Marcoleta, NTC cite ABS-CBN violations in hearing on merger with TV5

SAGIP Party-list Representative Rodante Marcoleta on Wednesday said that the partnership between ABS-CBN and TV5 was a “circumvention” of the law following the House of Representatives' decision in 2020 not to renew ABS-CBN's franchise.

According to Tina Panganiban-Perez's report on "24 Oras", the National Telecommunications Commission during a hearing of the House commitees on Legislative Franchises, and on Trade and Industry also mentioned violations by ABS-CBN.

“Bakit hindi muna nila kasi i-settle, ayusin, bayarang ang dapat bayaran? Hindi 'yung makikisakay ka na lang na parang business as usual na lang. At kung sinasabi nila na hindi merger ito, hindi po acquisition, ito po circumvention na naman eh,” Marcoleta said.

(Why can’t they first settle, fix, and pay their liabilities instead of riding another company and acting like it's business as usual? They’re saying this is not a merger nor an acquisition but this is another circumvention.)

“The violations like the lack of permit of the encrypment of the content and the encryption of the signal is also a violation. And it lasted for several years. It has no permit for the digital broadcast of its 11 channels. Also, ABS-CBN violated the cease and desist order. It also sold millions of black boxes throughout the land because, without which, the encrypted content cannot be viewed by our people. That's the reason why they violated their free-to-air contracts. I'm not still mentioning the violation about the PDRs which are supposed to be the jurisdiction of the Securities and Exchange Commission (SEC) as well as the tax evasion schemes that they have employed,” he added.

GMA News has sought ABS-CBN for its comment.

Earlier, the media companies announced they would temporarily hold off their agreement to answer the questions of lawmakers and the NTC on their partnership and change provisions.

According to a memorandum released by the NTC on June 23, 2022, the commission prohibits any franchise holders to enter an agreement or joint-venture to any companies with outstanding issues with the government.

“Bago po namin aprubahan ang isang commercial agreement entered into na may jurisdiction ang NTC ay hihingi muna kami ng clearances doon po sa kontrata ng franchise holder and that includes clearances from the Department of Finance. Nandiyan kasi ang Bureau of Internal Revenue at Bureau of Customs,” NTC Commissioner Gamaliel Cordoba told the inquiry.

(Before we approve a commercial agreement that is under the jurisdiction of NTC, we ask for clearances from the franchise holder and that includes clearances from the Department of Finance because part of it are the Bureau of Internal Revenue and Bureau of Customs.)

“Magbibigay din kami ng clearance kung walang pending sa amin na babayarin o admin case at hihingi rin kami ng clearance from SEC. Binanggit ko rin kanina na kailagan din ng clearance from local government units. There was a pending case sa NTC against sa ABS-CBN dahil may violation ang ABS-CBN sa amin noong 2020 kung saan nagpay-per-view without authority from the commission. ‘Yun po ang isang violation na kailangan matapos bago kami makapagbigay ng clearance,” Cordoba said.

(We will also issue a clearance if the companies do not have pending payments or admin cases. We will also ask for clearance from the SEC. Like I mentioned, we also need clearance from LGUs. The ABS-CBN has a pending case in NTC because in 2020 it offered pay-per-view without authority from the commission. That violation must first be settled for us to give them clearance.)

The SEC had already submitted a position paper to Congress but said it would need to further study the issue.

“The commission respectfully submits that the... thorough examination on the provisions of these agreements including all the relevant attachments and documents must be made. Until then and subject to the explanation that would be provided by the ABS-CBN on the matters that were raised by the commission, the commission cannot make as yet any final determination on whether any violation was made by ABS-CBN when it executed the investment agreement and convertible loans agreement,” SEC General Counsel Atty. Romuald Padilla said.

The Philippine Competition Commission, for its part, said it was not notifiable on the partnership since it did not exceed P50 billion.

“Even if this transaction is not notifiable, we can initiate on our own a motu propio review on the transaction. But we have to have a reasonable basis,” PCC officer-in-charge chair Johannes Benjamin Bernabe said.

Meanwhile, Albay Representative Edcel Lagman defended the agreement.

“The deal is not a merger. The NTC memorandum is a usurpation of the legislative power. It adds and poses a restriction on a franchisee like TV-5 on its legislative franchise. The TV5-ABS-CBN transaction enhances fair competition in the television and broadcast industry,” Lagman said.

The House panel is set to continue the investigation. No date for the next hearing, however, was scheduled.  —NB, GMA