M230 Graduate School Ethics and Legal Standards. 2nd Issue: On legislative franchise

M230 Graduate School Ethics and Legal Standards. 2nd Issue: On legislative franchise:

   

      At your option, for 10 points, you may post what you research on in the comments section, as discussed in class, i.e., the legal standards that you researched on and discussed in class two weeks ago on legal standards involved in the application for legislative franchise and the “petition” to shut down ABS-CBN through a Petition for Quo Warranto from government lawyers (the OSG).

       Deadline: Saturday at 5pm Feb. 29, 2020.

        Advance Happy Anniversary of the People’s Uprising!

11 thoughts on “M230 Graduate School Ethics and Legal Standards. 2nd Issue: On legislative franchise

  1. In our class two weeks ago, I researched on question #3: What are the government agencies that are tasked to regulate the two kinds of press — television and print?

    I split the work with another classmate and I researched on government agencies in-charge of print media.

    According to the different sites that I visited, the Philippines is hailed as “one of the most free” when it comes to free press. There are no actual agencies that regulate print media.

    If there are any agencies that serve as watchdogs for print media, the sites I looked into stated they would be the NBI, on cases such as cyber-crime, and the Philippine Senate, when it came to cases about defining libel, and the Securities and Exchange Commission, which would be in charge of the validity of the media institution as a business.

    Instead, there are a lot of agencies that have formed that act as safe guards and self-regulation of the industry including the National Press Club (established in 1952), the Philippine Press Institute (established in 1964), and the Center for Media Freedom and Responsibility (established in 1989).

    Most recently, the Philippine Competition Commission, which was founded in 2016, was formed to ensure that fair and healthy market competition in all industries, including media and the press.

    Other than those listed above, there are no actual government agencies that regulate and oversee print media and the free press.

    Most of the print media have their own internal ombudsman (Inquirer and ABS-CBN are mentioned as having their own system in place) to self-regulate themselves.

  2. In our past discussion, I was assigned to explain what a “quo warranto” petition is.

    The words “quo warranto” were derived from Medieval Latin, with the direct translation, “By what warrant?” In law terms, as defined by Merriam-Webster, a quo warranto is “a proceeding for determining by what authority or right an office or franchise is held or exercised and seeking as an extraordinary remedy the discontinuance of an unlawful exercise of office or franchise.”

    Directly quoted from an article by Lian Buan from Rappler, “Section 1(c), Rule 66 of the Rules of Court says a quo warranto petition can be filed against an association which acts as a corporation within the Philippines without being legally incorporated or without lawful authority so to act.”

    Last February 10, Solicitor General Jose Calida filed a 63-page quo warranto petition against ABS-CBN via the Supreme Court. The petition indicated that the franchise committed 2 grave violations, namely, it allowed foreign owner to control the franchise through the selling of Philippine Depositary Receipts (PDRs), and they also operated the Kapamilya Box Office (KBO) as a new TV channel without any permits from the government.

    ABS-CBN was first granted its 25 year franchise by former president Fidel Ramos back in 1995, via the Republic Act 7966. Through the quo warranto, the Solicitor General is asking the Supreme Court to repeal RA 7966. Such act is a function of the congress or an administrative agency.

    In an article by Inquirer, it suggested that the petition raises some legal questions. Some of which are the following, directly quoted from the article:

    “(1) Does this exclusivity imply that only Congress, to the exclusion of the Supreme Court, may “revoke or forfeit” the franchises it had granted?

    (2) Quo warranto allows the solicitor general to challenge “a person who usurps, intrudes into, or unlawfully holds or exercises a… franchise.” Does it apply against a corporation with an existing valid franchise which it allegedly “abused or misused”?

    (3) Does ABS-CBN’s “free-to-air” franchise prohibit it from offering “pay-per-view” KBO programs?

    (4) Do PDRs grant their holders ownership rights? Are PDRs equivalent to shares of stock? Or, are they equivalent merely to bonds and other forms of indebtedness?

    (5) Assuming that the KBO is an abuse or misuse, is forfeiture of the franchise the proper penalty? Is it not merely a refund? Or a fine? Or a halt of the service?”

    [Source: Panganiban, Artemio V. “Quo Warranto on ABS-CBN (Part 1: Questions).” Inquirer Opinion, 23 Feb. 2020, opinion.inquirer.net/127549/quo-warranto-on-abs-cbn-part-1-questions.]

