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ABS-CBN’s state franchise

Content is a function of freedoms such as the freedom of expression, press freedom and other liberties guaranteeing a free and democratic society.

Dean Dela Paz

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Last Monday, the Office of the Solicitor General (OSG) in its role as the principal counsel of the Philippine government asked the Supreme Court to nullify the congressional franchise granted to ABS-CBN. Reports base the request in the nature of a quo warranto for violations of its franchise. This is an altogether different issue from the franchise renewal set in a few weeks.

Immediately, the media reported a flurry of knee-jerk reactions. These ranged from pursuing a vendetta, to accusing the OSG of stifling the press, to the harassment of critics — a default accusation whenever a charge has been brought against media regardless of the nature of the charge or its related and unrelated impetus to politics.

The OSG’s quo warranto is among its optional legal avenues where violations exist. Discern this from the roles between government and its franchises.

By definition a quo warranto is “a writ or legal action requiring an entity to show by what warrant an office or franchise is held, claimed, or exercised.” It seeks to question the existence or justification for the holding of an office or the enjoyment of a franchised privilege.

In the case filed against ABS-CBN, the OSG must present evidence that shows the non-validation of the franchise. This can range from violations of terms and conditions or the employment of the privilege against the interests of the granting entity.

Government franchises such as that granted to a utility like an electricity distribution company or cooperative, a water distribution utility, or the transportation franchises granted to mass transport companies are grants of a privilege. It is not a right of the franchise holder, nor is it a surrender of a right that belongs to the state.

The quick skinny is that it is “a special privilege given by government to a corporation or an individual to engage in a particular activity using public facilities, especially to provide a public service such as transportation or communications.”

This is not simply limited to the use of public utilities. We contend it also involves the use of a state-owned resource to carry out public services which are the responsibility of the state.

In the case of electricity, the responsibility to transmit and distribute electrons belongs to the state. By granting franchises the state simply authorizes private utilities to carry out state responsibilities, public services and functions.

In the case of a privately-operated water utility, entities are effectively authorized and contracted to distribute a state-owned resource on its behalf. Like the foregoing relationship with electricity transmission and distribution utilities, the grant is a grant of privilege not a right.

Because these are grants by the state where the state is afforded options to choose who it grants privileges to, the state retains regulatory control and effective ownership of the underlying resource or responsibility. This control can involve pricing, content and volume.

On pricing, this involves the tariffs charged to the public, whether the product is transmitted electricity or distributed water.

On content and volume, the issue becomes dicey where the franchisee is a media and telecommunications provider as in the case of ABS-CBN.

Volume is subject to the fair competition laws and what stands for anti-trust statutes. Content is a function of freedoms such as the freedom of expression, press freedom and other liberties guaranteeing a free and democratic society.

The debate on the latter however remains open, and is often vigorous where content is subject to requisite responsibility and the laws on libel, the spread of falsehoods and fake news especially where the nature of content goes from mere criticism and debate to false content that undermines the interest of the government that granted the franchise in the first place. Freedoms are neither absolute nor limitless. They are subject to responsibility. The government cannot hand an entity a knife simply to have that knife used to stab the government in the back.

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