Can the National Telecommunications Commission (NTC) authorize a radio or television station to operate without a congressional franchise? This question was squarely answered in the 2003 case of Associated Communications & Wireless Services – United Broadcasting Networks vs. NTC (G.R. No. 144109, 17 February 2003). The decision was penned by Supreme Court Justice Reynato S. Puno.
The gist of the decision: for a radio or television station to operate, it must have a congressional franchise AND a Certificate of Public Convenience (CPC). These are two distinct requirements — a franchise is a grant or privilege from the sovereign power, while a CPC is a form of regulation through the administrative agencies. Both requirements must be present before a radio or TV station may operate.
Act No. 3846 (1931) provides that: “No person, firm, company, association, or corporation shall construct, install, establish, or operate a radio transmitting station, or a radio receiving station used for commercial purposes, or a radio broadcasting station, without having first obtained a franchise therefor from the Congress of the Philippines”.
It has been argued that this provision applies only to radio stations. According to the Supreme Court, however, the subsequent law, Presidential Decree No. 576-A (1974), clearly shows that a franchise is required to operate radio as well as television stations. Section 1 of PD 576-A provides that: “No radio station or television channel may obtain a franchise unless it has sufficient capital on the basis of equity for its operation for at least one year, including purchase of equipment.”
The Supreme Court noted that a franchise started out as a “royal privilege or (a) branch of the King’s prerogative, subsisting in the hands of a subject.” 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.
Executive Order No. 546 (1979) integrated the Board of Communications and the Telecommunications Control Bureau into the National Telecommunications Commission (NTC). Among the powers vested in the NTC are the following:
- a. Issue Certificate of Public Convenience for the operation of communication utilities and services, radio communications systems, wire or wireless telephone or telegraph system, radio and television broadcasting system and other similar public utilities; and
- b. Grant permits for the use of radio frequencies for wireless telephone and telegraph systems and radio communication systems including amateur radio stations and radio and television broadcasting systems.
The NTC clearly has the authority to issue a CPC for the operation of radio communications systems and television broadcasting systems. The Supreme Court pointed to its decisions in previous cases, recognizing the necessity of both a congressional franchise under Act No. 3846 and a CPC under EO 546.
BOTH FRANCHISE AND CPC REQUIRED
The petitioner cited DOJ Opinion No. 98, series of 1991, which states that under EO 546, the NTC may issue a permit or authorization for the operation of radio and television broadcasting systems without a prior franchise issued by Congress. The petitioner claimed that on the basis of this DOJ Opinion, the NTC did not previously require a congressional franchise in all of its applications for permits with the NTC. The petitioner further argued that the Secretary of Justice is the legal adviser of government and, thus, the opinion is binding and conclusive upon the NTC as it was the NTC itself which requested the advisory from the DOJ.
The DOJ Opinion, according to the Supreme Court, is merely persuasive and not necessarily controlling. The DOJ Opinion is erroneous insofar as it holds that EO 546 dispenses with the requirement of a congressional franchise to operate radio and television stations. It is true that a congressional franchise is not required before “each and every public utility may operate.” For instance, there is no law which requires a legislative franchise for the operation of domestic air transport. For radio and television stations, however, there is a law (PD 576-A) which requires a franchise before they can operate.
Therefore, 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 PD 576-A.
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