Case Digests for Telecoms Law

Atty. Alejandro Gozon

Professor

Submitted by:

Jayeline D. Si
2nd Semester SY 2015-2016
Evangeline Aala vs. Globe Telecoms

FACTS:

Petitioners Evangeline Aala alleged among other things that they are the principal,
students and teachers of Solano National High school (SNHS); that they are all residents
of Barangay Quirino, Solano, Nueva Vizcaya, except for the teachers and students of the
SNHS who are considered transient to the said barangay where the Base Transceiver
Station (BTS) or cell cite antenna tower of Globe is constructed; on or about 20 of May,
2002, Globe immediately, surreptitiously and suspiciously started to construct the BTS on
400 sq. lot, which is not in accordance with existing laws, rules, and regulations; it appears
that before that before construction of BTS, it is required that several permits, clearances,
certifications and consent be first accomplished and granted by different government
agencies concerned. Globe started the construction of its BTS which is still on-going
without the required permits, clearances, certification and consent; prior to construction,
petitioners seasonably registered their protest and opposition to the construction of cell
site antenna, on the grounds of security and safety concerns and it being a health hazard.
Petitioners then prayed for the issuance of a Writ of Preliminary Injunction to enjoin
petitioners from further constructing the BTS. Globe then filed an opposition to the
plaintiffs prayer of a Writ of Preliminary Injunction.

The trial court ruled in favor of Globe Telecoms. It found that the BTS constructed is not
within the scope of Environmental Impact Statement (EIS) System; hence, it is not
required for Globe to secure an Environmental Compliance certificate (ECC). Since the
BTS emits radio frequency radiation is classified as non-ionizing radiation, the World
Health Organization made it clear that it is inconclusive relative to cancer. The rendered
perceive health risks by the petitioner is unfounded, as there is no showing that defendant
Globe failed to observe the minimum safe distance prescribed by the Health Physicist
who made an actual inspection of the proposed cell site. An appeal was made by the
petitioners.

ISSUE:

Whether the appellants are entitled to the issuance of a Writ of Preliminary Injunction to
stop the construction of defendants BTS?

HELD:

No, the main action for injunction is distinct from the provisional or ancillary remedy of
preliminary injunction which cannot exist except only as part or in incident of an
independent action or proceeding. As a matter of course in an injunction, the auxiliary
remedy of preliminary injunction whether prohibitory or mandatory, may issue. Under the
law, the main action for injunction seeks a judgment embodying a final injunction which
is distinct from, and should be confused with, the provisional the provisional remedy of
preliminary injunction, the sole object of which is to preserve the status quo until the merits
can be heard. From the forgoing, we sustain the trial courts dismissal of the main action
for injunction. Appellants were not entitled to writ of preliminary injunction, much more to
a judgment embodying a final injunction. Appellants failed to prove that they are entitled
to have the construction and installation of the appellees BTS in Barangay Quirino
complained of permanently or perpetually enjoined.
PLDT vs. NTC and Express Telecommunications (ETCI)

FACTS:

ETCI filed an application with public respondent NTC for the issuance of a Certificate of
Public Convenience and Necessity (CPCN) to construct, install, establish, operate and
maintain 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 filed an Opposition with a Motion to Dismiss, based primarily on the following
grounds: (1) ETCI is not capacitated or qualified under its legislative franchise to operate
a system wide telephone or network of telephone service such as the one proposed in its
application; (2) ETCI lacks the facilities needed and indispensable to the successful
operation of the proposed cellular mobile telephone system; (3) PLDT has itself a pending
application with NTC, Case No. 86-86, to install and operate a Cellular Mobile Telephone
System for domestic and international service not only in Manila but also in the provinces
and that under the "prior operator or protection of investment doctrine, PLDT has the
priority or preference in the operation of such service; and (4) the provisional authority, if
granted, will result in needless, uneconomical and harmful duplication, among others.

After evaluating the reconsideration sought by PLDT, the NTC, in October 1988,
maintained its ruling that liberally construed, applicants franchise carries with it the
privilege to operate and maintain a cellular mobile telephone service.

On 12 December 1988, NTC issued the first challenged Order. Opining that public
interest, convenience and necessity further demand a second cellular mobile telephone
service provider and finds PRIMA FACIE evidence showing applicants legal, financial
and technical capabilities to provide a cellular mobile service using the AMPS system,
NTC granted ETCI provisional authority to install, operate and maintain a cellular mobile
telephone system initially in Metro Manila, Phase A only, subject to the terms and
conditions set forth in the same Order.

ISSUE:

Whether NTC acted without jurisdiction or with grave abuse of discretion amounting to
lack or excess of jurisdiction in granting provisional authority to ETCI.

