REPUBLIC ACT NO. 7372 - AN
ACT GRANTING THE ISLA COMMUNICATIONS CO. A FRANCHISE TO INSTALL,
OPERATE AND MAINTAIN TELECOMMUNICATIONS SERVICES WITHIN THE TERRITORY
OF THE REPUBLIC OF THE PHILIPPINES AND INTERNATIONAL POINTS AND FOR
OTHER PURPOSES
Section 1. Subject to the conditions established in this Act
and the provisions of the Constitution and the provisions of laws,
orders or issuances not inconsistent herewith, there is hereby granted
to the Isla Communications Co. (ISLACOM), its successors or assigns the
right, privilege and authority to construct, operate and maintain all
types of mobile telecommunications, including cellular, personal
communications network, paging and trunk radio services (such as but
not limited to the transmission and reception of voice, data facsimile,
audio and video, and all other improvements and innovations pertaining
to or as may be applicable to mobile telecommunications technology) as
well as multi-channel microwave, fiber optic and satellite distribution
systems that may be required for the purpose of linking together said
mobile telecommunications network internally and externally to other
mobile telecommunications network and traditional wireline telephone
systems, whether domestic or international, whether directly or
indirectly, through networks and, generally, to provide by means of
this telecommunications system a telephone service and such other
telecommunications services such as there may be demand for in the
Philippines.
The grantee is authorized to carry on the business of providing to the
public telecommunications services within the territory of the Republic
of the Philippines and other countries and territories and, for the
purpose of providing said telecommunications services, to construct,
own and operate telecommunications system in and between provinces,
cities and municipalities of the Republic of the Philippines and to
lay, place and operate and maintain telecommunications lines in and
between the territory of the Republic of the Philippines and other
countries, including the construction, operation and maintenance of an
international digital gateway facility, and to construct, maintain and
operate and use all telecommunications apparatus necessary for the
provision of telecommunications services and to install, construct and
maintain telecommunications apparatus in, on, over, or under the public
roads, government rights-of-way, lands bridges, rivers, waters,
streets, lanes and sidewalks of said provinces, cities and
municipalities, and to lay submarine telecommunications cables in the
surrounding waters of the Philippines and for the purpose of connecting
its telecommunications systems with other telecommunications systems
operated by others within the Philippines and with the
telecommunications systems of other countries, as may be necessary and
best adapted to said provision of telecommunications services, and to
connect and keep connected its telecommunications system to other
telecommunications systems for the interconnection of
telecommunications services within the territory of the Republic of the
Philippines and between the Republic of the Philippines and other
countries and territories.
Sec. 2. The President of the Philippines, in times
of war, rebellion, public peril, calamity, emergency, disaster or
disturbance of peace and order, may take over and operate the stations,
transmitter systems, facilities and equipment of the grantee,
temporarily suspend the operation of any station in the interest of
public safety, security and public welfare, or authorize the temporary
use and operation thereof by any agency of the Government, upon due
compensations to the grantee, for the use of said stations, transmitter
systems, facilities and equipment during the period when they shall so
operated.
Sec. 3. The grantee may install, operate and
maintain radio telecommunications system to provide a telephone service
and other telecommunications services including mobile services within
the territory of the Republic of the Philippines and between the
Republic of the Philippines and ships at sea, aircraft in the air, and
the telecommunications systems of other countries: provided, that the
location, installation or operation of any such radio
telecommunications system must be previously approved by the National
Telecommunications Commission: provided, further, that the National
Telecommunications Commission shall have the authority to supervise and
regulate the installation or operation of such radio telecommunications
system.
Sec. 4. For the purpose of installing, operating
and maintaining its telecommunications lines, it shall be lawful for
the grantee, its successors assigns to make excavations or lay conduits
in any of the public places, highways, streets, lanes, alleys, avenues,
sidewalks, bridges of said provinces, cities and municipalities:
provided, however, that any public place, highway, street, lane, alley,
avenue, sidewalk or bridge disturbed, altered or changed by reason of
the installation, operation and maintenance of said telecommunications
lines underground shall be repaired and replaced in a workmanlike
manner by said grantee, its successors or assigns to the satisfaction
of the National Telecommunications Commission. Should the grantee, its
successors or assigns, after thirty (30) days notice from the proper
authority, fail, refuse or neglect to repair or replace any part of a
public place, road, highway, street, lane, alley, avenue, sidewalk or
bridge altered, changed or disturbed by said grantee, its successors or
assigns, then the Secretary of Transportation and Communications shall
have the right to have the same repaired and placed in good order and
condition at the cost and expense of the grantee, its successors and
assigns.
