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Republic of the Philippines
HOUSE OF REPRESENTATIVES
Constitution Hills, Quezon City

EIGHTEENTH CONGRESS
First Regular Session

HOUSE BILL No. _906

Introduced by REP. JOHNNY T. PIMENTEL

EXPLANATORY NOTE

The proposed bill seeks to extend the legislative franchise of Tandag Electric
and Telephone Company, Inc. (TETCO) for another twenty-five years and
expand the same to include internet service provision. TETCO was originally
granted a franchise under Republic Act No. 8715. Since its start of
operations, it has continuously provided telecommunication services for the
people of Tandag, Surigao del Sur. The new franchise under this Act would
incorporate the recent technological advances in telecommunications and
allow TETCO to provide improved services to the people of Surigao del Sur.

In today’s globalized society, the Internet is undeniably essential for the
function of modern cities. Connectivity through digital means of
communication is now an integral part of the human experience. Healthcare,
trade, information, and even governance are now more than ever coursed
through the various strands of the World Wide Web.

The proposed legislative franchise will definitely contribute to the economic
development of Surigao del Sur. TETCO can enable those living in secluded
or inaccessible areas to connect to the outside world through internet
connections. TETCO directly aids in the growth of connections and
efficiencies within the people of Tandag, Moreover, the grant of a specific
franchise can encourage competition in the industry, leading to overall lower
costs.

For the aforementioned reasons, the undersigned recommends that this bill
be signed into law.

JOHNNY T. \PIMENTEL~

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Republic of the Philippines
HOUSE OF REPRESENTATIVES
Constitution Hills, Quezon City

EIGHTEENTH CONGRESS
First Regular Session

HOUSE BILL NO. 906

Introduced by REP. JOHNNY T. PIMENTEL

AN ACT AMENDING THE FRANCHISE OF THE TANDAG ELECTRIC AND
TELEPHONE COMPANY, INC. GRANTED UNDER REPUBLIC ACT NO.
8715, AND RENEWING/EXTENDING THE TERM THEREOF TO
ANOTHER TWENTY-FIVE (25) YEARS FROM THE DATE OF
EFFECTIVITY OF THIS ACT

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

Section 1. Nature and Scope of Franchise. - Subject to applicable laws, rules,
and regulations, the franchise granted under Republic Act No. 8715 to
Tandag Electric and Telephone Company, Inc. (hereafter Grantee), its
successors, or assigns, to construct, establish, install, maintain, and
operate for commercial purposes and, in the public interest, local exchange
networks, including public calling stations or pay telephone stations or
wireless local loop and for such purpose provide basic telephone service or
other means related to the foregoing now known to science such as mobile,
cellular, paging, fiber optics, satellite transmit and receive systems,
transoceanic cable landing station and systems, switches, and their value-
added services such as, but not limited to, transmission of voice, data,
facsimile, control signs, audio and video, information services bureau, and
other telecommunications systems technologies, or which in the future may
be developed in the Province of Surigao del Sur for public domestic
telecommunications, is hereby renewed for another twenty-five (25) years
from the effectivity of this Act.

Section 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 it selected

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wavelengths or frequencies and the quality of transmission or reception
thereon as should maximize rendition of the grantee’s services or availability

or both thereof.

Section 3. Authority of the National Telecommunications Commission (NTC). —
As a condition precedent for operations under its franchise, the Grantee
shall secure from the NTC a Certificate of Public Convenience and Necessity
(CPCN) or other appropriate permits and licenses for the construction,
installation, and operation of its telecommunications systems or facilities.

The NTC shall have the authority to regulate the construction and operation
of the Grantee’s telecommunications system. In issuing the CPCN, the NTC
shall have the power to impose such conditions relative the construction
and operation of the Grantee’s telecommunications systems. The CPCN shall
state the areas covered and date the Grantee shall commence its services.

This section notwithstanding, the NTC shall not unreasonably withhold or
delay the grant of the CPCN, permits, or licenses.

Section 4. Excavation and Restoration Works. — For the purpose of erecting

and maintaining poles or other supports for

the wires for the

telecommunications system or unearthing and installing underground wires,
cables, or other conductors for the same, 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 or on any of the public
places, highways, streets, lanes, alleys avenues, sidewalks, or bridges of
provinces, cities, 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 by the Grantee, its successors, or assigns in
accordance with the standards set by the DPWH or the appropriate local
government unit. Should the Grantee, its successors, or assigns, after ten
(10) day notice from the aforementioned authorities, fail, refuse, or neglect to
repair or replace any part of the public place, road, highway, street, lane,
alley, avenue, sidewalk, or bridge altered, changed, or disturbed by its
installation, the DPWH or the local government unit concerned shall have
the same repaired and placed in good order and condition at double expense
to be charged to the Grantee, its successors, or assigns.

