Republic of the Philippines RECEIVED @\
HOUSE OF REPRESENTATIVES {= » TT ION 2014
Quezon City, Metro Manila © WPA

SIXTEENTH CONGRESS
First Regular Session

House Bill No, 46.45

Introduced by:
Hon. Ma, Georgina P. De Venecia and Hon. Marlyn L. Primicias-Agabas

EXPLANATORY NOTE

The Mabuhay Broadcasting System Inc. was granted a franchise to construct,
install, operate and maintain radio broadcasting stations in Luzon effective April 13,
1992 under Republic Act 7395. The same law has given the grantee the rights,
privileges, and authority to function for a period of twenty-five (25).

For twenty-two years now, the Mabuhay Broadcasting System Inc. serves as an
important instrument in information dissemination that bridges communication gaps
among the populace of Luzon, It was able to provide sound and balanced programming,
as rendered by its broadcasting stations, making information easily accessible to the
general public. It has also frequently communicated with the people on important issues
that concern the public interest.

In three years time, the law that has given life and mandate to the Mabuhay
Broadcasting System Inc.’s existence and operation will expire. Therefore, this bill
seeks to extend the term of the franchise of the Mabuhay Broadcasting System, Inc., for
another twenty five (25) years from its original expiration date, for radio and telev
broadcast in Luzon, Visayas, and Mindanao.

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

VA
'TAS-AGABAS,

i fd, yung
INA P. DE VENECIA
" District, Pangasinan



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

SLXTEENTH CONGRESS,
First Regular Session

4645

House Bill No.

Introduced by:
Hon. Ma. Georgina P. de Venecia and Hon. Marlyn Primicias-Agabas

AN ACT
AMENDING AND EXTENDING THE TERM OF FRANCHISE OF THE MABUHAY
BROADCASTING SYSTEM, INC, FOR ANOTHER TWENTY FIVE (25) YEARS,
AMENDING FOR THE PURPOSE REPUBLIC ACT NO, 7395, ENTITLED “AN ACT
GRANTING THE MABUHAY BROADCASTING SYSTEM, INC. A FRANCHISE T
INSTRUCT, INSTALL, OPERATE, AND MAINTAIN RADIO BROADCAS'
TIONS IN THE ISLAND OF LUZON” AND FOR OTHER PURPOSES

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

Section 1. Section 1 of Republic Act No. 7395 is hereby amended to read as follows:

“See 1. Nature and Scope of Franchise. — Subject to the provisions of the
Constitution and applicable laws, rules and regulations there is hereby
granted to the Mabuhay Broadcasting System, Inc., 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 TELEVISION broadcasting stations in the
[island of Luzon,] PHILIPPINES, INCLUDING DIGITAL RADIO AND
TELEVISION SYSTEMS, INTERNET PROTOCOL _(IP)-RELATED
SERVICES AND IP VALUE-ADDED SERVICES, AND ANY NEW
TECHNOLOGIES IN RADIO AND TI VISION AS ARE PRESENTLY
AVAILABLE OR WILL BE AVAILABLE THROUGH TECHNICAL
ADVANCES OR INNOVATIONS IN THE FUTURE, — with the
corresponding technological auxiliaries or facilities. FOR. special broadcast
and other program and distribution services, [including] _ AND relay
stations, MICROWAVE, SATELLITE OR WHATEVER MEANS OF
TRANSMISSION; and to install radio communication facilities for the
grantee's private use in its broadcast services.”

Sec. 2. Section 2 of Republic Act No. 7395 is hereby amended to read as follows:


“See. 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 other existing stations or 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 there[of] ON as should maximize rendition of the grantee's service
and/or availability _[thereof].”

