PRESIDENTIAL DECREE GRANTING THE DOMESTIC SATELLITE PHILIPPINES, INCORPORATED A FRANCHISE TO INSTALL, MAINTAIN AND OPERATE, IN ANY PLACE IN THE PHILIPPINES STATIONS FOR PROVIDING TELECOMMUNICATION SERVICES THROUGH THE USE OF SATELLITES, TELECOMMUNICATIONS (RADIO, TELEGRAPH, TELEPHONE AND TELEVISION SYSTEMS, LINES, CIRCUITS, WIRE/AND/ OR WIRELESS) TO SERVE ALL THOSE NEEDING SUCH SERVICE ON LAND, AT SEA AND IN THE AIR.

• Number: Presidential Decree No. 947
• Sections: 17

Preamble

WHEREAS, there is a need to develop a nationwide

telecommunications network which can provide various telecommunications

services to domestic carriers, television and radio network and

specialized service networks;

WHEREAS, it is necessary to introduce the latest technology

into existing networks in order to make available the most modern

services in various areas of the Archipelago;

WHEREAS, the use of these telecommunications services for

educational, informational, agricultural, industrial, law enforcement,

government and military purposes will catalyze the social, economic and

political advancement of the Philippines;

WHEREAS, the Domestic Satellite Philippines, Inc. has been

specifically organized to provide throughout the Republic of the

Philippines telecommunication services through the use of communication

satellites and other modern media;

NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the

Philippines, by virtue of the powers vested in me by the Constitution,

do hereby order and decree:

Section 1

SECTION 1. There is hereby granted to Domestic Satellite

Philippines, Inc., herein referred to as the Grantee, a franchise to

establish, install, operate and maintain in the Philippines, and at such

places as the Grantee may select, as a carrier's carrier, any and all

types of telecommunications services available through the use of space

relay and repeater stations for domestic public communications with

authority to receive and transmit messages, impressions, pictures,

music, entertainment, advertising, and signal throughout the Philippines

and between the Philippines and ships at sea, airplanes and other

conveyances, contract with and furnish channels of communication, both

satellite and terrestrial to authorized users; and to charge and receive

compensation therefor by tools and charges.

Section 2

SEC. 2. This franchise includes the right and authority of

the Grantee to construct, maintain and operate such ground and other

facilities, as needed, to deliver telecommunications services to and

from the communications satellite system and the telephone, telegraph,

telex and other network switching centers owned by domestic common

carriers, television and radio broadcasting stations and networks, and

terminals of specialized telecommunications network of government and/or

private persons and/or corporations such as computer/data

communications systems and point-to-point or switched voice networks.

The Grantee may also assist, as required, in the development of

nationwide television and radio coverage for education, information and

entertainment purposes by the construction, operation and maintenance

of necessary equipment and facilities. Further, the Grantee may, using

its facilities, provide satellite telecommunications services as

required to develop intra-regional communications of associations of

which the Republic of the Philippines is a member country, utilizing

existing or planned satellite systems as space relay devices provided

that such provision of services does not conflict with the country's

commitment as signatory to agreements of International Organizations.

Section 3

SEC. 3. Subject to the limitations and procedures

prescribed by law, the Grantee is authorized to exercise the rights of

eminent domain insofar as may be reasonably necessary to further the

establishment and efficient maintenance and operation of the

telecommunication services, its system, lines, circuits and/or stations.

The Grantee is authorized to construct and maintain its works of public

utility and services over and across public property of the

Philippines, including stations, highways, squares and reservations, and

other similar property of the Philippines and its branches.

Section 4

SEC. 4. This franchise shall continue for a period of

(50) years from the date the said telecommunication services shall be

put in actual commercial operations and is made upon the express

condition that the same shall be void, unless work of the

telecommunication system be begun within two years from the date of the

effectivity of this Decree and that system be in operation within four

years from said date. Said period may, however, be extended on

justifiable grounds by the Secretary of Public Works, Transportation and

Communications.

Section 5

SEC. 5. A special right is hereby reserved to the

President of the Republic of the Philippines in time of war, rebellion,

public peril, or other national emergencies and when public safety

required, to cause the closing of the Grantee's circuits and/or stations

or to authorize the use or possession thereof by any Department of the

government without compensation to the Grantee for the use of the said

station during the continuance of the national emergency.

