Franchise for Wireless Press Stations in Philippines

Franchise grant and authorized operations

Section 1 grants Philippine Press Wireless, Inc., and its successors or assigns, a franchise to construct, maintain, and operate stations in the Philippines for wireless reception and transmission of wordage, pictures, or other matter intended for publication.
The franchise covers transmission to and from points within the Philippines and to and from points exterior thereto, including airplanes, airships, and vessels located within the territorial limits of the Philippines.
Each station may consist of two plants: a sending station and a receiving station under Section 1.
Section 1 allows the grantee to establish in any province a station for the master receiving and transmitting plant.
If the grantee cannot use land line service, Section 1 allows establishment of a smaller plant or plants in Manila or other nearby points where such service is available to handle wireless traffic relayed to and from the master station, and such handling shall not be construed as engaging in domestic business in the Philippines but as a circuit for bringing press material to Manila from abroad.

Presidential control over public domain and frequencies

Section 2 empowers the President of the Philippines to permit the location of the stations on the public domain upon terms the President prescribes.
Section 5 requires the franchise to be conditioned on (a) the President’s allotment of frequencies and wave-lengths and (b) determination of the stations to and from which each frequency and wave-length may be used.
Under Section 5, the President must issue a license for use of such frequencies and wave-lengths; only then does the franchise take effect.
Under Section 5, the grantee must begin operation within three years from the date the presidential license is issued.
Section 6 authorizes the President, on reasonable notice, to change, cancel, or modify in whole or in part the allotments of frequencies and wave-lengths and the associated licenses.

Frequency changes and investigatory powers

Section 6 permits presidential action whenever, in the President’s judgment, the frequencies and wave-lengths have been used or are in danger of being used to impair electrical communication, stifle competition, obtain a monopoly, secure unreasonable rates, or otherwise violate laws of public policy of the Philippines.
Section 6 permits presidential action whenever, in the President’s judgment, public interest requires that the frequencies and wave-lengths be used for other purposes by the Commonwealth or by other licensed individuals or corporations.
Section 6 permits presidential action whenever, for any reason, public interest so requires.
Section 6 authorizes the President to appoint boards, commissions, or agents to investigate and determine facts for the exercise of these powers.
Under Section 6, such boards, commissions, or agents have authority by compulsory process of subpoena to summon witnesses, administer oaths, and take evidence.

Term, start/finish conditions, and non-domestic business

Section 3 provides that the franchise continues for fifty years from the date of the issuance of the license required in Section 5.
Section 3 makes the franchise void unless construction of the master station is started within one year from the date of issuance of the Section 5 license and is completed within two years.
Section 4 prohibits the grantee from engaging in domestic business in the Philippines without further special assent of the National Assembly.
Section 4 defines the franchise purpose as securing the right to conduct long distance wireless communication with points outside the Philippines by receiving and transmitting wordage, pictures, or other matter for publication, either in the public press or by broadcast radio-news.

Public domain locations, competition safeguards, and US/communal takeover

Section 7 requires the grantee to construct and operate its wireless station(s) so as not to interfere with the operation of other radio stations maintained and operated in the Philippines.
Section 8 reserves to the President of the United States, in time of war, insurrection, or domestic trouble, the right to take over and operate the station upon order and direction of the State Department of the Republic of the United States, with the United States Government paying and compensating the grantee during government operation.
Section 8 reserves a similar takeover right to the Commonwealth of the Philippines, under similar circumstances and conditions, upon the order and direction of the President of the Commonwealth.
The franchise is therefore subject to possible government operation during the enumerated emergencies under Section 8.

Rate fixing, accounting, audit, and franchise-related payments

Section 9 reserves to the Commonwealth Government through the Public Service Commissioner or other duly authorized officer the power to fix maximum rates charged by the grantee and its successors or assigns.
Section 10 requires the grantee to keep an account of gross receipts from business transacted under the franchise.
Under Section 10, the grantee must furnish the Auditor General and the Treasurer of the Philippines a copy of the gross receipts account not later than the thirty-first day of January of each year for the preceding year.
Section 10 makes the grantee’s books and accounts subject to official inspection by the Auditor General or authorized representative for auditing.
Under Section 10, in the absence of fraud or mistake, the audit and approval by the Auditor General of the accounts is final and conclusive evidence of the amount of gross receipts.

Taxes and percentage in lieu of franchise/earnings taxes

Section 11 requires payment of the same taxes on real estates, buildings, and personal property, exclusive of the franchise as other persons or corporations may be required by law to pay.
Section 11 requires the grantee to pay the Treasurer of the Philippines each year within ten days after the audit and approval of accounts under Section 10.
The required annual payment under Section 11 is one and one-half per centum of all gross receipts for business transacted under the franchise in the Philippines.
Section 11 states that the one and one-half per centum payment is in lieu of all taxes on the franchise or earnings thereof.

Liability for accidents and condemnation limits

Section 12 requires the grantee, its successors, or assigns to hold harmless the Commonwealth, provincial, and municipal governments from claims, accounts, demands, or actions arising out of accidents or injuries (to property or persons) caused by construction or operation of the stations for reception and transmission of press messages.
Section 13 prohibits taking private property by the grantee without proper condemnation proceedings and just compensation paid or tendered.
Section 13 limits the authority to take or occupy land only to land required for actual necessary purposes for which the franchise is granted.
Section 13 requires reversion of all lands or rights of use and occupation granted to the grantee upon termination of the franchise or upon its revocation or repeal, reverting to the Commonwealth Government or the appropriate provincial or municipal government that held the land or right at the time it was conceded.

Corporate issuance limits and labor condition

Section 14 prohibits the grantee, its successors, or assigns from issuing stock or bonds except in exchange for actual cash or for property at a fair valuation equal to the par value of the stock or bonds issued.
Section 14 prohibits the grantee, its successors, or assigns from using, employing, or contracting for the labor of persons claimed or alleged to be held in involuntary servitude.

Bond, filing period, and cancellation

Section 15 requires, as a condition of granting the franchise, that the grantee execute a bond in favor of the Government of the Philippines in the amount of twenty-five thousand pesos.
Section 15 requires the bond to be in a form and with sureties satisfactory to the Secretary of Public Works and Communications and conditioned upon faithful performance of the grantee’s obligations during the first three years of the franchise.
Under Section 15, after three years from acceptance, if the grantee fulfilled its obligations (or fulfilled them so soon thereafter as it could), the bond shall be cancelled by the Secretary of Public Works and Communications.
Section 16 requires the bond together with a written acceptance of the franchise to be given within six months after approval of this Act and to be filed with the Secretary of Public Works and Communications.

Constitutional limits and interpretation rule

Section 17 subjects the franchise to the limitations of the Constitution.
Section 17 requires that the franchise not be interpreted as an exclusive grant of the privileges provided.

Repeal, separability, and sunset

The Act provides for franchise duration under Section 3 and contains no separability, repealing, or sunset clause beyond the franchise term mechanics in Section 3.