Law Summary
Manner of Operations of Stations or Facilities
- Stations/facilities must minimize interference with existing or future stations.
- Grantee retains right to use assigned frequencies without diminishing transmission or reception quality.
Authority of the National Telecommunications Commission (NTC)
- Grantee must secure a Certificate of Public Convenience and Necessity or appropriate permits from NTC.
- NTC regulates conditions on construction, operation, maintenance, and service levels.
- Usage of radio frequencies requires NTC authorization.
- NTC is mandated to not unreasonably withhold or delay approvals.
Excavation and Restoration Works
- Grantee may excavate public areas for poles, wires, or conduits with prior approval of DPWH or relevant LGU.
- Responsible for repairing public infrastructure in a workmanlike manner following disturbance.
- Failure to repair after 10-day notice results in DPWH/LGU repairing at grantee’s expense, double the cost.
Responsibility to the Public
- Prohibition on use of facilities for obscene transmissions, false information, or subversive acts.
- Requirement to maintain and operate telecommunications systems satisfactorily and upgrade as technology advances.
- Obligation to improve and extend services, especially to unserved and disaster-prone areas.
- Compliance with the Free Mobile Disaster Alerts Act (RA 10639).
Rates of Services
- Charges/rates for telecommunications are subject to NTC approval.
- Exception for future classified nonregulated services.
Rights of the Government
- Radio spectrum is a state-owned finite national patrimony.
- The President may temporarily take over or suspend operations of facilities during emergencies.
- Such usage by government agencies requires compensation to the grantee.
Term of Franchise
- Franchise validity is 25 years from August 9, 2021.
- Automatic revocation if operations cease continuously for 2 years.
Right of Interconnection
- Grantee authorized to connect with other telecommunications systems to improve service.
- Interconnection terms subject to mutual agreement and NTC review.
Mobile Number Portability (MNP)
- Grantee must provide MNP and interconnect with others.
- Prohibited from installing features that impede nationwide MNP.
- NTC to issue implementing rules and regulations.
Tax Provisions
- Grantee liable for real estate, building, and personal property taxes, except for telecommunications equipment exempted from customs duties and taxes.
- Required to pay VAT on gross receipts from the franchise business.
- Exempt from all other local and national taxes except income tax.
Warranty in Favor of the Government
- Grantee holds government harmless from claims arising from accidents during construction or operation.
Sale, Transfer, or Assignment of Franchise
- Prohibits sale, lease, transfer, or assignment without prior Congressional approval.
- Must inform Congress within 60 days after any transaction.
- Failure to report results in automatic revocation.
- New owners subject to existing franchise conditions.
Dispersal of Ownership
- Public utilities offering at least 30% of capital stock in Philippine stock exchanges within 5 years.
- Alternative methods allowed if public offering is not applicable.
- Noncompliance causes ipso facto revocation.
Contracting with Telecommunications Entities
- Grantee may contract with expert entities for installation and operation, subject to NTC approval.
Employment Commitments
- Obligation to create jobs and accept trainees prioritizing local residents.
- Compliance with labor laws required.
- Employment reflected in annual SEC General Information Sheet.
Annual Reportorial Requirements
- Annual report to Congress on franchise compliance and operations by April 30 each year.
- Must include operational updates, financial statements, NTC certifications, ownership info.
- Certificate of compliance required before NTC permits issued.
Penalties for Noncompliance
- Failure to submit reports fined P1,000,000 per working day after effectivity.
- Interim fine is P500 per working day before applicability.
- Fines collected by NTC and remitted to Bureau of Treasury.
Equality Clause
- Other franchises’ advantages/favors to be extended to this grantee except territorial coverage, term, or service type.
Applicability Clause
- Franchise subject to Philippine corporation laws.
Repealability and Nonexclusivity
- Franchise may be amended, altered or revoked by Congress as public interest demands.
- Not an exclusive privilege.
Separability Clause
- Invalidity of any provision does not affect validity of remaining provisions.
Repealing Clause
- Conflicting laws, rules, orders are repealed, amended, or modified accordingly.
Effectivity
- Act takes effect 15 days after publication in Official Gazette or newspaper of general circulation.