SCA_Divinagracia v. CBS and PBS [Quo Warranto - Proper Remedy for VIOLATION of LEGIS FRANCHISE]

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Divinagracia v. CBS and PBC

G.R. No. 162272, April 7, 2009

FACTS:

Respondents Consolidated Broadcasting System, Inc. (CBS and

People!s Broadcasting Service, Inc. (PBSare two of the three networks

that comprise the well-known "Bombo Radyo Philippines

Obviously, they are involved in t"e operation o# radio

$roadcasting services in t"e P"ilippines, they being the

grantees o# legislative #ranc"isesby virtue of two laws, R.A.

%o. &'&& and R.A. %o. &)* Pursuant to said franchise laws, the National Telecommunications

ommission (%TC iss+ed #o+r (' Provisional A+t"orities to

PBS and si (- Provisional A+t"orities to CBS !eanwhile, B# an PB# legislative franchises 7582 contain a common

provisionpredicated on the "constitutional mandate to democratize ownership

of public utilities."

o grantee shall mae p+$lic o/ering t"ro+g" t"e stoc

ec"anges o# at least t"irty percent (012 o# its

common stocs within a period of three $%& years from the date ofe'ectivity of this (ct

Petitioner Santiago Divinagracia claimed that he was "the act+al and$ene3cial o4ner o# T4elve percent (5*2of the shares of stock" of PB

and B separately

)e *led two complaints against CBS and PBSwith the %TCalleging that

both entities had failed to make such offering , which is is a MISUSE

of the franchise conferredupon it by law and it continues to exerciseits franchise IN CN!"#$EN!IN % !&E '#(

+n short, Divinagracia prayed #or CA%C677ATI8% o# all the

)rovisional #uthorities granted b* the "!C

%TC!s R+ling

NT DIS9ISS6D B8T complaints +t ruled that it had full +urisdiction to revoke or cancel a )rovisional

#uthorit* or C)C for violations or infractions of the terms and conditions embodied

therein

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,U!- the CM)'#IN!S #C!U#''. CNS!I!U!E/

C''#!E"#' #!!#C0S on the legislative franchises of PBS and BS

since the sole issue for determination was whether the

franchisees had violated the mandate to democratize ownershipin their respective le!islative franchises

Proper remedy: quo warranto to be commenced b* the

Solicitor 1eneral in the name of the epublic of the Philippines, pursuant to ule ##of the ules of ourt

Thus, ivinagracia appealed with the ( under Rule %

CA!s R+ling

( ;P67D NT#s ruling on the same two grounds . complaints were indeed

a collateral attack on the le!islative franchises of BS and PBS and that a quo

warranto action was the proper mode )ence, the instant appeal with the

Divinagracia!s contentions

)e so+g"t #or t"e n+lli3cation o# t"e Povisional

A+t"orities/Ps/licenses issued by the NT, and %8T T6

76

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&t is settled that t"e determination o# t"e rig"t to t"e eercise o# a

#ranc"ise, or 4"et"er t"e rig"t to en?oy s+c" privilege "as

$een #or#eited $y non+ser, is more properly t"e s+$?ect o#

t"e prerogative 4rit o# +o 4arranto4

E+o 4arranto is speci3cally availa$leas a remedy if it is thought that

a government corporation AS 8FF6%D6D A

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+n short, Divinagracia!s proposed remedy SIM)'.

$E")(E"S the delicate ,#'#NCE % SE)#"#!IN % )(E"S-

and undul* grants superlative prerogatives to the N!C to frustrate thee%ercise of the constitutional freedom speech, e%pression, and of the press.

#llowing the N!C to countermand State polic* b* revoking

respondent7s vested legal right to operate broadcast stations UN/U'.

1I$ES to a ME"E #/MINIS!"#!I$E #1ENC. veto power over the

implementation of the law and the enforcement of especiall* vested

legal rights3

(nd, speaking of the Principle o# Separation o# Po4ers, the "'E %

!&E CU"!S- through quo warranto proceedings- NE#!'.

CM)'EMEN!S the traditional separation of powers 3'he determination of whether a franchisee is in breach of the

franchise speciall* enacted for it b* Congress is one inherentl*

SUI!E/ ! # CU"! % '#(, and not for an administrative a!ency, much less one towhich no such function has been dele!ated by on!ress.

WON NTC has the power to cance the icenses it issued?

%8, the %TC has %8 P8@6R T8 CA%C67 the licenses it issued4

9nder E33 No3 89: 5(')s harter6- even as the N!C is vested with the

)(E" ! ISSUE C)Cs to broadcast stations- N!C is N! E;)"ESS'.

$ES!E/ (I!& !&E )(E" ! C#NCE' such C)Cs, or otherwiseempowered to prevent broadcast stations with duly issued franchises and Ps from operatin!

radio or television stations.

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epublic of the Philippines

SU)"EME CU"!

*anila

S+(- -&&S&(

13"3 No3 = #pril >- =??@

S#N!I#1 C3 /I$IN#1"#CI#-Petitioner,

vs.

CNS'I/#!E/ ,"#/C#S!IN1 S.S!EM- INC3 and )E)'EAS ,"#/C#S!IN1 SE"$ICE-

INC3-espondents.

- + & S & (

!IN1#- J.:

-oes the (ational 'elecommunications ommission /('0 have 1urisdiction over complaints seein!

the cancellation of certificates of public convenience /Ps0 and other licenses it had issued to the

holders of duly3issued le!islative franchises on the !round that the franchisees had violated the

terms of their franchises4 'he ourt, in resolvin! that uestion, taes the opportunity to elaborate on

the dynamic behind the re!ulation of broadcast media in the Philippines, particularly the

interrelationship between the twin franchise and licensin! reuirements.

I.

"espondents Consolidated ,roadcasting S*stem- Inc3 5C,S6 and )eople7s ,roadcasting

Service- Inc3 5),S6 were incorporated in 9>> and "3#3 No3 >8B=. .6. (o. 777, enacted on 5 *ay $2, !rantedPBS a le!islative franchise to construct, install, maintain and operate radio and television stations

within the Philippines for a period of 25 years. .6. (o. 7582, enacted on 27 *ay $2, e%tended

BS)s previous le!islative franchise$to operate radio stations for another 25 years. !he C,S and

),S radio networks are two of the three networks that comprise the well2known

,ombo "ad*o )hilippines."2

Section of .6. (o. 777 and Section 9 of .6. (o. 7582 contain a common provision

predicated on the "constitutional mandate to democratize ownership of public

utilities."9'he common provision states:

S+. . -emocrati;ation of ownership.< &n compliance with the constitutional mandate to

democrati;e ownership of public utilities, the herein grantee shall make public offering

through the stock exchanges of at least thirt* percent 5D?6 of its common

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stocks within a period of three 5D6 *ears from the date of effectivit* of this #ct :

Provided, 'hat no sin!le person or entity shall be allowed to own more than five percent /5=0 of the

stoc offerin!s.

