Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

SIXTEENTH CONGRESS
Third Regular Session

HOUSE BILL NO. 6012

Introduced by REP. ARTURO B. ROBES.

EXPLANATORY NOTE

Through the enactment of Republic Act No. 7692 in 1994, Bell
Telecommunication Philippines, Inc. was granted a legislative franchise to install,
operate and maintain telecommunications systems throughout the Philippines.

Recognizing the vital role of telecommunication services in the country, this
bill seeks to renew the franchise granted to Bell Telecommunication Philippines, Inc.
for another twenty-five (25) years. Bell Telecommunication Philippines, Inc. provides
telecommunication services to the public, such as local exchange carrier (LEC),
international gateway facility (IGF), inter exchange carrier (IXC), very small aperture
terminal (VSAT), and internet service provider (ISP) services, among others.

Indeed, telecommunication services are imbued with a high degree of public
interest and the importance of their continuous operator not be overemphasized.
As such, immediate approval of this bill is earn



Re

6

Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

SIXTEENTH CONGRESS
Third Regular Session

HOUSE BILL NO. 6012

Introduced by REP. ARTURO B. ROBES

AN ACT
AMENDING AND EXTENDING FOR ANOTHER TWENTY-FIVE (25) YEARS THE
FRANCHISE GRANTED TO BELL TELECOMMUNICATION PHILIPPINES, INC.
UNDER REPUBLIC ACT NO. 7692 ENTITLED “AN ACT GRANTING TO BELL
TELECOMMUNICATION PHILIPPINES, INC., A FRANCHISE TO INSTALL,
OPERATE AND MAINTAIN TELECOMMUNICATIONS SYSTEMS THROUGHOUT
THE PHILIPPINES AND FOR OTHER PURPOSES"

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

SECTION 1. The franchise of Bell Telecommunication Philippines, Inc. granted
under Republic Act No. 7692 is hereby amended to read as follows:

“(Section 1 Nature and Scope of Franchise. — Subject to the
provisions of the Constitution and applicable laws, rules and regulations on
public telecommunications, the Bell Telecommunication Philippines, Inc., its
successors or assigns, and hereunder referred to as the grantee, is hereby
granted the right, privilege and authority to carry on the business of providing
telecommunications services in and between provinces, cities and
municipalities in the Philippines and between the Philippines and other
countries and territories and, for this purpose, to establish, operate, manage,
lease, maintain and purchase telecommunications systems, including mobile,
cellular and wired or wireless telecommunications systems, fiber optics,
satellite transmit and receive systems, and other telecommunications systems
and their value-added services such as, but not limited to, transmission of


v

aawe

voice, data, facsimile, control signals, audio and video, information service
bureau, and all other telecommunications systems technologies as are at
present available or be made available through technical advances or
innovations in the future, or construct, acquire, lease and operate or manage
transmitting and receiving stations and switching stations, both for local and
international services, lines, cables or systems, as is, or are, convenient or

essential to efficiently carry out the purposes of this franchise.

Sec. 2. Authority of the National Telecommunications Commission.
— The grantee shall secure from the National Telecommunications
Commission hereinafter referred to as the Commission, a certificate of public
convenience or appropriate permits and licenses for the location, construction,
installation, and operation of its telecommunications systems. 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 systems. 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 shall state the areas
covered and date the grantee shall commence the service,

Sec, 3. Responsibility to the Public. — The grantee shall provide
telephone service in any municipality in the Philippines where it has an
approved certificate of public convenience for the establishment, operation
and maintenance of a local exchange service, without discrimination to any
applicant thereof, in the order of the date of their applications.

The grantee shall operate and maintain alll 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 modify, improve
or change such stations, lines, cables, systems and equipment to keep
abreast with the advances in science and technology


16
17
18
19
20
ai
22

Sec. 4. Eminent Domain. — The grantee may acquire such private
property as is actually necessary for the realization of the purposes for which
this franchise is granted: provided, that in case the owner refuses to sell or
allow the use thereof, the proper proceedings shall be instituted: provided,
further, that just compensation is paid

Sec. 5 Ingress and Egress. — For the purpose of installing,
operating and maintaining its telecommunication lines, it shall be lawful for the
grantee to make excavations or lay conduits in any of the public places,
highways, streets, lanes, sidewalks, bridges or infrastructure in any provinces
and municipalities: provided, however, that any public place, highway, street
lane, sidewalk, bridge or infrastructure disturbed, altered, or changed thereby
shall be repaired and placed in a workmanlike manner by the grantee to the
satisfaction of the Department of Public Works and Highways or the local
engineering office, as the case may be, and/or in accordance with existing
laws or rules on excavations and reconstitution of such public civil works.

