IMPLEMENTING RULES AND REGULATIONS (IRR) FOR THE INTERCONNECTION OF AUTHORIZED PUBLIC TELECOMMUNICATIONS ENTITIES

PREAMBLE

WHEREAS, the State recognizes the vital role of telecommunications
in nation-building and economic development and in its desire to attain
universal access, it shall promote the rapid expansion of
telecommunications services in all areas of the Philippines in order to
maximize the use of all available telecommunications facilities, and to
ensure that every user of the public telecommunications shall have
access to such facilities at a mandated standard of service and at
reasonable costs;

WHEREAS, a general framework for interconnection of public
telecommunications networks and public telecommunications services,
regardless of the supporting technologies employed, is necessary in
order to provide end-to-end inter-operability of services for users and
access to all;

WHEREAS, fair, proportionate and non-discriminatory conditions for
interconnection and inter-operability are key factors in fostering the
development of open and competitive markets;

WHEREAS, it is important to lay down principles to guarantee
transparency, access to information, non-discrimination and equality of
access;

WHEREAS, with the approval and 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;

WHEREAS, the telecommunications environment is changing at an
unprecedented rate driven by technological advancements, expansion of
market boundaries and development of new business practices. These
developments in the telecommunications sector necessitate the review of
Memorandum Circular No. 9-7-93 and the formulation of a new regulatory
framework for interconnection of the networks of public
telecommunications entities to address the legal, economic, and
technical constraints that continue to hamper the continued growth and
development of the sector;

WHEREAS, pursuant to the provisions of R.A. 7925 and Executive Order
No. 59, Series of 1993, mandating interconnection of all public
telecommunications entities and vesting to the National
Telecommunications Commission with the power to ensure a larger and more
effective use of affordable telecommunications facilities and to
maintain effective and healthy competition, the National
Telecommunications Commission, by virtue of the powers vested upon it by
law, does hereby promulgate the following implementing rules and
regulations:

ARTICLE I
Applicability of the Provisions

SECTION 1.        These rules shall be applicable to all duly authorized public telecommunications entities as defined hereunder.

ARTICLE II
Definition of Terms

SECTION 2.        The following words and phrases shall have the meaning assigned to them unless the context otherwise requires:

a.         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 of
traffic derived from the interconnection.

b.         Access Deficit — the difference
between the required revenue to recover the cost of the line service and
the total revenue from retail monthly services fees and the revenue
from interconnection.

c.         Access Provider — a PTE that is requested to provide access to its network, system, facilities and/or customer base by an access seeker.

d.         Access Seeker — A PTE that requests access to the network, system, facilities or customer base of another PTE.

e.         Access Service — service given by the access provider to enable the access seeker to avail of any or all of its services.

f.          Billing Information — Appropriate
network usage data of one PTE that is required by another PTE to
facilitate customer billing with attendant acknowledgement and status
reports and are exchanged between PTEs to process claims and
adjustments.

g.         Commission — the National Telecommunications Commission.

h.         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.

i.          Cellular Mobile Telephone System (CMTS)
— 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 that is neither
a wireless local loop (WLL) service provided by a LEC or a trunk radio
service ordinarily being provided by a trunked radio carrier.

j.          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.

k.         Enhanced Services — refers to a
service which adds a feature or value to basic telephone service not
ordinarily provided by a PTE such as format, media, conversion,
encryption, enhanced security features, paging, internet protocol,
computer processing and the like; provided that in the provision of such
service, no law, rule, regulation or international convention to which
the Philippines is a signatory, is circumvented or violated. For
purposes of these rules and regulations, enhanced services shall also
mean value-added services, and vice-versa.

l.          Exchange — the entire plant and
facilities used in providing telecommunications services to subscribers
or customers in a calling (service) area.

m.        Exchange Access — the offering of
access to telecommunications services or facilities for purposes of
origination or termination of telephone services between PTEs.

n.         Grade of Service — the probability
that a proportion of the calls will be lost or blocked in the system.
The lower the proportion of loss or blockage, the better is the grade of
service.

o.         Incoming Collect Calls — telephone
calls originating from a subscriber or customer of a PTE and terminating
to and paid by a subscriber or customer of the terminating PTE.

p.         Incoming Paid Calls — telephone calls originating from a subscriber or customer of a PTE and paid to that PTE.

q.         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.

r.          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.

s.         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.

t.          Interconnect Services — network interconnect services, access services or access facility services.

u.         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.

v.         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 areas, enabling them to offer
telecommunications services of any type, whether of voice, data or
images, to each other’s subscribers or customers.

w.        International Gateway Facility (IGF) —
a facility consisting of international transmission, switching network
management facilities that serve as point of entry and exit in the
Philippines of international traffic between a PTE’s network and point/s
outside the Philippines.

x.         International Gateway Facility Operator — a telecommunications carrier providing IGF services.

y.         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.

z.         Local Calling (Service) Area — the
province within which telecommunications services are furnished
subscribers under specific schedule rates and without toll charges. For
purposes of these rules, the present areas forming part of the numbering
plan area “2” shall be considered a local calling (service) area of all
PTEs presently authorized to provide telecommunications service in any
portion of the said area.

aa.       Local Calls — Calls originating and terminating from one and the same PTE, or two (2) separate PTEs within the same local calling area.

bb.       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.

cc.       Major Supplier — a PTE who has the
ability to materially affect the market, directly or indirectly, for
basic and/or enhanced telecommunications services as a result of 1) its
control over essential facilities; and 2) use of its position in the
market.

dd.       Market Power — the ability to raise
and maintain price above the competitive level and so earn above-normal
returns. It also means the ability of an operator to act with a degree
of independence from competitors and consumers.

ee.       Meet Point — a point of
interconnection between two networks, designated by two PTEs, at which
one PTE’s responsibility begins and the other PTE’s responsibility ends.

ff.         Meet Point Interconnection Arrangement — an arrangement by which each PTE builds and maintains a network to meet point.

gg.       National Toll Calls — calls that are
(1) originating from one local calling (service) area and terminating to
another calling area (service) or (2) originating from another PTE to a
CMTS carrier, or vice-versa.

hh.       Network Element — a facility or
equipment used in the provision of telecommunications service including,
but not limited to, features, functions, and capabilities that are
provided by means of such facility or equipment, including but not
limited to, subscriber numbers, database, signaling systems, and
information sufficient for billing and collection or used in the
transmission, routing, or other provision of a telecommunications
service.

ii.         Network Interconnect Service — a
service which supports the physical and logical linking of networks to
allow the user of one network to communicate with the user of another
network (e.g. call termination).

jj.          Numbering Plan Area (NPA) — a geographic area in the country which has been given a specific area code by the Commission.

kk.       Outgoing Collect Calls — telephone
calls originating from a subscriber or customer of one PTE and paid by
the subscriber or customer of the terminating PTE.

