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EIGHTEENTH CONGRESS faired

REPUBLIC OF THE PHILIPPINES ies

First Regular Session

HOUSE OF REPRESENTATIVES

Introduced by Representative Rufus B. Rodriguez

House Bill No. 5705
EXPLANATORY NOTE

ABS-CBN traces its history to the first Philippine television station DZAQ-TV, owned by
Bolinao Electronics Corporation (BEC) which was later renamed Alto Broadcasting System
(ABS). In 1955, Manila Chronicle owner Eugenia Lopez, Sr. and former Vice President
Ferando Lopez, acquired a radio-TV franchise from the Congress and immediately established
Chronicle Broadcasting Network (CBN) in 1956. On February 24, 1957 Lopez invited Judge
Quirino to his house for breakfast and ABS was bought under a contract written on a table
napkin. The corporate name was reverted to Bolinao Electronics Corporation immediately after
the purchase of ABS. On February 1, 1967, it was incorporated as the ABS-CBN Broadcasting
Corporation and it shortened its corporate name in 2010 to simply ABS-CBN Corporation to
reflect the company's diversification

‘ABS CBN Corporation is involved in television and radio programming for domestic and
international audiences and other related businesses. ABS-CBN produces a wide variety of
engaging world-class entertainment programs in multiple genres and balanced, credible news
programs that are aired on free-to-air television. The company is also one of the leading radio
broadcasters, operating eighteen radio stations throughout the key cities of the Philippines.
ABS-CBN provides news and entertainment programming for eight channels on cable TV and
operates the country's largest cable TV service provider. It brings its content to worldwide
audiences via cable, satellite, online and mobile, In addition, ABS-CBN has business interests in
merchandising and licensing, mobile and online multimedia services, glossy magazine
publishing, video and audio post production, overseas telecommunication services, money
remittance, cargo forwarding, TV shopping services, theme park development and
management, property management and food and restaurant services, all of which complement
and enhance the Company's strength in content production and distribution. The Company is
also the first TV network in the country to broadcast in digital. In 2015, it commercially rolled out
its digital TV box, ABS-CBN TVplus, to prepare for the country's switch to digital TV.


ABS-CBN has also been very big on Corporate Social Responsibility (CSR), helping
others and in giving back. A big part of the CSR programs of ABS-CBN is the late Regina Paz
"Gina" Lopez. Gina Lopez initiated corporate social responsibility programs for the environment
and Filipino communities. She was once the Managing Director of the ABS-CBN Foundation.
She initiated Bantay Bata 163, the country's first media-based hotline. She established Bantay
Kalikasan, for which she received the 1997 Intemational Public Relations Award of Excellence
for the Environment and Outstanding Manilans Award for the Environment. She was also the
Vice-Chairperson of the ABS-CBN Bayan Foundation, which provides microfinance assistance
to micro-entrepreneurs. And she also initiated the rehabilitation of the Pasig River and nearby
urban streams through the Kapit Bisig para sa llog Pasig project.

The franchise of ABS-CBN will expire March 30, 2020. In order to provide uninterrupted
and improved delivery of its services to the Filipino people, the franchise should be renewed in
the soonest possible time.



EIGHTEENTH CONGRESS
REPUBLIC OF THE PHILIPPINES
First Regular Session

HOUSE OF REPRESENTATIVES

Introduced by Representative Rufus B. Rodriguez

House Bill No. 5705

AN ACT
RENEWING THE FRANCHISE GRANTED TO ABS-CBN CORPORATION (FORMERLY
ABS-CBN BROADCASTING CORPORATION) UNDER REPUBLIC ACT NO. 7966 OR "AN
ACT GRANTING ABS-CBN BROADCASTING CORPORATION A FRANCHISE TO
CONSTRUCT, INSTALL, ESTABLISH, OPERATE, AND MAINTAIN BROADCASTING
STATIONS IN THE PHILIPPINES, AND FOR OTHER PURPOSES" FOR TWENTY-FIVE (25)
YEARS FROM THE EFFECTIVITY OF THIS ACT

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

SECTION 1. Nature and Scope of Franchise. - Subject to the provisions of the 1987 Philippine
Constitution and applicable laws, rules and regulations, the franchise granted to ABS-CBN
Corporation (formerly ABS-CBN Broadcasting 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, radio and/or television broadcasting stations in
the Philippines, where frequencies and/or channels are still available for radio and/or television
broadcasting, 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 technological auxiliaries and facilities, special broadcast and other program and
distribution services and relay stations, is hereby renewed for another twenty-five (25) years
from the effectivity of this Act.

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 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 the availability thereof.

SEC. 3. Prior Approval of the National Telecommunications Commission. The grantee
shall secure from the National Telecommunications Commission (NTC), the appropriate permits
and licenses for the operation of its stations and facilities and shall not use any frequency in the
radioftelevision spectrum without authorization from the NTC. The NTC, however, shall not
unreasonably withhold or delay the grant of such authority

SEC. 4. Responsibility to the Public. - The grantee shall provide adequate public service time
to enable the goverment, 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 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. 5. Right of 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 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

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.

SEC. 6. Term of Franchise. - This franchise shall be in effect for a period of twenty five (25)
years, 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.

SEC. 7. Acceptance and Compliance. - Acceptance of this franchise shall be given in writing
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 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

SEC. 8. 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 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.

SEC. 9. 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.

SEC. 10. Sale, Lease, Transfer, Grant of Usufruct, or Assignment of Franchise. The
grantee shall 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, nor shall transfer the
controlling interest of the grantee, whether as a whole or in part 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 Congress shall be informed of any
sale, lease, transfer, grant of usufruct, or assignment of franchise or the rights or privileges
acquired thereunder, or the merger or transfer of the controlling interest of the grantee, within
sixty (60) days after the completion of said transaction: Provided, further, That failure to report to
Congress such change of ownership shall render the franchise jpso facto revoked: Provided,
finally, That 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


SEC. 11. 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 per centum (30%) or a higher percentage that may hereafter be provided by law of its
outstanding 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, establishment of cooperatives and other methods of encouraging public participation
by citizens and corporations operating public utilities must be implemented. Noncompliance
therewith shall render the franchise ipso facto revoked

SEC. 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.

SEC. 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, The reportorial compliance certificate issued by Congress shall be required
before any application for permit or certificate is accepted by NTC.

SEC. 14. Penalty Clause. - Failure of the grantee to submit the requisite annual report to
Congress shall be penalized by a fine of five hundred pesos (P500.00) per working day of
noncompliance. The fine shall be collected by the NTC from the delinquent franchise grantee
separate from the reportorial penalties imposed by the NTC. The collected funds shall accrue to
the monitoring fund of the NTC in line with its supervisory and regulatory functions.

SEC, 15. Equality Clause. - Any advantage, favor, privilege, exemption, or immunity granted
under existing franchises, or which may hereafter be granted for radio and/or television
broadcasting, upon prior review and approval Of Congress, shall become part of this franchise
end shall be accorded immediately and unconditionally to the herein grantee: Provided, That the
foregoing shall neither apply to nor affect the provisions of broadcasting franchises conceming
territory covered by the franchise, the life span of 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

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

SEC. 17. Repealing and Non-exclusivity 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.

SEC. 18. Publication. - This Act shall be published, through the initiative of the Grantee, fifteen
(15) days after this Act is signed by the President of the Philippines or has lapsed into law.

SEC. 19. Effectivity Clause. - This Act shall take effect fifteen (15) days after its publication in
the Official Gazette or in a newspaper of general circulation.

Approved,