NTC Reply letter to HOR SCO 202005146399337776543551332

12 May 2020 HON. ALAN PETER S. CAYETANO Speaker Republic of the Philippines House of Representatives Eighteenth Congress Quezon City HON. FRANZ E. ALVAREZ Chairperson Committee on Legislative Franchises Re: Order dated 11 May 2020 (“Order)”1

Dear Speaker Cayetano and Chairperson Alvarez: We, the undersigned members of the National Telecommunications Commission, respectfully write in response to the above-referenced Order.

We understand why the CDO took Congress by surprise, given the earlier information provided by NTC that it would issue a Provisional Authority (“PA”) for ABS-CBN to operate while the application for the renewal of its franchise was being heard in Congress. The representation was made upon the good faith belief that the issuance of the PA by the NTC provided the best possible solution at that time. Moreover, it was consistent with the legal advice of the Department of Justice, as well as Senate Resolution No. 40 based on equitable considerations. NTC could have thus exercised more openness and prudence under the circumstances and, at the very least, alerted Congress of NTC’s inability based on legal grounds to issue the PA as well as its subsequent decision to issue a CDO when the franchise of ABS-CBN expired.

Please rest assured that we intended no disrespect whatsoever towards Congress. On the contrary, it was precisely NTC’s full respect and recognition for Congress’ sole prerogatives that led it to desist from issuing a PA and, thereafter, to conclude that it was legally bound to issue a CDO.

The Order directed the undersigned to submit an explanation within seventy-two (72) hours from receipt of the Order why they should not be cited in contempt or proceeded against for issuing a Cease and Desist Order [“CDO”] against ABS-CBN Corporation [“ABS-CBN”] to immediately cease and desist from operating its radio and television stations. The Order noted that the NTC issued the CDO “after having assured the House of Representatives, during the hearing of the [Honorable Committee] on 10 March 2020, that the NTC will let the ABS-CBN Corporation continue its operations until Congress has disposed of the franchise renewal bills” and considered the issuance "undue interference on, and disobedience to the exercise of the power of the House of Representatives, and therefore, an affront to its dignity and an inexcusable disrespect of its authority.”

1

Through the past months, the NTC has rigorously sifted through various (and often opposing) legal arguments, opinions of legal luminaries (including retired justices of the Supreme Court), stakeholders, and concerns of other sectors, on how to legally support the issuance of a PA.2 The NTC also considered the Comment submitted by the Office of the Solicitor General (“OSG”) in a petition pending before the Supreme Court as the “statutory counsel” of the NTC3, as well as the letter dated 30 April 2020 that it sent the NTC, both vigorously asserting that the positions taken by the DOJ, the Senate, and the Congress supporting the issuance of a PA were contrary to the Constitution, the law, and jurisprudence which vested upon Congress the sole power to grant or renew a franchise. Correspondingly, the OSG cautioned the NTC that its issuance of the PA would make its members liable for criminal prosecution.

In the end, NTC’s collective assessment was that the Constitution, the laws,4 and jurisprudence,5 provided insurmountable obstacles to the issuance of a PA, notwithstanding equitable considerations. If the NTC were to issue a PA, it would have amounted to an encroachment into the exclusive domain of Congress. We understand that the licensing power of the NTC may only arise from the necessary delegation of power from the Congress through a law. NTC would thus abide by any law passed by Congress which may extend all telecommunication and broadcasting legislative franchises that expired during the public health emergency, if there be any.

In any event, the NTC notes that these issues are already before the Supreme Court and is duty-bound to desist from resolving and/or acting on such issues that are already before the Court.

For example, Retired Justice Reynato Puno (https://newsinfo.inquirer.net/1233323/abs-cbn-cant-operate-beyond-may-4-withoutfranchise-ex-cj-puno), Justice Angelina Sandoval-Gutierrez (https://www.rappler.com/nation/252845-ex-supreme-court-justicerefutes-doj-abs-cbn-needs-franchise -beyond-may-4-2020), Justice Antonio Carpio (https://www.pep.ph/news/local/149957/justice-antonio-carpio-provisional-authority-abs-cbn-franchise-a718-20200310), uniformly essayed that ABS CBN could not operate without a congressional franchise and that NTC did not have the authority to substitute the required franchise through a provisional authority to serve as a temporary franchise. Many legal luminaries arrived at the same conclusion.

3 Executive Order No. 282, Book IV, Title III, Chapter 12, Section 35.

4 R.A. 3846 requires broadcasting networks to have a congressional franchise to operate television and radio stations. R.A. 7925 explicitly provides: “No person shall commence or conduct the business of being a public telecommunications entity without first obtaining a franchise. R.A. 7966 granted a 25 year franchise extension to ABS CBN which expired on May 4, 2020.

5 In Associated Communications & Wireless Services United Broadcasting Networks v. National Telecommunications Commission, G.R. No. 144109, 17 February 2003, the Supreme Court held that a radio/broadcasting company cannot operate with an expired legislative franchise. The Supreme Court in Divinagracia v. Consolidated Broadcasting System, Inc. G.R. No. 162272, April 7, 2009, reiterated the ruling in Associated Communications, and held that: “This much thus is clear. Broadcast and television stations are required to obtain a legislative franchise, a requirement imposed by the Radio Control Act and affirmed by our ruling in Associated Broadcasting. After securing their legislative franchises, stations are required to obtain CPCs from the NTC before they can operate their radio or television broadcasting systems. Such requirement while traceable also to the Radio Control Act, currently finds its basis in E.O. No. 546, the law establishing the NTC.” The Divinagracia case further ruled that: (1) the complexities of the dual franchise/license regime for broadcast media should be understood within the context of separation of powers. The right of a particular entity to broadcast over the airwaves is established by law —i.e., the legislative franchise — and determined by Congress, the branch of government tasked with the creation of rights and obligations. The duty of the NTC, once Congress has established a legislative franchise for a broadcast media station, is to facilitate the operation by the franchisee of its broadcast stations; and (2) licenses and authorities issued by the NTC such as CPCs and Provisional Authorities "are junior to the legislative franchise enacted

by Congress. The licensing authority of the NTC is not on equal footing with the franchising authority of the State through Congress. The issuance of licenses by the NTC implements the legislative franchises established by Congress, in the same manner that the executive branch implements the laws of Congress rather than creates its own laws."

2

Nonetheless, we regret for failing to notify you, the Honorable Speaker, and the House of Representatives, and in particular the Chairperson and members of the Committee on Legislative Franchise, of our decision to issue a CDO against ABS-CBN following the expiration of its franchise last 4 May 2020. We are deeply saddened as well for the inconvenience we may have caused Congress. Again, we express our contriteness and sincere apologies for the ensuing confusion this has caused, not the least because we are in the midst of a crisis.

We have always been grateful for the guidance and support that have been generously extended to us by the members of the 18th Congress under your esteemed leadership and humbly ask for your kind understanding.

Thank you very much.

Very truly yours,

Gamaliel A. Cordoba Commissioner

Edgardo V. Cabarios Deputy Commissioner

Delilah F. Deles Deputy Commissioner

Atty. Ella Blanca B. Lopez Legal Branch Head