June 2, 2022
REPUBLIC ACT NO. 11837
AN ACT GRANTING LINKSERVE TELECOMMUNICATIONS NETWORK, INC. A FRANCHISE TO CONSTRUCT, INSTALL, ESTABLISH, OPERATE, AND MAINTAIN TELECOMMUNICATIONS SYSTEMS THROUGHOUT THE PHILIPPINES
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 Linkserve Telecommunications Network, Inc., hereunder referred to as the Grantee, its successors or assignees, a franchise to construct, install, establish, operate, and maintain, for commercial purposes and in the public interest, throughout the Philippines, wired and wireless telecommunications systems, including internet access, through copper, fiber optics, satellite systems, switches and all other telecommunication system or information and communications technologies as are at present available or will be made available through technological advances or innovations in the future, and offer telecommunications services, value-added services, including internet access service, or other electronic communication services, such as the transmission and reception of voice, data, facsimile, control signs, audio and video information services; or to construct, acquire,...
Summary of Republic Act No. 11837
Nature and Scope of Franchise
- Grants Linkserve Telecommunications Network, Inc. (the Grantee) a franchise to construct, install, establish, operate, and maintain telecommunications systems throughout the Philippines for commercial purposes. (Section 1)
- Allows the Grantee to offer telecommunications services, value-added services, internet access, and other electronic communication services. (Section 1)
Manner of Operation
- The Grantee's stations or facilities shall be constructed and operated in a manner that results in minimum interference with existing or future stations. (Section 2)
Authority of the National Telecommunications Commission (NTC)
- The Grantee must secure a Certificate of Public Convenience and Necessity or appropriate permits and licenses from the NTC. (Section 3)
- The NTC has the power to regulate and impose conditions on the construction, operation, maintenance, or service level of the Grantee's systems or facilities. (Section 3)
- The NTC can revoke or suspend the Grantee's permits or licenses after due process for any violation of the franchise provisions. (Section 3)
- The NTC can recommend to Congress the revocation of the franchise for any violation. (Section 3)
Excavation and Restoration Works
- The Grantee can make excavations or lay conduits in public places with prior approval from the Department of Public Works and Highways (DPWH) or the local government unit (LGU). (Section 4)
- The Grantee must repair and replace any public place disturbed by its works according to DPWH or LGU standards. (Section 4)
- If the Grantee fails to repair or replace after a 10-day notice, the DPWH or LGU can do it and charge the Grantee double the cost. (Section 4)
Responsibility to the Public
- The Grantee must conform to ethics of honest enterprise and not use its facilities for obscene, indecent, false, or subversive transmissions. (Section 5)
- The Grantee must operate and maintain its systems and equipment satisfactorily and keep up with technological advances. (Section 5)
- The Grantee must improve and extend its services to unserved areas and hazard- and typhoon-prone areas determined by the National Disaster Risk Reduction and Management Council. (Section 5)
- The Grantee must improve and upgrade its equipment, facilities, and services to comply with the Free Mobile Disaster Alerts Act. (Section 5)
Rates for Services
- The Grantee's rates and charges for regulated telecommunications services are subject to NTC approval. (Section 6)
- The rates must be unbundled, separable, and distinct among services offered, and regulated services must not subsidize unregulated services. (Section 6)
Right of the Government
- The government reserves the right to temporarily take over, suspend, or authorize the use of the Grantee's stations, facilities, or equipment during war, rebellion, public peril, calamity, emergency, disaster, or disturbance of peace and order, with due compensation to the Grantee. (Section 7)
Term of Franchise
- The franchise is valid for 25 years from the effectivity of the Act, unless sooner cancelled. (Section 8)
- The franchise shall be revoked if the Grantee fails to: (1) commence operations within 3 years from NTC permit approval, (2) commence operations within 5 years from the Act's effectivity, or (3) continuously operate for 2 years. (Section 8)
Bond
- The Grantee must file a bond with the NTC, in an amount determined by the NTC, to guarantee compliance with the franchise conditions. (Section 9)
- If the Grantee fulfills the conditions after 3 years from NTC permit approval, the bond shall be released; otherwise, it shall be forfeited, and the franchise revoked. (Section 9)
Right of Interconnection
- The Grantee is authorized to connect or demand connection of its systems to other duly authorized telecommunications systems in the Philippines for providing extended and improved services, subject to NTC review and modification. (Section 10)
Warranty in Favor of National and Local Governments
- The Grantee shall hold the national, provincial, city, and municipal governments free from claims, liabilities, or demands arising out of accidents causing injury or damage during the construction or operation of the Grantee's stations, facilities, or equipment. (Section 11)
Sale, Lease, Transfer, Grant of Usufruct, or Assignment of Franchise
- The Grantee cannot sell, lease, transfer, grant usufruct, assign the franchise or rights, or merge with another entity without prior approval from Congress. (Section 12)
