50-year cap applies to individual franchise granted, not cumulative – DOJ exec

MANILA, Philippines — The Department of Justice (DOJ) on Wednesday said the cap on franchises issued by Congress applies to individual franchises and that broadcast networks are allowed to apply for renewal once the franchise expires.

“Congress can issue multiple franchises that collectively can exceed 50 years as long as the individual franchises do not exceed [50 years],” DOJ Assistant Secretary Nicholas Ty told lawmakers during the joint hearing of the House committee on legislative franchises and the committee on good government and public accountability on ABS-CBN’s bid for a 25-year franchise.

Section 11 of Article XII of the 1987 Constitution states that: “No franchise, certificate, or any other form of authorization for the operation of a public utility shall be granted… for a longer period than fifty years.”

This provision in the Constitution has been the basis of critics of granting ABS-CBN a 25-year franchise in saying that the network should not be granted a new franchise since it has been operating for more than 50 years.

It was Agusan del Norte 1st District Rep. Lawrence Fortun who first asked Ty if Congress can grant a franchise for a period of 50 years.

Ty said it is the prerogative of the Congress to say how long a franchise would last as long as it does not exceed the 50-year cap as stated in the Constitution.

Fortun then asked if Congress can grant another franchise once the previous franchise lapses.

Ty explained that “Congress can once again issue a franchise to the same applicant”, backing up the earlier pronouncements of ABS-CBN lawyer Mario Bautista.

“Tulad ng sinabi ni Atty. Bautista, ang 50-year limitation under the Constitution pertains to the franchise itself and not to the grantee and for the renewal of franchise. Once again, Congress has the discretion to fix the term of that franchise as long as that term does not exceed the 50-year limit,” Ty said.

Ty added that “had the interpretation been that the 50-year limit applies to the grantee, it would be fair to suppose that those entities [which have been operating for more than 50 years] would have long shut down.”

With that, if Congress grants ABS-CBN a 25-year franchise, will it be constitutional?

“That action of Congress would be constitutional insofar as the 50-year term limit of the franchise is concerned,” Ty said.

ABS-CBN president and chief executive officer Carlo Katigbak has previously said that the 50-year cap on franchises only applies to individual franchises.

“Ang sinasabi sa Saligang-Batas ay ang isang prangkisa ay hindi maaring tumagal ng lampas 50 years. Pero hindi po nito sinasabi na pag-abot mo ng fifty years ng serbisyo, hindi ka na pwedeng magpatuloy ng serbisyo,” Katigbak said.

(According to the Constitution, a franchise cannot last for more than 50 years. But that does not mean that once you reach 50 years in service, you can no longer continue.)

“Ang sinasabi lang po ay kapag nag-expire ang iyong prangkisa, kailangan kumuha ulit ng panibagong prangkisa. At ang ibibigay na bagong prangkisa ay hindi pwedeng lumampas ng fifty years,” he added.

(What it says is that if your franchise expires, you can apply for a new franchise and that the new franchise cannot exceed fifty years.)

The 50-year cap on franchises is only one of a number of issues lodged against ABS-CBN amid its bid for a new franchise.

So far, the committees have tackled the citizenship of  ABS-CBN Chairman Emeritus Eugenio “Gabby” Lopez III, the network’s issuance of Philippine Depositary Receipts (PDRs), and the re-acquisition of the Lopez family of the network after the 1986 EDSA Revolution.