SE V E N T E EN T H C O N G R E SS O F T H E ) R E PU B L IC O F T H E P H IL IP P IN E S )First Regular Session )

S E N A T E

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17 MAY 17 P3-M

RECQlVLbbr.

C O M M IT T E E R E PO R T NO. 9G

S ubm itted by the C om m ittee on Public Services on MAY 1 7 ?fll7

Re ILB. No. 5176

R ecom m ending its app roval >vith am endm ents

Sponsor S ena to r G race Poe

M R. PR ESID EN T:

The Senate Committee on Public Services to which was referred ILB. No. 5176, introduced by Representatives Romualdo and Alvarez (F.), entitled:

“ AN A C lR E N E W IN G FO R A N O T H E R T W E N T Y -FIV E (25) YEARS H I E FR A N C H ISE G R A N T ED T O SA RRA G A IN T E G R A T E D AND M A N A G EM EN T C O R P O R A T IO N UNDER R E PU B L IC A C T NO. 7478, E N T IT L E D “ AN A CT G R A N T IN G T H E SA RRA G A IN T E G R A T E D M A N A G EM EN T C O R P O R A T IO N O F T H E P H IL IP P IN E S A FR A N C H ISE T O C O N ST R U C T , IN STA LL, O P E R A T E AND M A INTAIN FO R C O M M E R C IA L PU R PO SE S R A D IO AND T E L E V ISIO N B R O A D C A STIN G ST A T IO N S IN T H E P H IL IP P IN E S AND FO R O T H E R P U R P O S E S ”

has considered the same and has the honor to report it back to the Senate with the recommendation that the attached H.B. No. 5176 be approved with the following amendments, to wit:

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2.

On page 1, line 2, insert the num ber “ 1987” after the word “the” and before the word “Philippine” ;

On page 1, line 7, insert the phrase “ IN THK PIIIL IP P IN K S ” after the word “stations” and before the comma

3. On page 1, line 8, insert a comma with the word T E R R E S T R IA L ” after the word “satellite” and before the word “or” ;

4. On page 1, line 9, delete the word “technology” and replace it with the word “ T E C H N O L O G IE S ” ;

5. On page 2, line 1, delete the phrase “ in the Philippines” and insert the phrase “ AND l O INS PALL RA D IO C O M M U N IC A T IO N F A C IL IT IE S FO R T H E G R A N T E E ’S PR IV A T E USE IN ITS BRO A D CA ST SE R V IC E S” after the word “stations,” and before the word “ is” ;

6. On page 2, lines 16 and 17, delete the last sentence o f tlie first paragraph o f Section 3; “The NTC, however, shall not unreasonably witlihold or delay the grant o f any such authority.” ;

7. On page 2, lines 18 to 23, delete the second paragraph o f Section 3: (“The grantee shall not dispose or lease its facilities except to entities with a radio or television franchise: Provided, That the grantee shall inform and secure written authorization to proceed from the NTC, and report the transaction to the NTC within sixty (60) days after its completion: Provided, further, I'hat the NTC shall determine the corresponding sanction for any violation o f this provision.”);

8. On page 2, line 24, insert the phrase “ F R E E O F C H A R G E ,” after the word “provide” ;

9. On page 2, line 25, insert the phrase “ W H IC H IS R EA SO N A B LE AND S IT ’F IC IE N T ” after the word “time” and before the word “to”, and delete the word (“said” );

10. On page 2, line 26, insert the phrase “ O F T H E G R A N T E E ” after the word “ facilities” and before the comma delete the word “population” and replace it with the phrase “ PO PU LA TIO N /S O R PO R T IO N S T H E R E O F ” ;

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11. On page 2, line 27, insert the phrase “AINI) RKI.AV IM P O k I AIN T PU B LIC A N N O U N C L M E N T S AND W A R N IN G S AS N ECK SSITY , U R G EN C Y O R LAW M AY R E O l’IR E ” after the word “issues” and before the semicolon