&t further appears that followin! the enactment of these franchise laws, the N!C issued four 596

)rovisional #uthorities to ),S and six 5:6 )rovisional #uthorities to C,S, allowin!them to install, operate and maintain various 6* and >* broadcast stations in various locations

throu!hout the nation.5'hese Provisional 6uthorities were issued between $9 to $8, or after the

enactment of .6. (o. 777 and .6. (o. 7582.

)etitioner Santiago C3 /ivinagracia: filed two complaintsboth dated $ *arch $

with the (', respectively lod!ed a!ainst PBS7and BS.8?e alle!ed that he was the actual

and beneficial owner of !welve percent 58B=

mandating the public offering of at least D? of the common stocks of ),S and

C,S, both entities had failed to make such offering . 'hus, /ivinagraciacommonl* argued in his complaints that the failure on the part of ),S and C,S

to compl* with the mandate of their legislative franchise is a misuse of the

franchise conferredupon it by law and it continues to exercise its

franchise in contravention of the lawto the detriment of the !eneral public and ofcomplainant who are unable to en1oy the benefits bein! offered by a publicly listed company."$@&e

thus pra*ed for the cancellation of or C)Cs of ),S and C,S on account of the

alle!ed violation of the conditions set therein, as well as in its le!islative franchises.$$

n $ 6u!ust 2@@@, the N!C issued a consolidated decision /ISMISSIN1 bothcomplaints.$2Ahile the (' posited that it had full +urisdiction to revoke or cancel a

)rovisional #uthorit* or C)Cfor violations or infractions of the terms and conditions embodied

therein,$9it held that the CM)'#IN!S #C!U#''. CNS!I!U!E/

C''#!E"#' #!!#C0S on the legislative franchises of PBS and BSsince the sole issue for determination was whether the franchisees

had violated the mandate to democratize ownershipin their respective

le!islative franchises. 'he (' ruled that it was not competent to render a rulin! on that issue, the

same being more properl* the sub+ect of an action for quo warranto to

be commenced b* the Solicitor 1eneral in the name of the epublic of thePhilippines, pursuant to ule ## of the ules of ourt.$

6fter the (' had denied -ivina!racia)s motion for reconsideration,$5he filed a petition for review

under ule 9 of the ules of ourt with the ourt of 6ppeals.$#n $8 >ebruary 2@@, the Court of

#ppeals rendered a decision upholding the N!C. 'he appellate court a!reed with the

earlier conclusion that the complaints were indeed a collateral attackon the le!islative

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franchises of BS and PBS and that a quo warranto action was the proper mode to thresh out

the issues raised in the complaints.

?ence this petition, which submits as the principal issue, whether the (', with its retinue of

re!ulatory powers, is powerless to cancel Provisional 6uthorities and ertificates of Public

onvenience it issued to le!islative franchise3holders. 'hat central issue devolves into severalnarrower ar!uments, some of which hin!e on the authority of the (' to cancel the very Provisional

6uthorities and Ps which it is empowered to issue, as distin!uished from the le!islative franchise

itself, the cancellation of which -ivina!racia points out was not the relief he had sou!ht from the

('. 4uestions are raised as to whether the complaints did actuall* constitute a

collateral attack on the legislative franchises.

et this case ultimately rests to a lar!e de!ree on fundamentals. -ivina!racia)s case rotates on the

sin!ular thesis that the (' has the power to cancel Provisional 6uthorities and Ps, or in effect,

the power to cancel the licenses that allow broadcast stations to operate. 'he (', in its assailed

-ecision, e%pressly admits that it has such power even as it refrained from e%ercisin! the

same.$8'he ourt has yet to en!a!e in a deep inuiry into the Fuestion of whether theN!C has the power to cancel the operating licenses of entities to

whom Congress has issued franchises to operate broadcast stations ,especially on account of an alle!ed violation of the terms of their franchises. 'his is the opportune

time to e%amine the issue.

&&.

'o fully understand the scope and dimensions of the re!ulatory realm of the (', it is essential to

review the le!al bac!round of the re!ulation process. 6s operative fact, any person or enterprise

which wishes to operate a broadcast radio or television station in the Philippines has to secure ale!islative franchise in the form of a law passed by on!ress, and thereafter a license to operate

from the ('.

'he franchise reuirement traces its !enesis to 6ct (o. 98#, otherwise nown as the adio ontrol

6ct, enacted in $9$.$Section $ thereof provided that "CnDo person, firm, company, association or

corporation shall construct, install, establish, or operate % % % a radio broadcastin! station, without

havin! first obtained a franchise therefor from the (ational 6ssembly % % %" 2@Section 2 of the law

prohibited the construction or installation of any station without a permit !ranted by the Secretary of

Public Aors and ommunication, and the operation of such station without a license issued by the

same -epartment Secretary.2$'he law liewise empowered the Secretary of Public Aors and

ommunication "to re!ulate the establishment, use, and operation of all radio stations and of allforms of radio communications and transmissions within the Philippine &slands and to issue such

rules and re!ulations as may be necessary."22

(oticeably, our adio ontrol 6ct was enacted a few years after the Enited States on!ress had

passed the adio 6ct of $27. 6merican broadcasters themselves had ased their on!ress to step

in and re!ulate the radio industry, which was then in its infancy. 'he absence of !overnment

re!ulation in that maret had led to the emer!ence of hundreds of radio broadcastin! stations, each

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usin! freuencies of their choice and chan!in! freuencies at will, leadin! to literal chaos on the

airwaves. &t was the adio 6ct of $27 which introduced a licensin! reuirement for 6merican

broadcast stations, to be overseen eventually by the >ederal ommunications ommission />0.29

'his pre3re!ulation history of radio broadcast stations illustrates the continuin! necessity of a

!overnment role in overseein! the broadcast media industry, as opposed to other industries such asprint media and the &nternet.2Aithout re!ulation, the result would be a free3for3all maret with rival

broadcasters able with impunity to sabota!e the use by others of the airwaves.25*oreover, the

airwaves themselves the very medium utili;ed by broadcast

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6fter interrelatin! the premise of scarcity of resources with the >irst 6mendment ri!hts of

broadcasters, Red Lionconcluded that !overnment re!ulation of broadcast media was a necessity:

Ahere there are substantially more individuals who want to broadcast than there are freuencies to

allocate, it is idle to posit an unabrid!eable >irst 6mendment ri!ht to broadcast comparable to the

ri!ht of every individual to spea, write, or publish. &f $@@ persons want broadcast C95 E.S. 9#7,98D licenses but there are only $@ freuencies to allocate, all of them may have the same "ri!ht" to

a licenseK but if there is to be any effective communication by radio, only a few can be licensed and

the rest must be barred from the airwaves. &t would be stran!e if the >irst 6mendment, aimed at

protectin! and furtherin! communications, prevented the Government from main! radio

communication possible by reuirin! licenses to broadcast and by limitin! the number of licenses so

as not to overcrowd the spectrum.

'his has been the consistent view of the ourt. on!ress unuestionably has the power to !rant and

deny licenses and to eliminate e%istin! stations. (o one has a >irst 6mendment ri!ht to a license or

to monopoli;e a radio freuencyK to deny a station license because "the public interest" reuires it "is

not a denial of free speech."

