Question & AnswerQ&A (Act No. 3436)
The franchise is granted to the Philippine Long Distance Telephone Company, its successors or assigns, for a period of fifty years from the approval of the Act.
The franchise covers the construction, maintenance, and operation of telephone systems on the following routes: Manila-Baguio including all provinces traversed; and Manila-Iloilo-Negros-Cebu including the provinces and islands traversed.
The grantee is authorized to install, maintain, and operate telephone lines, including branch tributary lines, overhead or underground; erect poles and other structures; lay cables including submarine cables; and operate apparatus for the electrical transmission of messages, pictures, and signals. All such works must be approved and satisfy the requirements of the Secretary of Commerce and Communications.
Poles must be erected in a workmanlike manner at specified heights (wires at least ten feet above ground and fifteen feet over roads), placed not to endanger public safety, and located in places designated by the Secretary of Commerce and Communications. When twenty-five or more pairs of wires are on one line, they must be cabled; cables must be placed underground if more than 800 pairs are carried on one line, when so ordered by the Secretary.
The grantee may install and operate radio-telephone equipment with prior approval by the Governor-General on recommendation of the Secretary of Commerce and Communications, who also supervises and regulates it. However, the franchise does not authorize broadcasting commercial messages or the transmission of facsimiles or radio-telegraphic messages for hire.
The grantee shall supply telephone service to any applicant in any municipality covered by the franchise routes within thirty days after the application, prioritizing applications based on their date, up to system capacity as determined by the Public Service Commission. If the service point is more than 50 meters from the exchange, the applicant must pay the cost of installation for the additional distance.
The grantee must pay the same taxes on real estate, buildings, and personal property as other persons or corporations, excluding this franchise. Additionally, it must pay one percent of all gross receipts from the telephone and electrical transmission business under this franchise each year, in lieu of all other taxes on this franchise or its earnings.
Before beginning any construction, the grantee must obtain a Certificate of Public Necessity and Convenience from the Public Service Commission authorizing such construction. This certificate may impose conditions related to construction, equipment, maintenance, service, or operation.
If the grantee fails to begin construction or operation as required by the Certificate of Public Necessity and Convenience, the certificate may be declared null and void, the deposit forfeited to the Insular Government, or the grantee may be fined up to five thousand pesos as determined by the Public Service Commission, unless prevented by cause beyond its control.
No, the franchise is not exclusive. The right to grant franchises to other corporations or persons for telephone or electrical transmission is not impaired by this franchise. However, subsequent franchises must not impair the efficient transmission under this franchise, and costs for relocation of poles or wires are to be settled as provided.
The Philippine Government has the privilege, without compensation, to use the grantee's poles to attach one ten-pin crossarm and to install, maintain, and operate telegraph wires. The Bureau of Posts may place additional crossarms and wires by paying agreed compensation. Municipalities may also use poles for police and fire alarm systems without compensation, ensuring no interference with the grantee's service.
The grantee must deposit at least one thousand pesos as a deposit per Certificate of Public Necessity and Convenience, and specifically a twenty-five thousand peso deposit upon granting of the certificate for the Manila-Baguio line to guarantee good faith that the telephone system will be constructed and ready for operation within twelve months. Deposits may be in cash, bonds, or securities approved. Failure to comply results in forfeit of the deposit to the government.
The books and accounts must be open to inspection by district auditors or their representatives. The grantee must submit quarterly reports in duplicate to the Insular Auditor showing gross receipts, net receipts, and the general condition of the business. Additionally, a yearly account of gross receipts per municipality must be furnished to the Insular Auditor and Treasurer.
No, the grantee cannot transfer, sell, or assign the franchise directly or indirectly without the previous and explicit approval of the Philippine Legislature.
The franchise is subject to amendment, alteration, or repeal by the Congress of the United States as provided in specific U.S. Acts. Moreover, lands or rights acquired revert to the appropriate government owner upon termination. The franchise is conditioned by overarching laws limiting corporations and franchise grants under the applicable Acts of Congress.