Establishing Basic Policies For The Telephone Industry, Amending For The Purpose The Pertinent Provisions Of Commonwealth Act No. 146, As Amended, Otherwise Known As The Public Service Act,

MALACAÑANG
M a n i l a

PRESIDENTIAL DECREE No. 217 June 16, 1973

ESTABLISHING BASIC POLICIES FOR THE TELEPHONE INDUSTRY, AMENDING FOR THE PURPOSE THE PERTINENT PROVISIONS OF COMMONWEALTH ACT NO. 146, AS AMENDED, OTHERWISE KNOWN AS THE PUBLIC SERVICE ACT, AS AMENDED, AND ALL INCONSISTENT LEGISLATIVE AND MUNICIPAL FRANCHISE OF THE PHILIPPINE LONG DISTANCE TELEPHONE COMPANY UNDER ACT NO. 3436, AS AMENDED, AND ALL INCONSISTENT LEGISLATIVE AND MUNICIPAL FRANCHISES INCLUDING OTHER EXISTING LAWS

WHEREAS, telephone service is a crucial element in the conduct of business activity, the availability of which on a regular and uninterrupted basis is essential for the smooth and efficient functioning of industry;

WHEREAS, efficient telephone service contribute directly to national development by facilitating trade and commerce;

WHEREAS, the telephone industry is one of the most highly capital intensive industries;

WHEREAS, the telephone industry has fundamentally different characteristics from other utilities in that capital requirements per telephone unit installed increase as the number of customers serviced also increases instead of decreasing in cost per unit as in power...

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Basic Policies for the Telephone Industry

• Attainment of efficient telephone service for wide areas at lowest reasonable cost to subscribers (Section 1.1)
• Expansion financed through optimal domestic and foreign sources, debt and equity to minimize aggregate cost of capital (Section 1.2)
• Capital from ownership funds raised from broad base of investors involving large number of individuals (Section 1.3)
• Adoption of telephone subscriber self-financing concept where subscriber finances part of capital investments through stock purchase (Section 1.4)
• For preferred stock issuance, subscriber assured fixed annual income and convertibility to common shares after reasonable period (Section 1.5)
• Subscriber self-financing amount not to exceed 50% of installed telephone line cost as determined by regulatory bodies (Section 1.6)

Implementation and Regulatory Provisions

• Department of Public Works, Transportation and Communications to implement policies and promulgate rules and regulations (Section 2)
• Repeal or modification of conflicting provisions in Public Service Act, PLDT franchise, municipal franchises, and other laws (Section 3)
• Immediate effect of the Decree (Section 4)