VERA FILES FACT SHEET: What’s next for ABS-CBN after losing franchise bid?

Read this fact check in Filipino

For the second time since 1972, the government shut down broadcast network ABS-CBN, displacing more than 11,000 workers at a time the country is grappling with the coronavirus disease (COVID-19) pandemic that is taking a heavy toll on the economy.

Voting 70-11 on July 10 to deny the media giant’s bid for another 25-year franchise to operate, the House of Representatives’ committee on legislative franchises sealed the three cease and desist orders the National Telecommunications Commission (NTC) earlier served ABS-CBN to stop airing on television and radio as well as on cable and digital platforms through Sky Direct and TV Plus.

The vote set aside at least nine bills seeking to grant ABS-CBN a new franchise. Section 49 of the House Rules provides that a bill or resolution unfavorably acted on will be “laid on the table.” In the case of ABS-CBN, the vote effectively killed the bills, according to Anakalusugan Rep. Michael Defensor, ex-officio member of the committee.

However, legal experts and some lawmakers are exploring other measures to get the network back on air. Among these are people’s initiative and a new bill.

The committee vote came after at least 75 combined hours of public hearings during a congressional summer break. ABS-CBN executives, officials from concerned government agencies such as the Securities and Exchange Commission (SEC), Bureau of Internal Revenue (BIR), and NTC, among other resource persons, were grilled to shed light on the issues hurled against the network.

Local and international media outlets closely monitored the committee hearings and the voting process. The issue generated global interest because of President Rodrigo Duterte’s persistent attacks since 2017 on the broadcast network, even threatening to have it shut down and later suggesting that it be sold. (See VERA FILES FACT CHECK: Duterte statements belie Panelo's claim that the president 'does not want' ABS-CBN to shut down)

Here are five things you need to know regarding the verdict of the House franchise committee:

1. What does the rejection of ABS-CBN’s franchise renewal application by the House committee mean?

Under Sec. 49, Rule X of the Rules of the House of Representatives, bills unfavorably acted upon by a committee will be “laid on the table.”

This means, while the bills remain in the committee, they were, in effect, “killed” and not just set aside, as confirmed by Palawan Rep. Franz Alvarez, chair of the House committee on legislative franchises, during the final hearing.

Defensor, among those who voted against the franchise renewal, said, as “parliamentary courtesy,” lawmakers do not vote “no” to disapprove a measure, instead it is simply “laid on the table” so that it stays in the committee. But, for a franchise application, Defensor said “the effect would be to kill the application of the franchise.”

The failure of the network to have its franchise approved by the committee also meant the resolution will no longer reach the House plenary for a vote by all members to either approve or reject it.

In an interview with ANC, cable news channel of ABS-CBN, Bayan Muna Rep. Carlos Zarate, deputy minority leader of the House and ex-officio member of the committee, said the denial of the franchise would mean the network’s airwave frequency can now be reassigned by NTC to another franchise holder.

NTC, which regulates all telecommunications service providers, issued three cease and desist orders against ABS-CBN and its subsidiaries TV Plus (Channel 43) and SkyDirect on May 5 and June 30 following the expiry of its franchise on May 4.

2. How did the franchise committee vote?

An overwhelming majority of the 85 voting panel members -- 46 regular and 39 ex-officio -- of the House franchises committee voted in favor of the resolution prepared by the technical working group (TWG) proposing to deny ABS-CBN a new franchise.

The vote tally shows 70 representatives were in favor of the resolution to set aside the nine bills seeking to renew the franchise, while 11 opposed, one abstained, and two inhibited.

Sec. 31, Rule XI of House rules provides that a committee be composed of regular and ex-officio members, as well as authors of the bill under deliberation. Regular members are those elected from the majority and minority blocs, while ex-officio members are House officials, such as the House speaker, deputy speakers, and minority and majority leaders, who are allowed to join the committee, or those deputized by other representatives. Unlike the regular and ex-officio members, bill authors have no voting power.

The full tally of votes have yet to be uploaded on the House’s official website.

