ABS-CBN fran­chise bid junked

Published July 10, 2020, 3:24 PM

by Ben Rosario

The House Com­mit­tee on Leg­isla­tive Fran­chises re­jected on Fri­day 11 leg­isla­tive mea­sures propos­ing to grant a fresh 25-year leg­isla­tive fran­chise for net­work gi­ant ABS-CBN Cor­po­ra­tion.

The vote, 70 against the fran­chise bid and 11 in fa­vor, ended ABS-CBN’s bid to re­turn on the air af­ter it stopped op­er­a­tions on May 4, the day its pre­vi­ous 25-year con­gres­sional fran­chise ex­pired.


Chaired by Palawan Rep. Franz Al­varez, the House leg­isla­tive fran­chise panel ar­rived at the de­ci­sion af­ter con­duct­ing 12 days of joint hear­ings with the House Com­mit­tee on Good Gov­ern­ment that tack­led is­sues that hounded the net­work’s bid to re­sume op­er­a­tions.

The 85 panel mem­bers present – 36 of them ex-of­fi­cio mem­bers be­ing of­fi­cials of the cham­ber – voted for the ap­proval or de­nial of “Res­o­lu­tion Deny­ing the Fran­chise Ap­pli­ca­tion ABS-CBN Cor­po­ra­tion to Con­struct, In­stall, Es­tab­lish, Op­er­ate and Main­tain Ra­dio & Broad­cast­ing Sta­tions in the PH.”

Seventy con­gress­men up­held the res­o­lu­tion and re­jected the fran­chise bills while the 11 “neg­a­tive” votes sought to grant the Ka­pam­ilya net­work a new con­gres­sional li­cense to op­er­ate a broad­cast net­work.

Only one com­mit­tee mem­ber ab­stained while two de­cided to in­hibit them­selves from the vot­ing.

With the vote, Al­varez ap­proved a mo­tion to lay on the ta­ble the 11 leg­isla­tive pro­pos­als to allow ABS-CBN to get a fran­chise.

The 40-page res­o­lu­tion was pre­sented by the tech­ni­cal work­ing group that was formed Thurs­day to make a rec­om­men­da­tion on the vot­ing based on the sum­ma­tions pre­sented for and against the ABS-CBN fran­chise ap­pli­ca­tion.

Deputy Speaker and Cebu Rep. Pablo John Gar­cia, TWG chair­man, and As­sis­tant Ma­jor­ity Leader Xavier Je­sus Ro­mualdo of Camiguin ap­proved the res­o­lu­tion deny­ing the grant of fran­chise while the third TWG mem­ber, As­sis­tant Mi­nor­ity Leader Stella Luz Quimbo of Marik­ina City dis­sented.

Be­fore the vot­ing, Que­zon City Rep. Al­fred Var­gas de­clared he was in­hibit­ing him­self from the pro­ceed­ings for fear of con­flict of in­ter­est.

“This rep­re­sen­ta­tion as an ac­tor/ pro­ducer and has been en­gaged for artis­tic projects with the net­work,” Var­gas said.

On Thurs­day, Abang Lingkod Party-list Rep. Joseph Pad­u­ano with­drew his au­thor­ship of one of the ABS-CBN fran­chise pro­posal while Kabayan Rep. Ron Salo moved to lay his bill propos­ing a new fran­chise on the ta­ble.

Fol­low­ing a strong protest from the net­work, ACT CIS Party-list Rep. Eric Go Yap, chair­man of the House Com­mit­tee on Ap­pro­pri­a­tions, clar­i­fied his claim that he was of­fered a ₱200-mil­lion bribe to sup­port the ABS-CBN fran­chise.

Yap said he never claimed that the uniden­ti­fied “briber” was sent by the man­age­ment of the net­work.

ABS-CBN net­work started seek­ing the House of Rep­re­sen­ta­tives’ ap­proval of a new fran­chise dur­ing the 16th Congress, dur­ing the ad­min­is­tra­tion of then Pres­i­dent Benigno “Noynoy” Aquino III, known as an ally of the em­bat­tled net­work.

In the course of the hear­ings, law­mak­ers played key roles in pre­sent­ing flaws and vi­o­la­tions of the fran­chise li­cense al­legedly com­mit­ted by the ABS-CBN man­age­ment. The law­mak­ers were Deputy Speaker and Sagip Party-list Rep. Ro­dante Mar­co­leta; Deputy Ma­jor­ity Leader Crispin Remulla (NP, Cavite) and Reps. Mike De­fen­sor (Anakalusugan); Eric Go Yap (ACT CIS Party-list); Abra­ham To­lentino (PDP-La­ban, Cavite); and Clau­dine Bautista (DUMPER PSTD).

The de­fense panel was com­posed of Deputy Mi­nor­ity Leader and Bayan Rep. Car­los Zarate and Reps. Ru­fus Ro­driguez (In­de­pen­dent, Ca­gayan de Oro City); Ed­cel Lag­man (In­de­pen­dent, Al­bay); and Sol Aragones (NPC, La­guna).

