August 2003 - Philippine Supreme Court Decisions/Resolutions
[G.R. No. 138295. August 28, 2003.]
PILIPINO TELEPHONE CORPORATION, Petitioner, v. NATIONAL TELECOMMUNICATIONS COMMISSION and INTERNATIONAL COMMUNICATIONS CORPORATION, Respondents.
D E C I S I O N
This petition for review on certiorari 1 seeks to reverse the Joint Decision 2 of the Court of Appeals in CA-G.R. SP No. 47752 3 and CA-G.R. SP No. 47972 4 dated 15 April 1999 denying due course to the petition for certiorari 5 filed by Pilipino Telephone Corporation ("PILTEL"), and dismissing the same.chanrob1es virtua1 1aw 1ibrary
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. The areas covered by PILTEL’s PA included Sulu, Zamboanga del Norte, Zamboanga del Sur, Tawi-Tawi, Misamis Occidental, Davao del Sur, South Cotabato, Saranggani and Davao City.
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 Misamis Occidental, Zamboanga del Sur, Davao del Sur, South Cotabato and Saranggani.
On 11 November 1996, PILTEL filed its Opposition to ICC’s PA application.
On 9 March 1998, the NTC issued an Order ("NTC 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 on 5 June 1998 to nullify the NTC Order. On 28 July 1998, ICC filed its Comment to PILTEL’s Petition, while PILTEL filed its Reply on 28 August 1998.
On 21 September 1998, PILTEL filed an Urgent Motion to Resolve its application for the issuance of a temporary restraining order. PILTEL alleged, among others, that it had yet to receive ICC’s Comment despite the lapse of a considerable time from the Court of Appeals’ Resolution requiring ICC to file its Comment.
On 15 April 1999, the Court of Appeals issued a Joint Decision, the dispositive portion of which reads:chanrob1es virtual 1aw library
WHEREFORE, for finding no grave abuse of discretion, tantamount to lack . . . or excess of jurisdiction, on the part of the National Telecommunications Commission in issuing its challenged Order dated March 9, 1998 in NTC Case No. 96-194 which granted a provisional authority to International Communications Corporation, the two (2) consolidated cases of CA-G.R. SP No. 47752 and CA-G.R. SP No. 47972 are both hereby DENIED DUE COURSE and accordingly DISMISSED.
Costs against the petitioners.
SO ORDERED. 6
Hence, this petition.
The Ruling of the Court of Appeals
In its petition for certiorari, PILTEL claimed that the NTC acted with grave abuse of discretion amounting to lack of jurisdiction in granting ICC a PA to operate local exchange service in areas previously assigned to PILTEL. PILTEL alleged that the NTC Order violates Department of Transportation and Communications Circular No. 91-260, Executive Order No. 109 and NTC Memorandum Circular No. 11-9-93. PILTEL also claimed that the NTC Order is tantamount to an unwarranted taking of property without due process of law and violates the equal protection clause of the Constitution. Lastly, PILTEL alleged that the implementation of the NTC Order would foster ruinous competition.
In denying due course to the petition for certiorari, the Court of Appeals gave the following reasons:chanrob1es virtual 1aw library
First. Petitioner has not sufficiently shown us that other than this special civil action under Rule 65, they have no plain, speedy, and adequate remedy in the ordinary course of law against their perceived grievance. . . .
Second. Assuming arguendo that the propriety of the present recourse is not infirm, it is settled, however, that before certiorari may be availed of, petitioner must have filed a motion for reconsideration of the order or act complained of to enable the tribunal, board or office concerned to pass upon and correct its mistakes without the intervention of the higher courts. . . .
Third. Further assuming arguendo that certiorari [was] the proper remedy, petitioner still failed to show that the order complained of was tainted with grave abuse of discretion, so much so that after a careful deliberation of the arguments and grounds in support thereof, it undoubtedly appears that the disputed order was issued based on meritorious grounds. 7
In assailing the decision of the Court of Appeals, PILTEL contends that:chanrob1es virtual 1aw library
A. THE PETITIONER PROPERLY AVAILED OF THE REMEDY OF CERTIORARI UNDER RULE 65 OF THE 1997 RULES OF CIVIL PROCEDURE CONSIDERING THAT:chanrob1es virtual 1aw library
1. THERE IS NO APPEAL OR ANY PLAIN, SPEEDY AND ADEQUATE REMEDY IN THE ORDINARY COURSE OF LAW AVAILABLE TO PETITIONER.
2. THE ISSUES RAISED BY PETITIONER ARE PURELY OF LAW, HENCE, THE FILING OF A MOTION FOR RECONSIDERATION OF THE QUESTIONED ORDER IS NOT A CONDITION SINE QUA NON.
