Republic of the Philippines
HOUSE OF THE REPRESENTATIVES.
Quezon City, Metro Manila

EIGHTEENTH CONGRESS
FIRST REGULAR SESSION

House Bill No. ©509

Introduced by
CIBAC Party-List Representative Domingo C. Rivera

EXPLANATORY NOTE

Section 24, Article II of the 1987 Constitution explicitly states that the State
“recognizes the vital role of communication and information in nation-building.” It also
acknowledges the crucial role of the private sector in providing telecommunications
services to the Filipino people. Testament to this is the granting of legislative
franchises by Congress to qualified private companies which can operate and
provide these services to the people.

In 1997, the RCYULO Telephone System, Inc. was given the franchise to
construct, install, establish, operate and maintain local exchange networks in the
Municipalities of Binalbagan, Hiniragan, Isabela, Himamaylan, Pontevedra, and
Murcia, all in the province of Negros Occidental. Since then, the company actively
operates and provides telephone and communication services to the people of
Negros Occidental.

As its primary offering, it provides its subscribers with both the landline voice
connection and the more in-demand data connection. In fact, RCYULO Telephone
System Inc. has the distinction of being the first and only telephone company in the
Southern Part of Negros Occidental to offer an Automatic Dial System to its
subscribers. Now, it focuses its operations to the more remote communities within its
franchise area and provides latest telecommunications technology to its subscribers
who are literally based in the countryside.


Advances in the telecommunications technologies landscape had been
exponential over the past two decades and is expected to continue growing even at
a more accelerated pace. RCYULO Telephone System, Inc. desires to continue
making these services and products available to the localities it serves.

With all the foregoing, this legislative measure seeks to renew the franchise
granted to RCYULO Telephone System, Inc. for another twenty five (25) years so
that it can continue in providing telephone services to its clients.

Hence, the immediate approval of this bill is earnestly sought.

~ DOMINGO’C, RIVERA


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

EIGHTEENTH CONGRESS
First Regular Session

House Bill No. 9608

Introduced by
CIBAC Party-List Representative Domingo C. Rivera

AN ACT RENEWING FOR ANOTHER TWENTY-FIVE (25) YEARS
THE FRANCHISE GRANTED TO RCYULO TELEPHONE SYSTEM INC.,
UNDER REPUBLIC ACT NO. 8348 ENTITLED “AN ACT GRANTING
THE RYULO TELEPHONE SYSTEM INC. A FRANCHISE TO
CONSTRUCT, INSTALL, ESTABLISH, OPERATE AND MAINTAIN
LOCAL EXCHANGE NETWORKS IN THE MUNICIPALITIES OF
BINALBAGAN, HINIGARAN, PONTEVEDRA, ISABELA, MURCIA AND
THE CITY OF HIMAMAYLAN IN THE PROVINCE OF NEGROS
OCCIDENTAL

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

SEC. 1. Nature and Scope of Franchise — Subject to the provisions of the
Constitution and applicable laws, rules and regulations, the franchise granted to RYULO
Telephone SYSTEM Inc., under Republic Act No. 8348, and hereunder referred to as
the grantee, its successors or assignees, to construct, install, establish, operate and
maintain for commercial purposes and in the public interest, in the Municipalities of
Binalbagan, Hinigaran, Pontevedra, Isabela, Murcia and the City of Himamaylan in the
Province of Negros Occidental, Philippines, wire and/or wireless telecommunications
system, copper, fiber optics, satellite transmit and receive systems, switches and their


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value-added services such as transmission voice, data, facsimile, control signs audio
and video, information services and all other telecommunications system technologies
as are at present available or will be made available through technological advances or
innovations in the future; 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, 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 stablished by law, without in any way
diminishing its own privilege to use its assigned wavelengths or frequencies and the
quality of transmission or reception thereon as should maximize rendition of the
grantee’s services or the availability thereof.

SEC. 3. Authority of the National Telecommunications Commission. - The
grantee shall secure the National Telecommunications Commission (NTC) a Certificate
of the Public Convenience and Necessity (CPCN) and the appropriate permits and
licenses for the construction, installation and operation of its telecommunications
systems or facilities. In issuing 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 grantee shall not use 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 grants of such authority, permit or license.

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 assignees, with the prior approval of the Department
of Public Works and Highways (DPWH) or the local government unit (LGU) concerned,
as may be appropriate, to make excavations or lay conduits in any of the public places,
roads, highways, streets, lanes, alleys, avenues, sidewalks, or bridges of the province ,
cities, or municipalities: Provided, however, That a public place, road, highway, street,
lane, alley, avenue, sidewalk, or bridge disturbed, altered, or change 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 said grantee, its


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successors or assignees, in accordance with the standards set by the DPWH or the
LGU concerned. Should the grantee, its successor or assignees, after the ten (10) day
notice from the said authority, fail, refuse, or neglect to repair or replace any part of
public place, road, highway, street, lane, alley, avenue, sidewalk, or bridge altered,
changed or disturbed by the said grantee, its successors or assignees, then the DPWH
or the LGU concerned shall have the right to have the same repaired and placed in
good order and condition at double the amount spent for such repair or replacement, to
be charged against the grantee, its successors or assignees.

