Renewing for Another 25 Years the Franchise Granted to Sultan Kudarat Telephone System, Inc. under Republic Act No. 8637
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Renewing for Another 25 Years the Franchise Granted to Sultan Kudarat Telephone System, Inc. under Republic Act No. 8637
Republic Act No. 11758
April 29, 2022
Case Overview and Summary
Summary of Republic Act No. 11758Nature and Scope of Franchise
- Renews the franchise granted to Sultan Kudarat Telephone System, Inc. (SKTSI) under Republic Act No. 8637 for another 25 years to operate telecommunication systems and facilities in the Province of Sultan Kudarat. (Section 1)
- Allows SKTSI to construct, maintain, operate, own, manage, lease, and purchase telecommunication systems and facilities for domestic communications, including local exchange network, wire and/or wireless telecommunications system, copper, fiber optics, satellite transmit and receive systems, switches and their value-added services. (Section 1)
Manner of Operation of Stations or Facilities
- SKTSI's stations or facilities shall be constructed and operated in a manner that results in minimum interference on existing stations' wavelengths or frequencies. (Section 2)
Authority of the National Telecommunications Commission (NTC)
- SKTSI must secure a Certificate of Public Convenience and Necessity or appropriate permits and licenses from the NTC for the construction, installation, and operation of its telecommunication systems or facilities. (Section 3)
- The NTC has the power to regulate and impose conditions on SKTSI's operations. (Section 3)
- The NTC can revoke or suspend SKTSI's permits or licenses after due process for any violation of the franchise provisions. (Section 3)
- The NTC may recommend to Congress the revocation of the franchise for any violation. (Section 3)
Excavation and Restoration Works
- SKTSI can make excavations or lay conduits in public places with prior approval from the Department of Public Works and Highways (DPWH) or the local government unit (LGU) concerned. (Section 4)
- SKTSI must repair and replace any public place, road, highway, street, lane, alley, avenue, sidewalk, or bridge disturbed by its activities in accordance with DPWH or LGU standards. (Section 4)
- If SKTSI fails to repair or replace after a 10-day notice, the DPWH or LGU can have it repaired and charge SKTSI double the amount of costs and expenses. (Section 4)
Responsibility to the Public
- SKTSI must conform to the ethics of honest enterprise and not use its facilities for obscene or indecent transmission, dissemination of false information, misrepresentation, or assist in subversive or treasonable acts. (Section 5)
- SKTSI must operate and maintain its facilities in a satisfactory manner and keep up with advances in science and technology. (Section 5)
- SKTSI must improve and extend its services in areas not yet served, and in hazard- and typhoon-prone areas determined by the National Disaster Risk Reduction and Management Council, in coordination with the NTC. (Section 5)
- SKTSI must improve and upgrade its equipment, facilities and services to ensure compliance with the Free Mobile Disaster Alerts Act. (Section 5)
Rates for Services
- The charges and rates for SKTSI's regulated telecommunication services shall be subject to the approval of the NTC. (Section 6)
- The rates shall be unbundled, separable, and distinct among the services offered, and regulated services shall not subsidize unregulated ones. (Section 6)
Right of the Government
- The radio spectrum is part of the national patrimony, and its use by SKTSI is a privilege that may be withdrawn after due process. (Section 7)
- The President has the right to temporarily take over, suspend, or authorize the temporary use of SKTSI's stations, transmitters, facilities, or equipment in times of war, rebellion, public peril, calamity, emergency, disaster, or disturbance of peace and order, upon due compensation to SKTSI. (Section 7)
Term of Franchise
- The franchise shall be in effect for 25 years from the date of effectivity of this Act, unless sooner cancelled. (Section 8)
- The franchise shall be deemed ipso facto revoked if SKTSI fails to operate continuously for 2 years. (Section 8)
Right of Interconnection
- SKTSI is authorized to connect or demand connection of its telecommunication systems to other duly authorized systems in the Philippines for the purpose of providing extended and improved services, subject to the review and modification of the NTC. (Section 9)
Warranty in Favor of the National and Local Governments
- SKTSI 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, transmitters, facilities, or equipment. (Section 10)
Sale, Lease, Transfer, Grant of Usufruct, or Assignment of Franchise
