FIRST DIVISION

[G.R. No. 138295. August 28, 2003.]

PILIPINO TELEPHONE CORPORATION, petitioner, vs.

NATIONAL TELECOMMUNICATIONS COMMISSION and
INTERNATIONAL COMMUNICATIONS CORPORATION,
respondents.

Abello Concepcion Regala and Cruz for petitioner.

Quiason Makalintal Barot Torres & Ibarra for private respondent.

SYNOPSIS

Petitioner Pilipino Telephone Corporation filed a petition for certiorari before

the Court of Appeals seeking the nullification of the Order of respondent National
Telecommunications Commission (NTC) which granted respondent International
Communications Corporation (ICC) Provisional Authority (PA) to construct, operate
and maintain local exchange services in some of the areas already covered by
petitioner's Provisional Authority. Among other things, petitioner contended that the
Order of the respondent is tantamount to confiscation of property without due process
of law. The Court of Appeals, however, dismissed the petition. Hence, this petition.

The law expressly vests in the NTC the power and discretion to grant a
provisional permit or authority. The NTC Order explicitly provides for the basis of the
issuance of the PA. The Court will not disturb the factual findings of the respondent
NTC on the technical and financial capability of the respondent ICC to undertake the
proposed project. It generally accords great weight and even finality to factual
findings of the administrative bodies, such as the NTC, if substantial evidence
supports the findings, as in this case. The exception to this rule is when the
administrative agency arbitrarily disregarded evidence before it or misapprehended
evidence to such an extent as to compel a contrary conclusion had it properly
appreciated the evidence. Petitioner gravely failed to show that this exception applies
to the instant case. Moreover, the exercise of administrative discretion, such as the
issuance of a PA, is a policy decision and a matter that the NTC can best discharge,
Copyright 1994-2010 CD Technologies Asia, Inc. Philippine Jurisprudence 1901-2009 1
 not the courts. Furthermore, under the Constitution, no franchisee can demand or
acquire exclusivity in the operation of a public utility. Thus, a franchisee of a public
authority cannot complain of seizure or taking of property because of the issuance of
another franchise to a competitor. Petitioner, therefore, cannot complain of a taking of
an exclusive right that it does not own and which no franchisee can ever own.
Accordingly, the Court affirmed the dismissal of petitioner's petition not only because
it failed to exhaust available administrative remedies but also because the respondent
NTC acted within its jurisdiction in issuing the questioned Order.

SYLLABUS

1. REMEDIAL LAW; SPECIAL CIVIL ACTIONS; PETITION FOR

CERTIORARI; MOTION FOR RECONSIDERATION A PREREQUISITE FOR THE
FILING THEREOF; REVIEW OF FACTUAL FINDINGS AND EVALUATION OF
EVIDENCE NOT PROPER SUBJECTS OF CERTIORARI. — The settled rule is a
motion for reconsideration is a prerequisite for the filing of a petition for certiorari. A
petitioner must exhaust all other available remedies before resorting to certiorari. An
exception to this rule arises if the petitioner raises purely legal issues. However,
contrary to PILTEL's view, the issues raised in its petition for certiorari before the
Court of Appeals were mainly factual in nature. Since PILTEL disputes NTC's factual
findings and seeks a re-evaluation of the facts and evidence on record, the issues
PILTEL raised are not proper subjects for certiorari. Evidentiary matters or matters of
fact raised in the NTC are not proper grounds in the proceedings for certiorari before
the Court of Appeals. The sole office of a writ of certiorari is the correction of errors
of jurisdiction and does not include a review of the NTC's evaluation of the evidence
and factual findings.

2. ID.; ID.; ID.; FAILURE TO FILE MOTION FOR RECONSIDERATION

RENDERS PETITION DISMISSIBLE FOR NON-EXHAUSTION OF
ADMINISTRATIVE REMEDIES. — Even if the NTC Order was immediately
executory, it did not excuse PILTEL from filing a motion for reconsideration.
Contrary to PILTEL's view, a motion for reconsideration is the plain, speedy and
adequate remedy to the adverse NTC Order. Had PILTEL filed a motion for
reconsideration of the NTC Order, the NTC would have had the opportunity to correct
the alleged errors. In addition, PILTEL's failure to file a motion for reconsideration
rendered its petition for certiorari dismissible because of failure to exhaust
administrative remedies.

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 3. ID.; ID.; ID.; GRAVE ABUSE OF DISCRETION; EXPLAINED; THE
NATIONAL TELECOMMUNICATIONS COMMISSION DID NOT COMMIT
GRAVE ABUSE OF DISCRETION WHEN IT ISSUED THE QUESTIONED
ORDER IN CASE AT BAR. — In Benito v. Commission on Elections, the Court
defined grave abuse of discretion as follows: Grave abuse of discretion means such
capricious and whimsical exercise of judgment as is equivalent to lack of jurisdiction,
or, in other words where the power is exercised in an arbitrary or despotic manner by
reason of passion or personal hostility, and it must be so patent and gross as to amount
to an evasion of positive duty or to a virtual refusal to perform the duty enjoined or to
act at all in contemplation of law. It is not sufficient that a tribunal, in the exercise of
its power, abused its discretion, such abuse must be grave. Assuming that PILTEL's
petition for certiorari was proper, PILTEL nevertheless miserably failed to show that
the NTC gravely abused its discretion amounting to lack or excess of jurisdiction in
issuing the NTC Order. The NTC is the regulatory agency of the national government
with jurisdiction over all telecommunications entities. The law expressly vests in the
NTC the power and discretion to grant a provisional permit or authority. In this case,
the NTC did not commit grave abuse of discretion when it issued the questioned
Order.

