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

SEVENTEENTH CONGRESS
First Regular Session

3946

HOUSE BILL NO,

Fntodisced by Rep. Gana: atrina M. Ewerges

EXPLANATORY NOTE

This bill seeks the renewal of the Legislative Franchise granted to GMA
Network under RA 8608 on the 27** of March in the year 1998.

GMA Network is a Filipino institution. Since its humble beginnings as
Republic Broadcasting System in 1950, it has grown to be one of the most respected
Media companies in the region. Since its last legislative franchise renewal, GMA
Network, through exemplary corporate governance, has continued with and has

proportionately grown its economic, cultural and social contributions to our nation.

‘As an economic enterprise, GMA Network is publicly listed and traded. It
operates a network of 47 Very High Frequency (VHF), 33 Ultra High Frequency (UHF)
television stations and 24 radio stations throughout the country. GMA Network is now

global as it viewed by Filipinos all over the world through its international channels. In
the Digital Space, GMA’s portal is one of the most visited Filipino websites. The network
is consistently one of the nation’s top corporate taxpayers.

‘The Network's output in News and Public Affairs, best known for its neutrality
and impartiality, has resulted in numerous international and domestic awards. Some of
these have in turn resulted in commendations from this very body such as House
Resolutions 787 and 1694. Both unanimously adopted. Entertainment programming has


likewise resulted in major awards here and abroad. The common thread being that the

Network being considered a “caretaker"of core Filipino values.

Notable as well are the Network's efforts through its socio civic arms. Kapwa Ko, Mahal
Ko and GMA Kapuso Foundation have served as conduits for thousands of benefactors to
bring medical and myriad other forms of aid to the less fortunate, In recent years GMA
Kapuso Foundation’s efforts have been expanded to include the building of housing
units and schools such as those for the Yolanda victims in Leyte and the Sendong

victims in Hligan City.

With the view that GMA Network will continue on its present course and trajectory,

immediate approval of this bill is earnestly sought.

ANNA KATRINA M. ENVERGA


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

SEVENTEENTH CONGRESS
First Regular Session

3946

HOUSE BILL NO.

AN ACT
RENEWING THE FRANCHISE GRANTED TO GMA NETWORK, INC. (FORMERLY REPUBLIC
BROADCASTING SYSTEM, INC.) UNDER REPUBLIC ACT NO. 7252 ENTITLED “AN ACT
GRANTING THE REPUBLIC BROADCASTING SYSTEM, INC. A FRANCHISE TO CONSTRUCT,
INSTALL, OPERATE AND MAINTAIN RADIO AND TELEVISION BROADCASTING STATIONS.
IN THE PHILIPPINES” FOR TWENTY-FIVE (25) YEARS FROM THE EFFECTIVITY OF THIS
ACT

Be it enacted by the Senate and House of Representatives of the Philippines in Congress
assembled:

SECTION 1. Nature and Scope of Franchise - Subject to the provisions of the
Constitution and applicable laws, rules and regulations, there is hereby granted to GMA
Network, Inc,, it successors or assigns and hereunder referred to as the grantee, a franchise to
construct, install, operate and maintain for commercial purposes and in the public interest
radio and television broadcasting stations in the Philippines, including digital television
system, through microwave, satellite or whatever means, or the use of any new technologies
in television and radio systems, with the corresponding auxiliary, 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 or 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 service 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 its stations and shall not use any frequency in the radio/television
spectrum without having been authorized by the Commis



SECTION 4. Responsibility to the Public - The grantee shall provide adequate public
service 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; promote public participation, assist in the functions of public information and
education; conform to the ethics of honest enterprise; and not use its stations for the
broadcasting of obscene and indecent language, speech, act or scene, or for the dissemination
of deliberately false information or willful misrepresentation, or to the detriment of the public
interest, or to incite, encourage, or assist in subversive or treasonable acts.

SECTION 5. Right of Government - A special right is hereby reserved to the President
of the Philippines, in time of war, rebellion, public peril, calamity, emergency, disaster or
serious disturbance of peace and order, to temporarily take over and operate the stations or
facilities of the grantee, to temporarily suspend the operation of any station or facility 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 the use of said stations or facilities during the period when they shall be so operated.

SECTION 6. Term of Franchise - This franchise shall be for a term of twenty five (25)
years, unless sooner revoked or cancelled. In the event the grantee fails to operate
continuously for two (2) years, this franchise shall be deemed ipso facto revoked

SECTION 7. Acceptance and Compliance - This franchise shall become effective upon
acceptance in writing by the grantee. Upon giving such acceptance, the grantee shall exercise
the privileges granted under this Act. Non-acceptance shall render the franchise void.

SECTION 8. Tax Provisions - The grantee, its successors or assigns, shall be liable to
pay the same taxes on their real estate, buildings and personal property, exclusive of this
franchise, as other persons or corporations are now or hereafter may be required by law to
pay. In addition thereto, the grantee, its successors or assigns, shall pay a value added tax on
sale of services, pursuant to the relevant provisions of the National Internal Revenue Code
(R.A. No. 8424), as amended; provided that the grantee, its successors or assigns shall
continue to be liable for income taxes under Title I! of the National Internal Revenue Code, as
amended, pursuant to Section 2 of Executive Order No. 72 unless the latter enactment is
amended or repealed, in which case the amendment or repeal shall be applicable thereto.

The grantee shall file the return with and pay the tax due thereon to the Commissioner
of Internal Revenue or his duly authorized representative in accordance with the National
Internal Revenue Code and the return shall be subject to audit by the Bureau of Internal
Revenue.

SECTION 9. 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 and/or telecast,
may cut off from the air the speech, play, act or scene, or other matter being broadcast and/or
telecast if the tendency thereof is to propose and/or incite treason, rebellion or sedition; or
the language used therein or the theme thereof is indecent or immoral; and willful failure to
do so shall constitute a valid cause for the cancellation of this franchise.


SECTION 10. Warranty in Favor of National and Local Governments - The grantee
shall hold the national, provincial, city and municipal governments of the Philippines free
from 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 11. Sale, Lease, Transfer, Usufruct or Assignment - 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 shall the controlling interest of the grantee be transferred to any such private
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 all the same conditions, terms, restrictions, and limitations of this Act.

SECTION 12. 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 13. Reportorial Requirement - The grantee shall submit an annual report
to the Congress of the Philippines, through the Committee on Legislative Franchises of the
House of Representatives and the Committee on Public Services of the Senate on its
compliance with the terms and conditions of the franchise and on its operations on or before
April 30 of the succeeding year.

SECTION 14. Equality Clause - Any advantage, favor, privilege, exemption, or
immunity granted under existing franchise, or which may hereafter be granted for radio
and/or television broadcasting, upon prior review and approval of Congress, shall
automatically become part of this franchise and shall be accorded immediately and
unconditionally to the herein grantee: Provided, however, That the foregoing shall not apply
to nor affect provisions of broadcasting franchises concerning territory covered by the
franchise, or the type of service authorized by the franchise: Provided, further, That the
foregoing shall not apply to sale, lease, transfer or grant of usufruct of legislative franchise
with prior congressional approval.

SECTION 15. Separability Clause ~ \f any of the sections or provisions of this Act is
held invalid, all other provisions not affected thereby shall remain valid.

SECTION 16. Repealing Clause - This 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 17. Effectivity Clause - This Act shall take effect upon its approval.

Approved,