Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

EIGHTEENTH CONGRESS
Second Regular Session

HOUSE BILL No._8479

INTRODUCED BY REPRESENTATIVE XAVIER JESUS D. ROMUALDO

EXPLANATORY NOTE

The State recognizes the vital role of the private sector in the economic development of the
nation especially in public utilities like telecommunication entities.

Advances in information telecommunications technology has been exponential over the past
decades and is expected to continue to grow more in the future. However, the country continues
to lag behind its neighbors in terms of internet speed. While the COVID-19 pandemic has
resulted in accelerating online transactions, services, and entertainment, the country’s bandwidth
and information technology services remain behind the escalating demand. Reliable and fast
internet service would certainly help attract more investors to the county. Indeed, the present
state of service continues to perturb investors, who seek to have higher bandwidth for their data-
dependent transactions.

It is in this context that ISMO, Inc., a new telecommunications company, wishes to be granted a
legislative franchise to primarily contribute in the delivery of bandwidth and information
technology services, such as providing internet service or sale of bandwidth to interested parties
and offer other telecommunications services. If granted a franchise, ISMO, Inc. aims to help
facilitate the way to a better normal in the country.

Accordingly, the timely approval of this measure is earnestly requested.

Jes

XAVIER JESUS D. ROMUALDO


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Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City
EIGHTEENTH CONGRESS
Second Regular Session

HOUSE BILL No.8479

INTRODUCED BY REPRESENTATIVE XAVIER JESUS D. ROMUALDO

AN ACT
GRANTING ISMO, INC., A FRANCHISE TO CONSTRUCT, INSTALL, ESTABLISH,
MAINTAIN, AND OPERATE TELECOMMUNICATIONS SYSTEMS IN THE
PHILIPPINES.

Be it enacted by the Senate and House of Representatives of the Philippines in Congress
assembled:

SECTION 1. Nature and Scope of the Franchise. — Subject to the provisions of the
Constitution and applicable laws, rules, and regulations, there is hereby granted to ISMO, Inc.,
hereinafter referred to as the grantee, its successors, or assigns, a franchise to construct, install,
establish, lease, operate, and maintain, for commercial purposes and in the public interest,
throughout the Philippines and between the Philippines and other countries and territories, wired
and wireless telecommunications systems, including international and local exchange carrier,
international and domestic gateway facility, international and domestic submarine cable landing
stations, mobile, cellular, fixed line, trunked radio, fiber optics, multi-channel multipoint
distribution system and local multi-point distribution system satellite transmit and receive
systems, switches, electronic telecommunications or electronic communications services, in or
outside the Philippines and also in outer space, and value added services, such as transmission of
voice, data, facsimile, control signs, audio and video, information services, and all other
telecommunications, telecommunications systems, and technologies, as are at present available
or will be made available through technological advances or innovations in the future, and to
construct, establish, install, maintain, acquire, lease, purchase, operate, and manage the

corresponding transmitting and receiving stations, satellites, lines, networks, international


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invented, found, produced or manufactured, as it may consider convenient or essential to
efficiently carry out the purpose of this franchise.

As used in this Act, the term “tclecommunications” shall include “clectronic
communications.” Moreover, the term “electronic communications network” shall mean: (a) a
transmission system for conveyance, by use of electrical, magnetic or electro-magnetic energy,
of signals of any description; and (b) any of the following as are used, by the person providing
the system and in association with it, for conveyance of the signals: (1) apparatus comprised in
the system; (2) apparatus used for the switching and routing of the signals; and (3) software and
stored data, The term “clectronic communications scrvicc” shall mean a scrvice consisting of, or
having as its principal feature, the conveyance by means of an electronic communications
network of signals and includes wired, wireless, fixed, cellular, and mobile or integrated
telecommunications computers clectronie services, including value-added services, ot
technologies related to such service, which are at present available or made available through

technical advances or innovations in the future, and fixed and mobile stations, or both.

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 cstablished by law, without in any way diminishing its own right to usc its
assigned wavelengths or frequencies and the quality of transmission or reception thereon as
should maximize rendition of the grantee’s services and availability thereof.

