Case Digest: Batangas CATV vs. Court of Appeals, 439 SCRA 326, G.R. No. 138810

 

Batangas CATV vs. Court of Appeals, 439 SCRA 326, G.R. No. 138810, September 29, 2004

Subject: Transportation Law

FACTS

On July 28, 1986, respondent Sangguniang Panlungsod enacted Resolution No. 210 granting petitioner a permit to construct, install, and operate a CATV system in Batangas City. Section 8 of the Resolution provides that petitioner is authorized to charge its subscribers the maximum rates specified therein, “provided, however, that any increase of rates shall be subject to the approval of the Sangguniang Panlungsod.

Sometime in November 1993, petitioner increased its subscriber rates from P88.00 to P180.00 per month. As a result, respondent Mayor wrote petitioner a letter threatening to cancel its permit unless it secures the approval of respondent Sangguniang Panlungsod, pursuant to Resolution No. 210.

Petitioner then filed with the RTC, Branch 7, Batangas City, a petition for injunction alleging that respondent Sangguniang Panlungsod has no authority to regulate the subscriber rates charged by CATV operators because under Executive Order No. 205, the National Telecommunications Commission (NTC) has the sole authority to regulate the CATV operation in the Philippines.

ISSUE

Whether or not a local government unit (LGU) regulate the subscriber rates charged by CATV operators within its territorial jurisdiction

RULING

No, a local government unit (LGU) cannot regulate the subscriber rates charged by CATV operators within its territorial jurisdiction.

The logical conclusion, therefore, is that in light of the above laws and E.O. No. 436, the NTC exercises regulatory power over CATV operators to the exclusion of other bodies. Like any other enterprise, CATV operation maybe regulated by LGUs under the general welfare clause. This is primarily because the CATV system commits the indiscretion of crossing public properties. (It uses public properties in order to reach subscribers.) The physical realities of constructing CATV system – the use of public streets, rights of ways, the founding of structures, and the parceling of large regions – allow an LGU a certain degree of regulation over CATV operators.

SC held that while it recognizes the LGUs’ power under the general welfare clause, it cannot sustain Resolution No. 210. The respondents strayed from the well-recognized limits of its power. The flaws in Resolution No. 210 are: (1) it violates the mandate of existing laws and (2) it violates the State’s deregulation policy over the CATV industry. LGUs must recognize that technical matters concerning CATV operation are within the exclusive regulatory power of the NTC.

Case Digest: Philcomsat vs. Alcuaz, 180 SCRA 218, G.R. No. 84818

 

Philcomsat vs. Alcuaz, 180 SCRA 218, G.R. No. 84818, December 18, 1989

Subject: Transportation Law

FACTS

The petition seeks to annul and set aside an Order 1 issued by respondent Commissioner Jose Luis Alcuaz of the NTC which directs the provisional reduction of the rates which may be charged by petitioner for certain specified lines of its services by fifteen percent (15%) with the reservation to make further reductions later, for being violative of the constitutional prohibition against undue delegation of legislative power and a denial of procedural, as well as substantive, due process of law.

Petitioner was exempt from the jurisdiction of the then Public Service Commission, now respondent NTC. However, pursuant to Executive Order No. 196 placed under the jurisdiction, control and regulation of respondent NTC, including all its facilities and services and the fixing of rates. Implementing said Executive Order No. 196, respondents required petitioner to apply for the requisite certificate of public convenience and necessity covering its facilities and the services it renders, as well as the corresponding authority to charge rates therefor.

Petitioner filed with respondent NTC an application for authority to continue operating and maintaining the same facilities it has been continuously operating and maintaining since 1967, to continue providing the international satellite communications services it has likewise been providing since 1967, and to charge the current rates applied for in rendering such services.

Pending hearing, it also applied for a provisional authority so that it can continue to operate and maintain the above-mentioned facilities, provide the services and charge therefor the aforesaid rates therein applied for. petitioner was granted a provisional authority which was valid for six (6) months which was extended 3 times, but the last extension directed the petitioner to charge modified reduced rates through a reduction of fifteen percent (15%) on the present authorized rates. Hence this petition.

ISSUE

Whether or not the Respondent violates procedural due process for having been issued without prior notice and hearing in exercising its power to fix the rate of the Petitioner?

RULING

Yes, the respondent violated the procedural due process.

Under the law, if the authorities that where the function of the administrative body is legislative, notice of hearing is not required by due process of law, aside from statute, the necessity of notice and hearing in an administrative proceeding depends on the character of the proceeding and the circumstances involved. 

