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EN BANC

[G.R. No. 88404. October 18, 1990.]

PHILIPPINE LONG DISTANCE TELEPHONE CO. [PLDT],

petitioner, vs. THE NATIONAL TELECOMMUNICATIONSCOMMISSION AND CELLCOM, INC., (EXPRESSTELECOMMUNICATIONS CO., INC. [ETCI]), respondents.

Alampan & Manhit Law Offices for petitioner.Gozon, Fernandez, Defensor & Parel for privaterespondent.

D E C I S I O N

MELENCIO-HERRERA, J p:

Petitioner Philippine Long Distance Telephone Company(PLDT) assails, by way of Certiorari and Prohibition underRule 65, two (2) Orders of public respondent National

Telecommunications Commission (NTC), namely, the Order

of 12 December 1988 granting private respondent ExpressTelecommunications Co., Inc. (ETCI) provisional authorityto install, operate and maintain a Cellular Mobile

Telephone System in Metro-Manila (Phase A) inaccordance with specified conditions, and the Order, dated8 May 1988, denying reconsideration.

On 22 June 1958, Rep. Act No. 2090, was enacted,otherwise known as "An Act Granting Felix Alberto andCompany, Incorporated, a Franchise to Establish RadioStations for Domestic and Transoceanic

Telecommunications." Felix Alberto & Co., Inc. (FACI) wasthe original corporate name, which was changed to ETCIwith the amendment of the Articles of Incorporation in1964. Much later, "CELLCOM, Inc." was the name sought to

be adopted before the Securities and ExchangeCommission, but this was withdrawn and abandoned.

On 13 May 1987, alleging urgent public need, ETCI filed anapplication with public respondent NTC (docketed as NTCCase No. 87-89) for the issuance of a Certificate of PublicConvenience and Necessity (CPCN) to construct, install,establish, operate and maintain a Cellular Mobile

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Telephone System and an Alpha Numeric Paging System inMetro Manila and in the Southern Luzon regions, with aprayer for provisional authority to operate Phase A of itsproposal within Metro Manila.

PLDT filed an Opposition with a Motion to Dismiss, basedprimarily on the following grounds: (1) ETCI is notcapacitated or qualified under its legislative franchise tooperate a systemwide telephone or network of telephoneservice such as the one proposed in its application; (2)ETCI lacks the facilities needed and indispensable to thesuccessful operation of the proposed cellular mobile

telephone system; (3) PLDT has itself a pendingapplication with NTC, Case No. 86-86, to install andoperate a Cellular Mobile Telephone System for domesticand international service not only in Manila but also in theprovinces and that under the "prior operator" or"protection of investment" doctrine, PLDT has the priorityor preference in the operation of such service; and (4) theprovisional authority, if granted, will result in needless,

uneconomical and harmful duplication, among others.

In an Order, dated 12 November 1987, NTC overruledPLDT's Opposition and declared that Rep. Act No. 2090(1958) should be liberally construed as to include amongthe services under said franchise the operation of acellular mobile telephone service.

In the same Order, ETCI was required to submit thecertificate of registration of its Articles of Incorporationwith the Securities and Exchange Commission, the presentcapital and ownership structure of the company and suchother evidence, oral or documentary, as may be necessaryto prove its legal, financial and technical capabilities aswell as the economic justifications to warrant the setting

up of cellular mobile telephone and paging systems. Thecontinuance of the hearings was also directed.

After evaluating the reconsideration sought by PLDT, theNTC, in October 1988, maintained its ruling that liberallyconstrued, applicant's franchise carries with it the privilegeto operate and maintain a cellular mobile telephoneservice.

