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TRANSPORTATION: IV. OTHER MODES OF REGULATORY CONTROL,…

- - - - D. Take-over Power
        
        E. Privatization of State-Operated Public Utilities
        
        LEGISLATIVE REGULATION CANNOT, wo DUE PROCESS OF LAW:
        
        DEPRIVE OWNERS OF PROPERTY
        
        LIMIT/PRESCRIBE IRREVOCABLY VESTED RIGHTS OR PRIVILEGES
        LAWFULLY ACQUIRED
        UNDER A CHARTER/FRANCHISE
        Legislative regulation of public utilities must not have the effect of depriving an owner of his property without due process of law, nor of confiscating or appropriating private property without due process of law, nor of confiscating or appropriating private property without just compensation, nor of limiting or prescribing irrevocably vested rights or privileges lawfully acquired under a charter or franchise
        Kuwait Airways v. Philippine Airlines, G.R. No. 156087, May 8, 2009
        
        NEITHER MAY THE PRESIDENT AND HIS
        ALTER EGOS
        
        PRESIDENT MAY BE EMPOWERED BY LEGISLATION TAKE-OVER...
        
        PRIVATELY-OWNED PUBLIC UTILITY; AND
        
        PRIVATE BUSINESS AFFECTED WITH PUBLIC INTEREST
        The President, in the absence of a legislation, cannot exercise emergency powers, which includes the power to take over privately-owned public utility and private business affected with public interest under Art XII, Sec 17
        David v. Mcapagal-Arroyo, G.R. No. 171396, May 3, 2006
        
        TAKEOVER OF OPERATION,
        NO JUST COMPENSATION REQUIRED
        The temporary takeover by the government extends only to the operation of the business and not to the ownership thereof.
        As such the government is not required to compensate the private entity-owner of the said business as there is no transfer of ownership, whether permanent or temporary.
        The private entity-owner affected by the temporary takeover cannot, likewise, claim just compensation for the use of the said business and its properties as the temporary takeover by the government is in exercise of its police power and not of its power of eminent domain.
        (Agan v. Piatco, G.R. No. 155001, January 21, 2004)
        
        INCIDENTAL BENEFIT OF
        PRIVATE BUSINESS:
        EXPROPRIATION FOR ECONOMIC DEVELOPMENT VALID, EVEN IF ULTIMATELY BENEFITTING PRIVATE BUSINESS
        The most relevant development in the jurisprudence of that jurisdiction is Kelo v. City of New London and Berman v. Parker which upheld the expropriation of private property to pave the way for economic development, even when ultimately such development will benefit private business. Other jurisdictions have upheld expropriation of private property for redevelopment and subsequent transfer to private developers.
        More Electric v. Panay Electric, G.R. No. 248061, 15 September 2020
        
        EXPROPRIATE THEN TRANSFER TO
        PRIVATE DEVELOPERS IS VALID
        Other jurisdictions have upheld expropriation of private property for redevelopment and subsequent transfer to private developers.||| (MORE Electric and Power Corp. v. Panay Electric Co., Inc., G.R. Nos. 248061 & 249406, [September 15, 2020])
        
        LEGISLATION OF PUBLIC UTILITIES MUST NOT DEPRIVE OWNERS OF PROPERTY WITHOUT DUE PROCESS OF LAW
        BUT legislative regulation of public utilities must not have the effect of depriving an owner of his property without due process of law, nor of confiscating or appropriating private property without due process of law, nor of confiscating or appropriating private property without just compensation, nor of limiting or prescribing irrevocably vested rights or privileges lawfully acquired under a charter or franchise.
        (Kuwait Airways v. Philippine Airlines)
        
        TAKEOVER OF OPERATION IS NOT A TAKEOVER OF OWNERSHIP
        Takeover of operation is not a takeover of ownership, whether permanent or temporary.
        
        TAKEOVER IS POLICE POWER, NOT EMINENT DOMAIN
        It is an exercise of police power and not of eminent domain.
        