ll.          Outgoing Paid Calls — telephone calls originating from and paid by the subscriber or customer of the originating PTE.

mm.     Party — a party to an interconnection agreement or dispute.

nn.       Physical collocation — offering by an
access provider that enables an access seeker to: 1) place its own
equipment to be used for interconnection or access to unbundled network
elements within or upon an access provider’s premises, (2) use such
equipment to interconnect with an access provider’s network facilities
for the transmission and routing of telephone exchange services,
exchange access service, or both, or to gain access to an access
provider’s unbundled network elements for the provision of
telecommunications services, (3) enter those premises, to install,
maintain, and repair equipment necessary for interconnection or access
to unbundled elements, and (4) obtain reasonable amounts of space in an
access provider’s premises for the equipment necessary to
interconnection or access to unbundled elements, allocated on a
first-come first served basis.

oo.       Point of Interconnection (POI) — a
point of interconnection between two (2) telecommunications networks,
designated by two PTEs at which one PTE’s responsibility for service
begins and the other carrier’s responsibility ends.

pp.       Point of Presence (POP) — a specific
point as defined on the network where a point of interconnection shall
occur in such a way that such interconnection between and among PTEs can
be made efficiently and effectively.

qq.       Provisioning — involves the exchange
of information between PTEs where one executes a request for a set of
telecommunications products and services or unbundled network elements
or combination thereof from the other with attendant acknowledgements
and status reports.

rr.         Public Telecommunications Entity (PTE)
— any person, firm, partnership or corporation, government or private,
duly enfranchised by law and duly authorized by the Commission to engage
in the provision of particular telecommunications services to the
public for compensation.

ss.       Secretariat — Secretariat of the Commission.

tt.         Service Performance Standard — a level of service
which a telecommunications carrier, under normal conditions, is required
to provide to its customers as representative of adequate services.

uu.       Settlement Process — the payment
system between interconnecting PTEs for jointly providing
telecommunications services by which PTEs compensate each other for
interconnection services.

vv.        System-wide Exchange Line Capacity — total switch capacity of a LEC all over the country.

ww.      Telecommunications — a process which
enables a PTE to relay and receive voice, date, electronic messages,
written or printed matter, fixed or moving pictures, words, music or
visible or audible signals or any control signals of any design or for
any purpose by wire, radio or other electromagnetic, spectral, optical
or technological equipment.

xx.        Telecommunications Equipment —
equipment, other than customer premises equipment, used by a carrier to
provide telecommunications services including software integral to such
equipment.

yy.        Telecommunications Network —
transmission systems and, where applicable, switching equipment and
other resources which permit the conveyance or routing of signals
between defined termination points by wire, by radio, by optical or by
other electromagnetic means.

zz.        Telecommunications Services —
services offered for a fee directly to the public, or to such classes of
users as to be effectively available directly to the public, regardless
of the facilities used, consisting wholly or partly in the transmission
and routing of signals on authorized telecommunications networks.

aaa.    Traffic Interchange – all communications passing through the interconnection facilities of two (2) PTEs.

bbb.    Traffic Study — the process of recording usage measurements which can be translated into required quantities of equipment.

ccc.     Type Acceptance — an administrative
procedure by which a telecommunications equipment is accepted for use in
the country. The equipment is evaluated on the basis of type approval
tests done by reputable foreign approval or certification agencies.

ddd.    Type Approval — an administrative
procedure of technical tests and/or vetting applied to items of
telecommunications equipment before they can be sold or interconnected
with a telecommunications network.

eee.    Users (End-Users) — refers to consumers using or requesting publicly available telecommunications services.

fff.        Value-Added Services (VAS) — see enhanced services.

ggg.    Value-Added Service Provider (VASP) —
an entity which, relying on the transmission, switching and local
distribution facilities of a PTE, offers enhanced services beyond those
originally provided for by such carriers. A PTE duly authorized by the
Commission to provide enhanced services shall likewise be deemed a VASP.

hhh.     Virtual Collocation — an offering by
an access provider that enables an access seeker to: (1) designate or
specify equipment to be used for interconnection or access to unbundled
network elements to be located within or upon the former’s premises, and
dedicated to the latter’s use, (2) use such equipment to interconnect
with an access provider’s network facilities for the transmission and
routing of telephone exchange service, exchange access service or both,
or for access to an access provider’s unbundled network elements for the
provision of telecommunications service, and (3) electronically monitor
and control its communications channels terminating in such equipment.

ARTICLE III
General Principles of Interconnection

SECTION 3.        The following are the general principles of interconnection:

a.         Interconnection should enable subscribers or customers of two (2) PTEs to communicate with each other. (any-to-any).

b.         Interconnection should be across interfaces of sufficient functionality (end-to-end interoperability).

c.         Interconnection should directly follow the principle of fair compensation, compliance on commercial obligation (timely settlement, including payment) and service usage of interconnect facilities (no irregular and/or illegal traffic access or bypass).

d.         PTEs should have equal responsibility to interconnect
and should ensure that interconnection is carried out and in a swift
and efficient manner (equal responsibility).

e.         A request for interconnection should be satisfied in a timely fashion (Interconnection on request).

f.          Interconnection should be prompt, efficient and
seamless to the subscriber or consumer of both of the interconnecting
PTEs (prompt, efficient and seamless).

g.         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. Such interconnection must
be provided by a PTE:

a.         Under non-discriminatory terms, conditions (including
technical standards and specifications) and charges and of a quality no
less favorable than that provided for its own like services or for like
services of non-affiliated service suppliers or for its subsidiaries or
other affiliates; and

b.         In a timely fashion, on terms, conditions (including
technical standards and specifications) and cost-based charges that are
transparent, reasonable, having regard to economic feasibility, and
sufficiently unbundled so that the supplier need not pay for network
components for facilities that it does not require for the service to be
provided.

ARTICLE IV
General Provisions

SECTION 6.        The objectives underlying these implementing rules and regulations are to:

a.         Promote and protect the interests of telecommunications consumers and users;

b.         Provide a comprehensive and transparent framework for
the implementation of the interconnection policy of the State;

c.         Promote the expansion, availability and usage of all telecommunications facilities and services in the country;

d.         Promote and enhance fair and effective competition in the telecommunications industry;

e.         Ensure end-to-end interoperability of services for users at all times;

f.          Ensure that the user of any telecommunications
network can be connected to the user of any other network at all times;

g.         Establish fair and non-discriminatory provisions for
interconnection, and to provide for access to information, transparency
and equality of access to services; and

h.         Ensure compliance with prescribed technical standards for the provision of interconnection.

SECTION 7.        The interconnection between PTEs should
result into a universally accessible and fully integrated nationwide
telecommunications network for the benefit of the public.

