Chapter 6

This implies that the attainment of benchmarks set for universal access for our country can be more reasonable goal to work for than that of universal service. A recent development - promoted by the emerging Information Age - is the expansion of the concepts of both universal service and universal access. As the role of information in our daily lives increases exponentially - evidenced by the explosive growth of the Internet - access to information has become a critical element of both universal access and universal service. The progressive broadening of access to information is now an integral aspect of universal access.

This means that the provision of a telephone is no longer enough in the emerging Age of Information. The goal is now to provide access to both communications and information services.

Another expansion that has been introduced to the concepts of universal service and universal access has recently emerged. With the advances in technology and with users’ appetite whetted for the modern, sophisticated conveniences, access has become no longer just for basic services but also for the new, advanced and broadband multimedia multi-services.

All these lead to the conclusion that what should be charted is the progressive attainment of universal access benchmarks or goals which, in turn, will lead to the eventual attainment of universal service in our country. A practical time-bound definition of each of the goals of universal access must be based on the projected socio-economic development of the Philippines.

The proposed approach is for the Philippines to set universal access goals, for example, in terms of five-year benchmarks. The ultimate goal of attaining universal service can then be set at a certain year in the next century.

Critical to the attainment of these set goals are the policies, regulations and the required mechanisms that will support the realization of the PII vision. It is important that a responsible government body be given the mandate to formulate, implement and monitor them in order to achieve the goals of universal access and universal service in the Philippines.

Equally critical are the areas of technology transfer and the financing of PII projects. For a developing country like the Philippines, the acquisition of the required technology must be organized and enabled but it is the problem of funding development projects that appears to be a major concern. PII projects, as a rule, will require relatively huge capital requirements. The government has many other projects of equal if not higher priority than what can be accorded to the PII. In this sense, there is a need for an autonomous funding mechanism for PII projects that will aim to provide service particularly to the remote and rural areas of the country. Other government policies such as incentives, rules for foreign investors, special funds and similar “come-ons” that will ensure the availability of funds to finance PII projects will have to be enunciated.

While the national government should take the responsibility of ensuring that the provision of universal access and universal service is on target, it should also attempt to determine how responsibility can be appropriately and equitably allocated. Private sector-owned business enterprises, local government units and the civil society in general should all have to play roles in this noble undertaking. The realization of the PII vision is certainly the responsibility of every Filipino.

The detailed action plans that follow were designed and structured to address the foregoing concerns and to help ensure the speedy and orderly attainment of the goals of universal access and universal service in the country.

Action Plan 1

Formulate a Medium-Term Strategic National Development Plan for the Philippine Information Infrastructure (PII)

Government must develop the first medium-term strategic plan for the PII. This plan is proposed to be referred to as the “Philippine Information Infrastructure (PII) National Development Plan” or the “PII NDP”.

At the present time, the Department of Transportation and Communications (DOTC) is the government department mandated to lead the accelerated development of the PII. This lead role should be re-affirmed through an executive fiat that will entrust the DOTC with the prime responsibility for the accelerated and rational development of the PII. It shall also give the DOTC the task of leading the work of formulating the PII NDP. The order should also require all departments, agencies and offices of the executive branch of government to cooperate with the DOTC and support it in this major effort for the PII.

An Executive Order (EO) signed by the President of the Philippines should clearly recognize the need for this national development plan and mandate the DOTC to undertake the work on this strategic plan in cooperation with other government departments, agencies and offices as well as with the private sector.

This action plan envisions that the proposed EO should also create the national council for the PII proposed in another action plan in this PII Framework Proposal. (Please refer to Action Plan No. 31 entitled “Establish a National Council for PII Development.”) This national council will be tasked with, among others, the duty of supporting the
DOTC in the preparation of the proposed national development plan for the PII.

The EO should also define the responsibilities and roles of the different relevant government departments, agencies and bodies in the task of formulating the PII plan in relation to the DOTC. These government entities will include the National Information Technology Council (NITC), the Department of Science and Technology (DOST), the National Telecommunications Commission (NTC), the National Computer Center (NCC) and the National Economic Development Authority (NEDA).

It is critical that work on this proposed development plan should be done by the DOTC in close cooperation and effective coordination with the NITC as well as with DOST, NTC, NCC and the NEDA.

