CA upholds Dream Satellite’s right to air ABS-CBN’s free channels

The Court of Appeals (CA) has upheld the right of Dream Satellite TV, owned and operated by businessman Antonio ‘Tonyboy’ Cojuangco’s Philippine Multi-Media System Inc. (PMSI), to air to its subscribers ABS-CBN Channel 2 and Studio 23 without having to pay ABS-CBN for it.

In a 36-page decision, the appellate court affirmed the ruling of the Intellectual Property Office (IPO) declaring the legality of PMSI’s free carriage of ABS-CBN Channel 2 and Studio 23 in its direct-to-home DTH program line-up.

The Lopez-owned ABS-CBN filed earlier a complaint before the IPO against PMSI for the latter’s alleged violation of the broadcasting company’s intellectual property rights when it aired Channel 2 and Studio 23 without compensating the TV network for it.

The IPO, however, dismissed ABS-CBN’s complaint and said PMSI’s carriage of the free-to-air channels did not violate ABS-CBN’s rights but was, in fact, in compliance with a National Telecommunications Commission (NTC) memorandum requiring the mandatory carriage by cable TV operators of free-to-air channels within their areas of operation, otherwise known as the "must-carry rule."

The IPO noted that the must-carry rule favors both broadcasting organizations and the public. "It prevents cable television companies from excluding broadcast organizations especially in those places not reached by signal. Also, the rule prevents cable television companies from depriving viewers in far-flung areas the enjoyment of programs available to city viewers. In fact, this office finds the rule more burdensome on the part of the cable television companies," the IPO said.

It pointed out that cable TV companies carry the television signals and shoulder the costs without any recourse of charging. On the other hand, the signals that are carried by cable TV companies are dispersed and scattered by the TV stations and anybody with a TV set is free to pick them up.

The IPO further stressed that the rights of broadcasters, including ABS-CBN, over free-to-air broadcasts are not absolute and are subject to limitations in the name of public interest. Such limitations include the carriage by cable TV operators of free-to-air broadcasts which is deemed legally permissible under intellectual property laws.

In its decision, the CA agreed with the ruling of the IPO and added that "the very intent and spirit of the NTC circular is to prevent a situation whereby station owners and a few networks would have unfettered power to make time available only to highest bidders, to communicate only their own views on public issues, people, and to permit on the air only those with whom they agreed – contrary to the state policy that the (franchise) grantee like the petitioner, private respondent and other TV station owners, shall provide at all times sound and balanced pro-gramming and assist in the functions of public information and education. This is for the first time that we have a structure that works to accomplish explicit state policy goals."