SECTION 8.       Within the same local calling area,
PTEs should be interconnected on a direct basis, i.e., their networks
are directly linked by an interconnection facility, unless
interconnection through an IXC’s network is more feasible or efficient;
Provided, that no additional charges shall be passed on to end-users.

PTEs operating in two (2) different local calling areas must be
interconnected through an IXC’s network provided that if both PTEs are
also IXCs, the interconnection shall be effected through their IXC
networks.

Except as otherwise provided herein, all IXCs and IGF’s shall
interconnect with all other PTEs to provide subscribers or customers
freedom of choice for access to toll call or long distance services;
Provided, that all LECs shall interconnect with at least two (2) IXCs
with nationwide coverage or capability; Provided further, that if the LEC is a major supplier, it shall interconnect, directly or indirectly, with all IXCs.

SECTION 9 .       Interconnection among and between, PTEs shall ensure that:

a.         A subscriber or customer of a PTE is able to call a
subscriber or customer of any other PTE on a non-discriminatory basis;

b.         A subscriber or customer of a PTE is able to access
service provided by any other PTE either directly, or indirectly by
transiting, if technically feasible, the system or network of another
PTE; Provided, that no additional burden shall be passed on to
end-users; and

c.         The transmission of calls across and within the
respective networks should be transparent and seamless to both calling
and called parties.

SECTION 10.    Obligations of All PTEs — In addition to
the obligations and duties imposed by other laws, decrees, orders, rules
and regulations, all PTEs are obliged:

a.         To provide interconnection at cost-based charges in a manner sufficiently unbundled;

b.         To negotiate in good faith with other PTEs regarding the terms and conditions of interconnection agreements;

c.         To interconnect directly with the facilities and
equipment of other PTEs to allow access to all types of services
available to the customers of both parties;

d.         To install network features, functions, and capabilities necessary for interconnection;

e.         To provide non-discriminatory access to network
elements at any technically feasible point on charges, terms and
conditions that are just and reasonable;

f.          To provide unbundled network elements in a manner
that allows requesting carriers to combine such elements in order to
provide telecommunications service;

g.         To make available to other PTEs on a timely manner
all data and other relevant necessary to ensure an efficient, timely and
reliable interconnection; and

h.         Not to abuse information obtained from competitors in relation to interconnection with the latter.

SECTION 11.    Obligations of a Major Supplier — In
addition to the obligation imposed in Section 10, a major supplier shall
not commit acts constituting anti-competitive practices such as:

a.         engaging in anti-competitive cross subsidization to its subsidiaries or affiliates;

b.         engaging in anti-competitive cross-subsidization with other PTEs; and

c.         other acts similar to the foregoing.

SECTION 12.    An access provider must:

a.         treat each party seeking interconnection on a basis
that is non-discriminatory and no less favorable as to terms, conditions
and rates than the treatment which the access provider affords to
itself, its parent, subsidiaries, affiliates or to any other PTE to
which it is providing a materially equivalent service;

b.         treat each subscriber or customer of any
interconnecting party on a basis that is non-discriminatory and no less
favorable that the treatment which its affords to its own customers or
the customers of any other PTE to which it is providing a materially
equivalent service;

c.         deal with each interconnecting party on a
non-discriminatory basis in relation to the technical and operational
quality of the services which its provides, including the quality,
availability, time of provision, and technical standards and
specifications;

SECTION 13.     No PTE shall disconnect, disrupt or
discontinue an interconnection or bar or in any manner impede the access
by its subscribers or customers to subscribers or customers of a PTE
interconnected with it without the prior written approval of the
Commission.

ARTICLE V
Interconnection Agreements and Mandates

SECTION 14.     Procedure for Negotiation, Arbitration
and Approval of Interconnection Agreements, whether for basic or
enhanced interconnection:

1)         Agreements arrived at through Negotiation;

a.       Subject to existing technical, commercial and
operational rules or those which may hereafter be promulgated by the
Commission, PTEs may, on their own initiative, negotiate and enter into
an agreement for the interconnection of their networks or facilities.

b.       An access seeker shall serve the access provider its
request/demand for interconnection, furnishing the Commission a copy
thereof with proof of service of said notice to the other party in
accordance with the provisions of Paragraph VI of this section. The
request shall contain the following:

1.         Copies of the access seeker’s legislative franchise and CPCN/PA;

2.         System or network configuration;

3.         Proposed point/s of interconnection;

4.         Trunk requirements and signaling system;

5.         Proposed traffic routing and numbering scheme;

6.         Traffic forecast and assumptions used for a period of at least five (5) years;

7.         Traffic types and systems covered;

8.         Proposed interface;

9.         Proposed implementation schedule;

10.       List of existing exchanges which are suitable for interconnection including the number of lines available; and

11.       Compensation scheme, proposed access charge of settlement procedure.

c.       Within ten (10) days from receipt of the request or
demand for interconnection, the access provider shall serve to the
access seeker its counter-proposal or reply.

d.       Within a period of ninety (90) days from the time of
receipt of a copy of the notice by the Commission, the parties shall
discuss, negotiate and execute an interconnection agreement and submit
the same to the Commission for approval.

e.       If by the date of the expiration of the
interconnection agreement, the parties shall have failed to extend its
terms or execute an entirely new one, the interconnection agreement
except for the compensation scheme thereof shall be deemed extended and
shall remain in full force and effect until the parties have extended
the same or executed an entirely new agreement. The new and/or revised
compensation scheme as agreed upon by the parties shall retroact to the
date following the expiration of the old agreement.

f.        The parties are encouraged to avail themselves of
worldwide industry best practices for guidance in interconnection
negotiations and development of procedures for operations and
maintenance, and testing.

II.          Mediation — In the interest of public service the
Commission may, at its own initiative and at any stage in the
negotiation, intervene in the same and mediate between the parties.

III.         In cases where the two (2) PTEs refuse to negotiate
for the interconnection of their networks, the Commission may, upon the
complaint of any interested party or upon its own initiative, intervene
and assume jurisdiction over the matter and immediately direct physical
interconnection of the networks of the parties under such terms and
conditions it may deem proper under the circumstances.

Nothing in this paragraph shall, however, prevent the parties to
negotiate and execute an interconnection agreement and submit the same
to the Commission for approval. For this purpose, the parties shall be
given a period of ninety (90) days from receipt of notice of the filing
of the complaint within which to negotiate and execute an
interconnection agreement; Provided, that until an interconnection
agreement is executed the interconnection mandate adverted in the
immediately preceding paragraph shall remain in full force and effect.

