Extension of Broadcasting Franchise for Philippine Broadcasting Corporation

Manner of operation requirements

Section 2 requires stations or facilities to be constructed and operated to result in only the minimum interference on the wavelengths or frequencies of existing stations or other stations established by law.
Section 2 prohibits diminishing the grantee’s own privilege to use its assigned wavelengths or frequencies and to maximize the quality of transmission or reception.
Section 2 mandates operation in a manner that maximizes rendition of services and/or availability of the grantee’s services.

National Telecommunications Commission permits

Section 3 requires the grantee to secure from the National Telecommunications Commission (NTC) the appropriate permits and licenses for construction and operation.
Section 3 prohibits using any frequency in the radio/television spectrum without authorization from the NTC, while directing the NTC not to unreasonably withhold or delay such authority.
Section 3 prohibits disposing or leasing facilities except to entities with radio or television franchise.
For any prohibited-disposition exception transaction: Section 3 requires the grantee to inform and secure written authorization to proceed from the NTC, and report the transaction to the NTC within sixty (60) days after completion.
Section 3 directs the NTC to determine the corresponding sanction for any violation of the disposal/lease provision.

Public service and programming obligations

Section 4 requires the grantee to provide, free of charge, adequate public service time to enable the government, through the grantee’s broadcasting stations/facilities, to reach pertinent populations on important public issues and to relay important public announcements and warnings concerning public emergencies and calamities.
Section 4 requires the grantee to provide sound and balanced programming at all times.
Section 4 requires the grantee to promote public participation, assist in public information and education, and conform to the ethics of honest enterprise.
Section 4 requires promotion of audience sensibility and empowerment, including closed captioning.
Section 4 prohibits the grantee from using stations/facilities to broadcast obscene or indecent language, speech, act or scene or for dissemination of deliberately false information or willful misrepresentation to the detriment of the public interest, or to incite, encourage, or assist in subversive or treasonable acts.
Section 4 defines public service time as equivalent to a maximum aggregate of ten percent (10%) of paid commercials or advertisements, allocated based on the need of the executive, legislative, judiciary, constitutional commissions and international humanitarian organizations duly recognized by statutes.
Section 4 requires the NTC to increase public service time in case of extreme emergency or calamity, and to issue rules and regulations; such rules’ effectivity commences upon applicability with other similar broadcast network franchise holders.

Government reserved rights in emergencies

Section 5 states that the radio system is a finite resource part of national patrimony and that its use is a privilege conferred by the State, subject to withdrawal any time after due process.
Section 5 reserves a special right to the President of the Philippines in times of war, rebellion, public peril, calamity, emergency, disaster, or disturbance of peace and order to:
- temporarily take over and operate the grantee’s stations/facilities;
- temporarily suspend operation of any station/facility for public safety, security and public welfare; or
- authorize temporary use and operation by any government agency, with due compensation to the grantee, during the period of government operation.

Term, continuance, and cancellation

Section 6 provides that the franchise is in effect for twenty-five (25) years from the effectivity of the Act, unless sooner revoked or cancelled.
Section 6 deems the franchise ipso facto revoked if the grantee fails to operate continuously for two (2) years.

Self-regulation and consequences for refusal

Section 7 prohibits the grantee from requiring previous censorship of any speech, play, act, scene, or other matter to be broadcast.
Section 7 provides that if any broadcast content constitutes a violation of law or infringement of a private right, the grantee is free from civil or criminal liability for the content.
Section 7 requires the grantee, during any broadcast, to cut off the airing of any speech/play/act/scene or other matter if its tendency is to propose and/or incite treason, rebellion or sedition, or if the language/theme is indecent or immoral.
Section 7 provides that a willful failure to cut off as required constitutes a valid cause for cancellation of the franchise.

Government indemnity for accidents

Section 8 requires the grantee to hold free from all claims, liabilities, demands, or actions the national, provincial, city and municipal governments of the Philippines arising out of accidents causing injury to persons or damage to properties during the construction or operation of the grantee’s stations.

Employment and training obligations

Section 9 requires the grantee to create employment opportunities and to allow on-the-job trainings in franchise operations.
Section 9 requires priority to residents where the principal office is located.
Section 9 requires compliance with applicable labor standards and allowance entitlement under existing labor laws, rules and regulations, and similar issuances.
Section 9 requires employment opportunities/jobs created to be reflected in the General Information Sheet (GIS) submitted to the Securities and Exchange Commission annually.

Ownership limitations and approvals

Section 10 prohibits the grantee from selling, leasing, transferring, granting the usufruct of, nor assigning the franchise or the rights/privileges acquired thereunder to any person, firm, company, corporation, or other commercial or legal entity, and prohibits merging with another corporation/entity.
Section 10 prohibits transfer of the controlling interest of the grantee simultaneously or contemporaneously to any such person/entity without prior approval of Congress.
Section 10 requires Congress to be informed of any sale/lease/transfer/grant of usufruct/assignment, merger, or controlling interest transfer within sixty (60) days after completion.
Section 10 provides that failure to report to Congress renders the franchise ipso facto revoked.
Section 10 binds any transferee/assignee to the same conditions, terms, restrictions, and limitations of the Act.

Dispersal of ownership to Filipinos

Section 11 requires the grantee, to encourage public participation in public utilities, to offer Filipino citizens at least thirty percent (30%) or a higher percentage as may be provided by law, of its outstanding capital stock in any securities exchange in the Philippines within five (5) years from commencement of operations.
Section 11 provides that when public officer of shares is not applicable, the grantee must apply other methods encouraging public participation by citizens and corporations operating public utilities as allowed by law.
Section 11 provides that noncompliance renders the franchise ipso facto revoked.

Annual reporting to Congress and NTC

Section 12 requires the grantee to submit an annual report to Congress through the Committee on Legislative Franchise of the House of Representatives and the Committee on Public Service of the Philippine Senate.
Section 12 requires the annual report to cover compliance with franchise terms and conditions and operations.
Section 12 requires submission on or before April 30 of every year during the term of the franchise.
Section 12 provides that the reportorial compliance certificate issued by Congress is required before any application for permit or certificate is accepted by the NTC.

Fine for failure to report

Section 13 penalizes failure to submit the requisite annual report by a fine of Five hundred pesos (P500.00) per working day of noncompliance.
Section 13 directs that the fine is collected by the NTC from the delinquent franchise grantee separate from reportorial penalties imposed by the NTC.
Section 13 requires remittance of the collected fine to the National Treasury.

Equality clause for broadcast franchises

Section 14 provides that, except for taxes and customs duties, any advantage, favor, privilege, exemption, or immunity granted under existing franchises, or granted later for radio and/or television broadcasting upon prior review and approval of Congress, becomes part of this franchise and is accorded immediately and unconditionally to the grantee.
Section 14 limits the equality clause by providing that it does not apply to or affect provisions of broadcasting franchises concerning territorial coverage, term, or the type of service authorized by the franchise.

Amendment and nonexclusivity

Section 15 provides that the franchise is subject to amendment, alteration, or repeal by Congress when the public interest so requires.
Section 15 provides that the franchise is not interpreted as an exclusive grant of the privileges provided.

Separability, repeal, and effectivity

Section 16 provides that if any section or provision is held invalid, the remaining provisions not affected remain valid.
Section 17 repeals, amends, or modifies all laws, decrees, orders, resolutions, instructions, rules and regulations, and other issuances or parts thereof inconsistent with the Act.
Section 18 provides that the Act takes effect fifteen (15) days after its publication in the Official Gazette or in a newspaper of general circulation.
The Act is approved on March 08, 2019.