Summary: In the Philippines, customers can cancel an internet service provider (ISP) contract even during a lock-in period if there is a substantial breach—for example, chronic slow speeds, frequent outages, or failure to install/repair within a reasonable time. The primary legal anchors are the Civil Code on reciprocal obligations (rescission for breach), the Consumer Act (unfair or deceptive practices), and sector rules administered by the National Telecommunications Commission (NTC) under the Public Telecommunications Policy Act. This article explains when a breach becomes “substantial,” how lock-in and early-termination fees (ETFs) interact with your rights, what evidence to gather, and the step-by-step process to end service lawfully and recover payments or damages.

1) The Legal Framework at a Glance

Civil Code (Obligations & Contracts).
- Reciprocal obligations: You pay fees; the ISP delivers internet service at the promised level. If one side substantially breaches, the other may seek resolution (rescission) or specific performance, with damages. (Commonly cited provisions include Article 1191 and related damages provisions.)
- Bad faith / negligence: Delays, repeated failed repairs, or knowingly misleading claims can ground damages (moral, exemplary, and actual where proven).
- Fortuitous events: ISPs often invoke “force majeure.” But outages caused by foreseeable, manageable risks (e.g., poor network capacity, routine maintenance, equipment failure without diligence) are generally not fortuitous.
Consumer protection rules.
- Misrepresentation (e.g., advertising “up to 200 Mbps” but delivering a tiny fraction consistently, or promising coverage where none exists) and unconscionable terms are restricted.
- Contracts of adhesion: ISP contracts are standard-form. Ambiguities are construed against the drafter. Unusually harsh clauses may be declared unenforceable.
Sector regulation (NTC).
- ISPs must comply with quality-of-service (QoS) and customer-service standards and maintain transparent terms (plans, speeds, fair-use policies, installation/repair timeframes, fees).
- Consumers may file administrative complaints with the NTC for persistent service failures or unfair charges. NTC can order refunds, service credits, or other relief; it can also sanction providers.
- Lock-in periods are permitted (commonly up to 24 months for residential), but cannot be used to penalize consumers when the provider materially fails to perform.

2) What Counts as a “Substantial Breach”?

A breach becomes substantial when it defeats the essential purpose of the contract: reasonably reliable internet at the plan’s advertised or guaranteed parameters.

Typical substantial breaches include:

Chronic substandard speeds far below the plan’s typical/committed rate (not just occasional congestion).
Repeated or prolonged outages (e.g., hours or days at a time, recurring across weeks).
Failure to install or activate within a reasonable or promised timeframe.
Failure to repair within a reasonable period after trouble tickets/engineer visits.
Unilateral, material changes to your plan (speed throttling, data caps, price increases) without lawful basis or consent.
No coverage/feasible service at your location despite sales assurances.

Usually not substantial by itself:

A brief outage due to a severe typhoon or power grid failure (true force majeure), especially if the ISP acts diligently to restore service.
Minor, isolated speed dips during peak hours if overall performance is within norms and disclosures.

3) Lock-In Clauses vs. Your Right to Cancel

Lock-in = conditional discount/benefit in exchange for staying a fixed term. It does not give the provider a license to underperform. Key points:

Early Termination Fees (ETFs) may be valid only if you are the party withdrawing without the ISP’s fault. If the ISP’s substantial breach triggers cancellation, charging an ETF is typically unwarranted.
Pro-rata device amortization (e.g., modem, mesh routers) may still be collectible if those items conferred a separable benefit and the contract clearly itemizes them. But penalties tied to mere “loss of future profit” are often scrutinized.
Unfair contract terms (e.g., “we can change anything anytime; you can never cancel”) are vulnerable: courts and regulators construe them strictly against the ISP.

4) Evidence: Build a Persuasive Record

To cancel cleanly—and to fend off ETFs—assemble a contemporaneous file:

Service measurements
- Daily speed tests (same device, same spot, wired if possible), timestamped screenshots, using credible test tools.
- Ping/packet-loss logs and traceroutes during issues.
Outage diary
- Dates/times of loss of service; duration; impact (e.g., missed work/school).
Tickets & correspondence
- Job order numbers, SMS/app logs, technician visit notes, call reference numbers.
Advertising & plan terms
- Screenshots/leaflets stating plan speeds, data caps, installation/repair timelines, “service guarantees,” fair-use policy, and any commitment to minimum typical speeds.
Billing records
- Invoices showing you paid despite non-performance; any service credits already given.

The stronger your file, the easier to establish substantial breach and good-faith cancellation.

5) Practical Grounds Commonly Accepted

Persistent under-delivery of speed/latency despite tickets and “repairs.”
Prolonged or repeated outages (e.g., days each week, over multiple weeks).
Failure to install/activate/repair within promised or reasonable time (especially for new lines).
Relocation to a no-coverage area where the ISP cannot provide service; a lock-in tied to a service impossible to perform at the new address is contestable.
Unilateral material plan changes or unexpected charges that materially degrade value.
Misrepresentation by sales agents (e.g., claimed fiber availability that doesn’t exist).

6) Step-by-Step: How to Terminate Lawfully

Step 1 — Internal complaint. Write to the ISP’s official support channel stating the specific defects and demand cure within a defined period (e.g., 10 calendar days). Attach evidence. Ask for service credits and a written plan to restore compliance.

Step 2 — Final demand & notice of rescission. If unresolved, send a formal demand letter declaring the ISP in substantial breach and your intent to rescind/cancel without ETF if not cured by a final deadline. Request confirmation of account closure and waiver of penalties.

