SIXTEENTH CONGRES
Second Regular Session

HOUSE BILL NO. 5194

Introduced by REP. ELEANDRO JESUS F. MADRONA

EXPLANATORY NOTE

This Bill seeks to renew and amend the franchise of Enrique M. Orozco and Sons,
Inc. granted under Republic Act Number Thirty-Two Hundred Twenty-Nine, as amended,
entitled “An Act Granting Enrique M. Orozco and Sons, Inc,, Residing at Number Four
Hundred Forty-One-C, Isabel, Sampaloc, Manila, Philippines, A Temporary Permit to
Construct, Install, Maintain and Operate Public Radiotelephone and Radiotelegraph
Coastal Stations, and Public Fixed and Public Based and Land Mobile Stations for the
Reception and Transmission of Radiotelephone and Radiotelegraph Communications

within the Philippines” to another twenty-five years from the date of effectivity of this
Act.

Enrique M, Orozco and Sons, Inc. is one of the pioneers in telecommunications
industry in the Philippines, They have been in operation since 1960's. Their main core of
business is ship to shore radio communication service which provides communication
link between seafarers in the sea with their families and loved ones in the land.

Despite the advancement of technology in the telecommunication industry, there
are still a lot of people who use the radio communication service provided by Enrique M.
Orozco and Sons, Inc. since it is cheaper as compared to satellite telephone system being,
used by other seamen,

In view of the foregoing, approval of this bill is earnestly requested

i a

ELEANDRO JESUS F. MADRONA


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

SIXTEENTH CONGRESS
Second Regular Session
House BiLt No, 0194 _ ‘

Introduced by REP. ELEANDRO JESUS F. MADRONA

AN ACT

RENEWING AND AMENDING THE FRANCHISE GRANTED TO OROZCO AND
SONS, INC, UNDER REPUBLIC ACT NO, 3229 ENTITLED “AN ACT GRANTING
ENRIQUE M. OROZCO, RESIDING AT NUMBER FOUR HUNDRED FORTY-
ONE-C, ISABEL, SAMPALOC, MANILA, PHILIPPINES, A TEMPORARY PERMIT
TO CONSTRUCT, INSTALL, MAINTAIN AND OPERATE — PUBLIC
RADIOTELEPHONE AND RADIOTELEGRAPH COASTAL STATIONS, AND
PUBLIC FIXED AND PUBLIC BASED AND LAND MOBILE STATIONS FOR THE
RECEPTION AND TRANSMISSION or RADIOTELEPHONE AND
RADIOTELEGRAPH COMMUNICATIONS WITHIN THE PHILIPPINES” FOR
ANOTHER TWENTY-FIVE (25) YEARS FROM THE EFFECTIVITY OF THE ACT.

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

>
SECTION 1. The franchise granted to Mr. Enrique M. Orozco and Sons,

Inc. under Republic Act No, 3229 is hereby renewed for another twenty-five
(25) years from the effectivity of this Act.

SEC. 2. Section 1 of Republic Act No. 3229 is hereby amended to read

as follows:

“SECTION 1. Nature and Scope of Franchise. - Subject to the provisions of
the 1987 Philippine Constitution and applicable laws, rules and regulations,
there is hereby granted to Mr. Enrique M. Orozco hereunder referred to as the
grantee, its successors or assigns, a franchise to construct, install, establish,
operate and maintain for commercial purposes and in the public interest, in
the Philippines, wire and/or wireless telecommunications systems, including
but not limited to mobile, cellular, paging, fiber optics, multi-channel multi-
point distribution system (MMDS), local multi-point distribution system
(LMDS), satellite transmit and receive 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 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
efficiently carry out the purpose of this franchise.”

SEC, 3. 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 selected
wavelengths or frequencies and the quality of transmission or reception
thereon as should maximize rendition of the grantee’s services and/or
availability thereof.

SEC.4. 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 sétvice 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 date the grantee
shall commence the service. The NTC, however, shall not unreasonably
withhold or delay the grant of any such authority, permits or licenses.

SEC. 5. 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 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 any of the public places, highways, streets,
lanes, alleys, avenues, sidewalks or bridges of said province, cities and/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 in workmanlike manner’
by said grantee, its successors or assigns, in accordance with the standards set
by DPWH or the local government unit cofcerned. Should the grantee, its
successors assigns, 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 assigns, then the DPWH or the local
government unit 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 assigns.

SEC. 6. 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 discrifhination 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 which the grant shall furnish such 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. 7. Rates for Services. ~ The charges and rates for
telecommunications services of the grantec, ‘except the rates and charges on
those that may hereafter be declared or considered as non-regulated services,
whether flat rates or measured rates or varia

ion 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. 8. 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 they shall be so
operated. 2:

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

SEC. 10. 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. 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 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 assigns, shall

keep a separate account of the gros

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 (31st) day of January of
each year for the preceding twelve (12) months.

SEC. 13. Books and Accounts. ~ The books and accounts of the grantee,
its successor or assigns, shall always be open to the inspection of the
Commission on Audit (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, or assign this
franchise or the rights and privileges acquired thereunder to any person, firm,
company, corporation or other commercial or legal entity, or merge with any
other corporation or entity, or 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 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 ten per centum (10%) 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
franchise and on its operations on or before April 30 of the suc€eeding year.

SEC. 18. Penalty Clause. - Any grantee who fails to submit the requisite
Annual Report to Congress shall be fined Five Hundred Pesos (P500.00) per
working day of non-compliance. The fine shall be collected by the NTC from
said delinquent franchise grantee separate from the reportorial penalties
imposed by NTC. All proceeds from said fines or penalties shall accrue to the
monitoring fund of the NTC in line with its supervisory and regulatory
functions. The reportorial compliance certificate issued by Congress shall be

required before any application for permit or certificate is accepted by NTC.

SEC. 19. Equality Clause. - Any advantage, favor, privilege, exemption, or
immunity granted under other existing franchise, 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, however, 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. Publication. This Act shall be published, through the initiative
of the grantee, fifteen (15) days after this Act is signed by the President of the
Philippines or has lapsed into law.

SEC. 23. Bffectivity Clause. ~ This Act shall take effect fifteen (15) days
from the date of its publication in at least two (2) newspapers of general

circulation in the Philippines.

Approved,