In so far as generalization is possible in view of the great variety of administrative proceedings, it may be stated as a general rule that notice and hearing are not essential to the validity of administrative action where the administrative body acts in the exercise of executive, administrative, or legislative functions; but where a public administrative body acts in a judicial or quasi-judicial matter, and its acts are particular and immediate rather than general and prospective, the person whose rights or property may be affected by the action is entitled to notice and hearing.

Case Digest: Republic vs. MERALCO, 391 SCRA 700, G.R. No. 141314

 

Republic vs. MERALCO, 391 SCRA 700, G.R. No. 141314, November 15, 2002

Subject: Transportation Law

FACTS

MERALCO filed with petitioner ERB an application for the revision of its rate schedules to reflect an average increase in its distribution charge. ERB granted a provisional increase subject to the condition that should the COA thru its audit report find MERALCO is entitled to a lesser increase, all excess amounts collected from the latter’s customers shall either be refunded to them or correspondingly credited in their favor.

The COA report found that MERALCO is entitled to a lesser increase, thus ERB ordered the refund or crediting of the excess amounts. On appeal, the CA set aside the ERB decision. MRs were denied.

ISSUE

Whether or not the regulation of ERB as to the adjustment of rates of MERALCO is valid.

RULING

Yes, the regulation of ERB as to the adjustment of rates of MERALCO is valid.

The regulation of rates to be charged by public utilities is founded upon the police powers of the State and statutes prescribing rules for the control and regulation of public utilities are a valid exercise thereof. When private property is used for a public purpose and is affected with public interest, it ceases to be juris privati only and becomes subject to regulation. The regulation is to promote the common good. Submission to regulation may be withdrawn by the owner by discontinuing use; but as long as use of the property is continued, the same is subject to public regulation.

In regulating rates charged by public utilities, the State protects the public against arbitrary and excessive rates while maintaining the efficiency and quality of services rendered. However, the power to regulate rates does not give the State the right to prescribe rates which are so low as to deprive the public utility of a reasonable return on investment. Thus, the rates prescribed by the State must be one that yields a fair return on the public utility upon the value of the property performing the service and one that is reasonable to the public for the services rendered. The fixing of just and reasonable rates involves a balancing of the investor and the consumer interests.

Case Digest: Meralco vs. Marco Textiles, 374 SCRA 69, G.R. No. 126243

 

Meralco vs. Marco Textiles, 374 SCRA 69, G.R. No. 126243, January 18, 2002

Subject: Transportation Law

FACTS

Pursuant to the contract between MERALCO and MACRO, petitioner installed at respondent’s premises metering devices and necessary appurtenances thereto to record the latter’s electric energy consumption. The metering devices were duly identified by their meter and serial numbers: DB 351-86-02-315 and DB 351-85-04-362 while the installation of electric service was under billing account No. 9400-1822-19. Prior to installation, the BOE pre-tested, pre-calibrated and sealed the metering devices. Upon their installation at respondent’s premises, the devices were properly sealed and ascertained to be in perfect operating condition.

When respondent’s weaving department was gutted by fire on February 27, 1982, it caused a slump in the business resulting in irregular electric reading. It started operations in 1983 but was confined to dyeing textiles. Private respondent’s electric consumption varied, 30,000 to 66,000 kilowatt-hours (kwh) in 1984, 9,000 to 33,000 kwh in 1985 and 9,000 to 12,000 kwh in 1986.

MERALCO made several inspections. Each inspection resulted in a different billing.

The inspection report revealed that the meter tampering was committed once again. The meter seals were missing, and the polarity and non-polarity jaw of upper & lower elements were forcibly opened and hence, the meter disc stopped for all tests with loads on.

 MACRO filed with the Regional Trial Court a complaint for injunction with an application for a restraining order against MERALCO to restrain MERALCO from cutting MACRO’S electric service and to compel MERALCO to explain its billing.

The RTC issued a temporary restraining order enjoining the parties to maintain the status quo. After trial RTC rendered decision in favor of MACRO ordering MERALCO to restrain from disconnecting the power installation of MACRO, likewise, the Court of Appeals affirmed the RTC decision.

ISSUE

Whether or not MACRO tampered with the electric consumption meters.

