GMRC vs Bell Telecom

G.R. No. 126496, April 30, 1997

First Division, Hermosisima, Jr., (J)
Facts
October 19, 1993, Bell Telecommunication Philippines, Inc. (BellTel) filed with
the NTC an Application for a Certificate of Public Convenience and Necessity with
further request for the issuance of Provisional Authority despite not having obtained
a grant of a legislative franchise to engage in the business of telecommunications
service.
Due to being an unfranchised applicant, it was excluded in the
deliberations for service area assignments for local exchange carrier service. Only
a few were beneficiaries of formal awards of service area assignments GMCR, Inc.,
included.
March 25, 1994, R.A. No. 7692 granted BellTel a congressional franchise and
gave BellTel the authority to carry on the telecommunication services business and
to establish, operate, manage, lease, maintain and purchase telecommunications
systems.
July 12, 1994, BellTel filed with the NTC a second Application praying for the
issuance of a Certificate of Public Convenience and Necessity for the installation of
2,600,000 telephone lines in ten (10) years using the most modern and latest
state-of-the-art facilities and equipment and to provide a 100% digital local
exchange telephone network.
BellTel moved to withdraw its first application without prejudice. The second
application was opposed by several telecommunication companies, among them
was GMCR, Inc.
December 21, 1994, BellTels application was referred to the Common
Carriers Authorization Department (CCAD) for study and recommendation and
found BellTel's proposal is technically feasible and that it has the financial capacity
to support the project for at least an period of initial two (2) years.
Due to the favorable recommendations, a working draft was prepared by the
Legal Department and was initialed by Deputy Commissioners Fidelo Q. Dumlao and
Consuelo Perez but was not signed by Commissioner Simeon Kintanar.
Because of the inaction of the NTC in the matter of the petition praying for
the issuance of a provisional authority, BellTel an Urgent Ex-Parte Motion to Resolve
Application and for the Issuance of a Provisional Authority. Explicitly referring to the
findings of the CCAD and recommendations of Deputy Commissioners Dumlao and
Perez that were all favorable to BellTel. Still be of no action taken by the NTC BellTel
filed a Second Urgent Ex-Parte Motion reiterating its earlier prayer.

Since no hearing was conducted, BellTel filed a Motion to Promulgate praying

for the promulgation of the working draft of the order granting a provisional
authority to private respondent BellTel, on the ground that the working draft had
already been signed or initialed by Deputy Commissioners Dumlao and Perez which
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 two favorable votes out of a maximum three votes by the members of the
commission, are enough to validly promulgate an NTC decision.
July 4, 1995, the NTC denied the motion solely signed by Commissioner
Simeon Kintanar.
July 17, 1995, BellTel filed a Petition for Certiorari, Mandamus and Prohibition
against the NTC which was granted by the Court of Appeals when the Supreme
Court referred the case to them.

Issue
WHETHER OR NOT THE NTC IS A COLLEGIAL BODY REQUIRING A MAJORITY VOTE
IN ORDER TO VALIDLY DECIDE A CASE?

Ruling
The NTC (organized under E. O. No. 146) 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

G.R. No. 88404, October 18, 1990

En Banc, Melencio-Herrera, (J)
Facts
On 22 June 1958, Rep. Act No. 2090, was enacted granting ETCI (formerly
Felix Alberto and Company, Incorporated) to Establish Radio Stations for Domestic
and Transoceanic Telecommunications. On 13 May 1987, it filed an application with
NTC for the issuance of a Certificate of Public Convenience and Necessity (CPCN) to
operate 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 Phase A of its proposal within Metro Manila.
PLDT opposed and filed a Motion to Dismiss but NTC overruled PLDT's
Opposition and declared that Rep. Act No. 2090 (1958) should be liberally
construed as to include the operation of a cellular mobile telephone service in its
franchise and granted ETCI provisional authority to install, operate and maintain a
cellular mobile telephone system initially in Metro Manila only, subject to the terms
and conditions set forth in its Order and shall jointly submit interconnection
agreement with PLDT.
Subsequently, PLDT filed a Motion to Set Aside the Order granting provisional
authority, and alleged that the interconnection ordered was in violation of due
process and that the grant of provisional authority was jurisdictionally and
procedurally infirm. However, on 8 May 1989, NTC denied reconsideration.
PLDT questioned the NTC Orders of 12 December 1988 and 8 May 1989 by
way of Certiorari and Prohibition under Rule 65.

