Legal basis and predecessor franchise
- Section 1 renews the franchise granted under Republic Act No. 8108 to Mareco Broadcasting Network, Inc.
- The franchise is renewed for another twenty-five (25) years from the effectivity of Republic Act No. 11367 (Section 1).
- The Act governs the renewed authority “subject to the provisions of the Constitution and applicable laws, rules and regulations” (Section 1).
- Section 17 repeals, amends, or modifies all inconsistent issuances and parts thereof.
Policy and public-service commitments
- The franchise is granted for commercial purposes but also in the public interest, including broadcasting of news, documentaries, entertainment, informational and educational, and interactive television programs (Section 1).
- The grantee must provide adequate public service time, ensure sound and balanced programming, promote public participation, assist public information and education, conform to honest enterprise ethics, and promote audience sensibility and empowerment including closed captioning (Section 4).
- The grantee must not use its stations for obscene or indecent language, speech, act, or scene, for the 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).
- The grantee must not require previous censorship of any speech, play, act, or scene, or other matter to be broadcast, subject to the live cut-off duty and franchise-cancellation consequence (Section 7).
Scope of authority and permitted operations
- The grantee is authorized to construct, install, operate, and maintain for commercial purposes and in the public interest radio and/or television broadcasting stations in the Philippines where frequencies and/or channels are still available (Section 1).
- The authority covers origination, reception, processing, transmission, broadcast, rebroadcast, and distribution of audio, video information, and other electronic signals (Section 1).
- The franchise covers services through electromagnetic waves, fiber optics, satellite, and “whatever means now available or which in the future may be developed,” including direct-to-home/user broadcast via satellite, pay and cable television, multimedia, and value-added services (Section 1).
- The franchise covers content production and distribution facilities and other essential or convenient systems, including radio communication facilities and transmit and receive satellite systems (Section 1).
- The franchise includes relay stations and the distribution of news, documentary, entertainment, informational and educational, and interactive television programs, with technological auxiliaries or facilities (Section 1).
Technical operation standards and licensing
- The grantee must construct and operate its stations/facilities so that, at most, they result in minimum interference on wavelengths or frequencies of existing stations or other stations established by law (Section 2).
- The grantee must not diminish its own privilege to use its assigned wavelengths/frequencies and must maximize the quality of transmission or reception to maximize service rendition and/or availability (Section 2).
- The grantee must secure from the National Telecommunications Commission (NTC) the appropriate permits and licenses for construction and operation (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 authority (Section 3).
Public service duties and government take-over
- The grantee must provide, free of charge, adequate public service time reasonable and sufficient for government reach on important public issues and for relay of important public announcements and warnings concerning public emergencies and calamities as necessity, urgency, or law may require (Section 4).
- The public service time is equivalent to a maximum aggregate of ten percent (10%) of paid commercials or advertisements (Section 4).
- The ten percent (10%) public service time must be allocated based on need to the executive, legislative, judiciary, constitutional commissions, and international humanitarian organizations duly recognized by statutes (Section 4).
- The NTC must increase public service time in cases of extreme emergency or calamity, and must issue rules and regulations for this purpose with effectivity aligned to other similarly situated broadcast franchise holders (Section 4).
- The President of the Philippines reserves a special right to temporarily take over and operate the stations/facilities, temporarily suspend operation for public safety/security/public welfare, or authorize temporary government operation by any government agency upon due compensation to the grantee (Section 5).
- The use of the radio spectrum is a privilege of the grantee and the State may withdraw it any time after due process (Section 5).
- The grantee must hold national, provincial, city, and municipal governments free from claims, liabilities, demands, or actions arising from accidents causing injury to persons or damage to properties during construction or operation (Section 8).
Franchise term and conditions for loss
- The franchise runs for twenty-five (25) years from the date of effectivity of the Act unless sooner revoked or cancelled (Section 6).
- The franchise is ipso facto revoked if the grantee fails to operate continuously for two (2) years (Section 6).
Broadcast content rules and cut-off duty
- The grantee must not require any previous censorship of any speech, play, act, or scene, or other matter for broadcast (Section 7).
- During any broadcast, the grantee must cut off from the air any speech/play/act/scene or other matter whose tendency is to propose and/or incite treason, rebellion, or sedition (Section 7).
- The grantee must also cut off from the air when the language is indecent or immoral or when the theme thereof is indecent or immoral (Section 7).
- Willful failure to make the required cut-off constitutes a valid cause for cancellation of this franchise (Section 7).
Employment, ownership, and transfers
The grantee must create employment opportunities and allow on-the-job trainings in franchise operation (Section 9).
Priority in employment must be given to residents in areas where any of its offices is located (Section 9).
The grantee must follow applicable labor standards and allowance entitlement under existing labor laws, rules and regulations, and similar issuances (Section 9).
Employment opportunities/jobs created must be reflected in the General Information Sheet to be submitted to the Securities and Exchange Commission annually (Section 9).
The grantee must not sell, lease, transfer, grant the usufruct of, nor assign the franchise or rights/privileges acquired under it, nor merge with any other corporation/entity, nor transfer controlling interest, without prior approval of Congress of the Philippines (Section 10).
Congress must be informed of any sale/lease/transfer/grant of usufruct/assignment, merger, or transfer of controlling interest within sixty (60) days after completion of the transaction (Section 10).
Failure to report such ownership change to Congress renders the franchise ipso facto revoked (Section 10).
Any person/entity to which the franchise is sold, transferred, or assigned is subject to the same conditions, terms, restrictions, and limitations of the Act (Section 10).
The grantee must offer to Filipino citizens at least thirty percent (30%) (or a higher percentage that may be provided by law) of its outstanding capital stock in any securities exchange in the Philippines within five (5) years from the commencement of operations (Section 11).
If public offer of shares is not applicable, the grantee must apply other methods of encouraging public participation by citizens and corporations operating public utilities as allowed by law (Section 11).
Noncompliance with the required public participation requirement renders the franchise ipso facto revoked (Section 11).
Reporting obligations and penalties
The grantee must submit an annual report to Congress of the Philippines through the Committee on Legislative Franchises of the House of Representatives and the Committee on Public Services of the Philippine Senate (Section 12).
The report must cover compliance with franchise terms/conditions and the grantee’s operations (Section 12).
The annual report must be submitted on or before April 30 of every year during the term of the franchise (Section 12).
A reportorial compliance certificate issued by Congress is required before any application for permit or certificate is accepted by the NTC (Section 12).
Failure to submit the required annual report to Congress is penalized by a fine of Five hundred pesos (P500.00) per working day of noncompliance (Section 13).
The fine is collected by the NTC from the delinquent franchise grantee separately from reportorial penalties imposed by the NTC (Section 13).
The fine collected must be remitted to the National Treasury (Section 13).
Equality clause and effect of advantages
- Except for taxes and customs duties, 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, must become part of this franchise and must be accorded immediately and unconditionally to the grantee (Section 14).
- This equality clause does not affect franchise provisions concerning territorial coverage, the term, or the type of service authorized by the franchise (Section 14).
Amendment, exclusivity, separability, and repeal
- The franchise is subject to amendment, alteration, or repeal by Congress when the public interest so requires and is not interpreted as an exclusive grant of the privileges provided in the Act (Section 15).
- If any section or provision is held invalid, all other provisions not affected remain valid (Section 16).
- All inconsistent laws, decrees, orders, resolutions, instructions, rules and regulations, and other issuances, or parts thereof, are repealed, amended, or modified accordingly (Section 17).