Sec. 3. Section 3 of Republic Act No. 7395 is hereby amended to read as follows:

“See, 3.Prior Approval of the National Telecommunications
Commission. — The grantee shall secure from the National
Telecommunications Commission the appropriate permits and licenses for its
stations and shall not use any frequency in the radio/TELEVISION spectrum
without having been authorized by the Commission. The Commi
however, shall not unreasonably withhold or delay the grant of any such
authority OR IMPOSE UNNECESSARY REQUIREMENTS ‘THAT
WOULD IMPEDE IMMEDIATE START OF THE CONTEMPLATED
SERVIC

Sec. 4. Section 4 of Republic Act No. 7395 is hereby amended to read as follows:

“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 for the broadcasting of obscene and indecent language,
speech, act or scene, or for the dissemination of deliberately false information
or willful mistepresentation to the detriment of the public interest, or to incite,
sist in subversive or treasonable acts.”

encourage, or

Section 5 of Republic Act No. 7395 is hereby amended to read as follows:

“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 [may] _ 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.”

Sec. 6. Section 6 of Republic Act No. 7395 is hereby amended to read as follows:


Sec. 7.

Sec. 8.

“Sec. 6. Term of Franchise. — This franchise shall be IN EFFECT
for a term of twenty-five (25) years from the EXPIRY date of _ [effectivity
of this Act] REPUBLIC ACT 7395, unless sooner revoked or cancelled.
THIS FRANCHISE SHALL BE DEEMED /PSO FACTO REVOKED in the
event that grantee, THROUGH ITS OWN FAULT, fails to [operate
continuously for two (2) years, this franchise shall be ipso facto revoked]
COMPLY WITH ANY OF THE FOLLOWING CONDITIONS: (A)
COMMENCE OPERATIONS WITHIN TWO (2) YEARS FROM THE
APPROVAL OF ITS OPERATING PERMIT BY THE NTC; (B) OPERATE
CONTINUOUSLY FOR TWO (2) YEARS; AND (C) COMMENCE
OPERATIONS WITHIN THREE (3) YEARS FROM THE EFFECTIVITY
OF THIS ACT.”

Section 7 of Republic Act No. 7395 is hereby amended to read as follows:

“Sec. 7. Acceptance and Compliance. — Acceptance of this
franchise shall be given in writing within sixty (60) days after approval of this,
‘Act. [Upon giving such acceptance, the grantee shall exercise the privileges
granted under this act. Nonacceptance] REFUSAL OR FAILURE TO
ACCEPT THE FRANCHISE OR TO OPERATE WITHIN THE
PRESCRIBED PERIOD shalll render this franchise void.”

Section 8 of Republic Act No. 7395 is hereby amended to read as follo

“Sec. 8. Tax Provisions. — The grantee, its successors or .
shall be liable to pay all the same taxes [on their real estate, buildings and
personal property, exclusive of this franchise, as other persons or corporations
are now or hereafter may be required by law to pay. In addition thereto, the
grantee, its successors or assigns shall pay a franchise tax equivalent to three
percent (3%) of all gross receipts of the radio business transacted under this
franchise by the grantee, its successors or assigns and the said percentage shall
be in lieu of all taxes on this franchise or earnings thercof: provided, that the
grantee, its successors or assigns shall continue to be liable for income taxes
payable under title 11 of the National Internal Revenue Code pursuant to
Section 2 of Executive Order No. 72 unless the latter enactment is amended or
in which case the amendment or repeal shall be applicable thereto.],
, 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



Sec, 9.

EXISTING AND FUTURE BROADCASTING STATIONS FRANCHISES
SHALL LIKEWISE BE EXTENDED TO THE GRANTEE.

‘The grantce 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.”

Section 9 of Republic Act No. 7395 is hereby deleted and replaced as follows:

9, SELF-REGULATION BY AND UNDERTAKING OF
GRANTEE, — THE GRANTEE SHALL NOT REQUIRE ANY PREVIOUS
CENSORSHIP OF ANY SP! |, 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 OR INCITE TREASON, REBELLION OR SEDITION; OR THE
LANGUAGE USED THEREIN OR THE THEME THEREOF IS
INDECENT, OBSCENE OR IMMORAL; AND WILLFUL FAILURE TO
DO SO SHALL CONSTITUTE A VALID CAUSE FOR THE
CANCELLATION OF THIS FRANCHISE.”

Sec. 10. Section 10 of Republic Act No. 7395 remains the same.

