Franchise for Southern Broadcasting Network

Section 2 reserves to the President of the Philippines in times of war, rebellion, public peril, calamity, emergency, disaster, or disturbance of peace and order the power to take over and operate the broadcasting stations.
The President may also authorize the temporary use and operation of the stations by any department of government.
Presidential takeover or temporary government use must be accompanied by due compensation to the grantee for the use of the stations during the period of operation.

Section 3 empowers the President to permit the construction of the stations (or any of them) on land of the public domain.
Presidential permission must be granted on terms and conditions the President prescribes.

Section 4 provides a franchise duration of twenty-five (25) years from the date the first station is placed in operation.
The franchise is expressly granted under the condition that it becomes void unless construction is handled within specific timelines.
Construction must be begun two (2) years from the date of approval of this Act and must be completed within four (4) years from the same date.

Section 5 requires the grantee to file a bond of PHP 200,000 to guarantee full compliance with franchise conditions.
The bond is cancellable if the grantee has fulfilled the conditions after two (2) years from the date of approval, or as soon thereafter as fulfillment occurs.

Section 6 prohibits the grantee from requiring previous censorship of any speech, play, or other matter to be broadcast.
During any broadcast, the grantee may cut off from the air any speech, play, or other matter being broadcast if:
- it tends to propose and/or incite treason, rebellion or sedition, or
- the language used is indecent or immoral, or the theme is indecent or immoral.

Section 7(a) provides that the franchise does not take effect and no power under it may be exercised until the National Telecommunications Commission:
- allots frequencies and channels to the grantee,
- determines the stations to and from which each frequency may be used, and
- issues a license for such use.
Section 7(b) authorizes the NTC, on reasonable notice to the grantee, to change, cancel, or modify any or all frequency allotments:
- when the NTC judges that public interest requires use of the frequencies for other purposes—by the government or by other licensed individuals or corporations, or
- when the NTC judges that, for any reason, the public interest of the Philippines requires such action.

Section 8 requires the grantee to construct and operate its stations and select frequencies to avoid interference with existing stations.
Section 8 also requires operation to permit the expansion of the grantee’s services.

Section 9 requires the grantee to hold harmless the national, provincial, and municipal governments of the Philippines from claims, accounts, demands, or actions arising from accidents or injuries.
Liability coverage under Section 9 includes accidents or injuries affecting properties or persons caused by the construction or operation of the stations.

Section 10 prohibits the grantee from taking private property for any purpose without proper condemnation proceedings and just compensation paid or tendered.
Section 10 limits any franchise authority to take and occupy land to land only required for the actual necessary purposes for which the franchise is granted.

Section 11 requires the grantee to keep an account of gross receipts of its business.
The grantee must furnish the Commission on Audit Chairman and the Treasurer of the Philippines a copy of the gross receipts account not later than the 31st day of January of each year for the preceding year.
Section 11 subjects the grantee’s relevant books and accounts to official inspection by the Commission on Audit Chairman or authorized representatives.
Section 11 provides that the audit and approval of gross receipts accounts is final and conclusive evidence of the gross receipts amount, with an appeal to courts available under the terms and conditions in Philippine laws.

Section 12 makes the grantee and its operations subject to Philippine corporation laws currently existing or enacted in the future.

Section 13 prohibits the grantee from leasing, transferring, granting usufruct of, selling, or assigning the franchise—or any rights and privileges acquired thereunder—to any person, firm, company, corporation, or other commercial or legal entity, without prior approval of the Congress of the Philippines.
Section 13 also prohibits the grantee from merging with any person, firm, company, or corporation organized for the same purpose without prior Congressional approval.
Any corporation to which the franchise is sold, transferred, or assigned must be subject to Philippine corporation laws currently existing or later enacted.
Any person, firm, company, corporation, or legal entity to which the franchise is sold, transferred, or assigned must be subject to all conditions, terms, restrictions, and limitations of the franchise as fully and completely as if originally granted to that entity.

Section 14(a) requires the grantee to pay the same taxes on its real estate, buildings, and personal property (exclusive of the franchise) as other persons or corporations are required to pay by law.
Section 14(b) requires the grantee to pay the Treasurer of the Philippines each year—within ten (10) days after the audit and approval of accounts as prescribed by the Act—three percent (3%) of all gross receipts from the business transacted under the franchise.
Section 14(b) provides that, except for the taxes mentioned in Section 14(a) and income taxes, the franchise tax payment is in lieu of:
- other taxes,
- license fees, and
- administrative supervisory and regulatory fees.

Section 15 states the franchise is not an exclusive grant of the privilege provided.

Section 16 provides that the Act takes effect upon approval.
The Act lapsed into law on September 7, 1995 without the President’s signature pursuant to Section 27(1), Article VI of the Constitution.