SC rejects NOW's bid to become 3rd major telecom player

The bid of NOW Telecom Company Inc. to become the country’s third major player in the telecommunications industry was shut down by the Supreme Court.

This was stated in a 15-page ruling penned by Associate Justice Rodil Zalameda, wherein the Court’s First Division affirmed the ruling issued by the Court of Appeals (CA) on 24 May 2021, dismissing Now Telecom’s plea to nullify a circular issued by the National Telecommunications Commission (NTC) imposing certain qualifications and restrictions with respect to the entry of participants to become new major player (NMP) in the telecom industry.

The ruling of CA upheld the decision issued by the Regional Trial Court (RTC) of Manila Branch 42 in 2018 which junked the petition filed by NOW Telecom that sought the issuance of a writ of preliminary injunction (WPI) to prevent the NTC from implementing Memorandum Circular No. 09-09-2018, entitled "Rules and Regulations on the Selection Process for a New Major Player in the Philippine Telecommunications Market."

In its decision, the SC said, “Considering all the foregoing, the CA did not commit any reversible error in the assailed Decision and Resolution. The CA properly upheld the RTC's denial of NOW Telecom's application for WPI.”

The decision was penned by Associate Justice Zalameda and concurred in by Chief Justice Alexander Gesmundo, and Associate Justices Ramon Paul Hernando, Ricardo Rosario and Jose Midas Marquez of the SC’s first division.

The SC agreed with the CA and the Manila RTC that the assailed circular cannot be subject to injunctive relief by the lower courts under Section 3 of Republic Act No. 8975 (An Act To Ensure the Expeditious Implementation and Completion of Government Infrastructure Projects By Prohibiting Lower Court From Issuing Temporary Restraining Orders).

The said provision prohibits lower courts from issuing a temporary restraining order (TRO) or WPI against the government for the conduct of the bidding or awarding of contract or project of the government.

The high bench noted that telecommunications is considered a critical infrastructure under Section 2(a) of Republic Act 11659 (Public Service Act).

It stressed the CA correctly ruled that the implementation of the subject Circular involved an essential telecommunications infrastructure project, thus NOW Telecom cannot enjoin the implementation of the bidding process for the selection of the NMP by a lower court's WPI,” it stressed.

The SC said NOW Telecom’s application for a WPI has been rendered moot and academic with the entry of Mindanao Islamic Telephone Company Inc. (Mislatel).

It noted that during the pendency of the case, Mislatel was selected as the NMP by virtue of the NTC Circular, and was accordingly issued a Certificate of Public Convenience and Necessity (CPCN).