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On 12 December 1988, NTC issued the first challengedOrder. Opining that "public interest, convenience andnecessity further demand a second cellular mobile

telephone service provider and finds PRIMA FACIEevidence showing applicant's legal, financial and technicalcapabilities to provide a cellular mobile service using theAMPS system," NTC granted ETCI provisional authority toinstall, operate and maintain a cellular mobile telephonesystem initially in Metro Manila, Phase A only, subject tothe terms and conditions set forth in the same Order. Oneof the conditions prescribed (Condition No. 5) was that,

within ninety (90) days from date of the acceptance byETCI of the terms and conditions of the provisionalauthority, ETCI and PLDT "shall enter into aninterconnection agreement for the provision of adequateinterconnection facilities between applicant's cellularmobile telephone switch and the public switchedtelephone network and shall jointly submit suchinterconnection agreement to the Commission for

approval."In a "Motion to Set Aside the Order" granting provisionalauthority, PLDT alleged essentially that theinterconnection ordered was in violation of due processand that the grant of provisional authority was

jurisdictionally and procedurally infirm. On 8 May 1989,NTC denied reconsideration and set the date forcontinuation of the hearings on the main proceedings. Thisis the second questioned Order.

PLDT urges us now to annul the NTC Orders of 12December 1988 and 8 May 1989 and to order ETCI todesist from, suspend, and/or discontinue any and all actsintended for its implementation.On 15 June 1989, we resolved to dismiss the petition for its

failure to comply fully with the requirements of CircularNo. 188. Upon satisfactory showing, however, that therewas, in fact, such compliance, we reconsidered the order,reinstated the Petition, and required the respondents NTCand ETCI to submit their respective Comments.

On 27 February 1990, we issued a Temporary RestrainingOrder enjoining NTC to "Cease and Desist from all or any

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of its on-going proceedings and ETCI from continuing anyand all acts intended or related to or which will amount tothe implementation/execution of its provisional authority."

This was upon PLDT's urgent manifestation that it had

been served an NTC Order, dated 14 February 1990,directing immediate compliance with its Order of 12December 1988, "otherwise the Commission shall beconstrained to take the necessary measures and bring tobear upon PLDT the full sanctions provided by law."

We required PLDT to post a bond of P5M. It has complied,with the statement that it was "post(ing) the same on its

agreement and/or consent to have the same forfeited infavor of Private Respondent ETCI/CELLCOM should theinstant Petition be dismissed for lack of merit." ETCI tookexception to the sufficiency of the bond considering itsinitial investment of approximately P225M, but acceptedthe forfeiture proferred.

ETCI moved to have the TRO lifted, which we denied on 6

March 1990 We stated, however, that the inauguralceremony ETCI had scheduled for that day could proceed,as the same was not covered by the TRO.

PLDT relies on the following grounds for the issuance ofthe Writs prayed for:

"1. Respondent NTC's subject ordereffectively licensed and/or authorized acorporate entity without any franchise tooperate a public utility, legislative orotherwise, to establish and operate atelecommunications system.

"2. The same order validated stock

transactions of a public service enterprisecontrary to and/or in direct violation ofSection 20(h) of the Public Service Act.

"3. Respondent NTC adjudicated in the sameorder a controverted matter that was notheard at all in the proceedings underwhich it was promulgated."

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As correctly pointed out by respondents, this being aspecial civil action for Certiorari and Prohibition, we onlyneed determine if NTC acted without jurisdiction or with

grave abuse of discretion amounting to lack or excess ofjurisdiction in granting provisional authority to ETCI underthe NTC questioned Orders of 12 December 1988 and 8May 1989.

The case was set for oral argument on 21 August 1990with the parties directed to address, but not limited to, thefollowing issues: (1) the status and coverage of Rep. Act

No. 2090 as a franchise; (2) the transfer of shares of stockof a corporation holding a CPCN; and (3) the principle andprocedure of interconnection. The parties were thereafterrequired to submit their respective Memoranda, withwhich they have complied.

We find no grave abuse of discretion on the part of NTC,upon the following considerations:

1. NTC Jurisdiction

There can be no question that the NTC is theregulatory agency of the national governmentwith jurisdiction over all telecommunicationsentities. It is legally clothed with authority andgiven ample discretion to grant a provisionalpermit or authority. In fact, NTC may, on its owninitiative, grant such relief even in the absenceof a motion from an applicant.

"Sec. 3. Provisional Relief . Upon the filing of an application,complaint or petition or at any stage

thereafter, the Board may grant onmotion of the pleaders or on its owninitiative, the relief prayed for, basedon the pleading, together with theaffidavits and supporting documentsattached thereto, without prejudice toa final decision after completion of thehearing which shall be called within

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thirty (30) days from grant of authorityasked for." (Rule 15, Rules of Practiceand Procedure Before the Board ofCommunications (now NTC).

