Paolo Duterte, 2 lawmakers seek probe into ABS-CBN's alleged franchise violations

Three administration-allied congressmen, among them presidential son and Deputy Speaker Paolo Duterte, filed a resolution calling for a House probe into media network ABS-CBN's alleged violations in its now-expired franchise.

Duterte, House committee on  accounts chair Abraham Tolentino, and House committee on appropriations chair Eric Yap filed House Resolution (HR) No. 853 on Monday, May 11, less than a week after the National Telecommunications Commission (NTC) ordered the network to shut down its television and radio operations after its franchise expired on May 4.  

HR 853's authors – Duterte, Tolentino, and Yap – are all allies of Speaker Alan Peter Cayetano, who previously accused ABS-CBN of unfair election coverage.

Cayetano, however, already washed his hands of the ABS-CBN shutdown and said "there will be a reckoning" for the NTC and the "unconstitutional meddling" of Calida.

President Rodrigo Duterte, Paolo Duterte's father, has also been threatening ABS-CBN with closure since he rose to power in 2016, branding its owners – the Lopez family – as "oligarchs." He even taunted them in December 2019 to just sell the network.

HR 853 zeroed in on two alleged violations of the media giant: ABS-CBN Corporation's pay-per-view channel Kapamilya Box Office (KBO), and the issuance of Philippine Depository Receipts (PDRs) to foreigners through ABS-CBN Holdings Corporation.

These were the same issues Solicitor General Jose Calida cited in the quo warranto petition he filed with the Supreme Court (SC) against the embattled ABS-CBN on February 10. (READ: Calida wants to suspend ABS-CBN's movie channel KBO)

Duterte, Tolentino, and Yap said that through KBO, ABS-CBN is supposedly "gaining huge profits at the expense of the public while using the air frequencies provided by the government for free."

The 3 congressmen also claimed ABS-CBN's PDRs allegedly violate foreign ownership restrictions under Republic Act No. 7042 or the Foreign Investments Act of 1991 and Presidential Decree No. 1018 or Limiting the Ownership and Management of Mass Media to Citizens of the Philippines and for Other Purposes. 

But ABS-CBN has long debunked these accusations. (READ: EXPLAINER: ABS-CBN's defense in the Supreme Court quo warranto case) 

In the comment they filed with the SC in February, the network said it was ABS-CBN Convergence that offered KBO as a value-added-service. They said ABS-CBN Convergence "sought and obtained NTC approvals" and did not violate their franchise. 

In its defense of its PDRs, ABS-CBN argued PDR holders' rights "are not equivalent to the full beneficial ownership rights of the stakeholders" of the network. 

ABS-CBN also cited the SC case Gamboa vs Teves, where the justices ruled that foreign restriction is only on effective control of the company. The SC had said effective control comes with the grant of power to elect the Board of Directors and the right to full beneficial ownership of the shares.

HR 853 was filed on the same day the House committee on legislative franchises – the panel to which the resolution was referred – issued a show cause order against the NTC, directing it to explain why it should not be cited in contempt for issuing the cease and desist order against ABS-CBN.

Critics – among them several lawmakers – have already said Cayetano and the House leadership are to blame for the ABS-CBN shutdown.

For months, the legislative franchises panel sat on the bills that would have renewed the network's franchise. Cayetano had insisted that a provisional authority from the NTC would have been enough to keep ABS-CBN operating beyond May 4 while Congress was still deciding on its franchise renewal. 

But with no significant movement in Congress, Calida warned the NTC against the issuance of the temporary permit. On May 5, the NTC ordered ABS-CBN to cease operations. – Rappler.com

Mara Cepeda

Mara Cepeda writes about politics and women’s rights for Rappler. She covers the House of Representatives and the Office of the Vice President. Got tips? Send her an email at mara.cepeda@rappler.com or shoot her a tweet @maracepeda.

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