Law Summary
Eminent Domain and Use of Public Property
- Grantee authorized to exercise eminent domain as reasonably necessary for communication system establishment and operation.
- Requires prior approval from Secretary of Public Works and Communications for construction over public property (streets, highways, squares, reservations).
Establishment of Stations and Use of Communication Systems
- Grantee may establish stations in approved Philippine locations.
- Authorized to purchase, lease, or otherwise utilize existing communication systems technology.
Frequency and Wavelength Allocation and Regulation
- Secretary of Public Works and Communications allocates frequencies and wavelengths for grantee use and issues licenses.
- Secretary may modify or cancel allocations upon reasonable notice based on:
- Preventing impairment of communications, monopoly, unreasonable rates, or violation of public policy.
- Public interest needs for alternative uses.
- Secretary empowered to use boards or agents to investigate and enforce provisions, with subpoena power.
Jurisdiction of the Public Service Commission
- Public Service Commission has jurisdiction over the grantee only concerning rates charged.
- Rates subject to international commitments of the Philippines.
Government Rights During Emergencies
- Government may take over and operate communication stations during war, insurrection, or domestic trouble.
- Grantee must be compensated for government use during such periods.
Financial Reporting and Auditing
- Grantee required to keep separate accounts of Philippine business gross receipts.
- Copies to be submitted annually to Auditor General and Treasurer by January 31.
- Records subject to audit and inspection within the Philippines.
- Audit approval is conclusive but subject to appeal in courts.
Taxation and Franchise Fees
- Grantee liable for taxes on real estate, buildings, and personal property like other entities.
- Must pay 5% of gross receipts annually after audit approval to the government treasury.
Indemnification Clause
- Grantee must hold national, provincial, and municipal governments harmless from claims arising from accidents or injuries due to station operations.
Compliance with Corporate Laws
- Grantee subject to existing and future Philippine corporation laws.
Prohibition on Involuntary Servitude
- Prohibits employing persons held in involuntary servitude.
Amendment, Termination, and Duration of Franchise
- Franchise subject to amendment, alteration, or repeal by Congress.
- Rights to use public property revert to government upon termination.
- Franchise validity lasts 50 years from acceptance unless earlier terminated or extended.
Bond Requirement for Performance
- Grantee must execute a performance bond of fifty thousand pesos for the first three years.
- Bond cancelled after satisfactory fulfillment of obligations.
Conditions for Acceptance and Exercise of Rights
- Grantee must accept franchise in writing within six months of approval.
- Rights effective upon acceptance and bond approval.
Restriction on Transfer and Assignment
- Franchise and rights may not be leased, transferred, sold, assigned, or merged without Congressional approval.
Definition of Public Service Commission
- Term includes present and any future government bodies succeeding the commission.
Non-Exclusivity of Franchise
- Franchise is not exclusive; others may be granted similar privileges.
Limitation on Domestic Communication Services
- Franchise does not authorize engagement in domestic communication services in the Philippines.