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SolGen acts to cancel ABS-CBN franchise

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The government has asked the Supreme Court to forfeit the legislative franchise of ABS-CBN for violating the Constitution and for allegedly committing “abusive practices” prejudicial to the public interest.

Solicitor General Jose Calida filed the petition for quo warranto himself before the Court.

“The legislative franchises of ABS-CBN Corp. and its subsidiary, ABS-CBN Convergence Inc. must be revoked,” Calida said in a statement.

“We want to put an end to what we discovered to be highly abusive practices of ABS-CBN benefiting a greedy few at the expense of millions of its loyal subscribers. These practices have gone unnoticed or were disregarded for years,” he added.

Calida said “a franchise is a special privilege granted by the state, and should be restricted only to entities which faithfully adhere to our Constitution and laws.”

Calida also asked the Supreme Court to immediately stop the operation of ABS-CBN’s Kapamilya Box Office, a channel subscription where viewers can watch their favorite movies for P30 to P99 per week.

Calida said the petition will show that ABS-CBN has been broadcasting for a fee, which is beyond the scope of its legislative franchise.

“ABS-CBN Corporation is prohibited from using the free-to-air signals to profit from the public, except to comply with its contractual obligations under contracts with commercial advertisers and producers,” read the petition.

Calida said using the free-to-air frequency to charge subscribers is an abuse of its privilege.

“This warrants the revocation of ABS-CBN Corporation’s legislative franchise,” Calida said.

He said he media giant, hiding behind an “elaborately crafted corporate veil,” has been allowing foreign investors to take part in the ownership of the network, which is in violation of the Constitution, which bars foreign interests in mass media.

In particular, Calida accused the ABS-CBN of violating the Constitution when it issued Philippine Deposit Receipts through ABS-CBN Holdings Corp. to foreigners, contravening the constitutional restrictions on foreign ownership of mass media.

The Solicitor General also claimed that the ABS-CBN abused the privilege granted by the state when it launched and operated a pay-per-view channel in ABS-CBN TV plus , the KBO Channel, without approval or permit from the National Telecommunications Commission.

“While it’s true that broadcasting is a business, the welfare of the people must not be sacrificed in the pursuit of profit,” Calida said.

On the other hand, ABS-CBN Convergence Inc. (formerly Multi-Media Telephony Inc.) resorted to an ingenious corporate layering scheme to transfer its franchise without the necessary congressional approval, Calida said.

“It also failed to publicly offer any of its outstanding capital stock to any securities exchange within the Philippines within five years from the start of its operations, which is [an] indispensable condition in its franchise,” the chief state lawyer added.

This is the second time that Calida has filed a quo warranto petition before the Supreme Court.

The first time, he sought the nullification of the appointment of then Chief Justice Maria Lourdes Sereno. She was later ousted by the 15-member bench for failing to file statements of assets, liabilities and net worth.

The National Union of Journalists of the Philippines denounced the Office of the Solicitor General’s move and asked the Court and Congress to prove their independence.

READ: ‘ABS-CBN franchise up to Congress’

“This proves without a doubt that this government is hellbent on using all its powers to shut down the broadcast network whose franchise renewal, now pending in Congress, President Rodrigo Duterte has personally vowed to block. So much so that it would risk trampling on Congress’ authority to legislate franchises,” the NUJP said in a statement.

“We call on Congress and the Supreme Court to once and for all prove to the people that they are truly, as the Constitution envisions, independent and co-equal branches of government that are not at the beck and call of the executive,” it added.

“We must not allow the vindictiveness of one man, no matter how powerful, to run roughshod over the constitutionally guaranteed freedoms of the press and of expression, and the people’s right to know,” the NUJP said.

The Palace on Monday said President Duterte had no hand in Calida’s petition against ABS-CBN.

Presidential Spokesman Salvador Panelo said the President does not interfere with the work of other government officials.

Asked if the President communicated with Calida before the filing of the quo warranto petition, Panelo said: “None that I know of. What I know of the President’s style is, if you want to do something in relation to your job, do it. Let the law takes it course.”

Early in December last year, Duterte told ABS-CBN executives to just sell the network since he will make sure that they will be “out,” a pronouncement seen by media groups as an attack on press freedom.

Duterte has repeatedly threatened ABS-CBN for not airing his 2016 paid election advertisement and for alleged biased reporting.

