Manner of Operation of Stations or Facilities
- Facilities should be constructed and operated to minimize interference with existing or future stations.
- Ensures grantee’s rights to use assigned wavelengths/frequencies and transmission quality.
- Aims to maximize service rendition and availability.
Authority of the National Telecommunications Commission (NTC)
- Grantee must secure a Certificate of Public Convenience and Necessity, permits, and licenses from NTC.
- NTC can impose conditions on construction, operation, maintenance, and service levels.
- NTC regulates all aspects of the grantee’s telecommunications systems.
- Unauthorized use of radio frequencies is prohibited.
- Certificate specifies service areas and commencement date.
- NTC must not unreasonably withhold or delay approvals.
Excavation and Restoration Works
- Grantee authorized to excavate public places for pole erection or underground cabling with prior DPWH and local government approval.
- Obliged to restore disturbed public places conforming to DPWH or local standards.
- Failure to restore within 10 days allows DPWH or LGU to effect repairs at double cost charged to grantee.
Responsibility to the Public
- Grantee to uphold honesty, not transmit obscene or false information, or support subversive acts.
- Must operate and maintain facilities satisfactorily and adopt scientific and technological advances.
- Required to extend services to underserved, hazard, and typhoon-prone areas.
- Must comply with Republic Act No. 10639 (Free Mobile Disaster Alerts Act).
Rates for Services
- Charges and rates subject to NTC approval except non-regulated services declared in the future.
Rights of the Government
- Radio spectrum is a national patrimony; use is a State-conferred privilege.
- President may suspend operations during emergencies for public safety and welfare.
- Government may temporarily operate stations upon due compensation.
Term of Franchise
- Valid for 25 years from effectivity unless cancelled earlier.
- Automatically revoked if conditions unmet: commence operations within 1 year of permit approval, within 3 years from effectivity, or operate continuously for 2 years.
Employment Commitment
- Grantee to create employment and allow on-the-job training, prioritizing residents near offices.
- Compliance with labor standards mandated.
- Jobs created must be reported in Securities and Exchange Commission’s General Information Sheet annually.
Tax Provisions
- Grantee liable for real estate and personal property taxes except for certain exempted telecommunications equipment and materials.
- Exemptions from customs duties and taxes on specified equipment.
- Required to pay value-added tax on gross receipts.
- Income tax liability remains unless amended by law.
- Must file returns for audit by Bureau of Internal Revenue.
Bond Requirement
- Grantee must post a bond with NTC to guarantee franchise compliance.
- Bond released after 3 years if compliant; forfeited and franchise revoked if not.
Right of Interconnection
- Authorized to connect with other authorized telecommunications systems for service improvement.
- Terms subject to mutual agreement and NTC review.
Warranty in Favor of Government
- Grantee indemnifies national and local governments from claims arising from accidents during construction or operation.
Mobile Number Portability (MNP)
- Grantee must provide MNP and interconnect with other franchisees’ systems.
- Cannot install features that impede nationwide MNP.
- NTC to regulate implementation.
Sale, Lease, Transfer, or Assignment of Franchise
- Prohibited without prior Congressional approval and compliance with laws.
- Transferee subject to same franchise conditions.
Dispersal of Ownership
- Must offer at least 30% of capital stock to Filipino citizens within 5 years of operations.
- Alternative means for public participation allowed if public offering not applicable.
- Failure leads to franchise revocation.
Reportorial Requirements
- Annual compliance and operations report to Congress committees due by April 30 each year.
- Report required before permit applications with NTC are accepted.
Fines for Non-Compliance
- One million pesos fine per working day for failure to submit annual report, effective upon harmonization with other franchisees.
- Interim fine of five hundred pesos per working day applies.
- Fines collected by NTC and remitted to National Treasury.
Equality Clause
- Any advantages under existing or future franchises automatically granted to this grantee, excluding franchise territory, duration, or service type.
Amendability and Non-Exclusivity
- Congress may amend, alter, or repeal franchise as public interest requires.
- Franchise is non-exclusive.
Separability Clause
- Invalidity of any provision does not affect others.
Repealing Clause
- Conflicting laws, decrees, rules, and regulations are repealed or modified accordingly.
Effectivity
- Act takes effect 15 days after publication in the Official Gazette or a newspaper of general circulation.