TELECOMMUNICATIONS LAW

SUBMITTED TO: ATTY. GOZON SUBMITTED BY: NIKKA BIANCA REMULLA

GMCR, INC., ET. AL. vs. BELLTEL, ET. AL. G.R. No. 126496; April 30, 1997

FACTS: Private respondent Bell Telecommunication Philippines, Inc. (hereafter, BellTel) filed with the NTC an Application for a Certificate of Public Convenience and Necessity to Procure, Install, Operate and Maintain Nationwide Integrated Telecommunications Services and to Charge Rates Therefor and with Further Request for the Issuance of Provisional Authority. At the time of the filing of this application, private respondent BellTel had not been granted a legislative franchise to engage in the business of telecommunications service. Since private respondent BellTel was, at that time, an unenfranchised applicant, it was excluded in the deliberations for service area assignments for local exchange carrier service. On March 25, 1994, Republic Act No. 7692 was enacted granting private respondent BellTel a congressional franchise. On July 12, 1994, private respondent BellTel filed with the NTC a second Application praying for the issuance of a Certificate of Public Convenience and Necessity for the installation, operation and maintenance of a combined nationwide local toll (domestic and international) and tandem telephone exchanges and facilities using wire, wireless, microwave radio, satellites and fiber optic cable with Public Calling Offices (PCOs) and very small aperture antennas (VSATs) under an integrated system. In this second application, BellTel proposed to install 2,600,000 telephone lines in ten (10) years using the most modern and latest state-of-theart facilities and equipment and to provide a 100% digital local exchange telephone network. On June 13, 1995, the day of the hearing, private respondent BellTel filed a Motion to Promulgate. In said motion, private respondent prayed for the promulgation of the working draft of the order granting a provisional authority to private respondent BellTel, on the ground that the said working draft had already been signed or initialed by Deputy Commissioners Dumlao and Perez who, together, constitute a majority out of the three commissioners composing the NTC. To support its prayer, private respondent BellTel asserted that the NTC was a collegial body and that as such, two favorable votes out of a maximum three votes by the members of the commission, are enough to validly promulgate an NTC decision. Petitioners-oppositors filed their Joint Opposition to the aforecited motion. NTC denied the said motion in an Order solely filed by Commissioner Simeon Kintanar. ISSUES: Whether or not petitioner can solely deny the application by BellTel, in his capacity as Commissioner of the NTC.

HELD: No. The NTC is a collegial body requiring a majority vote out of the three members of the commission in order to validly decide a case or any incident therein. Corollarily, the vote alone of the chairman of the commission, as in this case, the vote of Commissioner Kintanar, absent the required concurring vote coming from the rest of the membership of the commission to at least arrive at a majority decision, is not sufficient to legally render an NTC order, resolution or decision. Simply put, Commissioner Kintanar is not the National Telecommunications Commission. He alone does not speak for and in behalf of the NTC. The NTC acts through a three-man body, and the three members of the commission each has one vote to cast in every deliberation concerning a case or any incident therein that is subject to the jurisdiction of the NTC. When we consider the historical milieu in which the NTC evolved into the quasi-judicial agency it is now under Executive Order No. 146 which organized the NTC as a three-man commission and expose the illegality of all memorandum circulars negating the collegial nature of the NTC under Executive Order No. 146, we are left with only one logical conclusion: the NTC is a collegial body and was a collegial body even during the time when it was acting as a one-man regime.

