G.R. No. 136762 Associated Communications Vs NTC
G.R. No. 136762 Associated Communications Vs NTC
G.R. No. 136762 Associated Communications Vs NTC
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FIRST DIVISION
ASSOCIATED COMMUNICATIONS and WIRELESS SERVICES, LTD., (ACWS) being operated and doing
business under the
trade name UNITED BROADCASTING NETWORK, INC., petitioner,
vs.
FIDELO Q. DUMLAO, CONSUELO S. PEREZ and TEODORO Y. YABES in their official capacities as Acting
Commissioner and Deputy Commissioners, respectively of the NATIONAL TELECOMMUNICATIONS
COMMISSION, respondents.
DECISION
CARPIO, J.:
The Case
This petition for review on certiorari1 seeks to reverse the Decision2 of the Court of Appeals dated September 30,
1998 in CA-G.R. SP No. 47675, as well as the Resolution dated December 10, 1998 denying the motion for
reconsideration. The Court of Appeals in its assailed Decision denied the petition for mandamus and prohibition filed
by Associated Communications and Wireless Services, Ltd. against Fidelo Q. Dumlao as Acting Commissioner, and
Consuelo S. Perez and Teodoro Y. Yabes as Deputy Commissioners of the National Telecommunications
Commission.
The Facts
Petitioner Associated Communications and Wireless Services, Ltd. ("ACWS" for brevity) is a registered partnership
organized and existing under the laws of the Philippines, doing business under the trade name United Broadcasting
Network, Inc. Initially, ACWS operated several radio and television stations nationwide by virtue of a legislative
franchise acquired in 1969 under R.A. No. 4551 through Concurrent Resolution No. 58 of the Sixth Congress of the
Philippines.3 Act No. 3846,4 as amended, otherwise known as the Radio Laws of the Philippines, requires a person
who operates radio broadcasting stations for commercial purposes to secure a legislative franchise.
In 1974, Presidential Decree No. 576-A5 ("PD 576-A" for brevity) took effect providing for the regulation of radio and
television broadcast services in the country. Effective December 31, 1981, PD 576-A6 terminated all franchises,
grants, licenses, permits, certificates or other forms of authority to operate radio or television broadcasting systems.
PD 576-A conferred on the Board of Communications and the Secretary of Public Works and Communications the
power to grant permits to operate radio or TV broadcast stations. The exercise of this power was made appealable
to the Office of the President.
With the termination of its legislative franchise, ACWS continued to operate its radio and television stations through
permits issued by the Board of Communications and the Secretary of Public Works and Communications pursuant
to PD 576-A.
In 1979, Executive Order No. 5467 ("EO 546" for brevity) created the Ministry of Public Works and the Ministry of
Transportation and Communications. EO 546 merged the Board of Communications and the Telecommunications
Control Bureau into a single entity called the National Telecommunications Commission under the Ministry of
Transportation and Communications.8 EO 546 vested in the NTC the power to grant permits for the operation of
radio and television stations. Specifically, subparagraphs (a) and (c) of EO 546 provide as follows:
"Section 15. Functions of the Commission. – The Commission shall exercise the following functions:
a. Issue Certificate of Public Convenience for the operation of communications utilities and services, radio
communications systems, wire or wireless telephone or telegraph systems, radio and television broadcasting
systems and other similar public utilities;
xxx
b. Grant permits for the use of radio frequencies for wireless telephone and telegraph systems and radio
communications systems including amateur radio stations and radio and television broadcasting systems;
The NTC granted ACWS renewable temporary permits and licenses for the continued operation of its radio10 and
television broadcasting systems.
ACWS operates Channel 25 under call sign DWQH-TV in the Ultra High Frequency (UHF) Band as authorized by
temporary permits. The latest temporary permit for Channel 25 was Temporary Permit No. BSD-0828-95 dated July
7, 1995, effective from June 29, 1995 to June 28, 1997.
ACWS applied for an increase of the transmitter power of Channel 25 from one kilowatt to 25 kilowatts, the
application docketed as NTC Case No. 91-031. In an Order dated May 28, 1996, then NTC Commissioner Simeon
Kintanar granted the application on the ground that ACWS "is legally, financially and technically capable and the
proposed increase of power will redound to the interest of the public." Consequently, ACWS embarked on an
expansion program to meet the NTC-approved upgrading of its facilities.
