Franchise for MBC Radio and TV Broadcasting

Section 2 requires the grantee’s existing and future stations or facilities to be constructed and operated to result in only the minimum interference on wavelengths or frequencies of other existing stations, and stations that may be established by law.
Section 2 prohibits operation from diminishing the grantee’s own right to use its selected wavelengths or frequencies.
Section 2 requires maximizing the grantee’s quality of transmission or reception and/or the availability of its services.

Section 3 requires the grantee to secure from the National Telecommunications Commission (NTC) the appropriate permits and licenses for its stations.
Section 3 prohibits the grantee from using any frequency in the radio and television spectrum without being authorized by the NTC.
Section 3 requires that the NTC shall not unreasonably withhold or delay the grant of authority.

Section 4 requires the grantee to provide reasonable public service time to enable the government, through its broadcasting stations, to reach the population on important public issues.
Section 4 requires the grantee to provide sound and balanced programming at all times.
Section 4 requires the grantee to promote public participation, including community programming, and to assist public information and education functions.
Section 4 requires conformity with the ethics of honest enterprise.
Section 4 prohibits the grantee from using its stations to broadcast obscene and indecent language, speech, act or scene, or to disseminate deliberately false information or willful misrepresentation to the detriment of the public interest.
Section 4 prohibits broadcasting designed to incite, encourage, or assist in subversive or treasonable acts.

Section 5 reserves to the President of the Philippines, in times of rebellion, public peril, calamity, emergency, disaster or disturbance of peace and order, the right to temporarily take over and operate the grantee’s stations.
Section 5 authorizes the President to temporarily suspend operation of any station for public safety, security and public welfare.
Section 5 authorizes the President to authorize temporary use and operation of the stations by any government agency.
Section 5 requires due compensation to the grantee for use of the stations during the period of such government operation.

Section 6 provides that the franchise runs for a term of twenty-five (25) years from the date of approval of this Act, unless sooner revoked or cancelled.
Section 6 provides that if the grantee fails to operate continuously for two (2) years, the franchise is deemed ipso facto revoked.

Section 7 requires written acceptance of the franchise within sixty (60) days after approval of this Act.
Section 7 provides that upon giving acceptance, the grantee shall exercise the privileges granted under the Act.
Section 7 states that nonacceptance renders the franchise void.

Section 8 makes the grantee, its successors or assigns, liable for the same taxes on real estate, buildings and personal property (exclusive of this franchise) as required for other persons or corporations.
Section 8 imposes a franchise tax equivalent to three percent (3%) of all gross receipts of the radio/television business transacted under the franchise.
Section 8 states that the three percent (3%) franchise tax is in lieu of all taxes on this franchise or earnings thereof.
Section 8 provides that the grantee continues to be liable for income taxes payable under Title II of the National Internal Revenue Code pursuant to Section 2 of Executive Order No. 72, unless that enactment is amended or repealed, in which case the amendment or repeal applies.
Section 8 requires the grantee to file the return and pay the tax due to the Commissioner of Internal Revenue or duly authorized representatives, in accordance with the National Internal Revenue Code.
Section 8 provides that the return is subject to audit by the Bureau of Internal Revenue.

Section 9 requires the grantee, its successors or assigns to continue to maintain status as a publicly-held corporation to comply with the constitutional mandate to democratize ownership of public utilities.

Section 10 prohibits the grantee from requiring any previous censorship of any speech, play, act or scene, or other matter to be broadcast and/or telecast.
Section 10 allows the grantee to cut off from the air during any broadcast and/or telecast the speech, play, act or scene, or other matter being broadcast and/or telecast if:
- the tendency is to propose and/or incite treason, rebellion or sedition, or
- the language or theme is indecent or immoral.
Section 10 states that the grantee’s willful failure to cut off under these conditions constitutes a valid cause for the cancellation of this franchise.

Section 11 requires the grantee to hold national, provincial, and municipal governments harmless from all claims, accounts, demands or actions arising out of accidents or injuries to property or persons caused by construction or operation of the stations.

Section 12 prohibits the grantee from leasing, transferring, granting the usufruct of, selling or assigning the franchise or its acquired rights and privileges to any person, firm, company, corporation, or other commercial or legal entity.
Section 12 prohibits the grantee from merging with any corporation or entity without the prior approval of the Congress of the Philippines.
Section 12 provides that any person or entity to which the franchise is sold, transferred, or assigned is subject to all the same conditions, terms, restrictions, and limitations of the Act.

Section 13 provides a separability clause: if any section or provision is held invalid, the other provisions not affected remain valid.
Section 14 requires compliance with and subjection to any general broadcast policy law Congress may hereafter enact.
Section 15 subjects the franchise to amendment, alteration or repeal by Congress when the public interest requires, and states the franchise is not an exclusive grant of the privileges provided.

Section 16 provides that the Act takes effect fifteen (15) days from its publication in at least two (2) newspapers of general circulation in the Philippines.
The Act is Approved, October 29, 1994.