Republic of the Philippines
House of Representatives
Quezon City

Seventeenth Congress

House Bill No.

Introduced by Rep. Ricardo T. Belmonte, Jr.

EXPLANATORY NOTE

“The State recognizes the vital role of communication and information
in nation-building.”
Art. II, Sec. 24, The 1987 Constitution of the Republic of the Philippines

This bill seeks to renew the franchise granted to Omninet Philippines, Inc. under
Republic Act No. 7298 entitled, “An Act Granting Omninet Philippines, Inc. A Franchise to
Establish, Install, Maintain, Lease and Operate Wire and/or Wireless Telecommunications
Systems, Lines, Circuits and Stations Within and Without the Philippines And For Other
Purposes" enacted into law on 26 March 1992.

Omnninet Philippines, Inc. is a renowned pioneer in the Philippine public mobile
radio system industry, having successfully developed and set up a nationwide radio system
and microwave network, including the establishment of interconnection agreements with
public switched telephone networks, which provided part of the backbone for the existing
telecommunications and information infrastructure in our country.

The 2016 National Elections will go down in Philippine history as the year when
mobile communications and social media in particular, and information technology in
general, became gamechangersin the exercise of our right of suffrage and catalyststo the
growth of our vibrant democracy. The times demand continuous improvement and
enhancement of our communications and information systems, and concomitant to this is
the assurance that capable and trusted industry partners are capacitated and licensed to
provide the support needed by the government in this endeavour.

Omninet Philippines, Inc. will be a strong partner of the Philippine government in
the provision and accessibility of these vital communication and information services. The
approval of this bill is earnestly requested.

i
Hon. Ricardo T. Belmonte, Jy-se


Republic of the Philippines
House of Representatives
‘Quezon City

Seventeenth Congress
1 Regular Session
4849

House Bill No.

Introduced by Rep. Ricardo T. Belmonte, Jr.

AN ACT

RENEWING FOR ANOTHER TWENTY-FIVE (25) YEARS THE FRANCHISE
GRANTED TO OMNINET PHILIPPINES, INC. UNDER REPUBLIC ACT NO.
7298 ENTITLED “AN ACT GRANTING TO OMNINET PHILIPPINES, INC. A
FRANCHISE TO ESTABLISH, INSTALL, MAINTAIN, LEASE AND OPERATE
WIRE AND/OR WIRELESS TELECOMMUNICATION SYSTEMS, LINES,
CIRCUITS AND STATIONS WITHIN AND WITHOUT THE PHILIPPINES AND
FOR OTHER PURPOSES”

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
Omninet Philippines, Inc. under Republic Act No. 7298 entitled “AN ACT
GRANTING TO OMNINET PHILIPPINES, INC. A FRANCHISE TO ESTABLISH,
INSTALL, MAINTAIN, LEASE AND OPERATE WIRE AND/OR WIRELESS
TELECOMMUNICATION SYSTEMS, LINES, CIRCUITS AND STATIONS WITHIN
AND WITHOUT THE PHILIPPINES AND FOR OTHER PURPOSES’ and
hereunder referred to as the grantee, its successors or assigns to establish, install
maintain, lease and operate for commercial purposes and in the public interest wire
and/or wireless telecommunication systems, lines, circuits and stations, fiber optics,
microwave and other facilities that are appropriate to the provision of up-to-date
telecommunication facilities within and without the Philippines for public
communications including but not limited to two-way radio communications
systems, paging, mobile/cellular services, packet switched system, satellite transmit
and receive systems, switches, pay television and/or program services by wire or
wireless means and other telecommunication systems and their value-added
services is hereby renewed for another twenty-five (25) years from the effectivity of
this Act.

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 privilege 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 National Telecommunications Commission a
Certificate of Public Convenience and Necessity or the appropriate permits and
licenses for the construction, installation and operation of its telecommunications
systems/ facilities. 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 the date the grantee shall commence the
service. The NTC, however, shall not unreasonably withhold or delay the grant of
such authority, permit or license.

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 assignees, with the prior approval of
the Department of Public Works and Highways (DPWH) or the local government
unit (LGU) concerned, as may be appropriate, to make excavations or lay conduits in
any of the public places, roads, highways, streets, lanes, alleys, avenues, sidewalks,
or bridges of the province, cities, and/or municipalities: Provided, however, That a
public place, road, 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 assignees, in
accordance with the standards set by DPWH or the LGU concerned. Should the
grantee, its successors assignees, 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 assignees, then the DPWH or the LGU 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 assignees.

SEC. 5.Responsibility to the Public.— The grantee shall conform to the ethics of
honest enterprise and shall not use its stations and facilities for obscene or indecent
transmissions, or for the dissemination of deliberately false information, or willful
misrepresentation, or assist in subversive or treasonable acts.


The grantee shall operate and maintain all its facilities, lines, cables, systems
and equipment for the transmission and reception of messages, signals, and pulses
ina satisfactory manner at all times, and as far as economical and practicable,
modify, improve, or change such facilities, lines, cables, systems and equipment to
keep abreast with advances in science and technology.

SEC. 6.Rates for Services.— The charges and rates for 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 a variation thereof,
shall be subject to the approval of the NTC 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 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 any station 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, transmitter systems, facilities and equipment during the period
when these shall be so operated.

The radio spectrum is a finite resource that is part of the national patrimony and the
use thereof is a privilege conferred upon the grantee by the State and may be
withdrawn any time after due process.

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

SEC. 9.Acceptance and Compliance.— Acceptance of this franchise shalll 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 (60) days after effectivity of this Act. Upon giving such
acceptance, the grantee shall exercise the privileges granted under this act.
Nonacceptance shalll render the franchise void.

SEC. 10.Right of Interconnection. ~ The grantee is hereby authorized to connect
or demand connection of its telecommunications systems to 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 the terms and


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conditions mutually agreed upon by the parties concerned, this right shall be subject
to the review and modification of the NTC.

SEC. 11.Gross Receipts. - The grantee, its successors or assignees, 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. 12.Books and Accounts. - The books and accounts of the grantee, its
successor or assignees, 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. 13.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 to property or to persons, caused by the construction
or operation of the stations, transmitters, facilities, or equipment of the grantee.

SEC. 14.Sale, Lease, Transfer, Usufruct, or Assignment of Franchise. - The grantee
shall not sell, lease, transfer, grant the usufruct of, 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 other corporation or entity,
nor shall transfer the controlling interest of the grantee, 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: Provided, That Congress shall be informed of any sale, lease, transfer,
grant of usufruct, or assignment of franchise or the rights or privileges acquired
thereunder, or of the merger or transfer of controlling interest of the grantee, 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. 15.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 cent (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 operating public utilities must be implemented.
Noncompliance therewith shall render the franchise ipso facto revoked.


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SEC. 16.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 every year during the term of its franchise. The
reportorial compliance certificate issued by Congress shall be required before any
application for permit or certificate is accepted by the NTC.

SEC. 17.Penalty Clause. - Failure of the grantee to submit the requisite annual
report to Congress shall be penalized with a fine in the amount of Five hundred
pesos (P500.00) per working day of noncompliance. The fine shall be collected by the
NTC from delinquent franchise grantee separate from the reportorial penalties
imposed by the NTC.

SEC. 18.Equality Clause. - Any advantage, favor, privilege, exemption, or
immunity granted under other existing franchises, 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, 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. 19.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. 20.Repealability 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 privilege herein provided for.

SEC. 21Effectivity. - This Act shall take effect fifteen (15) days after its
publication in the Official Gazette or in a newspaper of general circulation.

Approved,