Ernesto Francisco, Jr. v. Toll Regulatory Board entities for the toll operation of its franchised areas.

ation of its franchised areas. Several Supplemental Toll Operation

Agreements (STOA) were entered for the South Metro Manila Skyway, NLEX Expansion,
GR Number 166910 and South Luzon Expressway Projects.

Petition: Special civil actions under Rule 65
Petitioner: Ernesto B. Francisco, Jr. and Jose Ma. O. Hizon
Respondent: Toll Regulatory Board, Philippine National Construction Corporation,
Manila North Tollways Corporation, Benpres Holdings Corporation, First Philippine
Infrastructure Development Corporation, Tollway Management Corporation, PNCC
Skyway Corporation, Citra Metro Manila Tollways Corporation, and Hopewell Crown
Infrastructure, Inc.
Petitioners seek to nullify the various STOAs and assail the constitutionality of Sections
3(a and d) of PD 1112 in relation to Section 8(b) of PD 1894. Insofar as they vested the
TRB the power to issue, modify, and promulgate toll rate changes while given the ability
to collect tolls.
Issue:
Whether or not the TRB may be empowered to grant authority to operate the toll
facility/system.

Ponente: Velasco, Jr. J. Ruling:

Date: October 19, 2010 The TRB was granted sufficient power to grant a qualified person or entity with authority
to operate the toll facility/system. By explicit provisions of the PDs, the TRB was given
Facts:
power to grant administrative franchise for toll facility projects. The limiting thrust of
Article 11, Section 11 of the Constitution on the grant of franchise or other forms of
President Marcos issued PD 1112 authorizing the establishment of toll facilities on public
authorization to operate public utilities may, in context, be stated as follows: (a) the
improvements. It acknowledged the huge financial requirements and the need to tap the
grant shall be made only in favor of qualified Filipino citizens or corporations; (b)
resources of the private sector to implement the government’s infrastructure programs.
Congress can impair the obligation of franchises, as contracts; and (c) no such
PD 1112 allowed the collection of toll fees for the use of certain public improvements
authorization shall be exclusive or exceed fifty years. Under the 1987 Constitution,
that would allow a reasonable rate of return on investments. The same decree created
Congress has an explicit authority to grant a public utility franchise. However, it may
the Toll Regulatory Board, vesting it with the power to enter into contracts for the
validly delegate its legislative authority, under the power of subordinate
construction, maintenance, and operation of tollways, grant authority to operate a toll
legislation, to issue franchises of certain public utilities to some
facility, issue the necessary Toll Operation Certificate (TOC) and fix initial toll rates, and
administrative agencies.
adjust it from time to time after due notice and hearing. PD 1113 was issued granting
the Philippine National Construction Corporation for a period of 30 years, a franchise to
Dispositive:
operate toll facilities in the North Luzon and South Luzon Expressways. Subsequently, PD
1894 was issued further granting the PNCC a franchise over the Metro Manila The petitions in G.R. Nos. 166910 173630, and 169917 are hereby DENIED for lack of
Expressway and the expanded delineated NLEX and SLEX. merit. The petition in G.R. No. 183599 is GRANTED.

Then came the 1987 Constitution with its franchise provision. In 1993, the Government
Corporate

