Title
ABS-CBN Corp. vs. National Telecommunications Commission
Case
G.R. No. 252119
Decision Date
Aug 25, 2020
ABS-CBN's franchise expired in 2020; NTC issued a cease-and-desist order, upheld by the Supreme Court, ruling no grave abuse of discretion and no provisional authority without a valid franchise.
broadcasting company
legislative franchise
cease operations

Case Summary (G.R. No. 222916)

Factual Background

ABS-CBN CORPORATION was granted a twenty-five year legislative franchise under RA 7966, effective May 4, 1995, which expired May 4, 2020. Prior and contemporaneous to expiration, multiple bills for renewal and several resolutions seeking extension or provisional operation were filed in the House and the Senate. The Department of Justice issued observations advising that there existed an equitable practice to allow broadcast companies to continue operating pending renewal and that the NTC may provisionally authorize an entity to operate. The House Committee on Legislative Franchises and the Senate adopted resolutions expressing the sense that ABS-CBN should continue to operate pending final determination. The NTC issued Memorandum Order No. 02-03-2020 during the quarantine extending the validity of permits expiring during the quarantine period. Despite these circumstances, the NTC issued the CDO on May 5, 2020 directing ABS-CBN to immediately cease and desist from operating enumerated radio and television stations because RA 7966 had expired, and ABS-CBN complied and went off air.

Procedural History

On May 7, 2020 ABS-CBN CORPORATION filed a Petition for Certiorari and Prohibition with urgent applications for a temporary restraining order and writ of preliminary injunction, alleging grave abuse of discretion by the National Telecommunications Commission in issuing the CDO. The Court on May 19, 2020 required comments and impleaded the House of Representatives and the Senate as parties. The NTC, through the Office of the Solicitor General, filed its Comment and Omnibus Motion on May 25, 2020 and sought the discharge of the two Houses as parties. The Senate and the House each filed submissions seeking to be dropped as parties. ABS-CBN filed motions reiterating its request for provisional relief and opposed the discharge of the legislative Houses.

The Parties' Contentions

ABS-CBN CORPORATION argued that the NTC gravely abused its discretion by preempting Congress and ordering cessation of broadcasts while bills for renewal were pending, invoking a purported corollary or auxiliary power of Congress to define and preserve rights pending final determination and relying on the DOJ observations and prior equitable practice. ABS-CBN further alleged violations of equal protection because the NTC had previously allowed other broadcasters to operate pending franchise renewal, denial of due process because the CDO was issued without prior notice or hearing, and infringement on freedom of speech, freedom of the press, and the right to public information especially during the public health emergency. The National Telecommunications Commission maintained that it could not grant provisional authority in the absence of a valid legislative franchise without encroaching on Congress’ exclusive power to grant franchises, and defended issuance of the CDO as based on the expiration of RA 7966. The House and the Senate contended they were not indispensable parties and sought to be discharged.

Incidents After Filing

After the petition was filed, the House of Representatives served a Show Cause Order on the NTC and the NTC replied that issuance of a provisional authority would encroach upon Congress’ exclusive prerogative. ABS-CBN moved for urgent reiterative injunctive relief in view of a subsequently filed House bill that would have provided a provisional franchise; the House advanced and the Senate adopted resolutions requesting provisional authority for ABS-CBN pending franchise action. Meanwhile, the House Committee on Legislative Franchises proceeded with hearings and ultimately, on July 10, 2020, adopted the TWG recommendation to deny ABS-CBN’s franchise applications and laid the relevant house bills on the table.

Issue Before the Court

The primary issue was whether the National Telecommunications Commission gravely abused its discretion in issuing the May 5, 2020 Cease and Desist Order directing ABS-CBN CORPORATION to cease broadcasting.

Ruling of the Supreme Court

The Court resolved to drop the House of Representatives and the Senate as parties and dismissed the petition on the ground of mootness. The dismissal rested on the supervening official action of the House Committee on Legislative Franchises denying the franchise applications, which eliminated the factual basis for ABS-CBN’s claim that pending renewal bills required the NTC to refrain from issuing the CDO.

Legal Basis and Reasoning — Franchise as Legislative Prerogative

The Court reiterated that a legislative franchise is a special privilege conferred by Congress and is a prerequisite and continuing requirement for a broadcasting entity to operate radio and television stations. The Court cited Act No. 3846, PD 576-A, Executive Order No. 546, and prior jurisprudence, notably Associated Communications & Wireless Services v. NTC and Divinagracia v. Consolidated Broadcasting System, Inc., to explain that legislative franchises and administrative authorities (such as CPCs and permits issued by the NTC) coexist but that a legislative franchise must be embodied in duly enacted law.

Legal Basis and Reasoning — Mootness Doctrine Applied

The Court applied the doctrine of mootness, explaining that a case becomes moot when supervening events remove any justiciable controversy so that adjudication would yield no practical relief. Because the House Committee on Legislative Franchises officially denied all pending House bills and laid them on the table, the factual predicate for ABS-CBN’s claim—that pending bills might result in renewal and thus require NTC forbearance—ceased to exist. The denial rendered any relief annulling the CDO ineffectual because ABS-CBN could not legally resume broadcasting without a valid legislative franchise.

Legal Basis and Reasoning — Limits of Congressional “Corollary” Power

The Court found that ABS-CBN failed to demonstrate a sufficient legal basis for its theory that Congress possesses a corollary or auxiliary power to define and preserve rights of a franchise applicant pending final determination such that pending bills or committee action could substitute for a duly enacted law. The Court emphasized that congressional deliberations and pending bills are not equivalent to a law and cannot confer the statutory privilege to operate a broadcast network absent completion of the constitutionally prescribed legislative process.

Legal Basis and Reasoning — Other Constitutional Claims

The Court acknowledged ABS-CBN’s additional claims of unequal treatment, denial of due process, and infringement of freedom of the press and public information. The Court held, however, that resolution of those claims would not afford ABS-CBN any practical relief given the expiration of the legislative franchise and the subsequent denial by the House Committee; accordingly, those issues w

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