4. ID.; EVIDENCE; FACTUAL FINDINGS OF ADMINISTRATIVE

BODIES GENERALLY ACCORDED GREAT WEIGHT AND EVEN FINALITY
IF SUPPORTED BY SUBSTANTIAL EVIDENCE; EXCEPTION; NOT
APPLICABLE TO CASE AT BAR. — We will not disturb the factual findings of the
NTC on the technical and financial capability of the ICC to undertake the proposed
project. We generally accord great weight and even finality to factual findings of
administrative bodies such as the NTC, if substantial evidence supports the findings as
in this case. The exception to this rule is when the administrative agency arbitrarily
disregarded evidence before it or misapprehended evidence to such an extent as to
compel a contrary conclusion had it properly appreciated the evidence. PILTEL
gravely failed to show that this exception applies to the instant case. Moreover, the
exercise of administrative discretion, such as the issuance of a PA, is a policy decision
and a matter that the NTC can best discharge, not the courts.

5. CONSTITUTIONAL LAW; NATIONAL ECONOMY AND

PATRIMONY; OPERATION OF A PUBLIC UTILITY SHALL NOT BE
EXCLUSIVE. — Section 23 of EO 109 does not categorically state that the issuance
of a PA is exclusive to any telecommunications company. Neither Congress nor the
NTC can grant an exclusive "franchise, certificate, of any other form of authorization"
to operate a public utility. In Republic v. Express Telecommunications Co., the Court
Copyright 1994-2010 CD Technologies Asia, Inc. Philippine Jurisprudence 1901-2009 3
 held that "the Constitution is quite emphatic that the operation of a public utility shall
not be exclusive." Section 11, Article XII of the Constitution provides: . . . . Thus, in
Radio Communications of the Philippines, Inc. v. National Telecommunications
Commission, the Court ruled that the "Constitution mandates that a franchise cannot
be exclusive in nature."

6. ID.; ID.; ID.; PETITIONER'S RIGHT TO PROVIDE

TELECOMMUNICATIONS IS NOT EXCLUSIVE. — Even PILTEL's franchise,
Republic Act No. 6030 ("RA 6030"), expressly declares that PILTEL's right to
provide telecommunications services is not exclusive. Section 13 of RA 6030 states:
SECTION 13. The rights herein granted shall not be exclusive, and the right and
power to grant to any corporation, association or person other than the grantee
franchise for the telephone or electrical transmission of messages and signals shall not
be impaired or affected by the granting of this franchise: . . . ." Moreover, Section 1 of
RA 6030 expressly states that the grant of a franchise to PILTEL is "[s]ubject to the
conditions established . . . in the Constitution." Consequently, PILTEL does not enjoy
any exclusive right to operate telecommunications services in the areas covered by its
PA.

7. ID.; ID.; FRANCHISE TO OPERATE A PUBLIC UTILITY NOT AN

EXCLUSIVE PRIVATE PROPERTY OF FRANCHISEE. — PILTEL's contention
that the NTC Order amounts to a confiscation of property without due process of law
is untenable. "Confiscation" means the seizure of private property by the government
without compensation to the owner. A franchise to operate a public utility is not an
exclusive private property of the franchisee. Under the Constitution, no franchisee can
demand or acquire exclusivity in the operation of a public utility. Thus, a franchisee of
a public utility cannot complain of seizure or taking of property because of the
issuance of another franchise to a competitor. Every franchise, certificate or authority
to operate a public utility is, by constitutional mandate, non-exclusive. PILTEL cannot
complain of a taking of an exclusive right that it does not own and which no
franchisee can ever own. HcaATE