Sec. 5. This franchise shall be for a term of
twenty-five (25) years from the date of effectivity of this Act, unless
sooner revoked or cancelled. In any event that the grantee fails to
operate continuously for two (2) years, this franchise shall be deemed
ipso facto revoked.
Sec. 6. Acceptance of this franchise shall be
given in writing within sixty (60) days after the effectivity of this
Act. The grantee shall operate the telecommunications systems for which
this franchise is granted within four (4) years from the date of its
acceptance in writing of this franchise. Refusal or failure to accept
the franchise or to operate within the prescribed period shall render
the franchise void.
Sec. 7. All telecommunications systems owned,
operated or maintained by the grantee, its successors or assigns shall
be maintained and operated at all times in a satisfactory manner, and
it shall be the further duty of said guarantee, its successors or
assigns, whenever required to do so by the National Telecommunications
Commission, to modify, improve and change such telecommunications
systems in such manner and to such extent as the progress of science
and improvements in the method of conveyance of telecommunications
messages by means of said systems may make reasonable, proper and
economically feasible.
Sec. 8. The grantee, its successors or assigns
shall keep a separate account of the gross receipts of the
telecommunications service business transacted by it and shall furnish
the Commission on Audit and the National Treasurer a copy of such
account not later than the thirty-first day of January of each year for
the preceding twelve (12) months.
Sec. 9. The grantee shall not exercise any right
or privilege under this franchise without first having obtained such
certificate of public convenience and necessity from the National
Telecommunications Commission. This franchise shall not take effect nor
shall any power be exercised by the grantee until the National
Telecommunications Commission shall have allotted to the grantee the
frequencies and wavelengths to be used and determined the stations to
and from which each frequency and wavelength may be used, and issued to
the grantee a license for such case.
SECTION 10. The stations of the grantee shall be so
constructed and operated and the wavelengths so selected as to avoid
interference with existing stations and to permit the expansion of the
grantee's services.
SECTION 11. No private property shall be taken for
any purpose by the grantee without proper condemnation proceedings and
just compensation paid or tendered therefore, and any authority to take
and occupy land contained herein shall not apply to the taking, use or
occupation of any land except such as is required for the actual and
necessary purposes for which this franchise is granted.
SECTION 12. As a guaranty that this franchise has
been accepted in good faith, the grantee, its successors or assigns
shall filed, after the granting of the certificate of public
convenience and necessity by the National Telecommunications
Commission, with the National Treasurer, a surety bond in such amount
as may be fixed by the proper government authority to guarantee full
compliance and fulfillment of the conditions under which this franchise
is granted.
Should the said grantee, its successors or assigns, for any other cause
than the act of God or the public enemy, usurpation of military power,
martial law, riot, civil commotion or inevitable cause, fail, refuse or
neglect to begin, within two (2) years from the date of the granting of
said certificate of public convenience and necessity, the business of
providing telecommunications service or fail, refuse or neglect to be
fully equipped and ready to operate, within two (2) years from the date
of granting of said certificate of public convenience and necessity, a
telecommunications system as have been agreed with competent authority,
according to the terms of this franchise, then the bond prescribed by
this section to be filed with the National Treasurer shall become the
property of the National Government as liquidated damages caused to the
Government by such failure, refusal or neglect, and thereafter no
interest on said bond shall be paid to the grantee, its successors or
assigns.
Should the grantee, its successors or assigns begin the business of
providing a telephone service and be ready to operate according to the
terms of this franchise a telecommunications system within two (2)
years from the date of the granting of said certificate of public
convenience and necessity, then and in that event the bond prescribed
by this section shall be returned by the Government to the grantee, its
successors or assigns as soon as the telephone service has begun in
accordance with the terms of this franchise; Provided, further, that
all the time during which the grantee, its successors or assigns may be
prevented from carrying out the terms and conditions of this franchise
by any of said causes shall be added to the time allowed by this
franchise for compliance with its provisions.
SECTION 13. From the date the national
Telecommunications Commission allots the grantee the frequencies and
wavelengths to be used by it, the grantee shall be allowed for a period
of three (3) years to import all its capital equipment on a tax and
duty-free basis.
SECTION 14. The grantee, its successors or assigns
shall be liable to pay the same taxes on their real estate, buildings
and personal property, exclusive of this franchise, as other persons or
corporations which are now or hereafter may be required by law to pay.
