Key takeaways and recommended actions
Coupled with the amendments to the Public Service Act previously introduced by RA 11659 (which removed the 40% foreign ownership investment cap on the telecommunications sector), the passage of the KPA has effectively resulted in the removal of all significant legal barriers to foreign players' entry into the Philippine data transmission sector.
Companies, particularly foreign-owned companies, that are seeking to enter the data transmission sector in the Philippines are advised to closely monitor the drafting and promulgation of the Implementing Rules and Regulations (IRR) of the KPA and to initiate steps to be in a position to register as DTIPs once the IRR is promulgated.
The KPA also empowers the Department of Information and Communications Technology (DICT) to formulate policies to safeguard local data. Insofar as this may impact cross-border data transfers, it is also strongly recommended for DTIPs to closely monitor the DICT's potential actions as regards localization of data.
Quisumbing Torres is ready to assist organizations seeking to enter and/or expand their operations in the data transmission sector in the Philippines. If you require assistance or have any further inquiries related to the KPA or matters related to the KPA, please feel free to reach out to Quisumbing Torres' Intellectual Property, Data and Technology Practice Group.
In more detail
This landmark legislation, which lapsed into law on 23 August 2025, establishes a comprehensive and inclusive data transmission and connectivity framework that would narrow the digital divide and foster a competitive, open-access environment in the telecommunications sector. It will modernize the country's digital infrastructure by encouraging investment, promoting infrastructure sharing and ensuring fair competition.
In pursuit of the foregoing, the KPA, among other measures, introduces the following legal reforms:
- The KPA institutes a straightforward administrative registration requirement for DTIPs.
- It repeals the congressional franchise requirement for DTIPs. This means that DTIPs, which may include PTEs, VAS providers and SSPOs, no longer have to obtain congressional approval to put up and operate radio stations and telecommunications networks to be used solely for data transmission.
- The law allows DTIPs to deploy satellite technology and use associated spectrum in any or all segments of their broadband network without the need for a lease or rent capacity from enfranchised PTEs.
- It mandates the formulation by the DICT, in coordination with the National Telecommunications Commission and the Philippine Competition Commission, of the Spectrum Management Policy Framework (SMPF) to prescribe the national policies and guiding principles to govern spectrum management, including, among others, spectrum valuation and pricing, spectrum allocation, and spectrum assignment for public, private and government use.
Notably, the KPA also gives the DICT the authority to formulate policies to safeguard local data, when necessary to advance national security and public interest, with primacy given to cross-border data flows as a key enabler of the global economy.
The DICT is now taking the lead in drafting the IRR of the KPA, which it is mandated to promulgate within 90 days. The KPA's implementation is expected to be in full swing once the IRR of the law is promulgated.
* * * * *
Please contact QTInfoDesk@quisumbingtorres.com for inquiries.
VISIT QUISUMBING TORRES SITE