In this regard, it is proposed that the role of the NITC shall be to coordinate the planning work that the DOTC will be doing with those of the other government departments, bureaus, offices and agencies involved in the T-I-G-E-R-S strategy of the National Information Technology Plan (NITP). The DOST is proposed to provide the vital linkages with the science and technology communities in the country. NEDA, on the other hand, should provide the necessary guidance and direction in order that the PII NDP will be developed in accordance with the broad parameters set by the national development plan for the Philippines. The PII NDP will be a very important input to the updating of the NITP/IT21 as well as to the national development plan being prepared by the NEDA for the Philippines.

The PII National Development Plan will be different from the National Telecommunications Development Plan (NTDP) that the DOTC has prepared and regularly updates for the telecommunications sector. The regular review and updating of the PII NDP should also be the responsibility of the DOTC. The two plans obviously have to be closely correlated and effectively coordinated by the DOTC on a sustained basis.

The proposed PII NDP should serve as the integrating platform for all the existing but different plans and projects of the private sector related to the PII with those of government.

The formulation of the PII NDP should, therefore, be done in close and effective cooperation with the private sector. This was the strategy adopted by the DOTC in the formulation of the original NTDP as well as in its review and up-dating process.

The DOTC, in fact, has been very successful in getting the private sector involved in its major undertakings in telecommunications. This bias for private sector involvement also reflects the basic principle that the accelerated and rational development of the PII should be based on a close and effective partnership between government and the private sector.

The proposed Executive Order creating the national council for the PII and mandating DOTC to develop the PII national strategic plan should be signed by the President of the Philippines by early 1999.

Action Plan 2

Establish Well-Defined and Time-Bound Goals for Universal Access

Universal access under the PII context is proposed to mean access to both basic and advanced communications services. It also means access to information as well. Universal access must be at affordable costs, from anywhere, whether the location is urban or rural or whether it is in population centers or is remote from them.

The goal of universal access is to progressively move towards the full attainment of the set goal for universal service. It is only when universal service is finally attained that there will be full connectivity and full access to anyone, anytime, from anywhere and right from where anyone is.

Universal access benchmarks or “vital signs” for the Philippines should be defined in five-year phases starting the year 2000 and up to year 2020. Benchmarks are quantitative and qualitative descriptions of desired achievements of certain levels of universal access. The country's progressive march towards universal service - the basic objective of universal access - must be closely monitored in order that progress can be measured step-by-step and adjustments can be made, if and when needed.

“Teledensity” is an international standard of measure of access to basic voice or telephone service generally used by countries that are members of the International Telecommunications Union (ITU). It is expressed in the number of fixed wired main lines per 100 persons or inhabitants of a country.

Under the new concept of universal access, teledensity can no longer be the only indicator of development progress. Equally important

To teledensity as indicators are the affordability of the services offered, the quality of services and the types of services extended including phone substitutes like cellular, PCOs and others as well as coverage of the services offered. The universal access criteria should also not only consider population (for example, one telephone for every 100 inhabitants of a region) but should also consider other parameters. This can include the distance from the nearest telephone (a telephone is within 10 kilometers) and the time needed to reach one (a telephone is within 15 minutes walking distance) from any home in the country.

The use of teledensity as an indicator of progress for the PII development process can also be made more meaningful if it will measure not only progress on a national or regional level but also progress on local (provincial, city and even municipal) levels. Telephone penetration can also be described using households in a locality as a basis instead of the number of inhabitants.

Each country must decide on its own universal access benchmarks, indicators and goals according to its given economic situation. The Philippines must set its own universal access benchmarks. These benchmarks must be carefully set after close deliberations among all the parties involved in the PII planning process. It is proposed that these benchmarks be set as part of the national development plan for the PII. It is also proposed that work on the determination of what are the most practical and reasonable goals for universal access for the Philippines should be done through an in-depth study.

A joint government and private sector ad hoc study group that will be organized by the DOTC should undertake the study with the assistance of the proposed national council for the PII. It is assumed here

that such body has already been organized by the time the working group starts its work. The proposed PII Task Force shall also assist the working group. Considering the valuable and critical role of the private sector on this undertaking, representatives of the industry should serve in this working group and actively participate in its work.

The DOTC might have to appropriate funds to engage the services of consultants to assist the ad hoc working group. The same consultants can also assist the DOTC in its other PII responsibilities. Alternatively, a foreign funding source may be available to provide the expert services that the DOTC and its working groups may need.

The initial results of the work on universal access goals should be available for PII development planners to consider and adopt in time for the development of the PII NDP as well as for the updating of the NITP/IT21 and the national development plans for the country.