What the NTC granted was such a provisionalauthority, with a definite expiry period ofeighteen (18) months unless sooner renewed,and which may be revoked, amended or revisedby the NTC. It is also limited to Metro Manilaonly. What is more, the main proceedings areclearly to continue as stated in the NTC Order of

8 May 1989.

The provisional authority was issued after duehearing, reception of evidence and evaluationthereof, with the hearings attended by variousoppositors, including PLDT. It was granted onlyafter a prima facie showing that ETCI hag thenecessary legal, financial and technical

capabilities and that public interest, convenienceand necessity so demanded.

PLDT argues, however, that a provisionalauthority is nothing short of a Certificate ofPublic Convenience and Necessity (CPCN) andthat it is merely a "distinction without adifference." That is not so. Basic differences doexist, which need not be elaborated on. Whatshould be borne in mind is that provisionalauthority would be meaningless if the granteewere not allowed to operate. Moreover, it is clearfrom the very Order of 12 December 1988 itselfthat its scope is limited only to the first phase,out of four, of the proposed nationwide

telephone system. The installation and operationof an alpha numeric paging system was notauthorized. The provisional authority is notexclusive. Its lifetime is limited and may berevoked by the NTC at any time in accordancewith law. The initial expenditure of P130M moreor less, is rendered necessary even under aprovisional authority to enable ETCI to prove its

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capability. And as pointed out by the SolicitorGeneral, on behalf of the NTC, if what had beengranted were a CPCN, it would constitute a finalorder or award reviewable only by ordinary

appeal to the Court of Appeals pursuant toSection 9(3) of BP Blg. 129, and not by Certioraribefore this Court.

The final outcome of the application rests withinthe exclusive prerogative of the NTC. Whether ornot a CPCN would eventually issue would dependon the evidence to be presented during the

hearings still to be conducted, and only after afull evaluation of the proof thus presented.

2. The Coverage of ETCI's Franchise

Rep. Act No. 2090 grants ETCI (formerly FACI)"the right and privilege of constructing,installing, establishing and operating in the

entire Philippines radio stations for reception andtransmission of messages on radio stations inthe foreign and domestic public fixed point-to-point and public base, aeronautical and landmobile stations, . . . with the corresponding relaystations for the reception and transmission ofwireless messages on radiotelegraphy and/orradiotelephony . . . . " PLDT maintains that thescope of the franchise is limited to "radiostations" and excludes telephone services suchas the establishment of the proposed CellularMobile Telephone System (CMTS). However, inits Order of 12 November 1987, the NTCconstrued the technical term "radiotelephony"liberally as to include the operation of a cellular

mobile telephone system. It said:

"In resolving the said issue, theCommission takes into considerationthe different definitions of the term"radiotelephony." As defined by theNew International Webster Dictionarythe term "radiotelephony" is defined as

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a telephony carried on by aid ofradiowaves without connecting wires.

The International TelecommunicationsUnion (ITU) defines a "radiotelephone

call" as a "telephone call, originating inor intended on all or part of its routeover the radio communicationschannels of the mobile service or of themobile satellite service." From theabove definitions, while under RepublicAct 2090 a system-wide telephone ornetwork of telephone service by means

of connecting wires may not have beencontemplated, it can be construedliberally that the operation of a cellularmobile telephone service which carriesmessages, either voice or record, withthe aid of radiowaves or a part of itsroute carried over radiocommunication channels, is one

included among the services undersaid franchise for which a certificate ofpublic convenience and necessity maybe applied for."

The foregoing is the construction given by anadministrative agency possessed of thenecessary special knowledge, expertise andexperience and deserves great weight andrespect (Asturias Sugar Central, Inc. v.Commissioner of Customs, et al., L-19337,September 30, 1969, 29 SCRA 617). It can onlybe set aside on proof of gross abuse ofdiscretion, fraud, or error of law (Tupas LocalChapter No. 979 v. NLRC, et al., L-60532-33,

November 5, 1985, 139 SCRA 478). We discernnone of those considerations sufficient towarrant judicial intervention.

