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Republic of the Philippines fst “Oy
HOUSE OF REPRESENTATIVES a REC EIVeD &

Quezon City, Metro Manila

Eighteenth Congress
Second Regular Session

HOUSE BILL NO. 8800

Introduced by Representative Eleandro Jesus F. Madrona

EXPLANATORY NOTE

Broadcasting is an important and essential infrastructure just like
any public utility, ie. telecommunications, water, electricity,
transportation, and the like, that addresses the basic needs of peoples,
institutions, and communities. Its pervasiveness and efficiency have
a direct bearing on the level of well-being and development for many
sectors of society. Studies on information and communication
technology have shown a direct correlation between accessibility to
broadcasting and total and inclusive development. Indeed,
broadcasting not only enhances information dissemination but
completes the crucial cycle of communication very much needed by
our countrymen given the fact that the Philippines is an archipelago.

Considering some recent events, the clamor for a Philippine
broadcasting industry that provides efficient, dependable, and
affordable communication and information services is very clear.
Institutions and individual end-users have expressed their collective
desire and demand for the industry to keep in complimentary stride
with them and make significant contributions to nation building.
Statistics would show that industry demand drivers have been
growing steadily while there is a lag on the supply side.

Within the aforementioned context, ALLBroadcast Corporation
seeks to do its share to improve the broadcasting industry's capacity
to promote the common good and serve the general public. With its
financial and technical resources, the company seeks to establish
radio, television and satellite broadcasting stations, including cable
and digital television systems by using existing and new technologies
in radio, television and satellite systems.

This bill seeks to grant ALLBroadcast Corporation a franchise to
construct, install, establish, operate, and maintain broadcasting


systems in the Philippines for commercial purposes and, most
importantly, in the public interest.

In view of the foregoing, approval of this measure is most
respectfully sought.

ao

REP. ELEANDRO JESUS F. MADRONA


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

EIGHTEENTH CONGRESS
Second Regular Session

House Bill No. Beno

AN ACT
GRANTING ALLBROADCAST CORPORATION A FRANCHISE TO
CONSTRUCT, INSTALL, ESTABLISH, OPERATE, AND MAINTAIN RADIO,
TELEVISION AND SATELLITE BROADCASTING STATIONS IN THE
PHILIPPINES

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

Sec. 1. Nature and Scope of Franchise. - Subject to the provisions of the Constitution
and applicable laws, rules and regulations, there is hereby granted to ALLBroadcast
Corporation, hereunder referred to as the grantee, its successor or assignees, a
franchise to construct, install, operate, and maintain, for commercial purposes and in
the public interest, radio, television and satellite broadcasting stations in the
Philippines including cable and digital television systems, through microwave,
satellite, or broadcasting through any other means, as well as the use of any new
technology in television, radio and satellite systems, with the corresponding
technological auxiliaries and facilities, special broadcast and other program and
distribution services and relay stations.

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
where frequencies and channels are still available for radio and television
broadcasting, or other stations which may be established by law, without in any way
diminishing its own privilege 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 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 construction and operation of its stations or
facilities and shall not use any frequency in the radio, television or satellite spectrum


without authorization from the NTC. The NTC, however, shall not unreasonably
withhold or delay the grant of any of such authority.

The grantee shall not dispose or lease its facilities except to entities with a radio or
television broadcasting franchise: Provided, That the grantee shall inform and secure
written authorization to proceed from the NTC, and report the transaction to the NTC
within sixty (60) days after its completion: Provided, further, That the NTC shall
determine the corresponding sanction for any violation of this provision.

In case of any violation of the provisions of this franchise, the NTC shall have the
authority to revoke or suspend, after due process, the permits or licenses it issued
pursuant to the franchise. The NIC may recommend to Congress of the Philippines
the revocation of the franchise for any violation of the provisions of this franchise.

Sec. 4, Responsibility to the Public. - The grantee shall provide free of charge,
adequate public service time which is reasonable and sufficient to enable the
government, through the broadcasting stations or facilities of the grantee, to reach the
pertinent populations or portions thereof, on important public issues and relay
important public announcements and warnings concerning public emergencies and
calamities as necessity, urgency, or law 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 through, but not limited to, closed captioning;
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.

Public service time referred herein shall be equivalent to a minimum 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
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.

Pursuant to Republic Act No. 8370, otherwise known as the “Children’s Television
Act of 1997”, the grantee shall allot a minimum of fifteen percent (15%) of the daily
total air time of each broadcasting network to child-friendly shows within its regular
programming.

Sec. 5. Right of the 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 that may be withdrawn any time after due process.

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 these shall be so operated.