SEC. 5. Responsibility to the Public. - The grantee shall conform to the ethics
of honest enterprise and not use its stations or 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 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, cables, systems, and equipment to keep
abreast with the advances in science and technology.

The grantee shall improve and extend its services in areas not yet served, and in
hazard — and typhoon — prone areas that shall be determined by the National Disaster
Risk Reduction and Management Council, or its legal successor, in coordination with
the NTC.

SEC. 6. Rates of Service. - 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
of variation thereof, shall be subject to the approval or the NTC or its legal successor.

SEC. 7. Right of Government. - 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 any time after due process.

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

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order: to temporarily take over and operate the stations, transmitters, facilities 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 the stations, transmitters, facilities, or
equipment during the period when these shall be operated.

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

‘SEC. 9. Commitment to Provide and Promote the Creation of Employment
Opportunities. — The grantee shall create employment opportunities and shall allow
on-the-job training in their franchise operations: Provided, That priority shall be
accorded to the residents of the place where the principal office of the grantee is
located: Provided further, That the grantee shall follow the applicable labor standards
and allowance entitlement under existing labor laws, rules and regulations and similar
issuances: Provided, finally, That the employment opportunities or jobs created shall be
reflected in the General Information Sheet (GIS) to be submitted to the Securities and
Exchange Commission annually.

SEC. 10. Rights 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
authorize person or entity in the Philippines for the purpose of providing extended and
improved telecommunications services to the public, under the terms and conditions
mutually agreed upon by the parties concerned. The right shall be subject to review and
modification of the NTC.

SEC. 11. 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, liabilities, accounts, demands, or actions arising out of
accidents, causing injury to persons or damage to properties, during the construction or
operation of the stations, transmitters, facilities, or equipment of the grantee.

SEC. 12. Sale, Lease, Transfer, Grant of Usufruct, or Assignment of
Franchise. - The grantee shall not sell, lease, transfer, grant the usufruct of, nor assign

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this franchise or the rights and privileges acquired thereunder to any person, firm,
company, corporation or other entity, nor merge with any other corporation or entity, nor
shall transfer the controlling interest of the grantee, simultaneously or
contemporaneously, to any person, firm, company, corporation, or entity without the
prior approval of the Congress of the Philippines and compliance with legal
requirements stipulated in other statutes. 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.

SEC. 13. Dispersal of Ownership. — in accordance with the constitutional
provision to encourage public participation in public utilities, the grantee shall continue
to offer to Filipino citizens at least thirty percent (30%) of its common stocks, or a higher
percentage that may hereafter be provided by law, in any securities exchange in the
Philippines within five (5) years from the renewal of its franchise: Provided, That in case
where public offer of shares is not applicable, other methods of encouraging public
participation by citizens and corporations operating public utilities must be implemented.
Noncompliance therewith shall render the franchise ipso facto revoked.

SEC. 14. 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 operations to
the Congress of the Philippines, on or before April 30 of every year during the term of its
franchise. The compliance certificate issued by Congress shall be required before an
application for any permit, CPCN, or any equivalent thereof is accepted by the NTC.

SEC. 15. Penalty Clause. — Failure of the grantee to submit the requisite annual
report to Congress shall be penalized with fine in the amount of One million pesos
(P1,000,000.00) per working day of noncompliance, the effectivity of which shall
commence upon applicability with other telecommunications franchise grantees:
Provided, That in the interim, the grantee shalll be liable to pay the fine of five hundred
pesos (P500,000) per working day of noncompliance. The fine shall be collected by the
NTC from the delinquent franchise grantee separate from the reportorial penalties
imposed by the NTC and the same shall be remitted to the Bureau of Treasury.

SEC. 16. Equality Clause. - Any advantage, favor, privilege, exemption, or
immunity granted under existing franchises, or which may hereafter be granted, upon


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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 the provision of telecommunications
franchises concerning territory, life span, or type of service authorized by the franchise.

SEC.17. Separability Clause. — \f any of the section or provisions of this Act is
held invalid, all other provisions not affected thereby shall remain valid.

SEC. 18. Repealability and Nonexclusivity Clause. — This franchise shall be
subject to amendment, alteration, or repeal by the Congress of the Philippines when the
public interest so requires and shall not be interpreted as an exclusive grant of the
privilege herein provided for.

SEC. 19. Repealing Clause. — All other laws, orders, issuances, rules and
regulations, or parts thereof inconsistent with this Act are hereby repealed, amended, or
modified accordingly.

SEC. 20. Effectivity. - This Act shall take effect fifteen (15) days after its
Publication in the Official Gazette or in a newspaper of general circulation.

Approved,