operator without disruption of its services to the public.

Section 14. The NTC is directed to promulgate the implementing rules to this Executive Order within ninety (90) days from
the date of effectivity hereof.

Section 15. All executive orders, administrative orders, and other issuance inconsistent herewith are hereby repealed,
modified or amended accordingly.

Section 16. This Executive Order shall take effect immediately.

DONE in the City of Manila, this 24th day of February in the year of Our Lord, Nineteen Hundred and Ninety-Three.

(Sgd.) FIDEL V. RAMOS


By the President

(Sgd.) ANTONIO T. CARPIO


Chief Presidential Legal Counsel

MEMORANDUM CIRCULAR
NO. 9-7-93
SUBJECT: IMPLEMENTING GUIDELINES ON THE INTERCONNECTION
OF AUTHORIZED PUBLIC TELECOMMUNICATIONS
CARRIERS
Pursuant to the provisions of Executive Order No. 59 series of 1993 mandating
interconnection and the power of the Commission to encourage a larger and more
effective use of communication facilities and to maintain effective competition, the
National Telecommunications Commission (NTC) by virtue of the powers vested upon it
by law do hereby promulgate the following guidelines:

ARTICLE
SCOPE AND DEFINITION OF TERMS
Section 1. These guidelines shall be applicable to all duly authorized public
telecommunications carriers.
Section 2. For the purpose of this circular, the following terms and phrases shall be
defined as:
Access Charge – a remuneration paid to the local exchange carrier by the
interconnecting carriers for accessing the facilities and/or customer base of
such local exchange carrier which is needed by the interconnecting
carriers for the origination and/or termination of all types of traffic derived
from the interconnection.
Commission – shall refer to the National Telecommunications
Commission
Interconnection – shall refer to 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.
Inter-exchange Carrier (IXC) – a public telecommunications carrier
providing transmission and switching facilities which connect local
exchanges as well as IGFs within the Philippines enabling them to offer
telecommunications services of any type, whether of voice, data or images
for which there is a charge separate from the rate schedule applied to
subscribers within a local exchange area.
Interface – shall refer to facilities consisting of but not limited to
equipment, devices and materials required to make two
telecommunications systems or networks interwork with each other.
International Gateway Facility (IGF) – a facility consisting of international
transmission, switching and network management facilities which serve as
point of entry and exit in the Philippines of international traffic between
the national network and point/s outside the Philippines.
International Gateway Facility (IGF) Operator – a public
telecommunications carrier providing IGF services.
Local Exchange Carrier (LEC) – a public telecommunications carrier
offering telecommunications services, primarily but not limited to voiceto-
voice service within a contiguous geographic service area furnished to
individual subscribers under a common local exchange rate schedule
Point of Interconnection – shall refer to the point where signals are
conveyed from one telecommunications network to another
telecommunications network.
Point of Presence – a specific point as defined on the network where point
of interconnection shall occur in such a way that interconnection between
and among local exchange carriers, inter-exchange carriers and
international gateway facilities operations can be made efficiently and
effectively.
Public Telecommunications Carrier (PTC) – shall refer to a duly
enfranchised and NTC certificated telecommunications carrier and/or any
entity duly authorized by law including the government to provide public
telecommunications services.
ARTICLE II
GENERAL PROVISIONS
Section 3. All authorized public telecommunications carriers shall be interconnected
into a universally accessible and fully integrated nationwide
telecommunications network for the benefit of the public.
Section 4. All IXCs and IGFs shall interconnect with all LECs to provide freedom of
choice to toll facilities.
Section 5. Authorized public telecommunications carrier requesting for
interconnection shall submit to the party with whom interconnection is
requested all information necessary to effect interconnection copy furnish
the Commission.
Section 6. Interconnection among authorized public telecommunications carriers in
accordance with Section 3 shall be compulsory and may be effected
through the following process.
6.1 Negotiation
6.1.1 Subject to existing technical/operational and settlement rules or
which may hereafter be promulgated by the Commission, public
telecommunications carriers, may on their own initiative negotiate
and enter into an interconnection agreement, upon the request of
the party seeking interconnection.
6.1.2 The interconnection agreement entered into by parties through
negotiation shall be submitted to the Commission within ten (10)
days from date of execution of the Agreement for approval by
the Commission within thirty (30) days.
6.1.3 The start of the negotiation shall be from the time the party
requesting interconnection shall have submitted to the other party