In addition thereto, the grantee, its successors or assigns shall pay a
franchise tax equivalent to three percent (3%) of all gross receipts of
the business transacted under this franchise by the grantee, its
successors or assigns and the said percentage shall be in lieu of all
taxes on this franchise or earnings thereof: provided, that the
grantee, its successors or assigns shall continue to be liable for
income taxes payable under Title II of the National Internal Revenue
Code pursuant to Sec. 2 of Executive Order No. 72 unless the latter
enactment is amended or repealed, in which case the amendment or repeal
shall be applicable thereto.
The grantee shall file the return with and pay the tax due thereon to
the Commissioner of Internal Revenue or his duly authorized
representative in accordance with the National Internal Revenue Code.
The return shall be subject to audit by the Bureau of Internal Revenue.
SECTION 15. The rates for the telephone service or
changes for every type of call, flat rates as well as measured rates,
are subject to the approval of the National Telecommunications
Commission.
SECTION 16. The grantee is hereby authorized to
connect its telecommunications systems to any other telecommunications
systems installed, operated and maintained by any other grantee in the
Philippines for the purpose of providing telecommunications services to
the public on such terms and conditions as may be prescribed from time
to time by the National Telecommunications Commission.
SECTION 17. The books and accounts of the grantee,
its successors or assigns shall always be open to the inspection of the
Commissioner on Audit or his authorized representatives, and it shall
be the duty of the grantee to submit to the commission on audit
quarterly reports in duplicate showing the gross receipts and the net
receipts for the past quarter and the general condition of the business.
SECTION 18. The rights herein granted shall not be
exclusive, and the rights and power to grant to any corporation,
association, or person other than the grantee a franchise for the
provision of telephone service or the installation, operation and
maintenance of a telecommunications system shall not be impaired or
affected by the granting of this franchise: provided, that the
telecommunications lines installed by virtue of any franchise for the
provision of a telecommunications service of the installation,
operation and maintenance of a telecommunications systems grant
subsequent to this franchise shall be so placed as not to impair the
efficient and effective operation of the telecommunications system
installed under this franchise and actually in existence at the time of
the granting of said subsequent franchise: provided, further, that the
National Telecommunications Commission after hearing both parties
interested may compel the grantee of this franchise or its successors
or assigns to remove, relocate or replace their telecommunications
lines but in such case the reasonable cost of the removal, relocation
of replacement shall be paid by the grantee of the subsequent franchise
of his successors or assigns to the grantee of this franchise or its
successors or assigns.
SECTION 19. The grantee shall not lease, transfer,
grant the usufruct of, sell or assign this franchise or the rights and
privileges acquired thereunder to any person, firm, company,
corporation or entity, nor merge with any other corporation or entity
without the prior approval of the Congress of the Philippines. Neither
shall the controlling interest in the grantee be transferred, whether
as a whole or in parts and whether simultaneously or contemporaneously,
to any such person, firm, company, corporation or entity without the
prior approval of the congress of the Philippines, except when the
transfer is done: (a) through a stock exchange transaction; (b) for
purposes of qualifying persons for election to the board; and (c) to a
corporation that is controlled by the same stockholders as that of the
grantee. Any person or entity to which this franchise is validly sold,
transferred or assigned shall be subject to all the same conditions,
terms, restrictions and limitations of this Act.
Sec. 20. In compliance with the constitutional
mandate to democratize ownership of public utilities, the herein
grantee shall make a public offering through the stock exchange of at
least thirty percent (30%) of its common stocks within a period of
three (3) years from the date of the effectivity of this Act: provided,
that no single person or entity shall be allowed to own more than five
percent (5%) of their stock offering.
Sec. 21. The grantee shall comply with and be
subject to the provisions of a general telecommunications policy law
that may hereafter be enacted.
Sec. 22. The grantee is authorized to contract the
installation and operation of the telecommunications system which is
the subject of this grant entities with expertise in the field of
telecommunications under such terms and conditions as may be approved
by the National Telecommunications Commission.
Sec. 23. This franchise is granted with the
understanding and upon the condition that it shall be subject to
amendment, alteration or repeal by the Congress as provided in the
Constitutions, and that all lands or rights or use or occupation of
lands secured by virtue of this franchise shall revert upon its
termination to the national, provincial, city or municipal governments
which were the owners thereof upon the date on which this franchise was
granted. The pertinent provisions of the Constitution are hereby
incorporated in and made part of these presents, with the same effect
as if they were expressed herein.
Sec. 24. Wherever in this franchise the term
"grantee" is used, it shall be held and understood to mean and
represent the Isla Communications Co., its representatives, successors
or assigns.
Sec. 25. This Act shall take effect fifteen (15)
days from the date of its publication in at least two (2) newspapers of
general circulation in the Philippines.
Approved: April 10, 1992
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