Operation Standards for Stations or Facilities
- Operations must minimize interference with wavelengths or frequencies of existing or authorized stations.
- Ensures the grantee’s right to use and quality of frequencies is not diminished.
Requirement for NTC Approval
- The grantee must obtain permits and licenses from the National Telecommunications Commission (NTC) before construction and operation.
- Use of any radio/TV frequency requires NTC authorization.
- NTC must not unreasonably withhold or delay approvals.
Public Service Obligations
- The grantee must allocate adequate public service time for government communication of important issues.
- Programming must be sound, balanced, educational, and ethical.
- Broadcasting obscene or indecent language, false information, or content that incites subversive acts is prohibited.
Special Government Rights
- The President can temporarily take over or suspend broadcasting stations during war, rebellion, or emergencies.
- Compensation is to be given to the grantee during such use.
- The radio spectrum is a State-owned resource; franchise use is a privilege subject to withdrawal after due process.
Franchise Term
- The franchise is granted for 25 years from effectivity unless revoked earlier.
- Ipso facto revocation occurs if the grantee:
- Does not commence operations within 1 year of NTC permit approval.
- Fails to operate continuously for 2 years.
- Does not commence operations within 3 years from the law’s effectivity.
Acceptance and Compliance
- Grantee must accept the franchise in writing within 60 days of effectivity.
- Failure to accept renders the franchise void.
Bond Requirement
- The grantee must post a bond with the NTC guaranteeing compliance with franchise conditions.
- The bond is forfeited, and franchise revoked if conditions are unfulfilled after 3 years from permit approval.
Taxation
- Subject to all applicable taxes, duties, fees under the National Internal Revenue Code.
- Existing tax exemptions or benefits for broadcasting stations continue to apply.
- Taxes are filed and paid in the locality of the facility and subject to Bureau of Internal Revenue audit.
Self-regulation and Censorship
- No prior censorship required.
- The grantee must cut off broadcasts that incite treason, rebellion, sedition, or contain indecent or immoral content.
- Failure to do so is cause for franchise cancellation.
Right of Reply
- Aggrieved persons have the right to reply on the same or other program platforms using the grantee's facilities.
Indemnity Clause
- The grantee indemnifies national and local governments against claims or damages from accidents or injuries caused by station construction or operations.
Restrictions on Transfer and Ownership Changes
- The franchise and rights may not be leased, sold, transferred, assigned, merged, or have controlling interest changed without prior Congressional approval.
- Transferees are subject to the same franchise terms.
Dispersal of Ownership
- At least 30% of outstanding capital stock must be offered to the public in a Philippine securities exchange within 5 years from operations commencement.
- Compliance with SEC rules is mandatory.
- Non-compliance results in automatic franchise revocation.
Compliance with Future Broadcast Policies
- Subject to any general broadcast policy law enacted by Congress thereafter.
Equality Clause
- Any advantages or privileges granted under existing or future franchises automatically apply to this franchise, except territorial scope, term length, or type of service.
Separability Clause
- Invalidity of any provision does not affect the validity of other provisions.
Amendability and Non-exclusivity
- Congress may amend, alter, or repeal the franchise when public interest requires.
- The franchise is non-exclusive.
Annual Reporting
- The grantee must submit an annual report to Congress within 60 days after year-end on compliance and operations.
Effectivity
- The law takes effect 15 days after publication in two newspapers of general circulation upon grantee’s initiative.