When the goals for universal access are finally defined and approved, the PII vision, particularly the target date for its attainment, should be reviewed and then either validated or modified, as the case may be.

Considering the importance of this proposed action plan, it is envisioned that the DOTC will immediately and create the proposed ad hoc study group particularly if the PII national council has not yet been created by that time. This action plan envisions that by the end of the first quarter of 1999, the work of the group has already been completed and DOTC can already announce the nation’s goals for universal access.

With these universal access goals known, the DOTC will be able to also determine what will really be the target year for the realization of universal service in the Philippines.

Action Plan 3

Define the Roles of Government and Private Sector in PII Development

A principle set for the PII development process is that the private sector shall continue to be the major engine of development for the PII. There may, however, be a need for government to also have its own development projects for the PII. This is due to the concern that, in some specific cases, only action from government can bring the benefits of the PII to Filipinos living in remote and rural areas of the country.

Private enterprises, understandably, are not keen on investing in the so-called “unserved” and “under-served” areas of the country. Operating in these areas is, as a rule, not profitable. These areas usually cannot justify private sector investments as market and financial studies normally show the lack of financial viability and project feasibility. It is in such areas where the government must fill the gap and, if needed, should build the infrastructure itself.

It must, however, be clearly emphasized that any policy on PII development should underline the principle that government will not, as a rule, compete with the private sector. This principle now applies to the development of telecommunications infrastructure as provided for under Republic Act 7925. The same principle should apply to the physical infrastructure layer of the PII as well as to its other layers.

Government is, however, expected to play critically important roles in the development of infrastructure required for electronic governance wherever and whenever it is needed in the delivery of vital public services to its citizens. It will certainly have to be concerned with the Government Information Infrastructure (GOVT II). It is, likewise, expected to play larger roles in the digitization of content particularly of those that will make government data and statistics generally available to the public. The government is also expected to be a model user of the PII.

The present definition of roles of government and the private sector in the PII development process should be reviewed and more specifically stated in the Executive Order that is proposed to be issued on the formulation of a PII National Development Plan. Once stated in the EO, the statement becomes the governing policy and a valuable input to the PII planning process.

It is envisioned in this action plan that the DOTC will take the initiative of undertaking this review of the definition of roles and responsibilities of government and the private sector. It will submit its draft proposal to the private sector for its comments and counter-proposals. As soon as a consensus is reached, the DOTC shall include this in the draft of the EO to be submitted for the consideration of the Office of the President through the NITC.

It is envisioned that by early next year, the President of the Philippines will have signed the proposed Executive Order

Action Plan 4

Formulate Policy on the Rural Information Infrastructure (RII) as an Integral Part of PII Development

A common misconception not only in the Philippines but even elsewhere is that a National Information Infrastructure (NII) is only concerned about the high-capacity, high-speed, multi-services and multimedia backbone networks. The building of these networks are epitomized by the highly aggressive plan of the Republic of Singapore to establish what they call the “Singapore ONE”. But the Philippines presents a geographical challenge and an economy that are truly different from that of Singapore.

The Philippines, particularly its government and the national leadership, is expected to be more concerned about its responsibility to build its so-called “social infrastructure”. This comprises the facilities and services as well as the content it can deliver not only to the country’s remote and rural areas but also to the poor and depressed areas of urban Philippines. This is the principle underpinning the concept of a Rural Information Infrastructure (RII) .Building physical infrastructure to reach people located in small, isolated municipalities and in the remote villages is a daunting task and in many cases can be more expensive. This is mainly due to the difficulties posed by terrain and other geographical conditions. The task of reaching remote and rural areas demand certain technologies and people in these areas, by their very remoteness and isolation oftentimes also require certain unique services that necessitates the application of specialized technologies. The essence of RII is that every rural community has its own distinct set of communications and information requirements given the community’s geographical, demographic, economic and cultural characteristics. Services needed in urban areas may not be the ones really needed in the remote and rural areas. The Philippines, no doubt, needs the high-speed, high-capacity backbone networks that are usually associated with the term "information superhighway". The leaders of the nation and the PII planners must, however, also recognize the critical value to the Filipino people of reaching the remote and rural areas of the country and of providing the poor and the "disadvantaged" people of our country with the communications and information services they need. The current focus on the more economically viable infrastructure projects centered in urban areas must be replicated with a parallel focus on projects for the country’s remote and rural communities.

