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

SIXTEENTH (16!) CONGRESS
Second Regular Session

House BILL No. 4987

Introduced by REP. JOSE CHRISTOPHER Y. BELMONTE

EXPLANATORY NOTE

In the advent of technology, most Filipinos learned to incorporate television
in their lives as part of daily entertainment. This pleasure derived from a little box,
however, developed into a means to gathering information by keeping themselves
abreast with news and current events. Filipinos then became more knowledgeable
with current issues and have expressed more intelligent opinions on issues involving,
society and government. Television broadcast also expanded entertainment not only
to shows but also to sports, culture, food, travel and other interests.

‘The arrival of cable television further opened doors to the possibilities of
television—information, education and entertainment. It linked countries and
cultures within the comfort of a person’s home. It brought nations together in a
single television, which is readily accessible to the viewer. Thus, resulting to a
modern and well-rounded consumer.

Unfortunately, in the Philippines, the accessibility of cable television is
limited to the upper and middle classes. Luntian Cable Television therefore seeks to
bridge the gap and serve underprivileged class to experience the convenience of
cable television in order to strike a balance in the realm of technology.

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


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

SIXTEENTH (16!) CONGRESS
Second Regular Session

4987

HOUSE BILL NO.

Introduced by REP. JOSE CHRISTOPHER Y. BELMONTE

AN ACT GRANTING THE LUNTIAN CABLE SYSTEMS, INC., A FRANCHISE
TO ESTABLISH, CONSTRUCT, UNSTALL, MAINTAIN AND OPERATE
FOR COMMERCIAL PURPOSES CABLE/COMMUNITY ANTENNAE
‘TELEVISION SYSTEMS IN THE PHILIPPINES

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
Luntian Cable, Systems Inc., hereunder referred to as the grantee, its successors or
assigns, a franchise to construct, establish, install, operate and maintain for
commercial purposes and in the public interest, cable/community antennae
television (CATV) systems and other related services in and between the different
provinces and other municipalities in the Philippines and between the Philippines
and other countries and territories through the reception of audio, visual and other
signals of the different national and local television and radio stations, including pay
TV in the Philippines, and those of foreign television, radio and other stations
including interactive computer electronic systems and stations, and the distribution
or transmission of the same to homes, offices, condominiums, subdivisions, hotels,
restaurants, and other residential, commercial and industrial structures and other
public and private conveyances within and outside of the Philippines by means of
electromagnetic waves optics or any kind of energy, force, variations or impulses,
radiated through space or transmitted through technological advances or
innovations in the future; to originate, store, distribute, transmit and receive through
said systems, news and documentaries, entertainment, cultural, informational and
educational radio and television programs, both live and recorded; to construct,
establish, install, operate, manage, lease, maintain and purchase transmitting,


receiving and switching stations both for local and international services, lines, fiber
optics, microwave, cables, satellite transmit and receive systems, control signals,
audio and video systems, information service bureau, pay and pay per view
television, video on demand and public information on demand services, multi-disc
read only memory network delivery, packet and frame relay and electronic mail
services and other value added services and all other related technologies as are at
present available, or to be made available through technical advances or innovations
in the future, as is, or are, convenient to or essential to efficiently carry out the
purposes of this franchise.

SEC. 2. Manner of Operation of Stations or 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 rights to use its selected wavelengths or frequencies and
the quality of transmission or reception thereon as would maximize rendition of the
grantee's services and/or availability thereof.

SEC. 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,
transmitters or facilities and shall not use any frequency in the radio and television
spectrum without having been authorized by the Commission. The Commission,
however, shall not unreasonably withhold or delay the grant of any such authority.