See. 11

Section 11 of Republic Act No. 7395 is hereby amended to read as follows:

“See, 11, [Sale, Lease, Transfer, Usufruct, ete.) NON-
TRANSFERABILITY OF FRANCHISE, — The grantee shall not lease,
transfer, grant the usufruct of, sell or assign this franchise, or the rights and
privileges acquired therein, to any person, firm, company, corporation OR
OTHER COMMERCIAL or LEGAL entity, or merge with any other
corporation or entity, Neither shall the controlling interest OF — [in] 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 THE
SHALL NOT APPLY TO: (1) ANY TRAN!
SHARES TO ANY INVESTOR PURSUANT TO OR IN CONNECTION
WITH ANY INCREASE IN THE GRANTEE’S AUTHORIZED CAPITAL
STOCK WHICH SHALL RESULT IN THE DILUTION OF THE
STOCKHOLDINGS OF THE GRANTEL’S THEN EXISTING
STOCKHOLDERS; (2) ANY TRANSFER OR SALE OF SHARES OF



STOCK TO AN INVESTOR OR INVESTORS; (3) ANY SALE,
TRANSFER, OR ASSIGNMENT BY THE STOCKHOLDERS OF THE
GRANTEE IN FAVOR OF A HOLDING COMPANY WHOSE
STOCKHOLDERS ARE IDENTICAL TO THE STOCKHOLDERS OF THE
GRAN ; (4) ANY COMBINATION THEREOF WHERE SUCH
TRANSFER, SALE, OR ISSUANCE IS EFFECTED IN ORDER TO
ENABLE THE GRANTEE TO RAISE THE NECESSARY CAPITAL OR
FINANCING FOR THE PROVISION OF ANY OF THE SERVI
AUTHORIZED BY THIS ACT OR CARRY OUT ANY OF THI
PURPOSES FOR WHICH THE GRANTEE HAS BEEN INCORPORATED
OR ORGANIZED: PROVIDED, FURTHER, THAT ANY SUCH
TRANSFER, SALE OR ISSUANCE IS IN ACCORDANCE WITH ANY
APPLICABLE CONSTITUTIONAL LIMITATION. Any person or entity to
which this franchise is sold, transferred or assigned, shall be subject to all the
same conditions, terms, restrictions, and limitations of this Act.”

Sec. 12. New Provision:

“DISPERSAL OF OWNERSHIP. IN ACCORDANCE WITH
CONSTITUTIONAL PROVISIONS TO ENCOURAG PUBLIC.
PARTICIPATION IN PUBLIC UTILITIES, THE GRANTEE SHALL

OFFER AT LEAST THIRTY PER CENTUM (30%) OF ITS
OUTSTANDING CAPITAL STOCK, OR A HIGHER PERCENTAGE
THAT MAY HEREAFTER BE PROVIDED BY LAW, IN ANY
SECURITIES EXCHANGE IN THE PHILIPPINES WITHIN FIVE (5)

YEARS FROM THE TIME IT HAS ACHIEVED THE STATUS OF A
NATIONAL BROADCASTING NETWORK. A — “NATIONAL.
BROADCASTING NETWORK” IS HEREBY DEFINED AS ONE THAT
OPERATES TEN (10) OR MORE RADIO OR TELEVISION IONS.
NON-COMPLIANCE THEREWITH THROUGH THE FAULT OF THE
GRANTI IALL BE A GROUND FOR REVOCATION OF THIS
FRANCHISE.

Sec, 13. New Provision:

“EQUALITY CLAUSE. — ANY ADVANTAGE, FAVOR,
PRIVILE! EXEMPTION OR IMMUNITY GRANTED UNDER
EXISTING FRANCHISES, OR WHICH MAY HEREAFTER BE
GRANTED FOR RADIO OR TELEVISION BROAD ING, SHALL
IPSO FACTO 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.”

Sec. 14. Sections 12, 13, 14 and 16 of Republic Act No. 7395 remain the same.
Sec. 15. Section 15 of Republic Act No. 7395 is hereby deleted.

Sec. 16. This Act shall take effect fifteen (15) days after its publication in the Official
Gazette or in two (2) national newspapers and general circulation.

Approved,