Understanding NTC Memorandum Circular No. 002-02-2026
In line with the implementation of the Konektadong Pinoy Act (Republic Act No. 12235), the National Telecommunications Commission (NTC) issued Memorandum Circular No. 002-02-2026, which provides the detailed regulatory framework governing the eligibility, registration, authorization, and compliance requirements for Data Transmission Industry Participants (DTIPs).
This Memorandum Circular is a crucial regulatory issuance that operationalizes the law’s objective of liberalizing the data transmission sector while ensuring transparency, accountability, and consumer protection.
I. Purpose of the Memorandum Circular
NTC Memorandum Circular No. 002-02-2026 was issued to:
- Establish clear eligibility criteria for DTIPs
- Define the registration and authorization process
- Set compliance and reporting obligations
- Align NTC regulatory oversight with the open-access policy under the Konektadong Pinoy Act
- Ensure fair competition, network security, and service reliability
This Circular applies to both existing operators and new entrants intending to engage in data transmission services in the Philippines.
II. Who Are Covered Under the Circular
NTC Memorandum Circular No. 002-02-2026 applies broadly to entities classified as Data Transmission Industry Participants (DTIPs), as defined under the Konektadong Pinoy Act (R.A. No. 12235) and its Implementing Rules and Regulations.
Covered entities include, but are not limited to:
- Public Telecommunications Entities (PTEs) engaged in data transmission services
- Internet Service Providers (ISPs)
- Value-Added Service (VAS) Providers that rely on data transmission networks
- Access Providers, including last-mile network operators
- Backbone and Middle-Mile Network Providers
- Satellite Systems Providers offering data transmission services
- International Gateway Operators
- Infrastructure Providers supporting data transmission facilities
- Other juridical entities transmitting data for commercial purposes
All of the above are considered DTIPs and are therefore subject to the registration, authorization, compliance, and reporting requirements prescribed by the NTC pursuant to the Konektadong Pinoy Act.
Entities operating without the appropriate Certificate of Registration or Authorization issued by the Commission may be subject to administrative sanctions, including fines, suspension, or revocation of authority.
III. Eligibility Requirements for DTIPs
To qualify as a Data Transmission Industry Participant (DTIP) under the Konektadong Pinoy Act and the relevant NTC Memorandum Circular, an applicant must meet the following eligibility requirements:
- Legal Personality
- Must be a duly registered juridical entity (corporation, partnership, or cooperative) with the SEC, DTI, or CDA, as applicable.
- Foreign entities must comply with constitutional and statutory ownership requirements or applicable reciprocity rules.
- Must be a duly registered juridical entity (corporation, partnership, or cooperative) with the SEC, DTI, or CDA, as applicable.
- Primary Business Purpose
- The entity’s primary or secondary purpose must include data transmission, connectivity, network services, or related ICT services.
- The entity’s primary or secondary purpose must include data transmission, connectivity, network services, or related ICT services.
- Technical Capability
- Demonstrated capacity to deploy, operate, and maintain data transmission facilities or services.
- Availability of qualified technical personnel and compliant network design.
- Demonstrated capacity to deploy, operate, and maintain data transmission facilities or services.
- Financial Capability
- Proof of financial capacity to sustain operations, including capitalization, audited financial statements (if applicable), or other financial documents required by the NTC.
- Proof of financial capacity to sustain operations, including capitalization, audited financial statements (if applicable), or other financial documents required by the NTC.
- Regulatory Compliance Record
- No outstanding violations, unpaid penalties, or unresolved compliance issues with the NTC or other relevant government agencies.
- No outstanding violations, unpaid penalties, or unresolved compliance issues with the NTC or other relevant government agencies.
- Cybersecurity and Data Protection Readiness
- Compliance with cybersecurity standards, data privacy laws, and network security requirements as prescribed by the NTC and other regulatory bodies.
- Compliance with cybersecurity standards, data privacy laws, and network security requirements as prescribed by the NTC and other regulatory bodies.
- Submission by Authorized Party Only
- Applications must be submitted personally by the applicant, or through its duly authorized employee or legal counsel, in accordance with NTC rules.
- Applications must be submitted personally by the applicant, or through its duly authorized employee or legal counsel, in accordance with NTC rules.