PLDT vs. NTC GR No. 88404, 18 October 1990 FACTS: RA 2090 was enacted granting Felix Alberto & Co. (later ETCI) a franchise to establish radio stations for domestic and transoceanic telecommunications. ETCI filed an application with the NTC for the issuance of a certificate of public convenience and necessity to operate, etc. a Cellular Mobile Telephone System and an alpha numeric paging system in Metro Manila and in the Southern Luzon regions, with a prayer for provisional authority to operate within Metro Manila. PLDT filed an opposition with a motion to dismiss. NTC overruled PLDTs opposition and declared RA 2090 should be liberally construed so as to include the operation of a cellular mobile telephone service as part of services of the franchise. NTC granted ETCI provisional authority GR 88404, to install, operate, and maintain a cellular mobile telephone service initially in Metro Manila subject to the terms and conditions set forth in its order, including an interconnection agreement to be entered with PLDT. PLDT filed a motion to set aside order which was denied by the NTC. PLDT challenged the NTC orders before the Supreme Court through a special civil action for certiorari and prohibition. ISSUES: (1) Whether or not the provisional authority was properly granted (2) Whether or not ETCIs franchise includes operation of cellular mobile telephone system (3) Whether or not PLDT can refuse interconnection with ETCI HELD: As to the first issue, the provisional authority granted by the NTC has a definite expiry period of 18 months unless sooner renewed; may be revoked, amended or revised by the NTC; covers one of four phases; limited to Metro Manila only; and does not authorize the installation and operation of an alphanumeric paging system. It was further issued after due hearing, with PLDT attending and granted after a prima facie showing that ETCI had the necessary legal, financial and technical capabilities; and that public interest, convenience and necessity so demanded. Provisional authority would be meaningless if the grantee were not allowed to operate, as its lifetime is limited and may be revoked by the NTC at any time in accordance with law. As to the second issue, The NTC construed the technical term radiotelephony liberally as to include the operation of a cellular mobile telephone system. The construction given by an administrative agency possessed of the necessary special knowledge, expertise and experience and deserves great weight and respect. It can only be set aside by judicial intervention on proof of gross abuse of discretion, fraud or error of law.

As to the last issue, the NTC merely exercised its delegated authority to regulate the use of telecommunication networks when it decreed interconnection. PLDT cannot refuse interconnection as such is mandated under RA 6949 or the Municipal Telephone Act of 1989. What interconnection seeks to accomplish is to enable the system to reach out to the greatest number of people possible in line with governmental policies. With the broader reach, public interest and convenience will be better served. Public need, public interest, and the common good are the decisive, if not the ultimate, considerations.

Republic vs. Meralco GR 141314, 15 November 2002

FACTS: On December 23, 1993, MERALCO filed with the ERB an application for the revision of its rate schedules. The application reflected an average increase of 21 centavos per kilowatthour (kwh) in its distribution charge. The application also included a prayer for provisional approval of the increase pursuant to Section 16(c) of the Public Service Act and Section 8 of Executive Order No. 172. On January 28, 1994, the ERB issued an Order granting a provisional increase of P0.184 per kwh, subject to the condition that In the event, however, that the Board finds, after hearing and submission by the Commission on Audit of an audit report on the books and records of the applicant that the latter is entitled to a lesser increase in rates, all excess amounts collected from the applicants customers as a result of this Order shall either be refunded to them or correspondingly credited in their favor for application to electric bills covering future consumptions. In the same Order, the ERB requested the Commission on Audit (COA) to conduct an audit and examination of the books and other records of account of the applicant for such period of time, which in no case shall be less than 12 consecutive months, as it may deem appropriate and to submit a copy thereof to the ERB immediately upon completion. On February 11, 1997, the COA submitted its Audit Report SAO No. 95-07 (the COA Report) which contained, among others, the recommendation not to include income taxes paid by MERALCO as part of its operating expenses for purposes of rate determination and the use of the net average investment method for the computation of the proportionate value of the properties used by MERALCO during the test year for the determination of the rate base. Subsequently, the ERB rendered its decision adopting the above recommendations and authorized MERALCO to implement a rate adjustment in the average amount of P0.017 per kwh, effective with respect to MERALCOs billing cycles beginning February 1994. The ERB further ordered that the provisional relief in the amount of P0.184 per kilowatthour granted under the Boards Order dated January 28, 1994 is hereby superseded and modified and the excess average amount of P0.167 per kilowatthour starting with [MERALCOs] billing cycles beginning February 1994 until its billing cycles beginning February 1998, be refunded to [MERALCOs] customers or correspondingly credited in their favor for future consumption. ISSUE: Whether or not the Court of Appeal erred in ruling that income tax paid by MERALCO should be treated as part of its operating expenses and thus considered in determining the amount of increase in rates imposed by MERALCO