Before the expiration of Temporary Permit No. BSD-0828-95, ACWS applied for its renewal on June 3, 1997. In a
letter dated January 19, 1998, NTC Senior Executive Assistant III Delilah F. Deles informed ACWS of the approval
of its temporary permit for Channel 25, to be released upon payment of the necessary fees in the total amount of
P3,600.00.11 ACWS paid the amount on February 4, 1998 as evidenced by Official Receipt No. 0879209.12
The NTC, however, refused to release to ACWS the approved and paid for temporary permit. Instead, the NTC
issued an Order13 dated February 26, 1998 directing ACWS to show cause why its temporary permit to operate
should not be recalled for failure to secure a legislative franchise. The NTC also ordered ACWS to cease and desist
from operating Channel 25. The order reads:
"In a letter dated 17 November 1997, a copy of which is hereto attached as Annex "A", this Commission, thru its
Broadcast Service Division, directed above-named respondents to submit, within thirty (30) days from expiration of
its Temporary Permit, a new congressional franchise and failure to do so may cause a denial of their application for
renewal of their Temporary Permits. Despite this directive, respondents failed to submit a new congressional
franchise.
Earlier on, or on 28 October 1997, this Commission, thru the Chief, Broadcast Division, received from the
Committee on Legislative Franchises, a certification, a copy of which is hereto attached as Annex "B" that
respondents were ordered to submit requirements to support their franchise application (House Bill No. 14345) but
respondents failed to do, thus the application was never deliberated upon in the 9th Congress. In the 10th
Congress, no refiled application by the respondents was pending in the Committee on Legislative Franchise.
IN VIEW THEREOF, respondents are hereby directed to show cause in writing within ten (10) days from receipt of
this order why their assigned frequency, more specifically Channel 25 in the UHF Band, should not be recalled for
lack of the necessary Congressional Franchise as required by Section 1, Act No. 3846, as amended.
Moreover, respondent is hereby directed to cease and desist from operating DWQH-TV, unless subsequently
authorized by the Commission.
SO ORDERED."
The case was docketed as NTC Administrative Case No. 98-009. On March 17, 1998, ACWS filed its Answer
praying among others that the Order dated February 26, 1998 be set aside and the administrative case be
dismissed. Petitioner also prayed that the approved temporary permit to operate Channel 25 be released. Upon
ACWS's request, the NTC conducted a hearing on the matter on April 22, 1998, during which ACWS adduced
evidence. ACWS requested a continuance to June 8, 1998.
On May 15, 1998, despite the pendency of NTC Administrative Case No. 98-009 and its request for continuance,
ACWS filed with the Court of Appeals a petition for "Mandamus, Prohibition and Damages with Prayer for
Temporary Restraining Order and/or Writ of Preliminary Prohibitory Injunction." ACWS prayed that the NTC be
ordered to release ACWS's already approved and paid for temporary permit to operate Channel 25 or to issue the
corresponding Certificate of Public Convenience pursuant to EO 546. ACWS also sought to enjoin NTC from
proceeding with NTC Administrative Case No. 98-009. ACWS likewise sought reimbursement of its legal expenses
amounting to P100,000.00.
In a resolution dated May 22, 1998, the Court of Appeals restrained the NTC from continuing with the proceedings in
NTC Administrative Case No. 98-009. In due course, however, the Court of Appeals rendered its Decision denying
ACWS's petition and its motion to reconsider the same.
The Court of Appeals held that mandamus does not lie to compel the exercise of discretion in the grant or release of
a temporary permit to operate a television station. Neither is prohibition proper to enjoin the NTC from proceeding
with NTC Administrative Case No. 98-009. The Court of Appeals explained that even if the renewal of ACWS's
temporary permit had been approved and paid for, the NTC could still inquire whether ACWS complied with the
Memorandum of Understanding ("MOU" for brevity) between the House Committee on Legislative Franchises and
the KBP of which ACWS is a member. The MOU provides as follows:
"The NTC shall continue to issue and grant permits or authorizations to operate radio and television broadcast
stations within their mandate under Section 15 of Executive Order No. 546, provided that such temporary permits or
authorization to operate shall be valid for two (2) years within which the permittee shall be required to file an
application for a legislative franchise with the congress not later than December 31, 1994; provided further, if the
application for franchise remains unacted by the Congress without however being disapproved or denied, such
temporary permit or authorization to operate shall be extendible for another two (2) year period; provided finally, that
if the permittee of the temporary permit or authorization to operate fails to secure the legislative franchise with
Congress within this period, the NTC shall not extend or renew its permit or authorization to operate any further."
