Republic of the Philippines
House of Representatives
Quezon City

SEVENTEENTH CONGRESS
Second Regular Session

oust sit.wo 8660

INTRODUCED BY CONGRESSMAN XAVIER JESUS D. ROMUALDO-

EXPLANATORY NOTE

Article II Section 24 of the Philippine Constitution provides that:
“The State recognizes the vital role of communication and information in nation-building.”

This bill seeks to renew the franchise granted to the Radio Marine Network, Inc.

Republic Act No, 4607 granted Mr. Segundo P. Lustre, Jr. a franchise to establish,
maintain, and operate radio stations for telecommunication within and without the Philippines.
‘The franchise was renewed and transferred to the Radio Marine Network, Inc, by virtue of

Republic Act No. 7512.

Since 1965, the Radio Marine Network has facilitated ship-to-shore communication or
the exchange of voice and data communications between someone on a ship and someone on
land. For more than five decades, the Radio Marine Network, Inc. has allowed thousands of
seafarers at sea to keep in touch with their families through radio communication
Furthermore, the Radio Marine Network provides a cheaper and more stable alternative means
of ship-to-shore communication as wireless telecommunications roaming tend to be pricey and

more susceptible to natural calamities

Apart from renewing the franchise, the bill also seeks to expand the nature and scope of
its franchise to include wire and wireless telecommunications systems, copper, fiber optics,
and satellite transmit and receive systems. This will enable the franchise to cope with the
advancement of technology and empower them to develop ship-to-shore communications

using the said systems.

In view of the foregoing, the passage of this measure is earnestly sought.

Ka- VewR

XAVIER JESUS D. ROMUALDO


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Republic of the Philippines
House of Representatives
Quezon City

SEVENTEENTH CONGRESS
Second Regular Session

House BiLt No.8660
INTRODUCED BY CONGRESSMAN XAVIER JESUS D. ROMUALDO

AN ACT
RENEWING THE FRANCHISE GRANTED TO RADIO MARINE NETWORK, INCORPORATED,
UNDER REPUBLIC ACT NO. 4607, AS AMENDED BY REPUBLIC ACT NO. 7512

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
Philippine Constitution and applicable laws, rules and regulations, the franchise granted under
Republic Act No. 7512 entitled, “An Act authorizing the transfer and assignment to the Radio
Marine Network, Incorporated, of the franchise to establish, maintain and operate radio
stations for telecommunications within and without the Philippines granted under Republic
Act No. 4607 to Segundo P. Lustre, Jr, and extending the term of the said franchise to another
twenty-five years” to Radio Marine Network, Incorporated, hereunder referred to as the
grantee, its successors or assignees, a franchise to construct, install, establish, operate, and
maintain for commercial purposes and in the public interest, in the Philippines and between
the Philippines and other countries and territories, wire and/or wireless telecommunications
systems including mobile cellular, copper, fiber optics, satellite transmit and receive systems,
switches, and their value-added services such as the transmission of voice, data, facsimile,
control signs, audio and video, information services 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 are convenient or essential to
efficiency carry out the purpose of this franchise, is hereby renewed for another twenty-five

(25) years from the effectivity of this Act.


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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 privilege to use its
assigned wavelengths or frequencies and the quality of transmission or reception thereon as

should maximize rendition of the grantee’s service 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. 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 systems. 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 the date the grantee shall
commence the service. The NTC, however, shall not unreasonably withhold or delay the grant

of such authority, permit, or license.

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 assignees, 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, roads, highways,
streets, lanes, alleys, avenues, sidewalks, or bridges of the province, cities and/or
municipalities: Provided, however, That a public place, road, 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


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with the standards set by the DPWH or the LGU concerned. Should the grantee, its successors
or assignees, after the ten (10) day fetice frente iid atta od cto faceeateettn
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 of the LGU 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

assignees.

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 wilful 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 the
grantee shall furnish the 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.


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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 nonregulated services, whether the 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 the 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 these shalll 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 the effectivity of this Act, unless sooner cancelled. This franchise
shall be deemed ipso facto revoked in the event the grantee fails to comply with any of the

following conditions of this Act.

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.


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SEC. 10. Bond. - The grantee shall file a bond with the NTC in the amount that it shall
<itetaine| 1 itafankset lance rR tiaert Pate oe ibeteserta agian wre a
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 favour 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 toother 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 assignees, 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 (31") day of January of each year for the preceding twelve months.

SEC. 13. Books and Accounts. - The books and accounts of the grantee, its successor or
assignees, shall always be open to the inspection of the 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.


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SEC. 15. Sale, Lease, Transfer, Usufruct, or Assignment of Franchise. - The grantee
ll ec cule atcser eran test et che tien ie renee ont erate
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 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 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.

SEC. 16. Dispersal of Ownership. - 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, 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 franchises 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.


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SEC. 18. Penalty Clause. - Failure of the grantee to submit the requisite annual report
to Congress shall be penalized with a fine of five hundred pesos (Php500.00) per working day
of noncompliance. The fine shall be collected by the NTC from the delinquent franchise grantee

separate from the reportorial penalties imposed by the NTC.

SEC. 19. Equality Clause. - Any advantage, favour, 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 and unconditionally to the herein grantee. Provided, 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. 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 privilege herein provided for.

SEC. 22. Effectivity. - This Act shall take effect fifteen (15) days after its publication in a

newspaper of general circulation.

Approved.