rep v extelcom

7/29/2019 rep v extelcom

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REPUBLIC OF THE PHILIPPINES, represented by NATIONALTELECOMMUNICATIONS COMMISSION, petitioner, vs.EXPRESS TELECOMMUNICATION CO., INC. and BAYAN

TELECOMMUNICATIONS CO., INC., respondents.2002 Jan 15G.R. No. 147096ADMINISTRATIVE PROCEEDINGS

Facts:

December 29, 1992, Bayantel filed an application with theNational Telecommunication Commission for a certificate

of public convenience and necessity (CPCN) to install,operate and maintain a digital Cellular Mobile TelephoneSystem (CMTS) with prayer for a Provisional Authority(PA). The application was docketed as NTC Case No. 92-486.

January 22, 1993, NTC issued memorandum circulardirecting all interested applicants for national & regionalCMTS to file their applications on or before February 15,

1993.

May 26, 1993 filed an urgent ex-parte application to fileamended application.

Hearings on the amended application were conducted,but before bayantel can complete the presentation of itsevidence, NTC issued an order that all frequencies wereclosed in view of the 2 separate PAs in favor of Islacom &

GMCR, Inc., all other applications ordered archivedwithout prejudice to its reinstatement should the requisitefrequencies be made available.

March 9, 2000, NTC issued MC No. 9-3-2000 reallocatingfrequencies for assignment to existing CMTS operators

LynnedelacruzCIVLAWREV1Atty. Legaspi


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and to public telecommunication entities which shall beauthorized to install, operate and maintain CMTSnetworks.

May 17, 1999, Bayantel filed a motion to revive casewhen NTC issued MC for the availability of newfrequencies.

Extelcom filed with the CA a petition for certiorari andprohibition seeking the annulment of the order revivingthe application of Bayantel and the order grantingBayantel the PA.

The CA annulled and set aside the order of the NTC andthe amended application of Bayantel was dismissedwithout prejudice to the filing of a new CMTS.

Bayantel and NTC filed their separate motions forReconsideration.

Now this petition for review on certiorari filed by NTC.

The CA denied all the motions of the parties for lack ofmerit.

NTC filed this petition for review on certiorari.

Bayantel also filed its petition for review.

Issue:

1) Whether Extelcom exhausted all administrativeremedies.

2) May a purely administrative and discretionary functionbe interfered with by the courts



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3) Whether the NTC is the proper forum and whether itadopted the proper rules in resolving the case.

Decision

1) We now come to the issue of exhaustion ofadministrative remedies. The rule is well entrenched thata party must exhaust all administrative remedies beforeresorting to the courts. The premature invocation of theintervention of the court is fatal to ones cause of action.

This rule would not only give the administrative agency an

opportunity to decide the matter by itself correctly, butwould also prevent the unnecessary and premature resortto courts. In the case of Lopez v. City of Manila, we held:

2) It is a well-recognized principle that purelyadministrative and discretionary functions may not beinterfered with by the courts. (Coloso vs. Board ofAccountancy, G.R. No. L-5750, April 20, 1953) In general,courts have no supervising power over the proceedings

and actions of the administrative departments of thegovernment. This is generally true with respect to actsinvolving the exercise of judgement or discretion andfindings of fact. (54 Am. Jur. 558-559) xxx.

The established exception to the rule is where the issuingauthority has gone beyond its statutory authority,exercised unconstitutional powers or clearly actedarbitrarily and without regard to his duty or with grave

abuse of discretion. None of these obtains in the case atbar.

This Court has consistently held that the courts will notinterfere in matters which are addressed to the sounddiscretion of the government agency entrusted with the



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regulation of activities coming under the special andtechnical training and knowledge of such agency. It hasalso been held that the exercise of administrative

discretion is a policy decision and a matter that can bestbe discharged by the government agency concerned, andnot by the courts. In Villanueva v. Court of Appeals, itwas held that findings of fact which are supported byevidence and the conclusion of experts should not bedisturbed. This was reiterated in Metro TransitOrganization, Inc. v. National Labor Relations Commission,wherein it was ruled that factual findings of quasi-judicialbodies which have acquired expertise because their

jurisdiction is confined to specific matters are generallyaccorded not only respect but even finality and arebinding even upon the Supreme Court if they aresupported by substantial evidence.

Administrative agencies are given a wide latitude in theevaluation of evidence and in the exercise of itsadjudicative functions. This latitude includes theauthority to take judicial notice of facts within its special

competence.

In the case at bar, we find no reason to disturb the factualfindings of the NTC which formed the basis for awardingthe provisional authority to Bayantel.

3) In the regulatory telecommunications industry, the NTChas the sole authority to issue Certificates of PublicConvenience and Necessity (CPCN) for the installation,

operation, and maintenance of communications facilitiesand services, radio communications systems, telephoneand telegraphy systems. Such power includes theauthority to determine the areas of operations ofapplicants for telecommunications services. Specifically,Section 16 of the Public Service Act Authorizes the then



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PSC, upon notice and hearing, to issue Certificates ofPublic Convenience for the operation of public serviceswithin the Philippines "whenever the Commission finds

that the operation of the public service proposed and theauthorization to do business will promote the publicinterests in a proper and suitable manner." Theprocedure governing the issuance of such authorizationsis set forth in Section 29 of the said Act, the pertinentportion of which states:

"All hearings and investigations before the Commissionshall be governed by rules and adopted by the

Commission, and in the conduct thereof, the Commissionshall not be bound by the technical rules of legalevidence.xxx.

The NTC was correct when it applied the 1978 Rules ofpractice and procedure, particularly Rule 15, Sec. 3(Provisional Relief. Upon the filing of an application,complaint or petition or at any stage thereafter, the Boardmay grant on motion of the pleader or on its own

initiative, the relief prayed for, based on the pleading,together with the affidavits and supporting documentsattached thereto, without prejudice to a final decisionafter completion of the hearing which shall be calledwithin thirty (30) days from grant of authority asked for.)because the 1993 Revised Rules have never beenpublished in a newspaper of general circulation.

