Franchise Policy |


Not surprisingly, the Duterte administration assigned ABS-CBN broadcast frequencies to political ally Manny Villar and religious group Quiboloy. The frequencies sat vacant for a year after they refused to renew ABS-CBN’s franchise.

Antenna frequencies, broadcast or telco, are public resources. Because these are limited, the state must apportion their use. And because the frequencies belong to the public, their allocation must promote the public interest as much as possible. That’s the theory.

In our country, awarding franchises is a not-so-secret manger for members of Congress. Obtaining a franchise is an expensive process even if the state grants it for free.

In some other countries, they have offered the allocation of such franchises, with the money going to the national treasury. This should be the case since frequencies are scarce commodities that have economic value for businesses.

That’s what they should have done when they forced ABS-CBN to release their frequencies. Manny Villar and Quiboloy would have had to pay dearly for the privilege of using these frequencies.

It turns out that private parties who get frequencies for free from the state can also sell the right to use them afterwards. It is rent seeking.

In fact, there is another thing that must be done in the public interest.

With digital broadcasting, up to 10 TV channels can use the space that previously only housed one analogue channel. If the new administration has the national interest in mind, it should auction seven to ten channels instead of just one.

Of course, I dream. Franchise holders will insist on their right to have all 10 channels for the single analog channel they own or have requested. Politicians will not want the system to change.

For now, don’t cry for ABS-CBN. If you ask them, they’ll tell you they’ve migrated to an all-digital business model that doesn’t require franchises or frequencies. If a new administration gives them one, it’s gravy.

Going digital is how the world is going right now. Fewer and fewer homes in the United States are addicted to cable or still receive programming through old-fashioned analog television channels. Netflix and other streaming services are where they are now.

ABS-CBN had been forced to go into the future, ready or not. They now produce content that airs on Netflix, Viu, foreign broadcast networks and blocked on ABC 5 and A2Z among others.

What ABS-CBN has going for it is its ability to create content that sells here and abroad. Content is king in today’s digital media environment, and it’s a strength that none of those who now have franchises and frequencies have. Even the capacity of the GMA7 is limited.

This is something my friend Manny V will find out soon enough. The pragmatic businessman that is Manny, I don’t rule out the possibility that he is seeking a blocking deal with ABS-CBN for content.

What happened to ABS-CBN under the Duterte administration forced the network out of its traditional broadcast comfort zone and into the future of entertainment. As long as they can hope to recapture the good old days of a free-to-air TV franchise, the resolve to move forward won’t be as strong.

It can also be good for local talent as it will force ABS-CBN to go international in a big way and have their own BTS. There is no turning back now.

They have a talent roster that is very loyal. The talents have made personal sacrifices to help the network pull through these days. There is also the strong commitment of the Lopez family to recover at all costs.

That doesn’t mean the next administration shouldn’t revisit his case and how the awarding of franchises has been politicized. We have to do it right.

I don’t blame Manny Villar. He was doing things by the current rules. It may seem unfair to use his enormous political clout, but that’s how things are.

I knew Manny during our freshman year at UP in 1966. Manny and I were in the same ROTC platoon. We were classmates in some core subjects for our first two years.

I have stayed in touch with Manny over the years. I consider him a friend and enjoy our conversations on everything from business to politics. His daughter and mine were contemporaries of Ateneo.

I admire the courage and strategic thinking that allowed Manny to become the billionaire he is today. The way he integrated politics, business and family leaves you breathless.

The thing is… you also feel like he pushed his weight too much.

For example, he also quietly dominated the water sector by creating joint ventures with local water districts which are regulated by LWUA, an agency attached to DPWH, which was headed by his son. With a hundred water districts now, it is also becoming the national water king.

Second, members of Congress should not be financially interested in granting franchises while in office. His daughter Camille is a member of the Lower House and she voted not to grant ABS-CBN a new franchise. Then they get the ABS frequencies. Parang flagrant conflict of interest.

The scuttlebut is Manny wants the ABS frequency to help his son who is now running for senator when he runs for president in six years. But a frequency is just a frequency, and it will be of little use without the expertise to use it effectively.

Knowing Manny, I imagine he thinks he can easily buy talent, even among the unemployed ABS-CBN. From my years in the business and with ABS-CBN, I can tell him that it will take more than six years to develop a team that works as well as ABS-CBN has for all these years.

For now, that’s how the cookie crumbles. We can dream of better days, with better politicians in power. In reality, we are stuck with the crumbs we have because we vote for them every time.

Boo Chanco’s email address is [email protected]. Follow him on Twitter @boochanco.


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