Calida says ABS-CBN's KBO service illegal, but network says it has permits
Solicitor General Jose Calida wants a halt order against ABS-CBN operations of Kapamilya Box Office channel.
The STAR/Boy Santos
Calida says ABS-CBN's KBO service illegal, but network says it has permits
Kristine Joy Patag (Philstar.com) - February 12, 2020 - 1:27pm

MANILA, Philippines (Updated 3:21 p.m.) — Solicitor General Jose Calida has asked the Supreme Court to stop ABS-CBN Corp. from operating its Kapamilya Box Office Channel, a sub product on its TVPlus service that gives viewers access to pay-per-view movies.

In his quo warranto petition to the SC, Calida said that the broadcast giant’s KBO Channel is operating without necessary permits from the government, such as from the National Telecommunications Commission.

“Since ABS-CBN Corporation, without the requisite authority from NTC, has been continuously operating from KBO Channel, and illegally deriving profit from this unauthorized enterprise, the State can ask the Court to enjoin such operation,” Calida told the SC.

The solicitor general said that this is in violation of Republic Act 7966, or the law that granted ABS-CBN its franchise.

But ABS-CBN said its broadcast offerings, including KBO, “have received the necessary government and regulatory approvals and are not prohibited by our franchise.”

What Calida alleged against ABS-CBN

ABS-CBN offers the public to buy, in one-time payment, TVPlus, a digital set-up box that allows access to some of its channels such as MYX. Owners of TVPlus may opt to pay an additional P30 or P99 to subscribe to its KBO Channel and watch movies.

Calida said that under RA 7966, the network should first secure authority from the National Telecommunications Commission “before it uses any frequency in the television or radio spectrum.”

“ABS-CBN Corporation is using the free-to-air frequency granted to it by the State for its operations of a Conditional Access System (CAS), particularly its KBO Channel,” he said.

Calida noted that on April 1, 2015, the broadcasting network informed the National Telecommunications Commission that it would offer those who purchased its TV Plus a pay-per-view option on Digital Terrestrial TV (DTT) for the Pacquiao-Mayweather match.

NTC replied on April 29, 2015 and told the network to “refrain from offering any pay television service it [its] DTT trials until such time that the Commission has come up with appropriate guidelines for the same.”

Calida also cited the DICT Framework that held that “the operation of CAS is subject to prior approval or authorization by the government.”

Part of the DICT Framework read: “[T]he policy and rules and regulations for the introduction of Pay TV Services for DTTB has yet to be formulated, developed and issued should the regulator allow such operation.”

On May 14, 2019, Calida said that the NTC reiterated its order to ABS-CBN Corp. He said: “The NTC did not authorize ABS-CBN Corporation to operative a Conditional Access System (CAS) when it granted provision authority” to the network.

What is a CAS?

The Department of Information and Communications Technology defines CAS as “a technology used in digital TV systems that involves satisfying qualified criteria prior to granting access to content.” The definition was published on DICT’s Digital Terrestrial Television Broadcasting Migration Plan, October 2017.

The NTC also told the network that “[t]he use of Conditional Access System on DTTB Service shall be subject to such Conditional Access Guidelines that the Commission or any other relevant government agency may hereafter issue.”

Calida noted that the NTC or any government agency has yet to issue the said Conditional Access guidelines.

He told the SC that ABS-CBN started offering paid live viewing and pay-per-view of some shows on April 2016 until February 2019, even without NTC permit on conditional access.

“In the absence of any permit from NTC and guidelines on conditional access, ABS-CBN Corporation has no authority to offer the KBO Channel,” it said.

What ABS-CBN said

ABS-CBN in a statement released Monday said that they have “necessary government and regulatory approvals” for KBO.

“KBO remains one of the cheapest forms of entertainment that we can provide to the public,” it said.

The broadcast giant reiterated that they did not violate any laws and Calida's allegations are without merit.

"ABS-CBN complies with all pertinent laws governing its franchise and has secured all necessary government and regulatory approvals for its business operations," it said.

What a legal opinion from Justice Secretary Guevarra said

The NTC, in 2018, asked Justice Secretary Menardo Guevarra for a legal opinion on whether TV broadcasters are allowed to engage in Conditional Access or Conditional Access System, and offer TV pay-per-view services.

The legal opinion was posted by Internet and ICT rights advocacy organization Democracy.net.ph. Guevarra has confirmed portions of the opinion sent to him for verification.

NTC said that pay-per-views are considered “highly propriety premium programs” and is a feature of digital television that TV networks “can adopt as a new business model.”

Guevarra, in a legal opinion issued June 2018, told the NTC that: “We find it clear enough that broadcast companies can engage in Conditional Access or Conditional Access System, and for the same reason can offer TV pay-per-view services.”

It should be noted though that the NTC received Guevarra’s legal opinion June 2018, or nearly a year after the Commission reiterated its order to ABS-CBN, as Calida said.

The Justice secretary stated that Section 1 of franchise laws the broadcast network is given franchise:

to construct, operate and maintain, for commercial purposes and in the public interest, television and radio broadcasting stations in and throughout the Philippines, through microwave, satellite or whatever means including the use of any new technologies in television and radio systems, with the corresponding technological auxiliaries or facilities, special broadcast and other broadcast distribution services and relay stations.

Basing on franchise laws, Guevarra said that NTC’s question on whether TV can engage CA or CAS and offer pay-per-view services is allowed.

“The provisions of Section 1 are categorical enough that there is no need for interpretation—only application,” he said.

 “There is nothing in said provisions that would give any impression that ‘commercial purposes’ are limited only to income derived by TV broadcast companies from paid advertisements,” Guevarra added.

He also said that the NTC may refer to Executive Order No. 436 and RA 5015 or the Anti-Cable Television and Cable Internet Tapping Acr of 2103 for guidelines of CA or CAS services of TV broadcasters.

Note that Calida, in his quo warranto plea against ABS-CBN, said that NTC or any government agency has yet to issue the said Conditional Access guidelines.

RA 1015 defined Cable Television (CATV) Service as “transmission or delivery of video and audio signals and programming for a fee, through fiber optics, coaxial cable and other technological means.”

Guevarra said "TV broadcasters may be allowed to engage in Conditional Acess or Conditional Access System, more specifically to offer TV pay-per-view services, provided that it does not amount to CATV service, which shall only be considered as such [CATV] if it is for purposes of providing multiple channel CATV service.'"

ABS-CBN ABS-CBN FRANCHISE EXPLAINER JOSE CALIDA MENARDO GUEVARRA SUPREME COURT
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