SEC. 4. Ingress and Egress. — For the purpose of erecting and maintaining,
poles or other supports for said wires or other conductors or for the purposes of
laying and maintaining underground wires, cable, or other conductors, it shall be
lawful for the grantee, its successors or assigns, with the prior approval of the
Department of Public Works and Highways, to make excavations or lay conduits in
any of the public places, highways, streets, lanes, alleys, avenues, sidewalks or
bridges of said provinces, cities and/or municipalities: Provided, however, That any
public place, highway, street, lane, alley, avenue, sidewalk or bridge disturbed,
altered or changed by reason of the erection of poles or other supports or the
underground laying of wires, other conductors or conduits, shall be repaired and
replaced in a workmanlike manner by said grantee, its successors or assigns, in
accordance with the standards set by the Department of Public Works and
Highways. Should the grantee, its successors or assigns, after the ten days' notice
from the said authority, fail, refuse or neglect to repair or replace any part of a public
place, road, highway, street, lane, alley, avenue, sidewalk or bridge altered, changed
or disturbed by said grantee, its successors or assigns, then the Department of Public
Works and Highways shall have the right to have the same repaired and placed in
good order and condition at double the expense to be charged against the grantee,
its successors or assigns.

SEC. 5. Responsibility to the Public. — The grantee shall provide adequate
public service time to enable the government, through the said cable television
stations, to reach the population on important public issues; provide at all times


sound and balanced programming; promote public participation such as in
community programming; assist in the functions of public information and
education; conform to the ethics of honest enterprise; and not use its stations for the
transmission of obscene and indecent language, speech, act or scene; or 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.

SEC. 6. Right of Government. — A special right is 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,
transmitters or facilities of the grantee, to temporarily suspend the operation of any
station, transmitter or facility in the interest of public safety, security and public
welfare, or 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,
transmitters or facilities during the period when they shall be so operated.

The radio spectrums is a finite resource that is a 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.

SEC. 7, 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 its
permit by the National Telecommunications Commission;
(b) Operate continuously for two (2) years; and
(©) Commence operations within three (3) years from the effectivity of
this Act.

Acceptance and Compliance. — Acceptance of this franchise shall be
given in writing within sixty (60) days after 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.

SEC. 9. Bond. — The grantee shall file a bond issued in favor of the National
‘Telecommunications Commission, 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 fulfilled 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.

SEC. 10. 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 franchise tax of three percent (3%) per annum or at such percentage as


may be required by law on all gross receipts of the business transacted under this
franchise by the grantee, its successors or assigns: Provided, That the grantee, its
successors or assigns shall continue to be liable for income taxes payable under Title
IL of the National Internal Revenue Code 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 representatives in
accordance with the National Internal Revenue Code and the return shall be subject
to audit by the Bureau of Internal Revenue.

SEC. 11. 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 or transmitted from its stations: Provided, That the grantee during.
any broadcast or transmission shall cut off from the air or transmission the speech,
play, act or scene, or other matter being broadcast or transmitted 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.

SEC. 12. Warranty in Favor of National and Local Governments. — The
grantee shall hold the national, provincial, city and municipal governments of the
Philippines harmless 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, transmitters, facilities and equipment of the grantee.

SEC. 13, Non-transferability of Franchise — The grantee shall not lease,
transfer, grant the usufruct of, sell or assign this franchise nor the right 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: Provided, That the foregoing limitations shall not apply to: (1) any
issuance of shares to any investor pursuant to or in connection with any increase in
the grantee’s authorized capital stock which shall result in the dilution of the
stockholdings of the grantee's then existing stockholders; (2) any sale, transfer or
assignment by the stockholders of the grantee in favor of a holding company whose
stockholders are identical to the stockholders of the grantee. Any person or entity to
which this franchise is validly sold, transferred or assigned shall be subject to the
same conditions, terms, restrictions and limitations of this Act

SEC. 15. General Cable Television Policy Law. — The grantee shall comply
with and be subject to the provisions of a general cable television policy law which
Congress may hereafter enact.


SEC. 16. Separability Clause. — If any of the sections or provisions of this Act
is held invalid, all the other provisions not affected thereby shall remain valid.

SEC. 17. Repealability and Non-exclusivity Clause. — ‘The franchise herein
granted 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.

SEC. 18. Reportorial Requirement, — The grantee shall submit an annual
report to the Congress of the Philippines on its compliance with the terms and
conditions of its franchise and on its operations within sixty (60) days from the end
of every year.

SEC. 19. Effectivity Clause. — This Act shall take effect fifteen (15) days after
its publication in the Official Gazette or in two (2) national newspapers in general
circulation.

Approved,