IV.        Approval by the Commission — Any interconnection
agreement entered into by the parties through negotiation shall be
submitted to the Commission for approval within ten (10) days from
execution thereof. The Commission may disapprove the agreement on any of
the following grounds:

a.       The agreement or portion thereof is contrary to law, rules and regulations, public morals and safety;

b.       The agreement is not consistent with national security, public interest and convenience and necessity;

c.       The agreement does not contain the minimum provisions set forth in the immediately preceding section;

d.       The agreement or a portion thereof discriminates against a PTE which is not a party to the agreement;

e.       The compensation scheme or interconnection rates or
charges agreed upon are unreasonable, not cost-based, and/or
discriminatory; or

f.        Other just and valid causes in the interest of public service and convenience.

The Commission shall notify the parties of its approval or
disapproval of the interconnection agreement, or any of its terms and
conditions, within thirty (30) days from its submission. Otherwise, it
shall be deemed approved.

V.        Compulsory Arbitration and Interconnection Mandate:

a.  Proceedings for compulsory arbitration may be initiated motu
propio by the Commission against the parties or by any formal petition
by any interested person/s or local government unit where the parties
operate should they fail to reach an agreement within the ninety (90)
day period above-provided.

Immediately thereafter, the Commission shall assume jurisdiction
over the case, immediately direct the provisional interconnection of
the parties’ networks and declare the terms and conditions, commercial,
technical and otherwise, that shall govern the interconnection of the
parties.

Immediately thereafter, the Commission shall assume jurisdiction
over the case, immediately direct the provisional interconnection of
the parties’ networks and declare the terms and conditions, commercial,
technical or otherwise, that shall govern the interconnection of the
parties.

The Commission shall immediately notify the parties thereof and
serve upon them copies of the petition or complaint with an order
directing them to file their respective responsive pleadings within a
non-extendible period of (10) days from receipt thereof.

The case shall be deemed submitted for resolution after the
filing of the responsive pleadings, unless the Commission determines the
need for the parties to file reply and rejoinder, in which case the
matter the deemed submitted for resolution upon the filing of the latter
pleading.

b.  In all other cases the proceedings may be commenced by the
filing of a verified petition by a party with supporting documents and
papers and must contain the following:

1.      the names of the parties;

2.      unresolved issues and respective position of the parties with respect to those issues; and

3.      other matters related to the interconnection that the parties may wish to submit for resolution.

The respondent shall file its answer to the petition within a
non-extendible period of ten (10) days from receipt of a copy of thereof
and provide additional information as it deems necessary for the
expeditious resolution of the matter. After the lapse of ten (10) days,
the case is deemed submitted for resolution regardless of whether or not
the respondent was able to file its responsive pleading.

c.  Within a period of thirty (30) days from the time it is
submitted for resolution, the Commission shall resolve the petition
through the issuance of an Interconnection Mandate ordering the parties
to interconnect with each other under such terms and conditions set by
the Commission. The resolution shall be final and immediately executory.

d.  In the exercise of its duty to mandate interconnection among
disputing telecommunications carriers, the Commission shall take into
account the following, among others:

1.         the interest and convenience of the public;

2.         the necessity of interconnection;

3.         the desirability of stimulating innovative market
offerings and of providing users with a wide range of telecommunications
services both at national and local level;

4.         the availability of technically and commercially viable alternatives to the interconnection requested;

5.         the desirability of ensuring equal access arrangements;

6.         the need to maintain the integrity of the public telecommunications network and the interoperability of services;

7.         the nature of the request in relation to the resources available to meet the request;

8.         the relative market positions of the parties;

9.         the promotion of competition; and

10.       the need to achieve and maintain universal access.

e.  In the exercise of its powers, the Commission shall exert
all efforts towards the amicable settlement of all issues relating to
interconnection.

VI.        The interconnection agreement or interconnection
mandate may be revised, amended or revoked by the Commission for just
and valid cause after due notice and hearing in the interest of public
service.

SECTION 15.    The following shall be the minimum terms and conditions of interconnection agreements and interconnection mandates:

I.          General Provisions

a.  commercial and financial relations, and notably the terms of payment and the billing and collection procedures;

b.  requirement concerning the exchange of information between
the two operators and the corresponding frequency or periodicity of
notice;

c.  procedures to be followed in the event of alterations being proposed to the interconnection offer of one of the parties;

d.  definition and limitation of liability and indemnity between operators;

e.  procedures and legal remedies in case of degradation of service;

f.   intellectual property rights, whenever applicable;

g.  duration, conditions and mechanics of re-negotiation of interconnection agreements; and

h.  provisions governing requests and/or offers for new types of interconnection.

II.          Provisions on Interconnection Services Provided and the Corresponding Remuneration

a.  provisions governing access to basic services: switching and, for public network operators, leased lines;

b.  provisions governing access to supplementary services;

c.  provisions governing billing services for third parties; and

d.  provisions governing collocation.

III.         Provisions on the Technical Aspect of Interconnection

a.  measures implemented to allow users equal access to the various networks and services and equivalent formats;

b.  measures to ensure compliance with the essential requirements;

c.  comprehensive description of the interconnect interface;

d.  the quality of the services provided including, but not
limited to availability, security, efficiency and synchronization; and

e.  traffic routing arrangements

IV.        Arrangements for the Establishment of Interconnection

a.  provisions governing service provision: traffic
forecasting arrangements and the implementation of interconnect
interfaces, procedures concerning the identification of the termination
points of leased lines and the time frame for provision;

b.  the designation of the points of interconnection and the description of the physical arrangements for interconnection;

c.  arrangements for the reciprocal sizing of interface
equipment and the systems common to each network so as to maintain the
quality of service provided for in the interconnection agreement as well
as compliance with the essential requirements;

d.  arrangements for testing the operation of interfaces and the interoperability of services; and

e.  arrangement for clearing and recording faults.

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 or customer of another party. Unless
otherwise agreed upon, the billing and collection of payments for
outgoing calls made by a subscriber or customer of a party but using the
IXC or IGF facility of another party, shall be the responsibility of
the party-IXC or party-IGF, as the case may be.

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. The data required to be included in the
statement shall be mutually agreed upon by both parties. In the event a
party fails to submit the settlement statement within the said period,
any available data for purposes of reconciliation and statement shall be
used. The party who failed to submit the data shall have the right to
contest or dispute the reconciled data within three (3) months from
transaction month. Thereafter, said party shall be barred to dispute the
data.

If the party with a receivable does not agree with the settlement
statements of the other party, it shall send its own reconciliation
statement to the latter within sixty (60) days from receipt of the
statement.

A party with payable balance shall pay all undisputed calls within
thirty (30) days from receipt of the billing statement sent by the
party with receivable.

