Biz buzz: Solar versus Fox

Is a cable TV content provider considered a mass media entity?

The answer to this question will have massive implications on the local media and entertainment landscape, possibly in the region of hundreds of millions of pesos.

This is after Solar Entertainment Corp. of the Tieng family sued the local unit of Fox Television—called Fox International Channels Philippines Corp.— for allegedly violating no less than the Philippine Constitution, which expressly prohibits the presence of foreign owners in the local media industry.

Solar is also suing Fox for allegedly violating the Foreign Investments Act and a couple of Marcos-era presidential decrees.

“Is Fox engaged in mass media and advertising activities, in violation of the nationality restrictions?” a summary of the pleading read. “If it is, then its certificate of corporate registration should be revoked, and its operations halted, at once.”

Biz Buzz learned that the dispute between Fox and Solar started as early as 2015, when the entertainment firm of the Tiengs filed a complaint before the Securities and Exchange Commission against the international media giant.

To that complaint, Fox replied it was only an indirect subsidiary of the multinational company that actually provides the media content. The content shown on its channels (available to Philippine cable TV subscribers) is supposedly uploaded not by it, but by a third-party satellite operator. “This dissemination of content is supposedly done not by it, but by various local cable TV operators,” the brief read.

But according to Solar’s camp, if Fox’s assertion—that all acts attributed to it is actually done by other corporate entities—is taken as truth, then its operations here would be entirely irrelevant.

“If the content shown on its channels is determined by other entities, if the actual transmission of content is done by a third-party provider, then there is no reason for Fox’s existence,” Solar insisted. “Yet Fox insists that capital was expended, and funds invested, on an entity that merely makes a ‘playlist’ of programs to be aired on a few channels.”

Uh-oh.

Solar proceeded to ask what the “real” purpose of Fox’s local operations is.

“The answer is simple: Fox localizes content and tailor-fits it for the domestic audience,” Tieng’s firm said, answering its own rhetorical question. “It picks and chooses which programs to broadcast locally, operates and runs the local feeds of its international channels, dubs and translates programs to the local language, and produces its own advertisements. Clearly, Fox is being used, and is allowing itself to be used, as a conduit (a dummy, so to speak), to permit other foreign entities to inject itself into the local media and advertising industries. (Let us not forget that Fox is a foreign company itself.) This is proscribed by the Constitution.”

Solar added that, by engaging in mass media and advertising activities under foreign control and backed by foreign funding, Fox “underhandedly” edged out its local competition, causing them damage (we supposed Solar was speaking from experience).

“By skirting the nationality restrictions, Fox has been saving on taxes (on royalties for the right to use/exhibit shows, on income due on advertising sales), various government agency fees, and other costs,” the complaint said. “This, Fox has been doing for almost two decades now—since its fraudulent incorporation in 1996.”

Wow. Tough words from a local firm going up against a multinational giant that airs popular shows on local cable TV watched by millions of Filipinos.

What does Solar want from Fox? Nothing less than the latter’s complete cessation of local activities through the revocation of its certificate of registration. Ouch. Let’s see how the courts resolve this. —DAXIM L. LUCAS

DU30 spies

Enterprising employees at local government units (LGUs), such as those who earn extra livelihood out of granting building permits and other papers requiring local clearance, are more conscious on doing business these days lest they be caught plying their trade.  According to the grapevine, Malacanang has strengthened its intelligence gathering  and planted spies in some LGUs to catch erring staffers.

After all, if President Duterte decides to focus next on getting rid of scalawags in the bureaucracy, these people will naturally fear for their lives.

However, it will take more than identifying the rotten eggs to put an end to what has become an extortion business for some.  We gathered that while involved folks have heard about the spies, such malpractices continue. If at all, scalawags are more careful in the execution of their trades. With the risk-reward dynamics skewed up, it only means that oftentimes, it may only become more costly for households and businesses. —DORIS DUMLAO-ABADILLA

Upbeat in Makati

The mood was generally upbeat (almost ecstatic, in fact, believe it or not) during a recent meeting of the Rotary Club of Makati at the Peninsula Manila.

With Makati Mayor Abigail Binay as guest speaker, Rotarians were only too eager to hear the new mayor deliver her first State of the City address before Club members—a tradition started by her father, former Vice President Jejomar Binay.

Those in the crowd were not disappointed as the young lawmaker-turned-city mayor cited a litany of changes she would be introducing to the country’s premier financial district, including lawful and clean governance, transparent bidding processes and enhanced collection efficiency.

But she received thunderous applause when she declared that Makati City will not increase business and real property taxes this year. In fact, she said the city’s number crunchers were already finding means to lower taxes to reward businessmen who have been loyal to Makati.

With a new Binay at the helm of the city, it would seem that Makati residents can expect more positive changes in the coming months. Given the kind of pummeling the family was subjected to ahead of last year’s elections, it bears watching to see if her brand of public service can revive the family’s political fortunes. —DAXIM L. LUCAS

Tugade’s solution

A more definitive agreement for the MRT-3, LRT-1 and MRT-7 common station in Quezon City was signed this week— a big step toward closing an issue running close to eight years now.

But for the Department of Transportation (DOTr) under Arthur Tugade, it also comes as a rare piece of good news for an agency that tends to draw plenty of public outrage.

Since Tugade unofficially assumed the role of traffic czar, it’s unfortunate that progress in terms of cutting Metro Manila’s traffic “crisis” has barely been felt.

True, the department said it would take time and patience to solve problems that were long years in the making. But that matters little to the average commuter in a packed train, or a motorist traversing equally congested roads.

The common station deal signing this week helped clear the air about a number of issues.

These mainly dealt with passenger convenience and steps to end a legal challenge raised by SM Prime Holdings versus the DOTr of 2014 after an intended change in government led to an unintended change in their contract.

Perhaps the biggest change this time around was Tugade, who apparently played a key role in bringing this diverse set of interests to agree on a single goal, which is to get this crucial piece of infrastructure off the ground.

If anything, the common station deal again brought to the fore an attribute of Tugade that was touted during his time as head of Clark Development Corp. and his early days at the DOTr, which was his ability to extract results in difficult situations.

That image has been doused somewhat by various political and private sector roadblocks, a mis-appreciated anecdote on traffic “state of mind,” and a stark truth: that solving the country’s transportation woes were much more difficult than turning Clark around.

With the common station issue coming to its resolution, it’s fair to say it was a job well done by the DOTr. Hopefully, we see similar successes, and in a much shorter time span. —MIGUEL R. CAMUS