Operation of Stations and Facilities
- Grantee's stations/facilities must minimize interference with existing and lawful stations.
- Full right to use selected wavelengths/frequencies with quality transmission/reception preserved.
Regulation and Licensing by National Telecommunications Commission (NTC)
- Grantee must secure certificate of public convenience and necessity 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 withhold or delay permits.
Ingress and Egress for Infrastructure
- Grantee authorized to excavate and install infrastructure in public places upon prior approval by the Department of Public Works and Highways (DPWH).
- Any disturbance to public property must be repaired to DPWH standards.
- Failure to repair permits DPWH to do repairs at double expense charged to grantee.
Responsibilities to the Public
- Grantee must operate with honesty, avoid obscene or false transmissions, and not assist subversive acts.
- Must provide telephone service without discrimination where certified by NTC, in order of applications.
- Capacity must be increased to meet demand unless economically unfeasible, in which case user may be required to defray costs.
- Facilities must be well maintained and technologically updated.
Regulation of Rates
- Rates for telecommunications services, except non-regulated ones, require NTC approval.
- Rates shall be unbundled and distinct by service.
- Regulated services must not subsidize unregulated ones.
Government Rights
- The President may temporarily take over stations or suspend operations in emergencies, with due compensation.
- Use of radio spectrum is a state-granted privilege and may be withdrawn after due process.
Term and Revocation of Franchise
- Franchise valid for 25 years from effectivity unless revoked.
- Franchise revoked if operations not commenced within 3 years of permit, fail to operate continuously for 2 years, or do not start within 5 years of effectivity.
Acceptance and Compliance
- Grantee must accept franchise in writing within 60 days from effectivity.
- Failure to accept renders franchise void.
Bond Requirement
- Grantee must post bond with NTC to guarantee compliance.
- Bond is cancellable after 5 years upon compliance, forfeited and franchise revoked otherwise.
Right of Interconnection
- Grantee authorized to connect to other authorized telecommunications systems under mutually agreed terms subject to NTC review.
Tax Obligations
- Grantee liable for all applicable taxes under the National Internal Revenue Code and other laws.
- Tax exemptions granted under other laws remain unaffected.
- Filing and payment of taxes to local and national authorities required.
Accounting and Audit
- Grantee must keep separate accounts of gross receipts and submit annual report to Commission on Audit (COA) and National Treasury.
- COA has authority to inspect and require quarterly reports on finances and business conditions.
Indemnity to Government
- Grantee holds national and local governments harmless from claims arising from accidents or injuries related to its operations.
Transfer, Sale, or Lease of Franchise
- Transfer, lease, sale, merger, or assignment requires prior Congressional approval.
- Successors subject to same terms and conditions.
Dispersal of Ownership
- At least 30% of outstanding capital stock must be offered to public via Philippine securities exchange within 5 years from operations commencement.
- Failure to comply leads to automatic revocation.
Equality Clause
- Any advantages or privileges granted under existing or future franchises must also apply to this franchise except territorial scope, term, and authorized services.
Separability Clause
- Invalidity of any provision does not affect validity of the remaining provisions.
Repealability and Nonexclusivity
- Franchise subject to amendment, alteration, or repeal by Congress.
- Not an exclusive grant of privileges.
Reporting Requirements
- Annual report to Congress on compliance and operations due within 60 days after each year.
Effectivity
- Act takes effect 15 days after publication in two newspapers of general circulation initiated by grantee.