REPUBLIC OF THE PHILIPPINES
HOUSE OF REPRESENTATIVES
QUEZON CITY
FIFTEENTH CONGRESS

SECOND REGULAR SESSION

COMMITTEE REPORT NO. 2033
TOMAR 2012
Submitted by the Committee on Legislative Franchises on .

mags
Oued

Re : House Bill No. . Prepared by the Committee;

Recommending its approval, in substitution of House Bill No, 5872

Sponsors: Representatives Marcelino R. Teodoro, Paolo Everardo S. Javier,
Glorgidi B. Aggabao, Arturo 8. Robes, Eleandro Jesus F. Madrona, George P.
Amaiz, Andres D. Salvacion, Jr., Jeci A. Lapus, Yevgeny Vincente B. Emano and
Sigfrido R, Tinga,

MR. SPEAKER:

The Committee on Legislative Franchises to which was referred House Bill
Ne, 5872, introduced by Rep. Paolo Everardo S. Javier.

“AN ACT RENEWING AND AMENDING THE FRANCHISE GRANTED TO
PHILIPPINE GLOBAL COMMLNICATIONS, INC. (RCA COMMUNICATIONS, INC.)
UNDER REPUBLIC ACT NO. 4167”

has considered the same and recommends that the attached House Bill No
GO82 entitled:

“AN ACT RENEWING THE FRANCHISE GRANTED TO PHILIPPINE
GLOBAL COMMUNICATIONS, INC. (FORMERLY RCA COMMUNICATIONS,
iNC.) FOR ANOTHER TWENTY-FIVE (25) YEARS AMENDING FOR THE
PURPOSE REPUBLIC ACT 4617 “


be approved in substitution of House Bili No. 5872 with Paolo Everardo S. Javier,
Marcelino “Marcy” R. Teodoro, Giorgidi B. Aggabao, Arturo B. Robes, Eleandro
Jesus F. Madrona, George P. Amaiz, Andres D. Salvacion, Jr., Jeci A Lapus,
Yevgeny Vincente B. Emano and Sigfrido R. Tinga as authors thereof.

Respectfully submitted:

forte Tor, ho
MARCELINO “MARCY” R. TEQDORO

Chairperson
Committee on Legisiative Franchises

THE HONORABLE
THE SPEAKER
House of Representatives


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eeu anne

16

Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

FIFTEENTH CONGRESS
Second Regular Session

* 7 oO
House Bill No oC3e

introduced by Reps. Paolo Everando 3. Javier, Marcelino “Marcy” R. Teodoro,
Giorgidi B. Aggabao, Arturo B. Robes, Eleandro Jesus F. Madrona, George P.
Amaiz, Andres 0. Salvacion, Jr., Jeci A. Lapus, Yevgeny Vincente B. Emano and
Sigfrido R. Tinga

AN ACT RENEWING THE FRANCHISE GRANTED TO PHILIPPINE GLOBAL
COMMUNICATIONS, INC. (FORMERLY RCA COMMUNICATIONS, INC.) FOR:
ANOTHER TWENTY-FIVE (25) YEARS AMENDING FOR THE PURPOSE
REPUBLIC ACT 4617

Be it enactod by the Senate and House of Representatives of the Philippines in
Congress assembled.

SECTION 1. Nature and Scope of Franchise. - Subject to the provisions of the
1987 Philippine Constitution and applicable laws, rules and regulations, there is
hereby granted to Philippine Global Communications, Inc. (formerly RCA
Coramunications, inc}, hereunder referred to as the grantee, its successors or
assigns, a franchise to construct, instal, establish, operate and maintain for
commercial purposes and in the public interest, throughout the Philippines and
between the Philippines and other countries and terntories, wire and/or wireless
telecommunications systems, including but not limited to mobile, cellular, paging,
fiber optics, multi-channel muti-point distribution system (MMDS), local multi-point
distribution system (LMDS), satellite transmit and receive systems, switches, and
their value-added services such as, but not limited to, transmission of voice, data,
facsimile, control signs, audio and videc, information services bureau and all other
telecommunications systems technologies as are at present available or will be
made available through technological advances or innovations in the future; and/or
construct, acquire, lease and operate or manage transmitting and receiving stations,
lines, cables or systems as are convenient or essential to efficiently carry out the
purpose of this franchise.


