‘NTC cannot impose rates on telcos sans due process’

MANILA, Philippines — The Supreme Court (SC) has declared that the National Telecommunications Commission (NTC) cannot impose rates on telecommunication companies without due process.

In a ruling promulgated on Feb. 13 but made public on Sept. 6, the SC Second Division said due process still prevails in administrative proceedings.

“The regulatory power of administrative bodies such as the National Telecommunications Commission does not give it unbridled permission to impose rates without giving telecommunications companies an opportunity to air out their grievances or seek reconsideration,” the ruling read.

The decision upheld the ruling of the Court of Appeals (CA) that imposed a permanent preliminary injunction against a billing scheme implemented by the NTC in 2009.

Under the scheme, mobile phone users are charged using a six-second-per-pulse unit as the default billing for voice calls.

Prior to this, telcos charged users by the minute, such that even a fraction of a minute was automatically charged as one minute.

The NTC later issued show cause orders against several telcos for defying the directive, as well as cease and desist orders to stop them from charging their subscribers using the old billing system.

This prompted the telcos to file petitions before the CA, which the appellate court granted, hence the present petition before the SC.

In resolving the case, the SC ruled that while the NTC has authority to impose certain rates and regulations, it cannot do so unilaterally and without basis.

Citing the Public Telecommunications Policy Act, the SC said that while NTC has the power to regulate rates, these rates must be just and fair to both customers and telcos.

It also pointed out that the rates must be reasonable and sufficient to cover the cost of business operations based on data collected through hearings and consultation with participating telcos.

The high court found that the commission did not consider the evidence presented by the telcos in their proposals and that the NTC’s explanation for rejecting the proposed rates was also insufficient.

“The Commission violated the right to due process of the telecommunications companies when it did not give them a chance to assail the contents of the Dec. 5, 2009 orders,” the high tribunal said.

It added that by ordering the implementation of the new billing scheme, the NTC “robbed the telcos of a chance to seek reconsideration of its decision.”