AN ACT GRANTING THE ETELCO
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AN ACT GRANTING THE ETELCO
Republic Act No. 9321
August 8, 2004
Case Overview and Summary
Summary of Republic Act No. 9321Nature and Scope of Franchise (Section 1):
- Grants eTELCO, Inc. a franchise to construct, install, establish, operate and maintain telecommunications systems throughout the Philippines and between the Philippines and other countries/territories.
- Covers wire and/or wireless telecommunications systems, except for mobile and cellular, including paging, fiber optics, MMDS, LMDS, satellite transmit/receive systems, switches, and value-added services like transmission of voice, data, facsimile, control signs, audio, video, information service bureau, and other technologies.
Operation of Stations and Facilities (Section 2):
- Stations/facilities shall be constructed and operated to result in minimum interference on existing or future stations' wavelengths/frequencies.
- Grantee has the right to use its selected wavelengths/frequencies and maintain transmission/reception quality.
Authority of NTC (Section 3):
- Grantee must secure a certificate of public convenience and necessity or appropriate permits/licenses from NTC for construction, installation, and operation.
- NTC can impose conditions on construction, operation, maintenance, or service level.
- Grantee cannot use radio spectrum frequencies without NTC authorization.
- NTC shall not unreasonably withhold or delay granting such authority, permits, or licenses.
Ingress and Egress (Section 4):
- Grantee can make excavations or lay conduits in public places, highways, streets, etc., with prior DPWH approval.
- Grantee must repair/replace any public place, highway, street, etc., disturbed by its activities according to DPWH standards.
- If grantee fails to repair/replace within 10 days after notice, DPWH can do it at double expense charged to the grantee.
Responsibility to the Public (Section 5):
- Grantee shall conform to ethics of honest enterprise and not use stations/facilities for obscene, indecent, false, or subversive transmissions.
- Grantee shall provide basic/enhanced telephone service without discrimination in municipalities where it has a certificate of public convenience and necessity, up to the capacity of its local exchange.
- Grantee shall increase capacity to meet demand, unless expansion cost is less than the smallest viable local exchange, in which case the applicant shall defray the installation expenses.
- Grantee shall operate and maintain stations, lines, cables, systems, and equipment in a satisfactory manner and keep up with advances in science and technology.
Rates of Services (Section 6):
- Charges and rates for regulated telecommunications services, except those declared as non-regulated, shall be subject to NTC approval.
- Rates shall be unbundled, separable, and distinct among services offered, and regulated services shall not subsidize unregulated ones.
Right of Government (Section 7):
- The President can temporarily take over, suspend operations, or authorize temporary use of grantee's stations, transmitters, facilities, or equipment during war, rebellion, public peril, calamity, emergency, disaster, or disturbance of peace and order, with due compensation to the grantee.
- The radio spectrum is part of the national patrimony, and its use is a privilege that may be withdrawn after due process.
Term of Franchise (Section 8):
- The franchise is for 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:
- Commence operations within 3 years from NTC's approval of its operating permit/provisional authority.
- Operate continuously for 2 years.
- Commence operation within 3 years from the effectivity of this Act.
Acceptance and Compliance (Section 9):
- Acceptance of the franchise shall be given in writing within 60 days from the effectivity of this Act.
- Non-acceptance shall render the franchise void.
Bond (Section 10):
- Grantee shall file a bond, determined by NTC, to guarantee compliance with franchise conditions.
- If grantee fulfills conditions after 5 years from NTC permit approval, the bond shall be cancelled; otherwise, it shall be forfeited to the government, and the franchise ipso facto revoked.
Right of Interconnection (Section 11):
- Grantee is authorized to connect or demand connection of its telecommunications system to any other duly authorized system in the Philippines for providing extended and improved services, under mutually agreed terms and conditions, subject to NTC review and modification.
Tax Provisions (Section 12):
- Grantee shall be subject to payment of all taxes, duties, fees, charges, and other impositions under the National Internal Revenue Code of 1997, as amended, and other applicable laws.
- Specific tax exemptions, incentives, or privileges granted under relevant laws shall not be construed as repealed.
- All rights, privileges, benefits, and exemptions accorded to existing and future telecommunications franchises shall likewise be extended to the grantee.
Gross Receipts (Section 13):
- Grantee shall keep separate accounts of gross receipts and furnish a copy to COA and National Treasury by January 31 of each year for the preceding 12 months.
Books of Accounts (Section 14):
- Grantee's books of accounts shall be open to inspection by COA or its authorized representatives.
- Grantee shall submit to COA two copies of quarterly reports on gross receipts, net profits, and general condition of the business.
Warranty in Favor of National and Local Governments (Section 15):
- Grantee shall hold the National, Provincial, City, and Municipal governments free from claims, accounts, demands, or actions arising out of accidents or injuries caused by the construction or operation of its stations, transmitters, facilities, and equipment.
Non-transferability (Section 16):
- Grantee shall not lease, transfer, grant usufruct, sell, assign this franchise or the rights and privileges acquired thereunder, nor merge with any other corporation or entity, nor transfer the controlling interest, whether as a whole or in part, simultaneously or contemporaneously, to any person, firm, company, corporation, or other commercial or legal entity.
Dispersal of Ownership (Section 17):
- In accordance with the constitutional provision to encourage public participation in public utilities, the grantee shall offer at least 30% of its outstanding capital stock, or a higher percentage as may be provided by law, in any securities exchange in the Philippines within 5 years from the commencement of its operation.
- The public offering shall comply with SEC rules and regulations.
- Non-compliance shall render the franchise ipso facto revoked.
Equality Clause (Section 18):
- Except for taxes, any advantage, favor, privilege, exemption, or immunity granted under existing or future franchises shall ipso facto become part of this franchise and shall be accorded immediately and unconditionally to the grantee.
- However, this shall not apply to provisions concerning territory covered, life span of the franchise, or type of service authorized.
Separability Clause (Section 19):
- If any section or provision of this Act is held invalid, all other unaffected provisions shall remain valid.
Repealability and Non-exclusivity 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.
- It shall not be interpreted as an exclusive grant of the privileges provided herein.
Reportorial Requirement (Section 21):
- 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 60 days from the end of its year.
Effectivity Clause (Section 22):
- This Act shall take effect 15 days from the date of its publication, upon the initiative of the Grantee, in at least two newspapers of general circulation in the Philippines.
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Law
AN ACT GRANTING THE ETELCO
Republic Act No. 9321
•August 8, 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. 9321            
AN ACT GRANTING THE eTELCO, INC. A FRANCHISE TO CONSTRUCT, INSTALL, ESTABLISH, OPERATE AND MAINTAIN TELECOMMUNICATIONS SYSTEMS THROUGHOUT THE PHILIPPINES.
Be it enacted by the Senate and House of Representatives of the Philippines in Congress assembled:
Section 1. Nature and Scope Franchise. – Subject to the provisions of the Constitution and applicable laws, rules and regulations, there is hereby granted to eTELCO, Inc., hereunder referred to as the grantee, a franchise to construct, establish, install, 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 and except for mobile and cellular, shall include but not be limited to, paging, fiber optics, multichannel multipoint distribution systems (MMDS), local multipoint distribution systems (LMDS), satellite transmit and receive systems, switches and their...
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