Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

EIGTHTEENTH CONGRESS:
First Regular Session

5753
HOUSE BILL NO.____

Introduced by Hon. Josephine Y. Ramirez Sato

EXPLANATORY NOTE

As we usher our country and the Filipino to times where the media
landscape is rapidly changing and media outlets are multiplying, we find
audiences and users from all walks of life becoming more reliant on mass
media for news, public information, for learning and for entertainment.

Official Philippine statistics! cite that over 4 out of 5 Filipino household
have a television and own a cellular phone. Further, that 4 in every 5
Filipino watch television. Majority of Filipinos with ages 10 to 64 years old
are exposed to television (81.0%), radio (65.6%), newspaper (60.7%) and
magazine (60.6%).

More recent media research and surveys support these results.? Television
ownership continue to rise. Also, that while digital media and internet use
are on the rise, majority of Filipinos still prefer and spend more time
watching television. In 2016, 96.6 percent of Filipinos watch TV daily with
television considered as most trusted source of political information in the
Philippines.

It is in this context that ABS-CBN Corporation, a long trusted broadcast
media corporation in the Philippines faces the expiration of its 25 year

* https://psa.gov.phsites/default/fles/2013%20FLEMMS%20Final%20Report pdf
? https:/www. kantarmedia.com/global/newsroom/press-releases/kantar-media-study-shows-tv-
remains-king-in-the-philippines,

Page 1 of 9


government franchise, as granted by Republic Act No. 7966, come March
30, 2020.

ABS-CBN Broadcasting Corporation was formally incorporated in February
1, 1967. Since then ABS CBN has grown to be the country’s top media
conglomerate and entertainment organization. In the span of its most
recent franchise, ABS-CBN stands as the biggest media corporation in the
country besting others in terms of revenue, net income, assets, market
capitalization and number of employees.

ABS-CBN built on its core service of creating content and production for
television and radio to expand its operations on cable, on-line, satellite,
cinema, music, magazine and book publishing, live events both for
domestic and international audiences.

In the era of booming information and communications technology, as an
industry leader ABS-CBN, with a renewed government franchise, is
expected to push forward Philippine broadcast media with its continuing
commitment for innovations and quality service.

In view of the foregoing, the passage of this measure is earnestly sought.

 https:/Awww.abs-cbn.com

Page 2 of 9


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

EIGTHTEENTH CONGRESS
First Regular Session

5753
HOUSE BILL NO.

Introduced by Hon. Josephine Y. Ramirez Sato
Lone District of Occidental Mindoro

AN ACT RENEWING FOR ANOTHER TWENTY-FIVE (25) YEARS THE FRANCHISE
GRANTED TO ABS-CBN BROADCASTING CORPORATION, PRESENTLY KNOWN AS.
ABS-CBN CORPORATION, UNDER REPUBLIC ACT NO. 7966, ENTITLED “AN ACT
GRANTING THE ABS-CBN BROADCASTING CORPORATION A FRANCHISE TO
CONSTRUCT, INSTALL, OPERATE AND MAINTAIN TELEVISION AND RADIO
BROADCASTING STATIONS IN THE PHILIPPINES AND FOR OTHER PURPOSES”
Be it enacted by the Senate and House of Representatives of the Philippines in Congress

assembled:

Section 1. Section 1 of Republic Act No. 7966 is hereby amended to read as follows:

“Section 1. Nature and Scope of Franchise. ~ Subject to the provisions of the
Constitution and applicable laws, rules and regulations, the franchise granted under
republic act no. 7966 to abs cbn broadcasting corporation, presently known as
ABS-CBN corporation, hereunder referred to as the grantee, its successors or
assignees to construct, install, establish, operate and maintain, for commercial
purposes and in the public interest, television and radio broadcasting stations in and
throughout the Philippines, through microwave, satellite or whatever means including

the use of any new technologies in television and radio systems, with the corresponding

Page 3 of 9


technological auxiliaries or facilities, special broadcast and other broadcast distribution

services and relay stations, is hereby renewed for another twenty-five (25) years.”
Section 2. Section 2 of Republic Act No. 7966 is hereby amended to read as follows:

