Landmark ruling

A recent decision of the Philippine Supreme Court has laid to rest the issue of whether or not the National Telecommunications Commission (NTC) has the power to cancel the licenses of broadcasting stations on the ground that they violated the terms of their congressional franchises.

In a decision penned by SC Justice Dante Tinga, the Court noted that even under existing laws, the NTC’s power to issue certificates of public convenience (CPCs) to broadcast stations did not expressly carry with it the power to cancel such CPCs.

The matter was brought up to the High Tribunal by a certain Santiago Divinagracia who alleged that Consolidated Broadcasting System, Inc. (CBS) and People’s Broadcasting Service, Inc. (PBS), two of three radio networks that comprise Bombo Radyo Philippines, violated the terms of their congressional franchises when they failed to offer at least 30 percent of their common stocks to the public as required by law and their legislative franchises.

Divinagracia claimed that because of the misuse and violation of their franchises, the provisional authorities granted by the NTC to PBS and CBS to install, operate and maintain various AM and FM broadcast stations had to be cancelled.

The NTC however dismissed the complaints, claiming that while it had full jurisdiction to revoke or cancel a PA or CPC for violations or infractions of the terms and conditions embodied therein, the complaints actually constituted collateral attacks on the legislative franchises of the two networks which are more properly the subject of a quo warranto action to be commenced by the Solicitor General in the name of the Republic of the Philippines.

Divinagracia went to the Court of Appeals which upheld the NTC’s denial. He then elevated the matter to the Supreme Court.

But the SC found no legal basis for recognizing the NTC’s authority to cancel the CPCs or PAs of broadcasting stations on the ground of violation of their legislative franchises.

It stressed that the cancellation of a CPC or license to operate of a broadcast station is essentially a death sentence and the most drastic means to inhibit a broadcast media practitioner from exercising the constitutional right to free speech, expression and of the press.

The Court added that the authority of the franchisee to engage in broadcast operations is derived in the legislative mandate and that to cancel the PA or the CPC is, in effect, to cancel the franchise or otherwise prevent its exercise.

By law, it said the NTC is incapacitated to frustrate such mandate by unduly withholding or canceling the provisional authority or the CPC for reasons other than the orderly administration of the frequencies in the radio spectrum. Thus, the NTC cannot, without clear and proper delegation by Congress, prevent the exercise of a legislative franchise by withholding or canceling the licenses of the franchisee.

The last two points however have created some confusion (or hope) on the part of other legislative franchise holders who are also grantees of PAs or CPCs from the NTC.

If for instance it is a telecommunications company that violated the terms of its congressional franchise, does the NTC have the authority to cancel its license? While it is true that other franchise holders do not enjoy the constitutional freedom of the press, it can be argued that as in the case of broadcasting companies, the NTC cannot subvert the will of Congress by withholding the exercise of the legislative franchise via the cancellation of PAs or CPCs.

We’’ll never know the answer to this until such time that this issue is brought up the Supreme Court. In the meantime, the NTC has been forewarned.

Shift to digital

Speaking of the NTC, there are unconfirmed reports that the regulatory body is leaning towards adopting the Japanese standard when the NTC mandates the migration from analog to digital video broadcast.

If these reports are true, then NTC’s choice and allegedly that of Malacañang’s, will run counter to the alleged preference by the Kapisanan ng mga Brodkaster sa Pilipinas (KBP) and the standard adopted by Mediascape for its MyTV service.

Other companies that are looking at the possibility of going into mobile television, on the other hand, just want the NTC to make a decision once and for all. After all, the 2015 deadline is just six years’ away and the shift is not as easy as it may seem, especially in the case of broadcasting companies that do not have the financial muscle as the top two TV stations.

While before the NTC was considering adopting a technology-neutral approach in the country’s bid to shift to digital broadcast, for some reason, it decided to adopt a particular standard.

According to NTC commissioner Ruel Canobas, the Japanese have offered to bring in the DVB technology virtually for free, attaching concessional loans to their offer. The Europeans on the other hand are doing no such thing and believe that Japan’s offer is a testament to the lack of quality of their service.

The European players insist that technology is much cheaper than Japan’s at much better quality, with set up boxes priced about $26, compared to Japan’s $29. And one thing going for the Europeans is the fact that there are more countries using their standard.

The NTC says it is keeping the 2015 deadline for the shift to digital. The United States has phased out analog beginning last month.

The rumor mill is abuzz with talk that there is more to the choice than meets the eye. Let us hope that any choice that the NTC makes will have sound technological basis and that the rumors are just rumors.

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