Terminating an ISP Contract for Poor Service in the Philippines
(Updated May 2025)
This article is for general information only and is not a substitute for personal legal advice. Always review your own service agreement and consult counsel when necessary.
1. Why the issue matters
Slow or unreliable internet can be a material breach of an ISP’s promise to deliver a minimum level of service—especially now that remote work, online classes, and e-commerce are the norm. Philippine contract law and telecom-specific regulations give subscribers several exit routes that can void early-termination fees, trigger rebates, and even support a claim for damages. (Consumer Rights for Telco Service Delays in the Philippines, Consumer Rights for Telco Service Delays in the Philippines)
2. The legal building blocks
| Layer | Key authorities | How they help you terminate |
|---|---|---|
| General contract law | Civil Code Arts. 1170 (breach), 1191 (rescission), 1306 (freedom to stipulate) | Lets you cancel when the ISP’s non-performance is substantial and not just trivial. |
| Consumer protection | Republic Act 7394 (Consumer Act) | Bars unfair or unconscionable contract terms (e.g., excessive lock-in or termination fees) and guarantees the right to redress. (R.A. 7394 - LawPhil) |
| Sector-specific law | RA 7925 (Public Telecommunications Policy Act) & EO 546 | Makes the National Telecommunications Commission (NTC) the primary regulator with power to set quality-of-service (QoS) and issue subscriber-relief orders. (R.A. 7925 - LawPhil) |
| NTC rules | MC 19-12-2004 (Service Performance Standards) and MC 07-08-2015 (Fixed-Broadband Measurement) | Define minimum fixed-line speed (80 % of subscribed speed, 80 % of the time) and require pro-rated rebates after 24 h continuous outage. (Value Added Services - Region 7 NTC) |
| Pending legislation | Senate Bill 1831 – “Better Internet Act” (80 / 80 rule + daily fines) and House bill on automatic refunds (2023) | Not yet law but adds political pressure and persuasive value in negotiations. (Senate Bill No. 1831 - 18th Congress, Bill mandating refunds for poor internet connection hurdles House) |
3. When “poor service” is a legal ground for cancellation
You have a good-faith basis to terminate—often without penalty—when any of the following persist after reasonable notice:
- Chronic speed shortfall below the 80 / 80 benchmark or the speed explicitly promised in a service-level agreement (SLA). (Value Added Services - Region 7 NTC)
- Frequent or extended downtime exceeding 24 h per episode without credited rebates. (UNDERSTANDING REBATE CLAIMS FOR INTERNET SERVICE ..., UNDERSTANDING REBATE CLAIMS FOR INTERNET SERVICE ...)
- Mis-billing or hidden charges that violate RA 7394’s disclosure rules. (How to Contest Unfair Internet Service Disconnections and Billing ...)
- Unreasonable lock-in or early-termination fee (ETF)—e.g., fees that exceed a pro-rated recovery of the modem cost plus modest admin charges. (Contract termination for poor internet service Philippines)
- Misrepresentation in marketing (e.g., “fiber” service that is actually VDSL). False advertising can be treated as fraud, nullifying the contract ab initio.
4. Step-by-step termination roadmap
- Document the breach
- Run timestamped speed tests (NTC or Ookla) three times a day for at least seven days.
- Keep screenshots of outage alerts, modem logs, and help-desk tickets.
- Review your contract
- Note the lock-in period, cure period, ETF formula, and SLA.
- Serve a demand letter
- Cite Art. 1191 (rescission) and specific NTC circular provisions breached.
- Give the ISP 15–30 days to cure (or the period specified in the SLA).
- Escalate internally
- Use the ISP’s “Office of the President” or “Corporate Escalations” channel; record reference numbers.
- File an NTC complaint if no satisfactory action:
- Submit the NTC complaint form + evidence in person, by e-mail, or at regional help desks. The NTC sets a mediation hearing within days.
- Ask for (a) termination without ETF, (b) bill rebates for every day of outage, and (c) release of your Customer Premises Equipment without charge.
- Parallel or follow-up action at DTI (Fair Trade Enforcement Bureau) for consumer arbitration up to ₱300 k. (Complaints Handling - Fair Trade Enforcement Bureau - DTI)
- Sue in court as a last resort—rescission + actual, moral and exemplary damages (Art. 2219). Small-claims jurisdiction now reaches ₱1 m for pure monetary claims (A.M. 22-06-01-SC).
5. Early-termination fees: when do you still pay?
| Scenario | ETF outcome |
|---|---|
| ISP’s breach proved (speed logs + NTC finding) | Waived. An ETF is liquidated damages; an injured party cannot collect damages for its own breach. |
| You simply change your mind within lock-in | Payable, but the amount must reflect actual unrecovered equipment cost. Punitive ETFs are void under Arts. 1229 & 2227 CC + RA 7394’s unconscionability test. |
| Force-majeure outage (e.g., typhoon) | Contract may excuse performance; ETF usually still applies if you seek termination, unless the downtime is prolonged beyond the “service viability” clause. |
6. Rebates, refunds & damages
- Automatic rebates. The Supreme Court (G.R. 250390, 15 Mar 2023) affirmed NTC’s power to compel subscriber rebates for network outages, cementing MC 19-12-2004’s credit-back rule. (Consumer Refund Rights for GPS Service Philippines)
- House/Senate bills would make rebates automatic once downtime hits 24 h—no claim needed. (Bill mandating refunds for poor internet connection hurdles House, Senate Bill No. 1831 - 18th Congress)
- Damages (court action): lost profits for business subscribers, moral damages for severe disruption (e.g., bar-exam taker who missed an online exam).
7. Illustrative jurisprudence
| Case | Take-away |
|---|---|
| Globe Telecom v. NTC (pulse-billing refunds) | NTC may order refunds/rebates but must observe due process; still a weapon for consumers. (G.R. No. 143964 - LawPhil) |
| Globe Telecom v. NTC (G.R. 250390 - 2023) | Rebates are a valid regulatory remedy for degraded service—not an unconstitutional taking. (Consumer Refund Rights for GPS Service Philippines) |
| Philtrack Corp. v. Villanueva (2021) | Over-promised GPS accuracy = misrepresentation; court allowed rescission and refund of a long-term contract. (Consumer Refund Rights for GPS Service Philippines) |
8. Practical tips & pitfalls
- Return the modem/ONT and ask the technician to sign a turn-over receipt; failure to do so is the most common reason ISPs keep billing.
- Pay any undisputed arrears before filing a complaint; non-payment weakens your moral high ground.
- Keep communications in writing (e-mail or chat transcript). Verbal promises are hard to prove.
- Beware of “retention offers.” Accepting a speed upgrade in lieu of termination may reset the lock-in. Get clarifications in writing.
9. Sample one-page demand letter (outline)
- Header: Your name, account no., service address
- Facts: Chronology of outages/speed tests (attach printouts)
- Legal basis: Cite RA 7394, RA 7925 §5, MC 07-08-2015 §4(b), Civil Code Art. 1191
- Relief sought: (a) immediate cancellation without ETF, (b) rebate of ₱ ___ covering ___ days, (c) free retrieval of CPE
- Cure period: “If the foregoing is not complied with within fifteen (15) days of receipt, I shall seek relief from the NTC/DTI and the courts.”
- Mode of service: Courier + e-mail (keep proof-of-receipt)
10. Key take-aways
Philippine law already lets you walk away from a sub-par ISP without paying punitive fees—provided you document, demand, and escalate properly. The combination of RA 7394, RA 7925, and binding NTC circulars gives consumers teeth, while new bills in Congress promise even stronger automatic-refund rules. Use them.