Step 3 — File with the NTC (and, where appropriate, DTI). For telco/ISP disputes, lodge a verified complaint with the NTC (regional office or central). Include your evidence and demand waiver of ETFs, refunds/credits, and a portability letter (if you’re moving providers). If your case includes false advertising or broader consumer issues, you may also raise aspects with DTI. (For privacy breaches, notify the NPC.)

Step 4 — Withhold ETF; continue paying undisputed, prorated dues. If service still runs during dispute, pay what is fairly due for usable service; contest ETFs and penalty charges in writing. Keep receipts.

Step 5 — Litigation or small claims (if needed). If significant sums are at stake (e.g., improper ETFs, paid service during lengthy non-performance), consider Small Claims (no lawyer required up to the current jurisdictional cap) or regular civil action for rescission and damages. Use your evidence file.

7) Remedies You Can Seek

Cancellation (rescission) without ETF or penalties.
Refunds/credits for periods of non-service or substandard service.
Liquidated damages only if validly stipulated and not unconscionable (often these favor providers; consumers typically seek actual/moral damages instead).
Damages for losses reasonably proven (e.g., lost day-work for home-based workers—though courts require solid proof).
Regulatory orders: NTC may direct restoration, refunds, or administrative fines against the provider.

8) Common ISP Defenses—and How to Respond

“Best-effort only.”
- Rebuttal: Even “best-effort” does not excuse systemic, chronic underperformance below transparent norms. If advertising/plan sheets indicate typical or minimum performance, use them.
Force majeure.
- Rebuttal: Routine congestion, chronic capacity shortfalls, preventable equipment failures, and long repair delays are generally not fortuitous. Show patterns and lack of diligence.
“You agreed to lock-in.”
- Rebuttal: Lock-in presumes mutual performance. Substantial breach by the provider defeats the consideration; ETFs become unjust.
“We provided rebates.”
- Rebuttal: Token credits do not cure repeated breach. Credits may mitigate but not erase the right to rescind if the service remains substantially defective.

9) Residential vs. Business Accounts

Residential plans are more standardized; regulators scrutinize retail advertising, lock-ins, and crediting.
Business plans may include Service Level Agreements (SLAs) with explicit metrics (uptime %, mean time to repair) and termination-for-cause clauses. These can make cancellation cleaner when targets are missed. Preserve SLA and monthly performance reports.

10) Strategic Tips

Measure like a pro: If possible, perform wired tests from a capable device, avoid Wi-Fi interference confounders, and test at varied times (peak vs. off-peak).
Ask for the “technical findings.” After site visits, request the technician’s notes and any line tests.
Negotiate a clean break: Many ISPs will waive ETFs if presented with a strong record and a draft NTC complaint.
Mind device returns: Return modems/ONTs and accessories with an acknowledgment receipt to avoid “unreturned equipment” charges.
Porting/moving: If switching providers, overlap for a short period to avoid downtime; then close the old account in writing and keep proof of receipt.

11) Template: Final Demand & Notice of Rescission

Subject: Final Demand; Notice of Rescission for Substantial Breach — [Account No./Service Address] To: [ISP Legal/Customer Care Email & Address]

I am on Plan [Speed/Price] under a lock-in expiring on [Date]. Since [Start Date], the service has been materially defective due to [chronic outages/very low speeds/failure to repair], despite multiple tickets: [list reference nos. and dates].

Attached are speed-test logs, outage records, and correspondence demonstrating persistent non-compliance with your advertised/committed service levels and reasonable standards of diligence.

Under the Civil Code on reciprocal obligations, your substantial breach entitles me to rescission with damages. Unless you cure within 10 calendar days from receipt of this letter—by restoring service to compliant levels and issuing appropriate credits—I shall cancel the service for cause effective immediately thereafter, without early termination fees or penalties, and seek refunds/credits for the affected periods.

Please confirm in writing (a) the waiver of ETFs/penalties, (b) account closure date, and (c) any equipment return instructions.

If unresolved, I will file a complaint with the NTC and pursue further remedies.

Sincerely, [Name] [Service Address / Contact No.] [Attachments: logs, screenshots, tickets, plan materials, bills]

12) Frequently Asked Questions

Q: Can I stop paying immediately? A: Pay for any usable service you actually received while disputing; expressly withhold ETFs and penalties you contest. Put your position in writing.

Q: What if the ISP refuses to cancel? A: File a verified complaint with NTC (attach your full record). You can also pursue Small Claims for refunds/penalties improperly charged.

Q: I moved and there’s no coverage. Does lock-in still bind me? A: If the ISP cannot render service at the new address and no feasible relocation option exists, ongoing performance may be impossible, supporting cancellation without ETF. Return equipment and document the no-coverage finding.

Q: The contract says “speeds are up to X.” A: “Up to” language is not a shield for persistent, material underperformance. Use typical/minimum speeds stated elsewhere, QoS obligations, and your logs to show breach.

Q: They credited one bad month; now it’s bad again. A: Recurrent failure after “fixes” indicates continuing breach. Credits don’t waive your right to rescind if defects persist.

13) Key Takeaways

Lock-in is not absolute. It cannot trap you in a chronically defective service.
Document everything. Strong records win waivers, refunds, and regulatory relief.
Follow due process. Demand, cure period, written notice, and—if needed—NTC complaint.
Aim for a clean exit. Waiver of ETFs, closure letter, and equipment return receipt.

This article offers general information on Philippine law and telecom regulation. It is not a substitute for tailored legal advice. For high-value disputes or complex fact patterns, consider consulting counsel to evaluate litigation or settlement strategy.