        EMERGENCY POWERS INCLUDES THESE POWERS
        
        POWER TO DECLARE STATE OF NATIONAL EMERGENCY IS NOT EMERGENCY POWERS
        Distinction must be drawn between the President's authority to declare "a state of national emergency" and the exercise emergency powers • Power to declare a state of national emergency: o Art VII, Sec 18 grants the President such power, hence, no legitimate constitutional objection can be raised o Under Art VI, Sec 23, there is no requirement for Congress to first authorize the President before he can declare a "state of national emergency"
      - ACCUMULATED 50 YEARS IS ALSO PROHIBITED (30, THEN EXTEND BY 50)*
        While TRB is vested by law with the power to extend the administrative franchise or authority that it granted, it cannot do so for an accumulated** period exceeding 50 years
        In this case, the MNTC STOA already has an original stipulated period of 30 years
        Clause 17.5 allows the extension of this period if necessary to fully repay the loans made by MNTC to the lenders If the maximum extension of 50 years is used, then the accumulated concession period would be 80 years. This is a clear violation of the constitution
        (Francisco vs. Toll Regulatory Board)
    - - DELEGATION: POWER TO GRANT FRANCHISE MAY ALSO BE DELEGATED
        Franchise includes not only authorizations directly from Congress in the form of statute, but also those granted by administrative agencies to which the power to grant franchise has been delegated by Congress
        (Francisco v. Toll Regulatory Board)
        
        FIXING OF INITIAL! TOLL RATES DOES NOT REQUIRE NOTICE AND HEARING
        Distinction between statutory prescription on the fixing of initial toll rates vs. periodic/interim or
        subsequent toll rates
        
        ADJUSTMENTS OR SUBSEQUENT! TOLL RATES REQUIRE NOTICE AND HEARING
        hearing required refers to notice and hearing for the approval or denial of petitions for toll rate adjustments or subsequent toll rates, NOT fixing of initial toll rates
        By express legal provision, the TRB is authorized to approve the initial toll rates without
        the necessity of a hearing.
        It’s only when there’s a challenge on the initial toll rates fixed that public hearings are required.
        
        NTC HAS POWER TO IMPOSE MUST-CARRY RULE (EXTENSION OF COVERAGE) AS PUBLIC SAFETY AND INTEREST REQUIRES
        The carriage of ABS-CBN's signals by virtue of the must-carry rule in Memorandum Circular No. 04-08-88 is under the direction and control of the government through the NTC which is vested with exclusive jurisdiction to supervise, regulate and control telecommunications and broadcast services/facilities in the Philippines. 26
        The imposition of the must-carry rule is within the NTC's power to promulgate rules and regulations, as public safety and interest may require, to encourage a larger and more effective use of communications, radio and television broadcasting facilities, and to maintain effective competition among private entities in these activities whenever the Commission finds it reasonably feasible.||| (ABS-CBN Broadcasting Corp. v. Philippine Multi-Media System, Inc., G.R. Nos. 175769-70, [January 19, 2009], 596 PHIL 283-314)
        
        RATIONALE: COMMON GOOD
        The policy of the Memorandum Circular is to carry improved signals in remote areas for the good of the general public and to promote dissemination of information. In line with this policy, it is clear that DTH television should be deemed covered by the Memorandum Circular. Notwithstanding the different technologies employed, both DTH and cable television have the ability to carry improved signals and promote dissemination of information because they operate and function in the same way.||| (ABS-CBN Broadcasting Corp. v. Philippine Multi-Media System, Inc., G.R. Nos. 175769-70, [January 19, 2009], 596 PHIL 283-314)
        
        ART. II, SECTION 9. The State shall promote a just and dynamic social order that will ensure the prosperity and independence of the nation and free the people from poverty through policies that provide adequate social services, promote full employment, a rising standard of living, and an improved quality of life for all.
        
        ART. II, SECTION 17. The State shall give priority to education, science and technology, arts, culture, and sports to foster patriotism and nationalism, accelerate social progress, and promote total human liberation and development.
        
        ART. II, SECTION 24. The State recognizes the vital role of communication and information in nation-building.
        
        COMMON GOOD JUSTIFIES AMENDMENTS
        Art. XII, §11 of the Constitution authorizes the amendment of franchises for "the common good."
        (Telecom v. Comelec)
        
        RIGHT OF VIEWERS & LISTENERS > BROADCASTERS
        "[I]t is the right of the viewers and listeners, not the right of the broadcasters, which is paramount." (The Court explained here why the deprivation of broadcasters of their airtime to give way for COMELECT Time without just compensation in the past did not violate Due Process)
        (Telecomm v. Comelec)
        
        RIGHT TO INFORMATION (ART. III, SEC. 7)
        Art. III, §7 of the Constitution provides that "the right of the people to information on matters of public concern shall be recognized,"
        
