The Underlying Basis of NTC why ABS Was Not Granted at Least, a Provisional

Franchise

https://en.wikipedia.org/wiki/ABS-CBN_franchise_renewal_controversy

1. What is a provisional franchise?

https://news.mb.com.ph/2020/05/04/doj-insists-abs-cbn-can-operate-with-provisional-
authority/ done

https://www.bworldonline.com/ntc-mum-on-provisional-authority-to-media-company/

2. Why is abs not granted?

https://newsinfo.inquirer.net/1268851/calida-warns-ntc-vs-granting-provisional-authority-
to-abs-cbn done

https://news.abs-cbn.com/news/05/14/20/ntc-sends-abs-cbn-broadcast-shutdown-
explanation-to-house-lawmaker
3. Why is abs given a CDO
EO 546 https://www.lawphil.net/executive/execord/eo1979/eo_546_1979.html done

4. Why a CDO is not proper

https://verafiles.org/articles/vera-files-fact-check-ntc-backpedals-abs-cbn-franchise
The 25-year franchise of ABS-CBN granted through Republic Act No. 7966 on March
30, 1995 expired this year. In an order dated May 5, 2020, NTC directed ABS-CBN to
immediately cease and desist the operation of their radio and television stations as
stated. The Order cited that upon the expiration of RA 7966, ABS-CBN no longer has a
valid and subsisting congressional franchise.

Prior to the order, there have been issues on whether NTC can provide a provisional
authority to ABS-CBN while the renewal of their franchise is pending in the Congress.

In the case of GMA Network v NTC (2014), NTC clarified in its comment the meaning of
a provisional authority. A provisional authority (PA) refers to an authority given to an
entity qualified to operate a public utility for a limited period during the pendency of its
application for or before the issuance of its Certificate of Public Convenience (CPC). It
has a general scope because it is akin to a provisional CPC in that it gives a public
utility provider power to operate as such and be bound by the laws and rules governing
public utilities, pending the issuance of its actual CPC 1.

The franchise of ABS-CBN was expiring on May 4, 2020, which is the same day of the
resumption of session in Congress. The Congress was not able to pass the law
extending the franchise of ABS-CBN for another 25 years before it took a two-month
break early March. Absent the franchise, Solicitor General Calida claims that the NTC
Commissioners could risk subjecting themselves to prosecution under the Anti-Graft
and Corrupt Practices Law in the country if it issued said “unlawful” PAs. 2

NTC’s direction to ABS-CBN to stop operating its various TV and radio broadcasting
stations nationwide was primarily due to the absence of “a valid Congressional
Franchise as required by law.”3 Their non-issuance of a provisional authority further
acted with a cease-and-desist order which gave ABS-CBN ten days from receipt of the
Order to respond as to why the frequencies assigned to it should not be recalled. NTC
also cited section 1 of RA 38464, or the Radio Control Law which provided:

1 GMA Network Inc. v. NTC Gr. No 196112 February 26, 2014 https://lawphil.net/judjuris/juri
2014/feb2014/gr_196112_2014.html

2 https://newsinfo.inquirer.net/1268851/calida-warns-ntc-vs-granting-provisional-authority-to-abs-cbn
3 NTC Issues Cease and Desist Order Against ABS-CBN. May 5, 2020. National
Telecommunications Commission.
4 Republic Act 3846. http://ntc.gov.ph/wp-content/uploads/2015/10/LawsRulesRegulations/RAs_PDs
_EOs/RA_3846.pdf
 “No person, firm, company, association or corporation shall construct, install,
establish, or operate a radio station within the Philippine Islands without having
first obtained a franchise therefor from the Philippine Legislature; Provided
however, That no franchise from the Legislature shall be necessary for the
construction, installation, establishment or operation of a broadcasting station, an
amateur station, an experimental station, a training station, a station on board a
mobile vessel, train, or aircraft, or a private station in a place without any means
of communication.”

NTC’s response to the Congress’ request for a written explanation as to why they have
not issued a PA was:

“Allowing ABSCBN Corp to operate beyond its lapsed franchise would have
encroached on Congress' exclusive right over legislative franchises.”

They maintained that their non-commitment to grant PA to ABS-CBN was because they
had considered the Office of the Solicitor General’s advice which he released five days
before the expiry of the franchise. SolGen Calida also included in the letter to NTC that
they would face graft charges if it issued ABS-CBN provisional authority. 5

Moreover, NTC’s denial of issuing a PA was further strengthened because a case for
quo warranto was actually filed by the Office of the Solicitor General. NTC
Commissioner Cordoba further explained that it would be untenable on their part to let
the franchise continue and based their non-issuance with RA 3846. Commissioner
Cordoba noted:

“We never issued a provisional license to any broadcaster while their franchise
was pending in Congress. What happened then was we just allowed them to
continue operating; [however] the difference from those instances and on the
ABS-CBN issue is that…a case for quo warranto was actually filed by the Office
of the Solicitor General.”6

The Department of Justice, however, has a different stand. Justice Secretary Menaro
Guevarra assured the media that “The DOJ stands by its position that there is sufficient
equitable basis to allow broadcast entities to continue operating while the bills for the
renewal of their franchise remain pending with Congress.” Guevarra added that “while
existing laws provide that a person who wishes to operate a radio/tv station must first
obtain a legislative franchise and thereafter a license to operate from the NTC, there is
no law that governs the rights and obligations of a person or entity who has already
been granted a legislative franchise and has fully operated for many years, has applied
for the renewal of its franchise long before the expiration thereof, but for reasons not

5 https://newsinfo.inquirer.net/1281630/https-newsinfo-inquirer-net-1270074-ntc-issues-cease-and-desis
t-order-vs-abs-cbn

6 https://newsinfo.inquirer.net/1281630/https-newsinfo-inquirer-net-1270074-ntc-issues -cease-and-
desist-order-vs-abs-cbn
attributable to said person or entity, the legislature has not yet acted on the renewal of
the said franchise.”

