EN BANC

G.R. No. L-63318 November 25, 1983

PHILIPPINE CONSUMERS FOUNDATION, INC., Petitioner, vs.NATIONAL

TELECOMMUNICATIONS COMMISSION AND PHILIPPINE LONG DISTANCE
TELEPHONE COMPANY, Respondents.

Tomas C. Llamas for petitioner.chanrobles virtual law library

The Solicitor General for respondent NTC.chanrobles virtual law library

Graciano C. Regala and Eliseo B. Alampay for respondent PLDT.

RELOVA, J.:

Petition for certiorari seeking to set aside and annul the decision, dated November
22, 1982, of public respondent National Telecommunications Commission (NTC, for
short), approving the application of the Philippine Long Distance Telephone
Company (PLDT, for short) of its revised schedule for its Subscriber Investment
Plan (SIP) for the entire service area, including the ex-RETELCO area; as well as
the order of January 14, 1983 which denied the motion for reconsideration of
petitioner Philippine Consumers Foundation, Inc. (PCFI, for
short).chanroblesvirtualawlibrary chanrobles virtual law library

Records show that on March 20, 1980, private respondent PLDT filed an application
with the NTC for the approval of a revised schedule for its Subscriber Investment
Plan (SIP), docketed as Case No. 82-27.chanroblesvirtualawlibrary chanrobles
virtual law library

On April 14, 1982, the NTC issued an ex-parte order provisionally approving the
revised schedule which, however, was set aside by this Court on August 31, 1982 in
the case of "Samuel Bautista vs. NTC, et al.," 116 SCRA 411. The Court therein
ruled that "there was necessity of a hearing by the Commission before it should
have acted on the application of the PLDT so that the public could air its opposition,
particularly the herein petitioner and the Solicitor General, representing the
government. They should be given the opportunity to substantiate their objection
that the rates under the subscriber investment plan are excessive and unreasonable
and, as a consequence, the low income and middle class group cannot afford to
have telephone connections; and, that there is no need to increase the rate
because the applicant is financially sound." chanrobles virtual law library
On November 22, 1982, the NTC rendered the questioned decision permanently
approving PLDT's new and increased SIP rates, the dispositive portion of which
reads:

IN VIEW OF ALL THE FOREGOING, this Commission finds that applicant's reduced
proposals for its revised Subscriber Investment Plan Schedule, upon further
reductions herein ordered with respect to subscriber investments for new
installations of single residential telephones in the Metro Manila and Provincial
Service Areas, are all within the 50%-of-cost limit provided in P.D. 217; that they
are just and reasonable and in consonance with the public policies declared in said
decree; and that it is in the public interest that applicant's revised SIP Schedule be,
as it is hereby APPROVED, as follows:

REVISED SIP SCHEDULE chanrobles virtual law library

Service Category Revised SIP Rates chanrobles virtual law library

Metro Manila Provincial

1. New Installations �chanrobles virtual law library

1. PBX/PABX Trunk P 5,000 P3,000 chanrobles virtual law library

2. Business Phone: chanrobles virtual law library

Single line 3,500 2,000 chanrobles virtual law library

Party line 2,000 1,600 chanrobles virtual law library

3. Residential Phone: chanrobles virtual law library

Single line 1,800 1,300 chanrobles virtual law library

Party line 900 800 chanrobles virtual law library

4. Leased Line 2,500 2,500chanrobles virtual law library

5. Tie trunk or tie line 2,500 2,500chanrobles virtual law library

6. Outside local 2,500 2,500 chanrobles virtual law library

II. Transfers �chanrobles virtual law library

1. PBX/PABX 1,500 1,200 chanrobles virtual law library

2. Business Phone:chanrobles virtual law library

Single line 800 600 chanrobles virtual law library

Party line 600 500 chanrobles virtual law library

3. Residential Phone:chanrobles virtual law library

Single line 600 500 chanrobles virtual law library

Party line 500 300 chanrobles virtual law library

4. Leased Line 800 800 chanrobles virtual law library

Revised SIP Rateschanrobles virtual law library

Metro Manila Provincial chanrobles virtual law library

5. Tie trunk or tie line P800 P800 chanrobles virtual law library

6. Outside Local 800 800chanrobles virtual law library

(pp. 34-35, Rollo)