  3. In connection with the discussion about freedom of the press centering on legal standards in an application for a legislative franchise, I researched about question #3: What government agencies are involved in the process of setting legal conditions for the establishment and operation of a media outlet, broadcast in particular?

    Though an independent media regulation body does not exist in the country, there are several government agencies involved in the process of setting legal conditions for the establishment and operation of a media outlet.

    A “twin franchising” principle in setting up a broadcast business is followed.
    First, it requires registration with the Securities and Exchange Commission (SEC) in order to begin its corporate existence and conduct business in the Philippines.
    The next step is to seek a legislative franchise from Congress, also called a primary franchise, with a term of 25 years, subject to renewal. This is obligatory for all private corporate entities.
    Then, an authorization by the National Telecommunication Commission (NTC) through a Certificate of Public Convenience and Necessity (CPC) – called a “secondary franchise” is also needed.

    On the other hand, Cable TV does not need a secondary franchise but an authorization by the NTC.
    Print and online media also don’t need franchise to operate but the law requires publishers, editors, managers, owners and stockholders of a newspaper to register with the Philippine Postal Corporation (PPC) for them to avail themselves of mailing privileges.

    Moreover, there is no specific government body dedicated to monitoring media concentration but the Philippine Competition Commission (PCC)–a new anti-trust body established under the Fair Competition Act serves to monitor, prevent or otherwise breakup media monopolies.

    Source: https://philippines.mom-rsf.org/en/context/law/

  4. With the ongoing issue on the renewal of ABS-CBN franchise and having it discussed in class (Media 230), I was assigned to research on question number 1. What are the requirements in the application for a legislative franchise in print and broadcast media in the Philippines? We divided the topic with one of my classmate and I was asked to do a research on broadcast media.

    After reading different articles, here are the things I learned on this topic of interest.

    In getting a franchise for a broadcast media, the company should follow the constitutional law which states that “The ownership and management of mass media shall be limited to citizens of the Philippines, or to corporations or associations wholly owned and managed by such citizens.” This only means that media companies should be 100% owned by Filipinos.

    The process in broadcast media takes a lot in comparison to print. First, the company should register in Securities and Exchange Commission (SEC) like all private entities do in order to begin a business in our country. The next is the need to seek a legislative franchise from Congress, also called primary franchise, with 25 years of term and is subject to renewal. Also, in order to fully start a new television or media outlet they need an authorization by the National Telecommunication Commission (NTC) through Certificate of Public Convenience and Necessity (CPC) or the “secondary franchise”.

    In line with this, licensing is necessary for the government to control the use of frequency bandwidths. Without the government control, the medium would be of little use because of discord of competing voices, none of which could be clearly and predictably heard.

    Source: https://philippines.mom-rsf.org/en/context/law/title-to-be-edited/

  5. Last meeting we had a discussion regarding the issue of the renewal of the ABS-CBN’s franchise and I was assigned to research the statements given by the government regarding the said issue.

    According to Buhay Party Representative Lito Atienza on his interview in CNN Philippines published last February 24, he stated that he does not believe that the senate is too busy to discuss the renewal of the franchise of ABS-CBN. As a rebuttal to Speaker Allan Peter Cayetano’s statement that the hearing about the franchise will just a waste of time and they have a lot of bills that are pending and worth spending for their efforts and time.

    Atienza also added that if Cayetano still neglects the issue, it would be better if he would just resign as part of the congress since he is not doing his job.

    “Ang panawagan sa pag-resign ay ginagawa sa floor… The moment na ayaw na ako ng majority ng mga kongresista, aalis ako,” (CNN Philippines, 2020). This is the exact statement that Cayetano said on his interview as a response to Atienza’s call for his resignation.

    According to one of the articles in Radyo Inquirer published last February 23, Malacañang spokesperson Salvador Panelo released a statement that the President said the he is not interested to monitor the hearing about the issue since he has a lot of things to do.

    Moreover, on Panelo’s previous statement he also stated that Malacañang has nothing to do with the issue regarding the franchise of ABS-CBN network and he also pointed out the we should let the Solicitor General do his job. He also mentioned that they will not interfere with any proceedings of the congress.

    On Senator Bato Dela Rosa’s statement during the Philippine Senate hearing involving the ABS-CBN’s franchise, he said the he is one step closer in supporting the case of the network for the renewal of its franchise. In contrast to his statement last week that he said that the welfare of the Filipino people is more important than the 11,000 ABS-CBN employees who are about to lose their jobs if the franchise failed to renew.