D E C I S I O N

YNARES-SANTIAGO, J.:

On December 29, 1992, International CommunicationsCorporation (now Bayan Telecommunications, Inc. or



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Bayantel) filed an application with the NationalTelecommunications Commission (NTC) for a Certificate ofPublic Convenience or Necessity (CPCN) to install, operate

and maintain a digital Cellular Mobile TelephoneSystem/Service (CMTS) with prayer for a ProvisionalAuthority (PA). The application was docketed as NTC CaseNo. 92-486.[1]

Shortly thereafter, or on January 22, 1993, the NTC issuedMemorandum Circular No. 4-1-93 directing all interestedapplicants for nationwide or regional CMTS to file theirrespective applications before the Commission on or

before February 15, 1993, and deferring the acceptanceof any application filed after said date until further orders.[2]

On May 6, 1993, and prior to the issuance of any notice ofhearing by the NTC with respect to Bayantel's originalapplication, Bayantel filed an urgent ex-parte motion toadmit an amended application.[3] On May 17, 1993, thenotice of hearing issued by the NTC with respect to this

amended application was published in the ManilaChronicle. Copies of the application as well as the noticeof hearing were mailed to all affected parties.Subsequently, hearings were conducted on the amendedapplication. But before Bayantel could complete thepresentation of its evidence, the NTC issued an Orderdated December 19, 1993 stating:

In view of the recent grant of two (2) separate Provisional

Authorities in favor of ISLACOM and GMCR, Inc., whichresulted in the closing out of all available frequencies forthe service being applied for by herein applicant, and inorder that this case may not remain pending for anindefinite period of time, AS PRAYED FOR, let this case be,as it is, hereby ordered ARCHIVED without prejudice to its



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reinstatement if and when the requisite frequencybecomes available.

SO ORDERED.[4]

On June 18, 1998, the NTC issued Memorandum CircularNo. 5-6-98 re-allocating five (5) megahertz (MHz) of theradio frequency spectrum for the expansion of CMTSnetworks. The re-allocated 5 MHz were taken from thefollowing bands: 1730-1732.5 / 1825-1827.5 MHz and1732.5-1735 / 1827.5-1830 MHz.[5]

Likewise, on March 23, 1999, Memorandum Circular No. 3-3-99 was issued by the NTC re-allocating an additionalfive (5) MHz frequencies for CMTS service, namely: 1735-1737.5 / 1830-1832.5 MHz; 1737.5-1740 / 1832.5-1835MHz; 1740-1742.5 / 1835-1837.5 MHz; and 1742.5-1745 /1837.5-1840 MHz.[6]

On May 17, 1999, Bayantel filed an Ex-Parte Motion toRevive Case,[7] citing the availability of new frequency

bands for CMTS operators, as provided for underMemorandum Circular No. 3-3-99.

On February 1, 2000, the NTC granted BayanTel's motionto revive the latter's application and set the case forhearings on February 9, 10, 15, 17 and 22, 2000.[8] TheNTC noted that the application was ordered archivedwithout prejudice to its reinstatement if and when therequisite frequency shall become available.

Respondent Express Telecommunication Co., Inc.(Extelcom) filed in NTC Case No. 92-486 an Opposition(With Motion to Dismiss) praying for the dismissal ofBayantel's application.[9] Extelcom argued thatBayantel's motion sought the revival of an archived



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application filed almost eight (8) years ago. Thus, thedocumentary evidence and the allegations of respondentBayantel in this application are all outdated and should no

longer be used as basis of the necessity for the proposedCMTS service. Moreover, Extelcom alleged that there wasno public need for the service applied for by Bayantel asthe present five CMTS operators --- Extelcom, Globe

Telecom, Inc., Smart Communication, Inc., PilipinoTelephone Corporation, and Isla CommunicationCorporation, Inc. --- more than adequately addressed themarket demand, and all are in the process of enhancingand expanding their respective networks based on recent

technological developments.

Extelcom likewise contended that there were no availableradio frequencies that could accommodate a new CMTSoperator as the frequency bands allocated in NTCMemorandum Circular No. 3-3-99 were intended for andhad in fact been applied for by the existing CMTSoperators. The NTC, in its Memorandum Circular No. 4-1-93, declared it its policy to defer the acceptance of any

application for CMTS. All the frequency bands allocatedfor CMTS use under the NTC's Memorandum Circular No.5-11-88 and Memorandum Circular No. 2-12-92 hadalready been allocated to the existing CMTS operators.Finally, Extelcom pointed out that Bayantel is itssubstantial stockholder to the extent of about 46% of itsoutstanding capital stock, and Bayantel's applicationundermines the very operations of Extelcom.

On March 13, 2000, Bayantel filed a ConsolidatedReply/Comment,[10] stating that the opposition wasactually a motion seeking a reconsideration of the NTCOrder reviving the instant application, and thus cannotdwell on the material allegations or the merits of the case.Furthermore, Extelcom cannot claim that frequencies



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were not available inasmuch as the allocation andassignment thereof rest solely on the discretion of theNTC.

In the meantime, the NTC issued on March 9, 2000Memorandum Circular No. 9-3-2000, re-allocating thefollowing radio frequency bands for assignment toexisting CMTS operators and to public telecommunicationentities which shall be authorized to install, operate andmaintain CMTS networks, namely: 1745-1750MHz / 1840-1845MHz; 1750-1775MHz / 1845-1850MHz; 1765-1770MHz / 1860-1865MHz; and 1770-1775MHz / 1865-

1870MHz.[11]

On May 3, 2000, the NTC issued an Order granting infavor of Bayantel a provisional authority to operate CMTSservice.[12] The Order stated in pertinent part:

On the issue of legal capacity on the part of Bayantel, thisCommission has already taken notice of the change inname of International Communications Corporation to

Bayan Telecommunications, Inc. Thus, in the Decisionentered in NTC Case No. 93-284/94-200 dated 19 July1999, it was recognized that Bayan Telecommunications,Inc., was formerly named International CommunicationsCorp. Bayantel and ICC Telecoms, Inc. are one and thesame entity, and it necessarily follows that what legalcapacity ICC Telecoms has or has acquired is also thelegal capacity that Bayantel possesses.