- SKTSI 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, nor merge with any other corporation or entity, nor transfer the controlling interest, without the prior approval of Congress. (Section 11)
- SKTSI must inform Congress within 60 days after any such transaction. Failure to report shall render the franchise ipso facto revoked. (Section 11)
- 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. (Section 11)
Dispersal of Ownership
- SKTSI shall offer at least 30% of its outstanding capital stocks, or a higher percentage provided by law, to Filipino citizens in any securities exchange in the Philippines within 5 years from the effectivity of this Act. (Section 12)
- If public offer of shares is not applicable, other methods of encouraging public participation must be implemented. (Section 12)
- Noncompliance shall render the franchise ipso facto revoked. (Section 12)
Commitment to Provide and Promote the Creation of Employment Opportunities
- SKTSI shall create employment opportunities and accept on-the-job trainees in its franchise operations, with priority accorded to residents of the place where its principal office is located. (Section 13)
- SKTSI shall comply with applicable labor standards and allowance entitlement under existing labor laws, rules and regulations. (Section 13)
- The employment opportunities or jobs created shall be reflected in the General Information Sheet (GIS) submitted to the Securities and Exchange Commission (SEC) annually. (Section 13)
Reportorial Requirement
- SKTSI shall 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. (Section 14)
- The annual report shall include updates on activities, development, operation, or expansion of business; audited financial statements; latest GIS submitted to the SEC; certification of the NTC on the status of its permits and operations; and an update on the dispersal of ownership undertaking, if applicable. (Section 14)
- The reportorial compliance certificate issued by Congress shall be required before any application for permit or certificate is accepted by the NTC. (Section 14)
Fine
- 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. (Section 15)
- In the interim, SKTSI shall be liable to pay a fine of Five hundred pesos (P500.00) per working day of noncompliance to the NTC. (Section 15)
- The fine shall be collected separately from the reportorial penalties imposed by the NTC and remitted to the Bureau of the Treasury. (Section 15)
Equality Clause
- 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 SKTSI, except for provisions concerning territory covered, life span of the franchise, or type of service authorized. (Section 16)
Repealability and Nonexclusivity Clause
- 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 privilege. (Section 17)
Separability Clause
- If any section or provision of this Act is held invalid, all other provisions not affected shall remain valid. (Section 18)
Repealing Clause
- 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. (Section 19)
Effectivity
- This Act shall take effect 15 days after its publication in the Official Gazette or in a newspaper of general circulation. (Section 20)
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Sultan Kudarat Telephone System, Inc.
telecommunication systems and facilities
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fiber optics
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Certificate of Public Convenience and Necessity
excavation and restoration works
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Law
Renewing for Another 25 Years the Franchise Granted to Sultan Kudarat Telephone System, Inc. under Republic Act No. 8637
Republic Act No. 11758
•April 29, 2022
April 29, 2022
REPUBLIC ACT NO. 11758
AN ACT RENEWING FOR ANOTHER TWENTY-FIVE (25) YEARS THE FRANCHISE GRANTED TO SULTAN KUDARAT TELEPHONE SYSTEM, INC. UNDER REPUBLIC ACT NO. 8637, ENTITLED "AN ACT GRANTING THE SULTAN KUDARAT TELEPHONE SYSTEM, INC. A FRANCHISE TO CONSTRUCT, ESTABLISH, INSTALL, MAINTAIN AND OPERATE LOCAL EXCHANGE NETWORK IN THE PROVINCE OF SULTAN KUDARAT"
SECTION 1. Nature and Scope of Franchise. — Subject to the provisions of the Constitution and applicable laws, rules and regulations, the franchise granted to Sultan Kudarat Telephone System, Inc. (SKTSI), hereunder referred as the Grantee, its successors or assignees, under Republic Act No. 8637, to establish, construct, maintain, operate, own, manage, lease, and purchase for commercial purposes and in the public interest in the Province of Sultan Kudarat, telecommunication systems and facilities for domestic communications, including local exchange network, wire and/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...
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