    In addition, Senate President Vicente Sotto III said that why is the resolution regarding the franchise of a network to operate was asked from the congress wherein ever since no one asked them to do such things.

    “I’m just wondering why they want a resolution from us when in the previous expired franchises they never asked for one. Why are they placing the burden on us? They should be decisive enough to act,” (GMA News Online, 2020).

    As conclusion, I think all of the parties involved to this issue should do their part in making things right not just for the interest of an individual but they have to consider the effect of their decisions and actions to the Filipino nation.

    Sources:

    ABS-CBN News (2020). Bato says ‘one step closer’ to backing ABS-CBN franchise renewal. Retrieved from: https://news.abs-cbn.com/news/02/24/20/bato-says-one-step-closer-to-backing-abs-cbn-franchise-renewal

    CNN Philippine Staff (2020). ‘Maybe we should have a new Speaker’: Solon slams House inaction in ABS-CBN franchise case. Retrieved from: https://www.cnnphilippines.com/news/2020/2/24/Lito-Atienza-House-Speaker-Alan-Peter-Cayetano-ABS-CBN-franchise-renewal.html

    Galvez, Daphne (2020). Duterte ‘not interested’ in Senate hearing on ABS-CBN franchise — Panelo. Retrieved from: https://newsinfo.inquirer.net/1232293/duterte-not-interested-in-senate-hearing-on-abs-cbn-franchise

    GMA News Online (2020). Sotto: Why the need for concurrent reso for ABS-CBN franchise?. Retrieved from: https://www.gmanetwork.com/news/news/nation/727305/sotto-why-the-need-for-concurrent-reso-for-abs-cbn-franchise/story/

    Lopez, Melissa (2020). Cayetano says Congress too busy to tackle ABS-CBN franchise renewal. Retrieved from: https://cnnphilippines.com/news/2020/2/14/Cayetano-Congress-too-busy-ABS-CBN-renewal.html

  6. Last meeting we had a discussion regarding the issue of the renewal of the ABS-CBN’s franchise and I was assigned to research the statements given by the government regarding the said issue.

    According to Buhay Party Representative Lito Atienza on his interview in CNN Philippines published last February 24, he stated that he does not believe that the senate is too busy to discuss the renewal of the franchise of ABS-CBN. As a rebuttal to Speaker Allan Peter Cayetano’s statement that the hearing about the franchise will just a waste of time and they have a lot of bills that are pending and worth spending for their efforts and time.

    Atienza also added that if Cayetano still neglects the issue, it would be better if he would just resign as part of the congress since he is not doing his job.

    “Ang panawagan sa pag-resign ay ginagawa sa floor… The moment na ayaw na ako ng majority ng mga kongresista, aalis ako,” (CNN Philippines, 2020). This is the exact statement that Cayetano said on his interview as a response to Atienza’s call for his resignation.

    According to one of the articles in Radyo Inquirer published last February 23, Malacañang spokesperson Salvador Panelo released a statement that the President said the he is not interested to monitor the hearing about the issue since he has a lot of things to do.

    Moreover, on Panelo’s previous statement he also stated that Malacañang has nothing to do with the issue regarding the franchise of ABS-CBN network and he also pointed out the we should let the Solicitor General do his job. He also mentioned that they will not interfere with any proceedings of the congress.

    On Senator Bato Dela Rosa’s statement during the Philippine Senate hearing involving the ABS-CBN’s franchise, he said the he is one step closer in supporting the case of the network for the renewal of its franchise. In contrast to his statement last week that he said that the welfare of the Filipino people is more important than the 11,000 ABS-CBN employees who are about to lose their jobs if the franchise failed to renew.

    In addition, Senate President Vicente Sotto III said that why is the resolution regarding the franchise of a network to operate was asked from the congress wherein ever since no one asked them to do such things.

    “I’m just wondering why they want a resolution from us when in the previous expired franchises they never asked for one. Why are they placing the burden on us? They should be decisive enough to act,” (GMA News Online, 2020).

    As conclusion, I think all of the parties involved to this issue should do their part in making things right not just for the interest of an individual but they have to consider the effect of their decisions and actions to the Filipino nation.

