Granting a Radio and Television Broadcasting Franchise to Capricom Broadcasting Network Corp.

Case Overview and Summary

Summary of Republic Act No. 11681

Nature and Scope of Franchise (Section 1):
- Grants Capricom Broadcasting Network Corp. (the Grantee) a franchise to construct, install, establish, operate, and maintain radio and television broadcasting stations in Tabaco City, Albay, and other areas in the Philippines.
- Allows the use of any new technology in radio and television systems.
- Permits the installation of radio communications facilities for the Grantee's private use.

Manner of Operation (Section 2):
- Stations or facilities shall be operated in a manner that results in minimum interference with existing or future stations.

Prior Approval of NTC (Section 3):
- The Grantee must secure appropriate permits and licenses from the National Telecommunications Commission (NTC).
- The NTC shall not unreasonably withhold or delay the grant of authority.
- The NTC can revoke or suspend permits or licenses after due process for violations.
- The NTC may recommend to Congress the revocation of the franchise for violations.

Responsibility to the Public (Section 4):
- The Grantee shall provide free public service time equivalent to a maximum of 10% of paid commercials, allocated to government branches, judiciary, constitutional commissions, and international humanitarian organizations.
- The NTC can increase public service time in emergencies or calamities.
- The Grantee shall allot a minimum of 15% of daily total air time to child-friendly shows.
- The Grantee shall not broadcast obscene, indecent, false, or subversive content.

Right of the Government (Section 5):
- The President can temporarily take over, suspend operations, or authorize government use of the Grantee's stations or facilities during war, rebellion, public peril, calamity, emergency, disaster, or disturbance of peace and order, with due compensation.

Term of Franchise (Section 6):
- The franchise is valid for 25 years from the effectivity of the Act, unless revoked or cancelled.
- The franchise shall be revoked if the Grantee fails to commence operations within 3 years from NTC permit approval, within 5 years from the Act's effectivity, or fails to operate continuously for 2 years.

Self-regulation by the Grantee (Section 7):
- The Grantee shall not require prior censorship but can cut off broadcasts that incite treason, rebellion, sedition, or are indecent or immoral.
- Willful failure to do so shall be a valid cause for franchise cancellation.

Warranty in Favor of National and Local Governments (Section 8):
- The Grantee shall hold the national, provincial, city, and municipal governments free from claims, liabilities, demands, or actions arising out of accidents during construction or operation.

Employment Opportunities (Section 9):
- The Grantee shall create employment opportunities and accept on-the-job trainees, prioritizing residents of the principal office location.
- The Grantee shall comply with applicable labor standards and allowances.
- Employment opportunities shall be reflected in the General Information Sheet submitted to the SEC annually.

Sale, Lease, Transfer, Grant of Usufruct, or Assignment of Franchise (Section 10):
- The Grantee cannot sell, lease, transfer, grant usufruct, assign the franchise, merge, or transfer controlling interest without prior approval of Congress.
- The Grantee must inform Congress within 60 days after such transactions.
- Failure to report shall render the franchise revoked.
- Any entity to which the franchise is transferred shall be subject to the same conditions.

Dispersal of Ownership (Section 11):
- The Grantee shall offer at least 30% of its outstanding capital stocks to Filipino citizens in a securities exchange within 5 years from the Act's effectivity.
- Noncompliance shall render the franchise revoked.

Reportorial Requirement (Section 12):
- The Grantee shall submit an annual report on compliance and operations to Congress on or before April 30 of every year.
- The report shall include updates on activities, development, operation, expansion, audited financial statements, GIS, NTC certification, and ownership dispersal.
- A reportorial compliance certificate from Congress shall be required before the NTC accepts permit applications.

Fine (Section 13):
- Failure to submit the annual report shall be penalized by a fine of 500 pesos per working day of noncompliance, remitted to the Bureau of the Treasury.

Equality Clause (Section 14):
- Any advantage, favor, privilege, exemption, or immunity granted under existing or future broadcasting franchises shall be accorded to the Grantee, except for provisions concerning territorial coverage, term, or type of service.

Repealability and Nonexclusivity Clause (Section 15):
- The franchise is subject to amendment, alteration, or repeal by Congress when the public interest requires.
- The franchise shall not be interpreted as an exclusive grant of privileges.

Separability Clause (Section 16):
- If any section or provision is held invalid, all other valid provisions shall remain in effect.

Repealing Clause (Section 17):
- All laws, decrees, orders, resolutions, instructions, rules and regulations inconsistent with this Act are repealed, amended, or modified accordingly.

Effectivity (Section 18):
- The Act shall take effect 15 days after its publication in the Official Gazette or a newspaper of general circulation.