Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

EIGHTEENTH CONGRESS

First Regular Session

HOUSE BILL NO. dd

Introduced by REPRESENTATIVE JOEL MAYO Z. ALMARIO

EXPLANATORY NOTE

As enshrined in the Constitution, the State recognizes the vital role of
communication and information in nation-building and the indispensable role of the
private sector.

This bill seeks to renew the franchise granted to Mati Telephone Corporation
(MTC) for another twenty-five (25) years since its due enactment under
Republic Act No. 8675 in June 25, 1998. Additionally, MTC had the outstanding
distinction of being the first telephone company in the Province of Davao Oriental
to offer an Automatic Dial System for its subscribers.

With 57 years in operation, MTC continues to provide the latest
telecommunications technology to its subscribers who are physically based in the
countryside. With this, MTC is thriving to continue to deliver global access and
connectivity to its current subscribers by providing more telephone and broadband lines
in the coming years. It, now, focuses more on providing interconnection to the rest of the
Province of Davao Oriental's area of operation.

Advances in the telecommunications technological landscape have been
exponential over the past two decades and is expected to continue to grow even more in
the coming decades. For over almost six decades of service, the company has proven to
make substantial contribution and significant participation in the modernization and
development to its area of operation.

With the renewal of its franchise, Mati Telephone Corporation is dedicated to
make these services and products available to more subscribers and to the rest of the
Province of Davao Oriental.

Hence, the approval of this bill is earnestly sought.

“ 2nd District, Davao Oriental


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City
EIGHTEENTH CONGRESS

First Regular Session

HOUSE BILL NO 343_

Introduced by REPRESENTATIVE JOEL MAYO Z. ALMARIO

AN ACT
RENEWING FOR ANOTHER TWENTY-FIVE (25) YEARS THE FRANCHISE GRANTED
TO MATI TELEPHONE CORPORATION UNDER REPUBLIC ACT NO. 8675, ENTITLED
‘AN ACT GRANTING THE MATI TELEPHONE CORPORATION, A FRANCHISE TO
CONSTRUCT, INSTALL, ESTABLISH, OPERATE AND, MAINTAIN LOCAL EXCHANGE
NETWORK IN THE PROVINCE OF DAVAO ORIENTAL AND ALL CITIES THEREIN.’

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

SECTION1. Nature and Scope of Franchise. - Subject to the provisions of the
Constitution and applicable laws, rules and regulations, the franchise granted to Mati
Telephone Corporation, under Republic Act No. 8675, 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 Province of Davao Oriental,
Philippines, wire and/or wireless telecommunications system, copper, fiber optics,
satellite transmit and receive systems, switches and their value-added services such as
the transmission of 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 or other stations which may be established by law, without 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 Public


Convenience and Necessity (CPCN) and the appropriate permits and licenses for the
construction, installations, 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 NTC 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 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 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
provinces, cities, or municipalities: Provided, however, That a public place, road, 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 said grantee, its
successors or assignees, in accordance with the standards set by the DPWH or the LGU
concerned. Should the grantee, its successors 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 assigned, 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
hazard-and typhoon-prone areas that shall be determined by the National Disaster Risk
Reduction and Management Council in coordination with NTC.

SEC. 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 rate or measured rates or variation
thereof, shall be subject to the approval of the NTC or its legal successor.


SEC. 7. Right of the 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.

Aspecial right is hereby reserved to the President of the Philippines, in times of
war, rebellion, public peril, calamity emergency, disaster or disturbance of peace an
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 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 operation: Provided, That priority shall be accorded to
the residents in areas where any of its offices 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. 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 right shall be subject to the 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 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 validly 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%) or a higher percentage that may hereafter
be provided by law of its common stocks in any securities exchange in the Philippines
within five (5) years from the renewal of its franchise: Provided, That in cases 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 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 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 Bureau of Treasury.

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

SEC. 17. 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. 18. Repealability 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 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,