B. THE NATIONAL TELECOMMUNICATIONS COMMISSION ACTED WITH GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OR EXCESS OF JURISDICTION CONSIDERING THAT:chanrob1es virtual 1aw library
1. THE GRANT OF THE PROVISIONAL AUTHORITY TO ICC TO OPERATE LOCAL EXCHANGE SERVICE IN AREAS PREVIOUSLY ASSIGNED TO PILTEL UNDER ITS OWN PROVISIONAL AUTHORITY IS VIOLATIVE OF NTC MEMORANDUM CIRCULAR NO. 11-9-93.
2. THE GRANT OF THE PROVISIONAL AUTHORITY TO ICC TO OPERATE LOCAL EXCHANGE SERVICE IN AREAS PREVIOUSLY ASSIGNED TO PILTEL IS TANTAMOUNT TO CONFISCATION OF PROPERTY WITHOUT DUE PROCESS OF LAW.chanrob1es virtua1 1aw 1ibrary
3. THE GRANT OF THE PROVISIONAL AUTHORITY TO ICC TO OPERATE LOCAL EXCHANGE SERVICE IN AREAS PREVIOUSLY ASSIGNED TO PILTEL WOULD VIOLATE THE LATTER’S RIGHTS AS A PRIOR OPERATOR AND ITS RIGHT TO BE PROTECTED IN ITS INVESTMENT. 8
The petition lacks merit.
Whether PILTEL properly availed of the remedy of certiorari
PILTEL insists that the NTC Order is not a proper subject of an appeal since it is interlocutory which did not resolve ICC’s pending application for a Certificate of Public Convenience and Necessity. Even assuming that appeal is an available remedy, PILTEL contends that it is not adequate to relieve promptly PILTEL from the injurious effect 9 of the NTC Order which was immediately executory under the NTC Rules of Practice and Procedure. 10 PILTEL also insists that a motion for reconsideration is dispensable since the issues raised in the NTC were the same issues presented in the Court of Appeals and these are purely questions of law. Thus, PILTEL argues, a motion for reconsideration before the NTC would have served no purpose. 11
The settled rule is a motion for reconsideration is a prerequisite for the filing of a petition for certiorari. 12 A petitioner must exhaust all other available remedies before resorting to certiorari. An exception to this rule arises if the petitioner raises purely legal issues. However, contrary to PILTEL’s view, the issues raised in its petition for certiorari before the Court of Appeals were mainly factual in nature. Since PILTEL disputes NTC’s factual findings and seeks a re-evaluation of the facts and evidence on record, the issues PILTEL raised are not proper subjects for certiorari. Evidentiary matters or matters of fact raised in the NTC are not proper grounds in the proceedings for certiorari before the Court of Appeals. 13 The sole office of a writ of certiorari is the correction of errors of jurisdiction and does not include a review of the NTC’s evaluation of the evidence and factual findings. 14
Even if the NTC Order was immediately executory, it did not excuse PILTEL from filing a motion for reconsideration. Contrary to PILTEL’s view, a motion for reconsideration is the plain, speedy and adequate remedy to the adverse NTC Order. 15 Had PILTEL filed a motion for reconsideration of the NTC Order, the NTC would have had the opportunity to correct the alleged errors. 16 In addition, PILTEL’s failure to file a motion for reconsideration rendered its petition for certiorari dismissible because of failure to exhaust administrative remedies.
In Republic v. Express Telecommunication Co., Inc., 17 the Court ruled that Extelcom failed to exhaust available administrative remedies when it filed with the Court of Appeals a petition for certiorari and prohibition without a motion for reconsideration, thus:chanrob1es virtual 1aw library
Clearly, Extelcom violated the rule on exhaustion of administrative remedies when it went directly to the Court of Appeals on a petition for certiorari and prohibition from the Order of the NTC dated May 3, 2000, without first filing a motion for reconsideration. It is well-settled that the filing of a motion for reconsideration is a prerequisite to the filing of a special civil action for certiorari.
