8/29/2018 R.A.

9169

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Republic of the Philippines

Congress of the Philippines
Metro Manila

Twelfth Congress
First Regular Session

Begun and held in Metro Manila, on Monday, the twenty-third day of July, two thousand one.

Republic Act No. 9169 August 1, 2002

AN ACT GRANTING THE SEAGULL MARINE COMMUNICATION NETWORK CORP. A FRANCHISE TO

CONSTRUCT, INSTALL, ESTABLISH, OPERATE AND MAINTAIN PUBLIC RADIOTELEPHONE COASTAL
STATIONS FOR THE TRANSMISSION AND RECEPTION OF RADIOTELEPHONE COMMUNICATIONS WITHIN
AND OUTSIDE THE PHILIPPINES

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

Section 1. Nature and Scope of Franchise. - Subject to the provisions of the Constitution and applicable laws, rules
and regulations, there is hereby granted to Seagull Marine Communication Network Corp., hereunder referred to as
the grantee, its successors or assigns, a franchise to construct, install, establish, operate and maintain for
commercial purposes and in the public interest, public radiotelephone coastal stations for the transmission and
reception of radiotelephone communications with vessels at sea within and outside the Philippines.

Section 2. Manner of Operation of Stations or Facilities. – The stations or facilities of the grantee shall be
constructed and operated in a manner as will, at most, result only in the minimum interference on the wavelengths
or frequencies of existing stations or other stations which may be established by law, without in any way diminishing
its own right to use its selected wavelengths or frequencies and the quality of transmission or reception thereon as
should maximize rendition of the grantee's services and/or the availability thereof.

Section 3. Authority of the National Telecommunications Commission (NTC). - The grantee shall secure from the
NTC, hereinafter referred to as the Commission, a certificate of public convenience and necessity or the appropriate
permits and licenses for the construction, installation and operation of its telecommunications systems/facilities. 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 systems. 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 the date the grantee shall commence the service. The Commission, however, shall not
unreasonably withhold or delay the grant of any such authority, permits or licenses.

Section 4. Responsibility to the Public. - The grantee shall conform to the ethics of honest enterprise and shall not
use its stations/facilities for obscene or indecent transmission or for dissemination of deliberately false information or
willful misrepresentation, or assist in subversive or treasonable acts.

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.

Section 5. Rates for Services. - The charges and rates for telecommunications systems of the grantee, except the
rates and charges on those that may hereafter be declared or considered as nonregulated services, whether flat
rates or measured rates or variation thereof, shall be subject to the approval of the Commission or its legal
successors. 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 6. Right of Government. - A special right is hereby reserved to the President of the Philippines, in times of
war, rebellion, public peril, calamity, emergency, disaster or disturbance of peace and order, to temporarily take over

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and operate the stations, transmitters, facilities or equipment of the grantee, to temporarily suspend the operation of
any station, transmitter, facility or equipment in the interest of public safety, security and public welfare, or to
authorize the temporary use and operation thereof by any agency of the government, upon due compensation to the
grantee for the use of said stations, transmitters, facilities or equipment during the period when they shall be so
operated.

The radio spectrum is a finite resource that is a part of the national patrimony and the use thereof is a privilege
conferred upon the grantee by the State and may be withdrawn anytime, after due process.

Section 7. Term of Franchise. - 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. This franchise shall be deemed ipso facto revoked in the event the
grantee fails to comply with any of the following conditions:

(a) Commence operations within one (1) year from the approval of its operating permit or provisional authority
by the NTC;

(b) Operate continuously for two (2) years; and

(c) Commence operations within three (3) years from the effectivity of this Act.

Section 8. Acceptance and Compliance. - Acceptance of this franchise shall be given in writing within sixty (60)
days from the effectivity of this Act. Upon giving such acceptance, the grantee shall exercise the privileges granted
under this Act. Nonacceptance shall render the franchise void.

Section 9. Bond. - The grantee shall file a bond issued in favor of the NTC, which shall determine the amount, to
guarantee the compliance with and fulfillment of the conditions under which this franchise is granted. If after five (5)
years from the date of the approval of its permit by the Commission, the grantee shall have fulfilled the same, the
bond shall be cancelled by the Commission. Otherwise, the bond shall be forfeited in favor of the government and
the franchise ipso facto revoked.

