Republic of the Philippines
House of Representatives
Quezon City

18" Congress
First Regular Session

House Bill No. 6894

EXPLANATORY NOTE

In September 1996, Republic Act No. 8213 was enacted to grant NOW Cable, Inc. 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 for a period of twenty-five
(25) years or until September 2021.

Through the years, NOW Cable has consistenly delivered reliable service of communication and
has been a vital tool in the dissemination of information to the public. This has been crucial to
‘economic growth and modenization, as well as ease of doing business, in NOW Cable’s areas of
‘operation. Moreover, NOW Cable has worked to provide diverse content to serve both educational
and entertainment value. Recently, NOW Cable was granted the authority to expand its services
to some parts of North Luzon, South Luzon, Visayas and Mindanao, and the Company is now
poised to more effectively carry out its services to the public.

If given the opportunity to adopt various technological advances available today, the Company
will be better equipped to provide timely, reliable and state-of-the art interactive television and
multimedia services through next generation broadcast systems, wireless/satellite communications
networks. It is in this regard that the Company is also pursuing an expansion of the scope of its
franchise.

‘Asa public service company, NOW Cable has upheld the terms of its franchise and fully complied
with the requirements of various government regulations. This has been attested to by the House
Committee on Legislative Franchises and the Securities and Exchange Commission, which have
issued certifications on the good standing of the Company.

Thus, the early passage of this bill is earnestly requested.

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REP. JUAN FIDEL FELIPE NOGRALES


Republic of the Philippines
House of Representatives
Quezon City

18 Congress
First Regular Session

6894

Introduced by: REP. JUAN FIDEL FELIPE F. NOGRALES

AN ACT RENEWING THE FRANCHISE GRANTED TO NOW CABLE,
INC. (FORMERLY KNOWN AS GHT NETWORK, INC.) UNDER
REPUBLIC ACT NO. 8213 OR " AN ACT GRANTING GHT NETWORK,
INC. A FRANCHISE TO CONSTRUCT, INSTALL, ESTABLISH,
OPERATE AND MAINTAIN RADIO AND TELEVISION
BROADCASTING STATIONS AND MULTIMEDIA SERVICES IN THE
FHILIPPINES" FOR ANOTHER 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 NOW Cable,
Inc., 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, including multi-channel multi-point distribution
system (MMDS), local multi-channel multi-point distribution system (LMDS), or next generation
broadcast systems, wired/wireless/satellite communications networks; to construct, establish,
install, operate, manage, lease, maintain and purchase transmitting, receiving and switching stations,
both for local and international services, intranet and internet networks, lines, fiber optics, including digital
television, through microwave, cables, satellite transmit and receive systems, control signals, audio
and video systems data, 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 and other technology that may hereafter or in the future be developed
such as outer space including low/high altitude platform systems and low/high earth orbit satellite
systems, laser systems in the field of broadcasting for telecasting and broadcasting of news,
documentaries, entertainment, informational and educational, interactive and various television
programs, with the corresponding technological auxiliaries or facilities, special broadcast and other



program and distribution services and relay stations.

SEC. 2. Manner of Operation of Stations for 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 the existing stations or other stations which may
be established by law, without in any way diminishing its own right to usc 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 the appropriate permits and
licenses for the construction and operation o. its stations and facilities and shall not use any
frequency in the radiofelevision 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. 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; assist
in the function of public information and education; conform to the ethics of honest enterprise, and
not use its stations or 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 mind 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 the said stations or
facilities during the period when they shall be so operated.

The radio spectrum 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. 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 canceled. 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 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 shall render the
franchise void.

SEC. 8 Tax Provisions. - The grantee, its successors or assigns, shall be liable to pay the
same taxes on its 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 the value-added tax under Republic Act No. 7716
or a franchise tax of five percent (5%) per annum or at such percentage as may be prescribed by
law on all gross receipts of the radio/television business transacted under this franchise by the
‘grantee, its successors or assigns, whichever is higher: Provided, That the grantee, its successors
or assigns, shall continue to be liable for income taxes payable under Title II 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.

SEC. 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, shall cut off from the air the speech,
play, act or scene, or other matter being broadcast if there is a clear and present danger thereof 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. 10. Warranty in Favor of National and Local Governments. - The grantee shall
hold the national, provincial 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 of the grantee,

SEC. 11. Sale, Lease, Transfer, Usufruct, etc. - 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 all the
same conditions, terms, restrictions, and limitations of this Act.

SEC. 12. Dispersal of Ownership - In accordance with constitutional provisions to
encourage public participation in public utilities, the grantee shall offer at least thirty percent
(30%) of its outstanding capital stock or a higher percentage that may hereafter be provided by
aw in any securities exchange in the Philippines within live (5) 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 or more radio and/or television stations. Noncompliance therewith shall
render the franchise ipso facto revoked.

SEC. 13. 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. 14. Equality Clause. - In the event of any competing individual, partnership or
corporation receiving from Congress a similar franchise in which there shall be any term or terms
more favorable than those granted under the franchise or tending to place the herein grantee at any
disadvantage, then such term or terms shall ipso facto become part of the terms hereof and shall
operate equally in favor of the grantee as in the case of said competing individual, partnership or
corporation,

SEC. 15. 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. 16. Repealability and Nonexclusivity 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 17. Reportorial Requirement. The grantee shall submit an annual report to the
Congress of the Philippines on its compliance with the terms and conditions of the franchise and
on its operations within sixty (60) days from the end of every year,

Sec. 18. Effectivity. This Act shall take effect fifteen (15) days after its publication in the
Official Gazette or in a newspaper of general circulation.

Approved,