Submarine Cable Landing Stations in the Philippines: Permits and Rights

A submarine cable landing in the Philippines is a regulated telecommunications activity. Under Republic Act No. 7925, no person may commence or conduct the business of being a public telecommunications entity without first obtaining a franchise from Congress (Section 16). A landing station that transmits and switches international traffic is operated by an international carrier, a category defined in Section 3 of the same law. The National Telecommunications Commission (NTC) is the principal administrator of the law and issues the Certificate of Public Convenience and Necessity (CPCN) that accompanies the franchise.

Who Needs a Franchise for a Submarine Cable Landing

A submarine cable system that carries voice, data, or other signals between the Philippines and another country falls within the definition of telecommunications under Section 3 of R.A. No. 7925 — any process enabling a telecommunications entity to relay and receive voice, data, electronic messages, images, or signals by wire, radio, or other electromagnetic, spectral, optical, or technological means.

An entity primarily engaged in providing transmission and switching of telecommunications services between the Philippines and any other point in the world is an international carrier under the same section. Section 10 sets the entry requirements: only entities that will also provide local exchange services and can demonstrably show the technical and financial capability to install and operate an international gateway facility may operate as an international carrier.

Two compliance deadlines attach to that authority under Section 10. The carrier must produce a firm correspondent or interconnection relationship with major overseas telecommunications authorities or carriers within one year from the grant of authority, and must comply with its obligation to provide local exchange service in unserved or underserved areas within three years from the grant. Failure to comply is a ground to cancel the authority or permit to operate as an international carrier.

The Franchise and CPCN Path

Section 16 of R.A. No. 7925 requires a franchise before any public telecommunications entity may commence or conduct business. The NTC, in granting a CPCN, may impose conditions on duration, termination, technical standards for equipment, rates, or service, provided these are not contrary to the franchise terms. The CPCN cannot be shorter than five years nor longer than the life of the franchise. Where a CPCN expires at the same time as the franchise, it is deemed renewed for the same term if the franchise itself is renewed or extended.

Not every network change requires a fresh NTC approval. Section 16 provides that expansion and financing of network and services using equipment compatible with or homologous to existing or previously approved plant, to serve additional demand in the same areas, does not require Commission approval. The same exemption covers upgrading existing plant and network facilities to replace obsolete or outmoded equipment with state-of-the-art technology to improve service quality within the same covered areas.

Interconnection and Landing Rights

A landing station is only useful if traffic can move between networks. Section 9 obliges an inter-exchange carrier to interconnect with other networks in the same category and with local exchange carriers or other telecommunications entities, upon application, within a reasonable time, and at fair and reasonable charges, so that domestic and international long distance services are possible.

Section 18 governs the commercial terms. Access charge and revenue sharing arrangements between interconnecting carriers are negotiated between the parties, and the agreement is submitted to the NTC. If the parties cannot agree within a reasonable period, the dispute goes to the NTC for resolution. In approving an access charge formula or revenue sharing agreement, the NTC must ensure equity, reciprocity, and fairness, taking into account the cost of the facilities needed to complete the interconnection.

Foreign Ownership and Public Utility Classification

Submarine cable operators should also track how the Public Service Act, as amended by R.A. No. 11659, treats their activity. Under the IRR of R.A. No. 11659, telecommunications is defined by reference to Section 3 of R.A. No. 7925, but the definition expressly carves out passive telecommunications tower infrastructure and components — including poles, fiber ducts, dark fiber cables, and passive tower infrastructure as defined by the DICT — as well as value-added services.

Section 10 of the IRR lists the sectors classified as public utilities: distribution of electricity, transmission of electricity, petroleum and petroleum products pipeline transmission systems, water and wastewater pipeline systems including sewerage, seaports, and public utility vehicles. Telecommunications is not among them. Section 6 of the IRR provides that the relevant administrative agency shall not impose nationality requirements on a public service not classified as a public utility under its jurisdiction or supervision.

Section 7 of the IRR restates the certification requirement: no public service shall operate in the Philippines without a valid certificate or authorization from the relevant administrative agency. Section 15 makes it unlawful to engage in any public service business without first securing that certificate, except for grantees of legislative franchises expressly exempting the grantee from the certificate requirement.

Frequently asked questions

Do I need a franchise to build a submarine cable landing station in the Philippines? If the facility will be used to provide telecommunications services to the public for compensation, yes. Section 16 of R.A. No. 7925 prohibits commencing or conducting the business of a public telecommunications entity without a franchise, and the NTC issues the accompanying CPCN.

Is a submarine cable landing station a public utility under Philippine law? The IRR of R.A. No. 11659 lists the sectors classified as public utilities, and telecommunications is not one of them. That classification can change: under Section 11 of the IRR, the President may recommend to Congress, upon NEDA's recommendation, that a particular public service be classified as a public utility based on criteria such as natural monopoly and necessity to public life.

What happens if an international carrier fails to meet its obligations? Under Section 10 of R.A. No. 7925, failure to produce a firm correspondent or interconnection relationship within one year, or to provide local exchange service in unserved or underserved areas within three years from the grant of authority, is a cause to cancel the authority or permit to operate as an international carrier.

Practical takeaways

• A submarine cable landing operation that serves the public for compensation needs a congressional franchise and an NTC CPCN; the CPCN runs no shorter than five years and no longer than the franchise.
• International carrier status under Section 10 of R.A. No. 7925 carries a one-year deadline for correspondent or interconnection relationships and a three-year deadline for local exchange service in unserved or underserved areas.
• Interconnection and access charge terms are privately negotiated but must be submitted to the NTC, which resolves disputes if the parties cannot agree.
• Telecommunications is not listed among the public utility sectors in the IRR of R.A. No. 11659, and the IRR bars nationality requirements on public services not classified as public utilities.
• Passive infrastructure — poles, fiber ducts, dark fiber cables, and passive tower components — is excluded from the IRR's definition of telecommunications, which matters for how a project is structured.

Primary sources

The rules discussed above are drawn from the following primary sources, as published in the Official Gazette and the national statute book.

• IRR of REPUBLIC ACT NO. 11659 - IMPLEMENTING RULES AND REGULATIONS OF THE REPUBLIC ACT NO. 11659 OR AN ACT AMENDING COMMONWEALTH ACT NO. 146, OTHERWISE KNOWN AS THE PUBLIC SERVICE ACT, AS AMENDED

• REPUBLIC ACT NO. 7925 - AN ACT TO PROMOTE AND GOVERN THE DEVELOPMENT OF PHILIPPINE TELECOMMUNICATIONS AND THE DELIVERY OF PUBLIC TELECOMMUNICATIONS SERVICES

This article is general information and not legal advice. For your specific situation, consult a lawyer or ask ASG Legal AI.