Section 10. Tax Provisions. - The grantee, its successors or assigns, shall be subject to the payment of all taxes,
duties, fees or charges and other impositions under the National Internal Revenue Code of 1997, as amended, and
other applicable laws: Provided, That nothing herein shall be construed as repealing any specific tax exemptions,
incentives or privileges granted under any relevant law: Provided, further, That all rights, privileges, benefits and
exemptions accorded to existing and future telecommunications franchises shall likewise be extended to the
grantee.

The grantee shall file the return with the city or province where its facility is located and pay the income tax due
thereon to the Commissioner of Internal Revenue or his duly authorized representatives in accordance with the
National Internal Revenue Code and the return shall be subject to audit by the Bureau of Internal Revenue.

Section 11. Gross Receipts. - The grantee, its successors or assigns, shall keep a separate account of the gross
receipts of the business transacted by it and shall furnish the Commission on Audit (COA) and the National Treasury
a copy of such account not later than the thirty-first (31st) day of January of each year for the preceding twelve (12)
months.

Section 12. Books and Accounts. - 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 autorized representatives, and it shall be the duty of
the grantee to submit to the COA, two (2) copies of the quarterly reports on the gross receipts, the net profits and
the general condition of the business.

Section 13. Warranty in Favor of National and Local Governments. - The grantee shall hold the national, provincial,
city and municipal governments of the Philippines 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
stations, transmitters, facilities and equipment of the grantee.

Section 14. Sale, Lease, Transfer, Usufruct, Etc. - The grantee shall not lease, transfer, grant the usufruct of, sell
nor assign this franchise or the rights and privileges acquired thereunder to any person, firm, company, corporation
or other commercial or legal entity, nor merge with any other corporation or entity, nor shall the controlling interest of
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 sold, transferred or assigned shall be subject to the same conditions,
terms, restrictions and limitations of this Act.

Section 15. Dispersal of Ownership. - In accordance with the constitutional provision to encourage public
participation in public utilities, the grantee shall offer at least thirty percentum (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

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five (5) years from the commencement of its operations. Noncompliance therewith shall render the franchise ipso
facto revoked.

Section 16. Equality Clause. - Any advantage, favor, privilege, exemption or immunity granted under existing
franchises, or may hereafter be granted, shall ipso facto become part of previously granted telecommunications
franchises and shall be accorded immediately and unconditionally to the grantees of such franchises: Provided,
however, That the foregoing shall neither apply to nor affect provisions of telecommunications franchises concerning
territory covered by the franchise, the life span of the franchise, or the type of service authorized by the franchise.

Section 17. Separability Clause. - If any of the sections or provisions of this Act is held invalid, all the other
provisions not affected thereby shall remain valid.

Section 18. Repealability and Nonexclusivity Clause. - This franchise shall be subject to amendment, alteration or
repeal by the Congress of the Philippines when the public interest so requires and shall not be interpreted as an
exclusive grant of the privileges herein provided for.

Section 19. Reportorial Requirement. - The grantee shall submit an annual report to the Congress of the Philippines
on its compliance with the terms and conditions of its franchise and on its operations within sixty (60) days from the
end of every year.

Section 20. Effectivity Clause. - This Act shall take effect fifteen (15) days from the date of its publication, upon the
initiative of the grantee, in at least two (2) newspapers of general circulation in the Philippines.

Approved,

FRANKLIN DRILON JOSE DE VENECIA JR.

President of the Senate Speaker of the House of
Representatives

This Act, which originated in the House of Representative was finally passed by the House of Representatives and
the Senate on May 8, 2002 and March 11, 2002, respectively.

OSCAR G. YABES ROBERTO P. NAZARENO

Secretary of Senate Secretary General
House of Represenatives

Approved: August 1, 2002

GLORIA MACAPAGAL-ARROYO
President of the Philippines

The Lawphil Project - Arellano Law Foundation

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