Grant of Franchise to Insular Broadcasting System, Inc. (Broadcasting Stations)

March 30, 1995

REPUBLIC ACT NO. 7964

AN ACT GRANTING THE INSULAR BROADCASTING SYSTEM, INC., A FRANCHISE TO INSTALL, OPERATE AND MAINTAIN BROADCASTING STATIONS IN THE PHILIPPINES

SECTION 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 Insular Broadcasting System, Inc., hereunder referred to as the grantee, its successor or assigns, a franchise to construct, install, operate and maintain for commercial purposes and in the public interest radio and television broadcasting stations, including special broadcast and other broadcast distribution services and relay station.

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 the other existing station or stations which may be established in accordance with 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. cd i

SECTION 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 Commission, however, shall not unreasonably withhold or delay the grant of any such authority.

SECTION 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 misrepresentation to the detriment of the public interest; or to incite, encourage, or assist in subversive or treasonable acts.

SECTION 5. Right of Government. — The President of the Philippines, in times of rebellion, public peril, calamity, emergency, disaster or disturbance of peace and order, may temporarily take over and operate the stations of the grantee, temporarily suspend the operation of any station 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 of the grantee, for the use of said stations during the period when they shall be so operated.

SECTION 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. In the event the grantee fails to operate continuously for two (2) years, this shall be deemed ipso facto revoked.

SECTION 7. Acceptance and Compliance. — Acceptance of this franchise shall be given in writing to Congress within sixty (60) days after the effectivity of this Act. Upon giving such acceptance, the grantee shall exercise the privileges granted under this Act. Nonacceptance shall render the franchise void. aisa dc

SECTION 8. Tax Provisions. — The grantee, its successors or assigns, shall be liable to pay 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 be levied, assessed and collected a franchise tax equivalent to three percent (3%) of all gross receipts of the radio/television business transacted under this franchise by the grantee, its successors or assigns: Provided, That the grantee, its successors or assigns shall continue to be liable for income taxes payable under Title II of the National Internal Revenue Code.

The grantee shall file the return with and pay the tax 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. 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 and/or telecast from its stations: Provided, That the grantee, during any broadcast and/or telecast shall cut off from the air the speech, play, act or scene, or other matter being broadcast/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 willful failure to do so shall constitute a valid cause for the cancellation of this franchise.

SECTION 10. Warranty in Favor of National and Local Governments. — The grantee shall hold the national, provincial, and municipal governments of the Philippines harmless 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.

SECTION 11. Sale, Lease, Transfer, Usufruct, etc. — The grantee shall not lease, transfer, grant the usufruct of, sell nor assign this franchise or the rights and privileges acquired thereunder to any person, firm, company, corporation or entity, nor merge with any other corportion or entity without the prior approval of the Congress of the Philippines. Neither shall the controlling interest in the grantee be transferred, whether as a whole or in parts and whether simultaneously or contemporaneously, to such person, firm, company, corporation or entity without the prior approval of the Congress of the Philippines. 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.

SECTION 12. Separability Clause. — If any section or provision of this Act is held invalid, all the other provisions not affected thereby shall remain valid.

SECTION 13. Repealability 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.

SECTION 14. 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.

SECTION 15. Reportorial Requirement. — The grantee shall submit an annual report to the Congress of the Philippines on its compliance with the terms and conditions of its franchise and on its operations within sixty (60) days from the end of every year. aisa dc

SECTION 16. Effectivity Clause. — This Act shall take effect fifteen (15) days from the date of its publication in at least two (2) newspapers of general circulation in the Philippines.

Approved: March 30, 1995

This Act which originated in the House of Representatives was finally passed by the House of Representatives and the Senate on February 6, 1995 and February 2, 1995, respectively.

Published in Malaya and the Philippine Times Journal on April 19, 1995. Published in the Official Gazette, Vol. 91 No. 29 page 4589 on July 17, 1995.