G.R. No. 88404 October 18, 1990
PHILIPPINE LONG DISTANCE TELEPHONE CO. (PLDT), petitioner, vs. THE NATIONAL TELECOMMUNICATIONS COMMISSION AND CELLCOM, INC. (EXPRESS TELECOMMUNICATIONS CO., INC. [ETCI]), respondents.

FACTS

Petitioner PLDT assailed via certiorari and prohibition two NTC Orders: one dated December 12, 1988, granting private respondent ETCI provisional authority to install and operate a Cellular Mobile Telephone System in Metro Manila, and another dated May 8, 1989, denying reconsideration. ETCI’s application was based on its legislative franchise under Republic Act No. 2090 , enacted in 1958. PLDT filed a vigorous opposition, arguing that ETCI’s franchise did not authorize cellular mobile telephone service, that ETCI lacked necessary facilities, that PLDT’s own pending application for a similar service deserved priority under the “prior operator” doctrine, and that granting the authority would cause harmful duplication.
The NTC, in its November 12, 1987 Order, overruled PLDT’s opposition. It ruled that RA 2090 should be liberally construed to include the operation of cellular mobile telephone service. The NTC then required ETCI to submit further evidence of its legal, financial, and technical capabilities. After subsequent proceedings, the NTC issued the challenged December 1988 Order, finding prima facie evidence of ETCI’s capabilities and that public interest demanded a second service provider. It granted provisional authority subject to conditions, including a mandate for ETCI and PLDT to enter into an interconnection agreement within 90 days. PLDT’s motion to set aside this order was denied in May 1989, prompting this petition. The Supreme Court initially dismissed the petition for procedural lapses but later reinstated it and issued a Temporary Restraining Order.

ISSUE

The primary issue is whether the National Telecommunications Commission acted with grave abuse of discretion in granting Express Telecommunications Co., Inc. provisional authority to operate a cellular mobile telephone system.

RULING

The Supreme Court DISMISSED the petition, upholding the NTC’s orders. The Court found no grave abuse of discretion in the NTC’s interpretation of ETCI’s franchise or in its grant of provisional authority. On the franchise issue, the Court agreed with the NTC’s liberal construction. RA 2090 granted ETCI a franchise “to establish, maintain and operate radio stations for domestic and transoceanic telecommunications.” The Court ruled that a cellular mobile telephone system is a radio telecommunications system, falling within the broad scope of the franchise. The law’s silence on specific technologies does not preclude the inclusion of new, technologically advanced services like cellular telephony, which did not exist when the franchise was enacted.
Regarding the grant of provisional authority, the Court affirmed the NTC’s statutory power under Section 16 of the Public Service Act to issue such authority based on prima facie evidence of an applicant’s capability and public need. The NTC sufficiently established this through hearings and evidence submitted by ETCI. The Court rejected PLDT’s claim of priority under the “prior operator” doctrine, clarifying that this doctrine applies to prevent competition on the same route or territory for the same type of service, not to bar the entry of a new service provider altogether when public interest requires it. The NTC’s finding of public need for a second cellular provider was a factual determination within its expertise, not reviewable by certiorari absent grave abuse. The Court also held that the interconnection requirement was a valid exercise of the NTC’s regulatory power to ensure integrated public service.