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

> RECEIVED
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| Eighteenth Congress
First Regular Session

| HOUSE BILL No, _6250

Introduced by HONORABLE JESUS CRISPIN C. REMULLA

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| EXPLANATORY NOTE

This bill seeks to renew the franchise granted to Blockbuster Broadcasting System, Inc.,
under Republie Act No. 8726 entitled, “AN ACT GRANTING THE BLOCKBUSTER
BROADCASTING SYSTEM, INC, A FRANCHISE TO CONSTRUCT, INSTALL, ESTABLISH,
OPERATE AND MAINTAIN RADIO AND TELEVISION BROADCASTING STATIONS IN
THE PHILIPPINES” enacted into law on 3 August 1998,

The term of the franchise of Blockbuster Broadcasting System, Inc., which is twenty-five
(25) years, will expire in August 2023. The filing of this bill is very timely considering the legislative
process which undergo public hearings and consultations in both Houses of Congress. The renewal of
its franchise is ne for long term planning and capital investment due to the emerging technologies
that make the Fees industry capital intensive.

Communications and media play a vital role in the development and growth of our country.
The state policy is laid down in the 1987 Constitution which provides that “The state recognizes the
vital role of junication and information in nation-building.” A most effective means of
communication and dissemination of information is broadcast media particularly radio in the remote
places ofthe Philippine archipelago,

It is imperative that the government continue to play an active role in encouraging and
sustaining and the development of broadcast media.

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



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

Eighteenth Congress
First Regular Session

HOUSE BILL N' 6250

Introduced by HONORABLE JESUS CRISPIN C. REMULLA

AN ACT RENEWING FOR ANOTHER TWENTY FIVE (25) YEARS
THE FRANCHISE GRANTED TO BLOCKBUSTER BROADCASTING
SYSTEM, INC. UNDER REPUBLIC ACT NO. 8726, ENTITLED

“AN ACT GRANTING THE BLOCKBUSTER BROADCASTING
SYSTEM, INC., 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 Philippine Congress
Assembled:

SECTION 1. Nature and Scope of Franchise. — Subject to the provisions of the

Constitution
and applicable laws, rules and regulations, the franchise granted under Republic Act
No. 8726 to Blockbuster Broadcasting System, Inc., hereunder referred to as the
grantee, its successors or assignees to construct, install, establish, operate and
maintain for commercial purposes and in the public interest radio and/ or television
broadcasting stations, including digital television system, through microwave,
satellite, terrestrial or whatever means, as well as the use of any technology in
television and radio systems, with the corresponding technological auxiliaries and
facilities, special broadcast and other program and distribution services and relay
stations in the Philippines is hereby renewed for another twenty-five (25) years.


SECTION 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 existing stations or
other stations which may be established by law, without in any way diminishing its
own privilege to use its 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.

SECTION 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 or
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.

SECTION 4. Responsibility to the Public. — The grantee shall provide, free of charge,
adequate

public service time which is reasonable and sufficient to enable the government,
through the broadcasting stations or facilities of the grantee, 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; 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 or facilities for the broadcasting of obscene or 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.

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

SECTION 5. Right of the Government. — 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 any time after due process.

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;
temporarily suspend the operation of any station or facility in the interest of public
safety, security and public welfare; or 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 these shall be so operated.

SECTION 6. Term of Franchise. — This franchise shall be in effect for a period of twenty-

five

(25) years from the effectivity of this Act, unless sooner revoked or cancelled. ‘This
franchise shall be deemed ipso facto revoked in the event the grantee fails to operate

continuously for two (2) years.

SECTION 7. Self-regulation by and Undertaking of the 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 of other matter being broadcast in the
tendency thereof is to propose 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 8. 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, liabilities, demands, or actions arising out of accidents causing injury
to persons or damage to properties during the construction or operation of the stations
of the grantee.

SECTION 9. 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: Provide, 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 (GIS) to be submitted to the Securities and Exchange
Commission (SEC) annually.

SECTION 10. Sale, Lease, Transfer, Grant of Usufruct, or Assignment of Franchise —

The

grantee shall not sell, lease, transfer, grant the usufruct of, 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 transfer the controlling interest of the grantee, simultaneously or
contemporaneously, to any person, firm company, corporation or entity without the
prior approval of the Congress of the Philippines. Congress shall be informed of any
sale, lease, transfer, grant of usufruct, or assignment of franchise or the rights and
privileges acquired thereunder, or of the merger or transfer of the controlling interest
of the grantee, within sixty (60) days after the completion of the said transaction,

Failure to report to Congress such change of ownership shall render the franchise ipso
facto revoked. 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.


SECTION 11. 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 percent (30%) of its outstanding capital stock, or a higher
percentage thereof that may hereafter be provided by law in any securities exchange
in the Philippines within five (5) year from the commencement of its operations:
Provided, That in cases where public offer of shares is not applicable, the grantee
shall apply other methods or encouraging public participation by citizens and
corporations operating public utilities as allowed by law. Noncompliance therewith
shall render the franchise ipso facto revoked.

SECTION 12. Reportorial Requirement, ~ During the term of its franchise, the grantee

shall

submit an annual report to the Congress of the Philippines, through the Committee on
Legislative Franchises of the House of the 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 every year.

The annual report shall include an update on the roll-out, development, operation, or
expansion of business; audited financial statements; latest GIS officially submitted to
the SEC (if applicable); certification of the NTC on the status of its permits and
operations; and an update on the dispersal of ownership, undertaking, if applicable

The reportorial compliance certificate issued by Congress shall be required before an
application for permit, certificate, or any equivalent thereof is accepted by the NTC...

SECTION 13, Fine — Failure of the grantee to submit the requisite annual report to

Congress

shall be penalized by a fine of Five hundred pesos (PhPS00.00) per working day of
noncompliance. The fine shall be collected by the NTC from the delinquent franchise
grantee separate from the reportorial penalties imposed by the NTC and the same
shall be remitted to the National Treasury.


SECTION 14. Equality Clause. — Except for taxes and customs duties, any advantage,

favor,
privilege, exemption, or immunity granted under existing franchises, 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, That the foregoing
shall neither apply to nor affect provisions of broadcasting franchises concerning
territorial coverage, the term, or the type of service authorized under this franchise.

SECTION 15. Repeatability and Nonexclusivity Clause. — This franchise shall be subject to

<r 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.

SECTION 16. 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 17. Repealing Clause. — All laws, decrees, orders, resolutions, instructions, rules
and regulations, and other issuances or parts thereof which are inconsistent with the
provisions of this Act are hereby repealed, amended, or modified accordingly.

SECTION 18. Effectivity. ~ This Act shall take effect fifteen (15) days after its publication
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Approved,