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ABS-CBN Network

ABS-CBN asked to comment on cancellation of franchise

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The Supreme Court (SC) asked ABS-CBN Corp. to comment on the quo warranto suit filed by Solicitor General Jose Calida seeking to cancel the firm's franchise.

"Acting on the quo warranto petition filed by Solicitor General Calida on behalf of the Republic against respondents ABS CBN Corp. and ABS CBN Convergence Inc., the Supreme Court in today’s en banc session required the respondents to file their comment to the said petition for quo warranto within a non-extendible period of 10 days from receipt of notice," SC Public Information Office spokesperson Brian Keith Hosaka was quoted as saying.

The Office of the Solicitor General on Monday filed a quo warranto petition before the high court seeking to forfeit the legislative franchise of the network.

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

Calida said ABS-CBN had been hiding behind an "elaborately crafted corporate veil", and alleged that it was allowing foreign investors to take part in the ownership of a Philippine mass media entity by issuing Philippine Deposit Receipts (PDRs) through ABS-CBN Holdings Corp., which is a violation of the 1987 Constitution.

Under the 1987 Constitution, mass media ownership is limited to Filipinos.

"This simply means that mass media companies operating in the Philippines must be 100 percent Filipino-owned because they play an integral role in the nation's economic, political, and socio-political landscape," Calida said.

Calida added the broadcasting firm "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 prior approval or permit from the National Telecommunications Commission (NTC).

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

Calida said ABS-CBN Convergence, Inc. resorted to an "ingenious corporate layering scheme" in order to transfer its franchise without the necessary congressional approval.

"The legislative franchises of ABS-CBN Corporation and its subsidiary, ABS-CBN Convergence, Inc. must be revoked. A franchise is a special privilege granted by the State, and should be restricted only to entities which faithfully adhere to our Constitution," he said.

In a statement, ABS-CBN denied Calida's allegations and insisted on its compliance with all laws governing its franchise.

"All our broadcast offerings, including KBO, have received the necessary government and regulatory approvals and are not prohibited by our franchise," the network said.

It also reiterated that its PDRs "were evaluated and approved" by the Securities and Exchange Commission and the Philippine Stock Exchange prior to its public offering.

At least 11 lawmakers filed proposals to take up whether the Lopez-controlled firm's congressional franchise should be granted when its original franchise expires on March 30.

Under the law, the grantees of a broadcasting franchise must secure from the government, through the NTC, the required permits and licenses for their operation.

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