By the same toen, as far as the >irst 6mendment is concerned those who are licensed stand no

better than those to whom licenses are refused. 6 license permits broadcastin!, but the licensee has

no constitutional ri!ht to be the one who holds the license or to monopoli;e a radio freuency to the

e%clusion of his fellow citi;ens. 'here is nothin! in the >irst 6mendment which prevents the

Government from reuirin! a licensee to share his freuency with others and to conduct himself as a

pro%y or fiduciary with obli!ations to present those views and voices which are representative of his

community and which would otherwise, by necessity, be barred from the airwaves.28

% % % %

ather than confer freuency monopolies on a relatively small number of licensees, in a (ation of

2@@,@@@,@@@, the Government could surely have decreed that each freuency should be shared

amon! all or some of those who wish to use it, each bein! assi!ned a portion of the broadcast day

or the broadcast wee. 'he rulin! and re!ulations at issue here do not !o uite so far. 'hey assert

that under specified circumstances, a licensee must offer to mae available a reasonable amount of

broadcast time to those who have a view different from that which has already been e%pressed on

his station. 'he e%pression of a political endorsement, or of a personal attac while dealin! with a

controversial public issue, simply tri!!ers this time sharin!. 6s we have said, the >irst 6mendment

confers no ri!ht on licensees to prevent others from broadcastin! on "their" freuencies and no ri!ht

to an unconditional monopoly of a scarce resource which the Government has denied others the

ri!ht to use.

&n terms of constitutional principle, and as enforced sharin! of a scarce resource, the personal attac

and political editorial rules are indistin!uishable from the eual3time provision of L9$5, a specific

enactment of on!ress reuirin! stations to set aside reply time under specified circumstances and

to which the fairness doctrine and these constituent re!ulations are important complements. 'hat

provision, which has been part of the law since $27, adio 6ct of $27, L$8, Stat. $$7@, has

been held valid by this ourt as an obli!ation of the licensee relievin! him of any power in any way

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to prevent or censor the broadcast, and thus insulatin! him from liability for defamation. 'he

constitutionality of the statute under the >irst 6mendment was unuestioned./citations omitted02

6s made clear in ed Hion, the scarcity of radio freuencies made it necessary for the !overnment

to step in and allocate freuencies to competin! broadcasters. &n undertain! that function, the

!overnment is impelled to ad1ud!e which of the competin! applicants are worthy of freuencyallocation. &t is throu!h that role that it becomes le!ally viable for the !overnment to impose its own

values and !oals throu!h a re!ulatory re!ime that e%tends beyond the assi!nation of freuencies,

notwithstandin! the free e%pression !uarantees en1oyed by broadcasters. 6s the !overnment is put

in a position to determine who should be worthy to be accorded the privile!e to broadcast from a

finite and limited spectrum, it may impose re!ulations to see to it that broadcasters promote the

public !ood deemed important by the State, and to withdraw that privile!e from those who fall short

of the standards set in favor of other worthy applicants.

Such conditions are peculiar to broadcast media because of the scarcity of the airwaves. &ndeed,

any attempt to impose such a re!ulatory re!ime on a medium that is not belabored under similar

physical conditions, such as print media, will be clearly antithetical to democratic values and the freee%pression clause. 'his ourt, which has adopted the "scarcity of resources" doctrine in cases such

as 'elecom. M Broadcast 6ttys. of the Phils., &nc. v. *+H+,9@emphasi;ed the distinction citin!

ed Hion:

Petitioners complain that B.P. Bl!. 88$, L2 sin!les out radio and television stations to provide free

air time. 'hey contend that newspapers and ma!a;ines are not similarly reuired as, in fact, in

Philippine Press &nstitute v. *+H+ we upheld their ri!ht to the payment of 1ust compensation for

the print space they may provide under L@.

'he ar!ument will not bear analysis. &t rests on the fallacy that broadcast media are entitled to the

same treatment under the free speech !uarantee of the onstitution as the print media. 'here areimportant differences in the characteristics of the two media, however, which 1ustify their differential

treatment for free speech purposes. Because of the physical limitations of the broadcast spectrum,

the !overnment must, of necessity, allocate broadcast freuencies to those wishin! to use them.

'here is no similar 1ustification for !overnment allocation and re!ulation of the print media.

&n the allocation of limited resources, relevant conditions may validly be imposed on the !rantees or

licensees. 'he reason for this is that, as already noted, the !overnment spends public funds for the

allocation and re!ulation of the broadcast industry, which it does not do in the case of the print

media. 'o reuire the radio and television broadcast industry to provide free air time for the

*+H+ 'ime is a fair e%chan!e for what the industry !ets.9$

ther rationales may have emer!ed as well validatin! state re!ulation of broadcast media,92but the

reality of scarce airwaves remains the primary, indisputable and indispensable 1ustification for the

!overnment re!ulatory role. 'he inte!ration of the scarcity doctrine into the 1urisprudence on

broadcast media illustrates how the libertarian ideal of the free e%pression clause may be tempered

and balanced by actualities in the real world while preservin! the core essence of the constitutional

!uarantee. &ndeed, without !overnment re!ulation of the broadcast spectrum, the ability of

broadcasters to clearly e%press their views would be inhibited by the anarchy of competition. Since

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the airwaves themselves are not susceptible to physical appropriation and private ownership, it is but

indispensable that the !overnment step in as the !uardian of the spectrum.

eference to the scarcity doctrine is necessary to !ain a full understandin! of the paradi!m that

!overns the state re!ulation of broadcast media. 'hat paradi!m, as it e%ists in the Enited States, is

conte%tually similar to our own, e%cept in one very crucial re!ard F the dual franchiseNlicensereuirements we impose.

&&&.

ecall that the adio ontrol 6ct specifically reuired the obtention of a le!islative franchise for the

operation of a radio station in the Philippines. Ahen the Public Service 6ct was enacted in $9#, the

Public Service ommission /PS0 was vested with 1urisdiction over "public services," includin! over

"wire or wireless broadcastin! stations."99?owever, amon! those specifically e%empted from the

re!ulatory reach of the PS were "radio companies, e%cept with respect to the fi%in! of

rates."9'hus, followin! the adio ontrol 6ct, the administrative re!ulation of "radio companies"

remained with the Secretary of Public Aors and ommunications. &t appears that despite theadvent of commercial television in the $5@s, no correspondin! amendment to either the adio

ontrol 6ct or the Public Service 6ct was passed to reflect that new technolo!y then.

