In a motion, GMA asked the NTC to immediately act on its Sept. 15 motion for issuance of cease and desist order and declare void the merger and consolidation of SkyCable and Home Cable as the merger violates Section 20(g) ofthe Public Service Act as well as the respondents’ own franchises.
Section 20(g) of the Public Service Act prohibits a public service, without the prior approval of the commission to, among others, "merge or consolidate its property, franchises, privileges or rights, or any part thereof, with those of any public service."
Section 10 of SkyCable’s franchise, on the other hand, prohibits the cable company from "merging with any corporation or entity without the prior approval of the Congress of the Philippines." In addition, the controlling interest of the franchise holder shall not be "transferred, whether as a whole or in parts and whether simultaneously or contemporaneously, to any such person, firm, company, corporation or entity without the prior approval of the Congress of the Philippines."
Sky and Home Cable announced earlier they have executed a master consolidation agreement that outlines the ownership of their operations and have formed a holding company (Beyond Cable Holdings, Inc.). The respondents have also signed a memorandum of agreement (MOA) with their creditor banks and expect their consolidation to be completed by the end of January 2004.
PLDT president Manuel Pangilinan, whose company owns Home Cable, was quoted as saying, "with the completion of the debt restructuring agreement, we’ll likely see consolidation by the end of January."
The consolidation of Sky and Home Cable is being implemented without the prior approval of the NTC and Congress, GMA said.
GMA Network said the NTC should not wait for the merger to be completed before resolving the matter to prevent irreparable harm to persons with interest in the merger. This includes the public at large and the creditors of the respondents who are acting upon the belief that the consolidation is legal.
GMA OIC for legal affairs Roberto Rafael Lucila said the unlawful merger of the dominant cable companies is inimical to the public interest. "The consolidation has shown its adverse effects in the industry," Lucila said.