How stations must operate
- The grantee must construct and operate its stations or facilities to achieve minimum interference on wavelengths or frequencies of existing stations or other stations that may be established by law.
- Operation must be done without diminishing the grantee’s right to use its selected wavelengths or frequencies and without diminishing the quality of transmission or reception.
- Operations must maximize rendition of the grantee’s services and/or their availability.
NTC permits and frequency authorization
- The grantee must secure from the National Telecommunications Commission (NTC) the appropriate permits and licenses for the construction and operation of its stations and facilities.
- The grantee must not use any frequency in the radio/television spectrum without NTC authorization.
- The NTC must not unreasonably withhold or delay authority for the grant of permits and licenses.
Public service and programming duties
- The grantee must provide adequate public service time to enable the government, through its broadcasting stations or facilities, to reach the population on important public issues.
- The grantee must provide sound and balanced programming at all times.
- The grantee must assist in functions of public information and education.
- The grantee must conform to the ethics of honest enterprise.
- The grantee must not use its stations or facilities 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.
- The grantee must not use its stations to incite, encourage, or assist in subversive or treasonable acts.
Government takeover and spectrum status
- A special right is reserved to the President of the Philippines to temporarily take over and operate the grantee’s stations or facilities, or to temporarily suspend operation of any station or facility, or to authorize temporary government use and operation by any agency.
- The President’s actions may be taken in times of war, rebellion, public peril, calamity, emergency, disaster, or disturbance of peace and order.
- Temporary government use requires due compensation to the grantee.
- The franchise privilege is framed as a privilege in the national patrimony: the radio spectrum is finite, part of national patrimony, and may be withdrawn anytime after due process.
Franchise term, automatic revocation, acceptance
- The franchise has a term of twenty-five (25) years from the date of effectivity of Republic Act No. 8995, unless sooner revoked or cancelled.
- The franchise is ipso facto revoked if the grantee fails to comply with these conditions:
- Commence operations within one (1) year from approval of its operating permit or provisional authority by the NTC.
- Operate continuously for two (2) years.
- Commence operations within three (3) years from the effectivity of the Act.
- The grantee must give written acceptance within sixty (60) days from the effectivity of the Act.
- Upon acceptance, the grantee must exercise the franchise privileges.
- Nonacceptance renders the franchise void.
Bond requirement and forfeiture
- The grantee must file a bond issued in favor of the NTC.
- The NTC determines the bond amount to guarantee compliance with and fulfillment of the franchise conditions.
- If within three (3) years from approval of the grantee’s permit by the NTC the grantee has fulfilled the conditions, the bond is cancelled by the NTC.
- If the grantee fails to fulfill the same within three (3) years, the bond is forfeited in favor of the government and the franchise is ipso facto revoked.
Taxes and returns
- The grantee is subject to payment of all taxes, duties, fees or charges and other impositions under the National Internal Revenue Code (NIRC) of 1997, as amended, and other applicable laws.
- The Act preserves existing tax benefits: nothing repeals any specific tax exemptions, incentives, or privileges granted under any relevant law.
- Rights and privileges given to existing and future broadcasting station franchises are extended to the grantee.
- The grantee must file the return with the city or province where its facility is located and pay taxes due thereon to the Commissioner of Internal Revenue or duly authorized representatives under the NIRC.
- The returns are subject to audit by the Bureau of Internal Revenue.
Self-regulation, reply right, and safety
- The grantee must not require previous censorship of any speech, play, act or scene, or other matter to be broadcast.
- During broadcasting, the grantee must cut off from the air any speech, play, act or scene, or other matter if it tends to propose and/or incite treason, rebellion or sedition, or if the language or theme is indecent or immoral.
- Willful failure to cut off constitutes a valid cause for cancellation of the franchise.
- Any person aggrieved by any remark, report, statement, commentary or like broadcast by broadcasters using the grantee’s facilities has the right to reply in the same program or in any other program the aggrieved party may choose.
- The grantee must hold the national, provincial, and municipal governments harmless from claims, accounts, demands, or actions arising from accidents or injuries—whether to property or persons—caused by construction or operation of the grantee’s stations.
Transfer limits and ownership dispersion
- The grantee must not lease, transfer, grant the usufruct of, sell, or assign the franchise or the rights and privileges acquired thereunder to any person, firm, company, corporation, or other commercial or legal entity.
- The grantee must not merge with any other corporation or entity.
- The grantee must not transfer the controlling interest—whether as a whole or in parts, and whether simultaneously or contemporaneously—to any such person or entity.
- Any transfer, sale, or assignment of the franchise and rights made without prior approval of the Congress of the Philippines is prohibited.
- Any person or entity to which the franchise is sold, transferred, or assigned must be subject to the same conditions, terms, restrictions, and limitations of the Act.
- To encourage public participation, the grantee must offer at least thirty percent (30%) of its outstanding capital stock (or a higher percentage if later required by law in a securities exchange in the Philippines) within five (5) years from achieving the status of a national broadcasting network.
- A national broadcasting network is defined as one operating three (3) or more radio and/or television stations.
- Noncompliance with this ownership dispersion requirement renders the franchise ipso facto revoked.
Equality clause and future broadcast policy
- The grantee must comply with and be subject to a general broadcast policy law that Congress may later enact.
- Any advantage, favor, privilege, exemption, or immunity granted under existing franchises, or that may later be granted, becomes part of previously granted telecommunications franchises and must be accorded immediately and unconditionally to their grantees.
- The equality clause does not apply to or affect provisions in telecommunications franchises concerning territory covered, the life span of the franchise, or the type of service authorized.
Reporting, amendment, separability, effectivity
- The grantee must submit an annual report to Congress on its compliance with franchise terms and conditions and on its operations within sixty (60) days from the end of every year.
- If any section or provision of the Act is held invalid, the remaining provisions not affected remain valid (separability clause).
- The franchise is subject to amendment, alteration, or repeal by Congress when the public interest so requires.
- The franchise must not be interpreted as an exclusive grant of privileges.
- The Act takes effect fifteen (15) days from its publication upon the grantee’s initiative in at least two (2) newspapers of general circulation in the Philippines.
Dates and parties; approval and passage
- The Act was approved: January 5, 2001.
- The Act is Republic Act No. 8995.
- The franchise is held by Polytechnic Foundation of Cotabato and Asia, Inc..
- The Act originated in the House of Representatives and was finally passed by the House and Senate on October 18, 2000 and October 10, 2000, respectively.