Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City
FIFTEENTH CONGRESS
First Regular Session

House Bill No. 3867

Introduced by HON. CARLO V. LOPEZ

EXPLANATORY NOTE

This bill seeks to grant the Pro2call Telecommunications Corporation a
franchise to construct, install, establish, operate and maintain telecommunications
systems throughout the Philippines.

Article Il, Section 24 of the Constitution provides that, “The State recognizes
the vital role of communication and information in nation building.” It further
emphasizes the right of people to information on matters of public concern as
provided under Article Ill, Section 7 of the Bill of Rights. All these can be achieved
through communications. .

The importance of communications in all facets of human activity, be it
personal, social or political in character, should not be overlooked as an essential
medium through which interactions may be established. Communications is a vital
factor for effecting change. It is a reality that communications have acquired
significant role not only in the socio-economic aspect but also more importantly in the
political behavior of the people.

Our present telecommunication network, though seemingly sufficient at a
sudden glance, is still sadly lacking. The major telecommunication companies serve
only densely populated places for practical and economical reasons. But the
Philippines is an archipelagic country composed of more than seven thousand
islands that badly needs such service. Realizing the need to fill this inadequacy in our
telecommunication system, Pro2call Telecommunications Corporation intends to do
its share in improving the present situation by serving the underserved areas
especially in the countryside and remote islands.

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


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

FIFTEENTH CONGRESS

First Regular Session
House Bill No. 3867

Introduced by Hon. Carlo V. Lopez

AN ACT
GRANTING THE PRO2CALL TELECOMMUNICATIONS CORPORATION A
FRANCHISE TO CONSTRUCT, INSTALL, ESTABLISH, OPERATE AND
MAINTAIN TELECOMMUNICATIONS SYSTEMS THROUGHOUT THE
PHILIPPINES

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

SECTION 1. Nature and Scope of Franchise. - Subject to the provisions of the
Constitution and applicable laws, rules and regulations, there is hereby granted to
Pro2call Telecommunications Corporation, 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, throughout the
Philippines and between the Philippines and other countries and territories, wire
and/or wireless telecommunications systems, including but not limited to mobile,
cellular, paging, fiber optics, multi-channel 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, cable
landing in the Philippines 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 in or are convenient
or essential to efficiently carry out the purpose of this franchise.


SEC. 2. Manner of Operation of Stations of 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
grantees services and/or the availability thereof.

SEC. 3. Authority of the National Telecommunications Commission. - The
grantee shall secure from the National Telecommunications Commission (NTC),
hereinafter referred to as the Commission, 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 Commission shall have the power to impose such conditions relative to the
construction, operation, maintenance, or service level of the telecommunications
system. 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 Commissién.
Such certificate shall state the areas covered and date the grantee shall commence
the service. The Commission, however, shall not unreasonably withhold or delay the
grant of any such authority, permits or licenses.

SEC. 4. Ingress and Egress. — 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), 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. Should the grantee, its successors assigns, after the ten days 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 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. 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
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 Commission, 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
Commission 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.

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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 Commission 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 granted 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.

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 for a term of twenty-five
(25) years from the date of effectivity of this Act, unless sooner revoked or cancelled
This franchise shall be deemed jpso facto revoked in the event the grantee fails to
comply with any of the following conditions:

(a) Commence operation within five (5) years from the approval of its operating
permit by the National Telecommunications Commission;

(b) Operate continuously for two (2) years; and

(c) Commence operations within five (5) years from the effectivity of this Act.


SEC. 9. Acceptance and Compliance. — Acceptance of this franchise shall be
given in writing 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 issued in favor of the National
Telecommunications Commission, which shall determine the amount, to guarantee
the compliance with and fulfilment of the conditions under which this franchise is
granted. If, after five (5) years from the date of the approval of its permit by the
Commission, the grantee shall have fulfilled the same, the bond shall be cancelled by
the Commission. 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 any other
telecommunications systems installed, operate 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 Commission.

SEC. 12. Gross Receipts. - The grantee, its successors or assigns, shall keep
a separate account of the gross receipts of the business transacted by it and shall
furnish the Commission on Audit 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 Commissioner on
Audit or his authorized representatives and 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. :

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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 harmless 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. Nontransferability of Franchise. - The grantee shall not lease,
transfer, grant the usufruct of, sell 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
the controlling interest of 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. 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. 16. Dispersal of Ownership. — In accordance with the constitutional
provision to encourage public participation in public utilities, the grantee shall offer, at
least thirty percentum (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 five (5) years from the commencement of its operations. Noncompliance
therewith shall render the franchise ipso facto revoked.

SEC. 17. Equality Clause. - Any advantage, favor, privilege, exemption, or
immunity granted under existing franchise, or which may hereafter be granted, shall
ipso facto 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. 7


SEC. 18. Reportorial Requirement. — The grantee shall submit an annual
report to the Congress of the Philippines on its compliance with the terms and
conditions of the franchise and on its operations within sixty (60) days from the end of
every year.

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 privileges herein provided for.

SEC. 21. Effectivity Clause. - This Act shall take effect fifteen (15) days from
the date of its publication, upon the initiative of the grantee, in at least two (2)

newspapers of general circulation in the Philippines.

Approved,