Republic of the Philippines
HOUSE OF REPRESENTATIVES

Quezon City 11 uy 2014
SIXTEENTH CONGRESS fy
First Regular Session \is

House Bri no,__ 4639

Introduced by HONORABLE EDCEL “GREX” B. LAGMAN

EXPLANATORY NOTE

The Filipinas Broadcasting Network, Inc. (FBNI) was incorporated and
registered with the Securities and Exchange Commission (SEC) on April 5, 1960 for
the purpose of engaging in commercial radio programming and broadcasting on a
nationwide coverage.

Barely two (2) months after its incorporation and registration with SEC,
FBNI was granted a legislative franchise to establish radio stations for domestic
telecommunications, broadcasting and telecasting by virtue of Republic Act No.
2290 on June 19, 1960 for a period of fifty (50) years. Twelve (12) years after its
operation, the late President Ferdinand Marcos placed the entire Philippines under
Martial Law in 1972, which led to the suppression of civil and political rights of the
Filipino people, including infringement of constitutional rights to freedom of
‘expression and of the press.

During those dark years in our country’s political history,FBNI played a
critical role in the nation’s quest for freedom as it performed a watchdog function
and has often taken an adversarial stand against the government amidst imminent
threat of closure and incarceration of its owners and broadcasters. After
experiencing the best and the worst climates in the broadcasting industry, it has
proven it can withstand the test of time under any circumstance, FBNI's franchise
was extended by Congress in 1995 for a period of twenty five (25) years by virtue
of Republic Act No. 8168. However, the legislative franchise of this broadcasting
company is about to expire in a few years time and there is an urgent need to
seek a legislative fiat for its continued operation.

This bill therefore seeks to grant a franchise to FBNI to enable it to continue
its tradition of excellence and an enduring legacy of disseminating timely, accurate
and truthful information to the Filipino people.

In view of the foregoing, the approval of this bill is earnestly sought.

Bos

HON. EDCEL “GREX” B. LAGMAN


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

SIXTEENTH CONGRESS
First Regular Session

4639

House Bill No.

Introduced by: HON. EDCEL “Grex” B. LAGMAN

AN ACT
GRANTING THE FILIPINAS BROADCASTING NETWORK, INCORPORATED A
FRANCHISE TO CONSTRUCT, INSTALL, ESTABLISH, OPERATE AND MAINTAIN
RADIO AND TELEVISION BROADCASTING STATIONS IN THE PHILIPPINES

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

SECTION 4. 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 Filipinas Broadcasting Network, Incorporated (FBNI) 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 digital television
system, Internet Protocol (IP) -related services and |P-value-added services, through
microwave, satellite or whatever means, including the use of any new technologies in
television and radio 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 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 wavelengths or frequencies of 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 and/or 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
and facilities and shall not use any frequency in the radio/television spectrum without
authorization from the NTC. The NTC, 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 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 goverment, 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, unless sooner revoked or cancelled. This franchise shall be
deemed ipso facto revoked in the event the grantee fails to comply with any of the
following conditions:

(a) Commence operations within 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; and
(0c) Operate continuously for two (2) years.

SEC. 7. 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. Tax Provisions. - The grantee, its successors or assigns, shall be
subject to the payment of all taxes, duties, fees or charges and other impositions under
the National Internal Revenue Code of 1997, as amended, and other applicable laws:
Provided, That nothing herein shall be construed as repealing any specific tax
exemptions, incentives or privileges granted under any relevant law: Provided, further,
that all rights, privileges, benefits and exemptions accorded to existing and future
broadcasting stations franchises shall likewise be extended to the grantee, The grantee
shall file the return with the city or province where its facility is located, and pay the
taxes due thereon to the Commissioner of Internal Revenue or his duly authorized
representatives 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: 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 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 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, city 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, or Assignment of Franchise. - The
grantee shall not lease, transfer, grant the usufruct of, sell nor assign this franchise or
the rights and privilege 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:
Provided, That Congress shall be informed of any lease, transfer, granting the usufruct
of, sale or assignment of franchise or the rights or privileges acquired within sixty (60)
days after the completion of said transaction: Provided, further, That failure to report to
Congress such change of ownership shall render the franchise ipso facto revoked:
Provided, finally, That 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. 12. 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 per centum (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, establishment of
cooperatives and other methods of encouraging public participation by citizens and


corporations operating public utilities must be implemented. 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. 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. 15. Penalty Clause — Any grantee who fails to submit the Annual Report
to Congress will be fined Five Hundred Pesos (P500,00) per working day of non-
compliance. Said fine will be collected by the NTC from said delinquent franchise
grantee separate from the reportorial penalties imposed by 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 Congress shall be required
before any application for permit or certificate is accepted by NTC

SEC. 16. Equality Clause. - Any advantage, favor, privilege, exemption, or
immunity granted under existing franchise, or which may hereafter be granted for radio
and/or television 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, however, That the foregoing shall neither apply to nor
affect provisions of broadcasting franchises concerning territory covered by the
franchise, the life span of the franchise or the type of service authorized by the
franchise: Provided, further, That the foregoing shalll not apply to sale, lease, transfer or
grant of usufruct of legislative franchise with prior congressional approval

SEC. 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

SEC. 18. Repealability and Non-exclusivity 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. 19. Publication. This Act shall be published, through the initiative of the
Grantee, fifteen (15) days after this Act is signed by the President of the Philippines or
has lapsed into law

SEC. 20. Effectivity. - This Act shall take effect fifteen (15) days from its
publication in the Official Gazette or in any newspaper of general circulation in the
Philippines.

Approved,