Republic of the Philippines
House of Representatives
Quezon City

SEVENTEENTH CONGRESS
First Regular Session

nous bit no, 4913

INTRODUCED BY CONGRESSMAN ALFRED VARGAS

EXPLANATORY NOTE

Article II Section 24 of the Philippine Constitution provides that:

“The State recognizes the vital role of communication and information in nation-
building.”

‘This bill seeks to renew the franchise granted to the Radio Marine Network, Inc.

Through Republic Act No. 4607, Mr. Segundo P. Lustre, Jr. was granted a franchise to
establish, maintain, and operate radio stations for telecommunications within and outside
the Philippines. The franchise was renewed and transferred to the Radio Marine Network,
Inc, by virtue of Republic Act No. 7512,

Since 1965, the Radio Marine Network has facilitated ship-to-shore communication
or the exchange of voice and data communications between those on board the ship and
those from land. For more than five decades, the Radio Marine Network, Inc. has allowed
thousands of seafarers at sea to keep in touch with their families through radio
communication, Furthermore, the Radio Marine Network has provided a cheaper and more
stable alternative means of ship-to-shore communication as roaming through wireless
telecommunications has been markedly more expensive and more susceptible to
breakdown during natural calamities,

Apart from renewing the franchise, the bill also seeks to expand the nature and
scope of its franchise to include wire and wireless telecommunications systems, copper,
fiber optics, and satellite transmit and receive systems. This will enable the franchise to
cope with the advancement of technology and empower them to develop ship-to-shore
communications using the said systems.

In view of the foregoing, the passage of this measure is earnestly sought.

ALFRED VARGAS


Republic of the Philippines
House of Representatives
Quezon City

SEVENTEENTH CONGRESS
First Regular Session

4513

HOUSE BILL NO.

INTRODUCED BY CONGRESSMAN ALFRED VARGAS

AN ACT
RENEWING THE FRANCHISE GRANTED TO RADIO MARINE NETWORK,
INCORPORATED, UNDER REPUBLIC ACT NO. 4607, AS AMENDED BY REPUBLIC ACT
NO, 7512

Be it enacted 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
Philippine Constitution and applicable laws, rules and regulations, the franchise granted
under Republic Act No. 7512 entitled, “An Act authorizing the transfer and assignment to
the Radio Marine Network, Incorporated, of the franchise to establish, maintain and operate
radio stations for telecommunications within and without the Philippines granted under
Republic Act No, 4607 to Segundo P. Lustre, Jr,, and extending the term of the said franchise
to another twenty-five years” to Radio Marine Network, Incorporated, hereunder referred
to as the grantee, its successors or assignees, a franchise to construct, install, establish,
operate, and maintain for commercial purposes and in the public interest, in the Philippines
and between the Philippines and other countries and territories, wire and/or wireless
telecommunications systems including mobile cellular, 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 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 efficiency 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 established 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 service and/or the availability
thereof.

SEC, 3. Authority of the National Telecommunications Commission, - The
grantee shall secure from the National Telecommunications Commission (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
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
systems. 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 province, cities and/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 assignees, then the DPWH of the LGU concerned shall have the right to have
the same repaired and placed in good order and condition at double expense 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/facilities for obscene or indecent transmission or
for dissemination of deliberately false information or wilful 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 establishment, 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 service 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 the grantee shall furnish the 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, 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 services
of the grantee, except the rates and charges on those that may hereafter be declared or
considered as nonregulated services, whether the 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. 7. Right of the 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.

‘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 shalll be in effect for a period of twenty-
five (25) years from the date of the effectivity of this Act, unless sooner cancelled. This
franchise shall be deemed ipso facto revoked in the event the grantee fails to comply with
any of the following conditions of this Act.

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 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 shall file a bond with the NTC in the amount that it
shall determine to guarantee compliance with and fulfilment 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 NTC, the grantee shall have fulfilled the conditions, the bond shall be cancelled by the
NTC, Otherwise, the bond shall be forfeited in favour of the government and the franchise
ipso facto revoked.

SEC, 11. Right of Interconnection, ~ The grantee is hereby authorized to connect or
demand connection of its telecommunications systems toother 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 shall be subject to the review and modification of the NTC.

SEC. 12, 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 (31*) day of January of each year for the preceding twelve months.

SEC, 13, Books and Accounts. - The books and accounts of the grantee, its
successor or assignees, shall always be open to the inspection of the 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. 14, 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, 15, 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 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 contemporaneously, to any such 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 assignment of
franchise or the rights or privileges acquired thereunder, or of the merger, or transfer of
controlling interest of the grantee, 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 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.


SEC, 16, 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 percent (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: 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. 17, 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 franchises 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.

SEC, 18, Penalty Clause. ~ Failure of the grantee to submit the requisite annual
report to Congress shall be penalized with a fine of five hundred pesos (Php500.00) 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.

SEC. 19, Equality Clause. - Any advantage, favour, 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 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.

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, 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, 22. Effectivity. ~ This Act shall take effect fifteen (15) days after its publication
in a newspaper of general circulation.

Approved.