NTC questions ABS-TV5 joint venture

The National Telecommunications Commission (NTC) is set to review the deal that would allow ABS-CBN to broadcast its programs on TV5 following the former’s failure to renew its broadcasting franchise in 2020.

In an interview over Radyo Pilipinas on Thursday, NTC Commissioner Gamaliel Cordoba said there would be a thorough review of the proposed joint venture between the two broadcasting companies due to what he said were ABS-CBN’s violations that were brought up in the investigation conducted by the 18th Congress in 2020.

The deal, Cordoba said, would allow ABS-CBN to have part ownership of TV5 and would allow the former to “ride” the broadcasting franchise of the latter.

“They can’t secure their own franchise, so what they will do is ride the franchise of TV5. But until now they are still burdened with their old violations,” he said in Filipino.

He announced the release of NTC Memorandum Order 3-06-2022 that would prohibit a “franchise grantee” to enter into “mergers, joint ventures, sale, or any commercial agreement arrangements on matters within the Commission’s mandate and jurisdiction.”

“The franchise grantee should not be able to enter into a commercial arrangement with an entity that still has obligations with the national and local government,” he said.

The franchise grantee, he said, will have to ensure that clearances have been obtained from the “appropriate government agencies” such as the Bureau of Internal Revenue (BIR), Bureau of Customs, the Securities and Exchange Commission (SEC) and the NTC.

The NTC’s next step would be to have the two companies submit a copy of their signed commercial agreement along with clearances from the said relevant government agencies.

He noted that the memorandum states that the NTC would need to approve before “consummation” of such a partnership.

To date, he said the NTC is yet to see the details of the partnership agreement to find out whether the deal violates any government regulations.

Earlier, the ABS-CBN Corporation announced its plan to acquire 6.46 million new common shares of the TV5 Network Inc., representing 34.99 percent of its total voting and outstanding capital stock for P2.16 billion.

Following the acquisition, MediaQuest Holdings, Inc.—the operator of TV5 —will have 64.79 percent of voting and capital stock and would still have controlling stock of the network.

SAGIP Party List Rep. Rodante Marcoleta, who had led the anti-ABS-CBN campaign in the 18th Congress, called on the Philippine Competition Commission (PCC) and the NTC to investigate the deal, calling it a “circumvention of the law.”

Last week, businessman Manuel V. Pangilinan said talks for the joint venture were in the “closing stages.”

“We have been having discussions with them for over a year. But it is fair to characterize it as we’re in the closing stages,” Pangilinan said.

Pangilinan said TV5 will own 65 percent, while the remaining 35 percent will go to ABS-CBN.

Congress did not renew ABS-CBN’s congressional franchise before its expiration date on May 4, 2020.

ABS-CBN, upon the directive of the NTC’s shutdown order, ceased its broadcast operations on May 5, 2020.