Reserved State Rights During Emergencies
- The President of the Philippines may take over or authorize government use of the stations in times of war, rebellion, or public peril.
- Such government use is temporary and requires no compensation to the franchisee during these periods.
Franchise Term and Commencement Requirement
- The franchise period is 25 years from the date of approval.
- The franchise becomes void if at least one station is not operational within two years from approval.
Licensing and Regulatory Oversight by the NTC
- The franchisee must secure authorization and frequency allocation from the National Telecommunications Commission (NTC) before exercising the franchise.
- The NTC may change, cancel, or modify the franchise or frequencies upon reasonable notice for reasons such as interference, monopoly risk, public interest, or violation of laws.
Frequency Use and Interference Avoidance
- Stations must be constructed and operated to avoid interference with existing stations.
- Frequency selection must also allow for service expansion.
Nonliability of Government Entities
- The franchisee shall hold government entities harmless from claims or damages arising from station operations or construction.
Accounting and Auditing Requirements
- The franchisee must keep detailed accounts of gross receipts and submit them annually by January 31 to the Commission on Audit (COA).
- The COA has authority to inspect, audit, and approve accounts which serve as conclusive evidence of gross receipts, but the franchisee may appeal to courts.
Restrictions on Transfer and Assignment
- Lease, transfer, sale, assignment, or merger related to the franchise require prior congressional approval.
- Assignees are subject to the same franchise terms and conditions.
Compliance with Corporation Laws
- The franchisee and its successors or assigns must comply with existing or future corporation laws of the Philippines.
Performance Bond Requirement
- A performance bond of PHP 300,000 must be posted to guarantee compliance with franchise conditions.
- The bond is refundable upon fulfillment of conditions after two years.
Tax Obligations
- The franchisee shall pay applicable taxes on income, business, real estate, buildings, personal property excluding the franchise tax.
- Additionally, a franchise tax of 3% on gross receipts under the franchise must be paid annually within 10 days after COA approval.
Congressional Power Over Franchise
- Congress may amend, alter, modify, or repeal the franchise at any time for public interest.
Nonexclusivity of Franchise
- The grant does not confer exclusivity on the franchisee.
Separability Clause
- If any provision is declared invalid or unconstitutional, remaining provisions shall continue in effect.
Effectivity
- The Act takes effect 15 days after publication in two national newspapers.
- The Act lapsed into law without presidential signature as per constitutional provision.