G.R. No. L-68729. May 29, 1987.
Radio Communications of the Philippines, Inc. vs. National Telecommunications Commission and Kayumanggi Radio Network Incorporated.

FACTS

Petitioner Radio Communications of the Philippines, Inc. (RCPI) has operated a radio communications system since 1957 under its legislative franchise, Republic Act No. 2036 . It established radio telegraph services in Sorsogon, Sorsogon (1968), San Jose, Occidental Mindoro (1971), and Catarman, Northern Samar (1976). It later installed radio telephone services in these locations, starting in San Jose in 1971 and in Sorsogon and Catarman in 1983. In 1980, respondent National Telecommunications Commission (NTC) authorized private respondent Kayumanggi Radio Network Inc. to operate radio communications systems in Catarman and San Jose.
In 1983, Kayumanggi filed a complaint with the NTC, alleging RCPI was operating its radio telephone services in Catarman and San Jose without a required Certificate of Public Convenience and Necessity (CPCN). RCPI countered that its operations were covered by its legislative franchise, previously recognized by the NTC’s predecessor, the Public Service Commission (PSC). The NTC, in a 1984 decision, ordered RCPI to cease operating its radio telephone services in the three locations, holding that under Executive Order No. 546, a CPCN is mandatory for operating such communication utilities.

ISSUE

Whether RCPI, as a grantee of a legislative franchise, is required to secure a Certificate of Public Convenience and Necessity from the NTC to validly operate its radio telephone services.

RULING

Yes. The Supreme Court affirmed the NTC’s decision, ruling that RCPI must secure a CPCN. The Court rejected RCPI’s argument that the exemptions under Sections 14 and 15 of the Public Service Law ( Commonwealth Act No. 146 ) survived the regulatory reorganization. Presidential Decree No. 1 abolished the PSC and transferred its functions to specialized boards, including the Board of Communications. Executive Order No. 546 later abolished that Board and the Telecommunications Control Bureau, transferring their functions to the NTC.
Critically, Section 15 of E.O. 546 explicitly mandates the NTC to issue CPCNs for the operation of communications utilities and services, including radio communications systems. This provision contains no exemption for existing franchise holders like RCPI. The law’s unequivocal language must be obeyed. The Court found no evidence that RCPI secured the necessary CPCN or prior authority from the relevant Secretary for its radio telephone installations in 1971 and 1983. Possession of a legislative franchise does not automatically confer authority to operate without the requisite CPCN from the NTC, which ensures operations promote public interest. Furthermore, a franchise is not exclusive and is subject to amendment for the common good, allowing the NTC to authorize another operator, like Kayumanggi, in the same area. The NTC’s factual findings, supported by substantial evidence, are conclusive.