        PROMOTING DISTRIBUTIVE JUSTICE AND COMMON GOOD (ART. XII, SEC. 6)
        while Art. XII, §6 states that "the use of property bears a social function [and] the right to own, establish, and operate economic enterprises [is] subject to the duty of the State to promote distributive justice and to intervene when the common good so demands."
      - REGULATORY LAWS ON PUBLIC UTILITIES ARE RETROACTIVE
        statutes enacted for the regulation of public utilities, being a proper exercise by the State of its police power, are applicable not only to those public utilities coming into existence after its passage, but likewise to those already established and in operation . . ."||| (Radio Communications of the Philippines, Inc. v. NTC)
        
        SUBSEQUENT AMENDMENTS ARE RETROACTIVE
        Executive Order No. 546, being an implementing measure of P.D. No. 1 insofar as it amends the Public Service Law (CA No. 146, as amended) is applicable to the petitioner who must be bound by its provisions. The petitioner cannot install and operate radio telephone services on the basis of its legislative franchise alone.||| (Radio Communications of the Philippines, Inc. v. National Telecommunications Commission, G.R. No. L-68729, [May 29, 1987], 234 PHIL 443-452)
  - - - NO MONOPOLY IF PUBLIC UTILITY
        In a previous case, the Court has held that there is no such thing as a monopoly when a property is operated as a public utility under the rules and regulations of the Public Utility Commission and the terms and provision of the Public Utility Act
        Batangas Transport v. Ornales, 53 Phil 455 (1928)
        
        PROTECTION-OF-INVESTMENTS RULE IS NOT ABSOLUTE SINCE EXCLUSIVE RIGHT TO FRANCHISES AND CPC IS PROHIBITED
        
        The “protection-of-investments rule” is not absolute for nobody has exclusive right to secure a franchise or a certificate of public convenience.
        
        PSC ONLY HAS DUTY TO
        PROTECT PUBLIC UTILITY INVESTMENTS IF THE OPERATORS COMPLY WITH LAWS, RULES, AND REGULATIONS
        
        “The duty of the PSC to protect the investment of a public utility operator refers only to operators of good standing - those who comply with the laws, rules and regulations — and not to operators who are unconcerned with the public interest and whose investments have failed or deteriorated because of their own fault.”
        (Rizal Light v. Morong, GR L-20993, September 26, 1968)
        
        The Court pointed out that provisions for COMELEC Time have been made by amendment of the franchises of radio and television broadcast stations and, until the present case was brought, such provisions had not been thought of as taking property without just compensation.
        o Rule: Art. XII, §11 of the Constitution authorizes the amendment of franchises for "the common good."
        Right of the Public is Paramount as against the right of broadcasters
        o Application: What better measure can be conceived for the common good than one for free air time for the benefit not only of candidates but even more of the public, particularly the voters, so that they will be fully informed of the issues in an election? "It is the right of the viewers and listeners, not the right of the broadcasters, which is paramount."
        (Telecom v. COMELEC, G.R. No. 132922, 21 April 1998)
        
        P-O-I RULE = GRANT 2ND LICENSE
        IF OPERATOR HAS COMPLIED WITH LAWS, RULES, AND REGULATIONS
        “The Government having taken over the control and supervision of all public utilities, so long as an operator under a prior license complies with the terms and conditions of his license and reasonable rules and regulations for its operation and meets the reasonable demands of the public, it is the duty of the commission to protect rather than to destroy his investment by the granting of the second license to another person for the same thing over the same route of travel. The granting of such a license does not serve its convenience or promote the interests of the public.”
        
        POLICY OF REGULATION
        The policy of regulation is also the reason and the justification for holding that the regulation of an existing system of transportation, which is properly serving a given field, is to be preferred to competition among several independent systems
  - - - EQUITY PARTICIPATION OF PUBLIC UTILITIES
        The State shall encourage equity participation in public utilities by the general public.
        
        PARTICIPATION OF FOREIGNERS LIN GOVERNING BODY OF PUBLIC UTILITY SHALL BE LIMITED TO THEIR PROPORTIONATE SHARE IN CAPITAL
        The participation of foreign investors in the governing body of any public utility enterprise shall be limited to their proportionate share in its capital,
        
        ALL EXECUTIVE AND MANAGING OFFICERS OF SUCH CORPORATION/ASSOCIATION MUST BE PH CITIZENS
        and all the executive and managing officers of such corporation or association must be citizens of the Philippines.