Renewing for Another 25 Years the Franchise Granted to Calapan Telephone System, Inc., Formerly Known as the Calapan Telephone System, Inc.
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Renewing for Another 25 Years the Franchise Granted to Calapan Telephone System, Inc., Formerly Known as the Calapan Telephone System, Inc.
Republic Act No. 11774
May 27, 2022
Case Overview and Summary
Summary of Republic Act No. 11774Nature and Scope of Franchise (Section 1):
- Renews the franchise granted to Calapan Telephone System, Inc. (the Grantee) under Republic Act No. 8351 for another 25 years.
- Allows the Grantee to construct, establish, install, maintain, and operate local access network, wired or wireless telecommunications systems, and associated equipment in the Province of Oriental Mindoro.
Manner of Operation of Stations or 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 must secure a Certificate of Public Convenience and Necessity or appropriate permits and licenses from the NTC.
- The NTC has the power to regulate and impose conditions on the Grantee's operations.
- The NTC can revoke or suspend the Grantee's permits or licenses after due process for any violation of the franchise.
- The NTC may recommend to Congress the revocation of the franchise for any violation.
Excavation and Restoration Works (Section 4):
- The Grantee may make excavations or lay conduits in public places, roads, highways, etc., with prior approval from the DPWH or LGU.
- The Grantee must repair and replace any public place, road, highway, etc., disturbed by its works in accordance with DPWH or LGU standards.
- 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.
Responsibility to the Public (Section 5):
- The Grantee must conform to ethics of honest enterprise and not use its facilities for obscene, indecent, false, or subversive transmissions.
- The Grantee must operate and maintain its facilities satisfactorily and keep up with advances in science and technology.
- The Grantee must improve and extend its services in unserved areas and hazard- and typhoon-prone areas determined by the National Disaster Risk Reduction and Management Council.
- The Grantee must improve and upgrade its equipment, facilities, and services to comply with the Free Mobile Disaster Alerts Act.
Rates for Services (Section 6):
- The Grantee's charges and rates for regulated telecommunication services 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 the Government (Section 7):
- The government reserves the right to temporarily take over, suspend, or authorize the temporary use of the Grantee's stations, facilities, or equipment during times of war, rebellion, public peril, calamity, emergency, disaster, or disturbance of peace and order, with due compensation to the Grantee.
Term of Franchise (Section 8):
- The franchise shall be in effect for 25 years from the date of effectivity of this Act, unless sooner cancelled.
- The franchise shall be deemed revoked if the Grantee fails to operate continuously for 2 years.
Right of Interconnection (Section 9):
- The Grantee is authorized to connect or demand connection of its telecommunications systems to other duly authorized systems for providing extended and improved services, subject to review and modification by the NTC.
Warranty in Favor of the National and Local Governments (Section 10):
- The Grantee shall hold the national, provincial, city, and municipal governments free from all claims, liabilities, accounts, demands, or actions arising out of accidents causing injury to persons or damage to properties during the construction or operation of its stations, facilities, or equipment.
Sale, Lease, Transfer, Grant of Usufruct, or Assignment of Franchise (Section 11):
- The Grantee cannot sell, lease, transfer, grant the usufruct of, or assign this franchise or the rights and privileges acquired thereunder to any person, firm, company, corporation, or other entity without the prior approval of Congress.
- The Grantee must inform Congress of any such transaction within 60 days after completion, or the franchise shall be revoked.
- Any entity to which the franchise is sold, transferred, or assigned shall be subject to the same conditions, terms, restrictions, and limitations of this Act.
Dispersal of Ownership (Section 12):
- The Grantee shall offer at least 30% of its outstanding capital stock, or a higher percentage as may be provided by law, to Filipino citizens in any securities exchange in the Philippines within 5 years from the effectivity of this Act.
- Noncompliance shall render the franchise revoked.
