ABS CBN Non Renewal of Franchise PDF

 

Case: ABS-CBN Corporation Vs. National Telecommunications Corporation G.R. No. 252119 - August 25, 2020 J. Perlas-Bernabe  Perlas-Bernabe  ●

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Ma Marc rch h 30 30,, 1995 1995:: ABSABS-CB CBN N was was gran grante ted d a le legi gisl slat ativ ive e fr fran anch chis ise e to "c "con onst stru ruct ct,, op oper erat ate e and and maintain, for  commercial purposes and in the public interest, television and radio br broa oadc dcas asti ting ng stat statio ions ns  in and and thro throug ugho hout ut the the Phil Philip ippi pine nes" s" un unde derr RA 79 7966 66.. The The fr fran anch chis ise e was valid  for a term of 25 years from the law's effectivity on May 4, 1995, or until May 4, 2020. 2014 and  2018: bills for the renewal of ABS-CBN's franchise were filed in the 16th and 17 17th th Cong Congre ress ss..  In the the cu curr rren entt (or (or 18th 18th)) Co Cong ngre ress ss,, 11 bill bills s fo forr th the e re rene newa wall of ABSABS-CB CBN' N's s franchise were submitted in the House and 2 were filed in the Senate. February 26,  2020: another bill was filed seeking the amendment of Section 1 of RA 7966 to  ext xte end the term erm of ABS-C -CB BN's N's fra ran nchis chise e wh whil ile e Congre ress ss is still till delib liberati ratin ng on the issue of franchise renewal. February 24,  2020: the Senate Committee on Public Services called a hearing to "look in into to,, in  ai aid d of le legi gisl slat atio ion, n, the the oper operat atio ions ns of [ AB ABSC SCBN BN]] to de dete term rmin ine e co comp mpli lian ance ce with with th the e terms and conditions of its franchise under [RA] 7966." ○ During the  hearing, NTC's Commissioner Cordoba stated that the NTC has not wi with thdr draw awn n any any  Pr Prov ovis isio iona nall Auth Author orit ity y to op oper erat ate e un unde derr si simi mila larr ci circ rcum umst stan ance ces s an and d has not  clo lose sed d any bro roa adcast com compan any y in th the e past due to an expire ired fr fra anchis ise e, pending its renewal. ○ Commis mmiss sion ioner Cord Cordo oba  als lso o decla lare red d that in the case of ABS-C BS-CB BN, it will will is iss sue a Provisional Authority if so advised by the Department of Justice (DOJ). Feb. 26:  DOJ Secretary Menardo Guevarra refrained from rendering a formal legal opin inio ion n on  the matte tter. Non Nonethe thele les ss, he mad made the follo llowin wing observ rva atio ion ns fo forr the NTC' NTC's s "guidance": ○ (a (a)) there  is an "e "es stab tabli lis shed pra ract ctic ice e" or "e "eq quita itable pra ract ctic ice e" to allo llow a bro roa adcas astt company to  continue its operations despite an expired franchise, pending its renewal; ○ (b) the  plenary power of Congress includes the auxiliary power to define and pr pres eser erve ve the the  righ rights ts of the the fran franch chis ise e appl applic ican antt pe pend ndin ing g fina finall de dete term rmin inat atio ion n of th the e renewal of the franchise; and ○ (c) the the NTC may may provis provisiona ionally lly au autho thorize rize an an entity entity to operate operate.. Feb. 26:  House Committee on Legislative Franchises sent a letter to NTC enjoining it to grant ABS-CBN  a provisional authority to operate until such time that the House of  Representatives/Congress has made a decision on its application. March 4:  the Senate adopted a Resolution stating that [ABS-CBN], its subsidiaries and/or affiliates,  ABS-CBN Convergence, Inc., Sky Cable Corporation and Amcara Broa Broadc dcas asti ting ng Netw Networ ork, k,  Inc. Inc.,, sh shou ould ld co cont ntin inue ue to op oper erat ate e pe pend ndin ing g fina finall de dete term rmin inat atio ion n of  the renewal of its franchise March 10:  NTC said it will follow the DOJ’s advice and let ABS-CBN continue its operations based on equity

