Republic of the Philippines
HOUSE OF REPRESENTATIVES
‘Quezon City_

FIFTEENTH CONGRESS
THIRD REGULAR SESSION

COMMITTEE REPORT NO. _
Submitted by the Commitiee on Legislative Franchises on __120E0 2012
Re : House BillNo._6 797
Recommending approval, in substitution of House Bill No, 6042

Sponsors: Representatives Marcelino “Marcy’ R. Teodoro, Randolp S. Ting and
Carlos M. Padilla

MR. SPEAKER;

The Committee on Legislative Franchises to which was referred House Bill
No. 6042, introduced by Rep. Randolph S. Ting, entitled:
“AN ACT GRANTING THE WE ARE IT PHILIPPINES, INC. A FRANCHISE TO.

CONSTRUCT, INSTALL, ESTABLISH, OPERATE AND MAINTAIN
TELECOMMUNICATIONS SYSTEMS THROUGHOUT THE PHILIPPINES”

has considered the same and recommends that the attached House Bill No.
6757. entitled:

“AN ACT GRANTING THE WE ARE IT, INC. A FRANCHISE TO CONSTRUCT,
INSTALL, ESTABLISH, OPERATE AND MAINTAIN TELECOMMUNICATIONS
SYSTEMS THROUGHOUT THE PHILIPPINES”


Page 2 of 2
Committee Report on the application of We Are It, inc.

Authored by Rep. Randolph S. Ting

be approved in substitution of House Bill No. 6042 with Reps. Randolph S. Ting,
Carlos M. Padilla and Marcelino “Marcy” C. Teodoro as authors thereof.

Respectfully submitted:__
lomr Ka We ww
MARCELINO “MARCY” R. TEODORO

Chairman
Committee on Legislative Franchises

THE HONORABLE SPEAKER
HOUSE OF REPRESENTATIVES
QUEZON CITY


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

FIFTEENTH CONGRESS
Third Regular Session

6757

House Bill No.

Introduced by Reps. Randolp S. Ting, Carlos M. Padilla and Marcelino R. Teodoro

AN ACT
GRANTING THE WE ARE JT, INC. A FRANCHISE TO CONSTRUCT, INSTALL,
ESTABLISH, OPERATE AND MAINTAIN TELECOMMUNICATIONS SYSTEMS
THROUGHOUT 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 We Are !T, Inc., hereunder referred to as the Grantee, its
SUCCESSOrs oF 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, multichannel 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, contro! 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.


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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 nght 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.3. Authority of the National Telecommunications Commission (NTC). ~

4 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 systemsffacilities. 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 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. 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 iaying 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
concemed, 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 concemed. 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 focal government unit concemed shall have the
right to have the same repaired and placed in good order and condition at double

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expense to be charged against the grantee, its successors or assigns.

4 SEC. 5. Responsibility to the Public. - The grantee shall conform to the ethics
1® of honest enterprise and not use its stations/facilities for obscene or indecent
11 transmission or for dissemination of deliberately false information or willful
12 misrepresentation, or assist in subversive or treasonable acts

13 The grantee shall provide basic or enhanced telephone service in any city
14 and/or municipality in the Philippines where it has an approved Certificate of Public
S Convenience and Necessity for the establishment, operation and maintenance of a
/p \ocal exchange service, without discrimination to any applicant therefor, in the order
1). of the date of their applications, up to the limit of the capacity of its local telephone
1g exchange, and should the demand for the telephone service at any time increase
19 beyond the capacity thereof, the grantee shall increase the same to meet such
20 demand: Provided, That in case the total demand to be satisfied by the expansion is
4 less than the smallest viable local exchange available in the market es determined
2 by the Commission, the grantee shail not be obliged to fumish such service unless
24 the applicant for telephone service defrays the actual expenses for the installation of
a the telecommunications apparatus necessary for such services and in such case, the
2s Commission may extend the time within which the grant shalt furnish such service.

% The grantee shall operate and maintain all its stations, lines, cables, systems,
27 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,
Y modify, improve or change such stations, jines, cables, systems, and equipment to
\30_ keep abreast with the advances in science and technology


i 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 pe
declared or considered as non-regulated services, whether flat rates or measured
fates or variation thereof, shali 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

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manner that regulated services do not subsidize the unregulated ones,

8 SEC. 7. Right of Government. — A special right is hereby reserved to the
9 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
(2 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 govemment, upon due
Js compensation to the grantee for the use of said stations, transmitters, facilities or
1 equipment during the period when they shail be so operated.

| The radio spectrum is a finite resource that is part of the national patrimony and
iB the use thereof is a privilege conferred upon the grantee by the State and may be
#7 withdrawn anytime after due process

® SEC. 8. Term of Franchise. - This franchise shall be in effect for a period of
21 twenty-five (25) years from the date of effectivity of this Act, unless sooner cancelled,
2 This franchise shall be deemed ipso facto revoked in the event the grantee fails to

44 comply with any of the following conditions:

a (a) Commence operations within one (1) year from the approval of its operating
2s permit by the National Telecommunications Commission,

2% (b) Commence operations within three (3) years from the effectivity of this Act

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| (©) 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. Non-acceptance shall render the franchise void

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SEC. 10. Bond. - The grantee shall file a bond with the NTC in the amount that it
shall determine to guarantee compliance with and futfillment of the conditions under
40 which this franchise is granted. If after three (3) years from the date of the approval
1 of its permit by the NTC, the grantee shall have fulfilled the conditions, the bond shall
12 be cancelled by the NTC. Otherwise, the bond shall be forfeited in favor of the
8 government and the franchise jpso facto revoked.

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4 SEC. 11. Right of interconnection. ~ The grantee is hereby authorized to
‘© connect or demand connection of its telecommunications systems to other
44 telecommunications systems installed, operated and maintained by any other duly
77 authorized person or entity in the Philippines for the purpose of providing extended
and improved telecommunications services to the public, under such terms and
7 conditions mutually agreed upon by the parties concemed. The terms and conditions
20 shall be subject to the review and modification of the NTC.

4 SEC. 12. Gross Receipts. - The grantee, its successors or assigns, shall keep
22 a separate account of the gross receipts of the business transacted by it and shall
& fumish the Commission on Audit (COA) and the National Treasury a copy of such
24 account not later than the thirty-first (31st) day of January of each year for the
2s preceding twelve (12) months.

% SEC. 13. Books and Accounts. - The books and accounts of the grantee, its
2) successor or assigns, shall always be open to the inspection of the NTC on Audit
26 (COA) and its duly-authorized representatives. It shall be the duty of the grantee to


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submit to the COA two (2) copies of the quarterly reports on the gross receipts, the
net profits and the general condition of tne business.

SEC. 14. Warranty in Favor of the National and Local Govemments. — The
grantee shall hold the national, provincial, city and municipal govemments 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 thirty per centu (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 and other methods of encouraging public participation
by citizens and corporations 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 succeeding 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 to be 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 conceming 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 shali 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.

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3
4 SEC. 23 Effectivity Clause. — This Act shall take effect fifteen (15) days from
S the date of its publication in at least two (2) newspapers of general circulation in the
4

Philippines

7 Approved,