IV. Evaluation Criteria Used by the NTC
Once an application is filed, the National Telecommunications Commission evaluates DTIP applications based on the following key criteria:
- Completeness of Documentary Requirements
- All required forms, supporting documents, technical descriptions, and sworn statements must be complete and accurate.
- All required forms, supporting documents, technical descriptions, and sworn statements must be complete and accurate.
- Technical Soundness
- Evaluation of network architecture, system design, equipment specifications, and service capability to ensure compliance with NTC standards.
- Evaluation of network architecture, system design, equipment specifications, and service capability to ensure compliance with NTC standards.
- Consistency with Declared Services
- The proposed services must be consistent with the applicant’s declared business purpose and technical submissions.
- The proposed services must be consistent with the applicant’s declared business purpose and technical submissions.
- Financial Viability
- Assessment of whether the applicant has sufficient financial resources to operate continuously and responsibly.
- Assessment of whether the applicant has sufficient financial resources to operate continuously and responsibly.
- Compliance with National Policy Objectives
- Alignment with the goals of the Konektadong Pinoy Act, including:
- Faster broadband deployment
- Improved access and competition
- Efficient use of shared infrastructure
- Faster broadband deployment
- Alignment with the goals of the Konektadong Pinoy Act, including:
- Public Interest Considerations
- Whether the proposed operations promote consumer welfare, fair competition, and reliable data transmission services.
- Whether the proposed operations promote consumer welfare, fair competition, and reliable data transmission services.
- Security and Public Safety Compliance
- Adherence to cybersecurity, lawful interception, and public safety requirements as mandated by law and regulation.
V. Compliance Obligations of DTIPs
Once registered or authorized, DTIPs are required to comply with continuing obligations, including:
1. Operational Compliance
- Adherence to service quality and performance standards
- Compliance with open-access and infrastructure-sharing policies
2. Cybersecurity and Data Protection
- Implementation of recognized cybersecurity frameworks
- Reporting of material cybersecurity incidents
- Coordination with the DICT and National CERT
3. Competition and Fair Access
- Non-discriminatory access to facilities
- Transparent pricing and cost disclosures
- Compliance with Philippine competition laws
VI. Reportorial Requirements
The Memorandum Circular reiterates the importance of regular reporting, including:
- Annual Reports containing investment data, network coverage, pricing, and subscriber information
- Submission of books of accounts, especially for entities operating across multiple network segments
- Annual Financial Statements (AFS) submitted within prescribed deadlines
- Other reports as may be required by the NTC or PCC
Failure to submit complete and timely reports may result in penalties or enforcement actions.
VII. Penalties for Non-Compliance
The NTC is empowered to impose administrative sanctions for violations of the Circular, including:
- Monetary fines
- Suspension of registration or authorization
- Revocation of operating authority
- Other regulatory actions allowed under law
Compliance is therefore essential not only for lawful operation but also for business continuity.
VIII. Impact on Existing and Prospective DTIPs
For Existing Operators
- Review current registrations and permits
- Align internal processes with new reporting and compliance standards
- Ensure cybersecurity and accounting systems are compliant
For Prospective DTIPs
- Prepare complete eligibility documentation
- Secure professional legal and technical support
- Understand the regulatory obligations prior to entering the market
The Circular reflects a regulatory environment that is more accessible, but also more structured and compliance-driven.
IX. How Apsay Law Office Can Assist
Given the technical and regulatory complexity of NTC Memorandum Circular No. 002-02-2026, Apsay Law Office provides specialized assistance for covered entities, including:
- DTIP registration and authorization processing
- Regulatory compliance advisory
- Preparation of documentary, legal, and reportorial requirements
- Technical Requirements through its partnered PECEs.
- Annual and periodic reporting assistance
- Representation before the NTC and related agencies
Our goal is to help clients operate confidently and compliantly under the Konektadong Pinoy regulatory framework.
Conclusion
NTC Memorandum Circular No. 002-02-2026 plays a pivotal role in implementing the Konektadong Pinoy Act by clearly defining who may operate as DTIPs and how such operations are regulated. For stakeholders in the data transmission industry, understanding and complying with this Circular is essential for lawful, sustainable, and competitive operations.
For guidance on compliance, registration, or regulatory strategy, Apsay Law Office stands ready to assist.
Visit www.apsaylaw.com or message us to learn more.