GR 135992; (January, 2006) (Digest)

G.R. No. 135992; January 31, 2006
EASTERN TELECOMMUNICATIONS PHILIPPINES, INC. and TELECOMMUNICATIONS TECHNOLOGIES, INC., petitioners, vs. INTERNATIONAL COMMUNICATION CORPORATION, Respondent.

FACTS

This is an Amended Decision resolving a Motion for Partial Reconsideration. In a Decision dated July 23, 2004, the Supreme Court partially granted a petition for review and affirmed an NTC Order dated November 10, 1997, but modified it by requiring respondent International Communication Corporation (ICC) to comply with Section 27 of NTC MC No. 11-9-93. This required ICC to: (1) deposit in escrow 20% of the investment for the first two years of its proposed project, and (2) post a performance bond equivalent to 10% of that investment (not exceeding P500 Million). Respondent ICC filed a motion for partial reconsideration, seeking to delete these requirements. ICC argued that Section 27 of NTC MC No. 11-9-93 applied only to applications filed under Executive Order No. 109 (E.O. No. 109) and not to voluntary applications. In support, ICC attached a letter from NTC Deputy Commissioner and OIC Kathleen G. Heceta, stating that the escrow and bond were required to ensure the installation of local exchange lines under E.O. 109 and RA 7925, and since ICC had already complied with its obligation by installing over 300,000 lines in its original areas by early 1997, these requirements were not imposed in its subsequent authorizations. The Court required comments from petitioners and the NTC. The Office of the Solicitor General (OSG), representing the NTC, filed a Manifestation/Comment agreeing with respondent ICC that the escrow and performance bond are not required for subsequent authorizations for additional/new areas outside the original roll-out obligation under E.O. No. 109. Petitioners did not file a comment and later manifested they had no further comments on the motion.

ISSUE

Whether respondent International Communication Corporation is required to make a 20% escrow deposit and post a 10% performance bond under Section 27 of NTC MC No. 11-9-93 for a provisional authority granted on a voluntary application for areas outside its original roll-out obligation under E.O. No. 109.

RULING

The Supreme Court GRANTED respondent’s Motion for Partial Reconsideration and AMENDED its July 23, 2004 Decision. The Court held that the interpretation of the National Telecommunications Commission (NTC) — through the OSG — that Section 27 of NTC MC No. 11-9-93, requiring an escrow deposit and performance bond, pertains only to a local exchange operator’s original roll-out obligation under E.O. No. 109, and not to roll-out obligations under subsequent or voluntary applications outside the scope of E.O. No. 109, should be sustained. The Court emphasized that the NTC, as the specialized administrative agency with rule-making power, is in the best position to interpret its own rules, regulations, and guidelines. Judicial respect is accorded to such interpretation unless it is shown to be clearly unreasonable, arbitrary, or constitutes an error of law, abuse of power, lack of jurisdiction, or grave abuse of discretion. Since the NTC explicitly clarified that the requirements were not applicable to ICC’s subsequent authorization (which was a voluntary application for areas outside its original E.O. 109 commitment), and this interpretation was not disputed by petitioners, the Court found no reason to deviate from it. Consequently, the dispositive portion of the July 23, 2004 Decision was amended to deny the petition for review and affirm the NTC Order dated November 10, 1997 in its entirety, thereby deleting the order for ICC to make the 20% escrow deposit and post the 10% performance bond.