EIGHTEENTH CONGRESS OF THE )

REPUBLIC OF THE PHILIPPINES )
First Regular Session )
HOUSE OF REPRESENTATIVES Sy
4305 NE wupey 8F
H.B.No,__ #399 INDEX

Introduced by Rep. Vilma Santos-Recto
6th District of Batangas

AN ACT
RENEWING FOR ANOTHER TWENTY-FIVE (25) YEARS THE FRANCHISE
GRANTED TO ABS-CBN BROADCASTING CORPORATION, PRESENTLY
KNOWN AS ABS-CBN CORPORATION, UNDER REPUBLIC ACT NO. 7966,
ENTITLED "AN ACT GRANTING THE ABS-CBN BROADCASTING
CORPORATION A FRANCHISE TO CONSTRUCT, INSTALL, OPERATE AND
MAINTAIN TELEVISION AND RADIO BROADCASTING STATIONS IN THE
PHILIPPINES, AND FOR OTHER PURPOSES”

EXPLANATORY NOTE

ABS-CBN Broadcasting Corporation, presently known as ABS-CBN Corporation,
was formed by the merger of Alto Broadcasting System (ABS) and Chronicle Broadcasting
Network (CBN). ABS was founded in 1946 by American electronics engineer James
Lindenberg as Bolinao Electronics Corporation (BEC) and was renamed Alto Broadcasting
System (ABS) in 1952 after Judge Antonio Quirino, brother of President Elpidio Quirino,
purchased the company. The television station was known as DZAQ-TV. The industrialist
Eugenio "Efiing" Lopez Sr. and his brother former vice president Fernando Lopez, founded
Chronicle Broadcasting Network (CBN) in 1956 primarily for radio broadcasting. On
February 1, 1967, ABS and CBN were merged and incorporated as ABS-CBN Broadcasting
Corporation and renamed ABS-CBN Corporation in 2010 to reflect the company's

diversification.

ABS-CBN is the Philippines’ largest entertainment and media conglomerate in terms

of revenue, operating income, net income, assets, equity, market capitalization, and number

* hmosJ/abachn fandom com/wiK/ARS-CBN Histon


of employees. It is primarily involved in content creation and production for television,
online, and over-the-top platforms, cable, satellite, cinema, live events, and radio for

domestic and international markets.”

Despite the growing popularity of social media, television still remains as a preferred
‘mass medium in our provinces and other far-flung areas. ABS-CBN has remained steadfast in
its commitment to reach out to as many Filipinos as possible by delivering their quality core
programs closer to our countrymen by taking advantage of emerging broadcast technologies.

In view of the foregoing, the approval of the bill js



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EIGHTEENTH CONGRESS OF THE )

REPUBLIC OF THE PHILIPPINES )
First Regular Session )
HOUSE OF REPRESENTATIVES
H.B.No, 4395

Introduced by Rep. Vilma Santos-Recto
6th District of Batangas

AN ACT
RENEWING FOR ANOTHER TWENTY-FIVE (25) YEARS THE FRANCHISE
GRANTED TO ABS-CBN BROADCASTING CORPORATION, PRESENTLY
KNOWN AS ABS-CBN CORPORATION, UNDER REPUBLIC ACT NO. 7966,
ENTITLED "AN ACT GRANTING THE ABS-CBN BROADCASTING
CORPORATION A FRANCHISE TO CONSTRUCT, INSTALL, OPERATE AND
MAINTAIN TELEVISION AND RADIO BROADCASTING STATIONS IN THE
PHILIPPINES, AND FOR OTHER PURPOSES”

Be it enacted by the Senate and House of Representatives of the Philippines in Congress
assembled:
Section 1. Section 1 of Republic Act No. 7966 is hereby amended to read as follows:
“Section 1. Nature and Scope of Franchise, — Subject to the provisions
of the Constitution and applicable laws, rules and regulations, {the ABS-CBN
fn ~ : -
or-assigns, is-hereby-granted-a franchise} THE FRANCHISE GRANTED
UNDER REPUBLIC ACT NO. 7966 TO ABS-CBN BROADCASTING
CORPORATION, PRESENTLY KNOWN AS ABS-CBN
CORPORATION, HEREUNDER REFERRED TO AS THE GRANTEE,
ITS SUCCESSORS OR ASSIGNEES to construct, INSTALL,

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ESTABLISH, operate and maintain, for commercial purposes and in the
public interest, television and radio broadcasting stations in and throughout the
Philippines, through microwave, satellite or whatever means including the use
of any new technologies in television and radio systems, with the
corresponding technological auxiliaries or facilities, special broadcast and


