Franchise for Kalayaan Broadcasting System

Section 2 requires the grantee to construct and operate stations or facilities in a manner that results in only minimum interference on wavelengths or frequencies of other existing stations or stations that may be established by law.
Section 2 requires that the operation does not diminish the grantee’s right to use its selected wavelengths or frequencies.
Section 2 requires the grantee to maximize rendition of its services and/or availability by ensuring the quality of transmission or reception.

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

Section 4 requires the grantee to provide reasonable public service time so the government can reach the population on important public issues through the broadcasting stations.
Section 4 requires the grantee to provide sound and balanced programming at all times.
Section 4 requires promotion of public participation, including community programming.
Section 4 requires assistance in the functions of public information and education.
Section 4 requires conformity with the ethics of honest enterprise.
Section 4 prohibits using stations to broadcast obscene and indecent language, speech, act or scene, or to disseminate deliberately false information or willful misrepresentation.
Section 4 prohibits use of stations to the detriment of the public interest, or to incite, encourage, or 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 in the interest of public safety, security and public welfare.
Section 5 authorizes the President to permit temporary use and operation by any agency of the Government.
Section 5 requires due compensation to the grantee for the use of the stations during periods of such government operation.

Section 6 sets the franchise term at twenty-five (25) years from the date of effectivity of the 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 acceptance in writing within sixty (60) days after the Act’s effectivity.
Section 7 provides that upon giving acceptance, the grantee shall exercise the privileges granted.
Section 7 states that nonacceptance renders the franchise void.

Section 8 requires the grantee, its successors or assigns to pay the same taxes on its real estate, buildings and personal property as other persons or corporations required by law.
Section 8 imposes a franchise tax equivalent to three percent (3%) of all gross receipts of the radio business transacted under the franchise.
Section 8 states that the 3% franchise tax is in lieu of all taxes on the franchise or earnings thereof.
Section 8 requires continued liability for income taxes payable under Title II of the National Internal Revenue Code pursuant to Section 2 of Executive Order No. 72, unless later amended or repealed.
Section 8 requires filing the return with and paying tax due to the Commissioner of Internal Revenue or duly authorized representative 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 compliance with the constitutional mandate to democratize ownership of public utilities.
Section 9 requires a public offering through the stock exchange of at least thirty percent (30%) of the grantee’s common stock within three (3) years from the Act’s effectivity.
Section 9 limits ownership by any single person or entity to no more than five percent (5%) of the stock offerings.

Section 10 requires the grantee to hold harmless the national, provincial and municipal governments from all claims, accounts, demands or actions.
Section 10 limits such claims to those arising out of accidents or injuries, whether to property or persons, caused by the construction or operation of the stations of the grantee.

Section 11 prohibits the grantee from leasing, transferring, granting usufruct of, selling, or assigning the franchise or the rights and privileges acquired thereunder to any person, firm, company, corporation, or other commercial or legal entity without prior approval of Congress of the Philippines.
Section 11 prohibits transferring the controlling interest in the grantee, whether as a whole or in parts and whether simultaneously or contemporaneously, without prior approval of Congress of the Philippines.
Section 11 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 15 requires submission of an annual report to the Congress of the Philippines on compliance with franchise terms and conditions and on operations.
Section 15 requires the annual report within sixty (60) days from the end of every year.

Section 12 provides that if any section or provision is held invalid, all other provisions not affected remain valid.
Section 13 allows the franchise to be amended, altered or repealed by Congress when the public interest so requires.
Section 13 states the franchise must not be interpreted as an exclusive grant of the privileges provided.
Section 14 requires the grantee to comply with and be subject to provisions of a general broadcast policy law that may be enacted in the future.

Section 16 provides that the Act takes effect fifteen days (15) days from the date of its publication in at least two (2) newspapers of general circulation in the Philippines.

The Act is Republic Act No. 7303, titled “An Act Granting the Kalayaan Broadcasting System, Incorporated, a Franchise to Construct, Install, Operate and Maintain Radio Broadcasting Stations in the Island of Mindanao and for Other Purposes.”
The Act is dated March 26, 1992 and is approved by President Corazon C. Aquino.
The legislative passage dates are February 5, 1992 (House of Representatives) and February 4, 1992 (Senate), as reflected in the Act’s final passage notes.
Section 7 sets a sixty (60) days acceptance window measured from the Act’s effectivity under Section 16.