AN ACT GRANTING THE DIGITEL CROSSING
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AN ACT GRANTING THE DIGITEL CROSSING
Republic Act No. 9235
January 18, 2004
Case Overview and Summary
Summary of Republic Act No. 9235Nature and Scope of Franchise (Section 1):
- Grants Digital Crossing, Inc. (the grantee) a franchise to construct, install, establish, operate and maintain telecommunications systems throughout the Philippines and between the Philippines and other countries.
- Covers wire and/or wireless telecommunications systems, including mobile, cellular, paging, fiber optics, multi-channel distribution system (MDS), local multi-point distribution system (LMDS), satellite transmit and receive systems, switches and value-added services.
Manner of Operation of Stations or Facilities (Section 2):
- The grantee's stations or facilities shall be constructed and operated in a manner that results in minimum interference on existing or future stations' wavelengths or frequencies.
Authority of the National Telecommunications Commission (Section 3):
- The grantee must secure a certificate of public convenience and necessity or appropriate permits and licenses from the National Telecommunications Commission (NTC).
- The NTC has the power to impose conditions on the construction, operation, maintenance or service level of the telecommunications system.
- The NTC has the authority to regulate the construction and operation of the telecommunications system.
- The grantee cannot use any frequency in the radio spectrum without NTC authorization.
Ingress and Egress (Section 4):
- The grantee has the right, with prior approval from the Department of Public Works and Highways (DPWH), to make excavations or lay conduits in public places, highways, streets, etc. for erecting and maintaining poles or underground wires and cables.
- The grantee must repair and replace any public place, highway, street, etc. disturbed by its activities in accordance with DPWH standards.
Responsibility to the Public (Section 5):
- The grantee must conform to ethics of honest enterprise and not use its stations/facilities for obscene or indecent transmission, false information, misrepresentation, or subversive or treasonable acts.
- The grantee must provide basic or enhanced telephone service without discrimination in areas where it has an approved certificate of public convenience and necessity, up to the capacity of its local telephone exchange.
- The grantee must operate and maintain its stations, lines, cables, systems and equipment in a satisfactory manner and keep abreast with advances in science and technology.
Rates for Services (Section 6):
- The charges for the grantee's telecommunications services, except those declared as non-regulated, shall be subject to NTC approval.
- The rates shall be unbundled, separable and distinct among the services offered, and regulated services shall not subsidize unregulated ones.
Right of Government (Section 7):
- The President has the right, in times of war, rebellion, public peril, calamity, emergency, disaster or disturbance of peace and order, to temporarily take over and operate the grantee's stations, transmitters, facilities or equipment, or to temporarily suspend their operation in the interest of public safety, security and welfare.
- The radio spectrum is part of the national patrimony and the use thereof is a privilege that may be withdrawn anytime after due process.
Term of Franchise (Section 8):
- The franchise is for a term of twenty-five (25) years from the date of effectivity of this Act, unless sooner revoked or cancelled.
- The franchise shall be deemed ipso facto revoked if the grantee fails to:
(a) Commence operations within three (3) years from the approval of its operating permit or provisional authority by the NTC;
(b) Operate continuously for two (2) years; and
(c) Commence operations within five (5) years from the effectivity of this Act.
Acceptance and Compliance (Section 9):
- The grantee must accept the franchise in writing within sixty (60) days from the effectivity of this Act.
- Non-acceptance shall render the franchise void.
Bond (Section 10):
- The grantee shall file a bond, with an amount determined by the NTC, to guarantee compliance with the conditions of the franchise.
- If the grantee has fulfilled the conditions after five (5) years from the date of approval of its permit by the NTC, the bond shall be cancelled. Otherwise, the bond shall be forfeited in favor of the government and the franchise ipso facto revoked.
Right of Interconnection (Section 11):
- The grantee is authorized to connect or demand connection of its telecommunications systems to any other duly authorized telecommunications systems in the Philippines for the purpose of providing extended and improved services to the public, under terms and conditions mutually agreed upon by the parties and subject to NTC review and modification.
Tax Provisions (Section 12):
- The grantee, its successor or assigns, shall be subject to the payment of all taxes, duties, fees or charges and other impositions under the National Internal Revenue Code (NIRC) of 1997, as amended, and other applicable laws, unless specifically exempted.