Sec. 6. Interconnection. — The grantee is authorized to connect or
demand connection of its telecommunications systems to any other
telecommunications systems installed, maintained and operated 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 interconnection and
the same shall be subject to the review or modification of the Commission.

Sec. 7 Equality Clause. — If any subsequent franchise for
telecommunications service is awarded or granted by the Congress of the
Philippines with terms, privileges and conditions more favorable and beneficial
than those contained in this Act, then the same privileges or advantages shall
ipso facto accrue to the herein grantee and be deemed part of this Act.

Sec. 8. Sale, Lease, Usufruct, etc. — The grantee shall not lease,
transfer, grant the usufruct of, sell or assign this franchise or the rights and


20
21
22

privileges acquired thereunder to any person, firm, company, corporation or
entity, nor merge with any other corporation or entity without the prior
approval of the Congress of the Philippines. Neither shall the controlling
interest in the grantee be transferred, 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 the foregoing limitations shall not apply to: (a)
Any transfer or issuance of shares of stock in the implementation of the
requirement for the dispersal of the grantee's ownership pursuant to Section
11 of this Act; (b) any transfer or sale of shares of stock to a foreign investor
or investors; (c) any issuance of shares to any foreign or local investors
pursuant to or in connection with any increase in the grantee's authorized
capital stock which shall result in the dilution of the stockholdings of the
grantee's then existing stockholders; (d) any combination thereof where such
transfer, sale or issuance is effected in order to enable the grantee to raise
the necessary capital or financing for the provision of any of the services
authorized by this Act and/or to carry out any of the purposes for which the
grantee has been incorporated or organized: provided, further, that any such
transfer, sale or issuance is in accordance with any applicable constitutional
limitations. Any person or entity to which this franchise is validly sold,
transferred or assigned shall be subject to all the same conditions, terms,
restrictions, and limitations of this Act.

Sec. 9. Tax Provisions. — The grantee shall be liable to pay the
same taxes on their real estate, buildings and personal property exclusive of
this franchise, as other persons or telecommunication entities are now or
hereafter may be required by law to pay. In addition thereto, the grantee shall
pay to the Bureau of Internal Revenue each year three per centum (3%) of the
gross receipts of its regulated telecommunications services transacted under
this franchise, and the said percentage shall be in lieu of all taxes on this
franchise or earnings thereof: provided, that the grantee shall continue to be
liable for income taxes payable under Title I! of the National Internal Revenue
Code pursuant to Sec. 2 of Executive Order No. 72 unless the latter


Rw

16

7
18
19
20
2

22
23
24
25
26
27
28

enactment is amended or repealed, in which case the amendment or repeal
shall be applicable thereon.

SECTION 10. Rates of Services. — the tariffs and rates for telephone
service and other types of telecommunications services of the grantee except
the rate 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 effective only after approval of the Commission. 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

SECTION 11 Dispersal of Ownership. — In accordance with the
constitutional provision to encourage public participation in public utilities, the
grantee shall offer at least thirty per centum (30%) of its outstanding capital
stock or a higher percentage that may hereafter be provided by law in any
securities exchange in the Philippines within three (3) years from effectivity of
this Act.

SECTION 12. Term of Franchise. — This franchise shall be for a
period of twenty-five (25) years from the date of effectivity of this Act unless
sooner revoked or cancelled. In the event the grantee fails to operate
continuously for two (2) years, this franchise shall be deemed ipso facto
revoked.