- The Grantee must inform Congress within 60 days after any such transaction; failure to report shall revoke the franchise ipso facto. (Section 12)
- Any entity to which the franchise is transferred shall be subject to the same conditions, terms, restrictions, and limitations. (Section 12)
Dispersal of Ownership
- The Grantee must offer at least 30% (or a higher percentage required by law) of its outstanding capital stocks to Filipino citizens in a securities exchange within 5 years from the Act's effectivity. (Section 13)
- If public offer of shares is not applicable, other methods of encouraging public participation must be implemented. (Section 13)
- Noncompliance shall render the franchise ipso facto revoked. (Section 13)
Commitment to Provide and Promote Employment Opportunities
- The Grantee must create employment opportunities and accept on-the-job trainees in its franchise operations, prioritizing residents of the Grantee's principal office location. (Section 14)
- The Grantee must comply with applicable labor standards and allowance entitlement under existing labor laws, rules, and regulations. (Section 14)
- The employment opportunities created shall be reflected in the General Information Sheet (GIS) submitted to the Securities and Exchange Commission (SEC) annually. (Section 14)
Reportorial Requirement
- The Grantee must submit an annual report to Congress on its compliance with the franchise terms and conditions and its operations by April 30 of every year. (Section 15)
- The annual report must include updates on activities, development, operation, expansion, audited financial statements, latest GIS, NTC certification on permit and operation status, and update on dispersal of ownership undertaking. (Section 15)
- A reportorial compliance certificate from Congress shall be required before the NTC accepts any application for permit or certificate from the Grantee. (Section 15)
Fine
- Failure to submit the annual report to Congress shall be penalized with a fine of ₱1,000,000 for each working day of noncompliance, effective upon applicability to other telecommunications franchise grantees. (Section 16)
- In the interim, the Grantee shall be liable to pay a fine of ₱500 per working day of noncompliance to the NTC. (Section 16)
- The fine shall be collected separately from NTC penalties and remitted to the Bureau of the Treasury. (Section 16)
Equality of Treatment in the Telecommunications Industry
- Any advantage, favor, privilege, exemption, or immunity granted under existing or future telecommunications franchises approved by Congress shall be accorded immediately and unconditionally to the Grantee, except for provisions concerning territorial coverage, term, or type of service authorized. (Section 17)
Repealability and Nonexclusivity Clause
- The franchise is subject to amendment, alteration, or repeal by Congress when the public interest requires, and shall not be interpreted as an exclusive grant of privileges. (Section 18)
Separability Clause
- If any section or provision of the Act is held invalid, all other unaffected provisions shall remain valid. (Section 19)
Repealing Clause
- All laws, decrees, orders, resolutions, instructions, rules and regulations, and other issuances or parts thereof inconsistent with the Act are repealed, amended, or modified accordingly. (Section 20)
Effectivity
- The Act shall take effect 15 days after its publication in the Official Gazette or a newspaper of general circulation. (Section 21)
Nature and Scope of Franchise
- Grants Linkserve Telecommunications Network, Inc. (the Grantee) a franchise to construct, install, establish, operate, and maintain telecommunications systems throughout the Philippines for commercial purposes. (Section 1)
- Allows the Grantee to offer telecommunications services, value-added services, internet access, and other electronic communication services. (Section 1)
Manner of Operation
- The Grantee's stations or facilities shall be constructed and operated in a manner that results in minimum interference with existing or future stations. (Section 2)
Authority of the National Telecommunications Commission (NTC)
- The Grantee must secure a Certificate of Public Convenience and Necessity or appropriate permits and licenses from the NTC. (Section 3)
- The NTC has the power to regulate and impose conditions on the construction, operation, maintenance, or service level of the Grantee's systems or facilities. (Section 3)
- The NTC can revoke or suspend the Grantee's permits or licenses after due process for any violation of the franchise provisions. (Section 3)
- The NTC can recommend to Congress the revocation of the franchise for any violation. (Section 3)
Excavation and Restoration Works
- The Grantee can make excavations or lay conduits in public places with prior approval from the Department of Public Works and Highways (DPWH) or the local government unit (LGU). (Section 4)
- The Grantee must repair and replace any public place disturbed by its works according to DPWH or LGU standards. (Section 4)
- If the Grantee fails to repair or replace after a 10-day notice, the DPWH or LGU can do it and charge the Grantee double the cost. (Section 4)
Responsibility to the Public
- The Grantee must conform to ethics of honest enterprise and not use its facilities for obscene, indecent, false, or subversive transmissions. (Section 5)
- The Grantee must operate and maintain its systems and equipment satisfactorily and keep up with technological advances. (Section 5)
- The Grantee must improve and extend its services to unserved areas and hazard- and typhoon-prone areas determined by the National Disaster Risk Reduction and Management Council. (Section 5)
