April 29, 2022
REPUBLIC ACT NO. 11757
AN ACT RENEWING FOR ANOTHER TWENTY-FIVE (25) YEARS THE FRANCHISE GRANTED TO INDEPENDENT TELEPHONE COMPANY, INC. UNDER REPUBLIC ACT NO. 8615, ENTITLED "AN ACT GRANTING THE INDEPENDENT TELEPHONE COMPANY, INC. A FRANCHISE TO CONSTRUCT, ESTABLISH, INSTALL, MAINTAIN AND OPERATE A LOCAL EXCHANGE NETWORK IN THE MUNICIPALITY OF BIÑAN, PROVINCE OF LAGUNA"
SECTION 1.Nature and Scope of Franchise. — Subject to the provisions of the Constitution and applicable laws, rules and regulations, the franchise granted to Independent Telephone Company, Inc., hereunder referred to as the Grantee, its successors or assignees, under Republic Act No. 8615, to construct, install, establish, operate, and maintain for commercial purposes and in the public interest, in the City of Biñan, Province of Laguna, telecommunication systems and facilities for domestic communications, including local exchange network, public calling stations or pay telephone stations, wire and wireless telecommunications system, copper, fiber optics, satellite transmit and receive systems, switches and their value-added services such as the transmission of voice,...
Summary of Republic Act No. 11757
Nature and Scope of Franchise (Section 1):
- Renews the franchise granted to Independent Telephone Company, Inc. (the Grantee) under Republic Act No. 8615 for another 25 years.
- Allows the Grantee to construct, install, establish, operate, and maintain telecommunication systems and facilities for domestic communications in the City of Biñan, Province of Laguna.
- Covers local exchange network, public calling stations, wire and wireless telecommunications systems, copper and fiber optic cables, satellite systems, switches, and value-added services like voice, data, facsimile, control signs, audio and video transmission, and other technologies.
Manner of Operation (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 permits or licenses after due process for any violation of the franchise provisions.
- The NTC can recommend to Congress the revocation of the franchise for any violation.
Excavation and Restoration Works (Section 4):
- The Grantee can 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 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 the repair 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 systems and equipment 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 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 ones.
Right of the Government (Section 7):
- The radio spectrum is part of the national patrimony, and its use by the Grantee is a privilege that may be withdrawn after due process.
- The President can temporarily take over, suspend, or authorize the temporary use of the Grantee's stations, transmitters, facilities, or equipment in 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 is valid for 25 years from the 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 systems to other duly authorized telecommunications systems in the Philippines 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 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 this franchise or the rights and privileges acquired thereunder to any person, firm, company, corporation, or other commercial or legal 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 must offer at least 30% of its outstanding capital stocks, 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 Grantee's 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 or jobs 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 on its operations to Congress on or before April 30 of every year during the term of its franchise.
- The annual report shall include an update on the roll-out, development, operation or expansion of business; audited financial statements; latest GIS officially submitted to the SEC, if applicable; certification of the NTC on the status of its 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.
- The fine shall be collected by the NTC from the delinquent franchise Grantee separate 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 approved by 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.
Nature and Scope of Franchise (Section 1):
- Renews the franchise granted to Independent Telephone Company, Inc. (the Grantee) under Republic Act No. 8615 for another 25 years.
- Allows the Grantee to construct, install, establish, operate, and maintain telecommunication systems and facilities for domestic communications in the City of Biñan, Province of Laguna.
- Covers local exchange network, public calling stations, wire and wireless telecommunications systems, copper and fiber optic cables, satellite systems, switches, and value-added services like voice, data, facsimile, control signs, audio and video transmission, and other technologies.
Manner of Operation (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 permits or licenses after due process for any violation of the franchise provisions.
- The NTC can recommend to Congress the revocation of the franchise for any violation.
Excavation and Restoration Works (Section 4):
- The Grantee can 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 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 the repair 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 systems and equipment 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 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 ones.
Right of the Government (Section 7):
- The radio spectrum is part of the national patrimony, and its use by the Grantee is a privilege that may be withdrawn after due process.
- The President can temporarily take over, suspend, or authorize the temporary use of the Grantee's stations, transmitters, facilities, or equipment in 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 is valid for 25 years from the 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 systems to other duly authorized telecommunications systems in the Philippines 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 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 this franchise or the rights and privileges acquired thereunder to any person, firm, company, corporation, or other commercial or legal 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 must offer at least 30% of its outstanding capital stocks, 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 Grantee's 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 or jobs 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 on its operations to Congress on or before April 30 of every year during the term of its franchise.
- The annual report shall include an update on the roll-out, development, operation or expansion of business; audited financial statements; latest GIS officially submitted to the SEC, if applicable; certification of the NTC on the status of its 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.
- The fine shall be collected by the NTC from the delinquent franchise Grantee separate 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 approved by 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.