Franchise amendment and basic authority
- The franchise of Express Telecommunications Co. Inc. (formerly “Felix Alberto and Company, Incorporated”) granted under Republic Act No. 2090 is amended and governs the grantee’s operations.
- The franchise authorizes the grantee, its successors, or assigns to construct, install, establish, operate and maintain for commercial purposes and in the public interest, throughout the Philippines and between the Philippines and other countries and territories:
- wire and/or wireless telecommunications systems, including mobile, cellular, paging, fiber optics, MMDS, LMDS, satellite transmit and receive systems, switches, and their value-added services; and
- transmission of voice, data facsimile, control signs, audio and video, information services bureau, and all other telecommunications systems technologies available now or made available through technological advances.
- The franchise also authorizes the grantee to construct, acquire, lease and operate or manage transmitting and receiving stations, lines, cables, systems, and all other types of facilities and structures convenient or essential to carry out the franchise purpose.
- Franchise operations remain subject to the Constitution and applicable laws, rules, and regulations.
Manner of operation and regulator powers
- Stations and facilities must be constructed and operated to result in minimum interference on wavelengths or frequencies of existing stations or stations established by law, without diminishing the grantee’s right to use its selected frequencies and without sacrificing transmission or reception quality.
- The grantee must maximize the rendition of its services and/or their availability through proper station and equipment operation.
- The grantee must secure from the National Telecommunications Commission (NTC):
- a certificate of public convenience and necessity or
- the appropriate permits and licenses
as may be required by law for the construction, installation, and operation of its telecommunications systems/facilities.
- The NTC may impose conditions related to construction, operation, maintenance, or service level, and regulates construction and operation of the telecommunications systems.
- The grantee must not use any frequency in the radio spectrum without authorization from the NTC.
- The NTC must not unreasonably withhold or delay issuance of the needed authority, permits, or licenses, and the certificate must state the areas covered and the date the grantee shall commence service.
Public infrastructure access and repairs
- With prior approval of the Department of Public Works and Highways (DPWH), the grantee may:
- make excavations or
- lay conduits in public places, highways, streets, lanes, alleys, avenues, sidewalks, or bridges in relevant provinces, cities, and/or municipalities
for erecting and maintaining poles or supports and for laying and maintaining underground wires/cables/conductors.
- Any public place, highway, street, lane, alley, avenue, sidewalk, or bridge disturbed, altered, or changed must be repaired and replaced by the grantee in a workmanlike manner according to DPWH standards.
- If the grantee fails, refuses, or neglects to repair or replace after ten (10) days written notice from the DPWH, the DPWH may repair and restore the affected property and charge the grantee at double the expense.
Service obligations and operating standards
- The grantee must provide basic or enhanced telephone service in any municipality within the coverage of an approved certificate for basic and/or enhanced local exchange service.
- Service must be provided without discrimination to applicants in the order of the date of their applications, up to the capacity of the local telephone exchange.
- If demand increases beyond the exchange capacity, the grantee must increase capacity to meet demand.
- The grantee is not obliged to furnish service if the total demand for expansion is less than the smallest viable local exchange available in the market as determined by the NTC; in that case, the applicant must defray the actual expenses for installation of the necessary telecommunications apparatus.
- The NTC may extend the time within which the grantee must furnish service where the applicant defrays the actual installation expenses.
- The grantee must operate and maintain all stations, lines, cables, systems, and equipment for transmission and reception of messages, signals, and pulses in a satisfactory manner at all times.
- As far as economical and practicable, the grantee must modify, improve, or change its stations, lines, cables, systems, and equipment to keep abreast of advances in science and technology.
Rates, interconnection, and records
- Charges and rates for telecommunications services are subject to NTC approval for regulated services, including flat rates or measured rates or variations, and the NTC approves rates for telecommunications services except those later declared or considered nonregulated.
- Regulated services must not subsidize unregulated services.