Commitment to Provide and Promote the Creation of Employment Opportunities (Section 13):
- The Grantee shall create employment opportunities and accept on-the-job trainees in the franchise operations, with priority accorded to residents of the place where the principal office is located.
- The Grantee shall comply with applicable labor standards and allowance entitlement under existing labor laws, rules, and regulations.
- The employment opportunities created shall be reflected in the General Information Sheet submitted to the SEC annually.
Reportorial Requirement (Section 14):
- The Grantee shall submit an annual report on its compliance with the franchise terms and conditions and its operations to Congress on or before April 30 of every year during the term of the franchise.
- The annual report shall include updates on activities, development, operation, and expansion of business; audited financial statements; latest GIS submitted to the SEC; certification of the NTC on the status of permits and operations; and an update on the dispersal of ownership undertaking.
- The reportorial compliance certificate issued by Congress shall be required before any application for permit or certificate is accepted by the NTC.
Fine (Section 15):
- Failure to submit the annual report to Congress shall be penalized with a fine of One million pesos (P1,000,000.00) for each working day of noncompliance, effective upon applicability with other telecommunications franchise grantees.
- In the interim, the Grantee shall be liable to pay a fine of Five hundred pesos (P500.00) per working day of noncompliance to the NTC.
- The fine shall be collected separately from the reportorial penalties imposed by the NTC and remitted to the Bureau of the Treasury.
Equality Clause (Section 16):
- Any advantage, favor, privilege, exemption, or immunity granted under existing or future telecommunications franchises, upon prior review and approval of Congress, shall become part of this franchise and shall be accorded immediately and unconditionally to the Grantee, except for provisions concerning territory covered, life span of the franchise, or type of service authorized.
Repealability and Nonexclusivity Clause (Section 17):
- This franchise shall be subject to amendment, alteration, or repeal by Congress when the public interest so requires and shall not be interpreted as an exclusive grant of the privileges provided.
Separability Clause (Section 18):
- If any section or provision of this Act is held invalid, all other provisions not affected shall remain valid.
Repealing Clause (Section 19):
- All laws, decrees, orders, resolutions, instructions, rules and regulations, and other issuances or parts thereof which are inconsistent with the provisions of this Act are hereby repealed, amended, or modified accordingly.
Effectivity (Section 20):
- This Act shall take effect 15 days after its publication in the Official Gazette or in a newspaper of general circulation.
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Renewing for Another 25 Years the Franchise Granted to Calapan Telephone System, Inc., Formerly Known as the Calapan Telephone System, Inc.
Republic Act No. 11774
•May 27, 2022
May 27, 2022
REPUBLIC ACT NO. 11774
AN ACT RENEWING FOR ANOTHER TWENTY-FIVE (25) YEARS THE FRANCHISE GRANTED TO CALAPAN TELEPHONE SYSTEM, INC., FORMERLY KNOWN AS THE CALAPAN TELEPHONE SYSTEM, INC., UNDER REPUBLIC ACT NO. 8351, ENTITLED "AN ACT GRANTING THE CALAPAN TELEPHONE SYSTEM, INC., A FRANCHISE TO CONSTRUCT, ESTABLISH, INSTALL, MAINTAIN AND OPERATE LOCAL EXCHANGE NETWORK IN THE PROVINCE OF ORIENTAL MINDORO"
SECTION 1. Nature and Scope of Franchise. — Subject to the provisions of the Constitution and applicable laws, rules and regulations, the franchise granted to Calapan Telephone System, Inc., hereunder referred to as the Grantee, its successors or assignees, under Republic Act No. 8351, to construct, establish, install, maintain, and operate, and for commercial purposes and in the public interest, in the Province of Oriental Mindoro, local access network, wired or wireless telecommunications system, copper, fiber optics, satellite transmit and receive systems, switches and their value-added services such as the transmission of voice, data, facsimile, control signs, audio and video, information services, and all other telecommunication system technologies as are at present...
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