8. ID.; ID.; ID.; FRANCHISE TO OPERATE PUBLIC UTILITY DOES

NOT VEST UPON FRANCHISEE EXCLUSIVE RIGHT AS PRIOR OPERATOR.
— Likewise, PILTEL's argument that the NTC Order violates PILTEL's rights as a
prior operator has no merit. The Court resolved a similar question in Republic v.
Republic Telephone Company, Inc. In striking down Retelco's claim that it had a right
to be protected in its investment as a franchise-holder and prior operator of a
telephone service in Malolos, Bulacan, the Court held: RETELCO's foremost
argument is that "such operations and maintenance of the telephone system and
Copyright 1994-2010 CD Technologies Asia, Inc. Philippine Jurisprudence 1901-2009 4
 solicitation of subscribers by [petitioners] constituted an unfair and ruinous
competition to the detriment of [RETELCO which] is a grantee of both municipal and
legislative franchises for the purpose." In effect, RETELCO pleads for protection
from the courts on the assumption that its franchises vested in it an exclusive right as
prior operator. There is no clear showing by RETELCO, however, that its franchises
are of an exclusive character. . . . At any rate, it may very well be pointed out as well
that neither did the franchise of PLDT at the time of the controversy confer exclusive
rights upon PLDT in the operation of a telephone system. In fact, we have made it a
matter of judicial notice that all legislative franchises for the operation of a telephone
system contain the following provision: "It is expressly provided that in the event the
Philippine Government should desire to maintain and operate for itself the system and
enterprise herein authorized, the grantee shall surrender his franchise and will turn
over to the Government said system and all serviceable equipment therein, at cost, less
reasonable depreciation."

DECISION

CARPIO, J : p

The Case

This petition for review on certiorari 1(1) seeks to reverse the Joint Decision
2(2) of the Court of Appeals in CA-G.R. SP No. 47752 3(3) and CA-G.R. SP No.
47972 4(4) dated 15 April 1999 denying due course to the petition for certiorari 5(5)
filed by Pilipino Telephone Corporation ("PILTEL"), and dismissing the same.

The Facts

On 20 March 1995, the National Telecommunications Commission ("NTC")

issued PILTEL a Provisional Authority ("PA") to install, operate and maintain
telephone exchanges and public calling offices. The areas covered by PILTEL's PA
included Sulu, Zamboanga del Norte, Zamboanga del Sur, Tawi-Tawi, Misamis
Occidental, Davao del Sur, South Cotabato, Saranggani and Davao City.

On 21 June 1996, while PILTEL's PA was still valid and subsisting, the
International Communications Corporation ("ICC") applied with the NTC for a PA to
construct, operate and maintain local exchange services in some of the areas covered
Copyright 1994-2010 CD Technologies Asia, Inc. Philippine Jurisprudence 1901-2009 5
 by PILTEL's PA. Among the areas included in ICC's application were Misamis
Occidental, Zamboanga del Sur, Davao del Sur, South Cotabato and Saranggani.

On 11 November 1996, PILTEL filed its Opposition to ICC's PA application.

On 9 March 1998, the NTC issued an Order ("NTC Order") granting ICC a PA
to establish local exchange services in areas that included Misamis Occidental,
Zamboanga del Sur, Davao del Sur, South Cotabato and Saranggani.

PILTEL filed a petition for certiorari with prayer for the issuance of a
temporary restraining order or writ of preliminary injunction with the Court of
Appeals on 5 June 1998 to nullify the NTC Order. On 28 July 1998, ICC filed its
Comment to PILTEL's Petition, while PILTEL filed its Reply on 28 August 1998.

On 21 September 1998, PILTEL filed an Urgent Motion to Resolve its

application for the issuance of a temporary restraining order. PILTEL alleged, among
others, that it had yet to receive ICC's Comment despite the lapse of a considerable
time from the Court of Appeals' Resolution requiring ICC to file its Comment.

On 15 April 1999, the Court of Appeals issued a Joint Decision, the dispositive
portion of which reads:

WHEREFORE, for finding no grave abuse of discretion, tantamount to

lack . . . or excess of jurisdiction, on the part of the National
Telecommunications Commission in issuing its challenged Order dated March
9, 1998 in NTC Case No. 96-194 which granted a provisional authority to
International Communications Corporation, the two (2) consolidated cases of
CA-G.R. SP No. 47752 and CA-G.R. SP No. 47972 are both hereby DENIED
DUE COURSE and accordingly DISMISSED.

Costs against the petitioners.

SO ORDERED. 6(6)

Hence, this petition.

The Ruling of the Court of Appeals

In its petition for certiorari, PILTEL claimed that the NTC acted with grave
abuse of discretion amounting to lack of jurisdiction in granting ICC a PA to operate
local exchange service in areas previously assigned to PILTEL. PILTEL alleged that
the NTC Order violates Department of Transportation and Communications Circular
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 No. 91-260, Executive Order No. 109 and NTC Memorandum Circular No. 11-9-93.
PILTEL also claimed that the NTC Order is tantamount to an unwarranted taking of
property without due process of law and violates the equal protection clause of the
Constitution. Lastly, PILTEL alleged that the implementation of the NTC Order
would foster ruinous competition.

In denying due course to the petition for certiorari, the Court of Appeals gave
the following reasons:

First. Petitioner has not sufficiently shown us that other than this special
civil action under Rule 65, they have no plain, speedy, and adequate remedy in
the ordinary course of law against their perceived grievance. . . .

Second. Assuming arguendo that the propriety of the present recourse is

not infirm, it is settled, however, that before certiorari may be availed of,
petitioner must have filed a motion for reconsideration of the order or act
complained of to enable the tribunal, board or office concerned to pass upon and
correct its mistakes without the intervention of the higher courts. . . .

