December 26, 2020
REPUBLIC ACT NO. 11512
AN ACT RENEWING FOR ANOTHER TWENTY-FIVE (25) YEARS THE FRANCHISE GRANTED TO CRUZ TELEPHONE COMPANY, INC. UNDER REPUBLIC ACT NO. 7961, ENTITLED "AN ACT GRANTING TO CRUZ TELEPHONE COMPANY, INC. (CRUZTELCO), A FRANCHISE TO INSTALL, OPERATE, AND MAINTAIN A TELECOMMUNICATIONS SYSTEM THROUGHOUT THE PHILIPPINES"
SECTION 1.Nature and Scope of Franchise. — Subject to the provisions of the Constitution and applicable laws, rules and regulations, the franchise granted to Cruz Telephone Company, Inc., hereunder referred to as the grantee, its successors or assignees, to construct, install, establish, operate, and maintain for commercial purposes and in the public interest, in the Philippines and between the Philippines and other countries and territories, wire and/or wireless telecommunications system including mobile cellular, 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 telecommunications system technologies as are at present available or will be...
Nature and Scope of Franchise
- Renews the franchise granted to Cruz Telephone Company, Inc. (CRUZTELCO) to operate telecommunications systems in the Philippines and between the Philippines and other countries for 25 years from the effectivity of this Act. (Section 1)
- Allows CRUZTELCO to construct, install, operate, and maintain wire and/or wireless telecommunications systems, including mobile cellular, fiber optics, satellite systems, and other technologies. (Section 1)
Manner of Operation
- CRUZTELCO'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)
- CRUZTELCO must secure a Certificate of Public Convenience and Necessity or appropriate permits and licenses from the NTC for construction, installation, and operation of its systems. (Section 3)
- The NTC has the power to regulate and impose conditions on CRUZTELCO's operations. (Section 3)
- CRUZTELCO cannot use any radio frequency without authorization from the NTC. (Section 3)
Excavation and Restoration Works
- CRUZTELCO may make excavations or lay conduits in public places with prior approval from the Department of Public Works and Highways (DPWH) or local government unit (LGU). (Section 4)
- CRUZTELCO must repair and replace any public place, road, highway, etc. disturbed by its works according to DPWH or LGU standards. (Section 4)
- If CRUZTELCO fails to repair or replace after a 10-day notice, the DPWH or LGU can do the repairs and charge CRUZTELCO double the cost. (Section 4)
Responsibility to the Public
- CRUZTELCO must conform to ethics of honest enterprise and not use its facilities for obscene, indecent, false, or subversive transmissions. (Section 5)
- CRUZTELCO must operate and maintain its systems satisfactorily and keep up with technological advances. (Section 5)
- CRUZTELCO must improve and extend services to unserved areas, hazard-prone areas determined by the National Disaster Risk Reduction and Management Council, and comply with the Free Mobile Disaster Alerts Act. (Section 5)
Rates for Services
- CRUZTELCO's rates and charges for telecommunications services, except those declared as non-regulated, shall be subject to NTC's approval. (Section 6)
Right of Government
- The President can temporarily take over, suspend operations, or authorize government use of CRUZTELCO's stations, facilities, or equipment during war, public peril, calamity, or disturbance, with due compensation to CRUZTELCO. (Section 7)
Term of Franchise
- The franchise is valid for 25 years from the effectivity of this Act, unless sooner revoked or cancelled. (Section 8)
- The franchise shall be deemed revoked if CRUZTELCO fails to operate continuously for 2 years. (Section 8)
Right of Interconnection
- CRUZTELCO is authorized to interconnect its systems with other telecommunications systems to provide extended and improved services, subject to NTC review and modification. (Section 9)
Mobile Number Portability
- CRUZTELCO shall provide mobile number portability and its implementing mechanism. (Section 10)
- CRUZTELCO shall interconnect with other telecommunications franchise grantees and not impede the implementation of a nationwide mobile number portability system. (Section 10)
- The NTC shall issue rules and regulations for mobile number portability. (Section 10)
Warranty in Favor of National and Local Governments
- CRUZTELCO shall hold the national, provincial, city, and municipal governments free from claims, liabilities, or demands arising out of accidents during construction or operation of its stations or facilities. (Section 11)
Sale, Lease, Transfer, Grant of Usufruct, or Assignment of Franchise
- CRUZTELCO cannot sell, lease, transfer, grant usufruct, or assign this franchise or merge with another entity without prior approval from Congress. (Section 12)
- Congress must be informed of any such transaction within 60 days after completion. (Section 12)
