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

First Regular Session

HOUSE BILL NO. 545

INTRODUCED BY CONGRESSMAN PEDRO P, ROMUALDO

EXPLANATORY NOTE

This proposed measure establishes a national policy on subscribed television service.
‘The cable/community antennae television was first introduced in the country around
four decades ago. Today, it is a mammoth industry, serving majority of our
municipalities and cities with an estimated total investment of more than Eight Billion
Pesos, employing thousands all over the country.

In the forty (40) years of its existence in the Philippines, subscribed television service
has had its own share of challenges and obstacles. Operators have continually been
hounded by confusing government policies, lack of access to funds, and inadequate
government support and incentives to promote the industry.

is bill seeks to address the needs of the industry by setting down procedures,
standards and guidelines that would encourage the growth and development of
subscribed television services. Among the salient points of the measure are:

(a) Differentiation between Subscribed Television Network Services (STVNS) and
Subscribed Television Communications Services (STVCS), in order to define the
classification of services provided by the various STVS companies that comprise
the industry;

(b) Providing specific rights to subscribed television service operators such as the
right of easement, right lease excess capacity and right to advertise; and

(c) Repeal of Executive Orders No. 205 and 436, which hinder the advancement of
the industry.

‘The passage of this measure is long overdue. The industry needs this legislation so it can
thrive as a legitimate business, provide better service to its subscribers and create
employment for the residents in their respective service area of operations. It is
expected that more investors will likely participate in this industry if it has a definite set

of regulations. With this premise, the immediate approval of this bill is-eaynestly
sought.
Biwi


Republic of the Philippimes
HOUSE OF REPRESENTATIVES
Quezon City, Metro Manila
FIFTEENTH CONGRESS
First Regular Session

HOUSE BILL NO. _ Bas

INTRODUCED BY CONGRESSMAN PEDRO P. ROMUALDO

AN ACT
TO PROMOTE AND REGULATE THE SUBSCRIBED TELEVISION SERVICE
IN THE PHILIPPINES AND FOR OTHER PURPOSES

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

SECTION 1. Title. This Act shall be known as the “Subscribed TV Act”.

SEC. 2, Scope and Application. This Act shall apply to all subscribed television
systems and services (STVS) in the Philippines.

SEC. 3. Declaration of Policy. It shall be the policy of the State to:

a) Recognize Subscribed Television Services (STVS) as a service impressed with
public interest and therefore subject to reasonable government regulation;

b) Promote viable competition and prevent monopolistic behavior in the STVS
industry in order to sustain its growth;

c) Ensure equal access by Subscribed Television Service (STVS) providers to all
programs;

d) Establish and promote the highest standards for STVS and operations to
maximize its value to its subscribers; and

e) Encourage self-regulation in the STVS industry and professionalism in the
delivery of its services through nationwide associations of legitimate cable
television service operators.

SEC. 4. Definition of Terms. As used in this Act:
a) Subscribed Television Services (STVS) shall refer to and comprise of:

1. Subscribed Television Communications Services (STVCS) — which shall
refer to the transmission or delivery to subscribers of video and audio
programming and/or other programming service for a fee, with or with
or without subscriber interaction, through fiber optics, coaxial cable,
satellite, and/or future technological means;

2. Subscribed Television Network Service (STVNS) — which shall refer to
the equipment and facilities necessary for the generation, relay and
reception of television and its associated control signals of any design
by wire or wireless means for the purpose of providing television
service to multiple subscribers with defined geographic service areas.

b) Subscribed Television Operator/Entity ~ shall refer to any person or group of
persons, natural or juridical, engaged in the operation of subseribed television
network service and is actually providing subscribed television service to the
subseribers.