SECTION 13. Acceptance of Franchise. — Within sixty (60) days
after the effectivity of this Act, the grantee shall file with the Secretary of
Transportation and Communications its written acceptance of this franchise
and of all the terms and conditions hereof. In default of such acceptance
within the said time, this franchise shall become null and void, As a guaranty
that it has accepted this franchise in good faith, the grantee shall, within thirty
(30) days, deposit with the National Treasury the sum of One hundred
thousand pesos (P100,000.00) in cash or negotiable instruments of the


Secxwerd)daw

Philippine Government and file a bond in the amount of One million pesos
(P1,000,000.00)

Should the grantee fail, refuse or neglect to begin the business of
providing a telephone service within two (2) years of the grant of the certificate
of public convenience and for any reason other than an act of God, act of the
public enemy, military power, martial law, riot, civil commotion, or unavoidable
cause, then the deposit prescribed under this section shall be forfeited in favor
of the National Government as liquidated damages. Should the grantee
perform on time the undertaking for which the deposit is required, then the
deposit shall be returned to the grantee and its bond cancelled within six (6)
months of commencement of service

SECTION 14. Filing of Application with the Commission. — Within six
(6) months after the effectivity of this Act, the grantee shall file an application
with the Commission for a certificate of public convenience authorizing it to
construct, operate and maintain a telecommunications system and to offer the
corresponding telecommunication service in such municipalities as it may
deem in need of such service. Failure to file such an application for any
reason other than force majeure or acts of God shall render this franchise
void.

SECTION 15. Warranty. — The grantee shall hold the national,
provincial, city and municipal governments harmless from all claims,
accounts, demands or actions arising out of accidents or injuries, whether to
property or to persons, caused by the installation and operation of the
telecommunications systems of the grantee.

SECTION 16. Right of Government. — In the event of war, rebellion,
insurrection or similar national crisis and the Government shall find it
necessary to operate and maintain for itself any or all of the
telecommunication apparatus and system herein authorized, the grantee shall
temporarily turn over such facilities or apparatus to the government in


Ak

a

16

exchange for payment of just and reasonable compensation for the use

thereof.

SECTION 17, Alteration or Repeal of Franchise. — This franchise
shall be subject to amendment, alteration or repeal by the Congress of the
Philippines. All lands or rights of use or occupation of lands secured by virtue
of this franchise shall revert upon its termination to the national, provincial or
municipal governments concerned which were the owners thereof upon the
date on which this franchise was granted.

SECTION 18.  Separability Clause, — If any section or provision of
this Act is declared unconstitutional or invalid, the other sections or provisions
not affected thereby shall continue to be in force and effect.

SECTION 19. _Effectivity Clause, — This Act shall take effect fifteen
(15) days after its publication in at least two (2) newspapers of general

circulation in the Philippines.)

SEC 1 NATURE AND SCOPE OF FRANCHISE. — SUBJECT TO
THE PROVISIONS OF THE 1987 CONSTITUTION AND APPLICABLE
LAWS, RULES AND REGULATIONS ON PUBLIC TELECOMMUNICATIONS,
BELL TELECOMMUNICATION PHILIPPINES, INC., HEREUNDER
REFERRED TO AS THE GRANTEE, ITS SUCCESSORS OR ASSIGNEES,
IS HEREBY GRANTED THE RIGHT, PRIVILEGE AND AUTHORITY TO
CARRY ON THE BUSINESS OF PROVIDING TELECOMMUNICATIONS
SERVICES IN AND BETWEEN PROVINCES, CITIES AND MUNICIPALITIES
IN THE PHILIPPINES AND BETWEEN THE PHILIPPINES AND OTHER
COUNTRIES AND TERRITORIES AND, FOR THIS PURPOSE, TO
ESTABLISH, OPERATE, MANAGE, LEASE, MAINTAIN AND PURCHASE
TELECOMMUNICATIONS SYSTEMS, INCLUDING MOBILE, CELLULAR
AND WIRED OR WIRELESS TELECOMMUNICATIONS SYSTEMS, FIBER
OPTICS, SATELLITE TRANSMIT AND RECEIVE SYSTEMS, AND OTHER
TELECOMMUNICATIONS SYSTEMS AND THEIR VALUE-ADDED