3. The Status of ETCI's Franchise

PLDT alleges that the ETCI franchise had lapsedinto non-existence for failure of the franchise

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holder to begin and complete construction of theradio system authorized under the franchise asexplicitly required in Section 4 of its franchise,Rep. Act No. 2090. 1 PLDT also invokes Pres.

Decree No. 36, enacted on 2 November 1972,which legislates the mandatory cancellation orinvalidation of all franchises for the operation ofcommunications services, which have not beenavailed of or used by the party or parties inwhose name they were issued.

However, whether or not ETCI, and before it

FACI, in contravention of its franchise, startedthe first of its radio telecommunication stationswithin (2) years from the grant of its franchiseand completed the construction within ten (10)years from said date; and whether or not itsfranchise had remained unused from the time ofits issuance, are questions of fact beyond theprovince of this Court, besides the well-settled

procedural consideration that factual issues arenot subjects of a special civil action for Certiorari(Central Bank of the Philippines vs. Court ofAppeals, G.R. No. 41859, 8 March 1989, 171SCRA 49; Ygay vs. Escareal, G.R. No. 44189, 8February 1985, 135 SCRA 78; Filipino Merchant'sInsurance Co., Inc. vs. Intermediate AppellateCourt, G.R. No. 71640, 27 June 1988, 162 SCRA669). Moreover, neither Section 4, Rep. Act No.2090 nor Pres. Decree No. 36 should beconstrued as self-executing in working aforfeiture. Franchise holders should be given anopportunity to be heard, particularly so, where,as in this case, ETCI does not admit any breach,in consonance with the rudiments of fair play.

Thus, the factual situation of this case differsfrom that in Angeles Ry Co. vs. City of LosAngeles (92 Pacific Reporter 490) cited by PLDT,where the grantee therein admitted its failure tocomplete the conditions of its franchise and yetinsisted on a decree of forfeiture.

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More importantly, PLDT's allegation partakes of acollateral attack on a franchise (Rep. Act No.2090), which is not allowed. A franchise is aproperty right and cannot be revoked or forfeited

without due process of law. The determination ofthe right to the exercise of a franchise, orwhether the right to enjoy such privilege hasbeen forfeited by non-user, is more properly thesubject of the prerogative writ of quo warranto,the right to assert which, as a rule, belongs tothe State "upon complaint or otherwise"(Sections 1, 2 and 3, Rule 66, Rules of Court), 2

the reason being that the abuse of a franchise isa public wrong and not a private injury. Aforfeiture of a franchise will have to be declaredin a direct proceeding for the purpose brought bythe State because a franchise is granted by lawand its unlawful exercise is primarily a concernof Government.

"A . . . franchise is . . . granted by law,and its . . . unlawful exercise is theconcern primarily of the Government.Hence, the latter as a role is the partycalled upon to bring the action for such. . . unlawful exercise of . . . franchise."(IV-B V. FRANCISCO, 298 [1963 ed.],citing Cruz vs. Ramos, 84 Phil. 226).

4. ETCI's Stock Transactions

ETCI admits that in 1964, the Albertos, asoriginal owners of more than 40% of theoutstanding capital stock sold their holdings tothe Orbes. In 1968, the Albertos re-acquired the

shares they had sold to the Orbes. In 1987, theAlbertos sold more than 40% of their shares toHoracio Yalung. Thereafter, the presentstockholders acquired their ETCI shares.Moreover, in 1964, ETCI had increased its capitalstock from P40,000.00 to P360,000.00; and in1987, from P360,000.00 to P40M.

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PLDT contends that the transfers in 1987 of theshares of stock to the new stockholders amountto a transfer of ETCI's franchise, which needsCongressional approval pursuant to Rep. Act No.

2090, and since such approval had not beenobtained, ETCI's franchise had been invalidated.The provision relied on reads, in part, as follows:

SECTION 10. The grantee shall notlease, transfer, grant the usufruct of,sell or assign this franchise nor therights and privileges acquired

thereunder to any person, firm,company, corporation or othercommercial or legal entity nor mergewith any other person, company orcorporation organized for the samepurpose, without the approval of theCongress of the Philippines first had. . .. . "

It should be noted, however, that the foregoingprovision is, directed to the "grantee" of thefranchise, which is the corporation itself andrefers to a sale, lease, or assignment of thatfranchise. It does not include the transfer or saleof shares of stock of a corporation by the latter'sstockholders.

