Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City, Metro Manila

Fifteenth Congress
First Regular Session

: 2
uouse pu xo__ 1432

Introduced by Honorable Roger Gaviola Mercado

EXPLANATORY NOTE

Section 23, Article II of the 1987 Constitution provides that
“the State recognizes the vital role of communication and information in
nation-building.”

This bill seeks to grant the National Television Corporation a franchise to
construct, maintain and operate for commercial, semi-commercial and non-commercial
purposes and in the public interest, radio and television broadcasting stations in all forms
permitted by law in the Philippines.

National Television Corporation is a corporation organized under Philippine laws
and was duly registered at the Securities and Exchange Commission under Reg. No
CS200807578 on May 21, 2008.

Through these radio and television stations, the National Television Corporation
has a primordial objective of providing the Filipinos wholesome entertainment and vital
information as well as serving the interests of the people and the government with fervor
and fidelity

To give true meaning to freedom of expression which has been continuously
recognized and guaranteed by our Constitution, approval of the measures is earnestly

requested. -

ROGER GAVIOLA MERCADO


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City, Metro Manila

Fifteenth Congress
First Regular Session

ay:
HOUSE BILL NO. 1132

Introduced by Honorable Roger Gaviola Mercado

AN ACT
GRANTING THE NATIONAL TELEVISION CORPORATION A
FRANCHISE TO CONTRUCT, INSTALL, ESTABLISH, OPERATE
AND MAINTAIN RADIO AND TELEVISION BROADCASTING
STATIONS IN THE PHILIPPINES.

SECTION 1. Nature and Scope of Franchise. Subject the
provisions of the Constitution and applicable laws, rules, and regulations,
there is hereby granted to National Television Corporation, hereunder
referred to as the grantee, its successors or assigns, a franchise to construct,
install, establish, 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 for radio
and/or television broadcasting, with the corresponding technological
auxiliaries and facilities, special broadcast and other program and
distribution services and relay stations, and to install radio communication
facilities for the grantee’s private use in its broadcast services.

SECTION 2. Manner of Operation of Stations of Facilities. — The
stations of facilities of the grantee shall be constructed and operated in a


manner as will, at most, result only in the minimum interference on the
wavelengths or frequencies of existing stations or other stations which may
be established by law, without in any way diminishing its own right to use
its selected wavelengths or frequencies and the quality of transmission or
reception thereon as should maximize rendition of the grantee’s services
and/or availability thereof.

SECTION 3. Prior Approval of the National Telecommunications
Commission. — The grantee shall secure from the National
Telecommunications Commission the appropriate permits and licenses for
the construction and operation of its stations and facilities and shall not use
any frequency in the radio/television spectrum without having been
authorized by the Commission. The Commission, however, shall not
unreasonably withhold or delay the grant of any such authority.

SECTION 4. Responsibility of the Public. - The grantee shall
provide adequate public services time to enable the government, through the
said broadcasting stations or facilities, to reach the population on important
public issues; provide at all times sound and balanced programming; assist
in the functions of public information and education; conform to the ethics
of honest enterprise; and not use its stations and facilities for the
broadcasting of obscene and indecent language, speech act, act or scene, or
for the dissemination of deliberately false information or willful
misinterpretation, to the detriment of the public interest, or to incite,
encourage or assist in subversive or treasonable acts.

SECTION 5. Right of the Government. — A special right is hereby
reserved to the President of the Philippines, in times of war, rebellion, public
peril, calamity, emergency, disaster, or disturbance of peace and order, to
temporarily take over and operate the stations or facilities in the interest of
public safety, security and public welfare, or to authorize the temporary use
and operation thereof by any agency of the government, upon due
compensation to the grantee, for use of said stations of facilities during the
period when they shall be operated.

The radio spectrum is a finite resource that is part of the national
patrimony and the use thereof is a privilege conferred upon the grantee by
the State and may be withdrawn anytime after due process.


SECTION 6. Term of Franchise. — This franchise shall be for a term
of twenty-five (25) years from the date of effectivity of this Act, unless
sooner revoked or cancelled. This franchise shall be deemed ipso facto
revoked in the event the grantee fails to comply with any of the following
conditions:

(a) Commence operations within one (1) year from the approval of
the operating permit by the National Telecommunications
Commission;

(b) Operate continuously for two (2) years; and

(c) Commence operations within three (3) years form the effectivity
of this Act.

SECTION 7. Acceptance and Compliance. — Acceptance of this
franchise shall be given in writing within sixty (60) days from the
effectivity of this Act. Upon giving such acceptance, the grantee shall
exercise the privileges granted under this Act. Non acceptance shall render
the franchise void.

