PLDT vs. NTC

GR 88404, 18 October 1990; En Banc, Melencio-Herrera (J)

FACTS: On 22 June 1958, RA 2090 was enacted granting Felix Alberto & Co. (later ETCI) a franchise to establish radio stations for domestic and transoceanic telecommunications. On 13 May 1987, ETCI filed an application with the NTC for the issuance of a certificate of public convenience and necessity to operate, etc. a Cellular Mobile Telephone System and an alpha numeric paging system in Metro Manila and in the Southern Luzon regions, with a prayer for provisional authority to operate within Metro Manila. PLDT filed an opposition with a motion to dismiss. On 12 November 1987, NTC overruled PLDT’s opposition and declared RA 2090 should be liberally construed so as to include the operation of a cellular mobile telephone service as part of services of the franchise. On 12 December 1988, NTC granted ETCI provisional authority to install, operate, and maintain a cellular mobile telephone service initially in Metro Manila subject to the terms and conditions set forth in its order, including an interconnection agreement to be entered with PLDT. PLDT filed a motion to set aside order which was denied by the NTC on 8 May 1989. PLDT challenged the 12 December 1988 and 8 May 1989 NTC orders before the Supreme Court through a special civil action for certiorari and prohibition.

ISSUES:

(1) Whether the provisional authority was properly granted.

(2) Whether ETCI’s franchise includes operation of cellular mobile telephone system (CMTS)

(3) Whether PLDT can refuse interconnection with ETCI.

RULING:

(1) The provisional authority granted by the NTC (which is the regulatory agency of the National Government over all telecommunications entities) has a definite expiry period of 18 months unless sooner renewed; may be revoked, amended or revised by the NTC; covers one of four phases; limited to Metro Manila only; and does not authorize the installation and operation of an alphanumeric paging system. It was further issued after due hearing, with PLDT attending and granted after a prima facie showing that ETCI had the necessary legal, financial and technical capabilities; and that public interest, convenience and necessity so demanded. Provisional authority would be meaningless if the grantee were not allowed to operate, as its lifetime is limited and may be revoked by the NTC at any time in accordance with law.

(2) The NTC construed the technical term “radiotelephony” liberally as to include the operation of a cellular mobile telephone system. The construction given by an administrative agency possessed of the necessary special knowledge, expertise and experience and deserves great weight and respect. It can only be set aside by judicial intervention on proof of gross abuse of discretion, fraud or error of law.

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

The NTC order does not deprive PLDT due process as it allows the parties themselves to discuss and agree upon the specific terms and conditions of the interconnection agreement instead of the NTC itself laying down the standards of interconnection which it can very well impose.