Law Summary
Location and Installation Standards for Telephone Infrastructure
- All poles and conduits must be located as designated by municipal authorities.
- Structures must not disfigure streets and should adhere to Public Service Commission (PSC)-approved professional standards.
- Poles must maintain cables at least 15 feet above ground.
- When wire pairs reach 25 or more, they must be placed in a cable; more than 800 pairs must be placed underground if ordered by PSC.
Excavation and Restoration Obligations
- The grantee may excavate public places for installation and maintenance, subject to restoration conditions.
- Any disturbed streets or public places must be restored to their original condition to the satisfaction of the municipal mayor.
Temporary Removal and Raising of Wires
- Upon 48-hour notice from the municipal council, the grantee must raise or remove wires/conduits blocking municipal work or building removal.
- The party requesting removal pays one-half of replacement costs.
- Failure to comply permits the mayor, with council approval, to order removal at the grantee's expense.
Maintenance and Service Standards
- Telephone equipment must be modern, first-class, and maintained to ensure efficient service.
- The grantee must comply with PSC directives to update or improve the system based on advances in technology.
Financial and Reporting Requirements
- The grantee shall maintain separate accounts of gross receipts and submit annual reports to the Auditor General and Treasurer.
- The grantee pays taxes on property like other taxpayers.
- Additionally, a 1% gross receipts tax on the telephone business must be paid annually to the Treasury in lieu of all taxes on the franchise and earnings.
Mandatory Application for Certificate of Public Necessity and Convenience
- Within 60 days of approval, the grantee must apply for a certificate of public necessity and convenience from PSC or franchise becomes void.
- No construction or operation may commence without PSC approval via this certificate.
Certificate of Public Necessity and Convenience Conditions
- The PSC issues the certificate after due hearing, imposing conditions on construction, maintenance, operation, and service.
- The grantee must accept terms and deposit a guaranty to start work.
- Failure to begin service within prescribed time (except for force majeure) results in forfeiture of deposit and nullification of certificate.
- Non-acceptance of conditions automatically voids the franchise.
Deposit as Good Faith and Penalties
- A deposit of PHP 1,000 or government bonds covering this amount is required as a performance guarantee.
- Interest on deposits shall accrue to the grantee.
- Failure to start service within 12 months forfeits the deposit to the government as liquidated damages.
- Successful commencement leads to deposit refund upon installation compliance.
Inspection and Reporting of Business Operations
- The grantee’s books and accounts are open to inspection by the provincial auditor.
- Quarterly reports on gross receipts and business status must be submitted to the Auditor General.
Non-Exclusivity of Franchise
- This franchise does not prevent the government or others from granting similar franchises.
- New franchises must ensure that existing poles and cables under this franchise are not impaired.
- PSC may order relocation of poles or wires, with costs borne by new franchise grantees.
Liability and Indemnification
- The grantee indemnifies all government levels against claims arising from accidents or injuries related to telephone system construction or operation.
Regulation of Telephone Rates
- Rates for service, including flat and measured rates, require PSC approval.
- Monthly rates for metallic circuit telephones within the poblacion are also subject to PSC approval.
Transfer Restrictions
- Transfer, sale, or assignment of the franchise requires prior explicit approval of Congress.
Expansion and Additional Facilities
- The grantee may acquire or lease additional telephone stations, lines, cables, or systems as necessary.
- Permission from PSC is required before installing, maintaining, or leasing additional facilities.
Government Use of Poles
- The government may use grantee’s poles without compensation to install certain crossarms and wires.
- Additional government installations may involve payment agreed between Director of Telecommunications and the grantee; disputes resolved by PSC.
- The municipality may use poles for police and fire alarm systems without compensation, provided no interference occurs.
Purchase of Provincial Government Telephone Property
- The grantee shall purchase similar telephone property from the provincial government at agreed price or as determined by PSC as referee.
Government Takeover Provision
- If the government decides to operate the telephone system, the grantee shall surrender the franchise and transfer system equipment at cost minus reasonable depreciation.
Effectivity
- The Act took effect immediately upon approval on June 17, 1961.