Manner of operation and frequency protection
- The grantee must construct and operate its stations or facilities in a manner that results in only the minimum interference on the wavelengths or frequencies of existing stations or other stations established by law.
- The grantee must maintain its own right to use its selected wavelengths or frequencies without diminishing the quality of transmission or reception.
- Operations must maximize rendition of the grantee’s services and/or availability of those services.
- Interference control is required as a performance standard for the grantee’s radio operations.
National Telecommunication Commission (NTC) permits
- The grantee must secure from the National Telecommunication Commission (NTC) the appropriate permits and licenses for construction and operation.
- The grantee must not use any frequency in the radio spectrum without NTC authorization.
- The NTC must not unreasonably withhold or delay the grant of the required authority.
Public service obligations and broadcast restrictions
- The grantee must provide adequate public service time so the government can reach the population on important public issues through the grantee’s stations or facilities.
- The grantee must provide sound and balanced programming at all times.
- The grantee must assist in the functions of public information and education.
- The grantee must conform to the ethics of honest enterprise.
- The grantee must not use its stations or facilities to broadcast obscene and indecent language, speech, act or scene, or for the dissemination of deliberately false information or willful misrepresentation to the detriment of the public interest.
- The grantee must not use its stations or facilities to incite, encourage or assist in subversive or treasonable acts.
Government takeover and radio spectrum character
- In times of war, rebellion, public peril, calamity, emergency, disaster, or disturbance of peace and order, a special right is reserved to the President of the Philippines to:
- temporarily take over and operate the grantee’s stations or facilities; and/or
- temporarily suspend the operation of any station or facility for public safety, security and public welfare; and/or
- authorize temporary use and operation by any government agency.
- Temporary operation by the government or authorization to use must be upon due compensation to the grantee.
- The franchise holder’s use of the radio spectrum is described as a privilege conferred by the State that may be withdrawn anytime after due process.
- The radio spectrum is declared a finite resource and part of the national patrimony.
Franchise term, ipso facto revocation triggers
- The franchise lasts for a term of twenty-five (25) years from the date of effectivity of Republic Act No. 9171, unless sooner revoked or cancelled.
- The franchise is deemed ipso facto revoked if the grantee fails to comply with any of these conditions:
- Commence operations within one (1) year from the approval of its operating permit or provisional authority by the NTC;
- Operate continuously for two (2) years; and
- Commence operations within three (3) years from the effectivity of this Act.
Acceptance, bond, and compliance consequences
- The grantee must give written acceptance of the franchise within sixty (60) days from the effectivity of the Act.
- After written acceptance, the grantee must exercise the privileges granted under the Act.
- Non-acceptance makes the franchise void.
- The grantee must file a bond issued in favor of the NTC to guarantee compliance with and fulfillment of the franchise conditions.
- If the grantee fulfills the bond conditions within three (3) years from approval of its permit by the Commission (NTC), the bond is cancelled by the Commission.
- If the grantee fails to fulfill the conditions within that period, the bond is forfeited in favor of the government and the franchise is ipso facto revoked.
Tax obligations and return/audit rules
- The grantee, including its successors or assigns, must pay all taxes, duties, fees or charges and other impositions under the National Internal Revenue Code (NIRC) of 1997, as amended, and other applicable laws.
- Nothing limits the continuation of specific tax exemptions, incentives or privileges granted under relevant laws.
- Rights, privileges, benefits and exemptions accorded to existing and future telecommunications franchises are extended to the grantee.
- The grantee must file the tax return with the city or province where its facility is located and pay the income tax due to the Commissioner of Internal Revenue or authorized representatives under the NIRC.
- The filed return is subject to audit by the Bureau of Internal Revenue.
Self-regulation, censorship limits, and reply right
- The grantee must not require any previous censorship of any speech, play, act or scene, or other matter to be broadcast.
- During any broadcast, the grantee must cut off from the air any speech, play, act or scene, or other matter being broadcast if it tends to:
- propose and/or incite treason, rebellion or sedition, or
- involve language that is indecent or immoral, or
- is based on a theme that is indecent or immoral.
- A willful failure to cut off the broadcast under these conditions constitutes a valid cause for cancellation of this franchise.
- Any person aggrieved by any remark, report, statement, commentary, or similar broadcast by broadcasters using the grantee’s facilities has the right to reply in the same program or any other program the aggrieved party may choose.
Liability assurance for governments
- The grantee must hold the national, provincial, city and municipal governments harmless from all claims, accounts, demands, or actions arising from accidents or injuries to property or persons caused by the construction or operation of the grantee’s stations.
Transfers, merger limits, and Congress approval
- The grantee must not:
- lease, transfer, grant usufruct, sell, or assign the franchise or rights and privileges acquired under it; or
- merge with any other corporation or entity; or
- transfer the grantee’s controlling interest—whether as a whole or in parts and whether simultaneously or contemporaneously—
to any person, firm, company, corporation, or other commercial or legal entity.
- Any sale, transfer, assignment, merger, or controlling-interest transfer of the franchise privileges requires prior approval of the Congress of the Philippines.
- Any person or entity to which the franchise is sold, transferred, or assigned is subject to the same conditions, terms, restrictions, and limitations of the Act.
Ownership dispersal for public participation
- The grantee must offer at least thirty percentum (30%) of its outstanding capital stock, or a higher percentage that may later be required by law, in any securities exchange in the Philippines.
- The dispersal 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 one that operates three (3) or more radio and/or television stations.
- Noncompliance with the required ownership dispersal renders the franchise ipso facto revoked.
Future general broadcast policy and equality clause
- The grantee must comply with and be subject to a general broadcast policy law that Congress may hereafter enact.
- Any advantage, favor, privilege, exemption, or immunity granted under existing franchises, or granted in the future, automatically becomes part of previously granted telecommunications franchises and must be accorded to their grantees immediately and unconditionally.
- The equality clause does not affect provisions of telecommunications franchises concerning:
- territory covered by the franchise,
- the life span of the franchise, or
- the type of service authorized by the franchise.
Reporting, separability, repeal, non-exclusivity
- The grantee must submit an annual report to the Congress of the Philippines on compliance with franchise terms and on operations.
- The annual report must be filed within sixty (60) days from the end of every year.
- If any section or provision of Republic Act No. 9171 is held invalid, the remaining sections not affected remain valid (separability clause).
- The franchise is subject to amendment, alteration or repeal by Congress when the public interest requires.
- The franchise must not be interpreted as an exclusive grant of the privileges provided in the Act (non-exclusivity).
Effectivity and publication rule
- The Act takes effect fifteen (15) days from the date of its publication, upon the initiative of the grantee, in at least two (2) newspapers of general circulation in the Philippines.