QuestionsQuestions (Republic Act No. 9172)
RA 9172 authorizes the grantee to construct, install, establish, operate and maintain wire and/or wireless telecommunications systems throughout the Philippines and between the Philippines and other countries/territories, including mobile, cellular, paging, fiber optic, MMDS, LMDS, satellite transmit/receive systems, switches, and value-added services such as transmission of voice, data, facsimile, control signs, audio/video, and information services, using existing or future available technologies, and to construct/acquire/lease/operate/manage transmitting and receiving stations, lines, cables or systems essential to carry out the purpose of the franchise.
The franchise operations must be constructed and operated in a manner that will result at most in the minimum interference on the wavelengths or frequencies of existing stations or other lawful stations, without diminishing the grantee’s right to use its selected wavelengths or frequencies and the quality of transmission or reception.
The grantee must secure from the NTC a certificate of public convenience and necessity (or the appropriate permits and licenses) for construction, installation and operation. The NTC may impose conditions and regulate construction and operation. The grantee cannot use radio spectrum frequencies unless authorized by the NTC.
No. RA 9172 provides that the NTC shall not unreasonably withhold or delay the grant of any such authority, permits or licenses.
With prior approval of the DPWH, the grantee may excavate or lay conduits in public places and infrastructure. The grantee must repair and replace any disturbed facilities in a workmanlike manner according to DPWH standards. If it fails after 10 days notice, DPWH may repair at double expense charged against the grantee.
The grantee must adhere to honest enterprise ethics; it must not use facilities for obscene/indecent transmission, dissemination of deliberately false information, willful misrepresentation, or assist in subversive/treasonable acts. It must provide basic or enhanced telephone service in municipalities where it has an approved certificate for local exchange service, without discrimination, in order of application date, up to exchange capacity, and increase capacity to meet demand unless demand expansion is below a smallest viable local exchange threshold determined by the Commission.
Charges and rates for telecommunications services (except those declared nonregulated) must be approved by the NTC. Regulated services must not subsidize unregulated services; rates must be unbundled, separable and distinct among services offered.
In times of war, rebellion, public peril, calamity, emergency, disaster, or disturbance of peace and order, the President may temporarily take over and operate the grantee’s stations/facilities/equipment, temporarily suspend operation, or authorize government agencies to use and operate them, upon due compensation to the grantee.
The franchise term is 25 years from effectivity of the Act, unless sooner revoked or cancelled. It is deemed ipso facto revoked if the grantee (a) fails to commence operations within 3 years from NTC approval of operating permit/provisional authority, (b) fails to operate continuously for 2 years, and (c) fails to commence operations within 5 years from the effectivity of the Act.
The grantee must give written acceptance within 60 days from the effectivity of the Act. Upon acceptance, it may exercise the franchise privileges. Nonacceptance renders the franchise void.
The grantee must file a bond issued in favor of the NTC to guarantee compliance with franchise conditions. If after five years from approval of its permit by the Commission the grantee fulfilled the same, the bond is cancelled by the Commission; otherwise, the bond is forfeited in favor of the government and the franchise is ipso facto revoked.
The grantee may connect or demand connection of its telecommunications systems to other duly authorized telecommunications systems to provide extended and improved services. Terms are mutually agreed upon by parties, subject to review or modification by the Commission.
The grantee is subject to all taxes, duties, fees and other impositions under the NIRC of 1997 as amended and other applicable laws. However, nothing repeals specific tax exemptions/incentives/privileges granted under relevant law. Rights/benefits/exemptions accorded to existing and future telecommunications franchises are extended to the grantee.
The grantee must keep separate accounts of gross receipts and furnish COA and the National Treasury a copy not later than Jan. 31 each year for the preceding 12 months. Its books and accounts must be open to COA inspection, and it must submit two copies of quarterly reports on gross receipts, net profits and the general condition of business. It must submit an annual report to Congress on compliance with franchise terms and on operations within 60 days from the end of each year.
The grantee cannot lease, transfer, grant usufruct of, sell or assign the franchise or rights/privileges, nor merge with another entity, nor transfer controlling interest (whether as a whole or in parts, whether simultaneously or contemporaneously) to another person/entity without prior approval of Congress. Any assignee must be subject to the same conditions, terms, restrictions and limitations.
Within five years from commencement of operations, the grantee must offer at least 30% of its outstanding capital stock (or a higher percentage required by later law) in the Philippine securities exchange to encourage public participation. Noncompliance renders the franchise ipso facto revoked.
In the renewal/extension provision, the term is extended/renewed for another 25 years, but the franchise is deemed ipso facto revoked if the grantee fails to operate continuously for two years.