“Section 2. Manner of Operation of Stations or Facilities. - The existing and future

stations or facilities of the grantee shall be constructed in a manner as will at most
result only in the minimum interference on the wavelengths or frequencies of existing
stations and other stations which may be established by law without in any way
diminishing in own right to use its assigned wavelengths or frequencies and the quality
of transmission or reception thereon as should maximize rendition of the grantee’s

services and/or the availability thereof.”
Section 3. Section 3 of Republic Act No. 7966 is hereby amended to read as follows:

“Section 3. Prior Approval of the National Telecommunications Commission. - The
grantee shall secure from the National Telecommunications Commission (NTC) the
appropriate permits and licenses for its stations or facilities and shall not use any
frequently in the television or radio spectrum without authorization from the NTC.
The NTC, however, shall not unreasonably withhold or delay the grant of any such
authority.”

Section 4. Section 4 of Republic Act No. 7966 is hereby amended to read as follows:

“Section 4. Responsibility to the Public. _ - The grantee shall provide free of charge,
adequate public service time to enable the government, through the said broadcasting
stations, to reach the pertinent populations or potions thereof, on important public
issues; and relay important public announcements and warnings concerning
public emergencies and calamities, as necessity, urgency or law may require;
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; promote audience sensibility and empowerment including
closed captioning; and use its stations for the broadcasting of obscene and indecent
language, speech, act, scene or for the dissemination of deliberately false information or

Page 4 of 9


willful misrepresentation to the detriment of the public interest, or to incite, encourage,

or assist in subversive or treasonable acts.

“Public service time referred herein shall be equivalent to a maximum aggregate
of ten percent (10%) of the paid commercials or advertisements which shall be
allocated based on need to the executive and legislative branches, the judiciary,
constitutional commissions and international humanitarian organizations duly
recognized by statutes: provided, that the NTC shall increase the public service
time in case of extreme emergency or calamity. The NTC shall issue rules and
regulations for this purpose, the effectivity of which shall commence upon
applicability with other similarly situated broadcast network franchise holders.”

Section 5. Section 5 of Republic Act No. 7966 is hereby amended to read as follows:

“Section 5. Right of Government. - 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 any time after due process.

“A special right is hereby reserved to the President of the Philippines, in times of
rebellion, public peril, calamity, emergency, disaster or disturbance of peace and order,
to temporarily take over and operation the stations of the grantee, to temporarily
suspend the operation of any station 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 the said station

during the period when they shall be so operated.”
Section 6. Section 6 of Republic Act No. 7966 is hereby amended to read as follows:

“Section 6. Terms 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

operate continuously for two (2) years.”

Section 7. Section 7 of Republic Act No. 7966 is hereby amended to read as follows:

Page 5 of 9


“Section 7. Acceptance and Compliance. - Acceptance of this franchise shall be given in
writing to the Congress of the Philippines, through the committee on legislative
franchise of the house of representatives and the committee on public services of
the senate of the Philippines 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 shalll render the franchise void.”

Section 8. Section 8 of Republic Act No. 7966 is hereby amended to read as follows:

“Section 8. Tax Provisions. - The grantee, its successors or assigns; shall continue to
be subject to all applicable taxes, duties, fees or charges and other impositions
under Republic Act No. 8424, otherwise known as ‘The National internal Revenue
Code of 1997’, as amended, Republic Act No. 7160, otherwise known as ‘the Local

Government Code of 1991’, as amended, and other applicable laws.”
Section 9. Section 9 of Republic Act No. 7966 is hereby amended to read as follows:

“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 and/or telecast from its stations: Provided, That the grantee, during any
broadcast and/or telecast, shall not allow to be aired 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; provided, further, that willful failure to do so shall
constitute a valid cause for the cancellation of this franchise.”

Section 10. Section 10 of Republic Act No. 7966 is hereby amended to read as follows:

“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, liabilities, demands or actions arising out of accidents causing
injury to persons or damage to properties, during the construction or operation of
the stations of the grantee.”