Section 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,
treasonable acts.

or assist

in subversive or

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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.

As far as economically possible 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 in coordination with the NTC.

The Grantee shall also improve and upgrade its equipment, facilities and
services, in order to ensure effective compliance with the objectives of
Republic Act No. 10639 or “The Free Mobile Disaster Alerts Act”.

Section 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 nonregulated services,
whether flat rates or measured rates or variation thereof, shall be subject to
the approval of the NTC or its legal successor.

Section 7. 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 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 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.

Section 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.

Section 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 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. Refusal or failure to accept
the franchise shall render the franchise void.

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Section 10, Tax Provisions. ~The Grantee, its successors or assignees, shall
be liable to pay the same taxes on their real estate, buildings and personal
property, exclusive of this franchise, as other persons or corporations which
are now or thereafter may be required by law to pay, except radio
telecommunications and electronic communications equipment, machinery,
and spare parts needed in connection with the business of the grantee
which shall be exempt from customs duties, tariffs and other taxes, as well
as those declared exempt in this section. In addition thereto, the Grantee,
its successors or assignees, shall pay a value-added tax on all gross receipts
of the business transacted under this franchise by the grantee, its
successors or assignees, in the Philippines in lieu of any and all taxes of any
kind, nature, or description levied, established, or collected by an authority
whatsoever including, but not limited to, city, municipal, provincial, or
national, from which the Grantee is hereby expressly exempted effective
from the date of the effectivity of this Act:

Provided, That the grantee, its successors or assignees, shall continue to be
liable for income taxes payable under Title II of the National Internal
Revenue Code pursuant to Section 2 of Executive Order No. 72, unless the
latter enactment is amended or repealed, in which case the amendment or
repeal shall be applicable thereto.

The Grantee shall file the return with and pay the tax thereon to the
Commissioner of Internal Revenue or his duly authorized representative in
accordance with the National Internal Revenue Code and the return shall be
subject to audit by the Bureau of Internal Revenue.

Section 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 the terms and conditions mutually agreed upon by the parties
concerned. The exercise of this right shall be subject to the review and
modification of the NTC.

Section 12. 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 that cause injury to persons or damage to
properties, during the construction or operation of the stations, transmitters,
facilities, or equipment of the grantee.

Section 13. Sale, Lease, Transfer, Usufruct, or Assignment of Franchise. -
The Grantee shall not sell, lease, transfer, grant the usufruct of, nor assign
this franchise or the rights and privileges acquired thereunder to any person,
firm, company, corporation or other commercial or legal entity, nor shall

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transfer the controlling interest of the grantee, whether as a whole or in part,
and whether 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: Provided, That any person or entity to which this franchise is
validly sold, transferred, or assigned shall be subject to the same conditions,
terms, restrictions, and limitations of this Act.

Section 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 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 accepted by the NTC.

Section 15. Penalty Clause. - Failure of the Grantee to submit the requisite
annual report to Congress shall be penalized with a 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 shall be liable to pay the fine of Five hundred pesos (P500.00) 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 National Treasury.

Section 16. Equality Clause. - Any advantage, favor, privilege, exemption, or
immunity granted under other existing franchises, 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 the provisions of telecommunications franchises concerning territory
covered by the franchise, the life span of the franchise or the type of service
authorized by the franchise.

Section 17. Separability Clause. - If any section or provision of this Act is
held invalid, all other provisions not affected thereby shall remain valid.

Section 18. 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 shall not be interpreted
as an exclusive grant of the privileges herein provided for.

All provisions of Republic Act No. 8715 inconsistent with this Act are hereby
repealed or modified accordingly.

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All other provisions of Republic Act No. 8715 which are not inconsistent
with the provisions of this Act and remain unrepealed shall continue to be in
full force and effect: Provided, That all pending suits of whatever kind or
nature, whether civil, criminal or administrative filed by or against the
Grantee in connection with the provisions of Republic Act No. 8715, shall
continue to be prosecuted under the said law: Provided, further, That all
valid and existing liabilities, fines, penalties, surcharges and/or unpaid tax
assessments of the grantee from March 26, 1992 until the effectivity of the
new law shall remain valid and enforceable under Republic Act No. 7301
and Republic Act No. 7940.

Section 19. Hffectivity. - This Act shall take effect fifteen (15) days after its
publication in the Official Gazette or in a newspaper of general circulation.

Approved.

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