Law Summary
Operation of Stations and Facilities
- Grantee must operate stations to cause minimal interference with existing or legally established stations.
- Retains rights to selected wavelengths or frequencies without diminishing transmission or reception quality.
National Telecommunications Commission (NTC) Approval
- Grantee required to secure permits and licenses from NTC for construction and operation of stations.
- Unauthorized use of frequencies is prohibited.
- NTC must not unreasonably withhold or delay permits.
Public Service Obligations
- Grantee must allocate adequate public service time for government communication on important issues.
- Must provide sound, balanced programming assisting public information and education.
- Broadcasts must avoid obscene/indecent content and not disseminate false information or incite treasonable acts.
Government's Special Rights
- President may take over, suspend, or authorize use of broadcasting facilities in times of emergencies like war, rebellion, calamity, or public disorder.
- Temporary government operation to be compensated.
- Radio spectrum considered national patrimony; usage is a state privilege subject to withdrawal after due process.
Term and Revocation of Franchise
- Franchise valid for 25 years from effectivity unless revoked or cancelled.
- Franchise ipso facto revoked if grantee fails to commence operations within 1 year of NTC permit approval, operate continuously for 2 years, or commence operations within 3 years of Act effectivity.
Acceptance and Compliance
- Grantee must accept the franchise in writing within 60 days from effectivity.
- Lack of acceptance renders franchise void.
Bond Requirement
- Grantee to file a bond with NTC to guarantee compliance.
- Bond amount determined by NTC; cancelled after 3 years of fulfilling requirements.
- Failure to comply results in bond forfeiture and automatic franchise revocation.
Taxation
- Grantee subject to all taxes, duties, fees under National Internal Revenue Code and other laws.
- Existing tax exemptions or privileges not repealed.
- Must file returns and pay taxes where facilities are located; returns subject to BIR audit.
Self-Regulation and Censorship
- No prior censorship required on broadcast content.
- Obliged to cut off broadcasts inciting treason, rebellion, sedition, or containing indecent/immoral content.
- Willful failure to cut such content is ground for franchise cancellation.
Right of Reply
- Persons aggrieved by broadcasts using grantee’s facilities have the right to reply on the same or another program.
Indemnity for Government
- Grantee to hold national and local governments free from liability for accidents or injuries caused by station operations or construction.
Restrictions on Transfer or Assignment
- Franchise and rights cannot be leased, sold, transferred, assigned, merged, or have controlling interest changed without prior Congress approval.
- Transferees subjected to same franchise terms.
Ownership Dispersal Requirement
- Grantee must offer at least 30% of its outstanding capital stock in a Philippine securities exchange within 5 years after becoming a national broadcasting network.
- "National broadcasting network" defined as operating 3 or more radio/TV stations.
- Failure to comply results in automatic franchise revocation.
Compliance with Future General Broadcast Policy
- Grantee subject to future general broadcast policy laws that Congress may enact.
Annual Reporting to Congress
- Grantee to submit annual reports on compliance and operations within 60 days after each year’s end.
Equality Clause
- Grantee accorded any advantages, privileges or exemptions granted to other existing or future broadcasting franchises, except those concerning territorial coverage, franchise term, or type of authorized service.
Separability Clause
- Invalidity of any provision does not affect validity of remaining provisions.
Amendment and Nonexclusivity
- Franchise subject to amendment, alteration, or repeal by Congress in public interest.
- Rights granted are nonexclusive.
Effectivity
- Act effective fifteen (15) days after publication in two newspapers of general circulation upon grantee’s initiative.