On the allegation that the Commission has committed anerror in allowing the revival of the instant application, itappears that the Order dated 14 December 1993archiving the same was anchored on the non-availabilityof frequencies for CMTS. In the same Order, it wasexpressly stated that the archival hereof, shall be without



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prejudice to its reinstatement "if and when the requisitefrequency becomes available." Inherent in the said Orderis the prerogative of the Commission in reviving the

same, subject to prevailing conditions. The Order of 1February 2001, cited the availability of frequencies forCMTS, and based thereon, the Commission, exercising itsprerogative, revived and reinstated the instantapplication. The fact that the motion for revival hereofwas made ex-parte by the applicant is of no moment, solong as the oppositors are given the opportunity to belater heard and present the merits of their respectiveoppositions in the proceedings.

On the allegation that the instant application is alreadyobsolete and overtaken by developments, the issue iswhether applicant has the legal, financial and technicalcapacity to undertake the proposed project. Thedetermination of such capacity lies solely within thediscretion of the Commission, through its applicable rulesand regulations. At any rate, the oppositors are notprecluded from showing evidence disputing such capacity

in the proceedings at hand. On the alleged non-availability of frequencies for the proposed service in viewof the pending applications for the same, the Commissiontakes note that it has issued Memorandum Circular 9-3-2000, allocating additional frequencies for CMTS. Theeligibility of existing operators who applied for additionalfrequencies shall be treated and resolved in theirrespective applications, and are not in issue in the case athand.

Accordingly, the Motions for Reconsideration filed bySMARTCOM and GLOBE TELECOMS/ISLACOM and theMotion to Dismiss filed by EXTELCOM are hereby DENIEDfor lack of merit.[13]



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The grant of the provisional authority was anchored onthe following findings:

COMMENTS:

1. Due to the operational mergers between SmartCommunications, Inc. and Pilipino Telephone Corporation(Piltel) and between Globe Telecom, Inc. (Globe) and IslaCommunications, Inc. (Islacom), free and effectivecompetition in the CMTS market is threatened. The fifthoperator, Extelcom, cannot provide good competition inas much as it provides service using the analog AMPS.

The GSM system dominates the market.

2. There are at present two applicants for the assignmentof the frequencies in the 1.7 Ghz and 1.8 Ghz allocated toCMTS, namely Globe and Extelcom. Based on the numberof subscribers Extelcom has, there appears to be nocongestion in its network - a condition that is necessaryfor an applicant to be assigned additional frequencies.Globe has yet to prove that there is congestion in its

network considering its operational merger with Islacom.

3. Based on the reports submitted to the Commission,48% of the total number of cities and municipalities arestill without telephone service despite the more than 3million installed lines waiting to be subscribed.

CONCLUSIONS:

1. To ensure effective competition in the CMTS marketconsidering the operational merger of some of the CMTSoperators, new CMTS operators must be allowed toprovide the service.



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2. The re-allocated frequencies for CMTS of 3 blocks of 5Mhz x 2 is sufficient for the number of applicants shouldthe applicants be qualified.

3. There is a need to provide service to some or all of theremaining cities and municipalities without telephoneservice.

4. The submitted documents are sufficient to determinecompliance to the technical requirements. The applicantcan be directed to submit details such as channelingplans, exact locations of cell sites, etc. as the project

implementation progresses, actual area coverageascertained and traffic data are made available. Applicantappears to be technically qualified to undertake theproposed project and offer the proposed service.

IN VIEW OF THE FOREGOING and considering that there isprima facie evidence to show that Applicant is legally,technically and financially qualified and that the proposedservice is technically feasible and economically viable, in

the interest of public service, and in order to facilitate thedevelopment of telecommunications services in all areasof the country, as well as to ensure healthy competitionamong authorized CMTS providers, let a PROVISIONALAUTHORITY (P.A.) be issued to Applicant BAYAN

TELECOMMUNICATIONS, INC. authorizing it to construct,install, operate and maintain a Nationwide Cellular Mobile

Telephone Systems (CMTS), subject to the following termsand conditions without prejudice to a final decision after

completion of the hearing which shall be called withinthirty (30) days from grant of authority, in accordancewith Section 3, Rule 15, Part IV of the Commission's Rulesof Practice and Procedure. xxx.[14]



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Extelcom filed with the Court of Appeals a petition forcertiorari and prohibition,[15] docketed as CA-G.R. SP No.58893, seeking the annulment of the Order reviving the

application of Bayantel, the Order granting Bayantel aprovisional authority to construct, install, operate andmaintain a nationwide CMTS, and Memorandum CircularNo. 9-3-2000 allocating frequency bands to new publictelecommunication entities which are authorized toinstall, operate and maintain CMTS.

On September 13, 2000, the Court of Appeals renderedthe assailed Decision,[16] the dispositive portion of which

reads:

WHEREFORE, the writs of certiorari and prohibition prayedfor are GRANTED. The Orders of public respondent datedFebruary 1, 2000 and May 3, 2000 in NTC Case No. 92-486 are hereby ANNULLED and SET ASIDE and theAmended Application of respondent Bayantel isDISMISSED without prejudice to the filing of a new CMTSapplication. The writ of preliminary injunction issued

under our Resolution dated August 15, 2000, restrainingand enjoining the respondents from enforcing the Ordersdated February 1, 2000 and May 3, 2000 in the said NTCcase is hereby made permanent. The Motion forReconsideration of respondent Bayantel dated August 28,2000 is denied for lack of merit.

SO ORDERED.[17]

Bayantel filed a motion for reconsideration of the abovedecision.[18] The NTC, represented by the Office of theSolicitor General (OSG), also filed its own motion forreconsideration.[19] On the other hand, Extelcom filed aMotion for Partial Reconsideration, praying that NTC



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Memorandum Circular No. 9-3-2000 be also declared nulland void.[20]

On February 9, 2001, the Court of Appeals issued theassailed Resolution denying all of the motions forreconsideration of the parties for lack of merit.[21]

Hence, the NTC filed the instant petition for review oncertiorari, docketed as G.R. No. 147096, raising thefollowing issues for resolution of this Court:

A. Whether or not the Order dated February 1, 2000 of the

petitioner which revived the application of respondentBayantel in NTC Case No. 92-486 violated respondentExtelcom's right to procedural due process of law;

B. Whether or not the Order dated May 3, 2000 of thepetitioner granting respondent Bayantel a provisionalauthority to operate a CMTS is in substantial compliancewith NTC Rules of Practice and Procedure andMemorandum Circular No. 9-14-90 dated September 4,

1990.[22]

Subsequently, Bayantel also filed its petition for review,docketed as G.R. No. 147210, assigning the followingerrors:

I. THE COURT OF APPEALS SERIOUSLY ERRED IN ITSINTERPRETATION OF THE PRINCIPLE OF "EXHAUSTION OFADMINISTRATIVE REMEDIES" WHEN IT FAILED TO DISMISS

HEREIN RESPONDENT'S PETITION FOR CERTIORARIDESPITE ITS FAILURE TO FILE A MOTION FORRECONSIDERATION.