Third. Further assuming arguendo that certiorari [was] the proper

remedy, petitioner still failed to show that the order complained of was tainted
with grave abuse of discretion, so much so that after a careful deliberation of the
arguments and grounds in support thereof, it undoubtedly appears that the
disputed order was issued based on meritorious grounds. 7(7)

The Issues

In assailing the decision of the Court of Appeals, PILTEL contends that:

A. THE PETITIONER PROPERLY AVAILED OF THE REMEDY OF

CERTIORARI UNDER RULE 65 OF THE 1997 RULES OF CIVIL
PROCEDURE CONSIDERING THAT:

1. THERE IS NO APPEAL OR ANY PLAIN, SPEEDY AND

ADEQUATE REMEDY IN THE ORDINARY COURSE OF
LAW AVAILABLE TO PETITIONER.

2. THE ISSUES RAISED BY PETITIONER ARE PURELY OF

LAW, HENCE, THE FILING OF A MOTION FOR
RECONSIDERATION OF THE QUESTIONED ORDER IS
NOT A CONDITION SINE QUA NON.

B. THE NATIONAL TELECOMMUNICATIONS COMMISSION

Copyright 1994-2010 CD Technologies Asia, Inc. Philippine Jurisprudence 1901-2009 7
 ACTED WITH GRAVE ABUSE OF DISCRETION AMOUNTING TO
LACK OR EXCESS OF JURISDICTION CONSIDERING THAT:

1. THE GRANT OF THE PROVISIONAL AUTHORITY TO ICC

TO OPERATE LOCAL EXCHANGE SERVICE IN AREAS
PREVIOUSLY ASSIGNED TO PILTEL UNDER ITS OWN
PROVISIONAL AUTHORITY IS VIOLATIVE OF NTC
MEMORANDUM CIRCULAR NO. 11-9-93.

2. THE GRANT OF THE PROVISIONAL AUTHORITY TO ICC

TO OPERATE LOCAL EXCHANGE SERVICE IN AREAS
PREVIOUSLY ASSIGNED TO PILTEL IS TANTAMOUNT
TO CONFISCATION OF PROPERTY WITHOUT DUE
PROCESS OF LAW. HCEaDI

3. THE GRANT OF THE PROVISIONAL AUTHORITY TO ICC

TO OPERATE LOCAL EXCHANGE SERVICE IN AREAS
PREVIOUSLY ASSIGNED TO PILTEL WOULD VIOLATE
THE LATTER'S RIGHTS AS A PRIOR OPERATOR AND ITS
RIGHT TO BE PROTECTED IN ITS INVESTMENT. 8(8)

The Court's Ruling

The petition lacks merit.

Whether PILTEL properly availed of the remedy of certiorari

PILTEL insists that the NTC Order is not a proper subject of an appeal since it
is interlocutory which did not resolve ICC's pending application for a Certificate of
Public Convenience and Necessity. Even assuming that appeal is an available remedy,
PILTEL contends that it is not adequate to relieve promptly PILTEL from the
injurious effect 9(9) of the NTC Order which was immediately executory under the
NTC Rules of Practice and Procedure. 10(10) PILTEL also insists that a motion for
reconsideration is dispensable since the issues raised in the NTC were the same issues
presented in the Court of Appeals and these are purely questions of law. Thus,
PILTEL argues, a motion for reconsideration before the NTC would have served no
purpose. 11(11)

The settled rule is a motion for reconsideration is a prerequisite for the filing of
a petition for certiorari. 12(12) A petitioner must exhaust all other available remedies
before resorting to certiorari. An exception to this rule arises if the petitioner raises
purely legal issues. However, contrary to PILTEL's view, the issues raised in its
Copyright 1994-2010 CD Technologies Asia, Inc. Philippine Jurisprudence 1901-2009 8
 petition for certiorari before the Court of Appeals were mainly factual in nature.
Since PILTEL disputes NTC's factual findings and seeks a re-evaluation of the facts
and evidence on record, the issues PILTEL raised are not proper subjects for
certiorari. Evidentiary matters or matters of fact raised in the NTC are not proper
grounds in the proceedings for certiorari before the Court of Appeals. 13(13) The sole
office of a writ of certiorari is the correction of errors of jurisdiction and does not
include a review of the NTC's evaluation of the evidence and factual findings. 14(14)

Even if the NTC Order was immediately executory, it did not excuse PILTEL
from filing a motion for reconsideration. Contrary to PILTEL's view, a motion for
reconsideration is the plain, speedy and adequate remedy to the adverse NTC Order.
15(15) Had PILTEL filed a motion for reconsideration of the NTC Order, the NTC
would have had the opportunity to correct the alleged errors. 16(16) In addition,
PILTEL's failure to file a motion for reconsideration rendered its petition for
certiorari dismissible because of failure to exhaust administrative remedies.

