Punzi's Corner Blog

In reply to your request for an opinion on whether the National Telecomunications Commission ("NTC") has to authority to issue Memorandum Circular No. 01-03-2006, we reply in the negative.

It is our opinion that the NTC DOES NOT have the power our authority to issue the aforementioned memorandum for the following reasons:

1. An examination of the laws governing the NTC, namely, Republic Acts Nos. 7925 (Telecommunications), 3846 (Radio) and 6849 (Telephone), readily reveal that it does not explicitly state its power to regulate content.

Under Section 5, RA 7925, the NTC only has the power to:

a) Adopt an administrative process which would facilitate the entry of qualified service providers and adopt a pricing policy which would generate sufficient returns to encourage them to provide basic telecommunications services in unserved and underserved areas;

b) Ensure quality, safety, reliability, security, compatibility and inter-operability of telecommunications facilities and services in conformity with standards and specifications set by international radio and telecommunications organizations to which the Philippines is a signatory;

c) Mandate a fair and reasonable interconnection of facilities of authorized public network operators and other providers of telecommunications services through appropriate modalities of interconnection and at a reasonable and fair level of charges which make provision for the cross subsidy to unprofitable local exchange service areas so as to promote telephone density and provide the most extensive access to basic telecommunications services available at affordable rates to the public;

d) Foster fair and efficient market conduct through, but not limited to, the protection of telecommunications entities from unfair trade practices of other carriers;

e) Promote consumers welfare by facilitating access to telecommunications services whose infrastructure and network must be geared towards the needs of individual and business users;

f) Protect consumers against misuse of telecommunications entity's monopoly or quasi-monopolistic powers by but not limited to the investigation of complaints and exacting compliance with service standards from such entity; and

g) In the exercise of its regulatory powers, continue to impose such fees and charges as may be necessary to cover reasonable costs and expenses for the regulation and supervision of the operations of telecommunications entities.

The NTC exercises the duties and responsibilities of the Secretary of Transportation and Communication under Section 3, RA 3846 as follows:

a) He shall classify radio stations and prescribe the nature of service to be rendered by each class and by each station within any class;

b) He shall assign call letters and assign frequencies for each station licensed by him and for each station established by virtue of a franchise granted by the Philippine Legislature and specify the stations to which each such frequency may be used;

c) He shall make rules and regulations to prevent and eliminate interference between stations and to carry out the provisions of this Act and the provisions of International Radio Regulations: Provided however, that changes in the frequencies or in the authorized power, or in the character of omitted signals, or in the type of the power supply, or in the hours of operation of any licensed station, shall not be made without first giving the station a hearing;

d) He may establish areas or zones to be served by any station;

e) He may make special rules and regulations applicable to radio stations engaging in chain broadcasting;

f) He may make general rules and regulations requiring stations to keep records of traffic handled, distress, frequency watches, programs, transmissions of energy, communications or signs;

g) He may conduct such investigations as may be necessary in connection with radio matters and hold hearings, summon witnesses, administer oaths and compel the production of books, logs, documents and papers;

h) He may prescribe rules and regulations to be observed by radio training schools; he may supervise the course and method of instruction therein, and he may refuse to admit to examinations for radio operators' licenses graduates of any radio school not complying with the regulations;

i) He shall prescribe rates of charges to be paid to the Government for the inspection of stations, for the licensing of stations, for the examination of operators, for the licensing of operators, for the renewal of station or operator licenses, and for such other services as may be rendered;

j) He is hereby empowered to approve or disapprove any application for the construction, installation, establishment or operation of a radio station;

k) He may approve or disapprove any application for renewal of station or operator license: Provided however, that no application for renewal shall be disapproved without giving the licensee a hearing;

l) He may, at his discretion, bring criminal actions against violators of the radio law or the regulations; or simply suspend or revoke the offender's station or operator's licenses; or refuse to renew such licenses; or just reprimand and warn the offenders;

m) The location of any station, and the power and kind or type of apparatus to be used shall be subject to his approval;

n) He shall prescribe rules and regulations to be observed by stations for the handling of SOS messages and distress traffic: Provided, that such rules and regulations shall not conflict with the provisions of the International Radio Regulations.

Finally, the NTC has the following functions under Section 3, RA 6849:

(a) Develop, in coordination with all other agencies concerned, a plan for providing public calling stations with technology capable of voice and data transmission in every municipality and, when feasible, in such barangay not otherwise served by an existing telephone exchange using appropriate technology and for this purpose formulate or cause to be formulated, engineering studies;

(b) Undertake the implementation of the said plans and programs and toward this end, to enter into contracts subject to existing laws and regulations for the procurement of equipment, construction of facilities and the installation of the system;

(c) Arrange for funding form any source, private, government, foreign or domestic, including official development assistance, bilateral and multilateral loans subject to applicable laws and regulations;

(d) Prescribe and ensure compatibility with minimum standards and regulations to assure acceptable standards of construction, maintenance, operation,

(e) personnel training, accounting and fiscal practices for the municipal telecommunications operators of public calling stations;

(f) Furnish technical assistance and personnel training programs for the municipal telecommunications operators of public calling stations;

(g) Monitor and evaluate local telecommunications and effect system integration and operations whenever economically and technically feasible.

As readily seen from above, the NTC has no power to regulate content of a radio and television broadcast. Hence, the aforementioned memorandum has no legal basis.

2. Even assuming, for the sake of argument that it does, it is invalid because it constitutes prior restraint of the freedom of expression, allowed only under extreme circumstances. Even granting the existence such extreme circumstances, such memorandum should be deemed automatically lifted once they cease to exist.

We hope we have sufficiently addressed your concerns. If you have any futher inquiries, please do not hesitate to contact us.

Very truly yours,
Punzi
Principal Attorney