ABS CBN franchise EXPIRES today, May 4, 2020. To continue operating or not?

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Calida warns NTC vs granting provisional authority to ABS-CBN

By: Christia Marie Ramos – INQUIRER.net
May 03, 2020

MANILA, Philippines — The Philippine government’s top lawyer on Sunday warned the National Telecommunications Commission (NTC) against granting ABS-CBN provisional authority to operate while the approval of its franchise is pending in Congress.

Solicitor General Jose Calida’s statement opposing the granting of provisional authority to the country’s biggest media network comes as the country marks World Press Freedom Day.

According to the solicitor general, the NTC commissioners could risk subjecting themselves to prosecution under the country’s anti-graft and corruption laws should they issue the “unlawful” PAs to ABS-CBN in the absence of a franchise.

The media giant’s franchise is set to expire on May 4, the same day Congress resumes its regular session.

Congress went on a two month break early March without passing a law extending the franchise of ABS-CBN for another 25 years.

During a later hearing of the House legislative franchise committee in March, NTC Commissioner Gamaliel Cordoba said the NTC will issue a provisional authority to ABS-CBN allowing it to operate pending its application.

Cordoba told the House panel that this decision was based on an opinion of the Department of Justice (DOJ) allowing ABS-CBN to operate based on equity considerations.

The Senate adopted a similar resolution urging the NTC to grant ABS-CBN provisional authority to continue its operations as its franchise approval remains pending.

However, Calida stressed that the Constitution gives Congress “the exclusive power to grant franchises to public utilities, such as broadcasting companies, in order to operate in the country.”

Citing a 2014 Supreme Court decision, the solicitor general said an entity must first secure a franchise from Congress.

After it is granted one, it should then apply for a Certificate of Public Convenience (CPC) from the NTC before it can operate.

Pending approval of its CPC, however, it can apply for a provisional authority (PA) so it can start operating during the interim, he said.

“Hence, a PA should only be issued once a congressional franchise has been granted and an application for CPC is pending before the NTC for approval,” Calida said. “The NTC cannot issue a PA when the broadcast company has no valid and existing legislative franchise.”

“No less than the Constitution requires a prior franchise from Congress. Hence, when there is no renewal, the franchise expires by operation of law. The franchise ceases to exist and the entity can no longer continue its operations as a public utility,” he added.

Pursuant to applicable laws, Supreme Court rulings as well as its own rules, Calida said the NTC can only issue a cease and desist order and/or a recall order against a broadcasting entity in the absence of a congressional franchise.

The solicitor general further said the NTC could not rely on the letter of the House leadership as well as the Senate resolution which both urged the commission to grant a provisional authority to ABS-CBN.

“These issuances cannot amend the current law requiring a congressional franchise for the operation of broadcasting networks. Not being separate laws themselves, they cannot amend or repeal prior laws,” Calida said.

He added that the NTC could not use the opinion of the justice department as legal basis to grant ABS-CBN provisional authority, saying a 2003 ruling by the Supreme Court held invalid a 1991 DOJ opinion which stated that the NTC may issue a permit or authorization without a legislative franchise. 

Calida then reminded the NTC that “contrary to the DOJ opinion, equity considerations do not justify granting PAs to ABS-CBN and its affiliates considering the clear mandate of the Constitution, laws, and decisions of the Supreme Court on the matter.”

“Equity is only available when there is no law on a particular matter. Where the law is clear, as in this case, it must be obeyed,” he said.

On February 11, Calida sought the revocation of ABS-CBN’s franchise over alleged violations through a quo warranto petition filed before the Supreme Court

Calida, in his petition, claimed that ABS-CBN violated the constitution when it issued Philippine Depositary Receipts (PDRs) through ABS-CBN Holdings Corporation to foreigners.

He also accused the network of “broadcasting for a fee” when it operated a pay-per-view channel (KBO Channel) in its ABS-CBN TV Plus cable product without approval or permit from the National Telecommunications Commission.

ABS-CBN has since maintained that it did not violate any law governing its franchise and that it had secured all necessary approvals for its business operations.


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