Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

teenth Congress
irst Regular Session

5608

HOUSE BILL

Introduced by REP. AURELIO D. GONZALES, JR., REP. JOHNNY T. PIMENTEL
and REP. PAULINO SALVADOR C. LEACHON

EXPLANATORY NOTE
ABS CBN Corporation (“ABS-CBN”) is a leader in television and radio programming for
domestic and international audiences and other related businesses; providing pews and
entertainment programming for eight channels on cable TV and operates the country's
largest cable TV service provider. It brings its content to worldwide audiences via cable,
satellite, online and mobile; and operates around eighteen radio stations throughout the key

cities of the Philippines.

ABS-CBN produces a wide variety of engaging world-class entertainment programs in
multiple genres, balanced and credible news programs that are aired on free-to-air

television.

ABS-CBN has likewise leveraged its broadcast operations to support the development of
sports, especially amongst the youth and the local communities. ABS-CBN has partnered with
the University Athletics Association of the Philippines (“UAAP”) and the National Collegiate
Athletic Association (“NCAA”) in order to highlight the skills of our young Filipino athletes,
give them helpful exposure necessary for their development, and to aid in preparing them for

the next level of their careers.

ABS-CBN likewise supports the Maharlika Pilipinas Basketball League Association, Inc.
(“MPBL”) and assists in furthering the latter’s goals of searching for grassroots talents and
providing workshops and training for all ages. ABS-CBN’s ability to reach a wide audience
(in the Philippines and abroad) and its thrust to showcase budding Filipino athletic talents
through the MPBL, is an invaluable contribution to the development of sports in the


Philippines. By broadcasting the MPBL and similar leagues, ABS-CBN is able to inspire

young local athletic talents in various provinces in the Philippines to believe that they too can

reach their dreams.

The foregoing, together with ABS-CBN’s various achievements in the broadcast industry
— award winning and world-class content, focus on public service, and pioneering
technologies (such as in digital broadcast) ~ certainly warrant the renewal of ABS-CBN’s
broadcast franchise to ensure the uninterrupted and improved delivery of its services to the
Filipino people.

REP. AU! D. ALES, JR

REP. JOHNNY T. PIMENT)
3 District, Hfampang i

2” District, © ur

REP. PAULINO SALVADOR C. LEACHON

istrict, Oriental Mindoro


Republic of the Philippines
HOUSE OF REPRESENTATIVES
‘Quezon City

Eighteenth Congress
First Regular Session

5608
HOUSE BILL NO.

Introduced by REP. AURELIO D. GONZALES, JR., REP. JOHNNY T. PIMENTEL
and REP. PAULINO SALVADOR C. LEACHON

AN ACT RENEWING THE FRANCHISE GRANTED TO ABS-CBN
CORPORATION (FORMERLY ABS-CBN BROADCASTING CORPORATION)
UNDER REPUBLIC ACT NO. 7966 OR "AN ACT GRANTING ABS-CBN
BROADCASTING CORPORATION A FRANCHISE TO CONSTRUCT; INSTALL,
ESTABLISH, OPERATE, AND MAINTAIN BROADCASTING STATIONS IN THE
PHILIPPINES, AND FOR OTHER PURPOSES" FOR TWENTYFIVE (25) YEARS
FROM THE EFFECTIVITY OF THIS ACT

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

SECTION 1. Nature and Scope of Franchise. - Subject to the provisions of the 1937 Philippine
Constitution and applicable laws, rules and regulations, the franchise granted to ABS-CBN
Corporation (formerly ABSCBN Broadcasting Corporation), 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
in the Philippines, where frequencies and/or channels are still available for radio and/or
television broadcasting, including digital television system, through microwave, satellite or
whatever means, or 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, is hereby renewed for another twenty-five (25) years
from the effectivity of this Act.

SEC. 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 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 the 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 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 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 government, 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 any time 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 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. 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 willful failure to do so shall constitute a valid
cause for the cancellation of this franchise.

SEC. 9. Warranty in Favor of National and Local Governments. - The grantee shall hold the
national provincial, city and municipal governments of the Philippines free 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. 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


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 transfer the controlling
interest of the grantee, whether as a whole or in part 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
sale, lease, transfer, grant of usufruct, or assignment of franchise or the rights or privileges
acquired thereunder, or the merger or transfer of the controlling interest of the grantee, 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. 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 per centum (30%) or a higher percentage that may hereafter be provided by law of
its outstanding 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. 12. 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. 13. 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, The reportorial compliance certificate issued by Congress shall be required
before any application for permit or certificate is accepted by NTC.

SEC. 14. 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) 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 NT C. The collected funds shall accrue
to the monitoring fund of the NTC in line with its supervisory and regulatory functions.

SEC. 15, Equality Clause. - 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
end 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
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 shall not apply to
sale, lease, transfer or grant of usufruct of legislative franchise with prior congressional
approval.

SEC. 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


SEC. 17. Repeatability 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. 18. 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. 19. Effectivity Clause. - This Act shall take effect fifteen (15) days after its publication
in the Official Gazette or in a newspaper of general circulation.

Approved,