Operation and Frequency Use
- Operations must minimize interference with existing or legally established stations.
- Grantee retains rights to use selected frequencies without diminishing transmission or reception quality.
Authorization and Permits
- Grantee must secure permits and licenses from the National Telecommunications Commission (NTC) prior to constructing or operating stations.
- Use of radio/television frequencies requires prior authorization from the NTC.
- NTC shall not unreasonably withhold or delay permits.
Public Service Obligations
- Grantee must allocate adequate public service airtime for government communication on important public issues.
- Must ensure sound and balanced programming.
- Assist in public information and education functions.
- Adhere to ethical business standards.
- Prohibited from broadcasting obscene or indecent content.
- Prohibited from distributing deliberately false information or content that incites subversion, treason, or public harm.
Government's Special Rights
- President may temporarily take over or suspend operation of stations during war, rebellion, public peril, calamity, or emergency.
- Temporary use by government agencies authorized with due compensation to grantee.
- Usage of radio spectrum is a state-conferred privilege subject to withdrawal after due process.
Franchise Term and Revocation Conditions
- Term: 25 years from effectivity unless revoked or cancelled earlier.
- Ipso facto revocation if grantee fails to:
- Commence operations within one year after NTC permit approval.
- Operate continuously for two years.
- Commence operations within three years from act’s effectivity.
Acceptance and Effectiveness
- Grantee must accept franchise in writing within 60 days of effectivity.
- Non-acceptance renders franchise void.
Performance Bond
- Grantee required to file a compliance bond in favor of NTC.
- Amount determined by NTC.
- Bond cancelled after 3 years of compliance or forfeited otherwise, resulting in ipso facto revocation.
Taxation
- Grantee liable for real estate, building and personal property taxes like other corporations.
- Shall pay either value-added tax or a franchise tax of 5% (or as law prescribes) on gross receipts from the broadcasting business, whichever is higher.
- Continued liability for income tax unless changes in relevant laws.
- Tax returns subject to Bureau of Internal Revenue audit.
Self-Regulation and Censorship
- No prior censorship required on broadcasts.
- Must cut off broadcasts inciting treason, rebellion, sedition, or containing indecent or immoral content.
- Failure to act justifies franchise cancellation.
Indemnification of Government
- Grantee agrees to hold national and local governments harmless from all claims or liabilities arising from accidents or injuries related to construction or operation of stations.
Restrictions on Transfer and Sale
- Franchise and related rights cannot be leased, sold, transferred, assigned, or merged without prior Congressional approval.
- Any transferee subject to the same terms and conditions.
Ownership Dispersal Requirements
- Grantee must offer at least 30% of its outstanding capital stock to the public via Philippine securities exchange within 5 years of becoming a national broadcasting network.
- "National broadcasting network" means operating three or more radio and/or television stations.
- Noncompliance results in ipso facto revocation.
Compliance with Future Laws
- Grantee must comply with future general broadcast policy laws enacted by Congress.
Separability and Amendability
- Invalidity of any provision does not affect validity of the rest.
- Franchise is subject to amendment, alteration, or repeal by Congress in public interest.
- Not an exclusive grant.
Reporting Requirement
- Grantee must submit annual compliance and operations report to Congress within 60 days after each year’s end.
Effectivity
- Law takes effect 15 days after publication in two newspapers of general circulation in the Philippines.