Issues
1. WHETHER OR NOT THE PROVISIONAL AUTHORITY PROPERLY GRANTED
2. WHETHER OR NOT THE OPERATION OF CELLULAR MOBILE TELEPHONE
SYSTEM WAS INCLUDED IN THE FRANCISE GRANTED TO ETCI?
3. WHETHER OR NOT CAN PLDT DECLINE THE INTERCONNECTION WITH ETCI?

Ruling
The provisional authority was issued after due hearing, reception of evidence
and evaluation thereof, with the hearings attended by various oppositors, including
PLDT. It was granted only after a prima facie showing that ETCI hag the necessary
legal, financial and technical capabilities and that public interest, convenience and
necessity so demanded.

PLDTs argument that a provisional authority is nothing short of a Certificate

of Public Convenience and Necessity (CPCN) and that it is merely a distinction
without a difference is without basis. Basic differences do exist, but need not be
elaborated on. What should be borne in mind is that provisional authority would be
meaningless if the grantee were not allowed to operate. Moreover, the Order of 12
December 1988 itself that its scope is limited only to the first phase, out of four, of
the proposed nationwide telephone system. The installation and operation of an
alpha numeric paging system was not authorized. The provisional authority is not
exclusive. Its lifetime is limited and may be revoked by the NTC at any time in
accordance with law.
Rep. Act No. 2090 grants ETCI (formerly FACI) "the right and privilege of
constructing, installing, establishing and operating in the entire Philippines radio
stations for reception and transmission of messages on radio stations in the foreign
and domestic public fixed point-to-point and public base, aeronautical and land
mobile stations, . . . with the corresponding relay stations for the reception and
transmission of wireless messages on radiotelegraphy and/or radiotelephony . . . . "
In its Order of 12 November 1987, the NTC construed the technical term
"radiotelephony" liberally as to include the operation of a cellular mobile telephone
system.
The Commission takes into consideration the different definitions of the term
"radiotelephony" and concluded that the operation of a cellular mobile telephone
service which carries messages, either voice or record, with the aid of radiowaves
or a part of its route carried over radio communication channels, is one included
among the services granted in the franchise for which a certificate of public
convenience and necessity was issued
Rep. Act No. 6849, or the Municipal Telephone Act of 1989, approved on 8
February 1990, mandates interconnection providing as it does that "all domestic
telecommunications carriers or utilities . . . shall be interconnected to the public
switch telephone network." Such regulation of the use and ownership of
telecommunications systems is in the exercise of the plenary police power of the
State for the promotion of the general welfare.
The interconnection which has been required of PLDT is a form of
"intervention" with property rights dictated by "the objective of government to
promote the rapid expansion of telecommunications services in all areas of the
Philippines, . . . to maximize the use of telecommunications facilities available, . . .
in recognition of the vital role of communications in nation building . . . and to
ensure that all users of the public telecommunications service have access to all
other users of the service wherever they may be within the Philippines at an
acceptable standard of service and at reasonable cost" (DOTC Circular No. 90-248).
Undoubtedly, the encompassing objective is the common good. The NTC, as the
regulatory agency of the State, exercised its delegated authority to regulate the use
of telecommunications networks when it decreed interconnection.

5
The NTC order to interconnect allows the parties themselves to discuss and
agree upon the specific terms and conditions of the interconnection agreement
instead of the NTC itself laying down the standards of interconnection which it can
very well impose. Thus it is that PLDT cannot justifiably claim denial of due process.
It has been heard. It will continue to be heard in the main proceedings. It will
surely be heard in the negotiations concerning the interconnection agreement.
As disclosed during the hearing, the interconnection sought by ETCI is by no
means a "parasitic dependence" on PLDT. The ETCI system can operate on its own
even without interconnection, but it will be limited to its own subscribers. 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 laid down.
Cellular phones can access PLDT units and vice versa in as wide an area as
attainable. With the broader reach, public interest and convenience will be better
served.