SEC. 3. Authority of the National Telecommunications Commission. — The grantee shall
secure from the National Telecommunications Commission (NTC) a certificate of public
convenience and necessity (CPCN) or the appropriate permits and licenses for the construction,
installation, and operation of its telecommunications systems. In issuing the certificate, the NTC
shall have the power to impose such conditions relative to the construction, operation,
maintenance, or service level of such telecommunications systems. The NTC shall have the
authority to regulate the construction and operation of the tclecommunications systems of the

grantee. The grantee shall not use any frequency in the radio spectrum without authorization


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the service. The NTC, however, shall not unreasonably withhold or delay the grant of any such
authority, permit, or license,

SEC. 4. Excavation and Restoration Works. — For the purpose of crecting and
maintaining poles or other supports for 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 unit (LGU) concemed, 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 province, citics, and municipalitics; Provided, that a public place,
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 the grantee, its successors or
assigns, in accordance with the standards set by the DPWH or the LGU concemed. 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
assignees, then the DPWH or the LGU concerned shall have the right to have the same repaired
and replaced in good order and condition and charge the grantec, its successors or assigns, at
double the amount of the cost and expenses for repair or replacement.

SEC. 5. 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 dissemination
of deliberately false information or willful misrepresentation, or assist in subversive or
treasonable acts.

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, lincs, cables, systems, and cquipment to kecp abreast with the advances in scicnce and

technology.


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The grantee shall improve and extend its services in areas not yet served, and in hazard-
and typhoon-prone areas that shall be determined by the National Disaster Risk Reduction and
Management Council, or its legal successor, in coordination with the 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, otherwise
known as the Free Mobile Disaster Alerts Act.

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
non-regulated services, whether flat rates or measured rates or variation thercof, shall be subject
to the approval of the NTC or its legal successor.

SEC. 7. Right of the Government. — 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.

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 usc 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 these shall
be so operated

SEC. 8. Term of the 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 continuously operate for two
(2) years.

SEC. 9. Right of Interconnection. — The grantee is hereby authorized to connect or
demand connections of its telecommunications systems to any other telecommunications systems

installed, operated, and maintained by any other duly-authorized person or entity in the


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the public under such terms and conditions mutually agreed upon by the parties concemed and
the same shall be subject to the review or modification of the NTC.

SEC. 10. Mobile Number Portability. - The grantce shall provide mobile number
portability (MNP) and its implementing mechanism, and shall interconnect, directly or indirectly,
with the infrastructure, facilities, systems, or equipment of other telecommunications franchise
grantees. It shall not install network features, functions, or capabilities that will impede the
implementation of a nationwide MNP system. The NTC shall issue rules and regulations for this
purpose, the effectivity of which shall commence upon applicability with other
tclecommunications franchise grantecs.

SEC. 11. Warranty in Favor of the National Government and of Local Governments. —
The grantee shall hold the national, provincial, city and municipal governments of the
Philippines free from all claims, liabilities, 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,

SEC. 12. Sale, Lease, Transfer, Grant of Usufruct, or Assignment of Franchise. — The
grantee shall not sell, lease, transter, 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 part, and whether simultaneously or
contemporaneously, to any such 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 of the rights and privileges
acquired thereunder, or of the merger or transfer of the 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. 13. Dispersal of Ownership. — In accordance with the constitutional provision to


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least thirty percent (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, the grantee shall apply other methods of encouraging public participation by citizens
and corporation as allowed by law. Noncompliance therewith shall render the franchise ipso
facto revoked.

SEC. 14. Commitment to Provide and Promote the Creation of Employment
Opportunities. - The grantee shall create employment opportunities and accept on-the-job
trainees in the franchise operations; Provided, That priority shall be accorded to the residents of
the place where their principal office is located; Provided, further, That the grantee shall comply
with the applicable labor standards and allowance entitlement under existing labor laws, rules,
and regulations; Provided, finally, That the employment opportunities or jobs created shall be
reflected in its general information sheet (GIS) to be submitted to the Securities and Exchange
Commission (SEC).

SEC. 15. 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 cvery 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. 13. Fine. — Failure of the grantee to submit the requisite annual report to the
Congress shall be penalized by a fine of five hundred pesos (P500.00) per working day of non-
compliance. The fine shall be collected by the NTC from the grantee and shall be separate and
distinct from other penalties imposed by the NTC for non-compliance with its reportorial
requirements.

SEC. 14, 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


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foregoing shall neither apply to nor affect the 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. 15. 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.

SEC. 16. Separability Clause. — If any of the sections or provisions of this Act is held
invalid, all other provisions not affected thereby shall remain in full force and effect.

SEC. 17. Effectivity. — This Act shall take effect fifteen (15) days after its publication in

the Official Gazette or in a newspaper of general circulation.

Approved,