The embattled network was shut down Tuesday night including its other TV and radio stations in the country. Photograph from ABS-CBN News
Culture Spotlight

OPINION: What makes an ABS-CBN shutdown so alluring to high-stakes businessmen?

Shutting down the largest broadcast network in the Philippines is brazen abuse of political power. But who benefits from this abuse? By RAFAEL A.S.G. ONGPIN
ANCX | May 08 2020

Some people have been asking me what my thoughts are on the ABS-CBN shutdown. I have been telling them that I think pretty much everyone I know on Facebook has already expressed their thoughts, there is no pressing need for mine. However, yesterday morning, while I was having my coffee, my former boss, Mario A. Oreta, (who all of us Alphaland alumni call "MAO"), messaged me on Viber, asking the same thing. Old habits die hard, I guess, because I jumped right to it.

I will start with my conclusion: Shutting down the largest broadcast network in the Philippines is a brazen abuse of political power. Government exists, theoretically, in order to protect the public interest, to act in favor of the greatest good for the greatest number. This particular act obviously serves no one except Duterte and his henchmen. Instead of creating value, the shutdown has destroyed it at a rate significant enough that I predict it will register on our already battered GDP.

The last broadcast: ABS-CBN Chairman Mark Lopez (left) and the network's President and CEO Carlo Katigbak last Tuesday at the ABS-CBN newsroom. Photo by Chiara Zambrano.

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The affair has emphasized the basic dysfunctionality of the government. It's exactly the same as the license plate debacle that dated back to the previous administration. A license plate is no different from a franchise, in principle. It allows you to own and operate a car. The government bungled the procurement of license plates, so none were available. Then they said that cars would not be able to use the roads unless they had license plates: "no plate - no travel.” This situation is no different, in principle, from the present one.

Blame congress, not him: Solicitor General Jose Calida. Photo from ABS-CBN News

Let us, at the outset, discard the nonsense peddled by the Palace, that president Duterte is "neutral" on this issue. This allegation assigns more agency to the unlovely SolicitOrc General Calida than he could have. We do know that the mental faculties and judgement of the President are impaired: he insists on demonstrating this in no uncertain terms every Monday night on television. Nevertheless, no one believes Calida would act without the assent, if not the order, of the President.

Calida, of course, blames this on Congress, for failing to act on the franchise renewal. This is actually true, so let's examine what a franchise is, and why they have failed to act on it.

 

What is a franchise? 

I find that most people do not understand this: a franchise is a privilege granted by the government to use a limited public resource that it controls on behalf of the public. In the case of a broadcast franchise, that resource, is, specifically, a set of radio frequencies.

That is all it boils down to: Radio frequencies. The franchise does not regulate ABS-CBN's right to exist as a corporation, or to produce content, or operate a news organization. In fact, parts of ABS-CBN are still operational online right now, as we speak, including its news department, and all of its cable channels, including ABS-CBN News Channel (ANC), which is still broadcasting TV Patrol, ABS-CBN International and its prime business unit, The Filipino Channel (TFC) in the United States. Cable, despite the fact that it reaches millions of people, is not defined as "broadcast", but as "narrowcast", since it is paid for, not "free-to-air", and in general uses no radio frequencies.

Of course, the radio frequencies are critical, in the sense that this was how ABS-CBN's content was made available to the majority of its viewers, and thus, the majority of its advertising revenue is based on this. By cutting off the frequency access, the government is thus cutting off ABS-CBN's main revenue.

In the case of ABS-CBN, in the National Capital Region, those frequencies are, specifically:

55.25 MHz in the VHF band 1, for what we in Metro Manila know as "Channel 2", but whose official call sign is DWWX-TV;

525.25 MHz in the UHF band for "Channel 23", call sign DWAC-TV;

630 kHz in the AM band for "DZMM Radyo Patrol", officially DZMM-AM;

101.9 kHz in the FM band for "MOR 101.9 For Life!", call sign DWRR-FM.

The foregoing are termed "analog" frequencies, which broadcast television signals according to the NTSC standard originally promulgated in the United States, and thus can be received by conventional analog television sets, or the international AM and FM standards for radio. In addition to the analog broadcasts, ABS-CBN has been broadcasting digitally for about a decade now, using the following separate frequencies:

485.143 MHz, channel 16 UHF, for ABS-CBN TV Plus;

647.143 MHz, channel 43 UHF, for ABS-CBN Manila.

ABS-CBN has many other frequencies nationwide, which are allocated by geography and date of application; this is dictated both by the first-come-first served nature of the allocations, and the archipelagic nature of our geography.

ABS-CBN Executives (left to right) Chairman Mark Lopez, General Counsel Atty. Mario L. Bautista, President CEO Carlo Katigbak and Chief Operating Officer Cory Vidanes during the senate hearing on the company's franchise renewal on February 24, 2020. Jonathan Cellona, ABS-CBN News

As a side technical note, the lower the frequency, the more desirable, as the rate of propagation, or coverage, per watt of broadcast power is more efficient. This applies to both analog and digital broadcast. The higher in the frequency spectrum you go, the more power you will need to achieve the same effective coverage. ABS-CBN has the lowest analog frequency allocated in the VHF band, because it was the first television station in the Philippines.