SECTION 8. Bond. — The grantee shall file a bond issued in favor of
the National Telecommunications Commissions, which shall determine the
amount, to guarantee the compliance with and fulfillment of the conditions
under which this franchise is granted. If after three (3) years from ‘the date
of the approval of its permit by the Commission, the grantee shall have the
same, the bond shall be cancelled by the Commission. Otherwise, the bond
shall be forfeited in favor of the government and the franchise ipso facto
revoked.

SECTION 9. Tax Provisions. — The grantee, its successors or
assigns, shall be subject to the payment of all taxes, duties, fees or charges
and other imposition under the National Internal Revenue Code (NIRC) of
1997, as amended, and other applicable laws; Provided, That nothing herein
shall be construed as repealing any specific tax exemptions, incentives or
privileges, benefits and exemptions accorded to existing and future
broadcasting station franchises shall likewise be extended to the grantee.


The grantee shall file the return with the city or province where its
facility is located and pay the taxes due thereon to the Commissioner on
Internal Revenue or his duly authorized representative in accordance with
the NIRC and the return shall be subject to audit by the Bureau of Internal
Revenue.

SECTION 10. Self-Regulation by and Undertaking of Grantee. -
The grantee shall not require any previous censorship of any speech, play,
act or scene, or other matter to be broadcast from its stations; Provided, That
the grantee, during any broadcast, shall cut off from the air the speech, play,
act or scene, or other matter being broadcast if the tendency thereof is to
propose and/or incite treason, rebellion or sedition; or the language used
therein or theme thereof is indecent or immoral; and willful failure to do
shall constitute a valid cause for the cancellation of this franchise.

SECTION 11. Warranty in Favor on National and Local
Governments. - The grantee shall hold the national, provincial, city and
municipal governments of the Philippines harmless form all claims,
accounts, demands or actions arising out of accidents or injuries, whether to
property or to persons, caused by the construction or operation of the
stations of the grantee.

SECTION 12. Nontransferrability of Franchise. — The grantee shall
not lease, transfer, grant the usufruct of, sell nor assign this franchise or the
rights and privileges acquired thereunder to any person, firm, company,
corporation or other commercial or legal entity, nor merge with any other
corporation or entity, nor shall the controlling interest of the grantee be
transferred, whether as a whole or in parts and whether simultaneously or
contemporaneously, to any such person, firm, company, corporation, or
entity without the prior approval of the Congress of the Philippines. Any
person or entity to which this franchise is sold, transferred or assigned, shall
be subject to the same conditions, terms, restrictions and limitations of this
Act.

SECTION 13. Dispersal of Ownership. — In accordance with the
constitutional provision to encourage public participation in public utilities,
the grantee shall offer at least thirty per centum (30%) of its outstanding
capital stock or a higher percentage that may hereafter be provided by law


in any securities exchange in the Philippines within fifteen (15) years from
the time it has achieved the status of a national broadcasting network. A
“national broadcasting network” is hereby defined as one that operates three
(3) or more radio and/or television stations. Noncompliance therewith shall
render the franchise ipso facto revoked.

SECTION 14. Equality Clause. - Any advantage, favor, privilege,
exemption, or immunity granted under existing franchise, or which may
hereunder be granted for radio and/or television broadcasting, shall ipso
facto become part of this franchise and shall be accorded immediately and
unconditionally to the herein grantee: Provided, however, That the
foregoing shall neither apply to nor affect provisions of broadcasting
franchises concerning territory covered by the franchise, the life span of the
franchise or the type of service authorized by the franchise.

SECTION 15. General Broadcast Policy Law. — The grantee shall
comply with and be subject to the provisions of a general broadcast policy
law, which congress may hereafter enact.

SECTION 16. Reportorial Requirement. — The grantee shall comply
with and be subject to the provisions of a general broadcast policy law,
which Congress may hereafter enact.

SECTION 17. Separability Clause. - If any of the sections or
provisions of this Act is held invalid, all other provisions not affected
thereby shall remain valid.

SECTION 18. Repeatability and Nonexclusivity Clause. The
franchise shall be subject to amendment, alteration, or repeal by the
Congress of the Philippines when the public interest so requires and shall
not be interpreted as an exclusive grant of the privileges herein provided for.

, SECTION 19. Efectivity Clause. — This Act shall take effect fifteen
(15) days from the date of its publication in at least two (2) papers of
general circulation in the Philippines.

Approved.