The sale of shares of stock of a public utility isgoverned by another law, i.e., Section 20(h) ofthe Public Service Act (Commonwealth Act No.146). Pursuant thereto, the Public ServiceCommission (now the NTC) is the governmentagency vested with the authority to approve the

transfer of more than 40% of the subscribedcapital stock of a telecommunications companyto a single transferee, thus:

SEC. 20. Acts requiring theapproval of the Commission. Subject toestablished limitations and exceptionsand saving provisions to the contrary,

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it shall be unlawful for any publicservice or for the owner, lessee oroperator thereof, without the approvaland authorization of the Commission

previously had

xxx xxx xxx

(h) To sell or register in its booksthe transfer or sale of shares ofits capital stock, if the result ofthat sale in itself or in

connection with anotherprevious sale, shall be to vest inthe transferee more than fortyper centum of the subscribedcapital of said public service.Any transfer made in violation ofthis provision shall be void andof no effect and shall not be

registered in the books of thepublic service corporation.Nothing herein contained shallbe construed to prevent theholding of shares lawfullyacquired. (As amended by Com.Act No. 454)."

In other words, transfers of shares of a publicutility corporation need only NTC approval, notCongressional authorization. What transpired inETCI were a series of transfers of shares startingin 1964 until 1987. The approval of the NTC maybe deemed to have been met when it authorizedthe issuance of the provisional authority to ETCI.

There was full disclosure before the NTC of thetransfers. In fact, the NTC Order of 12 November1987 required ETCI to submit its "present capitaland ownership structure." Further, ETCI evenfiled a Motion before the NTC, dated 8 December1987, or more than a year prior to the grant ofprovisional authority, seeking approval of theincrease in its capital stock from P960,000.00 to

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P40M, and the stock transfers made by itsstockholders.

A distinction should be made between shares of

stock, which are owned by stockholders, the saleof which requires only NTC approval, and thefranchise itself which is owned by thecorporation as the grantee thereof, the sale ortransfer of which requires Congressionalsanction. Since stockholders own the shares ofstock, they may dispose of the same as they seefit. They may not, however, transfer or assign

the property of a corporation, like its franchise.In other words, even if the original stockholdershad transferred their shares to another group ofshareholders, the franchise granted to thecorporation subsists as long as the corporation,as an entity, continues to exist. The franchise isnot thereby invalidated by the transfer of theshares. A corporation has a personality separate

and distinct from that of each stockholder. It hasthe right of continuity or perpetual succession(Corporation Code, Sec. 2).

To all appearances, the stock transfers were notjust for the purpose of acquiring the ETCIfranchise, considering that, as heretofore stated,a series of transfers was involved from 1964 to1987. And, contrary to PLDT's assertion, thefranchise was not the only property of ETCI ofmeaningful value. The "zero" book value of ETCIassets, as reflected in its balance sheet, wasplausibly explained as due to the accumulateddepreciation over the years entered foraccounting purposes and was not reflective of

the actual value that those assets wouldcommand in the market.

But again, whether ETCI has offended against aprovision of its franchise, or has subjected it tomisuse or abuse, may more properly be inquiredinto in quo warranto proceedings instituted bythe State. It is the condition of every franchise

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that it is subject to amendment, alteration, orrepeal when the common good so requires (1987Constitution, Article XII, Section 11).

5. The NTC Interconnection Order

In the provisional authority granted by NTC toETCI, one of the conditions imposed was that thelatter and PLDT were to enter into aninterconnection agreement to be jointlysubmitted to NTC for approval.