HELD: Yes. In regulating rates charged by public utilities, the State protects the public against arbitrary and excessive rates while maintaining the efficiency and quality of services rendered. However, the power to regulate rates does not give the State the right to prescribe rates which are so low as to deprive the public utility of a reasonable return on investment. Thus, the rates prescribed by the State must be one that yields a fair return on the public utility upon the value of the property performing the service and one that is reasonable to the public for the services rendered. The fixing of just and reasonable rates involves a balancing of the investor and the consumer interests. The ERB was created under Executive Order No. 172 to regulate, among others, the distribution of energy resources and to fix rates to be charged by public utilities involved in the distribution of electricity. In the fixing of rates, the only standard which the legislature is required to prescribe for the guidance of the administrative authority is that the rate be reasonable and just. It has been held that even in the absence of an express requirement as to reasonableness, this standard may be implied. What is a just and reasonable rate is a question of fact calling for the exercise of discretion, good sense, and a fair, enlightened and independent judgment. The requirement of reasonableness comprehends such rates which must not be so low as to be confiscatory, or too high as to be oppressive. In determining whether a rate is confiscatory, it is essential also to consider the given situation, requirements and opportunities of the utility. In the cases at bar, findings and conclusions of the ERB on the rate that can be charged by MERALCO to the public should be respected. The function of the court, in exercising its power of judicial review, is to determine whether under the facts and circumstances, the final order entered by the administrative agency is unlawful or unreasonable. Thus, to the extent that the administrative agency has not been arbitrary or capricious in the exercise of its power, the time-honored principle is that courts should not interfere. The principle of separation of powers dictates that courts should hesitate to review the acts of administrative officers except in clear cases of grave abuse of discretion

Smart Communications vs. NTC GR 151908, 12 August 2003

FACTS: Pursuant to its rule-making and regulatory powers, the National Telecommunications Commission (NTC) issued on June 16, 2000 Memorandum Circular No. 13-6-2000, promulgating rules and regulations on the billing of telecommunications services. The Memorandum Circular provided that it shall take effect 15 days after its publication in a newspaper of general circulation and three certified true copies thereof furnished the UP Law Center. It was published in the newspaper, The Philippine Star, on June 22, 2000. Meanwhile, the provisions of the Memorandum Circular pertaining to the sale and use of prepaid cards and the unit of billing for cellular mobile telephone service took effect 90 days from the effectivity of the Memorandum Circular. On August 30, 2000, the NTC issued a Memorandum to all cellular mobile telephone service (CMTS) operators which contained measures to minimize if not totally eliminate the incidence of stealing of cellular phone units. On October 20, 2000, petitioners Isla Communications Co., Inc. and Pilipino Telephone Corporation filed against the NTC an action for declaration of nullity of NTC Memorandum Circular No. 13-62000 (the Billing Circular) and the NTC Memorandum dated October 6, 2000, with prayer for the issuance of a writ of preliminary injunction and temporary restraining order. The trial court issued an order granting the writ of preliminary injuction. Accordingly, the defendants are hereby enjoined from implementing NTC Memorandum Circular 13-6-2000 and the NTC Memorandum, dated October 6, 2000, pending the issuance and finality of the decision in this case. ISSUES: (1) Whether NTC and not the regular courts has jurisdiction over the case (2) Whether private respondent failed to exhaust available administrative remedy HELD: As to the first issue, it is the regular court and not the NTC which has jurisdiction over the case. Contrary to the finding of the Court of Appeals, the issues raised in the complaint do not entail highly technical matters. Rather, what is required of the judge who will resolve this issue is a basic familiarity with the workings of the cellular telephone service, including prepaid SIM and call cards and this is judicially known to be within the knowledge of a good percentage of our population and expertise in fundamental principles of civil law and the Constitution.