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 , hereinafter referred to as the Commission,
a Certificate of Public Convenience and Necessity of the appropriate permits and
licenses for the construction, installation and operation of its tetecommunications
systems/facilities. In issuing the certificate, the Commission shall have the power to
impose such conditions relative to the construction, operation, maintenance, or
service level of the telecommunications system. The Commission shall have the
authority to regulate the construction and operation of its telecommunications
systems. The grantee shall not use any frequency in the radio spectrum without
having been authorized by the Commission. Such certificate shalt state the areas
coverad and date the grantee shall commence the service, The Commission,
however, shall not unreasonably withhold or deiay 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 suocessors or assigns, with the prior approval of
the Department of Public Works and Highways (OPWH) or the local government unit
conoemed, a8 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 municipaities: Provided, however, That a public place,
highway, street, lane, alley, avenue, sidewalk or bridge disturbed, altered or changed
by reason of erection of potes or other supports or the underground iaying of ves,


other conductors or conduits, shall be repaired and replaced in workmanlike manner
by said grantee, its successors or assigns, in accordance with the standards set by
DPWH or the local goverment unit concemed. Should the grantee, its successors
assigns, after the ten (10) day natice from the said authority, fail, refuse or neglect to
repair of replace any part of public place, road, highway, street, lane, aley, avenue,
sidewalk or bridge altered, changed or disturbed by the said grantee, its successors
or assigns, then the DPWH or the local government unit concerned shall have the
fight to have the same repaired and placed in good order and condition at double
expense fo be charged against the grantee, its successors o assigns.

SEC. 5. Responsibility to the Pubsc. - The grantee shall conform to the ethics
of honest enterprise and not use its stations/facilities for obscene or indecent
transmission of for dissemination of dehberately false information or wiltful
misrepresentation, of assist in subversive or treasonable acts.

‘The grantee shali 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 establishment, operation and maintenance of 2
jocal 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 totat demand to be satisfied by the expansion is
less than the smailest viable local exchange available in the market as determined
by the Commission, the grantee shall not be obliged to furnish such service unless
the applicant for telephone service defrays the actual expenses for the installation of
the telecommunications apparatus necessary for such services and in such case, the
Commission may extend the time within which the grant shail fumish such service.

The grantee shalt 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,


modity, improve or change such stations, lines, cables, systems, and equipment to
keep abreast with the advances in science and technology.

SEC. 6. Rates for Services. - The charges and rates for telecommunications
sesvices 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 Commission 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. 7. Right of Government. — A speciat 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 order, to 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 goverment, upon due
compensation to the grantee for the use of said stations, transmitters, facilities or
equipment during the period when they shalt be so operated.

The radio spectrum is @ finite resource that is part of the national patrimony:
ang the use thereof is a privdege conferred upon the grantee by the State and may
be withdrawn anytime after due process.

SEC. 8. Term of Franchise. — This franchise shalt be in effect for a period of
twenty-five (25) years from the date of effectivity of this Act, unless sooner cancelled.
‘This franchise shall be deemed ipso facto revoked in the event the grantee fails to
operate continuously within two (2} years.

SEC. 9. Acceptance and Compliance. - Acceptance of this franchise shall be
given in writing to the Congress of the Phitippines, through the Committee on
Legisiative Franchises of the House of Representatives and the Committee on Public


Services of the Senate within sixty (60) days from the effectivity of this Act. Upon
giving such acceptance, the grantee shall exercise the privileges granted under this
Act. Non-acceptance shall render the franchise void.

