RADIO COMMUNICATIONS OF THE PHILIPPINES, INC VS NATIONAL o S14(d): The following are exempted from the provisions of the

empted from the provisions of the preceding

TELECOMMUNICATIONS COMMISSION and KAYUMANGGI RADIO section:…(d) Radio companies except with respect to the fixing of rates;…
NETWORK INC o S15: With the exception of those enumerated in the preceding section, no
May 29, 1987 | J. Gutierrez J public service shall operate in the Philippines without possessing a valid
and subsisting certificate from the PSC, known as "certificate of public
convenience," or "certificate of convenience and public necessity," as the
DOCTRINE: case may be, to the effect that the operation of said service and the
 A franchise, being merely a privilege emanating from the sovereign power of authorization to do business will promote the public interests in a proper
the state and owing its existence to a grant, is subject to regulation by the state and suitable manner…
itself by virtue of its police power through its administrative agencies
 Art. XII, sec. 11 of the 1986 Constitution mandates that a franchise cannot be ISSUE/RATIO: W/N RCPI is required to secure a certificate of public
exclusive in nature nor can a franchise be granted except that it must be convenience and necessity before it can validly operate its radio stations
subject to amendment, alteration, or even repeal by the legislature when the including radio telephone services. YES. It is not exempted.
common good so requires
1. The exemption enjoyed by radio companies from the jurisdiction of the
FACTS PSC and the Board of Communications no longer exists because of the
changes effected by PD 1 and EO 546.
 In 1980, respondent NTC authorized private respondent Kayumanggi
Radio Network to operate radio communications systems in Samar and a. PD 1 (1972) – Abolished PSC and transferred its functions to the Board of
Mindoro Transportation, the Board of Communications and the Board of Power and
Waterworks
 Kayumanggi Radio Network filed a complaint with the NTC alleging that
i. functions transferred were still subject to the limitations provided in
the petitioner RCPI (Radio Communications of the Philippines, Inc.) was
the Public Service Law
operating in said places without a certificate of public convenience and
b. EO 546 (1979) – abolished the Board of Communications and the
necessity
Telecommunications Control Bureau and their functions were transferred
 RCPI: Its telephone services are covered by the legislative franchise
to the NTC
recognized by both NTC and its predecessor, the Public Service Commission
i. Sec 15: Functions of the Commission.- The Commission shall
(PSC)
exercise the following functions:
o Legislative franchise was granted by RA 20361 in 1957
a) Issue Certificate of Public Convenience for the operation of
 NTC ordered petitioner RCPI to immediately cease or desist from the communications utilities and services, radio communications
operation of its radio telephone services in said places. MR denied. petitions systems, wire or wireless telephone or telegraph
o EO 5462: a certificate of public convenience and necessity is system, radio and television broadcasting system and other
mandatory for the operation of communication utilities and services similar public utilities;
including radio communications b) Establish, prescribe and regulate areas of operation of
 Hence, present petition. particular operators of public service communications;…;
 RCPI: The abolition of the PSC under PD 1 and the creation of the NTC c) Grant permits for the use of radio frequencies for wireless
under EO 546 to replace the PSC did not affect the exemption RCPI telephone and telegraph systems and radio communication
enjoyed under the Public Service Law, under these provisions: systems including amateur radio stations and radio and
o S13(a): the Commission shall have jurisdiction, supervision, and control television broadcasting systems;….
over all public services and their franchises, equipment and other e) Establish and prescribe rules, regulations, standards,
properties, and in the exercise of its authority, it shall have the necessary specifications in all cases related to the issued Certificate of
powers and the aid of public force:… Public Convenience and administer and enforce the same;…
g) Promulgate such rules and regulations, as public safety and
1 AN ACT GRANTING THE RADIO COMMUNICATIONS OF THE PHILIPPINES A FRANCHISE TO interest may require, to encourage a larger and more effective
ESTABLISH RADIO STATIONS FOR DOMESTIC TELECOMMUNICATIONS. use of communications, radio and television broadcasting
2 CREATING A MINISTRY OF PUBLIC WORKS AND A MINISTRY OF TRANSPORTATION AND facilities, and to maintain effective competition among private
COMMUNICATIONS
 entities in these activities whenever the Commission finds it 3. Also, it was well within the powers of NTC to authorize the installation by
reasonably feasible; Kayumanggi Radio Network
h) Supervise and inspect the operation of radio stations and
telecommunications facilities;
i) Undertake the examination and licensing of radio operators; DECISION:
j) Undertake, whenever necessary, the registration of radio  Petition DISMISSED
transmitters and transceivers; and  Order of NTC AFFIRMED
k) Perform such other functions as may be prescribed by law.

2. RCPI cannot install and operate radio telephone services on the basis of
its legislative franchise alone
a. Nature of a franchise:
i. A franchise started out as a royal privilege or a branch of the
King's prerogative. Today, a franchise, being merely a privilege
emanating from the sovereign power of the state and owing its
existence to a grant, is subject to regulation by the state itself by
virtue of its police power through its administrative agencies
a) Art. XII, sec. 11 of the 1986 Constitution mandates that a
franchise cannot be exclusive in nature nor can a franchise be
granted except that it must be subject to amendment,
alteration, or even repeal by the legislature when the common
good so requires
ii. Pangasinan transportation Co., Inc. vs PSC: Statutes enacted for
the regulation of public utilities, being a proper exercise by the
State of its police power, are applicable not only to those public
utilities coming into existence after its passage, but likewise to
those already established and in operation
b. Under RA 2036 itself, approval of the then Secretary of Public Works
and Communications was a precondition before RCPI could put up
radio stations. However, records of the case do not show that RCPI
was granted such approval.
i. S1: Subject to the provisions of the Constitution, and to the
provisions, not inconsistent herewith, of Act No. 3846,…Public
Service Act, and their amendments, and other applicable
laws, there is hereby granted to RCPI,…, the right and privilege of
constructing, installing, establishing and operating in the
Philippines, at such places as the said corporation may select and
the Secretary of Public Works and Communications may
approve, radio stations for the reception and transmission of
wireless messages on radiotelegraphy and/or radiotelephone…
ii. S4(a): This franchise shall not take effect nor shall any powers
thereunder be exercised by the grantee until the Secretary of
Public works and Communications shall have allotted to the
grantee the frequencies and wave lengths to be used, and issued
to the grantee a license for such case.