3. What were the issues raised against the network?

Among the issues tackled by the franchise committee, together with the committee on good government and public accountability, in the 12 public hearings it held since March 10 were alleged violations under ABS-CBN’s previous franchise, such as not following the prescribed process for the return of assets from the government to the network post-martial law, citizenship, labor malpractices, tax avoidance, use of Philippine Depositary Receipts, and biased reporting.

During the hearings, representatives of concerned government agencies were also called to clarify issues raised against the network.

On July 1, Bureau of Internal Revenue (BIR) Assistant Commissioner Manuel Mapoy told the committee that ABS-CBN has been “regularly paying its corporate taxes over the past years. Mapoy said the network paid at least P15.3 billion taxes from 2016 to 2019.

In another hearing on June 30, Labor Undersecretary Ann Dione said ABS-CBN was fully compliant with the law, with 60 percent of the 108 or 109 alleged illegal dismissal cases resolved were in favor of the workers. However, the Department of Labor and Employment criticized the network in a statement on July 1 for allegedly trying to deceive lawmakers by misrepresenting that it was a “compliant company” when it merely took steps to rectify violations of labor laws and standards found by its labor inspectors.

4. What’s next for ABS-CBN after the rejection of its application for franchise renewal?

Albay Rep. Edcel Lagman, who filed a bill for the network’s franchise renewal, said proposing a new one is the “proper [next] step” since there is no legal provision prohibiting it, but that proponents would have to “see the [political] climate” before such move is made.

At least one House member, Batangas Rep. Vilma Santos-Recto, among those who voted in favor of ABS-CBN, has pledged to sponsor another bill to bring the network back on air.

Another approach raised by supporters of ABS-CBN is the people’s initiative, a constitutionally guaranteed right that allows private individuals to “directly propose or enact laws or approve or reject any act or law or part thereof passed by the Congress or local legislative body” or even amend the Constitution.

Under Republic Act No. 6735, or the Initiative and Referendum Act, a people’s initiative starts with a petition that must be signed by at least 10 percent of the total number of registered voters, of which every legislative district (a total of 238) must be represented by at least three percent.

The signatures will then be submitted to the Commission on Elections (Comelec) to be verified and validated, and for the scheduling and conduct of a referendum.

A proposed enactment, approval, amendment or rejection of a national law must then be approved by a majority of the votes cast by all registered voters in the country.

In a media interview after the House committee vote, University of Santo Tomas law professor Enrique Dela Cruz said the initiative would have difficulty succeeding if Duterte campaigns against it, given his popularity based on surveys.

5. What does ABS-CBN’s franchise non-renewal mean for press freedom?

While the House committee insists that the franchise issue is not about press freedom, local and international media organizations, civil society and human rights groups, and media practitioners have argued otherwise.

In a July 13 statement, the Commission on Human Rights said the denial of the network’s franchise ultimately "impacts greatly on the work of media as purveyor of free speech and information” as it “gives a chilling effect on freedom of the press.”

Human Rights Watch called the final hearing a “black day for media freedom” in the country that was previously regarded as a “bastion of press freedom and democracy in the region.”

In a solidarity statement, over 1,000 journalists and media workers across platforms from different parts of the country, as of July 17, said the rejection of a new franchise for ABS-CBN:

“...sounds the death knell to a credible source of news and a huge attack on press freedom in the country.”

They warned that history will be “cruel” to lawmakers who voted against the renewal and that “the only ‘historic’ deed they were able to accomplish is to make the chamber a pawn for carrying out a personal vendetta.”

The National Union of Journalists of the Philippines (NUJP), for its part, said the House of the 18th Congress “has declared itself (an) enemy of democracy.”

Duterte has been threatening to block the network’s franchise renewal as early as 2017, when he accused ABS-CBN of “swindling” him for not airing his paid advertisements during the campaign period for the 2016 presidential elections.

(See VERA FILES FACT CHECK: Duterte's past statements belie Roque's claim that the president is 'neutral' on ABS-CBN issue; VERA FILES FACT CHECK: Duterte statements belie Panelo's claim that the president 'does not want' ABS-CBN to shut down; VERA FILES FACT CHECK: Duterte not the only president to attack Inquirer, ABS-CBN)

His tirades against the network persisted, and, in one speech in December 2019, the president said he will “see to it” that the network is “out.”