SEC. 10. Bond, - The grantee shalt file a bond with the NTC in the amount that it
shall determine to guarantee compliance with and fulfillment of the conditions under
which this franchise is granted. If after three (3) years from the date of the approval
of its permit by the Commission, the grantee shail have futfilled the conditions, the
bond shall be cancelled by the Commission. Otherwise, the bond shall be forfeited in
favor of the government and the franchise jpso facto revoked.

SEC. 11. Right of interconnection. ~ The grantee is hereby authorized to
connect or demand connection of its telecommunications systems to other
telecommunications systems installed, operated and maintained by any other duly
authorized person or entity in the Philippines for the purpose of providing extended
and improved telecommunications services to the public, under such terms and
conditions mutually agreed upon by the parties concerned and the same shail be
Subject to the review and modification of the Commission.

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

SEC. 13. Books and Accounts. — The books and accounts of the grantee, its
successor or assigns, shail always be open to the inspection of the Commission on
Audit (COA) and its duty-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. 14. Warranty in Favor of the National and Local Govemments. - The
grantee shail hold the national, provincial, city and municipal govemments 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
cr operation of the stations, transmitters, facilities and equipment of the grantee.

SEC. 15. Sale, Lease, Transfer, Usufruct, or Assignment.of Franchise. - The
Grantee shail not sell, tease, transfer, grant the usufruct of, or assign this franchise or
the rights and privileges acquired thereunder to any person, firm, company,
corporation or other commercial or legal entity, or merge with any other corporation
or entity, or shall transfer the controlling interest of the graniee, whether as a whole
or in parts and whether simultaneously or contemporaneously, to any such person,
firm, company, corporation or entity without the prior approval of the Congrass of the
Philippines: Proviied, That Congress shall be informed of any sate, lease, transfer,
grant of usufruct, or assignment of franchise or the rights or privileges acquired
within sixty (60) days after the completion of said transaction: Provided, further, That
failure to report to Congress such change of ownership shall render the franchise
spso facto revoked: Provided, finally, That any person or entity to which this franchise
is sok, transferred or assigned, shal! be subject to the same conditions, terms,
restrictions and limitations of this Act

SEC. 16. Dispersal of Ownership. In accordance with the constitutions!
Provision to encourage public participation in public utifties, 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
‘Operations. Noncompliance therewith shall render the franchise ipso facto revoked.

SEC. 17. Reportoriat Requirement. - The grantee shall submit an annuai
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 operations on or before April 30 of the succeeding year.


ak

SEC. 18. Penalty Clause - Any grantee who fails to submit the Annuat
Report to Congress shalt be fined Five Hundred Pesos (P500.00) per working day of
non-compliance. The fine shail be collected by the NTC from said delinquent
franchise grantee separate from the reportorial penalties imposed by NTC. The
collected funds shall accrue to the monitoring fund of the NTC in line with its
supervisory and regulatory functions. The reportorial compliance certificate issued by
Congress shal! be required before any application for permit or certificate is accepted
by NTC.

SEC. 19. 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,
however, That the foregoing shalt neither apply to nor affect provisions of
telecommunications franchises conceming territory covered by the franchise, the life
span of the franchise or the type of service authonzed by the franchise.

SEC. 20. Separability Clause. ~ if any of the sections or provisions of this Act
is held invalid, all other provisions not affected thereby shall remain valid.

SEC. 21 Repeatability and Non-exclusivity Clause, ~ This franchise shall be
subject to amendment, alteration, or repeal by the Congress of the Philippines when
the public interest so requires and shail not be interpreted as an exclusive grant of
the privilege herein provided for.

SEC. 22, Publication. This Act shai be pubtished, through the initiative of the.
grantee, fifteen (15) days after this Act is signed by the President of the Philippines
or has iapsed into law.

SEC. 23 Effectivity Clause. — This Act shail take effect fifteen (15) days from
the date of its publication in at feast wo (2) newspapers of general circulation in the
Philippines,

Approved,