This case does not fall under any of the recognized exceptions to this rule. Although the Order of the NTC dated May 3, 2000 granting provisional authority to Bayantel was immediately executory, it did not preclude the filing of a motion for reconsideration. Under the NTC Rules, a party adversely affected by a decision, order, ruling or resolution may within fifteen (15) days file a motion for reconsideration. That the Order of the NTC became immediately executory does not mean that the remedy of filing a motion for reconsideration is foreclosed to the petitioner. (Emphasis supplied)
In fine, the Court of Appeals correctly dismissed PILTEL’s petition for certiorari for PILTEL’s failure to file a motion for reconsideration of the NTC Order.
Whether NTC committed grave abuse of discretion
In Benito v. Commission on Elections, 18 the Court defined grave abuse of discretion as follows:chanrob1es virtual 1aw library
Grave abuse of discretion means such capricious and whimsical exercise of judgment as is equivalent to lack of jurisdiction, or, in other words where the power is exercised in an arbitrary or despotic manner by reason of passion or personal hostility, and it must be so patent and gross as to amount to an evasion of positive duty or to a virtual refusal to perform the duty enjoined or to act at all in contemplation of law. It is not sufficient that a tribunal, in the exercise of its power, abused its discretion, such abuse must be grave. (Emphasis supplied)
Assuming that PILTEL’s petition for certiorari was proper, PILTEL nevertheless miserably failed to show that the NTC gravely abused its discretion amounting to lack or excess of jurisdiction in issuing the NTC Order. The NTC is the regulatory agency of the national government with jurisdiction over all telecommunications entities. 19 The law expressly vests in the NTC the power and discretion to grant a provisional permit or authority. 20 In this case, the NTC did not commit grave abuse of discretion when it issued the questioned Order. The NTC Order explicitly provides for the basis of the issuance of the PA, as follows:chanrob1es virtual 1aw library
The technical feasibility study submitted and offered in evidence by the applicant contains technical designs which consist of two main components, to wit:chanrob1es virtual 1aw library
(a) The rural network component consisting of a number of dispersed switching centers throughout Regions 6, 7, 9, 10, 11 and 12 interconnected by a digital microwave transmission system.
(b) The transit (Inter-exchange carrier) network consisting of transit switching centers of Manila and Cebu for the interconnection of the ICC LEC Networks with the network of other LEC operators, IGF operators (as well as ICC IGF), CMTS operators and operators of PCO Networks.
Its network design is based on conservative projections and value based engineering assumptions to ensure than an effective and efficient network is provided.
The structure of ICC’s LEC has two (2) layer hierarchical network: the transit layer which provides the classic trunk (tool) switching and inter-carrier interconnect functions; and the local exchange carrier.
Applicant will be using Northern Telecom DMS 100/200 and DMS 300 (Toll Exchange) digital switching equipment for its LEC Network/Service in the twenty-two (22) provinces in Visayas and Mindanao areas.
Applicant’s proposed LEC project in the Visayas and Mindanao areas will be implemented within [a] three (3) year period with a total number of 250,000 lines as mentioned in the submitted Feasibility Study. The distribution of ICC’s committed lines for its proposed LEC project in the cities and municipalities of the twenty-two (22) provinces in the Visayas and Mindanao areas are enumerated in Annex "B" of the amended application.
As regards the capital costs for the present proposed project, applicant’s financial documents show the following figures:chanrob1es virtual 1aw library
Year 1 P1.796 Billion
Year 2 1.434 Billion
Year 3 2.319 Billion
TOTAL P5.549 Billion
Applicant’s projected revenues and expenses (in thousand pesos) are as follows:chanrob1es virtual 1aw library
Year Net Income/Loss
Applicant submitted its amended Articles of Incorporation approved by the Securities and Exchange Commission on July 31, 1996 as shown by the attached Certificate of Increase of Capital Stock wherein applicants Authorized Capital Stock was increased from P1,500,000, . . . (illegible) Million shares with par value of P100 each.
Of the increase of P3,500,000,000.00 in the authorized capital stock, the amount of P2,185,000,000.00 has been subscribed and fully paid by Bayan Telecommunications Holdings Corporation.
Per 1996 Annual Report submitted by the applicant, the following figures reflected their financial position:chanrob1es virtual 1aw library
Total assets = P11,369,996,565
Total liabilities = 6,779,971,249
Total stockholder’s equity = 4,590,025,316
with a debt-to-equity ratio of 60% to 40%.
