Associated Communications vs NTC: "NTC does not have the power to issue provisional permits."

Associated Communications vs NTC : "NTC does not have the power to issue provisional permits."

ASSOCIATED COMMUNICATIONS & WIRELESS SERVICES – UNITED BROADCASTING NETWORKS, PETITIONER, VS. NATIONAL TELECOMMUNICATIONS COMMISSION, RESPONDENT.

G.R. No. 144109, February 17, 2003

PUNO, J.:

Facts: 

The Associated Communications & Wireless Service-United Broadcasting Networks v[s] National Telecommunications case was decided way back in February 2003. The decision was written by then-Justice Puno and concurred in by Justices Artemio Panganiban, Angelina Sandoval-Gutierrez, Renato Corona and Conchita Carpio-Morales.

Act 3846 was enacted into law in 1931 mandating that “No person, firm, company, association or corporation shall construct, install, establish or operate a radio transmitting station, or a radio receiving station used for commercial purposes, or a radio broadcasting station without having first obtained a franchise therefore[e] from the Congress of the Philippines…”

In 1965, pursuant to Radio Control Act 3846, the group of Villaverde et. al. was granted a 50-year franchise to operate a public radiophone and telegraph for certain provinces through Republic Act 4551. In 1969, the franchise was transferred to Associated Communications and Wireless Service-United Broadcasting Networks (ACWS-UBN).

In 1974, President Ferdinand Marcos issued Presidential Decree (PD) 576-A, decreeing among others that “all franchises, grants, licenses, permits, certificates or other forms of authority to operate radio or television broadcasting systems shall terminate on Dec. 31, 1981.”

In 1979, Executive Order (EO) 546 was issued integrating and reorganizing certain agencies into the NTC. Thus, the agency was vested with the powers to “issue Certificate of Public Convenience (CPC) for the operation of communication utilities and services, radio communications systems, wire or wireless telephone or telegraph system, radio and television broadcasting system and other similar public utilities” and to “grant permits for the use of radio frequencies for wireless telephone and telegraph systems and radio communication systems including amateur radio stations and radio and television broadcasting systems.”

ACWS’ franchise was terminated on Dec. 31, 1981, in accordance with the provisions of PD 576-A. It then continued to operate its radio stations under permits granted by the NTC.

In May 1994, the NTC, the Committee on Legislative Franchises and the Kapisanan ng mga Brodkaster sa Pilipinas entered into a memorandum of understanding (MoU) agreeing that NTC could issue and grant permits to operate, which shall be valid for two years and which the permitee shall file an application for legislative franchise with Congress not later than Dec. 31, 1994.

Prior to the Dec. 31, 1994 deadline set by the MoU, ACWS filed with Congress an application for a franchise on Dec. 20, 1994, which was not deliberated on by the ninth Congress. Pending its approval, the NTC issued to ACWS a temporary permit to operate a television station via Channel 25 from June 29, 1995 to June 28, 1997.

On Aug. 17, 1998, the NTC issued Memorandum Circular 14-10-98 delineating certain guidelines, which include that “no application/petition for Certificate of Public Convenience to establish, maintain and operate a broadcast station in the broadcast service shall be accepted for filing without showing that the applicant has an approved legislative franchise.”

Subsequently, in January 1999, the NTC recalled the permit assigned to ACWS, ordered it to cease and desist from operating Channel 25 and denied its application for a permit to operate. Thereafter, the Court of Appeals (CA) affirmed the NTC decision and ACWS went to the Supreme Court questioning the appellate court’s and NTC decision.

In simple words, ACWS was operating with an “expired” legislative franchise and relying only on the temporary operating permits issued by NTC.

Issue:

WHETHER OR NOT THE COURT OF APPEALS ERRED IN UPHOLDING THE RULING OF THE NTC THAT A CONGRESSIONAL FRANCHISE IS A CONDITION SINE QUA NON IN THE OPERATION OF A RADIO AND TELEVISION BROADCASTING SYSTEM

Ruling:

No. The high court upheld the decision of the CA that “a congressional franchise is required for the operation of radio and television broadcasting stations as this requirement under Act 3846 was not expressly repealed by PD 576-A nor EO 546.” It ruled that without an express repeal, a subsequent law cannot be construed as repealing a prior law unless there is an irreconcilable inconsistency and repugnancy in the language of the new and old laws, which ACWS was not able to show.

There is nothing in PD 576-A that reveals any intention to do away with the requirement of a franchise for the operation of radio and television stations. Section 6 of PD 576-A merely identifies the regulatory agencies (which includes the NTC) from whom authorizations, in addition to the required congressional franchise, must be secured.

The NTC’s functions are to “assign call letter and assign frequencies for each station licensed by him and for each station established by virtue of a franchise granted by the Congress of the Philippines and specify the stations to which each of such frequencies may be used” and to issue “Certificates of Public Convenience for the operation of communications utilities and services, radio communications systems…radio and television broadcasting systems and other similar public utilities.” Dispensing with the requirement of a congressional franchise is not in line with the declared purposes of PD 576-A.

“The statutory functions of NTC may then be given effect as Congress’ prerogative to grant franchises under Act 3846 is upheld for they are distinct forms of authority. The former covers matters dealing mostly with the technical side of radio or television broadcasting, while the latter involves the exercise by the legislature of an exclusive power resulting in a franchise or a grant under authority of government, conferring a special right to do an act or series of acts of public concern.”

A franchise, being merely a privilege emanating from the sovereign power of the state and owing its existence to a grant, is subject to regulation by the state itself by virtue of its police power through its administrative agencies. In the case of television and broadcasting, the legislative franchise can be granted by Congress alone and the franchisee shall be regulated by the NTC. The regulation of radio and television communications is a function assigned to and performed by the NTC and at the same time recognized the requirement of a congressional franchise for the operation of a radio or television station.

In fact, in the normal course of securing authorizations to operate a television and radio station, the application for a CPC with the NTC comes after securing a franchise from Congress. The NTC cannot issue a CPC unless there is a valid franchise in place.

Justice Puno emphasized: “The call to dispense with the requisite legislative franchise must, however, be addressed to Congress as the lawmaker of the land for the Court’s function is to interpret and not to rewrite the law. As long as the law remains unchanged, the requirement of a franchise to operate a television station must be upheld.”

References:

ASSOCIATED COMMUNICATIONS & WIRELESS SERVICES – UNITED BROADCASTING NETWORKS, PETITIONER, VS. NATIONAL TELECOMMUNICATIONS COMMISSION. G.R. No. 144109, February 17, 2003 

Al S. Vitangcol 3rd. (February 29, 2020). Analyzing the Associated Communications and Wireless ruling vis-à-vis the ABS-CBN case. The Manila Times. Retrieved May 7, 2020, from https://www.manilatimes.net/2020/02/29/opinion/columnists/analyzing-the-associated-communications-and-wireless-ruling-vis-a-vis-the-abs-cbn-case/698193/

Ina Reformina (May 06, 2020). Ex-justice Carpio says TRO only option left for ABS-CBN following NTC halt order. ABS-CBN News. Retrieved May 7, 2020, from https://news.abs-cbn.com/news/05/06/20/ex-justice-carpio-says-tro-only-option-left-for-abs-cbn-following-ntc-halt-order