Section 11. A new Section 11 is hereby inserted to read as follows:

Page 6 of 9


“Section 11. Commitment to provide and promote the creation of employment
opportunities. _- The grantee shall create employment opportunities and
shall allow on-the-job trainings in their franchise operation: provided, that
priority shall be accorded to the residents in areas where any of its offices is
located: provided, further, that the grantee shall comply with the applicable labor
standards and allowance entitlement under existing labor laws, rules and
regulations and similar issuances: provided, finally, that the employment
opportunities or jobs created shall be reflected in the general information sheet
to be submitted to the Securities and Exchange Commission annually.”

Section 12. The present Section 11 of Republic Act No. 7966 is hereby renumbered as
Section 12 and amended to read as follows:

“Section 12. Sale, Lease, Transfer, Grant of Usufruct or Assignment of Franchise. -
The grantee shalll not sell, lease, transfer, grant the usufruct of, 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, without the approval of Congress of the Philippines. Congress
shall be informed of any sale, lease, transfer, grant of usufruct, or assignment of
franchise or the rights and privileges acquired thereunder, or of the merger or
transfer of the controlling interest of the grantee, within sixty (60) days after the
completion of the said transaction. Failure to report to congress such change of
ownership shall render the franchise ipso facto revoked. Any person or entity to
which this franchise is sold, transferred or assigned shall be subject to all the same

conditions, terms and limitations of this Act.”
Section 13. A new Section 13 is hereby inserted to read as follows:

“Section 13. Dispersal of Ownership. _- In accordance with the constitutional
provision to encourage public participation in public utilities, the grantee shall
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 the commencement of its
operations: provided, that in cases where public offer of shares is not applicable,
the grantee shall apply other methods of encouraging public participation by

Page 7 of 9


citizens and corporations operating public utilities as allowed by law.
Noncompliance therewith shall render the franchise ipso facto revoked.”

Section 14. A new Section 14 is hereby inserted to read as follows:

“Section 14. Reportorial Requirement. - During the term of its franchise, 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 every

year.

“The annual report shall include an update on the roll-out, development,
operation, or expansion of business, audited financial statements; latest general
information sheet officially submitted to the sec (if applicable); certification of
the NTC on the status of its permits and operations; and an update on the
dispersal of ownership undertaking, if applicable.

“the reportorial compliance certificate issued by congress shall be required
before an application for permit, certificate, or any equivalent thereof, is accepted
by the NTC.”

Section 15. Anew Section 15 is hereby inserted after the new Section 14 of Republic
Act No. 7966, to read as follows:

“Section 15. Fine. - Failure of the grantee to submit the requisite annual report to
congress shall be penalized by a fine of five hundred pesos (php 500.00) per
working day of non-compliance. The fine shall be collected by the NTC from the
delinquent franchise grantee separate from the reportorial penalties imposed by
the NTC and the same shall be remitted to the national treasury.”

Section 16. A new Section 16 is hereby inserted after the new Section 15 of Republic Act
No. 7966 to read as follows:

“Section 16. Equality Clause. _~ Any advantage, favor, privilege, exemption, or
immunity granted under existing franchises, or which may hereafter be granted

Page 8 of 9


for radio and television broadcasting, upon prior review and approval of
congress, shall become part of this franchise and shall be accorded immediately
and unconditionally to the herein grantee: provided, that the foregoing shall
neither apply to nor affect provisions of broadcasting franchises concerning
territorial coverage, the term, or the type of service authorize under this
franchise.”

Section 17. Repealability and Non-exclusivity Clauses. ~ 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 18. Separability Clause. - If any of the sections or provisions of this Act is held
invalid, all the provisions not affected thereby shall remain valid.

Section 19. Repealing Clause. - Any law, presidential decree or issuance, executive
order, letter of instructions, rule ore regulation, Inconsistent with the provisions of this

Act is hereby repealed or modified accordingly.

Section 20. Effectivity. - This Act shall take effect fifteen (15) days following its
complete publication in two (2) newspapers of general circulation or in the Official

Gazette.

Approved,

Page 9 of 9