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TELECOMMUNICATIONSPRACTICEATTY.AQUINO
NATIONALTELECOMMUNICATIONSCOMMISSIONSCASES|1
GMCR,INC.ETAL.V.BELLTELECOMMUNICATIONS 1
GLOBETELECOMS,INC.V.NTC 12
SMARTV.NTC 27
AMBIL,JR.V.COMELEC 34
ASSOCIATIONOFPHILIPPINECOCONUTDESICCATORSV.PCA 41
SPOUSESMIRASOLV.COURTOFAPPEALS 48GMAV.ABS-CBN 57
GMCR,INC.ETAL.V.BELLTELECOMMUNICATIONS
FIRSTDIVISION
[G.R.No.126496.April30,1997]
GMCR, INC.; SMART COMMUNICATIONS, INC.;
INTERNATIONAL COMMUNICATIONS CORP.; ISLA
COMMUNICATIONS CO., INC.,petitioners, vs.BELL
TELECOMMUNICATION PHILIPPINES, INC.; THE
NATIONALTELECOMMUNICATIONSCOMMISSIONand
HON.SIMEONL.KINTANARinhisofficialcapacityas
Commissioner of the National
Telecommunications, respondents.
[G.R.No.126526.April30,1997]
COMMISSIONER SIMEON L. KINTANAR, NATIONAL
TELECOMMUNICATIONS COMMISSION,petitioner,
vs.BELL TELECOMMUNICATION PHILIPPINES,
INC.,respondent.
DECISION
HERMOSISIMA,JR.,J.:
Beforeusareconsolidatedpetitionsseekingthereviewand
reversal of the decision[1]of the respondent Court of
Appeals[2]declaring the National Telecommunications
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Commission (hereafter, NTC) to be a collegial body under
ExecutiveOrderNo.546 [3]andorderingtheNTCtoheretoforesit
and act en banc, i.e., with the concurrence of at least two
commissioners, for a valid dispensation of its quasi-judicial
functions.
Establishedbyevidencearethefollowingfacts:
On October 19, 1993, 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
andtoChargeRatesThereforandwithFurtherRequestforthe
IssuanceofProvisionalAuthority.Thisapplicationwasdocketed
as NTC Case No. 93-481.At the time of the f il ing of this
application, privaterespondentBellTelhad notbeengranted a
legislative franchise to engage in the business of
telecommunicationsservice.Since private respondent BellTel was, at that time, an
unenfranchised applicant, itwas excludedin the deliberations
for service area assignments for local exchange carrier
service[4].Thus, only petitioners GMCR, Inc., Smart
Communications, Inc., Isla Communications Co. , Inc. and
InternationalCommunicationsCorporation,amongothers,were
beneficiaries of formal awards of service area assignments in
AprilandMay,1994.
On March 25, 1994, Republic Act No. 7692 was enacted
granting private respondent BellTel a congressional franchise
which gave privaterespondentBellTelthe right,privilege andauthorityto
carryonthebusinessofprovidingtelecommunicationsservices
inandbetweenprovinces,cities,andmunicipalitiesinthe
Philippinesandforthispurpose,toestablish,operate,manage,
lease,maintainandpurchasetelecommunicationssystems,
includingmobile,cellularandwiredorwireless
telecommunicationssystems,fiberoptics,satellitetransmitand
receivesystems,andothertelecommunicationssystemsand
theirvalue-addedservicessuchas,butnotlimitedto,
transmissionofvoice,data,facsimile,controlsignals,audioand
video,informationservicebureau,andallothertelecommunicationssystemstechnologiesasareatpresent
availableorbemadeavailablethroughtechnicaladvancesor
innovationsinthefuture,orconstruct,acquire,leaseandoperate
ormanagetransmittingandreceivingstationsandswitching
stations,bothforlocalandinternationalservices,lines,cablesor
systems,asis,orareconvenientoressentialtoefficientlycarry
outthepurposesofthisfranchise. [5]
OnJuly12,1994,privaterespondentBellTelfiledwiththe
NTC a second Application[6]praying for the issuance of a
Certificate of Public Convenience and Necessity for theinstallation, 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
CallingOffices(PCOs)andverysmallapertureantennas(VSATs)
under an integrated system.This second application was
docketed as NTC Case No. 94-229.In this second application,
BellTelproposedtoinstall2,600,000telephonelinesinten(10)
yearsusingthemostmodernandlateststate-of-the-artfacilities
and equipment and to provide a 100% digital local exchange
telephonenetwork.
Private respondent BellTel moved towithdraw its earlier
applicationdocketedasNTCCaseNo.93-481.InanOrderdated
July 11,1994,this earlierapplication wasordered withdrawn,
withoutprejudice.
ThesecondapplicationofprivaterespondentBellTelwhich
wasdocketedasNTCCaseNo.94-229wasassignedtoaHearing
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Officer for reception of private respondent BellTels
evidence.Written opposition and other pertinent pleadings
werefiledbypetitionersGMCR,Inc.,SmartCommunications,Inc.,
IslaCommunicationsCo.,Inc.andInternationalCommunications
Corporation as oppositors. Other oppositors to private
respondent BellTels application were Capitol Wireless, Inc.,
Eastern Misamis Oriental Telephone Cooperative, LibertyBroadcastingNetwork,Inc.,MidsayapCommunication,Northern
Telephone, PAPTELCO, Pil ipino Telephone Corporation,
PhilippineGlobalCommunications,Inc.,PhilippineLongDistance
Telephone Company, Philippine Telegraph and Telephone
Corporation,Radio Communicationsofthe Philippines, Inc.and
ExtelcomandTelecommunicationsOffice.
On December 20, 1994, private respondent BellTel
completed the presentation of its evidence-in-chief.In the
courseoftheproceedings,thewitnessesofBellTelwerecross-
examinedby the aforementioned oppositors.OnDecember 21,
1994,BellTelfileditsFormalOfferofEvidencetogetherwithallthe technical, financial and legal documents in support of its
application.Pursuanttoitsrules,theapplicationwasreferredto
the Common Carriers Authorization Department (CCAD) for
studyandrecommendation.
OnFebruary6,1995,theCCAD,throughEngr.MarleRabena,
submitted to Deputy Commissioner Fidelo Q. Dumlao, a
MemorandumdatedFebruary6,1995 [7]manifestinghisfindings
and recommending that based on technical documents
submitted,BellTelsproposalistechnicallyfeasible. [8]
Subsequently,Mr.RaulitoSuarez,thechiefoftheRatesandRegulatoryDivisionofCCAD,conductedafinancialevaluationof
theprojectproposalofprivaterespondentBellTel.OnMarch29,
1995,Mr.SuarezmadethefindingthatBellTelhasthefinancial
capabilitytosupportitsproposedprojectatleastfortheinitial
two(2)years.
Agreeing with the findings and recommendations of the
CCAD,NTCDeputyCommissionersFideloDumlaoandConsuelo
Perez adoptedthe sameand expressly signified their approval
thereto by making the following notation on the aforestated
MemorandumoftheCCADdatedFebruary6,1995:
Withthefindingoffinancialcapabilityandtechnicalfeasibility,theapplicationmeritsdue/favorableconsideration.[9]
Belowthis notation,DeputyCommissionersFidelo Dumlaoand
ConsueloPerezaffixedtheirsignaturesandthedate,4/6/95.
In view ofthesefavorablerecommendationsby theCCAD
and two members of the NTC, the Legal Department thereof
prepared a working draft[10]of the order granting provisional
authoritytoprivaterespondentBellTel.Thesaidworkingdraft
was initialed by Deputy CommissionersFideloQ. Dumlao and
Consuelo Perez but was not signed by Commissioner Simeon
Kintanar.
Whileordinarily,a decision that isconcurredin bytwoof
thethreememberscomposingaquasi-judicialbodyisentitledto
promulgation,petitioners claimthat pursuantto theprevailing
policyandthecorrespondingprocedureandpracticeintheNTC,
theexclusiveauthoritytosign,validateandpromulgateanyand
allorders,resolutionsanddecisionsoftheNTCislodgedinthe
Chairman,inthiscase,CommissionerSimeonKintanar,and,thus,
sinceonlyCommissioner SimeonKintanaris recognizedby the
NTCSecretariatasthesoleauthoritytosignanyandallorders,
resolutions and decisions of the NTC, only his vote counts;
Deputy Commissioners Dumlao and Perez have allegedly no
voting power and both their concurrence which actually
constitutes the majority is inutile without the assent of
CommissionerKintanar.
Anxious over the inaction oftheNTCin the matter of its
petition praying for the issuance of a provisional authority,
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privaterespondent BellTelfiled onMay 5,1995an UrgentEx-
Parte Motion toResolveApplication and forthe Issuance of a
Provisional Authority[11].Reference was explicitlymade to the
findings of the CCAD and recommendations of Deputy
Commissioners Dumlao and Perez that were all favorable to
private respondent BellTel. Mention was also made of the
aforementionedworkingdraftoftheordergrantingaprovisionalauthority to BellTel , which draft was made by the Legal
Department of the NTC and initialed by the said deputy
commissioners.
No action was taken by the NTC on the aforecited
motion.Thus,onMay12,1995,privaterespondentBellTelfiled
aSecondUrgentEx-ParteMotion [12]reiteratingitsearlierprayer.
Petitioners-oppositors f iled an Opposition[13]to the
aforestatedtwomotionsofprivaterespondentBellTel.
In an Order dated May 16, 1995, signed solely by
CommissionerSimeonKintanar,theNTC,insteadofresolvingthetwopendingmotionsofprivaterespondentBellTel,setthesaid
motions for a hearing on May 29, 1995.On May 29, 1995,
however, nohearingwas conducted asthe samewas reset on
June13,1995.
OnJune13,1995,thedayofthehearing,privaterespondent
BellTel filed aMotionto Promulgate(Amending theMotion to
Resolve)[14]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
groundthatthesaidworking drafthad alreadybeensignedor
initialed by Deputy Commissioners Dumlao and Perez who,together,constitutea majorityout ofthe three commissioners
composing theNTC.Tosupport its prayer,private respondent
BellTel asserted that theNTCwas a collegialbody andthatas
such,twofavorablevotesoutofamaximumthreevotesbythe
membersof thecommission,are enoughto validlypromulgate
anNTCdecision.
On June 23, 1995, petitioners-oppositors filed their Joint
Opposition[15]totheaforecitedmotion.