In cases where the statements of the parties do not reconcile, the following rules shall govern:

a.  If the variance is four percent (4%) of the amount payable
as reflected in the books of the payor or lower, the party with the
(payable) balance shall pay the lower of the two amounts reflected
separately in the respective reconciliation statement of the parties;

b.  If the variance is more than four percent (4%) but not more
than seven percent (7%) of the amount payable, the party with (payable)
balance shall pay the lower of the two amounts reflected separately in
the respective reconciliation statements of the parties plus fifty
percent (50%) of the amount of the variance.

c.  If the variance exceeds seven percent (7%), the parties
shall be given a period of thirty (30) days to settle the dispute. If
the parties fail to settle their dispute, the same shall be referred to
the Commission for arbitration.

d.  In cases falling under (a) and (b), payment of the party
with a balance shall be made within thirty (30) days from receipt of the
reconciliation statement sent by the party with receivable; Provided,
that the payment by the party with a balance shall be without prejudice
to the right of the party with receivable to collect the remaining
balance and for this purpose, the parties shall be given thirty (30)
days to settle their dispute. If the parties fail to settle their
dispute, the same shall be referred to the Commission for arbitration.

The proceedings mentioned in this section shall be summary in
nature and the Commission shall resolve the matter within a period of
thirty (30) days from the time the same is submitted for resolution.

Nothing in this Section shall prevent the parties from their
settling their disputes among themselves by continuous reconciliation of
their statements.

SECTION 19.     Except as provided in the preceding
section, the party with a (payable) balance shall settle the amount due
within thirty (30) days after the reconciliation of the statements.

SECTION 20.    For International Calls: The collection
of payments from the Foreign Administrations for all incoming paid calls
and outgoing collect calls shall be the responsibility of the IGF
operator that received/sent said international paid calls from/to said
Foreign Administration. The parties shall settle the interconnect
charges for a particular month within thirty (30) calendar days from
receiving the statements also for said particular month from all its
foreign correspondents through a toll journal mutually agreed upon by
both parties. Within fifteen (15) days from receipt of the toll journal,
the party with a payable shall send to the other party a reconciliation
statement reflecting the amount computed as payable, otherwise, the
toll journal shall be deemed accepted by the party with a receivable.

SECTION 21.    The modes of payments including the
interests, penalties or surcharges for late payments shall be mutually
agreed upon by both parties.

ARTICLE VII
Establishment and Location of Points of Interconnection

SECTION 22.     POIs must be established and maintained
at any mutually agreed technically feasible point/s in the carrier’s
system and/or network or at point/s as may be mandated by the
Commission.

SECTION 23.     In the interconnection agreement or
interconnection mandate between LECs and IXCs or IGF operators, the LEC
shall be required to program and activate in its switches or system the
access code of the IXC or IGF operators, as the case may be, as assigned
by the NTC, to enable the LEC subscriber or customer to access the long
distance carrier of his choice.

In the event that an LEC upgrades to stored program control (SPC)
exchanges, the parties shall implement equal access preprogrammed option
and still allow the subscriber at the time of his call freedom of
selection of any other inter-exchange or international gateway operator.

SECTION 24.     The access seeker must provide sufficient
details to the access provider in relation to a POI/s and/or POP/s to
enable the latter to evaluate the nature and extent of network
conditioning that may be required and to estimate the cost of
establishing the POI/s and/or POP/s.

SECTION 25.     For IXC-to-IXC interconnection, each
carrier shall bear its own port, data fill and switch costs to support a
POI and the parties shall share the cost of the interconnect capacity
equally.

ARTICLE VIII
Interconnection of the Systems

SECTION 26.    The interconnection links and trunks
needed to effect interconnection shall be provided by each of the
interconnecting parties in accordance with their respective traffic
requirements on 50-50 basis unless otherwise provided in these rules.
However, other terminating facilities required for the interconnection
that are to be installed at their respective premises shall be borne by
each party.

SECTION 27 .    In inter-exchange interconnections, the
IXC shall provide interconnecting facilities up to the main distribution
frame (MDF) of the LEC; Provided, that the latter has a total system-wide exchange line capacity not exceeding five thousand (5,000); Provided, further, that this provision shall apply only to LECs that do not offer any other services except VAS.

For LECs with more than five thousand (5,000) total system-wide
exchange line capacity or offering telecommunications services other
than VAS, the provisions of the immediately preceding section shall
apply, except as may be otherwise agreed upon by the parties.

SECTION 28.     The IGF operator shall provide
interconnecting trunks up to the Main Distribution Frame (MDF) of the
LEC where the IXCs cannot provide the required facilities. In case a LEC
also is an IXC, the interconnection of the IGF operator to the LEC
shall be through the latter’s IXC facility.

If the IGF operator would want to interconnect directly with the LEC, the provisions of Section 27 shall apply.

SECTION 29.     Unless specified by the Commission, the point of interconnection (POI) shall be as follows:

1.1       LEC to LEC

1.1.1 Single-switch LEC to Single-switch LEC within a local (calling) service area.

The LEC shall interconnect their local switches directly.

1.1.2 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.

1.1.3 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.

1.2       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 LEC’s
service area.

1.3       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 LEC’s service area.

1.4       LEC to CMTS

1.4.1  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.

1.4.2  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.

1.5       LEC to Trunk Radio Network (TRN)

1.5.1   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.

1.5.2  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.

1.6       LEC to Radio Paging Network (RPN)

1.6.1  Single-switch LEC to the RPN

The switch of the single-switch LEC shall be directly interconnected to RPN.

1.6.3  Multi-switch LEC to the RPN. The RPN shall be
interconnected to the nearest tandem or local switch of the multi-switch
LEC.

1.7       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.

1.8       IXC to IGF

The IGF shall be interconnected to the nearest point in the IXC network.

1.9       CMTS to CMTS

The CMTS networks shall be interconnected at all technically feasible points in their networks or through an IXC.

2.0       TRN to CMTS

Their networks shall be interconnected at all technically feasible points.

2.1       Others

Except as already provided above, two (2) PTEs operating in
separate or non-overlapping service areas shall be interconnected
through the facility of an IXC.

ARTICLE IX
Cost of Interconnect Facilities

SECTION 30 .    Cost of Interconnect Facilities and Ownership

a.  Unless otherwise agreed upon by the parties or provided in
existing memorandum circulars, the parties shall jointly and equally
provide and share the costs of the interconnect facilities necessary to
interconnect the systems of both parties: Provided, that in an
interconnection between an IXC and a LEC with less than five thousand
(5,000) total system-wide exchange line capacity and does not offer or
provide any other telecommunications services except VAS, the former
shall shoulder the cost of interconnection.

b.  As an alternative, the parties may agree that one party
(advancing party) shall, at its own expense, advance the costs of the
interconnect facilities.

c.  Beneficial and legal ownership of the portion of the
interconnect facilities at the premises of the other party (reimbursing
party) shall vest upon full payment of half, or as maybe mutually agreed
upon, of the costs of interconnection.

d.  No fees shall be collected from a party for the collocation
of its interconnection facilities within the premises of another party
if such facilities are indispensable to effect or implement the
interconnection of the parties’ basic services.

