EXECUTIVE ORDER NO. 109 July 12, 1993
POLICY TO IMPROVE THE PROVISION OF LOCAL EXCHANGE CARRIER SERVICE
WHEREAS, local exchange service is fundamental to the goal of providing universal access to basic and other telecommunications services;
WHEREAS, during the development phase, cost-based pricing of services such as national and international long distance and other telecommunications services may be employed to generate funds which my then be used to subsidize the local exchange service;
WHEREAS, while the telecommunications sector as a whole is profitable, the profits mainly come from the toll services particularly from the international long distance service; and
WHEREAS, there is a need to promulgate new policy directives to meet the targets of Government through the National Telecommunications Development Plan (NTDP) of the Department of Transportation and Communications (DOTC), specifically: (1) to ensure the orderly development of the telecommunications sector through the provision of service to all areas of the country, (2) to satisfy the unserviced demand for telephones and (3) to provide healthy competition among authorized service providers....
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Executive Orders
Policy To Improve The Provision Of Local Exchange Carrier Service
Executive Order No. 109
EXECUTIVE ORDER NO. 109 - POLICY TO IMPROVE THE PROVISION OF LOCAL EXCHANGE CARRIER SERVICE
Definitions:
- Basic Telecommunications Service: local exchange residence and business telephone service and telegraph service without additional features. (Section 1a)
- Cost-based pricing: pricing system where actual cost establishes the basic charge with a fixed mark-up. (Section 1b)
- Local Exchange Carrier Service: voice-to-voice service within a contiguous geographic area under a common local exchange rate schedule. (Section 1c)
- Value-based pricing: pricing system where cost establishes the minimum charge and a variable mark-up is added based on value. (Section 1d)
- Universal Access: availability of reliable and affordable telecommunications service in urban and rural areas. (Section 1e)
Objective: To improve the provision of local exchange service in unserved and underserved areas to promote universal access to basic telecommunications service. (Section 2)
General Policy: The Government shall pursue the policy of democratization in the ownership and operation of telecommunication facilities and services. (Section 3)
Cross-Subsidy:
- Until universal access to basic telecommunications service is achieved and priced to reflect actual costs, local exchange service shall continue to be cross-subsidized by other telecommunications services within the same company. (Section 4)
Service Packaging for International Gateway Operators:
- Authorized international gateway operators shall provide local exchange service in unserved and underserved areas, including Metro Manila, within three (3) years from NTC authorization, under the following guidelines: (Section 5)
-- Provide a minimum of three hundred (300) local exchange lines per international switch termination. (Section 5a)
-- At least one (1) rural exchange line shall be provided for every ten (10) urban local exchange lines installed. (Section 5b)
-- Establishment of Public Calling Offices at the rural barangay level shall be credited towards the obligation to provide local exchange service. (Section 5c)
-- No permit for an international gateway facility shall be granted unless the applicant can establish necessary foreign correspondenceships. (Section 5d)
-- Carriers already providing local exchange service in accordance with Section 5a, 5b and 5c shall be authorized to operate an international gateway subject to applicable laws. (Section 5e)
Subsidiary:
- The subsidiaries of a public telecommunication carrier operating an authorized international gateway shall not be allowed to operate another gateway. (Section 6)
- A telecommunications company shall be considered as a subsidiary if any of the following conditions exists: (Section 6)
-- The two companies share the services of key operating and management personnel. (Section 6a)
-- The shareholdings of one company, together with the shareholdings of its stockholders, in the other company aggregate more than fifty percent (50%) of the outstanding capital stock of the latter company. (Section 6b)
-- One company and its stockholders have a combined exposure in the other company in the form of loans, advances, or asset-lease equivalent to more than fifty percent (50%) of the capital accounts of the other company. (Section 6c)
Cellular Mobile Telephone System:
- Authorized international gateway operators may also be authorized to provide Cellular Mobile Telephone System (CMTS) service and other non-basic telecommunications service which are possible sources of subsidy for local exchange carrier service. (Section 7)
Non-Basic Services:
- Authorized providers of other non-basic telecommunications service which are possible sources of subsidy shall be required to provide local exchange carrier service in accordance with guidelines, rules and regulations prescribed by the NTC. (Section 8)
Duration of Services:
- The obligation to provide local exchange carrier service shall remain in force for as long as the service providers described in Sections 5, 7 and 8 hold their authorizations to provide their respective non-basic services. (Section 9)
Other Requirements:
- The foregoing provisions shall be without prejudice to the other requirements for the grant of franchises and Certificates of Public Convenience and Necessity. (Section 10)
Interconnection Requirement:
- All telecommunications service networks shall be interconnected in a non-discriminatory manner in accordance with Executive Order No. 59 (1993) and its implementing guidelines. (Section 11)
Financial Reporting Requirements:
- The internal subsidy flows shall be made explicit in the financial reporting system of the telecommunications service providers. (Section 12)
Policy Implementation:
- The NTC is directed to promulgate the guidelines, rules and regulations to implement this Executive Order within thirty (30) days from the effective date. (Section 13)
Violations:
- Any violation of the Executive Order shall be subject to the same penalties provided for in Section 13 of Executive Order No. 59 (1993). (Section 14)
Transitory Provisions:
- Existing telecommunications service providers described in Sections 5, 7 and 8 shall have a period of five (5) years to comply with the requirements to provide local exchange service. (Section 15)
Pending Applications:
- Telecommunications service providers with existing and pending applications for International Gateway Facility, Cellular Mobile System (CMTS) and other Value Added Services (VAS) need not revise their applications with the NTC. (Section 16)
- However, upon issuance of the Provisional Authority or CPCN, they shall be given a period of three (3) months to submit and file the necessary applications for local exchange service in accordance with the provisions hereof. (Section 16)
Repealing Clause:
- All executive orders, administrative orders and other Executive issuances inconsistent herewith are repealed, modified or amended accordingly. (Section 17)
Effectivity:
- This Executive Order shall take effect immediately. (Section 18)
Definitions:
- Basic Telecommunications Service: local exchange residence and business telephone service and telegraph service without additional features. (Section 1a)
- Cost-based pricing: pricing system where actual cost establishes the basic charge with a fixed mark-up. (Section 1b)
- Local Exchange Carrier Service: voice-to-voice service within a contiguous geographic area under a common local exchange rate schedule. (Section 1c)
- Value-based pricing: pricing system where cost establishes the minimum charge and a variable mark-up is added based on value. (Section 1d)
- Universal Access: availability of reliable and affordable telecommunications service in urban and rural areas. (Section 1e)
Objective: To improve the provision of local exchange service in unserved and underserved areas to promote universal access to basic telecommunications service. (Section 2)
General Policy: The Government shall pursue the policy of democratization in the ownership and operation of telecommunication facilities and services. (Section 3)
Cross-Subsidy:
- Until universal access to basic telecommunications service is achieved and priced to reflect actual costs, local exchange service shall continue to be cross-subsidized by other telecommunications services within the same company. (Section 4)
Service Packaging for International Gateway Operators:
- Authorized international gateway operators shall provide local exchange service in unserved and underserved areas, including Metro Manila, within three (3) years from NTC authorization, under the following guidelines: (Section 5)
-- Provide a minimum of three hundred (300) local exchange lines per international switch termination. (Section 5a)
-- At least one (1) rural exchange line shall be provided for every ten (10) urban local exchange lines installed. (Section 5b)
-- Establishment of Public Calling Offices at the rural barangay level shall be credited towards the obligation to provide local exchange service. (Section 5c)
-- No permit for an international gateway facility shall be granted unless the applicant can establish necessary foreign correspondenceships. (Section 5d)
-- Carriers already providing local exchange service in accordance with Section 5a, 5b and 5c shall be authorized to operate an international gateway subject to applicable laws. (Section 5e)
Subsidiary:
- The subsidiaries of a public telecommunication carrier operating an authorized international gateway shall not be allowed to operate another gateway. (Section 6)
- A telecommunications company shall be considered as a subsidiary if any of the following conditions exists: (Section 6)
-- The two companies share the services of key operating and management personnel. (Section 6a)
-- The shareholdings of one company, together with the shareholdings of its stockholders, in the other company aggregate more than fifty percent (50%) of the outstanding capital stock of the latter company. (Section 6b)
-- One company and its stockholders have a combined exposure in the other company in the form of loans, advances, or asset-lease equivalent to more than fifty percent (50%) of the capital accounts of the other company. (Section 6c)
Cellular Mobile Telephone System:
- Authorized international gateway operators may also be authorized to provide Cellular Mobile Telephone System (CMTS) service and other non-basic telecommunications service which are possible sources of subsidy for local exchange carrier service. (Section 7)
Non-Basic Services:
- Authorized providers of other non-basic telecommunications service which are possible sources of subsidy shall be required to provide local exchange carrier service in accordance with guidelines, rules and regulations prescribed by the NTC. (Section 8)
Duration of Services:
- The obligation to provide local exchange carrier service shall remain in force for as long as the service providers described in Sections 5, 7 and 8 hold their authorizations to provide their respective non-basic services. (Section 9)
Other Requirements:
- The foregoing provisions shall be without prejudice to the other requirements for the grant of franchises and Certificates of Public Convenience and Necessity. (Section 10)
Interconnection Requirement:
- All telecommunications service networks shall be interconnected in a non-discriminatory manner in accordance with Executive Order No. 59 (1993) and its implementing guidelines. (Section 11)
Financial Reporting Requirements:
- The internal subsidy flows shall be made explicit in the financial reporting system of the telecommunications service providers. (Section 12)
Policy Implementation:
- The NTC is directed to promulgate the guidelines, rules and regulations to implement this Executive Order within thirty (30) days from the effective date. (Section 13)
Violations:
- Any violation of the Executive Order shall be subject to the same penalties provided for in Section 13 of Executive Order No. 59 (1993). (Section 14)
Transitory Provisions:
- Existing telecommunications service providers described in Sections 5, 7 and 8 shall have a period of five (5) years to comply with the requirements to provide local exchange service. (Section 15)
Pending Applications:
- Telecommunications service providers with existing and pending applications for International Gateway Facility, Cellular Mobile System (CMTS) and other Value Added Services (VAS) need not revise their applications with the NTC. (Section 16)
- However, upon issuance of the Provisional Authority or CPCN, they shall be given a period of three (3) months to submit and file the necessary applications for local exchange service in accordance with the provisions hereof. (Section 16)
Repealing Clause:
- All executive orders, administrative orders and other Executive issuances inconsistent herewith are repealed, modified or amended accordingly. (Section 17)
Effectivity:
- This Executive Order shall take effect immediately. (Section 18)