RULING

No, MACRO did not tamper with the electric consumption meter

Under the law, the private electric utility or rural electric cooperative have the right and authority to disconnect the electric service after serving notice or warning to that effect without the need of a court or administrative order if someone caught in flagrante delicto doing of any acts tampers, jumpers or other devices whereby water, electricity or piped gas is stolen

In this case, Macro did not commit tampering act, as MACRO religiously paid its Monthly billing. Here, MERALCO committed wrongful and injurious invasion of MACRO''s rights by insinuating tampering of meters and demanding bills which are arbitrary, unjust, baseless and unexplained. "MERALCO should bear the loss. Public service companies which do not exercise prudence in the discharge of their duties shall be made to bear the consequences of such oversight.

Case Digest: Republic vs. Express Telecom, 373 SCRA 316, G.R. No. 147096

 

Republic vs. Express Telecom, 373 SCRA 316, G.R. No. 147096, January 15, 2002

Subject: Transportation Law

FACTS

In 1992, Bayantel filed an application with the NTC for a Certificate of Public Convenience or Necessity (CPCN) to operate a CMTS.

On May 17, 1999, Bayantel filed an Ex-Parte Motion to Revive Case, citing the availability of new frequency bands for CMTS operators, as provided for under Memorandum Circular No. 3-3-99.

On February 1, 2000, the NTC granted BayanTel's motion to revive the latter's application and set the case for hearings. Extelcom filed in NTC an Opposition (With Motion to Dismiss) praying for the dismissal of Bayantel's application and alleged that there was no public need for the service applied for by Bayantel.

On May 3, 2000, the NTC issued an Order granting in favor of Bayantel a provisional authority to operate CMTS service. With this, Extelcom filed with the Court of Appeals a petition for certiorari and prohibition, seeking the annulment of the NTC’s order.

On September 13, 2000, the Court of Appeals granted the writs of certiorari and prohibition prayed for by Extelcom. The orders of NTC were annulled and set aside and the Amended Application of respondent Bayantel is dismissed without prejudice to the filing of a new CMTS application.

Bayantel filed a motion for reconsideration. NTC, represented by OSG, also filed its own motion for reconsideration. On the other hand, Extelcom filed a Motion for Partial Reconsideration, praying that NTC Memorandum Circular No. 9-3-2000 be also declared null and void.  CA denied all of the motions for reconsideration of the parties for lack of merit. Hence, the NTC and Bayantel filed separate petitions for review.

ISSUE

Whether or not CA seriously erred in declaring the May 3, 2000 order granting Bayantel a provisional authority should be set aside and reversed.

RULING

Yes, CA seriously erred in declaring the May 3, 2000 order granting Bayantel a provisional authority should be set aside and reversed.

Section 16 of the Public Service Act authorizes the then PSC, upon notice and hearing, to issue Certificates of Public Convenience for the operation of public services within the Philippines "whenever the Commission finds that the operation of the public service proposed and the authorization to do business will promote the public interests in a proper and suitable manner."

Section 29 of the Public Service Act states that all hearings and investigations before the Commission shall be governed by rules adopted by the Commission, and in the conduct thereof, the Commission shall not be bound by the technical rules of legal evidence.

In this case, the Court of Appeals erred in annulling the Order of the NTC dated May 3, 2000, granting Bayantel a provisional authority to install, operate and maintain CMTS. The general rule is that purely administrative and discretionary functions may not be interfered with by the courts. The established exception to the rule is where the issuing authority has gone beyond its statutory authority, exercised unconstitutional powers or clearly acted arbitrarily and without regard to his duty or with grave abuse of discretion. None of these obtains in the case at bar.

Case Digest: Telecom vs. COMELEC, 289 SCRA 337, G.R. No. 132922

 

Telecom vs. COMELEC, 289 SCRA 337, G.R. No. 132922, April 21, 1998

Subject: Transportation Law

FACTS

Petitioner Telecommunications and Broadcast Attorneys of the Philippines, Inc. and GMA Network, Inc. challenge the validity of Section 92 of BP 881 on the ground (1) that it takes property without due process of law and without just compensation; (2) that it denies radio and television broadcast companies the equal protection of the laws; and (3) that it is in excess of the power given to the COMELEC to supervise or regulate the operation of media of communication or information during the period of election.