OnJuly4,1995,theNTCdeniedthesaidmotioninanOrder
solelysignedbyCommissionerSimeonKintanar.
OnJuly17,1995,privaterespondentBellTelfiledwiththis
court a Petition for Certiorari, Mandamus and Prohibitionseekingthe nullification ofthe aforestatedOrder dated July 4,
1995denyingtheMotiontoPromulgate.
On July 26, 1995, we issued a Resolution referring said
petition to the respondent Court of Appeals for proper
determinationandresolutionpursuanttoSection9,par.1ofB.P.
Blg.129.
In the interim, the Solicitor General filed with the
respondent appellate court a Manifestation In Lieu of
Comment[16]inwhichtheSolicitorGeneraltookalegalposition
adverseto that oftheNTC.TheSolicitorGeneral,aftera closeexaminationof thelawscreatingtheNTC anditspredecessors
andastudiousanalysisofcertainDepartmentofTransportation
and Communications (DOTC) orders, NTC circulars, and
DepartmentofJustice(DOJ)legalopinionspertinenttotheissue
ofcollegialityoftheNTC,madethefollowingrecommendations:
WHEREFORE,theSolicitorGeneralrespectfullypraysthatthis
HonorableCourt:
(a)declarerespondentNationalTelecommunications
Commissionasacollegialbody;
(b)restrainrespondentCommissionerSimeonKintanarfrom
arrogatinguntohimselfalonethepowersofthesaidagency;
(c)orderNTC,actingasacollegialbody,toresolvepetitioner
BellTelecomsapplicationunderNTC-94-229;
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(d)declareNTCMemorandumCirculars1-1-93and3-1-93as
void;[and]
(e)upholdthelegalityofDOTCDepartmentOrder92-614. [17]
On September 23, 1996, respondent Court of Appeals
promulgatedthehereinassaileddecisionthedispositiveportionofwhichreadsasfollows:
INTHELIGHTOFALLTHEFOREGOING,judgmentishereby
renderedasfollows:
1.Petitioners petition for a writ of Certiorari and
Prohibition is hereby granted.Accordingly, NTC
Memorandum Circular No. 1-1-93,Annex J of the
Petition,MemorandumCircularNo.3-1-93,AnnexK
ofthePetition andtheOrderofKintanar,AnnexL of
thePetition,areherebySETASIDEforbeingcontrarytolaw.TheRespondentsandallthoseactingforand
in their behalfare hereby enjoinedand prohibited
fromimplementingorenforcingthesame;[and]
2.Petitioners petition for mandamus is
herebyGRANTEDin that the Respondent NTC,
composed of Kintanar and deputy commissioners
Perez andDumlao, areherebydirectedto meeten
banc and to consider and act on the draft
Order,Annex B of the Petition, within fifteen (15)
days from the finality of this Decision.Without
pronouncementastocosts.
SOORDERED.[18]
The herein assailed decision being unacceptable to
petitioner Simeon Kintanar and petitioners GMCR, Inc., Smart
Communications, Inc., Isla Communications Co. , Inc. and
InternationalCommunicationsCorporationasoppositorsinthe
application of private respondent BellTel for a provisional
authority,theyfiledwiththiscourtseparatepetitionsforreview.
Commissioner Kintanars petition, docketed as G.R. No.
126526,ascribestotherespondentappellatecourtthefollowing
assignmentoferrors:
1.TheCourtofAppeals,insettingasideNTCMC1-1-93andMC
3-1-93andtheOrderoftheCommissiondatedJuly4,1995,
madeacollateralattackonalawwhichwasnowherecalledfor
inthepleadingsofthepartiesnorisauthorizedbytheRulesof
Court.
2.TheCourtofAppealserredinassumingandimposingthatthe
Commissionisacollegialbodysimplybyreasonofthefactthat
otherbodieswhichwereaspinofffromthedefunctPublic
ServiceCommissionwerecreatedasacollegialbody.Thelaw
thatcreatedEO546erasedthecollegialcharacteroftheproceedingsbeforetheNTC.
3.TheCourtofAppealsdecisioncontainsseriouscontradiction;
worse,itconsideredevidencenotformallyofferedor
incorporatedintotherecordsofthecase;yetfailedtoconsider
evidencesubmittedbypetitioner-appellantnoronthe
prejudicialissueonnon-joinderofindispensableparties-
3.1CAerredinassumingthattheNTCiscollegialbythefact
thatChartersofotherregulatoryagenciesexpresslymadethem
collegialwhilethisexpressprovisionwasabsentinNTCscharter.
3.2CAcontradictsitselfbyholdingthatDOTCMC92-614
prevailsand[requires]collegiality.
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3.3ThedecisionsbyUndersecretaryLichaucosignedbyher
andher2deputiesareinnowayindicativeofcollegialityand
shouldnotbeconsideredashavinganypersuasiveeffectxxx.
3.4TheCourtofAppealserredinapplyingtheBoardof
CommunicationsRulesofPracticeandProcedures.
4.TheCourtofAppealserredwhenitgrantedmandamus,
directingandineffectcontrollingCommissionerKintanarand
deputyCommissionersDumlaoandPerez,tomeetenbancto
considerandactonadraftOrderonlywhichtheCourtitself
recognizednolongerhadtheapprovaloftwo(2)Commissioners
whileinthesametokentheCourtofAppealshadsetasideaduly
promulgatedOrderofJuly4,1995allegedlybecauseitdidnot
carrytheapprovalof2commissioners. [19]
On theother hand,petitioners-oppositors,in theirpetition
docketedas G.R.No. 126496,assail thedecisionof respondentappellatecourtonthefollowinggrounds:
1.The Court of Appeals erred in not dismissing the
instant Petition outright for its failure to implead
indispensableparties,inviolationofSection5,Rule
65andSec.3,Rule7oftheRevisedRulesofCourt;
2.The Court of Appeals seriously erred in taking
cognizance of and passing upon BellTels Petition,
whichonitsfaceisprematuresincetheOrderofJuly
4, 1996 assailed was not a final decision of the
Commission;
3.Evenassumingarguendo that theCourt ofAppeals
cantakecognizanceofthePetition,thedispositionin
Decisiontherein whichnullifies NTCMemorandum
Circulars 1-1-93 and 3-1-93 itself constitutes a
collateral attack on the said laws, the validity of
whichwereneverputinissuebyanyoftheparties,
contrary to the clear legal requirement that the
validity of laws can be attacked only in direct
proceedingsinstitutedforthatpurpose;
4.Itwas infactimproper for theCourt ofAppeals to
passonthevalidityofNTCCircularNo.1-1-93and
Memorandum Circular No. 3-1-93 since the same
wasabsolutelyunnecessaryfortheresolutionofthe
Petition;
5.Evenassuming that theCourt of Appeals correctly
definedtheprimeissuesasbeingthatofcollegiality,
nonetheless the Court of Appeals committed a
serious error of law in declaring the NTC as a
collegialbodydespitetheclearintentofE.O.No.546
and the provisions of DOTC MC 95-640, and the
obviousimplicationsofpendingbillsinCongresson
thereorganizationoftheNTC;
6.The Decision, in mandating that the NTCCommissioner and Deputy Commissioners sit to
considerthedraft-andonlythedraft-inrenderingits
Decision in BellTels application constitutes an
unwarranted, unauthorized and unlawful
interferenceinandcanalizationofthediscretionary
functions of the Commission as a quasi-judicial
entity;and
7.TheDecision condonesthe illegaland unethicalact
ofBellTelofsurreptitiouslysecuringadraftdecision,
and encourages and places premium on future
similarillegalacts-allin violation oftherulingandthe mandate of the Supreme Court in In Re
Jurado: Adm. Matter No. 90-5-383 (July 12,
1990).[20]
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OnDecember16,1996,privaterespondentBellTelfiledan
OmnibusMotion[21]prayingfor,amongothers,theconsolidation
ofG.R.Nos.126496and126526.
On December 18, 1996, respondent BellTel f iled its
Comment.[22]On the same day, the NTC and Commissioner
KintanarfiledaManifestation/Motion[23]echoingtheprayerfor
theconsolidationoftheG.R.Nos.126496and126526.
OnDecember19, 1996, theOffice ofthe Solicitor General
filedaManifestation/Motion [24]reiteratingthatitslegalstancein
thiscase is adverse to thatof the NTC and praying thatit be
excludedfromfilinganycommentinbehalfoftheNTC.
InaResolutiondatedFebruary5,1997,weresolved,among
others,toexcusetheSolicitorGeneralfromfilinganycomment
inbehalfoftheNTC,requiretheNTCtofileitsowncommentin
G.R. No. 126496 and to consolidate G.R. Nos. 126496 and
126526.
OnMarch6,1997,theNTCandCommissionerKintanarfiled
a Manifestation/Motion[25]praying that the latters petition in
G.R.No.126526beadoptedastheircommentintheconsolidated
cases.
Upon thejoinderof issuesin theseconsolidated cases,we
perceivethefundamentalissuetobethatofthecollegialityofthe
NTCasaquasi-judicialagency.
Wefindtheconsolidatedpetitionswantingofmerit.
First.We hereby declare that theNTCis a collegial body
requiring a majority vote out of the three members of thecommission in order to validly decide a case or any incident
therein.Corollarily, the vote alone of the chairman of the
commission,asinthiscase,thevoteofCommissionerKintanar,
absenttherequiredconcurringvotecomingfromtherestofthe
membership ofthe commission toat leastarriveat amajority
decision, is not sufficient to legally render an NTC order,
resolutionordecision.
Simply put, Commissioner Kintanar is not the National
TelecommunicationsCommission.Healone does not speak for
and in behalf of the NTC.The NTC actsthrough a three-man
body,and thethreemembers ofthe commissioneach hasone
vote to cast in every deliberation concerning a case or any
incident therein that is subject to the jurisdiction of the
NTC.WhenweconsiderthehistoricalmilieuinwhichtheNTC
evolvedintothequasi-judicialagencyitisnowunderExecutive
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:theNTCisacollegialbodyandwasacollegialbody
evenduringthetimewhenitwasactingasaone-manregime.