- The Grantee must improve and upgrade its equipment, facilities, and services to comply with the Free Mobile Disaster Alerts Act. (Section 5)
Rates for Services
- The Grantee's rates and charges for regulated telecommunications services are subject to NTC approval. (Section 6)
- The rates must be unbundled, separable, and distinct among services offered, and regulated services must not subsidize unregulated services. (Section 6)
Right of the Government
- The government reserves the right to temporarily take over, suspend, or authorize the use of the Grantee's stations, facilities, or equipment during war, rebellion, public peril, calamity, emergency, disaster, or disturbance of peace and order, with due compensation to the Grantee. (Section 7)
Term of Franchise
- The franchise is valid for 25 years from the effectivity of the Act, unless sooner cancelled. (Section 8)
- The franchise shall be revoked if the Grantee fails to: (1) commence operations within 3 years from NTC permit approval, (2) commence operations within 5 years from the Act's effectivity, or (3) continuously operate for 2 years. (Section 8)
Bond
- The Grantee must file a bond with the NTC, in an amount determined by the NTC, to guarantee compliance with the franchise conditions. (Section 9)
- If the Grantee fulfills the conditions after 3 years from NTC permit approval, the bond shall be released; otherwise, it shall be forfeited, and the franchise revoked. (Section 9)
Right of Interconnection
- The Grantee is authorized to connect or demand connection of its systems to other duly authorized telecommunications systems in the Philippines for providing extended and improved services, subject to NTC review and modification. (Section 10)
Warranty in Favor of National and Local Governments
- The Grantee shall hold the national, provincial, city, and municipal governments free from claims, liabilities, or demands arising out of accidents causing injury or damage during the construction or operation of the Grantee's stations, facilities, or equipment. (Section 11)
Sale, Lease, Transfer, Grant of Usufruct, or Assignment of Franchise
- The Grantee cannot sell, lease, transfer, grant usufruct, assign the franchise or rights, or merge with another entity without prior approval from Congress. (Section 12)
- The Grantee must inform Congress within 60 days after any such transaction; failure to report shall revoke the franchise ipso facto. (Section 12)
- Any entity to which the franchise is transferred shall be subject to the same conditions, terms, restrictions, and limitations. (Section 12)
Dispersal of Ownership
- The Grantee must offer at least 30% (or a higher percentage required by law) of its outstanding capital stocks to Filipino citizens in a securities exchange within 5 years from the Act's effectivity. (Section 13)
- If public offer of shares is not applicable, other methods of encouraging public participation must be implemented. (Section 13)
- Noncompliance shall render the franchise ipso facto revoked. (Section 13)
Commitment to Provide and Promote Employment Opportunities
- The Grantee must create employment opportunities and accept on-the-job trainees in its franchise operations, prioritizing residents of the Grantee's principal office location. (Section 14)
- The Grantee must comply with applicable labor standards and allowance entitlement under existing labor laws, rules, and regulations. (Section 14)
- The employment opportunities created shall be reflected in the General Information Sheet (GIS) submitted to the Securities and Exchange Commission (SEC) annually. (Section 14)
Reportorial Requirement
- The Grantee must submit an annual report to Congress on its compliance with the franchise terms and conditions and its operations by April 30 of every year. (Section 15)
- The annual report must include updates on activities, development, operation, expansion, audited financial statements, latest GIS, NTC certification on permit and operation status, and update on dispersal of ownership undertaking. (Section 15)
- A reportorial compliance certificate from Congress shall be required before the NTC accepts any application for permit or certificate from the Grantee. (Section 15)
Fine
- Failure to submit the annual report to Congress shall be penalized with a fine of ₱1,000,000 for each working day of noncompliance, effective upon applicability to other telecommunications franchise grantees. (Section 16)
- In the interim, the Grantee shall be liable to pay a fine of ₱500 per working day of noncompliance to the NTC. (Section 16)
- The fine shall be collected separately from NTC penalties and remitted to the Bureau of the Treasury. (Section 16)
Equality of Treatment in the Telecommunications Industry
- Any advantage, favor, privilege, exemption, or immunity granted under existing or future telecommunications franchises approved by Congress shall be accorded immediately and unconditionally to the Grantee, except for provisions concerning territorial coverage, term, or type of service authorized. (Section 17)
Repealability and Nonexclusivity Clause
- The franchise is subject to amendment, alteration, or repeal by Congress when the public interest requires, and shall not be interpreted as an exclusive grant of privileges. (Section 18)
Separability Clause
- If any section or provision of the Act is held invalid, all other unaffected provisions shall remain valid. (Section 19)
Repealing Clause
- All laws, decrees, orders, resolutions, instructions, rules and regulations, and other issuances or parts thereof inconsistent with the Act are repealed, amended, or modified accordingly. (Section 20)
Effectivity
- The Act shall take effect 15 days after its publication in the Official Gazette or a newspaper of general circulation. (Section 21)