Applicant has an outstanding balance for permit fee amounting to P88,988,089.00 for the following . . . (illegible) previously authorized, to wit:chanrob1es virtual 1aw library
The Commission has noted that the present application received favorable endorsements/resolutions from twenty-three (23) Local Government Units (LGU) and non-Government Organizations (NGOs) in the Visayas and Mindanao Regions manifesting support for the applicant’s proposed projects.chanrob1es virtua1 1aw 1ibrary
In determining the service areas to be assigned to herein applicant with a view to rationalizing the distribution thereof to qualified applicants, the Commission took into consideration the other pending applications for LEC services, the existing number of authorized LEC applicants, the need to provide LEC service to all areas of the country the soonest time possible, as well as the fact that earlier on, this Commission had occasion to commend in another case herein applicant ICC for being the first to have completed, nay exceeded, its compliance with its commitments under Executive Order 109 and NTC Memorandum Circular No. 11-9-93.
WHEREFORE, it appearing that a prima facie evidence exists that applicant is financially and technically capable of undertaking the proposed project, and in order to fast-track the development of telecommunication services through the provisioning of telephone services to all areas of the country, and to foster as well healthy competition among authorized service providers, the Commission hereby grants applicant International Communications Corporation a Provisional Authority (P.A.), predicated upon its legislative franchise, R.A. No. 3259, as amended by R.A. No. 4905, and R.A. No. 7633, to install, operate and maintain local telephone exchanges in the following provinces, . . . 21 (Emphasis supplied)
We will not disturb the factual findings of the NTC on the technical and financial capability of the ICC to undertake the proposed project. We generally accord great weight and even finality to factual findings of administrative bodies such as the NTC, if substantial evidence supports the findings as in this case. 22 The exception to this rule is when the administrative agency arbitrarily disregarded evidence before it or misapprehended evidence to such an extent as to compel a contrary conclusion had it properly appreciated the evidence. 23 PILTEL gravely failed to show that this exception applies to the instant case. Moreover, the exercise of administrative discretion, such as the issuance of a PA, is a policy decision and a matter that the NTC can best discharge, not the courts. 24
PILTEL contends that the NTC violated Section 23 of NTC Memorandum Circular No. 11-9-93, otherwise known as the "Implementing Guidelines on the Provisions of EO 109," which states:chanrob1es virtual 1aw library
Section 23. No other company or entity shall be authorized to provide local exchange service in areas where the LECs comply with the relevant provisions of NTC MC No. 10-17-90 and NTC MC No. 10-16-90 and that the local exchange service area is not underserved. (Emphasis supplied)
Section 23 of EO 109 does not categorically state that the issuance of a PA is exclusive to any telecommunications company. Neither Congress nor the NTC can grant an exclusive "franchise, certificate, of any other form of authorization" to operate a public utility. In Republic v. Express Telecommunications Co. 25 the Court held that "the Constitution is quite emphatic that the operation of a public utility shall not be exclusive." 26 Section 11, Article XII of the Constitution provides:chanrob1es virtual 1aw library
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 . . . 27 (Emphasis supplied)
Thus, in Radio Communications of the Philippines, Inc. v. National Telecommunications Commission, 28 the Court ruled that the "Constitution mandates that a franchise cannot be exclusive in nature."cralaw virtua1aw library
Even PILTEL’s franchise, Republic Act No. 6030 ("RA 6030"), expressly declares that PILTEL’s right to provide telecommunications services is not exclusive. Section 13 of RA 6030 states:chanrob1es virtual 1aw library
SECTION 13. The rights herein granted shall not be exclusive, and the right and power to grant to any corporation, association or person other than the grantee franchise for the telephone or electrical transmission of messages and signals shall not be impaired or affected by the granting of this franchise: . . .." (Emphasis supplied)
Moreover, Section 1 of RA 6030 29 expressly states that the grant of a franchise to PILTEL is" [s]ubject to the conditions established . . . in the Constitution." Consequently, PILTEL does not enjoy any exclusive right to operate telecommunications services in the areas covered by its PA.
Among the declared national policies in Republic Act No. 7925, otherwise known as the "Public Telecommunications Policy Act of the Philippines," is the healthy competition among telecommunications carriers, to wit: 30
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." 31
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." 32
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. 33 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.