12. On page 2, line 29, insert the phrase “ P R O M O T E A U D IEN C E SEN SIBILITY ' AND E M P O W E R M E N T T H R O U G H , BUT N O T L IM IT E D T O , C L O SE D C A P T IO N IN G ;” ;

13. On page 3, between lines 5 and 6, after the phrase “treasonable acts.” , insert a new second paragraph o f Section 4, which shall read as follows;

“ PU BLIC SE R V IC E T IM E REI E R R ED H ER EIN SH A LL BE EQ U IV A LE N T TO TEN PE R C E N T (lft% ) O F T H E PAID C O M M E R C IA L S O R A D V E R T ISE M E N T S W H IC H SH A LL BE A L L O C A T E D BASED ON NEED T O T H E E.XECl T I \ E, LEG ISLA r i \ E, .lUDIC lARY , ( O N S 1H U I IONALC O M M ISSIO N S AND IN l ERNA I IO N A L H U M A N ITA RIA N O R G A N I/.V n O N S DLLY R E C O G M /E D BY S IA T U T E S : PROVIDED, n i A T H I E N IC SH A LL IN C R E A SE T H E PU B LIC SERY IC E TIM E IN CA SE O F EM ERGENCY O R C A L A M H Y. T H E NIC SH A LL ISSUE RU LES AND RECH LA TIO N S FO R T H IS PU R PO SE , T H E EFFEC T IM l Y O F W H IC H SH A LL (O iM M E N C E UPON A PPLIC A B ILITY W IT H O T H E R SIM IL A R L Y SITUA I ED BRO A D CA ST NETYVORK FRANC HISE H O L D E R S .”

I lence, the entire Section 4 shall now read as:

“SEC. 4. Responsibility to the Public. ~ r\\\Q grantee shall provide free o f charge, adequate public service time which is reasonable and sufllcient to enable the government, through the broadcasting stations or facilities o f the grantee, to reach the pertinent population/s or portions thereof on important public issues and relay important public announcements and warnings as necessity, urgency or law may require; provide at all times sound and balanced programming; promote public participation; assist in the functions o f public information and education; conform

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to the ethics o f honest enterprise; promote audience sensibility and empowerment through, but not limited to, closed captioning; and not use its stations or facilities for the broadcasting o f obscene or indecent language, speech, act, or scene; or for the dissemination o f deliberately false infonnation or willful misinterpretation, to the detriment o f the public interest, or to incite, encourage or assist in subversive or treasonable acts.

“Public service time referred herein shall be equivalent to ten (10%) percent o f the 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 o f emergency or calamity. The NTC shall issue rules and regulations for this purpose, the effectivity o f which shall commence upon applicability with other similarly situated broadcast network franchise holders.” ;

14. On page 3, after Section 4 and before Section 5 - Right o f Government, insert a new section, which shall read as follows;

“ COM PL!AN CH WITH LABOR STANDARDS. - I HR C R A M RR, ITS SI C C R SSO R S O R A SSICN RRS SH A R I. C O M PR V W IT H TH R A PPL IC A B L R RAHOR STANDARDS I NDRR RX ISTIN C RAHOR RAW S, R l'L R S AND R R C U R A TIO N S AND SI CH O T H R R ISSI ANCRS AS MAY HR PR O M U LG A TR D BY THR D R PA R TM R N T O F LA B O R AND R M P L O ^M R N T (DORR), TA K IN G IN TO C O N SID R R A T IO N TH R NA IT RR AND PE C U L IA R IT IR S O F T H E B R O A D C A S IIN G IN D l STR^

15. On page 3, after line 28, after “Section 7 - Acceptance and Com pliance”, insert a new section, which shall read as follows;

UTAX PROVISIONS. - T H E G R A N T E E , ITS SU C C E SSO R S O RA SSIG N EE S SH ARE CO N TIN U R A PPR IC A B R R lA X R S, DU TIES, O T H E R IM P O S IT IO N S UNDER

T O BE S U B JE C T T O ARE FEES O R C H A R G E S AND R E PU B R IC A C T NO. 8424,

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O n iE R W IS l! : KN OW N AS “ T IIL N A TIO N A L IN T ER N A L REVENT E C O D E O F 1997” , AS A M EN D ED , R E PU B L IC AC I NO. 7160, O T H E R W IS E K N OW N AS “ H I E LO C A L CiO V ERN M EN T ( O D E OI 1991” , AS A M EN D ED , AND O T H E R A PPL K A BLE I.A W S.”

