Question & AnswerQ&A (Republic Act No. 9172)
The franchise allows Eastern Telecommunications Philippines, Inc. to construct, install, establish, operate, and maintain wire and/or wireless telecommunications systems for commercial purposes and public interest throughout the Philippines and between the Philippines and other countries. This includes mobile, cellular, paging, fiber optic, MMDS, LMDS, satellite systems, switches, and value-added services such as transmission of voice, data, facsimile, audio, video, and information services.
The NTC has the power to issue certificates of public convenience and necessity, permits, and licenses for construction, installation, and operation of telecommunications systems. It can impose conditions related to construction, operation, maintenance, and service levels and regulate the use of radio frequencies. It cannot unreasonably withhold or delay granting such authority.
The franchise is automatically revoked if the grantee fails to commence operations within three years from NTC approval, fails to operate continuously for two years, or fails to commence operations within five years from the effectivity of the Act. Noncompliance with the requirement to offer at least 30% of outstanding capital stock on any Philippine securities exchange within five years from commencement of operations also results in revocation.
With prior approval from the Department of Public Works and Highways (DPWH), the grantee may excavate or lay conduits in public places. The grantee is responsible for repairing and restoring disturbed public property to DPWH standards. Failure to repair within 10 days after notice gives DPWH the right to repair at double expense charged to the grantee.
The grantee must conform to honest enterprise ethics, refraining from using stations/facilities for obscene or indecent transmissions, dissemination of false information, willful misrepresentation, or assisting in subversive or treasonable acts.
Telecommunications service rates, except for those declared nonregulated, must be approved by the NTC. Rates must be unbundled, separable, and distinct among services, ensuring that regulated services do not subsidize unregulated ones.
The President of the Philippines may temporarily take over and operate the grantee’s stations and equipment or suspend their operation during periods of war, rebellion, public peril, calamity, emergency, disaster, or peace disturbance. The government must provide due compensation to the grantee for such use.
The grantee must accept the franchise in writing within 60 days from the Act’s effectivity. Acceptance obligates the grantee to exercise the franchise privileges. Failure to accept renders the franchise void.
The franchise or controlling interest may not be leased, transferred, sold, assigned, merged, or have its controlling interest transferred without prior approval from the Congress of the Philippines. Any such transfer is subject to the same franchise conditions.
The grantee must offer at least thirty percent (30%) of its outstanding capital stock, or a higher percentage mandated by law, in any securities exchange in the Philippines within five years from commencing operations. Failure to comply results in ipso facto revocation of the franchise.
No, the franchise is not exclusive. It may be amended, altered, or repealed by Congress when public interest so requires.
The grantee must submit an annual report to Congress within 60 days after each year’s end detailing compliance with franchise terms and operational status. It must also provide copies of gross receipts and business condition reports to the Commission on Audit and the National Treasury by January 31 yearly.
The grantee is subject to all applicable taxes, duties, fees, and charges under the National Internal Revenue Code and other laws. It must file tax returns with the local city or province where its facilities are located and pay income tax accordingly.
The franchise term is extended for twenty-five (25) years from the date of the original franchise’s expiration.
The bond guarantees the grantee’s compliance with franchise conditions. If the grantee fulfills conditions five years after permit approval, the bond is canceled. Otherwise, it is forfeited in favor of the government and the franchise revoked.