ARTICLE X
Efficient Provisioning of Capacity

SECTION 31.     Interconnection shall be effected 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.

SECTION 32.    The Commission in consultation with the
industry shall develop codes of practice to be used in forecasting,
ordering and provisioning of interconnection capacity.

SECTION 33.     If warranted, a PTE may request another
PTE to which it is interconnected, the provisioning of additional
interconnection capacity. The request should contain the following
information:

a.      the number interconnection capacity required to meet additional demand;

b.      the approximate date the additional interconnection capacity required must be provisioned or activated; and

c.       a traffic study adverted in Sec. 40 below

SECTION 34 .    All requests by a PTE for the
provisioning or activation of additional interconnection capacity shall
be filed with the Commission not later than the day the same was served
on the other party.

SECTION 35.    The access provider must provide the
access seeker with the following information within ten (10) days from
the time of receipt of the latter’s request copy furnished the
Commission:

a.      whether it is willing to grant the request;

b.      whether it will be able to do so within the time frames required by the access seeker; and

c.       in the event the access provider is not willing or able
to agree to the request or it is unable to do so within the time frame
requested, specific and detailed justification for its unwillingness or
inability.

SECTION 36.     Where the access provider has informed
the access seeker that is able to provide capacity, it must ensure that
the system conditioning and provisioning procedures required to provide
capacity is undertaken within the agreed period.

SECTION 37.     The provisions of Section 14 insofar as
they are not inconsistent with the provisions of this Article shall
govern the negotiation, arbitration and approval of agreements for the
provision or installation of additional interconnection capacity.
However, if there is no agreement within the aforementioned ten (10) day
period, the Commission shall intervene and decide on the matter.

SECTION 38 .    A PTE provides reasonable advance notice
to all other PTEs with which it is interconnected of planned changes to
its telecommunications services of the latter.

SECTION 39 .    Grade of service P.01 or one per cent
(1%) blocking must be provided by both PTEs to each other starting at
the point of interconnection and throughout their respective networks.

SECTION 40.     Capacity —

a.  The parties shall ensure that sufficient trunk and
interconnect facilities are supplied at each point of interconnection to
meet the prescribed grade of service for conveyance of traffic between
the parties.

b.  In the event of failure to meet the prescribed grade of
service, both parties shall mutually agree to immediately implement
solutions to achieve the required grade of service.

c.  Both parties shall exchange traffic and facility forecasts
including actual traffic measurements and parameters at least once every
three (3) months to facilitate allocation of facilities for future
requirements, as well as basic information such as the description of
the existing and future network relevant to interconnection and list of
exchanges (existing and planned) suitable for interconnecting including
lines available.

d.  Both parties shall provide additional circuits based on
traffic measurements and studies to be conducted covering a period of
thirty (30) days separately but simultaneously by both parties. If
traffic data from both parties do not tally, the number of additional
trunks to be provided shall be determined using agreed traffic data
which shall in no case be less than half the difference between the
traffic data. The additional trunks shall be placed in operation not
later than fifteen (15) days from date of agreement.

e.  LEC to LEC: If traffic data are not available, the initial
interconnection trunk capacity shall be calculated using Erlang B
Equation with the grade of service at P.01, and assuming that the
traffic per subscriber line is 0.12 Erlang during busy hour.

f.   Other types of Network Interconnection: The parties shall
initially mutually agree on the number of interconnect trunks/subscriber
lines. Additional trunks/subscriber lines shall be based on actual
measured traffic referred to in Paragraph (c).

ARTICLE XI
Interconnect Service Charging Guidelines

SECTION 41.     Interconnect service charges shall be set
so as to promote efficient and sustainable competition for the benefit
of the public, and promote economic and efficient network use.

SECTION 42 .    Charges in Interconnection Agreements
shall respect the principles of objectivity, transparency, reciprocity
and non-discrimination. Undue imposition of excessive charges is not
allowed.

SECTION 43.     The pattern for interconnect service
charges should match as closely as possible the pattern of underlying
costs incurred such that when a fixed cost is incurred, a fixed charge
should be imposed and when a usage cost is incurred, a usage charge
should be imposed.

SECTION 44.    All charges for interconnect services
shall be transparent and unbundled so that the interconnecting PTE does
not have to pay for any network elements, equipment, facility or
component it does not need for interconnection.

SECTION 45.     The specific charges for interconnect
services shall be based on the long run incremental costs of providing
the services. This requirement shall not be imposed until such time that
the Commission prescribes a specific cost methodology.

SECTION 46 .    The interconnect services shall be classified into basic or ancillary interconnection service:

Basic interconnection service refers to regular call conveyance
services and include all origination and call termination of basic
telecommunications services.

Ancillary interconnection service refers to the conveyance of
traffic involving enhanced services, or to enable a party to offer other
special or ancillary services such as Equal Access, Carrier
Pre-subscription, Number Portability, Directory Inquiry,
Operator-Assistance and Emergency Services, or use of certain network
elements including call related data bases not essential for basic
interconnection services. Provision of ancillary service interconnection
shall be dependent on the service provider.

ARTICLE XII
Charges for Basic Interconnection Service

SECTION 47.     The charges for basic interconnection
service shall be by way of access charges for network interconnect usage
on interconnected networks and shall consist of discrete charges, for
call origination, call transiting and call termination, and a network
interconnect subsidy for the LEC, if it be the other party to the
interconnection but this subsidy shall not apply where the
interconnected networks are both LECs. The LEC shall be entitled to such
subsidy albeit it is at the same time an IGF and/or CMTS operator.

SECTION 48.     IGF and CMTS operators (who are
themselves required to provide LEC service) shall not be exempt from the
requirement to provide a network interconnection subsidy when they
interconnect with the local exchange of other carriers.

SECTION 49.     The interconnect subsidy shall be
prescribed by the Commission for access deficit, high cost service areas
and universal access support as required.

SECTION 50.     National and international long distance
calls and CMTS calls originated and/or terminated by PTEs shall include
the appropriate interconnect subsidy which shall be collected and
remitted to the LECs.

SECTION 51.     Where an access provider offers several
services that are in competition with the services of the access seeker,
the same interconnect service charges shall be imputed to the access
seeker’s competing service through its internal transfer pricing
arrangements between different categories of service.

ARTICLE XIII
Charges for Ancillary Interconnection Services

SECTION 52.     The charges for ancillary interconnect
services should be based on the costs of providing the specific
interconnect services requested by the Access Seeker, which may include:

a.      Non-recurring (one-time) and recurring (rental) costs of
implementing the physical interconnection, such as engineering,
specific equipment, signaling resources, compatibility testing and
connection maintenance; and

b.      Variable charges for ancillary and supplementary
services, such as directory and operator assistance, data collection,
billing, switched-based and advanced services whenever applicable.

