REPUBLIC ACT NO. 7617 - AN ACT
GRANTING TO THE TELECOMMUNICATIONS TECHNOLOGIES PHILIPPINES,
INCORPORATED, A FRANCHISE TO INSTALL, OPERATE AND MAINTAIN
TELECOMMUNICATIONS SYSTEMS THROUGHOUT THE PHILIPPINES AND FOR OTHER
PURPOSES
Section 1. Nature and Scope of Franchise. — Subject to the
provisions of the Constitution and applicable laws, rules and
regulations on public telecommunications, there is hereby granted to
the Telecommunications Technologies Philippines, Incorporated, its
successors or assigns a franchise to install, operate and maintain
telecommunications systems throughout the Philippines including but not
limited to the operations of local exchange service or public switched
telephone network, public-calling stations, inter-exchange carrier or
national toll transmission value-added or enhanced services intelligent
networks, mobile or personal communications services, international
gateway facility, and paging services; and for the purpose of providing
said telecommunications systems in and between provinces, cities and
municipalities of the Philippines, in on, over, or under lands and
waters, as may be necessary and best adapted to the provision of
telecommunications services, to contract other countries and
territories, to use any technology whether digital or analogue, via
cable, satellite, microwave, optical fiber, or any transmission medium,
and with such telecommunication apparatus as may be necessary for the
provision of such telecommunication services, and to connect and keep
connected its telecommunications system to other telecommunications
systems.
Sec. 2. Definition of Terms. — As used in this
Act, the following words and/or terms shall be interpreted of defined
in this manner:
(a) "Telecommunications system" means the combination
of hardware and software for the conveyance, through the agency of
electric, magnetic, electro-magnetic, electro-chemical or
electro-mechanical energy of speech and other sounds, visual images,
data or signals;
(b) "Telecommunications apparatus" means any device
or equipment manufactured or adopted for use in transmitting or
receiving anything conveyed by a telecommunications system, and
includes any telecommunications lines;
(c) "Telecommunication message" means voice, data,
images and anything conveyed through a telecommunications system;
(d) "Telecommunications service" means a service for
the conveyance of any telecommunication message of and by the general
public or customer and includes a directory information service and the
installation, maintenance, adjustment, repair, relocation or
replacement of telecommunication apparatus, excluding the broadcasting
of any communication message the purpose of which is to advertise any
product or service other than the use of the telecommunication service
itself;
(e) "Telephone service" means a telecommunication
service consisting of the conveyance primarily of voice and, secondary
of other forms of message;
(f) "Telecommunication line" means any wire, cable,
tube, pipe, conduit or other similar material, including its casing or
coating, which is designated or adapted to function as a
telecommunication apparatus; and
(g) "Local telephone exchange" means a central
switching facility or a telecommunications apparatus which routes calls
through the network or system.
Sec. 3. Authority of the National
Telecommunications Commission. — The grantee shall secure from the
National Telecommunications Commission, hereinafter referred to as the
Commission, a certificate of public convenience or appropriate permits
and licenses for the location, construction, installation and operation
of its telecommunications systems. In issuing the certificate, the
Commission shall have the power to impose such conditions relative to
the construction, operation, maintenance, or service level of the
telecommunications system. The Commission shall have the authority to
regulate the construction and operation of its telecommunications
systems. The grantee shall not use any frequency in the radio spectrum
without having been authorized by the Commission. Such certificate
shall state the areas covered and date the grantee shall commence the
service.
Sec. 4. Responsibility to the Public. — The
grantee shall provide basic or enhanced telephone service in any
municipality in the Philippines where it has an approved certificate of
public convenience for the establishment, operation, and maintenance of
a local exchange service, without discrimination to any applicant
therefore, in the order of the date of their applications, up to the
limit of the capacity of its local telephone exchange, and should the
demand for the telephone service at any time increase beyond the
capacity thereof, the grantee shall increase the same to meet such
demand: provided, that in the case the total demand to be satisfied by
the expansion is less than the smallest viable local exchange available
in the market as be determined by the Commission, the grantee shall not
be obliged to furnish said service, unless the applicant for telephone
service defrays the actual expenses for the installation of the
telecommunication apparatus necessary for such services and in such
case the Commission may extend the time within which the grantee shall
furnish such service.
The grantee shall operate and maintain all its stations, lines, cables,
systems and equipment for the transmission and reception of messages,
signals and pulses in a satisfactory manner at all times, and as far as
economical and practicable, modify, improve or change such stations,
lines, cables, systems and equipment to keep abreast with the advances
in science and technology.
Sec. 5. Eminent Domain. — The grantee may acquire
such private property as is actually necessary for the realization of
the purposes for which this franchise is granted: provided, that in
case the owner refuses to sell or allow thereof, the proper
condemnation proceedings shall be instituted: provided, further, that
just compensation is paid.
Sec. 6. Ingress and Egress. — For the purpose of
installing operating and maintaining its telecommunication lines, it
shall be lawful for the grantee to make excavations or lay conduits in
any of the public places, highways, streets, lanes, sidewalks, bridges
or infrastructure in any provinces and municipalities: provided,
however, that any public place, highway, street, lane, sidewalk, bridge
or infrastructure disturbed, altered, or changed thereby shall be
repaired and replaced in a workman-like manner by the grantee to the
satisfaction of the Department of Public Works and Highways or the
local engineering, office, as the case may be, and/or in accordance
with existing laws or rules on excavations and reconstitution of such
public civil works.
