SC rules vs NTC-imposed telco charges

 

MANILA, Philippines — The National Telecommunications Commission (NTC) cannot impose rates on telecommunications (telco) companies without due process, the Supreme Court (SC) said on Friday.

In a statement, the SC cited the NTC’s imposition of a six-second-per-pulse billing system for voice calls in 2009, which required telecommunications companies to charge mobile phone users / subscribers only for actual usage.

Prior to this, companies charged users by the minute, such that even a fraction of a minute was automatically charged as one minute.

NTC later issued show cause orders against Globe Telecom, Inc. and Innove Communications, Inc.; Smart Communications, Inc.; Connectivity Unlimited Resource Enterprises, Inc.; and Digitel Mobile Philippines, Inc., for defying its directive. 

The NTC also issued cease-and-desist orders to stop telecommunications companies from charging their subscribers using the old billing system. 

“The Supreme Court affirmed the decision of the Court of Appeals. While the NTC, under Republic Act No. 7925 or the Public Telecommunications Policy Act, has the power to regulate rates, these rates must be just and fair to both customers and telco companies. The rates must be reasonable and sufficient to cover the cost of business operations based on data collected through hearings and consultation with participating telco companies,” the statement read.

“The Court found that the NTC did not consider the evidence presented by the companies in their proposals and that the NTC’s explanation for rejecting the proposed rates was also insufficient,” it added.

Moreover, the SC said that the NTC cannot set rates without allowing the companies to air their requests for reconsideration.