We thus quote with approval the encompassing legal
ruminationsoftherespondentCourtofAppealsindisposingof
theissueofthecollegialityoftheNTC:
Inresolvingtheissue,Werecallthat,onNovember17,1936,the
NationalAssemblypassedCommonwealthActNo.146which
createdthePublicServiceCommission(PSC).Whileproviding
thatthePSCshallconsistofaPublicServiceCommissioneranda
DeputyCommissioner,thelawmadeitclearthatthePSCwasnot
acollegialbodybystatingthattheDeputyCommissionercould
actonlyonmattersdelegatedtohimbythePublicService
Commissioner.AsamendedbyRA2677,thePublicService
Commissionwastransformedintoandemergedasacollegialbody,composedofonePublicServiceCommissionerandfive(5)
AssociateCommissioners.Theamendmentprovidedthat
contestedcasesandallcasesinvolvingthefixingofratesshallbe
decidedbytheCommissionenbanc.
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OnSeptember24,1972,thenPresidentFerdinandE.Marcos
signed,intolaw,PresidentialDecreeNo.1adoptingand
approvingtheIntegratedReorganizationPlanwhich,inturn,
createdtheBoardofCommunications(BOC)inplaceofthe
PSC.Thistime,thenewregulatoryboardwascomposedofthree
(3)officersexercisingquasi-judicialfunctions:
xxxTheBoardofCommunicationsshallbecomposedofafull
timeChairmanwhoshallbeofunquestionedintegrityand
recognizedprominenceinpreviouspublicand/orprivate
employment;twofull-timememberswhoshallbecompetenton
allaspectsofcommunications,preferablyoneofwhomshallbea
lawyerandtheotheraneconomistxxx
OnJanuary25,1978,theBOCpromulgateditsRulesof
ProcedureandPracticeinconnectionwithapplicationsand
proceedingsbeforeit.
OnJuly23,1979,PresidentMarcosissuedExecutiveOrderNo.
546,creatingtheMinistriesofPublicWorks,andof
TransportationandCommunications,mergedthedefunctBoard
ofCommunicationsandtheTelecommunicationsControlBureau
intoasingleentity,theNationalTelecommunications
Commission(NTC).ThesaidlawwasissuedbythenPresident
Marcosintheexerciseofhislegislativepowers.Sec.16ofE.O.
546providesthat--
xxxTheCommissionshallbecomposedofaCommissionerand
twoDeputyCommissioners,preferablyoneofwhomshallbea
lawyerandanotheraneconomist.xxx
TheaforementionedExecutiveOrdertookeffectonSeptember
24,1979xxx.However,theNTCdidnotpromulgateanyRules
ofProcedureandPractice.Consequently,thethenexistingRules
ofProcedureandPracticepromulgatedbytheBOCwasapplied
toproceedingsintheNTC.Inthemeantime,theDecisionsofthe
NTCweresignedbytheChairmanaloneoftheNTCwhich
renderedthetwo(2)deputyCommissionersnon-participative
inthetaskofdecision-making.ThispromptedthethenMinister
ofTransportationandCommunicationJoseP.Dans,Jr.toseek
thelegalopinionofthethenMinisterofJusticeRicardoC.Puno,
astowhethertheNTCwasacollegialbodyornot.OnJanuary11,1984,MinisterPunosentaletter-opinionxxxtotheeffect
thattheNTCwasnotacollegialbodybutasingleentityandthus
thethenpracticeofonlytheChairmanoftheNTCsigningthe
DecisionsoftheNTCwasauthorizedbylaw.xxx
Admittedly,theopinionoftheSecretaryofJusticeisentitledto
greatweightxxx.However,thesameisnotcontrollingor
conclusiveonthecourtsxxx.Wefindanddeclare,inthe
presentrecourse,thatthePunoOpinionisnot
correct.Admittedly,EO546doesnotspecificallystatethatthe
NTCwasacollegialbody.NeitherdoesitprovidethattheNTC
shouldmeetEnBancindecidingacaseorinexercisingits
adjudicatoryorquasi-judicialfunctions.Buttheabsenceofsuch
provisionsdoesnotmilitateagainstthecollegialnatureofthe
NTCunderthecontextofSection16ofEO546andunderthe
RulesofProcedureandPracticeappliedbytheNTCinits
proceedings.Under[Rule15]ofsaidRules,theBOC(nowthe
NTC)sitsEnBanc:
xxxIneverycaseheardbytheBoardenbanc,theorders,
rulings,decisionsandresolutionsdisposingofthemeritsofthe
matterwithinitsjurisdictionshallbereachedwiththe
concurrenceofatleasttworegularmembersafterdeliberationandconsultationandthereafterassignedtoamemberforthe
writingoftheopinion.Anymemberdissentingfromtheorder,
ruling,decisionorresolutionshallstateinwritingthereasonfor
hisdissent.
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Inallothercases,adulyassignedMembershallissueallorders,
rulings,decisionsandresolutionspertinenttothecaseassigned
tohim.Copyofthedecisiononthemeritofthecasesoassigned
shallbefurnishedtheChairmanoftheBoard.
xxx
Inscrutably,acasebeforetheBOCmaybeassignedtoandheard
byonlyamemberthereofwhoistaskedtoprepareand
promulgatehisDecisionthereon,orheard,EnBanc,bythefull
membershipoftheBOCinwhichcasetheconcurrenceofatleast
two(2)ofthemembershipoftheBOCisnecessaryforavalid
Decisionxxx.WhileitmaybetruethattheaforesaidRulesof
ProcedurewaspromulgatedbeforetheeffectivityofExecutive
OrderNo.546,however,theRulesofProcedureofBOCgoverned
therulesofpracticeandprocedurebeforetheNTCwhenitwas
establishedunderExecutiveOrderNo.546.Thiswas
enunciatedbytheSupremeCourtinthecaseofPhilippine
ConsumersFoundation,Inc.versusNational
TelecommunicationsCommission,131SCRA200whenit
declaredthat:
TheRulesofPracticeandProcedurepromulgatedonJanuary25,
1978bytheBoardofCommunications,theimmediate
predecessorofrespondentNTCxxxgoverntherulesofpractice
andprocedurebeforetheBOCthen,nowrespondentNTC.xxx
InthecaseofPhilippineLongDistanceTelephoneCompany
versusNationalTelecommunications,etal.,190SCRA717,the
SupremeCourtappliedandcitedRule15oftheRulesofProcedureandPracticeofBOCxxx.
Hence,underitsRulesofProcedureandPractice,the
RespondentNTC,asitspredecessor,theBOC,hadconsistently
beenandremainsacollegialbody.
RespondentsKintanarsandNTCsposethatRespondent
Kintanar,alone,isvestedwithauthoritytosignandpromulgatea
DecisionoftheNTCisantitheticaltothenatureofacommission
asenvisagedinExecutiveOrderNo.546.Itmustbebornein
mindthataCommissionisdefinedas:
[a]bodycomposedofseveralpersonsactingunderlawfulauthoritytoperformsomepublicservice.(CityofLouisville
MunicipalHousingCommissionversusPublicHousing
Administration,261SouthwesternReporter,2nd,page286).
ACommissionisalsodefinedasaboardorcommitteeofofficials
appointedandempoweredtoperformcertainactsorexercise
certainjurisdictionofapublicnatureorservicexxx(Black,Law
Dictionary,page246).Thereispersuasiveauthoritythata
commissionissynonymouswithboard(StateEx.Rel.Johnson
versusIndependentSchoolDistrictNo.810,WabashCounty,109
NorthwesternReporter2nd,page596).Indeed,ascanbeeasily
discernedfromthecontextofSection16ofExecutiveOrderNo.
546,theCommissioniscomposedofaCommissionerandtwo(2)
deputycommissionersxxxnotthecommissioner,alone,as
pontificatedbyKintanar.Theconjunctivewordandisnot
withoutanylegalsignificance.Itisnot,byanychance,a
surplusageinthelaw.Itmeansinadditionto(McCaullWebster
ElevatorCompanyversusAdams,167NorthwesternReporter,
330,page332).Thewordand,whetheritisusedtoconnect
words,phrasesorfullsentence[s],mustbeacceptedasbinding
togetherandasrelatingtooneanotherxxx.
Ininterpretingastatute,everypartthereofshouldbegiveneffectonthetheorythatitwasenactedasanintegratedlawand
notasacombinationofdissonantprovisions.Astheaphorism
goes,thatthethingmayratherhaveeffectthanbedestroyedxx
x.IfitwastheintentionofPresidentMarcostoconstitutemerely
asingleentity,aone-mangovernmentalbody,insteadofa
commissionorathree-mancollegialbody,hewouldnothave
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constitutedacommissionandwouldnothavespecifically
decreedthattheCommissioniscomposedof,notthe
commissioneralone,butofthecommissionerandthetwo(2)
deputycommissioners.Irrefragably,then,theNTCisa
commissioncomposednotonlyofKintanar,butPerezand
Dumlaoaswell,actingtogetherintheperformanceoftheir
adjudicatoryorquasi-judicialfunctions,conformablywiththeRulesofProcedureandPracticepromulgatedbytheBOCand
applicabletotheNTC.
ThebarefacedfactthatxxxofExecutiveOrder546usedthe
worddeputytodesignatethetwo(2)othermembersofthe
CommissiondoesnotmilitateagainstthecollegialityoftheNTC.
xxxThecollegialityoftheNTCcannotbedisparagedbythe
merenominaldesignationofthemembershipthereof.Indeed,
Weareconvincedthatsuchnominaldesignationsarewithout
functionalimplicationsandaredesignedmerelyforthepurpose
ofadministrativestructureorhierarchyofthepersonnelofthe
NTC.xxx
Inhindsight,evenSecretaryGarciawasinaccordwiththe
collegialityoftheNTCwhenhepromulgatedandissued
DepartmentOrderNo.92-614xxx.EventhenCommissioner
MarianoBenedictoopenlyexpressedhisvehementoppositionto
theDepartmentOrderofSecretaryGarciaandoptedtoseek
refugeintheopinionofthethenMinisterofJusticePunoxxx.It
wasonlywhenCommissionerBenedictoresignedand
RespondentKintanarwasdesignatedtoreplaceCommissioner
BenedictothatSecretaryGarciaflip-flapped[sic],andsuddenly
founditexpedienttorecallhisDepartmentOrderNo.92-614andauthorizeKintanartodecide,allbyhimself,allcasespending
withtheNTCinfrontalviolationoftheRulesofProcedureand
PracticebeforetheNTC,morespecificallyRule15thereofxxx.
xxx
TheRespondentscannotfindsolaceinHouseBillNo.10558to
buttresstheirargumentxxxbecauseundertheHouseBill,the
NTCistransformedintoacollegialbody.Indeed,Wefind
Respondentsposetenuous.For,itcanlikewisebeargued,with
justification,thatHouseBillNo.10558indeedconfirmsthe
existingcollegialnatureoftheNTCbysoexpresslyreaffirming
thesame.
xxx
Insum,then,WefindandsodeclarethatNTCCircularNo.1-1-93
xxxMemorandumCircularNo.3-1-93xxxandtheOrderof
KintanarxxxdeclaringtheNTCasasingleentityornon-
collegialentity,arecontrarytolawandthusnullandvoidand
shouldbe,astheyarehereby,setaside. [26]
Second.Petitioners take us to task with their vigorous
contention that respondent appellate courts act of nullifying
NTC Memorandum CircularNo. 1-1-93 issued by then
Commissioner Mariano Benedicto, Jr. and NTC Memorandum
CircularNo.3-1-93issuedalsobythenCommissionerBenedicto
onJanuary6,1993,wasacollateralattackagainsttheaforecited
circularsandanunnecessaryandabusiveexerciseofthecourts
powertonullifyadministrativeregulations.
