Appeals court junks ‘text’ refund


Bad news for mobile phone “texters.”

The Court of Appeals (CA) has junked the order of the National Telecommunications Commission (NTC) to telecom firms to refund their subscribers some P7 billion in excess short message service (SMS) or texting charges.

In a 25-page decision, the Former 6th Division of the CA set aside the orders issued by the NTC dated November 20, 2012 and May 7, 2014 lowering the prices of text messages.

The NTC had ruled that telecom firms Globe, Smart and Digitel violated NTC Memorandum Circular (MC) No. 02-10-2011, which ordered a reduction in the interconnection charge to 15 centavos per off-network SMS from 35 centavos out of the regular P1 charge per text message.

Regulators had estimated the refund at P7 billion, to be returned by way of prepaid load discounts or, in the case of postpaid subscribers, a deduction or refund.

The June 27, 2016 CA decision penned by Associate Justice Priscilla Baltazar-Padilla, with the concurrence of Associate Justices Noel Tijam and Agnes Reyes Carpio, ruled that the NTC’s order did not have legal basis and did not follow due process.

Reducing the interconnection charge did not mean the SMS rates were automatically reduced, it said.

“It is to be reiterated that while the issuance of the 2011 MC satisfied the requirement of due process insofar as the interconnection charge is concerned, this does not, however, apply to the lowering of the SMS retail rate,” the ruling pointed out.

The NTC is the main respondent to the case, with Bayan Muna party-list group as interveners as taxpayers and subscribers.

While the intention of the NTC was for the good of subscribers, fair play and justice must be observed, the court said.

“All told, to penalize the [telecom firms]for not lowering the SMS retail rate, something which the 2011 MC does not mandate, will be the height of injustice and unfairness.

Therefore, the questioned decisions and resolutions of the NTC should be struck down.

While they are welcome [to]many, the demands of justice and fair play should not be relegated to the background for the sake of popularity,” it said.

The appellate court also noted that “the NTC was not able to explain the need to make the SMS more affordable.”

“We find this essential because the NTC is invoking the power of regulation over telecommunications service which is deregulated. The record is also devoid of any evidence to show whether the present P1 per text is unreasonable and unjust to justify the NTC’s interference. Apparently, the NTC harps on the popular belief that anything that is lower is good,” it said.

Telecom firms had previously argued that it would be difficult to implement the refund because the identities of millions of prepaid subscribers are not known.


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