#1 Philippine Long Distance Telephone Co. [PLDT] v. NTC and ETCI [G.R. No.88404.

October
18, 1990]
23NOV
FACTS

On June 22, 1958, R.A. No. 2090 was enacted which granted respondent formerly Felix
Alberto and Company, Inc. (FACI), now Express Telecommunications Co., Inc. (ETCI) a
franchise to establish radio stations for domestic and transoceanic telecommunications.

On May 13, 1987, alleging urgent public need, ETCI filed an application with the National
Telecommunications Commission (NTC) for the issuance of a Certificate of Public
Convenience and Necessity (CPCN) to construct, install, establish and maintain a
Cellular Mobile Telephone system and an Alpha Numeric paging system in metro
manila and in the southern Luzon regions w/ a prayer for provisional authority operate
phase A of its proposal in Metro Manila

Petitioner PLDT filed a motion to dismiss on the ff: grounds

1. ETCI not qualified to operate under its franchise a national cellular telecom network
2. ETCI lacks facilities needed to proposed system
3. PLDT itself has a pending application for the same system at the NTC invoking the
protection of investment doctrine
4. Granting provisional authority would result in duplication
On November 12, 1987, NTC overruled PLDTs opposition RA2090 should be liberally
construed to include cellular mobile telephones.
On December 12, 1988, NTC granted ETCI provisional authority to operate in MANILA
one of conditions (No.5) is that ETCI and PLDT shall enter into an interconnection
agreement opined that public interest, convenience and necessity further demand a second
cellular mobile telephone service
PLDT moved to annul the NTC orders at the SC.
On February 27, 1990, SC issued a TRO enjoining NTC from implementation of provisional
authority, requiring PLDT to post 5m bond which would be forfeited to ETCI if the petition
be dismissed for lack of merit.
PLDT relies on the ff: grounds for TRO:
1. ETCI unauthorized franchise
2. Violation of validated stock transactions under section 20(h) of the Public service act
3. NTC matter was not heard in all the proceedings
MAIN QUESTION: WON, NTC acted w/o jurisdiction or with grave abuse of discretion in
granting provisional authority to ETCI
Held:
1. NTC has jurisdiction
 a. NTC is the regulatory agency for all telecom entities thus it has authority & discretion
grant provisional authority it also related to public interest

2. ETCIs franchise is construed to include cellular mobile telephone systems

a. Radio telephony construed liberally can be that operation of cellular mobile service
which carries messages with the aid of radio waves

3. ETCI is still existing

a. PLDT alleges that ETCI lapsed into inexistence for failure to being and complete
construction of the radio system however PLDT allegation partakes as a collateral
attack on a franchise which is not allowed
A franchise is a property right and cannot be revoked or forfeited without due process
of law.
4. ETCIs stock transactions were valid

a. PLDT contends that the transfer of ETCI stock to new stockholder amounts to transfer of
franchise However under the Public service act, the NTC is the govt. agency
vested with the authority to approve the transfer of more than 40% of the
subscribed capital stock of a telecom company to a single transferee
Transfer of shares of a public utility need only NTC approval, not Congressional
5. PLDT cannot justifiably refuse to interconnect with ETCI

a. The municipal telephone act was approved in 1990 which mandates the interconnection
which provide that all domestic telecom carriers or utilities shall be interconnected\
Such regulation of the use of ownership telecom systems is within the police power of
the state to promote the general welfare
b. The interconnection which has been required of PLDT is a form of intervention with
property rights dictated by the encompassing objective for the common good. The
NTC, as the regulatory agency of the State, merely exercised its delegated authority to
regulate the use of telecommunications networks when it decreed interconnection.
objective of the govt. is to promote the rapid expansion of telecom services in all areas
of the PH, in recognition of the vital role of communications in nation building, to ensure
that all people have access to other users wherever in the ph. COMMON GOOD
NTC interconnection order seeks public need, public interest and the common good, Art II sec.
24, recognizes the vital role of communications and information in nation building

Dissent J. Cruz: No due process where private property is taken by the govt. from one private
person to another only to the other direct benefit (ETCI)
When eminent domain is exercised by a delegate of the legislature, like ETCI, the courts may
inquire into the necessity or propriety of the expropriation.