) Direct Broadcast Satellite Service — shall refer to the service that delivers TV
Programs to the home through a satellite receiving dish, rather than a cable
system landline wherein pictures are sent aloft, bounced off a satellite
transponder and returned directly to the subscriber’s home; also popularly
known as direct-to- home/direct-to-user broadcast system.

d) Multi-distribution System Service — shall refer to a cable television service
transmitted to the user via terrestrial radio.

e) Commission — shall refer to the National Telecommunications Commission.

f) Provisional Authority — shall refer to a conditional authority granted by the
Commission, for a period of two (2) years, to a qualified applicant, after due
notice and hearing, to operate and maintain a STVS, pending the grant of a
Certificate of Authority.

8) Certificate of Authority — shall refer to a grant consistent with the STVS
policies and objectives to a qualified applicant, after due notice and hearing of
a final authority to own, operate and maintain a STVS by the Commission.

h) Franchise — shall refer to a privilege conferred upon a cable television
operator/entity by Congress, authorizing that operator/entity to engage in the
operations of a subscribed television service.

i) Franchise Grantee ~ shall refer to a person or any group of persons, natural or
juridical, associations or entities granted a legislative franchise to operate a
STVNS.

J) Service Area — shall refer to the area of operation of one or more STVCS
operator/s. It may refer to city, municipality, region or the entire country.

SEC. 5. Supervision and Regulation. — The supervision and regulation of the
ions of STVS in the Philippines shall be vested in the National
‘Telecommunications Commission. In particular, the Commission shall:

a) Provide guidelines for the authorization, licensing, construction or
installation, operation and maintenance of a STVS in the Philippines;

b) Issue, suspend and revoke Certificates of Authority or Provisional Authority,
licenses, permits and other authorization in the exercise of its regulatory and
supervisory powers under this Act;

©) Hear, investigate and decide all questions, controversies or disputes arising
out of or in connection with the operations of STVS in the country;

d) Determine the necessity of granting additional subscribed television operators
within a service area covered by existing operators:

e) Issue subpoenas and require the production of books, papers, records and
other documents as may be necessary in the resolution of any matter under its
consideration;

f) Prosecute violations of the provisions of this Act, rules and regulations, orders
and other issuances promulgated by the Commission in the implementation
of this Act, and impose penalties and other sanctions on such violation; and

g) Perform such other functions as the Commission deems necessary in the
implementation of this Act.

SEC. 6. Legislative Franchise. ~ Any person, association or corporation who
shall install and operate or render STVNS on a nationwide basis only shall be required
to obtain and secure a franchise from the Congress of the Philippines and a Certificate of
Authority from the Commission: Provided, That municipal or provincial STVNS
operators shall be required to obtain and secure the necessary local government permit
and licenses from the appropriate local government authority, as well as a Certificate of
Authority from the Commission.


A STVNS shall be deemed to be operated on a nationwide basis if the network is
intended to be installed and operated to service at least three (3) regions or at least three
(3) provinces in separate regions or in at least three (3) highly urbanized cities as its
service area

SEC. 7. Authority to Operate. — Any person, association or corporation who
shall install and operate or render STVS within a municipality, city or province shall be
required to obtain a Certificate of Authority as a pre-requisite for local permits and
licenses from the Commission.

A Certificate of Authority to operate a STVS shall be issued in favor of an
applicant legally, technically and financially capable of providing subscribed television
service for a period of five (5) years from the date of its issuance and subject to such
other terms and conditions the Commission may reasonably impose. However, the
Commission may issue a Provisional Authority to operate a STVS pending the grant of a
Certificate of Authority to operate as long as the subscribed television service operator
shall comply with existing policies and regulations of the Commission.

SEC. 8. Non-exclusivity. — The Congress of the Philippines may award one or
re legislative franchise within the same service area. To encourage a competitive
environment, Congress shall give a franchise grantee a period of three (3) years from the
grant of a franchise to secure subscribers within the subject service area before granting
another franchise to other interested subscribed television operators within the same
service area.

