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406 Amberland Place

Jade Drive, Ortigas Center
Pasig City 1605
Philippines
Draft Memorandum Order
In replacement of NTC MO 07-07-2011, as requested by Sen. Paolo Benigno Bam
Aquino IV, in pursuit of the senator s advocacy for better internet connection
services for the public

Respectfully submitted by Engr. Pierre Tito Galla, PECE, on behalf of
Democracy. Net. PH
Draft Memorandum Order

MEMORANDUM ORDER

SUBJECT: MINIMUM SPEED OF BROADBAND CONNECTIONS

WHEREAS, the 1987 Constitution fully recognizes the vital role of communications in nation
building and provides for the emergence of communications structures suitable to the needs
and aspirations of the nation;

WHEREAS, the promotion of competition in the telecommunications market is a key objective of
Republic Act No. 7925 (RA7925, for brevity), otherwise known as The Public
Telecommunications Policy Act of the Philippines, which mandates that a healthy competitive
environment shall be fostered, one in which telecommunications carriers are free to make
business decisions and interact with one another in providing telecommunications services, with
the end in view of encouraging their financial viability while maintaining affordable rates;

WHEREAS, RA7925 further defines the role of the government to promote a fair, efficient and
responsive market to stimulate growth and development of the telecommunications facilities
and services;

WHEREAS, RA7925 mandates the National Telecommunications Commission (the Commission,
for brevity) to promote and protect the consumers of public telecommunications services;

WHEREAS, customers/ subscribers/ users have the right to be informed of the quality of the
broadband/ internet connection service being provided;

NOW, THEREFORE, pursuant to RA7925, Executive Order (EO) No. 546 series of 1979, and in
order to maintain and foster fair competition in the telecommunications industry, and promote
and protect the rights of broadband service customers/ subscribers/ users, the National
Telecommunications Commission hereby promulgates the following definitions and rules:









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406 Amberland Place
Jade Drive, Ortigas Center
Pasig City 1605
Philippines
A. Definitions

A. 1. Wireless broadband: over-the-air (OTA) connectivity with theoretical downstream
data rate at least 1 Mbps and theoretical upstream data rate of at least 768 kbps.

A. 2. Wireless internet: OTA connectivity with theoretical downstream or upstream data
rate less than wireless broadband.

A. 3. Wireline broadband: internet connectivity via terrestrial landline networks with
theoretical downstream data rate at least 2 Mbps and theoretical upstream data rate of
at least 1 Mbps.

A. 4. Wireline internet: internet connectivity via terrestrial landline networks with
theoretical downstream or theoretical upstream data rate less than wireless broadband
but greater than dial-up internet.

A. 5. Dial-up internet: internet connectivity via terrestrial landline networks with
theoretical downstream data rate of 56.6 kbps and theoretical upstream data rate of
48.8 kbps, as provided for by ITU-T Recommendation V.92 Enhancements to
Recommendation V.90, or less.

A. 6. The Commission shall adopt the official technical definitions of technologies such as
but not limited to GSM, HSPA, WiMax, LTE, and so forth, as provided for by the ITU and
other international bodies and consortia.


B. Rules on Offer Information

B. 1. The subscribers/consumers shall be properly informed of the broadband/ internet
connection service being offered to them.

B. 2. Service providers shall be required to specify the minimum and be allowed to
specify the maximum (up to) of the following information:

B. 2.1 broadband/ internet connection data rates (minimum broadband/
internet connection data rates and theoretical best broadband/ internet
connection data rates) and the service rates in their offers to consumers/
subscribers/ users in their advertisements, flyers, brochures, and service
agreements and service level agreements.

B. 2.2 data rate reliability (minimum data rate reliability and best data rate
reliability) and the service rates in their offers to consumers/ subscribers/ users
in their advertisements, flyers, brochures, and service agreements and service
level agreements.








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406 Amberland Place
Jade Drive, Ortigas Center
Pasig City 1605
Philippines
B. 2.3 service reliability (minimum service reliability and best service
reliability) and the service rates in their offers to consumers/ subscribers/ users
in their advertisements, flyers, brochures, and service agreements and service
level agreements.

B. 2.4 overall reliability (minimum overall reliability and best overall
reliability) and the service rates in their offers to consumers/ subscribers/ users
in their advertisements, flyers, brochures, and service agreements and service
level agreements.

B. 3. Service offers made through advertisements, flyers, and brochures shall contain the
service rates for broadband/ internet connection data rates, data rate reliability, and
service reliability using any of these methods, e.g.:

B. 3. a. PhP 100.00/ month for up to 768 kbps maximum downstream data
rate, up to 384 kbps maximum upstream data rate, 95% data rate reliability,
and 95% service reliability; or,

B. 3. b. PhP 100.00/ month for 384 kbps minimum downstream data rate, 192
kbps minimum upstream data rate, 80% data rate reliability, 80% service
reliability, and 6.4 GB daily download cap.