(Emphasis supplied.)
In view of ACWS's failure to secure a legislative franchise as required by the MOU, the NTC issued its Order of
February 26, 1998.
The Court of Appeals then observed that the matters ventilated in the petition were substantially the same as those
raised in ACWS's answer in NTC Administrative Case No. 98-009. Applying the doctrine of primary jurisdiction, the
Court of Appeals declared that the determination of whether ACWS complied with the requisites for the renewal of
its permit is best left for the NTC to decide as the government agency tasked to oversee the operations of radio and
television stations. The Court of Appeals concluded that ACWS cannot at this stage come to the court to enjoin the
NTC from excising a power clearly vested in it by law.
The Issues
2. FAILING OR REFUSING TO GRASP THE BASIC DIFFERENCE BETWEEN THE MERE RELEASE OF
AN ALREADY APPROVED AND PAID FOR TEMPORARY PERMIT TO OPERATE AND THE EVALUATION
OF PETITIONER'S CAPABILITY TO OPERATE A TELEVISION STATION.
On the first and second issues, ACWS agrees that the exercise of discretion cannot be compelled by mandamus.
ACWS likewise agrees that the power to grant a permit or authority to operate a broadcast facility is discretionary.
However, ACWS points out that once the discretionary power has been exercised as in this case where the
temporary permit had already been approved, the simple act of releasing the approved and paid for temporary
permit becomes merely ministerial.
On the third issue, ACWS contends that the MOU is contrary to PD 576-A and EO 546 for requiring a legislative
franchise in order to secure a certificate of public convenience. Moreover, the MOU, as executed by a mere
Committee of the Lower House and the KBP encroaches on the exercise of the executive functions of the NTC.
On the fourth issue, ACWS argues that the doctrine of primary jurisdiction is inapplicable to this case considering
that the issue submitted to the Court of Appeals does not call for any "special knowledge, experience and service of
the tribunal to determine technical and intricate matters of fact." The question for resolution of the Court of Appeals
is whether the NTC acted in a whimsical and arbitrary manner in its unjustified refusal to release the already
approved and paid for temporary permit and in immediately ordering the suspension of ACWS's television
operations.
Lastly, petitioner argues that it is entitled to a reimbursement of its legal expenses in the amount of P100,000.00 on
account of NTC's capricious, vexing and arbitrary actuations.
In sum, petitioner seeks the following reliefs: (1) the release of its already approved and paid for temporary permit to
operate; (2) the cessation of the administrative proceedings initiated by NTC against petitioner for the purpose of
recalling its Channel 25 permit to operate; and (3) damages in the amount of P100,000.00 for the capricious, vexing
and arbitrary actuations of the NTC officials concerned.
We cannot rule on the merits of the petition on the grounds of non-exhaustion of administrative remedies and litis
pendentia.
NTC Administrative Case No. 98-009 commenced upon NTC's issuance of the Order dated February 26, 1998. The
Order "directed ACWS to show cause in writing within ten (10) days from receipt why their assigned frequency,
Channel 25 in the UHF Band, should not be recalled for lack of the necessary congressional franchise as required
by Section 1, Act No. 3846, as amended." The Order also directed ACWS to cease and desist from operating its
television station, unless subsequently authorized by the Commission. There was no mention of the MOU
purportedly executed by the House Committee on Legislative Franchises and the KBP.