Counsel held that the PNCC may enter into a joint venture agreement with private
entities without going into public bidding. On February 1994, the DPWH together with
other private entities executed a MOU to open the door for entry of private capital in the
Subic and Clark extension projects. PNCC entered into a financial and technical JVAs with
 Liberty Broadcasting Network, Inc. v. Altacom Wireless System, Inc.,
FACTS:
Atlocom Wireless System, Inc. (Atlocom) is a grantee of a legislative franchise under
Republic Act (R.A.) No. 8605.4 On October 8, 2003, the National Telecommunications
Commission (NTC) issued an Order5 in NTC Case No. 98-158 relative to the application
of Atlocom for a Certificate of Public Convenience
the PA shall be valid for a period of eighteen (18) months, or until April 8, 2005. In a
letter7 dated April 5, 2004, Atlocom thru its counsel requested for "an extension of time
of the allocation of the above-enumerated frequencies and for the period for the
construction and installation of the radio stations in the condition no. 2 of the Order."
Earlier, Atlocom filed an Application for Permit to Import8 the necessary equipment.
Atlocom followed up its application for extension of PA through a letter9 dated June 2,
2005 addressed to Deputy Commissioner Jorge V. Sarmiento. Subsequently, Atlocom
filed a Motion for Extension of Provisional Authority10 in NTC Case No. 98-158 on March
3, 2005.
On August 23, 2005, NTC issued Memorandum Circular No. (MC) 06-08-200511 re-
allocating the following bands for broadband wireless access for fixed, nomadic and
mobile networks
n December 23, 2008, NTC denied Atlocom's motion for extension of PA, citing the re-
allocation of MMDS frequencies for Broadband Wireless Access in accordance with MC
06-08-2005 and the unavailability of other alternative frequencies.12chanrobleslaw
On September 8, 2009, Atlocom filed in the RTC a Petition13 to enjoin the
implementation of MC 06-08-2005 and reinstate the frequencies of Atlocom. It was
further prayed that after hearing the court render judgment declaring the said issuance
as null and void because NTC unlawfully deprived Atlocom of the right to its assigned
frequencies without notice and hearing. The case was docketed as Civil Case No. Q-09-
65566.
Liberty Broadcasting Network, Inc. (LBNI), also a grantee of a legislative franchise (R.A.
No. 1553, as amended by R.A. No. 4154) for radio and television broadcasting, as well
as radio stations for international and domestic communications of all types and
services, and holder of a Certificate of Public Convenience and Necessity (CPCN) to
operate a radio communications network, was allowed to intervene in the case, joining
the defendant NTC in opposing Atlocom's claims. Pursuant to MC 06-08-2005, frequency
bands 2535-2545 MHz and 2565-2595 MHz were re-allocated and assigned to LBNI,
which covered the 2572-2596 MHz being claimed by Atlocom as allegedly assigned to it.
ISSUE:
(1) in finding that the NTC did not observe due process when it issued MC 06-08-2005
and basing such conclusion on a mistaken notion that the grant of PA is
tantamount to a frequency assignment;
HELD:
We do not concur with the CA in holding that NTC's inaction or delay on Atlocom's
application for extension of PA had violated the latter's right to due process because it
resulted in depriving Atlocom of the use of frequencies which were re-allocated through
the issuance of MC 06-08-2005. Such declaration rather conveys an inaccurate picture
of the regulatory process for public broadcasting and telecommunications services.
Under existing laws and regulations, it is clear that a frequency assignment is not
automatically included in the PA granted by the NTC to an applicant for a CPC. Thus,
the Order dated October 8, 2003 expressly provided that the PA granted to Atlocom,
valid for 18 months, is subject to several conditions, foremost of which is the
assignment of frequency by the Frequency Management Division (FMD).
While Atlocom presented a Certification24 dated October 22, 2003 issued by Alvin N.
Blanco, Chief of NTC's Broadcast Division, stating that certain frequencies were
"identified" for Atlocom's MMDS (Metro Manila) covering 2572-2596 frequency bands,
there is no document evidencing that these frequencies were actually assigned to
Atlocom by the FMD. There is likewise nothing in the records to suggest that NTC
"unreasonably" withheld or delayed authority to use such frequencies identified for
Atlocom.
Atlocom blamed NTC's three-year delay in resolving the motion for extension of PA for
its inability to use the frequencies identified for its MMDS, as these were eventually re-
allocated in 2005 under MC 06-08-2005. But as Atlocom was fully aware, Section 6 of
R.A. No. 8605 provides that the Government may at anytime withdraw the frequency
after due process. Records showed that a notice was duly published and a public
hearing was actually conducted on July 12, 2005 by NTC on the proposed Memo
Circular: Frequency Band Allocations for Broadcast Wireless Access. Said event was
attended by representatives of the different broadcasting and telecommunication
companies, including Atlocom.25 The position papers and feedback submitted by various
companies in connection with the proposed memorandum circular on wireless
broadband access were all presented as evidence in the RTC.26 We have held that the
essence of due process is simply an opportunity to be heard, or as applied to
administrative proceedings, an opportunity to explain one's side.27 The requirements of
due process were thus satisfied by the NTC in the re-allocation of frequency.
Contrary to the CA's pronouncement, the re-allocation of frequency cannot be
conditioned on resolution of any pending request for extension of PA previously
granted. Even entities with unexpired PA cannot claim a vested right on a specific
frequency assignment. This proceeds from the nature of its franchise which is not solely
for commercial purposes but one imbued with public interest. As earlier quoted,
Atlocom's franchise (R.A. No. 8605) declared the use of radio spectrum as a mere
privilege conferred upon the grantee by the State that may be withdrawn anytime
provided that due process is observed. It further emphasized that the radio spectrum is
a finite resource and its use and distribution should be aligned with existing laws and
policies.

R.A. No. 7925 likewise recognizes the vital role of telecommunications to national
development and security and provides that the radio frequency shall be managed and
directed to serve the public interest. Being a limited resource, the law mandates a
periodic review of frequency allocation.
 Batangas CATV, Inc. v. CA protection of the constitutional provision as to impairment of the obligation of a contract
does not extend to privileges, franchises and grants given by a municipality in excess of
G.R. No. 138810 September 29, 2004
Facts: its powers, or ultra vires.