ARTICLE XIV
Technical Specifications and Operational Requirements

SECTION 53 .    The interconnecting parties shall
maintain and operate their facilities in accordance with their
respective obligations in their interconnection agreement duly approved
or an interconnection mandate issued by the Commission and shall comply
with the applicable technical standards specified in NTC MC 10-17-90
(Service Performance Standards) and NTC MC 10-16-90 (Technical
Standards) and such other standards that the Commission shall hereafter
prescribe.

SECTION 54.    The interconnecting parties shall:

a.         cooperate and provide facilities in their respective system for testing;

b.         agree on standard procedures on trouble reporting,
testing and see to it that the information are shared between them to
facilitate the efficient routing of messages over all points of
connection;

c.         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 description
of the existing and future network relevant to interconnection and list
of exchanges, existing and planned, suitable for interconnection
including the number of lines available; and

d.         provide additional circuits based on traffic
measurements and studies to be conducted covering a period of thirty
(30) days separately but simultaneously by both parties. The parties
shall compare study results and agree on the number of circuits to be
added.

Misrouted or unauthorized traffic shall not be considered in the computation for determining the required number of circuits.

In the event that the parties cannot reach an agreement, the
matter shall be brought by any or both of the parties to the Commission
for arbitration.

The implementation of the additional circuits shall be completed
within the next fifteen (15) days after the number of circuits has been
agreed upon.

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 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 under-utilization over a period of at least six (6) months;

SECTION 55 .    PTEs who do not meet the prescribed
service performance and technical standards shall be required to upgrade
their facilities to comply with national standards within a period of
time as may be determined by the Commission taking into consideration
the attendant circumstances.

ARTICLE XIV
Access to Network Elements on Unbundled Basis

SECTION 56.     An access provider may provide to an
access seeker, for a provision of a telecommunication service, access to
its network elements on an unbundled basis.

SECTION 57.     The provision of access to unbundled
network elements includes the provision of a connection to an unbundled
network element independent of the access provider’s providing
interconnection to the access seeker.

SECTION 58.     An access provider shall provide an
access seeker access to an unbundled network element, along with all of
the unbundled elements features, functions, and capabilities, in a
manner that allows the requesting PTE to provide any telecommunications
service that can be offered by means of that network element.

SECTION 59 .    An access provider may provide, on such
commercial terms and conditions that are just, reasonable and
non-discriminatory, any technically feasible method of obtaining

interconnection or access to unbundled network elements at a particular point upon request by an access seeker.

SECTION 60.     Unless otherwise agreed upon by the
parties, access to unbundled network elements shall be linked through
“meet point” interconnection arrangements, provided that in case the
access provider is a LEC, the point of interconnection shall be
established within the LECS’s service area.

SECTION 61.     A previously successful method of
obtaining interconnection or access to unbundled network elements at a
particular premises or point on the network of the access provider is
substantial evidence that such method is technically feasible in the
case of substantially similar network premises or points.

SECTION 62.     An access provider that denies a request
for a particular method of obtaining interconnection or access to
unbundled network elements on the access provider’s network must prove
to the Commission that the requested method of obtaining interconnection
or access to unbundled network elements at that point is not
technically feasible.

SECTION 63.     An access provider shall not be required
to provide for physical collocation of equipment necessary for
interconnection access to unbundled network elements at its premises if
it demonstrates to the Commission that physical collocation is not
practical for technical reasons or because of space limitations. In such
cases, the access provider shall be required to provide virtual
collocation, except at points where the access provider proves to the
Commission that virtual collocation is not technically feasible. If
virtual collocation is not also technically feasible, the access
provider shall provide other methods of interconnection and access to
unbundled network elements to the extent technically feasible.

SECTION 64.     Existing agreements for the provision of
access to network elements on a bundled basis shall continue to be in
force and effect until such time that the Commission shall have
reestablished rates and settling procedures which will provide for the
economic viability of PTEs and a fair return of their investments.

ARTICLE XV
Standards of Physical and Virtual Collocation

SECTION 65.     Subject to fair and non-discriminatory
compensation arrangements, and to the extent technically feasible an
access provider shall provide physical collocation and virtual
collocation to access seekers on a first come-first served basis;
Provided, that in case the compensation arrangements for collocation are
not contained in the interconnection agreement, the delay in the
negotiation for and execution of compensation arrangements shall in no
way be a cause for the delay in the execution of interconnection
agreement and actual interconnection of the parties.

SECTION 66.     Equipment used for interconnection and access to unbundled network elements includes, but is not limited to:

a.         Transmission equipment including, but not limited to optical terminating equipment and multiplexers; and

b.         Equipment being collocated to terminate basic transmission facilities.

SECTION 67.     Nothing in these rules shall be construed
to require an access provider to permit collocation of switching or
billing equipment or equipment used to provide enhanced services.

SECTION 68.     When providing virtual collocation, an
access provider shall, at a minimum, install, maintain, and repair
collocated equipment identified in Section 66 within the same time
periods and with failure rates that are no greater than those that apply
to the performance of similar functions for comparable equipment of the
access provider.

SECTION 69 .    An access provider shall allocate space
for the collocation of the equipment identified in Section 66 of this
section in accordance with the following requirements:

a.         An access provider shall make space available within
or on its premises to access seekers on a first-come, first served
basis; Provided, that the access provider shall not be required to lease
or construct additional space to provide for physical collocation when
existing space has been exhausted;

b.         To the extent possible, an access provider shall make
contiguous space available for access seekers that seek to expand their
existing collocation space;

c.         When planning renovations of existing facilities or
constructing or leasing new facilities, an access provider shall take
into account projected demand for collocation for equipment;

d.         An access provider may retain a limited amount of
floor space for its own specific future needs or uses; Provided, that it
may not reserve space for future use on terms more favorable than those
that apply to other PTEs seeking reserve collocation space for their
own future use;

e.         An access provider shall relinquish any space held
for future use before denying a request for physical collocation on the
grounds of space limitations; and

f.          An access provider may impose reasonable restrictions on the warehousing of unused space by collocating PTEs.

SECTION 70 .    An access provider shall permit
collocating PTEs to collocate equipment and connect such equipment to
unbundled network transmission elements obtained from the access
provider, and shall not require such PTEs to bring their own
transmission facilities to the premises of the access provider in which
they seek to collocate equipment.

SECTION 71.    Whenever possible, an access provider may
permit a collocating PTE at its premises and to connect its collocated
equipment to the collocated equipment of another PTE within the same
premises; Provided, that the collocated equipment is also used for
interconnection with the access provider or for access to its unbundled
network elements.

SECTION 72.     An access provider shall provide the
connection between the equipment in the collocated spaces of two or more
PTEs, unless it permits one or more of the collocating carriers to
provide this connection for themselves.