Com­ing up with its rec­om­men­da­tions barely 15 hours af­ter it was cre­ated, the TWG said it based its res­o­lu­tion from the records from the 12-day hear­ings, the sum­ma­tions pre­sented by Mar­co­leta and Zarate and con­sul­ta­tions with House mem­bers.

Dam­ag­ing to the net­work’s cause to re­main alive were the ac­cu­sa­tions of tax avoid­ance schemes, its “less than ex­em­plary” treat­ment of work­ers, and al­le­ga­tions of bi­ased re­port­ing and med­dling in po­lit­i­cal af­fairs.

De­spite earn­ing bil­lions in an­nual rev­enues, ABS-CBN re­port­edly paid an in­come tax of ₱563.01 mil­lion over a three-year pe­riod from 2017 to 2019. Its main ri­val, GMA 7 gave gov­ern­ment ₱3.13 bil­lion dur­ing the same pe­riod.

“How­ever, through cor­po­rate lay­er­ing, tak­ing ad­van­tage of well­known tax havens such as Hun­gary Lux­em­bourg and the Cay­man Is­lands and even through the use of our own PEZA in­cen­tives, we see that only a min­i­mal frac­tion is re­mit­ted to gov­ern­ment,” the TWG lamented.

The al­leged tax avoid­ance scheme was done through the set­ting up of the Big Dip­per Corp., which took ad­van­tage of the tax in­cen­tives of­fered by the Philip­pine Ex­port Zone Au­thor­ity.

The TWG panel also cited the la­bor com­plaints filed by for­mer em­ploy­ees, mostly trig­gered by the al­leged fail­ure of the net­work to reg­u­lar­ize them de­spite the long years they have served the net­work.

On the ques­tion aired against the dual cit­i­zen­ship of ABS-CBN Chair­man Emer­i­tus Eu­ge­nio “Gabby” Lopez III, the TWG said there “is a cloud of doubt” on his al­le­giance to the Philip­pines.

Lopez was born in Bos­ton, Mas­sachusetts, from Filipino par­ents Con­chita and Eu­ge­nio Lopez. He au­to­mat­i­cally ac­quired Amer­i­can cit­i­zen­ship but reg­is­tered for dual cit­i­zen­ship as Filipino-Amer­i­can be­fore the Depart­ment of Jus­tice and the Bu­reau of Im­mi­gra­tion.

Mar­co­leta and De­fen­sor, who both stressed that the Con­sti­tu­tion specif­i­cally pro­vides for full Filipino cit­i­zen­ship for me­dia own­ers, in­sisted that there was no show­ing that Lopez’s mother was a Filipino.

“Mr. Lopez him­self does not have a Philip­pine gov­ern­ment-is­sued birth cer­tifi­cate which could have served as con­clu­sive proof that he is a Filipino cit­i­zen,” the TWG said.

The con­tro­versy over the is­suance by ABS-CBN of the Philip­pine De­posi­tary Re­ceipts (PDRs) that were sold to for­eign­ers was also raised, with the Se­cu­ri­ties and Ex­change Com­mis­sion declar­ing noth­ing wrong with the busi­ness deals.

“ABS-CBN’s PDRs ap­pear to have al­lowed for­eign­ers a mea­sure of con­trol in the com­pany which could have vi­o­lated the 1987 Con­sti­tu­tion,” the TWG stated.

“Given that the net­work is a mass me­dia en­tity re­quired to be 100 per­cent Filipino-owned and man­aged, and not­ing its stature and in­flu­ence in the Philip­pine so­ci­ety and pub­lic pol­icy, ABS-CBN should have been cir­cum­spect to avoid any doubts or sus­pi­cion of im­pro­pri­ety from its scheme of al­low­ing for­eign­ers to hold PDRs cor­re­spond­ing to share­hold­ings in ABS-CBN,” the body warned.

The net­work’s con­tention that it did not vi­o­late the con­sti­tu­tional pro­vi­sion for a 50-year limit on fran­chises was up­held by the TWG.

How­ever, the three-man panel ques­tioned ABS-CBN’s in­abil­ity to con­vince the com­mit­tee that the process for the re­turn of the net­work by gov­ern­ment was fol­lowed.

It was re­called that the net­work was seized by the gov­ern­ment dur­ing mar­tial law and was re­turned by the in­com­ing gov­ern­ment ad­min­is­tra­tion fol­low­ing the col­lapse of the Mar­cos gov­ern­ment in 1986.

The TWG backed Mar­co­leta’s claim that ABS-CBN TV Plus Box sys­tem should have re­quired a sep­a­rate leg­isla­tive fran­chise and that it vi­o­lated its own fran­chise when it im­posed fees for pub­lic ac­cess to its Ka­pam­ilya Box Of­fice pay-per-view chan­nel.