June 2, 2022
REPUBLIC ACT NO. 11836
AN ACT RENEWING FOR ANOTHER TWENTY-FIVE (25) YEARS THE FRANCHISE GRANTED TO GENERAL TELEPHONE SYSTEM, INC. UNDER REPUBLIC ACT NO. 8636, ENTITLED "AN ACT GRANTING THE GENERAL TELEPHONE SYSTEM, INC. A FRANCHISE TO CONSTRUCT, ESTABLISH, INSTALL, MAINTAIN AND OPERATE LOCAL EXCHANGE NETWORK IN THE PROVINCES OF QUEZON, BATANGAS AND LAGUNA; MUNICIPALITIES OF PASACAO, LIBMANAN AND CABUSAO, PROVINCE OF CAMARINES SUR; AND THE MUNICIPALITY OF PARACALE, PROVINCE OF CAMARINES NORTE," AND EXPANDING ITS COVERAGE TO THE ENTIRE PROVINCES OF CAMARINES NORTE AND CAMARINES SUR
SECTION 1.Nature and Scope of Franchise. — Subject to the provisions of the Constitution and applicable laws, rules and regulations, the franchise granted to General Telephone System, Inc., hereunder referred to as the Grantee, its successors or assignees, under Republic Act No. 8636, to construct, establish, install, maintain, and operate for commercial purposes and in the public interest in the Provinces of Quezon, Batangas, Laguna, Camarines Norte, and Camarines Sur, wired and wireless telecommunications systems, including...
Summary of Republic Act No. 11836
Nature and Scope of Franchise (Section 1):
- Renews the franchise granted to General Telephone System, Inc. (the Grantee) under Republic Act No. 8636 for another 25 years.
- Allows the Grantee to construct, establish, install, maintain, and operate wired and wireless telecommunications systems, including internet access, in the provinces of Quezon, Batangas, Laguna, Camarines Norte, and Camarines Sur.
- Authorizes the Grantee to offer telecommunications services, value-added services, internet access, and other electronic communication services.
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 construction, operation, maintenance, or service level of the Grantee's systems or facilities.
- The NTC can revoke or suspend the Grantee's permits or licenses after due process for any violation of the franchise provisions.
- The NTC may recommend to Congress the revocation of the franchise for any violation.
Excavation and Restoration Works (Section 4):
- The Grantee is allowed to make excavations or lay conduits in public places, roads, highways, etc., with prior approval from the Department of Public Works and Highways (DPWH) or the local government unit (LGU).
- The Grantee must repair and replace any public place, road, highway, etc., disturbed by its activities 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 the repair and charge the Grantee double the cost.
Responsibility to the Public (Section 5):
- The Grantee must conform with the ethics of honest enterprise and not use its facilities for obscene, indecent, false, or subversive transmissions.
- The Grantee must operate and maintain its systems and equipment in a satisfactory manner and keep up with technological advances.
- The Grantee must improve and extend its services in areas not yet served and in hazard- and typhoon-prone areas identified 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 charges and rates for the Grantee's regulated telecommunications services are subject to the approval of the NTC.
- The rates must be unbundled, separable, and distinct among the services offered, and regulated services must not subsidize unregulated services.
Right of the Government (Section 7):
- The radio spectrum is part of the national patrimony, and its use is a privilege that may be withdrawn by the State after due process.
- In times of war, rebellion, public peril, calamity, emergency, disaster, or disturbance of peace and order, the President may temporarily take over, suspend, or authorize the temporary use of the Grantee's stations, transmitters, facilities, or equipment, with due compensation to the Grantee.
Term of Franchise (Section 8):
- The franchise is effective for 25 years from the date of effectivity of the Act, unless sooner cancelled.
- The franchise shall be deemed ipso facto 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 or damage during the construction or operation of the Grantee's stations, transmitters, 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 the franchise or 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.
- Failure to report such change of ownership shall render the franchise ipso facto revoked.
- Any entity to which the franchise is sold, transferred, or assigned shall be subject to the same conditions, terms, restrictions, and limitations of the Act.
Dispersal of Ownership (Section 12):
- The Grantee must 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 the Act.
- Noncompliance shall render the franchise ipso facto 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 given to residents of the place where the principal office is located.
