ABS-CBN Broadcasting Corporation v Philippine Multi-Media System, Inc. G.R. Nos. 175769-70, January 19, 2009

ABS-CBN Broadcasting Corporation v Philippine Multi-Media System, Inc.
G.R. Nos. 175769-70, January 19, 2009


Facts:
Philippine Multi-Media System, Inc. (PMSI), operator of Dream Broadcsating System, delivers a digital direct-to-home (DTH) television satellite to its subscribers all over the Philippines, was granted a legislative franchise under Republic Act 8630 and was given a Provisional Authority by the National Telecommunications Commission (NTC) to install, operate and maintain a nationwide DTH satellite service. When it commenced operations, it offered as part of its program line-up, together with other paid premium program channels, ABS-CBN Channels 2 and 23, NBN, Channel 4, ABC, Channel 5, GMA, Channel 7, RPN, Channel 9, and IBC, Channel 13, pursuant to Memorandum Circular 4-08-88 which mandated all cable television system operators, operating within the Grade “A” and “B” CONTOURS to carry out the television signals of the authorized television broadcast stations.

ABS-CBN Broadcasting Corporation (ABS-CBN), a licensed television and radio broadcasting network, demanded PMSI to cease and desist from “rebroadcasting” Channels 2 and 23. In its reply, PMSI contended that the “rebroadcasting” was in accordance with the authority granted by NTC under its obligations under NTC MC 4-08-88.

Negotiations were ensued between the parties in an effort to reach a settlement; however, the same was terminated by ABS-CBN allegedly due to PMSI’s inability to ensure the prevention of illegal “retransmission” and further “rebroadcast” of its signals, as well as the adverse effect of the rebroadcasts on the business operations of its regional television stations.

ABS-CBN filed with the Intellectual Property Rights Office (IPO) a complaint for “Violation of Laws Involving Property Rights, with Prayer for the Issuance of a Temporary Restraining Order and/or Writ of Preliminary Injunction” alleging that PMSI’s unauthorized rebroadcasting of Channels 2 and 23 infringed on its broadcasting rights and copyright. The TRO was granted by the Bureau of Legal Affairs (BLA) of IPO. PMSI, pursuant to the TRO, suspended the retransmission of PMSI of Channels 2 and 23 and likewise filed a petition for certiorari with the Court of Appeals. The Court of Appeals granted the petition of PMSI and reversed the decision of the BLA. ABS-CBN filed its appeal however it was dismissed by the Court of Appeals. Furthermore, ABS-CBN’s motion for reconsideration was denied.

Issue:
1. Whether or not PMSI violated the Laws on Property Rights.
2. Whether or not the issuance MC 4-08-88 by the NTC is a valid exercise of the police power of the State.

Held:
1. NO. PMSI did not violate the Laws on Property Rights because it is not engaged in rebroadcasting Channels 2 and 23. Rebroadcasting has been defined as “the simultaneous broadcasting by one broadcasting organization of the broadcast of another broadcasting organization.” It is also “the transmission by wireless means for the public reception of sounds or of images or of representations thereof; such transmission by satellite is also ‘broadcasting’ where the means for decrypting are provided to the public by the broadcasting organization or with its consent.” PMSI is only engaged in the carrying of signals of ABS-CBN coming from ABS-CBN and transmitting signals. PMSI is not the origin nor does it claim to be the origin of the programs broadcasted by the ABS-CBN. PMSI did not make and transmit on its own but merely carried the existing signals of the ABS-CBN. When PMSI subscribers view ABS-CBN’s programs in Channels 2 and 23, they know that the origin thereof was the ABS-CBN.

The nature of broadcasting is to scatter the signals in its widest area of coverage as possible. On this score, it may be said that making public means that accessibility is undiscriminating as long as it is within the range of the transmitter and equipment of the broadcaster. That the medium through which the PMSI carries the ABS-CBN’s signal, that is via satellite, does not diminish the fact that it operates and functions as a cable television. It remains that the PMSI’s transmission of signals via its DTH satellite television service cannot be considered within the purview of broadcasting.

Furthermore, there is no rebroadcasting on the part of the PMSI of the ABS-CBM’s programs on Channels 2 and 23, as defined under the Rome Convention, which defines rebroadcasting as “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 Memorandum Circular 04-08-88. With regard to its premium channels, it buys the channels from content providers and transmits on an as-is basis to its viewers. Clearly, PMSI does not perform the functions of a broadcasting organization; thus, it cannot be said that it is engaged in rebroadcasting Channels 2 and 23.

Therefore, the retransmission of ABS-CBN’s signals by PMSI – which functions essentially as a cable television – does not constitute rebroadcasting in violation of the former’s intellectual property rights under the IP Code.


2. YES. The law on copyright is not absolute. 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 in these activities whenever the Commission finds it reasonably feasible.

The “Must-Carry Rule” is in consonance with the principles and objectives underlying Executive Order No. 436, to wit:

The Filipino people must be given wider access to more sources of news, information, education, sports event and entertainment programs other than those provided for by mass media and afforded television programs to attain a well informed, well-versed and culturally refined citizenry and enhance their socio-economic growth.

Moreover, radio and television waves are mere franchised which may be reasonably burdened with some form of public service. It is a privilege subject, among other things, to amendment by Congress in accordance with the constitutional provision that “any such franchise or right granted . . . shall be subject to amendment, alteration or repeal by the Congress when the common good so requires.”

The must carry rule is a valid exercise of the police power of the State. It favors both broadcasting organizations and the public. It prevents cable television companies from excluding broadcasting organization especially in those places not reached by signal. Also, the rule prevents cable television companies from depriving viewers in far-flung areas the enjoyment of programs available to city viewers. In fact, this Office finds the rule more burdensome on the part of the cable television companies. The latter carries the television signals and shoulders the costs without any recourse of charging. On the other hand, the signals that are carried by cable television companies are dispersed and scattered by the television stations and anybody with a television set is free to pick them up.