Calida wants to suspend ABS-CBN's movie channel KBO

MANILA, Philippines – Solicitor General Jose Calida not only wants to revoke ABS-CBN's franchise, he is also seeking an immediate suspension of the network's Kapamilya Box Office (KBO) channel, a paid sub-product that lets subscribers watch their movies on demand.

"The petitioner prays that this Honorable Court issue a Temporary Restraining Order (TRO) or writ of preliminary injunction enjoining ABS-CBN Corporation from further operating the KBO Channel and offering it to the general public," Calida said in his 63-page quo warranto petition filed before the Supreme Court on Monday, February 10.

ABS-CBN currently offers ABS-CBN TV plus, a "digibox" that lets paid subscribers access ABS-CBN channels like Sports and action, MYX, etc. It is a one-time payment service. If you have TV Plus, you can add the KBO channel where, for an added P30-P99 fee, the subscriber can watch ABS-CBN movies programmed for the week.

Calida said that by charging its subscribers additional payment, ABS-CBN violated its franchise conditions.

In a statement on Monday, ABS-CBN said "all our broadcast offerings, including KBO, have received the necessary government and regulatory approvals and are not prohibited by our franchise."

KBO channel

Calida said ABS-CBN did not secure required approval from the National Telecommunications Commission (NTC) to use its frequency for KBO. Under ABS-CBN's franchise law, or Republic Act No. 7966, ABS-CBN's shall secure permits and licenses from NTC to "use any frequency in the television or radio spectrum."

Calida said that the NTC told ABS-CBN on April 29, 2015, to "refrain from offering any pay television service...until such time that the Commission has come up with appropriate guidelines for the same."

Calida said the NTC reiterated that order on May 14, 2019.

To put it simply, Calida said ABS-CBN is not allowed to charge subscribers for the use of frequency that was merely granted to them by government through its 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," Calida said.

"Therefore, ABS-CBN Corporation has no lawful authority to utilize free-to-air signals to collect fees from the viewing public for its operations of the KBO channel," said Calida.

"KBO remains one of the cheapest forms of entertainment that we can provide to the public," said ABS-CBN. 

Calida is asking the Supreme Court to revoke ABS-CBN's franchise, citing "abuses" by the network such as the KBO issue, and alleged foreign ownership through the use of Philippine Depositary Receipts (PDRs).

ABS-CBN's 25-year franchise will expire on March 30. There have been no movements yet in the House of Representatives on the bills to renew the franchise.

As many as 11,000 jobs are on the line.

ABS-CBN is just among the media organizations that are the frequent subjects of President Rodrigo Duterte's rants, including Rappler and the Philippine Daily Inquirer. – 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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