II. THE COURT OF APPEALS SERIOUSLY ERRED IN ITSFINDING THAT THE REVIVAL OF NTC CASE NO. 92-486



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ANCHORED ON A EX-PARTE MOTION TO REVIVE CASEWAS TANTAMOUNT TO GRAVE ABUSE OF DISCRETION ON

THE PART OF THE NTC.

III. THE COURT OF APPEALS SERIOUSLY ERRED WHEN ITDENIED THE MANDATE OF THE NTC AS THE AGENCY OFGOVERNMENT WITH THE SOLE DISCRETION REGARDINGALLOCATION OF FREQUENCY BAND TO

TELECOMMUNICATIONS ENTITIES.

IV. THE COURT OF APPEALS SERIOUSLY ERRED IN ITSINTERPRETATION OF THE LEGAL PRINCIPLE THAT

JURISDICTION ONCE ACQUIRED CANNOT BE LOST WHEN ITDECLARED THAT THE ARCHIVED APPLICATION SHOULD BEDEEMED AS A NEW APPLICATION IN VIEW OF THESUBSTANTIAL CHANGE IN THE CIRCUMSTANCES ALLEGEDIN ITS AMENDMENT APPLICATION.

V. CONTRARY TO THE FINDING OF THE COURT OFAPPEALS, THE ARCHIVING OF THE BAYANTEL APPLICATIONWAS A VALID ACT ON THE PART OF THE NTC EVEN IN THE

ABSENCE OF A SPECIFIC RULE ON ARCHIVING OF CASESSINCE RULES OF PROCEDURE ARE, AS A MATTER OFCOURSE, LIBERALLY CONSTRUED IN PROCEEDINGSBEFORE ADMINISTRATIVE BODIES AND SHOULD GIVE WAY

TO THE GREATER HIERARCHY OF PUBLIC WELFARE ANDPUBLIC INTEREST.

VI. CONTRARY TO THE FINDING OF THE COURT OFAPPEALS, THE ARCHIVING OF BAYANTEL'S APPLICATION

WAS NOT VIOLATIVE OF THE SUMMARY NATURE OF THEPROCEEDINGS IN THE NTC UNDER SEC. 3, RULE 1 OF THENTC REVISED RULES OF PROCEDURE.

VII. THE COURT OF APPEALS SERIOUSLY ERRED IN ITSFINDING THAT THE ARCHIVING OF BAYANTEL'S



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APPLICATION WAS VIOLATIVE OF THE ALLEGED DECLAREDPOLICY OF THE GOVERNMENT ON THE TRANSPARENCYAND FAIRNESS OF ADMINISTRATIVE PROCESS IN THE NTC

AS LAID DOWN IN SEC 4(1) OF R.A. NO. 7925.

VIII. THE COURT OF APPEALS SERIOUSLY ERRED IN ITSFINDING THAT THE NTC VIOLATED THE PROVISIONS OF

THE CONSTITUTION PERTAINING TO DUE PROCESS OFLAW.

IX. THE COURT OF APPEALS SERIOUSLY ERRED INDECLARING THAT THE MAY 3, 2000 ORDER GRANTING

BAYANTEL A PROVISIONAL AUTHORITY SHOULD BE SETASIDE AND REVERSED.

i. Contrary to the finding of the Court of Appeals, therewas no violation of the NTC Rule that the legal, technical,financial and economic documentations in support of theprayer for provisional authority should first be submitted.

ii. Contrary to the finding of the Court of Appeals, there

was no violation of Sec. 3, Rule 15 of the NTC Rules ofPractice and Procedure that a motion must first be filedbefore a provisional authority could be issued.

iii. Contrary to the finding of the Court of Appeals that aplea for provisional authority necessitates a notice andhearing, the very rule cited by the petitioner (Section 5,Rule 4 of the NTC Rules of Practice and Procedure)provides otherwise.

iv. Contrary to the finding of the Court of Appeals, urgentpublic need is not the only basis for the grant of aprovisional authority to an applicant;



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v. Contrary to the finding of the Court of Appeals, therewas no violation of the constitutional provision on theright of the public to information when the Common

Carrier Authorization Department (CCAD) prepared itsevaluation report.[23]

Considering the identity of the matters involved, thisCourt resolved to consolidate the two petitions.[24]

At the outset, it is well to discuss the nature and functionsof the NTC, and analyze its powers and authority as wellas the laws, rules and regulations that govern its

existence and operations.

The NTC was created pursuant to Executive Order No.546, promulgated on July 23, 1979. It assumed thefunctions formerly assigned to the Board ofCommunications and the Telecommunications ControlBureau, which were both abolished under the saidExecutive Order. Previously, the NTC's functions weremerely those of the defunct Public Service Commission

(PSC), created under Commonwealth Act No. 146, asamended, otherwise known as the Public Service Act,considering that the Board of Communications was thesuccessor-in-interest of the PSC. Under Executive OrderNo. 125-A, issued in April 1987, the NTC became anattached agency of the Department of Transportation andCommunications.

In the regulatory telecommunications industry, the NTC

has the sole authority to issue Certificates of PublicConvenience and Necessity (CPCN) for the installation,operation, and maintenance of communications facilitiesand services, radio communications systems, telephoneand telegraph systems. Such power includes the authorityto determine the areas of operations of applicants for



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telecommunications services. Specifically, Section 16 ofthe Public Service Act authorizes the then PSC, uponnotice and hearing, to issue Certificates of Public

Convenience for the operation of public services withinthe Philippines "whenever the Commission finds that theoperation of the public service proposed and theauthorization to do business will promote the publicinterests in a proper and suitable manner."[25] Theprocedure governing the issuance of such authorizationsis set forth in Section 29 of the said Act, the pertinentportion of which states:

All hearings and investigations before the Commissionshall be governed by rules adopted by the Commission,and in the conduct thereof, the Commission shall not bebound by the technical rules of legal evidence. xxx.

