Republic of the Philippines
HOUSE OF REPRESENTATIVES

18T CONGRESS
First Regular Session

~ 6946
HOUSE BILL NO.

Introduced by. HON. ALFREDO A. GARBIN, JR.

EXPLANATORY NOTE

Undoubtedly, broadcast industry plays a vital role in the development and
growth of our country and, ultimately, in shaping our country’s future, It promotes
public participation and influences public opinion on important matters concerning
our country.

It is noteworthy to emphasize, however, that broadcast industry is capital
intensive and high technology dependent. In other words, to fully harness and
utilize its benefits, substantial and considerable investments on emerging and
modern broadcasting facilities are needed. Needless to state, only after investing in a
state-of-the-art, sophisticated, and efficient broadcasting and transmission system
can we expect positive changes and improvement in the means information is
received by, and disseminated to, the public.

‘Thus, it is imperative that the government continue to play an active role in
sustaining and encouraging the development of broadcast industry. The
government has to attract, promote and welcome more capital infusion and
investments into broadcast industry. Equally important, the government has to
ensure that any and all existing media infrastructure and facilities are utilized to the
fullest extent possible and that the owners/investors thereof could continue their
service and assistance to the nation.

In its commitment to provide innovative ways to deliver public service to the
Filipino people, Servotron Industries, Inc. (“Servotron”) has made, and intends to
make, significant capital investments to upgrade, improve, and enhance its
broadcasting facilities and transmission system. These investments are expected
continue with the government-mandated shift from analog transmission to digital
transmission. In recognition of the capital requirements of Servotron’s operations,
the renewal and expansion of its franchise are recommended to fully utilize the
capital invested therein, to ensure the uninterrupted, nationwide, and improved
delivery of its services to the Filipino people, to fully assist the government in
disseminating information to the people, and to enrich, enhance, and improve the
broadcasting system in our country.



Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

18™ CONGRESS
First Regular Session

HOUSE BILL No. __6946

Introduced by. HON. ALFREDO A.. GARBIN, JR.

AN ACT AMENDING THE FRANCHISE GRANTED TO SERVOTRON
INDUSTRIES, INC. UNDER REPUBLIC ACT NO. 8127 TO RENEW THE
FRANCHISE FOR ANOTHER TWENTY-FIVE (25) YEARS FROM THE
EFFECTIVITY OF THIS ACT AND TO EXPAND INTO NATIONAL
COVERAGE THE FRANCHISE GRANTED AND FOR OTHER PURPOSES

SECTION. 1. Nature and Scope of Franchise. ~ Subject to the provisions of
the Constitution, as well as other applicable laws and their amendments, the
franchise granted to Servotron Industries, Inc., its successors or assigns,
hereunder referred to as the grantee, to construct, install, establish, operate and
maintain for commercial purposes, including for pay-service, and in the public
interest, radio, television and satellite broadcasting stations throughout the
Philippines, including digital terrestrial television, multi-channel microwave
transmission, repeater stations, translators, satellite transmission, and direct-to-
home user satellite broadcast system, cable or community antennae television
system (CATV), multi-point distribution system (MUDS), local multi-point
distribution system (LMDS), interactive system or station, transmitting, receiving
and switching stations, both for local and international services, lines, fiber
optics, microwave, satellite, transmit and receive systems, control signals, audio
and video systems, information service bureau, pay and pay-per-view television,
video on demand and public information on demand services, multi-disc read-
only memory, memory network delivery, packet and frame relay and electronic
mail services and other value-added services and all other technologies as are
presently available through technical advances or innovations in the future, as is,
or are convenient to or essential to efficiently carry out the purposes of this
franchise and to install radio communication facilities for the grantee's private
use in its broadcast services, means of distribution including the use of all new
technologies in broadcasting as are at present available or to be made available
through technological advances or innovations in the future, with the
corresponding technological auxiliaries and facilities, special broadcast and other
program and broadcast 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 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.

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 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.

SEC. 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 (10%) percent of paid commercials or advertisements which
shall be allocated based on need to the executive, legislative, 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. 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; 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 these shall be so operated.

SEC. 6. Term of Franchise. - This franchise shall be for a term of twenty-
five (25) years from the date of 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.


SEC. 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, 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. 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.

SEC. 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:
Provided further, That the grantee shall follow 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 the
Securities and Exchange Commission annually.

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 privileges acquired thereunder to any person, firm,
company, corporation or other commercial or legal entity nor merge with any
other corporation or entity, without the prior approval of the Congress of the
Philippines and compliance with legal requirements stipulated in other statutes:
Provided, 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 percent (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, the grantee shall apply other methods of encouraging
public participation by citizens and corporations operating public utilities as
allowed by law. Noncompliance therewith shall render the franchise ipso facto
revoked.

SEC. 12. 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 Philippine Senate, on its compliance with the terms and conditions of the
franchise and on its operations on or before April 30 of every year during the
term of its franchise. The reportorial compliance certificate issued by Congress


shall be required before any application for permit or certificate is accepted by
the NTC.

SEC. 13. Fine. - 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 shalll 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.

SEC. 14. 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 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 by the franchise.

SEC. 15. Repealability and Nonexclusivity 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. 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. 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.

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

Approved,