Law Summary
Operation and Interference Standards
- Stations and facilities must be operated so as to cause minimum interference to existing or future stations.
- The Grantee retains full privilege to use assigned frequencies without diminishing transmission or reception quality.
Regulation by the National Telecommunications Commission (NTC)
- The Grantee must secure a Certificate of Public Convenience and Necessity and other permits from the NTC before construction and operation.
- NTC can regulate construction, operation, maintenance, and service standards.
- Frequency use requires NTC authorization.
- NTC has power to revoke or suspend permits for violations after due process.
- NTC may recommend franchise revocation to Congress for violations.
Excavation and Restoration Requirements
- Grantee may perform excavations for poles or underground wires with DPWH or LGU prior approval.
- Disturbed public places must be repaired in a workmanlike manner following DPWH or LGU standards.
- Failure to repair after 10-day notice allows DPWH or LGU to conduct repairs at twice the cost charged to Grantee.
Duties and Responsibilities to the Public
- The Grantee must adhere to ethical standards prohibiting obscene or false transmissions.
- Stations and equipment must be operated and maintained satisfactorily, incorporating technology advances when feasible.
- Service coverage must be expanded, especially in underserved and disaster-prone areas.
- Compliance with the Free Mobile Disaster Alerts Act (RA 10639) is required through equipment and service upgrades.
Regulation of Service Rates
- Charges for telecommunications services (except nonregulated services) are subject to NTC approval.
- Rates must be unbundled and designed so regulated services do not subsidize unregulated services.
Government's Rights Over Radio Spectrum
- Radio spectrum is a national patrimony and use is a State-conferred privilege subject to withdrawal after due process.
- The President may temporarily take over, suspend, or authorize government use of Grantee’s facilities during emergencies with just compensation.
Franchise Term and Conditions for Revocation
- Franchise lasts 25 years unless revoked or cancelled earlier.
- Ipso facto revocation occurs if the Grantee fails to commence operations within 3 years after NTC permit approval, within 5 years after the Act's effectivity, or to operate continuously for 2 years.
Bond Requirement
- A bond determined by NTC must be filed as guarantee for franchise compliance.
- The bond is released after 3 years if obligations are fulfilled, else forfeited and franchise revoked.
Interconnection Rights
- Grantee is authorized to connect or demand interconnection with other authorized telecommunications systems.
- Interconnection terms are subject to NTC review and modification.
Liability and Warranty to Government
- The Grantee indemnifies national and local governments from claims arising from accidents during construction or operation.
Restrictions on Transfer and Assignment
- Selling, leasing, transferring, granting usufruct, or assigning the franchise or controlling interest requires prior congressional approval.
- Failure to report ownership changes within 60 days renders the franchise revoked.
- New owners assume all franchise terms and conditions.
Public Ownership and Dispersal Requirements
- At least 30% of outstanding capital stock must be offered to Filipino citizens in any Philippine securities exchange within 5 years.
- Where public offering is not applicable, alternative methods to encourage Filipino participation must be implemented.
- Noncompliance leads to ipso facto revocation.
Employment and Labor Commitments
- The Grantee shall create employment opportunities and accept on-the-job trainees, prioritizing residents near its principal office.
- Compliance with labor laws and standards is required.
- Employment data must be reflected in the annual General Information Sheet submitted to the SEC.
Annual Reportorial Requirements
- Annual reports on compliance and operations must be submitted to Congress by April 30 each year.
- Reports include activity updates, financial statements, GIS, NTC certifications, and ownership dispersal updates.
- A compliance certificate from Congress is required before NTC can accept permit applications.
Penalties for Reportorial Noncompliance
- Failure to submit annual report results in a fine of PHP 1,000,000 per working day after applicability to other grantees.
- In the interim, the fine is PHP 500 per working day payable to NTC.
- Fines are separate from other penalties and remitted to Bureau of Treasury.
Equality Clause
- Any advantage or privilege granted to other telecommunications franchises upon congressional approval automatically extends to the Grantee.
- Does not affect franchise territory, duration, or authorized service type.
Amendment and Nonexclusivity of Franchise
- The franchise may be amended, altered, or repealed by Congress when public interest requires.
- The franchise is not exclusive.
Separability Clause
- Invalidity of any section does not affect other provisions, which remain effective.
Repealing Clause
- Inconsistent laws, rules, or regulations are repealed, amended, or modified accordingly.
Effectivity
- The Act takes effect 15 days after publication in the Official Gazette or a newspaper of general circulation.