In granting Bayantel the provisional authority to operate aCMTS, the NTC applied Rule 15, Section 3 of its 1978Rules of Practice and Procedure, which provides:

Sec. 3. Provisional Relief. --- Upon the filing of anapplication, complaint or petition or at any stagethereafter, the Board may grant on motion of the pleaderor on its own initiative, the relief prayed for, based on thepleading, together with the affidavits and supportingdocuments attached thereto, without prejudice to a finaldecision after completion of the hearing which shall becalled within thirty (30) days from grant of authority

asked for. (underscoring ours)

Respondent Extelcom, however, contends that the NTCshould have applied the Revised Rules which were filedwith the Office of the National Administrative Register onFebruary 3, 1993. These Revised Rules deleted the phrase



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"on its own initiative;" accordingly, a provisional authoritymay be issued only upon filing of the proper motionbefore the Commission.

In answer to this argument, the NTC, through theSecretary of the Commission, issued a certification to theeffect that inasmuch as the 1993 Revised Rules have notbeen published in a newspaper of general circulation, theNTC has been applying the 1978 Rules.

The absence of publication, coupled with the certificationby the Commissioner of the NTC stating that the NTC was

still governed by the 1978 Rules, clearly indicate that the1993 Revised Rules have not taken effect at the time ofthe grant of the provisional authority to Bayantel. The factthat the 1993 Revised Rules were filed with the UP LawCenter on February 3, 1993 is of no moment. There isnothing in the Administrative Code of 1987 which impliesthat the filing of the rules with the UP Law Center is theoperative act that gives the rules force and effect. BookVII, Chapter 2, Section 3 thereof merely states:

Filing. --- (1) Every agency shall file with the University ofthe Philippines Law Center three (3) certified copes ofevery rule adopted by it. Rules in force on the date ofeffectivity of this Code which are not filed within three (3)months from the date shall not thereafter be the basis ofany sanction against any party or persons.

(2) The records officer of the agency, or his equivalent

functionary, shall carry out the requirements of thissection under pain or disciplinary action.

(3) A permanent register of all rules shall be kept by theissuing agency and shall be open to public inspection.



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The National Administrative Register is merely a bulletinof codified rules and it is furnished only to the Office ofthe President, Congress, all appellate courts, the National

Library, other public offices or agencies as the Congressmay select, and to other persons at a price sufficient tocover publication and mailing or distribution costs.[26] Ina similar case, we held:

This does not imply however, that the subjectAdministrative Order is a valid exercise of such quasi-legislative power. The original Administrative Order issuedon August 30, 1989, under which the respondents filed

their applications for importations, was not published inthe Official Gazette or in a newspaper of generalcirculation. The questioned Administrative Order, legally,until it is published, is invalid within the context of Article2 of Civil Code, which reads:

"Article 2. Laws shall take effect after fifteen daysfollowing the completion of their publication in the OfficialGazette (or in a newspaper of general circulation in the

Philippines), unless it is otherwise provided. x x x"

The fact that the amendments to Administrative Order No.SOCPEC 89-08-01 were filed with, and published by theUP Law Center in the National Administrative Register,does not cure the defect related to the effectivity of theAdministrative Order.

This Court, in Taada vs. Tuvera (G.R. No. L-63915,

December 29, 1986, 146 SCRA 446) stated, thus:

"We hold therefore that all statutes, including those oflocal application and private laws, shall be published as acondition for their effectivity, which shall begin fifteen



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days after publication unless a different effectivity is fixedby the legislature.

Covered by this rule are presidential decrees andexecutive orders promulgated by the President in theexercise of legislative power or, at present, directlyconferred by the Constitution. Administrative Rules andRegulations must also be published if their purpose is toenforce or implement existing law pursuant also to a validdelegation.

Interpretative regulations and those merely internal in

nature, that is, regulating only the personnel of theadministrative agency and not the public, need not bepublished. Neither is publication required of the so-calledletters of instructions issued by administrative superiorsconcerning the rules or guidelines to be followed by theirsubordinates in the performance of their duties.

x x x

We agree that the publication must be in full or it is nopublication at all since its purpose is to inform the publicof the contents of the laws."

The Administrative Order under consideration is one ofthose issuances which should be published for itseffectivity, since its purpose is to enforce and implementan existing law pursuant to a valid delegation, i.e., P.D.1071, in relation to LOI 444 and EO 133.[27]

Thus, publication in the Official Gazette or a newspaper ofgeneral circulation is a condition sine qua non beforestatutes, rules or regulations can take effect. This isexplicit from Executive Order No. 200, which repealedArticle 2 of the Civil Code, and which states that:



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Laws shall take effect after fifteen days following thecompletion of their publication either in the Official

Gazette or in a newspaper of general circulation in thePhilippines, unless it is otherwise provided.[28]

The Rules of Practice and Procedure of the NTC, whichimplements Section 29 of the Public Service Act (C.A. 146,as amended), fall squarely within the scope of these laws,as explicitly mentioned in the case Taada v. Tuvera.[29]

Our pronouncement in Taada vs. Tuvera is clear and

categorical. Administrative rules and regulations must bepublished if their purpose is to enforce or implementexisting law pursuant to a valid delegation. The onlyexceptions are interpretative regulations, those merelyinternal in nature, or those so-called letters of instructionsissued by administrative superiors concerning the rulesand guidelines to be followed by their subordinates in theperformance of their duties.[30]

Hence, the 1993 Revised Rules should be published in theOfficial Gazette or in a newspaper of general circulationbefore it can take effect. Even the 1993 Revised Rulesitself mandates that said Rules shall take effect only aftertheir publication in a newspaper of general circulation.[31] In the absence of such publication, therefore, it is the1978 Rules that governs.