There are two things to note here: first, in digital broadcast, it is possible to put multiple channels on the same frequency without interference. On the TVPlus frequency, 485.143 MHz, ABS-CBN offers a total of seven channels.

Second, the extra TVPlus channels (5 out of the 7) are encrypted, and thus not free-to-air. You need to obtain the TVPlus appliance and a paid subscription in order to be able to view them. The other frequency, 647.143 MHz, is unencrypted and free-to-air, and can be viewed by anyone with an appliance that conforms to the Japanese ISDB-T standard—for example, any television made in Japan for the domestic market. I believe the TVPlus channel uses the European DVB standard, the same as its ABS-CBN affiliate SkyCable, as well as the TV5 group's Cignal TV. They are not required to conform to the ISDB-T standard because they are not "broadcast". Update: yes, they did start off this way, but have now switched to ISDB-T.

This has become relevant recently, because an obscure group known as FICTAP, the Federation of International Cable Television Associates of the Philippines, has been alleging that ABS-CBN violated its franchise by broadcasting more than one channel on its TVPlus frequency.

FICTAP's complaint is nonsense, because the franchise (which is a law) explicitly allows ABS-CBN to broadcast on its assigned frequencies, with no mention of any limits, or even the word "channel". Both Congress and the NTC are well aware of the potential to broadcast multiple channels on the same frequency.  In any case, the NTC granted additional frequencies to ABS-CBN for its digital channels.

It is also to be noted that the shrill complainant, Estrellia Juliano-Tamano, head of the FICTAP, is the stepmother of Adel Tamano, who, in turn, is the spokesperson and right hand of Dennis A. Uy, a known Duterte crony. Uy formed a media and communications company, which until now has no known franchise asset, right before Duterte made a public appearance telling the owners of ABS-CBN to sell the station, on Dec. 30 last year. It has since been known that the mother-and-son Tamano, however, have not been in good terms. And while a couple of other top-tier businessmen have been rumored to express interest in the station, Uy has already denied having any interest in ABS-CBN.

In December, Dennis Uy was reported to be expanding his businesses to media and entertainment. Photo by Ted Aljibe, AFP

Under Philippine laws, however, broadcast franchises are not transferable. Any entity that buys broadcast assets must apply for their own franchise, or a renewal of the previous franchise, but under a change of ownership, which is about the same thing.

Having established that the object of regulation is radio frequencies, let us turn to the nature of regulation. A typical Philippine broadcast franchise today sets the following conditions:

1. It gives the franchisee the right to construct, install, establish, maintain and operate radio and television stations, for commercial purposes, and in the public interest, usually in a defined territory, which can be as small as a province, or as large as the whole Philippines.

2. The broadcaster may not broadcast outside their assigned frequencies, or in a manner that interferes with other licensed frequencies.

3. The broadcaster must have the approval and assignment of frequencies from the NTC.

4. The broadcaster must exercise public responsibility. This is specifically defined.

5. The broadcaster must comply with labor standards.

6. The privilege of the radio frequency may be withdrawn by government at any time after due process.

7. The franchise period, usually 25 years.

8. The company granted the franchise must have a minimum public equity ownership, usually 30%, within usually 5 years after the franchise is granted.

The rest is boilerplate.

These provisions are pretty well-defined, and thus one might expect that renewal of such a franchise would be merely 'ministerial'. In other words, it takes but a moment, and not a lot of debate, to determine whether or not a company has complied with its franchise conditions, or not. It's a binary question, yes or no. If that company has not clearly violated any franchise condition, then the franchise should be renewed.

In fact, franchises should automatically renew, unless there is a formal legal objection. Think about it. Why should we give the government that kind of power over business?

But this is the Philippines.

 

The power to say no, the power to delay 

Quite a few people have asked, if it is so simple, and there were no violations, why wasn't the franchise renewed, when ABS-CBN first applied for renewal in 2014? Because, Congress. 

If you think that the people responsible for tackling this issue were simply too busy to attend to it, you must have been born yesterday.

If, on the other hand, you believe that these same people were sitting around waiting for a payoff from ABS-CBN, in terms of money or some kind of power, before they would move, I would not call you a conspiracy theorist.

The crooked among the government bureaucrats in this country rely on two main powers to enrich themselves, or otherwise gain personal advantage: the power to say no, and the power to delay, or not decide. This is at the very core of corruption in our political system.

In fact, history has shown that officials who take the risk of saying yes instead of no get bitten in the ass years later, when they are out of office, typically in the Sandiganbayan. I cannot think of very many effective officials or public servants who did not face multiple cases in the Sandiganbayan until very late in their lives.

The problem is that the reverse is not true. A government official is easy to sue for doing something, but they are very difficult to sue for not doing something. In other words, the congressmen have absolutely no legal liability for failing to do their duty.

Will Congress step up to the plate and finally pass the renewal? I doubt it. They will find other ways to avoid it until the next election. Their perception is that to pass the renewal is to oppose the president. No one wants to oppose the president, either because they benefit from his regime, or they simply do not have the strength of character to do what is right.

When a government is able to block a multi-billion peso business from operating for no good reason, that is, simply, wrong on all levels, whether from a moral, legal, or practical standpoint. This is a clear abuse of political power and twisting of the law. Because it is wrong, we must say so, and we must fight it.