G.R. No.

84818 December 18, 1989

PHILIPPINE COMMUNICATIONS SATELLITE CORPORATION, petitioner, vs. JOSE LUIS A.
ALCUAZ, as NTC Commissioner, and NATIONAL TELECOMMUNICATIONS COMMISSION,
respondents.
Facts of the case:
Herein petitioner is engaged in providing for services involving telecommunications since 1967.
On 1987 E.O. 196 was issued, that placed the petitioner under the jurisdiction, control and
regulation of respondent NTC, including all its facilities and services and the fixing of rates. The
Charging rates for certain specified lines that were reduced by order of herein respondent Jose
Alcuaz Commissioner of the National Telecommunications Commission. The rates were ordered
to be reduced by fifteen percent (15%) due to Executive Order No. 546 which granted the NTC
the power to fix rates. Said order was issued without prior notice and hearing
Issues of the case:
1. Whether or not the E.O. 546 Of the NTC empowers to fix rates public communications
does not provide the necessary standards constitutionally required, resulting to undue
delegation of legislative power of the NTC particularly in its adjudicatory power?
2. Whether or not thus the E.O. 546 is constitutional without a just and proper hearing?
3. Whether or not the rate of 15% reduction is unjust, unreasonable and confiscatory,
which will result to a violation of substantive due process?
Ruling of the case:
1. Here the court was in favor the NTC, the E.O. 196 which delegates the petitioner to be
under the power or the NTC which enables them to have adjudicatory power over them.
2. Here the court sided with the petitioner, for the E.O. 546 to be applicable the
respondents must have given a notice and held a hearing even it is temporal in nature.
Section 16(C) of the Public Service Act provides:
Section 16. Proceedings of the Commission, upon notice and hearing the
Commission shall have power, upon proper notice and hearing in
accordance with the rules and provisions of this Act, subject to the
limitations and exceptions mentioned and saving provisions to the
contrary:
xxx xxx xxx
(c) To fix and determine individual or joint rates, ... which shall be
imposed, observed and followed thereafter by any public service; ...
3. The Court sided again with the petitioner. the Inherent power and authority of the
State, or its authorized agent, to regulate the rates charged by public utilities should be
subject always to the requirement that the rates so fixed shall be reasonable and just. A
commission has no power to fix rates which are unreasonable or to regulate them
 arbitrarily. This basic requirement of reasonableness comprehends such rates which
must not be so low as to be confiscatory, or too high as to be oppressive.

Consequently, we hold that the challenged order, particularly on the issue of rates provided
therein, being violative of the due process clause is void and should be nullified.
Respondents should now proceed, as they should heretofore have done, with the hearing
and determination of petitioner's pending application for a certificate of public convenience
and necessity and in which proceeding the subject of rates involved in the present
controversy, as well as other matter involved in said application, be duly adjudicated with
reasonable dispatch and with due observance of our pronouncements herein.