HELD:

No. There was no grave abuse of discretion, tantamount to lack of or excess of

jurisdiction, on the part of the National Telecommunications Commission.
The decisive considerations are public need, public interest, and the common good.
Those were the overriding factors which motivated NTC in granting provisional authority
to ETCI. Article II, Section 24 of the 1987 Constitution, recognizes the vital role of
communication and information in nation building. It is likewise a State policy to provide
the environment for the emergence of communications structures suitable to the balanced
flow of information into, out of, and across the country.

Despite the fact that there is a virtual monopoly of the telephone system in the country at
present. Service is sadly inadequate. Customer demands are hardly met, whether fixed
or mobile. There is a unanimous cry to hasten the development of a modern, efficient,
satisfactory and continuous telecommunications service not only in Metro Manila but
throughout the archipelago.

Free competition in the industry may also provide the answer to a much-desired
improvement in the quality and delivery of this type of public utility, to improved
technology, fast and handy mobile service, and reduced user dissatisfaction. After all,
neither PLDT nor any other public utility has a constitutional right to a monopoly position
in view of the Constitutional proscription that no franchise certificate or authorization shall
be exclusive in character or shall last longer than fifty (50) years. Additionally, the State
is empowered to decide whether public interest demands that monopolies be regulated
or prohibited (1987 Constitution. Article XII, Section 19).
GMCR vs. Bell Telecommunication Philippines (BellTel)

Facts:

On 19 October 1993, BellTel filed with the NTC an application for a certificate of public
convenience with a further request for the issuance of a provisional authority (NTC Case
93-481). On 25 March 1994, RA 7692 was enacted granting BellTel a legislative franchise
to operate business of providing telecommunication services. In 12 July 1994, BellTel a
legislative franchise to operate business of providing telecommunication services. On 12
July 1994, BellTel filed a second application for a certificate of public convenience,
proposing to install 2.6 million telephone lines in 10 years and to provide a 100% digital
local exchange network (NTC Case 94-229). It also moved for the withdrawal of the first
application, without prejudice, which was granted by the NTC. BellTels application (2nd)
was opposed by various telecommunication companies. BellTels application was
referred to the Common Carriers Authorization Department (CCAD), which found
BellTels proposal technically feasible and BellTel to be financially capable. The two
deputy commissioners of the NTC signified their approval of the CCAD recommendation.
The working draft was prepared by the legal department, was initialed by the two deputy
commissioners, but was not signed by NTC Commissioner Simeon Kintanar. BellTel filed
a motion to promulgate, after previously filing two urgent ex-parte motion to resolve
application which were not acted upon by the NTC. On 4 July 1995, the NTC denied the
motion in an order signed solely by Commissioner Kintanar. On 17 July 1995, BellTel filed
a petition for certiorari, mandamus and prohibition against NTC before the Supreme
Court. The Court referred the case to the Court of Appeals pursuant to Paragraph 1,
Section 9 of BP 129. The Court of Appeals granted BellTels
position. Hence, the petitions for review by the opposing telecommunication companies
and Commissioner Kintanar.

Issue:

Whether the vote of the Chairman of the Commission is sufficient to legally render an
NTC order,resolution or decision?

Held:

Having been organized under Executive Order 146 as a three-man commission, the NTC
is a collegial body and was a collegial body even during the time it was acting as a one-
man regime. NTC is a collegial body requiring a majority vote out of three members of the
commission in order to validly decide a case or any incident therein. The vote alone of
the chairman of the Commission, 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. NTC
Circulars 1-1-93, 3-1-93 and the Order of Kintanar, declaring the NTC as a single entity
or non-collegial entity, are contrary to law and thus are null and void.
Globe Telecom, Inc. v. National Telecommunications Commission

FACTS:

Private respondent Smart Communications, Inc (Smart) filed with the NTC a Complaint
to effect the interconnection of their SMS or texting services with petitioner Globe
Telecom, Inc. (Globe). Globe pointed out procedural defects in Smarts complaints and
moved to dismiss the case. I also pointed out that another network, Islacom, was allowed
to provide such service without prior NTC approval. The National
Telecommunications Commission (NTC) ruled that both Smart and Globe were
equally blameworthy and issued an Order penalizing both on the ground of providing
SMS under Value Added Services (VAS) without prior approval from the NTC. The Court
of Appeals sustained the NTC Order.

ISSUES:

Whether or not Globe may be required to secure prior NTC approval before providing
SMS or texting services and whether or not SMS is a VAS under Public
telecommunications Act (PTA) of 1995?

