AN ACT GRANTING THE SOLID BROADBAND CORPORATION A FRANCHISE TO CONSTRUCT

Case Overview and Summary

Summary of Republic Act No. 9116

Nature and Scope of Franchise (Section 1):
- Grants Solid Broadband Corporation a franchise to construct, install, operate and maintain broadband telecommunications networks and systems throughout the Philippines for commercial and public purposes.
- Covers a wide range of telecommunications services including local exchange, mobile cellular, internet, satellite communications, and more.

Manner of Operation (Section 2):
- Stations/facilities to be operated in a manner that minimizes interference with existing stations.

Authority of NTC (Section 3):
- Grantee must secure necessary permits and licenses from the National Telecommunications Commission (NTC).
- NTC has authority to regulate construction and operation, and impose conditions.
- NTC approval required for use of radio spectrum frequencies.

Ingress and Egress (Section 4):
- Grantee can make excavations or lay conduits in public places with prior DPWH approval.
- Grantee must repair any disturbances caused, or DPWH can do so at double expense to the grantee.

Responsibility to the Public (Section 5):
- Grantee must conform to ethics of honest enterprise and not engage in obscene, indecent, false or subversive transmissions.
- Grantee must provide basic telephone service without discrimination, up to capacity limits.
- Grantee must operate and maintain systems satisfactorily and keep up with technological advances.

Rates for Services (Section 6):
- Charges and rates for regulated services subject to NTC approval.
- Rates must be unbundled and separable among services offered.

Right of Government (Section 7):
- President can temporarily take over or suspend operations during war, emergency, etc.
- Radio spectrum is part of national patrimony and its use is a privilege that can be withdrawn.

Term of Franchise (Section 8):
- Franchise valid for 25 years from effectivity of the Act.
- Revoked if grantee fails to: commence operations within 3 years, operate continuously for 2 years, or commence operations within 5 years.

Acceptance and Compliance (Section 9):
- Grantee must accept the franchise in writing within 60 days of effectivity.

Bond (Section 10):
- Grantee must file a bond with NTC to guarantee compliance.
- Bond cancelled after 5 years if grantee has fulfilled conditions, otherwise forfeited.

Right of Interconnection (Section 11):
- Grantee can interconnect with other telecom systems, subject to mutually agreed terms and NTC review.

Tax Provisions (Section 12):
- Grantee subject to taxes under NIRC and other applicable laws.
- Specific tax exemptions or privileges granted remain in effect.

Gross Receipts (Section 13):
- Grantee must keep separate account of gross receipts and furnish copy to COA and National Treasury annually.

Books and Accounts (Section 14):
- Books and accounts open to COA inspection.
- Grantee must submit quarterly reports on gross receipts, net profits and general condition.

Warranty to Government (Section 15):
- Grantee holds government harmless from claims arising out of construction or operation.

Sale, Lease, Transfer, etc. (Section 16):
- Grantee cannot lease, transfer, sell or assign franchise without prior Congressional approval.

Dispersal of Ownership (Section 17):
- Grantee must offer at least 30% of outstanding capital stock in Philippine securities exchange within 5 years of operations.

Equality Clause (Section 18):
- Any advantages granted to other franchises shall also apply to this franchise.

Separability Clause (Section 19):
- If any provision is held invalid, other provisions remain valid.

Repealability and Non-Exclusivity (Section 20):
- Franchise subject to amendment, alteration or repeal by Congress in public interest.
- Not an exclusive grant of privileges.

Reportorial Requirement (Section 21):
- Grantee must submit annual report to Congress on compliance and operations within 60 days of year-end.

Effectivity (Section 22):
- Act effective 15 days after publication in at least 2 newspapers of general circulation.