Operation of Stations or Facilities
- Stations/facilities must minimize interference with existing or new stations.
- Grantee retains right to use selected frequencies without diminishing transmission quality.
Authority of the National Telecommunications Commission (NTC)
- Grantee must secure certificate of public convenience and necessity (CPCN) or appropriate permits from NTC.
- NTC may impose conditions on construction, operation, maintenance, and service levels.
- Use of radio frequencies requires NTC authorization.
- NTC must not unreasonably delay or withhold permit issuance.
Ingress and Egress Rights
- Grantee may, with DPWH approval, make excavations or lay conduits in public places for poles or underground wiring.
- Disturbed public property must be repaired per DPWH standards.
- DPWH can repair disruptions at double expense to grantee if repairs are not made within 10 days.
Responsibility to the Public
- Grantee must adhere to ethics; prohibited from obscene or false transmissions or aiding subversive acts.
- Must provide telephone services without discrimination, limited by capacity.
- Required to expand capacity if demand exceeds existing infrastructure unless expenses are borne by applicants.
- Stations and equipment must be maintained and updated with technological advances.
Rates for Services
- Charges for regulated telecommunications services require NTC approval.
- Rates must be unbundled and ensure regulated services do not subsidize unregulated ones.
Rights of Government
- President can take over or suspend use of grantee’s facilities during emergencies, with due compensation.
- Radio spectrum is a state resource and may be withdrawn with due process.
Term of Franchise
- Franchise valid for 25 years from effectivity unless revoked.
- Grounds for ipso facto revocation include failure to commence operations within 3 years of permit approval, continuous non-operation for 2 years, or failure to commence within 5 years of Act effectivity.
Acceptance and Compliance
- Grantee must accept franchise in writing within 60 days or franchise becomes void.
- Exercise of privileges follows acceptance.
Bond Requirement
- Grantee must file a bond with NTC to guarantee compliance with franchise conditions.
- Bond canceled after 5 years if conditions fulfilled; otherwise forfeited and franchise revoked.
Right of Interconnection
- Authorized to connect telecommunications systems with other authorized providers.
- Terms subject to mutual agreement and NTC review.
Tax Provisions
- Grantee subject to all applicable taxes under NIRC except pre-existing exemptions.
- Required to file tax returns locally and subject to BIR audit.
- Telecommunications franchises share tax benefits granted by law.
Gross Receipts Reporting
- Separate accounts of gross receipts to be kept.
- Annual account submissions to COA and National Treasury by January 31 each year.
Books and Accounts Inspection
- Books open to COA inspection.
- Quarterly reports on gross receipts, net profits, and business condition must be submitted in duplicate.
Warranty in Favor of Governments
- Grantee holds all government levels harmless from claims arising from operation or construction-related accidents or injuries.
Restrictions on Franchise Transfer
- Franchise or controlling interest cannot be leased, sold, transferred, assigned, merged without Congress approval.
- Successors subject to same franchise conditions.
Ownership Dispersal
- At least 30% of outstanding capital stock must be offered on Philippine securities exchange within 5 years of operations.
- Noncompliance results in automatic revocation.
Equality Clause
- Advantages and privileges granted under existing or future telecommunications franchises are immediately extended to this franchise.
- Excludes territory, lifespan, and type of service provisions.
Separability Clause
- Invalid provisions do not affect the validity of other provisions.
Repealability and Nonexclusivity
- Congress may amend, alter or repeal franchise when public interest requires.
- Franchise is nonexclusive.
Reportorial Requirements
- Grantee to submit annual report on franchise compliance and operations to Congress within 60 days after year-end.
Renewal and Extension of Franchise
- Franchise term renewed for another 25 years from expiration.
- Failure to operate continuously for 2 years results in ipso facto revocation.
Effectivity
- Act takes effect 15 days after publication in two newspapers upon grantee initiative.