Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

SIXTEENTH CONGRESS
FIRST REGULAR SESSION

HOUSE BILL NO. 4507

Introduced by Rep. JOSEPH GILBERT F. VIOLAGO.

EXPLANATORY NOTE

This bill seeks to renew the franchise of Contel Communications, Incorporated,
(CONTEL) assignee of the grantee under Republic Act numbered thirty-nine hundred
and thirty-two, as amended by Republic Act numbered seventy-four hundred and
one, entitled “An Act granting the Concepcion Industries, Incorporated a franchise to
construct, maintain, and operate radiotelephone stations for the transmission and
reception of radio communications within the Philippines" for another twenty-five (25)
years from the effectivity of the Act.

The importance of voice communications can never be denied. Various forms of
communication devices have been invented and developed throughout the ages.
One such form that has managed to survive notwithstanding the challenges of the
web-based devices is Radio Telephone communication.

Radio Telephone communications has been an integral part of our country's
communications media. This type of system's primary purpose is efficiency wherein
a sizable number of people can conduct and carry multiple conversations utilizing
only a few distinct frequencies. Radio Telephone Trunking is utilized by many
government entities here and abroad to provide two-way communication for fire
departments, police, hospitals and other offices.

As an active Industrial Partner in the Philippines, Concepcion Industries have been a
long time member of the Radio Telephone Industry under CONTEL.

The original franchise of CONTEL is set to expire on April 2017 thus approval of this
bill is urgently requested

cas J

2 a

Rep, JOSEPH GILBERT F. VIOLAGO
2" District, Nueva Ecija


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

SIXTEENTH CONGRESS
First Regular Session

House Bill No. 4507

Introduced by Rep. JOSEPH GILBERT F. VIOLAGO

AN ACT
RENEWING THE FRANCHISE OF CONTEL COMMUNICATIONS,
INCORPORATED, ASSIGNEE OF THE GRANTEE UNDER
REPUBLIC ACT NUMBERED THIRTY-NINE HUNDRED AND THIRTY-TWO,

AS AMENDED BY REPUBLIC ACT NUMBERED SEVENTY-FOUR HUNDRED
AND ONE, ENTITLED “AN ACT GRANTING THE CONCEPCION INDUSTRIES,
INCORPORATED A FRANCHISE TO CONSTRUCT, MAINTAIN, AND OPERATE
RADIOTELEPHONE STATIONS FOR THE TRANSMISSION AND RECEPTION OF

RADIO COMMUNICATIONS WITHIN THE PHILIPPINES” FOR ANOTHER
TWENTY-FIVE (25) YEARS FROM THE EFFECTIVITY OF THE ACT

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
1987 Philippine Constitution and applicable laws, rules and regulations, the franchise
granted to CONTEL Communications, Incorporated, assignee of the grantee under
Republic Act No. 3932 entitled “An Act Granting the Concepcion Industries,
Incorporated, a Franchise to Construct, Maintain, and Operate Radiotelephone
Stations for the Transmission and Reception of Radio Communications within the
Philippines” and as amended by Republic Act No. 7401” to construct, install,
establish, operate and maintain for commercial purposes and in the public interest,
wire and/or wireless telecommunications systems, including but not limited to mobile,
cellular, paging, fiber optics, multi-channel multi-point 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 in throughout the Philippines, 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 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 availability thereof

SEC.3. Authority of the National Telecommunications Commission (NTC). —
The grantee shall secure from the 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. 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 date the grantee shall commence the service. The NTC, however, shall
not unreasonably withhold or delay the grant of any such authority, permits or
licenses.

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 assigns, with the prior approval of
the Department of Public Works and Highways (DPWH) or the local government unit
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 assigns, in accordance with the standards set by
DPWH or the local government unit concerned, Should the grantee, its successors
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 assigns, then the DPWH or the local government unit 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 assigns

SEC. 5. Responsibility (0 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 city
and/or municipality in the Philippines where it has an approved Certificate of Public
Convenience and Necessity for the establishment, operation and maintenance of a
local exchange service, without discrimination to any applicant therefor, 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 NTC, the grantee shall not be obliged to furnish such 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

NTC may extend the time within which the grant shall furnish such service.


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.

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 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 such 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, 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

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 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 jpso facto revoked in the event the grantee fails to
operate continuously for two (2) years.


SEC. 9. Acceptance and Compliance. — 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 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 with the NTC in the amount that it
shall determine to guarantee compliance with and fulfilment of the conditions under
which this franchise is granted. If after three (3) years from the date of the approval
of its permit by the NTC, the grantee shall have fulfilled the conditions, the bond shall
be cancelled by the NTC, Otherwise, the bond 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 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. 12. Gross Receipts. - The grantee, its successors or assigns, 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. 13. Books and Accounts. - The books and accounts of the grantee, its
successor or assigns, 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. 14, 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 and equipment of the grantee.

SEC. 15. Sale, Lease, Transfer, Usufruct, or Assignment.of Franchise. - The
grantee shall not sell, lease, transfer, grant the usufruct of, or 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, whether as a whole
or in parts 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 or the rights or privileges acquired
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. 16. Dispersal of Ownership. - In accordance with the constitutional
provision to encourage public participation in public utilities, the grantee shalll offer to
Filipino citizens at least thirty per centum (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.

SEC. 17. 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 the succeeding year.

SEC. 18. Penally Clause. - Any grantee who fails to submit the requisite
‘Annual Report to Congress shall be fined Five Hundred Pesos (P500.00) per
working day of non-compliance. The fine shall be collected by the NTC from said
delinquent franchise grantee separate from the reportorial penalties imposed by
NTC. Alll proceeds from said fines or penalties shall accrue to the monitoring fund of
the NTC in line with its supervisory and regulatory functions. The reportorial
compliance certificate issued by Congress shall be required before any application
for permit or certificate is accepted by NTC.

SEC. 19, Equality Clause. - Any advantage, favor, privilege, exemption, or
immunity granted under other existing franchise, 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,
however, 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. 20. 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. 21. Repeatability 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 privilege herein provided for.

SEC. 22. Publication. This Act shall be published, through the initiative of the
grantee, fifteen (15) days after this Act is signed by the President of the Philippines
or has lapsed into law.


SEC. 23 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 in the
Philippines.

Approved,