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Nineteenth Congress
Second Regular Session
HouseBiilNo.ml5
Introduced  by:
HON. MARISSA ``DEL MAR" MAGSIN0
0FW PARTY LIST
EXPLANATORY NOTE
The  Constitution  recognizes  the  vital  role  of the  private  sector  in  the  development  and
growth   of  the   nation's   economy,   which   includes   the   establishment  of  needed   utilities   and
infrastructure such as a telecommunication company.
As the telecommunication sector continues to be the epicenter for growth of the economy,
advances in information telecommunications technology in the country and in the global landscape
have been exponential over the past decades, and will  continue to grow more in the future.   But
despite the growth in innovation technology; the Philippines continues to lag behind its neighboring
countries like South Korea, Singapore, Hong Kong, among others, in terms of internet speed. This is
reported to be a contributing factor to the slow growth of the country's economy.
The Philippines has one of the lowest internet speeds, though the giant networks and the
National Telecommunications Commission claim otherwise as they keep on saying it is improving.
Given the effect of the COVID-19 pandemic in accelerating online transactions, online services, even
online entertainment, the glaring fact that the country's bandwidth and IT services trail behind the
escalating demand continues to perturb investors and possible investors alike, as they seek to have
higher bandwidth for their data-dependent transactions. Bandwidth is the amount of data that can
be transferred from one point to another within a network in a specific amount of time, measured in
bits per second (mbps).  The higher the mbps, the more data it can carry.
It is  in  this  context that  KONEK TELECOMMUNICATIONS  INC.  a  new telecommunications
company,  seeks a grant of congressional franchise to contribute to the delivery of bandwidth and IT
services, such  as  providing internet service or sale of bandwidth  to  interested  parties,  and  offer
other telecommunications  services.   It aims  to  assist the government in strengthening a  modern
society  and a competitive economy in a fast-evolving world.
Hence, the immediate approval of this bill is earnestly sought.                                         `
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ARISSA ``DEL


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Nineteenth Congress
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Introduced  by :
HON. MARISSA ``DEL MAR'' MAGSINO
0FW PARTY LIST
AN ACT GRANTING KONEK TELECOMMUNICATIONS 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. Ivafure ai]d Scope o/Franchl`se. -Subject to the provisions of the Constitution and
applicable      laws,      rules      and      regulations,      there      is      hereby      granted      to      KONEK
TELECOMMUNICATIONS  INC.,  herein  referred  to  as  the  grantee,  its  successor  or  assignee,  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   /or   wireless   telecommunications   systems   including
international  and  Local  Exchange  Carrier  (LEC),  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   (MMDS)   local   multi-point
distribution   system   (LMDS)   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 but not limited to, transmission of voice,
data,   facsimile,   control   signs,  audio  and  video,  information  services  bureau   and  all  other
telecommunications,   telecommunications   systems   and   /or  technologies   as   are   at   present
available or will be made available through technological advances or innovations in the future;
or right to construct, establish, install, maintain, acquire, lease, purchase and operate or manage
the  corresponding transmitting and receiving stations, satellites,  lines,  networks, international
gateways,   local  exchanges,  systems,   cables,   device,   or  platforms  that  may  be   discovered,
invented,  found,  produced  or  manufactured  as  it  may  consider  convenient  or  essential  to
efficiently carry out the purpose of this franchise.
In   this   Act,   the   term   ``telecommunications"   shall   include   "electronic   communications".   In
addition, the following terms shall have the meanings set forth herein:


