Question & AnswerQ&A (Republic Act No. 7294)
The main purpose of Republic Act No. 7294 is to grant Smart Information Technologies, Inc. (SMART) a franchise to establish, install, maintain, lease, and operate integrated telecommunications, computer, and electronic services and stations throughout the Philippines for public domestic and international telecommunications.
The franchise is granted for a term of twenty-five (25) years from the date of approval of the Act, unless sooner revoked or cancelled.
If the grantee fails to operate continuously for two (2) years, the franchise shall be deemed ipso facto revoked.
No, the grantee cannot lease, transfer, sell, assign, or grant usufruct of the franchise or merge with another entity without prior approval of the Congress of the Philippines.
The grantee must conform to honest enterprise ethics and must not use its stations for obscene or indecent transmissions, dissemination of false information, or assist in subversive or treasonable acts.
The subscription charges and rates must be approved by the National Telecommunications Commission (NTC) or its legal successors.
The President can take over and operate the stations during times of war, rebellion, public peril, calamity, emergency, disaster, or disturbance of peace and order, with due compensation to the grantee.
The grantee must pay the same taxes on real estate, buildings, and personal property as others, in addition to a franchise tax equivalent to 3% of all gross receipts from the franchised business, aside from income taxes.
The grantee must secure appropriate permits, licenses, and certificates from the NTC for its stations and must not use any frequency without NTC authorization.
The grantee must submit an annual report to the Congress of the Philippines on its compliance with the franchise's terms and on its operations within sixty (60) days from the end of every year.
If any section or provision is held invalid, all other provisions not affected shall remain valid (Separability Clause).
No, the franchise is non-exclusive and may be amended, altered, or repealed by Congress whenever the public interest requires.
The grantee must list and make a public offering of at least 30% of its authorized capital stock through a securities exchange in the Philippines within two years from the effectivity of the Act.
The Act took effect fifteen (15) days after its publication in at least two newspapers of general circulation in the Philippines.