of the complete data or information, to wit:
1. Copy of the CPCN/PA and franchise
2. System or network configuration
3. Proposed point of connection
4. Trunk requirements
5. Proposed traffic routing
6. Traffic forecast and assumptions used (at least five years)
7. Traffic types and services covered
8. Proposed compensation/settlement
9. Proposed interface
10. Proposed implementation schedule
Both parties shall provide each other basic information such as:
1. Description of existing and future network relevant to
interconnection.
2. List of exchanges (existing and planned) suitable for
interconnection including number of lines available.
6.2 Submission by Parties to the Commission
6.2.1 Should parties fail to reach an agreement in ninety (90) days from
start of negotiations in accordance with Section 6.1.3 Article II
hereof, the Commission shall, on the application of any of the
parties involved, formally hear the parties to draw up the terms and
conditions of the Interconnect Mandate.
6.2.2 The Commission shall resolve the issue of mandating
interconnection within thirty (30) days from the time the same is
filed with the Commission. The resolution made by the
Commission on the terms and conditions of any interconnection
mandate is immediately executory.
Section 7. Interconnection shall at all times satisfy the requirements of fair
competition and shall be effected in a non-discriminatory manner.
Section 8. All parties to an Interconnect Agreement or Interconnect Mandate shall be
obligated to comply with all the terms and conditions as approved by the
Commission and shall be subject to the penalties herein prescribed
pursuant to EO 59.
ARTICLE III
TECHNICAL/OPERATIONS REQUIREMENTS
Section 9. The interconnecting parties shall maintain and operate their facilities in
accordance with their respective obligations in the Interconnect
Agreement/Interconnect Mandate approved by the Commission and shall
comply with the provisions of NTC MC No. 10-17-90 (Service
Performance Standards) and NTC MC No. 10-16-90 (Technical
Standards) and such other standards that the Commission shall prescribe
upon consultation with the industry.
Section 10. Interconnecting parties shall:
10.1 Cooperate and provide facilities in their respective system for testing,
agree on an standard on trouble reporting, testing and restoral and see to it
that information are shared between them to facilitate the efficient routing
of messages over all points of connection.
10.2 Maintain over all grade of service as defined in MC 10-17-90
10.3 Exchange traffic and facility forecasts on a semi-annual basis to facilitate
allocation of facilities for future requirements, as well as provide basic
information such as the description of the existing and future network
relevant to interconnection and list of exchanges (existing and planned)
suitable for interconnection including number of lines available.
10.4 Provide additional circuits based on traffic measurements and studies to be
conducted covering a period of thirty (3) days separately but
simultaneously by both parties. Parties shall compare study results and
agree on the number of circuits to be added. In the event that the parties
cannot reach an agreement, the matter shall be brought to the Commission
for final action. Implementation of the additional circuits shall be done
within the next fifteen (15) days after the number of circuits has been
agreed unless acquisition of additional facilities is involved which were
not included in the facility forecasts exchange on a semi-annual basis. In
the event that the interconnection trunks are underutilized with reference
to the mandated grade of service, the excess trunks may be deactivated
within fifteen (15) days from receipt of notice in writing from either party;
provided, that a party requesting disconnection of underutilized
interconnection trunks can show by convincing evidence that either the
disconnected circuits are urgently needed for other purposes by the
requesting party or that the measured traffic and the historical growth of
the affected circuit has shown a consistent record of underutilization over
a period of at least six (6) months.
Section 11. Public telecommunications carriers which do not meet the prescribed
service performance and technical standards shall be required to upgrade
their facilities to comply with said national standards within reasonable
period.
Section 12. The transmission link/s and terminating facilities needed to effect
interconnection shall be provided by each of the interconnecting parties in
accordance with the traffic requirements of each of the parties.
Section 13. The interconnection Agreement and/or Interconnect Mandate approved or
prescribed by the Commission may be revoked, revised or amended by the
Commission for just and valid cause in the interest of public service
strictly observing due process.
Section 14. PTCs shall provide as many points of presence as necessary to effect an
efficient interconnection.
Section 15. The inter-exchange carrier shall provide interconnecting facilities up to the
main distribution frame (MDF) of the local exchange carriers with 5000
exchange lines or less per local area. For LECs with more than 5000
exchange line Section12 shall apply; provided that the pending application
