[ANALYSIS] Why Congress should delegate its franchising power to NTC

House of Representatives Minority Leader Bienvenido Abante, Jr. has led the call for the abolition of the National Telecommunications Commission (NTC) for issuing a Cease and Desist Order to ABS-CBN, after the lapse of its legislative franchise on May 4, 2020. This comes after NTC Commissioner Gamaliel Cordoba stated under oath before the House Committee on Legislative Franchises that it would grant the broadcast company a provisional authority to operate pending action on the franchise bills before the House.

Lawmakers faulted the NTC for breaking its commitment of allowing ABS-CBN to keep operating. However, Solicitor General Jose Calida, who previously issued a statement to NTC against the grant of provisional authority, placed the blame on Congress for sitting on the franchise bills. (READ: House panel issues show cause order vs NTC over ABS-CBN shutdown)

Whoever is at fault, the suggestion that the NTC be abolished is counterproductive. It is Congress who should delegate its franchising power to the NTC to prevent the constitutional and legal conundrum that arose out of ABS-CBN’s franchise renewal. (READ: Senate to NTC: Reconsider ABS-CBN shutdown order)

A franchise is a privilege

The Supreme Court has ruled in a number of cases that a “franchise” is a privilege granted by the State that comes from its sovereign power. It is inherently legislative in character, so Congress is vested with the power to grant franchises to certain persons or companies it deems fit.

The broadcast industry operates using this franchise system. Because radio frequencies, to which television (TV) signals are carried, are a finite resource, it is heavily regulated by the State. Act No. 3846 or the Radio Control Law, enacted in 1931, provides that no company may establish and operate a radio or TV station in the Philippines without first obtaining a franchise from Congress.

What the NTC does 

There are actually two authorizations needed to be able to operate a broadcast station. 

The first is the franchise, which is granted by Congress through a law. The second is the authorization from the NTC called a Certificate of Public Convenience and Necessity (CPC). Although currently the NTC mostly focuses on the technical aspects and requirements to be able to broadcast, there are already processes and mechanisms in place in the issuance of the CPC that requires publication, service, and hearing, giving other parties the opportunity to oppose the application. 

As the NTC functions now, there are already institutional structures in place that would allow for it to also process franchise applications and give the public the opportunity to oppose them. 

Grant of Franchise may be delegated

The 1987 Constitution does not mandate that all franchises be granted by Congress. In fact, it may be delegated to an administrative body through a law. For example, in the case of public transport carriers, the franchise is granted by the Land Transportation Franchising and Regulatory Board (LTFRB). It would be unimaginable that operators of buses and jeepneys would all troop to Congress just to file for franchise applications. LTFRB, as the responsible administrative agency, would be best equipped to know the routes where buses and jeepneys can operate.

Other examples where the grant of franchises or licenses is delegated include tollways, ports, and gaming operations.

Reasons for delegation

Justice Jose P. Laurel, way back in 1940, summed up the 3 reasons why there is a need to delegate a portion of the legislative power, including the grant of franchises: the growing complexities of modern life, the multiplication of subjects of governmental regulation, and the increased difficulty of administering the laws.

But there is another reason why franchises would be best delegated to an administrative agency like the NTC — to minimize the impact of undue politics.

Congress is a political body. Its members are all politicians. It is not far-fetched to think that there are political considerations at play, which could work both ways. Broadcast station owners who need congressmen to file bills on their behalf and vote these bills into law could temper their content as not to antagonize or to appease those who have the bills in their hands. In the same way, politicians who may have had content broadcasted against them may hold it against the media companies in the course of the process. To remove these unnecessary restraints on the freedom of the press, we can delegate the power to issue broadcast franchise to a less politicized body. 

Delegating the issuance of the franchise would also help speed up the process, as the matter will no longer be trapped in the pipeline of matters to be tackled by Congress. By giving the task to an agency whose primary objective is to regulate the use of radio frequencies for broadcast, the franchise would be in the hands of an authority that is both more technically knowledgeable and focused on broadcasting.    

The ABS-CBN’s dilemma is a prime example: the Senate hearings have shown that it has not breached any law, but there has been continuing inaction on the part of the House, making it difficult for the station to secure the franchise.

When Congress delegates the power to grant franchises through a law, it would set the qualifications for which a company may be granted one. These would include technical and financial considerations: is the company equipped with sufficient assets to operate a broadcast station, does it have enough capital to sustain operations, etc. The NTC, as the agency in charge of the broadcasting industry, would not be able to justify a denial of franchise for any reason outside the parameters and requirements set by law. Certainly, political influences would not be a justifiable reason.

Another benefit of delegating the franchising power is the availability of judicial remedies. When a company which complies with all the qualifications for operating a broadcast network is denied a franchise by the NTC, it can go to the courts to question the denial. In the current setup, recourse to the courts is precluded because failure by Congress to take up a franchise bill is not an issue a court can judge on because of the “political question” doctrine. Political questions refer to issues where full discretion is delegated to the legislative or executive branch of government. Whether or not Congress takes up a bill granting a franchise to a company is fully discretionary on the part of Congress.

Similarly, in the United States, applications for broadcast franchises are processed by the independent Federal Communications Commission, not by the US Congress.

In 2016, the Center for Media Freedom and Responsibility (CMFR) sounded the alarm on this issue, and observed the politicization of the franchising process when a mass media company’s survival is “dependent on whoever occupies Congress and, ultimately, the Office of the President.”

Freedom of the press is an enshrined constitutional right. For it to remain one, government must ensure that there are less restrictions on its exercise. The grant of broadcast privileges to a mass media company should not solely be in the hands of politicians, who may have their own ties and agenda.

Media companies should be allowed to operate without the hindrance of undue politics, either working for or against them. The more broadcast companies that are operating free from unnecessary restraints, the more vibrant democracy becomes. As Justice Louis Brandeis of the US Supreme Court once said: the remedy to false speech is “more speech, not enforced silence.” – Rappler.com

Jonas Cruz and Ticia Soresca are graduating students from the UP College of Law.