Infrastructure Installation and Location
- Poles and conduits must be located as designated by local authorities.
- Poles must conform to aesthetic and safety standards approved by the Public Service Commission (PSC).
- Wires must maintain a minimum height of 15 feet above ground.
- When the number of wire pairs reaches specified thresholds (25 or 800), wires must be cabled or placed underground upon PSC order.
Excavation and Public Property Restoration
- Grantee may excavate public places for poles and conduits installation.
- Disturbed public property must be restored to prior condition to the satisfaction of local engineers.
Relocation of Poles and Wires upon Notice
- Grantee must raise or remove wires and poles obstructing public works or building removal upon 48-hour notice.
- Costs of replacement shared between grantee and requesting party.
- Failure to comply may result in local government ordering removal at grantee’s expense.
Quality and Maintenance of Service
- All apparatus must be modern and first class.
- Telephone lines and installations must be maintained efficiently.
- Grantee required to modify and improve the system as dictated by scientific progress and PSC requirements.
Financial Accounting and Reporting
- Grantee to keep separate accounts of gross receipts.
- Annual submission of accounts to Auditor General and Treasurer of the Philippines by July 31.
Franchise Tax
- A 5% franchise tax on gross earnings: 3% to National Government, 2% to local government where the franchise operates.
Public Service Commission Certificate Requirement
- Grantee must apply for a certificate of public necessity and convenience (CPC) within 60 days.
- No construction or operation without CPC approval under terms of Commonwealth Act No. 146.
- The PSC may impose conditions on construction, equipment, service, and operation.
- Failure to comply may render the franchise void and forfeiture of deposits.
Good Faith Deposit and Penalties
- Deposit of P1,000 or equivalent securities required upon acceptance of franchise terms.
- Deposit acts as guarantee to commence operation within 12 months after CPC approval.
- Failure to operate timely (except due to force majeure or equivalent causes) results in forfeiture of deposit as liquidated damages.
- Deposit returned upon compliance and service installation.
Inspection and Quarterly Reporting
- Books and accounts open for inspection by local auditors.
- Quarterly reports of gross and net receipts and business condition to be submitted to the Auditor General.
Non-Exclusivity of Franchise
- Franchise is non-exclusive; other entities may be licensed for similar services.
- Infrastructure placement by subsequent franchises must not impair existing service.
- PSC may order relocation of poles or wires with cost-sharing provisions.
Indemnification
- Grantee must hold government entities harmless from claims arising from accidents or injuries caused by the telephone system’s construction or operation.
Regulation of Rates
- Telephone service rates, including flat and measured rates, require PSC approval.
- Rates for services within poblacion limits also subject to PSC approval.
Transfer and Assignment Restrictions
- Franchise cannot be transferred, sold, or assigned without prior explicit Congressional approval.
- Mortgaging the franchise to government-controlled financial institutions is permitted for business expansion.
Additional Installation and Leasing
- Grantee may install or acquire additional telephone facilities as necessary.
- Such activities require prior PSC permission.
Government Use of Infrastructure
- Philippine Government permitted to use one crossarm on grantee’s poles without compensation for telegraph wires.
- Additional crossarms require negotiated rental payments subject to PSC arbitration.
- Pangasinan provincial government allowed to use poles for police and fire alarm lines without compensation, ensuring no interference.
Government Option to Take Over
- If government opts to operate the system, grantee must relinquish the franchise.
- System and equipment to be transferred at cost minus reasonable depreciation.
Supersession of Previous Franchise
- This franchise supersedes any prior franchise granted by the municipal council of San Carlos.
Effectivity
- Law takes effect upon approval on June 19, 1971.