SIXTEENTH CONGRESS )
OF THE REPUBLIC OF THE PHILIPPINES — )
Third Regular Session )

HOUSE OF REPRESENTATIVES
6003

House Bill No.

Introduced by REP. BEN P. EVARDONE,
Lone District, Eastern Samar

EXPLANATORY NOTE

Republic Act No. 7925, otherwise known as the “Public Telecommunications Policy
Act of the Philippines” was passed into law with the purpose of providing policy and
regulation in the governance of telecommunications industry, It also disfavored
telecommunication monopoly and permits the entry of new telecommunications enti

In line with the purpose of the law and as the telecommunications industry is imbued
with public interest, this bill wishes to provide a leveling of the playing field among
telecommunication entities and allows a better comparative advantage of the different
telecommunication players and to offer each subscribing sectors a better choice apart from
the dominant ones in the country.

At the end, the novelty of this bill will solely redound to benefit of the industry
subscribers, a majority of which are the common Filipino masses.

In view of the foregoing, the approval of this bill is hereby requested.

BHN P. EVARDONE


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SIXTEENTH CONGRESS )
OF THE REPUBLIC OF THE PHILIPPINES)
Third Regular Session )

HOUSE OF REPRESENTATIVES
House Bill No.__6003

—— ________ =a

Introduced by REP. BEN P. EVARDONE
Lone District, Eastern Samar

Ee

AN ACT
GRANTING THE AMA TELECOMMUNICATIONS, INC. A FRANCHISE TO
CONSTRUCT, INSTALL, ESTABLISH, OPERATE AND MAINTAIN
TELECOMMUNICATIONS SYSTEMS IN THE PHILIPPINES

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 1987
Philippine Constitution and applicable laws, rules and regulations, there is hereby granted to
AMA Telecommunications, Inc., 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 mobile cellular, paging, 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 efficiently carry out the purpose of this franchi

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

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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.

ion (NTC). — The

grantee shall secure from the NTC a Certificate of Public Convenience and Necessity or the

SEC.3. Authority of the National Telecommunications Com

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 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 of assignees, with the prior approval of the Department of Public
Works and Highways (DPWH) or the local government unit (LGU) concemed, 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 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 or the LGU concemed 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.


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SEC. 5. Responsibility to the Public. - The grantee shall conform to the ethies 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 assis

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 m:

intenance 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 which 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

‘advanees 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 such 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

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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 shall be in effect for a period of twenty-

five (25) years from the date of the effectivity of this Act, unless sooner cancelled,
franchise shall be deemed ipso facto revoked in the event the grantce fails to comply with any

of the following conditions:

(a) Commence operations within one (1) year from the approval of its operating permit

by the National Telecommunications Commission;

(b) Commence operations within three (3) years from the effectivity of this Act; and

(©) 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.

SEC. 10. Bond. - The grantee shall file a bond with the NTC in the amount that it
shall determine to guarantee compliance with and fulfillment of the conditions under which

this franc!

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 con

jons, the bond shall be cancelled by the
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NTC, Otherwise, the bond shall be forfeited in favor 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 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 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 (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 assignees, 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 busi

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 Assignmentof Franchise. - The
grantee shall not sell, lease, transfer, grant the usuffuct 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

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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 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: 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 i
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. 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 (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.

SEC. 19. Equality Clause. - Any advantage, favor, privilege, exemption, or immunity
granted under other existing franchises, or which may hereafter be granted, upon prior review
and shall be accorded

and approval of Congress, shall become part of this franchi
immediately and unconditionally to the herein grantee: Provided, That the foregoing shall
neither apply to nor affect provisions of telecommunications franchises concerning territory

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covered by the franchise, the life span of the franchise, or the type of service authorized by

the franchise.

SEC. 20. Separability Clause. ~ \f any of the sections or provi
invalid, all other provisions not affected thereby shall remain valid.

SEC. 21. 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 privilege

herein provided for.

SEC. 22. Effectivity. - This Act shall take effect fifteen (15) days after its publication

in the Official Gazette or in a newspaper of general circulation.

Approved,