G.R. No. 200224 - Globe Telecom, Inc. and Innove Communications, Inc. vs. National Telecommunications Commission et al.

Globe Telecom, Inc., Innove Communications, Inc., Connectivity Unlimited Resource Enterprises, Inc., Smart Communications, Inc., and Digitel Mobile Philippines, Inc. are major telecommunications companies in the Philippines.
The National Telecommunications Commission (NTC) is the government regulatory body overseeing telecommunications.
The case arose from disputes over NTC's authority to impose certain rates and regulations on Cellular Mobile Telephone Service (CMTS) providers.

On July 23, 2009, NTC issued Memorandum Circular No. 05-07-2009, prescribing a six-second-per-pulse unit of billing for mobile voice calls, replacing the then-prevailing one-minute-per-pulse scheme.
The MC allowed subscribers the option to be billed on a one-minute basis or subscribe to unlimited service offerings.
Telecommunications companies filed applications to adopt new rates pursuant to this MC.

On December 5, 2009, NTC issued Orders granting provisional authority for new rates but imposed the six-second pulse billing regime as the default.
Conditions included that the flag-down rate for the first two pulses should not exceed the prevailing rate and strict adherence to authorized rates.
Globe and Innove and Smart published advisories to their subscribers detailing new billing schemes.
On December 9, 2009, NTC issued Show Cause Orders and Cease and Desist Orders against the telecommunications companies for allegedly continuing to implement the old billing system.

The telecommunications companies filed petitions claiming that the NTC orders violated their rights, particularly due process and exceeded regulatory authority.
The Court of Appeals granted a temporary restraining order in February 2010 and a writ of preliminary injunction in May 2010, enjoining NTC from enforcing the December 5 and 9, 2009 Orders.
On December 28, 2010, the Court of Appeals reversed and set aside the NTC's orders, permanently enjoining enforcement pending new applications and processes with due regard to due process.

Multiple petitions for review were consolidated and elevated to the Supreme Court.
Issues arose on the extent of NTC's regulatory powers, the validity of the six-second-per-pulse billing scheme, the use of dialing prefixes, and procedural due process.

The telecommunications industry has transitioned from tight regulation to a policy of deregulation and promotion of free competition under Republic Act No. 7925.
Legislative franchises require service charges to be subject to the NTC's approval.
Technological changes and competition have introduced various pricing models, including unlimited call offerings.

Whether the NTC has the authority to impose rates on CMTS providers' services under Republic Act No. 7925.

Whether the imposition of the six-second-per-pulse billing scheme and the prohibition of prefix dialing for implementing the scheme is valid.

Whether the December 5, 2009 NTC Orders and December 9, 2009 Show Cause and Cease and Desist Orders are valid, particularly in terms of due process.