SECTION 73 .    An access provider is not required to
permit a collocating PTE to place their connecting transmission
facilities within its premises outside of the actual physical
collocation space.

SECTION 74.     An access provider may require security
arrangements to separate a collocating telecommunication carrier’s space
from its facilities.

SECTION 75 .    An access provider shall permit a
collocating PTE to subcontract the construction of physical collocation
arrangements with contractors approved by it; Provided, that it shall
not unreasonably withhold approval of contractors. Approval by an access
provider shall be based on the same criteria it uses in approving
contractors for its own purposes.

ARTICLE XVI
Operation of an International Gateway

SECTION 76.     Interconnection among telecommunications
carriers shall be effected in such a manner that it permits re-routing
of call from an IGF operator which is rendered inoperative whether in
whole or in part in the event of strikes, lockouts, disasters,
calamities, and similar causes to other IGF operators.

SECTION 77 .    Unless otherwise agreed, each party shall
be responsible for the construction, operation and maintenance of
interconnection equipment and facilities located or installed within its
premises to ensure adequate, reliable, and efficient service to the
public at all times. Any modification, substitution or addition of
interconnection equipment and facilities required shall be mutually
agreed upon by both parties.

SECTION 78.     Each party shall take all necessary
steps, precautions and safeguards in the location, construction and
maintenance of its equipment, and insure their safety from natural and
human hazards and other forms of interference and disruptions.

ARTICLE XVIII
Maintenance, Fault Reporting and Clearance Procedures

SECTION 79.    The parties shall mutually agree on the
maintenance procedure to be followed strictly observing and complying
with the service performance standards prescribed by the Commission and
the internationally accepted performance standards.

SECTION 80 .    The parties shall exert all reasonable
efforts necessary to maintain the interconnection facilities in
efficient working order and to repair the same in prompt and effective
manner. Maintenance of Interconnection facilities includes, but not
limited to, routing meter readings, minor repairs, minor technical
adjustments and observance of proper cleanliness of the equipment/radio
stations.

SECTION 81 .    All fault reporting that affects traffic
flow must be exchanged between the parties and all reported faults shall
be dealt with promptly in accordance with procedures to be agreed by
the parties. The parties shall coordinate with and assist each other
whenever possible in the identification and rectification of faults on
interconnect links and/or transmission facilities.

When one party has cleared the fault, positive confirmation should
be given to the other party. Updates of fault clearances shall be made
available to the other party upon request.

ARTICLE XIX
Force Majeure

SECTION 82.     The obligations of the parties to an
interconnection agreement shall be considered relieved and discharged
upon the occurrence of any of the following events;

a.         Condemnation of either party’s premises by any
authority having the power of eminent domain to the extent that it
directly and adversely affects the performance of the obligations or
exercise of the rights of the parties;

b.         Actions taken in compliance with any valid order or
regulation of the Commission or any duly constituted authority of the
Republic of the Philippines;

c.         Invasion by a foreign power of the country existence
of a state of war in the Philippines to the extent that it directly and
adversely affects the discharge of the obligations and exercise of the
rights of the parties;

d.         Any action taken by a local or national governing
body which tends to prevent the continued use of the properties of
either party for the purpose contemplated herein to the extent that it
directly and adversely affects the discharge of the obligations and
exercise of the rights of the parties;

e.         Rebellion or insurrection which directly affects the
performance of the obligations and exercise of rights of the parties;
and

f.          Acts of God to the extent that they directly and
adversely affect the discharge of the obligations and exercise of the
rights of the parties.

ARTICLE XX
Confidentiality of Information

SECTION 83.     All information provided by one party to
another in relation to interconnection between them must be treated as
strictly confidential and shall not be disclosed or divulged to any
third party unless it is with prior knowledge and written consent of the
party providing the information or the disclosure thereof is required
by law or by any lawful order of any competent authority.

ARTICLE XXI
Penalties

SECTION 84.     Any violation of these rules and those
promulgated by the Commission pursuant to Executive Order No. 59,
Republic Act No. 7925 and their implementing rules and regulation shall,
upon due notice and hearing, be subject to any or combination of the
following penalties:

a.         Administrative fines, penalties and sanctions as may
be imposed by the Commission pursuant to existing laws, decrees, orders
and rules and regulations;

b.         Suspension of further action on all pending and future applications for permits, licenses, or authorizations;

c.         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;

d.         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 85.     Government financial institution are
hereby discouraged from extending loans to PTEs who violate any
provision of this Memorandum Circular.

ARTICLE XXII
Construction of the Rules

SECTION 86.     These rules shall be liberally
interpreted to promote and encourage interconnection between and among
all the telecommunications carriers.

SECTION 87.     Nothing in these rules shall be
interpreted to limit, restrict or otherwise prohibit the parties from
entering into an agreement whose terms and conditions are better than
what is being mandated by these rules for their mutual benefit and for
the benefit of the public.

ARTICLE XXIII
Transitory Provisions

SECTION 88.    PTEs which are interconnected to each
other at the time of the effectivity of these rules and regulations, and
whose interconnections agreements stipulate or provide for terms and
conditions that are not consistent or in conflict with or do not comply
with these rules and regulations, shall have a period of one (1) year
from the effectivity hereof to re-negotiate and agree on the amendment,
revision or modification of such terms and conditions so as to comply
with these rules and regulations. In the event of a failure of the
parties to agree on such amendments, revisions or modifications, such
shall be considered a dispute, and upon petition of a party to the
interconnection, the Commission shall assume jurisdiction and resolve
the same in accordance with Section 14 hereof.

SECTION 89.     Existing settlement agreements using the
revenue sharing scheme pursuant to NTC Case No. 88-145 shall remain
valid until such time that the Commission shall have established and
prescribed a specific cost methodology.

SECTION 90 .    All PTEs that do not have the capability
to measure both incoming and outgoing are hereby given a period of two
(2) years from the effectivity of this Memorandum Circular within which
to install, operate and maintain equipment, devices and capabilities to
measure both incoming and outgoing calls.

In the absence of said capability, data/records of the concerned
PTE that has such capability shall be used for purposes of billing and
settlement and any other technical requirements.

ARTICLE XXIV
Final Provisions

SECTION 91 .    Any portion or section of these rules
which may be declared invalid or unconstitutional shall not affect the
validity of the other remaining portion or sections.

SECTION 92.     All existing memoranda, circulars, rules
and regulations inconsistent with the provisions of this memorandum
circular are hereby repealed or amended accordingly.

SECTION 93 .    This memorandum circular shall take
effect fifteen (15) days following the completion of its publication in
the Official Gazette or in a newspaper of general circulation in the
Philippines; Provided, that at least three (3) certified copies thereof
be filed with the University of the Philippines Law Center.

Adopted: 21 July 2000