In Republic v. Express Telecommunication Co., Inc., 17(17) the Court ruled

that Extelcom failed to exhaust available administrative remedies when it filed with
the Court of Appeals a petition for certiorari and prohibition without a motion for
reconsideration, thus:

Clearly, Extelcom violated the rule on exhaustion of administrative

remedies when it went directly to the Court of Appeals on a petition for
certiorari and prohibition from the Order of the NTC dated May 3, 2000,
without first filing a motion for reconsideration. It is well-settled that the filing
of a motion for reconsideration is a prerequisite to the filing of a special civil
action for certiorari.

xxx xxx xxx

This case does not fall under any of the recognized exceptions to this
rule. Although the Order of the NTC dated May 3, 2000 granting provisional
authority to Bayantel was immediately executory, it did not preclude the filing
of a motion for reconsideration. Under the NTC Rules, a party adversely
affected by a decision, order, ruling or resolution may within fifteen (15) days
file a motion for reconsideration. That the Order of the NTC became
immediately executory does not mean that the remedy of filing a motion for
reconsideration is foreclosed to the petitioner. (Italics supplied)

In fine, the Court of Appeals correctly dismissed PILTEL's petition for

certiorari for PILTEL's failure to file a motion for reconsideration of the NTC Order.
Copyright 1994-2010 CD Technologies Asia, Inc. Philippine Jurisprudence 1901-2009 9
 Whether NTC committed grave abuse of discretion

In Benito v. Commission on Elections, 18(18) the Court defined grave abuse of

discretion as follows:

Grave abuse of discretion means such capricious and whimsical exercise

of judgment as is equivalent to lack of jurisdiction, or, in other words where the
power is exercised in an arbitrary or despotic manner by reason of passion or
personal hostility, and it must be so patent and gross as to amount to an evasion
of positive duty or to a virtual refusal to perform the duty enjoined or to act at
all in contemplation of law. It is not sufficient that a tribunal, in the exercise of
its power, abused its discretion, such abuse must be grave. (Italics supplied)

Assuming that PILTEL's petition for certiorari was proper, PILTEL

nevertheless miserably failed to show that the NTC gravely abused its discretion
amounting to lack or excess of jurisdiction in issuing the NTC Order. The NTC is the
regulatory agency of the national government with jurisdiction over all
telecommunications entities. 19(19) The law expressly vests in the NTC the power
and discretion to grant a provisional permit or authority. 20(20) In this case, the NTC
did not commit grave abuse of discretion when it issued the questioned Order. The
NTC Order explicitly provides for the basis of the issuance of the PA, as follows:

The technical feasibility study submitted and offered in evidence by the

applicant contains technical designs which consist of two main components, to
wit:

(a) The rural network component consisting of a number of

dispersed switching centers throughout Regions 6, 7, 9, 10, 11
and 12 interconnected by a digital microwave transmission
system.

(b) The transit (Inter-exchange carrier) network consisting of transit

switching centers of Manila and Cebu for the interconnection of
the ICC LEC Networks with the network of other LEC operators,
IGF operators (as well as ICC IGF), CMTS operators and
operators of PCO Networks.

Its network design is based on conservative projections and value based

engineering assumptions to ensure than an effective and efficient network is
provided.

The structure of ICC's LEC has two (2) layer hierarchical network: the
Copyright 1994-2010 CD Technologies Asia, Inc. Philippine Jurisprudence 1901-2009 10
 transit layer which provides the classic trunk (tool) switching and inter-carrier
interconnect functions; and the local exchange carrier.

Applicant will be using Northern Telecom DMS 100/200 and DMS 300
(Toll Exchange) digital switching equipment for its LEC Network/Service in the
twenty-two (22) provinces in Visayas and Mindanao areas.

Applicant's proposed LEC project in the Visayas and Mindanao areas

will be implemented within [a] three (3) year period with a total number of
250,000 lines as mentioned in the submitted Feasibility Study. The distribution
of ICC's committed lines for its proposed LEC project in the cities and
municipalities of the twenty-two (22) provinces in the Visayas and Mindanao
areas are enumerated in Annex "B" of the amended application.

xxx xxx xxx

As regards the capital costs for the present proposed project, applicant's
financial documents show the following figures:

Year 1 P1.796 Billion

Year 2 1.434 Billion
Year 3 2.319 Billion
TOTAL P5.549 Billion

Applicant's projected revenues and expenses (in thousand pesos) are as

follows:

Year Net Income/Loss

1 (549,178.00)
2 (489,243.00)
3 (425,208.00)
4 6,796.00
5 276,434.00
6 456,457.00
7 649,782.00
8 910,524.00
9 1,226,510.00
10 1,563,005.00

Applicant submitted its amended Articles of Incorporation approved by

the Securities and Exchange Commission on July 31, 1996 as shown by the
attached Certificate of Increase of Capital Stock wherein applicants Authorized
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 Capital Stock was increased from P1,500,000, . . . (illegible) Million shares with
par value of P100 each.

Of the increase of P3,500,000,000.00 in the authorized capital stock, the

amount of P2,185,000,000.00 has been subscribed and fully paid by Bayan
Telecommunications Holdings Corporation.

