ABS-CBN BROADCASTING CORPORATION v. PHILIPPINE MULTI-MEDIA SYSTEM, INC.

G.R. No. 175769-70, January 19, 2009, Ynares-Santiago, J.

The carriage of ABS-CBNs signals by virtue of the must-carry rule 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. Accordingly, the Must-Carry Rulefalls under the
foregoing category of limitations on copyright.

FACTS:

Respondent Philippine Multi-Media System, Inc. (PMSI) is the operator of Dream

Broadcasting System. It delivers digital direct-to-home (DTH) television via satellite to its
subscribers all over the Philippines, was granted a legislative franchise under Republic Act
No. 8630 and was given a Provisional Authority by the National Telecommunications
Commission (NTC) on February 1, 2000 to install, operate and maintain a nationwide DTH
satellite service. When it commenced operations, it offered as part of its program line-up
ABS-CBN Channels 2 and 23, NBN, Channel 4, ABC Channel 5, GMA Channel 7, RPN Channel
9, and IBC Channel 13, together with other paid premium program channels. However, ABS-
CBN demanded for PMSI to cease and desist from rebroadcasting Channels 2 and 23. PMSI
replied that the rebroadcasting was in accordance with the authority granted it by NTC and
its obligation under 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. ABS-CBN filed
with the 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. It alleged
that PMSIs unauthorized rebroadcasting of Channels 2 and 23 infringed on its broadcasting
rights and copyright.

PMSI argued that its rebroadcasting is justified under the must-carry rule under
Memorandum Circular No. 04-08-88, while ABS-CBN contended that PMSIs unauthorized
rebroadcasting of Channels 2 and 23 is an infringement of its broadcasting rights and
copyright under the Intellectual Property Code (IP Code).

ISSUE:
 Whether or not the respondent PMSI is guilty of copyright infringement.

RULING:

No. In the case at hand, 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 PMSIs subscribers view ABS-CBNs
programs in Channels 2 and 23, they know that the origin thereof was ABS-CBN. It must be
emphasized that the law on copyright is not absolute. The IP Code provides in Sec. 184 the
limitations on Copyright. - (h) The use made of a work by or under the direction or control of
the Government, by the National Library or by educational, scientific or professional
institutions where such use is in the public interest and is compatible with fair use.

The carriage of ABS-CBNs 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 NTCs 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. Accordingly, the Must-Carry Rule under NTC Circular No. 4-08-88 falls
under the foregoing category of limitations on copyright.

GMA NETWORK, INC. v. CENTRAL CATV, INC.

G.R. No. 176694, July 18, 2014, Brion, J.

The must-carry rule mandates the CATV networks to carry and show in full the free
local TVs programs, including advertisements, without alteration or deletion. Therefore,
such solicitation and showing of advertisements did not constitute an infringement of the
television and broadcast markets under Section 2 of E.O. No. 205.
FACTS:

Sometime in February 2000, the petitioner, together with the Kapisanan ng mga
Brodkaster ng Pilipinas, Audiovisual Communicators, Incorporated, Filipinas Broadcasting
Network and Rajah Broadcasting Network, Inc. (complainants), filed with the NTC a
complaint against the respondent to stop it from soliciting and showing advertisements in its
cable television (CATV)system, pursuant to Section 2 of Executive Order (EO) No. 205, which
provides that a grantees authority to operate a CATV system shall not infringe on the
television and broadcast markets. The petitioner alleged that the phrase "television and
broadcast markets" includes the commercial or advertising market.

In its answer, the respondent admitted the airing of commercial advertisement on its
CATV network but alleged that Section 3 of EO No. 436, expressly allowed CATV providers to
carry advertisements and other similar paid segments provided there is consent from their
program providers.

ISSUE:

Whether or not the respondent is guilty of copyright infringement.

RULING:

No. The CATV operators are not prohibited from showing advertisements under EO
No. 205 and its implementing rules and regulations, MC 4-08-88. Section 6 of EO No. 205
expressly and unequivocally vests with the NTC the delegated legislative authority to issue
its implementing rules and regulations. Following this authority, the NTC has issued the
implementing rules and regulations of EO No. 205 through MC 4-08-88. Its whereas clause
provides that it was issued pursuant to Act No. 3846 and EO No. 205 which granted the NTC
the authority to set down rules and regulations on CATV systems.
 MC 4-08-88 mirrored the legislative intent of EO No. 205 and acknowledged the
importance of the CATV operations in the promotion of the general welfare. The circular
provides in its whereas clause that the CATV has the ability to offer additional programming
and to carry much improved broadcast signals in the remote areas, thereby enriching the
lives of the rest of the population through the dissemination of social, economic and
educational information, and cultural programs.

Unavoidably, however, the improved broadcast signals that CATV offers may infringe
or encroach upon the audience or viewer market of the free-signal TV. This is so because the
latters signal may not reach the remote areas or reach them with poor signal quality. To
foreclose this possibility and protect the free-TV market (audience market), the must-carry
rule was adopted to level the playing field. With the must-carry rule in place, the CATV
networks are required to carry and show in full the free local TVs programs, including
advertisements, without alteration or deletion. This, in turn, benefits the public who would
have a wide-range of choices of programs or broadcast to watch. This also benefits the free-
TV signal as their broadcasts are carried under the CATVs much-improved broadcast signals
thus expanding their viewers share.

In view of the discussion above, the Court finds that the quoted sections of MC 4-08-
88, i.e., 6.2, 6.2.1, 6.4(a)(1) and 6.4(b) which embody the "must-carry rule," are the
governing rules in the present case. These provisions sufficiently and fairly implement the
intent of Section 2 of EO No. 205 to protect the broadcast television market vis--vis the
CATV system. For emphasis, under these rules, the phrase "television and broadcast
markets" means viewers or audience market and not commercial advertisement market as
claimed by the petitioner. Therefore, the respondents act of showing advertisements does
not constitute an infringement of the "television and broadcast markets" under Section 2 of
EO No. 205.