- Failure to report such change of ownership shall render the franchise revoked. (Section 12)
- Any entity to which the franchise is transferred shall be subject to the same conditions of this Act. (Section 12)
Dispersal of Ownership
- CRUZTELCO shall offer at least 30% or a higher percentage of its common stocks to Filipino citizens in a securities exchange within 5 years from the renewal of its franchise. (Section 13)
- If public offer of shares is not applicable, other methods of encouraging public participation must be implemented. (Section 13)
- Non-compliance shall render the franchise revoked. (Section 13)
Commitment to Provide and Promote Employment Opportunities
- CRUZTELCO shall create employment opportunities and allow on-the-job trainings, prioritizing residents of the place where its principal office is located. (Section 14)
- CRUZTELCO shall follow applicable labor standards and allowance entitlement under existing labor laws. (Section 14)
- The employment opportunities created shall be reflected in the General Information Sheet submitted to the Securities and Exchange Commission annually. (Section 14)
Reportorial Requirement
- CRUZTELCO shall submit an annual report to Congress on its compliance with the franchise terms and operations on or before April 30 of every year. (Section 15)
- The annual report shall include updates on business roll-out, development, operation, and expansion; audited financial statements; latest General Information Sheet; NTC certification on permits and operations; 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 CRUZTELCO. (Section 15)
Fine
- Failure to submit the annual report to Congress shall be penalized with a fine of One million pesos (P1,000,000.00) per working day of non-compliance, upon applicability with other telecommunications franchise grantees. (Section 16)
- In the interim, the fine shall be Five hundred pesos (P500.00) per working day of non-compliance. (Section 16)
- The NTC shall collect the fine from CRUZTELCO separate from its own penalties and remit it to the Bureau of the Treasury. (Section 16)
Equality Clause
- Any advantage, favor, privilege, exemption, or immunity granted under existing or future franchises, upon prior review and approval of Congress, shall become part of this franchise and be accorded to CRUZTELCO, except for provisions concerning territorial coverage, term, or type of service. (Section 17)
Repealability and Non-exclusivity Clause
- This 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 privilege. (Section 18)
Separability Clause
- If any section or provision of this Act is held invalid, all other valid provisions shall remain in effect. (Section 19)
Repealing Clause
- All laws, decrees, orders, resolutions, instructions, rules and regulations inconsistent with this Act are repealed, amended, or modified accordingly. (Section 20)
Effectivity
- This Act shall take effect 15 days after its publication in the Official Gazette or a newspaper of general circulation. (Section 21)
- Renews the franchise granted to Cruz Telephone Company, Inc. (CRUZTELCO) to operate telecommunications systems in the Philippines and between the Philippines and other countries for 25 years from the effectivity of this Act. (Section 1)
- Allows CRUZTELCO to construct, install, operate, and maintain wire and/or wireless telecommunications systems, including mobile cellular, fiber optics, satellite systems, and other technologies. (Section 1)
Manner of Operation
- CRUZTELCO'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)
- CRUZTELCO must secure a Certificate of Public Convenience and Necessity or appropriate permits and licenses from the NTC for construction, installation, and operation of its systems. (Section 3)
- The NTC has the power to regulate and impose conditions on CRUZTELCO's operations. (Section 3)
- CRUZTELCO cannot use any radio frequency without authorization from the NTC. (Section 3)
Excavation and Restoration Works
- CRUZTELCO may make excavations or lay conduits in public places with prior approval from the Department of Public Works and Highways (DPWH) or local government unit (LGU). (Section 4)
- CRUZTELCO must repair and replace any public place, road, highway, etc. disturbed by its works according to DPWH or LGU standards. (Section 4)
- If CRUZTELCO fails to repair or replace after a 10-day notice, the DPWH or LGU can do the repairs and charge CRUZTELCO double the cost. (Section 4)
Responsibility to the Public
- CRUZTELCO must conform to ethics of honest enterprise and not use its facilities for obscene, indecent, false, or subversive transmissions. (Section 5)
- CRUZTELCO must operate and maintain its systems satisfactorily and keep up with technological advances. (Section 5)
- CRUZTELCO must improve and extend services to unserved areas, hazard-prone areas determined by the National Disaster Risk Reduction and Management Council, and comply with the Free Mobile Disaster Alerts Act. (Section 5)