    Sources:

    ABS-CBN News (2020). Bato says ‘one step closer’ to backing ABS-CBN franchise renewal. Retrieved from: https://news.abs-cbn.com/news/02/24/20/bato-says-one-step-closer-to-backing-abs-cbn-franchise-renewal

    CNN Philippine Staff (2020). ‘Maybe we should have a new Speaker’: Solon slams House inaction in ABS-CBN franchise case. Retrieved from: https://www.cnnphilippines.com/news/2020/2/24/Lito-Atienza-House-Speaker-Alan-Peter-Cayetano-ABS-CBN-franchise-renewal.html

    Galvez, Daphne (2020). Duterte ‘not interested’ in Senate hearing on ABS-CBN franchise — Panelo. Retrieved from: https://newsinfo.inquirer.net/1232293/duterte-not-interested-in-senate-hearing-on-abs-cbn-franchise

    GMA News Online (2020). Sotto: Why the need for concurrent reso for ABS-CBN franchise?. Retrieved from: https://www.gmanetwork.com/news/news/nation/727305/sotto-why-the-need-for-concurrent-reso-for-abs-cbn-franchise/story/

    Lopez, Melissa (2020). Cayetano says Congress too busy to tackle ABS-CBN franchise renewal. Retrieved from: https://cnnphilippines.com/news/2020/2/14/Cayetano-Congress-too-busy-ABS-CBN-renewal.html

  7. During the February 14 class, I volunteered to aid the discussion by reviewing the grounds raised in the quo warranto.

    The first issue raised are the programs and the resulting revenues gained from additional channels and pay-per-views. Pay-per-views for sport events such as Manny Pacquaio’s boxing matches, and additional channel subscriptions via TV plus incur additional revenue. Access to KBO require one-time payment from households. These activities are said to be beyond the scope of its franchise.
    Philippine Star: Solicitor general Jose Calida said ABS-CBN did not secure the necessary permits from the National Telecommunications Commission (NTC), citing an order from the NTC in 2019 that supposedly orders the network to “refrain from offering any pay television service.”
    However, this argument is short sighted. ABS-CBN secured these permits in 2015. The 2019 NTC issue cited by Calida was brought about the fees that ABS-CBN requires from consumers for the additional channels and pay-per-views. These are not grounds for closing down TV Plus and KBO, much less the entire corporation. The company can simply be fined for amassing revenue from paid TV. There is no clear law or clauses under the same RA yet that prohibits earning from digital terrestrial television (DTTV). Much like the internet, DTTV technology only arrived in the Philippines decades after the law was written.
    Source: https://www.philstar.com/headlines/2020/02/12/1992514/calida-says-abs-cbns-kbo-service-illegal-network-says-it-has-permits
    According to Calida, ABS-CBN has also violated the constitution by granting foreign investors shares in ownership of the network, which is a Filipino media corporation.

    The network, the OSG said, had issued Philippine Deposit Receipts (PDRs) through ABS-CBN Holdings Corp. to foreigners in violation of the foreign ownership restriction on mass media in the Constitution. – Philippine Star
    In response, Rappler clarified and detailed the misconceptions on PDRs: “PDRs are financial instruments used by media entities to allow foreign investments without violating the constitutional rule that media companies should be 100% Filipino-owned. PDRs are a common, lawful practice, and their legality has been upheld by the Supreme Court.”
    Source: https://www.rappler.com/nation/251410-calida-hits-abs-cbn-foreign-ownership

  8. In the discussion, I talked about one of the requisites of securing a broadcast franchise under R.A. 8098 and the related issues to the Petition for Quo Warranto of Solicitor General Callida against ABS-CBN Corporation and ABS-CBN Convergence.

    An Act Granting Broadcast Enterprises and Affiliated Media (BEAM), Inc. a Franchise to Establish, Construct, Operate and Maintain Commercial Radio and Television Broadcast Stations Including Cable Television Systems in the Philippines of Republic Act No. 8098 by the congress of the Philippines which was enacted on 6 July 1995

    The main arguments stated in the Petition for Quo Warranto are the following:

    Respondent ABS-CBN Corporation violated its legislative franchise when it operated a pay-per-view channel through free-to-air signals.
    Respondent ABS-CBN Convergence, Inc. violated its franchise under R.A. No. 7908, as amended by R.A. No. 8332.
    Respondent ABS-CBN Corporation’s issuance of Philippine Deposit Receipts through ABS-CBN Holdings Corporation. violates foreign ownership restriction of mass media under section 11, Article XVI of the constitution.

    On the first argument, Solicitor General Callida alleges that NTC did not authorize and grant Conditional Access System through monetizing from selling ABS-CBN TV Plus box and subscription fees.

