Fascinating technology

Mass media and technological evolution

The Securities and Exchange Commission (SEC), in its June 28, 2022 en banc decision in the Rappler case, had the opportunity to explain why the Constitution itself requires the mass media in the Philippines to be fully owned and controlled by Filipinos.

The 1987 Constitution, specifically Article 16, Section 11, stipulates that the ownership and management of mass media shall be limited to citizens of the Philippines, or to corporations, cooperatives or associations, wholly owned and operated by such citizens.

The SEC explained that the significance and significance of this constitutional provision relate to the policy the Constitution purports to implement – the protection of the best interests of the nation, i.e., the prevention of influence of public opinion by foreigners; otherwise, the country can easily be influenced or even manipulated by foreign entities.

Noting the important role of mass media in forming the minds of the people and influencing public opinion, the Commission stated that the power of mass media is such that it can attract and direct attention of the public, to persuade in matters of opinion and belief, to influence behavior, to structure definitions of reality, to confer status and legitimacy, and to inform quickly and widely.

Foreign entities acquiring control of the mass media, he stressed, will have the power and means to effectively control, shape and influence public opinion, and have the ability to steer public opinion. in the direction of their choosing to the detriment of the Filipino people. .

The SEC upheld its earlier decision revoking the certificates of incorporation of Rappler Inc. and Rappler Holdings Corp. and declaring invalid the Philippine Certificates of Deposit or PDRs issued to the foreign entity Omidyar Network (ON) due to a violation of the Constitution, the Code of Securities Regulation, and Executive Order 1018 which limits the ownership and management of mass media to Philippine citizens and provides penalties for violations, including license cancellation and imprisonment, a fine, or both.

In its 2018 ruling, the SEC noted that Rappler Holdings had issued 7.2 million PDRs covering shares of Rappler Inc. which were sold to Omidyar. Said PDRs contain a provision obliging the issuer to obtain the approval of PDR holders on social matters, in particular prohibiting any modification of the articles or articles of association of the issuer without first obtaining the approval of the holders of PDRs holding at least two-thirds of all PDRs issued and in circulation.

Mass media control, which the Constitution allows to be exercised entirely by Filipinos, is not limited to stock ownership or board management, but includes equity derivatives that confer control that includes influence on company policy.

A PDR is a security that grants the holder the right or option to buy the underlying security, in this case shares of Rappler Inc. They therefore do not necessarily translate into ownership of Rappler Inc. Unfortunately, the PDR provision gave control over a mass media. entity in Omidyar, which the Constitution absolutely prohibits.

As for Rappler’s assertion that he is not engaged in mass media, the SEC went on to say that the term includes technologies that were not present at the time the Constitution was granted, such as Internet, mobile technology and social media, but which are nonetheless included in the spirit and intent of the law which is to prevent foreigners from influencing the minds of the Filipino people.

Meanwhile, in its 2018 ruling, the Court of Appeals recognized Omidyar’s donation of all of its PDRs to Rappler staff and ordered the SEC to review the merits of the removal penalty. license imposed by the SEC in its decision of January 11. 2018 decision in light of the alleged donation that occurred.

The AC also found and asserted that Rappler and RHC were not deprived of due process.

But the SEC, in its subsequent order, said the gift deed did not and will not remedy Rappler’s constitutional violation that occurred at the time the PDRs, which granted Omidyar policy control and affairs of a mass media entity, were published.

He added that the waiver was only issued for the duration of the proceedings, with the SEC making it clear that its execution was an afterthought and had no purpose other than to make it appear and convince the Commission and the AC that Omidyar will not exercise control over Rappler even if the same is granted in the PDRs.

The SEC pointed out that the PDRs, being the instrument that facilitated the granting of control by a mass media entity to a foreign entity, were void as contrary to the Constitution and the law. Being a void and non-existent contract or document, PDRs cannot and never can be a valid object of a donation, he said.

Considering that the donation is void because contrary to law and public order, the Commission declared in its decision that it cannot be ratified in order to remedy a violation already committed.

Incorporation, the SEC noted, is a mere privilege granted by the state to those who are able to demonstrate to the satisfaction of the Commission that they have complied with legal and regulatory requirements and if the SEC finds that a corporation has violated the Constitution or any law, rule or regulation, it is required to impose appropriate penalties, including the ultimate penalty of revocation of its certificate of incorporation, if warranted.

Rappler, he added, cannot be allowed to remain unharmed by the mere expediency of a waiver and/or donation for what is otherwise a criminal offense.

Of course, Rappler said business would continue as usual and he would challenge the SEC’s decision in the Supreme Court.

It will be interesting and instructive for all of us to know how CS decides on this issue, especially on the question of what the term mass media now encompasses.

Gencos still committed to PSA

Consumers have reaped the benefits of the Power Supply Agreement (PSA) between Meralco and generation companies such as Ayala’s AC Energy Inc (ACEN) and First Gen.

ACEN and First Gen were among four gencos under contract with Meralco to supply power to the electric utility under the PSA program.

Thanks to the PSA, Meralco is able to deliver on its commitment to keep the price of electricity stable under the PSA fixed pricing system, further mitigating price increases.

Indications show that ACEN and First Gen are sticking to their deal with Meralco, relieving the public of further increases in electricity rates caused by soaring world market fuel prices caused by the conflict in Ukraine.

Experts say this partnership with ACEN and First Gen has shielded Meralco subscribers from a further increase in electricity rates as the public is still recovering from the economic backlash caused by two years of restrictions due to the COVID-19 pandemic. 19

It has been said that the two companies actually bear part of the production costs which have increased due to soaring fuel prices.

In these difficult times, PSAs are playing a vital role in stabilizing electricity tariffs in the country, benefiting consumers beleaguered by economic challenges.

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