Sec. 6, Term of Franchise. - This franchise shall be in effect for a period of twenty-five
(25) years from the date of the effectivity of this Act, unless sooner cancelled. This
franchise shall be deemed ipso facto revoked in the event that the grantee fails to
comply with any of the following conditions:

(a) commence operations within three (3) years from the approval of its
operating permit by the NTC;

(6) commence operations within five (6) years from the effectivity of this Act;
and

()__ operate continuously for two (2) years.

Sec. 7. Renewal or Extension of Franchise. - The grantee shall apply for the renewal
or extension of its franchise three (3) years before its expiration which shall be
reckoned from fifteen (15) days after the publication of the franchise in the Official
Gazette or in a newspaper of general circulation

Sec. 8. Tax Provisions. - The grantee, its successors or assignees, 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 which are now or thereafter may be
required by law to pay, except radio, television, satellite and electronic
communications equipment, machinery, and spare parts needed in connection with
the business of the grantee which shall be exempt from customs duties, tariffs and
other taxes, as well as those declared exempt in this section. In addition thereto, the
grantee, its successors, or assignees, shall pay a value-added tax on all gross receipts
of the business transacted under this franchise by the grantee, its successors or
assignees, in the Philippines in lieu of any and all, taxes of any kind, nature, or
description levied, established, or collected by an authority whatsoever including, but
not limited to, city, municipal, provincial, or national, from which the grantee is
hereby expressly exempted effective from the date of the effectivity of this Act:
Provided, That grantee, its successors or assignees, shall continue to be liable for
income taxes payable under Title II of the National Internal Revenue Code pursuant


to Section 2 of the Executive Order No. 72, unless the latter enactment is amended or
repealed, in which case amendment or repeal shall be applicable thereto.

‘The grantee shall file the return with and pay the tax 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.

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, but if any such speech, play, act or scene, or other matter
should constitute a violation of the law or infringement of a private right, the grantee
shall be free from any liability, civil or criminal, for such speech, play, act or scene, or
other matter: Provided, That the grantee, during any broadcast, shall cut off the airing
of speech, play, act or scene, or other matter being broadcast if the tendency thereof is
to propose 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. 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.

Sec. 11. Commitment to Provide and Promote the Creation of Employment
Opportunities. - The grantee shall create employment opportunities and accept on-
the-job trainees in the franchise operations: Provided, That priority shall be accorded
to the residents of the place where the principal office of the grantee is located:
Provided, further, That the grantee shall ensure that at least sixty percent (60%) of its
employees are regular employees and in no case shall the percentage of contractual,
job order employees, or casual employees, talents, and independent contractors
combined, exceed forty percent (40%) of its total workforce: Provided, finally, That the
grantee shall comply with the applicable labor standards and allowance entitlement
under existing labor laws, rules and regulations, and similar issuances.

The employment opportunities or jobs created shall be reflected in the General
Information Sheet (GIS) to be submitted to the Securities and Exchange Commission
(SEC) annually. In addition, the grantee shall include in its annual report to Congress
the number of trainees, job order workers, casual employees, and contract of service
workers whose employment status are made regular, and append the appropriate
certificate from the Department of Labor and Employment attesting that it has
complied with the employment requirement under this Section.


Sec. 12. 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 the controlling interest of the grantee be transferred, whether
simultaneously or contemporaneously, to any person, firm, company, corporation or
entity without the prior approval of Congress. The grantee shall inform Congress 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 the same conditions, terms, restrictions, and limitations of
this Act.

Sec. 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 citizens and corporations
operating public utilities as allowed by law. Non-compliance therewith shall render
the franchise ipso facto revoked.

Sec. 14. Reportorial Requirement. - The grantee shall submit an annual report on its
compliance with the terms and conditions of the franchise and on its operations 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 or
before April 30 of every year during the term of its franchise.

The annual report shall include an update on the roll-out, development, operation or
expansion of business; audited financial statements; latest GIS 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 shalll be required before any
application for permit or certificate is accepted by the NTC.

Sec. 15, Fine. - 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 and the same
shall be remitted to the Bureau of the Treasury.

Sec. 16. Equality Clause. - Any advantage, favor, privilege, exemption, or immunity
granted under existing franchises, or which may hereafter be granted for radio,
television and /or satellite 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 the provisions of broadcasting franchises concerning territorial coverage,
the term, or the type of service authorized by the franchise.

Sec. 17. Repealability and Non-exclusivity Clause. - This franchise shall be subject
to amendment, alteration, or repeal by Congress when the public interest so requires
and shall not be interpreted as an exclusive grant of the privileges herein provided
for.

Sec. 18. 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. 19. Repealing Clause. ~ All laws, decrees, orders, resolutions, instructions, rules
and regulations, and other issuance or parts thereof which are inconsistent with the

provision of this Act are hereby repealed, amended, or modified accordingly.

Sec. 20. Effectivity. - This Act shall take effect fifteen (15) days after its publication in
the Official Gazette or in a newspaper of general circulation.

Approved,