G.R. No. 260434 - Now Telecom Company, Inc. vs. National Telecommunications Commission

On January 8, 2018, the Department of Information and Communications Technology (DICT) issued Memorandum Order No. 001, series of 2018, establishing policy guidelines to fast-track the entry of a New Major Player (NMP) in the Philippine telecommunications market pursuant to the directive of then President Duterte.
The memorandum required the NMP applicant to possess a valid congressional telecommunications franchise, not be affiliated with the dominant Globe or PLDT groups, and have binding commitments for investments, secured by performance bonds. The NMP would be assigned available radio frequency bands.
The National Telecommunications Commission (NTC) was tasked to promulgate the memorandum circular containing the Terms of Reference (TOR) for the selection and assignment of radio frequencies.
On April 6, 2018, Administrative Order No. 11, series of 2018, was issued creating an Oversight Committee to assist the NTC in formulating TORs and overseeing compliance.

Following public hearings, the NTC issued Memorandum Circular No. 09-09-2018 ("Subject Circular") on September 20, 2018, prescribing rules and regulations on the selection process for the NMP through a public, open, and competitive process.
Timelines were published: circular effective October 6, 2018; Invitation to Bid on October 7, 2018; issuance of selection documents on October 8, 2018; and submission and opening of bids on November 7, 2018.

On October 8, 2018, NOW Telecom Company, Inc. (NOW Telecom) filed a Complaint for Injunction with application for temporary restraining order (TRO) and writ of preliminary injunction (WPI) against the NTC to restrain implementation of specific provisions of the Subject Circular.
NOW Telecom challenged:

Section 6.2(j) requiring posting of Participation Security of PHP 700 million (0.5% of minimum capital and operational expenditure).
Section 11 requiring a Performance Security of 10% of the remaining capital and operational expenditure.
Section 8 imposing a non-refundable filing fee of PHP 10 million to appeal to the NTC En Banc.
Section 10.1 concerning submission of Business and Roll-out plans after NMP determination, argued as circumventing prohibition on variations in bids and contracts.
Section 3 relating to the assignment of radio frequencies, claiming NOW Telecom’s vested right as a franchise holder.

NOW Telecom sought to enjoin NTC from enforcing these provisions, arguing it has a clear legal right via its legislative and administrative franchise, that injunction is proper as the selection is not an infrastructure project covered by RA 8975’s prohibition on injunctions, and that there is extreme urgency due to the NTC timeline.

The RTC denied the TRO and required memoranda on the propriety of WPI.
In an Order dated November 5, 2018, the RTC denied NOW Telecom’s prayer for WPI, ruling that NOW Telecom has no clear or vested right over radio frequencies; a legislative franchise and license do not confer vested rights to specific frequencies.
The court found NOW Telecom had not met the financial qualifications for participation and its claimed rights were not clear or existing.

On November 7, 2018, NOW Telecom elevated the case to the CA via Petition for Certiorari with an urgent motion for ex-parte TRO or WPI.
The CA denied the petition, affirming the RTC’s denial of the injunctive relief, holding NOW Telecom failed to establish clear and unmistakable right or grave and irreparable injury as it was only a prospective bidder without actual rights over frequencies.
The CA underscored RA 8975’s explicit prohibition of injunctions against government contracts, except by the Supreme Court.
NOW Telecom’s motion for reconsideration was denied by the CA in a Resolution dated April 12, 2022.

NOW Telecom filed a Petition for Review on Certiorari before the Supreme Court.
During the pendency, Mindanao Islamic Telephone Company, Inc. (MISLATEL) was selected as the NMP and issued a Certificate of Public Convenience and Necessity (CPCN).
The Supreme Court conducted further review, including submissions from the NTC through the Office of the Solicitor General (OSG), which argued the prohibition on injunction under RA 8975 applies fully, NOW Telecom failed to prove requisites for injunctive relief, and the Circular was valid.

Whether the denial of NOW Telecom’s application for injunctive relief was proper.

Whether a legislative franchise confers a clear and demandable right to be assigned specific radio frequencies.

Whether the NTC's issuance and implementation of the Subject Circular can be enjoined by a lower court considering the provisions of Republic Act No. 8975.

Whether NOW Telecom established the requisites for the issuance of a writ of preliminary injunction.