Likewise, PILTEL’s argument that the NTC Order violates PILTEL’s rights as a prior operator has no merit. The Court resolved a similar question in Republic v. Republic Telephone Company, Inc. 34 In striking down Retelco’s claim that it had a right to be protected in its investment as a franchise-holder and prior operator of a telephone service in Malolos, Bulacan, the Court held:chanrob1es virtual 1aw library
RETELCO’s foremost argument is that "such operations and maintenance of the telephone system and solicitation of subscribers by [petitioners] constituted an unfair and ruinous competition to the detriment of [RETELCO which] is a grantee of both municipal and legislative franchises for the purpose." In effect, RETELCO pleads for protection from the courts on the assumption that its franchises vested in it an exclusive right as prior operator. There is no clear showing by RETELCO, however, that its franchises are of an exclusive character. . . . At any rate, it may very well be pointed out as well that neither did the franchise of PLDT at the time of the controversy confer exclusive rights upon PLDT in the operation of a telephone system. In fact, we have made it a matter of judicial notice that all legislative franchises for the operation of a telephone system contain the following provision:jgc:chanrobles.com.ph
"It is expressly provided that in the event the Philippine Government should desire to maintain and operate for itself the system and enterprise herein authorized, the grantee shall surrender his franchise and will turn over to the Government said system and all serviceable equipment therein, at cost, less reasonable depreciation."cralaw virtua1aw library
In sum, the Court of Appeals correctly dismissed PILTEL’s petition for certiorari not only because PILTEL failed to exhaust the available administrative remedies but also because NTC acted within its jurisdiction in issuing the NTC Order.
WHEREFORE, we DENY the petition. The Decision of the Court of Appeals dated 15 April 1999 in CA-G.R. SP No. 47752 and CA-G.R. SP No. 47972 is AFFIRMED. Costs against petitioner.
SO ORDERED.chanrob1es virtua1 1aw 1ibrary
Davide, Jr., C.J., Vitug, Ynares-Santiago and Azcuna, JJ., concur.
1. Under Rule 45 of the Rules of Court.
2. Penned by Associate Justice Martin S. Villarama, Jr. with Associate Justices Angelina Sandoval-Gutierrez and Romeo A. Brawner, concurring.
3. Entitled "Philippine Global Communications, Inc., Petitioner, v. National Telecommunications Commission and International Communications Corporation, Respondents."cralaw virtua1aw library
4. Entitled "Pilipino Telephone Corporation, Petitioner, v. National Telecommunications Commission and International Communications Corporation, Respondents." Only PILTEL appealed to this Court.
5. Under Rule 65 of the Rules of Court.
6. Rollo, p. 44.
7. Ibid., pp. 36–40.
8. Ibid., pp. 259–260.
9. Ibid., p. 263.
11. Ibid., p. 265.
12. Bernardo v. Abalos, Sr., G.R. No. 137266, 5 December 2001, 371 SCRA 459.
13. Negros Oriental Electric Cooperative 1 v. Secretary of the Department of Labor and Employment, G.R. No. 143616, 9 May 2001, 357 SCRA 668.
14. Oro v. Diaz, 413 Phil. 416 (2001).
15. See Tan, Jr. v. Sandiganbayan, 354 Phil. 463 (1998).
16. See Sevillana v. I.T. (International), Corp., G.R. No. 99047, 16 April 2001, 356 SCRA 451.
17. G.R. Nos. 147096 & 147210, 15 January 2002, 373 SCRA 316.
18. G.R. No. 134913, 19 January 2001, 349 SCRA 705.
19. Philippine Long Distance Telephone Co. v. National Telecommunications Commission, G.R. No. 88404, 18 October 1990, 190 SCRA 717.
21. Rollo, pp. 101–105.
22. Batangas Laguna Tayabas Bus Co., Inc. v. Bitanga, 415 Phil. 43 (2001).
24. Remolona v. Civil Service Commission, 414 Phil. 590 (2001).
25. See note 17.
26. Republic v. Express Telecommunications Co., Inc., supra, note 17.
27. Section 11, Article XII, 1987 Constitution.
28. G.R. No. L-68729, 29 May 1987, 150 SCRA 450.
29. As amended by Republic Acts Nos. 6531 and 7293.
30. Republic v. Express Telecommunications Co., Inc., supra, note 17.
31. Republic v. Express Telecommunications Co., Inc., supra, note 17.
32. Philippine Long Distance Telephone Co. v. National Telecommunications Commission, supra, note 19. See also Republic v. Republic Telephone Company, Inc., G.R. No. 64888, 28 November 1996, 265 SCRA 1.
33. Black’s Law Dictionary, Fifth Edition, 1979.
34. Republic v. Republic Telephone Company, Inc., supra, note 32.