Renewing for Another 25 Years the Franchise Granted to Meridian Telekoms, Inc., Presently Known as Smart Broadband, Inc.
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Renewing for Another 25 Years the Franchise Granted to Meridian Telekoms, Inc., Presently Known as Smart Broadband, Inc.
Republic Act No. 11678
April 8, 2022
Case Overview and Summary
Summary of Republic Act No. 11678Nature and Scope of Franchise (Section 1):
- Renews the franchise granted to Meridian Telekoms, Inc. (presently known as Smart Broadband, Inc.) under Republic Act No. 8337 for another 25 years.
- Allows the Grantee to construct, install, establish, maintain, lease and operate wired or wireless telecommunications systems throughout the Philippines and between the Philippines and other countries.
- Covers various technologies such as mobile, cellular, fixed line, fiber optics, satellite, switches, and value-added services for transmission of voice, data, images, and other telecommunications services.
Manner of Operation (Section 2):
- The Grantee's stations or facilities shall be 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 permits or licenses after due process for violations.
- The NTC may 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 with prior approval from the DPWH or LGU.
- The Grantee must repair and replace any public place disturbed by its works according to standards set by the DPWH or LGU.
- 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 technological advances.
- The Grantee must improve and extend services to unserved areas, hazard-prone areas, and comply with the Free Mobile Disaster Alerts Act.
Rates for Services (Section 6):
- The Grantee's rates and charges for regulated services are subject to NTC approval.
- Rates must be unbundled and separable among services offered, and regulated services must not subsidize unregulated ones.
Right of the Government (Section 7):
- The government reserves the right to temporarily take over, suspend operations, or authorize temporary use of the Grantee's facilities during war, public peril, calamity, or emergency, with due compensation.
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 interconnect with other telecommunications systems to provide extended and improved services, subject to NTC review and modification.
Mobile Number Portability (Section 10):
- The Grantee shall provide mobile number portability and the required infrastructure and processes.
- The Grantee shall interconnect with other telecommunications franchise grantees and not impede the implementation of a nationwide mobile number portability system.
Warranty in Favor of National and Local Governments (Section 11):
- The Grantee shall hold the national, provincial, city, and municipal governments free from claims, liabilities, or demands arising out of accidents during construction or operation.
Sale, Lease, Transfer, Grant of Usufruct, or Assignment of Franchise (Section 12):
- The Grantee cannot sell, lease, transfer, grant usufruct, or assign the franchise or merge without prior approval from Congress.
- The Grantee must inform Congress of any such transaction within 60 days, or the franchise shall be revoked.
- Any entity to which the franchise is transferred shall be subject to the same conditions and limitations.
Dispersal of Ownership (Section 13):
- The Grantee shall offer at least 30% of its outstanding capital stock to Filipino citizens in a securities exchange within 5 years from the effectivity of this Act.
- Noncompliance shall render the franchise ipso facto revoked.
Commitment to Provide and Promote Employment Opportunities (Section 14):
- The Grantee shall create employment opportunities and accept on-the-job trainees, with priority to residents where its principal office is located.
- The Grantee shall comply with applicable labor standards and allowance entitlement.
- The employment opportunities created shall be reflected in the GIS submitted to the SEC annually.
Reportorial Requirement (Section 15):
- The Grantee shall submit an annual report on its compliance with the franchise and operations to Congress on or before April 30 of every year.
- The annual report shall include updates on activities, development, operation, expansion, audited financial statements, GIS, NTC certification, and dispersal of ownership undertaking.
- A reportorial compliance certificate from Congress shall be required before the NTC accepts any application for permit or certificate.
Fine (Section 16):
- Failure to submit the annual report shall be penalized with a fine of ₱1,000,000 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 ₱500 per working day of noncompliance to the NTC.
Equality Clause (Section 17):
- Any advantage, favor, privilege, exemption, or immunity granted under existing or future telecommunications franchises shall be accorded to the Grantee, except for provisions concerning territory, life span, or type of service.
Repealability and Nonexclusivity Clause (Section 18):
- This 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.
Separability Clause (Section 19):
- If any section or provision of this Act is held invalid, all other provisions not affected shall remain valid.
Repealing Clause (Section 20):
- All laws, decrees, orders, resolutions, instructions, rules and regulations inconsistent with this Act are hereby repealed, amended, or modified accordingly.
Effectivity (Section 21):
- 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 Meridian Telekoms, Inc., Presently Known as Smart Broadband, Inc.
Republic Act No. 11678
•April 8, 2022
April 8, 2022
REPUBLIC ACT NO. 11678
AN ACT RENEWING FOR ANOTHER TWENTY-FIVE (25) YEARS THE FRANCHISE GRANTED TO MERIDIAN TELEKOMS, INC., PRESENTLY KNOWN AS SMART BROADBAND, INC., UNDER REPUBLIC ACT NO. 8337, ENTITLED "AN ACT GRANTING THE MERIDIAN TELEKOMS, INC., A FRANCHISE TO CONSTRUCT, INSTALL, ESTABLISH, MAINTAIN, LEASE AND OPERATE WIRE AND/OR WIRELESS 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, the franchise granted to Meridian Telekoms, Inc., presently known as Smart Broadband, Inc., under Republic Act No. 8337, hereunder referred as the Grantee, its successors or assignees, to construct, install, establish, maintain, lease and operate, for commercial purposes and in the public interest, throughout the Philippines and between the Philippines and other countries and territories, wired or wireless telecommunications systems including mobile, cellular, fixed line, trunked radio, fiber optics, multi-channel multipoint distribution system (MMDS), local multi-point distribution system (LMDS), satellite transmit and receive systems, switches, and value-added services such as transmission of voice, data, images,...
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