Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City
FIFTEENTH CONGRESS

First Regular Session

House Bill No. 436

Introduced by HON. GIORGIDI B. AGGABAO

EXPLANATORY NOTE

Telecommunications is § vital as our natural resources. And for the
Philippines to cope with the growing demand for such services, we must open
new doors to promote the upliftment and improvement of our present
telecommunications system.

As embodied in Section 24, Article II of the 1987 Constitution, the State
recognizes the vital role of communication and information in nation building,
Explicitly, the State recognizes the establishment of communication and
information facilities.

Indeed, for an archipelagic country with widely dispersed population and
an uneven level of development, telecommunications services provide a
unifying, uplifting and democratizing force.

Telecommmunications Technology Solutions Inc. intends to do its share in
improving and augmenting the present telecommunications system in the
country. The company will avail of state-of-the-art and appropriate
technologies that will allow the most effective and efficient delivery of it’s
services to as many of our countrymen, especially in the countryside.

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

Soman laccanao


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City
FIFTEENTH CONGRESS

First Regular Session

House Bill No. 436

Introduced by HON. GIORGIDI B. AGGABAO

AN ACT
GRANTING THE TELECOMMUNICATIONS TECHNOLOGY SOLUTIONS INC.
A FRANCHISE TO CONSTRUCT, INSTALL, ESTABLISH, OPERATE AND
MAINTAIN TELECOMMUNICATIONS SYSTEMS THROUGHOUT THE
PHILIPPINES

Be it enacted by the Senate and the 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, there is hereby
granted to Telecommunication Technology Solutions Inc., 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
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 I or are convenient or essential to efficiently carry
out the purpose of this franchise.

SEC. 2. Manner of Operation of stations of 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 right to use its selected
wavelengths or frequencies and the quality of transmission or reception
thereon as should maximize rendition of the grantees 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
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 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
license.

SEC, 4. Ingress and Egrees. ~ 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 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),


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 altered, changed or disturbed
by the said grantee, its successors or assigns, then the DPWH 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/facilities for obscene or
indecent transmission or for dissemination of deliberately false information

or willful misrepresentation, or assist in subversive or treasonable acts.

‘The grantee shall provide basic or enhanced telephone service in any
municipality in the Philippines where it has an approved Certificate of Public
Convenience and Necessity for the establishment, operation and
maintenance of basic and/or enhanced local exchange service, without
discrimination to any applicant therefore, 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 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 grant shall furnish such service.

SEC. 6, Rates for Services. - The charges and raies 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


Upen 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 issued in favor of the
National Telecommunications commission, which shail determine the
amount, to guarantee the 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
ond shall be forfeited in favor of the government and the franchise ipso
facto revoked.

SEC. 11. Right of Interconnection. - The grantee is hereby authorized
‘to connect or demand connection of its telecommunications systems to any
other telecommunications systems installed, operate 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 buy it and shall furnish the Commission on Audit and the
National Treasury a copy of such account not later than thirty-first (31%) 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 Commissioner on Audit or his authorized representatives and 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.


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 granted 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 aiithorize 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 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.

SEC. 8. Term of Franchise. — This franchise shall be for a term 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 fails to comply with any of the following conditions:

(a) Commence operation within three (3) years from the approval of its
operating permit by the National Telecommunications Commission;

(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.


SEC. 14. Warvanty in Favor of the 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
peisons, caused by the construction or operation of the stations,
transmitters, facilities and equipment of the grantee.

SEC. 15. Non-transferabitity of Franchise. — The grantee shall not
lease, transfer, grant the usufruct of, sell nor assign this franchise or the
Tights and privileges acquired thereunder to any person, firm, company,
corporation or entity without the prior approval of the Congress of the
Philippines. Any person or entity to which this franchise is validly sold,
transferred or assigned,-shall be subject to the same conditions, terms,
restrictions and limitations of this Act.

SEC. 16. Dispersal of Owmership. - In accordance with the
constitutional provision to encourage public participation in 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 five (5) years from the
commencement of its operations. Noncompliance therewith shall render the
franchise ipso facto revoked.

SEC. 17. Equality Clause. - Any advantage, favor, privilege,
exemption, or immunity granted under existing franchise for
telecommunications system, or which may hereafter be granted, shall ipso
(facto become part of this franchise and shall be accorded immediately and
unconditionally to the herein grantee: Provided, however, That the foregoing
shail 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. 18. Reportorial Requirement. — The grantee shall submit an
annual report to the Congress of the Philippines on its compliance with the
terms and conditions of the franchise and on its operations within sixty (60)
days from the end of every year.

SEC. 19. 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. 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 shal! not be interpreted
as an exclusive grant of the privileges herein provide for.

SEC. 21. Hffectivity Clause. — this Act shall take effect fifteen (15) days
from the date of its publication, upon the initiative of the grantee, in at least

two (2} papers of general circulation in the Philippines.

Approved.