16. On page 4, line 6, insert the phrase “ FRO M ITS ST A T IO N S” aOer the word “matter” bclbrc the ct)lon

17. On page 4, line 7, insert the phrase “ A N D /O R T E L E C A S I ” after the word “broadcast” and before the comma and replace the phrase “cut o ff from the air” with “ N O T A L L O W T O BE A IR E D ” ;

18. On page 4, line 8, insert the phrase “A N D /O R T E L E C A S T ” after the word “broadcast” and before the word “if” ;

19. On page 4, line 16, delete the word (“during”) and replace it with the word “ C A I SED ” ;

20. On page 4, lines 25 to 29, delete the words ''"Provided, That Congress shall be informed o f any sale, lease, transfer, grant o f usufruct, or assignment of franchise or the rights and privileges acquired thereunder, or o f the merger, or transfer o f the controlling interest o f the grantee, within sixty (6) days after the completion o f said transaction: Provided, further. That” ;

21. On page 5, lines 1 and 2, delete the words “ failure to report to Congress such change o f ownership shall render the franchise ipso facto revoked:”, and likewise delete the word "finally,” in line 2;

22. On page 5, lines 5 to 14, delete the entire Section 11 - Dispersal o f Ownership;

23. On page 5, lines 26 to 28, and on page 6, lines 1 and 2, delete the entire Section 14 - Penalty Clause; and

24. On page 6, line 3, delete the phrase (“Except for taxes and customs duties,” ).

25. Renumber the sections accordingly.

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Respectfully submitted:

rA ( i : POLC/hairperson

FR A N C IS “ C lI IZ ” G. ESC U D ER O Vice Chairperson

JO S E P H V IC T O R G. E JE R C IT O Vice Chairperson

LORKN B. LEG A RD A J. G O R D O N

PA M ILO M. LACSO N JU A N iVHGUEL “ M IG Z ” F. ZU B IR I

A N TO N IO “ SONNA ” F. T R IL L A N E S IV JO E L V IEEA N U EV A

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l{ZChv(^XK/3h-^ SUi^

Congress of the Philippines Seventeenth Congress First Regular Session }

HOUSE OF REPRESENTATIVES

H. No. 5176

By Representatives Romualdo and Alvarez (F.), per Ccmmittee Report No . 149

AN ACT RENEWING FOR ANOTHER TWENTY-FIVE (25) 'I’EARS THE FRANCHISE GRANTED TO SARRAGA INTEGRATED AND MANAGEMENT CORPORATION L'NDER REPUBLIC ACT NO. T4- 8. ENTITLED “AN ACT GRANTING THE SARRAGA INTEGRATED MANAGEMENT CORPORATION OF THE PHILIPPINES A FRANCHISE TO CONSTRUCT. INSTALL, OPERATE AND MAINTAIN FOR COMMERCIAL PURPOSES r a d io a n d TELEVISION BROADCASTING STATIONS IN THE PHILIPPINES AND FOR OTHER PURPOSES"

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

1 Section I. Mature and Scope of Franchise. - Subject to the

2 provisions of the Philippine Constitution and applicable laws, rules and

3 regulations, the franchise granted to Sarraga Integrated and Management

4 Corporation, hereunder referred to as the grantee, its succes.sors or assignees

5 under Republic Act No. 7478. to construcL install, establish, operate, and

6 maintain for commercial purposes and in the public interesu radio andor

7 television broadcasting stations, including digital television system, through

8 microwave, satellite or whatever metins. as well as the use of any new

9 technology' in television and radio systems, with the corresponding

10 technological auxiliaries and facilities, special broadca.st and other program

1 and distribution services and relay stations in the Philippines, is hereby

2 renewed for another twenty-five (25) years from the efTecti\ ity of this Act.

