Prior franchise and legal coverage
- The renewed franchise is originally traced to Republic Act No. 3122, entitled “An Act Granting the Radio Mindanao Network, Inc. of the Philippines a Franchise to Construct, Operate and Maintain Commercial Television and Radio Broadcasting Stations Within the Philippines,” as amended by Republic Act No. 6980 (Section 1).
- The franchise is granted under the 1987 Philippine Constitution and applicable laws, rules, and regulations (Section 1).
- The grantee is authorized to construct, install, establish, operate and maintain radio and/or television broadcasting stations for commercial purposes and in the public interest (Section 1).
- The authorization covers broadcasting stations “in the Philippines,” including digital television system and related services and facilities (Section 1).
Authorized stations and technology use
- The grantee may operate commercial radio and/or television broadcasting stations through microwave, satellite or whatever means, including the use of any new technologies in television and radio systems (Section 1).
- The grantee may use corresponding technological auxiliaries and facilities, special broadcast and other program and distribution services, and relay stations in the Philippines (Section 1).
- The stations must be constructed and operated to result, at most, in minimum interference with wavelengths or frequencies of existing stations or other stations established by law, without diminishing the grantee’s privilege to use its assigned frequencies and the quality of transmission or reception (Section 2).
- The operational standard is to maximize the grantee’s services and/or availability (Section 2).
NTC permits, frequency authorization, and approvals
- 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 (Section 3).
- The grantee must not use any frequency in the radio/television spectrum without authorization from the NTC (Section 3).
- The NTC must not unreasonably withhold or delay the grant of such authority (Section 3).
Public service and broadcast standards
- The grantee must provide adequate public service time to enable the government to reach the population on important public issues through the grantee’s broadcasting stations or facilities (Section 4).
- The grantee must provide sound and balanced programming at all times (Section 4).
- The grantee must assist in public information and education functions (Section 4).
- The grantee must conform to the ethics of honest enterprise (Section 4).
- The grantee must not use 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 public interest, or to incite, encourage or assist in subversive or treasonable acts (Section 4).
Rights reserved to the President
- A special right is reserved to the President of the Philippines in times of war, rebellion, public peril, calamity, emergency, disaster, or disturbance of peace and order (Section 5).
- In these events, the President may temporarily take over and operate the grantee’s stations or facilities (Section 5).
- In these events, the President may temporarily suspend the operation of any station or facility in the interest of public safety, security and public welfare (Section 5).
- In these events, the President may authorize temporary use and operation of the stations or facilities by any government agency upon due compensation to the grantee (Section 5).
- The radio spectrum is declared a finite resource part of the national patrimony, and its use is a privilege conferred by the State that may be withdrawn any time after due process (Section 5).
Franchise term, continuous operation, and government takeover effects
- The franchise lasts for twenty-five (25) years from April 18, 2016, unless sooner revoked or cancelled (Section 6).
- The franchise is deemed ipso facto revoked if the grantee fails to operate continuously for two (2) years (Section 6).
- The grantee’s franchise authorization remains subject to the President’s special rights in the events listed in Section 5 (Section 5).
Acceptance, validity condition, and timing
- The grantee must give written acceptance of the new franchise to Congress through the Committee on Legislative Franchises of the House of Representatives and the Committee on Public Services of the Senate within sixty (60) days from the effectivity of Republic Act No. 10818 (Section 7).
- Upon giving such acceptance, the grantee must exercise the privileges granted under Republic Act No. 10818 (Section 7).
- Nonacceptance renders the franchise void (Section 7).
Self-regulation during broadcasts
- The grantee must not require previous censorship of any speech, play, act or scene, or other matter to be broadcast from its stations (Section 8).
- During any broadcast, the grantee must cut off from the air the speech, play, act or scene, or other matter being broadcast if it tends to propose and/or incite treason, rebellion or sedition, or if the language used therein or the theme thereof is indecent or immoral (Section 8).
- Willful failure to cut off as required constitutes a valid cause for cancellation of the franchise (Section 8).
Government liability protection
- The grantee must hold the national, provincial, city and municipal governments free 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 stations of the grantee (Section 9).
Limits on transfer, assignment, merger, and ownership changes
- The grantee must not lease, transfer, grant 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 (Section 10).
- The grantee must not merge with any other corporation or entity (Section 10).
- The grantee must not transfer the controlling interest of the grantee, whether as a whole or in parts, and whether simultaneously or contemporaneously, to any such person or entity without prior approval of Congress (Section 10).
- Congress must be informed of any lease, transfer, granting of usufruct, sale or assignment of franchise or the rights and privileges acquired thereunder, or of the merger, or transfer of controlling interest, within sixty (60) days after completion of the transaction (Section 10).
- Failure to report such change of ownership to Congress renders the franchise ipso facto revoked (Section 10).
- 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 Republic Act No. 10818 (Section 10).
Required public participation in ownership
- The grantee must offer to Filipino citizens at least thirty percent (30%) (or a higher percentage that may hereafter 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).
- If public offer of shares is not applicable, cooperatives and other methods encouraging public participation by citizens and corporations operating public utilities must be implemented (Section 11).
- Noncompliance with the required public participation results in the franchise being ipso facto revoked (Section 11).
Future broadcast policy compliance and Congress oversight
- The grantee must comply with and be subject to the provisions of a general broadcast policy law that Congress may hereafter enact (Section 12).
- The grantee must submit an annual report to Congress through the Committee on Legislative Franchises of the House of Representatives and the Committee on Public Services of the Senate on compliance with franchise terms and its operations on or before April 30 of every year during the term of the franchise (Section 13).
Annual report penalties and NTC collection
- Failure to submit the annual report to Congress is penalized with a fine of PHP 500.00 per working day of noncompliance (Section 14).
- The fine is collected by the NTC from the delinquent franchise grantee separate from reportorial penalties imposed by the NTC (Section 14).
- Collected funds accrue to the monitoring fund of the NTC in line with its supervisory and regulatory functions (Section 14).
- The reportorial compliance certificate issued by Congress is required before any application for permit or certificate is accepted by the NTC (Section 14).
Equality (most-favored franchise) clause
- Any advantage, favor, privilege, exemption, or immunity granted under existing franchises, or which may be granted for radio and/or television broadcasting, upon prior review and approval of Congress becomes part of the franchise and must be accorded immediately and unconditionally to the grantee (Section 15).
- The equality clause does not apply to provisions of broadcasting franchises concerning territory covered, the life span of the franchise, or the type of service authorized by the franchise (Section 15).
- The equality clause does not apply to sale, lease, transfer, or grant of usufruct of a legislative franchise with prior congressional approval (Section 15).
Amendments, separability, and repeal effects
- If any section or provision of Republic Act No. 10818 is held invalid, the remaining provisions not affected remain valid (Section 16).
- The franchise is subject to amendment, alteration, or repeal by Congress when the public interest so requires, and it is not interpreted as an exclusive grant of the privileges provided (Section 17).
Effectivity and publication rule
- Republic Act No. 10818 takes effect fifteen (15) days after its publication in at least two (2) newspapers of general circulation (Section 18).