Solons say telcos must secure Congress nod for additional franchise

Lawmakers have filed a bill amending Republic Act 7925, otherwise known as the Public Telecommunications Policy Act, in a bid to protect the public from emerging corporate trends which tend to control ownerships and monopolize public utilities.


Marikina City Rep. Marcelino Teodoro and Isabela Rep. Giorgidi Aggabao filed House Bill 5778 to assert the right of the government to regulate public utilities through legislation.

Teodoro said RA 7925 was enacted in March 1995 to deregulate the telecommunications industry and promote competition among industry players thus allowing the sector’s growth through the years.

“Telecommunications is one public utility where the need of a legislative franchise is required before an entity goes into business, or where approval of Congress is also being sought in case of any sale, lease, transfer and grant of usufruct of the franchise of any telecommunications entity, as provided for by its respective legislative franchise,” Teodoro said.

According to Teodoro, certain provisions of RA 7925 were not very clear and may allow telecommunications players not to be consistent with the provisions and conditionalities of their respective franchises.

Teodoro cited Section 7 of RA 7925 as an example which provides telecommunications to own or operate one or more telecommunications categories, as long as they are covered by a franchise.

“Impliedly, telecommunications entities with legislative franchises which merged or are sold out need not go to Congress in order to do so,” Teodoro said.

Aggabao said another provision which is also being used to justify the actions of telecommunications players not to seek Congress’ approval in the sale, transfer, lease or usufruct of their franchise is Section 23 which grants, ipso facto, equal treatment among telecommunications players, and automatically provides existing telecommunications players any advantage, favor, exemption, or immunity granted into a new player.

“This provision weakens the congressional mandate in granting the privilege of a legislative franchise,” Aggabao said.


Aggabao said Section 11, Article XII of the 1987 Constitution so provides that neither shall any such franchise or right be granted except under the condition that it shall be subject to amendment alteration, or repeal by Congress when the common good so requires.

Under the measure, the lawmakers proposed to amend Section 4 of the Declaration of National Policy, by inserting the words “excluding sale, lease, transfer or grant of usufruct of their legislative franchise.”

Under Section 7 Categories of Telecommunications Entities, is also amended by inserting the phrase “and after prior notification and approval of Congress with regard to said Act.”

The bill also amends Section 16. Franchise by including the word “legislative” and phrase “likewise, the board shall notify Congress prior to any action it shall make” and the sentence “further, any sale, lease or purchase or a legislative franchise from one Telecommunications Company to another must seek prior approval of Congress before consummation of any contract pertaining to any such act.”

Furthermore, Section 23. Equality of Treatment in the Telecommunications Industry is also amended by including the phrase “upon prior review and approval of Congress.”

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