Administrative Law

Arellano University School of Law

aiza ebina/2015

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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