B. 4. Service agreements and service level agreements shall contain the service rates for
broadband/ internet connection data rates, data rate reliability, and service reliability
using both methods B. 3. a. and B. 3. b.


C. Rules on Measurement and Metrics

C. 1. Actual downstream and upstream data rates shall be measured at the subscriber
end during periods of actual use.

C. 2. Actual download data volume shall be measured at the subscriber end.

C. 3. Data rate reliability is measured over a period of one (1) day and calculated as:

Data rate reliability = {[(Average downstream data rate during actual usage
during the day)/("Up to" downstream data rate)] x [(Average upstream data rate
during actual usage during the day)/("Up to" upstream data rate)]} x 100%

C. 4. Service reliability is measured over a period of one (1) day and calculated as:

Service reliability = {[(Number of seconds of actual subscriber use during the day)
- (Number of seconds below service data rate during actual subscriber use during
the day)] / (Number of seconds of actual subscriber use during the day)} x 100%







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406 Amberland Place
Jade Drive, Ortigas Center
Pasig City 1605
Philippines

C. 5. Overall reliability is measured over a period of one (1) day and calculated as:

Overall reliability = Data rate reliability in % x Service reliability in %

C. 6. Actual data rate reliability, actual service reliability, and actual overall reliability
shall be calculated from data as measured according to rule C. 1.

C. 7. The Commission, after public consultations convened for this purpose, will
determine the official data rate and data volume measurement and monitoring tool to
be used to measure network traffic.

C. 8. Service providers shall provide the official data rate and volume measurement and
monitoring tool free to all their subscribers.

C. 9. Service providers shall ensure that the official data rate and volume measurement
and monitoring tool shall be compatible with the operating systems of their subscribers.

C. 10. The information generated by the official data rate measurement and monitoring
tool shall be the primary basis to resolve disputes regarding data rates, service
reliability, and data volumes between service providers and subscribers.


D. Rules on Service Standards for Standard Broadband Connectivity Offers

D. 1. Minimum actual downstream and upstream data rates shall not be less than 50% of
advertised up to data rates.

D. 2. Data rate reliability shall not be below 80%.

D. 3. Service reliability shall not be below 80%.

D. 4. Overall reliability shall not be below 80%.


E. Rules on Best Efforts Offers

E. 1. Service providers may offer broadband/ internet connection services on a best
efforts basis, provided:

E. 1 a. Minimum actual downstream and upstream data rates shall not be less
than 50% of advertised best effort data rates;

E. 1. b. Best effort data rate reliability shall not be below 50%;








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406 Amberland Place
Jade Drive, Ortigas Center
Pasig City 1605
Philippines
E. 1. c. Service reliability shall not be below 50%;

E. 1. d. Overall reliability shall not be below 50%

E. 1. e. Best efforts services must not be the sole product of the service
provider.

E. 1. f. Apart from complying with Rule B, best efforts services offers to
consumers/ subscribers/ users shall be clearly identified as such in their
advertisements, flyers, brochures, and service agreements and service level
agreements.

E. 1. g. Apart from complying with Rule B, the phrase this is a best efforts
service must be included in advertisements, flyers, brochures, and service
agreements and service level agreements.


F. Rules on Data Volume Capping

F. 1. Service providers may set maximum limits on the data volume allowed per
subscriber/user per day, provided:

F. 1. a. The limit shall not be less than 80% of the data volume that can be
provided per day by the maximum (up to) theoretical broadband/ internet
connection data rate; e.g, the data volume limit of a 1 Mbps downstream
connection shall not be less than 80% of 10.8 GB per day, or 8.6 GB per day;

F. 1. b. No limits shall be set for upstream data volumes.


G. Rules on Fair Use Guidelines

G. 1. Should fair use rules be adopted by service providers, service providers shall
provide the following information on service agreements and service level agreements:

G. 1. a. The threshold for which fair use rules shall be applied (fair use
thresholds).

G. 1. b. The service standards that shall be applied during the fair use period.

G. 1. c. The maximum period that a fair use period shall last.

G. 2. Service providers shall provide automated means for the subscriber to be made
aware that the use of his internet connection is nearing fair use thresholds, has
reached fair use thresholds, and has exceeded fair use thresholds. Service providers







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406 Amberland Place
Jade Drive, Ortigas Center
Pasig City 1605
Philippines
shall not apply speed throttling or data volume capping without such automated means
of informing the subscriber.

G. 3. Service providers shall provide automated means for the subscriber to be made
aware that the subscriber is nearing the end of the fair use period, has reached the
end of the fair use period, and that a new fair use period has begun. Any speed
throttling or data volume capping previously applied shall be cancelled automatically,
without need for demand, and the subscriber shall likewise be informed of the
cancellation.