- The Grantee must 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 (GIS) submitted to the Securities and Exchange Commission (SEC) annually.
Reportorial Requirement (Section 14):
- The Grantee must 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 must include updates on activities, development, operation and/or expansion of business; audited financial statements; latest GIS submitted to the SEC; certification from the NTC on the status of permits and operations; and an update on the dispersal of ownership undertaking, if applicable.
- 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 requisite 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 of Treatment in the Telecommunications Industry (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 territorial coverage, term, or type of service authorized by the franchise.
Repealability and Nonexclusivity Clause (Section 17):
- The franchise is 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 the 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 the Act are hereby repealed, amended, or modified accordingly.
Effectivity (Section 20):
- The Act shall take effect 15 days after its publication in the Official Gazette or in a newspaper of general circulation.
Nature and Scope of Franchise (Section 1):
- Renews the franchise granted to General Telephone System, Inc. (the Grantee) under Republic Act No. 8636 for another 25 years.
- Allows the Grantee to construct, establish, install, maintain, and operate wired and wireless telecommunications systems, including internet access, in the provinces of Quezon, Batangas, Laguna, Camarines Norte, and Camarines Sur.
- Authorizes the Grantee to offer telecommunications services, value-added services, internet access, and other electronic communication services.
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 construction, operation, maintenance, or service level of the Grantee's systems or facilities.
- The NTC can revoke or suspend the Grantee's permits or licenses after due process for any violation of the franchise provisions.
- The NTC may recommend to Congress the revocation of the franchise for any violation.
Excavation and Restoration Works (Section 4):
- The Grantee is allowed to make excavations or lay conduits in public places, roads, highways, etc., with prior approval from the Department of Public Works and Highways (DPWH) or the local government unit (LGU).
- The Grantee must repair and replace any public place, road, highway, etc., disturbed by its activities 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 the repair and charge the Grantee double the cost.
Responsibility to the Public (Section 5):
- The Grantee must conform with the ethics of honest enterprise and not use its facilities for obscene, indecent, false, or subversive transmissions.
- The Grantee must operate and maintain its systems and equipment in a satisfactory manner and keep up with technological advances.
- The Grantee must improve and extend its services in areas not yet served and in hazard- and typhoon-prone areas identified 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 charges and rates for the Grantee's regulated telecommunications services are subject to the approval of the NTC.
- The rates must be unbundled, separable, and distinct among the services offered, and regulated services must not subsidize unregulated services.
Right of the Government (Section 7):
- The radio spectrum is part of the national patrimony, and its use is a privilege that may be withdrawn by the State after due process.
- In times of war, rebellion, public peril, calamity, emergency, disaster, or disturbance of peace and order, the President may temporarily take over, suspend, or authorize the temporary use of the Grantee's stations, transmitters, facilities, or equipment, with due compensation to the Grantee.
Term of Franchise (Section 8):
- The franchise is effective for 25 years from the date of effectivity of the Act, unless sooner cancelled.
- The franchise shall be deemed ipso facto 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 or damage during the construction or operation of the Grantee's stations, transmitters, 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 the franchise or 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.
- Failure to report such change of ownership shall render the franchise ipso facto revoked.
- Any entity to which the franchise is sold, transferred, or assigned shall be subject to the same conditions, terms, restrictions, and limitations of the Act.
Dispersal of Ownership (Section 12):
- The Grantee must 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 the Act.
- Noncompliance shall render the franchise ipso facto 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 given to residents of the place where the principal office is located.
- The Grantee must 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 (GIS) submitted to the Securities and Exchange Commission (SEC) annually.
Reportorial Requirement (Section 14):
- The Grantee must 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 must include updates on activities, development, operation and/or expansion of business; audited financial statements; latest GIS submitted to the SEC; certification from the NTC on the status of permits and operations; and an update on the dispersal of ownership undertaking, if applicable.
- 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 requisite 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 of Treatment in the Telecommunications Industry (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 territorial coverage, term, or type of service authorized by the franchise.
Repealability and Nonexclusivity Clause (Section 17):
- The franchise is 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 the 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 the Act are hereby repealed, amended, or modified accordingly.
Effectivity (Section 20):
- The Act shall take effect 15 days after its publication in the Official Gazette or in a newspaper of general circulation.