Shortly after the $72 declaration of martial law, President *arcos issued Presidential -ecree /P.-.0

(o. $, which allocated to the Board of ommunications the authority to issue Ps for the operation

of radio and television broadcastin! systems and to !rant permits for the use of radio freuencies for

such broadcastin! systems. &n $7, President *arcos promul!ated Presidential -ecree (o. 57#36,

entitled "e!ulatin! the wnership and peration of adio and 'elevision Stations and for other

Purposes." Section # of that law reads:

Section #36ll franchises, !rants, licenses, permits, certificates or other forms of authority to operateradio or television broadcastin! systems shall terminate on -ecember 9$, $8$. 'hereafter,

irrespective of any franchise, !rants, license, permit, certificate or other forms of authority to operate

!ranted by any office, a!ency or person, no radio or television station shall be authori;ed to

operated without the authority of the Board of ommunications and the Secretary of Public Aors

and ommunications or their successors who have the ri!ht and authority to assi!n to ualified

parties freuencies, channels or other means of identifyin! broadcastin!

systemsK Provided,however, that any conflict over, or disa!reement with a decision of the

aforementioned authorities may be appealed finally to the ffice of the President within fifteen days

from the date the decision is received by the party in interest.

6 few years later, President *arcos promul!ated +%ecutive rder /+..0 (o. 5#, establishin!amon! others the (ational 'elecommunications ommission. Section $5 thereof enumerates the

various functions of the ('.

Section $5. Functions of the Commission.< 'he ommission shall e%ercise the followin! functions:

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a. &ssue ertificate of Public onvenience for the operation of communications utilities and

services, radio communications systems, wire or wireless telephone or tele!raph systems,

radio and television broadcastin! system and other similar public utilitiesK

b. +stablish, prescribe and re!ulate areas of operation of particular operators of public

service communicationsK and determine and prescribe char!es or rates pertinent to theoperation of such public utility facilities and services e%cept in cases where char!es or rates

are established by international bodies or associations of which the Philippines is a

participatin! member or by bodies reco!ni;ed by the Philippine Government as the proper

arbiter of such char!es or ratesK

c. Grant permits for the use of radio freuencies for wireless telephone and tele!raph

systems and radio communication systems includin! amateur radio stations and radio and

television broadcastin! systemsK

d. Sub3allocate series of freuencies of bands allocated by the &nternational

'elecommunications Enion to the specific servicesK

e. +stablish and prescribe rules, re!ulations, standards, specifications in all cases related to

the issued ertificate of Public onvenience and administer and enforce the sameK

f. oordinate and cooperate with !overnment a!encies and other entities concerned with

any aspect involvin! communications with a view to continuously improve the

communications service in the countryK

!. Promul!ate such rules and re!ulations, as public safety and interest may reuire, to

encoura!e a lar!er and more effective use of communications, radio and television

broadcastin! facilities, and to maintain effective competition amon! private entities in theseactivities whenever the ommission finds it reasonably feasibleK

h. Supervise and inspect the operation of radio stations and telecommunications facilitiesK

i. Endertae the e%amination and licensin! of radio operatorsK

1. Endertae, whenever necessary, the re!istration of radio transmitters and transceiversK

and

. Perform such other functions as may be prescribed by law.

'hese enactments were considered when in 2@@9 the ourt definitively resolved that the operation

of a radio or television station does reuire a con!ressional franchise. &n 6ssociated

ommunications M Aireless Services v. (',95the ourt too note of the confusion then within the

broadcast industry as to whether the franchise reuirement first ordained in the $9$ adio ontrol

6ct remained e%tant !iven the enactment of P.-. (o. 57#36 in $7 and +.. (o. 5# in $7.

(otably, neither law had specifically reuired le!islative franchises for the operation of broadcast

stations. (onetheless, the ourt noted that Section $ of P.-. (o. 57#36 had e%pressly referred to the

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franchise reuirement in statin! that "CnDo radio station or television channel may obtain a franchise

unless it has sufficient capital on the basis of euity for its operation for at least one

yearI ."9#Section # of that law made a similar reference to the franchise reuirement.97>rom those

references, the ourt concluded that the franchise reuirement under the adio ontrol 6ct was not

repealed by P.-. (o. 57#36.98

'urnin! to +.. (o. 5#, the ourt arrived at a similar conclusion, despite a -epartment of Oustice

pinion statin! that the $7 enactment had dispensed with the con!ressional franchise

reuirement. 'he ourt clarified that the $8 rulin! in 6lbano v. eyes, to the effect that "franchises

issued by on!ress are not reuired before each and every public utility may operate" did not

dispense with the franchise reuirement insofar as broadcast stations are concerned.

ur rulin! in 6lbano that a con!ressional franchise is not reuired before "each and every public

utility may operate" should be viewed in its proper li!ht. Ahere there is a law such as P.-. (o. 57#36

which reuires a franchise for the operation of radio and television stations, that law must be

followed until subseuently repealed. 6s we have earlier shown, however, there is nothin! in the

subseuent +.. (o. 5# which evinces an intent to dispense with the franchise reuirement. &ncontradistinction with the case at bar, the law applicable in 6lbano,i.e., +.. (o. 9@, did not reuire a

franchise for the Philippine Ports 6uthority to tae over, mana!e and operate the *anila &nternational

Port omple% and undertae the providin! of car!o handlin! and port related services thereat.

Similarly, in Philippine 6irlines, &nc. v. ivil 6eronautics Board, et al., we ruled that a le!islative

franchise is not necessary for the operation of domestic air transport because "there is nothin! in the

law nor in the onstitution which indicates that a le!islative franchise is an indispensable

reuirement for an entity to operate as a domestic air transport operator." 'hus, while it is correct to

say that specified a!encies in the +%ecutive Branch have the power to issue authori;ation for certain

classes of public utilities, this does not mean that the authori;ation or P issued by the ('

dispenses with the reuirement of a franchise as this is clearly reuired under P.-. (o. 57#36.9

'he ourt further observed that on!ress itself had accepted it as a !iven that a le!islative franchise

is still reuired to operate a broadcastin! station in the Philippines.

'hat the le!islative intent is to continue reuirin! a franchise for the operation of radio and television

broadcastin! stations is clear from the franchises !ranted by on!ress after the effectivity of +..

(o. 5# in $7 for the operation of radio and television stations. 6mon! these are: /$0 .6. (o.

$9$ dated 6pril 2, 2@@$, entitled "6n 6ct Grantin! the &ddes Broadcast Group, &nc., a >ranchise to

onstruct, &nstall, +stablish, perate and *aintain adio and 'elevision Broadcastin! Stations in the

Philippines"K /20 .6. (o. $8 dated Ouly 9$, 2@@$, entitled "6n 6ct Grantin! the ?ypersonic

Broadcastin! enter, &nc., a >ranchise to onstruct, &nstall, +stablish, perate and *aintain adio

Broadcastin! Stations in the PhilippinesK" and /90 .6. (o. 7#78 dated >ebruary $7, $, entitled"6n 6ct Grantin! the -i!ital 'elecommunication Philippines, &ncorporated, a >ranchise to &nstall,

perate and *aintain 'elecommunications Systems 'hrou!hout the Philippines." 6ll three

franchises reuire the !rantees to secure a P(NlicenseNpermit to construct and operate their

stationsNsystems. Hiewise, the 'a% eform 6ct of $7 provides in Section $$ for ta% on franchise

of radio andNor television broadcastin! companies % % %@

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6ssociated ommunications maes clear that presently broadcast stations are still reuired to obtain

a le!islative franchise, as they have been so since the passa!e of the adio ontrol 6ct in $9$. By

virtue of this reuirement, the broadcast industry falls within the ambit of Section $$, 6rticle && of the

$87 onstitution, the one constitutional provision

concerned with the !rant of franchises in the Philippines.