PLDT vehemently opposes interconnection withits own public switched telephone network. Itcontends: that while PLDT welcomesinterconnections in the furtherance of publicinterest, only parties who can establish that theyhave valid and subsisting legislative franchisesare entitled to apply for a CPCN or provisionalauthority, absent which, NTC has no jurisdiction

to grant them the CPCN or interconnection withPLDT; that the 73 telephone systems operatingall over the Philippines have a viability andfeasibility independent of any interconnectionwith PLDT; that "the NTC is not empowered tocompel such a private raid on PLDT's legitimateincome arising out of its gigantic investment;"that "it is not public interest, but purely a privateand selfish interest which will be served by aninterconnection under ETCI's terms;" and that "tocompel PLDT to interconnect merely to giveviability to a prospective competitor, whichcannot stand on its own feet, cannot be justifiedin the name of a non-existent public need" (PLDTMemorandum, pp. 48 and 50).

PLDT cannot justifiably refuse to interconnect.

Rep. Act No. 6849, or the Municipal TelephoneAct of 1989, approved on 8 February 1990,mandates interconnection providing as it doesthat "all domestic telecommunications carriers orutilities . . . shall be interconnected to the public

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switch telephone network." Such regulation ofthe use and ownership of telecommunicationssystems is in the exercise of the plenary policepower of the State for the promotion of the

general welfare. The 1987 Constitutionrecognizes the existence of that power when itprovides:

"SEC. 6. The use of property bearsa social function, and all economicagents shall contribute to the commongood. Individuals and private groups,

including corporations, cooperatives,and similar collective organizations,shall have the right to own, establish,and operate economic enterprises,subject to the duty of the State topromote distributive justice and tointervene when the common good sodemands" (Article XII).

The interconnection which has been required ofPLDT is a form of "intervention" with propertyrights dictated by "the objective of governmentto promote the rapid expansion of telecommunications services in all areas of thePhilippines, . . . to maximize the use oftelecommunications facilities available, . . . inrecognition of the vital role of communications innation building . . . and to ensure that all users ofthe public telecommunications service haveaccess to all other users of the service whereverthey may be within the Philippines at anacceptable standard of service and at reasonablecost" (DOTC Circular No. 90-248). Undoubtedly,

the encompassing objective is the commongood. The NTC, as the regulatory agency of theState, merely exercised its delegated authorityto regulate the use of telecommunicationsnetworks when it decreed interconnection.

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The importance and emphasis given tointerconnection dates back to Ministry CircularNo. 82-81, dated 6 December 1982, providing:

"Sec. 1. That the governmentencourages the provision andoperation of public mobile telephoneservice within local sub-base stations,particularly, in the highlycommercialized areas;

"Sec. 5. That, in the event the

authority to operate said service begranted to other applicants, other thanthe franchise holder, the franchiseoperator shall be under obligation toenter into an agreement with thedomestic telephone network, under aninterconnection agreement;"Department of Transportation and

Communication (DOTC) Circular No.87-188, issued in 1987, also decrees:

"12. All publiccommunications carriersshall interconnect theirfacilities pursuant tocomparatively efficientinterconnection (CEI) asdefined by the NTC in theinterest of economicefficiency."

The sharing of revenue was an additional featureconsidered in DOTC Circular No. 90-248, dated

14 June 1990, laying down the "Policy onInterconnection and Revenue Sharing by PublicCommunications Carriers," thus:

"WHEREAS, it is the objective ofgovernment to promote the rapidexpansion of telecommunicationsservices in all areas of the Philippines;

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"WHEREAS, there is s need tomaximize the use of telecommunications facilities available

and encourage investment intelecommunications infrastructure bysuitably qualified service providers;

"WHEREAS, in recognition of the vitalrole of communications in nationbuilding, there is a need to ensure thatall users of the public

telecommunications service haveaccess to all other users of the servicewherever they may be within thePhilippines at an acceptable standardof service and at reasonable cost.

"WHEREFORE, xxx the followingDepartment policies on interconnection

and revenue sharing are herebypromulgated:

1. All facilities offering publictelecommunication servicesshall be interconnected into thenationwide telecommunicationsnetwork/s,

xxx xxxxxx4. The interconnection of networks

shall be effected in a fair andnon-discriminatory manner andwithin the shortest timeframe

practicable.

5. The precise points of interfacebetween service operators shallbe as defined by the NTC; andthe apportionment of costs anddivision of revenues resultingfrom interconnection of

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telecommunications networksshall be as approved and/orprescribed by the NTC.

xxx xxxxxx"

Since then, the NTC, on 12 July1990, issued MemorandumCircular No. 7-13-90 prescribingthe "Rules and RegulationsGoverning the Interconnection of

Local Telephone Exchanges andPublic Calling Offices with theNationwide TelecommunicationsNetwork/s, the Sharing ofRevenue Derived Therefrom,and for Other Purposes."

