GLOBE V. NTC G.R. No. 143964. July 26, 2004
FACTS:
On 4 June 1999, Smart filed a Complaint with public respondent NTC,praying that NTC order the immediate interconnection of Smarts and Globes GSM networks. Smart alleged that Globe, with evident bad faith and malice, refused to grant Smarts request for the interconnection of SMS.
Globe filed its Answer with Motion to Dismiss on 7 June 1999, interposing grounds that the Complaint was premature, Smarts failure to comply with the conditions precedent required in Section 6 of NTC Memorandum Circular 9-7-93,19 and its omission of the mandatory Certification of Non-Forum Shopping.
On 19 July 1999, NTC issued the Order now subject of the present petition.
According to NTC Both Smart and Globe were equally blameworthy for their lack of cooperation in the submission of the documentation required for interconnection and for having unduly maneuvered the situation into the present impasse.
NTC held that since SMS falls squarely within the definition of value-added (VAS) service or enhanced-service given in NTC Memorandum Circular No. 8-9-95 (MC No. 8-9-95) their implementation of SMS interconnection is mandatory.The NTC also declared that both Smart and Globe have been providing SMS without authority from it.
Globe filed with the CA a Petition for Certiorari and Prohibition to nullify and set aside the Order and to prohibit NTC from taking any further action in the case.
Globe reiterated its previous arguments that the complaint should have been dismissed for failure to comply with conditions precedent and the non-forum shopping rule.They claimed that NTC acted without jurisdiction in declaring that it had no authority to render SMS, pointing out that the matter was not raised as an issue before it at all.
They alleged that the Order is a patent nullity as it imposed an administrative penalty for an offense for which neither it nor Smart was sufficiently charged nor heard on in violation of their right to due process.
The CA issued a Temporary Restraining Order (TRO) on 31 Aug 1999. In its Memorandum, Globe called the attention of the CA in an earlier NTC decision regarding Islacom, holding that SMS is a deregulated special feature and does not require the prior approval of the NTC.
ISSUE:
Whether NTC may legally require Globe to secure NTC approval before it continues providing SMS.
WON SMS is a Value Added Service (VAS) under Public telecommunications Act (PTA) of 1995;
HELD:
1. NO. The NTC may not legally require Globe to secure its approval for Globe to continue providing SMS. This does not imply though that NTC lacks authority to regulate SMS or to classify it as VAS. However, the move should be implemented properly, through unequivocal regulations applicable to all entities that are similarly situated, and in an even-handed manner. This should not be interpreted, however, as removing SMS from the ambit of jurisdiction and review by the NTC. The NTC will continue to exercise, by way of its broad grant, jurisdiction over Globe and Smart’s SMS offerings, including questions of rates and customer complaints. Yet caution must be had. Much complication could have been avoided had the NTC adopted a proactive position, promulgating the necessary rules and regulations to cope up with the advent of the technologies it superintends. With the persistent advent of new offerings in the telecommunications industry, the NTC’s role will become more crucial than at any time before.
2. NO. There is no legal basis under the PTA or the memorandum circulars promulgated by the NTC to denominate SMS as VAS, and any subsequent determination by the NTC on whether SMS is VAS should be made with proper regard for due process and in conformity with the PTA.
Is SMS a VAS, enhanced service, or a special feature? Apparently, even the NTC is unsure. It had told Islacom that SMS was a special feature, then subsequently held that it was a VAS. However, the pertinent laws and regulations had not changed from the time of the Islacom letter up to the day the Order was issued. Only the thinking of NTC did.
More significantly, NTC never required ISLACOM to apply for prior approval in order to provide SMS, even after the Order to that effect was promulgated against Globe and Smart. This fact was admitted by NTC during oral arguments. NTCs treatment of Islacom, apart from being obviously discriminatory, puts into question whether or not NTC truly believes that SMS is VAS. NTC is unable to point out any subsequent rule or regulation, enacted after it promulgated the adverse order against Globe and Smart, affirming the newly-arrived determination that SMS is VAS.
In fact, as Smart admitted during the oral arguments, while it did comply with the NTC Order requiring it to secure prior approval, it was never informed by the NTC of any action on its request. While NTC counters that it did issue a Certificate of Registration to Smart, authorizing the latter as a provider of SMS, such Certificate of Registration was issued only on 13 March 2003, or nearly four (4) years after Smart had made its request.This inaction indicates a lack of seriousness on the part of the NTC to implement its own rulings. Also, it tends to indicate the lack of belief or confusion on NTCs part as to how SMS should be treated. Given the abstract set of rules the NTC has chosen to implement, this should come as no surprise. Yet no matter how content the NTC may be with its attitude of sloth towards regulation, the effect may prove ruinous to the sector it regulates.
Moreover, the Court realizes that the PTA of 1995 is not intended to constrain the industry within a cumbersome regulatory regime. The policy as pre-ordained by legislative fiat renders the traditionally regimented business in an elementary free state to make business decisions, avowing that it is under this atmosphere that the industry would prosper.
It is disappointing at least if the deregulation thrust of the law is skirted deliberately. But it is ignominious if the spirit is defeated through a crazy quilt of vague, overlapping rules that are implemented haphazardly.
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FACTS V.2
Smart Communications filed a complaint against Globe Telecom before the NTC.
Smart alleged that Globe Telecom refused interconnection and it asked the NTC to compel Globe Telecom to link up their respective networks.
The NTC then issued the usual show cause order informing Globe Telecom about its alleged refusal to interconnect.
On July 19, 1999, the NTC issued an order declaring both companies "equally blameworthy" for their failure to interconnect.
The commission also held that SMS is a value added service or enhanced service under NTC Memorandum Circular No. 8-9-95, and that both companies were providing SMS without authority from the commission.
The NTC also held that since SMS was a value added service or enhanced service, interconnection was mandatory under Executive Order 59.