$

'he reuirement of a le!islative franchiseliewise differentiates the Philippine broadcast industry from that in 6merica, where there is no need

to secure a franchise from the E.S. on!ress.

&t is thus clear that the operators of broadcast stations in the Philippines must secure a le!islative

franchise, a reuirement imposed by the adio ontrol 6ct of $9$ and accommodated under the

$87 onstitution. 6t the same time, the ourt in 6ssociated ommunications referred to another

form of "permission" reuired of broadcast stations, that is the P issued by the ('. Ahat is the

source of such reuirement4

'he adio ontrol 6ct had also obli!ed radio broadcast stations to secure a permit from the

Secretary of ommerce and &ndustry2

prior to the construction or installation of any station.9

Said-epartment Secretary was also empowered to re!ulate "the establishment, use and operation of all

radio stations and of all forms of radio communications and

transmission within the Philippines."6mon! the specific powers !ranted to the Secretary over radio

stations are the approval or disapproval of any application for the construction, installation,

establishment or operation of a radio station5and the approval or disapproval of any application for

renewal of station or operation license.#

6s earlier noted, radio broadcastin! companies were e%empted from the 1urisdiction of the defunct

Public Service ommission e%cept with respect to their ratesK thus, they did not fall within the same

re!ulatory re!ime as other public services, the re!ime which was characteri;ed by the need for Por P(. ?owever, followin! the adio ontrol 6ct, it became clear that radio broadcast companies

need to obtain a similar license from the !overnment in order to operate, at that time from the

-epartment of Public Aors and ommunications.

'hen, as earlier noted, in $72, President *arcos throu!h P.-. (o. $, transferred to the Board of

ommunications the function of issuin! Ps for the operation of radio and television broadcastin!

systems, as well as the !rantin! of permits for the use of radio freuencies for such broadcastin!

systems. Aith the creation of the (', throu!h +.. (o. 5# in $7, that a!ency was vested with

the power to "CiDssue certificateCsD of public convenience for the operation ofI radio and television

broadcastin! systemCsD."7'hat power remains e%tant and undisputed to date.

'his much thus is clear. Broadcast and television stations are reuired to obtain a le!islative

franchise, a reuirement imposed by the adio ontrol 6ct and affirmed by our rulin! in 6ssociated

Broadcastin!. 6fter securin! their le!islative franchises, stations are reuired to obtain Ps from

the (' before they can operate their radio or television broadcastin! systems. Such reuirement

while traceable also to the adio ontrol 6ct, currently finds its basis in +.. (o. 5#, the law

establishin! the ('.

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>rom these same le!al premises, the ne%t and most critical uestion is whether the (' has the

power to cancel the Ps it has issued to le!islative franchisees.

&.

'he comple%ities of our dual franchiseNlicense re!ime for broadcast media should be understoodwithin the conte%t of separation of powers. 'he ri!ht of a particular entity to broadcast over the

airwaves is established by law Qi.e., the le!islative franchise Q and determined by on!ress, the

branch of !overnment tased with the creation of ri!hts and obli!ations. 6s with all other laws

passed by on!ress, the function of the e%ecutive branch of !overnment, to which the (' belon!s,

is the implementation of the law. &n broad theory, the le!al obli!ation of the (' once on!ress has

established a le!islative franchise for a broadcast media station is to facilitate the operation by the

franchisee of its broadcast stations. ?owever, since the public administration of the airwaves is a

reuisite for the operation of a franchise and is moreover a hi!hly technical function, on!ress has

dele!ated to the (' the tas of administration over the broadcast spectrum, includin! the

determination of available bandwidths and the allocation of such available bandwidths amon! the

various le!islative franchisees. 'he licensin! power of the (' thus arises from the necessarydele!ation by on!ress of le!islative power !eared towards the orderly e%ercise by franchisees of

the ri!hts !ranted them by on!ress.

on!ress may very well in its wisdom impose additional obli!ations on the various franchisees and

accordin!ly dele!ate to the (' the power to ensure that the broadcast stations comply with their

obli!ations under the law. Because broadcast media en1oys a lesser de!ree of free e%pression

protection as compared to their counterparts in print, these le!islative restrictions are !enerally

permissible under the onstitution. et no enactment of on!ress may contravene the onstitution

and its Bill of i!htsK hence, whatever restrictions are imposed by on!ress on broadcast media

franchisees remain susceptible to 1udicial review and analysis under the 1urisprudential framewor

for scrutiny of free e%pression cases involvin! the broadcast media.

'he restrictions enacted by on!ress on broadcast media franchisees have to pass the mettle of

constitutionality. n the other hand, the restrictions imposed by an administrative a!ency such as

the (' on broadcast media franchisees will have to pass not only the test of constitutionality, but

also the test of authority and le!itimacy, i.e., whether such restrictions have been imposed in the

e%ercise of duly dele!ated le!islative powers from on!ress. &f the restriction or sanction imposed

by the administrative a!ency cannot trace its ori!in from le!islative dele!ation, whether it is by virtue

of a specific !rant or from valid dele!ation of rule3main! power to the administrative a!ency, then

the action of such administrative a!ency cannot be sustained. 'he life and authority of an

administrative a!ency emanates solely from an 6ct of on!ress, and its faculties confined within the

parameters set by the le!islative branch of !overnment.

Ae earlier replicated the various functions of the (', as established b* E33 No3 89:3ne

can readily notice that even as the N!C is vested with the )(E" ! ISSUE C)Cs to

broadcast stations- it is N! E;)"ESS'. $ES!E/ (I!& !&E

)(E" ! C#NCE' such C)Cs, or otherwise empowered to prevent broadcaststations with duly issued franchises and Ps from operatin! radio or television stations. 1avvphi1

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&n contrast, when the adio ontrol 6ct of $9$ maintained a similar reuirement for radio stations to

obtain a license from a !overnment official /the Secretary of ommerce and &ndustry0, it similarly

empowered the !overnment, throu!h the Secretary of Public Aors and ommunications, to

suspend or revoe such license, as indicated in Section 9/m0:

Section 9. 'he Secretary of Public Aors and ommunications is hereby empowered, to re!ulatethe construction or manufacture, possession, control, sale and transfer of radio transmitters or

transceivers /combination transmitter3receiver0 and the establishment, use, the operation of all radio

stations and of all form of radio communications and transmissions within the Philippines. &n addition

to the above he shall have the followin! specific powers and duties:

/m0 ?e may, at his direction brin! criminal action a!ainst violators of the radio laws or the re!ulations

and confiscate the radio apparatus in case of ille!al operationK or simply suspend or revoe the

offender)s station or operator licenses or refuse to renew such licensesK or 1ust reprimand and warn

the offendersK8

Section 9/m0 be!ets the uestion F did the (' retain the power !ranted in $9$ to the Secretary ofPublic Aors and ommunications to "% % % suspend or revoe the offender)s station or operator

licenses or refuse to renew such licenses"4 Ae earlier adverted to the statutory history. 'he

enactment of the Public Service 6ct in $9# did not deprive the Secretary of re!ulatory 1urisdiction

over radio stations, which included the power to impose fines. &n fact, the Public Service

ommission was precluded from e%ercisin! such 1urisdiction, e%cept with respect to the fi%in! of

rates.