 

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March 16:  due to the ECQ, NTC issued an MO declaring all subsisting permits expiring within the  quarantine period shall automatically be renewed and shall continue to be valid 60 days after the end of the quarantine Ma May y 3:  SolG lGe en Cali Calid da warn rne ed the the NCT again gains st gra ran nting ing ABS-C -CB BN pro rovi vis sion ional auth tho orit rity to operate while the franchise approval is pending ○ But Cha Chairp irperso rson  Alv Alvare rez z said tha that wi witth th the e DOJ’ J’s s le leg gal op opin inio ion n and the auth tho orit rity given by the House, there was no reason for ABS to discontinue its operations Ma May y 4: AB ABS S fr fran anch chis ise e expi expire red d May 5:  NTC issued the CDO directing ABS to immediately cease and desist from operating its radio and tv stations, based solely on the expiration of rA 7966. ○ ABS ABS c com ompl plie ied d = wen wentt o off ff-a -air ir May 7: 7 :   AB ABS S fi file led d peti petiti tion on for for ce cert rtio iora rari ri and and pr proh ohib ibit itio ion n with with TRO TRO @SC @SC alle allegi ging ng GAD GAD by NTC in issuing the CDO ○ ABS-CBN mainly  argues that instead of issuing the CDO, the NTC should have al allo lowe wed d ABSABS-CB CBN N  to cont contin inue ue it its s op oper erat atio ions ns pend pendin ing g Cong Congre ress ss'' de dete term rmin inat atio ion n of  whethe ther or  not to re ren new its its leg legisla islati tiv ve fra ranc nch his ise e base sed d on th the e bills ills alre lready file filed d there refo for. r. In  this re reg gard rd,, ABS-CB -CBN posits its th tha at "th "the plen lenary power wer of Con Congre ress ss to gr gran antt or  rene renew w a fran franch chis ise e nece necess ssar aril ily y in incl clud udes es th the e co coro roll llar ary y po powe werr to de defi fine ne an and d preserve rights and obligations pending its final determination of the matter.” May 11:  NTC received a show cause order from HoR requiring it to explain why it should not be cited in contempt for issuing the CDO ○ NTC explained  that based on the wording of the consti, laws, and prevailing  jurisprudence,  jurisprude nce, it  could not issue a provisional provisional authority in favor of ABS-CBN pending the  deliberations of the Congress on its franchise, as to do so would amount to  an encroachment into the exclusive power of Congress to grant legislative franchises to broadcasting companies.

W/N NTC  gravely abused its discretion in issuing the CDO against ABS-CBN =   case dis ism mis iss sed on  th the e gro rou und of mootne tness since ince the House alre lready denied ied the re ren newal wal of th the e ABS franchise ● Based sed on  our Co Con nstit tituti tio on and laws laws,, a leg legis isla lati tiv ve fr fra anchis ise e is bot both a pre re-r -re equis isit ite e and a co cont ntin inui uing ng requ requir irem emen entt  for for broa broadc dcas asti ting ng enti entiti ties es to br broa oadc dcas astt th thei eirr pr prog ogra rams ms th thro roug ugh h television and radio stations in the country. ● A franchise  is basically a legislative grant of a special privilege to a person which does not belong to citizens generally of common right. ○ It is sub subje jec ct to re reg gula lati tio on by the the State its itself by vi virt rtu ue of its its police lice power wer th thro rou ugh its its administrative agencies. ○ Section 11,  Article XII of the 1987 Constitution further states that "for the op oper erat atio ion n of  a publ public ic util utilit ity, y,"" no "suc "such h fr fran anch chis ise e or righ rightt [sha [shall ll]] be gr gran ante ted d ex exce cept pt un unde derr the the  co cond ndit itio ion n that that it sh shal alll be su subj bjec ectt to amen amendm dmen ent, t, alte altera rati tion on,, or re repe peal al by the Congress when the common good so requires.