- All rights, privileges, benefits and exemptions accorded to existing and future telecommunications franchises shall likewise be extended to the grantee.
Gross Receipts (Section 13):
- The grantee shall keep a separate account of the gross receipts of its business and furnish the Commission on Audit (COA) and the National Treasury a copy of such account not later than the 31st day of January of each year for the preceding twelve (12) months.
Books and Accounts (Section 14):
- The grantee's books and accounts shall always be open to inspection by the COA or its authorized representatives.
- The grantee shall submit to the COA two (2) copies of the quarterly reports on the gross receipts, net profits and general condition of the business.
Warranty in Favor of National and Local Governments (Section 15):
- The grantee shall hold the national, provincial, city and municipal governments of the Philippines harmless from all claims, accounts, demands or actions arising out of accidents or injuries caused by the construction or operation of the grantee's stations, transmitters, facilities and equipment.
Sale, Lease, Transfer, Usufruct, etc. (Section 16):
- The grantee shall not lease, transfer, grant the usufruct of, sell nor assign this franchise or the rights and privileges acquired thereunder to any person, firm, company, corporation or other commercial or legal entity, nor merge with any other corporation or entity, nor shall the controlling interest of the grantee be transferred, without the prior approval of the Congress of the Philippines.
Dispersal of Ownership (Section 17):
- In accordance with the constitutional provision to encourage public participation in public utilities, the grantee shall offer at least thirty per centum (30%) of its outstanding capital stock or a higher percentage that may hereafter be provided by law in any securities exchange in the Philippines within five (5) years from the commencement of its operations.
- Noncompliance shall render the franchise ipso facto revoked.
Equality Clause (Section 18):
- Any advantage, favor, privilege, exemption or immunity granted under existing franchise, or may thereafter be granted, shall ipso facto become part of this franchise and shall be accorded immediately and unconditionally to the grantee, except for provisions concerning territory covered by the franchise, the life span of the franchise or the type of service authorized by the franchise.
Separability Clause (Section 19):
- If any of the sections or provisions of this Act is held invalid, all the other provisions not affected thereby shall remain valid.
Repealability Clause and Nonexclusivity Clause (Section 20):
- This franchise shall be subject to amendment, alteration or repeal by the Congress of the Philippines when the public interest so requires.
- This franchise shall not be interpreted as an exclusive grant of the privileges provided for.
Reportorial Requirement (Section 21):
- The grantee shall submit an annual report to the Congress of the Philippines on its compliance with the terms and conditions of the franchise and on its operations within sixty (60) days from the end of every year.
Effectivity Clause (Section 22):
- This Act shall take effect fifteen (15) days from the date of its publication, upon the initiative of the grantee, in at least two (2) newspapers of general circulation in the Philippines.
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Law
AN ACT GRANTING THE DIGITEL CROSSING
Republic Act No. 9235
•January 18, 2004
Republic of the Philippines
Congress of the Philippines
Metro Manila
Twelfth CongressThird Regular Session
Begun and held in Metro Manila, on Monday, the twenty-eight day of July, two thousand three.
Republic Act No. 9235             January 18, 2004 (lapsed)
AN ACT GRANTING THE DIGITEL CROSSING, INC. A FRANCHISE TO CONSTRUCT, INSTALL, ESTABLISH,OPERATE AND MAINTAIN TELECOMMUNINCATIONS SYSTEM THROUGHOUT THE PHILIPPINES
Be it enacted by the Senate and House of Representatives of the Philippines in Congress assembled:
Section 1. Nature and Scope of Franchise. - Subject to the provisions of the Constitutional and applicable laws, rules and regulations, There is hereby granted to Digital Crossing, Inc., hereunder referred to as the grantee, its successors or assigns, a franchise to construct, install, establish, operate and maintain for commercial purposes and in the public interest, throughout the Philippines and between the Philippines and other countries and territories, wire and/or wireless telecommunications systems, including but not limited to mobile, cellular ,paging, fiber optics, multi-channel distribution system (MDS), local multi-point distribution system (LMDS), satellite transmit and...
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