In any event, regardless of whether the 1978 Rules or the

1993 Revised Rules should apply, the records show thatthe amended application filed by Bayantel in fact includeda motion for the issuance of a provisional authority.Hence, it cannot be said that the NTC granted theprovisional authority motu proprio. The Court of Appeals,therefore, erred when it found that the NTC issued its



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Order of May 3, 2000 on its own initiative. This much isacknowledged in the Decision of the Court of Appeals:

As prayer, ICC asked for the immediate grant ofprovisional authority to construct, install, maintain andoperate the subject service and to charge the proposedrates and after due notice and hearing, approve theinstant application and grant the corresponding certificateof public convenience and necessity.[32]

The Court of Appeals also erred when it declared that theNTC's Order archiving Bayantel's application was null and

void. The archiving of cases is a widely accepted measuredesigned to shelve cases in which no immediate action isexpected but where no grounds exist for their outrightdismissal, albeit without prejudice. It saves the petitioneror applicant from the added trouble and expense of re-filing a dismissed case. Under this scheme, an inactivecase is kept alive but held in abeyance until the situationobtains wherein action thereon can be taken.

In the case at bar, the said application was orderedarchived because of lack of available frequencies at thetime, and made subject to reinstatement upon availabilityof the requisite frequency. To be sure, there was nothingirregular in the revival of the application after thecondition therefor was fulfilled.

While, as held by the Court of Appeals, there are no clearprovisions in the Rules of the NTC which expressly allow

the archiving of any application, this recourse may bejustified under Rule 1, Section 2 of the 1978 Rules, whichstates:

Sec. 2. Scope.--- These rules govern pleadings, practiceand procedure before the Board of Communications (now



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NTC) in all matters of hearing, investigation andproceedings within the jurisdiction of the Board. However,in the broader interest of justice and in order to best

serve the public interest, the Board may, in any particularmatter, except it from these rules and apply such suitableprocedure to improve the service in the transaction of thepublic business. (underscoring ours)

The Court of Appeals ruled that the NTC committed graveabuse of discretion when it revived Bayantel's applicationbased on an ex-parte motion. In this regard, the pertinentprovisions of the NTC Rules:

Sec. 5. Ex-parte Motions. --- Except for motions forprovisional authorization of proposed services andincrease of rates, ex-parte motions shall be acted upon bythe Board only upon showing of urgent necessity thereforand the right of the opposing party is not substantiallyimpaired.[33]

Thus, in cases which do not involve either an application

for rate increase or an application for a provisionalauthority, the NTC may entertain ex-parte motions onlywhere there is an urgent necessity to do so and no rightsof the opposing parties are impaired.

The Court of Appeals ruled that there was a violation ofthe fundamental right of Extelcom to due process when itwas not afforded the opportunity to question the motionfor the revival of the application. However, it must be

noted that said Order referred to a simple revival of thearchived application of Bayantel in NTC Case No. 92-426.At this stage, it cannot be said that Extelcom's right toprocedural due process was prejudiced. It will still havethe opportunity to be heard during the full-blownadversarial hearings that will follow. In fact, the records



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show that the NTC has scheduled several hearing datesfor this purpose, at which all interested parties shall beallowed to register their opposition. We have ruled that

there is no denial of due process where full-blownadversarial proceedings are conducted before anadministrative body.[34] With Extelcom having fullyparticipated in the proceedings, and indeed, given theopportunity to file its opposition to the application, therewas clearly no denial of its right to due process.

In Zaldivar vs. Sandiganbayan (166 SCRA 316 [1988]), weheld that the right to be heard does not only refer to the

right to present verbal arguments in court. A party mayalso be heard through his pleadings. where opportunity tobe heard is accorded either through oral arguments orpleadings, there is no denial of procedural due process. Asreiterated in National Semiconductor (HK) Distribution,Ltd. vs. NLRC (G.R. No. 123520, June 26, 1998), theessence of due process is simply an opportunity to beheard, or as applied to administrative proceedings, anopportunity to explain one's side. Hence, in Navarro III vs.

Damaso (246 SCRA 260 [1995]), we held that a formal ortrial-type hearing is not at all times and not in allinstances essential. Plainly, petitioner was not denied dueprocess.[35]

Extelcom had already entered its appearance as a partyand filed its opposition to the application. It was neitherprecluded nor barred from participating in the hearingsthereon. Indeed, nothing, not even the Order reviving the

application, bars or prevents Extelcom and the otheroppositors from participating in the hearings andadducing evidence in support of their respectiveoppositions. The motion to revive could not have possiblycaused prejudice to Extelcom since the motion onlysought the revival of the application. It was merely a



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preliminary step towards the resumption of the hearingson the application of Bayantel. The latter will still have toprove its capability to undertake the proposed CMTS.

Indeed, in its Order dated February 1, 2000, the NTC setseveral hearing dates precisely intended for thepresentation of evidence on Bayantel's capability andqualification. Notice of these hearings were sent to allparties concerned, including Extelcom.

As regards the changes in the personal circumstances ofBayantel, the same may be ventilated at the hearingsduring Bayantel's presentation of evidence. In fact,

Extelcom was able to raise its arguments on this matter inthe Opposition (With Motion to Dismiss) anent the re-opening and re-instatement of the application of Bayantel.Extelcom was thus heard on this particular point.

Likewise, the requirements of notice and publication ofthe application is no longer necessary inasmuch as theapplication is a mere revival of an application which hasalready been published earlier. At any rate, the records

show that all of the five (5) CMTS operators in the countrywere duly notified and were allowed to raise theirrespective oppositions to Bayantel's application throughthe NTC's Order dated February 1, 2000.

It should be borne in mind that among the declarednational policies under Republic Act No. 7925, otherwiseknown as the Public Telecommunications Policy Act of thePhilippines, is the healthy competition among

telecommunications carriers, to wit:

A healthy competitive environment shall be fostered, onein which telecommunications carriers are free to makebusiness decisions and to interact with one another inproviding telecommunications services, with the end in



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view of encouraging their financial viability whilemaintaining affordable rates.[36]

The NTC is clothed with sufficient discretion to act onmatters solely within its competence. Clearly, the need fora healthy competitive environment in telecommunicationsis sufficient impetus for the NTC to consider all thoseapplicants who are willing to offer competition, developthe market and provide the environment necessary forgreater public service. This was the intention that came tolight with the issuance of Memorandum Circular 9-3-2000,allocating new frequency bands for use of CMTS. This

memorandum circular enumerated the conditionsprevailing and the reasons which necessitated itsissuance as follows:

- the international accounting rates are rapidly declining,threatening the subsidy to the local exchange service asmandated in EO 109 and RA 7925;

- the public telecommunications entities which were

obligated to install, operate and maintain local exchangenetwork have performed their obligations in varyingdegrees;

- after more than three (3) years from the performance ofthe obligations only 52% of the total number of cities andmunicipalities are provided with local telephone service.