 

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With respect  to the broadcast industry, Section 1 of Act No. 38461 as amen amende ded, d, cl clea earl rly y pro rovi vid des tha that  "[n "[n]o perso rson, firm firm,, compa mpany, ass sso oci cia ation ion or co corp rpo ora rati tio on shall co con nstr tru uct ct,, in inst stal all, l, es esta tabl blis ish, h,  or oper operat ate e a radi radio o st stat atio ion n with within in th the e Phil Philip ippi pine ne Is Isla land nds s   with without out having having first obtained a franchise therefor  from  from the Philippine Legislature x x x." 2 Section 6  of PD 576-A furth urthe er im imp poses ses, as an   ad addi diti tion onal al requ requir irem emen entt to oper operat ate e a ra radi dio o or  te tele levi visi sion on stat statio ion, n,   an "aut "autho hori rity ty" " comi coming ng fr from om "the "the Boar Board d of Comm Commun unic icat atio ions ns and the the  Secre cretary of Public blic Works rks and and Co Com mmun munic ica atio tions or th the eir succ cce ess sso ors [( [(i. i.e e., the NTC))] who  have the right and authority to assign to qualified parties frequencies, NTC channels or other means of identifying broadcasting systems." Div Divin ina agra gracia v.  Con Consoli lida datted Bro roa adcas asti tin ng Syste ystem m, In Inc c.: Broadcast and television st sta atio tions are  re req quir ire ed to obtain a le leg gis isla lattiv ive e fra ran nch chis ise e. Afte terr se sec curin ring th the eir leg legis isla lattiv ive e fr fran anch chis ises es,, stat statio ions ns  are are requ requir ired ed to obta obtain in CPCs CPCs fr from om th the e NTC NTC be befo fore re th they ey ca can n op oper erat ate e their radio or television broadcasting systems. ITC, the  core of ABS-CBN's petition rests on its argument that the NTC should not have pre-empted the  will of Congress by directing it (ABS-CBN) to halt its broadcasting operations pending  the determination of Congress on the renewal of its legislative franchise based on the bills specifically filed therefor. ○ ABS-C -CB BN claim laims s  tha that Co Con ngre ress ss has the "c "co oro roll lla ary ry/a /au uxilia iliary ry power" to define ine and preserve rights and obligations pending its final determination on the matter. The Court  takes judicial notice of the fact that on July 10, th the e Hous ouse Comm ommitt tte ee on Legisl Leg islati ative ve Franch Franchise ises s had adopt adopted ed the recom recomme menda ndatio tion n of the Techni Technica call Worki Working ng Group (TWG)  to "deny the application of ABS-CBN Corporation for a franchise to cons constr truc uct, t, inst instal all, l,  es esta tabl blis ish, h, op oper erat ate e an and d main mainta tain in ra radi dio o an and d br broa oadc dcas asti ting ng st stat atio ions ns in th the e Philippines" by  an overwhelming 70 affirmative votes from the 85 voting members present. ○ While ABS-CBN  states that there are two (2) pending bills for the renewal of its legislative franchise  authored by members of the Senate, the Constitution provides that  private bills, such as those pertaining to the grant or renewal of a franchise, must exclusively originate from the lower house of Congress. ■ These "substitute"  bills (from Senate) are nonetheless only prepared in anti tic cip ipa atio tion of  the the corr corre espo spondin ing g bill ill fro rom m th the e lo lowe werr House se,, and th tha at th the e action of  the Senate as a body is withheld pending receipt of the said Hous Ho use e bill bill.. Unfo Unfort rtun unat atel ely, y, the the Ho Hous use e Comm Commit itte tee e alre alread ady y de deni nied ed th the e ho hous use e bills. The denial  pertained to "all of the House Bills and House Resolutions relative to the grant or renewal of the franchise application of ABS-CBN Corporation The adoption  of the TWG's recommendation by the House Committee on Legislative Franchises is  considered as the official expression of the legislative will that has di disp spel elle led d an any y  prev previo ious us un unce cert rtai aint nty y rega regard rdin ing g ABSABS-CB CBN' N's s fr fran anch chis ise e st stat atus us in inso sofa farr as th the e pending franchise renewal bills are concerned.