Rates for Services
- CRUZTELCO's rates and charges for telecommunications services, except those declared as non-regulated, shall be subject to NTC's approval. (Section 6)
Right of Government
- The President can temporarily take over, suspend operations, or authorize government use of CRUZTELCO's stations, facilities, or equipment during war, public peril, calamity, or disturbance, with due compensation to CRUZTELCO. (Section 7)
Term of Franchise
- The franchise is valid for 25 years from the effectivity of this Act, unless sooner revoked or cancelled. (Section 8)
- The franchise shall be deemed revoked if CRUZTELCO fails to operate continuously for 2 years. (Section 8)
Right of Interconnection
- CRUZTELCO is authorized to interconnect its systems with other telecommunications systems to provide extended and improved services, subject to NTC review and modification. (Section 9)
Mobile Number Portability
- CRUZTELCO shall provide mobile number portability and its implementing mechanism. (Section 10)
- CRUZTELCO shall interconnect with other telecommunications franchise grantees and not impede the implementation of a nationwide mobile number portability system. (Section 10)
- The NTC shall issue rules and regulations for mobile number portability. (Section 10)
Warranty in Favor of National and Local Governments
- CRUZTELCO shall hold the national, provincial, city, and municipal governments free from claims, liabilities, or demands arising out of accidents during construction or operation of its stations or facilities. (Section 11)
Sale, Lease, Transfer, Grant of Usufruct, or Assignment of Franchise
- CRUZTELCO cannot sell, lease, transfer, grant usufruct, or assign this franchise or merge with another entity without prior approval from Congress. (Section 12)
- Congress must be informed of any such transaction within 60 days after completion. (Section 12)
- Failure to report such change of ownership shall render the franchise revoked. (Section 12)
- Any entity to which the franchise is transferred shall be subject to the same conditions of this Act. (Section 12)
Dispersal of Ownership
- CRUZTELCO shall offer at least 30% or a higher percentage of its common stocks to Filipino citizens in a securities exchange within 5 years from the renewal of its franchise. (Section 13)
- If public offer of shares is not applicable, other methods of encouraging public participation must be implemented. (Section 13)
- Non-compliance shall render the franchise revoked. (Section 13)
Commitment to Provide and Promote Employment Opportunities
- CRUZTELCO shall create employment opportunities and allow on-the-job trainings, prioritizing residents of the place where its principal office is located. (Section 14)
- CRUZTELCO shall follow applicable labor standards and allowance entitlement under existing labor laws. (Section 14)
- The employment opportunities created shall be reflected in the General Information Sheet submitted to the Securities and Exchange Commission annually. (Section 14)
Reportorial Requirement
- CRUZTELCO shall submit an annual report to Congress on its compliance with the franchise terms and operations on or before April 30 of every year. (Section 15)
- The annual report shall include updates on business roll-out, development, operation, and expansion; audited financial statements; latest General Information Sheet; NTC certification on permits and operations; 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 CRUZTELCO. (Section 15)
Fine
- Failure to submit the annual report to Congress shall be penalized with a fine of One million pesos (P1,000,000.00) per working day of non-compliance, upon applicability with other telecommunications franchise grantees. (Section 16)
- In the interim, the fine shall be Five hundred pesos (P500.00) per working day of non-compliance. (Section 16)
- The NTC shall collect the fine from CRUZTELCO separate from its own penalties and remit it to the Bureau of the Treasury. (Section 16)
Equality Clause
- Any advantage, favor, privilege, exemption, or immunity granted under existing or future franchises, upon prior review and approval of Congress, shall become part of this franchise and be accorded to CRUZTELCO, except for provisions concerning territorial coverage, term, or type of service. (Section 17)
Repealability and Non-exclusivity Clause
- This 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 privilege. (Section 18)
Separability Clause
- If any section or provision of this Act is held invalid, all other valid provisions shall remain in effect. (Section 19)
Repealing Clause
- All laws, decrees, orders, resolutions, instructions, rules and regulations inconsistent with this Act are repealed, amended, or modified accordingly. (Section 20)
Effectivity
- This Act shall take effect 15 days after its publication in the Official Gazette or a newspaper of general circulation. (Section 21)