Philcomsat v Alcuaz – Regalado, J.
NTC gave the necessary permit but it
Petitioner:Phil. Communications Satellite Corp.
Respondent:Jose Alcuaz (NTC Commissioner), NTC
Concept: Inherent Limitations: Delegation of
Taxation Power
Brief Facts:Philcomsat is engaged in providing for
services involving telecommunications. By order of
Jose Alcuaz(Commissioner of the National
Telecommunications Commission), charging rates
for certain specified lines were ordered to be
reduced by fifteen percent (15%). Basis for this was
Executive Order No. 546 which granted the NTC the
power to fix rates.
Doctrine:The power of the NTC to fix rates is
limited by the requirements of public safety, public
interest, reasonable feasibility and reasonable
rates, which conjointly more than satisfy the
requirements of a valid delegation of legislative
power. Delegation of legislative power may be
sustained only upon the ground that some
standard for its exercise is provided and that the
legislature in making the delegation has prescribed
the manner of the exercise of the delegated power.
FACTS:
1. Philcomsat provides satellite services to
companies like Globeand PLDT.
2. RA 5514 grants Philcomsat the authority to
construct and operate facilities to deliver
telecommunications services from the
communications satellite system and
ground terminals in the Philippines.
3. Under Section 5 of RA 5514, Philcomsat was
exempt from the jurisdiction, control and
regulation of the Public Service Commission
later known as the National
Telecommunications Commission (NTC).
4. However, EO 196 was promulgated and
placed Philcomsat under the jurisdiction of
the NTC.
5. Philcomsat has to acquire permit to operate
from the NTC in order to continue operating
its existing satellites.
6.
directed Philcomsat to reduce its current
rates by 15%.
7. NTC ordered said reduction on the ground
that in its on-going review of present
service rates and thefinancial statements of
Philcomsat, the NTCtook note there is merit
in a reduction in some of Philcomsat'srates,
subject tofurther reductions should the NTC
find in it that more reduction should
beeffected.
8. NTC based its power to fix the rates on EO
546.
9. Philcomsat sued NTC.
Philcomsat: EO 546 (Empowering NTC to fix rates
for public service communications) does not
provide the necessary standards which were
constitutionally required.
o Hence, there is an undue delegation of
legislative power.
o Neither EO 546nor EO 196 shows that NTC
is guided by any standard in the exercise of
its rate-fixing and adjudicatory powers.
 Hence the petition to annul the said NTC Order.
ISSUES:
1. WON there was a valid delegation of legislative
power in granting NTC authority to fix rates. (YES)
RATIO:
1. YES. Pursuant to Executive Orders 546 and 196,
NTC is empowered to determine and prescribe
rates pertinent to operation of public service
communications.
 NTC in the exercise of rate-fixing power is
limited by the requirements of public
safety, public interest, reasonable finality
and reasonable rates, which conjointly
more than satisfy the requirements of a
valid delegation of legislative power.
 The Delegation of legislative power may be
sustained only upon the ground that some
standard for its exercise is provided and
that the legislature in making the delegation
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 has prescribed the manner of the exercise NTC should be guided by the requirements of
of the delegated power. public safety, public interest and reasonable
o When the administrative agency feasibility of maintaining effective competition of
establishes a rate, its act must both private entities in communications and
be non-confiscatory and must have broadcasting facilities.
been established in the manner
prescribed by the legislature Executive Order No. 196 (June 17, 1987)
o In the absence of a fixed standard, “Vesting the jurisdiction, control and regulation
the delegation of power becomes over the Philippine Communications Satellite
unconstitutional. Corporation with the National Telecommunications
 In case of a delegation of rate-fixing power, Commission”
the only standard which the legislature is
required to prescribe for the guidance of Digested by: André
the administrative authority is that the rate
be reasonable and just.
o Even in the absence of an express
requirement, this standard of
reasonableness may be implied.
o In the case at bar, the fixed rate is
found to be of merit and reasonable.
 In Vigan Electric Light Co., Inc. vs. Public
Service Commission,SC said that rule-
making power and even the power to fix
rates- when such rules and/or rates are
meant to apply to all enterprises of a given
kind throughout the Philippines-may
partake of a legislative character.

DISPOSITIVE:Petition GRANTED. NTC Order is SET

ASIDE (since it was violative of the Due Process
Clause – A Different Issue)

NOTES:
Executive Order No. 546 was issued by Pres. Marcos
during Martial Law (so it was of legislative nature)

Executive Order No. 546 (July 23, 1979)

“Creating a Ministry of Public Works and a Ministry
of Transportation and Communications”

Sec. 6(d), EO 546

The national economic viability of the entire
network or components of the communications
systems contemplated therein should be
maintained at reasonable rates.

Section 15(g), EO 546

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