G.R. No. L-27412 October 28, 1969
BUREAU OF TELECOMMUNICATIONS, petitioner-appellant, vs. THE PUBLIC SERVICE COMMISSION and THE PHILIPPINE LONG DISTANCE TELEPHONE COMPANY, respondents-appellees.

FACTS

The Philippine Long Distance Telephone Company (PLDT), a public utility corporation with a legislative franchise, filed a complaint with the Public Service Commission (PSC) against the Bureau of Telecommunications. PLDT alleged that the Bureau was operating telephone services, including a long-distance service between Iloilo, Bacolod, Cebu, Davao, and Manila, without submitting its rates for PSC approval and was charging rates much lower than those authorized for PLDT. PLDT prayed that the Bureau be required to submit its rate schedule for approval and be enjoined from charging unauthorized rates. The Bureau contested the PSC’s jurisdiction, arguing it operates not for general business purposes but to serve governmental needs, with any income from private sources being incidental. The PSC ruled in favor of PLDT, directing the Bureau to submit its rate schedule for approval and enjoining it from enforcing its present rates without PSC approval. The Bureau appealed this decision.

ISSUE

Whether or not the Bureau of Telecommunications is a “public service” as defined in the Public Service Act, as amended, and is therefore subject to the jurisdiction, supervision, and control of the Public Service Commission.

RULING

The Supreme Court reversed the decision of the Public Service Commission and dismissed PLDT’s complaint. The Court held that the Bureau of Telecommunications is not a “public service” under the Public Service Act, as it is not operating for “general business purposes.” The Act defines “public service” as including entities operating for hire or compensation, with general or limited clientele, and done for general business purposes. The Court, citing precedents, defined “business” as an activity where profit is the purpose or livelihood is the motive. The Bureau, which lacks corporate existence and discharges a governmental function, meets its expenses through congressional appropriations and is not authorized to use its income for gain. Although 20% to 30% of its subscribers are private, this service is incidental to its primary governmental function of meeting the telecommunication needs of the Government and the people. Its creation via Executive Order No. 94 and its mandated duties do not indicate it was established for general business purposes. Therefore, the Bureau is not subject to PSC jurisdiction.