Republic (Rep. by ERB)

vs. Manila Electric Company (MERALCO)
G.R. No. 141314, November 15, 2002
Third Division, Puno, (J)

Facts
On December 23, 1993, MERALCO filed with the Energy Regulatory Board an
application for the revision of its rate schedules. The application had an average
increase of 21 centavos per kilowatt hour (kwh) in its distribution charge.
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 that the
Board finds a lesser increase in rates, all excess amounts collected from the
applicants customers shall be refunded or correspondingly credited in their favor
for application to electric bills covering future consumptions. The ERB likewise
requested the Commission on Audit (COA) to conduct an audit and examination of
the books and related record for a period of time and to submit a copy to the ERB
immediately upon completion. Upon the submission of the COA audit report, the
ERB rendered its decision adopting the above recommendations and authorized
MERALCO to implement a rate adjustment in the average amount of P0.017 and the
excess amount of P0.167 per kwh shall be refunded starting with billing cycles from
February 1994 to February 1998. It also held that income tax should not form part
of the operating expense and ordered MERALCO for the use of the Net Average
Investment Method in its computation of the rate base.

Issues
1. WHETHER OR NOT THE RATES OF MERALCO ARE JUST AND REASONABLE?
2. WHETHER OR NOT INCOME TAX SHOULD FORM PART OF THE OPERATING
EXPENSES?
3. WHETHER OR NOT THE NET AVERAGE INVESTMENT METHOD SHALL BE USED IN
THE COMPUTATION OF THE RATE BASE?

Ruling
1. The regulation of rates to be charged by public utilities is founded upon the
police powers of the State and statutes prescribing rules for the control and
regulation of public utilities are a valid exercise thereof. When private property is
used for a public purpose and is affected with public interest, it ceases to be juris
privati only and becomes subject to regulation. The regulation is to promote the
common good.
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

7
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.
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.
What is a just and reasonable rate calls for the exercise of discretion, good
sense, and a fair, enlightened and independent judgment. The findings and
conclusions of the ERB on the rate that can be charged by MERALCO to the public
should be respected. The time-honored principle that courts should not interfere
where administrative agency has not been arbitrary or capricious in the exercise of
its power.
2. Income tax should be borne by the taxpayers for the benefits/protection they
received from the state and should not be passed on to the consumers.
The
obligation of paying income taxes should be for MERALCOs account alone and
should not be passed on to consumers by forming it as part of the operating
expenses.
3. The ERB did not abuse its discretion when it applied the net average investment
method. The reasonableness of net average investment method is borne by the
records of the case. By using the net average investment method, the ERB and the
COA considered for determination of the rate base the value of properties and
equipment used by MERALCO in proportion to the period that the same were
actually used during the period in question. This treatment is consistent with the
settled rule in rate regulation that the determination of the rate base of a public
utility entitled to a return must be based on properties and equipment actually
being used or are useful to the operations of the public utility and MERALCO has not
adequately shown that the rates prescribed by the ERB are unjust and
unreasonable

SMART vs NTC
G.R. No. 151908, August 12, 2003
First Division, Ynares-Santiago, (J)
Facts

8
On June 16, 2000 NTC issued Memorandum Circular No. 13-6-2000
promulgating rules and regulations on the billing of telecommunications services
including provisions concerning the use and sale of prepaid call cards and unit of
billing for the cellular mobile telephone service (CMTS). On August 30, 2000, a
Memorandum was issued by NTC to all CMTS operators to minimize if not totally
eliminate the incidence of stealing of cellular phone units. Another Memorandum
followed on October 6, 2000 addressed to all public telecommunications entities
reminding them of the validity of all prepaid and SIM cards sold and used on 07
October 2000 shall be valid for at least two (2) years from date of first use.
On October 20, 2000 IslaCom and PILTEL filed against NTC Commissioner
Joseph A. Santiago, Deputy Commissioner Aurelio M. Umali and Deputy
Commissioner Nestor C. Dacanay, an action for declaration of nullity of NTC MC No.
13-6-2000 and the NTC Memo dated October 6, 2000, with prayer for the issuance
of a writ of preliminary injunction and temporary restraining order. Islacom and
Piltel alleged that the NTC has no jurisdiction to regulate the sale of consumer
goods and prayed the Billing Circular be declared null and void ab initio.
Globe Telecom, Inc. and Smart Communications, Inc. filed a joint Motion for
Leave to Intervene and to Admit Complaint-in-Intervention which was granted by
the trial court and issued a temporary restraining order enjoining the NTC from
implementing Memorandum Circular No. 13-6-2000 and the Memorandum dated
October 6, 2000. NTC moved for reconsideration, but was denied. NTC thereafter
filed a special civil action for certiorari and probation before the Court of Appeals
and such petition was granted and dismissed the companies complaint without
prejudice to the referral of their grievances with the NTC.