3 Sec. 2. Manner o f Operation o f Stations or Facilities. - The stations

4 or facilities o f the grantee shall be constructed and operated in a manner as

5 will, at most, result only in the minimum interference or. the wavelengths or

6 frequencies o f existing stations or other stations which ma> be established by

7 law. without in any way diminishing its own privilege to use its assigned

8 wavelengths or frequencies and the quality o f transmission or reception

9 thereon as should maximize rendition of the grantee's services and/or

10 availability thereof.

11 Sec. 3. Prior Approval o f the National Teiecommunications

12 Commission. - The grantee shall secure from the National

13 Telecommunications Commission iNTC) the appropriate permits and licenses

14 for tlie construction and operation of its stations and facilities and shall not use

15 any Irequency in the radio-'tele\ ision spectnim without authorization from the

16 NTC. The NTC. however, shall not unreasonably withhold or delay the grant

17 of an> such authority.

18 The grantee shall not dispv.se or lease its facilities evcept to entities with

19 a radio or television franchise: Provided. That the grantee shall inform and

20 secure written authorization to proceed from the NTC. and report the

21 transaction to the NTC within sixty (60) days after its completion: Provided,

21 further That the NTC shall determine the corresponding sanction for any

23 violation of this provision.

24 Sec. 4. Responsibility to the Public. - The grantee shall provide

25 adequate public service time to enable the government, through the said

26 broadcasting stations or facilities, to reach the population on important public

27 issues: provide at all times sound and balanced programming; promote public

28 participation such as in community programming; assist in the functions of

29 public information and education; conform to the ethics o f honest enterprise;

1 and not use its stations or facilities for the broadcasting of obscene and

2 indecent language, speech, act or scene: or for the dissemination of

3 deliberately false information or willful misrepresentation to the detriment of

4 the public interest; or to incite, encourage, or assist in subversive or

5 treasonable acts.

6 Sec. 5. Right of Government. - The radio spectrum is a finite

7 resource that is part of the national patrimony and the use thereof is a privilege

8 conferred upon the grantee by the State and may be withdrawn any time after

9 due process.

10 A special right is hereby reserved to the President of the Philippines, in

11 times of war, rebellion, public peril, calamity, emergency, disaster, or

12 disturbance of peace and order: to temporarily take over and operate the

13 stations or facilities of the grantee; to temporarily suspend the operation of any

14 station or facility in the interest of public safety, .security and public welfare;

15 or to authorize the temporary use and operation thereof by any agency of the

16 government, upon due compensation to the grantee, for tiK use of said stations

17 or facilities during the period when these shall be so operated.

18 Sec. 6. Term of Franchise. - This franchise shall be in effect for a

19 period of twenty-five (25) years from the approval of this Act, unless sooner

20 revoked or cancelled. This franchise shall be deemed ipso facto revoked in the

21 event the grantee fail.s to operate continuously for two (2) years.

22 Sec. 7. Acceptance and Compliance. - Acceptance of this new

23 franchise shall be given in writing to the Congress of the Philippines, through

24 the Committee on Legislative Franchises o f the House of Representatives and

25 the Committee on Public Services of the Senate, within sixty (60) days from

26 the effectivity of this Act. Upon giving such acceptance, the grantee shall

27 exercise the privileges granted under this Act. Nonacccptance shall render the

28 franchise void.

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Sec. 8. Self-regulation by and Undertaking o f Grantee The graniee

shall not require any previous censorship of any speech, play, act or scene, or

other matter to be broadcast from its stations but if any such speech, play, act

or scene, or other matter should constitute a violation of the law or

infringement of a private right the grantee shall be free from any liability,

civil or criminal, for such speech, play, act or scene, or other matter;

Provided. That the grantee, during any broadcast, shall cut off from the air the

speech, play, act or scene, or other matter being broad ,ast if the tendency

thereof is to propose and/cr 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

revocation and cancellation o f this franchise.