As to the second issue, Administrative agencies possess quasi-legislative or rule-making powers and quasi-judicial or administrative adjudicatory powers. Quasi-legislative or rule-making power is the power to make rules and regulations which results in delegated legislation that is within the confines of the granting statute and the doctrine of non-delegability and separability of powers. In questioning the validity or constitutionality of a rule or regulation issued by an administrative agency, a party need not exhaust administrative remedies before going to court. This principle applies only where the act of the administrative agency concerned was performed pursuant to its quasi-judicial function, and not when the assailed act pertained to its rule-making or quasi-legislative power. In Association of Philippine Coconut Dessicators v. Philippine Coconut Authority it was held: The rule of requiring exhaustion of administrative remedies before a party may seek judicial review, so strenuously urged by the Solicitor General on behalf of respondent, has obviously no application here. The resolution in question was issued by the PCA in the exercise of its rulemaking or legislative power. However, only judicial review of decisions of administrative agencies made in the exercise of their quasi-judicial function is subject to the exhaustion doctrine.

Spouses Centeno vs. Municipality of Isabela, et.al. CA-G.R. CV No. 85254, 22 November 2010 FACTS: Before Us is an appeal under Rule 41 of the 1997 Rules of CivilProcedure seeking to nullify the order dated 9 June 2005 of Branch 20 of the Regional Trial Court (RTC) of Cauayan City, Isabela in Civil CaseNo. Br. 201313 for Mandatory Injunction With Prayer For Issuance of Preliminary Injunction and Damages filed by plaintiffs-appellants,Spouses Rodolfo Centeno and Nena (Nelia) Centenoagainst defendants Municipality of Alicia, Isabela, GlobeTelecom, Inc., (hereinafter Globe) represented by Christopher Q.Handog and Magna Restu Philippines Inc., represented by FranciscoDuran. The plaintiffs objected the approval of Globes application to construct a Tower Antenna in their place, claiming that they were deprived of their right to due process. On June 9, 2005, the appellate court rendered a decision stating that the plaintiffs could have also presented their grievances to the Sangguniang Panlalawigan when in reviewed Resolution No. 2003-119, with the view of having it disapproved because it is hazardous to the health of the plaintiff and other residents similarly situated, They opted to come to Court immediately invoking judicial intervention inspite of the existence administrative remedies available to them. Thus, the complaint was dismissed. ISSUES: 1. Whether or not the CA has a jurisdiction over the case at bar; 2. Whether the complaint is pre-mature for failure to exhaust administrative remedies and the complaint has no cause of action; HELD: The doctrine of exhaustion of administrative remedies calls for resort first to the appropriate administrative authorities in the resolution of a controversy falling under their jurisdiction before the same may be elevated to the courts of justice for review, and nonobservance thereof is a ground for the dismissal of the complaint. Thus, if a remedy within the administrative machinery can still be resorted by giving the administrative officer concerned every opportunity to decide on a matter that comes within his jurisdiction then such remedy should be exhausted first before courts judicial power can be sought. Thus, availment of administrative remedy entails lesser expenses and provides for a speedier disposition of controversies. The requirement of prior exhaustion of administrative of administrative remedies is not absolute, there being instances when it may be dispensed with and judicial action may be validly resorted to immediately, among which are: 1

