By Alexandra Erika Ang
At 7:52 pm of May 5, 2020, ABS-CBN signed off the air after a cease and desist order was issued to immediately shut down the network’s broadcasting operations. Two months later, on July 10, the House of Representatives’ Committee on Legislative Franchises denied its application for a broadcasting franchise. This was the climax of a months-long battle over the network’s franchise renewal. What is arguably one of the country’s primary source of news and entertainment is now just a black screen.
NTC’s cease and desist order covered the 42 television stations operated by ABS-CBN, and several radio stations including DZMM and MOR.
On one side, the shutdown of ABS-CBN is the final nail on the coffin, sealing the lips of its journalists, and an attack on free speech and expression with the added injury of 11,000 Filipinos being put out of jobs. On the other, it is the government exercising its duty to enforce the law against a corporation that has seemingly failed to abide by the constitutional requirement of full Filipino ownership of broadcasting mediums.
The Issues
While observing the events that took place, it is difficult to discern such without injecting a bit of personal bias on the matter. Such is the effect of having a problem so convoluted with politically-charged interests and allegiances. While one may see this as an authoritarian act of silencing political dissent, others may see it as a stand against monopolies and corporate greed.
Regardless of one’s opinion on the matter, legally speaking, we can narrow down the discourse into three main issues: First, did ABS-CBN violate the terms of its franchise, specifically on the provision that it should be 100% Filipino owned? Second, can it still operate beyond the expiration of its franchise? Lastly, should its franchise be renewed?
On the matter of ABS-CBN’s ownership, we should look no further than the 1987 Constitution.
Article XVI, Section 11 of the 1987 Constitution states, “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.”
Clearly, the framers of the Constitution intended that control and management of mass media corporations should be under Filipinos. SEC-OGC Opinion No. 11-14, dated June 2, 2014, justifies such strict requirement to prevent the use of mass media by aliens to influence public opinion to the detriment of the best interest of the nation. After all, mass media, in its name alone, is a medium used to disseminate information to the people and, in contemporary understanding, should encompass technology that was not present during the drafting of the Constitution.
Where did the conflict begin? We go back to September 29, 1999, when ABS-CBN offered PDRs to foreign investors. If PDRs sound vaguely familiar, it is because other high-profile mass media corporations such GMA and, more recently, Rappler have been embroiled with the same controversy involving this somewhat loophole to the constitutional bar.
The Philippine Stock Exchange defines PDRs as a “security which grants the holder the right to the delivery of sale of the underlying share. PDRs are not pieces of evidence or statements, nor certificates of ownership of a corporation.” While a person who purchases a PDR does not become a stockholder of the issuing company, they still may become one should they elect the option to have the shares represented by such PDRs delivered and sold to them. While there is yet a clear answer as to whether PDRs should be included in contemplating the ownership of a corporation, it is still obvious that PDRs are pieces of evidence of credit, and proof that the corporation had accepted monetary investment to be used for their operations. It also bears mentioning that PDR holders, while not shareholders, receive dividends from ABS-CBN Holdings. In the absence of a law that clearly states that PDRs sold to foreign investors are tantamount to foreign ownership, or jurisprudence from which we can base a definitive answer, we would have to wait on the courts for their ruling or for Congress to pass the necessary legislation.
As to the issue on whether ABS-CBN may still continue to operate beyond the expiration of its franchise, the answer would be both yes and no. As a corporation, they may still continue to operate their business as a film and television production house, talent development center, and other ventures it is engaged in. What is prohibited is operating as a mass media entity, broadcasting their content on Philippine airwaves. Such prohibition is enshrined in Article VI, Section 16 of Republic Act 7925 or the “Public Telecommunications Policy Act of the Philippines” which states, “No person shall commence or conduct the business of being a public telecommunications entity without first obtaining a franchise.”
What is clear under the law is that it is the Congress that has the power to review franchises. There should be no reason for the renewal to be denied should ABS-CBN’s petition be in correct form and they find that there are no anomalies and violations, specifically as to the ownership of the corporation. Nevertheless, Congress concluded otherwise, and found the media giant unworthy of the legislative franchise. There is no explicit legal provision stating that the approval is based on the pure discretion of Congress. The law merely provides that it is the only body that may grant the said public franchise.
Those opposing ABS-CBN’s franchise renewal, notably Federation of International Cable TV and Telecommunications Association of the Philippines (FICTAP), brought up the issue of ABS-CBN renewing the franchise for multiple “channels” whereas the franchise granted to the network in 1995 only speaks of “one channel”. However, it had been explained that in the advent of digital broadcasting, having multiple channels on one frequency, which is what a franchise actually grants the use thereof, has been made possible.
Certainly, the plurality of mass media is not only important, but also necessary in a democratic society. To quote Dean Melencio Santa Maria of Far Eastern University Institute of Law, “a franchise may be a privilege, but when it enhances a higher value in the exercise of our democratic rights – such as freedom of expression, speech, and the press – its renewal deserves immediate attention.” The media we consume both informs the public and shapes public opinion. We have seen it influence political views. In the same vein, we have witnessed mass media criticize and remove the very people it had put into power.
While some may see the shutdown of ABS-CBN as finally taking down the mass media conglomerate, if anything, it has lit a fire in the bellies of all of those who continue to fight for the 11,000 ABS-CBN employees and for press freedom. The struggle is not an ordinary one. This fight is far from over.◾