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 AN ACT PROVIDING FOR THE REGULATION OF RADIO STATIONS AND RADIO COMMUNICATIONS IN THE PHILIPPINE ISLANDS, AND FOR OTHER PURPOSES 2

 REGULATING THE OWNERSHIP AND OPERATION OF RADIO AND TELEVISION STATIONS AND FOR OTHER PURPOSES

 

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The supervening  denial of these bills means that ABS-CBN cannot any more in inv voke the  sam same as basi sis s for for contin tinuin ing g the op ope era rattion ion of the rad radio and te tele lev vis isio ion n networks covered by the CDO issued by the NTC. ○ Accord cordin ing gly ly,, the  is issu sue e on the "co "coro roll lla ary ry//auxi xili lia ary ry"" powers of Con Congre ress ss pending ing the renewal of these bills had already been rendered moot. ■ case ase or is iss sue is consi sid dere red d moo moot and aca cad demic mic when it cease ses s to pre res sent a justiciable  controversy by virtue of supervening events, so that an adjudication of  the case or a declaration on the issue would be of no practical value or use. Even if  the CDO is annulled as prayed for, ABS-CBN cannot altogether resume its bro road adc cast opera rattio ion ns  thro rou ugh it its s ra rad dio and te tele lev vis isio ion n st sta atio tions beca cau use its its le leg gis isla lati tiv ve franchise therefor  had already expired and that, considering the denial of the House Committee on Legislative Franchises, has not been renewed. ABS-CBN failed  to provide sufficient legal basis to support its theory on Congress' so-c so-cal alle led d "cor "corol olla lary ry/a /aux uxil ilia iary ry""  po powe wers rs pe pend ndin ing g de dete term rmin inat atio ion n of th the e re rene newa wall of its its ex expi pire red d franchise. ○ A le leg gis isla lati tiv ve  fra franchis chise e gra ran nti tin ng bro roa adca cas stin ting entit tities ies the the priv rivile ilege to bro roa adca cas st th thei eirr prog progra rams ms  thro throug ugh h tele televi visi sion on and and ra radi dio o st stat atio ions ns in th the e co coun untr try y must must be in th the e form of a duly enacted law. ○ The congre ress ssio iona nall  deli lib bera rati tio ons on pendin ing g bills ills are not equiv iva ale len nt and ca can nnot take the  place of a duly enacted law, which requires the entire constitutional process for legislation to take its full course. ○ Neither can  it be inferred from our Constitution and our present statutes that te temp mpor orar ary y stat statut utor ory y  priv privil ileg eges es may may be ac acco cord rded ed to a fr fran anch chis ise e ap appl plic ican antt pe pend ndin ing g deliberation of a franchise grant or renewal. Wh Whil ile e th the e Cour Courtt unde unders rsta tand nds s the the plig plight ht and and co conc ncer erns ns of ABSABS-CB CBN, N, its its empl employ oyee ees, s, an and d its its supporters in  general, it wishes to emphasize that the act of granting or renewing legislative franchises is beyond the Court's power. ○ Congress has  the sole authority to grant and renew legislative franchises for  broadcasting entities such as ABS

Ruling: Petition Ruling:  Petition dismissed on the ground of mootness.

OTHER NOTES:  At the  end of the congressional congressional hearings on the ABS-CBN franchise application application – where the med me dia netw two ork  was was giv iven en the wid wide lat latitu itude and opport rtu unity ity to defe fen nd its itself agains inst the alle llege ged d violations it  is being accused of – the Committee on Franchises’ Technical Working Group (T (TWG WG)) re reco comm mmen ende ded d  the the de deni nial al of the the fran franch chis ise e ap appl plic icat atio ion n of ABSABS-CB CBN N Corp Corpor orat atio ion n ba base sed d on following grounds: 1. Dual Dual ci citi tize zens nshi hip p  of it its s Ch Chai airm rman an Emer Emerit itus us,, Euge Eugeni nio o “Gab “Gabby by”” Lo Lope pez z III III as ag agai ains nstt th the e 10 100 0 percent Filipino  requirement for the ownership and management of mass media as pr pres escr crib ibed ed by  the the 1987 1987 Cons Consti titu tuti tion on.. The The Fili Filipi pino no ci citi tize zens nshi hip p an and d alle allegi gian ance ce of Mr. Mr. Lo Lope pez z to the Philippines was found to be doubtful and implausible;

