Nature and coverage of the renewed franchise
- Section 1 renews the franchise to construct, install, establish, operate, and maintain for commercial purposes and in the public interest radio and television broadcasting stations.
- The franchise covers radio and television broadcasting stations and related systems, including digital and pay television system, through microwave, satellite, or whatever means, and the use of new technology in television and radio systems.
- The franchise includes technological auxiliaries and facilities, special broadcast and other program and distribution services, and relay stations in the Philippines.
- The franchise renewal extends for another twenty-five (25) years, subject to the Constitution and applicable laws, rules, and regulations (Section 1).
Operating standards and interference limits
- The grantee must construct and operate its stations or facilities so that, at most, they result in only the minimum interference on the wavelengths or frequencies of existing stations or other stations that may be established by law (Section 2).
- The grantee must not diminish its own privilege to use its assigned wavelengths or frequencies and must maximize the quality of transmission or reception and the availability of its services (Section 2).
National Telecommunications Commission permits and sanctions
- The grantee must secure from the National Telecommunications Commission (NTC) the appropriate permits and licenses for the construction and operation of its stations or 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 authority for use of frequencies (Section 3).
- If the grantee violates the franchise provisions, the NTC may revoke or suspend, after due process, the permits or licenses it issued pursuant to the franchise (Section 3).
- The NTC may recommend to Congress the revocation of the franchise for any violation of franchise provisions (Section 3).
Public service obligations and content limits
- The grantee must provide, free of charge, adequate public service time reasonable and sufficient for government broadcasting stations or facilities to reach pertinent populations with important public issues and to relay important public announcements and warnings concerning public emergencies and calamities, as necessity, urgency, or law may require (Section 4).
- The grantee must provide balanced programming at all times (Section 4).
- The grantee must promote public participation and assist public information and education, conform to the ethics of honest enterprise, and promote audience sensibility and empowerment, including closed captioning (Section 4).
- The grantee must not use stations or facilities to broadcast obscene or indecent language, speech, act, or scene, nor disseminate deliberately false information or willful misrepresentation to the detriment of public interest, nor incite, encourage, or assist in subversive or treasonable acts (Section 4).
- Public service time must be equivalent to a maximum aggregate of ten percent (10%) of the paid commercials or advertisements, allocated based on the need of the Executive and Legislative branches, the Judiciary, Constitutional Commissions, and international humanitarian organizations duly recognized by statutes (Section 4).
- The NTC must increase public service time in case of extreme emergency or calamity, and the NTC must issue rules and regulations for this purpose (Section 4).
- The grant of child programming must comply with Republic Act No. 8370 (Children’s Television Act of 1997) by allotting a minimum of fifteen percent (15%) of the daily total airtime of each broadcasting network to child-friendly shows within regular programming (Section 4).
Government rights, takeover, and spectrum as privilege
- The radio spectrum is declared a finite resource and 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).
- The President is reserved a special right, 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 or facilities;
- temporarily suspend operation of any station or facility in the interest of public safety, security, and public welfare; or
- authorize temporary use and operation by any government agency upon due compensation to the grantee (Section 5).
Franchise term, continuous-operation condition
- The franchise lasts for twenty-five (25) years from the effectivity of the Act 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).
Self-regulation and cut-off duty during broadcasts
- The grantee must not require previous censorship of any speech, play, act, or scene, or other matter to be broadcast (Section 7).
- If broadcast speech, play, act, or scene, or other matter violates law or infringes a private right, the grantee is free from civil or criminal liability for that broadcast (Section 7).
- During any broadcast, the grantee must cut off the airing of speech, play, act or scene, or other matter if the tendency is to propose and/or incite treason, rebellion or sedition, or if the language used or the theme is indecent or immoral (Section 7).
- Willful failure to cut off under the preceding duty constitutes a valid cause for cancellation of this franchise (Section 7).
Government warranty on injury or property damage
- The grantee must hold the national, provincial, city, and municipal governments free from all claims, liabilities, demands, or actions arising from accidents causing injury to persons or damage to properties during the construction or operation of the grantee’s stations (Section 8).
Employment creation and on-the-job trainees
- The grantee must create employment opportunities and must allow on-the-job trainees in its franchise operations (Section 9).
- Priority in traineeship must be accorded to residents of the place where the grantee’s principal office 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 (GIS) submitted to the Securities and Exchange Commission (SEC) annually (Section 9).
Restrictions on sale, lease, transfer, or assignment
- The grantee must not sell, lease, transfer, grant the usufruct of, or assign the franchise or its rights and privileges, nor merge with another corporation or entity, nor transfer the controlling interest of the grantee, simultaneously or contemporaneously, without prior approval of Congress (Section 10).
- Congress must be informed of any sale, lease, transfer, grant of usufruct, or assignment, or of merger or controlling-interest transfer, within sixty (60) days after completion of the transaction (Section 10).
- Failure to report to Congress such change of ownership results in the franchise being ipso facto revoked (Section 10).
- Any person or entity to which the franchise is sold, transferred, or assigned is subject to the same conditions, terms, restrictions, and limitations in the Act (Section 10).
Dispersal of ownership to citizens
- To encourage public participation in public utilities, the grantee must offer to Filipino citizens at least thirty percent (30%), or a higher percentage later required 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 renders the franchise ipso facto revoked (Section 11).
Annual reporting to Congress and NTC gatekeeping
- 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 operations on or before April 30 of every year during the franchise term (Section 12).
- The annual report must include:
- an update on roll-out, development, operation, and/or expansion of business;
- audited financial statements;
- the latest GIS officially submitted to the SEC, if applicable;
- a certification of the NTC on the status of permits and operations; and
- an update on dispersal of ownership undertaking, if applicable (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).
Financial penalty for late or noncompliance
- Failure of the grantee to submit the required report results in a fine of PHP 500.00 per working day of noncompliance (Section 13).
- The NTC collects the fine from the delinquent grantee, separately from reportorial penalties imposed by the NTC, and remits it to the Bureau of the Treasury (Section 13).
Equality clause for broadcasting franchises
- Any advantage, favor, privilege, exemption, or immunity granted under existing franchises, or later granted under radio and/or television broadcasting franchises upon prior review and approval of Congress, becomes part of this franchise and must be accorded immediately and unconditionally to the grantee (Section 14).
- The equality clause does not affect provisions of broadcasting franchises concerning territorial coverage, term, or type of service authorized (Section 14).
Amendment, alteration, or repeal; nonexclusivity
- Congress may amend, alter, or repeal the franchise when the public interest requires (Section 15).
- The franchise must not be interpreted as an exclusive grant of the privileges provided (Section 15).
Separability and repealing provisions
- If any section or provision of the Act is held invalid, the remaining provisions not affected remain valid (Section 16).
- All laws, decrees, orders, resolutions, instructions, rules and regulations, and other issuances, or parts thereof, inconsistent with the Act are repealed, amended, or modified accordingly (Section 17).