It must be remembered bypetitioners, however, that
administrativeregulationsderivetheirvalidityfromthestatute
that they were, in the first place, intended to
implement.Memorandum Circulars 1-1-93 and 3-1-93 are on
theirfacenullandvoidabinitioforbeingunabashedlycontraryto law.They were nullified by respondent Court of Appeals
becausetheyareabsolutelyillegaland,assuch,arewithoutany
force and effect.The fact that implementation of these illegal
regulations has resulted in the institutionalization of the one-
manruleintheNTC,isnotandcanneverbearatificationofsuch
anillegal practice.Atthe least,theseillegalregulations arean
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erroneous interpretation ofE.O. No. 546and in thecontext of
andits predecessor laws.Atthe most,these illegalregulations
areattemptstovalidatetheone-manruleintheNTCasexecuted
bypersonswiththeselfishinterestofmaintainingtheirillusory
holdofpower.
Sincethequestionedmemorandumcircularsareinherently
andpatentlynullandvoidforbeingtotallyviolativeofthespiritandletterofE.O.No.546thatconstitutestheNTCasacollegial
body, no courtmay shirk from itsduty ofstriking down such
illegalregulations.
Third.InitscertiorariactionbeforetherespondentCourtof
Appeals,privaterespondentBellTelwasproceedingagainstthe
NTCandCommissionerKintanarfortheformersadherenceand
defenseofitsone-manruleasenforcedbythelatter.Thus,only
the NTC and Commissioner Kintanar may be considered as
indispensable parties. After all , it is they whom private
respondent BellTel seek to be chastised and corrected by the
court for having acted in grave abuse of their discretion
amountingtolackorexcessofjurisdiction.
Theoppositorsin NTCCaseNo.94-229 arenotabsolutely
necessaryforthefinaldeterminationoftheissueofgraveabuse
of discretion on the part of the NTC and of Commissioner
KintanarinhiscapacityaschairmanofNTCbecausethetaskof
defending them primarily lies in the Office of the Solicitor
General.Furthermore,werethecourttofindthatcertiorarilies
against the NTC and Commissioner Kintanar, the oppositors
causecouldnotbesignificantlyaffectedbysuchrulingbecause
theissueofgraveabuseofdiscretiongoesnotintothemeritsof
thecaseinwhichtheoppositorsareinterestedbutintotheissue
ofcollegialitythat requires, regardlessof themerits ofa case,
that thesamebedecided onthe basis ofa majorityvoteof at
leasttwomembersofthecommission.
Theissueinthiscaseis,itbearsrepeating,notthemeritsof
theapplication of privaterespondentBellTelfor a provisional
authority to operate what promises to be the most
technologicallyadvancedtelephoneserviceinthe country.This
courtisnotin anywayconcernedwithwhetherornotprivate
respondent BellTels projectproposal is technicallyfeasible or
financiallyviable, andthis court shouldnot, in fact,delve into
these matters which are patently outside of its review
jurisdiction.All that respondentCourt of AppealspasseduponwasthequestionofwhetherornottheNTCandCommissioner
Kintanarcommittedgraveabuseofdiscretion, andsowe must
review and ascertain the correctness of the findings of the
respondentappellatecourtonthisscore,andthisscorealone.
Thus, theclaim ofpetitioners that there is here a case of
non-joinderofindispensablepartiesinthepersonsofallofthe
oppositorsinNTCCaseNo.94-229,isuntenable.
Fourth.Petitioners, in apparentparanoia, argue thatwhat
therespondentappellatecourthasactuallyordered,wasthatthe
NTCsitandmeetenbancandforthwithgrantprivaterespondent
BellTels application for a provisional authority.Petitioners,
however, have obviously over-read the second part of the
dispositiveportionof theherein assaileddecisionrendered by
respondentCourtofAppeals.
There isno disputethatjurisprudence issettled asto the
propriety ofmandamusin causing a quasi-judicial agency to
exerciseitsdiscretioninacasealreadyripeforadjudicationand
long-awaitingtheproperdisposition.Astohowthisdiscretionis
to be exercised,however, isa realmoutside the office of the
special civil action of mandamus. It is elementary legal
knowledge, after all,thatmandamusdoes not l ie to control
discretion.
When the respondent Court of Appeals directed
CommissionersKintanar,DumlaoandPereztomeetenbancand
toconsiderand actontheworkingdraft oftheordergranting
provisionalauthoritytoBellTel,saidcourtwassimplyordering
the NTC to sit and meeten bancas a collegial body, and the
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subjectofthedeliberationofthethree-mancommissionwould
bethesaidworkingdraftwhichembodiesonecourseofaction
thatmaybetakenonprivaterespondentBellTelsapplicationfor
a provisional authority.The respondent Court of Appeals,
however, did not order the NTC to forthwith grant said
application.Thisisunderstandablesinceeverycommissionerof
thethree-manNTChasavoteeachtocastindisposingofprivaterespondent BellTels application and the respondent appellate
courtwouldnot pre-emptthe exercise bythe membersof the
commissionoftheirindividualdiscretioninprivaterespondent
BellTelscase.
Respondentappellatecourtintends,however,fortheNTCto
promptlyproceedwiththeconsiderationofprivaterespondent
BellTels application forprovisionalauthority,for thesame has
beenripefordecisionsinceDecember,1994.Withthemarked
propensityofCommissionerKintanartodelayactiononthesaid
application and his insistent arrogation of sole power to
promulgate any and all NTC decisions, respondent Court ofAppealsorder fortheNTC tositand meetenbancto consider
private respondent BellTels application for a provisional
authority,attainsdeepsignificance.
Fifth.Theaccusationofpetitionersthattheworkingdraftof
theordergranting provisionalauthorityto privaterespondent
BellTel, wasobtained by thelatterthrough illegal means, is a
seriouscharge.However,notasinglepieceofevidencehasbeen
profferedbypetitionerstoprovethischarge.
PrivaterespondentBellTelmakesnosecretofthesourceof
thesaid workingdraft.Inprivate respondent BellTelsUrgent
Ex-Parte Motion to Resolve Application and For Issuance of
ProvisionalAuthority, itis allegedthatsaidworking draftwas
preparedbyAtty.BasilioBolanteoftheLegalDepartmentofthe
NTC.[27]SaidworkingdraftwasinitialedbytheCCADHead,Engr.
Edgardo Cabarios and by Deputy Commissioners Dumlao and
Perez.[28]The working draft isattached to the recordsof NTC
CaseNo.94-229whichmaybeborrowedbyanypersonforany
statedpurpose. [29]
Significantly,nooneamongtheaforementionedpersonshas
renouncedtheworkingdraftordeclaredittobespurious.More
importantly,petitionershaveutterlyfailedtoofferproofofany
illegality in the preparation or procurement of said working
draft.
Themorecriticalpointthatmattersmost,however,isthat
we cannot be diverted from the principal issue in this case
concerningthecollegialityoftheNTC.Intheultimate,theissue
ofthe procurementof theworking draft ismoreaproposfor a
criminal or administrative investigation than in the instant
proceedingslargelyaddressedtotheresolutionofapurelylegal
question.
WHEREFORE, premises considered, the instant
consolidatedpetitionsareherebyDISMISSEDforlackofmerit.
Costsagainstpetitioners.
SOORDERED.
Bellosillo,Vitug,andKapunan,JJ.,concur.
Padilla (Chairman),nopart; inview ofinterests inGMRC,
Inc.
GLOBETELECOMS,INC.V.NTC
SECONDDIVISION
[G.R.No.143964.July26,2004]
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GLOBE TELECOM, INC.,petitioner, vs.THE NATIONAL
TELECOMMUNICATIONS COMMISSION,
COMMISSIONER JOSEPH A. SANTIAGO, DEPUTY
COMMISSIONERS AURELIO M. UMALI and NESTOR
DACANAY, and SMART COMMUNICATIONS, INC.
respondents.
DECISION
TINGA,J.:
Telecommunicationsservicesareaffectedbyahighdegree
ofpublicinterest.[1]Telephonecompanieshavehistoricallybeen
regulated as common carriers,[2]and indeed, the 1936 Public
Service Act has classified wire or wireless communications
systems as a public service, along with other common
carriers.[3]
Yetwiththeadventofrapidtechnologicalchangesaffecting
the telecommunications industry, there has been a marked
reevaluation of the traditional paradigm governing state
regulation over telecommunications. For example, the United
States FederalCommunications Commissionhas chosen notto
impose strict common regulations on incumbent cellular
providers, choosing instead to let go of the reinsand rely on
marketforcestogovernpricingandserviceterms. [4]
InthePhilippines,asimilarparadigmshiftcanbediscerned
withthepassageofthePublicTelecommunicationsActof1995
(PTA).Asnotedbyoneofthelawsprincipalauthors,Sen.John
Osmea,underpriorlaws,thegovernmentregulatedtheentryofpricingand operationof allpublic telecommunicationsentities.