Notwithstanding, the Commission may grant to an interested applicant-operator
the authorization to operate a STVNS before the expiration of the three-year period
given to a prior STNVS operator within the same franchise area upon determination by
the Commission that:

a) The prior subscribed television operator/entity has not substantially complied
with the terms and conditions of his authorization;

b) The STVNS being provided by the prior subscribed television operator/entity
to its subscriber is sub-standard, inefficient and/or inadequate;

¢) The prior subscribed television operator/entity has unreasonably and

unjustifiably refused or failed to comply with the terms and conditions of the

authorization or the orders, issuances or regulations promulgated by the

Commission; and/or

‘The area is highly urbanized and is capable of sustaining more than two (2)

STVNS.

d

SEC. 9. Rights of Subscribed Television Operators. ~ To maximize the use of
available facilities and promote development of the subscribed television industry, all
subscribed television operators/entities shall have the following rights:

a) Right of Easement — Duly authorized subscribed telelvision operators shall
have the right of easement over right-of-way granted to existing public utilities and
dedicated to compatible uses; Provided, That the subscribed television operator shall
ensure that:

1) The owner of the property subject to easement is justly compensated for the
servitude and damages caused by the installation, operation or removal of its

subscribed television facilities;

‘The function, appearance and safety of the property subject to easement and

the convenience and safety of other users and the general public are not

adversely affected: and

3) The expenses of installation, operation or removal of such facilities are borne
by the subscribed television operator exercising the right of easement;
Provided, further, That the rate of annual fees to be paid by the subscribed
television operator in compensation to the owner of the property subject to
easement shall be fixed by the Commission.

2


b) Right to Lease Excess Capacity - Duly authorized subscribed television
operators/entities may, with the approval of the Commission, lease or sub-lease the
excess capacity of its cable television system, but may not utilize such excess capacity, or
in any manner engage, in broadcast or telecommunications without securing the
appropriate legislative franchise from the Congress of the Philippines and authority
from the Commission.

SEC. 10. Use of Public Utility Facilities And/Or Poles. - Subscribed television
operators may use existing public utility facilities and/or poles dedicated to compatible
us Provided, That, public utility operators/entities shall ensure that the rates for the
use of its facilities and/or poles shall be made transparent to the public through
publication of rates which must be based on the use of such facilities and/or poles by the
subscribed television operator/entity as fixed by the Commission in coordination with
the National Electrification Administration (NEA).

SEC. 11, Value-added Services. — Subscribed Television Operators may offer,
provide and operate other STVNS-related value-added services: Provided, That the
prior approval of the Commission is acquired.

SEC. 12. Advertisements. — Subscribed television may include advertisements
and other similar paid segments for which the operator may charge and collect
reasonable fees: Provided, That such paid segments shall not exceed ten (10) minutes
per hour of programs: Provided, further, That said advertisements and similar paid
segments shall be exhibited or shown at the start and/or end of the program. Provided
finally, That no foreign program provider or distributor shall be allowed to solicit and
sell commercial positions and advertising time in their programming for products and
services directed solely at and within the Philippines and insert such advertisements in
the regional satellite feed of such foreign programmers and distributors to be received
by the subscribed television operator.

SEC. 13. Carriage of Commercial/Local Television Signal. ~ Operators of
commercial/local television networks, as owners of the program, may choose whether
or not to be carried by the STVCS operators, and may charge reasonable fees.

Discriminatory policies shall not be allowed. The broadcast operator must charge
the same rate to all STVCS operators who avail carriage of the program.

SEC. 14. Deregulation of Service Rates. ~ The deregulation of service rates of
cable television system operators shall be maintained and respected by the government
to encourage growth in the industry and foster the availability of quality programs.

The Commission shall, however, retain its residual powers to regulate service
rates when ruinous competition results or when a monopoly or a cartel or combination
thereof, in restraint of free competition exists and the service rates are distorted or
unable to function freely and the subscribers are adversely affected. In such cases, the
Commission shall establish either a floor or ceiling on the service rates.