- there are mergers and consolidations among the

existing cellular mobile telephone service (CMTS)providers threatening the efficiency of competition;

- there is a need to hasten the installation of localexchange lines in unserved areas;



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- there are existing CMTS operators which areexperiencing congestion in the network resulting to lowgrade of service;

- the consumers/customers shall be given the freedom tochoose CMTS operators from which they could get theservice.[37]

Clearly spelled out is the need to provide enhancedcompetition and the requirement for more landlines andtelecommunications facilities in unserved areas in thecountry. On both scores, therefore, there was sufficient

showing that the NTC acted well within its jurisdiction andin pursuance of its avowed duties when it allowed therevival of Bayantel's application.

We now come to the issue of exhaustion of administrativeremedies. The rule is well-entrenched that a party mustexhaust all administrative remedies before resorting tothe courts. The premature invocation of the interventionof the court is fatal to one's cause of action. This rule

would not only give the administrative agency anopportunity to decide the matter by itself correctly, butwould also prevent the unnecessary and premature resortto courts.[38] In the case of Lopez v. City of Manila,[39]we held:

As a general rule, where the law provides for theremedies against the action of an administrative board,body or officer, relief to courts can be sought only after

exhausting all remedies provided. The reason rests uponthe presumption that the administrative body, if given thechance to correct its mistake or error, may amend itsdecision on a given matter and decide it properly.

Therefore, where a remedy is available within theadministrative machinery, this should be resorted to



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before resort can be made to the courts, not only to givethe administrative agency the opportunity to decide thematter by itself correctly, but also to prevent unnecessary

and premature resort to courts.

Clearly, Extelcom violated the rule on exhaustion ofadministrative remedies when it went directly to the Courtof Appeals on a petition for certiorari and prohibition fromthe Order of the NTC dated May 3, 2000, without firstfiling a motion for reconsideration. It is well-settled thatthe filing of a motion for reconsideration is a prerequisiteto the filing of a special civil action for certiorari.

The general rule is that, in order to give the lower courtthe opportunity to correct itself, a motion forreconsideration is a prerequisite to certiorari. It also basicthat petitioner must exhaust all other available remediesbefore resorting to certiorari. This rule, however, issubject to certain exceptions such as any of the following:(1) the issues raised are purely legal in nature, (2) publicinterest is involved, (3) extreme urgency is obvious or (4)

special circumstances warrant immediate or more directaction.[40]

This case does not fall under any of the recognizedexceptions to this rule. Although the Order of the NTCdated May 3, 2000 granting provisional authority toBayantel was immediately executory, it did not precludethe filing of a motion for reconsideration. Under the NTCRules, a party adversely affected by a decision, order,

ruling or resolution may within fifteen (15) days file amotion for reconsideration. That the Order of the NTCbecame immediately executory does not mean that theremedy of filing a motion for reconsideration is foreclosedto the petitioner.[41]



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Furthermore, Extelcom does not enjoy the grant of anyvested interest on the right to render a public service. TheConstitution is quite emphatic that the operation of a

public utility shall not be exclusive. Thus:

No franchise, certificate, or any other form ofauthorization for the operation of a public utility shall begranted to citizens of the Philippines or to corporationsorganized under the laws of the Philippines at least sixtyper centum of whose capital is owned by such citizens,nor shall such franchise, certificate or authorization beexclusive in character or for a longer period than fifty

years. Neither shall any such franchise or right be grantedexcept under the condition that it shall be subject toamendment, alteraion, or repeal by the Congress whenthe common good so requires. xxx xxx xxx.[42]

In Radio Communications of the Phils., Inc. v. NationalTelecommunications Commission,[43] we held:

It is well within the powers of the public respondent to

authorize the installation by the private respondentnetwork of radio communications systems in Catarman,Samar and San Jose, Mindoro. Under the circumstances,the mere fact that the petitioner possesses a franchise toput up and operate a radio communications system incertain areas is not an insuperable obstacle to the publicrespondent's issuing the proper certificate to an applicantdesiring to extend the same services to those areas. TheConstitution mandates that a franchise cannot be

exclusive in nature nor can a franchise be granted exceptthat it must be subject to amendment, alteration, or evenrepeal by the legislature when the common good sorequires. (Art. XII, sec. 11 of the 1986 Constitution). Thereis an express provision in the petitioner's franchise which



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provides compliance with the above mandate (RA 2036,sec. 15).

Even in the provisional authority granted to Extelcom, it isexpressly stated that such authority is not exclusive.

Thus, the Court of Appeals erred when it gave due courseto Extelcom's petition and ruled that it constitutes anexception to the rule on exhaustion of administrativeremedies.

Also, the Court of Appeals erred in annulling the Order ofthe NTC dated May 3, 2000, granting Bayantel a

provisional authority to install, operate and maintainCMTS. The general rule is that purely administrative anddiscretionary functions may not be interfered with by thecourts. Thus, in Lacuesta v. Herrera,[44] it was held:

xxx (T)he powers granted to the Secretary of Agricultureand Commerce (natural resources) by law regarding thedisposition of public lands such as granting of licenses,permits, leases and contracts, or approving, rejecting,

reinstating, or canceling applications, are all executiveand administrative in nature. It is a well recognizedprinciple that purely administrative and discretionaryfunctions may not be interfered with by the courts.(Coloso vs. Board of Accountancy, G.R. No. L-5750, April20, 1953) In general, courts have no supervising powerover the proceedings and actions of the administrativedepartments of the government. This is generally truewith respect to acts involving the exercise of judgement

or discretion and findings of fact. (54 Am. Jur. 558-559)xxx.

The established exception to the rule is where the issuingauthority has gone beyond its statutory authority,exercised unconstitutional powers or clearly acted



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arbitrarily and without regard to his duty or with graveabuse of discretion.[45] None of these obtains in the caseat bar.

