Republic of the Philippines
HOUSE OF THE REPRESENTATIVES
Quezon City

SEVENTEENTH CONGRESS
Second Regular Session

HOUSE BILL NO. 7692

Introduced by: REP. ALFREDO A. GARBIN, Jr.,

EXPLANATORY NOTE

The proposed law seeks to extend Sear Telecommunications, Inc.,
legislative franchise for another twenty-five (25) years.

Sear Telecommunications is a corporation organized and existing under the
laws of Republic of the Philippines. It is duly enfranchised to install,
operate and maintain wire and wireless telecommunications systems in the
Philippines by virtue of Republic Act No. 8678 and currently operates radio
trunk repeater service in Metro Manila and Cebu City, a viable alternative
to cellular mobile telephony and private radio networks. Sear
Telecommunications has more than seven hundred (700) existing units
distributed among more than fifty (50) registered corporate subscriber
units with access facilities in various areas. It likewise holds a certificate of
public convenience and necessity to install, operate and maintain public
broadband services in the Philippines which provides service to several
subscribers

Sear Telecommunications’ franchise will expire on June 25, 2023. The
extension thereof will allow Sear Telecommunications to continue
providing its various telecommunications services at rates affordable to the
consuming public. Extending Sear Telecommunications’ franchise will
also ensure the uninterrupted and improved delivery of its services to the
Filipino people. The extended franchise will allow Sear
Telecommunications to construct, establish, install, maintain, purchase and
operate the radio trunking system and public broadband services as it may
consider necessary and convenient, or reasonable.


Given the role that Sear Telecommunications’ plays in the nation’s growth
and development, it is highly recommended that the immediate updating
and renewal of the franchise be granted so that it may continue to provide
uninterrupted and indispensable public service to the country.

The immediate

1e pro] d law is earnestly sought.
[PEO POSE y/soug)



Republic of the Philippines

HOUSE OF THE REPRESENTATIVES
Quezon City

SEVENTEENTH CONGRESS
Second Regular Session

HOUSE BILL No. 7692

Introduced by HON. ALFREDO A. GARBIN, Jr.

AN ACT RENEWING THE FRANCHISE GRANTED TO SEAR
TELECOMMUNICATIONS, INC., UNDER REPUBLIC ACT NO.
8678 ENTITLED “AN ACT GRANTING THE’ SEAR
TELECOMMUNICATIONS, INC. A FRANCHISE, TO
CONSTRUCT, ESTABLISH, INSTALL, MAINTAIN AND
OPERATE WIRE AND/OR WIRELESS
TELECOMMUNICATIONS SYSTEMS IN THE PHILIPPINES”
FOR TWENTY-FIVE (25) YEARS FROM THE EFFECTIVITY OF
THIS ACT

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 Constitution and applicable laws, rules and
regulations, the franchise granted to Sear Telecommunications, Inc.,
hereunder referred to as the grantee, its successors or assignees, to
construct, establish, install, maintain, lease, purchase and operate for
commercial purposes and in the public interest, wired, mobile and
fixed wireless telecommunications system such as paging system,
cellular phone system, personal communications network, trunked
radio services and other means related to the foregoing, now known
to science or which in the future may be developed through technical
innovations and advances, throughout the Philippines and between
the Philippines and other countries and territories, is hereby
extended for twenty-five (25) years from the effectivity of this Act.
For this purpose, the grantee is hereby granted the right to construct,
establish, install, maintain, lease, purchase and operate the
corresponding transmitting and receiving stations, satellites, lines,
systems, networks, international gateways, local exchanges, and
platforms as it may consider necessary, convenient, or reasonable.


SECTION 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 the 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.

SECTION 3. Authority of the National Telecommunications
Commission.— The grantee shall secure from the National
Telecommunications Commission, hereinafter referred to as the
Commission, a certificate of public convenience or the appropriate
permits and licenses for the location, construction, installation and
operation of its telecommunications systems. 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 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.

SECTION 4. Responsibility to the Public.— The grantee shall
conform to the ethics of honest enterprise and shall not use its
stations for obscene or indecent transmission or for the dissemination
of deliberately false information or willful misrepresentation, or
assist in subversive or treasonable acts.

The grantee shall improve and extend its services in areas and
yet served, and in hazard-and-typhoon-prone areas that shall be
determined by the National Disaster Risk Reduction and
Management Council in coordination with the National
Telecommunications Commission (NTC)).