wR wD

ea

22
23
24

26
27
28
29
30
31

SERVICES SUCH AS TRANSMISSION OF VOICE, DATA, FACSIMILE,
CONTROL SIGNALS, AUDIO AND VIDEO, INFORMATION SERVICE
BUREAU, AND ALL OTHER TELECOMMUNICATIONS SYSTEMS
TECHNOLOGIES AS ARE AT PRESENT AVAILABLE OR BE MADE
AVAILABLE THROUGH TECHNICAL ADVANCES OR INNOVATIONS IN
THE FUTURE, OR CONSTRUCT, ACQUIRE, LEASE, AND OPERATE OR
MANAGE TRANSMITTING AND RECEIVING STATIONS AND SWITCHING
STATIONS, BOTH FOR LOCAL AND INTERNATIONAL SERVICES, LINES,
CABLES OR SYSTEMS, AS IS, OR ARE, CONVENIENT OR ESSENTIAL TO
EFFICIENTLY CARRY OUT THE PURPOSES 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 ASSIGNED
WAVELENGTHS OR FREQUENCIES AND THE QUALITY OF
TRANSMISSION OR RECEPTION THEREON AS SHOULD MAXIMIZE
RENDITION OF THE GRANTEE'S SERVICES AND/OR THE AVAILABILITY
THEREOF.

SEC.3. AUTHORITY OF THE NATIONAL TELECOMMUNICATIONS
COMMISSION (NTC). — THE GRANTEE SHALL SECURE FROM THE 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 SYSTEM. THE NTC SHALL HAVE THE
AUTHORITY TO REGULATE THE CONSTRUCTION AND OPERATION OF


Oe wne

ao

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 DPWH OR THE LGU
CONCERNED. SHOULD THE GRANTEE, ITS SUCCESSORS 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
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 WILLFUL 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 THE 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 THE SERVICES AND IN SUCH CASE, THE NTC MAY
EXTEND THE TIME WITHIN WHICH THE GRANT 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 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 A MANNER THAT
REGULATED SERVICES DO NOT SUBSIDIZE THE UNREGULATED
ONES.

SEC. 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,


ie

18
19
20
21
22
23
24

26

27
28

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 SHALL 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 /PSO FACTO REVOKED IN THE
EVENT THE GRANTEE FAILS TO OPERATE CONTINUOUSLY FOR TWO
(2) YEARS.

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. NONACCEPTANCE SHALL RENDER THE
FRANCHISE VOID. AS A GUARANTY THAT IT HAS ACCEPTED THIS
FRANCHISE IN GOOD FAITH, THE GRANTEE SHALL, WITHIN THIRTY
(30) DAYS, DEPOSIT WITH THE NATIONAL TREASURY THE SUM OF
ONE HUNDRED THOUSAND PESOS (P100,000.00) IN CASH OR
NEGOTIABLE INSTRUMENTS OF THE PHILIPPINE GOVERNMENT AND
FILE A BOND IN THE AMOUNT OF ONE MILLION PESOS (P1,000,000.00).

SHOULD THE GRANTEE FAIL, REFUSE OR NEGLECT TO BEGIN
THE BUSINESS OF PROVIDING A TELEPHONE SERVICE WITHIN TWO
(2) YEARS OF THE GRANT OF THE CERTIFICATE OF PUBLIC


€1

(YOO) LIGNY NO NOISSINWOO SHL 4O NOILLOAdSNI SHL OL NSdO 38
SAVM1V TIVHS ‘SSSNOISSV YO SHOSSSOONS SLI ‘SALNVUO SHL 40
SLNNOOOV GNV SHOOE SH1L ~ SLNNODOV GN SOO “Z| “OAS

SHLNOW (ZL) SATAML ONIGSOSYd
HL YO4 YVSA HOVE 4O AYVNNYS JO AVG (1SL€) LSYIS-ALYIHL
SHL NVHL Y3SlV1 LON INNODDVY HONS 4O AdOOD W AYNSWAYL
TWNOILVYN SHL ONY (VOO) LIGNY NO NOISSIWWOS SHL HSINENS
TIVHS GNV lI Ad GSLOVSNVYL SSSNISNA SHL JO SildId03u
SSOUND SHL JO LNNODOV JLVuVdaS V d3ay TIVHS ‘SSSNOISSV YO
SYOSSIOONS SLI ‘SSLNVUYO SHL - ‘SLid/FOFY SSOYD ‘LL “OAS