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other broadcast distribution services and relay stations}, IS HEREBY
RENEWED FOR ANOTHER TWENTY-FIVE (25) YEARS.”
Sec. 2. Section 2 of Republic Act No. 7966 is hereby amended to read as follows:
“Sec. 2. Manner of Operation of Stations or Facilities. — The existing
and future stations or facilities of the grantee shall be constructed in a manner
as will at most result only in the minimum interference on the wavelengths or
frequencies of fthe-other} existing stationS or OTHER stations which may be
established by law without in any way diminishing its own right to use its
fseleeted} ASSIGNED wavelengths or frequencies and the quality of
transmission or reception thereon as should maximize rendition of the
grantee’s services and/or the availability thereof.”
Sec. 3. Section 3 of Republic Act No. 7966 is hereby amended to read as follows:
“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 its stations OR FACILITIES and shall not use any frequency in the
television or radio spectrum without fhaving—been—authorized—by—the
Commission} AUTHORIZATION FROM THE NTC. The {Commission}
NTC, however, shall not unreasonably withhold or delay the grant of any such
authority.”
Sec. 4. Section 4 of Republic Act No. 7966 is hereby amended to read as follows:
“Sec. 4. Responsibility to the Public. — The grantee shall provide FREE
OF CHARGE, adequate public service time to enable the government,
through the said broadcasting stations, 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 MAY REQUIRE; provide at all times
sound and balanced programming; promote public participation fseh-as-in
community-programming}; assist in the functions of public information and
education; conform to the ethics of honest enterprise; PROMOTE
AUDIENCE SENSIBILITY AND EMPOWERMENT INCLUDING
CLOSED CAPTIONING; and not use its stations for the broadcasting of
obscene and indecent language, speech, act, for} scenef} or for the
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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 MAXIMUM 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 EXTREME 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.”

Sec. 5. Section 5 of Republic Act No. 7966 is hereby amended to read as follows:

“Sec. 5. Right of Government. - THE RADIO SPECTRUM IS A
FINITE RESOURCE THAT IS PART OF THE NATIONAL
(PETRIMONY AND THE USE THEREOF IS A_ PRIVILEGE
CONFERRED UPON THE GRANTEE BY THE STATE AND MAY BE
WITHDRAWN ANY TIME AFTER DUE PROCESS.

“A special right is hereby reserved to the President of the Philippines, in
times of rebellion, public peril, calamity, emergency, disaster or disturbance of
peace and order, to temporarily take over and operate the stations of the
grantee, to temporarily suspend the operation of any station 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 the said stations during the period
when they shall be so operated.”

Sec. 6. Section 6 of Republic Act No. 7966 is hereby amended to read as follows:

“Sec. 6. Term of Franchise. — This franchise shall be for a term of
twenty-five (25) years from the date of effectivity of this Act, UNLESS
SOONER REVOKED OR CANCELLED. THIS FRANCHISE SHALL

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BE DEEMED IPSO FACTO REVOKED IN THE EVENT THE
GRANTEE FAILS TO OPERATE CONTINUOUSLY FOR TWO (2)
YEARS.”
Sec. 7. Section 7 of Republic Act No. 7966 is hereby amended to read as follows:
“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 OF THE PHILIPPINES 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. Section 8 of Republic Act No. 7966 is hereby amended to read as follows:

“Sec. 8. Tax Provisions. — The grantee, its successors or assigns} shall
CONTINUE TO BE SUBJECT TO ALL APPLICABLE TAXES,
DUTIES, FEES OR CHARGES AND OTHER IMPOSITIONS UNDER
REPUBLIC ACT NO. 8424, OTHERWISE KNOWN AS ‘THE
NATIONAL INTERNAL REVENUE CODE OF 1997, AS AMENDED,
REPUBLIC ACT NO. 7160, OTHERWISE KNOWN AS ‘THE LOCAL
GOVERNMENT CODE OF 1991’, AS AMENDED, AND OTHER
APPLICABLE LAWS.” {be-tiable-to-pay-the-same-taxes-on-their real-estate;

oes : ive of thie franchioe,

Sec. 9 Section 9 of Republic Act No. 7966 is hereby amended to read as follows:


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“Sec. 9. Selfrregulation 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 and/or telecast from its stations: Provided, That
the grantee, during any broadcast and/or telecast, shall feut-off-from} NOT
ALLOW TO BE AIRED fthe-air} the speech, play, act or scene, or other
matter being broadcast and/or telecast 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:{;—and} PROVIDED, FURTHER,
THAT willful failure to do so shall constitute a valid cause for the
cancellation of this franchise.”

