Grant of Franchise to United Press Associations for the Reception and Transmission of Wireless Messages, etc.

September 5, 1938

COMMONWEALTH ACT NO. 387

AN ACT GRANTING TO THE UNITED PRESS ASSOCIATIONS A FRANCHISE TO CONSTRUCT, MAINTAIN AND OPERATE IN THE PHILIPPINES STATIONS FOR THE RECEPTION AND TRANSMISSION OF WIRELESS LONG DISTANCE MESSAGES, PICTURES OR OTHER MATTER PERTAINING TO THE PRESS

SECTION 1. There is granted to the United Press Associations, its successors or assigns, a franchise to construct, maintain and operate in the Philippines at such places as the said company may select, subject to the approval of the Secretary of Public Works and Communications, a station or stations for the wireless reception and transmission or wordage, pictures or other matter intended for publication, either in the public press or by means of broadcast radionews, to and from points within the Philippines, to and from points exterior thereto, including airplanes, airships and vessels even though such airplanes, airships and vessels be located within the territorial limits of the Philippines.

Each station may consist of two plants, a sending station and a receiving station: Provided, That the United Press Associations, may establish in any province in the Philippines a station for the master receiving and transmitting plant, and if, due to lack of facilities or other reason, the said company is unable to avail itself of the use of land line service, it may establish, in Manila or other nearby points where such service is available, such smaller plant or plants as may be necessary for the handling of wireless traffic relayed to and from the master stations, which handling of traffic shall not be construed as engaging in domestic business in the Philippines, but merely a part of the circuit in bringing press material to Manila from points exterior to the Philippines.

SECTION 2. The President of the Philippines shall have power and authority to permit the location of said stations or any of them on the public domain upon such terms as he may prescribe.

SECTION 3. This grant and concession shall continue for a period of fifty years from the date of the issuance of the license required in section five hereof and is made upon the express condition that the same shall be void unless the construction of the master station be started within one year from the date of the issuance of said license and be completed within two years.

SECTION 4. The said company shall not engaged in domestic business in the Philippines without further special assent of the National Assembly, it being understood that the purpose of this franchise is to secure to the said company the right to conduct the business of long distance wireless communication with points outside the Philippines, by receiving and transmitting wordage, pictures or other matter for publication, either in the public press or by means of broadcast radionews.

SECTION 5. This franchise shall not take effect until the President of the Philippines shall have allotted to the grantee the frequencies and wave-lengths to be used thereunder and determined the stations to and from which each such frequency and wave-length may be used, and issued to the grantee a license for such use. The grantee shall begin operation under this franchise within three years from the date on which said license shall have been issued by the President of the Philippines.

SECTION 6. The President of the Philippines on reasonable notice to the grantee, may at any time change or cancel or modify in whole or in part any or all of the allotments of frequencies or wave-lengths hereunder as well as any license issued hereunder to use such frequencies or wave-lengths to or from any or all stations to and from which they may be used. He may take such action (a) whenever in his judgment such frequencies and wave-lengths have been used or there is danger that they will be used by the grantee to impair electrical communication or stifle competition or to obtain a monopoly in electrical communication, or to secure unreasonable rates for such communication, or otherwise to violate the laws of public policy of the Philippines; (b) whenever in his judgment the public interest of the Philippines requires that such frequencies or wave-lengths should be used for other purposes than those of the grantee, either by the Commonwealth of the Philippines or by other individuals or corporations licensed by it; (c) whenever in his judgment for any reason the public interest of the Philippines so require.

The President of the Philippines is authorized to appoint, employ or make use of such boards, commissions, or agents as in his discretion he may select, to investigate and determine the facts upon which he may act as aforesaid, and such boards, commissions and agents shall have the right by compulsory process of subpoena, to summon witnesses, administer oaths and take evidence.

SECTION 7. The grantee, its successors or assigns, shall so construct and operate its wireless station or stations as not to interfere with the operation of other radio stations maintained and operated in the Philippines.

