Globe Telecom, Inc. v. National Telecommunications Commission [G.R. No.143964. July 26, 2004]

23 Nov


Private respondent Smart Communications, Inc (Smart) filed with the NTC a Complaint to effect the interconnection of their SMS or texting services with petitioner Globe Telecom, Inc. (Globe). Globe pointed out procedural defects in Smarts complaints and moved to dismiss the case. I also pointed out that another network, Islacom, was allowed to provide such service without prior NTC approval. The National Telecommunications Commission (NTC) ruled that both Smart and Globe were “equally blameworthy” and issued an Order penalizing both on the ground of providing SMS under Value Added Services (VAS) without prior approval from the NTC. The Court of Appeals sustained the NTC Order.


Whether or not:

(1) Globe may be required to secure prior NTC approval before providing SMS or texting services;

(2)  SMS is a VAS under Public telecommunications Act (PTA) of 1995;


(1) NO. The NTC may not legally require Globe to secure its approval for Globe to continue providing SMS. This does not imply though that NTC lacks authority to regulate SMS or to classify it as VAS.  However, the move should be implemented properly, through unequivocal regulations applicable to all entities that are similarly situated, and in an even-handed manner. This should not be interpreted, however, as removing SMS from the ambit of jurisdiction and review by the NTC. The NTC will continue to exercise, by way of its broad grant, jurisdiction over Globe and Smart’s SMS offerings, including questions of rates and customer complaints. Yet caution must be had. Much complication could have been avoided had the NTC adopted a proactive position, promulgating the necessary rules and regulations to cope up with the advent of the technologies it superintends.  With the persistent advent of new offerings in the telecommunications industry, the NTC’s role will become more crucial than at any time before.

(2) NO. There is no legal basis under the PTA or the memorandum circulars promulgated by the NTC to denominate SMS as VAS, and any subsequent determination by the NTC on whether SMS is VAS should be made with proper regard for due process and in conformity with the PTA. The Court realizes that the PTA is not intended to constrain the industry within a cumbersome regulatory regime. The policy as pre-ordained by legislative fiat renders the traditionally regimented business in an elementary free state to make business decisions, avowing that it is under this atmosphere that the industry would prosper.  It is disappointing at least if the deregulation thrust of the law is skirted deliberately.  But it is ignominious if the spirit is defeated through a crazy quilt of vague, overlapping rules that are implemented haphazardly.

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Posted by on November 23, 2014 in Case Digests


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