for local telephone service in a particular local area is less than 25% of the
number of working direct exchange lines. The international gateway
operator shall provide the interconnecting trunks up to the MDF of the
LEC when the IXCs cannot provide the required toll facilities. In case an
LEC also provides an IXC facility, all types of traffic shall be routed via
the trunk level.
Section 16. Interconnection shall be for a reasonable time frame and for sufficient
capacity and in sufficient number to enable messages conveyed to
conveniently meet all reasonable traffic demands for conveyance of
messages between the system of the parties involved in the
interconnection.
Section 17. Pursuant to Sect. 4 of Executive Order 59 local exchange provider or
carrier (LEC’s) shall agree with the interexchange carrier and/or the IGF
operator interconnecting with the former to provide an exclusive fixed
carrier access code with prior coordination and subject to the approval of
the Commission, in order that any subscriber of the LEC may access the
long distance carrier of choice.
Ultimately, as the Local Exchange Carrier (LEC) upgrades to storedprogram-
control (SPC) exchanges they may implement equal access
preprogrammed option and still allow the subscriber at the time of his call
freedom of selection of any other interexchange or international gateway
carrier.
ARTICLE IV
OPERATION OF AN INTERNATIONAL GATEWAY
Section 18. Interconnection among public communications carriers shall be effected in
such a manner that permits rerouting of calls from an international
gateway operator which is rendered inoperative whether in whole or in
part in the event of strikes, lockouts disasters, calamities and similar
caused to other international gateway operators.
Section 19. The subsidiaries as defined in EO 109 of a public telecommunication
carrier operating an authorized international gateway shall not be allowed
to operate another gateway.
Section 20. The technical/operating rules shall whenever applicable, be in accordance
with duly approved and adopted International Telecommunications
Recommendations.
ARTICLE V
CHARGES AND SETTLEMENTS
Section 21. Settlement shall be effected through bilateral negotiations between
interconnecting parties and shall conform with the following:
21.1 The reasonable cost of interconnection shall be shared by the interconnect
parties in accordance with the traffic requirements and the terms and
conditions of the Interconnect Agreement or Interconnect Mandate, as the
case maybe; provided, however that when one of the interconnecting
parties is a local exchange carrier with 5000 exchange lines or less in
which case Article III Section 15 shall apply.
21.2 For networks interconnected at the local exchange level, the LEC shall
charge a network access charge based on the volume of traffic either on a
per minute or volume of information with appropriate day and night
differentiation.
In case of store and forward facsimile, data and voice mail, paging,
trunked radio and other services interconnected to the local exchange
network, and where the services derived from such interconnection would
generate local traffic, the settlement shall be on the basis of the equivalent
monthly trunk lines charges as generally charged by the LEC to the
customer owning their own PABXs. However, where toll traffic are
derived from such services, Section21.3 shall apply for settlement
purposes.
21.3 For networks interconnected at the trunk exchange level, the network
access charge shall be determined as follows:
Each LEC shall develop a standardized procedure, hereafter known as a
“Cost Manual,” for calculating the costs of the facilities used in the
provision of toll carrier interconnection service.
1. The starting point for calculation of LEC costs shall be the total
company books that conform to generally accepted accounting
principles.
2. Individual companies with more detailed accounting structures can
use that information to develop their costs of service, provided that
the account detail conforms to generally accepted accounting
principles.
3. Investments or expenses that can be identified as directly attributed
to toll carrier interconnection service can be directly assigned to
that service category.
4. An investment or expense which is utilized in the production of
toll carrier interconenction service and one or more other services
(e.g., basic local exchange service) shall be allocated using a
methodology which most appropriately reflects the cost-causative
characteristics of the services. To the extent feasible, LECs should
use existing records/reports to allocate the investment or expense
into the appropriate service categories. If existing carrier records
do not provide sufficient detail, it may become necessary to
perform a “special study” (recognizing cost-causality) to allocate
investments and expenses among the appropriate service
categories. If a carrier can demonstrate that allocation on the basis
of cost causation is impracticable or unreasonable for certain
investments or expenses, it may allocate those costs using an
explicit allocation formula subject to approval by the Commission.
5. A portion of common “overhead” costs of the LEC, such as