SECTION 8. A special right is reserved to the President of the United States, in time of war, insurrection, or domestic trouble, to take over and operate the said station upon the order and direction of the State Department of the Republic of the United States, the United States Government paying and compensating the grantee for the use of said station during the period when they shall be so operated by the said Government.

A similar right is hereby reserved to the Commonwealth of the Philippines, under similar circumstances and upon similar conditions, upon the order and direction of the President of the Commonwealth.

SECTION 9. The right is hereby reserved to the Government of the Commonwealth of the Philippines through the Public Service Commissioner or such other officer as may be thereunto duly authorized, to fix the maximum rates to be charged by the said company, its successors or assigns.

SECTION 10. The grantee, its successors or assigns, shall keep an account of the gross receipts of the business transacted by it and shall furnish to the Auditor General and the Treasurer of the Philippines a copy of such account not later than the thirty-first day of January of each year for the preceding year. For the purpose of auditing accounts so rendered to the Auditor General and the Treasurer of the Philippines, all of the books and accounts of the grantee, its successors or assigns, shall be subject to the official inspection of the Auditor General, or his authorized representative, and in the absence of fraud or mistake the audit and approval by the Auditor General of the accounts so rendered to him and to the Treasurer of the Philippines shall be final and conclusive evidence as to the amount of said gross receipts.

SECTION 11. The grantee, its successors or assigns, shall be liable to pay the same taxes on their real estates, buildings, and personal property, exclusive of the franchise, as other persons or corporations are now or hereafter may be required by law to pay. The grantee, its successors or assigns, shall further pay the Treasurer of the Philippines each year, within ten days after the audit and approval of the accounts as prescribed in section ten of this Act, one and one-half per centum of all gross receipts for business transacted under this franchise by said grantee, its successors or assigns, in the Philippines, and the said percentages shall be in lieu of all taxes on the franchise or earnings thereof.

SECTION 12. The grantee, its successors or assigns, shall hold the Commonwealth, 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 for reception and transmission of press messages of said grantee, its successors or assigns.

SECTION 13. No private property shall be taken for any purpose by the grantee of this franchise, its successors or assigns, without proper condemnation proceedings and just compensation paid or tendered therefore, and any authority contained herein to take and occupy land shall not authorize the taking, use, or occupation of any land except such as is required for actual necessary purposes for which the franchise is granted. All lands or rights of use and occupation of lands granted to the grantee, its successors or assigns, shall, upon the termination of this franchise or upon its revocation or repeal, revert to the Commonwealth Government or the provincial or municipal government to which such lands or the right to use and occupy them belonged at the time the grant thereof or the right to use or occupy the same was conceded to the grantee herein, its successors or assigns.

SECTION 14. The grantee, its successors or assigns, shall not issue stock or bonds except in exchange for actual cash or for property at a fair valuation equal to the par value of the stock or bonds issued, and said grantee, its successors or assigns, shall not use, employ, or contract for the labor of persons claimed or alleged to be held in involuntary servitude.

SECTION 15. As a condition of the granting of this franchise the grantee shall execute a bond in favor of the Government of the Philippines, in the sum of twenty-five thousand pesos, in a form and with sureties satisfactory to the Secretary of Public Works and Communications, conditioned upon the faithful performance of the grantee's obligations hereunder during the first three years of the life of this franchise. If, after three years from the date of the acceptance of this franchise, the grantee shall have fulfilled said obligation or so soon thereafter as the grantee shall have fulfilled the same, the bond aforesaid shall be cancelled by the Secretary of Public Works and Communications.

SECTION 16. The bond required in the preceding section together with an acceptance in writing of this franchise shall be given within six months after approval of this Act, and filed with the Secretary of Public Works and Communications.

SECTION 17. This franchise shall be subject to the limitations of the Constitution and shall not be interpreted to mean as exclusive grant of the privileges herein provided for.

SECTION 18. This Act shall take effect on its approval.

Approved: September 5, 1938