"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.
``Electronic communications service" shall mean a service consisting in, or having as its principal
feature,  the  conveyance  by  means  of an  electronic  communications  network  of  signals.  It
includes  wired,  wireless,  fixed,  cellular,  and/or  mobile,  or  integrated  telecommunications
computers electronic services, including value-added services, or 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, and/or both.
SEC.2.  Manner  Of Operation  Of Stations  or  Facilities.   -   The  stat±or\s  or  fact+ities  o[ 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 grantee's services and/or the 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  or  the  appropriate  permits  and  licenses  for  the  construction,
installation and operation of its telecommunications systems/facilities.   The grantee shall  not
use  any  frequency  in  the  radio  spectrum  without  authorization  from  the  NTC.  The  NTC,
however,  shall  not  unreasonably withhold  or  delay the  grant  of such  authority,  permits  or
licenses.
SEC. 4.  Excavatr.on  and Restoratl-on  Words.  -  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
successor or assignee, 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, 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  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 the DPWH or the
LGU concerned.   Should the grantee, its successors or 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  replaced  in  good  order and  condition  at double  expense to  be
charged against the grantee, its successors or assignees.
SEC. 5.  Respousl-bl.JI.ty  to  [Jle nibJl.c.    -    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 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, lines,
cables, systems, and equipment to keep abreast with the advances in science and technology.
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 R.A. No. 10639 or the ``Free Mobile Disaster
Alerts Act".
SEC. 6.  Rates /or Seri7I.ces.  -  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
nonregulated  services,  whether  flat  rates  or  measured  rates  or  variation  thereof,  shall  be
subject to the approval of the NTC or its legal successor.
SEC. 7.  Rl.ght a/ Goo/ernmen£   -   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.
SEC. 8.  Term a/Franchl.se.  -  This franchise shall be for a term 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 comply with the following conditions:
(a)        Commence operations within three (3) years from the approval of its operating
permits by the NTC
(b)        Commence operations within five (5) years from the effectivity of this Act; and
(c)         Opeliate continuously for two consecutive (2) years.
SEC. 9.  RI.ght o/Ji]terconnectl-ol].   -   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 such terms and conditions mutually agreed upon by the parties concerned and the same
shall be subject to the review and modification of the NTC.
SEC.  10. Mobl.le JVumber Portrbl-JI-ty.   -   The grantee 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
telecommunications franchise grantees.
SEC.11. Acceptflnce and CompJI.ance.-Acceptance of this franchise shall 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 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."
SEC. 12. Tax Provl.sl'ons,. Exempt].ons. -The grantee, its successors or assignees, shall be liable
to pay the same taxes on their personal properties not directly, actually and exclusively used in
the telecommunications operations, exclusive of this franchise, as other persons or corporations
which are  now or hereafter may be required by law to pay, except real  estate or realty tax,
buildings    and    other   edifices    or   structures,    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 equivalent to ten percent (10%) only 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, barangay, 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 11 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 his 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.
SEC.13. Sale, Lease, Transfer, Grant Of Usufruct, or Assignment Of Franchise. ~ The graLutee
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, or merge with any other corporation or entity, or shall transfer the controlling
interest  of  the  grantee  simultaneously  or  contemporaneously,  to  any  such  person,  firm,
company, corporation or entity without the prior approval of the Congress of the Philippines.
except when the person or entity to which this franchise is sold, transferred or assigned is a
subsidiary or affiliate of the grantee and that at least sixty percent (60%) of   the outstanding
capital  stock  entitled  to  vote  of such  subsidiary  or  affiliate  is  owned  and  held  by  Filipino
citizens: 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.


A subsidiary or affiliate of the grantee refers to a person that, upon the effectivity of this Act,
directly  or indirectly,  through  one  (1)  or more  intermediary corporations,  owns  more  than
thirty percent (30%) of the outstanding capital stock of the grantee.
SEC.   14.  DI.spersflJ  a/  Ownershl.p.   -   In  accordance  with  the   constitutional   provision  to
encourage public participation in public utilities, the grantee shall offer to Filipino citizens  at
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 establishment of cooperatives  operating public utilities  must be implemented.
Noncompliance therewith shall render the franchise ipso facto revoked.
SEC.15. 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 ensure that at
least  sixty  percent  (600/o)  of its  employees  are  regular  employees  and  in  no  case  shall  the
percentage   of  contractual   employees,   job   orders,   casuals,   and   independent   contractors
combined, exceed forty percent (40) of its total workforce: Provided, finally, That the grantee
shall  comply with  the  applicable  labor  standards  and  allowance  entitlement under  existing
labor laws, rules and regulations, and similar issuances.
SEC. 16. RepoJtoIT.dr Requl.rement. -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.  PeJlaJty Clawse,   -   Failure  of the  grantee to  submit the  requisite  annual  report to
Congress  shall be penalized with  a fine of five  hundred  pesos  (P500,00)  per working day of
noncompliance. The fine shall be collected by the NTC from said delinquent franchise grantee
separate from the reportorial penalties imposed by the NTC.
SEC.  18. EquaJI-ty CJause.  - Any advantage,  favor, privilege,  exemption,  or immunity granted
under existing franchises,  or which may hereinafter 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 the provisions of telecommunications franchises concerning territory covered, the term,
or the type of service authorized, by the franchise.
SEC.  19.  Repealability  and  Nonexclusivity  Clause.    -  This  franchise  sha\\  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. 20. Separabl.JI.ty CJause.  -If any of the sections or provisions of this Act is held invalid, all
other provisions not affected thereby shall remain valid.
SEC.  21.  Repealing CJause.    -   AIl  laws,  decrees,  orders,  resolutions,  instructions,  rules  and
regulations, and other issuances or parts thereof which are inconsistent with the provisions of
this Act are hereby repealed, amended , or modified accordingly.
SEC. 22. EJrectl.VI.ty.   -   This Act shall take effect fifteen  (15)  days after   its publication in the
Official Gazette or in a newspaper of general circulation.
Approved,