SC favors telcos over NTC in row

SC favors telcos over NTC in row | Daily Tribune

The National Telecommunications Commission (NTC) cannot impose rates on telecommunications companies without going through due process, the Supreme Court’s Second Division said in a decision penned by Senior Associate Justice Marvic M.V.F. Leonen dated 3 February 2023 and released on 6 September.

The ruling set aside the NTC orders imposing a new billing scheme for telecommunication companies.

The NTC in 2009, imposed a six-second-per-pulse billing scheme for voice calls, requiring telco companies to charge mobile phone users only for actual usage.

Prior to this, companies charged users by the minute, such that even a fraction of a minute was automatically charged as one minute.

The NTC then issued show cause orders against the telco companies, namely Globe Telecom, Inc. and Innove Communications, Inc.; Smart Communications, Inc.; Connectivity Unlimited Resource Enterprises, Inc.; and Digitel Mobile Philippines, Inc., for defying its directive.

It also issued cease and desist orders (CDOs) to stop the telco companies from charging their subscribers using the old billing system.

Telcos challenged the orders before the Court of Appeals, arguing that the NTC exceeded its authority to regulate rates when it imposed the new billing scheme in violation of their right to due process. The Court of Appeals (CA) set aside the NTC’s Orders.

The decision of the CA was affirmed by the Supreme Court.

While the NTC, under Republic Act 7925 or the Public Telecommunications Policy Act, has the power to regulate rates, these rates must be just and fair to both customers and telco companies.

The rates must be reasonable and sufficient to cover the cost of business operations based on data collected through hearings and consultation with participating telco companies.

The SC held that while the NTC has the authority to impose a new baseline rate for voice calls, it cannot do so unilaterally and without basis.

It found that the NTC did not consider the evidence presented by the companies in their proposals and that the NTC’s explanation for rejecting the proposed rates was also insufficient.