Sec. 9. Warranty in Favor oj Sational arid 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 propenies during the

construction or operation of the stations of the grantee.

Sec. 10. Sale. Lease. Transfer. Usufruct, or Assignment of Franchise.

- The grantee shall not sell, lease, transfer, grant the usufruct o f 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, nor the controlling interest of the grantee

be transferred, w'hciher as a whole or in parts, and whether simultaneously or

contemporaneously, to any such persoa firm, company, corporation, or entity

without the prior approval o f the Congress of the Philippines: Provided. That

Congress shall be informed o f any sale, lease, transfer, grant o f usufruct, or

assignment of franchise or the rights and privileges acquired thereunder, or of

the merger, or transfer of the controlling interest of the grantee, within sixty

(60) days after the completion of said transaction: Provided, further. That

1 failure to report to Congress such change of ownership shall render the

2 franchise ipso facto revoked: Provided finally. That any person or entity to

3 which this franchise is sold, transferred or assigned, shall be subject to the

4 same conditions, terms, restrictions, and limitations of this Act.

5 Sec. 11. Dispersal o f Ownership. - In accordance with the

6 constitutional provision to encourage public participation in public utilities, the

7 grantee shall offer to Filipino citizens at least thirty percent (30%) or a higher

8 percentage that may hereafter be provided by law of its outstanding capital

9 stock in any securities exchange in the Philippines within five (5) years from

10 the commencement of its operations: Provided. That in cases where public

11 offer of shares is not applicable, the grantee shall apply other methods of

12 encouraging public participation by citizens and corporations operating public

13 utilities as allowed by law. Noncompliance therewith shall render the franchise

14 ipso facto revoked.

15 Sec. 12. General Broadcast Policy Law. - The grantee shall comply

16 with and be subject to the provisions o f a general broadcast policy law, which

17 Cor.grcss may hereafter enaa.

18 Sec. 13. Reportorial Requirement. - The grantee shall submit an

19 annual report to the Congress of the Philippines, through the Committee on

20 Legislative Franchises of the House of Representatives and the Committee on

21 Public Services of the Senate, on its compliance with the terms and conditions

22 of the franchise and on its operations on or before April 30 of every year

23 during the term of its franchise. The reportorial compliance certificate issued

24 by Congress shall be required before any application for permit or certificate is

25 accepted by the NTC.

26 Sec. 14. Penalty Clause. - Failure of the grantee to submit the

27 requisite annual report to Congress shall be penalized by a fine of five hundred

28 pesos (P500.00) per working day of noncompiiance. The fine shall be

1 collected by the NTC from the delinquent franchise grantee separate from the

2 reportorial penalties imposed by the NTC.

3 Sec. 15. Equality Clause. - Except for taxes and customs duties, any

4 advantage, favor, pnvilegc, exemption, or immunity granted under existing

5 franchises, or which may hereafter be granted for radio and/or television

6 broadcasting, upon prior review and approval of Congress, shall become part

7 of this franchise and shall be accorded immediately and unconditionally ic the

8 herein grantee: Provided. That the foregoing shall neither apply to nor affect

9 the provisions of broadcasting franchises concerning territorial coverage, the

10 term, or the type of sen ice authorized by the franchise.

11 Sec. 16. Separability Clause. - If any section or provision of this Act

12 is held invalid, all other provisions not affected thereby shall remain valid.

13 Sec. 17. Repealability and h'onexclusiv,ty Clause. - This frarichise

14 shall be subject to amendment, alteration, or repeal by the Congress of the

15 Philippines when the pt blic interest so requires and shall not be interpreted as

16 an exclusive grant o! the privileges herein provided for.

17 All other laws. ordcrs. issuances, rules and regulations or parts thereof

18 inconsistent with this Act arc hereby repealed, amended or modified

19 accordingly.

20 Sec. 18. EJfectivity. - This Act shall take effect fifteen (15) days after

21 its publication in the Official Gazette or in a new spaper of general circulation.

Approved.

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