The new lawproposed to dismantle gradually the barriers to
entry, replace government control on price and income with
market instruments, and shift the focus of governments
interventiontowardsensuringservicestandardsandprotection
ofcustomers. [5]Towardsthisgoal,ArticleII,Section8ofthePTA
sets forth the regulatory logic, mandating that a healthy
competitive environment shall be fostered, one in which
telecommunicationscarriersarefreetomakebusinessdecisions
and to interact with one another in providing
telecommunications services, with the end in view of
encouragingtheirfinancialviabilitywhilemaintainingaffordable
rates.[6]
Thestatuteitselfdefinestheroleofthegovernmenttopromote a fair, efficient and responsive market to stimulate
growth and development of the telecommunications facilities
andservices. [7]
The present petition dramatizes to a degree the clash of
philosophies between traditional notions of regulation and
theaucoranttrendtoderegulation.Appropriately,itinvolvesthe
most ubiquitousfeature ofthe mobilephone,ShortMessaging
Service (SMS)[8]or text messaging, which has been
transformedfromameretechnologicalfadintoavitalmeansof
communication.And propitiously, thecase allowsthe Court to
evaluate the role of the National TelecommunicationsCommission(NTC)inthisdayandage.
TheNTCisat theforefrontofthegovernmentresponseto
the avalanche of inventions and innovations in the dynamic
telecommunicationsfield.Everyregulatoryactionitundertakes
isofkeeninterestnotonlytoindustryanalystsandplayersbut
tothepublicatlarge.Theintensivescrutinyisunderstandable
given the high financial stakes involved and the inexorable
impactonconsumers.Anditsrulingsaretraditionallyaccorded
respect even by the courts, owing traditional deference to
administrative agencies equipped with special knowledge,
experience and capability to hear and determine promptlydisputesontechnicalmatters. [9]
Atthesametime,judicialreviewofactionsofadministrative
agencies is essential, as a check on theunique powers vested
unto these instrumentalities.[10]Review is available to reverse
thefindingsofthespecializedadministrativeagencyiftherecord
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before the Court clearly precludes the agencys decision from
beingjustifiedbyafairestimateoftheworthofthetestimonyof
witnessesoritsinformedjudgmentonmatterswithinitsspecial
competence,orboth. [11]Reviewmayalsobewarrantedtoensure
that theNTC or similarly empowered agencies act within the
confinesof theirlegalmandateandconformtothedemandsof
dueprocessandequalprotection.[12]
AntecedentFacts
Globe andprivate respondentSmartCommunications,Inc.
(Smart) are both grantees of valid and subsisting legislative
franchises, [13]authorizing them, among others, to operate
aCellularMobileTelephoneSystem(CMTS), utilizing theGlobal
SystemforMobileCommunication(GSM)technology.[14]Among
theinherentservicessupportedbytheGSMnetworkistheShort
MessageServices(SMS),[15]also known colloquially as texting,which hasattainedimmensepopularity inthe Philippinesas a
modeofelectroniccommunication.
On 4 June 1999, Smart filed aComplaint[16]with public
respondent NTC, praying that NTC order the immediate
interconnection of Smarts and Globes GSM networks,
particularly their respective SMS or texting
services. TheComplaintarose from the inability of the two
leadingCMTSproviderstoeffectinterconnection.Smartalleged
that Globe,withevident badfaith andmalice, refusedto grant
SmartsrequestfortheinterconnectionofSMS. [17]
On7June1999,NTCissuedaShowCauseOrder,informing
Globe oftheComplaint,specifically the allegations therein that,
amongothersdespiteformalrequestmadebySmarttoGlobe
fortheinterconnectionoftheirrespectiveSMSortextmessaging
services, Globe, with evident bad faith, malice and to the
prejudiceofSmartandGlobeandthepublicingeneral,refused
to grant Smarts request for the interconnection of their
respective SMS or text messaging services, in violation of the
mandateofRepublicAct7925,ExecutiveOrderNo.39,andtheir
respectiveimplementingrulesandregulations. [18]
GlobefileditsAnswerwithMotiontoDismisson7June1999,
interposing groundsthat theComplaintwaspremature,Smarts
failure to comply with the conditions precedent required inSection 6 of NTC Memorandum Circular 9-7-93,[19]and its
omission of the mandatory Certification of Non-Forum
Shopping.[20]Smartrespondedthatithadalreadysubmittedthe
voluminousdocumentsaskedbyGlobeinconnectionwithother
interconnectionagreementsbetweenthe twocarriers, and that
with those voluminous documents the interconnection of the
SMSsystemscouldbeexpeditedbymerelyamendingtheparties
existingCMTS-to-CMTSinterconnectionagreements. [21]
On 19 July 1999, NTCissuedtheOrdernow subject ofthe
presentpetition.IntheOrder,afternotingthatbothSmartand
Globewereequallyblameworthyfortheirlackofcooperationin the submission of the documentation required for
interconnection and for having unduly maneuvered the
situation into the presentimpasse,[22]NTCheldthatsinceSMS
fallssquarely within thedefinitionof value-addedservice or
enhanced-servicegiveninNTCMemorandumCircularNo.8-
9-95 (MC No. 8-9-95) the implementation of SMS
interconnectionismandatorypursuanttoExecutiveOrder(E.O.)
No.59.[23]
TheNTCalsodeclaredthatbothSmartandGlobehavebeen
providingSMSwithoutauthorityfromit,inviolationofSection
420 (f) of MC No. 8-9-95 which requires PTEs intending to
provide value-added services (VAS) to secure prior approval
fromNTC through an administrative process. Yet, in view of
what itnotedas thepeculiarcircumstances ofthe case,NTC
refrained from issuing aShow Cause Order with a Cease and
Desist Order, and instead directed the parties to secure the
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requisite authority to provide SMS within thirty (30) days,
subject to the payment of finein the amount of two hundred
pesos (P200.00) from thedate ofviolationand foreveryday
duringwhichsuchviolationcontinues. [24]
GlobefiledwiththeCourtofAppealsaPetitionforCertiorari
and Prohibition[25] to nullify and set aside theOrderand to
prohibit NTC from taking any further action in the case. Itreiterateditspreviousargumentsthatthecomplaintshouldhave
beendismissedforfailuretocomplywithconditionsprecedent
andthenon-forumshoppingrule.ItalsoclaimedthatNTCacted
without jurisdiction in declaring that it had no authority to
renderSMS, pointing out that thematterwasnotraisedas an
issue before it at all. Finally, Globe allegedthat theOrderis a
patent nullity as it imposed an administrative penalty for an
offenseforwhichneither itnor Smartwas sufficientlycharged
norheardoninviolationoftheirrighttodueprocess. [26]
The Court of Appeals issued aTemporary Restraining
Orderon31August1999.
In itsMemorandum, Globe also called the attention of the
appellatecourttothe earlierdecisionofNTCpertainingto the
application of Isla Communications Co., Inc. (Islacom) to
provideSMS,allegedlyholdingthatSMSisaderegulatedspecial
featureofthetelephonenetworkandthereforedoesnotrequire
the prior approval of NTC.[27]Globe alleged that its departure
fromitsrulingin theIslacom case constitutesa denialofequal
protectionofthelaw.
On 22 November 1999, aDecision[28]was promulgated by
theFormer Special Fifth Division of the Court ofAppeals[29]affirmingintotothe NTCOrder.Interestingly, on the
same day Globe and Smart voluntarilyagreed to interconnect
their respective SMS systems, and the interconnection was
effectedatmidnightofthatday. [30]
Yet, on21 December1999, GlobefiledaMotionforPartial
Reconsideration,[31]seeking to reconsider only the portion of
theDecisionthat upheld NTCs finding that Globe lacked the
authoritytoprovideSMSanditsimpositionofafine.BothSmart
andNTCfiledtheirrespectivecomments,stressingthereinthat
Globe indeed lacked the authority to provide SMS.[32]Inreply,
Globe asserted that the more salient issue was whether NTCcomplied with its ownRules of Practice and Procedurebefore
making the finding of want of authority and imposing the
fine.Globealsoreiteratedthatithasbeenlegallyoperatingits
SMSsystemsince1994andthatSMSbeingaderegulatedspecial
featureof thetelephone networkit may operateSMS without
priorapprovalofNTC.
After the Court of Appeals denied theMotion for Partial
Reconsideration,[33]GlobeelevatedthecontroversytothisCourt.
Globe contends that theCourt ofAppeals erred inholding
that the NTC has the power under Section 17 of the Public
ServiceLaw [34]tosubjectGlobetoanadministrativesanctionanda fine withoutpriornotice andhearing inviolationof thedue
processrequirements;that specificallydue processwas denied
Globebecausethehearingsactuallyconducteddweltondifferent
issues;and,theappellatecourterredinholdingthatanypossible
violationofdueprocesscommittedbyNTCwascuredbythefact
thatNTCrefrainedfromissuingaShowCauseOrderwithaCease
and Desist Order, directing instead the parties to secure the
requisiteauthoritywithinthirtydays.Globealsocontendsthat
intreatingit differentlyfromothercarriersprovidingSMS the
CourtofAppealsdenieditequalprotectionofthelaw.
The case was called for oral argument on 22 March
2004.Significantly,Smarthasdeviatedfromitsoriginalposition.
It no longer prays that the Court affirm the
assailedDecisionandOrder, and the twin rulings therein that
SMSisVASandthatGlobewasrequiredtosecurepriorauthority
beforeofferingSMS.Instead,SmartnowarguesthatSMSisnot
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VASandthatNTCmaynotlegallyrequireeitherSmartorGlobe
tosecure prior approvalbefore providing SMS. Smart hasalso
chosen not to make any submission on Globes claim of due
processviolations. [35]
Aspresentedduringtheoralarguments,thecentralissues
are: (1)whetherNTCmaylegallyrequireGlobeto secureNTC
approvalbeforeitcontinuesprovidingSMS;(2)whetherSMSisaVASunderthePTA,orspecialfeatureunderNTCMCNo.14-11-
97;and(3)whetherNTCactedwithdueprocessinlevyingthe
fine against Globe.[36]Another issue is also raised whether
Globeshouldhavefirstfiledamotionforreconsiderationbefore
theNTC,but this relativelyminor question canbe resolved in
brief.
NecessityofFilingMotionforReconsideration
Globedeliberatelydidnotfileamotionforreconsideration
withtheNTCbeforeelevatingthemattertotheCourtofAppeals
via a petition for certiorari. Generally, a motion for
reconsiderationis a prerequisite forthefilingof a petition for
certiorari.[37]Inoptingnottofilethemotionforreconsideration,
Globe asserted before the Court of Appeals that the case fell
withintheexceptionstothegeneralrule. [38]Theappellatecourt
in the questionedDecisioncited the purported procedural
defect,[39]yetchoseanywaytoruleonthemeritsaswell.
