Franchise Scope and Operation Rights
- Franchise granted for 50 years to operate telephone and telegraph lines within and between provinces and municipalities of Panay.
- Right to construct necessary infrastructure including poles, wires, cables, conduits, and appliances.
- Poles and conduits must be located as designated by local authorities and maintained in a workmanlike manner.
- Safety provisions for preventing hazards related to electric wires.
- Requirements for relocation or removal of poles and wires upon government resolution, with cost-sharing provisions.
- Authority for appeal to Governor-General on relocation orders.
- Compliance with local electrical work regulations.
- Obligations for underground cables when wire pairs exceed specified limits.
- Placement of infrastructure must not impair transmission efficiency of existing companies.
Construction and Maintenance in Public Places
- Lawful to excavate and lay conduits on public properties under local regulatory orders.
- Obliged to repair and restore disturbed public property to a satisfactory condition.
- Failure to repair allows authorities to repair at grantee's expense.
Operational Standards and Improvements
- Telephone and telegraph systems must be maintained in a modern, first-class style.
- Duty to update and improve systems according to scientific and technological progress.
Accounting and Auditing
- Separate accounts of gross receipts must be kept per municipality.
- Annual submission of accounts to Insular Auditor and Treasurer.
- Audit results are final and conclusive absent fraud or error.
Taxation and Financial Obligations
- Payment of taxes on real estate, buildings, personal property as other entities.
- Additional annual payment as a fixed percentage of gross receipts in lieu of taxes on franchise or earnings.
Performance Bond and Franchise Acceptance
- Deposit of five thousand pesos or approved negotiable securities as guaranty upon franchise acceptance.
- Deposit held at interest; interest payable to grantee.
- Failure to commence operation of at least 200 telephones in Iloilo within 18 months (except for specified causes) results in forfeiture of deposit as liquidated damages.
- Extensions granted for force majeure events.
Inspection Rights
- Books and accounts subject to inspection at any time by Insular Auditor or authorized representatives.
Non-Exclusivity of Franchise
- Franchise is not exclusive; government can grant others similar franchises.
- Subsequent franchises must not impair existing infrastructure efficiency.
- Costs for necessary relocations caused by new franchises borne by newcomers.
Liability and Indemnification
- Grantees hold governments harmless from claims arising from accidents or injuries related to system construction or operation.
Government Use of Infrastructure
- Municipalities may use grantee’s conduits and poles without compensation for police and fire alarm systems.
- Usage must not interfere with grantee’s message transmission efficiency.
Construction and Operation Deadlines and Conditions
- Written acceptance filed within 90 days after bid acceptance.
- Construction of telephone system to begin within 6 months; fully operational with 200 telephones in Iloilo within 18 months.
- Failure to comply may cause franchise forfeiture unless due to force majeure.
Rate Regulation and Maximum Charges
- Maximum flat monthly rates set for various subscriber types (non-residence, residence, party lines).
- No requirement for subscribers to purchase instruments or pay installation deposits.
- Rates subject to regulatory approval ensuring reasonable return on investment.
Transfer and Assignment of Franchise
- Franchise may be sold or assigned only to corporations under Philippine or U.S. laws with Governor-General approval.
- Transferees subject to all franchise terms and conditions.
Franchise Amendments, Stock Issuance, and Property Rights
- Franchise subject to amendment or repeal by U.S. Congress.
- Stock or bonds issuable only for cash or fair valued property; no stock or bond dividends allowed.
- Private property cannot be taken without just compensation.
- Land rights revert to government upon franchise termination or revocation.
- Incorporated terms from Act of Congress relating to franchise grants apply fully.
Bidder Guarantees and Implementation
- Bidders must submit certified check as good faith guarantee.
- Act in effect upon passage.