Batangas City Sangguniang Panlungsod (R) enacted Resolution No. 210 granting
Batangas CATV (P) franchise to operate cable system in the city. Sec. 8 of the Resolution
provides that P is authorized to charge subscribers maximum rates but increase shall be
subject to R’s review. P then increased subscriber rates from P88.00 to P180.00 per
month so R threatened it to get approval from the latter.

P: P filed with the RTC a petition for injunction alleging that R has no authority to
regulate subscriber rates charged by CATV operators because under E.O. No. 205, the
NTC has sole authority to regulate CATV in the Philippines. Also, the LGC extends to
LGUs the general power to perform any act that would benefit constituents but doesn’t
authorize them to regulate CATV operation.

R: argues that Resolution was enacted pursuant to Sec. 177(c) & (d) of BP 337 (LGC of
1983) which authorizes LGUs to regulate businesses and is in the nature of a contract
between P & R.

Issue:

Whether R can regulate CATV franchise.

Ruling:

No. The resolution is an enactment of an LGU acting only as agent of the national
legislature. There is no law authorizing LGUs to grant franchises to operate CATV.
Whatever authority the LGUs had before, the same had been withdrawn when President
Marcos issued P.D. No. 1512 terminating all franchises, permits or certificates for the
operation of CATV system previously granted by local governments. Today, pursuant to
Section 3 of E.O. No. 436, only persons, associations, partnerships, corporations or
cooperatives granted a Provisional Authority or Certificate of Authority by the NTC may
install, operate and maintain a cable television system or render cable television service
within a service area. It is clear that in the absence of constitutional or legislative
authorization, municipalities have no power to grant franchises. Consequently, the