'hen, in $72, the re!ulatory authority over broadcast media was transferred to the Board of

ommunications by virtue of P. -. (o. $, which adopted, approved, and made as part of the law of

the land the &nte!rated eor!ani;ation Plan which was prepared by the ommission on

eor!ani;ation.

6mon! the cabinet departments affected by the plan was the -epartment of PublicAors and ommunications, which was now renamed the -epartment of Public Aors,

'ransportation and ommunication.5@(ew re!ulatory boards under the administrative supervision of

the -epartment were created, includin! the Board of ommunications.5$

'he functions of the Board of ommunications were enumerated in Part , hapter &, 6rticle &&&, Sec.

5 of the &nte!rated eor!ani;ation Plan.52Ahat is noticeably missin! from these enumerated

functions of the Board of ommunications is the power to revoe or cancel Ps, even as the Board

was vested the power to issue the same. 'hat same pattern held true in $7#, when the Board of

ommunications was abolished by +.. (o. 5#.59Said e%ecutive order, promul!ated by then

President *arcos in the e%ercise of his le!islative powers, created the (' but liewise withheld

from it the authority to cancel licenses and Ps, even as it was empowered to issue Ps. Giventhe very specific functions allocated by law to the (', it would be very difficult to reco!ni;e any

intent to allocate to the ommission such re!ulatory functions previously !ranted to the Secretary of

Public Aors and ommunications, but not included in the e%haustive list of functions enumerated in

Section $5.

ertainly, petitioner fails to point to any provision of +.. (o. 5# authori;in! the (' to cancel

licenses. (either does he cite any provision under P.-. (o. $ or the adio ontrol 6ct, even if

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Section 9/m0 of the latter law provides at least, the startin! point of a fair ar!ument. &nstead,

petitioner relies on the power !ranted to the Public Service ommission to revoe Ps or P(s

under Section $#/m0 of the Public Service 6ct.5'hat ar!ument has been irrefra!ably refuted by

Section $ of the Public Service 6ct, and by 1urisprudence, most especially P& v. ('.556s earlier

noted, at no time did radio companies fall under the 1urisdiction of the Public Service ommission as

they were e%pressly e%cluded from its mandate under Section $. &n addition, the ourt ruled inP& that since radio companies, includin! broadcast stations and tele!raphic a!encies, were never

under the 1urisdiction of the Public Service ommission e%cept as to rate3fi%in!, that ommission)s

authority to impose fines did not carry over to the (' even while the other re!ulatory a!encies that

emanated from the ommission did retain the previous authority their predecessor had

e%ercised.5#No provision in the )ublic Service #ct thus can be relied upon b* the

petitioner to claim that the N!C has the authorit* to cancel C)Cs or licenses .

&t is still evident that +.. (o. 5# provides no e%plicit basis to assert that the (' has the power to

cancel the licenses or Ps it has duly issued, even as the government office previousl*

tasked with the regulation of radio stations- the Secretar* of )ublic (orks and

Communications- previousl* possessed such power b* express mandate of law .

&n order to sustain petitioner)s premise, the ourt will be unable to rely on an uneuivocally current

and e%tant provision of law that 1ustifies the (')s power to cancel Ps. Petitioner su!!ests that

since the (' has the power to issue Ps, it necessarily has the power to revoe the same. ne

mi!ht also ar!ue that throu!h the !eneral rule3main! power of the (', we can discern a ri!ht of

the (' to cancel Ps.

Ae must be mindful that the issue for resolution is not a run3of3the3mill matter which would be settled

with ease with the application of the principles of statutory construction. &t is at this 1uncture that the

constitutional implications of this case must ascend to preeminence.

6.

&t is beyond uestion that respondents, as with all other radio and television broadcast stations, find

shelter in the Bill of i!hts, particularly Section 9, 6rticle &&& of the onstitution. 6t the same time, as

we have labored earlier to point out, broadcast media stands, by reason of the conditions of scarcity,

within a different tier of protection from print media, which unlie broadcast, does not have any

re!ulatory interaction with the !overnment durin! its operation.

Still, the fact that state re!ulation of broadcast media is constitutionally 1ustified does not mean that

its practitioners are precluded from invoin! Section 9, 6rticle &&& of the onstitution in their behalf.

>ar from it. ur democratic way of life is actuali;ed by the e%istence of a free press, whether print

media or broadcast media. 6s with print media, free e%pression throu!h broadcast media is

protected from prior restraint or subseuent punishment. 'he franchise and licensin! reuirements

are mainly impositions of the laws of physics which would stand to periodic reassessment as

technolo!y advances. 'he science of today renders state re!ulation as a necessity, yet this should

not encumber the courts from accommodatin! !reater freedoms to broadcast media when doin! so

would not interfere with the e%istin! le!itimate state interests in re!ulatin! the industry.

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&n > v. Hea!ue of Aomen oters of alifornia,57the E.S. Supreme ourt reviewed a law

prohibitin! noncommercial broadcast stations that received fundin! from a public corporation from

"en!a!in! in editoriali;in!." 'he E.S. Supreme ourt acnowled!ed the differentiated >irst

6mendment standard of review that applied to broadcast media. Still, it struc down the restriction,

holdin! that "CtheD re!ulation impermissibly sweeps within its prohibition a wide ran!e of speech by

wholly private stations on topics that do not tae a directly partisan stand or that have nothin!whatever to do with federal, state, or local !overnment."58Ae are similarly able to maintain fidelity to

the fundamental ri!hts of broadcasters even while upholdin! the rationale behind the re!ulatory

re!ime !overnin! them.

Should petitioner)s position that the (' has the power to cancel Ps or licenses it has issued to

broadcast stations althou!h they are in the first place empowered by their respective franchise to

e%ercise their ri!hts to free e%pression and as members of a free press, be adopted broadcast media

would be encumbered by another layer of state restrictions. 6s thin!s stand, they are already

reuired to secure a franchise from on!ress and a P from the (' in order to operate. Epon

operation, they are obli!ed to comply with the various re!ulatory issuances of the (', which has

the power to impose fees and fines and other mandates it may deem fit to prescribe in the e%erciseof its rule3main! power.

'he fact that broadcast media already labors under this concededly valid re!ulatory framewor

necessarily creates inhibitions on its practitioners as they operate on a daily basis. (ewspapers are

able to print out their daily editions without fear that a !overnment a!ency such as the (' will be

able to suspend their publication or fine them based on their content. Broadcast stations do already

operate with that possibility in mind, and that circumstance ineluctably restrains its content,

notwithstandin! the constitutional ri!ht to free e%pression. ?owever, the cancellation of a P or

license to operate of a broadcast station, if we reco!ni;e that possibility, is essentially a death

sentence, the most drastic means to inhibit a broadcast media practitioner from e%ercisin! the

constitutional ri!ht to free speech, e%pression and of the press.