general administrative costs, shall be allocated to the toll carrier
interconnection service category based on a specific allocation
formula that will be subject to review by the Commission.
Within one hundred and eighty (180) days of the effective date of
this Circular, each LEC shall furnish the Commission with a copy
of its Cost Manual and a full reporting of the costs determined in
accordance with the Cost Manual, for review and final approval by
the Commission.
Section 22. In the course of the bilateral negotiations process, each LEC shall develop
network and end user access charges for toll carrier interconneciton, based
on the costs of providing toll interconnection service as defined by the
LEC’s approved Cost Manual and associated cost study results, in the
following manner:
22.1 Network access charges applicable to the toll provider on a per minute
basis, that recognize the volume of traffic carried, the distance covered,
and an appropriate differential between the day and night rate periods.
The access charge rates for inbound vs. outbound calls may be deaveraged
as negotiated by the parties, subject to the approval of the Commission.
22.2 An operator surcharge for operator-assisted toll calls shall be collected and
kept by the service provider employing the operator.
22.3 An end user access charge shall be collected monthly and kept by the
LEC, which recovers a portion of the non-traffic-sensitive costs of the
local exchange switching facilities used jointly in the provision of basic
local service and toll carrier interconnection service. The end used access
charge shall in no case exceed ten percent (10%) of the end user’s
recurring monthly charge for basic local exchange service subject to the
approval of the Commission.
22.4 For each LEC, the total annual revenue generated by the network access
charges, operator surcharge, and end user access charge under reasonable
estimates or forecasts of associated demand shall be equal to the total costs
determined for the toll carrier interconnection service category in
accordance with the LEC’s Cost Manual.
22.5 All access charges, whether end user, operator surcharge, network access
charges, shall be subject to approval of the Commission.
Section 23. Access charge scheme of revenue shall be fully implemented not alter than
two (2) years from the effectivity of this Circular.
Section 24. The interconnecting parties shall submit to each other monthly settlement
reports and other reports needed for the settlement within ninety (90) days
following the end of each month. The party with balance after reconciling
their settlement reports shall pay the other party said balance not later than
thirty (30) days after the reports have been received by both parties.
Amounts due which are not paid within the said period shall bear interest
at mutually agreed rate.
ARTICLE VI
TRANSITORY PROVISION
Section 25. Interconnecting parties may agree that existing PTCs who do not presently
comply with the prescribed standards, may enter or maintain their existing
Agreement whereby they shall used technical standards other than those
specified in NTC MC No. 10-16-90 for a period not exceeding three (3)
years from the effectivity of this circular.
Section 26. Existing settlement shall remain in force for a period not exceeding two
(2) years from the approval of this circular.
Section 27. Interim settlement agreements using the revenue sharing scheme pursuant
to NTC Case No. 88-145 may be entered into by the interconnecting
parties for a period not exceeding two (2) years from the approval of this
circular.
ARTICLE VII
PENALTIES FOR VIOLATIONS
Section 28. Any violation of the order promulgated by the Commission pursuant to
Executive Order 59 and its Implementing Guidelines shall, upon due
notice and hearing, be subject to any or combinations of the following
penalties.
28.1 Imposition of such administrative fines, penalties and sanctions as may be
allowed or prescribed by existing laws.
28.2 Suspension of further on all pending and future applications for permits,
licenses or authorizations of the violating carrier or operator.
28.3 Disqualification of the responsible employees, officers or directors of the
violating carrier or operator from being employed in any enterprise or
entity under the supervision of the Commission.
28.4 Suspension of the authorized rates for any service or services of the
violating carrier or operator without disruption of its services to the public.
ARTICLE VIII
FINAL PROVISIONS
Section 29. Any portion or section of this circular which maybe declared to be invalid
or unconstitutional shall not affect the validity of the other remaining
portions or sections.
Section 30. All existing memoranda, circulars, rules and regulations inconsistent with
the provisions of this circular are hereby repealed or amended accordingly.
Section 31. This circular shall take effect fifteen (15) days after its publication in the
official gazette or newspaper of general circulation, provided further that
at least three (3) certified copies thereof shall be filed with the University
of the Philippines law Center.
Done in the City of Quezon, this 23rd day of July, in the year of our Lord, nineteen
hundred and ninety three.
(SGD.) SIMEON L. KINTANAR
Commissioner

