Supervision of the Bureau of Communications Over the Operations of Sining Makulay, Inc.

July 21, 1979

LETTER OF INSTRUCTIONS NO. 894

WHEREAS, under PD No. 1512 Sining Makulay, Inc. (SMI) was granted an exclusive franchise to construct, operate and maintain community antenna television system (CATV) in the Philippines; aisa dc

WHEREAS, the CATV system of Sining Makulay, INC. in addition to improving and enlarging the existing TV coverage, has the capability of originating specialized programs which can be transmitted thru the vacant TV channels;

WHEREAS, the presentation of special programs and entertainment is necessary to complement the governmental program of promoting the cultural and educational development of various segments of society and to fully utilize the facilities of this advanced state of TV technology; aisa dc

NOW, THEREFORE, I, FERDINAND E. MARCOS, Prime Minister and President of the Republic of the Philippines, by virtue of the powers vested in me by the Constitution do hereby direct:

1. That the operations of SINING MAKULAY, INC., be under the direct supervision of the Chairman of the Board of Communications;

2. That SINING MAKULAY, INC., in connection with the operation of a CATV system be authorized to use TV channels 5, 6, 10, 11 and 12 for originating specialized programs and entertainment for the promotion of the cultural and educational development of various segments of society;

3. That SINING MAKULAY, INC., be allowed to charge the following rates;

a. Basic Rates

(1) For each subscriber's connection to service one (1) television set P20.00/month cd

(2) For each additional television set extension in the same subscriber's private residence for use by his family, additional charge of P5.00/month

(3) Initial connection charge of P200.00

(4) In addition, the Grantee may charge for actual cost of the following:

(a) for relocation of outlets, (b) for additional work and materials for connection to subscriber's premises located at a greater distance from the feeder cable, or in the event that the distance from the center line of the street, alley or easement occupied by a feeder cable to any outlet at the subscriber's set exceeds 150 feet, (c) for providing underground service from underground cable necessitating trenching (including back filling, repairing and/or replanting), and (d) for additional work, materials and special services other than the above-mentioned.

(5) The Grantee may originate its own programs aside from the regular commercial channels, provided that Grantee shall charge SPECIAL PROGRAM FEE of P65.00 per month for a minimum of two (2) additional channels and P35.00 for each additional channel.

(6) Special Program fee for each additional television set P20.00/month

b. Special Rates acd

The Grantee may charge such reasonable rate as may be agreed with the customer for providing special services or coverage and for the advertisements in the originated programs. cd

All collections pursuant to the above rates shall be taken into account in determining the gross receipts of the Grantee upon which the three per cent (3%) franchise tax shall be paid by the Grantee in lieu of any and all taxes, duties and tariffs of any kind, nature or description as provided for in Sec. 7 of PD No. 1512.

DONE in the City of Manila, this 21st day of July, in the year of Our Lord, Nineteen Hundred and Seventy-Nine. cd