HELD:

The NTC may not legally require Globe to secure its approval for Globe to continue
providing SMS. This does not imply though that NTC lacks authority to regulate SMS or
to classify it as VAS. However, the move should be implemented properly,
through unequivocal regulations applicable to all entities that are similarly situated, and
in an even-handed manner. This should not be interpreted, however, as removing
SMS from the ambit of jurisdiction and review by the NTC. The NTC will continue to
exercise, by way of its broad grant, jurisdiction over Globe and Smarts SMS offerings,
including questions of rates and customer complaints. Yet caution must be had. Much
complication could have been avoided had the NTC adopted a proactive position,
promulgating the necessary rules and regulations to cope up with the advent of
the technologies it superintends. With the persistent advent of new offerings in the
telecommunications industry, the NTCs role will become more crucial than at any time
before.

On the second issue.There is no legal basis under the PTA or the memorandum circulars
promulgated by the NTC to denominate SMS as VAS, and any subsequent determination
by the NTC on whether SMS is VAS should be made with proper regard for due process
and in conformity with the PTA. The Court realizes that the PTA is not intended to
constrain the industry within a cumbersome regulatory regime. The policy as pre-ordained
by legislative fiat renders the traditionally regimented business in an elementary free state
to make business decisions, avowing that it is under this atmosphere that the industry
would prosper. It is disappointing at least if the deregulation thrust of the law is skirted
deliberately. But it is ignominious if the spirit is defeated through a crazy quilt of vague,
overlapping rules that are implemented haphazardly.
Digitel Telecommunications vs. City Government of Batangas

FACTS:

On 17 February 1994, Republic Act No. 7678 (RA 7678) granted petitioner a 25-year
franchise to install, operate and maintain telecommunications systems throughout the
Philippines. Sometime in 1997, respondent issued a building permit for the installation of
petitioners telecommunications facilities in Batangas City. After the installation of the
facilities, petitioner applied with the Mayors office of Batangas City for a permit to operate.
Because of a discrepancy in the actual investment costs used in computing the prescribed
fees for the clearances and permits, petitioner was not able to secure a Mayors Permit
for the year 1998. Petitioner was also advised to settle its unpaid realty taxes. However,
petitioner claimed exemption from the payment of realty tax. In 1999, respondent refused
to issue a Mayors Permit to petitioner without payment of its realty taxes.

On 2 July 1999, respondent threatened to close down petitioners operations.

Hence, on 3 July 1999, petitioner instituted a complaint for prohibition and mandamus
with prayer for a temporary restraining order or writ of preliminary injunction. On the same
date, respondent served a Cease and Desist Order on petitioner. On 20 January 2000,
during the pendency of the complaint, petitioner paid its realty taxes of P2,043,265 under
protest. Petitioner resumed its business, rendering the other issues raised in petitioners
complaint moot. Consequently, the only issue left for resolution is whether petitioner is
exempt from the realty tax.

ISSUE:

Whether or not under the first sentence of Section 5 of RA 7678, petitioners real properties
used in its telecommunications business are exempt from the realty tax?
HELD:

The petition has no merit. The first sentence of Section 5 of RA 7678 is the same provision
found in almost all legislative franchises in the telecommunications industry dating back
to 1905. It is also the same provision that appears in the legislative franchises of other
telecommunications companies like Philippine Long Distance Telephone Company,
Smart Information Technologies, Inc.and Globe Telecom. Since 1905, no
telecommunications company has claimed exemption from realty tax based on the phrase
exclusive of this franchise, until petitioner filed the present case on 3 July 1999. The first
sentence of Section 5 clearly states that the legislative franchisee shall be liable to pay
the following taxes: (1) the same taxes on its real estate, buildings, and personal property
exclusive of this franchise as other persons or corporations are now or hereafter may be
required by law to pay; (2) franchise tax as may be prescribed by law of all gross receipts
of the telephone or other telecommunications businesses transacted under this
franchise;1[28] and (3) income taxes payable under Title II of the National Internal
Revenue Code.

The crux of the controversy lies in the interpretation of the phrase exclusive of this
franchise in the first sentence of Section 5. Petitioner interprets the phrase to mean that
its real properties that are used in its telecommunications business shall not be subject
to realty tax. Respondent interprets the same phrase to mean that the term personal
property shall not include petitioners franchise, which is an intangible personal property.

We rule that the phrase exclusive of this franchise simply means that petitioners
franchise shall not be subject to the taxes imposed in the first sentence of Section 5. The
first sentence lists the properties that are subject to taxes, and the list excludes the
franchise. A plain reading shows that the phrase exclusive of this franchise is meant to
exclude the legislative franchise from the properties subject to taxes under the first
sentence. In effect, petitioners franchise, which is a personal property, is not subject to
the taxes imposed on properties under the first sentence of Section 5. In short, petitioners
franchise is excluded from the properties taxable under the first sentence of Section 5 but
the gross receipts from its franchise are expressly taxable under the second sentence of
the same Section.