Moreover, in petitions for certiorari, evidentiary matters ormatters of fact raised in the court below are not propergrounds nor may such be ruled upon in the proceedings.As held in National Federation of Labor v. NLRC:[46]

At the outset, it should be noted that a petition forcertiorari under Rule 65 of the Rules of Court will prosperonly if there is a showing of grave abuse of discretion or

an act without or in excess of jurisdiction on the part ofthe National Labor Relations Commission. It does notinclude an inquiry as to the correctness of the evaluationof evidence which was the basis of the labor official orofficer in determining his conclusion. It is not for thisCourt to re-examine conflicting evidence, re-evaluate thecredibility of witnesses nor substitute the findings of factof an administrative tribunal which has gained expertisein its special field. Considering that the findings of fact of

the labor arbiter and the NLRC are supported by evidenceon record, the same must be accorded due respect andfinality.

This Court has consistently held that the courts will notinterfere in matters which are addressed to the sounddiscretion of the government agency entrusted with theregulation of activities coming under the special andtechnical training and knowledge of such agency.[47] It

has also been held that the exercise of administrativediscretion is a policy decision and a matter that can bestbe discharged by the government agency concerned, andnot by the courts.[48] In Villanueva v. Court of Appeals,[49] it was held that findings of fact which are supportedby evidence and the conclusion of experts should not be



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disturbed. This was reiterated in Metro TransitOrganization, Inc. v. National Labor Relations Commission,[50] wherein it was ruled that factual findings of quasi-

judicial bodies which have acquired expertise becausetheir jurisdiction is confined to specific matters aregenerally accorded not only respect but even finality andare binding even upon the Supreme Court if they aresupported by substantial evidence.

Administrative agencies are given a wide latitude in theevaluation of evidence and in the exercise of itsadjudicative functions. This latitude includes the authority

to take judicial notice of facts within its specialcompetence.

In the case at bar, we find no reason to disturb the factualfindings of the NTC which formed the basis for awardingthe provisional authority to Bayantel. As found by theNTC, Bayantel has been granted several provisional andpermanent authorities before to operate varioustelecommunications services.[51] Indeed, it was

established that Bayantel was the first company tocomply with its obligation to install local exchange linespursuant to E.O. 109 and R.A. 7925. In recognition of thesame, the provisional authority awarded in favor ofBayantel to operate Local Exchange Services in QuezonCity, Malabon, Valenzuela and the entire Bicol region wasmade permanent and a CPCN for the said service wasgranted in its favor. Prima facie evidence was likewisefound showing Bayantel's legal, financial and technical

capacity to undertake the proposed cellular mobiletelephone service.

Likewise, the May 3, 2000 Order did not violate NTCMemorandum Circular No. 9-14-90 dated September 4,1990, contrary to the ruling of the Court of Appeals. The



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memorandum circular sets forth the procedure for theissuance of provisional authority thus:

EFFECTIVE THIS DATE, and as part of the Commission'sdrive to streamline and fast track action onapplications/petitions for CPCN other forms ofauthorizations, the Commission shall be evaluatingapplications/petitions for immediate issuance ofprovisional authorizations, pending hearing and finalauthorization of an application on its merit.

For this purpose, it is hereby directed that all

applicants/petitioners seeking for provisionalauthorizations, shall submit immediately to theCommission, either together with their application or in aMotion all their legal, technical, financial, economicdocumentations in support of their prayer for provisionalauthorizations for evaluation. On the basis of theircompleteness and their having complied withrequirements, the Commission shall be issuing provisionalauthorizations.

Clearly, a provisional authority may be issued evenpending hearing and final determination of an applicationon its merits.

Finally, this Court finds that the Manifestations ofExtelcom alleging forum shopping on the part of the NTCand Bayantel are not impressed with merit. The divisionsof the Supreme Court are not to be considered as

separate and distinct courts. The Supreme Court remainsa unit notwithstanding that it works in divisions. Althoughit may have three divisions, it is but a single court. Actionsconsidered in any of these divisions and decisionsrendered therein are, in effect, by the same Tribunal. Thedivisions of this Court are not to be considered as



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separate and distinct courts but as divisions of one andthe same court.[52]

Moreover, the rules on forum shopping should not beliterally interpreted. We have stated thus:

It is scarcely necessary to add that Circular No. 28-91must be so interpreted and applied as to achieve thepurposes projected by the Supreme Court when itpromulgated that circular. Circular No. 28-91 wasdesigned to serve as an instrument to promote andfacilitate the orderly administration of justice and should

not be interpreted with such absolute literalness as tosubvert its own ultimate and legitimate objection or thegoal of all rules of procedure - which is to achievesubstantial justice as expeditiously as possible.[53]

Even assuming that separate actions have been filed bytwo different parties involving essentially the samesubject matter, no forum shopping was committed as theparties did not resort to multiple judicial remedies. The

Court, therefore, directed the consolidation of the twocases because they involve essentially the same issues. Itwould also prevent the absurd situation wherein twodifferent divisions of the same court would renderaltogether different rulings in the cases at bar.

We rule, likewise, that the NTC has legal standing to fileand initiate legal action in cases where it is clear that itsinaction would result in an impairment of its ability to

execute and perform its functions. Similarly, we havepreviously held in Civil Service Commission v.Dacoycoy[54] that the Civil Service Commission, as anaggrieved party, may appeal the decision of the Court ofAppeals to this Court.



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As correctly stated by the NTC, the rule invoked byExtelcom is Rule 65 of the Rules of Civil Procedure, whichprovides that public respondents shall not appear in or file

an answer or comment to the petition or any pleadingtherein.[55] The instant petition, on the other hand, wasfiled under Rule 45 where no similar proscription exists.

WHEREFORE, in view of the foregoing, the consolidatedpetitions are GRANTED. The Court of Appeals' Decisiondated September 13, 2000 and Resolution dated February9, 2001 are REVERSED and SET ASIDE. The permanentinjunction issued by the Court of Appeals is LIFTED. The

Orders of the NTC dated February 1, 2000 and May 3,2000 are REINSTATED. No pronouncement as to costs.

SO ORDERED.

Davide, Jr., C.J., (Chairman), Puno, Kapunan, and Pardo, JJ.,concur.

rep v extelcom

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