Franchise for PANTELCO II to Operate Telecom Services

Stations and facilities must minimize interference on wavelengths or frequencies with existing or lawful stations without compromising quality.
Operator power must correspond only to the coverage area authorized.

The grantee must secure a certificate of public convenience and necessity and other appropriate permits from the NTC.
NTC has authority to regulate construction, operation, and service levels of telecommunications systems.
Using frequencies requires prior NTC authorization.
Certification specifies service areas and commencement date.
The NTC shall not unreasonably delay issuance of permits.

The grantee must adhere to honest enterprise ethics and avoid obscene or indecent transmissions or dissemination of false information.
Provide non-discriminatory basic/enhanced telephone services within approved service areas and in order of applications received.
Capacity must be expanded promptly to meet demand except if demand is below the minimum viable exchange, where the applicant may bear installation expenses.
Facilities must be operated and maintained satisfactorily and updated with technological advances.

Rates for regulated telecommunications services require NTC approval.
Rates must be unbundled and distinct among services and not subsidize unregulated services.

The President of the Philippines may temporarily take over or suspend operation of the grantee’s facilities in times of war, rebellion, emergency, calamity, or public safety concerns with due compensation.
Radio spectrum use is a privilege and national patrimony and may be withdrawn after due process.

Franchise term is 25 years from effectivity unless revoked or cancelled.
Franchise revocation occurs if the grantee fails to commence operation within 3 years from NTC approval, operate continuously for 2 years, or commence operation within 5 years from the act's effectivity.

The grantee must accept the franchise in writing within 60 days from the act's effectivity.
Failure to accept renders the franchise void.

A compliance bond is required by the NTC to guarantee fulfillment of franchise conditions.
The bond is cancelable after 5 years if conditions are met; otherwise, it may be forfeited and franchise revoked.

The grantee may connect or demand connection of its telecommunications systems to other authorized systems on mutually agreed terms, subject to NTC review.

The grantee is subject to all applicable taxes, duties, and fees under the National Internal Revenue Code and other laws.
Existing specific tax exemptions or incentives remain unaffected.
Tax returns are filed with relevant local revenue offices and are subject to Bureau of Internal Revenue audit.

The grantee must maintain separate accounts of gross receipts.
Annual reports of receipts must be submitted to the Commission on Audit and the National Treasury by January 31 annually.

Books and accounts must be open to inspection by the Commission on Audit.
Quarterly reports on gross receipts, net profits, and business conditions must be submitted to COA.

The grantee shall hold national and local governments harmless from claims arising from accidents or injuries due to its operations.

The franchise or its rights may not be leased, transferred, sold, assigned, or merged without prior Congressional approval.
Any successor entity is subject to the same franchise terms.

At least 30% of the grantee’s outstanding capital stock must be offered to the public in a Philippine securities exchange within 10 years from operations start.
Noncompliance results in ipso facto revocation.

All advantages, privileges, or exemptions granted under existing or future telecom franchises automatically extend to the grantee, except those affecting territorial coverage, franchise duration, or authorized service type.

Invalidity of any section or provision does not affect the validity of the rest of the Act.

The grantee must submit an annual compliance and operations report to Congress within 60 days after year-end.

The Act takes effect 15 days after publication in at least two newspapers of general circulation initiated by the grantee.