AN ACT GRANTING THE METRO KIDAPAWAN TELEPHONE CORPORATION (MKTC) A FRANCHISE TO CONSTRUCT

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AN ACT GRANTING THE METRO KIDAPAWAN TELEPHONE CORPORATION (MKTC) A FRANCHISE TO CONSTRUCT

Republic Act No. 9518

May 13, 2009

Case Overview and Summary

Summary of Republic Act No. 9518

Nature and Scope of Franchise (Section 1):
- Grants Metro Kidapawan Telephone Corporation (MKTC) a franchise to construct, install, establish, operate and maintain local exchange network in the Province of North Cotabato.
- Allows MKTC to provide basic telephone service capable of accessing local, national, international and other networks.

Manner of Operation (Section 2):
- MKTC's stations/facilities shall operate in a manner that results in minimum interference with existing stations.
- MKTC shall not exceed the required radiated power to cover its allowed area of operation.

Authority of the National Telecommunications Commission (NTC) (Section 3):
- MKTC shall secure a certificate of public convenience and necessity or appropriate permits and licenses from NTC.
- NTC has the power to impose conditions on MKTC's construction, operation, maintenance or service level.
- NTC has the authority to regulate MKTC's construction and operation.
- MKTC shall not use any frequency without NTC's authorization.

Responsibility to the Public (Section 4):
- MKTC shall conform to ethics of honest enterprise and not use its stations for obscene, indecent or false transmissions.
- MKTC shall provide basic or enhanced telephone service without discrimination, up to the capacity of its local exchange.
- MKTC shall maintain and operate its stations, lines, cables, systems and equipment satisfactorily.

Rates for Services (Section 5):
- MKTC's charges and rates for regulated services shall be subject to NTC's approval.
- Rates shall be unbundled and separable among services offered.
- Regulated services shall not subsidize unregulated ones.

Right of Government (Section 6):
- The President can temporarily take over, suspend or authorize temporary use of MKTC's stations/facilities during war, rebellion, public peril, calamity, emergency, disaster or disturbance of peace and order, with due compensation.

Term of Franchise (Section 7):
- The franchise is valid for 25 years from the date of effectivity of this Act, unless sooner revoked or cancelled.
- The franchise shall be deemed revoked if MKTC fails to: (a) commence operations within 3 years from NTC's approval, (b) operate continuously for 2 years, and (c) commence operations within 5 years from the effectivity of this Act.

Acceptance and Compliance (Section 8):
- MKTC shall accept the franchise in writing within 60 days from the effectivity of this Act.
- Non-acceptance shall render the franchise void.

Bond (Section 9):
- MKTC shall file a bond in favor of NTC to guarantee compliance with the franchise conditions.
- The bond shall be cancelled by NTC if MKTC fulfills the conditions within 5 years from the date of NTC's approval, otherwise the bond shall be forfeited.

Right of Interconnection (Section 10):
- MKTC is authorized to connect or demand connection of its systems to other duly authorized telecommunications systems for providing extended and improved services, subject to mutually agreed terms and NTC's review.

Gross Receipts (Section 11):
- MKTC shall keep a separate account of gross receipts and furnish a copy to the Commission on Audit (COA) and National Treasury annually by January 31st.

Books and Accounts (Section 12):
- MKTC's books and accounts shall be open to inspection by COA.
- MKTC shall submit quarterly reports on gross receipts, net profits and general condition of the business to COA.

Warranty in Favor of National and Local Governments (Section 13):
- MKTC shall hold the national, provincial, city and municipal governments free from claims arising out of accidents or injuries caused by MKTC's construction or operation.

Nontransferability of Franchise (Section 14):
- MKTC shall not lease, transfer, grant usufruct, sell, assign or merge the franchise or controlling interest without prior approval of the Congress.

Dispersal of Ownership (Section 15):
- MKTC shall offer at least 30% of its outstanding capital stock in a securities exchange in the Philippines within 10 years from commencement of operations or from the date of effectivity of this Act, whichever is later.
- Non-compliance shall render the franchise revoked.

Reportorial Requirement (Section 16):
- MKTC shall submit an annual report to the Congress on its compliance with the franchise terms and conditions and on its operations within 60 days from the end of every year.

Equality Clause (Section 17):
- Any advantage, favor, privilege, exemption or immunity granted to existing or future local telephone system franchises shall become part of this franchise, except provisions concerning territory, life span or type of service.

Separability Clause (Section 18):
- If any section or provision is held invalid, all other valid provisions shall remain in effect.

Repealability and Nonexclusivity Clause (Section 19):
- This franchise is subject to amendment, alteration or repeal by the Congress when public interest requires.
- This franchise shall not be interpreted as an exclusive grant.

Effectivity Clause (Section 20):
- This Act shall take effect 15 days from the date of its publication in at least two newspapers of general circulation in the Philippines, upon MKTC's initiative.

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Law

AN ACT GRANTING THE METRO KIDAPAWAN TELEPHONE CORPORATION (MKTC) A FRANCHISE TO CONSTRUCT

Republic Act No. 9518

•

May 13, 2009

Republic of the PhilippinesCONGRESS OF THE PHILIPPINESMetro Manila Fourteenth CongressSecond Regular Session Begun and held in Metro Manila, on Monday, the twenty - eighth day of July, two thousand eight. Republic Act No. 9518 AN ACT GRANTING THE METRO KIDAPAWAN TELEPHONE CORPORATION (MKTC) A FRANCHISE TO CONSTRUCT, INSTALL, ESTABLISH, OPERATE AND MAINTAIN LOCAL EXCHANGE NETWORK IN THE PROVINCE OF NORTH COTABATO 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 Constitution and applicable laws, rules and regulations, there is hereby granted to the Metro Kidapawan Telephone Corporation (MKTC), 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, local exchange network, including public calling stations or pay telephone stations or wireless local loop and their value - added services in the Province of North Cotabato, and for such purpose provide basic telephone service capable of accessing local,...

AN ACT GRANTING THE METRO KIDAPAWAN TELEPHONE CORPORATION (MKTC) A FRANCHISE TO CONSTRUCT

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Amended by

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AN ACT GRANTING THE METRO KIDAPAWAN TELEPHONE CORPORATION (MKTC) A FRANCHISE TO CONSTRUCT

AN ACT GRANTING THE METRO KIDAPAWAN TELEPHONE CORPORATION (MKTC) A FRANCHISE TO CONSTRUCT

Republic Act No. 9518

May 13, 2009

Case Overview and Summary

Amends

Amended by

Tags

Statutes

Republic Acts

Metro Kidapawan Telephone Corporation (MKTC)

franchise

local exchange network

North Cotabato

National Telecommunications Commission (NTC)

certificate of public convenience and necessity

permits

licenses

basic telephone service

public calling stations

pay telephone stations

wireless local loop

value-added services

wavelengths

frequencies

radiated power

area of operation

construction

installation

operation

maintenance

service level

ethics

honest enterprise

obscene transmission

indecent transmission

false information

misrepresentation

subversive acts

treasonable acts

discrimination

local telephone exchange

capacity

expansion

charges

rates

regulated services

unregulated services

President

war

rebellion

public peril

calamity

emergency

disaster

disturbance of peace and order

due compensation

radio spectrum

national patrimony

due process

term of franchise

revocation

cancellation

acceptance

compliance

bond

interconnection

gross receipts

Commission on Audit (COA)

National Treasury

net profits

general condition

warranty

accidents

injuries

nontransferability

usufruct

merger

controlling interest

Congress approval