SolGen Calida dismissed the opinion of the DOJ by citing the 2003 Supreme Court
ruling in the case of Associated Communications & Wireless Service – United
Broadcasting Networks v. NTC. According to him, the NTC could not use the DOJ’s
opinion as legal basis to grant ABS-CBN provisional authority because in the
aforementioned case, the Court held invalid a 1991 DOJ opinion which stated that the
NTC may issue a permit or authorization without a legislative franchise, for the Justice
Department’s opinion is merely persuasive and not necessarily controlling. Calida
further stressed that equitable considerations are only available when no applicable law
exists on a particular matter, but “where the law is clear, as in this case, it must be
obeyed.”7 Calida then reminded the NTC that the Constitution, laws, and jurisprudence
provide clear mandates on the matter. The OSG’s opinion on equity was later confirmed
as one of the points that the NTC considered in the non-issuance of PA for ABS-CBN.

Another advise of Calida that was taken into consideration by the NTC in its decision
not to issue a PA for ABS-CBN is the OSG’s reminder that PAs are issued only to those
who have valid and existing franchises. Using the same case of Associated
Communications & Wireless Service – United Broadcasting Networks v. NTC, Calida
noted that the facts in ABS-CBN’s case is different from the ones in the previous
aforementioned case since the subject company in the latter had already been granted
a franchise and a license to operate albeit subject to further deliberation for its renewal 8.
In ABS-CBN’s case, the network was no longer a holder of a franchise, so NTC would
not be able to issue a valid PA. To emphasize, the OSG outlined the steps of the
issuance of a valid PA:

“An entity must first secure a franchise from Congress. After it is granted one, it
should apply for a Certificate of Public Convenience from the NTC before it can
operate. Pending approval of its CPC, however, it can apply for a PA so it can
start operating during the interim.

Hence, a PA should only be issued once a congressional franchise has been

granted and an application for CPC is pending before the NTC for approval. The
NTC cannot issue a PA when the broadcast company has no valid and existing
legislative franchise.”9

7https://newsinfo.inquirer.net/1268851/calida-warns-ntc-vs-granting-provisional-authority-to-abs-cbn
8 https://news.mb.com.ph/2020/05/04/doj-insists-abs-cbn-can-operate-with-provisional-authority/
9 https://news.mb.com.ph/2020/05/03/osg-warns-ntc-against-issuing-provisional-permits-to-operate-to-
abs-cbn-its-subsidiary/
In the said Supreme Court decision, the power to issue and extend franchises which
includes conditional permits for operation of radio and television broadcasting stations
lies with Congress. Franchise bills are considered a local bill which must “originate
exclusively in the House of Representatives, pursuant to Section 24, Article VI of the
Constitution. However, the Senate may “propose or concur with amendments.”

In an interview on CNN’s The Source dated February 25, 2020 10, former Chief Justice
Reynato Puno who penned the decision, without a franchise, ABS-CBN cannot operate
after its franchise’ expiry. He also commented that a concurrent resolution of the both
houses of Congress or a resolution from the House of Representative, granting ABS-
CBN a provisional permit would suffice to allow it to continue airing pending the
legislative action on the franchise application since it will only be a status quo order.

Pending the hearing, the House Committee on Legislative Franchises Chair Franz
Alvarez wrote a letter concurred in by Speaker Alan Peter Cayetano, urged the NTC to
issue to ABS-CBN Corporation and its subsidiaries and affiliates 11. The Senate, on the
other hand, filed a concurrent resolution through Senate Minority Leader Franklin Drilon
seeking to authorize the NTC to grant the network a provisional permit to operate until
the 18th Congress finally acts on the renewal of its franchise, citing that both the Senate
and the House need more time to deliberate on the matter 12. The letter was sent to the
office of the NTC Commissioner.

To emphasize, NTC does not have the power to issue provisional authority without a
franchise given by Congress in accordance with Republic Act No 7929 which defines
the powers of NTC. As a matter of practice, there have been instances where NTC give
provisional authority before the expiration of the franchise.

10 https://www.youtube.com/watch?v=4lhx4AO8bno&feature=youtu.be&t=1491
11 http://www.congress.gov.ph/press/details.php?
pressid=11830&fbclid=IwAR2k1djbzPdH7eI3WaboY3AMPoqgfkhv7iCBwv7QrjHO-EkrKMyW9xzc6jg
12 https://www.philstar.com/headlines/2020/02/27/1996450/house-panel-tells-ntc-let-abs-cbn-operate