The Supreme Court affirmed that a direct-to-home (DTH) satellite service provider’s retransmission of free-to-air television signals does not constitute a violation of broadcasting rights or copyright under the Intellectual Property Code. This decision underscores the ‘must-carry’ rule, which mandates cable and DTH operators to include local television signals in their service offerings. The ruling emphasizes the importance of providing the public with access to diverse information sources, balancing this against the intellectual property rights of broadcasting organizations. This case clarifies the scope of broadcasting rights in the context of evolving technologies and the role of regulatory bodies in promoting public interest.

Signal Scramble: How Far Do Broadcasting Rights Extend in the Digital Age?

This case revolves around a dispute between ABS-CBN Broadcasting Corporation and Philippine Multi-Media System, Inc. (PMSI), the operator of Dream Broadcasting System. ABS-CBN claimed that PMSI’s unauthorized rebroadcasting of Channels 2 and 23 infringed on its broadcasting rights and copyright. However, PMSI argued that it was complying with the ‘must-carry’ rule under NTC Memorandum Circular No. 4-08-88, which requires cable television system operators to carry the television signals of authorized broadcast stations. The central legal question is whether a DTH satellite service provider like PMSI, in retransmitting free-to-air channels, is violating the broadcasting rights of the originating network, or if it is acting within the bounds of regulations designed to promote public access to information.

The Intellectual Property Code (IP Code) grants broadcasting organizations exclusive rights over their broadcasts. Specifically, Section 211.1 of the IP Code states that broadcasting organizations have the exclusive right to authorize or prevent the rebroadcasting of their broadcasts. Similarly, Section 177 of the IP Code protects copyright holders by granting them the exclusive right to control public performance and communication of their works. However, these rights are not absolute, as Section 184.1(h) provides limitations, particularly when the use is under the direction or control of the government and in the public interest.

The Supreme Court, aligning with the Intellectual Property Office (IPO) Director-General and the Court of Appeals, found that PMSI was not engaged in ‘rebroadcasting’ as defined under the Rome Convention, to which the Philippines is a signatory. The Rome Convention defines rebroadcasting as “the simultaneous broadcasting by one broadcasting organization of the broadcast of another broadcasting organization.” The Court emphasized that PMSI does not create or transmit its own signals, but merely carries ABS-CBN’s signals, which viewers receive unaltered. PMSI does not claim ownership or authorship of the content broadcasted on Channels 2 and 23, thus distinguishing its role from that of a broadcasting organization.

"Under the Rome Convention, rebroadcasting is ‘the simultaneous broadcasting by one broadcasting organization of the broadcast of another broadcasting organization.’ The Working Paper prepared by the Secretariat of the Standing Committee on Copyright and Related Rights defines broadcasting organizations as ‘entities that take the financial and editorial responsibility for the selection and arrangement of, and investment in, the transmitted content.’"

The Court likened PMSI’s services to those of a cable television system, emphasizing that PMSI’s activity falls under ‘cable retransmission,’ which is not protected under the Rome Convention. This distinction is crucial because while the Rome Convention grants broadcasting organizations the right to authorize or prohibit rebroadcasting, this protection does not extend to cable retransmission. The retransmission of ABS-CBN’s signals by PMSI, operating as a cable television service, does not violate ABS-CBN’s intellectual property rights under the IP Code. This determination significantly limits the scope of broadcasting rights when weighed against the public interest served by ensuring wider access to television signals.

Furthermore, the Court underscored that the ‘must-carry’ rule, as mandated by NTC Memorandum Circular No. 04-08-88, falls under the limitations on copyright. The carriage of ABS-CBN’s signals under this rule is under the direction and control of the government through the NTC. The NTC’s role is to supervise, regulate, and control telecommunications and broadcast services in the Philippines. This power is derived from its mandate to promulgate rules and regulations for public safety and interest, encouraging more effective use of communications and maintaining competition among private entities. In essence, the ‘must-carry’ rule serves the public interest by promoting a well-informed citizenry, aligning with the objectives of Executive Order No. 436.

The Court also addressed ABS-CBN’s argument that PMSI’s carriage of its signals was for commercial purposes, creating unfair competition. It found that ABS-CBN failed to provide substantial evidence to support this claim. ABS-CBN did not demonstrate that PMSI carried its signals for profit or that it adversely affected the business operations of its regional stations. Since anyone with a television set and antenna can access ABS-CBN’s signals for free, PMSI’s inclusion of these signals does not give it a commercial advantage. In fact, the ‘must-carry’ rule benefits broadcasting networks by increasing viewership, which in turn attracts commercial advertisers and producers.

