Operation and Interference Standards
- Stations must minimize interference with existing or legally established stations.
- Grantee’s right to use selected frequencies shall not be diminished.
- Transmission and reception quality must maximize service rendition and availability.
Regulatory Approval by National Telecommunications Commission (NTC)
- Grantee must secure permits and licenses from NTC for construction and operation.
- Use of frequencies without NTC authorization is prohibited.
- NTC should not unreasonably delay or withhold authority.
Public Service Obligations
- Must provide adequate public service airtime for government communications on important issues.
- Programming must be sound, balanced, and assist public information and education.
- Programming must conform to honest enterprise ethics.
- Stations must not broadcast obscene, indecent content or false information.
- Must avoid inciting or assisting subversive or treasonable acts.
Government’s Special Rights During Emergencies
- President may temporarily take over or suspend station operations during war, rebellion, public peril, calamity, emergency, disaster, or peace disturbance.
- Compensation is due to grantee for temporary use by government agencies.
- Radio spectrum is a limited national resource granted as a privilege subject to withdrawal after due process.
Franchise Term and Grounds for Automatic Revocation
- Franchise term: 25 years from effectivity unless revoked/cancelled earlier.
- Automatic revocation if grantee fails to:
- Begin operations within 1 year after NTC permit approval.
- Operate continuously for 2 years.
- Begin operations within 3 years from effectivity of Act.
Acceptance and Compliance Requirements
- Written acceptance required within 60 days from Act’s effectivity.
- Exercise of granted privileges contingent upon acceptance.
- Failure to accept renders franchise void.
Bond Requirement
- Grantee must post a bond in favor of NTC to guarantee compliance.
- NTC determines bond amount.
- Bond cancelled after 3 years if conditions fulfilled.
- Bond forfeiture leads to franchise revocation.
Taxation
- Subject to payment of real estate, building, and personal property taxes consonant with other taxpayers.
- Required to pay value-added tax under R.A. 7716 or 5% franchise tax on gross receipts, whichever is higher.
- Income tax liability remains unless amended/repealed by law.
- Tax filing and payments made to Commissioner of Internal Revenue; subject to audit.
Self-Regulation and Censorship
- No prior censorship required of broadcasts.
- Grantee must cut off broadcasts promoting treason, rebellion, sedition, or containing indecent/immoral content.
- Failure to do so justifies franchise cancellation.
Indemnification of Government
- Grantee holds national and local governments harmless from claims arising from station construction or operation accidents or injuries.
Restrictions on Transfer and Assignment
- Franchise cannot be leased, transferred, sold, assigned, or merged without prior Congressional approval.
- Applies to controlling interests as well.
- Transfers subject to same franchise conditions.
Ownership Dispersal and Capital Stock Offerings
- Must offer at least 30% of outstanding capital stock in Philippine securities exchange within 5 years upon becoming a national broadcasting network.
- National broadcasting network defined as operating three or more radio and/or television stations.
- Noncompliance leads to automatic revocation.
Corporate Conversion
- Franchise ownership to be transferred to a corporation with the grantee retaining majority ownership.
- Noncompliance results in revocation.
Compliance with Future Broadcast Policy Laws
- Franchise subject to future general broadcast policy laws enacted by Congress.
Separability Clause
- Invalidity of any section does not affect the validity of remaining provisions.
Amendment and Non-exclusivity
- Congress may amend, alter, or repeal franchise as public interest requires.
- Franchise is not an exclusive grant.
Reporting Requirements
- Grantee must submit annual compliance and operational reports to Congress within 60 days after each year-end.
Effectivity
- Act takes effect 15 days after publication in two newspapers of general circulation.
- The law lapsed into effect without the President’s signature as per constitutional provision.