Extension of franchise for telecommunications

The franchise originally granted under Republic Act No. 3259 is extended for an additional twenty-five (25) years beyond its expiration on August 9, 1996.

The grantee must secure a certificate from the National Telecommunications Commission (NTC) or its successor before starting construction or exercising franchise privileges.
The NTC will issue such certificate only after due hearing and upon finding the proposed operations necessary and proper for public convenience.
The Commission has authority to impose conditions relating to construction, equipment, maintenance, services, or operations.

All rates for telecommunications services offered by the grantee are subject to NTC approval.

To democratize ownership, the grantee must offer at least thirty percent (30%) of its common stock to the public within three years from the enactment of the law.
No single person or entity may own more than five percent (5%) of these stocks.

The grantee must obtain proper permits and licenses from the NTC for its stations.
Use of radio frequencies requires prior authorization from the Commission.
The station operations must minimize interference with other stations while maintaining transmission quality.

The grantee must maintain its systems in a satisfactory manner at all times.
Upon NTC request, the grantee must modify or improve systems to keep pace with technological progress.

The grantee must hold the government harmless from all claims arising from accidents or injuries caused by its operations.

The President may temporarily take over or authorize government use of the grantee’s transmitting, receiving, and switching stations during war, rebellion, public peril, calamity, or disturbances.
Compensation must be given to the grantee for such temporary use.

The grantee is required to keep and submit an account of gross receipts annually to the Commissioner of Audit and the Treasurer.
The accounts are subject to official inspection, audit, and approval, which shall be conclusive evidence of gross receipts.
The grantee may appeal the audit findings to the courts as prescribed by law.

The grantee shall pay property taxes on real and personal property like other taxpayers.
Additionally, it shall pay a franchise tax equal to three percent (3%) of all gross receipts from telephone and telecommunications business under the franchise.
This franchise tax is in lieu of all other taxes on the franchise except income taxes under existing laws.
The grantee must file tax returns and submit detailed annual reports on operations, accounts, and compliance to Congress.

The NTC may authorize another qualified operator to temporarily maintain the grantee’s telecommunications services if the franchise is suspended or revoked.
Such authorization is conditional and does not equate to a new certificate of public convenience and necessity.

The NTC can mandate the grantee to allow interconnection with other authorized telecommunications operators.
The terms of interconnection shall be reasonable and promote public interest.

The grantee must continuously operate and maintain all stations, lines, cables, and equipment in a satisfactory manner.
The grantee must upgrade equipment and services to conform with advancements in science and technology, as required by the NTC.

The grantee and its successors or assigns shall be subject to Philippine corporation laws.

The grantee cannot lease, transfer, sell, assign, or merge the franchise or related rights without prior Congressional approval.
Any entity acquiring the franchise assumes all rights, duties, and conditions of the original grantee.

The franchise is not exclusive and does not prevent the grant of similar privileges to other entities.

The grantee must formally accept the franchise and its terms within sixty (60) days of enactment.
Failure to accept within the prescribed period renders the franchise null and void.
Future telecommunications policy laws enacted by Congress shall apply to the grantee.

Provisions of Republic Act No. 3259 inconsistent with this law are repealed.
Congress retains the power to amend, alter, or repeal the franchise in the interest of the common good.

The law takes effect fifteen (15) days after its publication in two newspapers of general circulation in the Philippines.