This approach is, in fact, closely aligned with the “Para sa Mahirap” philosophy of President Joseph Ejercito Estrada and fits excellently into the "Pro-Poor Initiatives" launched by the incumbent Secretary of Transportation and Communications.

The RII concept has its successful precedents in other countries. In the Philippines, it can be said that the RII is not altogether a novel concept. The goal to provide “one telephone in every municipality” which was embodied in a legislative measure introduced in the late ‘80s by the then Congressman Vicente C. Rivera, Jr., is a forerunner of the present universal access concept. Clearly, the concept of PCOs is also an RII concept. The recently launched “telepono para sa barangay” project is another an RII initiative.

In the Philippines, where many areas still do not have the benefits of a “dial tone”, the RII’s value to the overall PII development is great. Notwithstanding the present economic situation prevailing our country, RII must be given the highest concern and priority by government.

It is proposed under this action plan that a new policy pronouncement on the RII be articulated by the DOTC through a Department Order signed by the Secretary of Transportation and Communications. This order from the DOTC will serve as the initial guide to all participants to the RII development process.

The RII should then be incorporated in the legislative measure that will be drafted and introduced in Congress for the replacement of Republic Act No. 6849 (Please see Action Plan No. 7). Once signed into a law, the concept of the RII will have been institutionalized in the Philippines.

It is proposed that the RII-enabling Department Order be issued by the DOTC, at the latest, before the first quarter of 1999 ends. The move to legislate the bill that will either extend or repeal RA 6849 should also be done within the same timeframe or, at the latest, before the end of the year 1999 and should be led by the DOTC. Efforts must be strongly exerted by all concerned in order that the legislative measure can be signed into law before the dawning of the new millennium.

Action Plan 5

Introduce the Concept of the "Expanded PCO" or the Community-based Multimedia Access Center

A pillar of the Rural Information Infrastructure (RII) concept is the widespread establishment of community-based multi-services, multimedia access points that are proposed to be called Multimedia Access Centers or “telecenters” for short. These proposed telecenters are simply expanded public calling offices (PCOs). The difference is that PCOs are mainly for telephone calling only while the telecenters are for multimedia and information access as well.

The PCOs are envisioned to gradually evolve from what it is now into something much more expansive in scope and services. It will no longer just be providing voice/telephone and fax service but also data and information services including access to Internet, electronic mail and other electronic messaging services. Accordingly, the PCOs should be renamed to reflect the expanded scope of services they offer to the public.

As the concept gains grounds, it is envisioned that telecenters will eventually provide multimedia multi-services even to the remote and rural areas of the Philippines. These services will include those that will allow video conferencing, high-speed access to the Internet, viewing of television programs for distance education as well as for entertainment, “virtual” bookstores, libraries and stores from where they can download information and many other similar applications.

It might be deemed foolhardy to even "dream" that these types of services will be brought to the rural areas of the Philippines. Some may say that these services should be reserved for the people living in the urban areas and that they are the only ones who can find real need for them and, most importantly, afford them.

This is, however, not what the PII is all about. The basic concept underpinning the PII is the provision of the same type of services at the same cost, at the same time and at the same quality to all Filipinos and residents of the country. It does allow for a differentiation between what communications facilities and information access should be made available to those who are living in the cities and to those living in the geographically remote areas.

The telecenters should eventually incorporate and provide under one roof the multi-function information kiosks that will allow citizens to carry out transactions with various government agencies such as in the filing of taxes, licensing applications and other similar forms of transactions.

For the more urbanized areas, they can also house a “cybercafe”, banking ATMs and other devices that will be used in electronic commerce transactions. In really remote and rural areas, they can be used to provide farmers access to such basic data, statistics and information such as weather and meteorological forecasts, farm gate prices, transport schedules and other valuable information.

Telecenters are envisioned to be both a service-oriented facility as well as a profit center. In those areas where they are not projected to produce revenues initially, they are expected to not only survive but to eventually even make money for those who will invest in them.

The basic idea is not for government to build these telecenters just by itself but to attract private sector individuals and enterprises to invest in them. The role of government is to introduce the concept and possibly build a number of them to serve as models or prototypes. Government should also provide support mechanisms in order that private sector investors can be attracted to it as an investment venture. In the smaller communities, they can be operated like “mom and pop” businesses or, as “sari-sari” store adjuncts.

