In its motion for reconsideration filed with the NTC, SkyCable said the rule being cited by NTC as having been violated – NTC Memorandum Circular no. 04-88-88 which requires cable TV operators to carry the broadcast channels on their channel of transmission (i.e. GMA 7 – on Channel 7) – has already been rendered ineffective by the Intellectual Property Code (Republic Act No. 8293).
It said that with the passage of RA 8293 on Jan. 1, 1998), any person/entity (specially cable TV operators like respondent) other than the broadcasting organization itself are prohibited from rebroadcasting the broadcasts of said organizations.
SkyCable added that it is erroneous for NTC to enforce said circular since it seizes from the latter without any justification its management prerogative to decide on which channel it wants to carry a particular TV broadcasting network, adding that to compel it to carry the TV networks on the same channel number on which it is transmitting will result in serious technical, financial, and business repercussions.
"To compel respondent to carry the local TV networks in the same channel number at which it is transmitting would require massive investment not only in the form of equipment but also manpower, and other incidental expenses, which will seriously, financial and business wise, hurt respondent and ultimately redound to the damage and prejudice of its subscribers," it said.
SkyCable general counsel Gerardo Ramiro also clarified that contrary to some reports, the NTC order did not ask the cable firm to place GMA’s signal back on Channel 12. Rather, the NTC ruling asked SkyCable to comply with the 1988 NTC circular.
Under the old NTC ‘Must-Carry’ rule provided for under the said circular, cable operators are required to carry off-air channels (such as GMA 7) on the channel of assignment (which is Channel 7) unless technically not feasible. Sky Cable has been carrying GMA 7 on Channel 12 until it was transferred to Channel 14 recently.
GMA 7 suffered lower ratings in February and March this year and accused SkyCable provincial affiliate Pilipino Cable Corp. (PCC), as well as Philippine HomeCable Holdings Inc. (HomeCable), of distorting its signal, following a re-assignment of the off-air channels. PCC has denied the charges saying the channel re-assignments were done to improve signal quality.
PCC further noted that GMA7 ratings plummeted even in areas where no channel re-assignments were made, such as in Metro Cebu and Metro Davao.
Ramiro maintained that it is the cable company’s prerogative to assign channels within its system, as long as its customers are satisfied with the services provided. "It does not make sense for us to distort the signals of any channel. Our own subscribers will complain. The simple transfer of GMA7’s signal to its new position does not cause any signal distortion whatsoever, considering further that the new positions are clean channels," he said.
Apart from GMA7, no other VHF off-air broadcast station complained of the new channel assignments.
In its motion, SkyCable said that no evidence was presented by GMA to the NTC to establish that with the revision of respondent’s channel programming, the viewing public (specifically, respondent’s subscribers) suffered prejudice in the form of poor signal or transmission.