H. Rules on Prepaid Service Offers

H. 1. The Commission may allow service providers different service rates for prepaid
services, provided:

H. 2. a. Data rate reliability, service reliability, and overall reliability shall comply
with minimum thresholds as provided for above.

H. 2. b. Prepaid services shall not be subject to speed throttling.

H. 2. c. Prepaid services shall not be subject to data volume capping.


I. Rules on Refund or Rebate

I. 1. Upon the occurrence of periods where the actual downstream or upstream data
rates are below the minimum standards (below service level), said periods (below
service level period) shall not be subject to billing by the service provider. Should these
periods not be contiguous, or should these periods be intermittent, they shall be
aggregated for purpose of refund or rebate.

I. 2. Automated means of refund or rebate shall be provided by the service provider,
should standards as provided by Rules B, C, D, E, F, and G are not being met by the
service provider. The service provider shall provide the refund or rebate immediately to
the subscriber upon resumption of the levels of service subscribed, without need for
demand on the part of the subscriber.


J. Rules on Requests for Service Standards Adjustments

J. 1. Service providers may request the Commission for adjustments of data rate
reliability, service reliability, and overall reliability minimum thresholds stated above,
subject to compliance with the following:








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406 Amberland Place
Jade Drive, Ortigas Center
Pasig City 1605
Philippines
J. 1. a. The service provider submits a sworn statement, attested to by the Chief
Technology Officer or his equivalent, that their subscriber base is not greater
than 80% of their capacity.

J. 1. b. The service provider submits a sworn statement, attested to by the Chief
Technology Officer or his equivalent, that even if their subscriber base is not
greater than 80% of their capacity, their ability to meet minimum reliability
thresholds is limited.

J. 1. c. The service provider submits a sworn statement, attested to by the Chief
Technology Officer or his equivalent, that the reduction in reliability thresholds
shall not result in reliability thresholds less than 25% below best efforts
reliability thresholds.

J. 1. d. The service provider shall reduce the service rates equitably, and the
reduction in service rates shall not be less than 25% of the current service rates.

J. 1. e. The reduction in reliability thresholds shall be effective for only one (1)
year, after which the service provider is required to comply with the minimum
reliability thresholds prior to the reduction allowed by the Commission.

J. 1. f. The Commission shall hold public hearings upon receipt of a request of a
service provider for the reduction of minimum reliability thresholds.

J. 1. g. No service provider shall be allowed to make a request for the reduction
of minimum reliability thresholds within one (1) year of a disapproved request
for the reduction of minimum reliability thresholds or two (2) years of an
approved request for the reduction of minimum reliability thresholds, whichever
is applicable.


K. Rules for Transparency and Compliance

K. 1. To ensure transparency of service providers compliance with this Order, the
following shall be complied with:

K. 1. a. Service providers shall provide to the Commission a sworn statement,
attested to by the Chief Technology Officer or his equivalent, containing the
audited results of the minimum, peak, and average upstream and downstream
data rates, average, minimum, and maximum data rate reliability, average,
minimum, and maximum service reliability, and number of subscribers affected
by the daily download cap as applicable, for a period of six (6) months, every July
30 for the period of January 1 to June 30, and January 30 for the period of July 1
to December 31.








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406 Amberland Place
Jade Drive, Ortigas Center
Pasig City 1605
Philippines
K. 1. b. Service providers shall, at a subscriber's request, provide to the
subscriber a sworn statement, attested to by the Chief Technology Officer or his
equivalent, containing the audited results of the minimum, peak, and average
upstream and downstream data rates, average, minimum, and maximum data
rate reliability, average, minimum, and maximum service reliability, and dates
affected by the daily download cap as applicable, for a period of three (3)
months, up to and including the date the subscriber made the request, of the
service of the subscriber. The sworn statement shall be provided no later than
fifteen (15) days after the request was transmitted to the service provider or its
authorized customer service representative.

K. 1. c. Service providers, with the approval of the Commission, may require a
small administrative fee not exceeding ten (10%) of the subscriber's subscription
fee, for the processing and release of the sworn statement requested for under
K. 1. b.

K. 1. d. Service providers shall not require non-disclosure agreements as a
requirement for the processing and release of the sworn statement requested
for under K. 1. b.


L. Rules for Non-Compliance

L. 1. Upon failure on the part of a service provider to comply with this Order, the
Commission shall file the appropriate administrative case against the said service
provider, without prejudice to requiring the service provider to pay penalties and fines
deemed equitable by the Commission, and without prejudice to requiring the service
provider to provide rebates or refunds to affected subscribers.


M. Other Rules

M. 1. Service providers offering committed information rate (CIR) shall comply with
Commission MC No. 12-19-2004.

M. 2. Any circular, order, memoranda or parts thereof inconsistent herewith are
deemed repealed or amended accordingly.

M. 3. This Order shall take effect fifteen (15) days after publication in a newspaper of
general circulation and three (3) certified true copies are furnished the UP Law Center.