The National Telecommunications Commission is proposing a law that will require telecommunication companies to remit a small portion of their earnings to the government to fund broadband infrastructure in unserved and underserved areas.
Under the draft bill titled An Act Institutionalizing A Universal Access Fund, one-fourth of one percent of the gross revenues of all public telecommunications entities should be collected and automatically appropriated to the UAF.
The UAF should be used to provide ICT or broadband infrastructure in unserved and underserved areas.
The country’s two largest telecommunications companies in 2014 reported combined gross revenues of P264 billion. Philippine Long Distance Telephone Co. registered revenues of P165.1 billion while Globe Telecom Inc. posted P99 billion.
The proposed bill will also require the NTC to remit 90 percent of the annual spectrum users fees paid by the telcos to the UAF as an automatic appropriation.
The NTC collects nearly a half a billion pesos annually from the telcos and broadband operators for the use of frequencies.
The International Telecommunication Union said only 18.9 percent of the Philippine households had Internet connection in 2012.
Earlier, NTC deputy commissioner Edgardo Cabarios said the government is unlikely to meet its goal to provide at least 2 megabits per second Internet download speed to 80 percent of the households throughout the country by 2016.
At the rate of P60-billion annual investment by telcos, Cabarios said it would take 10 years to meet the targets if there was no government intervention.
He said the investment requirement for at least 2Mbps for 20.17 million households by 2016 amounted to P800 billion.
The government of Thailand invested $114 million to provide Internet service as part of its economic policy. Malaysia, meanwhile, spent $4.5 billion over a period of 10 years to lay fiber optic lines to every home in Malaysia’s urban areas.
The proposed bill also requires the creation of the Universal Access Fund Board solely for budgetary purpose and administrative support to the Department of Science and Technology.
The board should be composed of seven members with the secretary of DoST as ex-officio chairman, the secretaries of Finance, Budget and Management and Commissioner of the NTC as ex-officio members.
The other three members will respectively come from the Institute of Electronics Engineers of the Philippines, telecommunications organizations and consumer groups who will be appointed for a term of three years each by the President of the Philippines upon the recommendations the DoST and NTC.
The UAF board will ensure that the books of account and other records of the Universal Access Fund are independently audited each year in accordance with the purpose of the fund and generally accepted accounting principles and that a report of the audit is publicly available.