LAW ON MASS MEDIA: Specific Laws, case law, and rules governing the Quo Warranto petition against ABS-CBN & the grant/repeal of franchises:
1.Art. XII Sec. 11, 1987 Constitution;
2.RA 7966 or the ABS-CBN legislative franchise;
3.RCPI vs. NTC, G.R. No. L-68729 May 29, 1987
4.EO 546 implementing PD Number 1 amending the Public Service Act governing the grant, regulation, and repeal of legislative franchises
On the grant, repeal, amendment of legislative franchises, the constitutional provision is as follows:
1987 Constitution, Art. XII Section 11. No franchise, certificate, or any other form of authorization for the operation of a public utility shall be granted except to citizens of the Philippines or to corporations or associations organized under the laws of the Philippines, at least sixty per centum of whose capital is owned by such citizens; nor shall such franchise, certificate, or authorization be exclusive in character or for a longer period than fifty years. Neither shall any such franchise or right be granted except under the condition that it shall be subject to amendment, alteration, or repeal by the Congress when the common good so requires. The State shall encourage equity participation in public utilities by the general public. The participation of foreign investors in the governing body of any public utility enterprise shall be limited to their proportionate share in its capital, and all the executive and managing officers of such corporation or association must be citizens of the Philippines. (underscoring supplied)
(Only Congress can repeal a legislative franchise.) JURISDICTIONAL ISSUES: 1.Whether a quo warranto proceeding is the proper remedy to repeal a legislative franchise.
2.Whether the Supreme Court acting on a quo warranto petition has the authority to repeal a legislative franchise.
(Quoted below is the legislative franchise of ABS-CBN: Republic Act 7966. This legislative franchise expires in 40 days, or on March 30, 2020. Congress goes on recess on March 11, 2020. A few hours ago, a resolution was filed in the House urging the Committee on legislative franchises to report out the committee report to plenary today.)
REPUBLIC ACT NO. 7966 – AN ACT GRANTING THE ABS-CBN BROADCASTING CORPORATION A FRANCHISE TO CONSTRUCT, INSTALL, OPERATE AND MAINTAIN TELEVISION AND RADIO BROADCASTING STATIONS IN THE PHILIPPINES, AND FOR OTHER PURPOSES
Section 1. Nature and Scope of Franchise. — Subject to the provisions of the Constitution and applicable laws, rules and regulations, the ABS-CBN Broadcasting Corporation, hereunder referred to as the grantee, its successors or assigns, is hereby granted a franchise to construct, operate and maintain, for commercial purposes and in the public interest, television and radio broadcasting stations in and throughout the Philippines, through microwave, satellite or whatever means including the use of any new technologies in television and radio systems, with the corresponding technological auxiliaries or facilities, special broadcast and other broadcast distribution services and relay stations.
Sec. 2. Manner of Operation of Stations or Facilities. — The existing and future stations or facilities of the grantee shall be constructed in a manner as will at most result only in the minimum interference on the wavelengths or frequencies of the other existing station or stations which may be established by law without in any way diminishing its own right to use its selected wavelengths or frequencies and the quality of transmission or reception thereon as should maximize rendition of the grantee’s services and/or the availability thereof.
Sec. 3. Prior Approval of the National Telecommunications Commission. — The grantee shall secure from the National Telecommunications Commission the appropriate permits and licenses for its station and shall not use any frequency in the television or radio spectrum without having been authorized by the Commission. The Commission, however, shall not unreasonably withhold or delay the grant of any such authority.
Sec. 4. Responsibility to the Public. — The grantee shall provide adequate public service time to enable the government, through the said broadcasting stations, to reach the population on important public issues; provide at all times sound and balanced programming; promote public participation such as in community programming; assist in the functions of public information and education; conform to the ethics of honest enterprise; and not use its stations for the broadcasting of obscene and indecent language, speech, act or scene, or for the dissemination of deliberately false information or willful misrepresentation to the detriment of the public interest, or to incite, encourage, or assist in subversive or treasonable acts.
Sec. 5. Right of Government. — A special right is hereby reserved to the President of the Philippines, in times of rebellion, public peril, calamity, emergency, disaster or disturbance of peace and order, to temporarily take over and operate the stations of the grantee, to temporarily suspend the operation of any station in the interest of public safety, security and public welfare, or to authorize the temporary use and operation thereof by any agency of the government, upon due compensation to the grantee, for the use of the said stations during the period when they shall be so operated.
Sec. 6. Term of Franchise. — This franchise shall be for a term of twenty-five (25) years from the date of effectivity of this Act.
