Republic of the Philippines
Bouse of Representatives
Queszon City

Eighteenth Congress
First Regular Session

HOUSE BILL No.__7288_

Introduced by HONORABLE PRINCESS RIHAN M. SAKALURAN

EXPLANATORY NOTE

Marbel Telephone System, Inc. was granted a twenty-five (25)
year franchise on January 10, 1998. Since its inception in 1965 as
a sole proprietorship, Marbel Telephone System, Inc. had the
distinction of being the first telephone company to offer an
Automatic Dial System for its subscribers in Koronadal City. Marbel
Telephone System, Inc. provides its subscribers with both the
landline voice connection and the more in demand data connection
as its primary offering. It now focuses more its operations to the
more remote communities in its municipalities within its area of
operation.

From serving the people of Koronadal City, the service area of
Marbel Telephone System, Inc. expanded to the municipalities of
Banga, Surallah, T’boli, Lake Sebu, Sto. Niiio, Norala, Tantangan,
Tampakan, Tupi and Polomolok, all in the province of South
Cotabato; Maasim and Glan of Sarangani Province and General
Santos City, which proactively involved in progress and
development. Since 1985, Marbel Telephone System, Inc.
introduced improvements and accelerated the delivery of basic
data and telecommunications to the community which contributed


to the advancement of the socio-economic activities of the covered
municipalities.

This bill seeks to renew the franchise granted to Marbel
Telephone System, Inc. for another twenty-five (25) years. As
enshrined in the Constitution, the State recognizes the vital role of
communication and information in nation-building and the
indispensable role of the private sector.

Advances in the telecommunications technological landscape
had been exponential over the past five decades and will continue
to grow even be more accelerated in the coming decades. From its
humble beginning, Marbel Telephone System, Inc. had seen that it
had substantially contributed to the modernization and
development in its area of operation.

It being well aware of the need to provide relevant and
adequate service to Filipinos in the provinces, Marbel Telephone
System, Inc. is committed to make these services and products
available to the locality it serves. Moreover, national and local
issues, especially on matters concerning the development of
provinces, can only be circularized and transmitted to a wider
range of coverage through the services provided by Marbel
Telephone System, Inc. given the age of advancement in technology
and communications.

Hence, the approval of this bill is earnestly sought.

c Le ir ote


Republic of the Philippines
House of Representatives
Eighteenth Congress

First Regular Session

HOUSE BILL No. _7288

Introduced by HONORABLE PRINCESS RIHAN M. SAKALURAN

AN ACT RENEWING THE FRANCHISE GRANTED TO MARBEL
TELEPHONE SYSTEM, INC. (MTSI) TO CONSTRUCT,
INSTALL, MAINTAIN AND OPERATE LOCAL EXCHANGE
NETWORK IN THE PROVINCES OF SOUTH COTABATO,
SULTAN KUDARAT, AND SARANGANI

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

SEC. 1. Nature and Scope of Franchise. - Subject to the
provisions of the Constitution and applicable laws, rules and
regulations, there is hereby granted to Marbel Telephone System,
Inc. (MTSI) hereunder referred to as the grantee, its successors or
assigns, a franchise to construct, install, maintain and operate
telecommunications stations, network systems and facilities,
including local exchange network, including public calling stations
or pay telephone stations or wireless local loop and for such
purpose provide basic telephone service or other means related to
the foregoing now known to science or which in the future may be


developed, in the provinces of South Cotabato, Sultan Kudarat, and
Sarangani, for public domestic telecommunications.

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
selected 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 location, construction, installation,
maintenance and operation of its telecommunications
systems/facilities. 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 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. 4. Responsibility to the Public. - The grantee shall
conform to the ethics of honest enterprise and will 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.

SEC. 5. 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

4


operate the stations, transmitters, facilities of the grantee, to
temporarily suspend the operation of any station or facility 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 its stations or facilities during the period when they shall be
so operated.

SEC. 6. 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 ipso facto revoked, in the event the grantee fails to comply
with any of the following conditions: (a) commence operations
within two (2) years from the approval of its operating permit or
provisional authority by the NTC; (b) operate continuously for two
(2) years; and (c) commence operations within three (3) years
from the effectivity of this Act.

SEC. 7. 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. Non-
acceptance shall render the franchise void.

SEC. 8. Tax Provisions. - The grantee, its successors or
assigns, shall be subject to the payment of all taxes, duties, fees or
charges and other impositions under National Internal revenue
Code of 1997, as amended, and other applicable laws.

SEC. 9. 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 (COA) and the National Treasury a copy of such account not
later than the thirty-first (31s) day of January of each year for the
preceding twelve (12) months.


SEC. 10. Books and Accounts. - The books and accounts of
the grantee, its successors 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. 11. Warranty in Favor of 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. 12. 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 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. 13. 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. 14. 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. 15. 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
privileges herein provided for.

SEC. 16. Effectivity Clause. - This Act shall take effect fifteen
(15) days after its publication in the Official Gazette or in a
newspaper of general circulation in the Philippines.

SEC. 17. Right of Grantee. - For the purpose of installing,
operating and maintaining its telecommunications lines, it shall be
lawful for the grantee, its successors or assigns to make
excavations or lay conduits in any of the public places, highways,
streets, lanes, alleys, avenues, sidewalks, bridges of said provinces,
cities and municipalities: Provided, however, That any public
place, highway, street, lane, alley, avenue, sidewalk, bridge
disturbed, altered or changed by reason of the installation,
operation and maintenance of said telecommunications lines
underground shall be repaired and replaced in a workmanlike
manner by said grantee, its successors or assigns to the
satisfaction of the National Telecommunications Commission.

7,


Should the grantee, its successors or assigns, after thirty (30)
days’ notice from the property 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 said grantee, its successors or assigns, then the
Secretary of Transportation and Communication shall have the
right to have the same repaired and place in good order and
condition at the cost and expense of the grantee, its successors or
assigns.

SEC. 18. Rates for Services. - The charges and rates for
services, excluding the sale or lease of equipment or units, that the
grantee shall offer to the public shall be subject to the approval of
the National Telecommunications Commission or its legal
successors.

SEC. 19. Right of Interconnection. - The grantee is hereby
authorized to connect or demand connection of its
telecommunications systems to any 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 as may be prescribed
from time to time by the National Telecommunications
Commission; Provided, that ruinous and expensive criss-crossing
interconnections shall be discouraged.

SEC. 20. Public Offering of Common Stocks. - In compliance
with the constitutional mandate to democratize ownership of
public utilities, the herein grantee shall make a public offering
through the stock exchange of at least thirty percent (30%) of its
common stocks within a period of five (5) years from the date of
effectivity of this Act: Provided, that no single person or entity
shall be allowed to own more than five (5%) of the stock offering.


SEC. 21. Taking of Private Property. - No private property
shall be taken for any purpose by the grantee without proper
condemnation proceedings and just compensation paid or
tendered therefor, and any authority to take and occupy land
contained herein shall not apply to the taking, use or occupation of
any land except such is required for the actual and necessary
purposed for which this franchise is granted.

SEC. 22. Equal and Level Playing Field Provision. - In the
event of any individual or entity receiving from Congress a
franchise to provide similar telecommunications services as the
herein grantee, in which case there shall be any term or terms
favorable than those herein granted, or tending to place herein
grantee at any disadvantage, then such favorable provision, terms
or conditions shall ipso facto become part of the terms and/or
provisions hereof, and shall operate equally in favor of the grantee
as in the case of such other individual or entity.

SEC. 23. 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.

Approved.

HONORABLE PRINCESS RIHAN M. SAKALURAN