On March 17, 1998, ACWS filed an answer asserting that the frequency assigned to Channel 25 should not be
recalled for the following reasons: (1) Department of Justice Opinion No. 98, Series of 1991,15 states that EO 546
authorizes an administrative agency such as the NTC to issue permits for the operation of radio and television
broadcasting systems without need of a prior franchise issued by Congress; (2) NTC is estopped from recalling the
assigned frequency since it had previously approved the application for renewal of the temporary permit which has
been paid for; (3) the recall or cancellation is unreasonable, unfair and oppressive considering that ACWS had
commenced upgrading and expanding its facilities, expending millions of pesos purchasing new equipment after
NTC approved its permit to purchase; and (4) the letter dated November 17, 1997 mentioned in the Order dated
February 26, 1998 was never sent nor received by ACWS as validated by the lack of proof of service or at least the
registry receipt or a return card. ACWS sought the dismissal of the administrative case and the release of the
temporary permit.
Apparently, the rights asserted and reliefs prayed for by ACWS before the NTC, the Court of Appeals and now
before this Court are identical and based on the same facts. ACWS did not wait for the administrative case to
proceed to its appropriate conclusion before seeking judicial intervention. Hence, the Court of Appeals properly
denied the petition for premature invocation of the court's jurisdiction.
It appears that the NTC issued the Order pursuant to the NTC Rules of Practice and Procedure. Rule 13, Part IV
(Summary Proceedings) of the NTC Rules provides thus:
"PART IV-SUMMARY PROCEEDINGS
Section 1. When applicable. – Based on the report of an authorized personnel of the Board, or the credible sworn
statement of any offended party, the board instead of acting according to the procedure indicated for complaints,
may issue an order directing a respondent operator to appear before the board within seventy-two hours from his
receipt of a copy of the order and show cause why his certificate should not be cancelled or suspended for the
cause stated in the report or complaint.
This summary proceeding shall apply, in the discretion of the Board, only in cases where the continued acts of the
public's utility operator shall cause serious detriment to public interest.
This summary proceeding shall also be applicable in cases of willful or contumacious refusal by an operator to
comply with an order, rule or regulation of the Board, or any provision of the Public Services Act, as amended, or
any provisions of the Plan.
The Board, for good cause, may prior to the hearing suspend for a period not exceeding thirty (30) days any
certificate or the exercise of any right or authority granted under the Act or Plan by order of the Board, whenever
such step shall in the judgment of the Board be necessary to avoid serious and irreparable damage or
inconvenience to the public or to private interests.
Section 2. Content. – The order to show cause shall include a statement in substance of the violation reported or
complained of, and, whenever practicable, there shall be appended to it a copy of the report or complaint upon
which the order is based."
It is not disputed that ACWS had in fact applied for a franchise with the 9th Congress of the Philippines but failed to
submit the necessary supporting documents. The Committee on Legislative Franchises issued a certification
attesting to this fact. It was then that the NTC, now acting as a three-member commission, inquired why ACWS
failed to submit the documents. The NTC also warned ACWS about the probable recall of its assigned frequency for
failure to secure a legislative franchise as required by Act No. 3846.
Before a party may seek the intervention of the court, he should first avail of all the means afforded him by
administrative processes.16 This rule on exhaustion of administrative remedies was explained thus:
"The underlying principle of the rule on exhaustion of administrative remedies rests on the presumption that the
administrative agency, if afforded a complete chance to pass upon the matter, will decide the same
correctly. There are both legal and practical reasons for the principle. The administrative process is intended to
provide less expensive and more speedy solution to disputes. Where the enabling statute indicates a procedure for
administrative review and provides a system of administrative appeal or reconsideration, the courts - for reasons of
law, comity and convenience - will not entertain a case unless the available administrative remedies have been
resorted to and the appropriate authorities have been given an opportunity to act and correct errors committed in the
administrative forum." 17 (Emphasis supplied).
Indeed, the issues which administrative agencies such as the NTC are authorized to decide should not be
summarily taken from them and submitted to a court without first giving such administrative agency the opportunity
to dispose of the same after due deliberation. The purpose of the administrative case was precisely to thresh out the
legality of the continued operation of Channel 25.
The administrative case was the proper forum for ACWS to ventilate its side. The administrative case also provides
an opportunity for the NTC to correct any actual or fancied errors attributed to it by way of re-examination of the
factual and legal aspects of the case. This is the reason why ACWS was required to file an answer and hearings
were held on the matter.