The Supreme Court emphasized that the legislative franchises granted to both ABS-CBN and PMSI are in line with state policies enshrined in the Constitution, particularly Sections 9, 17, and 24 of Article II, focusing on social order, education, and the vital role of communication in nation-building. Both ABS-CBN and PMSI have obligations to provide public service time, sound and balanced programming, and to assist in public information and education. This underscores that broadcasting is a privilege subject to reasonable burdens in the interest of public service. The court quoted Telecom. Broadcast Attys. of the Phils., Inc. v. COMELEC, highlighting that a franchise is a mere privilege which may be reasonably burdened with some form of public service, and that it is the right of the viewers and listeners, not the right of the broadcasters, which is paramount.

"All broadcasting, whether by radio or by television stations, is licensed by the government. Airwave frequencies have to be allocated as there are more individuals who want to broadcast than there are frequencies to assign. A franchise is thus 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.’"

Finally, the Court addressed the issue of contempt, finding that the dismissal of the petition for contempt filed by ABS-CBN was in order. Although the Court of Appeals did not require PMSI to comment on the petition for contempt, this procedural lapse was rendered moot because the main case had already been decided in favor of PMSI. Ordering respondents to comment and conducting a hearing on the contempt charge would be circuitous and of no practical value.

FAQs

What was the key issue in this case?	The key issue was whether PMSI’s retransmission of ABS-CBN’s channels constituted a violation of ABS-CBN’s broadcasting rights and copyright under the Intellectual Property Code. The court had to balance intellectual property rights with the ‘must-carry’ rule designed for public access.
What is the ‘must-carry’ rule?	The ‘must-carry’ rule, under NTC Memorandum Circular No. 4-08-88, requires cable television and DTH service providers to carry the television signals of authorized broadcast stations in their service areas. This rule is intended to ensure public access to free-to-air channels.
Did PMSI violate ABS-CBN’s copyright?	The Supreme Court held that PMSI did not violate ABS-CBN’s copyright because PMSI’s actions were considered ‘cable retransmission,’ which is not protected under the Rome Convention. PMSI was merely carrying ABS-CBN’s signals without altering them.
What is the Rome Convention?	The Rome Convention is an international treaty that protects the rights of performers, producers of phonograms, and broadcasting organizations. It grants broadcasting organizations the right to authorize or prohibit the rebroadcasting of their broadcasts.
How did the Court define ‘rebroadcasting’?	The Court defined ‘rebroadcasting’ as the simultaneous broadcasting by one broadcasting organization of the broadcast of another broadcasting organization, as per the Rome Convention. PMSI’s role as a mere carrier of signals did not qualify as rebroadcasting.
What role did the NTC play in this case?	The NTC (National Telecommunications Commission) is the government agency responsible for regulating telecommunications and broadcast services in the Philippines. The NTC’s Memorandum Circular No. 4-08-88 mandated the ‘must-carry’ rule.
Why was the issue of contempt dismissed?	The issue of contempt was dismissed because the main case had already been decided in favor of PMSI. Pursuing the contempt charge would have been unnecessary and of no practical value.
What was ABS-CBN’s main argument?	ABS-CBN argued that PMSI’s unauthorized rebroadcasting of Channels 2 and 23 infringed on its broadcasting rights and copyright, creating unfair competition and adversely affecting its regional stations. The Court found these arguments unsubstantiated.
Was the ‘must-carry’ rule deemed constitutional in this case?	The Court did not directly rule on the constitutionality of the ‘must-carry’ rule, as the case could be resolved on other grounds. However, the Court noted that the rule aligns with state policies on promoting public access to information.

In conclusion, the Supreme Court’s decision clarifies the interplay between broadcasting rights and regulations designed to promote public access to information. By upholding the ‘must-carry’ rule and distinguishing cable retransmission from rebroadcasting, the Court reaffirmed the importance of balancing intellectual property rights with the broader public interest. This ruling ensures that viewers have access to diverse sources of information, while also recognizing the obligations of broadcasting organizations to serve the public good.

For inquiries regarding the application of this ruling to specific circumstances, please contact ASG Law through contact or via email at frontdesk@asglawpartners.com.

Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
Source: ABS-CBN Broadcasting Corporation v. Philippine Multi-Media System, Inc., G.R. Nos. 175769-70, January 19, 2009