Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

SEVENTEENTH CONGRESS
First Regular Session

4693
HOUSE BILL NO. _

Introduced by REP. EMMANUEL F. MADRONA

EXPLANATORY NOTE

This Bill seeks to renew the franchise of Enrique M. Orozco and Sons, Inc.
granted under Republic Act Number T ‘wo Hundred Twenty-Nine (RA 3229), as
amended, entitled “An Act Granting Enrique M. Orozco and Sons, Inc,, Residing at
Number Four Hundred Forty-One-C, Isabel, Sampaloc, Manila, Philippines, A
Temporary Permit to Construct, Install, Maintain and Operate Public Radiotelephone and
Radiotelegraph Coastal Stations, and Public Fixed and Public Based and Land Mobile
Stations for the Reception and Transmission of Radiotelephone and Radiotelegraph
Communications within the Philippines” to another twenty-five years from the date of
effectivity of this Act

Enrique M, Orozco and Sons, Inc. is one of the pioncers in telecommunications
industry in the Philippines. They have been in operation since 1960’s, Their main core of
business is ship to shore radio communication service which provides communication
link between seafarers in the sea with their families and loved ones in the land

Despite the advancement of technology in the telecommunication industry, there
are still a lot of people who use the radio communication service provided by Enrique M
Orozco and Sons, Inc. since it is cheaper as compared to satellite telephone system being
used by other seamen

‘This measure was filed and duly approved during the 16" Congress

In view of the foregoing, approval of this bill is earnestly requested

EMMANUEL F.MADRONA


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

SIXTEENTH CONGRESS
Second. Regular Session

HOUSE £49 Ko. 469 3 =

Introduced by REP, EMMANUEL F. MADRONA

AN ACT
RENEWING FOR ANOTHER TWI Y-FIVE (25) YEARS THE FRANCHISE
GRANTED TO ENRIQUE M. OROZCO AND SONS INC, UNDER REPUBLIC ACT
NO, 3229

Be it enacted by the Senate and House of Representatives of the Philippines in

ngress assembled:

SECTION 1. Nature and Scope of Franchise. — Subject to the provisions

of the 1987 Philippine Constitution and applicable laws, rules and regulations,

the franchise granted to the Enrique M. Orozco and Sons Inc., hereunder

referred to as the grantee, its s ors or assignees, under Republic Act No.

3229, to construct, install, establish, operate, and maintain for commercial

purposes and in the public interest, wire and/or wireless telecommunications

systems including mobile cellular, paging, fiber optics, satellite transmit and
receive systems, switches, and their value-added services such as transmission
of voice, data, facsimile, control signs, audio and video, information servic

S,

and all other telecommunications systems technologies as are at present

available or will be

made available through

chnological advances or

innovations in the future; and/or c

truct, acquire, lease, and operate, or
manage transmitting and receiving stations, lines, cables or systems in the

Philippines, for domestic and international communication:

is hereby renewed

for another twenty-five (25) years from the effectivity of this Act.

SEC. 2. Manner of Operation of Stations or Facilities. - The stations or
facilities of the grantee shall be constructed and operated in a manner as will,
at most, result only in the minimum interference on the wavelengths or
frequencies of existing stations or other stations which may be established by
law, without in any way diminishing its own right to use its selected
wavelengths or frequencies and the quality of transmission or reception


thereon as should maximize rendition of the grantee’s services and/or

availability thereof.

SEC.3. Authority of the National Telecommunications Commission (NTC). ~
‘The grantee shall secure from the NTC a Certificate of Public Convenience and
Necessity or the appropriate permits and licenses for the construction,
installation and operation of its telecommunications systems/facilities. In

is

uing the certificate, the NTC shall have the power to impose such conditions
relative to the construction, operation, maintenance, or service level of the
telecommunications system. The NTC shall have the authority to regulate the
construction and operation of its telecommunications systems. The grantee

shall not us

any frequency in the radio spectrum without authorization from
the NTC. Such certificate shall state the areas covered and the date the grantee
shall commence the service. The NTC, however, shall not unreasonably

withhold or delay the grant of any such authority, permits or licenses.

