Be it enacted by the Senate and House of Representatives of the Philippines in Congress assembled:

SECTION 1. Subject to the conditions established in this Act and the provisions of Commonwealth Act Numbered One hundred and forty-six, as amended, and of the Constitution, applicable thereto, there is hereby granted to the Pilipino Telephone Corporation, hereinafter called the grantee, its successors or assigns, for a period of twenty-five years from the approval of this Act, the right, privilege, and authority to construct, maintain and operate telephone systems in the Municipality of Puerto Princesa, Province of Palawan; Municipality of Masbate, Province of Masbate; Municipality of Pili; Province of Camarines Sur; Municipality of Jolo, Province of Sulu; Municipality of Aparri, Province of Cagayan; Municipality of Pagadian, Province of Zamboanga del Sur; and in and between the provinces, cities and municipalities in the Bicol Provinces and Mindanao, it being understood that the grantee is authorized to construct, operate and maintain such exchanges and branch tributary lines within the provinces, cities and municipalities traversed to connect with the main systems, as public interest may warrant. The grantee is authorized to carry on the business of the electrical transmission of messages and signals in and between the said provinces, cities and municipalities, and connect such systems within the Philippines to the telephone systems of other countries, and for the purpose of operating said telephone systems and transmitting messages and signals by means of electricity, to construct, maintain and operate and use all apparatus, conduits, appliances, receivers, transmitters, antennas, and equipment necessary for the electrical transmission of messages and signals, and to erect poles, structures, string wires, build conduits, lay cables, and to construct, maintain and use such other approved and generally accepted means of electrical conduction 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 overhead or underground or submarine lines or on the surface of the ground, as may be necessary and best adapted to said transmission: Provided, however, That all cables laid, all poles erected and all conduits constructed or used by the grantee, its successors or assigns, shall be located in places designated by said grantee with the approval of the provincial or municipal board or council of the province, city or municipality concerned, and poles shall be erected in a workmanlike manner to the satisfaction of the said body: Provided, further, That the poles erected, wires and cables strung or conduits laid by virtue of this franchise shall be so placed as not to impair the efficient and effective transmission of messages and signals by any other company whose poles are erected, whose wires and cables are strung, or whose conduits are actually laid at the time that the poles are to be erected, wires and cables strung and conduits laid under and by virtue of this franchise: and Provided, finally, That poles erected by the grantee shall be of such a height of at least ten feet above the level of the ground providing a height of at least fifteen feet in crossing roads or streets, and shall be so placed as not to be a danger to public safety, in accordance with a plan approved by the Secretary of Public Works and Communications.

SEC. 2. Whenever any person has obtained permission to use any of the streets of the province, city or municipality concerned for the purpose of removing any building or in the prosecution of any municipal work or for any other cause whatsoever, making it necessary to raise or remove any of said wires or conduits which may obstruct or hinder the prosecution of said work, the said grantee, upon notice by the provincial or municipal board or council of the province, city or municipality concerned served upon said grantee at least forty-eight hours in advance, shall raise or remove any of said wires or conduits which may hinder the prosecution of such work or obstruct the removal of said building, so as to allow the free and unobstructed passage of said building and the free and unobstructed prosecution of said work, and the person or entity at whose request the wires or poles or other structures have been removed, shall pay one-half of the actual cost of replacing the poles or raising the wires and other conductors or structures. The notice shall be in the form of a resolution duly adopted by the provincial or municipal board or council of the province, city or municipality concerned served upon the grantee or its duly authorized representatives or agents by a person competent to testify as a witness in a civil action, and in case of refusal or failure of the grantee to comply with such notice, the city mayor, or municipal mayor with the proper approval of the provincial board first had, as the case may be, shall order such wires or conduits or other structures to be raised or removed at the expense of the grantee, for the purposes aforesaid.

SEC. 3. The grantee may install, maintain and operate radiotelephone equipment to furnish an economical medium of telephonic communications in and between said provinces, cities and municipalities in the Philippines and between the Philippine telephone systems and those of other countries; Provided, That the location, installation or operation of such radio-telephone equipment must be previously approved by the President of the Philippines upon the recommendation of the Secretary of Public Works and Communications: Provided, further, That the Secretary of Public Works and Communications shall have the authority to supervise and regulate the installation or operation of such radio-telephone equipment. The privilege to install, maintain and operate radio-telephone equipment shall not be construed to authorize the broadcasting of any commercial message, or the transmission of any message for hire by radio-graphic equipment or the transmission of radio-telegraphic messages for hire.

