Franchise for ABS-CBN Broadcasting Operations

The grantee must construct existing and future stations or facilities in a way that results in only the minimum interference on the wavelengths or frequencies of other existing stations that may be established by law.
The grantee’s construction must not diminish its own right to use its selected wavelengths or frequencies.
The construction must maximize the quality of transmission or reception and/or the availability of the grantee’s services.

The grantee must secure from the National Telecommunications Commission (NTC) the appropriate permits and licenses for its stations.
The grantee must not use any frequency in the television or radio spectrum without authorization from the NTC.
The NTC must not unreasonably withhold or delay the grant of such authority.

The grantee must provide adequate public service time to enable the government, through the broadcasting stations, to reach the population on important public issues.
The grantee must provide at all times sound and balanced programming.
The grantee must promote public participation, including community programming.
The grantee must assist the functions of public information and education.
The grantee must conform to the ethics of honest enterprise.
The grantee must not broadcast obscene and indecent language, speech, act or scene.
The grantee must not disseminate deliberately false information or willful misrepresentation to the detriment of the public interest.
The grantee must not use its stations to incite, encourage, or assist in subversive or treasonable acts.

The President has a special reserved right, in times of rebellion, public peril, calamity, emergency, disaster, or disturbance of peace and order, to:
- temporarily take over and operate the stations of the grantee; or
- temporarily suspend the operation of any station in the interest of public safety, security and public welfare; or
- authorize temporary use and operation by any government agency.
Temporary government use is subject to due compensation to the grantee for the use of the stations during the period of such operation.

The franchise term is twenty-five (25) years from the date of effectivity of the Act.
The grantee must give written acceptance of the franchise to Congress within sixty (60) days from the Act’s effectivity.
Upon written acceptance, the grantee must exercise the privileges granted under the Act.

The grantee (and its successors/assigns) must pay the same taxes on real estate, buildings and personal property, exclusive of the franchise, as other persons or corporations pay under existing or future law.
In addition, the grantee must pay a franchise tax equivalent to three percent (3%) of all gross receipts of the radio/television business transacted under the franchise.
The 3% franchise tax is in lieu of all taxes on this franchise or earnings thereof.
The grantee remains 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 Executive Order is amended or repealed (and any amendment or repeal applies to that liability).
The grantee must file the return with and pay the tax due to the Commissioner of Internal Revenue or duly authorized representatives in accordance with the National Internal Revenue Code.
The filed return is subject to audit by the Bureau of Internal Revenue.

The grantee must not require any previous censorship of any speech, play, act or scene, or other matter to be broadcast and/or telecast from its stations.
The grantee must cut off from the air any speech, play, act or scene, or other matter being broadcast and/or telecast if:
- its tendency is to propose and/or incite treason, rebellion or sedition; or
- the language used therein or the theme thereof is indecent or immoral.
A willful failure to make the required cut-off constitutes a valid cause for the cancellation of the franchise.

The grantee must hold national, provincial, and municipal governments of the Philippines harmless from all claims, accounts, demands, or actions arising from accidents or injuries—whether to property or persons—caused by the construction or operation of the grantee’s stations.

The grantee may not lease, transfer, grant the usufruct of, sell, or assign 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 Congress.
Any person or entity to which the franchise is sold, transferred, or assigned must be subject to the same conditions, terms, and limitations of the Act.

The grantee must comply with a general broadcast policy law that Congress may hereafter enact.

Separability: If any section or provision of the Act is held invalid, all other provisions not affected remain valid (Section 13).
Amendment/alteration/repeal: Congress may amend, alter, or repeal the franchise when the public interest requires (Section 14).
The franchise is not interpreted as an exclusive grant of the privileges provided (Section 14).

The Act takes effect fifteen (15) days from the date of its publication in at least two (2) newspapers of general circulation in the Philippines (Section 15).
The Act is approved on March 30, 1995.
The Act is dated March 30, 1995 and takes effect after the required publication and 15-day period.