Regulations are important to rural infrastructure development. Usually different rules and regulations apply to the rural areas than to urban ones. The government regulatory body must recognize this and apply this principle to its rule-making responsibility. Government should, therefore, make sure that appropriate rules and regulations are defined and will support telecenter projects rather than obstruct them.

For instance, telecenters will require communications lines and information access. Unless the telecenters are provided by the telecommunications carriers and information services providers themselves, these facilities must be assured those who will invest in them, at the time they are needed and at reasonable/comparable fees and charges. Potential problems in this area should be anticipated.

The quality of service provided by these telecenters should be monitored and closely supervised by the government office mandated to take this responsibility. The same strictness and attention to detail that Filipinos have by now gotten used to with, for example, in the case of fast food chains, convenience stores and other franchised services should also be required of telecenter operators.

Telephone companies may also be allowed to operate telecenters. Geographical distances from one telecenter to another might have to be regulated to ensure optimum coverage and fair competition among operators. The other potential problem is the possibility that there will be a lot of interest to operate telecenters in the profitable areas and there

will be no one to operate in the non-viable areas. The pitfalls encountered in the implementation of the local telephone programs of the past and the tendency to suggest another “service area scheme” should obviously be avoided. Another issue is to what extent government funds will be utilized to build and operate these telecenters. The possible use of a special fund for rural service will have to be addressed. This and many other potential problems must be confronted and resolved as part of the development of the Multimedia Access Center concept and the effort to ensure its success.

The DOTC Department Order on Rural Information Infrastructure (RII) is proposed to also introduce the concept of community-based Multimedia Access Centers or telecenters. As an initial move, it is proposed that telecenter models be built in certain pilot areas. An ideal step is to expand existing PCOs into telecenters.

This aspect of the development of the Multimedia Access Center concept is also an integral part of what is envisioned in the proposed PII Strategic Initiative on “rural” development. The RII and its twin pillars: the telecenters and the Universal Service Fund are the integral parts of this proposed “rural” strategic initiative package. It is expected that the development of Multimedia Access Centers will be greatly enhanced when the proposed extension of the life of RA 6849 or the enactment of a new law to replace it becomes a reality. The concept of Multimedia Access Centers or telecenters is, therefore, also a part of the legislative reform agenda in this PII Framework Proposal.

This action plan envisions that even before the law could be passed, the DOTC should have already built a number of model telecenters in different parts of the country. The time frame for this action plan is set at the same time as that set for the other RII-related action plans.

Action Plan 6

Introduce Legislation to Create the Universal Access Fund

A Universal Access Fund should be created in the Philippines. There is a need for legislative action in order that a law can be enacted creating this fund. In some other countries, this fund is referred to as a Universal Service Fund. This concept has been successfully demonstrated in some countries as an invaluable tool in extending communications and information access to particularly to the rural areas.

The realization of the goals of universal access and universal service for our country will require huge amounts of both capital and operating investments. The private sector is expected to take the responsibility for building the information infrastructure in the cities and other urban areas of the country. On the other hand, there should be a fixed source of funds that will be autonomously administered and utilized solely for the deployment and development of communications and information facilities in the remote and rural areas. This will be the driving mechanism for the Rural Information Infrastructure (RII).

The existence of funds allocated specifically for the establishment of communications and information facilities in the remote and rural areas will be a very valuable support to the PII development process. Experience has already shown that despite the imposition of specific rules and regulations as in the case of the Service Area Scheme (SAS), private enterprise will always opt for the more profitable areas. They will by sheer business logic tend to delay provision of services to areas in the country that they may not consider as financially viable. Government must, therefore, subsidize or finance infrastructure development in these areas whether directly or indirectly.

While it might not be possible to raise all the funds needed to support the goals of the RII in the Philippines, the Universal Access Fund will provide the financial requirements of at least the model projects of RII. It will be important to fund the initial projects that can demonstrate their feasibility and value to the nation and to the people. A potential project that can be the subject of funding is the building and operation of pilot community-based Multimedia Access Centers or telecenters in the remote and rural areas of the Philippines which are considered non-profitable areas by private investors.

The establishment of a Universal Access Fund will require legislative action. The efforts to initiate this action plan must come jointly from both government and the private sector. It must be started as soon as possible. The development of communications and information facilities in rural Philippines must be attended to with the highest priority. It is only through this that the government can effectively address the critical needs of Filipinos living in the remote and rural areas for communications services and information access.