 

2. Is Issu suan ance ce of  Phil Philip ippi pine ne Depo Deposi sita tary ry Rece Receip ipts ts (PDR (PDRs) s) to fo fore reig igne ners rs whic which h allo allowe wed d fo fore reig ign n ownership in  ABS-CBN. This possibly violated the constitutional provision against ownership and management of mass media by foreigners; 3. Unlawful return  of assets to the Lopez family after martial law. In the course of the hear arin ing gs, ABS-C -CB BN  was not able to pro rove ve beyond a re reas aso onable doubt that it is in ind deed the absolute  owner of its assets and properties and not the government or someone el else se.. To  no note te,, the the su subm bmit itte ted d co copy py of ABSABS-CB CBN’ N’s s Tr Tran ansf sfer er Cert Certif ific icat ate e of Titl Title e (TCT (TCT)) of its its Moth Mo ther er Ig Igna naci cia a prop proper erty ty wher where e it its s main main broa broadc dcas astt st stat atio ion n an and d tr tran ansm smit itte terr ar are e loca locate ted d ha has s no actual  record in the Register of Deeds. Likewise, there are no records of the ar arbi bitr trat atio ion n proc procee eedi ding ngs, s,  ther there e wa was s ju just st a “C “Com ompr prom omis ise e Agre Agreem emen ent” t” be betw twee een n th the e pa part rtie ies. s. There are also no records of proceedings leading to the said Compromise Agreement. 4. Vio iola lattio ion n of  its its pre revi vio ous fran ranchis chise e by opera rattin ing g a pay ay-p -pe err-vi vie ew ch cha annel in its its ABS-C -CB BN TV Plus  (the KBO Channel) without prior approval or permission from the National Telecommunications Commission (NTC); 5. Its Its un unau auth thor oriz ized ed  use use of AM AMCA CARA RA’s ’s le legi gisl slat ativ ive e fr fran anch chis ise, e, an and d ABSABS-CB CBN N ap appa pare rent nt us use e of  a dummy; 6. The less  than exemplary labor practices including the many documented labor law vi viol olat atio ions ns li like ke  the the fail failur ure e to regu regula lari rize ze many many of its its empl employ oyee ees. s. To no note te,, on only ly 25 pe perc rcen entt or  2,661 out  of the total 11,701 total workers of ABS-CBN Corporation and all its subsidiaries are regular employees. 7. Quest stio ion nable and  unju just st tax avoid voida ance sche cheme mes s, whic which h are not necess ssar aril ily y ille illeg gal, but no nott al also so  co comm mmen enda dabl ble e and and prai praise sewo wort rthy hy,, and and bo bord rder ers s on be bein ing g immo immora rall when when vi view ewed ed in lig light of  the bil illi lio ons of pesos of lo lost st re reve ven nue for th the e Philip ilipp pin ine e gove vern rnm ment, whic which h could have funded much needed basic services for the Filipino people. 8. Biased reporting, reporting, inappropriate inappropriate program content, and political meddling. These grounds  formed the very basis as to why Congress denied the ABS-CBN franchise application.

 After the  denial of its franchise application, application, ABS-CBN supporters supporters are now pursuing a “People’s Initiative” (PI) to allow the media network to get its franchise. ● A lawyer  who is a supporter of ABS-CBN has already drafted a proposal for a petition to gr gran antt the the  medi media a netw networ ork k a fran franch chis ise e thro throug ugh h a PI, PI, ar argu guin ing g th that at th the e so sove vere reig ign n pe peop ople le ca can n directly pass  a law granting the media a franchise under Republic Act No. 6735 or the Initiative and Referendum Act. https://theaseanpost.com/article/why-did-congress-deny-abs-cbn-franchise