GMA Network Inc., and Maya Reforma the managing director of AGB Nielsen,
petitioners VS. ABS-CBN Broadcasting Corp., respondents
FACTS:
1) On December 20, 2007, Judge Charito Gonzales, Quezon City Regional Trial
Court Br. 80 released a Temporary Restraining Order on TV ratings surveys
based on a civil case filed by ABS-CBN Broadcasting Corporation versus AGB
Nielsen Media Research Philippines. ABS-CBN accused rival GMA Network of
funding bribing operations at Bacolod City, to discredit the former. The Court
further ordered ABS-CBN to file comment on the plea of AGB Nielsen for the
alleged gathering and dissemination of television ratings data, within five days
or until 22 December.
2) On December 21, 2007, DZMM correspondent Junrie Hidalgo reported a news
story entitled AGB Nielsen, umamin sa dayaan: GMA Network, tahasang
itinurong nasa likod ng dayaan (AGB Nielsen admits the cheating: GMA Network
fiercely accused of being responsible of the cheating) during the program
Showbiz Mismo, hosted by Cristy Fermin and Jobert Sucaldito. The news story
is based on an interview of AGB Nielsen's General Manager Maya Reforma
regarding the alleged cheating.
3) In response, GMA aired a TV plug condemning the alleged biased reporting and
denied the accusations of ABS-CBN. They later filed a P15-million (P10 million
for moral damages, P2.5 million for exemplary damages, P1.5 million attorney’s
fees and 1 million for litigation expenses) civil libel suit against ABS-CBN on 3
January 2008. The respondents included Hidalgo, Fermin, Sucaldito, the station
manager and news manager of DZMM and hosts, writers and executive
producers of TV programs Bandila, Entertainment Live and The Buzz after the
same story was aired on the mentioned programs.
ISSUES:
1) Whether or not ABS-CBN is liable for false and malicious allegations of ratings
manipulation to plaintiff GMA even if it is true matter of public interest and right
to know.
2) Whether or not ABS-CBN should be responsible for airing and letting their
editors and writers to comment on the issues of manipulation of ratings.
3) Whether or not ABS-CBN is liable for preliminary injunction.
DECISION/RULING OF THE CASE:
1) On January 7, 2008, the Quezon City RTC junked ABS-CBN's suit against AGB
Nielsen, saying the case was "prematurely filed" before the court. Judge Charito
Gonzales's basis is the principle of mutuality of contracts, citing Article 1308
and 1196, New Civil Code of the Philippines. Also, Judge Samuel Gaerlan,
QCRTC, Branch 92 issued court summons against ABS-CBN and its 15
personnel, in the P15-million damage suit by GMA Network.
2) On January 17, 2008, Judge Gaerlan inhibited himself from the case,
considering that he has a cousin working in the legal department of ABS-CBN.
The case was later re-raffled on January 28, 2008, and the case was eventually
assigned to Judge Henri Inting of Branch 95, QCRTC. Judge Inting submitted
GMA's petition for a temporary restraining order for decision.
3) On February 1, ABS-CBN presented two witnesses, Romie Diamanse and
Francis Casumpang, saying RGMA head Mike Enriquez was said to have given
the order to cheat in a meeting. Enriquez denied the charges and said that the
statements were "shameless, malicious fiction delivered by tainted informers
with an axe to grind." Diamanse and Casumpang were former employees of
RGMA's Iloilo Campus Radio FM station. Casumpang resigned from the station
after charges of embezzlement, and now works for ABS-CBN's MOR Iloilo. On
the other hand, RGMA accepted Diamanse's resignation "because he was
regarded as ineffective in his duties."
4) ABS-CBN then filed a petition for certiorari before the Court of Appeals to stop
the implementation of the TRO. ABS-CBN maintained that “the issue of
corruption as brought out by the discovery of the TV ratings manipulation is a
matter of clear public interest, and therefore needs to be reported on.”
*as to the Doctrine of Privilege Communication
HELD:
The Quezon City Regional Trial Court threw out a petition filed by GMA-7 which sought
to stop ABS-CBN from airing reports about the alleged TV ratings manipulation scandal
that purposedly cast “dishonor, discredit and disrepute” to the former.
Judge Alexander Balut in his ruling denied GMA-7′s petition for preliminary
injunction on three grounds:
1) GMA-7′s petition to stop ABS-CBN’s supposedly libelous reports comes too
late–the reports have already been aired;
2) GMA-7′s petition for injunction goes beyond the prayer contained in its
complaint; and
3) GMA-7′s petition for injunction constitutes prior restraint of freedom of
expression and, therefore, unconstitutional.
 Philippine Global Communications vs. Relova
GR L-52819 2 October 1980
Facts:
Petitioner Philippine Global Communications filed on 10 May 1976 with the Board of
Telecommunications an application for authority to establish a branch or station in Cebu
City “for the purpose of rendering international telecommunications services from Cebu
City to any point outside the Philippines where it is authorized to operated.” The
Solicitor General, and the private respondents Philippine Telegraph and Telephone
Corp., Capitol Wireless, and Radio Communications of the Philippines, Inc. opposed
such application.
Thereafter, on 9 March 1979, the Board of Communications rendered a decision,
recognizing the right of petitioners under its legislative franchise to establish branches
or stations anywhere in the Philippines, subject to its prior approval. A joint motion for
reconsideration, dated 14 June 1979, came from private respondents, followed as could
be expected by an opposition from petitioner. In a reply to such opposition, private
respondents put in issue the jurisdiction of the Board of Communications, now the
National Telecommunications Commission, to act on such application. Such motion is
still pending.
On 27 August 1979, private respondents filed before Judge Benjamin Relova an action
for declaratory judgment to ascertain the scope and coverage of the legislative
franchise of petitioner; it was ratified to Branch XI, presided by respondent Judge.
Hence, the certiorari and prohibition proceedings.
The Supreme Court dismissed the petition for certiorari, and set aside the restraining.
HELD:
1. Right to establish branch or station debatable From the very legislative franchise of
Philippine Global Communications, Inc. the right to establish a branch or station in Cebu
City “for the purpose of rendering international telecommunications services” from such
city to any point outside the Philippines is say the least, debatable. The matter is far
from clear, as its franchise does not, in express terms, grant it.
2. Position of the private respondents Since Section 1 of Republic Act No. 4617; [the
franchise in question] limits ingress and egress of Philippine Global messages or signals
only thru a ‘Sole Gateway’ (Manila) or only thru ‘[any point]’ or single location in the
Philippines, therefore:
a.) Philippine Global cannot establish branches or distribution systems
(direct connections to end-users) at any other point or locality within the
country for the purpose of transmitting and receiving messages between the
gateway (Manila) and these branches or stations located say, at Cebu or
Davao. For that is to constitute domestic service within the context of its
franchise;
b.) Philippine Global cannot even establish distribution systems in
Manila other than its main office or gateway to transmit and receive messages
to or from the end users destined for external transmission; this phase of
operation (between the main office at gateway to the distribution system or
individual equipment installed in the endusers’ offices in Manila) being ‘domestic
service’;
c.) Assuming arguendo, that Philippine Global shall not charge any
additional fee for the extra service mentioned does not detract from the fact
that the same still constitutes ‘domestic service’ since they are rendered from
one point in the Philippines to another point within the same country.”
) 3. Legal question appropriate to judiciary Fidelity to the basic concept of exhausting
administrative remedies calls for the equally fundamental principle of primary jurisdiction
to be respected. The doctrine of primary jurisdiction calls for application when there is
such competence to act on the part of an administrative body. Petitioner, however, could
not dissipate the well founded doubt as to whether its legislative franchise justifies its
plea to establish the branch or station in question. Absent such clarity as to the scope
and coverage of its franchise, a legal question arises which is more appropriate for the
judiciary than for an administrative agency to resolve. There is merit, therefore, to the
approach to seek judicial remedy as to whether or not the legislative franchise could be
so interpreted as to enable the National Telecommunications Commission to act on the
matter. A jurisdictional question thus arises and calls for an answer.