Wednesday, January 25, 2012

ABS-CBN vs. PMSI, G.R. No. 175769-70 (19 Jan 2009)

Facts: ABS-CBN is engaged in television and radio broadcasting through wireless and satellite means while Philippine Multi-Media Systems Inc. (“PMSI” for brevity), the operator of Dream Broadcasting System provides direct-to-home (DTH) television via satellite to its subscribers all over the Philippines. 

PMSI was granted legislative franchise under RA 8630 to install, operate and maintain a nationwide DTH satellite service and is obligated under by NTC Memorandum Circular No. 4-08-88, Section 6.2 of which requires all cable television system operators operating in a community within Grade “A” or “B” contours to carry the television signals of the authorized television broadcast stations (“must-carry rule”). 

ABS-CBN filed a complaint with Intellectual Property Office (IPO) for violation of laws involving property rights. It alleged that PMSI’s unauthorized rebroadcasting of Channels 2 and 23 infringed on its broadcasting rights and copyright and that the NTC circular only covers cable television system operators and not DTH satellite television operators. Moreover, NTC Circular 4-08-88 violates Sec. 9 of Art. III of the Constitution because it allows the taking of property for public use without payment of just compensation. 

PMSI argued that its rebroadcasting of Channels 2 and 23 is sanctioned by Memorandum Circular No. 04-08-88; that the must-carry rule under the Memorandum Circular is a valid exercise of police power. 

IPO and Court of Appeals ruled in favor of PMSI. 


Issues: 

(1) w/n PMSI infringed on ABS-CBN’s broadcasting rights and copyright 

(2) w/n PMSI is covered by the NTC Circular (“must-carry rule”) 

(3) Whether NTC Circular 4-08-88 violates Sec. 9 of Art. III of the Constitution because it allows the taking of property for public use without payment of just compensation or it is a valid exercise of police power. 


Held: 

(1) NO. PMSI does not infringe on ABS-CBN’s broadcasting rights under the IP Code as PMSI is not engaged in rebroadcasting of Channels 2 and 23. Rebroadcasting, which is prohibited by the IP Code, is “the simultaneous broadcasting by one broadcasting organization of the broadcast of another broadcasting organization.” ABS-CBN creates and transmits its own signals; PMSI merely carries such signals which the viewers receive in its unaltered form. PMSI does not produce, select, or determine the programs to be shown in Channels 2 and 23. Likewise, it does not pass itself off as the origin or author of such programs. Insofar as Channels 2 and 23 are concerned, PMSI merely retransmits the same in accordance with NTC Memorandum Circular 04-08-88. 

(2) YES. “DTH satellite tv operators” is covered under the NTC Circular which “requires all cable television system operators… to carry the television signals of the authorized television broadcast stations”. The Director-General of the IPO and the Court of Appeals correctly found that PMSI’s services are similar to a cable television system because the services it renders fall under cable “retransmission”. Thus, PMSI, being a DTH Satellite TV operator is covered by the NTC Circular. 

(3) The carriage of ABS-CBN’s signals by virtue of the must-carry rule in Memorandum Circular No. 04-08-88 is under the direction and control of the government though the NTC which is vested with exclusive jurisdiction to supervise, regulate and control telecommunications and broadcast services/facilities in the Philippines. The imposition of the must-carry rule is within the NTC’s power to promulgate rules and regulations, as public safety and interest may require, to encourage a larger and more effective use of communications, radio and television broadcasting facilities, and to maintain effective competition among private entities.

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