Republic of the Philippines
HOUSE OF REPRESENTATIVES
‘Quezon City, Philippines

SIXTEENTH CONGRESS
First Regular Session

House BILLNO._ 1514

INTRODUCED BY: HON. MARCELINO “MARCY” R. TEODORO

EXPLANATORY NOTE

The telecommunications industry was deregulated by virtue of Republic Act 7925
or the Public Telecommunications Policy Act which was enacted in 1995. This promoted
competition among industry players thereby allowing the sector's growth through the
years. Telecommunications is one public utility where the need of a legislative franchise
is required before an entity goes into business, or where approval of Congress is also
being sought in case of any sale, lease, transfer, and grant of usufruct of the franchise of
any telecommunications entity, as provided for by its respective legislative franchise.

It is observed, however, that certain provisions of Republic Act 7925 were not
very clear and may allow telecommunications players not to be consistent with the
provisions and conditionalities of their respective franchises. As an example, Section 7
of RA 7925 provides telecommunications to own or operate one or more
telecommunications categories, as long as they are covered by a franchise. impliedly,
telecommunications entities with legislative franchise which merged or sold out need not
go anymore to Congress in order to do so.

Another provision which is also being used to justify the actions of
telecommunications players not to seek Congress’ approval in the sale, transfer, lease or
usufruct of their franchise is Section 23 which grants, ipso facto, equal treatment among
telecommunications players, and automatically provides existing telecommunications
players any advantage, favor, exemption, or immunity granted into a new player. This
provision weakens the congressional mandate in granting the privilege of a legislative
franchise

Sec. 11, Article XII of the 1987 Constitution so provides that “neither shall any
such franchise or right be granted except under the condition that it shall be subject to
amendment, alteration, or repeal by the Congress when the common good so requires,

With this situation, there is a clamor from lawmakers and the public alike that the
right of the State to regulate public utilities be strengthened through Congress or the
authorized regulatory agency. This is to assure the protection of the public from these
emerging corporate trends which tend to control ownerships and monopolize public
utilities. Given this, a review of RA 7925 is very timely, hence this bill proposes to amend
Section 4, 7, 16 and 23 of the said law.

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

REP. MARCELINO “MARCY” R. TEODORO
1* District, Marikina City


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City, Philippines

SIXTEENTH CONGRESS
First Regular Session

HOUSE BILL NO. 1514

INTRODUCED BY: HON. MARCELINO “MARCY” R. TEODORO

AN ACT
AMENDING SECTIONS 4, 7, 16 AND 23 OF REPUBLIC ACT 7925,
OTHERWISE KNOWN AS THE PUBLIC TELECOMMUNICATIONS POLICY
ACT OF THE PHILIPPINES

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

SECTION 1. Article II, Section 4, (f) of Republic Act No, 7925, otherwise known
as the Public Telecommunications Policy of the Philippines Act is hereby amended to
read as follows:

“SECTION 4. Declaration of National Policy — (f) A healthy competitive
environment shall be fostered, one in which telecommunications carriers are free
to make business decisions EXCLUDING SALE, LEASE, TRANSFER OR
GRANT OF USUFRUCT OF THEIR LEGISLATIVE FRANCHISE and to interact
with one another in providing telecommunications services, with the end in view
of encouraging their financial viability while maintaining affordable rates.”
bool

SECTION 2. Article IV, Section 7 of the same Act shall be amended to read as
follows:

“SECTION 7. Categories of Telecommunications Entities. — A
telecommunications entity shall be authorized to operate in one or more of the
telecommunications categories mentioned in this Act provided each category is
covered by its franchise AND AFTER PRIOR NOTIFICATION AND APPROVAL
OF CONGRESS WITH REGARDS TO THE SAID ACT.”

SECTION 3. Article VI, Section 16 of the same Act shall be amended to read as
follows:

“SECTION 16, LEGISLATIVE Franchise. — No person shall commence or
conduct business of being a public telecommunications entity without first
obtaining a LEGISLATIVE franchise.

The Commission, in granting a Certificate of Public Convenience and
Necessity (CPCN), may impose such conditions as to duration and termination of
the privilege, concession or standard or technical aspects of the equipment,
rates, or service, not contrary to the terms of the franchise. In no case however,
shall the CPCN be shorter than five (6) years, nor longer than the life of the
franchise. A CPCN expiring at the same time as the franchise shall be deemed to
have been renewed for the same term if the franchise itself is also renewed or
extended.

Expansion and financing of network and services, utilizing equipment
compatible with or homologous to existing or previously approved plant and
facilities, in order to service additional demand in the same areas where the
previously approved network and services have been installed, shall [ not ]


require approval by the Commission. LIKEWISE, THE BOARD SHALL NOTIFY
CONGRESS PRIOR TO ANY ACTION IT SHALL MAKE.

FURTHER, ANY SALE, LEASE OR PURCHASE OF A LEGISLATIVE
FRANCHISE FROM ONE TELECOMMUNICATIONS COMPANY TO ANOTHER
MUST SEEK PRIOR APPROVAL OF CONGRESS BEFORE CONSUMMATION
OF ANY CONTRACT PERTAINING TO ANY SUCH ACT.”

SECTION 3. Article VIII, Section 23 of the same Act shall be amended to read as
follows:

“SECTION 23, Equality of Treatment in the Telecommunications Industry.
~ Any advantage, favor, privilege, exemption, or immunity granted under existing
franchises, or may hereafter be granted, shall, UPON PRIOR REVIEW AND
APPROVAL OF CONGRESS, [ ipso facto | become part of previously granted
telecommunications franchises and shall be accorded immediately and
unconditionally to the grantees of such franchises: 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. PROVIDED
FURTHER THAT THE FOREGOING SHALL NOT APPLY TO THE SALE,
LEASE, TRANSFER OR GRANT OF USUFRUCT OF LEGISLATIVE
FRANCHISES WITH PRIOR CONGRESSIONAL APPROVAL.

SECTION 4. Separability Clause. - If any provision of this Act is declared
invalid or unconstitutional, the other provisions not affected thereby shall continue to be
in full force and effect.

SECTION 5. Repealing Clause. - All laws, decrees, executive orders,
proclamations, rules and regulations and other issuances, or parts thereof which are
inconsistent with the provisions of this Act are hereby repealed, amended or modified.

SECTION 6. Effectivity Clause. — This Act shall take effect fifteen (15) days

after its publication in at least two (2) newspapers of general circulation in the
Philippines.

Approved,