Radio Communications of the Philippines vs National Telecommunications Commission

184 SCRA 517

Nature of Particular Acts

FACTS: Petitioner has been operating a radio communications system since 1957 under its legislative franchise
granted by Republic Act No. 2036 which was enacted on June 23, 1957.

In 1968, the petitioner established a radio telegraph service in Sorsogon, Sorsogon. In 1971, another radio telegraph
service was put up in San Jose, Mindoro followed by another in Catarman, Samar in 1976.

Private respondent Kayumanggi Radio Network Incorporated was authorized by the public respondent to operate
radio communications systems in Catarman, Samar and in San Jose, Mindoro.

The private respondent filed a complaint with the NTC alleging that the petitioner was operating in Catarman, Samar
and in San Jose, Mindoro without a certificate of public covenience and necessity. The petitioner, on the other hand,
counter-alleged that its telephone services in the places subject of the complaint are covered by the legislative
franchise recognized by both the public respondent and its predecessor, the Public Service Commission. In its
supplemental reply, the petitioner further stated that it has been in operation in the questioned places long before
private respondent Kayumanggi filed its application to operate in the same places.

NTC ordered petitioner RCPI to immediately cease or desist from the operation of its radio telephone services in
Catarman Northern Samar; San Jose, Occidental Mindoro; and Sorsogon, Sorsogon stating that under Executive Order
No. 546, a certificate of public convenience and necessity is mandatory for the operation of communication utilities
and services including radio communications. The petitioner filed a motion for reconsideration which was denied.

The petitioner's main argument states that the abolition of the Public Service Commission under Presidential Decree
No. 1 and the creation of the National Telecommunications Commission under Executive Order No. 546 to replace
the defunct Public Service Commission did not affect sections 14 and 15 of the Public Service Law.

The provisions of the Public Service Law pertinent to the petitioner's allegation are as follows:

Section 13. (a) the Commission shall have jurisdiction, supervision, and control over all public services and their
franchises, equipment and other properties, and in the exercise of its authority, it shall have the necessary powers
and the aid of public force

Section 14. The following are exempted from the provisions of the preceding section:

(d) Radio companies except with respect to the fixing of rates;

Section 15. With the exception of those enumerated in the preceding section, no public service shall operate in the
Philippines without possessing a valid and subsisting certificate from the Public Service Commission, known as
"certificate of public convenience," or "certificate of convenience and public necessity," as the case may be, to the
effect that the operation of said service and the authorization to do business will promote the public interests in a
proper and suitable manner

ISSUE: Whether or not RCPI, a grantee of a legislative franchise to operate a radio company, is required to secure a
certificate of public convenience and necessity before it can validly operate its radio stations including radio
telephone services in the aforementioned areas
RULING: Yes. Pursuant to Presidential Decree No. 1 dated September 23,1972, reorganizing the executive branch of
the National Government, the Public Service Commission was abolished and its functions were transferred to three
specialized regulatory boards. The functions so transferred were still subject to the limitations provided in sections 14
and 15 of the Public Service Law, as amended. With the enactment of Executive Order No. 546 on July 23, 1979
implementing P.D. No.1, the Board of Communications and the Telecommunications Control Bureau were abolished
and their functions were transferred to the National Telecommunications Commission.

It is clear from Executive Order No. 546, Section 15 provision that the exemption enjoyed by radio companies from
the jurisdiction of the Public Service Commission and the Board of Communications no longer exists because of the
changes effected by the Reorganization Law and implementing executive orders. The petitioner's claim that its
franchise cannot be affected by Executive Order No. 546 on the ground that it has long been in operation since 1957
cannot be sustained.

Executive Order No. 546, being an implementing measure of P.D. No. I insofar as it amends the Public Service Law (CA
No. 146, as amended) is applicable to the petitioner who must be bound by its provisions. The petitioner cannot
install and operate radio telephone services on the basis of its legislative franchise alone.

It was well within the powers of the public respondent to authorize the installation by the private respondent
network of radio communications systems in Catarman, Samar and San Jose, Mindoro. Under the circumstances of
this case, the mere fact that the petitioner possesses a franchise to put up and operate a radio communications
system in certain areas is not an insuperable obstacle to the public respondent's issuing the proper certificate to an
applicant desiring to extend the same services to those areas. The Constitution mandates that a franchise cannot be
exclusive in nature nor can a franchise be granted except that it must be subject to amendment, alteration, or even
repeal by the legislature when the common good so requires.

RATIO: Fixing rates and charges. - The reason is easily discerned from the fact that provisional rates are by their
nature temporary and subject to adjustment in conformity with the definitive rates approved after final hearing.

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