OLN SHL SO NOILVOISIGOW ONY M3IASY
FHL OL LOAPANS 3a TIWHS LHOIY SIHL ‘GANYSONOO S3ILYWd SHL
AG NOdN GaayxOV ATIVNLAIN SNOILIGNOD GNV SWHaL SHL YSGNN
‘OM@Nd SHL OL SAIOIANSS SNOILVOINNWWOOSTSL GSA0udWI GNV
Q3OGNALX3 ONIGIAOYd JO ASOdwNd FHL YOd SANIddIHd SAHL NI
ALILNS YO NOSHAd GAZIMOHLNV AING YSHLO ANV AG GANIVLNIVIAL
ONY ‘GSLVYSdO ‘GATIVLSNI SWALSAS SNOILVOINNWWOOSTSL
YSAHLO OL SW3LSAS SNOILVOINNWIWIOOS 13 L Sl
dO NOILOSNNOO GNVWSG YO LOANNOD O1 GAZIMOHLNY AGSYSH
S| SSLNVYD SHL —- NOLMOFNNODYFLNI JO LHOIY “OL “OAS

SOIANAS JO LNAWSONAWWOD SO SHLNOW (9)
XIS NIHLIM GSTIZONY9 GNO# SLI GNY SaLNVY9 SHL OL GSNYNLSY
3a TWHS LISOd3d SHL NSHL ‘GSYINDSY SI LISOdaq SHL HOIHM
YO4 ONDVLYSGNN SHL WIL NO WYOIYSd JSLNVYO SHL GINOHS
“SAOVWYG GS3LVGINOIT SV LNSWNYSAOD WNOLLWN 3HL 4O
YOAV NI GaLIa4YO4 38 TIVHS NOILOSS SIHL YSONN Gagiuosaud
LISOd30 3HL N3HL ‘SSNVO FIAVGIOAVNN YO ‘NOLLOWWOD TIAID
“LOIN ‘MYT TWILEWW 'Y3MOd AYVLITIN ‘AWANA OFTENd SHL JO LOV
“GOO JO LOW NV NVHL YSHLO NOSV3Y ANY HOd GNV SONSINSANOD

motown


wv

aaw

13

1S
16

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. 13. 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, OR
EQUIPMENT OF THE GRANTEE.

SEC. 14, SALE, LEASE, TRANSFER, USUFRUCT, OR ASSIGNMENT
OF FRANCHISE. - THE GRANTEE SHALL NOT LEASE, TRANSFER,
GRANT THE USUFRUCT OF, SELL OR ASSIGN THIS FRANCHISE OR
THE RIGHTS AND PRIVILEGES ACQUIRED THEREUNDER TO ANY
PERSON, FIRM, COMPANY, CORPORATION OR ENTITY, NOR MERGE
WITH ANY OTHER CORPORATION OR ENTITY WITHOUT THE PRIOR
APPROVAL OF THE CONGRESS OF THE PHILIPPINES, NEITHER SHALL
THE CONTROLLING INTEREST IN THE GRANTEE BE TRANSFERRED,
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 THE FOREGOING LIMITATIONS SHALL NOT APPLY
TO: (A) ANY TRANSFER OR ISSUANCE OF SHARES OF STOCK IN THE
IMPLEMENTATION OF THE REQUIREMENT FOR THE DISPERSAL OF
THE GRANTEE'S OWNERSHIP PURSUANT TO SECTION 11 OF
REPUBLIC ACT NO, 7692; (B) ANY TRANSFER OR SALE OF SHARES OF
STOCK TO A FOREIGN INVESTOR OR INVESTORS; (C) ANY ISSUANCE
OF SHARES TO ANY FOREIGN OR LOCAL INVESTORS PURSUANT TO


OL ¥344d0 TIWHS SSLNVYS SHL ‘SSILITILN ONENd NI NOILWdIOlLVd
oMgnd SOSVYNOONA OL NOISIAONd TWNOILNLILSNOO SHL
HLIM SJONVGYOOO"Y NI - ‘d/HSYFNMO JO TVWSYFdSIG ‘St “OAS