'his 1udicial philosophy ali!ns well with the preferred mode of scrutiny in the analysis of cases with

dimensions of the ri!ht to free e%pression. Ahen confronted with laws dealin! with freedom of the

mind or restrictin! the political process, of laws dealin! with the re!ulation of speech, !ender, or race

as well as other fundamental ri!hts as e%pansion from its earlier applications to eual protection, the

ourt has deemed it appropriate to apply "strict scrutiny" when assessin! the laws involved or the

le!al ar!uments pursued that would diminish the efficacy of such constitutional ri!ht. 'he assumed

authority of the (' to cancel Ps or licenses, if sustained, will create a permanent atmosphere of

a less free ri!ht to e%press on the part of broadcast media. So that ar!ument could be sustained, it

will have to withstand the strict scrutiny from this ourt.

Strict scrutiny entails that the presumed law or policy must be 1ustified by a compellin! state or

!overnment interest, that such law or policy must be narrowly tailored to achieve that !oal or

interest, and that the law or policy must be the least restrictive means for achievin! that interest. &t is

throu!h that lens that we e%amine petitioner)s premise that the (' has the authority to cancel

licenses of broadcast franchisees.

B.

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&n analy;in! the compellin! !overnment interest that may 1ustify the investiture of authority on the

(' advocated by petitioner, we cannot i!nore the interest of the State as e%pressed in the

respective le!islative franchises of the petitioner, .6. (o. 777 and . 6. 6ct (o. 7582. Since

le!islative franchises are e%tended throu!h statutes, they should receive reco!nition as the ultimate

e%pression of State policy. Ahat the le!islative franchises of respondents e%press is that the

on!ress, after due debate and deliberation, declares it as State policy that respondents shouldhave the ri!ht to operate broadcast stations. 'he President of the Philippines, by affi%in! his

si!nature to the law, concurs in such State policy.

#llowing the N!C to countermand State polic* b* revoking

respondent7s vested legal right to operate broadcast stations undul*

gives to a ME"E #/MINIS!"#!I$E #1ENC. veto power over the

implementation of the law and the enforcement of especiall* vested

legal rights3 'hat concern would not arise if on!ress had similarly empowered the (' withthe power to revoe a franchisee)s ri!ht to operate broadcast stations. But as earlier stated, there is

no such e%pression in the law, and by presumin! such ri!ht the ourt will be actin! contrary to the

stated State interest as e%pressed in respondents) le!islative franchises.

&f we e%amine the particular franchises of respondents, it is readily apparent that on!ress has

especially invested the (' with certain powers with respect to their broadcast operations. Both

.6. (o. 7775and .6. (o. 7582#@reuire the !rantee "to secure from the C('D the appropriate

permits and licenses for its stations," barrin! the private respondents from "usin! any freuency in

the radio spectrum without havin! been authori;ed by the C('D." 6t the same time, both laws

provided that "Cthe ('D, however, shall not unreasonably withhold or delay the !rant of any such

authority."

#n important proviso is stipulated in the legislative franchises-

particularl* under Section 8 of "3#3 No3 >9>> and Section D of "3#3 No3

>8B=, in relation to Section $$ of .6. (o. 9@2.

Section 5. i!ht of Government. < 6 special ri!ht is hereby reserved to the President of the

Philippines, in times of rebellion, public peril, calamity, emer!ency, disaster or disturbance of peace

and order, to temporarily tae over and operate the stations of the !rantee, temporarily suspend the

operation of any stations in the interest of public safety, security and public welfare, or authori;e the

temporary use and operation thereof by any a!ency of the Government, upon due compensation to

the !rantee, for the use of said stations durin! the period when they shall be so operated.

'he provision authori;es the President of the Philippines to e%ercise considerable infrin!ements on

the ri!ht of the franchisees to operate their enterprises and the ri!ht to free e%pression. Such

authority finds corollary constitutional 1ustification as well under Section $7, 6rticle &&, which allows

the State "in times of national emer!ency, when the public interest so reuires % % % durin! the

emer!ency and under reasonable terms prescribed by it, temporarily tae over or direct the

operation of any privately3owned public utility or business affected with public interest." Ae do not

doubt that the President or the State can e%ercise such authority throu!h the (', which remains an

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a!ency within the e%ecutive branch of !overnment, but such can be e%ercised only under limited and

rather drastic circumstances. !he* still do not vest in the N!C the broad

authorit* to cancel licenses and permits.

'hese provisions !rantin! special ri!hts to the President in times of emer!ency are incorporated in

our understandin! of the le!islated state policy with respect to the operation by private respondents

of their le!islative franchises. 'here are restrictions to the operation of such franchises, and when

these restrictions are indeed e%ercised there still may be cause for the courts to review whether said

limitations are 1ustified despite Section 9, 6rticle & of the onstitution. 6t the same time, the state

policy as embodied in these franchises is to restrict the !overnment)s ability to impair the freedom to

broadcast of the stations only upon the occurrence of national emer!encies or events that

compromise the national security.

&t should be further noted that even the aforeuoted provision does not authori;e the President or

the !overnment to cancel the licenses of the respondents. 'he temporary nature of the taeover or

closure of the station is emphasi;ed in the provision. 'hat fact further disen!a!es the provision from

any sense that such dele!ated authority can be the source of a broad rulin! affirmin! the ri!ht of the

(' to cancel the licenses of franchisees.

Aith the le!islated state policy stron!ly favorin! the unimpeded operation of the franchisee)s

stations, it becomes even more difficult to discern what compellin! State interest may be fulfilled in

cedin! to the (' the !eneral power to cancel the franchisee)s P)s or licenses absent e%plicit

statutory authori;ation. 'his absence of a compellin! state interest stron!ly disfavors petitioner)s

cause.

.

(ow, we shall tacle 1ointly whether a law or policy allowin! the (' to cancel Ps or licenses is to

be narrowly tailored to achieve that reuisite compellin! State !oal or interest, and whether such a

law or policy is the least restrictive means for achievin! that interest. Ae addressed earlier the

difficulty of envisionin! the compellin! State interest in !rantin! the (' such authority. But let us

assume for ar!ument)s sae, that relievin! the in1ury complained off by petitioner F the failure of

private respondents to open up ownership throu!h the initial public offerin! mandated by law F is a

compellin! enou!h State interest to allow the (' to e%tend conseuences by cancelin! the

licenses or Ps of the errin! franchisee.

!here is in fact a M"E #))")"I#!E- M"E N#""('.2!#I'"E/ #N/

'E#S! "ES!"IC!I$E "EME/. that is afforded b* the law. Such remedy is thatadverted to by the (' and the ourt of 6ppeals F the resort to Fuo warranto proceedingsunder ule ## of the ules of ourt.