Petitioner filed a motion for reconsideration of the above judgment on December

14, 1982, and after a month, or on January 14, 1983, NTC denied said motion for
reconsideration.chanroblesvirtualawlibrary chanrobles virtual law library

It is the submission of petitioner that the SIP schedule presented by the PLDT is
pre-mature and, therefore, illegal and baseless, because the NTC has not yet
promulgated the required rules and regulations implementing Section 2 of
Presidential Decree No. 217 which provides:

Section 2. The Department of Public Works, Transportation and Communications

through its Board of Communications and/or appropriate agency shall see to it that
the herein declared policies for the telephone industry are immediately
implemented and for this purpose pertinent rules and regulations may be
promulgated ... (Emphasis supplied).

Petitioner avers that the "substitute procedural vehicle utilized by NTC in allowing
the establishment of SIP by PLDT was by treating the appropriate Petition of PLDT
as if the same were a rate case over which the Rules of Practice was applicable.
NTC proceeded to invoke the summary powers provided for in the Rules of Practice
to fully bear on the hapless consumer, notably the repressive 'Provisional Reliefs;'
(pp. 5-6, Rollo) that at the hearings thereof, "NTC limited the numerous oppositors
in the instant Application, among them PCFI, by applying the two oppositor-rule.
This means that only two of the oppositors will be heard in representation of all the
oppositors, again pursuant to the procedure laid down in the Rules of Practice." (p.
130, rollo) Further, the NTC invoked its extraordinary powers pursuant to Section 3
of Rule 15 of the Rules of Practice, "whereby even without an iota or proof to
substantiate its application, NTC allowed the desired increase purportedly on a
provisional basis. " (p. 129, rollo) chanrobles virtual law library

The question is whether or not respondent acted with grave abuse of discretion
when it approved the Revised Subscriber Investment Plan (SIP) of respondent PLDT
in the absence of specific rules and regulations implementing Presidential Decree
No. 217. Petitioner claims that these implementing rules and regulations are
mandatory pre-requisite for the approval of said SIP
rates.chanroblesvirtualawlibrary chanrobles virtual law library

Respondent NTC admits the absence of rules and regulations referred to in PD 217.
However, it contends that nowhere in said decree is there any legal provision
making the promulgation of rules a mandatory pre-requisite to the establishment of
SIP and the determination of its schedules; that since respondent NTC is enjoined
to implement the declared policies of the decree, for its immediate implementation,
it may rely on existing Rules of Practice; that under the same Rules of Practice all
existing subscriber investment plans were presented, considered and approved by
the NTC; that the promulgation of the rules is inherently an internal and
administrative matter and therefore, is not a proper subject of litigation, much less
a duty of the NTC to accomplish; and, that public respondent may or may not
promulgate the rules in the immediate implementation of said decree as the word
used there is "may." chanrobles virtual law library

We are not persuaded.chanroblesvirtualawlibrary chanrobles virtual law library

Presidential Decree No. 217 was promulgated on June 16, 1973 and paragraph 4 of
Section 1 thereof provides:

4. In line with the objective of spreading ownership among a wide base of the
people, the concept of telephone subscriber self-financing is hereby adopted
whereby a telephone subscriber finances part of the capital investments in
telephone installations through the purchase of stocks, whether common or
preferred stock, of the telephone company. (Emphasis supplied)

There is merit in the contention of petitioner that it is the duty of respondent NTC
to promulgate rules and regulations because:

1. P.D. 217 deals with matters so alien, innovative and untested such that existing
substantive and procedural laws would not be applicable. Thus, the Subscriber
Investment Plan (SIP) was so set up precisely to ensure the financial viability of
public telecommunications companies which in turn assures the enjoyment of the
population at minimum cost the benefits of a telephone
facility.chanroblesvirtualawlibrary chanrobles virtual law library

The SIP has never been contemplated prior to P.D.

