AN ACT AMENDING ACT NUMBERED THIRTY-FOUR HUNDRED NINETY-FIVE

Case Overview and Summary

Summary of Republic Act No. 4630:

Granting of Franchise to Globe Wireless, Limited (to be renamed Globe-Mackay Cable and Radio Corporation):
- Right to construct, maintain and operate communication systems by radio, wire, satellites, and other means for reception and transmission of telecommunications between the Philippines and exterior points, including airplanes, airships, or vessels. (Section 1)
- Authorized to exercise right of eminent domain as reasonably necessary for establishment and operation of communication systems, with prior approval from Secretary of Public Works and Communications. (Section 2)
- Can establish stations in the Philippines as approved by the Secretary. (Section 3)
- Secretary of Public Works and Communications has power to:
    - Allot frequencies and wave lengths to be used, determine stations for their use, and issue license. (Section 4(a))
    - Change, cancel, or modify allotments of frequencies or wave lengths for reasons such as impairment of communications, stifling competition, obtaining monopoly, unreasonable rates, or violation of laws or public policy. (Section 4(b))
    - Appoint boards, commissions or agents to investigate and determine facts for such actions. (Section 4(c))
- Public Service Commission has jurisdiction over rates charged by the grantee, subject to international commitments of the Philippines. (Section 5)
- Government reserves the right to take over and operate the stations during war, insurrection, or domestic trouble, and compensate the grantee. (Section 6)

Financial and Reporting Requirements:
- Grantee to keep separate account of gross receipts in the Philippines and furnish copy to Auditor General and Treasurer by January 31 each year. (Section 7)
- Books and accounts related to Philippine business to be kept in the Philippines and subject to inspection by Auditor General. (Section 7)
- Liable to pay taxes on real estate, buildings, and personal property, exclusive of the franchise. (Section 8(a))
- Pay 5% of all gross receipts from Philippine business to Treasurer within 10 days after audit approval. (Section 8(b))

Other Provisions:
- Hold government harmless from claims arising out of accidents or injuries caused by construction or operation of stations. (Section 9)
- Subject to corporation laws of the Philippines. (Section 10)
- Unlawful to use or employ labor in involuntary servitude. (Section 11)
- Franchise subject to amendment, alteration, or repeal by Congress, and rights to use public property revert to government upon termination. (Section 12)
- Franchise valid for 50 years from acceptance, unless earlier terminated. (Section 12)
- Execute a bond of 50,000 pesos in favor of the government, conditioned on faithful performance for first 3 years. (Section 13)
- Acceptance of franchise within 6 months after approval. (Section 14)
- Cannot lease, transfer, grant usufruct, sell or assign franchise or merge without approval of Congress. (Section 15)
- Not an exclusive grant of privileges. (Section 17)
- Not authorized to engage in domestic communication service. (Section 18)