Quality and Maintenance of Facilities
- All equipment used must be modern and of first-class quality.
- Telephone lines and installations must be kept in satisfactory condition at all times.
- The company must comply with requirements from the National Telecommunications Commission to modify, improve, or upgrade its system based on technological advancements.
Financial Transparency and Auditing
- The grantee must keep separate accounts of gross receipts related to its telecommunications business.
- Annual financial reports must be submitted by July 31 each year to the Commission on Audit and the Treasurer of the Philippines.
- Books and accounts are subject to official inspection and audit; audit results are final, though appeal to courts is allowed.
Tax Obligations
- The grantee must pay property and personal taxes as other entities do.
- Additionally, it is required to pay 3% of gross receipts from regulated telecommunications services to the Bureau of Internal Revenue annually.
- Tax returns filed must comply with the National Internal Revenue Code and are subject to audit.
Filing for Certificate of Public Necessity and Convenience (CPC)
- The grantee must apply for the CPC within six months from the law’s effectivity.
- Failure to apply within this period renders the franchise null and void.
Compliance with Public Ownership Laws
- The grantee must adhere to provisions on public ownership or stock sales under any future general telecommunications laws enacted by Congress.
Acceptance of Franchise and Bond Requirements
- Written acceptance must be given to the Secretary of Transportation and Communications within 60 days of the law’s effectivity.
- The grantee must deposit Php 100,000 and file a Php 1 million bond with the National Treasurer upon granting of the first CPC.
- Failure to commence business within two years (except for force majeure) results in forfeiture of the deposit.
- Deposit will be returned and bond released within six months after starting service.
Duration and Revocation of Franchise
- Franchise is valid for 25 years from effectivity unless revoked or cancelled earlier.
- If the company fails to operate continuously for two years or fails to start within two years from CPC approval, the franchise is automatically revoked.
Indemnification
- The grantee must hold the national and local governments harmless from claims arising from accidents or injuries related to the construction or operation of their facilities.
Regulation of Rates and Charges
- Telephone and service rates under this franchise require prior approval from the National Telecommunications Commission.
Restriction on Transfer and Assignment
- Transfer, sale, or assignment of the franchise requires prior approval from Congress.
- Controlling interest in the company cannot be transferred, fully or partially, within five years from the law’s effectivity.
Non-exclusivity of Franchise
- The franchise granted is non-exclusive; Congress may grant similar rights to other entities.
Congressional Oversight
- The franchise is subject to amendment, alteration, or repeal by Congress when public interest requires.
Repeal of Previous Law
- Republic Act No. 652 is repealed, modified, or superseded upon the effectivity of this law.
Effectivity
- The law takes effect 15 days after its publication in at least two newspapers of general circulation.