Petitioner GMA Network claims that it suffered losses in providing COMELEC Time in the 1992 presidential election and the 1995 senatorial election and that it stands to suffer even more should it be required to do so again this year. Petitioners contend that Section 92 of BP 881 violates the due process clause and the eminent domain provision of the Constitution by taking airtime from radio and television broadcasting stations without payment of just compensation claiming that the primary source of revenue of the radio and television stations is the sale of air time to advertisers. Petitioners claim that Section 92 is an invalid amendment of R.A. No. 7252 which granted GMA Network, Inc. a franchise for the operation of radio and television broadcasting stations. They argue that although Section 5 of R.A. No. 7252 gives the government the power to temporarily use and operate the stations of petitioner GMA Network or to authorize such use and operation, the exercise of this right must be compensated. Petitioners also complain that B.P. 881, Section 92 singles out radio and television stations to provide free airtime.

Finally, it is argued that the power to supervise or regulate given to the COMELEC under Art. IX-C, Section 92 of the Constitution does not include the power to prohibit.

ISSUE

Whether or not the power to supervise or regulate given to the COMELEC under Art. IX-C, Section 92 of the Constitution includes the power to prohibit.

RULING

Yes, the power to supervise or regulate given to the COMELEC under Art. IX-C, Section 92 of the Constitution includes the power to prohibit.

The Constitution allows the COMELEC to regulate the use of media information, while Congress prohibits the sale or donation of print space or airtime for political ads. This distinction between the object of supervision and regulation is a fallacy. Section 11(b) of R.A. No. 6646 only half of the regulatory provision, mandated by the COMELEC to procure print space and airtime for allocation to candidates. The law ensures free, orderly, honest, peaceful, and credible elections by allocating equal time and space for all candidates.

The prohibition on media advertising by candidates limits the COMELEC Time and COMELEC Space, which are the only means through which candidates can advertise their qualifications and programs of government. Failure to provide airtime unless paid by the government would deprive the people of their right to know. The Constitution recognizes the right of the people to information on matters of public concern and states that the use of property bears a social function and is subject to the state's duty to promote distributive justice and intervene when the common good demands it.

To affirm the validity of Section 92 of B.P. 881, public broadcasters must ensure the variety and vigor of public debate on election issues. Broadcast media are not just common carriers but also public trustees responsible for ensuring access to the diversity of views on political issues. The use of property bears a social function and is subject to the state's duty to intervene for the common good. Broadcast media can find their reward in providing altruistic service in connection with election holdings.

Case Digest: Luzon Stevedoring Company, Inc. vs. The Public Service Commission, G.R. No. L-5458

 

Luzon Stevedoring Company, Inc. vs. The Public Service Commission, G.R. No. L-5458, September 16, 1953

Subject: Transportation Law

FACTS

Petitioners are engaged in the stevedoring or lighterage and harbor towage business. They are also engaged in interisland service which consist of hauling cargoes such as sugar, oil, fertilizer and other commercial commodities. There is no fixed route in the transportation of these cargoes, the same being left at the indication of the owner or shipper of the goods. Petitioners, in their hauling business, serve only a limited portion of the public.

The Philippine Shipowners’ Association complained to the Public Service Commission that petitioners were engaged in the transportation of cargo in the Philippines for hire or compensation without authority or approval of the Commission. The rates petitioners charged resulted in ruinous competition.

The Public Service Commission restrained petitioners from further operating their watercraft to transport goods for hire or compensation between points in the Philippines until the commission approves the rates they propose to charge.

ISSUE

Whether the petitioners fall under the definition in Section 13 (b) of the Public Service Law (C.A. Act No. 146).

RULING

Yes. It is not necessary under said definition that one holds himself out as serving or willing to serve the public in order to be considered public service. It is not necessary, in order to be a public service, that an organization be dedicated to public use, i.e., ready and willing to serve the public as a class. It is only necessary that it must in some way be impressed with a public interest; and whether the operation of a business is a public utility depends upon whether or not the service rendered by it is of a public character and of public consequence and concern.

It can scarcely be denied that the contracts between the owners of the barges and the owners of the cargo at bar were ordinary contracts of transportation and not of lease. Petitioners’ watercraft was manned entirely by crews in their employ and payroll, and the operation of the said craft was under their direction and control, the customers assuming no responsibility for the goods handled on the barges.

C.A. No. 146 clearly declares that an enterprise of any of the kinds therein enumerated is a public service if conducted for hire or compensation even if the operator deals only with a portion of the public or limited clientele. Public utility, even where the term is not defined by statute, is not determined by the number of people actually served.

The Public Service Law was enacted not only to protect the public against unreasonable charges and poor, inefficient service, but also to prevent ruinous competition.

Just as the legislature may not declare a company or enterprise to be a public utility when it is not inherently such, a public utility may not evade control and supervision of its operation by the government by selecting its customers under the guise of private transactions.