when the question raised is purely legal; 2 when the administrative body is in estoppel; 3 when the act complained of is patently illegal; 4 when there is urgent need for judicial intervention; 5 when the claim involved is small; 6 when irreparable damage will be suffered; 7 where there is no other plain, speedy and adequate remedy; 8 when strong public interest is involved; 9 in quo warranto proceedings; 10 when there is a violation of due process; 11 when respondent is a department secretary whose acts, as an alter ego of the president, bears the implied and assumed approval of the latter; 12 when to require exhaustion of administrative remedies would be reasonable; 13 when the rule of qualified political agency applies; 14 when the issue of non-exhaustion of administrative remedies has been rendered moot; and from among these exceptions, appellants claim principally the denial of due process arising from alleged want of notice to them of the proceedings before the Sangguniang Bayan resulting to violation of their constitutional right for safe, healthy and convenient social environment. Because the plaintiffs opted to come to court immediately invoking judicial intervention inspite of the existence of administrative remedies available to them, wherefore, in view of all the foregoing, the instant appeal is Denied for lack of merit. The decision of the RTC in Cauayan City is hereby affirmed and upheld.

Evangeline Aala vs. Globe Telecom CA-G.R. CV No. 78049 FACTS: Before this Court is an appeal assailing the Decision1 dated 11 February 2003 which dismissed the Petition, rendered by the Regional Trial Court, Second Judicial Region, Branch XXVII, Bayombong, Nueva Vizcaya in Civil Case No. 6482 for Injunction with prayer for the issuance of a writ of preliminary injunction and/or temporary restraining order plus damages. Petitioners-appellants Evangeline Aala, et al. are the principal, teachers, and students of the Solano National High School, who filed a petition before the RTC of Bayombong, Nueva Vizcaya, for the issuance of a writ of preliminary injunction and/or temporary restraining order plus damages, against Globe Telecoms, Inc. which was constructing a VTS on a 400 sq. m. lot at that time. Petitioners protested against the construction of Globes cell site antenna around the vicinity due to security, safety concerns, and health hazards that may cause them such as the exposure to radiation. The Executive Judge issued a 72-hour TRO and was extended into 20-day period. Globe filed an opposition with Motion to Dismiss. Various medical experts, environmentalists, and law enforcers became witnesses who tried to prove preponderance of their evidence for or against the construction of the cell site that later petitions filed an Ex-Parte Manifestation and Motion. But Globe opted to adopt the testimony of the amicus curiae Director Agnette Peralta of the bureau of Health Devices and technology under the department of Health. ISSUES: 1. Whether or not Globe should secure an Environmental Compliance Certificate (ECC) before putting up its cell site. 2. Whether or not a writ on injunction should be issued to restrain the defendant from putting up and operating its cell site; and HELD: The appellants contend the ruling of the trial court that the perceived health risk of the cell site is unfounded. They deem that in light of the findings of the World Health organization (WHO) that there are gaps in knowledge that have been identified for further research to make better assess health risks. But the RTC which the CA also affirmed ruled in favor of the appellee Globe by relying heavily on the present stand of the Bureau of Health Devices and Technology

that the radiation emitted by cell site antennas is not hazardous to human health if the minimum safe distance is observed. The claim of the Province of Nueva Vizcaya is to be considered as environmentally critical, it being a part of the watershed that supports the hydro-electric dam in Ramon, Isabela, is untenable as there is no showing that said area was declared by law as a watershed reserve nor was it declared by the President as an environmentally critical area. Hence, not being an environmentally critical area, the issuance of an ECC is not required. Neither is the installation of the cell site in Barangay Quirino, Solano, Nueva Vizcaya an environmentally critical project as it is not one of those covered or listed under Proclamation No. 2146. Memorandum Circular No. 4, Series of 2002 issued by the EMB-DENR listed the Based Transceiver Station as one of the telecommunications projects which are not covered by the EIS System, and as such, an ECC is not required prior to project implementation for the abovementioned project. Injunction is a judicial writ, process of proceeding whereby a party is ordered to do or refrain from doing a certain act. It may be the main action or merely a provisional remedy for and as an incident in the main action. The main action for injunctions is distinct from the provisional or ancillary remedy of preliminary injunction which cannot exist except only as part or an incident of an independent action or proceeding. As a matter of course, in an action for injunction, the auxiliary remedy of preliminary injunction, whether prohibitory or mandatory, may issue.