Sec. 10. Section 10 of Republic Act No. 7966 is hereby amended to read as follows:

“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} FREE from all claims, accounts}
LIABILITIES, demands or actions arising out of accidents forinjuries;
whether-to-property_orto-persons,caused_by} CAUSING INJURY TO
PERSONS OR DAMAGE TO PROPERTIES, DURING the construction
or operation of the stations of the grantee.”

Sec. 11. A new section 11 is hereby inserted after Section 10 of Republic Act No. 7966,

to read as follows:

“SEC. 11. COMMITMENT TO PROVIDE AND PROMOTE THE
CREATION OF EMPLOYMENT OPPORTUNITIES. — THE GRANTEE
SHALL CREATE EMPLOYMENT OPPORTUNITIES AND SHALL
ALLOW ON-THE-JOB TRAININGS IN THEIR FRANCHISE
OPERATION: PROVIDED, THAT PRIORITY SHALL BE ACCORDED
TO THE RESIDENTS IN AREAS WHERE ANY OF ITS OFFICES IS
LOCATED: PROVIDED, FURTHER, THAT THE GRANTEE SHALL
COMPLY WITH THE APPLICABLE LABOR STANDARDS AND
ALLOWANCE ENTITLEMENT UNDER EXISTING LABOR LAWS,
RULES AND REGULATIONS AND SIMILAR
ISSUANCES: PROVIDED, FINALLY, THAT THE EMPLOYMENT
OPPORTUNITIES OR JOBS CREATED SHALL BE REFLECTED IN
THE GENERAL INFORMATION SHEET TO BE SUBMITTED TO


1 THE SECURITIES AND EXCHANGE COMMISSION (SEC)
2 ANNUALLY.”

3 Sec. 12. The present Section 11 of Republic Act No. 7966 is hereby renumbered as
4. Section 12 and amended to read as follows:

5 “Sec. 14 12. Sale, Lease, Transfer, GRANT OF Usufrucifete} OR
6 ASSIGNMENT OF FRANCHISE. ~ The grantee shall not SELL, lease,
7 transfer, grant the usuffuct of, {sel} nor assign this franchise or the rights and
8 privileges acquired thereunder to any person, firm, company, corporation or
9 other commercial or legal entity, NOR MERGE WITH ANY OTHER
10 CORPORATION OR ENTITY, without the approval of the Congress of the
u Philippines. CONGRESS SHALL BE INFORMED OF ANY SALE,
2 LEASE, TRANSFER, GRANT OF USUFRUCT, OR ASSIGNMENT OF
3B FRANCHISE OR THE RIGHTS AND PRIVILEGES ACQUIRED
14 THEREUNDER, OR OF THE MERGER OR TRANSFER OF THE
15 CONTROLLING INTEREST OF THE GRANTEE, WITHIN SIXTY
16 (60) DAYS AFTER THE COMPLETION OF THE SAID
v7 TRANSACTION. FAILURE TO REPORT TO CONGRESS SUCH
18 CHANGE OF OWNERSHIP SHALL RENDER THE FRANCHISE [PSO
19 FACTO REVOKED. Any person or entity to which this franchise is sold,
20 transferred or assigned shall be subject to all the same conditions, terms, and
a limitations of this Act.”

2 Sec. 13. A new Section 13 is hereby inserted after Section 12 of Republic Act No.
23 7966, to read as follows:

24 “SEC. 13, DISPERSAL OF OWNERSHIP. — 1N ACCORDANCE
25 WITH THE CONSTITUTIONAL PROVISION TO ENCOURAGE
26 PUBLIC PARTICIPATION IN PUBLIC UTILITIES, THE GRANTEE
27 SHALL OFFER TO FILIPINO CITIZENS AT LEAST THIRTY
28 PERCENT (30%) OR A HIGHER PERCENTAGE THAT MAY
29 HEREAFTER BE PROVIDED BY LAW OF ITS OUTSTANDING
30 CAPITAL STOCK IN ANY SECURITIES EXCHANGE IN THE
31 PHILIPPINES WITHIN FIVE (5) YEARS FROM THE
32 COMMENCEMENT OF ITS OPERATIONS: PROVIDED, THAT IN
33 CASES WHERE PUBLIC OFFER OF SHARES IS NOT APPLICABLE,

34 THE GRANTEE SHALL APPLY OTHER METHODS OF
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1 ENCOURAGING PUBLIC PARTICIPATION BY CITIZENS AND
2 CORPORATIONS OPERATING PUBLIC UTILITIES AS ALLOWED
3 BY LAW. NONCOMPLIANCE THEREWITH SHALL RENDER THE
4 FRANCHISE IPSO FACTO REVOKED.”