Globeselectionto elevatethecasedirectlytotheCourtof
Appeals,skippingthestandardmotionforreconsideration,isnota mortal mistake. According to Globe, theOrderis a patent
nullity, it being violative of due process; the motion for
reconsiderationwasa uselessor idle ceremony; and,theissue
raisedpurelyone oflaw.[40]Indeed,the circumstancesadverted
to are among the recognized exceptions to the general
rule.[41]Besides,theissuespresentedareofrelativeimportance
andnovelty[42]so much sothat it isjudicious for the Courtto
resolvethemonthemeritsinsteadofhidingbehindprocedural
fineries.
TheMerits
Now,ontothemeritsofthepetition.
Deregulationisthemantrainthisageofglobalization.Globe
invokesit insupport ofits claim that itneed notsecure prior
authorityfromNTCinordertooperateSMS.Theclaimhastobe
evaluated carefully. After all, deregulation is not a magic
incantationthatwardsoff thespectreof intrusive government
withthemereinvocationofitsname.Theprinciples,guidelines,
rulesandregulationsthatgovernaderegulatedsystemmustbe
firmly rooted in the law and regulations that institute or
implementthederegulationregime.[43]
Theimplementationmustlikewisebefairandevenhanded.
Globe hinges its claim of exemption from obtaining prior
approvalfromtheNTConNTCMemorandumCircularNo.14-11-
97(MCNo. 14-11-97).Globenotesthatin a 7October1998
ruling on theapplication of Islacom for theoperation of SMS,
NTCdeclaredthattheapplicablecircularforSMSisMCNo.14-
11-97.[44]Under this ruling, it is alleged, NTC effectively
denominatedSMSasaspecialfeaturewhichunderMCNo.14-
11-97isaderegulatedservicethatneedsnopriorauthorization
from NTC. Globe further contends that NTCs requiring it to
secure prior authorization violates the due process and equalprotection clauses, since earlier it had exempted thesimilarly
situated Islacom from securing NTC approval prior to its
operationofSMS. [45]
On the other hand, the assailed NTCDecisioninvokes the
NTCImplementingRulesofthePTA(MCNo.8-9-95)tojustifyits
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claimthatGlobeandSmartneedtosecurepriorauthorityfrom
theNTCbeforeofferingSMS.
The statutory basis for the NTCs determination must be
thoroughlyexamined.Ourfirstlevelofinquiryshouldbeintothe
PTA.ItistheauthoritybehindMCNo.8-9-95.Itis alsothelaw
thatgoverns all publictelecommunications entities(PTEs) in
thePhilippines. [46]
PublicTelecommunicationsAct
The PTA has not strictly adoptedlaissez-faireas its
underlying philosophy to promote the telecommunications
industry.Infact,thelawimposesstricturesthatrestrainwithin
reasonhowPTEsconducttheirbusiness.Forexample,itrequires
thatany accesscharge/revenuesharingarrangementsbetween
all interconnecting carriers that are entered into have to besubmitted for approval to NTC.[47]Each telecommunication
category[48]established in the PTA is governed by detailed
regulations.Also,internationalcarriersandoperatorsofmobile
radioservicesarerequiredtoprovidelocalexchangeservicein
unservedorunderservedareas.[49]
Atthesametime,thegeneralthrustofthePTAis towards
modernizing the legal framework for the telecommunications
servicessector.Thetransmutationhasbecomenecessarydueto
the rapid changes as well within the telecommunications
industry.AsnotedbySenatorOsmeainhissponsorshipspeech:
[D]ramaticdevelopmentsduringthelast15yearsinthefieldof
semiconductors have drastically changed the
telecommunications sector worldwide as well as in the
Philippines. New technologies have fundamentally altered the
structure,the economics and thenatureof competitionin the
telecommunications business. Voice telephony is perhaps the
mostpopularfaceoftelecommunications,butitisnolongerthe
onlyone.Thereareotherfacessuchasdatacommunications,
electronic mail, voice mail, facsimile transmission, video
conferencing,mobileradioservices like trunkedradio,cellular
radio,andpersonalcommunicationsservices,radiopaging,and
so on. Because of the mind-boggling developments in
semiconductors,thetraditionalboundariesbetweencomputers,
telecommunications, and broadcasting are increasingly
becomingblurred. [50]
OneofthenovelintroductionsofthePTAistheconceptofa
value-addedservice(VAS).Section11ofthePTAgovernsthe
operations of a value-addedserviceprovider,which thelaw
defines as an entity which relying on the transmission,
switching andlocaldistribution facilitiesof thelocalexchange
and inter-exchange operators, and overseas carriers, offers
enhancedservicesbeyondthoseordinarilyprovidedforbysuch
carriers.[51]Section 11recognizesthatVASprovidersneed not
secureafranchise,providedthattheydonotputuptheirownnetwork.[52]However, a different rule is laid down for
telecommunicationsentitiessuchasGlobeandPLDT.Thesection
unequivocally requires NTC approval for the operation of a
value-addedservice.Itreads, viz:
Telecommunications entities may provide VAS, subject to the
additionalrequirementsthat:
a)prior approval of the Commission is
securedtoensurethatsuchVASofferings
are not cross-subsidized from theproceedsoftheirutilityoperations ;
b)otherprovidersofVASarenotdiscriminated
againstinratesnordeniedequitableaccessto
theirfacilities;and
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c)separatebooksofaccountsaremaintainedfor
theVAS.(Emphasissupplied) [53]
Oddly enough, neither the NTC nor the Courtof Appeals
cited theabove-quoted provision in their respective decisions,
which after all , is the statutory premise for the assailed
regulatoryaction.Thisfailureisbutamereindiciaofthepatternof ignorance or incompetence that sadly attends the actions
assailedinthispetition.
ItisclearthatthePTAhasleftopen-endedwhatservicesare
classified as value-added, prescribing instead a general
standard, set forth as a matter of principle and fundamental
policyby the legislature.[54]The validity ofthisstandardset by
Section11isnotputintoquestionbythepresentpetition,and
there isno needto inquireinto itspropriety.[55]The power to
enforcetheprovisionsofthePTA,includingtheimplementation
ofthestandardssettherein,isclearlyreposedwiththeNTC. [56]
ItcanalsobegleanedfromSection11thattherequirementthatPTEssecurepriorapprovalbeforeofferingVASistiedtoa
definitepurpose,i.e.,to ensure that such VASofferingsare
not cross-subsidized from the proceeds of their utility
operations . The reason is related to the fact that PTEs are
considered as public services,[57]and mandated to perform
certain public service functions. Section 11 should be seen in
relationtoE.O.109,whichmandatesthatinternationalgateway
operators shall be required to provide local exchange
service,[58]for the purpose of ensuring availability of reliable
and affordable telecommunications service in both urban and
ruralareasofthecountry.[59]
UnderE.O.No.109,localexchangeservicesaretobecross-subsidizedbyothertelecommunications
services within the same company until universal access is
achieved.[60]Section 10 of the PTA specifically aff irms the
requirementssetbyE.O.No.109.TherelevancetoVASisclear:
public policy maintains that the offer of VAS byPTEs cannot
interferewiththefundamentalprovisionbyPTEsoftheirother
publicservicerequirements.
More pertinently to the case at bar, the qualification
highlightsthefactthatthelegalrationaleforregulationofVASis
severelylimited.ThereisanimplicitrecognitionthatVASisnot
strictly a publicservice offering in theway that voice-to-voice
lines are, for example,but merely supplementary to the basicservice.Ultimately,theregulatoryattitudeoftheStatetowards
VAS offerings by PTEs is to treat its provisioning as a
businessdecisionsubjectto thediscretionof theofferor,
solongassuchservicesdonotinterferewithmandatorypublic
servicerequirementsimposedonPTEssuchasthoseunderE.O.
No.109.Thus,non-PTEsarenotsimilarlyrequiredtosecure
priorapprovalbeforeofferingVAS,astheyarenotburdened
by the public service requirements prescribed on
PTEs.[61]Dueregardmustbeaccordedtothisattitude,whichis
in consonance with the general philosophy of deregulation
expressedinthePTA.
ThePertinentNTCMemorandumCirculars
Next,weexaminetheregulatoryframeworkdevisedbyNTC
indealingwithVAS.
NTCreliedon Section420(f)of theImplementingRulesof
thePTA(ImplementingRules)asbasisforitsclaimthatprior
approvalmustbesecuredfromitbeforeGlobecanoperateSMS.
Section420oftheImplementingRules,containedinMCNo.8-9-95,statesinfull:
VALUEADDEDSERVICES(VAS)
(a) A non-PTEVASprovider shall notbe required to
secureafranchisefromCongress.
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(b) A non-PTE VAS provider can utilize its own
equipment capable only of routing, storing and
forwarding messages in whatever format for the
purpose of providing enhanced or augmented
telecommunicationsservices.Itshallnotputupits
own network. It shall use the transmission
network,tollorlocaldistribution,oftheauthorized
PTES.
(c)TheprovisionofVASshallnotinanywayaffectthe
crosssubsidytothelocalexchangenetworkbythe
international andnational toll services andCMTS
service.
(d)Entitiesintendingtoprovidevalueaddedservices
onlyshallsubmittothecommissionapplicationfor
registration for approval. The application form
shall include documents showing, among others,
systemconfiguration,modeofoperation,methodofchargingrates,leaseagreementwiththePTE,etc.
(e)Theapplicationforregistrationshallbeactedupon
by the Commission through an administrative
process within thirty (30) days from date of
application.
(f)PTEsintendingtoprovidevalueaddedservices
are required to secure prior approval by the
Commissionthroughanadministrativeprocess.
(g)VASprovidersshallcomplystrictlywiththeservice
performance and other standards prescribed
commission.(Emphasissupplied.)
InsteadofexpresslydefiningwhatVASis,theImplementing
Rules defineswhatenhancedservicesare,namely:a service
whichaddsafeatureorvaluenotordinarilyprovidedbyapublic
telecommunications entity such as format, media conversion,
encryption, enhanced security features, computer processing,
and thelike.[62]Given that thePTA definesVASas enhanced
services,thedefinitionprovidedintheImplementingRulesmay
likewise be applied to VAS. Still, the language of the
Implementing Rules is unnecessarily confusing. Much trouble
wouldhavebeensparedhadtheNTCconsistentlyusedtheterm
VASasitisusedinthePTA.
