The National Telecommunications Commission (NTC) is set to issue a memorandum circular (MC) that will impose higher administration fees and penalties for violation of ownership limits and other regulations in telecommunication services.
The proposed MC will also mandate annual performance audits for telco, broadcast and radio services to ensure quality of service.
The higher penalties are also imposed for violation including operating without valid authority and registration, late filing of extension, late or non-submission of reportorial requirements, illegal possession, construction and operation of radio transmitter/transceiver, and illegal use of frequency.
The MC is in compliance with the provisions of Republic Act (RA) No. 11659 and its Implementing Rules and Regulations (IRR) aligned to the amended Public Service Act.
Last May 15, NTC conducted a public consultation and received 17 position papers on the current draft of the MC.
At present, the telecom regulator is consolidating and studying every input received during the public consultation as well as the position papers.
“Finally, the present administration’s Economic Development Group has directed all relevant administrative/regulatory agencies, which includes the NTC, to finalize and submit their respective agency/sectoral rules and regulations to implement the provisions of RA 11659 and its IRR, on or before June 30, 2024,” NTC said in a statement.
In compliance with the amendments, the NTC said the draft MC’s salient points include entities covered, applicable nationality requirement in terms of percentage of ownership in covered entities, the conduct of performance, audit, required certification on information security standards, administrative fees, update sale of fines and penalties.
NTC is increasing the penalty from the previous maximum amount of P200 per day of violation to the new range of P5,000 to P2 million per day of violation.
Under the draft MC, the annual supervision and regulator fees (SRF) of all public service entities with capital stock shall be P0.50 for every P100 of the paid-up capitalization.
For all other public service entities without capital stock, the SRF shall be P0.50 for every P100 or fraction of the capital invested or of the property and equipment, whichever is higher.
“In no case shall the annual SRF be lower than P2,000,” the draft MC stated.
In addition, all public services under the jurisdiction of the NTC are mandated to undergo an annual performance audit by the independent evaluation team to monitor cost, the quality of service provided to the public, and the ability to immediately and adequately respond to emergency cases.
However, public telecommunication entities (PTE) shall also be further audited for risk assessment and cybersecurity.
“Each public service entity shall submit to the NTC the official result of its performance audit on or before April 30 of the year following the conduct thereof,” the draft circular read.
On the ownership share limitation, NTC will impose higher penalties depending on the business capitalization.
For micro business firms, the penalty ranges from P150,000 to P600,000; small businesses, from P750,000 to P3 million; medium businesses, from P5 million to P20 million; and for large enterprises, from P10 million to P40 million.
The NTC shall not impose nationality requirements on public services that are PTEs and value-added service providers (VAS), subject to Sections 24 and 25 of the law and its IRR.
However, the ownership and management of radio, television and other broadcast stations, and cable antennae television (CATV) operations shall continue to be limited to 60-40 percent in favor of Philippine citizens.
The draft circular covers PTEs, VAS providers, radio, TV, other broadcast stations and CATV operators.
Meanwhile, the NTC is looking to issue a revised version of the draft circular considering the position papers submitted by various companies.
“After due and proper consideration of pertinent inputs and comments, the NTC shall come up with a revised version of said Memorandum Circular which might be subjected to another public consultation, as may be deemed necessary,” NTC said in a statement.
