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Transpo - Week 4 - Prerogatives of Ownership and Operation - Coggle Diagram

- - - - D. Equality of Treatment
        
        Equality of Treatment in Telco Industry (RA 7925 S. 23) - Any advantage, favor, privilege, exemption, or immunity granted under existing franchises, or may hereafter be granted, shall ipso facto become part of previously granted telecommunications franchises and shall be accorded immediately and unconditionally to the grantees of such franchises:
        
        Qualification - Provided, however, That the foregoing shall neither apply to nor affect provisions of telecommunications franchises concerning territory covered by the franchise, the life span of the franchise, or the type of service authorized by the franchise.
        
        Scope of Equality of Treatment Clause (PLDT v. City of Davao) - Does not include the restoration/grant of in lieu of all taxes provisions. Instead, this refers to equal access clauses in interconnection agreements in order to promote gradual deregulation of the industry.
        
        Exemption - Refers to exemption from NTC regulations and requirements such as exemptions from securing permits every-time a telecommunications company imports equipment.
      - Prior-Operator Rule - So long an operator under a prior license complies with the terms and conditions of his license and reasonable rules and regulation for its operation and meets the reasonable demands of the public, duty of the PSC to protect, rather than destroy his investment by the granting of a subsequent license to another for the same thing over the same route of travel. Such second license does not serve its convenience or promote the interests of the public.
        
        WHAT IS THE PRIOR OPERATOR RULE? A first licensee or operator with a prior license should have more or less a vested and preferential right over a person who seeks to acquire another and a later license over the same route provided that the following are complied with:
        
        Keeps and performs with the terms and conditions of the
        license;
        
        Complies with the reasonable rules and regulations of the
        commission; and
        
        Meets the reasonable demands of the public.
        
        It refers to situations when competition results in prices that do not chronically or for extended periods of time cover costs of production, particularly fixed costs
        
        To secure adequate sustained service for the public at the least possible cost;
        
        To protect and conserve investments already made for this purpose; and
        
        To prevent ruinous competition
        
        PH Rabbit v. Gabatin - tempered the ruling in Batangas Transport Co.
        
        Rule: Nobody has a right over a franchise; grant must be guided by public service and interest
        
        Republic v. Retelco - right of prior operator not absolute; no mandatory provision of law
        
        So long as the first licensee (BTC) keeps and performs the conditions of its licenses, it should have a vested and preferential rights over another who seeks to acquire a license over the same route.
    - - Rate of Return (RP v. Meralco) - A judgment percentage, which if multiplied with the rate base, provides a fair return on the public utility for the use of its property for service to the public. Historically, SC has adopted a 12% rate of return.
      - Reasonable rate of return on investments and operating and maintenance cost (Ra 7718 Sec. 2o) - The rate of return that reflects the prevailing cost of capital in the domestic and international markets:
        
        Provided, That in case of negotiated contracts, such rate of return shall be determined by ICC of NEDA prior to the negotiation and/or call for proposals:
        
        Provided, further, That for negotiated contracts for public utility projects which are monopolies, the rate of return on rate base shall be determined by existing laws, which in no case shall exceed twelve per centum (12%)
        
        Republic v. Medina : Rate base, controlling standard is the present or market value. What is controlling are the circumstances, not the formula.
        
        Least-Cost Manner (NASECOR) - Method of determining the value of the capital is least cost to the consumer.
      - Rate Fixing - Unique to public utilities that the rates are fixed by the legislative or administrative agencies delegated. Rate-Fixing originates from public service act or specific laws such as EPIRA.
        
        Private Businesses - Private businesses, who generally have unlimited power subject to specific laws that limit the allowable rates.
  - - - Eminent Domain by Private Corporations (PNOC Alternative Fuels v. NGCP) - The right of eminent domain not being an inherent power for private corporations, whose right to expropriate is granted by mere legislative fiat, the delegate's exercise of the right of eminent domain is restrictively limited to the confines of the delegating law. The scope of this delegated legislative power is necessarily narrower than that of the delegating authority and may only be exercised in strict compliance with the terms of the delegating law.
        
        Distinguished from Takeover - Eminent domain may be delegated, but not takeover power. Delegation of takeover would be equivalent to grant of monopolistic franchise.
        
        Rationale of Delegation - Would require the utility to take partisan political sides, as eminent domain and therefore exercise of franchise contingent on the LGU/government authority exercising eminent domain.
        
        Take-Over Provisions (PANAY) - Singled out PANAY Electric to give up its existing facilities in favor of the new franchisee. Allowed equal protection clause violation allegations independent of political question defense. More privileges in favor of one public utility.
    - - Power to expropriate, granted to:
        
        Congress,
        
        Government Agencies
        
        Quasi-Public Entities
        
        Note that power of eminent domain is inherent.
      - Public Dominion v. Patrimonial Property - If patrimonial property, can be subject to expropriation.
        
        Limitations to Delegation of Expropriation (MORE ELECTRIC v. PANAY) - Subject to constitutional limitations + validity of the delegation of power.
        
        When the power of eminent domain is exercised by an agent of the State and by means of expropriation of real property, farther limitations are imposed by law, the rules of court and jurisprudence. In essence, these requirements are:
        
        A valid delegation to a public utility to exercise the power of eminent domain or pursue expropriation proceedings over a particular private property;
        
        An identified public use, purpose or welfare for which eminent domain or expropriation is exercised;
        
        Previous tender of a valid and definite offer to the owner of the property sought to be expropriated, but which offer is not accepted; and
        
        Payment of just compensation
        
        Constitutional Limitations -
        
        Due Process
        
        Just Compensation
        
        Public Purpose (MORE v. Panay Electric) - The expropriation of private property to pave the way for economic development, even when ultimately such development will benefit private business. This means that even eminent domain in favor of a private business is valid. Assailing this leans towards political question.
      - Questions:
        
        Can it be expropriated? (Is it private/patrimonial property?)
        
        Is the expropriation reasonable and necessary?