Senators probe ABS-CBN franchise as Calida moves for network’s shutdown

Christian V. Esguerra, ABS-CBN News

Posted at Feb 23 2020 11:28 PM | Updated as of Feb 24 2020 10:00 AM

Employees and supporters of ABS-CBN rally in front of the media station on February 14, 2020 to show their support against moves to strip its franchise on February 14, 2020. Fernando G. Sepe Jr., ABS-CBN News

MANILA—ABS-CBN network executives are set to appear before a Senate committee on Monday in a highly anticipated hearing seen as a pushback on the Philippine government’s move to close down the country’s largest media network, as congressmen continue to sit on proposals to renew its broadcast franchise.

The inquiry is scheduled on the same day the network is due to respond to Solicitor General Jose Calida’s quo warranto petition to take it off the air for supposed franchise violations.

The Supreme Court also gave ABS-CBN until Monday to answer Calida’s “very urgent motion” to gag the network and “persons acting on (its) behalf,” a sweeping plea that media and human rights groups described as an assault on press freedom.

“Revoking or not renewing a broadcast franchise becomes a different matter altogether because that constitutes an infringement of the first-ranked democratic freedom — freedom of expression,” said journalist Vergel Santos, former chairman of the Center for Media Freedom and Responsibility. 

Malacañang has distanced President Duterte from the petition of Calida, who serves as the government’s top lawyer. 

Duterte earlier promised to “make sure” that ABS-CBN would be out of broadcast, citing complaints over its coverage of his administration and unaired political ads in 2016. He later told its owners to “just sell” the business.

Calida has been invited to Monday’s public services committee’s hearing where he’s expected to be questioned on his Supreme Court petition to invalidate ABS-CBN’s existing franchise.

Several House leaders have criticized his quo warranto petition, insisting that Congress has the exclusive power to grant, repeal or renew franchises.

Sen. Grace Poe admitted that Calida’s gag order motion prompted her public services committee to push the hearing ahead of schedule “to be on the safe side.”

“That way, there’s no conflict and the resource persons won’t be apprehensive about giving their statements,” she told ABS-CBN News.

NO PRESSURE

Poe said the inquiry was not meant to pressure the House of Representatives to act on at least 11 ABS-CBN bills still stuck in its committee on legislative franchises. 

The network’s franchise will expire on March 30 but Speaker Alan Peter Cayetano said deliberations were “not that urgent,” insisting the network could still operate until March 2022.

Cagayan De Oro Rep. Rufus Rodriguez on Sunday said Cayetano should now green-light deliberations on ABS-CBN’s franchise renewal, saying “we are left behind because we do not act.”

Rodriguez, an administration congressman pushing for a fresh 25-year franchise for ABS-CBN, insisted that the House would not be “susceptible to any pressure from anybody, not even the Senate.”

But he was convinced that the Senate hearing was “being done precisely to tell the whole world that what Calida has done is not correct.”

“Since the Senate is a part of Congress, it has all the right to really hear it and tell Calida that it is not a proper thing for him to file that (quo warranto petition) in the Supreme Court,” Rodriguez told ABS-CBN News on Sunday.

REST EASY

Poe said the hearing was meant to clarify if ABS-CBN could still operate after March 30, an assurance earlier given by Cayetano and Senate President Vicente Sotto III as a matter of practice over pending franchise renewal applications.

“We’re not pressuring the House,” she said, noting that an extension put on paper would put pressure off Congress to act on the franchise renewal application before next month’s deadline. 

A commitment from the National Telecommunications Commission for an extension would also mean that the 11,000 workers of ABS-CBN Corp. and its subsidiaries “can rest easy,” she said.

As of Sunday afternoon, she said Calida was yet to confirm his attendance. But Justice Secretary Menardo Guevarra and NTC Commissioner Gamaliel Cordoba had both informed the committee that they would show up. 

Poe described Calida’s presence in the hearing as “crucial,” citing his objections to ABS-CBN’s franchise renewal.

ABUSES

Calida alleged that ABS-CBN Corp. “abused” its free-TV franchise by introducing the pay-per-view feature Kapamilya Box Office (KBO) without NTC approval. 

“This warrants the revocation of ABS-CBN Corp.’s legislative franchise,” he said in his petition.

ABS-CBN replied in a statement: “All our broadcast offerings, including KBO, have received the necessary government and regulatory approvals and are not prohibited by our franchise.”

The KBO feature allows subscribers to watch select movies for a fee of P30 or P99.

Calida also claimed that ABS-CBN Corp. violated the constitutional ban on foreign ownership in mass media by issuing Philippine Depositary Receipts (PDRs) to foreigners through ABS-CBN Holdings.

Foreigners may buy into PDRs and may be entitled to dividends. But they are not considered shareholders with voting rights in a company.

A former Philippine Stock Exchange president likened it to betting on a horse in a race where a person gets a share of the winnings without necessarily owning the triumphant horse.

LAYERING

Calida also accused ABS-CBN Convergence Inc., ABS-CBN’s telecommunications subsidiary, of violating the law by making use of the original franchise of the company it had acquired without congressional approval, using an “intricate web of corporate layering.”

“The government is being hoodwinked as it is made to believe that the finite and limited spectrum had been allocated to those that are worthy to be accorded the privilege, when in truth, it is only being utilized by one corporation, ABS-CBN,” he said.

The subsidiary’s failure to publicly offer at least 30 percent of its outstanding capital stock within 5 years since its operations began was also a ground to have its franchise revoked, he said.

In a statement, ABS-CBN Corp. said the acquisition of ABS-CBN 

Convergence was “undertaken under the same law and structures that have been utilized by other telecommunications companies.”