AN ACT GRANTING THE MUSLIM DEVELOPMENT MULTIPURPOSE COOPERATIVE A FRANCHISE TO CONSTRUCT

Case Overview and Summary

Summary of Republic Act No. 9171

Nature and Scope of Franchise (Section 1):
- Grants Muslim Development Multipurpose Cooperative ("grantee") a franchise to construct, install, establish, operate and maintain radio broadcasting stations in the Philippines for commercial purposes.
- Allows the use of microwave, satellite or any new technologies for radio broadcasting.
- Permits the operation of auxiliary facilities, special broadcast services, and relay stations.

Manner of Operation (Section 2):
- Stations must be operated in a manner that results in minimum interference with existing stations.
- Grantee has the right to use its selected wavelengths or frequencies without diminishing quality.

Prior Approval of NTC (Section 3):
- Grantee must secure appropriate permits and licenses from the National Telecommunications Commission (NTC) for construction and operation.
- NTC shall not unreasonably withhold or delay the grant of authority.

Responsibility to the Public (Section 4):
- Grantee shall provide adequate public service time for government to reach the population.
- Provide sound and balanced programming.
- Assist in public information and education functions.
- Conform to ethics of honest enterprise.
- Not broadcast obscene, indecent, false or subversive content.

Right of Government (Section 5):
- President can temporarily take over or suspend operations during war, rebellion, calamity, or disturbance.
- Radio spectrum is part of national patrimony and use is a privilege that may be withdrawn.

Term of Franchise (Section 6):
- Franchise is for 25 years from effectivity of the Act, unless revoked or cancelled.
- Franchise is revoked if grantee fails to:
    - Commence operations within 1 year of NTC permit.
    - Operate continuously for 2 years.
    - Commence operations within 3 years from effectivity.

Acceptance and Compliance (Section 7):
- Grantee must accept the franchise in writing within 60 days from effectivity.
- Non-acceptance renders the franchise void.

Bond (Section 8):
- Grantee must file a bond determined by NTC to guarantee compliance.
- Bond is cancelled after 3 years if grantee has fulfilled conditions, otherwise forfeited.

Tax Provisions (Section 9):
- Grantee is subject to payment of all taxes, duties, fees under NIRC of 1997 and other laws.
- Specific tax exemptions or privileges granted under relevant laws are not repealed.
- Grantee is entitled to rights, privileges, benefits and exemptions accorded to other telecoms franchises.

Self-regulation and Undertaking (Section 10):
- No prior censorship, but grantee must cut off indecent, immoral, treasonous or seditious broadcasts.
- Willful failure to do so is valid cause for cancellation of franchise.

Obligation to Aggrieved Parties (Section 11):
- Aggrieved parties have the right to reply in the same or another program of their choice.

Warranty to Government (Section 12):
- Grantee shall hold national and local governments harmless from claims arising from accidents or injuries caused by construction or operation.

Sale, Transfer, Assignment (Section 13):
- Grantee cannot lease, transfer, sell, assign or merge the franchise without prior Congressional approval.
- Any entity the franchise is transferred to is subject to the same conditions.

Dispersal of Ownership (Section 14):
- Grantee must offer at least 30% of outstanding capital stock in a securities exchange within 5 years of achieving national network status (defined as operating 3 or more stations).
- Non-compliance renders the franchise revoked.

General Broadcast Policy Law (Section 15):
- Grantee must comply with any general broadcast policy law enacted by Congress.

Equality Clause (Section 16):
- Any advantages granted to existing or future franchises shall immediately apply to this franchise, except for territory covered, lifespan, and type of service.

Separability Clause (Section 17):
- If any section is held invalid, other provisions remain valid.

Repealability and Non-Exclusivity (Section 18):
- Franchise is subject to amendment, alteration or repeal by Congress when public interest requires.
- Franchise shall not be interpreted as an exclusive grant.

Reportorial Requirement (Section 19):
- Grantee must submit an annual report to Congress on compliance and operations within 60 days from year-end.

Effectivity (Section 20):
- Act takes effect 15 days after publication in at least 2 newspapers of general circulation, upon grantee's initiative.