Ender Section $ of ule ##, "an action for the usurpation of a public office, position or franchise may

be brou!ht in the name of the epublic of the Philippines a!ainst a person who usurps, intrudes into,

or unlawfully holds or e%ercises public office, position or franchise."#$+ven while the action is

maintained in the name of the epublic#2, the Solicitor General or a public prosecutor is obli!ed to

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commence such action upon complaint, and upon !ood reason to believe that any case specified

under Section $ of ule ## can be established by proof.#9

'he special civil action of quo warranto is a prero!ative writ by which the Government can call upon

any person to show by what warrant he holds a public office or e%ercises a public franchise.#It is

settled that GtHhe determination of the right to the exercise of a franchise- orwhether the right to en+o* such privilege has been forfeited b* non2user- is more

properl* the sub+ect of the prerogative writ of quo warranto, the right to assert

which- as a rule- belongs to the State upon complaint or otherwise-7

the reason being that the #,USE % # %"#NC&ISE IS # )U,'IC

("N1 and not a private in+ur*."#56 forfeiture of a franchise will have to be declaredin a direct proceedin! for the purpose brou!ht by the State because a franchise is !ranted by law

and its unlawful e%ercise is primarily a concern of Government.##Quo warranto is

specificall* available as a remed* if it is thought that a government

corporation S %%EN/E/ #1#INS! its corporate charter or

MISUSE/ its franchise.#7

'he ourt of 6ppeals correctly noted that in PH-' v. (',#8the ourt had cited quo warranto as the

appropriate recourse with respect to an alle!ation by petitioner therein that a rival

telecommunications competitor had failed to construct its radio system within the ten /$@0 years from

approval of its franchise, as mandated by its le!islative franchise.#&t is beyond dispute that quo

warranto e%ists as an available and appropriate remedy a!ainst the wron! imputed on private

respondents.

)etitioners argue that since their pra*er involves the cancellation of theprovisional authorit* and C)Cs- and not the legislative franchise- then Fuo

warranto fails as a remed*. 'he ar!ument is artificial. 'he authority of the franchisee to en!a!e

in broadcast operations is derived in the le!islative mandate. !o cancel the provisional

authorit* or the C)C is- in effect- to cancel the franchise or otherwise

prevent its exercise. By law, the (' is incapacitated to frustrate such mandate by undulywithholdin! or cancelin! the provisional authority or the P for reasons other than the orderly

administration of the freuencies in the radio spectrum.

Ahat should occur instead is the converse. &f the courts conclude that private respondents have

violated the terms of their franchise and thus issue the writs of quo warranto a!ainst them, then the

(' is obli!ed to cancel any e%istin! licenses and Ps since these permits draw stren!th from the

possession of a valid franchise. &f the point has not already been made clear, then licenses

issued b* the N!C such as C)Cs and provisional authorities #"E

JUNI" to the legislative franchiseenacted by on!ress. !he licensing

authorit* of the N!C is not on eFual footing with the %"#NC&ISIN1

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#U!&"I!. of the State through Congress. 'he issuance of licenses b*

the N!C IM)'EMEN!S the legislative franchises established by on!ress, in

the same manner that the executive branch IM)'EMEN!S !&E '#(S of

Congress rather than creates its own laws. 6nd similar to the inabilit* of the

executive branch to prevent the implementation of laws b* Congress-the (' cannot, without clear and proper dele!ation by on!ress, prevent the e%ercise of a

le!islative franchise by withholdin! or cancelin! the licenses of the franchisee.

6nd the role of the courts- through Fuo warranto proceedings- neatl*

complements the traditional separation of powers that come to bear

in our anal*sis. 'he courts are entrusted with the ad1udication of the le!al status of persons,

the final arbiter of their ri!hts and obli!ations under law. 'he Fuestion of whether a

franchisee is in breach of the franchise speciall* enacted for it b*

Congress is one inherentl* SUI!E/ ! # CU"! % '#(, and not for anadministrative a!ency, much less one to which no such function has been dele!ated by on!ress. &n

the same way that availability of 1udicial review over laws does not preclude on!ress from

undertain! its own remedial measures by appropriately amendin! laws, the viability of uo warranto

in the instant cases does not preclude on!ress from enforcin! its own prero!ative by abro!atin!

the le!islative franchises of respondents should it be distressed enou!h by the franchisees) violation

of the franchises e%tended to them.

+vidently, the suggested theor* of petitioner to address his plaints

SIM)'. $E")(E"S the delicate ,#'#NCE % SE)#"#!IN %

)(E"S- and undul* grants superlative prerogatives to the N!C tofrustrate the e%ercise of the constitutional freedom speech, e%pression, and of the press. 6 more

narrowly3tailored relief that is responsive to the cause of petitioner not only e%ists, but is in fact tailor3

fitted to the constitutional framewor of our !overnment and the ad1udication of le!al and

constitutional ri!hts. Given the current status of the law, there is utterly no reason for this ourt to

subscribe to the theory that the (' has the presumed authority to cancel licenses and Ps

issued to due holders of le!islative franchise to en!a!e in broadcast operations.

.

6n entire subset of uestions may arise followin! this decision, involvin! issues or situations not

presently before us. Ae wish to mae clear that the only aspect of the re!ulatory 1urisdiction of the

(' that we are rulin! upon is its presumed power to cancel provisional authorities-

C)Cs or C)CNs and other such licensesreuired of franchisees before they can en!a!e in

broadcast operations. *oreover, our conclusion that the N!C has no such

poweris borne not simply from the statutory lan!ua!e of +.. (o. 5# or the respectivestipulations in private respondents) franchises, but moreso, from the application of the strict scrutiny

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standard which, despite its wei!ht towards free speech, still involves the analysis of the competin!

interests of the re!ulator and the re!ulated.

&n resolvin! the present uestions, it was of mared impact to the ourt that the presumed power to

cancel would lead to utterly fatal conseuences to the constitutional ri!ht to e%pression, as well as

the le!islated ri!ht of these franchisees to broadcast. ther re!ulatory measures of less drasticimpact will have to be assessed on their own terms in the proper cases, and our decision today

should not be accepted or cited as a blanet shearin! of the (')s re!ulatory 1urisdiction. &n

addition, considerin! our own present reco!nition of le!islative authority to re!ulate broadcast media

on terms more cumbersome than print media, it should not be discounted that on!ress may enact

amendments to the or!anic law of the (' that would alter the le!al milieu from which we

ad1udicated today.1avvphi1.zw+

Still, the ourt sees all benefit and no detriment in striin! this blow in favor of free e%pression and of

the press. Ahile the ability of the State to broadly re!ulate broadcast media is ultimately dictated by

physics, re!ulation with a li!ht touch evoes a democracy mature enou!h to withstand competin!

viewpoints and tastes. Perhaps unwittin!ly, the position advocated by petitioner curdles a most vitalsector of the press F broadcast media F within the heavy hand of the State. 'he ar!ument is not

warranted by law, and it betrays the constitutional e%pectations on this ourt to assert lines not

drawn and connect the dots around throats that are free to spea.

(&E"E%"E, the instant petition is /ENIE/. (o pronouncement as to costs.

S "/E"E/.