MEMORANDUM CIRCULAR
NO. 07-13-90
SUBJECT: RULES AND REGULATIONS GOVERNING THE
INTERCONNECTION OF LOCAL TELEPHONE EXCHANGES
AND PUBLIC CALLING OFFICE, WITH THE NATIONWIDE
TELECOMMUNICATIONS NETWORK/S, THE SHARING OF
REVENUE DERIVED THEREFROM, AND FOR OTHER
PURPOSES.
Pursuant to the powers vested upon the National Telecommunications Commission
(NTC) to encourage a larger and effective use of communications facilities and in line
with the State’s program to pursue and foster in a n orderly and vigorous manner, the
interconnection of all municipalities in the country, the following rules and regulations on
the interconnection of telephone exchanges with the nationwide telecommunications
network/s, including the sharing of revenue derived therefrom are hereby promulgated for
the information, guidance and compliance of all concerned.
SECTION 1 DEFINITION OF TERMS
a. Interconnecting company (ICC) – A local exchange operator duly
enfranchised and certificated/certified by the NTC or a government entity
technically and financially capable to install, operate and maintain
telephone systems in designated services areas.
b. Interconnection – For the purpose of this Circular, interconnection shall
refer to a situation where an inter-connecting company is interconnected to
the nationwide telecommunications network/s.
c. Public Calling Office – a Telecommunications facility at which the public
may, by the payment of appropriate fees, place as well as receive long
distance telephone calls and/or be capable of voice and data transmission.
d. National Telecommunications Development Plan – A Master Plan, which
includes all plans, related to the overall development of
telecommunications facilities and services of both government and
enfranchised telecommunications networks operators. The Plan shall
include, among others, the following:
1. Development Priorities
2. System Development Plan
3. Numbering Plan
4. Transmission Plan
5. Signalling
6. Switching and Routing
7. Synchronization
8. Charging (rates and tariff)
SECTION 2. INTERCONNECTION
2.1 Interconnection of local exchanges and/or the public calling offices with
the nationwide telecommunications network/s shall conform with the
Master Development Plan.
2.2 Enfranchised and certificated/certified local exchanges, PCO’s and
government-own systems shall comply with Spectrum Management,
Technical Standards and Fundamental Technical Plans promulgated by the
Commission. These Standards shall include but not limited to the
following:
1. Transmission, routing, switching, signalling, numbering, charging
and synchronization.
2. Radio Equipments
3. Service performance standards
4. Customer premises equipment
5. Outside plant
6. Frequency Management, including planning, engineering &
assignment.
2.3 Operators whether private or government of existing local exchanges or
PCO’s which do not meet interconnect standards shall be required to
provide interface equipment and devices in coordination with the
interexchange or transmission network operator/s.
2.4 Trunking requirement will based on best estimates for new local
exchanges and on periodic acceptable traffic studies from existing local
exchanges. These studies shall be conducted jointly by the operators of
local exchanges and the interexchange or transmission network/s and
submitted to the Commission.
2.5 Interconnecting parties shall share the cost of interconnection in
accordance with their respective responsibilities; maintain and operate
their facilities; and comply with their obligations as agreed upon and
approved by the Commission or as prescribed by the Commission.
2.6 A Traffic Agreement format shall be prescribed by the Commission taking
into consideration submitted recommendations.
SECTION 3. REVENUE SHARING
3.1 Traffic settlement agreements shall be based upon: (1) a recovery of tollrelated
costs and a fair return on the investment of both companies in the
facilities used in making the toll calls exchanged between the systems and
(2) a subsidy to local exchange providers.
3.2 Until modified by the NTC, the share of each operator shall be in
accordance with the Order of this Commission in Case No. 88-145 issued
on April 19, 1990.
3.3 The Commission shall prescribe/approve an Amended Interconnection and
Toll Revenue Sharing Agreement, taking into consideration the submitted
documents from interconnecting parties in compliance with the Order in
Case No. 88-145 and other relevant recommendations.
3.4 Shares on revenue shall be settled within ninety (90) days from receipt of
settlement statements.
3.5 The Interconnect and revenue sharing Agreements approved or prescribed
by the Commission may be revoked, revised or amended as the
Commission deems fir in the interest of public service.
Any Memorandum, Circular, rules and regulations of the Commission inconsistent with
the provisions of this Circular are hereby deemed revised, revoked, or amended.
This Circular shall take effect immediately
Quezon City, Philippines, July 12, 1990.
JOSEFINA T. LICHAUCO
Acting Commissioner
FLORENTINO L. AMPIL FIDELO Q. DUMLAO
Deputy Commissioner Deputy Commissioner

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