Section 6

SEC. 6. In consideration of the franchise and rights

hereby granted, the Grantee shall pay to the Republic of the Philippines

during the life of this franchise a tax of one-half per cent of gross

earnings derived by the Grantee from its operation under this franchise

and which originate from the Philippines. Such tax shall be due and

payable annually within ten days after the audit and approval of the

accounts by the Commission on Audit as prescribed in Section 11 hereof

and shall be in lieu of all taxes, assessments, charges, fees, or levies

of any kind, nature, or description, levied, established or collected

by any municipal, provincial, or national authority including but not

limited to customs duties, taxes, wharfage and all other charges,

imports, or fees on any and all equipments, machineries, vehicles, and

spare parts needed in the installation and/or operation of the business

of the Grantee, except that the Grantee shall pay the tax on its real

property in conformity with existing law.

Section 7

SEC. 7. The Grantee shall be subject to the pertinent

laws, rules and regulations of the Philippines and pertinent

international agreements to which the Philippines is or will be a

signatory, now existing or hereafter enacted.

Section 8

SEC. 8. The franchise hereby granted shall be subject to

amendment, alteration or repeal by competent authority, and the rights

to occupy public property and places hereby granted shall revert to the

government upon the termination of this franchise, or by such repeal or

forfeiture thereof or by its expiration in due course.

Section 9

SEC. 9. The operation and activities of the

telecommunications systems, lines, circuits and/or stations of the

Grantee shall contribute to the public welfare; shall conform to the

ethics of honest enterprise; shall assist in the functions of public

information and education; and shall not be used for the dissemination

of deliberately false information, or willful misrepresentation, or to

the detriment of the public health, or to incite, encourage or assist in

subversive or treasonable acts.

Section 10

SEC. 10. The right is hereby reserved to the government

of the Philippines, through the Board of Communications, or such other

office as may be hereunto duly authorized, to fix the minimum and

maximum rates to be charged by the Grantee.

Section 11

SEC. 11. The Grantee shall keep a separate account of

the gross receipts of business transacted by it in the Philippines and

shall furnish the Commission on Audit with a copy of such account not

later than the last day of February of each year for the preceding year.

For the purpose of auditing the accounts surrendered to the Commission

on Audit, all the books and accounts of the Grantee, or duplicates

thereof, so far as they relate to the business transacted in the

Philippines, shall be subject to the official inspection of the

Commission on Audit or his authorized representatives, and the audit or

approval of such accounts shall be final and conclusive evidence as to

the amount of said gross receipts, except that the Grantee shall have

the right to appeal to the Courts of the Philippines, under the terms

and conditions provided in the laws of this country.

Section 12

SEC. 12. As a condition of the granting of this

franchise, the Grantee shall execute a bond in favor of the Government

of the Philippines, in the sum of fifty thousand pesos in form and with

sureties satisfactory to the Secretary of Public Works, Transportation

and Communications, conditioned upon the faithful performance of the

Grantee's obligations hereunder during the first four years of the life

of this franchise or the extension that may be granted under Section 4

hereof. If, within the four years from the date of the effectivity of

this Decree or during the aforesaid extension, if any, the Grantee shall

have fulfilled said obligations or so soon thereafter as the Grantee

shall have fulfilled the same, the bond aforesaid shall be cancelled by

the Secretary of Public Works, Transportation and Communications.

Section 13

SEC. 13. Acceptance of the franchise shall be given in

writing within one year after the effectivity of this Decree. When so

accepted the Grantee and upon the approval of the bond aforesaid by the

Secretary of Public Works, Transportation and Communications, the

Grantee shall be empowered to exercise the privileges granted hereby.

Section 14

SEC. 14. The Grantee shall not lease, transfer, grant

the usufruct of, sell or assign this franchise, nor the rights or

privileges acquired thereunder, to any person, firm, company,

corporation or other commercial or legal entity, nor merge with any

other company or corporation organized for the same purpose, without the

prior approval of the President of the Philippines. Any person, firm,

company, corporation or other commercial or legal entity to which this

franchise is sold, transferred or assigned shall be subject to all the

conditions, terms, restrictions and limitations of this franchise as

fully and completely and to the same extent as if the franchise had been

granted to the same person, firm, company, corporation or other

commercial or legal entity.

Section 15

SEC. 15. This franchise shall not be interpreted to mean

an exclusive grant of the privileges herein provided for. However, in

the event any competing individual, partnership or corporation shall

receive a similar permit or franchise with terms and/or provisions more

favorable than those herein granted or which tend to place the Grantee

herein at any disadvantage, then such terms and/or provisions shall,

ipso facto, become part hereof and shall operate equally in favor of the

Grantee herein.

Section 16

SEC. 16. This Decree shall take effect immediately.

Done in the City of Manila, this 17th day of June, in the year

of Our Lord, nineteen hundred and seventy-six.

(Sgd.)

FERDINAND E. MARCOS

President

Republic of the Philippines

By the President:

(Sgd.)

JACOBO C. CLAVE

Presidential Executive Assistant