Potential sources for the Universal Access Fund have been identified. Among these are the following:

· The 10% overseas communications tax currently being collected by government from those using international telecommunications services.

· The proceeds from frequency spectrum users' fees charged by the NTC on carriers and other licensed entities using radio frequencies.

· The re-imposition of a licensing requirement for all those who buy and use mobile radio sets whether cellular, trunked radio or personal communications services and regardless of the technology utilized.

· All penalties imposed by the National Telecommunications Commission (NTC) on errant service providers.

· Proceeds from the privatization program for government-owned telecommunications facilities or from those that have been sequestered.

On a very rough basis, it is estimated that the total revenues generated by the international long distance telephone companies in the Philippines annually is around PhP 25.0 billion. This is based on the available 1997 revenue figures. The 10% tax imposed on international calls alone can, therefore, contribute PhP 2.5 billion a year to the proposed fund.

The government institution mandated by law to manage the Universal Access Fund should also seek other sources of funds either locally or from abroad. It should also develop financial schemes so that these funds can be used to achieve the set universal access and universal service goals for the Philippines.

The Universal Access Fund shall, as a matter of first option, fund private sector rather than government initiatives in remote and rural areas. These funds can be channeled through a special financing program in the form of loans, grants or a combination of both to private entities.

The channeling of funds can be done directly or indirectly through financial intermediaries like development banks. In fact, a government development bank like the Development Bank of the Philippines (DBP) may be the government financial institution that will be mandated by law to take the responsibility for administering the Universal Access Fund.

The establishment of a Universal Access Fund in the Philippines will have to be done through an enabling act of Congress. A new legislative measure should be drafted just for the purpose of the creating the Universal Access Fund. This proposed mechanism has direct financial implications on government revenues and it is, therefore, necessary for a law to be enacted to create it.

As part of the action plan on the Rural Information Infrastructure (RII), a DOTC Department Order will be issued to declare the policy to adopt the RII concept as part of its PII development process. The Universal Access Fund is one of the twin pillars of the RII. The Multimedia Access Center or telecenters is the other one. These two concepts will also have to be included in the proposed DOTC Department Order. It is proposed in this action plan that a separate legislative measure should be drafted by the DOTC as soon as possible in order to serve as the enabling act for this proposal to establish the Universal Access Fund.

It is expected that there will initially be a strong opposition to this proposal to rightfully channel back to the telecommunications industry some of the revenues generated from it. It is, however, expected that in the end, considering the noble objectives of this proposal, reason and good intentions will prevail. The funds will benefit our own people in the remote and rural areas who need communications and information very badly.

A strong and determined effort should be exerted to ensure that this legislative measure could be passed into a law within the first half of 1999 or, at the latest, before the end of that year.

Action Plan 7

Draft a Legislative Measure for Law to Replace RA 6849

(The "One Telephone for Every Municipality" Law)

Republic Act No. 6849 (“The Municipal Telephone Act”) was enacted into law last February 8, 1990. This law calls for a telephone with data transmission capabilities in every municipality and certain barangay centers in the country. By the end of 1997, the total number of Public Calling Offices (PCOs) installed was only 1, 055. This means that not all of the municipalities in the Philippines have already been provided with PCOs. The "Telepono Para Sa Barangay" project, on the other hand, was only recently launched. The full text of the law is shown as Annex “C” of this study report.

Yet RA 6849 has a sunset clause. By the year 2000, the law will have already lapsed and the Municipal Telephone Project Office (MTPO), the office created by RA 6849, will cease to exist.

This action plan proposes that RA 6849 should be replaced with a new law. This will require legislative action. The initial efforts to start the legislative process that should lead to the extension and amendment of the law should be led by the DOTC. The participation and the support of the private sector are vital in order that an early consensus can be developed behind this proposed legislative action.

The drafting of the measure should also be done in conjunction with members of the House of Representatives and the Senate who will sponsor the bill in the two houses of Congress.

The proposed amendment to this law shall serve as the legal platform for developing the critical mechanisms for helping attain the objectives of universal access and universal service in our country.

It will be used to introduce and institutionalize the concept of the community-based Multimedia Access Centers or telecenters. It can also serve as the legal basis for the establishment of the Universal Access Fund although in an earlier action plan it was alternatively proposed that the fund be created under a separate bill.