Per 1996 Annual Report submitted by the applicant, the following

figures reflected their financial position:

Total assets = P11,369,996,565

Total liabilities = 6,779,971,249
Total stockholder's equity = 4,590,025,316

with a debt-to-equity ratio of 60% to 40%.

Applicant has an outstanding balance for permit fee amounting to

P88,988,089.00 for the following . . . (illegible) previously authorized, to wit:

xxx xxx xxx

The Commission has noted that the present application received

favorable endorsements/resolutions from twenty-three (23) Local Government
Units (LGU) and non-Government Organizations (NGOs) in the Visayas and
Mindanao Regions manifesting support for the applicant's proposed projects.

In determining the service areas to be assigned to herein applicant with a

view to rationalizing the distribution thereof to qualified applicants, the
Commission took into consideration the other pending applications for LEC
services, the existing number of authorized LEC applicants, the need to provide
LEC service to all areas of the country the soonest time possible, as well as the
fact that earlier on, this Commission had occasion to commend in another case
herein applicant ICC for being the first to have completed, nay exceeded, its
compliance with its commitments under Executive Order 109 and NTC
Memorandum Circular No. 11-9-93.

WHEREFORE, it appearing that a prima facie evidence exists that

applicant is financially and technically capable of undertaking the proposed
project, and in order to fast-track the development of telecommunication
services through the provisioning of telephone services to all areas of the
country, and to foster as well healthy competition among authorized service
providers, the Commission hereby grants applicant International
Communications Corporation a Provisional Authority (P.A.), predicated upon
its legislative franchise, R.A. No. 3259, as amended by R.A. No. 4905, and R.A.
Copyright 1994-2010 CD Technologies Asia, Inc. Philippine Jurisprudence 1901-2009 12
 No. 7633, to install, operate and maintain local telephone exchanges in the
following provinces, . . . 21(21) (Italics supplied)

We will not disturb the factual findings of the NTC on the technical and
financial capability of the ICC to undertake the proposed project. We generally accord
great weight and even finality to factual findings of administrative bodies such as the
NTC, if substantial evidence supports the findings as in this case. 22(22) The
exception to this rule is when the administrative agency arbitrarily disregarded
evidence before it or misapprehended evidence to such an extent as to compel a
contrary conclusion had it properly appreciated the evidence. 23(23) PILTEL gravely
failed to show that this exception applies to the instant case. Moreover, the exercise of
administrative discretion, such as the issuance of a PA, is a policy decision and a
matter that the NTC can best discharge, not the courts. 24(24)

PILTEL contends that the NTC violated Section 23 of NTC Memorandum

Circular No. 11-9-93, otherwise known as the "Implementing Guidelines on the
Provisions of EO 109," which states:

Section 23. No other company or entity shall be authorized to provide

local exchange service in areas where the LECs comply with the relevant
provisions of NTC MC No. 10-17-90 and NTC MC No. 10-16-90 and that the
local exchange service area is not underserved. (Emphasis supplied)

Section 23 of EO 109 does not categorically state that the issuance of a PA is

exclusive to any telecommunications company. Neither Congress nor the NTC can
grant an exclusive "franchise, certificate, of any other form of authorization" to
operate a public utility. In Republic v. Express Telecommunications Co., 25(25) the
Court held that "the Constitution is quite emphatic that the operation of a public utility
shall not be exclusive." 26(26) Section 11, Article XII of the Constitution provides:

Sec. 11. No franchise, certificate, or any other form of authorization

for the operation of a public utility shall be granted to citizens of the Philippines
or to corporations or associations organized under the laws of the Philippines at
least sixty per centum of whose capital is owned by such citizens, nor shall such
franchise, certificate or authorization be exclusive in character or for a longer
period than fifty years. Neither shall any such franchise or right be granted
except under the condition that it shall be subject to amendment, alteration, or
repeal by the Congress when the common good so requires . . . 27(27) (Italics
supplied)

Thus, in Radio Communications of the Philippines, Inc. v. National

Copyright 1994-2010 CD Technologies Asia, Inc. Philippine Jurisprudence 1901-2009 13
 Telecommunications Commission, 28(28) the Court ruled that the "Constitution
mandates that a franchise cannot be exclusive in nature."

Even PILTEL's franchise, Republic Act No. 6030 ("RA 6030"), expressly
declares that PILTEL's right to provide telecommunications services is not exclusive.
Section 13 of RA 6030 states:

SECTION 13. The rights herein granted shall not be exclusive, and the
right and power to grant to any corporation, association or person other than the
grantee franchise for the telephone or electrical transmission of messages and
signals shall not be impaired or affected by the granting of this franchise: . . . ."
(Emphasis supplied)

Moreover, Section 1 of RA 6030 29(29) expressly states that the grant of a franchise
to PILTEL is "[s]ubject to the conditions established . . . in the Constitution."
Consequently, PILTEL does not enjoy any exclusive right to operate
telecommunications services in the areas covered by its PA.

Among the declared national policies in Republic Act No. 7925, otherwise
known as the "Public Telecommunications Policy Act of the Philippines," is the
healthy competition among telecommunications carriers, to wit: 30(30)

A healthy competitive environment shall be fostered, one in which

telecommunications carriers are free to make business decisions and to interact
with one another in providing telecommunications services, with the end in
view of encouraging their financial viability while maintaining affordable rates.

