Supreme Court Rules NTC Must Follow Due Process Before Imposing Rates on Telcos

The Supreme Court has declared that the National Telecommunications Commission (NTC) cannot impose rates on telecommunications companies without adhering to due process. In a recent decision, the SC Second Division upheld the Court of Appeals’ ruling, nullifying the NTC’s orders that imposed a new billing scheme on telcos.

“The regulatory power of administrative bodies such as the NTC does not grant it unbridled permission to impose rates without giving telecommunication companies an opportunity to air out their grievances or seek reconsideration,” the court stated. “The fundamental right to due process still prevails in administrative proceedings.”

Back in 2009, the NTC mandated a six-second-per-pulse billing scheme for voice calls, requiring telcos to charge mobile users only for actual usage. Prior to this directive, users were billed by the minute. When several telcos defied the directive, the NTC issued show cause orders against them, prompting the companies to file petitions before the Court of Appeals.

The Court of Appeals granted the petitions, leading the NTC to elevate the matter to the Supreme Court. In its ruling, the Supreme Court affirmed that while the NTC has the authority to impose certain rates and regulations, it cannot arbitrarily reject the proposed rates of telcos without proper justification.

“The NTC must justify why its regulations are more appropriate,” the court noted. It also emphasized that although telcos are public utilities, they remain private entities operating businesses that serve the public.

The Supreme Court made permanent the writ of preliminary injunction issued by the Court of Appeals, effectively preventing the NTC and its representatives from enforcing the contested orders. “The NTC and all persons acting on its behalf are also permanently enjoined from implementing the assailed order,” the decision read.

The ruling was promulgated in February 2023 but was only uploaded in August.