Does ABS-CBN Have a Case Against Dream?

Cocktales this morning reports that:

ABS-CBN Broadcasting Corp. said it was suing Dream Satellite not for competitive reasons, as reported here Monday, but for intellectual piracy in Dream’s re-broadcasting ABS-CBN channels. “ABS-CBN, as in any other broadcast stations, owns its broadcast signal and should be sufficiently compensated if any other entity intends to broadcast the same,” the Lopez network said in a statement.

According to the grapevine, GMA Network Inc. also filed a similar piracy case against Dream.

(The case was also reported here, here, and apparently affected the Sassy Lawyer personally)

The way I see it, the case against Dream can be broken down into two (2) parts: First, Dream is not permitted to re-broadcast Free-to-Air TV signals to its subcribers because the broadcaster “owns its signals.”  Second, Dream is not excused from paying royalties on the ground that it is required to carry Free-to-Air TV signals by relevant regulations of the NTC.

I’ll take the second one first. 

NTC Memo Circular No. 4-08-88, contains the so-called “Must Carry” Rule which says:

6.2.1 A cable TV system operating in a community which is within the Grade A or Grade B contours of an authorized TV broadcast station or stations must carry the TV signals of these stations.

Dream can argue that since it is required to carry ABS-CBN’s signal, it need not pay any royalties for the rebroadcast. This is logical enough. But it seems that the NTC circular does not apply to Dream because a Cable TV operator is defined as follows:

Any facility that, in whole or in part, receives directly or indirectly over the air, and amplifies or otherwise modifies (improves) the signals transmitting programs broadcast by one or more television, satellite or radio stations and distributes such signal by wire or cable to subscribing members of the public who pay for such service(s)

Because Dream does not distribute its signal by “wire or cable,” ABS-CBN would be correct in saying that there is nothing which requires or forces Dream from carrying its signal.

Moving on to the second ground for the suit which is based on the contention that ABS-CBN owns its signal for which it is entitled to compensation.  This finds support under Section 211.1 of the Intellectual Property Code which provides that broadcasting organizations have the exclusive right to authorize (or prevent)”the rebroadcasting of their broadcasts.” 

It seems to me then that ABS-CBN’s case stands on firm legal ground and I wonder what defense Dream would put up.  One option would be to cite an NTC circular that their Satellite service is equivalent to cable TV which would allow them to rely on the Must Carry Rule.  Short of that, the rebroadcast of free-to-air TV signals by Dream would seem to violate the rights of broadcasting organizations like ABS-CBN. 

Let’s see how this case is finally resolved.