Obviously, "the need for a healthy competitive environment in

telecommunications is sufficient impetus for the NTC to consider all those applicants,
who are willing to offer competition, develop the market and provide the environment
necessary for greater public service." 31(31)

Furthermore, "free competition in the industry may also provide the answer to a
much-desired improvement in the quality and delivery of this type of public utility, to
improved technology, fast and handy mobil[e] service, and reduced user
dissatisfaction." 32(32)

PILTEL's contention that the NTC Order amounts to a confiscation of property

without due process of law is untenable. "Confiscation" means the seizure of private
property by the government without compensation to the owner. 33(33) A franchise to
operate a public utility is not an exclusive private property of the franchisee. Under
Copyright 1994-2010 CD Technologies Asia, Inc. Philippine Jurisprudence 1901-2009 14
 the Constitution, no franchisee can demand or acquire exclusivity in the operation of a
public utility. Thus, a franchisee of a public utility cannot complain of seizure or
taking of property because of the issuance of another franchise to a competitor. Every
franchise, certificate or authority to operate a public utility is, by constitutional
mandate, non-exclusive. PILTEL cannot complain of a taking of an exclusive right
that it does not own and which no franchisee can ever own.

Likewise, PILTEL's argument that the NTC Order violates PILTEL's rights as
a prior operator has no merit. The Court resolved a similar question in Republic v.
Republic Telephone Company, Inc. 34(34) In striking down Retelco's claim that it had
a right to be protected in its investment as a franchise-holder and prior operator of a
telephone service in Malolos, Bulacan, the Court held:

RETELCO's foremost argument is that "such operations and

maintenance of the telephone system and solicitation of subscribers by
[petitioners] constituted an unfair and ruinous competition to the detriment of
[RETELCO which] is a grantee of both municipal and legislative franchises for
the purpose." In effect, RETELCO pleads for protection from the courts on the
assumption that its franchises vested in it an exclusive right as prior operator.
There is no clear showing by RETELCO, however, that its franchises are of an
exclusive character. . . . At any rate, it may very well be pointed out as well that
neither did the franchise of PLDT at the time of the controversy confer exclusive
rights upon PLDT in the operation of a telephone system. In fact, we have made
it a matter of judicial notice that all legislative franchises for the operation of a
telephone system contain the following provision:

"It is expressly provided that in the event the Philippine

Government should desire to maintain and operate for itself the system
and enterprise herein authorized, the grantee shall surrender his franchise
and will turn over to the Government said system and all serviceable
equipment therein, at cost, less reasonable depreciation."

In sum, the Court of Appeals correctly dismissed PILTEL's petition for

certiorari not only because PILTEL failed to exhaust the available administrative
remedies but also because NTC acted within its jurisdiction in issuing the NTC Order.

WHEREFORE, we DENY the petition. The Decision of the Court of Appeals

dated 15 April 1999 in CA-G.R. SP No. 47752 and CA-G.R. SP No. 47972 is
AFFIRMED. Costs against petitioner.

SO ORDERED. EaDATc

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 Davide, Jr., C.J., Vitug, Ynares-Santiago and Azcuna, JJ., concur.

Footnotes
1. Under Rule 45 of the Rules of Court.
2. Penned by Associate Justice Martin S. Villarama, Jr. with Associate Justices Angelina
Sandoval-Gutierrez and Romeo A. Brawner, concurring.
3. Entitled "Philippine Global Communications, Inc., petitioner, v. National
Telecommunications Commission and International Communications Corporation,
respondents."
4. Entitled "Pilipino Telephone Corporation, petitioner, v. National
Telecommunications Commission and International Communications Corporation,
respondents." Only PILTEL appealed to this Court.
5. Under Rule 65 of the Rules of Court.
6. Rollo, p. 44.
7. Ibid., pp. 36-40.
8. Ibid., pp. 259-260.
9. Ibid., p. 263.
10. Ibid.
11. Ibid., p. 265.
12. Bernardo v. Abalos, Sr., G.R. No. 137266, 5 December 2001, 371 SCRA 459.
13. Negros Oriental Electric Cooperative 1 v. Secretary of the Department of Labor and
Employment, G.R. No. 143616, 9 May 2001, 357 SCRA 668.
14. Oro v. Diaz, 413 Phil. 416 (2001).
15. See Tan, Jr. v. Sandiganbayan, 354 Phil. 463 (1998).
16. See Sevillana v. I.T. (International), Corp., G.R. No. 99047, 16 April 2001, 356
SCRA 451.
17. G.R. Nos. 147096 & 147210, 15 January 2002, 373 SCRA 316.
18. G.R. No. 134913, 19 January 2001, 349 SCRA 705.
19. Philippine Long Distance Telephone Co. v. National Telecommunications
Commission, G.R. No. 88404, 18 October 1990, 190 SCRA 717.
20. Ibid.
21. Rollo, pp. 101-105.
22. Batangas Laguna Tayabas Bus Co., Inc. v. Bitanga, 415 Phil. 43 (2001).
23. Ibid.
24. Remolona v. Civil Service Commission, 414 Phil. 590 (2001).
25. See note 17.
26. Republic v. Express Telecommunications Co., Inc., supra, note 17.
27. Section 11, Article XII, 1987 Constitution.
28. G.R. No. L-68729, 29 May 1987, 150 SCRA 450.
29. As amended by Republic Acts Nos. 6531 and 7293.
30. Republic v. Express Telecommunications Co., Inc., supra, note 17.
Copyright 1994-2010 CD Technologies Asia, Inc. Philippine Jurisprudence 1901-2009 16
 31. Republic v. Express Telecommunications Co., Inc., supra, note 17.
32. Philippine Long Distance Telephone Co. v. National Telecommunications
Commission, supra, note 19. See also Republic v. Republic Telephone Company, Inc.,
G.R. No. 64888, 28 November 1996, 265 SCRA 1.
33. Black's Law Dictionary, Fifth Edition, 1979.
34. Republic v. Republic Telephone Company, Inc., supra, note 32.