Issues
1. WHETHER OR NOT NTC HAS JURISDICION OVER THE CASE?
2. WHETHER OR NOT THE PARTIES SHOULD HAVE EXHAUSTD ADMINISTRATIVE
REMEDIES BEFORE FILING A CASE IN COURT?

Ruling
1 - The issues raised in the complaint do not entail highly technical matters but
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
(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.
Therefore, the RTC has jurisdiction to hear and decide the case.
2 - 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

9
when the assailed act pertained to its rule-making or quasi-legislative power. Even
assuming arguendo that the principle of exhaustion of administrative remedies
apply in this case, the records reveal that petitioners sufficiently complied with this
requirement.

Centeno vs Mun. of Alicia Isabela

CA-G.R. CV No. 85254, November 22, 2010
Fifth Division, Villon (J)
Facts
Sps. Centeno are residents of Calaocan, Alicia, Isabela filed a complaint with
the Regional Trial Court (RTC) against Mobile Communication Group, Globe
Telecommunications, Incorporated, now Asiacom, and the Municipality of Alicia,
Isabela, for the Construction and installation of a Globe Tower Antenna at Calaocan,
Alicia, Isabela on the ground that it is hazardous to their health and the health of
other residents similarly situated. There was a hearing concerning the application

10
of Globe where Sps. Centeno were notified but hearing was postponed. Subsequent
hearing was held but the Spouses were not notified.
October 1, 2003, the Sanguniang Bayan, passed Resolution No. 2003-119,
approving Globe's Application to construct a Tower Antenna at Calaocan, Alicia,
Isabela and the construction of the tower antenna was made.
The Spouse claimed that they were deprived of their right to due process and
prayed for the declaration of the Resolution No. 2003-119 as null and void.

Issues
1. WHETHER OR NOT THE SPS. CENTENO WAS DEPRIVED OF THEIR RIGHT TO
DUE PROCESS WITH THE CONSTRUCTION OF THE TOWER ANTENNA OF GLOBE
TELECOM?
2. WHETHER OR NOT THE HEALTH, LIVES AND PROPERTIES OF THE RESIDENTS
OF CALAOCAN, ALICIA, ISABELA WERE PUT TO REAL AND IMMINENT DANGER BY
THE CONSTRUCTION AND OPERATION OF GLOBE TOWER ANTENNA?

Ruling
The Sps. Centeno claim that they were principally denied 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 a safe,
healthy and convenient social environment. However, evidence on record did not
support their allegations. They were given an opportunity and right to be heard
concerning their objection to and grievances on the construction of the antenna
tower through their petition which was submitted before Sangguniang Bayan. It
bears stressing that due process does not necessarily mean or require a hearing,
but simply an opportunity or right to be heard. One may be heard, not solely by
verbal presentation but also, and perhaps many times more creditably and
practicable than oral argument, through pleadings. In administrative proceedings
moreover, technical rules of procedure and evidence are not strictly applied as
administrative process cannot be fully equated with due process in its strict judicial
sense. Indeed, deprivation of due process cannot be successfully invoked where a
party was given the chance to be heard as in the instant case. The essence of due
process is simply an opportunity to be heard, or as applied to administrative
proceedings, an opportunity to explain one's side or an opportunity to seek a
reconsideration of the action or ruling complained of. A formal or trial type hearing
is not at all times and in all instances essential. The requirements are satisfied
when they were afforded fair and reasonable opportunity to explain their side of the
controversy at hand. What is frowned upon is the absolute lack of notice or hearing
which do not appear to be obtaining in the case at bar.

11

Aala, Maranan et al v. Globe Telecoms, Inc.

CA-G.R. CV No. 78049
Facts
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.

12

period.

The Executive Judge issued a 72-hour TRO and was extended into 20-day
However, 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 an Environmental Impact Statement (EIS) is required to be
submitted by the defendant Globe before operating its cell site;
2. Whether or not the proposed cell site will prejudice the health, safety and
security
concerns
of
the
petitioners
and
other
stakeholders;
3. Whether or not a writ on injunction should be issued to restrain the defendant
from
putting
up
and
operating
its
cell
site;
and
4. Whether or not Globe should secure an Environmental Compliance Certificate
(ECC)
before
putting
up
its
cell
site.

Ruling
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.
On Environmental Concerns
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 hydroelectric 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

13
project

implementation

for

the

abovementioned

project.

On Preliminary Injunction
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.
The CA sustained the trial courts dismissal of the main action for Injunction.
Appellants were not entitled to a writ of preliminary injunction, much more to a
judgment embodying a final injunction.