217.chanroblesvirtualawlibrary chanrobles virtual law library
The existing law on the other hand, the Public Service Act, diametrically runs
counter to the spirit and intention, if not the purpose of P.D. 217. It may even be
gainsaid that as long as the optimum number of individuals may enjoy telephone
service, there is no limitation on the profitability of such companies. Hence, while
P.D. 217 encourages the profitability of public telecommunication companies, the
Public Service Act limits the same.chanroblesvirtualawlibrary chanrobles virtual law
library

2. In the absence of such rules and regulations, there is outright confusion among
the rights of PLDT, the consumers and the government itself. As may clearly be
seen, how can the Decision be said to have assured that most of the population will
enjoy telephone facilities? Did the Decision likewise assure the financial viability of
PLDT? Was the government's duty to provide telephone service to its constituents
subserved by the Decision? These questions can never be answered unless such
rules and regulations are set up.chanroblesvirtualawlibrary chanrobles virtual law
library

3. Finally, it should be emphasized that NTC is estopped from claiming that there is
no need to promulgate such rules and regulations. In the case of PCFI vs. NTC, G.R.
No. 61892, now pending resolution before this Honorable Tribunal, NTC totally
refused to act on a petition filed by PLDT precisely for the promulgation of such
rules and regulations.chanroblesvirtualawlibrary chanrobles virtual law library

Why then did NTC refuse to act on such petition if and when there is no need for
the promulgation of such rules and regulations? After all NTC could have simply
ruled that the petition in G.R. No. 61892 is unnecessary because such rules and
regulations are also unnecessary. (pp. 135-136, Rollo)

At any rate, there is no justification for the rate increase of the revised schedule of
PLDT's Subscriber Investment Plan. It is to say the least, untimely, considering the
present economic condition obtaining in the country. The approved rate defeats the
purpose of the decree which is to spread ownership among the wide base of
investors. The State, in Presidential Decree No. 217 promulgated on June 16, 1973,
adopted the basic policies of the telephone industry, which, among others, are: (1)
the attainment of efficient telephone service for as wide an area as possible at the
lowest reasonable costs to the subscriber; (2) the capital requirements of telephone
utilities obtained from ownership funds shall be raised from a broad base of
investors, involving as large a number of individual investors as may be possible;
and (3) in any subscriber self-financing plan, the amount of subscriber self-
financing will, in no case, exceed fifty per centum (50%) of the cost of the installed
telephone line, as may be determined from time to time by the regulatory bodies of
the State.chanroblesvirtualawlibrary chanrobles virtual law library

The load on the back of our people is heavy enough. Let us not increase its weight
further. Noteworthy is the concurrence of Justice Vicente Abad Santos in the case of
Bautista vs. NTC (supra) that "the PLDT which is reported to have made over 100
million pesos in profits in just six months but with its service so poor that even the
First Lady has taken notice should think of improved service before increased
profits." chanrobles virtual law library

Indeed, let t us not aggravate the situation of the populace by raising the revised
SIP schedule plan of the PLDT. A rate increase would be an additional burden on
the telephone subscribers. The plan to expand the company program and/or
improve its service is laudable, but the expenses should not be shouldered by the
telephone subscribers. Considering the multi-million profits of the company, the
cost of expansion and/or improvement should come from part of its huge
profits.chanroblesvirtualawlibrary chanrobles virtual law library

Anent the question that petitioner should have appealed the decision of respondent
NTC, instead of filing the instant petition, suffice it to say that certiorari is available
despite existence of the remedy of appeal where public welfare and the
advancement of public policy so dictate, or the orders complained of were issued in
excess of or without jurisdiction (Jose vs. Zulueta, 2 SCRA
574).chanroblesvirtualawlibrary chanrobles virtual law library

ACCORDINGLY, the DECISION of the public respondent National

Telecommunications Commission, dated November 22, 1982, and the ORDER dated
January 14, 1983. are hereby ANNULLED and SET
ASIDE.chanroblesvirtualawlibrarychanrobles virtual law library

SO ORDERED.

Fernando, C.J., Teehankee, Makasiar, Guerrero, Abad Santos, Melencio- Herrera,

Escolin and Gutierrez, Jr., JJ., concur.chanroblesvirtualawlibrary chanrobles virtual
law library

Aquino, Concepcion Jr., and De Castro, JJ., took no

part.chanroblesvirtualawlibrary chanrobles virtual law library

Plana, J., I reserve my vote.