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GMA NETWORK v. NATIONAL TELECOMMUNICATIONS COMMISSION

FACTS:

Petitioner GMA Network, Inc. (GMA) is a Filipino-owned domestic corporation engaged in radio and television broadcasting. Respondent National Telecommunications Commission (NTC) is a government agency authorized to issue certificates of public convenience for communications utilities and services. GMA applied for a certificate of public convenience to operate a radio station in Puerto Princesa City, Palawan, and was granted a provisional authority (PA) by the NTC. The PA expired in 1998, but GMA continued its broadcast operations based on temporary permits issued by the NTC. In 2002, GMA filed a motion for the issuance of a certificate of public convenience, claiming full compliance with the terms of the PA and its operation on the basis of temporary permits. The NTC set the motion for a hearing and directed GMA to explain why it should not be sanctioned for operating with an expired PA. GMA explained its failure to renew the PA and argued that the motion should not be sanctioned due to the lapse of the prescriptive period. The NTC renewed GMA's PA but imposed a fine for operating with an expired PA. GMA filed a motion for reconsideration, but it was denied. GMA appealed to the CA, arguing that the prescriptive period had lapsed, the fine was excessive, and the NTC had authorized its operation through temporary permits. The CA dismissed the appeal, upholding the fine imposed by the NTC. GMA filed a petition for review on certiorari.

ISSUES:

  1. Whether the NTC's action against GMA for operating with an expired permit is barred by the 60-day prescriptive period under Section 28 of the Public Service Act.

  2. Whether prior notice and hearing are required before imposing a fine on a public service utility for violation of its permit.

  3. Whether evidence of violations committed by the respondent Philippine Rabbit Bus Lines, Inc., can be admitted even if no complaint against such violations were filed within 60 days from their commission.

  4. Whether the amount of the fine imposed by the NTC is unconscionable.

  5. Whether the temporary permits issued by the NTC justify GMA's continued operation on an expired PA.

  6. Whether or not a temporary permit can be issued to a radio station without an updated provisional authority (PA) from the National Telecommunications Commission (NTC).

  7. Whether or not the NTC's interpretation of its own rules and regulations should be given great weight and respect.

RULING:

  1. The NTC's action is not barred by the 60-day prescriptive period under Section 28 of the Public Service Act. The prescriptive period is only applicable to criminal or penal proceedings filed under Chapter IV of the Act. The NTC's proceedings pertain to the regulatory or administrative aspects of a public service utility's observance of the terms and conditions of its permit.

  2. Prior notice and hearing are required before imposing a fine on a public service utility for violation of its permit. Section 21 of the Public Service Act expressly provides that fines can be imposed by the NTC after due notice and hearing. The imposition of a fine is a punitive measure and notice and hearing are essential to the valid exercise by an administrative agency of its quasi-judicial functions.

  3. The respondent Commission shall admit evidence of violations committed by the respondent Philippine Rabbit Bus Lines, Inc., even if no complaint against such violations were filed within 60 days from their commission.

  4. The amount of the fine imposed by the NTC is not unconscionable and is consistent with the P200.00 per day limitation under Section 21 of the Public Service Act.

  5. The temporary permits issued by the NTC do not justify GMA's continued operation on an expired PA.

  6. No, a temporary permit cannot be issued to a radio station without an updated PA. The operational validity of a temporary permit flows only from a previously updated PA. This means that there should be an effective PA before a temporary permit is issued. Without an updated PA, the radio station should not have been issued temporary permits.

  7. Yes, the NTC's interpretation of its own rules and regulations should be given great weight and respect. The NTC, being the government agency entrusted with the regulation of the telecommunications industry, has exclusive jurisdiction to establish and prescribe rules, regulations, standards, and specifications. Its interpretation of its own rules and regulations are traditionally accorded by the Court with great weight and respect, unless there is an error of law, abuse of power, lack of jurisdiction, or grave abuse of discretion.

PRINCIPLES:

  • The 60-day prescriptive period under Section 28 of the Public Service Act is applicable only to criminal or penal proceedings filed under Chapter IV of the Act.

  • Notice and hearing are essential in administrative proceedings and are required before imposing a fine on a public service utility for violation of its permit.

  • The imposition of a fine pursuant to Section 21 of the Public Service Act is punitive in nature and therefore requires compliance with the requirements of notice and hearing.

  • Evidence of violations can be admitted even if no complaint was filed within 60 days from their commission.

  • The NTC has the authority to impose fines in administrative proceedings.

  • The applicable provision for the imposition of fines in administrative proceedings is Section 21 of the Public Service Act, which governs violations or non-compliance with the terms and conditions of the certificate/s issued by the NTC.

  • The conscionability of the amount of the fine is determined by the allowable threshold set by the law.

  • Temporary permits are not a substitute for a PA and do not justify continued operation on an expired PA.

  • The State cannot be put in estoppel by the mistakes or errors of its officials or agents.

  • Administrative agencies, such as the NTC, should devise appropriate governance systems to ensure that their rules and regulations are followed and complied with, and deviations therefrom are deterred and quelled.

  • The government gains the people's trust and deference through an honest and effective bureaucracy.