A telecommunication tower (Image from NTC website)
Allowing the National Telecommunications Commission (NTC) to have approving control on block time agreements could be negatively impacting market competition in the free television sector, a new study released by the Philippine Competition Commission (PCC) said.
In its 30-page study titled ‘Blocktiming Practices in the Philippine Free TV Industry,’ the competition watchdog warned of the potential consequences of such a regulation which was started by the NTC in 2022.
“Overall, requiring prior approval of the NTC before engaging in blocktime agreements could potentially pose significant negative impacts on market competition,” it said in the report’s conclusion.
“The memorandum may raise barriers to entry of blocktimers, unnecessarily raise costs, create regulatory uncertainty and distort competition,” it noted.
Back in June 2022, the NTC released a memorandum limiting the amount of daily airtime that television and radio stations can sell to block timers to 50 percent.
Additionally, it restricted blocktime arrangements and mergers during the time, a period which coincided with the now scuttled plan between ABS-CBN Corp. and TV5 Network Inc. to enter into such a deal.
Aside from this, the PCC also tagged the non-renewal of ABS-CBN’s franchise as another anti-competitive development in the country’s free television space.
It said it has led to a “substantial increase in market concentration,” with GMA Network emerging as the dominant player.
“This concentration raised concerns about competition and access to broadcasting frequencies, as well as potential limitations on content diversity and audience choice,” the PCC said in its report.
Despite this, the PCC said that larger networks like GMA are not currently encouraged to limit airtime access.
“Larger networks recognize the value of diverse content, making it unlikely for them to solely secure shows from one producer,” the PCC report said.
“Engaging in foreclosure strategies limits the range of aired television content, which may decrease audience reach,” it added, noting such is a crucial factor in attracting potential advertisers and revenue-generating opportunities.
Due to these developments, the PCC said that the jurisdiction of NTC on blocktime agreements must be confirmed before it regulates the specific segment of the industry.
“The PCC recommends that this information be effectively communicated to the concerned stakeholders,” the PCC further said.
“In doing so, the NTC would ensure effective oversight of the industry, particularly in terms of implementing rules that may affect market competition,” it explained.
“This will also clarify any misunderstanding that may arise from the interpretation of and compliance to the subject memorandum,” the study explained.
“Predictable regulatory environment can help foster a level playing field among players in the industry,” it emphasized.
It also said the potential impact of the NTC memorandum on content diversity and the ability of content producers to access airtime should be carefully considered.
Meanwhile, the PCC recommended that the government can promote competition by awarding licenses to new TV stations to address the issue of the non-renewal of the ABS-CBN franchise.