SEC. 15. Responsibilities of Subscribed Television Operator to the Public. —'The
subscribed television operator or entity shall have the following responsibilities:

a) Provide adequate free public service time to relay government information on certain
national issues and in case of national emergencies and calamities;

b) Conform to the ethics of honest enterprise and not use its stations for the exhibition,
distribution or transmission of materials in violation of existing laws, executive
orders, rules and regulations of the Movie and Television Review and Classification
Board, Optical Media Board, Intellectual Property Office, Department of Trade and
Industry, Securities and Exchange Commission and other related government
agencies:

©) Provide prior notification to its subscribers concerning the adjustments of
subscribers rates and fees, or the change or deletion of programs, or the transfer of
programs to another channel except in instances of technical non-viability; and



4) Ensure and maintain the best quality of transmission of programs to its
subscribers.

SEC. 16. Prohibited Acts. — The following acts are hereby declared unlawful:

a) Engaging in any commercial television broadcast, telecommunications
activity, or STVCS, or electronic commercial transactions through the STVNS
unless duly approved /authorized for the purpose;

b) Receiving and distributing/transmitting satellite program signals, or

cinematographic works or other programs, without the written authorization

of the concerned satellite programmer or copyright owner;

Intercepting or receiving, or assisting in intercepting or receiving, any service

offered over a STVS by tapping or making or causing to be made, any

unauthorized connection, to existing subscribed television facilities through
the recording, reproduction, distribution, importation or sale, of intercepted
or received subscribed television service signals;

d) Using or receiving any direct or indirect benefit from any STVS through any of
the prohibited acts enumerated in the preceding paragraphs;

e) Using without proper authorization, any receiver-decoder or equivalent
circumvention devices or methods that allow for unauthorized decoding of
encoded satellite program signals; and

f) Damaging, destroying or removing, willfully or maliciously, STVS facilities
and accessories of authorized subscribed television operators which would
result into system disruption or network degradation.

©

SEC. 17. Incentives. — Subscribed Television Operators may avail of the benefits
granted to radio and television broadcasting stations under Presidential Decree No.
and Executive Order No. 226 arising from the importation of subscribed television
equipment and accessories.

SEC. 18, Penalties. — Any person, including directors and officers of a
corporation, who knowingly and willfully violates any provision of this Act or commits
any of the prohibited acts in the preceding section or any provision of this Act shall be
punished:

a) on the first offense, by a fine of not less than Fifty thousand pesos (P
50,000.00) but not more than Three hundred thousand pesos (P
300,000.00) or imprisonment or not less than one (1) year but not more than
three (3) years or both, and suspension of the franchise and authority to
operate for a period of not less than two (2) years but not more than five (5)
years:

on the second offense, by a fine of not less than Three hundred thousand
pesos (P 300,000.00) but not more than One million pesos (P 1,000,000.00)
or imprisonment of not less than three (3) years but not more than five (5)
years or both, and permanent ineligibility to receive a franchise and authority
to operate.

b)

Any person, natural or juridical, aggrieved by any violation of the preceding
sections may bring a civil, criminal or administrative action in a court or body of
competent jurisdiction.

SEC. 19. Implementing Rules and Regulations. — For the implementation of this
Act, the Commission shall, in consultation with the Movie and Television Review and
Classification Board, Videogram Regulatory Board, Intellectual Property Office, and
Regional Cable Television Cooperatives, promulgate the implementing rules and
regulations to govern the operations of the subscribed television industry within six (6)
months after the effectivity of this Act.

SEC. 20. Reportorial Requirements. — A duly authorized subscribed television
operator/entity shall submit an annual report on its operations to the Commission.


SEC. 21. Separability Clause. - If any provision of this Act is declared
unconstitutional, the same shall not affect the validity and effectivity of other provisions
thereof.

SEC. 22. Repealing Clause. — Executive Order No. 205, Executive Order No. 436
and all other laws, decrees, regulations or parts thereof inconsistent with the provisions
of this Act are hereby repealed or modified accordingly.

SEC. 23. Effectivity. — This Act shall take effect fifteen (15) days after its
publication in the Official Gazette or in at least two (2) newspapers of national

circulation.

Approved,