SEC. 4. Excavation and Restoration Works. ~ For the purpose of erecting
and maintaining poles or other supports for said wires or other conductors for
the purpose of laying and maintaining underground wires, cables or other
conductors, it shall be lawful for the grantee, its successors or assigns, with
the prior approval of the Department of Public Works and Highways (DPWH) or
the local government unit concerned, as may be appropriate, to make
excavations or lay conduits in any of the public places, highways, streets,

lanes, alleys, avenues, sidewalks or bridges of said province, cities and/or

municipalities: Provided, however, That a public place, highway, street, lane,
alley, avenue, sidewalk or bridge disturbed, altered or changed by reason of
erection of poles or other supports or the underground laying of wires, other
conductors or conduits, shall be repaired and replaced in workmanlike manner
by the grantee, its successors or assignees, in accordance with the standards
set by DPWH or the LGU con

erned. Should the grantee, its suc

ors
assignees, after the ten (10) day notic

from the said authority, fail, refuse or
neglect to repair or replace any part of public place, road, highway, str

et, lane,
alley, avenue, sidewalk or bridge altered, changed or disturbed by the grantee,
, then the DPWH or the LGU concerned shall have

its successors or assigne
the right to have the same repaired and placed in good order and condition, at

double expense to be charged against the grantee, its suc

Ssors or assignees.


SEC. 5. Responsibility to the Public, - ‘The grantee shall conform to the
ethics of honest enterprise and not use its stations/facilities for obscene or

indecent transmission, or for dissemination of deliberately false information or

willful misrepresentation, or assist in subversive or treasonable acts.

‘The grantee shall provide basic or enhanced telephone service in any city

and/or municipality in the Philippines where it has an approved Certificate of

Public Convenience and Necessity for the tablishment, operation and

maintenance of a local exchange service, without discrimination to any
applicant therefor, in the order of the date of their applications, up to the limit
of the capacity of its local telephone exchange, and should the demand for the
telephone service at any time increase beyond the capacity thereof, the grantee
shall increase the same to meet such demand: Provided, That in case the total
demand to be satisfied by the expansion is less than the smallest viable local
exchange available in the market as determined by the NTC, the grantee shall

not be obliged to furnish such service unless the applicant for telephone servic
defrays the actual expenses for the installation of the telecommunications

apparatus necessary for such services and in such case, the NTC may extend

the time within which the grant shall furnish such service.

The grantee shall operate and maintain all its stations, lines, cables,

systems, and equipment for the transmission and reception of messages,

signals and pulses in a satisfactory manner at all times, and as far as

economical and practicable, modify, improve or change such stations, lines,

bles, systems, and equipment to keep abreast with the advances in science

and technology.

C. 6. Rates for Services. — ‘The charges and rates for

telecommunications services of the grantee, except the rates and charges on

those that may hereafter be declared or considered as non-regulated services,
whether flat rates or measured rates or variation thereof, shall be subject to the
approval of the NTC or its legal successor. The rates to be charged by the
grantee shall be unbundled, separable and distinct among the services offered
and shall be determined in such a manner that regulated services do not

subsidize the unregulated ones.

SEC. 8. Right of Government. ~ A special right is hereby reserved to the

President of the Philippines, in times of war, rebellion, public peril, calamity,


emergency, disaster or disturbance of peace and orde

‘0 temporarily take over
and operate the stations, transmitters, facilities or equipment of the grantee; to
temporarily suspend the operation of any station, transmitter, facility or
equipment in the interest of public safety, security and public welfare; or to
authorize the temporary use and operation thereof by any agency of the
government, upon due compensation to the grantee for the use of said stations,
transmitters, facilities or equipment during the period when these shall be so

operated.

The radio spectrum is a finite resource that is part of the national

patrimony and the use thereof is a privilege

conferred upon the grantee by the
State and may be withdrawn anytime after due process.

SEC. 8. Term of Franchise. - This franchise shall be in effe

for a period of
twenty-five (25) years from the date of effectivity of this Act, unless sooner

cancelled. This franc! shall be deemed ipso facto revoked in the event the

grantee fails to operate continuously for two (2) years.

SEC. 9, Acceptance and Compliance, ~ Acceptance of this franchise shall be

given in writing to the Congress of the Philippines, through the Committee on

Legislative Franchises of the Hou entatives and the Committee on

of Rep

Public Servi

s of the Senate within sixty (60) days from the effectivity of this
Act. Upon giving such

eptance, the grantee shall exercise the privileges
granted under this Act. Non-acceptance shall render the franchise void.

SEC. 10. Right of Interconnection. - The grantee is hereby authorized to

connect or demand conne

tems to other

ction of its telecommunications sy:
telecommunications systems installed, operated and maintained by any other

duly authorized person or entity in the Philippines for the purpose of providing
€

tended and improved telecommunications services to the public, under such
terms and conditions mutually agreed upon by the parties concerned, this right
shall be subject to the review and modification of the NTC.

