NTC: ABS-CBN, TV5 need gov't clearances before approval of investment deal

Jessica Fenol, ABS-CBN News

Posted at Aug 24 2022 04:45 PM

MANILA - ABS-CBN and TV5 will need to secure clearances from related agencies before their proposed investment deal gets approved by the National Telecommunications Commission, an official said Wednesday.

NTC Commissioner Gamaliel Cordoba said that the agency released a Memorandum Order on June 23 this year which stated that if a franchise holder would enter into a commercial contract with another entity, the companies involved should have no obligations to the national and local governments.

Cordoba explained the memorandum order during the Committee on Legislative Franchises' joint hearing with the Committee on Trade and Industry on the proposed ABS-CBN investment in MediaQuest, which operates TV5. 

ABS-CBN and TV5 earlier disclosed that they are eyeing a deal where ABS-CBN would acquire 35 percent of TV5.

According to the NTC, both companies must prove that they have no pending liabilities with the Bureau of Internal Revenue, the Bureau of Customs as well as real property taxes to the local government, among others.

"Bago aprubahan ang isang commercial agreement ay hihingi po muna kami ng clearances doon po sa kontrata ng franchise holder... magbibggay din kmi ng clearance kung walang pending sa amin na babayaran o admin case," Cordoba said.

(Before the commercial agreement gets approved, we need clearances from franchise holder, we will also issue a clearance if there is no pending case with us or admin case)

"Kung ito po ay itutuloy ng TV5 ang transaction with ABS-CBN then we would ask for the said clearances to be submitted to the NTC before we can approve their agreement that they entered into. Ang basis po namin ay ang (our basis is the) Memorandum ordered that we issued last June 23, 2022," he added.

The NTC said it would clear the investment deal if there are no pending violations that are under its jurisdiction. 

Cordoba said ABS-CBN has a pending case involving its pay-per-view offering using its TVPlus digital boxes without the authority from the Commission.

During the hearing on ABS-CBN's application for franchise renewal in 2020, Cordoba argued that ABS-CBN should have waited for the implementing rules from the NTC before offering PPV. 

ABS-CBN meanwhile said during the 2020 hearings that its digital TV box with multi-channel capability as well as its pay-per-view service complied with the NTCs digital migration plan launched in 2014.

The IRR of the 2014 migration order allows multiple SD TV or HD TV channels.

Former Justice Secretary Menardo Guevarra also said during the franchise hearing in 2020 that ABS-CBN's Kapamilya Box Office (KBO) offering, which allows subscribers to access movies for a fee of P30, is covered by the "commercial purposes" clause of its old franchise. 

The Bureau of Internal Revenue in July 2020 also said ABS-CBN has no pending tax liabilities

Meanwhile, SAGIP Partylist Rep. Rodante Marcolate stressed that the NTC should look beyond the PPV violations of ABS-CBN. 

He insisted that the network violated foreign ownership by issuing Philippine Depositary Receipts (PDRs). 

ABS-CBN however said PDRs are purely financial instruments and its holders are "passive investors" who have no rights to own, manage or to vote directors in ABS-CBN Broadcasting Corp.

Marcoleta also urged the Philippine Competition Commission to look into the deal.

PLDT Inc chairman Manny Pangilinan earlier reiterated that the investment deal is not a merger and that it would not require the review of the PCC.

Both ABS-CBN and TV5 on Wednesday announced they are putting the deal on "pause" to address the issues raised by several lawmakers and the NTC.

The 2 firms maintained that the deal would positively impact the Philippine media industry.

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