SEC. 4. The grantee shall supply telephone service in said provinces, cities and municipalities where it may have established a local telephone exchange to any applicant for the same within thirty days alter the date of his application, and as between such applicant and other like applicants, in the order of the date of their applications, up to the limit of the capacity of the telephone system of said grantee, to be determined by the Public Service Commission on the application of such grantee and should the demand for telephone service at any time increase beyond the capacity of the telephone system of said grantee to supply the same, the capacity of said telephone system shall be increased to meet such demand, in accordance with the decision of the Public Service Commission or its legal successor: Provided, That in case the point at which the telephone service is to be supplied is more than fifty meters from the local exchange lines operated by said grantee, the latter shall not be obliged to furnish said service, unless the applicant for telephone service defrays the actual expenses for the poles and wires and installation thereof necessary for such service and in such case the Public Service Commission may extend the time within which the grantee must furnish such service beyond the said period of thirty days.

SEC. 5. For the purpose of erecting and maintaining poles or other supports for such wires or other conductors or for the purpose of laying and maintaining underground said wires, cables or other conductors, it shall be lawful for the grantee, its successors or assigns, to make excavations or lay conduits in any of the public places, highways, streets, lanes, alleys, avenues, sidewalks, or bridges in 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 erection of poles, or other supports, or the laying of underground of wires or other conductors, or of conduits, shall be repaired and replaced in a workmanlike manner by said grantee, its successors or assigns, to the satisfaction of the Secretary of Public Works and Communications. Should the grantee, its successors or assigns, after ten days notice from said authority, fail, refuse or neglect to 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 Public Works 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 or assigns.

SEC. 6. All telephone lines and systems for the transmission of messages and signals owned, maintained, or operated by the grantee, its successors or assigns, shall De operated and maintained at all times in a satisfactory manner, so as to render an efficient and elective telephone service. It shall be the further duty of said grantee, its successors or assigns, whenever required to do so by the Public Service Commission, to modify, improve, and change such telephone system or systems, for the transmission of messages and signals by means of electricity in such manner and to such extent as the progress of science, and improvements in the method of electrical transmission of messages and signals may make reasonable and proper.

SEC. 7. The grantee, its successors or assigns, shall keep a separate account of the gross receipts of its telephone and electrical transmission business and shall furnish the Auditor General and the Treasurer of the Philippines a copy each of such account not later than the thirty-first day of July of each year for the twelve months preceding the first day of July.

SEC. 8. In consideration of this franchise the grantee shall pay a tax equivalent to five per cent of its gross income.

SEC. 9. The grantee shall not begin any construction whatever, pursuant to this franchise without first obtaining a Certificate of Public Convenience and Necessity from the Public Service Commission, of the form and character provided for in Commonwealth Act Numbered One hundred and forty-six, as amended, specifically authorizing such construction. The grantee shall not exercise any right or privilege under this franchise without first obtaining such Certificate of Public Convenience and Necessity from the Public Service Commission. The Public Service Commission shall ,have the power to issue such certificate whenever it shall, after due hearing, determine that such construction or such exercise of the rights and privileges under this franchise is necessary and proper for the public convenience, and the Commission shall have the power, in issuing such certificate, to impose such conditions as to construction, equipment, and maintenance, service or operation as the public convenience and interest may reasonably require, and such certificate shall state the date that the grantee shall commence construction work and the period within which the work shall be completed. In order to avail itself of the rights granted by such Certificate of Public Convenience and Necessity, the grantee must file with the Public Service Commission, within such period as said Commission shall fix, its acceptance in writing of the terms and conditions of this franchise and of the certificate together with the document evidencing the fact that the deposit required in Section ten of this Act has been made, In the event that the grantee shall not commence the furnishing of telephone service referred to in the certificate obtained and filed as herein provided within such period as the Public Service Commission shall have fixed, said Commission may declare said certificate null and void and the deposit made pursuant to Section ten of this Act shall be forfeited to the National Government, unless the grantee shall have been prevented from doing so by an act of God, force majeure, usurpation by military power, martial law, riot, uprising, or other cause beyond its control: Provided, however, That if the grantee shall have been so prevented by any of such cause from commencing the telephone service within the period specified, the time during which it shall have been so prevented shall be added to said period.

SEC. 10. The grantee shall be required by the Public Service Commission for each Certificate of Public Convenience and Necessity obtained by it subsequent to the date of this Act, to make within such period as the said Commission shall fix, a deposit of not less than five thousand pesos, Philippine currency, or negotiable bonds of the Government of the Philippines, or other securities approved by the Public Service Commission, of the par value of not less than five thousand pesos, Philippine currency, in the National Treasury as a guaranty of good faith that the grantee, within the period also specified by the Public Service Commission, shall commence and terminate the necessary work and shall be provided with all the equipment necessary to commence furnishing telephone service in the corresponding province, city or municipality. The Public Service Commission shall order the return of the deposit hereby required to the grantee upon the termination of the work for the furnishing of telephone service in accordance with the terms and conditions of the certificate obtained, and the Treasurer of the Philippines shall return said deposit immediately upon the presentation to him of a certified copy of the order of the Public Service Commission.

