V THE FRANCHISE
The Franchise awarded to TIERONE IN LEGISLATIVE ORDER, MMA 202, GRANTING TIERONE COMMUNICATIONS INTERNATIONAL INC, IN PARTNERSHIP WITH GLOBAL ETHERNET SOLUTIONS, A 25 YEAR MANDATE TO ESTABLISH, CONSTRUCT, INSTALL, WORK, MAINTAIN, UPGRADE, MANAGE AND OPERATE NETWORKS TO PROVIDE LOCAL AND INTERNATIONAL TELECOMMUNICATIONS AND BROADCAST SERVICES INTO AND OUT OF ITS FRANCHISE REGION IN THE PHILIPPINES.
An IGF is not a just a telecom license, it is an area Franchise awarded by legislation for a period of 25 years. Thus TierOne has undergone 3 public hearings before the Legislative Assembly and proved its case. Moreover TierOne was asked to set up transmission towers and equipment in a site chosen by the Legislative assembly as a proof of its ability to deploy international telecommunications. The international testing was successful and TierOne was awarded a 25-year franchise.
TierOne also enjoys exclusivity in the area of its franchise for the next 10 years.
TierOne has a complete national reach to terminate its calls into any existing network due to Executive Order 059 enacted by former President Fidel V. Ramos all calls originated or aggregated through its IGF will be terminated national and seamlessly into all carriers existing, including first or second tier carriers.
The awarding of the IGF to TierOne also permits TierOne to act in partnership with Global Ethernet Solutions, its US partner under Section 3 of the franchise as follows:
Section 3 of the franchise states: TierOne has the Authorization to connect other systems, and to provide services by means of TierOne’s Network, by virtue of the Authority of the Secretary of the DOTC (Department of Transportation and communications) the franchise is hereby authorized to connect to networks, but not limited to the following:
Any public telecommunications system, in the Republic of the Philippines mobile or otherwise
Any private telecommunications system in the republic of the Philippines, mobile or otherwise,
Any telecommunications network situated on a vehicle, submersible, Hovercraft, aircraft or offshore installation
Telecommunications apparatus and equipment of every description including broadband, VoIP, and internet, which is comprised in TierOne’s networks and;
Any broadcast, media, cable TV. Internet Platforms, bundled services, whether fixed wire, satellite or wireless.
TierOne shall allow any person or persons, or organizations to connect peripheral equipment or apparatus to TierOne’s network to transmit and receive messages within or among its premises or organized network, provided that such person or persons or organization have earlier entered into an agreement with TierOne on stipulations terms and conditions relevant charges and equipment specification for such connection.
TierOne shall have the right to:
lease from incumbent operators and;
lease to incumbent operators, access capacity and Dark Fiber at negotiated carrier to carrier rates, as may be determined and approved by the DOTC Regional Secretary from time to time.
Subject to existing laws and regulations TierOne shall have the rights to direct access to international submarine cables on an ownership and or indefeasible right of use based on terms and conditions as may be laid down by the management of the respective cable from time to time.
TierOne shall have:
the rights to take equity in any international satellite organization including but not limited to Intelsat, Inmarsat, and Measat from time to time, as may be deemed appropriate.
the right to become a member of the International Telecommunications Union (ITU) with the classification of “Reorganized Private Operating Agency” or RPOA.
the rights to negotiate for any capacity from any incumbent operator at Carrier to carrier rates
Because the franchise was enacted by the Legislative Assembly embodied within said Franchise is a Sovereign Guarantee to protect the investment of the Grantee, Firstly as it is an ACT, it would take Legislation to repeal it and moreover, there is a specific clause in the franchise which protects its investors.
Namely Section 14. which states:
IF THE LIFE OF THIS FRANCHISE IS SHORTENED, TIERONE IS ENTITLED TO SUCH REFUND OF ITS EXPENSES FOR THE IMPLEMENTATION OF THE NETWORK AND INFRASTRUCTURE, TIERONE HAS INSTALLED PURSUANT TO THE GRANTING OF THIS FRANCHISE.
In simple terms TierOne is protected of its total investment by sovereign legislation and therefore in impervious to any change of leadership.
Further Telco Advantages
Holding a Telecommunications Franchise put you in a “carriers” club in which you may lease, enter into agreements, and exchange traffic with all existing worldwide franchise holders.
More importantly this enables you to set rates on telecom traffic, into and out of your franchise territory and between territories diverted through a Philippine switch.
You may appreciate that recognizing the volume of potential traffic. For example, a cell call to Australia through Smart Communications in January 2017, cost US$1.75 cents, when the actual cost is less than a tenth of a cent.
The franchise allows you to interact, form partnerships with international carriers, lease optic fiber, print and regulate phone cards, which can be used internationally, so if you are a traveler, you can use the phone card to dial our network from anywhere and call to another country at a rate set by us, the franchise holder.
You can sell cell phones, as you will be assigned an independent spectrum, (frequency).
As a franchise holder instead of spending millions of dollars and purchasing equipment and building infrastructure, you may co-locate with another franchise holder and “piggyback” by installing your decrementing switch in their building, and using their “dark fiber” to transmit your calls. This can be set up and operational in a few months.
Being a Franchise holder, gives you the right to be issued your own dialing code, CPCN, :” certificate of public conveyance and necessity” and permit to purchase transmitting equipment and associated decrementing switches which control the registration and consumption of time on your printed phone cards (or phone recharge calls built in to a Priority One / ACN card).
As these franchises are issued by act of legislation, the “club membership” is not large.
.Here is how it works.
Calls from out of the Philippines, pass through PLDT, the switch of the national Phone Company and pay an 8 cent “landing fee” this is for all carriers, other than franchise holders, who charge a similar rate, so as not to lose out on the “gravy train”
This is the only franchise in existence that names two partners on the Franchise.