Divinagracia v. Consolidated Broadcasting System (G.R. No. 162272)

Facts:

Respondents Consolidated Broadcasting System, Inc. (CBS) and People’s Broadcasting Service, Inc. (PBS) are radio networks both involved in the operation of radio broadcasting services in the Philippines, they being the grantees of legislative franchises. Following the enactment of these franchise laws, NTC issued Provisional Authorities allowing them to install, operate and maintain various AM and FM broadcast stations in various locations throughout the nation. Petitioner Santiago C. Divinagracia, alleging that he was a stockholder of respondent companies, filed two complaints with the NTC alleging that despite the provisions of the law mandating the public offering of at least 30% of the common stocks of Respondents, both entities had failed to make such offering. Petitioner prayed for the cancellation of all the Provisional Authorities or CPCs of Respondents. The NTC dismissed both complaints, positing that although it had full jurisdiction to revoke or cancel a Provisional Authority or CPC for violations or infractions of the terms and conditions, it refrained from exercising the same.

Issue:

Whether or not NTC has the power to cancel Provisional Authorities and CPCs of entities which Congress has issued franchises to operate

Ruling: NO.

We earlier replicated the various functions of the NTC, as established by E.O. No. 546. One can readily notice that even as the NTC is vested with the power to issue CPCs to broadcast stations, it is not expressly vested with the power to cancel such CPCs, or otherwise empowered to prevent broadcast stations with duly issued franchises and CPCs from operating radio or television stations.

Petitioner relies on the power granted to the Public Service Commission to revoke CPCs or CPCNs under Section 16(m) of the Public Service Act. That argument has been irrefragably refuted by Section 14 of the Public Service Act, and by jurisprudence, most especially RCPI v. NTC. As earlier noted, at no time did radio companies fall under the jurisdiction of the Public Service Commission as they were expressly excluded from its mandate under Section 14. In addition, the Court ruled in RCPI that since radio companies, including broadcast stations and telegraphic agencies, were never under the jurisdiction of the Public Service Commission except as to rate-fixing, that Commission’s authority to impose fines did not carry over to the NTC even while the other regulatory agencies that emanated from the Commission did retain the previous authority their predecessor had exercised. No provision in the Public Service Act thus can be relied upon by the petitioner to claim that the NTC has the authority to cancel CPCs or licenses.

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