Broadcast franchise for Reliance Broadcasting Inc.

Scope and permitted broadcast services

Section 1 grants the grantee the franchise to construct, install, establish, operate, and maintain radio and television broadcasting stations in the Philippines.
The stations may operate where frequencies and/or channels are still available for radio and television broadcasting.
The franchise covers digital radio and television systems, including IP-related services and IP-value-added services.
The grantee may broadcast through microwave, satellite, or whatever means, including the use of any new technologies in radio and television systems.
The franchise covers broadcast-related facilities including technological auxiliaries and facilities, special broadcast and other program and distribution services, and relay stations.

How broadcasting must be operated

Section 2 requires that stations and facilities be constructed and operated in a manner that results at most in minimum interference on the wavelengths or frequencies of existing stations or other stations that may be established by law.
The grantee’s operations must not diminish its own right to use selected wavelengths or frequencies.
The grantee must operate to maximize the rendition of its services and/or the availability thereof by maintaining quality of transmission or reception.

NTC permits and frequency authorization

Section 3 requires the grantee to secure from the National Telecommunications Commission (NTC) the appropriate permits and licenses for construction and operation of its stations and facilities.
The grantee must not use any frequency in the radio/television spectrum without authorization from the NTC.
The NTC must not unreasonably withhold or delay the grant of authority.

Public service, program standards, and restrictions

Section 4 requires the grantee to provide adequate public service time so the government can reach the population on important public issues.
The grantee must provide sound and balanced programming at all times.
The grantee must assist public information and education functions through its broadcasting.
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, actor scene, or to disseminate deliberately false information or willful misrepresentation, to the detriment of the public interest.
The grantee must not broadcast material that incites, encourages, or assists in subversive or treasonable acts.

Government special right over stations

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.
The President may temporarily take over and operate the grantee’s stations or facilities.
The President may temporarily suspend the operation of any station or facility for public safety, security, and public welfare.
The President may authorize temporary use and operation of the stations or facilities by any government agency.
The temporary government action must be supported by due compensation to the grantee for the use of the stations or facilities during the period of such operation.
Section 5 also declares the radio spectrum to be a finite resource and part of national patrimony, and that its use is a privilege conferred by the State that may be withdrawn anytime after due process.

Franchise term, automatic revocation triggers

Section 6 provides that the franchise is effective for twenty-five (25) years, unless sooner revoked or cancelled.
Section 6 provides that the franchise is ipso facto revoked if the grantee fails to comply with any of these conditions:
- (a) Commence operations within one (1) year from approval of its operating permit by the NTC;
- (b) Operate continuously for two (2) years; and
- (c) Commence operations within three (3) years from the effectivity of the Act.

Acceptance requirement and voiding

Section 7 requires the grantee to give written acceptance of the franchise within sixty (60) days from the effectivity of the Act.
Upon giving such acceptance, the grantee shall exercise the privileges granted under the Act.
Nonacceptance renders the franchise void.

Bond requirement and forfeiture consequences

Section 8 requires the grantee to file a bond with the NTC in an amount the NTC determines to guarantee compliance with and fulfillment of the franchise conditions.
If, after three (3) years from approval of the grantee’s permit by the Commission, the grantee has fulfilled the same, the bond shall be cancelled by the Commission.
Otherwise, the bond shall be forfeited in favor of the government and the franchise is ipso facto revoked.

Self-regulation undertaking for broadcast content

Section 9 prohibits the grantee from requiring any previous censorship of any speech, play, act, scene, or other matter for broadcast.
During any broadcast, the grantee must cut off from the air the broadcasted material 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.
Willful failure to cut off the broadcast when required constitutes a valid cause for cancellation of this franchise.

Liability and government immunity

Section 10 requires the grantee to hold the national, provincial, city and municipal governments harmless from all claims, accounts, demands, or actions arising out of accidents or injuries (to property or persons) caused by the construction or operation of the grantee’s stations.

Restrictions on transfer and corporate changes

Section 11 prohibits the grantee from leasing, transferring, granting usufruct of, selling, or assigning the franchise or the rights and privileges acquired under it to any person, firm, company, corporation, or other commercial or legal entity.
Section 11 also prohibits the grantee from merging with any other corporation or entity.
The grantee may not transfer the controlling interest, whether as a whole or in parts and whether simultaneously or contemporaneously, to any such person/entity without prior approval of the Congress of the Philippines.
The Act imposes its conditions and limitations on any person or entity to which the franchise is sold, transferred, or assigned.

Ownership dispersal requirement

Section 12 requires the grantee to offer at least thirty percent (30%) (or a higher percentage that may be later provided by law) of its outstanding capital stock in any securities exchange in the Philippines.
The offering must be made within five (5) years from the time the grantee achieves the status of a national broadcasting network.
Section 12 defines a national broadcasting network as one that operates three (3) or more radio and/or television stations.
Noncompliance with the dispersal requirement renders the franchise ipso facto revoked.

Equality clause for franchise advantages

Section 13 provides that any advantage, favor, privilege, exemption, or immunity granted under existing franchises, or which may later be granted for radio and television broadcasting, becomes part of the grantee’s franchise.
The added advantages must be accorded immediately and unconditionally.
The equality clause does not apply to or affect broadcasting franchises concerning:
- territory covered by the franchise;
- the life span of the franchise; or
- the type of service authorized by the franchise.

Compliance with future broadcast policy law

Section 14 requires the grantee to comply with and be subject to a general broadcast policy law that Congress may hereafter enact.

Annual reporting to Congress

Section 15 requires the grantee to submit an annual report to the Congress of the Philippines on compliance with the franchise terms and conditions and on operations.
The report must be filed within sixty (60) days from the end of every year.

Separability, amendability, and nonexclusivity

Section 16 contains a separability clause: if any section or provision is held invalid, the remaining provisions not affected remain valid.
Section 17 provides that the franchise is subject to amendment, alteration, or repeal by Congress when the public interest so requires.
Section 17 also states the franchise must not be interpreted as an exclusive grant of the privileges provided.

Effectivity rule

Section 18 provides that Republic Act No. 10178 takes effect fifteen (15) days after its publication, upon initiative of the grantee, in at least two (2) newspapers of general circulation in the Philippines.