Supreme Court junks NOW’s bid as new telco player

MANILA, Philippines — The Supreme Court (SC) has shut down the bid of NOW Telecom Co. Inc. to become the third major player in the country’s telecommunications industry.

In a 15-page ruling promulgated on Jan. 31, the SC’s First Division denied NOW Telecom’s petition that questioned the validity of the circular issued by the National Telecommunications Commission (NTC), whichs imposed qualifications and restrictions on the entry of a new major player (NMP) in the telco industry.

With this, NOW’s bid to become NMP has been shut down, as Mindanao Islamic Telephone Co. Inc. has been selected as the NMP under the NTC circular, and has been issued a certificate of public convenience and necessity (CPCN).

In deciding against NOW Telecom, the high court said the petition for injunctive relief has been rendered moot and academic, considering that there was already a chosen NMP and was accordingly issued a CPCN.

“It is an established rule that injunction will not issue to restrain the performance of an act already done, or to prevent events that have already happened,” the decision read.

“When the act sought to be prevented by injunction has already been performed or completed, nothing more can be enjoined or restrained; a writ of injunction then becomes moot and academic, and the court, by mere issuance of the writ, can no longer stop or undo the act,” it said.

To do so, the SC said, would “violate the sole purpose of a prohibitive injunction, that is, to preserve the status quo.”

The Court also said NOW Telecom failed to show it has complied with the provisions of the subject circular for it to be entitled to the allocated radio frequencies for NMP, as the telco was then a mere prospective bidder at the time of its application for the issuance of a writ of preliminary injunction (WPI).

The SC upheld the ruling of the Court of Appeals (CA) in May 2021 dismissing NOW Telecom’s plea to nullify the NTC’s 2018 circular “Rules and Regulations on the Selection Process for a New Major Player in the Philippine Telecommunications Market.”

In its decision, the appellate court said NOW Telecom failed to show a clear and unmistakable right for the issuance of an injunctive relief. The telco also failed to show grave and irreparable injury, as at the time it did not possess an actual or existing right over the frequencies that would be assigned to the NMP.

In affirming the CA ruling, the SC said the appellate court did not commit any reversible error. The high court also agreed the circular cannot be subject to injunctive relief by the lower courts under Section 3 of Republic Act 8975.

The provision bars lower courts from issuing temporary restraining orders or a WPI against the government for the conduct of the bidding or awarding of contract or project of the government.

“The CA correctly ruled that the implementation of the subject Circular involved an essential telecommunications infrastructure project. As such, NOW Telecom cannot enjoin the implementation of the bidding process for the selection of the NMP by a lower court’s WPI,” the SC said.

In its petition, NOW Telecom questioned the validity of certain provisions of the circular, which it claimed are “excessive, confiscatory, and violative of due process.”

It questioned the provision requiring an NMP to post a participation security with a face value of P700 million equivalent to one-half percent (0.5 percent) of the minimum capital and operational expenditure at the end of the commitment period.

It also challenged the requirement of the posting of a performance security at 10 percent of the remaining cumulative capital and operational expenditures commitment.

With this, a potential participant is required to post P14 billion to P24 billion for performance security.

NOW Telecom also questioned the non-refundable appeal fee amounting to P10 million under Section 8 of the circular. Section 10.1 requires the submission of the business and roll-out plans after the NMP is determined.