FACTS:

The petitioner ABS-CBN Broadcasting Corporation (ABS-CBN) is a licensed television and radio broadcasting company in the Philippines. It broadcasts television programs through Channel 2 on VHF and Channel 23 on UHF to Metro Manila and nearby provinces. ABS-CBN also owns regional television stations. The respondent Philippine Multi-Media System, Inc. (PMSI) operates Dream Broadcasting System, a digital direct-to-home (DTH) television service. PMSI rebroadcasts Channels 2 and 23 of ABS-CBN, along with other authorized television broadcast stations. ABS-CBN demanded PMSI to cease rebroadcasting, claiming infringement of broadcasting rights and copyright. PMSI argued that it had authority and obligation under NTC Memorandum Circular No. 4-08-88. Negotiations were terminated, and ABS-CBN filed a complaint with IPO. Temporary restraining order was issued, and PMSI suspended retransmission. PMSI filed a petition for certiorari with the Court of Appeals, citing its obligation under NTC Memorandum Circular No. 4-08-88. PMSI also submitted letters from NTC Commissioner Borje and the NTC enjoining compliance with the must-carry rule.

ISSUES:

1. Whether PMSI's transmission of signals via its DTH satellite television service constitutes rebroadcasting of ABS-CBN's programs on Channels 2 and 23.

2. Whether PMSI's services are similar to a cable television system.

3. Whether the must-carry rule is in line with state policies enshrined in the Constitution.

4. Whether the legislative franchises granted to ABS-CBN and PMSI require them to provide public service time.

5. Whether the requirement for broadcast stations to give free air time to candidates in an election is constitutional.

6. Whether PMSI's carriage of ABS-CBN's signals infringes on ABS-CBN's intellectual property rights.

7. Whether PMSI's carriage of ABS-CBN's signals violates the must-carry rule.

8. Whether the factual findings of the Court of Appeals affirming those of the lower fact-finding body are conclusive and not reviewable by the Supreme Court.

9. Whether DTH television services are covered by the Memorandum Circular No. 04-08-88.

10. Whether the constitutionality of the Memorandum Circular can be resolved in the present case.

11. Whether the Court of Appeals erred in dismissing the petition for contempt without ordering the respondents to comment on the same.

12. Whether the Court of Appeals should have conducted a hearing on the contempt charge even when the main case had already been disposed of.

RULING:

1. The Office finds that there is no rebroadcasting on the part of PMSI of ABS-CBN's programs on Channels 2 and 23. PMSI's transmission of signals via its DTH satellite television service does not fall within the definition of rebroadcasting under the Rome Convention.

2. The Director-General of the IPO and the Court of Appeals correctly found that PMSI's services are similar to a cable television system. The retransmission of ABS-CBN's signals by PMSI, which functions essentially as a cable television, does not violate ABS-CBN's intellectual property rights.

3. The must-carry rule and legislative franchises granted to ABS-CBN and PMSI are in line with state policies enshrined in the Constitution.

4. ABS-CBN and PMSI are required to provide public service time under their legislative franchises.

5. The requirement for broadcast stations to give free air time to candidates in an election is constitutional.

6. PMSI did not infringe on ABS-CBN's intellectual property rights under the Intellectual Property Code. ABS-CBN failed to provide substantial evidence that PMSI carried its signals for profit or that such carriage adversely affected the business operations of its regional stations.

7. PMSI's carriage of ABS-CBN's signals does not violate the must-carry rule. The must-carry rule benefits both broadcasting organizations and the public by preventing cable television companies from excluding broadcasting organizations and depriving viewers in far-flung areas of programs available to city viewers. ABS-CBN's argument that PMSI's carriage of the signals resulted in competition between its Metro Manila and regional stations was unfounded, as ABS-CBN is obligated to scatter its signals to the widest area of coverage possible.

8. The factual findings of the Court of Appeals, affirming those of the lower fact-finding body, are conclusive and not reviewable by the Supreme Court.

9. DTH television services are covered by the Memorandum Circular No. 04-08-88.

10. The constitutionality of the Memorandum Circular does not need to be resolved in the present case.

11. The Court denied the petition and affirmed the decision of the Court of Appeals. The dismissal of the petition for contempt filed by ABS-CBN was deemed in order. To order respondents to comment and have the Court of Appeals conduct a hearing on the contempt charge when the main case has already been disposed of in favor of PMSI would be circuitous. The issue of requiring respondents to comment has been rendered moot in light of the ruling on the merits.

PRINCIPLES:

• The Rome Convention defines rebroadcasting as the simultaneous broadcasting by one broadcasting organization of the broadcast of another broadcasting organization. PMSI does not meet the requirements of a broadcasting organization and therefore does not engage in rebroadcasting.

• Cable retransmission refers to the transmission of radio or television programs through cable or wire. The Rome Convention does not grant rights against unauthorized cable retransmission, allowing cable operators to retransmit broadcasts simultaneously without permission from broadcasting organizations or obligation to pay remuneration.

• The IP Code provides limitations on copyright, including the use made of a work by or under the direction or control of the government. The carriage of ABS-CBN's signals by PMSI through the must-carry rule falls within this limitation and is in consonance with the principles and objectives underlying Executive Order No. 436.

• A franchise is a privilege subject to amendment by Congress in accordance with the constitutional provision for the common good.

• The right of viewers and listeners to be fully informed of the issues in an election is paramount to the rights of the broadcasters.

• Broadcast stations do not own the airwaves and frequencies they use; they are granted the temporary privilege of using them.

• The exercise of a franchise privilege may reasonably be burdened with the performance of some form of public service.

• Administrative charges cannot be based on mere speculation or conjecture. The complainant has the burden of proving allegations by substantial evidence.

• Mere allegation is not evidence and is not equivalent to proof.

• The must-carry rule favors both broadcasting organizations and the public, preventing cable television companies from excluding broadcasting organizations and depriving viewers in far-flung areas of programs available to city viewers.

• The right of viewers and listeners to the most diverse choice of programs available is paramount.

• Findings of facts by administrative bodies charged with their specific field of expertise are given great weight by the courts, unless there is a substantial showing that such findings were made from an erroneous estimation of the evidence presented.

• Factual findings of the Court of Appeals are conclusive on the parties and are not reviewable by the Supreme Court.

• The interpretation of rules and regulations made by administrative agencies, such as the NTC, is given great respect by the Court, unless there is an error of law, abuse of power, lack of jurisdiction or grave abuse of discretion clearly conflicting with the letter and spirit of the law.

• The courts are hesitant to rule on constitutional questions and presume the acts of the political departments to be valid, absent a clear showing to the contrary.

• The constitutionality of a law or regulation cannot be collaterally attacked, and must be raised at the earliest opportunity in the trial court.

• The issue of constitutionality will not be addressed unless properly raised and presented in an appropriate case.

• The proceedings for punishment of indirect contempt are similar to those used in criminal prosecutions.

• When the issues have become moot, there is no justiciable controversy, rendering the resolution of the same of no practical use or value.