The NTC in its Order dated February 26, 1998 gave ACWS ten days from receipt to file an answer. On March 17,
1998, ACWS filed an answer. Upon ACWS's request, a hearing was held on April 22, 1998. Upon ACWS's motion, a
continuance to June 8, 1998 was granted. ACWS filed a petition for mandamus and prohibition with the Court of
Appeals on May 15, 1998, thirteen days after the first hearing and twenty-four days before the scheduled second
hearing. Under these circumstances, the NTC could hardly be expected to have acted on the issues and corrected
itself. Clearly, ACWS filed the petition prematurely.
The special civil actions of prohibition and mandamus are extraordinary remedies that a party can resort to only in
cases of extreme necessity where the ordinary forms of procedure are powerless to afford relief and where there is
no other clear, adequate and speedier remedy. In this case, NTC Administrative Case No. 98-009 was the
adequate, speedier and less expensive remedy to secure the reliefs sought.
It is basic that a party's failure to exhaust administrative remedies is fatal, especially where the case involves not
just issues of law and of fact but of administrative discretion. The available administrative procedures must be
pursued until a definite and final determination is held.18
In its Memorandum filed before this Court on December 14, 1999, ACWS claims that the NTC has already decided
NTC Administrative Case No. 98-009. ACWS further claims that it filed an appeal under the 1997 Rules of Civil
Procedure before the Court of Appeals from the NTC's decision in the administrative case. There are in effect two
cases pending between the same parties for the same causes of action and reliefs, one in the Court of Appeals and
the other in this Court.
If we resolve this case on the merits while ACWS's appeal is pending before the Court of Appeals, the duplicity of
suits would result in confusion and the possibility of conflicting decisions could arise. For an orderly administration of
justice, ACWS's appeal now pending before the Court of Appeals should be resolved first considering that the
appeal is from a decision of the NTC on the merits of the case.
Neither could ACWS plead denial of due process as justification for its immediate resort to the court. Section 1 of
the Bill of Rights lays down what is known as the "due process clause" of the Constitution, thus:
Section 1. No person shall be deprived of life, liberty, or property without due process of law, x x x."
In order to fall within the protection of this provision, two conditions must concur, namely, that there is a deprivation
and that such deprivation is done without proper observance of due process. When one speaks of due process of
law, a distinction must be made between matters of procedure and matters of substance. In essence, procedural
due process "refers to the method or manner by which the law is enforced," while substantive due process "requires
that the law itself, not merely the procedures by which the law would be enforced, is fair, reasonable, and just."19
ACWS argues that NTC failed to observe due process in the issuance of the Order dated February 26, 1998
because ACWS did not receive the letter dated November 17, 199820 mentioned in the Order. The letter required
petitioner to submit its new congressional franchise within 30 days from expiration of the temporary permit to be
renewed. The letter did not refer to Channel 25 but to the radio stations maintained and operated by ACWS. ACWS
likewise assails the directive to cease and desist from operating Channel 25. Obviously, ACWS is referring to the
procedural aspect of the due process clause.
Notice and hearing are fundamental requirements of procedural due process when an administrative body exercises
its quasi-judicial functions. Both were complied with in this case.
It is of no moment that ACWS did not receive the letter dated November 17, 1998. What is important is that ACWS
received the Order dated February 26, 1998 requiring it to show cause why its permit to operate Channel 25 should
not be cancelled. In any case, the Court has maintained a clear position with regard to the due process
requirements in administrative cases, that is -
"(a)s long as a party was given the opportunity to defend his interests in due course, he cannot be said to have been
denied due process of law, for this opportunity to be heard is the very essence of due process. Moreover, this
constitutional mandate is deemed satisfied if a person is granted an opportunity to seek reconsideration of
the action or ruling complained of."21(Emphasis supplied).
The NTC afforded ACWS an opportunity to be heard by requiring it to submit an answer and by conducting hearings
on the matter. All told, ACWS had an opportunity to seek a reconsideration of the Order dated February 26, 1998
before the NTC.
WHEREFORE, the Decision of the Court of Appeals dated September 30, 1998, as well as its Resolution dated
December 10, 1998 in CA-G.R. SP No. 47675, is AFFIRMED.