Sec. 7. Interconnection. — The grantee is
authorized to connect or demand connection of its telecommunications
systems to any other telecommunications systems installed, maintained
and operated by any other duly-authorized person or entity in the
Philippines for the purpose of providing extended and improved
telecommunications services to the public under such terms and
conditions mutually agreed upon by the interconnection and the same
shall be subject to the review or modification of the Commission.
Sec. 8. Equality Clause. — If any subsequent
franchise for telecommunication service is awarded or granted by the
Congress of the Philippines with terms, privileges and conditions more
favorable and beneficial than those contained in this Act, then the
same privileges or advantages shall, ipso facto, accrue to the herein
grantee and be deemed part of this Act.
Sec. 9. Sale, Lease, Transfer, Usufruct, etc. —
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 be 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. 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.
SECTION 10. Tax Provisions. — The grantee shall be
liable to pay the same taxes on their real estate, buildings and
personal property exclusive of this franchise, as other persons or
telecommunication entities are now or hereafter may be required by law
to pay. In addition thereto, the grantee shall pay to the Bureau of
Internal Revenue each year, three per centum (3%) of the gross receipts
of its regulated telecommunication services transacted under this
franchise, and the said percentages shall be in lieu of all taxes on
this franchise or earnings thereof: provided, that the grantee 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.
SECTION 11. Rates for Services. — The tariffs and
rates for the telephone service and other types of telecommunications
services of the grantee except the rates and charges on those that may
hereafter be declared or considered as non-regulated services, whether
flat rates or measured rates or variation thereof, shall be effective
only after approval of the Commission. The rates to be charged by the
grantee shall be unbundled, separable and distinct among the services
offered and shall be determined in such a manner that regulated
services do not subsidize the unregulated ones.
SECTION 12. Dispersal Ownership. — In accordance with
the constitutional provisions to encourage public participation in the
public utilities, the grantee shall offer at least thirty per centum
(30%) of its outstanding capital stock or a higher percentage that may
hereafter be provided by law in any securities exchange in the
Philippines within two (2) years from the effectivity of this Act.
SECTION 13. Term of Franchise. — The franchise shall
be for a period of twenty-five (25) years from the date of effectivity
of this Act unless sooner revoked or cancelled. In the event that the
grantee fails to operate continuously for two (2) years, this franchise
shall deemed ipso facto revoked.
SECTION 14. Acceptance of Franchise. — Within sixty
(60) days after the effectivity of this Act, the grantee shall file
with the Secretary of Transportation and Communications its written
acceptance of this franchise and of all the terms and conditions
hereof. In default of such acceptance within the said time, this
franchise shall become null and void.
As a guaranty that it has accepted this franchise in good faith, the
grantee shall, within thirty (30) days from the granting of its first
certificate of public convenience, deposit, with the National Treasury
the sum of One Hundred thousand pesos (P100,000) in cash or negotiable
instruments of the Philippine Government and file a bond in the amount
of One million pesos (P1,000,000).
Should the grantee fail, refuse or neglect to begin the business of
providing a telephone service within two (2) years of the grant of the
certificate of public convenience and for any reason other than an act
of God, act of the public enemy, military power, martial law, riot,
civil, commotion, or unavoidable cause, then the deposit prescribed
under this section shall be forfeited in favor of the National
Government as liquidated damages. Should the grantee perform on time
the undertaking for which the deposit is required, then the deposit
shall be returned to the grantee and its bond cancelled within six (6)
months of commencement of service.
SECTION 15. Filing of Application with the
Commission. — Within six (6) months after the effectivity of this Act,
the grantee shall file an application with the Commission of a
certificate of public convenience authorizing it to construct, operate
and maintain a telecommunications system and to offer the corresponding
telecommunication service in such municipalities as it may deem in need
of such service. Failure to file such an application for any reason
other than force majeure or acts of God shall render this franchise
void.
SECTION 16. Warranty. — The grantee shall hold the
national, provincial, city and municipal governments harmless from all
claims, accounts, demands or actions arising out of accidents or
injuries, whether to property or to persons, caused by the installation
and operation of the telecommunications systems of the grantee.
SECTION 17. Right of Government. — In the event of
war, rebellion, insurrection or similar national crisis and the
Government shall find it necessary to operate and maintain for itself
any or all of the telecommunication apparatus and system herein
authorized, the grantee shall temporarily turn over such facilities or
apparatus to the Government in exchange for payment of just and
reasonable compensation for the use thereof.
The Government shall have the privilege of using without compensation
the poles of the grantee to attach and to install, maintain and operate
wires of its telegraph system, traffic signals, police and fire alarm
system: provided, that the wires shall be placed and strung in such
manner as to cause no interference with or damage to the wires or the
telephone service of the grantee.
SECTION 18. Relationship with the Municipal Telephone
Act of 1990. — The grantee shall be deemed qualified participate as an
existing private carrier in the installation, operation and maintenance
of public-calling stations as provided for under Sec. 5 of Republic
Act No. 6849, the deadline imposed by such section in the aforesaid law
notwithstanding.
SECTION 19. Alteration or Repeal of Franchise. — This
franchise shall be subject to amendment, alternation or repeal by the
Congress of the Philippines. All lands or rights of use or occupation
of lands secured by virtue of this franchise shall revert upon its
termination to be national, provincial or municipal governments
concerned which were the owners thereof upon the date on which this
franchise was granted.
Sec. 20. Separability Clause. — If any section or
provision of this Act is declared unconstitutional or invalid, the
other sections or provisions not affected thereby shall continue to be
in force and effect.
Sec. 21. Effectivity Clause. — This Act shall take
effect fifteen (15) days after its publication in at least two (2)
newspapers of general circulation in the Philippines.
Approved: June 25, 1992
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