SEC. 11. Within sixty days after the approval of this Act, the grantee shall file with the Secretary of Public Works and Communications its written acceptance of this franchise and of all the terms and conditions hereof, and in default of such acceptance, within the time so limited, this franchise shall become null and void.

SEC. 12. The books and accounts of the grantee, its successors or assigns, shall always be open to the inspection of the provincial or city auditor or their representatives, and it shall be the duty of the grantee to submit to the Auditor General quarterly reports in duplicate showing the gross receipts and the net receipts for the quarter past and the general condition of the business.

SEC. 13. The rights herein granted shall not be exclusive, and the right and power to grant to any corporation, association or person other than the grantee franchise for the telephone or electrical transmission of messages and signals shall not be impaired or affected by the granting of this franchise: Provided, That the poles or antennas erected, wires strung, or cables or conduits laid by virtue of a franchise for telephone, or other electrical transmission of messages and signals granted subsequent to this franchise shall be so placed as not to impair the efficient and effective transmission of messages or signals under this franchise by means of poles or antennas erected, wires strung, or cables or conduits actually laid and in existence at the time of the granting of said subsequent franchise: And provided, further, That the Public Service Commission, after hearing both parties interested, may compel the grantee of this franchise or its successors or assigns, to remove, relocate, or replace its poles, wires or conduits; but in such case the reasonable cost of the removal, relocation, or replacement shall be paid by the grantee of the subsequent franchise or his successors or assigns to the grantee of this franchise or its successors or assigns.

SEC. 14. The grantee, its successors or assigns, shall hold the national, provincial, city or 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 construction or operation of the telephone, radio-telephone or electrical transmission system of said grantee, its successors or assigns.

SEC. 15. The rates of the telephone service, flat rates, toll rates as well as measured rates shall be subject to the approval of the Public Service Commission.

SEC. 16. The grantee may install, maintain, operate, purchase or lease such telephone stations, lines, cables or telecommunications systems, as is, or are, convenient or necessary to efficiently carry out the purpose of this franchise: Provided, however, That the grantee, its successors or assigns, shall not, without the permission of the Public Service Commission first had, install, maintain, operate, purchase or lease such stations, lines, cables or systems.

SEC. 17. The grantee shall not, without the previous and explicit approval of the Congress of the Philippines, directly or indirectly, transfer, sell or assign this franchise to any person, association, company or corporation or other mercantile or legal entity.

SEC. 18. The Philippine Government, including any and all of its departments and bureaus shall have the privilege, without compensation, of using such space on the poles of the grantee for wire attachments, cable attachments, or cross-arm attachments as will not impair the public safety, employees safety or service requirements of the grantee. Municipalities and cities shall also have the privilege, without compensation, of using the poles of the grantee for local police or fire alarm systems under the same terms and conditions. If the requirements of the Philippine Government or of a city or of a municipality for the use of the grantee's poles exceed the limitations named above in respect to public safety, employees safety, or service impairments, mutual agreements may be entered into between the government entities and the grantee for pole replacements or other constructions, the cost of said construction to be borne by the government entities and, if undertaken by the grantee, to be amortized on a basis of fair compensation to the grantee. In the case of disagreement as to pole replacement or other construction or compensation therefor the same shall be fixed by the Public Service Commission. Written request providing ninety days advance notice of needs will be filed with the grantee in advance of any attachments by the Philippine Government or the province or city or any municipality to grantee's poles.

SEC. 19. This franchise is granted with the condition that it shall be subject to amendment, alteration or repeal by the Congress of the Philippines when the public interest so requires, and that all public lands or rights of use or occupation of lands secured by virtue of this franchise shall revert upon its termination, revocation or nullification to the national, provincial or municipal governments which were the owners thereof on the date when this franchise was granted.

SEC. 20. The grantee agrees that in the event the Philippine Government should desire to maintain and operate for itself the system and enterprise herein authorized, the grantee shall surrender its franchise and Certificate of Public Convenience and Necessity in the aforesaid territory and will turn over to the government all serviceable equipment therein at replacement cost, less reasonable depreciation.

SEC. 21. Whenever in this franchise the term "grantee" is used, it shall be held and understood to mean and represent the Pilipino Telephone Corporation, its representatives, successors or assigns.

SEC. 22. This Act shall take effect upon its approval.

Enacted without Executive approval, August 4, 1969.