Thedefinitionof enhanced services inthe Implementing
Rules,whilemoredistinctthan that under thePTA,is stilltoo
sweeping.Ratherthanenumeratingwhatpossiblefeaturescould
be classified as VAS or enhanced services, the Implementing
Rulesinsteadfocusesonthecharacteristicsofthesefeatures.The
useof thephrasethe like,[63]and itsimplications ofanalogy,
presumesthatawholemyriadoftechnologiescaneventuallybesubsumedunderthedefinitionofenhancedservices.TheNTC
shouldnotbenecessarilyfaultedforsuchindistinctformulation
since it could not have known in 1995[64]what possible VAS
wouldbeavailableinthefuture.Thedefinitionlaiddowninthe
ImplementingRulesmayvalidlyserveasaguidefortheNTCto
determinewhatemergentofferingswouldfallunderVAS.
Still,owingtothegeneralnatureofthedefinitionlaiddown
intheImplementingRules,theexpectation arisesthattheNTC
would promulgate further issuances defining whetheror nota
specific feature newly available in the market is a VAS. Such
expectationisespeciallydemandediftheNTCistopenalizePTEswhofailtoobtainpriorapprovalinaccordancewithSection11
ofthePTA.Toourknowledge,theNTChasyettocomeoutwith
anadministrativeruleorregulationlistingwhichoftheofferings
inthemarkettodayfallunderVASorenhancedservices.
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Still, there isMC No.14-11-97, entitled Deregulating the
ProvisionofSpecialFeaturesintheTelephoneNetwork.Globe
invokesthiscircularasithadbeenpreviouslycitedbytheNTC
asapplicabletoSMS.
On 2 October 1998, Islacom wrote a letter to the
NTC,informingtheagency that itwill be offering thespecial
feature ofSMSforits CMTS,and citingthereinthatthenoticewasbeinggivenpursuanttoNTCMemorandumCircularNo.14-
11-97.[65]Inresponse,theNTCacknowledgedreceiptoftheletter
informingitofIslacomsofferingthespecialfeatureofSMS
foritsCMTS,andinstructedIslacomtoadheretotheprovisions
ofMCNo.14-11-97.[66]Theclearimplicationoftheletteristhat
NTCconsiderstheCircularasapplicabletoSMS.
An examinationof MCNo. 14-11-97further highlightsthe
state of regulatory confusion befalling the NTC. The relevant
portionsthereofarereproducedbelow:
SUBJECT:DEREGULATING THE PROVISION OF SPECIALFEATURESINTHETELEPHONENETWORK.
For the purpose of exempting specific telecommunications
servicefromrateortariffregulationsiftheservicehassufficient
competition to ensure fair and reasonable rates or tariffs,the
Commission hereby deregulates the provision of special
featuresinherenttotheTelephoneNetwork.
Section 1. For the purpose of this Circular,Special Feature
shallreferto a featureinherentto thetelephonenetwork
which may not be ordinarily provided by a TelephoneService Providersuch as call waiting, call forwarding ,
conferencecalling,speeddialing,callerID,maliciouscallID,call
transfer, charging information, call pick-up, call barring,
recordedannouncement,nodoubleconnect,warmline,wake-up
call,hotline,voicemail,andspecialfeaturesofferedtocustomers
with PABXssuchas directinwarddialingandnumber hunting,
andthelike;providedthatintheprovisionofthefeature,nolaw,
rule, regulation or international convention on
telecommunications is circumvented or violated.The
Commission shall periodically update the list of special
features in the Telephone Network which, including the
chargingofratestherefor,shallbederegulated .
Section2. A duly authorizedTelephone ServiceProvider shall
informtheCommissioninwriting ofthespecial features itcan
offer and the corresponding rates thirty (30) days prior to
launchdate.
xxx
Section 4. Authorized Telephone Service Providers shall
continuetochargetheirdulyapprovedratesforspecialservices
for3monthsfromtheeffectivityofthiscircular,afterwhichthey
maysettheirownrates.
xxx(Emphasissupplied)
JustlikeVASasdefinedunderthePTA,specialfeaturesare
also not ordinarily provided by the telephone company.
Considering that MC No. 14-11-97 was promulgated after the
passageof thePTA, itcan beassumedthatthe authorsof the
Circularwerewellawareoftheregulatoryschemeformedunder
the PTA. Moreover, MC No. 14-11-97 repeatedly invokes the
word deregulation, and it cannot be denied that the
liberalizationethoswasintroducedbythePTA.Yet,theneteffectofMCNo.14-11-97istoaddtothehazebecloudingtheNTCs
rationale for regulation. The introduction of a new concept,
specialfeature,whichisnotprovidedforinthePTAjustadds
tothe confusion,especiallyin lightof thesimilarities between
special features andVAS. Moreover, there isno requirement
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thataPTEseekingtoofferspecialfeaturesmustsecureprior
approvalfromtheNTC.
Is SMS a VAS, enhanced service, or a special feature?
Apparently,eventheNTCisunsure.IthadtoldIslacomthatSMS
was a special feature, then subsequently held that it was a
VAS. However, the pertinent laws and regulations had not
changed from the time of the Islacom letter up to the daytheOrderwasissued.OnlythethinkingofNTCdid.
Moresignificantly, NTCnever required ISLACOM to apply
for prior approval in order to provide SMS, even after
theOrderto that effect was promulgated against Globe and
Smart. This fact was admitted by NTC during oral
arguments. [67]NTCs treatment of Islacom, apart from being
obviouslydiscriminatory,putsintoquestionwhetherornotNTC
trulybelieves that SMSis VAS. NTCis unable topointout any
subsequentruleorregulation,enactedafteritpromulgatedthe
adverse order against Globe and Smart, affirming the newly-
arriveddeterminationthatSMSisVAS.
Infact,asSmartadmittedduringtheoralarguments,while
it did comply with the NTCOrderrequiring it to secure prior
approval,itwasneverinformedbytheNTCofanyactiononits
request.[68]WhileNTCcountersthatit didissuea Certificateof
RegistrationtoSmart,authorizingthelatterasaproviderofSMS,
such Certificate of Registration was issued only on 13 March
2003, or nearly four (4) years after Smart had made its
request.[69]This inaction indicates a lack ofseriousnesson the
part oftheNTCtoimplementits ownrulings.Also,ittendsto
indicatethelackofbeliefor confusiononNTCspartastohow
SMSshould betreated.Giventheabstractset ofrulestheNTChaschosentoimplement,thisshouldcomeasnosurprise.Yetno
matter howcontent theNTC maybe with itsattitude ofsloth
towardsregulation,theeffectmayproveruinoustothesectorit
regulates.
Every party subject to administrative regulation
deserves an opportunity to know, through reasonable
regulations promulgated by the agency, of the objective
standards thathaveto bemet. Such rule isintegral todue
process,asitprotectssubstantiverights.Suchrulealsopromotes
harmonywithintheserviceorindustrysubjecttoregulation.It
provides indubitable opportunities to weed out the most
frivolousconflictswithminimumhassle, andcertain footing in
decidingmoresubstantiveclaims.If this results ina tenfoldin
administrativerulesandregulations,suchpriceisworthpaying
ifitalsoresultsinclarityandconsistencyintheoperativerules
ofthegame.Theadministrativeprocesswillbestbevindicated
byclarityinitsexercise. [70]
Inshort,thelegalbasisinvokedbyNTCinclaimingthatSMS
isVAShasnotbeendulyestablished.Thefaultfallssquarelyon
NTC.WiththedualclassificationofSMSasaspecialfeatureand
aVASandthevaryingrulespertinenttoeachclassification,NTC
hasunnecessarilycomplicatedtheregulatoryframeworktothe
detriment of the industry and the consumers. But does that
translate to a finding that the NTCOrdersubjecting Globe to
priorapprovalisvoid?Thereisafinelinebetweenprofessional
mediocrity and illegality. NTCs byzantine approach to SMS
regulation is certainly inefficient. Unfortunately for NTC, its
actions have also transgressed due process inmany ways,as
shownintheensuingelucidation.
PenalizedViaaQuasi-JudicialProcess,
GlobeandSmartareEntitledto
CorrespondingProtections
It is essential to understand that the assailedOrderwas
promulgated by NTC in the exercise of its quasi-judicial
functions. The case arose when Smart had filed the initial
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complaint against Globe before NTC for interconnection of
SMS.[71]NTC issued aShow Cause Orderrequiring Globe to
answer Smarts charges. Hearings were conducted, and a
decisionmadeonthemerits,signedbythethreeCommissioners
oftheNTC,sittingasacollegialbody. [72]
Theinitialcontroversymayhaveinvolvedadifferentsubject
matter,interconnection,whichisnolongercontested.Itcannotbe denied though that the findings and penalty now assailed
before us was premised on the same exercise of
jurisdiction.Thus,itisnotrelevanttothiscasethattheprocess
forobtainingpriorapprovalunderthePTAanditsImplementing
Rules is administrative in nature. While this may be so, the
assailed NTCs determination and correspondingpenaltywere
renderedintheexerciseofquasi-judicialfunctions.Therefore,all
the requirements of due process attendant to the exercise of
quasi-judicialpowerapplytothepresentcase.Amongthemare
the seven cardinal primary rights in justiciable cases before
administrative tribunals, as enumerated inAng Tibayv.
CIR.[73]Theyaresynthesizedinasubsequentcase,asfollows:
Therearecardinalprimaryrightswhichmustberespectedeven
inproceedingsof this character.Thefirstoftheserightsis the
righttoahearing,whichincludestherightofthepartyinterested
or affected to present his own case and submit evidence in
supportthereof.Notonlymustthepartybegivenanopportunity
topresenthiscaseandtoadduceevidencetendingtoestablish
therightswhichhe assertsbutthe tribunal must consider the
evidence presented. While the duty to deliberate does not
imposetheobligationtodecideright,it does implya necessity
whichcannotbedisregarded,namely,thatofhavingsomethingtosupportitsdecision.Notonlymusttherebesomeevidenceto
support a finding or conclusion, but the evidence must be
substantial. The decision must be rendered on the evidence
presentedatthehearing,oratleastcontainedintherecordand
disclosedtothepartiesaffected. [74]
NTCviolated severalof these cardinal rightsdue Globein
thepromulgationoftheassailed Order.
First.The NTC Order is not supported by substantial
evidence.Neitherdoesitsufficientlyexplainthereasonsforthe
decisionrendered.
Our earlier discussion pertained to thelack of clear legal
basisforclassifyingSMSasVAS,owingtothefailureoftheNTC
toadoptclearrulesandregulationstothateffect.Muddledasthe
legalmilieugoverningSMSalreadyis,NTCsattempttoapplyits
confusingstandardsinthecaseofGlobeandSmartisevenmore
disconcerting. The very rationale adopted by the NTC in
itsOrderholding that SMS is VAS is short and shoddy.