The NTC order to interconnect allows the parties

themselves to discuss and agree upon thespecific terms and conditions of theinterconnection agreement instead of the NTCitself laying down the standards of interconnection which it can very well impose.

Thus it is that PLDT cannot justifiably claimdenial of due process. It has been heard. It willcontinue to be heard in the main proceedings. Itwill surely be heard in the negotiationsconcerning the interconnection agreement.

As disclosed during the hearing, theinterconnection sought by ETCI is by no means a"parasitic dependence" on PLDT. The ETCIsystem can operate on its own even without

interconnection, but it will be limited to its ownsubscribers. What interconnection seeks toaccomplish is to enable the system to reach outto the greatest number of people possible in linewith governmental policies laid down. Cellularphones can access PLDT units and vice versa inas wide an area as attainable. With the broaderreach, public interest and convenience will be

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better served. To be sure, ETCI could provide nomean competition (although PLDT maintains thatit has nothing to fear from the "innocuousinterconnection"), and eat into PLDT's own toll

revenue ("cream PLDT revenue," in its ownwords), but all for the eventual benefit of all thatthe system can reach.

6. Ultimate Considerations

The decisive considerations are public need,public interest, and the common good. Those

were the overriding factors which motivated NTCin granting provisional authority to ETCI. ArticleII, Section 24 of the 1987 Constitution,recognizes the vital role of communication andinformation in nation building. It is likewise aState policy to provide the environment for theemergence of communications structuressuitable to the balanced flow of information into,

out of, and across the country (Article XVI,Section 10, ibid.). A modern and dependablecommunications network rendering efficient andreasonably priced services is also indispensablefor accelerated economic recovery anddevelopment. To these public and nationalinterests, public utility companies must bow andyield.

Despite the fact that there is a virtual monopolyof the telephone system in the country atpresent, service is sadly inadequate. Customerdemands are hardly met, whether fixed ormobile. There is a unanimous cry to hasten thedevelopment of a modern, efficient, satisfactory

and continuous telecommunications service notonly in Metro Manila but throughout thearchipelago. The need therefor was dramaticallyemphasized by the destructive earthquake of 16

July 1990. It may be that users of the cellularmobile telephone would initially be limited to afew and to highly commercialized areas.However, it is a step in the right direction

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towards the enhancement of thetelecommunications infrastructure, theexpansion of telecommunications services in,hopefully, all areas of the country, with chances

of complete disruption of communicationsminimized. It will thus impact on the totaldevelopment of the country'stelecommunications systems and redound to thebenefit of even those who may not be able tosubscribe to ETCI.

Free competition in the industry may also

provide the answer to a much-desiredimprovement in the quality and delivery of thistype of public utility, to improved technology,fast and handy mobile service, and reduced userdissatisfaction. After all, neither PLDT nor anyother public utility has a constitutional right to amonopoly position in view of the Constitutionalproscription that no franchise certificate or

authorization shall be exclusive in character orshall last longer than fifty (50) years (ibid.,Section 11; Article XIV, Section 5, 1973Constitution; Article XIV, Section 8, 1935Constitution). Additionally, the State isempowered to decide whether public interestdemands that monopolies be regulated orprohibited (1987 Constitution, Article XII, Section19).

WHEREFORE, finding no grave abuse of discretion,tantamount to lack of or excess of jurisdiction, on the partof the National Telecommunications Commission in issuingits challenged Orders of 12 December 1988 and 8 May1989 in NTC Case No. 87-39, this Petition is DISMISSED for

lack of merit. The Temporary Restraining Order heretoforeissued is LIFTED. The bond issued as a condition for theissuance of said restraining Order is declared forfeited infavor of private responder Express TelecommunicationsCo., Inc.

Costs against petitioner.

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SO ORDERED.

Paras, Feliciano, Padilla, Sarmiento, Cortes, Grio-Aquinoand Regalado, JJ ., concur.