    Under R.A. No. 7966, ABS-CBN is required to secure prior authority from NTC before it uses any frequency in the television or radio spectrum:

    In which section 4 of the ABS-CBN Corporation franchise law states that “the use of conditional access system (CAS) on DTTB service shall be subject to such conditional access guidelines that the Commision or any other relevant government agency may hereafter issue.

    On the second argument, the ABS-CBN broadcast corporation has been hardly faulted for not complying with the prior approval of the Congress of the Philippines to which allegedly fall on the grounds of:

    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 entity, without the prior approval of the Congress of the Philippines.

    On the third argument, in the section 11, Article XVI of the Philippine constitution, it stated that:

    Section 11.
    (1) The ownership and management of mass media shall be limited to citizens of the Philippines, or to corporations, cooperatives or associations, wholly-owned and managed by such citizens.

    The Congress shall regulate or prohibit monopolies in commercial mass media when the public interest so requires. No combinations in restraint of trade or unfair competition therein shall be allowed.

    (2) The advertising industry is impressed with public interest, and shall be regulated by law for the protection of consumers and the promotion of the general welfare.

    Only Filipino citizens or corporations or associations at least seventy per centum of the capital of which is owned by such citizens shall be allowed to engage in the advertising industry.

    The participation of foreign investors in the governing body of entities in such industry shall be limited to their proportionate share in the capital thereof, and all the executive and managing officers of such entities must be citizens of the Philippines.

    Sources:
    Republic rep. by Solicitor General Calida vs. ABS-CBN Corp. and ABS-CBN Convergence Inc. Petition for Quo Warranto G.R. No. 251358., Supreme Court, 2020.
    Republic act No. 8098 – An Act Granting Broadcast Enterprises and Affiliated Media (BEAM), Inc. a Franchise to Establish, Construct, Operate and Maintain Commercial Radio and Television Broadcast Stations Including Cable Television Systems in the Philippines of 1995.
    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 of 1995.
    Nolledo, Jose N. The Constitution Of the Republic of the Philippines Explained : English-Filipino Version. Manila, Philippines :National Book Store, 1987.

    -Pat J.

  9. Relevant laws to requirements of operating a TV Network franchise are:

    RA 10904 Sec. 10
    The grantee shall hold the national, provincial, city, and municipal governments of the Philippines free 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 10 proves that ABS-CBN has always delivered covering calamities and cooperating, working closely with the local government units whenever needed over the years such as the recent Taal eruption and the ongoing NCov outbreak, ABS-CBN’s tireless efforts to cover these events display their dedication and live up “in the service of Filipino” motto.
    RA 7042
    Foreign investments shall be welcomed in the Philippines as supplement to Filipino capital and technology in those enterprises serving mainly the domestic market.
    The foreign investment act of 1991 allow foreign collaboration with the SEC’S 60-40 (60% local and 40% foreign) rule, in which the Solgen point out that network breach foreign ownership restrictions specifying issuing Philippine Depositary Receipts (PDR) to foreigners. Atty. Francis Lim states that issuing PDRs does not equate to foreign ownership but rather “the right to receive dividends from the issuer.”
    This type of argument has been used to close down Rappler and as the numbers are concerned and legislation merits these facts indicate of ABS-CBN’s compliance with the law.
    RA 3486 Section 3A and B
    a) He shall classify radio stations and prescribe the nature of service to be rendered by each class and by each station within any class;
    b) He shall assign call letters and assign frequencies for each station licensed by him and for each station established by virtue of a franchise granted by the Philippine Legislature and specify the stations to which each such frequency may be used.
    For radio stations, DZMM 630 and MOR (My Only Radio) 101.9 are two known distinct radio frequency numbers that does not have any distinct variation in rural areas to ensure access to every Filipino around the country and at the same time displays ABS CBN’s commitment to operate in the designated frequencies and stations they’re only allowed to operate.

    All in all, these three laws mentioned poses ABS-CBN’s compliance with the reuirements given in terms of equipment, broadcast installments, foreign ownership/investment laws that gives government a difficult time to impose lawsuits and such, prompting them to delay renewal hearing and pressuring congress not to take action, and Solgen Calida pushing the gag order to control public opinion.

  10. In the previous discussion regarding the legal grounds on the case against ABS-CBN, I researched about the network’s responses.

    PDRs are legal mechanisms for foreign investors to support local businesses without having board/ day-to-day control on the companies. Also, PDRs are also used by other networks such as GMA and TV5.

    Regarding tax issues, ABS-CBN has stated that they do not have any outstanding issues with BIR, NTC, and SEC.

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