In an earlier public hearing on the draft VoIP rules, local telecommunication companies (telcos) questioned a provision which allows "any person or entity seeking to provide VoIP for use by the public for compensation to register themselves as such with the NTC prior to operation as a VoIP provider."
The telcos stressed that allowing anybody, including foreigners, to provide VoIP will spell the death for most traditional voice providers.
Sarmiento, however, clarified that while the provision of VoIP will be opened to Internet service providers (ISPs) as well as to the telcos, the 40-percent constitutional limitation on foreign ownership will be observed.
This, he said, will not prevent foreign entities to enter into partnerships with local ISPs for the provision of VoIP provided they observe the constitutional limits on foreign equity.
Certain foreign companies such as US carrier AT&T have submitted position papers to the NTC wherein they have hinted their interest in offering VoIP services in the Philippines.
VoIP is defined by the NTC as the provision of voice communication using Internet protocol (IP) technology, instead of traditional circuit switched technology. It is as an application that digitizes and transmits voice communications in packets via the Internet, making possible convergence with other applications which distinguishes this from traditional telephony that is conducted through circuit switched connections.
Sarmiento also hinted that the NTC may stick with its classification of VoIP as a value-added service or VAS, which is defined as "enhanced services beyond those ordinarily provided for by local exchange and inter-exchange operators, and overseas carriers, where ordinarily provided‚ services shall mean voice services offered through circuit switched networks."
Local telcos opposed VoIP’s classification as a value-added service, as they maintained that VoIP is a regular telecommunications service which can only be offered by entities that are issued Congressional franchises to offer telecommunications services.
By classifying VoIP as VAS, even companies that do not possess franchises issued by Congress, such as most ISPs, will be allowed to offer VoIP, which is in violation of provisions of Republic Act 7925 or the Public Telecommunications Act, they said.
Sarmiento, however, stressed that as a protection to local telcos which have invested billions of pesos in their voice facilities, ISPs, as a condition to providing VoIP services to the public for compensation will be required to enter into an agreement with network providers as to the terms and conditions of fair and reasonable access as well as interconnection charges for such access and use.
The draft rules provide that where the VAS provider and network provider refuse to negotiate for the interconnection of their networks, the NTC may intervene and direct physical interconnection of the networks of the parties.
In a memorandum, the NTC noted that telecommunications costs can be expected to fall, while wider broadband deployment will be encouraged as more people see the benefits and uses of emerging information and communications technologies, such as VoIP. "
The tangible economic benefits to particular sectors of our population – from the families of overseas Filipino workers to our exporters to call center operations and business process outsourcing industries, among others – will not be trivial," it said.