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GMA NETWORK v. NATIONAL TELECOMMUNICATIONS COMMISSION

FACTS:

The petitioner, GMA Network, Inc. (GMA), filed a complaint before the National Telecommunications Commission (NTC) against Central CATV, Inc., Philippine Home Cable Holdings, Inc., and Pilipino Cable Corporation (respondents). GMA alleged that the respondents violated the Constitution, Executive Order No. 205, and its implementing rules and regulations by creating prohibited monopolies and combinations of trade in commercial mass media. GMA claimed that respondents Skycable, Home Cable, and PCC had consolidated their operations under a Master Consolidation Agreement (MCA) without the prior approval of the NTC and the Congress. GMA prayed for the issuance of a cease and desist order (CDO) and for respondents to maintain the quality of GMA's signal. The NTC denied GMA's motion for a CDO, prompting GMA to file a petition for certiorari before the Court of Appeals (CA). The CA dismissed the petition and found no grave abuse of discretion on the part of the NTC. GMA filed a petition for review on certiorari seeking the reversal of the CA's decision.

ISSUES:

  1. Whether the Court of Appeals committed grave abuse of discretion in denying the motion for the issuance of a cease and desist order.

  2. Whether the National Telecommunications Commission (NTC) has the authority to issue provisional reliefs, such as a cease and desist order.

  3. Whether the petitioner has complied with the requirements for the issuance of a cease and desist order.

  4. Whether the petitioner has a clear and unmistakable right to be protected.

  5. Whether the petitioner has proven the necessary requirements for the issuance of a writ of preliminary injunction.

  6. Whether the petitioner has established its right to be protected under Section 20(g) of the Public Service Act.

  7. Whether the petitioner's evidence supports the issuance of a cease and desist order.

RULING:

  1. The Court ruled that the Court of Appeals (CA) committed grave abuse of discretion in denying the motion for the issuance of a cease and desist order based on the wrong considerations. The CA erroneously believed that granting the motion would resolve the main case without trial. The Court, however, joined the conclusion of the CA that the motion should be denied based on the nature of a provisional remedy.

  2. The NTC has the authority to issue provisional reliefs, including a cease and desist order. Section 3, Part VI of the NTC Rules of Procedure and Practices grants the NTC the power to issue provisional reliefs upon the filing of a complaint or at any subsequent stage. The NTC is authorized to determine the propriety of issuing a cease and desist order as a provisional relief.

  3. The petitioner failed to comply with the requirements for the issuance of a cease and desist order. A cease and desist order is similar to a status quo order, which maintains the last peaceable and uncontested state of things before the controversy. To be entitled to such an order, the petitioner must show that there exists a clear and unmistakable right to be protected, this right is directly threatened by the act sought to be enjoined, the invasion of the right is material and substantial, and there is an urgent and paramount necessity for the issuance of the order. The petitioner has not met these requirements.

  4. The Court held that the petitioner failed to comply with the requirements for the issuance of a preliminary injunction. The petitioner did not prove that it has a clear and unmistakable right to be protected. Moreover, when the complainant's right or title is doubtful or disputed, the issuance of injunctive relief is improper. Additionally, the petitioner failed to clearly establish its right to be protected under Section 20(g) of the Public Service Act. The petitioner's evidence did not show that a merger or consolidation has taken place beyond the negotiation or completion stage and should be barred for lack of National Telecommunications Commission (NTC) approval. The Court denied the petitioner's prayer for the issuance of a cease and desist order.

PRINCIPLES:

  • An injunction will not issue to protect a right not in esse or a right that is merely contingent and may never arise. The alleged right must be clearly founded on or granted by law or enforceable as a matter of law.

  • A writ of preliminary injunction may be issued only when there is a clear showing of an actual existing right to be protected during the pendency of the principal action.

  • Section 20(g) of the Public Service Act allows the negotiation and completion of transactions for merger or consolidation prior to NTC approval, but prohibits the implementation or consummation of the transaction without NTC approval.

  • The complainant's right or title must be clear and not doubtful or disputed for the issuance of injunctive relief.

  • The evidence presented by the petitioner must support the requested relief, such as the issuance of a cease and desist order.