“If you are expecting that your franchise will be renewed, I am sorry. I will see to it that you are out,” Duterte said in a speech on Dec. 3 in Malacañang.

Panelo said Duterte’s threat was just an “expression of displeasure.” 

“There is a basis for his expression of displeasure. What? He was a victim of fraud. And when he expresses that, that expression falls within the freedom of expression, which we cannot deprive a President of, given that all citizens are entitled to,” Panelo said.

Duterte’s threats came amid reports that Davao-based businessman Dennis Uy, who has close ties with him, formed the Udenna Communications Media and Entertainment Holdings Corp.

ABS-CBN Corp. on Monday hit the quo warranto petition filed by Calida, calling it an “ill-timed” effort to close down the network.

“These allegations cited… are without merit. ABS-CBN complies with all pertinent laws governing its franchise and has secured all necessary government and regulatory approvals for its business operations,” the statement read.

All its broadcast offerings, including the KBO Channel, were able to obtain the necessary government approvals, while its Philippine depository receipts were duly evaluated and approved by the Securities and Exchange Commission and the Philippine Stock Exchange, the network said.

It underscored that its KBO Channel providing services to “nearly 90 percent of the Philippines,” is powered by the capital raised from Philippine depository receipts, while ABS-CBN Convergence backed government policies to lower the cost of Internet access.

“We reiterate that everything we do is in accordance with the law. We did not violate the law. This case appears to be an attempt to deprive Filipinos of the services of ABS-CBN,” the network said.

ABS-CBN’s franchise will expire on March 30. 

Human Rights Watch said the case filed by Calida had all the indications of political harassment.

“This is clearly an attempt by the Duterte government to intimidate or control ABS-CBN, which has aired and published critical reporting on the government, including its deadly war on drugs,” Carlos Conde, Researcher, Asia Division, of Human Rights Watch, said.

Conde said, with the network’s legislative franchise renewal pending before Congress, this case applies undue pressure on legislators who could be forced to toe the Duterte administration’s line against the media company.

Already, some legislators have stated that this could jeopardize the franchise renewal.

But constitutional law expert Tony La Viña said the television giant has a clear and unmistakable lawful authority when its franchise was granted by Congress and the purported violations should be raised elsewhere, not in the Supreme Court.

La Viña posited that the Supreme Court should dismiss the quo warranto petition outright because the allegations therein require trial of factual issues.

“The Supreme Court should just dismiss this on the basis that it is the wrong venue, wrong first venue to deal with these issues,” the lawyer said in an interview over ABS-CBN.

La Viña said the Supreme Court is not a trier of facts. 

Deputy Speaker and Camarines Sur Rep. Johnny Pimentel, meanwhile, said Calida’s action usurped the powers of Congress.

It is Congress, he added, which has the exclusive power to grant or cancel any franchise.

“In effect, OSG [Office of the Solicitor General] is already usurping the power of Congress. Congress has not yet even decided whether to renew or cancel the franchise,” Pimentel added.

Reps. Edcel Lagman of Albay, Sol Aragones of Laguna and Alfredo Garbin of Ako-Bicol shared a similar view.

Lagman, author of a House resolution supporting the renewal of ABS-CBN’s franchise, dismissed Calida’s petition as “unwarranted and misplaced.”

Senator Francis Pangilinan said Congress has a duty to give due process to ABS-CBN’s application for a franchise renewal.

“We are mandated under the law to give proper course to any application, which Congress has granted smoothly to other networks,” said Pangilinan, president of the opposition Liberal Party.

He also said complainants against the network should be formally lodged before Congress to be tackled in a hearing that gives an opportunity for all sides to be heard.

While networks are here for profit, he noted that they also exist for public service and as watchdog of government. Their continued operations should not be at the mercy of the government in power that they seek to monitor.

Senator Risa Hontiveros, also with the opposition, said it should be clear to any government in a modern democracy that a free press is not the enemy.

She called Calida’s petition “a vindictive move against critical journalism.”  Because the Constitution bestows upon Congress the power to grant or revoke legislative franchises, any issues related to them are best taken up with the legislature, Senator Joel Villanueva said.

Senator Sherwin Gatchalian said the petition was unnecessary because ABS-CBN’s franchise would end in March. He too, noted that the Constitution gives Congress th sole authority to approve, revoke or renew a franchise. 

READ: House to ABS-CBN: You get fair shake

READ: ABS-CBN issues statement on OSG's quo warranto petition


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