FACTS:
On November 11, 1931, Act No. 3846 was enacted, requiring all radio establishments / operators / stations to have a congressional franchise. In 1965 and pursuant to this law, Congress enacted R.A. 4551, granting Marcos J. Villaverde, Jr. and Winfred E. Villaverde a 50-year franchise to construct and operate a public radio station. In 1969, the franchise was transferred to petitioner Associated Communications & Wireless Services – United Broadcasting Network, Inc. (ACWS) through Congress’ Concurrent Resolution No. 58. ACWS then engaged in the installation and operation of several radio stations around the country.
In 1974, P.D. No. 576-A was issued requiring authority to operate from the Board of Communications and the Secretary of Public Works and Communications. In 1979, E.O. 546 was issued, integrating the Board of Communications and the Telecommunications Control Bureau into the National Telecommunications Commission (NTC). Among the powers of NTC is to issue certificate of public convenience for the operation of communication utilities and services, radio communication systems, wire or wireless telephone or telegraph system, radio and television broadcasting system and other similar public utilities; and grant permits for the use of radio frequencies for wireless telephone and telegraph systems and radio communication systems, etc.
Upon termination of petitioner’s franchise on December 31, 1981 pursuant to P.D. No. 576-A, it continued operating its radio stations under permits granted by the NTC.
On June 20, 1991, DOJ rendered an opinion, stating that under P.D. No. 576-A and prior to issuance of E.O. 546, NTC (then Board of Communications) had no authority to issue permits or authorizations to operate radio and television broadcasting systems without a franchise first being obtained. However, with the passage of E.O. 546 (a law issued pursuant to P.D. 1416 as amended by P.D. No. 1771, granting the then President continuing authority to reorganize the administrative structure of the national government), the NTC is authorized to issue permits to operate radio and television broadcasting systems without need of a prior franchise issued by Congress.
However, on May 3, 1994, the NTC, the Committee on Legislative Franchise of Congress, and the Kapisanan ng mga Brodkaster sa Pilipinas of which petitioner is a member of good standing, entered into a Memorandum of Understanding (MOU) that requires a congressional franchise to operate radio and television stations. However, the MOU also provides that the NTC permits shall be valid for 2 years within which the permittee shall be required to file an application for legislative franchise with Congress not later than December 31, 1994. If permittee failed to secure the legislative franchise within this period, the NTC shall not extend or renew its permit any further.
Prior to the December 31, 1994 deadline set by the MOU, petitioner filed with Congress an application for franchise on December 20, 1994. Pending its approval, NTC issued to petitioner a temporary permit dated July 7, 1995 to operate a television station via Channel 25 of the UHF Band from June 29, 1995 to June 28, 1997. In 1996, NTC authorized petitioner to increase the power output of Channel 25 from 1.0 kilowatt to 25 kilowatts; it also granted petitioner a permit to purchase radio transmitters/transceivers for use in its television Channel 25 broadcasting. Shortly before the expiration of its temporary permit, petitioner applied for its renewal on May 14, 1997.
Upon inquiry by NTC, the House Committee on Legislative Franchises of Congress said that petitioner’s franchise application was not deliberated upon due to lack of supporting documents. In the next Congress, petitioner did not refile its application.
Thus, on November 17, 1997, NTC wrote petitioner to submit a new congressional franchise and that pending compliance, its application for temporary permit would be held in abeyance. Petitioner failed to comply with the franchise requirement and claimed that it did not receive NTC’s letter. Even so, NTC notified petitioner on January 19, 1998 that its application for renewal of temporary permit was approved and would be released upon payment of the prescribed fee of P3,600.00. After paying said amount, NTC however refused to release the renewed permit. Instead, NTC issued a Show Cause Order and Cease and Desist Order against petitioner. Petitioner filed an answer to said Order and made initial presentation of evidence but asked for continuance. However, in the meantime, petitioner instead filed before the Court of Appeals a Petition for Mandamus, Prohibition, and Damages to compel the NTC to release its temporary permit to operate Channel 25 which was approved in January 1998. The appellate court denied the petition.
Meanwhile, NTC issued Memorandum Circular No. 14-10-98, extending the deadline for securing a legislative franchise up to December 31, 1999, the application of which must be filed immediately but not later than November 30. It also provided that affected broadcast operators must file their respective applications for renewal / extension of temporary permits together with the certification from the Committee on Legislative Franchises, House of Representatives that a franchise bill has indeed been filed prior to 30 November 1998.
Well within the November 30, 1998 deadline, House Bill No. 3216, ACWS’ legislative franchise application, was filed. On January 13, 1999, NTC rendered a decision against petitioner, finding that it did not have legal personality to justify issuance of any permit or license for not having a valid legislative franchise.
Petitioner sought recourse with the Court of Appeals, which affirmed the NTC decision. Hence, this petition for review on certiorari.
ISSUES:
- WHETHER OR NOT A CONGRESSIONAL FRANCHISE IS A CONDITION SINE QUA NON IN THE OPERATION OF A RADIO AND TELEVISION BROADCASTING SYSTEM
- WHETHER OR NOT THE NTC ADMINISTRATIVE CASE AGAINST PETITIONER HAD BEEN RENDERED MOOT AND ACADEMIC WITH THE ADOPTION AND PROMULGATION BY THE NTC OF MEMORANDUM CIRCULAR NO. 14-10-98
RULING:
Act No. 3846 requires a congressional franchise for the operation of radio and television broadcasting stations
Petitioner argues that Act No. 3846, requiring a congressional franchise, applies only to radio stations and not to television stations. It avers that it is for this reason that the NTC previously issued to it temporary permit dated July 7, 1995 to operate Channel 25 from June 29, 1995 to June 29, 1997 without requiring a congressional franchise.