The grantee shall also improve and upgrade its equipment,
facilities, and services in order to ensure effective compliance with


the objectives of Republic Act No. 10639 or the ‘Free Mobile Disaster
Alerts Act’.

SECTION 5. 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
non-regulated services, whether flat rates or measured rates or
variation thereof, shall be subject to the approval of the Commission
or its legal successors. 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.

SECTION 6. 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 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 a 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.

SECTION 7. Term of Franchise.— This franchise shall be
extended and in effect for a period 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 falls to operate continuously for two (2) years.

SECTION 8. Acceptance and Compliance.— Acceptance of this
franchise shall be given in writing to the Congress of the Philippines,
through the Committee on Legislative Franchise of the House of
Representative and the Committee on Public Services of the Senate,
within sixty (60) days from the effectivity of this Act. Upon giving
the acceptance, the grantee shall exercise the privileges granted


under this Act. Refusal or failure to accept the franchise within the
prescribed period shall render the franchise void.”

SECTION 9. Tax Provisions.— The grantee, its successors or
assignees, shall be liable to pay the same taxes on their real estate,
buildings and personal property, exclusive of this franchise, as other
persons or corporations which are now or hereafter may be required
by law to pay, except radio telecommunications and electronic
communications equipment, machinery and spare parts needed in
connection with the business of the grantee which shall be exempt
from customs duties, tariffs and other taxes, as well as those declared
exempt in this section. In addition thereto, the grantee, its successors
or assignees, shall pay a value-added tax on all gross receipts of the
business transacted under this franchise by the grantee, its successors
or assignees, in the Philippines, in lieu of any and all taxes of any
kind, nature or description levied, established or collected by an
authority whatsoever including, but not limited to, city, municipal,
provincial or national, from which the grantee is hereby expressly
exempted effective from the date of the effectivity of this Act:
Provided, That the grantee, its successors or assignees, shall continue
to be liable for income taxes payable under Title II of the National
Internal Revenue Code pursuant to Section 2 of Executive Order No.
72 unless the latter enactment is amended or repealed, in which case
the amendment or repeal shall be applicable thereto.

The grantee shall file the return with and pay the tax due
thereon to the Commissioner of Internal Revenue or its duly
authorized representative in accordance with the National Internal
Revenue Code and the return shall be subject to audit by the Bureau
of Internal Revenue.

SECTION 10. 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 mutually agreed upon
by the parties concerned and the same shall be subject to the review
or modification of the Commission.

SECTION 11.Warranty in Favor of 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.

SECTION 12. Sale, Lease, Transfer, Usufruct, Etc.— 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 corporation or entity, nor shall the
controlling interest in the grantee be transferred, whether as a whole
or in parts, and whether simultaneously or contemporaneously, to
any person, firm, company, corporation or entity, without the prior
approval of the Congress of the Philippines, except when such
person, firm, company, corporation or entity has a valid and existing,
legislative franchise for telecommunications or it is in pursuance of
the provisions of Section 16 of this Act. 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.

SECTION 13. Dispersal of Ownership. — In accordance with the
constitutional provisions to encourage public participation in the
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 ten (10) years from the effectivity of this Act,
whichever is later. Noncompliance therewith shall render the
franchise ipso facto revoked.

SECTION 14. Equality Clause.— Any advantage, favor,
privilege, exemption, or immunity granted under existing franchises,
or which may hereafter be granted upon prior review and approval
or Congress, shall become part of this franchise and shall be accorded
immediately and unconditionally to the herein grantee: Provided, That
the foregoing shall neither apply to nor affect provisions of
telecommunications franchises concerning territory covered by the
franchise, the lifespan of the franchise or the type of service
authorized by the franchise.”

SECTION 15. Separability Clause.— If any of the sections or
provisions of this Act is held invalid, all the other provisions not
affected thereby shall remain valid.


SECTION 16. 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.

SECTION 17. Reportorial Requirement.— The grantee shall
submit an annual report to the Congress of the Philippines on its
compliance with the terms and conditions of its franchise and on its
operations within sixty (60) days from the end of every year.

SECTION 18. Effectivity Clause.—- This Act shall take effect
fifteen (15) days from the date of its publication in at least two (2)
newspapers of general circulation in the Philippines.

Approved,