LOW SIHL JO SNOILVLIAIT GNV 'SNOILOINLS3Y ‘SWYSL 'SNOLLIGNOO
BWVS SHL OL LOaraNS 3a TIVHS ‘GANOISSV HO ‘dayYS4ISNVYL
‘alos SI 3SIHONVYS SIHL HOIHM OL ALILNS YO NOSYAd
ANW LVHL ‘ATIVNIS ‘GICIAOYd ‘GAYOAAY OLIVA OSd/ ASIHONWYS
SHL YSONSY TIVHS dIHSYSNMO 4O SDNVWHO HONS SSSYONOOD
OL LNOd3SH OL SYNTIW4 LVHL ‘Y3AOFJYOW ‘dIGIAOdd

[NOILOWSNVUYL GIVS JO NOILAIdWOO SHL YSLSV
SAW (09) ALXIS NIHLIM "SA.LNVYS SHL SO LSSYALNI ONITIONLNOO
JO YS4SNVYL YO ‘YSIONSW SHL JO YO ‘'YSONNSYSHL GaYINDOV
SSOSIAId YO SLHOIN SHL YO ASIHONVYS JO LNAWNOISSY YO
“LONYANSN JO LNVYO ‘YSSSNVYL ‘SSV3T ‘SIS ANV JO GAWYOSNI
3q@ TIVWHS SSSYONOO LWHL ‘SYOWYSHLYNA ‘'GAIGIAOYd

LOW SIHL
4O SNOLLVLINIT GNY ‘SNOILOINLSSY 'SWYAL 'SNOILIGNOO SWVS
AHL TW OL LOaraNs 3d TIVHS GANOISSV YO GAYYNS4ISNVYL ‘IOS
AIGIWA SI ASIHONVYS SIHL HOIHM OL ALLLNS YO NOSYAd ANV
“SNOILV.LIAIT TWNOLLALILSNOO JIGVOIIddv ANW HLIM SONVGYOOOV
NI SI JONVNSSI YO SIS 'YSSSNVYL HONS ANW LWHL ‘YSHLYNS
‘G¥qIAONd ‘GAZINVOYO YO GALVYOdYOON! N339d SVH SSLNVYO
HL HOIHM HOS SASOdYNd AHL JO ANV LNO AYYVO OL YO/ONV LOW
SIHL Ad GAZIMOHLNY SSOIAYAS SHL SO ANY JO NOISIAOYd SHL YOS
ONIONWNIS YO WildVO AYWSSSOSN SHL ASIVY OL SSLNVYS SHL
SIAVNA OL YAGHO NI G3L0344q SI JONVNSS! YO JVs ‘YASSNVYL
HONS SYSHM JOSYSHL NOILVNISWOO ANV (G) ‘SY3CTOHYOOLS
ONILSIXS NSHL SASLNVYO SHL JO SONIGIOHNOOLS SHL 4O
NOILN1I0 SHL NI .LINSSY TIWHS HOIHM MOOLS WLidvO GAZIHOHLNY
SGSLNVYD SHL NI SSVSYONI ANV HLIM NOILOSJNNOO NI YO

a


wo

we

20
21
22
23

FILIPINO CITIZENS AT LEAST THIRTY PER CENT (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.

SEC. 16. 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.

SEC. 17. PENALTY CLAUSE. - FAILURE OF THE GRANTEE TO
SUBMIT THE REQUISITE ANNUAL REPORT TO CONGRESS SHALL BE
PENALIZED WITH A FINE IN THE AMOUNT OF FIVE HUNDRED PESOS
(P500.00) PER WORKING DAY OF NONCOMPLIANCE. THE FINE SHALL
BE COLLECTED BY THE NTC FROM DELINQUENT FRANCHISE
GRANTEE SEPARATE FROM THE REPORTORIAL PENALTIES IMPOSED
BY THE NTC.

SEC. 18. 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


wn Rene

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. 19. 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. 20. 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. 2. Repealing Clause. - All laws, decrees, orders, resolutions, instructions and
rules and regulations or parts thereof, which are inconsistent with this Act, are

hereby deemed repealed or modified accordingly.

SEC. 3. Effectivity. - This Act shall take effect fifteen (15) days after its publication in
the Official Gazette or in a newspaper of general circulation.

Approved,