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 Endnotes

1 (Popup - Popup)
1. Under Rule 45 of the Rules of Court.

2 (Popup - Popup)
2. Penned by Associate Justice Martin S. Villarama, Jr. with Associate Justices Angelina
Sandoval-Gutierrez and Romeo A. Brawner, concurring.

3 (Popup - Popup)
3. Entitled "Philippine Global Communications, Inc., petitioner, v. National
Telecommunications Commission and International Communications Corporation,
respondents."

4 (Popup - Popup)
4. Entitled "Pilipino Telephone Corporation, petitioner, v. National Telecommunications
Commission and International Communications Corporation, respondents." Only
PILTEL appealed to this Court.

5 (Popup - Popup)
5. Under Rule 65 of the Rules of Court.

6 (Popup - Popup)
6. Rollo, p. 44.

7 (Popup - Popup)
7. Ibid., pp. 36–40.

8 (Popup - Popup)
8. Ibid., pp. 259–260.
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 9 (Popup - Popup)
9. Ibid., p. 263.

10 (Popup - Popup)
10. Ibid.

11 (Popup - Popup)
11. Ibid., p. 265.

12 (Popup - Popup)
12. Bernardo v. Abalos, Sr., G.R. No. 137266, 5 December 2001, 371 SCRA 459.

13 (Popup - Popup)
13. Negros Oriental Electric Cooperative 1 v. Secretary of the Department of Labor and
Employment, G.R. No. 143616, 9 May 2001, 357 SCRA 668.

14 (Popup - Popup)
14. Oro v. Diaz, 413 Phil. 416 (2001).

15 (Popup - Popup)
15. See Tan, Jr. v. Sandiganbayan, 354 Phil. 463 (1998).

16 (Popup - Popup)
16. See Sevillana v. I.T. (International), Corp., G.R. No. 99047, 16 April 2001, 356
SCRA 451.

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 17 (Popup - Popup)
17. G.R. Nos. 147096 & 147210, 15 January 2002, 373 SCRA 316.

18 (Popup - Popup)
18. G.R. No. 134913, 19 January 2001, 349 SCRA 705.

19 (Popup - Popup)
19. Philippine Long Distance Telephone Co. v. National Telecommunications
Commission, G.R. No. 88404, 18 October 1990, 190 SCRA 717.

20 (Popup - Popup)
20. Ibid.

21 (Popup - Popup)
21. Rollo, pp. 101-105.

22 (Popup - Popup)
22. Batangas Laguna Tayabas Bus Co., Inc. v. Bitanga, 415 Phil. 43 (2001).

23 (Popup - Popup)
23. Ibid.

24 (Popup - Popup)
24. Remolona v. Civil Service Commission, 414 Phil. 590 (2001).

25 (Popup - Popup)
25. See note 17.

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 26 (Popup - Popup)
26. Republic v. Express Telecommunications Co., Inc., supra, note 17.

27 (Popup - Popup)
27. Section 11, Article XII, 1987 Constitution.

28 (Popup - Popup)
28. G.R. No. L-68729, 29 May 1987, 150 SCRA 450.

29 (Popup - Popup)
29. As amended by Republic Acts Nos. 6531 and 7293.

30 (Popup - Popup)
30. Republic v. Express Telecommunications Co., Inc., supra, note 17.

31 (Popup - Popup)
31. Republic v. Express Telecommunications Co., Inc., supra, note 17.

32 (Popup - Popup)
32. Philippine Long Distance Telephone Co. v. National Telecommunications
Commission, supra, note 19. See also Republic v. Republic Telephone Company,
Inc., G.R. No. 64888, 28 November 1996, 265 SCRA 1.

33 (Popup - Popup)
33. Black's Law Dictionary, Fifth Edition, 1979.

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 34 (Popup - Popup)
34. Republic v. Republic Telephone Company, Inc., supra, note 32.

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