G.R. No. 176694 , July 18, 2014
GMA NETWORK, INC., Petitioner, vs. CENTRAL CATV, INC., Respondent.

FACTS

Petitioner GMA Network, Inc., together with other broadcast networks, filed a complaint before the National Telecommunications Commission (NTC) against respondent Central CATV, Inc., a cable television (CATV) operator. The complaint sought to stop the respondent from soliciting and showing advertisements on its CATV system, alleging that such acts infringed on the television and broadcast markets, which include the advertising market, in violation of Section 2 of Executive Order (EO) No. 205. The respondent admitted airing commercials but defended its actions under Section 3 of EO No. 436, issued in 1997, which allows CATV providers to carry advertisements provided they secure consent from their program providers. After the petitioner presented its evidence, the respondent filed a motion to dismiss via demurrer to evidence. The NTC granted the demurrer and dismissed the complaint, ruling that EO No. 436 clarified the term “infringement” in EO No. 205 and that the respondent had the required consent from program providers. The NTC also considered documents attached to the respondent’s demurrer, even though they were not formally offered as evidence, citing its discretion to relax technical rules. The Court of Appeals affirmed the NTC’s order. The petitioner elevated the case to the Supreme Court, arguing procedural errors in the grant of the demurrer and substantive errors in interpreting EO No. 205 and EO No. 436.

ISSUE

1. Whether the Court of Appeals erred in affirming the NTC’s order granting the respondent’s motion to dismiss by demurrer to evidence.
2. Whether the respondent is prohibited from showing advertisements under Section 2 of EO No. 205, in relation to paragraph 2, Section 3 of EO No. 436.

RULING

The Supreme Court denied the petition for lack of merit.
On the procedural issue, the Court held that while the NTC correctly granted the demurrer to evidence based on the insufficiency of the petitioner’s evidence and the applicable laws, it erred in considering the respondent’s evidence (certifications attached to its demurrer) in resolving the motion. Under Rule 33 of the Rules of Court, applicable suppletorily to NTC proceedings, a demurrer to evidence must be resolved solely on the basis of the plaintiff’s evidence, excluding the defendant’s evidence. The NTC’s relaxation of technical rules violated this fundamental evidentiary rule and the petitioner’s due process rights, as it deprived the petitioner of the opportunity to question or refute the respondent’s documents. However, this procedural error did not warrant a reversal because the substantive issue could be resolved based on the petitioner’s evidence and the applicable laws alone.
On the substantive issue, the Court clarified the nature of the executive issuances. EO No. 205, issued by President Corazon Aquino in 1987, is a law, as it was promulgated under the transitional legislative power of the President under the 1987 Constitution . In contrast, EO No. 436, issued by President Fidel Ramos in 1997, is an executive issuance exercising quasi-legislative or rule-making power, designed to implement the primary legislation (EO No. 205) by providing details through rules and regulations. The Court found that EO No. 436 is a valid implementation of EO No. 205. Section 2 of EO No. 205 prohibits CATV authority from infringing on television and broadcast markets but does not define “infringement.” Section 3 of EO No. 436 operationalizes this by allowing CATV operators to carry advertisements, provided they do not infringe on broadcast markets by inserting ads without the consent of the program provider. This does not amend or repeal EO No. 205 but merely fills in its details. Furthermore, the NTC, under Section 6 of EO No. 205, is authorized to issue implementing rules and regulations. EO No. 436, as an executive issuance, carries out this directive. The Court also noted that the petitioner failed to present substantial evidence to prove that the respondent aired advertisements without the consent of program providers, as required under EO No. 436. Thus, the respondent is not absolutely prohibited from showing advertisements; it may do so provided it complies with the condition in EO No. 436.