Manila, Philippines (March 13, 2017) – The Philippines Senate approved today on third and final reading two bills which sought to renew the franchises of Smart Communications Inc. and the Republic Broadcasting System Inc., currently known as Global Media Arts (GMA) Network, Inc. for another 25 years.

House Bill No. (HBN) 4637 would grant Smart a franchise to “establish, install, maintain, lease and operate integrated telecommunications/computer/electronic services, and stations throughout the country for public, domestic and international telecommunications.” It was approved with 15 affirmative votes, two negative vote by Senators Risa Hontiveros and Ping Lacson and no abstention.

Smart Life
Smart Communications’ Chairman and CEO Manny V. Pangilinan. Photo courtesy of Rappler.

Likewise, House Bill No. 4361, approved with 17 affirmative votes, no negative vote and zero abstention would grant GMA a franchise to “construct, install, establish, operate, and maintain radio and television broadcasting stations nationwide, including digital television systems through microwave, satellite or any new technologies in television and radio systems.”

GMA Network Center in Quezon City. Photo courtesy of Wikimedia.

The bills were sponsored by Senator Grace Poe, chairperson of the Committee on Public Services.

Amendments to Smart’s Franchise

Poe said that apart from extending Smart’s franchise, HBN 4361 introduced important amendments that would better protect the interest of telecom users.

The first amendment is the deletion of the term “co-use” in the application of the franchise so that “this seemingly innocuous word cannot be invoked in employing anti-competition practices.”

The bill also compels Smart to install facilities and bring under its coverage areas not yet served, specifically calamity-prone ones, where the presence of telecommunication services can help in times of disaster.

The bill also retained the requirement for congressional consent “on the sale, lease, transfer, usufruct or assignment of the franchise.”

Under the original franchise, Smart was required to make a public offering of at least 30% of its authorized capital stock in any securities exchange in the country within two years from effectivity of the act.

However, this was changed under HB 4637 with the addition of the phrase: “unless the grantee is wholly owned by a publicly listed company.” This provision effectively exempts Smart, a unit of listed PLDT, Inc. (PSE: TEL), from the initial public offering requirement.

The measure also exempts Smart from paying Customs duties, tariffs and taxes on radio telecommunications and electronic communications equipment.

GMA Required to Provide Free Public Service Announcements, Closed Captioning

Meanwhile, Poe said that aside from extending the GMA’s franchise, HBN 4631 requires the network to provide free public service time to the government, through the broadcasting stations or facilities, to relay important public announcements and warnings as needed or required by law.

The network would also provide sound and balanced programming, promote public participation, assist in the functions of public information and education as well as promote audience sensibility and empowerment through closed captioning, the proposed measure said.

According to RA 10905 or the Closed Caption Law, “closed captioning” is the method of “subtitling television programs by coding statements as vertical data signal that are decoded at the receiver and superimposed at the bottom of the television screen.”

According to Poe, GMA has 47 Ultra High Frequency (UHF) and 41 Very High Frequency (VHF) TV stations nationwide as well as AM and FM stations led by DZBB and DWLS.

These proposed laws will be sent to the Philippine president Rodrigo Duterte for his signature, then will become new laws (Republic Act). [techthetruth]


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