Astoundingly,theCourtofAppealsaffirmedtherationalebereft
of intelligent inquiry, much less comment. Stated in full, the
relevantportionoftheNTCOrderreads:
xxxGettingdown[to]thenitty-gritty,GlobesSMSinvolvesthe
transmissionofdataoveritsCMTSwhichisGlobesbasicservice.SMSis notordinarily providedby a CMTS operatorlikeGlobe,
andsinceSMSenhancesGlobesCMTS,SMSfitsintoanicety
[sic]with thedefinition ofvalue-added-serviceor enhanced-
service under NTCMemorandumCircular [8]-9-95 (Rule 001,
Item[15]). [75]
The Court usually accords great respect to the technical
findingsofadministrativeagenciesinthefieldsoftheirexpertise,
even if they are infelicitously worded. However, the above-
quoted finding is nothing more than bare assertions,
unsupported by substantial evidence.[76]
TheOrderreveals thatnodeepinquirywasmadeas tothenatureofSMS orwhatits
provisioning entails. In fact, the Court is unable to find how
exactly does SMSfits into anicetywith NTCM.C.No.8-9-95,
which defines enhanced services as analogous to format,
media conversion, encryption, enhanced security features,
computerprocessing,andthelike. [77]TheNTCmerelynotesthat
T P A A
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SMS involves the transmission of data over [the] CMTS, a
phraseologythatevincesno causalrelationto thedefinition in
M.C.No.8-9-95.Neitherdid theNTCendeavor toexplainwhy
thetransmissionofdatanecessarilyclassifiesSMSasaVAS.
Infact,ifthetransmissionofdataover[the]CMTSistobe
reckoned as the determinative characteristic of SMS, it would
seem that this is already sufficiently covered by Globe andSmartsrespective legislative franchises.[78]Smartis authorized
underitslegislativefranchisetoestablishandoperateintegrated
telecommunications/computer/ electronic services for public
domestic and international communications,[79]while Globe is
empowered to establish and operate domestic
telecommunications,andstationsfortransmissionandreception
ofmessages bymeans ofelectricity, electromagneticwaves or
any kind of energy, force, variations or impulses, whether
conveyed by wires, radiated through space or transmitted
throughothermediaandforthehandlingofanyandalltypesof
telecommunicationsservices. [80]
The question of the proper legal classification of VAS is
uniquelytechnical,tiedasatistothescientificandtechnological
application of the service or feature. Owing to the dearth of
substantivetechnicalfindingsanddatafromtheNTConwhicha
judicial review may reasonably be premised, it is not
opportunely proper for the Court to make its own technical
evaluation of VAS, especially in relation to SMS. Judicial fact-
findingofthedenovokindisgenerallyabhorredandtheshiftof
decisionalresponsibilitytothejudiciaryisnotfavoredasagainst
the substantiated and specialized determination of
administrative agencies.[81]
With greaterreason should this bethe standard for the exercise of judicial review when the
administrativeagencyconcernedhasnotinthefirstplacecome
outwithatechnicalfindingbasedonevidence,asinthiscase.
Yetatthesametime,thisabsenceofsubstantialevidencein
supportofthefindingthatSMSisVASalreadyrendersreversible
thatportionoftheNTCOrder.
Moreover, theOrderdoes not explain why the NTC was
according the VAS offerings of Globe and Smart a different
regulatorytreatment from that ofIslacom. Indeed,to this day,
NTChasnotofferedanysensibleexplanationwhy Islacomwasaccorded to a less onerous regulatory requirement, nor have
theycompelledIslacomtosufferthesameburdensasGlobeand
Smart.
Whilestabilityinthelaw,particularlyinthebusinessfield,
isdesirable, there is no demand that theNTC slavishly follow
precedent. [82]However,wethinkitessential, forthesakeof
clarity and intellectual honesty, that if an administrative
agencydecidesinconsistentlywith previous action,that it
explainthoroughlywhyadifferentresultiswarranted,orif
needbe,whythepreviousstandardsshouldnolongerapply
orshould beoverturned.[83]Suchexplanation is warrantedin order to sufficiently establish a decision as having
rational basis.[84]Any inconsistent decision lacking
thorough, ratiocination insupport maybe struckdown as
beingarbitrary.Andanydecisionwithabsolutelynothingto
supportitisanullity .[85]
Second. Globe and Smart were denied opportunity to
presentevidenceontheissuesrelatingtothenatureofVASand
thepriorapproval.
Anotherdisturbingcircumstance attending this petition is
thatuntilthepromulgationoftheassailed OrderGlobeandSmartwere never informed of the fact that their operation of SMS
withoutpriorauthoritywasatallanissueforconsideration.Asa
result, neitherGlobeor Smart wasafforded an opportunityto
presentevidenceintheirbehalfonthatpoint.
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NTCasserts that since Globe and Smart were requiredto
submit their respective Certificates of Public Convenience and
Necessity and franchises, theparties weresufficiently notified
that theauthorityto operatesuch servicewas amatterwhich
NTC could look into. This is wrong-headed considering the
governinglawandregulations.ItisclearthatbeforeNTCcould
penalizeGlobeandSmartforunauthorizedprovisionofSMS,it
mustfirstestablishthatSMSisVAS.Sincetherewasnoexpress
rule orregulation onthatquestion,Globe andSmartwould be
well withinreasonif they submitted evidencetoestablishthat
SMSwasnotVAS.Unfortunately,nosuchopportunityaroseand
nosuchargumentswereraisedsimplybecauseGlobeandSmart
were notawarethatthequestionof theirauthorityto provide
SMSwasanissueatall.Neithercoulditbesaidthattherequisite
ofprior authoritywas indubitableundertheexistingrulesand
regulations. Considering the prior treatment towards Islacom,
Globe(andSmart,haditchosentodoso)hadeveryrighttorely
onNTCsdisposalofIslacomsinitiativeandtobelievethatprior
approvalwasnotnecessary.
Neither was the matter ever raised during the hearings
conducted by NTC on Smarts petition. This claim has been
repeatedlyinvoked byGlobe.Itis borneout bytherecords or
theabsencethereof.NTCcouldhaveeasilyrebuffedthisclaimby
pointing to a definitive record. Yet strikingly, NTC has not
asserted that thematterof Globes authoritywas raisedin any
pleading or proceeding. In fact, Globe in itsConsolidated
Replybefore this Court challenged NTC to produce the
transcriptsofthehearingsitconductedtoprovethattheissueof
Globes authority to provideSMS was putin issue.The Court
similarly ordered the NTC to produce such transcripts.[86]NTCfailedtoproduceany. [87]
The opportunity to adduce evidence is essential in the
administrative process, as decisions must be rendered on the
evidencepresented,eitherinthehearing,oratleastcontainedin
the record and disclosed to the parties affected.[88]The
requirement that agencies hold hearings in which parties
affected by theagencys actioncan be represented by counsel
may be viewed as an effort to regularize this struggle for
advantage within a legislative adversary framework.[89]It
necessarilyfollowsthatifnoevidenceisprocuredpertinenttoa
particular issue, any eventual resolution of that issue on
substantivegrounds despitetheabsence ofevidenceis flawed.
Moreover,ifthepartiesdidhaveevidencetocountertheruling
but were wrongfully denied the opportunity to offer the
evidence,theresultwouldbeembarrassingontheadjudicator.
Thus, the comical, though expected, result of a definitive
orderwhichistotallyunsupportedbyevidence.Tothisblatant
violationofdueprocess,thisCourtstandsathwart.
Third.The imposition of fine is void for violation of due
process
ThematterofwhetherNTCcouldhaveimposedthefineon
GlobeintheassailedOrderisnecessarilyrelatedtodueprocessconsiderations.Since this question would also call to fore the
relevantprovisionsofthePublicServiceAct,itdeservesitsown
extensivediscussion.
Globeclaimsthat theissue ofitsauthority tooperateSMS
services was never raised as an issue in theComplaintfiled
againstitbySmart.NordidNTCeverrequireGlobetojustifyits
authority to operate SMS servicesbeforethe issuance of
theOrderimposingthefine.
The Court of Appeals, in its assailed decision, upheld the
powerofNTCtoimposeafineandtomakeapronouncementon
Globes alleged lack of operational authority without need ofhearing, simply by citing the provision of the Public Service
Act[90]whichenumeratestheinstanceswhenNTCmayact motu
proprio.ThatisSection17,paragraph(a),whichreadsthus:
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Sec. 17. Proceedings of [the National Telecommunications
Commission]without previous hearing. The Commission shall
have power, without previous hearing, subject to established
limitationsandexceptionsandsavingprovisionstothecontrary:
(a)Toinvestigate,uponitsowninitiative,oruponcomplaintin
writing, any matter concerning any public service as regards
mattersunder its jurisdiction; torequire anypublic serviceto
furnishsafe,adequate,andproperserviceasthepublicinterest
may require and warrant; to enforce compliance with any
standard,rule,regulation,orderorotherrequirementofthisAct
or of the Commission, and to prohibit or prevent any public
service as herein defined from operating without having first
secured a certificateof public convenience or public necessity
andconvenience,asthecasemaybe,andrequireexistingpublic
servicestopaythefeesprovidedforinthisActfortheissuance
ofthe propercertificate ofpublic convenienceor certificate of
publicnecessityandconvenience,asthecasemaybe,underthe
penalty, inthe discretionof theCommission,of therevocationandcancellationofanyacquiredrights.
Ontheotherhand,NTCitself,inthe Order,citesSection21
as thebasis forits imposition of fine on Globe.The provision
states:
Sec.21.Everypublicserviceviolatingorfailingtocomplywith
the terms and conditions of any certificate or any orders,
decisionsorregulationsoftheCommissionshallbesubjecttoa
fine ofnotexceedingtwohundredpesosperday foreveryday
during which such default or violation continues; and theCommission is hereby authorized and empowered to impose
suchfine,afterduenoticeandhearing .[Emphasissupplied.]
Sections 17 and 21 of the Public Service Act confer two
distinctpowersonNTC.UnderSection17,NTChasthepowerto
investigatea PTEcompliancewitha standard, rule, regulation,
order,orotherrequirementimposedby lawortheregulations
promulgatedbyNTC,aswellasrequirecomplianceifnecessary.
Bytheexplicitlanguageoftheprovision,NTCmayexercisethe
powe