Franchise dispersal of ownership
- Section 3 (as amended) requires the grantee to comply with the constitutional mandate to democratize ownership of public utilities by making a public offering.
- The grantee must offer to the public through the stock exchange in the Philippines at least thirty percent (30%) of its outstanding capital stock, or a higher percentage if later required by law.
- The offering must be made within five (5) years from the time the grantee achieves the status of a national broadcasting network.
- A “national broadcasting network” is defined as one that operates three (3) or more radio and/or television stations.
- Section 3 (as amended) treats as compliance the public offering through any securities exchange in the Philippines of at least thirty percent (30%) of the shares of a holding company that owns at least a majority of the capital stock of the grantee, if the resulting offered interest equals at least thirty percent (30%) of the grantee’s outstanding capital stock.
- Section 3 (as amended) provides that non-compliance with the dispersal requirement is a cause for revocation of the franchise.
- Section 3 (as amended) limits ownership by providing that no single person or entity shall be allowed to own more than five percent (5%) of the stock offerings.
Sale, lease, transfer, and merger restrictions
- Section 5 (as amended) prohibits the grantee from leasing, transferring, granting the usufruct of, selling, or assigning the franchise or the rights and privileges acquired thereunder to any person, firm, company, corporation, or entity.
- Section 5 (as amended) prohibits the grantee from merging with any other corporation or entity without the prior approval of the Congress of the Philippines.
- Section 5 (as amended) prohibits transferring the controlling interest in the grantee—whether as a whole or in parts and whether simultaneously or contemporaneously—to any person, firm, company, corporation, or entity without prior approval by the Congress of the Philippines.
- Section 5 (as amended) allows exceptions to these restrictions for specific capital-raising and stock transactions.
- The exceptions under Section 5 (as amended) permit:
- (1) transfer or issuance of shares to any investor in connection with an increase in the grantee’s authorized capital stock that dilutes the stockholdings of the then existing stockholders;
- (2) transfer or sale of shares to an investor or investors;
- (3) sale, transfer, or assignment of shares by stockholders of the grantee in favor of a holding company whose stockholders are identical to the stockholders of the grantee; and
- (4) combinations of these measures to enable the grantee to raise necessary capital or financing for authorized services and/or to carry out incorporation purposes.
- Section 5 (as amended) requires that any transfer, sale, or issuance under the exceptions comply with any applicable constitutional limitation.
- Section 5 (as amended) provides that any person or entity to whom the franchise is validly sold, transferred, or assigned is subject to all the same conditions, terms, restrictions, and limitations of Republic Act No. 7582 as amended.
Self-regulation and censorship prohibition
- Section 7 establishes an undertaking by the grantee regarding broadcast content and requires a self-regulation system.
- Section 7 prohibits the grantee from requiring any previous censorship of any speech, play, act or scene, or other matter to be broadcast from its stations.
- Section 7 requires the grantee, during any broadcast, to cut off from the air the speech, play, act or scene, or other matter being broadcast if the tendency thereof is to propose and/or incite treason, rebellion or sedition.
- Section 7 also requires the cut-off when the language used therein or the theme thereof is indecent or immoral.
- Section 7 provides that willful failure to make the required cut-off constitutes a valid cause for the cancellation of the franchise.
Renumbering of provisions
- Section 4 provides that the succeeding sections of Republic Act No. 7582 are renumbered accordingly after the insertion of the new Section 7.
Amendatory scope and predecessor law
- Republic Act No. 9212 amends Section 3 and Section 5 of Republic Act No. 7582 and inserts a new Section 7 into Republic Act No. 7582.
- Republic Act No. 9212 operates within the franchise framework of Republic Act No. 7582, which renews the broadcasting franchise of the grantee for another twenty-five (25) years from the date of approval of Republic Act No. 7582.