However, the Supreme Court upheld the CA in correctly ruling that a congressional franchise is necessary for petitioner to operate television Channel 25. Even assuming that Act No. 3846 applies only to radio stations, the subsequent P.D. 576-A clearly shows in Section 1 that a franchise is required to operate radio as well as television stations. As pointed out in the DOJ Opinion, there is nothing in P.D. NO. 576-A that reveals any intention to do away with the requirement of a franchise for the operation of radio and television stations. However, contrary to the same DOJ Opinion, the subsequent E.O. No. 546 did not dispense with the requirement of a congressional franchise. It merely abolished the Board of Communications and the Telecommunications Control Bureau under the Reorganization Plan and transferred their functions to the NTC, including power to issue CPC and grant permits for the use of frequencies.
In fine, there being no clear showing that the laws here involved cannot stand together, the presumption is against inconsistency or repugnance, hence, against implied repeal of the earlier law by the later statute.
A franchise is distinguished from a CPC in that the former is a grant or privilege from the sovereign power, while the latter is a form of regulation through the administrative agencies, viz:
“A franchise started out as a “royal privilege or (a) branch of the King’s prerogative, subsisting in the hands of a subject.” This definition was given by Finch, adopted by Blackstone, and accepted by every authority since. Today, a franchise, being merely a privilege emanating from the sovereign power of the state and owing its existence to a grant, is subject to regulation by the state itself by virtue of its police power through its administrative agencies.”
Even prior to E.O. No. 546, the NTC’S precursor, i.e., the Board of Communications, already had the function of issuing CPC under the Integrated Reorganization Plan. The CPC was required by the Board at the same time that P.D. No. 576-A required a franchise to operate radio and television stations. The function of the NTC to issue CPC under E.O. NO. 546 is thus nothing new and exists alongside the requirement of a congressional franchise under P.D. NO. 576-A. There is no conflict between the two laws. We adhere to the cardinal rule in statutory construction that statutes in pare materia, although in apparent conflict, or containing apparent inconsistencies, should, as far as reasonably possible, be construed in harmony with each other, so as to give force and effect to each. In Crusaders Broadcasting System, Inc. v. NTC, the Court held that under E.O. No. 546, the regulation of radio communications is a function assigned to and performed by the NTC and at the same time recognized the requirement of a congressional franchise for the operation of a radio station under Act no. 3846. Likewise, the same ruling was made in Radio Communication of the Philippines, Inc. v. NTC.
The Supreme Court’s ruling in Albano that a congressional franchise is not required before “each and every public utility may operate” should be viewed in its proper light. Where there is a law such as P.D. No. 576-A which requires a franchise for the operation of radio and television stations, that law must be followed until subsequently repealed. As earlier shown, however, there is nothing in the subsequent E.O. No. 546 which evinces an intent to dispense with the franchise requirement. In contradistinction with the case at bar, the law applicable in Albano, i.e., E.O. No. 30, did not require a franchise for the Philippine Ports Authority to take over, manage and operate the Manila International Port Complex and undertake the providing of cargo handling and port related services thereat. Similarly, in Philippine Airlines, Inc. v. Civil Aeronautics Board, et al., it was ruled that a legislative franchise is not necessary for the operation of domestic air transport because “there is nothing in the law nor in the Constitution which indicates that a legislative franchise is an indispensable requirement for an entity to operate as a domestic air transport operator.” Thus, while it is correct to say that specified agencies in the Executive Branch have the power to issue authorization for certain classes of public utilities, this does not mean that the authorization or CPC issued by the NTC dispenses with the requirement of a franchise as this is clearly required under P.D. NO. 576-A.
NTC’s Issuance Show Cause Order was not unreasonable, unfair, etc.
While Petitioner is correct that the NTC letter dated November 17, 1997 referred only to its radio station and not to its television Channel 25, the NTC’s February 26, 1998 order for petitioner to cease and desist from operating Channel 25 was not unreasonable, unfair, oppressive, whimsical and confiscatory. The 1994 MOU states in unmistakable terms that petitioner’s temporary permit to operate Channel 25 would be valid only for 2 years. During these 2 years, petitioner was supposed to have secured a congressional franchise, otherwise “the NTC shall not extend or renew its permit or authorization to operate any further.” Since petitioner failed to secure a congressional franchise, NTC’s approval of petitioner’s application for renewal of temporary permit was erroneous. In the absence of a renewed temporary permit, the NTC was correct in ordering petitioner to cease and desist from operating Channel 25. The erroneous approval of petitioner’s temporary permit did not estop NTC from ordering petitioner to cease and desist.
NTC Memorandum Circular did not render administrative case against petitioner moot and academic
Petitioner next contents that NTC’s Memorandum Circular rendered moot and academic the administrative case against it. Said Memorandum Circular covers “existing broadcast operators,” including petitioner, allowing them until December 31, 1999 to secure legislative franchise.
Supreme Court held that whether or not the benefits of the Memorandum Circular extend to petitioner, the fact is petitioner failed to secure a legislative franchise by December 31, 1999. Consequently, NTC’s recall of petitioner’s assigned frequency Channel 25 and denial of its application for renewal of its permit to operate the said television channel were proper.
In the normal course of securing authorizations to operate a television and radio station, the application for a CPC with the NTC comes after securing a franchise from Congress. The CPC is not a condition for the grant of a congressional franchise. (Thus, even if petitioner filed its application for renewal of temporary permit before December 31, 1999 and its franchise renewal is pending, NTC is still well within its rights to deny said application due to petitioner’s lack of a congressional franchise.)