Philippine Long Distance Telephone Co. Franchise

PLDT may install and operate radio-telephone equipment for economical communication along the franchise routes and internationally.
Location and operation require prior approval of the Governor-General.
The Secretary of Commerce and Communications supervises and regulates such installations.
This authority does not permit broadcasting commercial messages or transmitting facsimile/radio-telegraphic messages for hire.

PLDT must supply telephone service within 30 days to applicants within municipalities served by local exchanges, prioritizing by order of application.
Capacity limits are determined by the Public Service Commission; PLDT must expand capacity if demand increases.
If service point is more than 50 meters from local lines, applicants must pay the cost of connecting poles and wires.
The Public Service Commission can extend the service provision deadline in such cases.

With approval, PLDT may make excavations and lay conduits in public roads, streets, alleys, sidewalks, bridges.
Any disturbed public property must be restored in a workmanlike manner to the satisfaction of the Secretary of Commerce and Communications.
Failure to repair within 10 days permits the Secretary to order repairs at PLDT’s expense.

PLDT must maintain systems in a satisfactory manner at all times.
Required to modify, improve, and upgrade systems as necessitated by technological advances, upon Public Service Commission’s directive.

PLDT must keep separate accounts of gross receipts per municipality.
Annual submission of such accounts to the Insular Auditor and Treasurer is mandatory by July 31 each year.

PLDT pays the same taxes on its real and personal property as other entities.
Additionally, it pays 1% of gross receipts from telephone and electrical transmission business annually to the Insular Treasurer.
This 1% payment is in lieu of taxes on the franchise and its earnings.

Construction under this franchise requires a CPNC from the Public Service Commission.
No exercise of franchise privileges allowed without the CPNC.
The Commission may impose construction, maintenance, service, and operation conditions.
Failure to comply with CPNC conditions may result in certificate nullification or fines up to PHP 5,000.
Grantee must accept terms in writing and provide a deposit as guarantee.

Deposit of at least PHP 1,000 per CPNC, or approved securities, required to guarantee timely commencement and completion of work.
Deposit returned upon successful work completion as certified by the Public Service Commission.

PLDT must accept the franchise in writing within 40 days after approval, or franchise is void.
Must apply for CPNC for Manila-Baguio line within 6 months; begin construction within 6 months after CPNC issuance.
Service must start within 12 months, barring force majeure; deposit of PHP 25,000 due as additional guarantee.

Failure to start service or be operational within 12 months (except for force majeure) results in forfeiture of deposits as liquidated damages.
Time lost due to force majeure is added to the compliance periods.

Books and accounts subject to inspection by district auditors.
Quarterly reports of gross and net receipts, and general business condition, must be submitted to the Insular Auditor.

Franchise rights are non-exclusive.
Other franchises may be granted, but their infrastructure must not impair PLDT's transmission efficiency.
Public Service Commission may order removal or relocation of poles and wires, with relocation costs borne by the subsequent franchisee.

PLDT holds government entities harmless against claims arising from accidents or injuries caused by telephone system construction or operation.

Telephone service rates, both flat and measured, are subject to Public Service Commission approval.
Rates for metallic circuit telephones within municipal poblacions must also be approved.

Franchise may not be assigned, sold, or transferred without explicit approval of the Philippine Legislature.

PLDT may install, operate, purchase, or lease telephone stations, lines, cables necessary for franchise purposes with prior Public Service Commission permission.

Government may use poles to attach telegraph crossarms without compensation.
Additional crossarms require compensation, rate agreed upon or determined by Public Service Commission.
Municipalities may attach one standard crossarm for local police/fire alarm systems without compensation, provided no interference occurs.

Stock or bonds issued under the franchise must be exchanged for actual cash or fair-valued property.

Franchise is subject to amendment or repeal by U.S. Congress as per historical Acts.
Upon termination, lands and rights revert to the original government owners.

Municipalities are not required to connect to long distance lines without approval by their municipal council or provincial board.

Franchise does not authorize sending or receiving of radio-telegraphic messages for hire.

The term "grantee" includes the Philippine Long Distance Telephone Company, its representatives, successors, or assigns.