The Supreme Court (SC) has denied the petitions challenging a 2016 Court of Appeals (CA) ruling that blocked the National Telecommunications Commission (NTC) from enforcing its 2012 order, which had directed three major telecommunications companies to reduce text messaging rates and refund subscribers.
In a decision penned by Associate Justice Rodil Zalameda, the high court rejected the separate petitions filed by the NTC and former Bayan Muna Party-List Representatives Neri Colmenares and Carlos Isagani Zarate against Digitel Mobile Philippines, Globe Telecommunications, Inc., and Smart Communications, Inc.
The legal battle stems from the NTC’s issuance of Memorandum Circular No. 02-10-2011 on October 24, 2011, which slashed the interconnection charge for off-net Short Messaging Service (SMS) from ₱0.35 to not more than ₱0.15 per text. While the telecom firms complied by updating their interconnection agreements, a subsequent NTC internal complaint revealed they maintained their standard ₱1.00 retail rate for text messages sent to other networks.
By November 20, 2012, the NTC ordered the firms to slash retail SMS prices to ₱0.80, refund subscribers the ₱0.20 excess charge per off-net text collected since the circular’s effectivity, and pay a daily fine of ₱200 until compliance. The commission argued that savings from the reduced interconnection costs should have automatically been passed on to consumers.
However, the CA later consolidated the telecom firms’ appeals—including an intervention from Bayan Muna filed on October 3, 2024—and ruled that the NTC’s rate-reduction order violated due process. The CA maintained that dropping interconnection charges does not inherently dictate a drop in retail rates, adding that the NTC’s rate-fixing and residual powers are not absolute.
Affirming the appellate court’s 2016 decision and 2017 resolution, the Supreme Court emphasized that the NTC cannot read mandates into a circular where they do not explicitly exist.
“…it is also clear that there is no directive or requirement in the circular about the reduction of the SMS retail rates,” the SC pointed out, invoking a foundational rule of statutory construction. “…a meaning that does not appear nor is intended or reflected in the very language of the statute cannot be placed therein by construction.”
The high court firmly rejected the NTC’s position that the circular implied a mandatory reduction of consumer retail prices.
“The NTC cannot construe or interpret the circular as directing the reduction of the SMS retail rates when the very language of the circular does not state or reflect such directive,” the SC ruled.
The SC added that the regulatory body cannot use the circular’s introductory “whereas” clauses to legally enforce a reduction in consumer rates based on what it merely intended to happen.
“Clearly, the Interconnection Circular does not order or direct the reduction of the SMS retail rates. The Court cannot judicially supply such omission in the circular even if it was the intention of the NTC. The Court is not authorized to insert into the circular what should have been in it, or to supply what the NTC would have supplied if its attention had been called to the omission,” the high court said.
Concluding that the NTC lacked the basis to penalize the telcos or invoke residual powers under Republic Act No. 7925 without meeting specific statutory conditions, the SC held that the firms could not be found liable.
“Accordingly, the Petitions for Review on Certiorari filed by petitioners Bayan Muna Party-List Representatives Neri Colmenares and Carlos Isagani Zarate, and the National Telecommunications Commission are denied. The June 27, 2016 Decision and the July 25, 2017 Resolution of the Court of Appeals in CA-G.R. S.P. Nos. 135400, 135440, and 135449 are affirmed,” the dispositive portion of the SC decision read.