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Republic of the Philippines
HOUSE OF REPRESENTATIVE}
Quezon City

SIXTEENTH CONGRESS
Second Regular Session

HOUSE BILL NO.5154

Introduced by REP. ARTURO B. ROBES

EXPLANATORY NOTE

The Philippines’ telecommunications landscape is dominated by “for-profit” enterprises as
shown by their combined net profits of more than P25 Billion in 2013. While the present players,
provide the necessary connectivity for the country in terms of the traditional circuit voice and
text in the cellular telecommunications space, the current telecommunications landscape leaves a
lot to be desired in terms of:

a. Quality of service which unfortunately, despite pronouncements of the latest adoption
of technology like 4G, only leads to more expensive service than affordability to
consumers;

b. Very low internet penetration (about 6%) in the Philippines which is very keen to not
only the improvement of lives but towards the easy access and acquisition of
knowledge and skills to help in nation building; and

¢. Providing inteet connectivity to the poor, the millions at the bottom-of-the pyramid
of society, who cannot afford the devices and the monthly service fees that
incumbents offer in their internet business.

There is therefore a need to introduce in the telecommunications industry companies who
possess a vision different from the present players in the market — to make information easily
accessible to majority of our underprivileged constituents.

Pipol Broadband and Telecommunications Corporation (Pipol Broadband) represents this niche ,
with its camest and experienced focus on white space comprising of servicing the poor, the use
of low-cost technology and its software and patented business processes to efficiently serve its
market, Pipol Broadband could help the Philippines improve internet connectivity to the un-
served and under-served areas without necessarily treading on the turf of incumbent telcos.

Further, Pipol Broadband brings a fresh and responsible way of doing telecommunications in the
country by committing that its service is geared towards educational goals which will allow
learning for the underprivileged and all those who have no means to access to the formal


education system. The system will also aggressively filter all unwanted content in its service
such as blog sites that show or promote pornography and the like. The distribution of its services
will likewise be through poor communities so that it consequently promotes and dispenses
livelihood to the poor. It aims to partner with the necessary branches of government to be able to
help in public service such as public safety advisories and community alleviation
announcements, This is because Pipol Broadband, unlike other teleos, is inherently not just an
enterprise doing telecommunications and internet service, It is a social enterprise that has the
poor and marginalized at heart as its public with which it provides its telecommunications
service (Telecoms, Internet and Broadband for the Poor).

Hence, the early passage of this bill

s earnestly sought.

REP. ART!
Lone District
San Jose del Monte City


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Republic of the Philippines
HOUSE OF REPRESENTATIVES,
Quezon City

SIXTEENTH CONGRESS
Second Regular Session

HOUSE BILL NO. 5154

Introduced by REP. ARTURO B, ROBES

AN ACT
GRANTING THE PIPOL BROADBAND AND —TELECOMMUNICATIONS
CORPORATION 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
Constitution and applicable laws, rules and regulations, there is hereby granted to Pipol
Broadband and 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 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, control 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 in of are convenient or essential to efficiently carry out the purpose of this franchise.

SEC. 2. Manner of Operation of Stations or Facilities, ~ The stations or faculties 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 its 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


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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 systems, 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 Commission. 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, 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 or
assigns, with the prior approval of the Department of Public Works and Highways (DPWH) or
the local government units concerned, 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 local government unit: Provided, however, That a public place, highway, street,
Jane, 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 the DPWH or the local government units concerned. Should
the grantee, its successors or 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 local government units concerned 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/fucilities for obscene or indecent transmission or for
dissemination of deliberately false information or willful misrepresentation, or assi
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 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 grantee
shall furnish such service.



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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.

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 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 operate the stations, transmitters, facilities or
equipment of the grantee, to temporarily suspend the operation of an}’ 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, faculties 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
4 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 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 operation within three (3) 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 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. Non-acceptance shall render the franchise
void.

SEC. 10. Bond. ~ The grantee shall file a bond with the NTC, in the amount that the NTC shall
determine, to guarantee compliance with and fulfillment 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.


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SEC. 11. Right of Interconnection. ~The grantee is hereby authorized to connect or demand
connection of its telecommunications systems to any other telecommunications systems
nstalled, 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 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
(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 assigns,
shall always be open to the inspection of the COA and its duly authorized representatives. It shall
be the duty of the grantee to submit to the COA vwo (2) copies of the quarterly reports on the
gross receipts, the net profits and the general condition of the business.

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 (© 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 contemporancously, to
any such person, firm, company, corporation or entity without the prior approval of the Congre
of the Philippines: Provided, That Congress shall be informed of any sale, lease, transfer, grant
of usuftuct, 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, shalll 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 per centum (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, 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


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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 10 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 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, Equaligy 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. 20. Separability Clause. ~ [any of the sections or provisions of this Act is held invalid, all
other provisions not affected thereby shall remain valid.

SEC. 20, Repeatability 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

ays from the date of its

SEC. 21, Effectivity Clause. ~This Act shall take effect fifteen (15) d
publication in at least two (2) newspapers of general ci

Approved,