SEC. 11. Gross Receipts. - The grantee, its successors or assignees, shall
keep a separate account of the gross receipts of the business transacted by it
and shall furnish the Commission on Audit (COA) and the National Treasury a
copy of such account not later than the thirty-first (31st) day of January of
each year for the preceding twelve (12) months.


SEC. 12. Books and Accounts. — The books and accounts of the grantee,

its successor or

ignees, shall always be open to the inspection of the
Commission on Audit (COA) and its duly-authorized representatives. It shall be
the duty of the grantee to submit to the COA two (2) copies of the quarterly
reports on the gross receipts, the net profits and the general condition of the

business.

SEC. 13. Warranty in Favor of the National and Local Governments, ~ The
grantee shall hold the national, provincial, city and municipal governments of
the Philippines free from all claims, accounts, demands or actions arising out
of accidents or injuries, whether to property or to persons, caused by the
construction or operation of the stations, transmitters, facilities and equipment
of the grantee.

SEC. 14. Sale, Lea

Transfer, Usufruct, or Ass

gnment of Franchise.

‘The grantee shall not sell, lease, transfer, grant the usulruct of, or 2

ign this
franchise or the

ights and privileges acquired thereunder to any person, firm,
company, corporation or other commercial or legal entity, nor merge with any

other corporation or entity, nor shall transfer the controlling interest of the

grantee, whether as a whole or in parts, and whether simultaneously or
contemporancously, to any person, firm, company, corporation or entity
without the prior approval of the Congress of the Philippines: Provided, That
Congress shall be informed of any sale, lease, transfer, grant of usufruct, or

as

ignment of franchise or the

rights or privileges acquired within sixty (60)
days after th

completion of said transaction: Provided, further, That failure to

report to Congress such change of owne!

hip shall render the franchise ipso
facto revoked: Provided, finally, ‘That any person or entity to which this
franchise is sold, transferred or assigned, shall be subject to the same

conditions, terms, restrictions and limitations of this Act.

SE

. 15. Dispersal of Ownership. - In accordance with the constitutional
provision to encourage public participation in public utilities, the grantee shall
offer to Filipino citizens at least thirty per centum (30%) or a higher percentage
that may hereafter be provided by law of its outstanding capital stock in any
securities exchange in the Philippines within five (5) years from the

commencement of its operation:

Provided, That in cases where public offer of
shares is not applicable, establishment of cooperatives operating public utilities


must be implemented. Noncompliance therewith shall render the franchise ipso
facto revoked.

SEC, 16. Reportorial Requirement. ~The grantee shall submit an annual
report to the Congress of the Philippines, through the Committee on Legislative

Franchises of the House of Representatives and the Committee on Public

Services of the Senate, on its compliance with the terms and conditions of the

franchise and on its ope

rations on or before April 30 of every year during the

term of its franchise

‘The reportorial compliance certificate issued by Congress

shall be required before any application for permit or certificate is a
the NTC.

cepted by

SEC. 17. Penalty Clause. ~ Failure of the grantee to submit the requisite
annual report to Congress shall be penalized with a fine in the amount of Five
Hundred Pesos

(P500.00) per working day of noncompliance. ‘The fine shall be

collec

1 by the NTC from the delinquent franchise grantee separate from the

reportorial penalties imposed by NTC.

SE

. 18, Equality Clause. - Any advantage, favor, privilege, exemption, or

immunity granted under other existing franchise, or which may hereafter be

granted, upon prior review and approval of Congress, shall become part of
this franchise and shall be accorded immediately and unconditionally to the
herein grantee: Provided, That the foregoing shall neither apply to nor affect
provisions of telecommunications franchises concerning territory covered by

th

¢ franchise, the life span of the franchise or the type of service authorized by
the franchise.

SEC. 19. Separability Claus

If any of the sections or provisions of this

Act is held invalid, all other provisions not affe

ed thereby shall remain valid.

SEC. 20, Repealability and Nonexclusivity Clause, - This franchise shall

be subject to amendment, alteration, or repeal by the Congress of the

Philippines when the public interes

So requires and shall not be interpreted as

an exclusive grant of the privilege herein provided for.

SEC, 21, Effectivity. — ‘This Act shall take effect fifteen (15) days after its
publication in the Official Gazette or in a newspaper of general circulation.


Approved,