Duterte’s threats against ABS-CBN was also linked to a quo warranto petition filed before the Supreme Court by Solicitor General Jose Calida in February. Calida accused the network of violating its legislative franchise by issuing PDRs to foreigners and launching the pay-per-view KBO channel in its set-top box device TV Plus. (See VERA FILES FACT CHECK: SolGen's claim that ABS-CBN 'violated' foreign ownership restriction needs context and Consortium: quo warranto petition vs. ABS-CBN a 'parasitic assault' on press freedom)

That same month, Duterte’s former long-time aide and now Sen. Christopher Lawrence “Bong” Go said in a Senate hearing on ABS-CBN’s franchise that the president felt “hurt” and was “nababoy (bastardized)” by the “black propaganda” advertisements placed by former Sen. Antonio Trillanes IV and aired on the network.

ABS-CBN president and CEO Carlo Katigbak subsequently apologized to the president on behalf of the network for having offended him, which the latter publicly accepted.

Malacanang has maintained Duterte had since remained neutral on the issue. However, a recent report by the Inquirer showed the president saying in a speech that he had “dismantled the oligarchy” in the Philippines, referring to the Lopezes who own ABS-CBN, “without declaring martial law.”


Editor's note: This article was update to correct the information on one of two cease and desist orders issued by NTC against ABS-CBN on June 30. The order was directed at SKYdirect, the direct satellite service of SkyCable.


Sources

House of Representatives, The House Committee on Legislative Franchises today adopts the House Resolution…., July 10, 2020

House of Representatives, RULES OF THE HOUSE OF REPRESENTATIVES, Accessed July 10, 2020

House of Representatives, Comm. on Legislative Franchises Joint with Comm. on Good Government and Public Accountability Day 14, July 10, 2020

NTC shutting down ABS-CBN

Business Mirror, READ | House TWG Report recommending rejection of ABS-CBN franchise renewal, July 10, 2020

House committee voting tally

Congress of the Philippines, Franchise denied, July 10, 2020

Business Mirror, FINDINGS AND RECOMMENDATIONS, July 2020

ABS-CBN paying taxes

ABS-CBN ‘s labor compliance


ANC 24/7, PH House Lawmaker Lagman: Denial of ABS-CBN franchise a partisan decision | ANC, July 10,

ANC 24/7, Santos-Recto: I am willing to sponsor another ABS-CBN Franchise Bill | ANC (13 July 2020), July 13, 2020

Official Gazette, The 1987 Constitution, July 13, 2020

Official Gazette, Republic Act No. 6735, Accessed July 13, 2020

ANC 24/7, PH Law Professor: People's initiative to grant ABS-CBN franchise possible but difficult | ANC, July 11, 2020

Popularity of Duterte

Human Rights Watch Philippines, Philippines: Duterte Seeks to Shut Network, July 10, 2020

Commission on Human Rights, Statement of the Commission on Human Rights on the decision, July 11, 2020

National Union of Journalists of the Philippines, [Statement] The will of the people will prevail, July 10, 2020

Rappler.com, Duterte to block renewal of ABS-CBN franchise, April 17, 2017

RTVMalacanang, Speech of President Rodrigo Roa Duterte during the oath-taking of the newly appointed government officials, Dec. 3, 2019

Senate of the Philippines, Press Release - Bong Go confronts ABS-CBN for airing 'black propaganda' against PRRD; network issues apology, Feb. 24, 2020

Advertisements paid by Antonio Trillanes IV

House of Representatives, Comm on Legislative Franchises Joint with Comm on Good Government and Public Accountability Day 12, July 6, 2020

Presidential Communications Operations Office, It's up to Lower House to tackle ABS-CBN's franchise renewal, says President Duterte, Feb. 27, 2020

Presidential Communications Operations Office, On the House resolution on ABS-CBN Corporation – Presidential Communications Operations Office, July 10, 2020

Inquirer.net, Duterte sets off fresh tirades vs ABS-CBN after network lost franchise bid, July 15, 2020


(Guided by the code of principles of the International Fact-Checking Network at Poynter, VERA Files tracks the false claims, flip-flops, misleading statements of public officials and figures, and debunks them with factual evidence. Find out more about this initiative and our methodology.)

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