CA stops telcos' P7B refund to subscribers

Posted at 08/22/14 3:46 PM

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MANILA (2nd UPDATE) - The Court of Appeals (CA) has issued a 60-day temporary restraining order (TRO) to temporarily halt the refund of at least P7 billion by telecom firms to their subscribers for alleged excessive charges on short message service (SMS) fees.

In a 4-page resolution by its Sixth Division dated Aug. 20, 2014, penned by Associate Justice Priscilla Baltazar-Padilla, the appellate court granted the TRO plea of Digitel Philippines, one of three telecom firms (telcos) that questioned a Nov. 20, 2012 decision by the National Telecommunications Commission (NTC) that ordered the refund, and the subsequent May 7, 2014 NTC decision that denied the telcos' motion for reconsideration (MR).

"Wherefore, for the purpose of preserving the status quo during the pendency of the instant petition to prevent any irreparable damage that petitioner stands to suffer and to prevent any decision that may be rendered herein from becoming moot, academic and ineffectual, we resolve to grant the temporary restraining order sought for by the petitioner," the resolution read.

Digitel was directed to post a cash bond or surety bond of P500,000.

NTC issued the resolutions to penalize the telcos for violating the commission's Memorandum Circular (MC) No. 02-10-2011 which ordered, among others, the reduction of the interconnection charge for SMS between two separate networks to a rate not higher than 15-centavos per SMS from its rate then of 35-centavos.

The appellate court said the TRO is warranted because Digitel argued that its petition is anchored on whether NTC MC No. 02-10-2011 is limited only to interconnection charges and excludes retail prices on regular SMS.

The appellate court also stressed that the recovery of the refund "might be impossible" in the event that the court rules against NTC.

"To our minds, justice would be better served if the implementation of the NTC decision is restrained at this stage of the proceeding, especially that those who recently intervened in the case, had already moved for the issuance of a writ of execution.

"To prevent any irremediable injury that petitioner may sustain in view of the enforcement of the impugned decision, it is prudent to preserve the status quo, pending determination of the propriety of the issuance of the said judgment," the resolution read.

In its petition, Digitel claimed that "there is no means for it to ascertain the existence of the subscribers and the identities of the actual users of the Mobile Identification Numbers as may be found in its system."

Digitel further claimed that most of its subscribers are prepaid SIM card users.

The NTC was ordered to show cause within 10 days why Digitel's application for issuance of a writ of preliminary injunction should not be granted.

Once the appellate court issues the writ, the telcos will not have to pay the refund until a decision on the merits of the case is handed down.

Meaning, the writ of preliminary injunction will have an indefinite life.

The decision was concurred in by Associate Justices Noel Tijam and Agnes Reyes-Carpio.

Aside from Digitel, Smart Communications Inc. and Globe Telecom Inc. also filed separate similar petitions against the NTC.

Representatives from PLDT-Smart and Globe declined to comment, saying they have not received a copy of the ruling.