REPUBLIC ACT NO. 4137 - AN ACT GRANTING THE LUZON BROADCASTING COMPANY, INC., A FRANCHISE TO CONSTRUCT, MAINTAIN AND OPERATE RADIO BROADCASTING STATIONS WITHIN THE PHILIPPINES FOR COMMERCIAL PURPOSES.

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

SECTION 1. Subject to the provisions of the Constitution, the Luzon Broadcasting Company, Inc., is hereby granted a franchise to construct, maintain and operate radio broadcasting stations within the Philippines for commercial purposes and in the interest of the public.

SEC. 2. Such provisions of Act Numbered Thirty-eight hundred fort-six, entitled "An Act providing for the regulation of radio stations and radio communications in the Philippine Islands, and for other purposes;" Act Numbered Thirty-nine hundred ninety-seven, known as the Radio Broadcasting Law; Commonwealth Act Numbered One hundred forty-six, known as the Public Service Act, and their amendments, as are applicable to radio broadcasting stations shall be applicable, as far as practicable, to the radio stations referred to in Section one hereof.

SEC. 3. The franchise herein granted shall continue for a period of twenty-five years from the date the said stations shall be put in operation, and is granted upon the express condition that the same shall be void unless the construction of at least one radio broadcasting station be begun within three years from the date of approval of this Act, and be completed within four years from said date.

SEC. 4. This franchise is likewise made upon the express condition that the grantee shall provide adequate public service time to enable the Government, through the said stations, to reach the population on important issues; shall assist in the functions of public information and education; shall conform to the ethics of honest enterprise; and shall not use its stations for the broadcasting of obscene or indecent language, speech, act or scene, or for the dissemination of deliberately false information or wilful misrepresentation, or to the detriment of the public health and morals, or incite, encourage or assist in subversive or treasonable acts.

SEC. 5. As a condition of the granting of this franchise, the grantee shall file a bond in favor of the Government of the Philippines in the sum of twenty-five thousand pesos, in form and with sureties satisfactory to the Secretary of Public Works and Communications, conditioned upon the faithful performance of the grantee's obligations under this Act during the first three years of the life of this franchise. If, after four years from the date of acceptance of this franchise, the grantee shall have fulfilled said obligations, or as soon thereafter as the grantee shall have fulfilled the same, the bond aforesaid shall be cancelled by the Secretary of Public Works and Communications.

SEC. 6. Acceptance of this franchise shall be given in writing within six months after the approval of this Act. When so accepted by the grantee and upon approval of the bond aforesaid by the Secretary of Public Works and Communications, the grantee shall be empowered to exercise the privileges granted thereby.

SEC. 7. The grantee's radio broadcasting stations shall not be put in actual operation until the Secretary of Public Works and Communications shall have allotted to the grantee the frequency and wave lengths to be used under this franchise and issued to the grantee a license for such use.

SEC. 8. The radio broadcasting stations of the grantee shall be so constructed and operated and the wave lengths so selected as to avoid interference with existing radio broadcasting stations and to permit the expansion of the grantee's service.

SEC. 9. In the event of any competing individual, partnership or corporation receiving from the Congress a similar franchise in which there shall be any term or terms more favorable than those herein granted or tending to place the herein grantee at any disadvantage, then such term or terms shall ipso facto become a part of the terms hereof and shall operate equally in favor of the grantee as in the case of said competing individual, partnership or corporation.

SEC. 10. (a) The grantee shall be liable to pay the same taxes, unless exempted therefrom, on its real estate, buildings and personal property, exclusive of this franchise, as other persons or corporations are now or hereafter may be required by law to pay.

(b) The grantee shall further be liable to pay all other taxes that may be imposed by the National Internal Revenue Code by reason of this franchise.

SEC. 11. The grantee shall hold the national, provincial and municipal governments of the Philippines free from all claims, accounts, demands, or actions arising out of accidents or injuries, whether to property or to persons, caused by the construction or operation of the stations of the grantee.

SEC. 12. In the event that the Government should desire to maintain and operate for itself any or all of the stations herein authorized, the grantee shall turn over such station or stations to the Government with all the serviceable equipment therein at cost, less reasonable depreciation.

SEC. 13. A special right is reserved to the President of the Philippines in time of war, rebellion, public peril, emergency, calamity, disaster or disturbance of peace and order, to cause the closing of said stations or to authorize the temporary use and operation thereof by any department of the Government upon due compensation to the grantee during the period when they shall be so operated.

SEC. 14. The grantee 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 broadcast, if the tendency thereof is to propose and/or incite treason, rebellion or sedition, or the language used therein or the theme thereof is indecent or immoral, and wilful failure to do so shall constitute a valid cause for the cancellation of this franchise.

SEC. 15. The grantee shall not lease, transfer, grant the usufruct of, sell or 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 company or corporation organized for the same purpose, without the approval of the Congress of the Philippines first had. Any corporation to which this franchise may be sold, transferred, or assigned shall be subject to the corporation laws of the Philippines now existing or hereafter enacted, and any person, firm, company, corporation or other commercial or legal entity to which this franchise is sold, transferred, or assigned shall be subject to all conditions, terms, restrictions and limitations of this franchise as fully and as completely and to the same extent as if the franchise had been originally granted to the said person, firm, company, corporation or other commercial or legal entity.

SEC. 16, Whenever in this franchise the term "grantee" is used, it shall be held and understood to mean and represent the Luzon Broadcasting Company, Inc., its representatives, successors or assigns, unless the context indicates otherwise.

SEC. 17. The franchise hereby granted shall be subject to ammendment, alteration, or repeal by the Congress of the Philippines when the public interest so requires, and shall not be interpreted as an exclusive grant of the privileges herein provided for.

SEC. 18. This Act shall take effect upon its approval.

Approved, June 20, 1964.