SO ORDERED.
Davide, Jr., C.J., (Chairman), Vitug, Ynares-Santiago, and Azcuna, JJ., concur.
Footnotes
2 Penned by Associate Justice Demetrio G. Demetria with the concurrence of Associate Justices Emeterio C.
Cui and Ramon A. Barcelona.
3 Republic Act No. 4551 granted Marcos Villaverde and Winfred Villaverde a 50-year franchise to operate
radio stations, a provincial telephone system, commercial telephone and/or radiotelegraph communications
stations, with corresponding relay stations, among others. On June 18, 1969, the Sixth Congress of the
Philippines adopted Concurrent Resolution No. 58 which transferred the said franchise to ACWS.
"SEC. 1. No person, firm, company, association or corporation shall construct, install, establish, or operate a
radio transmitting station, or a radio receiving station used for commercial purposes, or a radio broadcasting
station, without having first obtained a franchise therefor from the Congress of the Philippines; Provided,
however, That no franchise from the Congress of the Philippines shall be necessary for the construction,
installation, establishment or operation of an amateur station, an experimental station, a training station, a
station on board a mobile vessel, train, or aircraft, or a private station in a place so outlying and so remote as
to afford no public communication system with the outside world: Provided, further, That radio broadcasting
stations established and operating at the time of the approval of this Act without the franchise herein required
shall be exempt from obtaining such franchise.
Unless otherwise specified, "station" or "radio station" as used in this Act shall refer to a radio transmitting
station and its receiving equipment, a radio receiving station used for commercial purposes, or a radio
broadcasting station." (As amended by Com. Act No. 365 and Com. Act No. 571, approved on June 17,
1940).
5 "Regulating the Ownership and Operation of Radio and Television Stations and for other Purposes."
"Section 6. All franchise grants, licenses, permits, certificates or other forms of authority to operate radio or
television broadcasting systems shall terminate on December 31, 1981. Thereafter, irrespective of any
franchise, grant, license, permit, certificate or other forms of authority to operate granted by any office, agency
or person, no radio or television station shall be authorized to operate without the authority of the Board of
Communications and the Secretary of Public Works and Communications or their successors who have the
right and authority to assign to qualified parties frequencies, channels or other means of identifying
broadcasting system: Provided, however, that any conflict over or disagreement with, a decision of the
aforementioned authorities may be appealed finally to the Office of the President within fifteen days from the
date the decision is received by the party in interest."
8 SECTION 14. National Telecommunications Commission. – The Board of Communications created under
Article III, Chapter I, Part X of the Integrated Reorganization Plan, as amended, and the Telecommunications
Bureau created under Article IX, Chapter I, Part X of the same plan, as amended, are integrated into a single
entity to be known as the National Telecommunications Commission and hereinafter referred to as the
Commission.
9 These powers and functions relating to radio and television broadcasting were a verbatim reproduction of
the powers and functions of the Board of Communications set forth in Presidential Decree No. 1 dated
September 24, 1972.
10 ACWS operates DYKR-FM in Mandaue City, DWBC-AM in Quezon City, 4FP-268 and DXKR-FM in Davao
City, DZV-230 and DWRK-FM in Metro Manila, DYKR-FM in Bacolod City.
13 Signed by Fidelo Q. Dumlao as Acting Commissioner and Teodoro Y. Yabes and Consuelo S. Perez as
Deputy Commissioners of the NTC.
17 Union Bank of the Philippines v. Court of Appeals, 290 SCRA 198 (1998).
18 Social Security System Employees Association v. Bathan-Velasco, 313 SCRA 250 (1999).
19 Corona v. United Harbor Pilots Association of the Philippines, 283 SCRA 31 (1997).
20 The letter dated November 17, 1997[20] addressed to ACWS referred to in said Order reads as follows:
"x x x.
Sir:
This is to acknowledge receipt of your application for renewal of the Temporary Permits of
the following radio stations:
Please be informed that your applications are being held in abeyance pending submission
of your new congressional franchise.
The above requirement should be submitted within thirty (30) days from expiration of the
Temporary Permit to be renewed. Failure to do so may constitute denial on your
application.
x x x."