Sec. 7. Acceptance and Compliance. — Acceptance of this franchise shall be given in writing to Congress within sixty (60) days from the effectivity of this Act. Upon giving such acceptance, the grantee shall exercise the privileges granted under this Act.
Sec. 8. Tax provisions. — The grantee, its successors or assigns, shall be liable to pay the same taxes on their real estate, buildings and personal property, exclusive of this franchise, as other persons or corporations are now or hereafter may be required by law to pay. In addition thereto, the grantee, its successors or assigns, shall pay a franchise tax equivalent to three percent (3%) of all gross receipts of the radio/television business transacted under this franchise by the grantee, its successors or assigns, and the said percentage shall be in lieu of all taxes on this franchise or earnings thereof: provided, that the grantee, its successors or assigns, shall continue to be liable for income taxes payable under Title II of the National Internal Revenue Code pursuant to Sec. 2 of Executive Order No. 72 unless the latter enactment is amended or repealed, in which case the amendment or repeal shall be applicable thereto.
The grantee shall file the return with and pay the tax due thereon to the Commissioner of Internal Revenue or his duly authorized representatives in accordance with the National Internal Revenue Code, and the return shall be subject to audit by the Bureau of Internal Revenue.
Sec. 9. Self-regulation by and Undertaking of Grantee. — The grantee shall not require any previous censorship of any speech, play, act or scene, or other matter to be broadcast and/or telecast from its stations: provided, that the grantee, during any broadcast and/or telecast, shall cut off from the air the speech, play, act or scene, or other matter being broadcast and/or telecast if the tendency thereof is to propose and/or incite treason, rebellion or sedition; or the language used therein or the theme thereof is indecent or immoral, and willful failure to do so shall constitute a valid cause for the cancellation of this franchise.
SECTION 10. Warranty in Favor of National and Local Governments. — The grantee shall hold the national, provincial, and municipal governments of the Philippines harmless from all claims, accounts, demands or actions arising out of accidents or injuries, whether to property or to persons, caused by the construction or operation of the stations of the grantee.
SECTION 11. Sale, Lease, Transfer, Usufruct, etc. — The grantee shall not lease, transfer, grant the usufruct of, sell nor assign this franchise or the rights and privileges acquired thereunder to any person, firm, company, corporation or other commercial or legal entity, without the approval of the Congress of the Philippines. Any person or entity to which this franchise is sold, transferred or assigned shall be subject to all the same conditions, terms, and limitations of this Act.
SECTION 12. General Broadcast Policy Law. — The grantee shall comply with a general broadcast policy law which Congress may hereafter enact.
SECTION 13. Separability Clause. — If any of the sections or provisions of this Act is held invalid, all the other provisions not affected thereby shall remain valid.
SECTION 14. Repealability and Non-exclusivity Clauses. — This franchise shall be subject to amendment, alteration or repeal by the Congress of the Philippines when the public interest so requires and shall not be interpreted as an exclusive grant of the privileges herein provided for.
SECTION 15. Effectivity. — This Act shall take effect fifteen (15) days from the date of its publication in at least two (2) newspapers of general circulation in the Philippines.
The specific case law defining the nature of a legislative franchise granted to broadcast media organizations is Radio Communications of the Philippines Inc. vs. National Telecommunications Commission and Kayumanggi Radio Network Inc. (or RCPI vs. NTC) G.R. No. L-68729 May 29, 1987 (where petitioner sought to circumvent the NTC requirement of a certificate of convenience to be granted before a radio station can operate)
The Supreme Court defined a franchise in the case of RCPI vs. NTC as follows: “ … A franchise started out as a “royal privilege or (a) branch of the King’s prerogative, subsisting in the hands of a subject.” This definition was given by Finch, adopted by Blackstone, and accepted by every authority since (State v. Twin Village Water Co., 98 Me 214, 56 A 763 (1903)). Today, a franchise, being merely a privilege emanating from the sovereign power of the state and owing its existence to a grant, is subject to regulation by the state itself by virtue of its police power through its administrative agencies. We ruled in Pangasinan transportation Co., Inc. v. Public Service Commission (70 Phil. 221) that:
… statutes enacted for the regulation of public utilities, being a proper exercise by the State of its police power, are applicable not only to those public utilities coming into existence after its passage, but likewise to those already established and in operation …
Executive Order No. 546, being an implementing measure of P.D. No. I insofar as it amends the Public Service Law (CA No. 146, as amended) is applicable to the petitioner who must be bound by its provisions. The petitioner cannot install and radio telephone services on the basis of its legislative franchise alone.”
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JURISDICTIONAL ISSUE: Whether the Supreme Court can or should take over the functions of the National Telecommunications Commission in passing upon issues of fact on whether or not ABS-CBN has “abused its franchise”.