If the above objectives can be accomplished through the replacement of RA 6849, then this new law will also serve as the broad platform for the institutionalization of the concept of Rural Information Infrastructure (RII) and its ideals. All infrastructure development programs related to the development of physical telecommunications and information facilities and services in the remote and rural areas of the country should be placed under the general classification of the RII.

The proposed new law should be used to establish a RII Projects Office (RII PO) within the DOTC to replace the Municipal Telephone Project Office (MTPO). This office will assume responsibility for the "Telepono para sa Barangay" project, for the introduction of the concept of expanding the PCOs to the community-based telecenters and for other RII-related projects.

The responsibility of RII PO should include the development of programs to ensure the fullest participation of private sectors in existing (MTPO) and new (RII PO) projects. Joint projects between government and private sector entities like the ones that have recently been announced should be encouraged. The provision of incentives to be extended even to 100% private sector-owned projects, for as long as they are exclusively dedicated to the remote and rural areas of the country, should also be included in this program.

The management of a Universal Access Fund may also be one of the responsibilities of the RII PO. The proposed new office can designate a Government Financial Institution (GFI) like the Development Bank of the Philippines (DBP) or the Land Bank of the Philippines (LBP) to administer the fund and act as the principal conduit of funds to the private sector carriers implementing RII PO-approved projects.

The RII PO should also be responsible for the development of a program that will make it easier for private sector investors and franchised private communications companies to access Official Development Assistance (ODA) funds through a designated GFI. In the past, the DBP was the designated GFI. It is possible that another GFI like the Land Bank of the Philippines (LBP), with its orientation towards countryside development, be also designated as an ODA conduit to RII projects.

The DOTC's Telecoms Policy and Planning Division supported by the PII Task Force that is proposed in a subsequent action plan in this framework proposal should focus on the development and deployment of broadband backbone networks and access facilities in the urban areas of the country. This should include those being developed by the private sector. The RII PO, on the other hand, should focus on the development and deployment of networks and access facilities for the remote and rural areas of the country by both government and private sector.

A Director who shall have the rank of an Assistant Secretary and reporting directly to the Undersecretary of Communications should head the RII PO. At present, a Director with the rank of an Undersecretary currently heads the MTPO. It is, therefore, proposed that there should be transitory provisions in the proposed law in order that the change will only take place when the term of office of the present incumbent expires.

The drafters of the proposed law should also consider the possibility of integrating the moribund Telecommunications Office (Telof) into the proposed RII PO. The main business of the Telof now is operating telegraph facilities on a nationwide basis and providing domestic telegram services. These services are now being technologically overtaken by faster and more efficient means of communications. The existing Telof offices presently situated in strategic centers of cities and municipalities all over the country are, in fact, ideal sites for telecenters.

It is to be expected that the drafting and filing of the legislative measure for this action plan will take time and the deliberations, considerations and debate on the bill will take even more time.

Considering that this present law is already lapsing, the new bill should be given high priority in Congress and, as much as feasible, certified as urgent by the President of the Philippines. Target for the enactment of the proposed law should be the first half of the year 1999. At the latest, the new law should be enacted before the end of 1999 in time for the new millennium.

Action Plan 8

Establish Regulations to Ensure Affordable Access to Communications and Information Services for All

The affordability of PII services is a key aspect of the PII vision. Government must ensure that both publicly owned and privately owned PCOs and telecenters, particularly those located in the remote and rural areas of the country, will charge rates based on the economic standards of the residents of the areas they are located in. Rates that are “national” or nationwide in coverage or a uniform rate schedule that apply to all parts of the country regardless of the economic status of an area (province, city or municipality) should no longer be allowed by the regulatory body.

As part of the current liberalization policy of our government, the rates and tariffs for public communications services are being gradually deregulated by the NTC. This is appropriate in certain areas of the country particularly the cities and other urban areas of the country. Rates for remote and rural areas, particularly those that are categorized as economically depressed, should continue to be regulated. Government should sanction private operators not complying with rules and regulations prescribing the exact rates and tariffs to be charged for each of the services provided to subscribers and users.

