Senate OKs bill extending Smart franchise by 25 years

By: - Reporter / @MAgerINQ
/ 03:53 PM March 13, 2017

Voting 16-2, the Senate on Monday approved on third and final reading a bill extending the legislative franchise for Smart Telecommunications Inc. for another 25 years.

Senators Panfilo Lacson and Risa Hontiveros voted against Senate Bill No. 1302.


The approval of the bill came exactly two weeks before the Smart’s franchise expires on March 27. A similar measure, House Bill No. 4637, was already passed by the House of Representatives last January.

The Senate version of the bill includes a “sunrise provision” that would raise the current penalty of P500 to P1 million for every working day that the telecommunications giant fails to submit the “requisite annual report” to Congress.


But in proposing to raise the penalty before the approval of the bill on second reading last week, Lacson said the increase should only take effect once the legislative franchises of other telcos are amended.

Lacson noted that the current P500 penalty was equivalent to only P3.250 million if the Smart would not report to Congress during the 25-year duration of its franchise while the increased penalty could result in P6.5 billion in 25 years, which would go to the national government.

“I accept Mr. President subject to style and I’d like to congratulate also the good senator for increasing the penalty by 2,000 percent,” Senator Grace Poe said in jest.

It was Poe, who defended the measure on the floor, as chair of the Senate committee on public services.

The Senate, meanwhile, turned down Lacson’s motion requiring Smart to make a public offering of at least 30 percent of its authorized capital stock in any securities exchange in the Philippines within two years after the approval of its franchise.

Section 13 of the bill states that “the grantee shall list, subject to the requirements of the Securities and Exchange Commission and the stock exchange concerned, and make a public offering through the stock exchange [of the shares representing at least thirty per centum (30%) of its authorized capital stock] in any securities exchange in the Philippines within two years from the effectivity of this Act, UNLESS the grantee is WHOLLY OWNED BY A PUBLICLY LISTED COMPANY.”

Lacson wanted the line “UNLESS the grantee is WHOLLY OWNED BY A PUBLICLY LISTED COMPANY” deleted and replaced with “In the event that the grantee fails to fully comply with the aforementioned requirements, this franchise shall be deemed in so facto revoked.”


The chamber rejected the motion with eight senators voting against it, including Poe, while only six were in favor of it.

In her sponsorship speech on the bill last March 1, Poe said Smart, under its new franchise, would be compelled to install facilities and bring under its coverage areas not yet served, “specifically calamity-prone ones, where the presence of telecommunication services can help in times of disaster.”

Also under the bill, she said, Smart will be required “to upgrade and program its entire infrastructure to be on standby to send out free mobile disaster alerts” as mandated by Republic Act 10639 or the Free Mobile Disaster Alerts Act. The senator was the principal author of the said law.

“How I wish, Mr. President, that we could include service guarantees, performance benchmarks, improvement pledges in the bill as the public hearings centered on these. How I wish we could accommodate penalties for lousy service in franchises. How I wish we could outlaw dropped calls, fine slow Internet, and ban false advertising. How I wish we could insert provisions which punish overbilling, reinstate vanishing loads, and sanction weak signals,” she said.

“But unfortunately these do not fall within the ambit of a legislative franchise. It is a function of regulation, and today these are proof of failed or feeble regulation.”

But Poe said those complaints could still be addressed in a separate legislation that would be applied not only to Smart but all other telcos. RAM/rga


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