- Rates must be unbundled, separable, and distinct among the services offered.
- The grantee is authorized to connect or demand connection of its telecommunications systems with any other duly authorized telecommunications system in the Philippines to provide extended and improved services to the public.
- Interconnection terms and conditions must be mutually agreed, and interconnection arrangements are subject to NTC review and modification.
- The grantee must keep a separate account of gross receipts and must furnish the same to the Commission on Audit and the National Treasury not later than January 31 of each year for the preceding twelve (12) months.
- The grantee must keep its books and accounts open to inspection by the Commissioner on Audit or authorized representatives.
- The grantee must submit to the Commission on Audit two (2) copies of quarterly reports on gross receipts, net profits, and the general condition of the business.
Government protection and liability safeguards
- The President of the Philippines has a special right, in times of war, rebellion, public peril, calamity, emergency, disaster, or disturbance of peace and order, to:
- temporarily take over and operate the grantee’s stations/transmitter/facilities/equipment, or
- temporarily suspend any station/transmitter/facility/equipment for public safety, security, and public welfare, or
- authorize temporary use and operation by any government agency,
upon due compensation to the grantee for use during the period of operation.
- The franchise recognizes that the radio spectrum is a finite resource part of national patrimony, and use is a privilege conferred by the State that may be withdrawn anytime after due process.
- The grantee must hold the national, provincial, city, and municipal governments harmless from claims, accounts, demands, or actions arising from accidents or injuries to property or persons directly caused by the grantee’s construction or operation of its stations, transmitters, facilities, and equipment.
Bond, ownership rules, and franchise limitations
- The grantee must file a bond issued in favor of the NTC, and the NTC determines the amount to guarantee compliance and fulfillment of franchise conditions.
- If, after five (5) years from the date of approval of the grantee’s permit by the NTC, the grantee has fulfilled the conditions, the NTC cancels the bond.
- If the grantee fails to fulfill the conditions after five (5) years, the bond is forfeited in favor of the government.
- The franchise is nontransferable without the prior approval of the Congress of the Philippines:
- The grantee may not lease, transfer, grant usufruct of, sell, or assign the franchise or rights/privileges acquired;
- The grantee may not merge with any other corporation or entity; and
- The controlling interest may not be transferred, whether as a whole or in parts and whether simultaneously or contemporaneously.
- Any person or entity to which the franchise is validly sold, transferred, or assigned becomes subject to the same conditions, terms, restrictions, and limitations of the Act.
- The grantee must offer at least thirty percentum (30%) of its outstanding capital stock, or a higher percentage if later required by law, in any securities exchange in the Philippines within five (5) years from the commencement of operations.
- The equality clause ensures that any advantage, favor, privilege, exemption, or immunity granted under existing telecommunications franchises issued prior to the Act, or granted after the Act, becomes part of this franchise and must be accorded immediately and unconditionally—except franchise provisions concerning territory covered, life span of the franchise, or type of service authorized.
Reporting, separability, and amendment/repeal
- The grantee must submit an annual report to the Congress of the Philippines on compliance with franchise terms and on operations within sixty (60) days from the end of every year.
- If any section or provision of the Act is held invalid, the remaining provisions not affected remain valid under the separability clause.
- Congress may amend, alter, or repeal the franchise when public interest requires, and the franchise is not interpreted as an exclusive grant of the privileges provided.
Renewal term, continuity condition, and effect of acceptance
- The franchise term is twenty-five (25) years from the date of effectivity of Republic Act No. 9714.
- The franchise is deemed ipso facto revoked if the grantee fails to operate continuously for two (2) years.
- The amendment and renewal/extension are binding upon written acceptance given within sixty (60) days from the date of effectivity of the Act.
Repeals and inconsistencies
- All laws, decrees, orders, resolutions, instructions and rules and regulations, or parts thereof, inconsistent with Republic Act No. 9714 are repealed or modified accordingly.