THE Court of Appeals (CA) has denied the appeal of the Philippine Competition Commission (PCC) to lift the writ of preliminary injunction it earlier issued enjoining the agency from reviewing the P70-billion buyout by PLDT and Globe of San Miguel Corp.’s (SMC) telecommunications assets.
Instead, the CA’s Special Twelfth Division, through a resolution penned by Associate Justice Ramon M. Bato Sr., issued a gag order directing the PCC to remove immediately from its web site its Preliminary Statement of Concern (PSOC), which contained an initial finding that the deal “is likely to substantially prevent, restrict and lessen competition” within the telco industry.
Likewise, the appellate court directed the PCC, PLDT and Globe to cease and desist from issuing public comments and statements that would violate the sub judice rule and subject them to indirect contempt of the court.
“Applying the sub judice rule, the PCC should immediately remove its PSOC posted on its web site and refrain from making comments on the subject acquisition while the case is pending in court,” the resolution read.
“Likewise, to be fair, PLDT should also refrain from making comments on the subject acquisition and desist from communicating their opinion to the public during the pendency of this case,” it added.
The gag order was issued upon the motion filed by PLDT, where it claimed that the publication of the PSOC violates Republic Act 10667, which considers confidential the deliberations and investigation conducted by the PCC.
Likewise, PLDT alleged that the PCC’s continuing communication with the media to drum up public sympathy violates the sub judice rule.
On August 26, 2016, the CA issued a writ of preliminary injunction against the PCC and its agents from conducting any investigation that would impair the rights of PLDT, Globe and SMC.
The injunction was issued in order not to affect the rights of the consumers and to protect the move to improve the Internet speed and connection nationwide.
In denying PCC’s motion for reconsideration of its August 26 resolution, the CA stood by its findings that the existence of all the requisites for the issuance of a writ of preliminary injunction has been established by PLDT and Globe.
The petitioners, according to the CA, were able to establish the existence of a clear positive right that needs judicial protection during the pendency of the main case.
They argued that the deal has been deemed approved by operation of law, since they have fully complied with the terms of the transitory circulars issued by the PCC. PLDT said its wireless subsidiary Smart has been implementing the transaction and using the frequencies as part of its nationwide rollout.
They warned that a reversal of the transaction will result in “irreparable and incalculable injury to the public service”.
“We agree with PLDT that there is an urgent and paramount necessity to enjoin the PCC from proceeding with the preacquisition review and/or investigation to prevent serious and irreparable damage to PLDT, whose credit standing is at risk and its ability to borrow funds to fully roll out the previously unused/idle 700-MHz spectrum may be jeopardized and unduly exposed it to violate the conditions imposed by NTC [National Telecommunications Commission] thereby impeding the three-year program of providing faster/reliable/affordable mobile data/Internet to the consuming public all over the country,” the CA pointed out.
The CA noted that the utilization of the previously unused 700 MHz by PLDT and Globe under a co-use agreement approved by the NTC will greatly benefit the public. The CA also branded as “misplaced” PCC’s contention that the issuance of the injunction effectively disposed of the case on the merits.
“We have to stress that the court’s determination of the existence of all the requisites for the issuance of a writ of preliminary injunction is interlocutory and preliminary in nature. The granting of a writ of preliminary injunction is an interlocutory order because it does not dispose of the main case,” the CA said.
It will be recalled that the PCC, in its letters dated June 7 and June 17, 2016, ordered the preacquisition review and investigation of the acquisition made by PLDT and Globe of all the issuing and outstanding shares and assets of Vega Telecom Inc., a subsidiary of SMC.
Both PLDT and Globe purchased on an equal sharing, or 50-50 basis, the entire issued and outstanding shares of stock of VTI.
The PCC letters issued against both PLDT and Globe was hailed to the CA seeking to stop the former with its orders.