Press Release
December 14, 2021

Senate moves to solve franchise woes, says Drilon

The Senate passed on second reading Senate Bill No. 1530, authored by Senate Minority Leader Franklin M. Drilon, which seeks to provide an immediate solution to dilemmas being faced by franchise applicants whose renewal of legislative franchises have been filed but remained pending in Congress.

SBN 1530 seeks the non-expiration of legislative franchises that are pending in Congress by amending Section 18, Book VII, Chapter 3 of Revised Administrative Code, Drilon explained. The Revised Administrative Code provides for the non-expiration of a license where the licensee has filed a timely and sufficient application for renewal, until a final determination by the agency is made.

Drilon's amendment simply expands the provision to also include franchises granted by Congress.

The bill provides that where a licensee or franchisee has made a timely and sufficient application for renewal of a franchise or license, the same shall not expire until after a final determination by the department, agency or branch of government.

The amendments, according to Drilon, also hope to address the unfair and iniquitous closure of their operations due to the issuance of cease and desist orders, after the expiration of a franchise pending renewal, which in turn result in job losses in the telecommunications and broadcast industries.

"It is acknowledged that there is a gap in the law in cases as exhibited in cases where a franchisee, having taken all the steps to renew its franchise, is unable to do so not due to its own fault, but due to Congress' failure to act on the application. As the principle of equity has been deemed insufficient to fill that gap, the timely passage of this measure is in order," Drilon said.

Congress has applied considerations of equity in previous similar situations and the measure seeks to institutionalize that practice, he noted.

"The amendment we propose would require the concerned agency or branch of government to act decisively on an application for renewal, and to express its decision in clear, unmistakable terms, to ensure that the applicant is not punished for the authority's indecision or inaction," Drilon said.

"SBN 1530 can save jobs and prevent and fix franchise woes caused by the inability of the grantee, in this case Congress, to act on an application for renewal in a timely manner," Drilon said.

"It will prevent the repeat of what happened to broadcast network ABS-CBN, a pillar of our media industry and pioneer of many innovations, whose franchise remained in limbo prior to the denial by a House of Representatives panel, in the meantime causing premature loss of 11,000 jobs. It is meant to protect both small and big franchise holders in the event that their franchise is not acted upon immediately," Drilon said.

When the bill was tackled in the committee, various sectors including the Kapisanan ng mga Brodkaster ng Pilipinas (KBP) threw its support behind the measure.

"This bill addresses the unfortunate situation where renewal for franchise applications are filed before expiration but are not acted upon in time," said KBP President Ruperto S. Nicdao Jr.

No less than the Department of Justice, in its official position paper, said that there is "nothing legally objectionable in the passage of a law of general application which allows the grantee of a franchise to operate while its application for renewal is being deliberated by Congress, it being an adjunct of its franchising, power which, in turn, is an adjunct of its legislative power".

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