-CEIVE
RECEIVE!

Republic of the Philippines
HOUSE OF REPRESENTATIVES
‘Quezon City

Sixteenth Congress
First Regular Session

HOUSE BILL NO. 3349

Introduced by Honorable Antonio F. Lagdameo, Jr.

EXPLANATORY NOTE

This bill seeks to renew the franchise granted to Kalayaan Broadcasting
System, Incorporated (KBSI).

Republic Act No. 7303, as amended, granted the KBSI a franchise to
construct, install, operate and maintain radio broadcasting and television stations in
the island of Mindanao. Under the law, KBSI was given a period of twenty five years
to operate which started on March 26, 1992 and will expire on March 26, 2017.

KBSI is not only operating commercially but it is also involved in public
service. The station has been giving free air time to all government agencies to air
updates and information regarding matters in their departments. At any time during
its live broadcast, it allows people from all walks of life the opportunity to air vital
information and concerns, and it also contributes to the coffers of the government in
the form of taxes and fees paid to the NTC.

As enunciated in the 1987 Constitution which provides that "7he State
recognizes the vital role of communication and information in nation building,”
communication indeed plays a very essential role in the development and growth of
our country. The renewal of the franchise is needed for its continuing operation to
fully assist the government in disseminating information to the people, and to enrich
and improve the information technology system in the country.

In view of the foregoing considerations, approval of this bill is earnestly

anti F. oe IR.

recommended.


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

Sixteenth Congress
First Regular Session

HOUSE BILL NO. 3340

Introduced by Honorable Antonio F. Lagdameo, Jr.

AN ACT
RENEWING THE FRANCHISE GRANTED TO THE KALAYAAN
BROADCASTING SYSTEM, INCORPORATED, TO CONSTRUCT, INSTALL,
MAINTAIN AND OPERATE RADIO BROADCASTING AND TELEVISION
STATIONS IN THE ISLAND OF MINDANAO

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

SECTION 1. Mature and Scope of Franchise. - Subject to the provisions
of the 1987 Philippine Constitution and applicable laws, rules and regulations, there
is hereby granted to Kalayaan Broadcasting System, Incorporated, hereunder
referred to as the grantee, its successors or assigns, a franchise to construct, install,
maintain and operate for commercial purposes and in the public interest, throughout
the Philippines and between the Philippines and other countries and territories, wire
or wireless telecommunications systems including, but not limited to, mobile,
cellular, paging, fiber optics, multi-channel multi-point distribution system (MMDS),
local multi-point distribution system (LMDS), satellite transmit and receive systems,
switches and their value-added services such as, but not limited to, transmission of
voice, data, facsimile, control signs, audio and video, information services bureau
and all other telecommunications systems technologies as are at present available or
will be made available through technological advances or innovations in the future;
Or construct, acquire, lease and operate or manage transmitting and receiving
stations, lines, cables or systems as are convenient or essential to efficiently carry
out the purpose of this franchise.


SEG? 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 the 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 or the availability thereof.

Seen ae Authority of the National Telecommunications
Commission (NTC). — The grantee shall secure from the NTC, hereinafter referred
to as the Commission, a certificate of public convenience and necessity or the
appropriate permits and licenses for the construction, installation and operation of
its telecommunications systems or facilities. In issuing the certificate, the
Commission shall have the power to impose such conditions relative to the
construction, operation, maintenance or service level of the telecommunications
systems. The Commission shall have the authority to regulate the construction and
operation of its telecommunications systems. The grantee shall not use any
frequency in the radio spectrum without having been authorized by the Commission.
Such certificate shall state the areas covered and date the grantee shall commence
the service. The Commission, however, shall not unreasonably withhold or delay
the grant of any such authority, permits or licenses.

SEC. 4. Responsibility to the Public. — The grantee shall provide
reasonable public service time to enable the government, through the said
broadcasting 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 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 from the date of effectivity of this Act, unless
sooner cancelled. This franchise shall be deemed /pso facto revoked in the event the
grantee fails to operate continuously within two (2) years.

SEGI7. 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. Bond. — The grantee shall file a bond with the NTC in the
amount that it shall determine 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 conditions, the bond shall be cancelled by the Commission. Otherwise,
the bond shall be forfeited in favor of the government and the franchise shall be
deemed /pso facto revoked.

SEC. 9: Right of Interconnection. - The grantee is hereby authorized
to connect or demand connection of its telecommunications systems to other
telecommunications systems installed, operated and maintained by any other duly


authorized person or entity in the Philippines for the purpose of providing extended
and improved telecommunications services to the public, under such terms and
conditions mutually agreed upon by the parties concerned and the same shall be
subject to the review and modification of the Commission.

SEC. 10. Gross Receipts. — The grantee, its successors or assigns, shall
keep a separate account of the gross receipts of the business transacted by it and
shall furnish the Commission on Audit (COA) and the National Treasury a copy of
such account not later than the thirty-first (31%) day of January of each year for the
preceding twelve (12) months.

SEC. 11. Books and Accounts. — The books and accounts of the
grantee, its successors or assigns, shall always be open to inspection of the COA
and its duly-authorized representatives. It shall be the duty of the grantee to
submit to the COA two (2) copies of the quarterly reports on the gross receipts, the
net profits and the general condition of the business.

SEC. 12: Warranty in Favor of the 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, transmitters, facilities and equipment of
the grantee.

SEC. 13. Nontransferability of Franchise. — 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. The condition, terms, restrictions and limitations set by this Act shall be
imposed on any person or entity to which this franchise is sold, transferred or
assigned.


SEC. 14. Dispersal of Ownership. — In accordance with the conditional

provision to encourage public participation in public utilities, the grantee shall offer
to Filipino citizens at least thirty (30) percent 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. Noncompliance therewith shall render the franchise /pso facto revoked.

SECA 15. 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.

SEC. 16. Penalty Clause. — Any grantee who fails to submit the annual
report to the Congress of the Philippines shall be fined by Five hundred (P500.00)
pesos per working day of noncompliance. The fine shall be collected by the NTC
from said 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. The reportorial compliance
certificate issued by the Congress of the Philippines shall be required before any
application for permit or certificate is accepted by the NTC.

SEC IT; Equality Clause. — Any advantage, favor, privilege, exemption,
or immunity granted under existing franchise, or which may hereafter be granted,
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,
however, That the foregoing shall neither apply to nor affect provisions of
telecommunications franchises concerning territory covered by the franchise, the life
span of the franchise or the type of service authorized by the franchise.

SEC. 18. 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 provided for in this Act.