Question & AnswerQ&A (Republic Act No. 11566)
The main purpose of Republic Act No. 7633 is to amend certain sections of Republic Act No. 3259, as amended, granting the International Communications Corporation a franchise to establish and operate telecommunications services including radio stations, extending the term of the franchise by twenty-five years from August 9, 1996, and to provide other related provisions.
The International Communications Corporation, its successors or assigns, is granted the right to construct, maintain, and operate telecommunications systems including radio, telegraph, telephone, facsimile, data, voice, audio and video services, with authority to transmit and receive information domestically and internationally.
The National Telecommunications Commission (NTC) has the authority to issue certificates of public convenience and necessity, approve rates for telecommunications services, impose conditions on operations, require permits and licenses for stations, authorize interconnection with other operators, and order temporary operation of services in cases of revocation or suspension.
The grantee must obtain a certificate of public convenience and necessity from the National Telecommunications Commission after due hearing, which determines that construction or operation is necessary and proper for the public convenience.
The grantee must offer at least 30% of its common stock to the public through stock exchanges within three years from the effectivity of the Act, and no single person or entity shall own more than 5% of the stock, to comply with the constitutional mandate to democratize ownership of public utilities.
The grantee must pay the same taxes on real estate, buildings, and personal property as others, a franchise tax of 3% on gross receipts from the telecommunications business (in lieu of other taxes on the franchise), and income taxes under Title II of the National Internal Revenue Code.
The President of the Philippines may take over and operate or authorize temporary use of the transmitting, receiving, and switching stations owned by the grantee, with due compensation to the grantee for the period of such government operation.
The grantee shall not lease, transfer, sell, or assign the franchise or rights acquired without the prior approval of Congress. Any entity acquiring the franchise shall be subject to all existing terms, conditions, and laws.
No, Section 17 clarifies that the franchise shall not be interpreted as an exclusive grant of the privileges provided within it.
The grantee must operate and maintain all stations, lines, and systems satisfactorily at all times and, when required by the National Telecommunications Commission for public good, must modify, improve or change such facilities to keep pace with scientific and technological advances.
The grantee must keep accounts of gross receipts and submit these to the Commissioner on Audit and the Treasurer of the Philippines annually by January 31 for the preceding year, and also submit a detailed annual report to Congress regarding its program, operations, accounts, tax payments, and compliance with franchise terms.
The NTC may, after notice and hearing, authorize a temporary operator to maintain and operate the grantee's telecommunications services to prevent irreparable damage or serious inconvenience to the public, but this temporary operation does not grant a new certificate of public convenience and necessity.
The grantee must file a written acceptance of the Act and its terms with the National Telecommunications Commission within 60 days of effectivity; otherwise, the Act becomes null and void.