On 20 March 1995, the National Telecommunications Commission (NTC) issued PILTEL a Provisional Authority (PA) to install, operate and maintain telephone exchanges and public calling offices in areas including Zamboanga del Norte, and Davao City, among others.
On 21 June 1996, while PILTEL’s PA was still valid and subsisting, the International Communications Corporation (ICC) applied with the NTC for a PA to construct, operate and maintain local exchange services in some of the areas covered by PILTEL’s PA. Among the areas included in ICC’s application were Zamboanga del Sur, Davao del Sur, South Cotabato and Saranggani.
PILTEL filed its Opposition to ICC’s PA application.
On 9 March 1998, the NTC issued an Order granting ICC a PA to establish local exchange services in areas that included Misamis Occidental, Zamboanga del Sur, Davao del Sur, South Cotabato and Saranggani.
PILTEL filed a petition for certiorari with prayer for the issuance of a temporary restraining order or writ of preliminary injunction with the Court of Appeals (CA) to nullify the NTC Order.
The CA issued a Joint Decision finding no grave abuse of discretion, tantamount to lack xxx or excess of jurisdiction, on the part of the National Telecommunications Commission in issuing its challenged Order.
Hence, this petition.
Whether the NTC acted with grave abuse of discretion amounting to lack of jurisdiction in granting ICC a Provisional Authority to operate local exchange service in areas previously assigned to PILTEL.
The petition lacks merit.
Among the declared national policies in R.A. No. 7925, otherwise known as the “Public Telecommunications Policy Act of the Philippines,” is the healthy competition among telecommunications carriers, to wit:
A healthy competitive environment shall be fostered, one in which telecommunications carriers are free to make business decisions and to interact with one another in providing telecommunications services, with the end in view of encouraging their financial viability while maintaining affordable rates.
Obviously, “the need for a healthy competitive environment in telecommunications is sufficient impetus for the NTC to consider all those applicants, who are willing to offer competition, develop the market and provide the environment necessary for greater public service.”
Furthermore, “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 mobil[e] service, and reduced user dissatisfaction.”
PILTEL’s contention that the NTC Order amounts to a confiscation of property without due process of law is untenable. “Confiscation” means the seizure of private property by the government without compensation to the owner.
A franchise to operate a public utility is not an exclusive private property of the franchisee. Under the Constitution, no franchisee can demand or acquire exclusivity in the operation of a public utility. Thus, a franchisee of a public utility cannot complain of seizure or taking of property because of the issuance of another franchise to a competitor. Every franchise, certificate or authority to operate a public utility is, by constitutional mandate, non-exclusive. PILTEL cannot complain of a taking of an exclusive right that it does not own and which no franchisee can ever own.
In Republic v. Express Telecommunications Co., the Court held that “the Constitution is quite emphatic that the operation of a public utility shall not be exclusive.” Section 11, Article XII of the Constitution provides:
Sec. 11. No franchise, certificate, or any other form of authorization for the operation of a public utility shall be granted to citizens of the Philippines or to corporations or associations organized under the laws of the Philippines at least sixty per centum of whose capital is owned by such citizens, nor shall such franchise, certificate or authorization be exclusive in character or for a longer period than fifty years. Neither shall any such franchise or right be granted except under the condition that it shall be subject to amendment, alteration, or repeal by the Congress when the common good so requires.