A completely deregulated environment for rates and tariffs should only take place when government has established that consumers in the rural areas can already afford rates approximating those in highly urbanized areas. Regulating rates in a competitive environment may result in preventing rates to be market-driven. Deregulating rates, on the other hand, will tend to push them to cost-based levels. This is the dilemma faced in balancing the benefits to the consumers and users in the urban areas, compared with the need to serve the rural areas where people generally do not have the capacity to pay the rates that are justifiable for certain services. A socially desirable pricing policy for certain areas of the country must be an accepted principle. A one-rate pricing approach per service for all areas regardless of the varying economic situations and based on the cost-subsidization principle should no longer be the norm. Rates offered to the remote, rural and depressed areas should never be higher than the lowest promotional rates offered to urban areas. For example, some telephone companies advertise promotional rates that offer 50% off the approved rates for international calls from the Philippines. Since these low rates are offered to attract callers in areas where there are high calling potentials, most often, these rates are not extended to the areas of the country. The reason usually is that the volumes of traffic in these areas are not attractive to the promoting carrier. This must not be allowed by the NTC.

The NTC as the regulatory body for public communications services in the Philippines will be the main government agency mainly responsible for implementing this action plan.

The goal is to ensure that communications and information services shall at all times and in all locations within the country be available at affordable rates and at all times to the general public, particularly to those located in the remote, rural and depressed areas of our country. The “disadvantaged”, the “challenged”, the “marginalized” and the senior citizens of the country must be provided services at rates they can afford.

The NTC should conduct a study and survey through its regional offices in order to deter mine what are the “affordability” problems in areas under their jurisdiction at the present time. As new, advanced and rate-sensitive services are introduced and as more PCOs, barangay phones, and the proposed multimedia access centers or telecenters are established, the role of the NTC on this matter will even be more crucial. It should, therefore, already be prepared now. The NTC can also realize the goal of this action plan through its "quasi-judicial" process, particularly when it is hearing cases and deciding on applications involving rates and tariffs. It is suggested that the NTC already has adequate powers to start implementing this action plan.

To ensure the continued vigilance of the NTC particularly its regional officers over this issue of affordability or rates, it is also proposed that the NTC issue a Memorandum Circular on this matter. This order shall instruct its regional offices to submit regular reports that will provide the NTC with the valuable inputs. The NTC regional offices should also be highly sensitive even to temporary situations that affect certain areas of our country. For example, if the Bicol region was declared a calamity area after it was devastated by a super-typhoon, then automatically the rates for communications services for that region should be lowered.

It is proposed in this action plan that the NTC shall take immediate steps to initiate the study and survey. It is envisioned that by mid-1999, the work will already have been completed. After this study, a new set of rules and regulations should be formulated by the NTC and released through a Memorandum Circular. It is proposed that this be released in the soonest possible time by the NTC but not later that the end of 1999. The NTC should also initiate other appropriate measures that it will deem necessary to introduce effective and responsive rules and regulations that will govern the determination of rates and tariffs for public communications services.

Action Plan 9

Establish a Publicly Accessible PII Databank

A publicly accessible databank to be maintained and up-dated regularly should be established by the NTC with possibly the support and cooperation of the National Computer Center (NCC). This databank will provide up-to-date information on the status of the telecommunications infrastructure development plans and projects of franchised telecommunications private carriers, as well as the projects of government, national and local, that will become integral parts of the PII. This databank should be accessible to all including those interested to locate or invest in certain areas of the country.

The availability of up-to-date and accurate information on all the important projects involved in the PII development process will also help attract more foreign and local investors into taking part in building/expanding it.

Up-to-date information on the status of infrastructure plans and projects should be available to all. Private franchised telecommunications carriers providing facilities to attain their own set infrastructure goals normally make their plans known to government through the licensing process of the NTC. After they have secured the approval of the regulatory body, the carriers oftentimes just proceed to change plans without even informing the NTC. This happens even if the authority granted them is just a provisional one. In our language, "madalas, nagkakalimutan na". This should no longer be allowed by the NTC.

The carriers should consistently update NTC on changes or modifications as they implement their respective projects. Once the NTC has granted a public telecommunications entity/carrier the license to provide facilities it has applied for, the carrier will be required to commit to the approved implementation schedules and accurate/updated status reportage thereof.

Failure to meet their deadlines should mean that the carrier involved must face sanctions and penalties. In order to avoid these, all changes in the project including but not limited to technical plans and work schedules must be submitted to and approved by the NTC. Proceeds from any penalties imposed by the NTC for violations of such shall go to the Universal Access Fund.

The purpose of this proposed action plan is to ensure that the most current and accurate information on where physical infrastructure facilities are being built and by whom will be available anytime to all interested parties. This information will have many uses. One of this is to assist carriers planning infrastructure projects in knowing where its competitors are building their own. This will help in avoiding wasteful duplication of resources.