PLDT V.

NTC

FACTS

On June 22, 1958, R.A. 2090 was enacted granting ETCI a franchise to establish radio stations for
domestic and transoceanic telecommunications.

On May 13, 1987, ETCI filed an application with respondent NTC for the issuance of a Certificate of
Public Convenience and Necessity (CPCN) to construct, install, establish, operate and maintain the
following facilities in Metro Manila and the Southern Luzon regions:

1.) Cellular Mobile Telephone System.

2.) Alpha Numeric Paging System.

Furthermore, attached to the application was a prayer for provisional authority to operate Phase A of its
proposal within Metro Manila.

Thereafter, PLDT filed an opposition with a Motion to Dismiss based on the following grounds:

1.) ETCI is not capacitated or qualified under its legislative franchise to operate the systems proposed in
its application.

2.) ETCI lacks the facilities needed and indispensable for the successful operation of the proposed
cellular mobile telephone system.

3.) PLDT has itself a pending application with the NTC to install and operate a Cellular Mobile System for
domestic and international service not only in Manila, but also in the provinces and that under the
“prior operator” or “protection of investment” doctrine, PLDT has the priority or preference in the
operation of such service.

4.) The provisional authority, if granted, will result in needless, uneconomical and harmful duplication.

On November 12, 1987, the NTC issued an Order overruling PLDT’s opposition. In the same Order, the
NTC required ETCI to submit the necessary follow-up documents for its application.

Subsequently, PLDT filed a Motion for Reconsideration. However, the motion was dismissed.

On December 12, 1988, the NTC issued an Order granting ETCI provisional authority too install, operate,
and maintain a cellular mobile telephone system initially in Metro Manila (Phase A), subject to the terms
and conditions set forth in the same Order. One of the conditions required ETCI and PLDT to enter into
an interconnection agreement within 90 days from the date of the acceptance of the terms and conditions
by ETCI.

Thereafter, PLDT alleged that the interconnection agreement ordered by the NTC was in violation of due
process and that the grant of provisional authority was judicially and procedurally infirm.

After due proceedings, the following issue was brought up for review.
 ISSUE

WHETHER OR NOT THE NTC ERRED IN GRANTING PROVISIONAL AUTHORITY TO ETCI

HELD

NO. There can be no question that the NTC is the regulatory agency of the national government with
jurisdiction over all telecommunications entities. It is legally clothed with authority and given ample
discretion to grant a provisional permit or authority. In fact, NTC may, on its own initiative, grant such
relief even in the absence of a motion from an applicant.

What the NTC granted was such a provisional authority, with a definite expiry period of eighteen (18)
months unless sooner renewed, and which may be revoked, amended or revised by the NTC. It is also
limited to Metro Manila only. What is more, the main proceedings are clearly to continue as stated in the
NTC Order of 8 May 1989.

The provisional authority was issued after due hearing, reception of evidence and evaluation thereof, with
the hearings attended by various oppositors, including PLDT. It was granted only after prima
facie showing that ETCI has the necessary legal, financial and technical capabilities and that public
interest, convenience and necessity so demanded.

DIFFERENCE OF PROVISIONAL AUTHORITY AND CPCN

PLDT argues, however, that a provisional authority is nothing short of a Certificate of Public Convenience
and Necessity (CPCN) and that it is merely a "distinction without a difference." That is not so. Basic
differences do exist, which need not be elaborated on. What should be borne in mind is that provisional
authority would be meaningless if the grantee were not allowed to operate. Moreover, it is clear from the
very Order of 12 December 1988 itself that its scope is limited only to the first phase, out of four, of the
proposed nationwide telephone system. The installation and operation of an alpha numeric paging system
was not authorized. The provisional authority is not exclusive. Its lifetime is limited and may be revoked by
the NTC at any time in accordance with law. The initial expenditure of P130M more or less, is rendered
necessary even under a provisional authority to enable ETCI to prove its capability. And as pointed out by
the Solicitor General, on behalf of the NTC, if what had been granted were a CPCN, it would constitute a
final order or award reviewable only by ordinary appeal to the Court of Appeals pursuant to Section 9(3)
of BP Blg. 129, and not by certiorari before this Court.

The final outcome of the application rests within the exclusive prerogative of the NTC. Whether or not a
CPCN would eventually issue would depend on the evidence to be presented during the hearings still to
be conducted, and only after a full evaluation of the proof thus presented.

The decisive consideration are public need, public interest, and the common good. Those were the
overriding factors which motivated NTC in granting provisional authority to ETCI. Article II, Section 24 of
the 1987 Constitution, recognizes the vital role of communication and information in nation building. It is
likewise a State policy to provide the environment for the emergence of communications structures
suitable to the balanced flow of information into, out of, and across the country (Article XVI, Section 10). A
modern and dependable communications network rendering efficient and reasonably priced services is
also indispensable for accelerated economic recovery and development. To these public and national
interests, public utility companies must bow and yield.
Despite the fact that there is a virtual monopoly of the telephone system in the country at present. service
is sadly inadequate. Customer demands are hardly met, whether fixed or mobile. There is a unanimous
cry to hasten the development of a modern, efficient, satisfactory and continuous telecommunications
service not only in Metro Manila but throughout the archipelago. The need therefor was dramatically
emphasized by the destructive earthquake of July 16, 1990. It may be that users of the cellular mobile
telephone would initially be limited to a few and to highly commercialized areas. However, it is a step in
the right direction towards the enhancement of the telecommunications infrastructure, the expansion of
telecommunications services in, hopefully, all areas of the country, with chances of complete disruption of
communications minimized. It will thus impact on, the total development of the country's
telecommunications systems and redound to the benefit of even those who may not be able to subscribe
to ETCI.

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