AN ACT GRANTING THE FIBER TELECOMMUNICATIONS INCORPORATED A FRANCHISE TO CONSTRUCT
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AN ACT GRANTING THE FIBER TELECOMMUNICATIONS INCORPORATED A FRANCHISE TO CONSTRUCT
Republic Act No. 9315
August 8, 2004
Case Overview and Summary
Summary of Republic Act No. 9315Nature and Scope of Franchise (Section 1):
- Grants Fiber Telecommunications Incorporated (the grantee) a franchise to construct, establish, install, maintain for commercial purposes, and operate telecommunications systems throughout the Philippines and between the Philippines and other countries.
- Covers wire and/or wireless telecommunications systems, except for mobile and cellular, including paging, fiber optics, multichannel multipoint distribution systems (MMDS), local multipoint distribution systems (LMDS), satellite transmit and receive systems, switches, and value-added services.
Operation of Stations and Facilities (Section 2):
- The grantee's stations or facilities shall be constructed and operated in a manner that results in minimum interference with existing or future stations.
Authority of the National Telecommunications Commission (NTC) (Section 3):
- The grantee shall secure a certificate of public convenience and necessity or appropriate permits and licenses from the NTC for the construction, installation, and operation of its telecommunications systems/facilities.
- The NTC has the power to impose conditions on the construction, operation, maintenance, or service level of the telecommunications systems.
- The grantee shall not use any frequency in the radio spectrum without authorization from the NTC.
Ingress and Egress (Section 4):
- The grantee, with prior approval from the Department of Public Works and Highways (DPWH), can make excavations or lay conduits in public places, highways, streets, etc., for erecting and maintaining poles or other supports for wires or conductors.
- The grantee shall 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 shall conform to the ethics of honest enterprise and not use its stations/facilities for obscene or indecent transmission, dissemination of false information, or assisting in subversive or treasonable acts.
- The grantee shall provide basic or enhanced telephone service without discrimination, up to the capacity of its local telephone exchange.
- The grantee shall operate and maintain its stations, lines, cable systems, and equipment in a satisfactory manner and modify or improve them to keep up with advances in science and technology.
Rates of Services (Section 6):
- The charges and rates for the grantee's telecommunications services, except those declared as non-regulated, shall be subject to the approval of the NTC.
- 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 of the Philippines has the right to temporarily take over and operate the grantee's stations, transmitters, facilities, or equipment in times of war, rebellion, public peril, calamity, emergency, disaster, or disturbance of peace and order.
- The radio spectrum is part of the national patrimony, and its use is a privilege conferred by the State that may be withdrawn anytime after due process.
Term of Franchise (Section 8):
- The franchise is valid for 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:
- Commence operations within three (3) years from the approval of its operating permit or provisional authority by the NTC.
- Operate continuously for two (2) years.
- Commence operation within three (3) years from the effectivity of this Act.
Acceptance and Compliance (Section 9):
- The grantee shall give written acceptance of the franchise 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, determined by the NTC, to guarantee compliance with the conditions of the franchise.
- If the grantee fulfills the conditions within five (5) years from the date of approval of its permit, 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 system to any other duly authorized telecommunications system in the Philippines for providing extended and improved services to the public, under mutually agreed terms and conditions, subject to review and modification by the NTC.
Tax Provisions (Section 12):
- The grantee shall be subject to the payment of all taxes, duties, fees, charges, and other impositions under the National Internal Revenue Code (NIRC) 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):
- The grantee shall keep separate accounts of its gross receipts and furnish the Commission on Audit and the National Treasury a copy of such accounts not later than the 31st day of January of each year for the preceding twelve (12) months.
Books of Accounts (Section 14):
- The grantee's books and accounts shall always be open to inspection by the Commissioner on Audit or authorized representatives.
- The grantee shall submit two (2) copies of quarterly reports on gross receipts, net profits, and the general condition of the business to the Commission on Audit.
Warranty in Favor of the 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.
Nontransferability (Section 16):
- The grantee shall not lease, transfer, grant the usufruct of, sell, or 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.
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 percent (30%) of its outstanding capital stock, or a higher percentage as may be provided by law, in any securities exchange in the Philippines within five (5) years from the commencement of its operation.
- The public offering shall comply with the rules and regulations of the Securities and Exchange Commission.
- 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 franchises or may hereafter be granted 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 the 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 section or provision of this Act is held invalid, all other provisions not affected 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.
- This franchise shall not be interpreted as an exclusive grant of the privileges provided herein.
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 its 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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AN ACT GRANTING THE FIBER TELECOMMUNICATIONS INCORPORATED A FRANCHISE TO CONSTRUCT
Republic Act No. 9315
•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 and three.
Republic Act No. 9315            
AN ACT GRANTING THE FIBER TELECOMMUNICATIONS INCORPORATED A FRANCHISE TO CONSTRUCT, INSTALL, ESTABLISH, OPERATE AND MAINTAIN TELECOMNICATIONS 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 Franchise. – Subject to the provisions of the Constitutional and applicable laws, rules and regulations, there is hereby granted to Fiber Telecommunications Incorporated, hereunder referred to as the grantee, a franchise to construct, established, 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,...
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