The Supreme Court has upheld the orders of the National Telecommunications Commission (NTC) which disqualified Next Mobile, Inc., now operating as NOW Telecom, and three other companies in their applications for a third-generation mobile communications technology or 3G radio frequency.

In a decision written by Senior Associate Justice Marivic M.V.F. Leonen, the SC denied the petitions challenging the NTC’s consolidated orders dated Dec. 28, 2005 and Aug. 28, 2008 on the disqualification of Next Mobile and other firms.

The three other disqualified telecommunications firms were those of the then Lopez-owned Bayan Telecommunications (BayanTel), Multi-Media Telephony, Inc. (MTI), and AZ Communications, Inc.

At the time, the NTC had already awarded four of five 3G frequency slots to Smart Communications, Inc., Globe Telecom, Inc., Digitel Mobile Philippines, Inc., and Connectivity Unlimited Resources Enterprise or CURE.

As of Nov. 19, 2018, the NTC named the consortium of Udenna Corporation, Chelsea Holdings, and China Telecom -- known as MISLATEL (Mindanao Islamic Telephone Company, Inc.) – and later as DITO Telecommunity Corporation as the new major player.

The SC’s decision, made public last April 4, also granted the NTC’s petition which challenged the 2010 ruling of the Court of Appeals (CA), which virtually ordered the telecommunications regulatory body to allocate the fifth and final 3G slot to BayanTel.

The SC said that “Republic Act No. 7925, or the Public Telecommunications Policy Act of the Philippines, declares as part of its national policy, that radio frequency spectrum as ‘a scarce public resource’ shall only be allocated ‘to service providers who will use it efficiently and effectively to meet public demand for telecommunications service and may avail of new and cost-effective technologies in the use of methods for its utilization.’"

It pointed out that the NTC, as the primary administrator of public resource “has the full discretion to assess and evaluate applicants to these frequency spectrums.

“In view of its (NTC) expertise in technical matters, and institutional experience, its factual findings are entitled to great weight before this Court and will not be reversed ‘save upon a very clear showing of serious violation of law or of fraud, personal malice or wanton oppression.’"

Through Memorandum Circular (MC) No. 07-08-2005, NTC outlined the rules for reallocating 3G frequencies, leading to applications from existing and new telecom entities.

In disqualifying Next Mobile, the NTC cited the firm’s unpaid spectrum user fees (SUFs) and supervision and regulations fees (SRFs) totaling P135.6 million as of December 2005.

In 2009, the CA denied Next Mobile’s petition and affirmed the assessments of NTC on its unpaid SUFs and SRFs. The CA also dismissed the telco’s petition assailing its disqualification by the NTC.

The SC affirmed the CA’s rulings.  It said that to qualify for a 3G frequency, MC 07-08-2005 mandates that the applicant must have no outstanding unpaid SRFs, SUFs, radio station license fees, permit fees, and other fees imposed by the NTC in accordance with applicable laws, rules, and regulations.

SUFs are based on spectrum usage, service type, and economic classification of covered areas, while SRFs are determined by the  subscribed or paid capital stock, capital invested, or property and equipment value.

The SC dismissed Next Mobile’s argument that the NTC should not have considered its additional paid-in capital from its debt-to-equity conversion when assessing its SRFs as it pointed out that the subscription did not constitute part of its capital stock.

It said: “When Next Mobile converted its creditors' liabilities to stock subscriptions, there was a corresponding increase in its capital stock. It is erroneous for Next Mobile to argue that this could not be considered as part of the capital stock since no payment was received when the liabilities were converted into equity.”

“The consideration in this instance would be the extinguishment of the liability. The stocks their creditors subscribed to are now considered as paid stocks. It would have formed part of their additional paid in capital,” it pointed out.

It noted that as of December 2005, Next Mobile had an unpaid SRFs of P126.09 million and SUFs of P9.67 million.

“As the [NTC] pointed out, Next Mobile did not pay these fees even under protest. Next Mobile was, thus, correctly disqualified for non-payment of fees,” the SC ruled.

In the same SC decision, the High Court affirmed the 2008 CA decision dismissing MTI’s petition against the NTC orders disqualifying it and three others from getting the last 3G slot.

In 2012, the SC denied a petition filed by AZ as it affirmed the CA’s ruling that upheld the NTC orders which denied its application for a certificate of public convenience and necessity, as it did not meet the qualifications established in MC 07-08-2005.

In a decision released last March, the SC denied the petition filed by NOW Telecom which challenged the circular issued by the NTC on the qualifications and restrictions on the entry of a new major player (NMP) in the country’s telecommunications industry.

With the denial, including the plea for a writ of injunction, NOW Telecom’s bid to become NMP has been effectively shut down since Mindanao Islamic Telephone Company, Inc. (MISLATEL) has been selected as the NMP under the NPC circular and has been issued a Certificate of Public Convenience and Necessity (CPCN).

The decision, written by Associate Justice Rodil V. Zalameda, stated: “It is an established rule that injunction will not issue to restrain the performance of an act already done, or to prevent events that have already happened.”

“When the act sought to be prevented by injunction has already been performed or completed, ‘nothing more can be enjoined or restrained; a writ of injunction then becomes moot and academic, and the court, by mere issuance of the writ, can no longer stop or undo the act,’” it said.

“’To do so would violate the sole purpose of a prohibitive injunction, that is, to preserve the status quo,’” it also said.

“In this case, the act sought to be restrained by NOW Telecom has already been done. The actual implementation of the selection process of the NMP pursuant to the subject Circular, and the resulting assignment of the allocated radio frequencies for the NMP to MISLATEL have rendered NOW Telecom's prayer for injunctive relief moot and academic. Accordingly, NOW Telecom's application for WPI should be denied,” the SC ruled.