OSG warns NTC against issuing provisional permits to operate to ABS-CBN, its subsidiary

Published May 3, 2020, 12:00 AM

by manilabulletin_admin

By Rey Panaligan 

Solicitor General Jose C. Calida on Sunday (May 3) warned officials of the National Telecommunications Commission (NTC) against issuing provisional authorities (PAs) to operate to ABS-CBN Corporation and its affiliate, ABS-CBN Convergency, Inc., in the absence of a congressional franchise.

Solicitor General Jose Calida (Czar Dancel)
Solicitor General Jose Calida

ABS-CBN Corporation’s franchise will expire on Monday (May 4), while that of ABS-CBN Convergence’s expired last March 17.

According to a statement of the Office of the Solicitor General (OSG), “the NTC commissioners risk subjecting themselves to prosecution under the Anti-Graft and Corrupt Practices Act should they issue the unlawful PAs to ABS-CBN Corporation and ABS-CBN Convergence in the absence of franchise.”

Case background

Last February, Calida filed a quo warranto case to forfeit the legislative franchises of ABS-CBN and its subsidiary. The SC acted on the petition by requiring the television firm and its subsidiary to file their comments.

Among other things, the OSG cited the television company’s alleged “highly abusive practices… benefitting a greedy few at the expense of millions of its loyal subscribers.”

It also alleged that “ABS-CBN has been broadcasting for a fee, which is beyond the scope of its legislative franchise.”

Also, the OSG said “the media giant, hiding behind an ‘elaborately crafted corporate veil,’ has been allowing foreign investors to take part in the ownership of Philippine mass media entity, in gross violation of the foreign interest restriction of mass media provided under Section 11, Article XVI of the Constitution.”

Based on published reports, ABS-CBN has denied all the OSG’s allegations as it claimed that it fully complies with all the pertinent laws and regulations governing its franchise.

Provisional authority

Citing case history, the OSG said in its statement that on Feb. 26, 2020, House Speaker Alan Peter Cayetano and Palawan Rep. Franz Alvarez, chair of the House committee on legislative franchises, “sent a letter to the NTC urging it to grant a provisional authority to ABS-CBN, effective on 4 May 2020, until such time as Congress has made a decision on its franchise application.”

It said “during the hearing of the House Committee on Legislative Franchises last 10 March 2020, NTC Commissioner Gamaliel Cordoba said the NTC will issue a PA to ABS-CBN allowing it to operate pending its application.”

It said Cordoba’s decision was based on an opinion of the Department of Justice (DOJ) allowing ABS-CBN to operate based on equity considerations.

But the OSG said “the Constitution gives Congress the exclusive power to grant franchises to public utilities, such as broadcasting companies, in order to operate in the country.”

“Although this legislative power may be delegated to administrative agencies through a law, at present, there is no such law giving the NTC or any other agency the power to grant franchises to broadcasting entities,” the OSG said.

Citing a 2014 Supreme Court decision, the OSG outlined the steps for the NTC to issue a PA to a broadcasting company:

“An entity must first secure a franchise from Congress. After it is granted one, it should apply for a Certificate of Public Convenience from the NTC before it can operate. Pending approval of its CPC, however, it can apply for a PA so it can start operating during the interim.

“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. The NTC cannot issue a PA when the broadcast company has no valid and existing legislative franchise.”

Other points

The other salient points in the OSG’s statement:

“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.

“In the absence of a congressional franchise, the NTC, pursuant to applicable laws, Supreme Court decisions, and its own rules, can only issue a cease and desist order and/or a recall order against a broadcasting entity.

“The NTC cannot rely on the 26 February 2020 letter of Speaker Cayetano and Rep. Alvarez or on Senate Resolution No. 344, which both urge the NTC to issue PAs to ABS-CBN Corporation and its affiliates, for the issuance of the PAs.

“Following a 2019 decision of the Supreme Court, the letter and the Senate resolution merely express the sentiment of the House committee and the Senate. They do not grant the NTC the power to issue PAs in contravention of existing laws.

“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.

“Moreover, the NTC cannot use the DOJ opinion as legal basis for the planned issuance. According to [Calida], as early as 2003, the Supreme Court held invalid a 1991 DOJ opinion stating that the NTC may issue a permit or authorization without a legislative franchise. The NTC is thus not bound by the DOJ opinion.

“Furthermore, Calida 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.”