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APRIL 16, 2015

NR # 3803

House body pushes for 25-year franchise renewal of PT&T


The House Committee on Legislative Franchises has endorsed for plenary approval
a measure extending the franchise granted to the Philippine Telegraph and Telephone
Corporation (PT&T) for another 25 years.
House Bill 5601, which substituted House Bill 4364 authored by Deputy Speaker
Sergio A.F. Apostol (2nd District, Leyte), authorizes PT&T to continue providing Internet
& Protocol (IP) based communications using the latest state of the art technology.
Apostol said PT&T has a long history of providing telegraph and telephone
communications since 1966 when it was first granted its National Legislative Franchise.
PT&T became a publicly listed entity in 1989 in compliance with the constitutional
mandate of democratizing ownership of all public utilities, Apostol said.
From a leadership role in providing public telegraphy, telex, data communications,
leased circuits and long distance voice services, PT&T has also participated in the service
area scheme (SAS) program of the government in the mid-1990 by accepting the
responsibility of rendering competitive local exchange carrier operations in Region 4A,
he said.
Rep. Marcelino R. Teodoro (1st District, Marikina City), chairman of the House
Committee on Legislative Franchises, said the evolution of Cellular Mobile Telecom
System (CMTS) has greatly transformed the development of telephony from wire line
dependency to wireless mobile communication.
PT&T towards the latter part of the 20 th century has shifted its focus in the
emerging market of Internet Protocol (IP) based global communications being embraced
by the public, Teodoro said.
Under the measure, PT&T franchise shall be renewed, amending Republic Act
4161, as amended by Republic Act Nos. 5048 and 6970, for a period of twenty-five years
effective from the date of effectivity of the proposed Act.
The franchise shall be deemed ipso facto revoked in the event the grantee fails to
operate continuously for two years.
The renewed franchise allows PT&T to establish, install, maintain and operate wire
and or wireless telecommunications systems, line, circuits and stations throughout the
Philippines for public domestic and international communications.

The measure requires PT&T to secure from the National Telecommunications


Commission (NTC) a Certificate of Public Convenience and Necessity and the appropriate
permits and licenses.
The President of the Philippines reserves a special right to temporarily take over
and operate the stations or facilities of PT&T, in times of war, rebellion, public peril,
calamity, emergency, disaster or disturbance of peace and order.
PT&T is prohibited to lease, transfer, sell or assign the franchise or the controlling
interest without the prior approval of Congress of the Philippines.
In accordance with the constitutional provision to encourage public participation in
public utilities, PT&T shall offer Filipino citizens at least thirty per cent or higher of its
outstanding capital stock in any securities exchange in the Philippines within five years
from the commencement of its operations.
In cases where public offer of shares is not applicable, establishment of
cooperatives operating public utilities must be implemented.
Non-compliance shall render the franchise ipso facto revoked.
PT&T shall submit an annual report to Congress of the Philippines, through the
House Committee on Legislative Franchises and the Committee on Public Services of the
Senate on or before April 30 of every year during the term of its franchises.
The reportorial compliance certificate issued by Congress shall be required before
any application for permit or certificate is accepted by the NTC.
Failure to submit the requisite annual report to Congress shall be penalized with a
fine of P500 per day to be implemented by the NTC. (30) jc