*fid &Id ao p5 :24 
THIRTEENTH CONGRESS OF THE REPUBLIC 
) 
OF THE PHILIPPINE 
First Regular Session 
S E  
T E  
P. 
S. No. 
Introduced by Senator S. R. Osmefia 111 
I 
EXPLANATORY NOTE 
Republic 
Act 
No. 
7925, 
otherwise 
known 
as 
the 
“Public 
Telecommunications Policy Act of 1995”, was enacted to promote and govern 
the development of the Philippine telecommunications industry as well as to 
provide the basic policies for the delivery of efficient public telecommunications 
service. In keeping with this objective, Section 23 of the above-mentioned Act 
provides: 
“Any advantage, favor, privilege, exemption, or immunity 
granted under existing franchises, or may hereafter be granted, 
shall 
ipso 
facto 
become 
part 
of 
previously 
granted 
telecommunications franchise and shall be accorded immediately 
and unconditionally to the grantees of such franchise: 
Provided, 
however, that the foregoing shall not 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.” 
This particular Section intended to level the playing field by making sure 
that any and all advantages, privileges, exemption or immunities granted to one 
firm would inure to the benefit of all other franchise holders. 
However, while the objective was noble, the application of the law resulted 
in some confusion as R.A. No. 7925 makes no distinction as to the nature and 
type of the telecommunications entity. 
Thus, it is possible for one type of 
telecommunications firm to enjoy the same benefits granted to another class of 
telecommunications franchise. Theoretically, a situation could arise wherein a 
paging company would be entitled to the same benefits granted to a telephone 
company, resulting in a situation where the former could also, avail of the right to 
exercise the power of eminent domain or the right of egress when it has no 
practical use for these rights. 
Moreover, Section 23 provides that the equality clause shall not apply to 
provisions concerning territory covered, the life-span of and the type of service 
authorized by the franchise. 
This enumeration is exclusive and necessarily 
implies that all other types of provisions not belonging to these categories m’ay 
bemodified accordingly. 


Republic Act No. 7674,' which amended Section 
7617, the original franchise of Telecommunications Te 
Inc. (TTPI), granted the corporation several exemptio 
Congressional approval in the sale or transfer of the franch 
I 
A franchise is a special privilege conferred by the State to an individual or 
group of individuals for their exclusive exercise. 
It is granted' based on the 
integrity, financial stability and capability as well as future 'investment plans of the 
franchise holders. 
To allow the transfer of controlling interest without 
Congressional approval could result in the franchise falling into the hands of new 
owners who many not be similarly qualified. Furthermore, it will encourage the 
application for a franchise of dummies who will peddle the franchise once it is 
granted. 
With the equality clause of R.A. No. 7925, the need for prior 
Congressional approval may be obviated. This may result in the controlling 
interest of other telecommunications franchises being transferred to individuals 
or firms which are not qualified. 
Therefore, this legislation proposes the inclusion, in the exemptions 
enumerated under Section 23 of R.A. No. 7925, of the prohibition against the 
transfer of controlling interest, whether by transfer or sale of shares of stock or 
by an increase in capitalization without the requisite Congressional approval. 
In view of the foregoing, the early approval of this bill is earnestly 
requested. 
d L L  
SERGIO OSMENA 111 
Senator 


I 
I " .  
THIRTEENTH CONGRESS OF THE REPUBLIC 
) 
L,': 
,il,,; 3u p f5 24 
OF THE PHILIPPINE 
) 
First Regular Session 
1 
Introduced by Senator S. R. Osmeha 111 
AN ACT 
FURTHER RESTRICTING THE TRANSFER OF TELECOMMUNICATION 
FRANCHISES LEGISLATIVE, AMENDING FOR THE PURPOSE SECTION 23, 
ARTICLE Vlll OF REPUBLIC ACT NO. 7925, OTHERWISE KNOWN AS THE 
"PUBLIC TELECOMMUNICATIONS POLICY ACT OF THE PHILIPPINES OF 
1995". 
Be it enacted by the Senate and House of Representatives of the 
Philippines in Congress assembled: 
I 
SECTION ?. Section 23, Article Vlll of Republic Act 7925, otherwise 
2 
known as the "Public Telecommunications Policy Act of the Philippines of 1995", 
3 
is hereby amended to read as follows: 
4 
"Sec. 
23. 
Equality 
of 
Treatment 
in 
the 
5 
Telecommunications Industry. - Any advantage, favor, privilege, 
G 
exemption or immunity granted under existing franchises, or may 
7 
hereafter be granted, shall ipso facto become part of previously granted 
8 
telecommunications franchises OF THE SAME NATURE and shall be 
9 
accorded immediately and unconditionally to the grantees of such 
10 
franchises: Provided, however, That the foregoing shall neither apply to 
I I 
nor affect provisions of telecommunications franchises concerning territory 
12 
covered by the franchise, the life span of the franchise, [or] the type of 
13 
service authorized by the franchise, OR ANY 
TRANSFER 
OF 


CONTROLLING INTEREST, WHETHER BY TRANSFER OR SALE OF 
SHARES OF STOCK OR BY AN INCREASE IN CAPITALIZATON. 
Sec. 
2. 
Repealing 
Clause. 
- 
All 
equality 
clauses 
of 
telecommunications franchises inconsistent with this Act are hereby 
deemed repealed or modified accordingly. 
Sec. 3. 
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. 
Approved,