Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

SEVENTEENTH CONGRESS
First Regular Session

5516

HOUSE BILL NO." "~

Introduced by Representative NANCY A. CATAMCO

EXPLANATORY NOTE

This legislative measure seeks to grant NORTH COTABATO MULTI-MEDIA
ADVERTISING CORPORATION a franchise to construct, install, establish, operate and
maintain radio stations throughout the Philippines.

In shaping the country’s future, the role of broadcast media cannot be
overemphasized. It molds, informs and educates the society through the promotion of public
awareness, participation and encouragement of public opinions on important matters concerning
the country.

Thus, investors should be encouraged to invest in the radio broadcasting business
to assist and support the government in disseminating important information on Issues and
matters of public concerns.

The NORTH COTABATO MULTI-MEDIA ADVERTISING CORPORATION is a
private corporation interested in the telecommunications business for domestic audiences and
other related business. It desires to operate radio stations throughout the Philippines with its
central base of operations at Kidapawan City, North Cotabato.

It cannot be gainsaid that the presence of more radio enterprises in the area of
communication industry will not only enhance competition but consequently make available
more information as well as entertainment to the public.

This is the reason why NORTH COTABATO MULTI-MEDIA ADVERTISING
CORPORATION seeks to offer itself as one service providers in the radio broadcasting industry
and therefore open the way for opportunities for more access to radio services by fostering a
healthy competition.



Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

SEVENTEENTH CONGRESS
First Regular Session

5516

HOUSE BILL No.

Introduced by HON. NANCY A. CATAMCO

(AN ACT GRANTING THE NORTH COTABATO MULTI-MEDIA ADVERTISING
CORPORATION, A FRANCHISE TO CONSTRUCT, INSTALL, ESTABLISH, OPERATE
AND MAINTAIN RADIO BROADCASTING STATIONS THROUGHOUT THE
PHILIPPINES

Be it enacted by the Senate and House of Representatives 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, there is hereby granted
to NORTH COTABATO MULTI-MEDIA ADVERTISING CORPORATION hereunder
referred to as the grantee, its successors or assignees, a franchise to construct, install,
establish, operate and maintain for commercial purposes and in the public interest, * radio
broadcasting stations throughout the Philippines’, with its central base of operations
located at Kidapawan City, North Cotabato, where frequencies are stil available for radio
broadcasting, including the use of new technologies in radio systems, with the
corresponding technological auxiliaries and facilities, special broadcast and other
program and distribution services and relay stations.

Section 2. Manner of Operation of Stations of 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 frequencies of existing stations or other stations which
maybe established by law, without in any way diminishing its own right to use its assigned
frequencies and the quality of transmission or reception thereon as should maximize
rendition of the grantee's services and/or the availability thereof.

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


Section 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 sounds
and balanced programming; assist in the functions of the public information and
education ; conform to the ethics of honest enterprise; and shall not use its stations and
facilities for the broadcasting of obscene and indecent language, speech, 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.

Section 5. Right of Govenrment- 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 operated.

The telecommunication spectrum is 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.

Section 6.Term of Franchise.- The Franchise shall be in effect for the period of
twenty five (25) years, unless sooner revoked or cancelled. The franchise shall be deemed ipso
facto, revoked in the event in the event the grantee fails to comply with any of the following
conditions

a.) Commence operations within on one (1) year from the
approval of its operating permit by the NTC;

b.) Commence operations within three (3) years from the
effectivity of this Act;

¢.) Operate continuously for two (2) years.

Section 7.Acceptance and Compliance.- Acceptance of this franchise shall be given in
the 17" 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.

Section 8. Bond.- The grantee shall file a bond with the NTC in the amount that the NTC
shall determine, to guarantee compliance with and fulfilment of the conditions under which this
franchise is granted. If after three (3) years from the date of approval of its permit by the
Commission, the grantee shall have fulfilled the same, the bond shall be cancelled by the


Commission. Otherwise, the bond shall be forfeited in favor of the government and the franchise
ipso facto revoked

Section 9.- Self-regulation by and Undertaking of the Grantee.- The grantee shall not
require any previous censorship of any speech, or other matter to be broadcast from its station:
Provided, That the grantee, during any broadcast, shall cut off from the air the speech, 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.

Section 10. Warranty in Favor of National and Local Governments.- The grantee shall
hold the national, provincial, city and municipal govermments of the Philippines free from all
claims, accounts, demands, or actions arising out of the accidents or injuries, whether to
Property or to persons, caused by the construction or operation of the stations of the grantee.

Section 11. Sale, Lease, Transfer, Grant of Usufruct, or Assignment of Franchise.~

The grantee shall not sell, lease, transfer, grant the usufruct of, or assign this Franchise
and privileges acquired thereunder to any person, firm, company, corporation of other
commercial legal entity, nor merge with any other corporation or entity nor shall transfer to
controlling interest of the grantee. Whether as a whole or in part, and whether simultaneously or
contemporaneously, to any such person, firm, company, corporation, entity without the prior
approval of the Congress of the Philippines; Provided, The Congress shall be informed of any
sale, lease, transfer, grant of usufruct, or assignment franchise or the rights or privileges
acquired thereunder, or merger or transfer of the grantee within sixty (60) days after the
completion of said transaction; Provided further, That the failure to report to Congress such
change of ownership shall render the franchise ipso facto revoked; Provided finally, That any
Person or entity which this franchise is sold, transferred or assigned, shall be subject to the said
conditions, terms, restrictions and limitations of this Act.

Section 12. Dispersal of Ownership.- \n accordance with the constitutional provision to
encourage public participation in public utilities, the grantee shall offer Filipino citizen at least
thirty per cent (30%) or as higher percentage that may hereafter be provided by law of its
outstanding capital stock in any securities exchange in the Philippines within five years from the
commencement of its operation. Provided, That in cases where put-offer of shares is not
applicable, establishment of cooperatives and other methods encouraging public participation by
citizens and corporations operating public utilities may be implemented. Non-compliance
therewith shall render the franchise ipso facto revoked.

Section 13. General Broadcast Policy Law.- The grantee shall comply with subject to the
provisions of a general broadcast policy law, which Congress may hereafter enact.

Section 14. Reportorial Requirement. The grantee shall submit an annual report to the
Congress of the Philippines, through the Committee in Legislative Franchises of the House of
Representatives and the Committee on Public Services of the Senate, in compliance with the
terms and conditions of the franchise and on its operations on or before April 30 of every year
during the term of its franchise. The reportorial compliance certificate issued by Congress shall
be required before any application for permit certificate is accepted by the NTC.


Section 15. 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) for every working day
of noncompliance. The fine shall be collected by the BTC from the delinquent franchise grantee
‘separate from the reportorial penalties imposed by the NTC.

Section 16. Equality Clause.- Any advantage, favor, privilege, exemption, or immunity
granted under existing franchises, or which may hereafter be granted for radio 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 conceming territory
covered by the franchise, the life span of the franchise and the type of service authorized by the
franchise.

Section 17.- Separability Clause.- If any of the sections or provisions of this Act is held
invalid, all other provisions not affected thereby shall remain valid.

Section 18. Repeatability and Nonexclusively Clause.- This franchise shall be subject to
amendment, alteration, or repeal by the Congress of the Philippines when public interest so
requires and shall not be interpreted as an exclusive grant of the privileges herein provided for.

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

Approved,