Void ABS-CBN franchise, Calida asks Supreme Court

MANILA, Philippines (4th UPDATE) – After weeks of speculation, and only more than a month before ABS-CBN's franchise expires, Solicitor General Jose Calida again pushed legal boundaries by filing on Monday, February 10, a quo warranto petition against network giant ABS-CBN.

Calida himself filed the petition before the Supreme Court (SC) past 9 am on Monday.

The "Very Urgent Omnibus Motion" asked the SC to nullify the franchises of ABS-CBN and ABS-CBN Convergence, Inc "as they are unlawfully exercising their legislative franchises."

Asked by Rappler if the petition was meant to revoke the network giant's franchise, Calida said "yes." 

Calida didn't grant interview to the media but released a statement accusing ABS-CBN of "highly abusive practices benefitting a greedy few at the expense of millions of its loyal subscribers."

Calida also accused ABS-CBN of a form of foreign ownership, citing the network's Philippine Depositary Receipts (PDRs).

"The media giant [has] been hiding behind an elaborately crafted corporate veil and [has] been allowing foreign investors to take part in the ownership of a Philippine mass media entity," Calida said in the statement.

"Like Rappler, ABS-CBN had issued Philippine Depositary Receipts (PDR) through ABS-CBN Holdings Corporation to foreigners, in violation of the foreign ownership restriction on mass media in the Constitution," added Calida.

Calida said this is "gross violation of the foreign interest restriction of mass media provided under Section 11, Article XVI of the Constitution." 

ABS-CBN has yet to issue a statement as of posting. 

Rappler maintains that raising capital through PDRs is aligned with Constitution and approved by Philippine courts. 

'Abuses'?

A quo warranto petition is filed by the solicitor general or a public prosecutor to void the position of a public officer if he or she is found to have usurped office or disqualified from the post, as what they did to ousted chief justice Maria Lourdes Sereno.

Section 1(c) of Rule 66 said the petition can also be filed against "an association which acts as a corporation within the Philippines without being legally incorporated or without lawful authority so to act."

Calida said, to use the wording of the provision, that ABS-CBN has been unlawfully exercising their franchise by "broadcasting for a fee, which is beyond the scope of its legislative franchise."

Calida hit ABS-CBN's products like ABS-CBN TV Plus, KBO Channel, and calling them "pay-per-view channel without prior approval or permit from the National Telecommunications Commission."

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

Expiring soon

ABS-CBN's 25-year franchise will expire on March 30. The House of Representatives has been sitting on the bills that aim to renew the franchise, although Speaker Alan Peter Cayetano has committed committee deliberations on the measures. 

The law that gave ABS-CBN the franchise, RA 7966, is silent on whether there is a grace period during which ABS-CBN can continue to operate while it waits for the renewal of its franchise. 

As many as 11,000 jobs are on the line, according to the National Union of Journalists of the Philippines (NUJP), in what can be the worst threat to ABS-CBN since its closure and takeover during the Marcos Martial Law period.

The NUJP has been holding weekly Friday protests to call on the government to renew the franchise.

President Rodrigo Duterte has consistently ranted against ABS-CBN, often complaining that the network did not air his political ads despite payment during the campaign.

As Duterte badgers the Lopezes to sell ABS-CBN, speculations mount that the President's campaign donor, Dennis Uy, may be a potential buyer. No deal has been made. – Rappler.com

Lian Buan

Lian Buan covers justice and corruption for Rappler. She is interested in decisions, pleadings, audits, contracts, and other documents that establish a trail. If you have leads, email lian.buan@rappler.com or tweet @lianbuan.

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