5 Sec. 14, A new Section 14 is hereby inserted after the new Section 13 of Republic Act
6 No. 7966, to read as follows:

7 “SEC. 14. REPORTORIAL REQUIREMENT. — DURING THE
8 TERM OF ITS FRANCHISE, THE GRANTEE SHALL SUBMIT AN
9 ANNUAL REPORT TO THE CONGRESS OF THE PHILIPPINES,
10 THROUGH THE COMMITTEE ON LEGISLATIVE FRANCHISES OF
1 THE HOUSE OF REPRESENTATIVES AND THE COMMITTEE ON
2 PUBLIC SERVICES OF THE SENATE, ON ITS COMPLIANCE WITH
a3) THE TERMS AND CONDITIONS OF THE FRANCHISE AND ON ITS
14 OPERATIONS ON OR BEFORE APRIL 30 OF EVERY YEAR.

15 “THE ANNUAL REPORT SHALL INCLUDE AN UPDATE ON
16 THE ROLL-OUT, DEVELOPMENT, OPERATION, OR EXPANSION
7 OF BUSINESS; AUDITED FINANCIAL STATEMENTS; LATEST
18 GENERAL INFORMATION SHEET OFFICIALLY SUBMITTED TO
19 THE SEC (IF APPLICABLE); CERTIFICATION OF THE NTC ON
20 THE STATUS OF ITS PERMITS AND OPERATIONS; AND AN
a UPDATE ON THE DISPERSAL OF OWNERSHIP UNDERTAKING, IF
2 APPLICABLE.

23 “THE REPORTORIAL COMPLIANCE CERTIFICATE ISSUED
24 BY CONGRESS SHALL BE REQUIRED BEFORE AN APPLICATION
25 FOR PERMIT, CERTIFICATE, OR ANY EQUIVALENT THEREOF,
26 IS ACCEPTED BY THE NTC.”
27 Sec. 15. A new Section 15 is hereby inserted after the new Section 14 of Republic Act
28 No. 7966, to read as follows:
29 “SEC. 15. FINE. — FAILURE OF THE GRANTEE TO SUBMIT
30 THE REQUISITE ANNUAL REPORT TO CONGRESS SHALL BE
31 PENALIZED BY A FINE OF FIVE HUNDRED PESOS (P500.00) PER
32 WORKING DAY OF NONCOMPLIANCE. THE FINE SHALL BE
33 COLLECTED BY THE NTC FROM THE DELINQUENT FRANCHISE

34 GRANTEE SEPARATE FROM THE REPORTORIAL PENALTIES
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1 IMPOSED BY THE NTC AND THE SAME SHALL BE REMITTED TO
2 ‘THE NATIONAL TREASURY.”
3 Sec. 16. A new Section 16 is hereby inserted after the new Section 15 of Republic Act
4 No, 7966, to read as follows:
5 “SEC. 16. EQUALITY CLAUSE. — ANY ADVANTAGE, FAVOR,
6 PRIVILEGE, EXEMPTION, OR IMMUNITY GRANTED UNDER
7 EXISTING FRANCHISES, OR WHICH MAY HEREAFTER BE
8 GRANTED FOR RADIO AND TELEVISION BROADCASTING, UPON
9 PRIOR REVIEW AND APPROVAL OF CONGRESS, SHALL
10 BECOME PART OF THIS FRANCHISE AND SHALL BE ACCORDED
u IMMEDIATELY AND UNCONDITIONALLY TO THE HEREIN
12 GRANTEE: PROVIDED, THAT THE FOREGOING SHALL NEITHER
3 APPLY TO NOR AFFECT PROVISIONS OF BROADCASTING
4 FRANCHISES CONCERNING TERRITORIAL COVERAGE, THE
15 TERM, OR THE TYPE OF SERVICE AUTHORIZED UNDER THIS
16 FRANCHISE.”
v7 Sec. 17. Repealability and Nonexclusivity Clauses. ~ This franchise shall be subject to

18 amendment, alteration or repeal by the Congress of the Philippines when the public interest
19 so requires and shall not be interpreted as an exclusive grant of the privileges herein provided
20 ~~ for.

a Sec. 18. Separability Clause. ~ If any of the sections or provisions of this Act is held
22 invalid, all the other provisions not affected thereby shall remain valid.

2B Sec. 19. Repealing Clause. — Any law, presidential decree or issuance, executive order,
24 letter of instruction, rule or regulation inconsistent with the provisions of this Act is hereby
25 repealed or modified accordingly.

26 Sec. 20. Effectivity. ~ This Act shall take effect fifteen (15) days following its complete
27 publication in two (2) newspapers of general circulation or in the Official Gazette.

28 Approved,