Lack of prior negotiation with existing telephone system operator does not render illegal operation of telephone system

In the case of Director of the Bureau of Telecommunications v. Aligaen, we emphasized the relevance of the latter portion of Section 79 (b) of Excutive Order No. 94 as providing a caveat to any initiative on the part of the government to operate and maintain a telephome system in an area where there is an existing franchise holder. In the said case of Aligaen, we foregrounded the need for BUTELCO to first enter into negotiation or arrangement with the operator or owner of the existing telephone system. We had stated, thus: "xxx The Bureau of Telecommunications may take steps to improve the telephone service in any locality in the Philippines, but in so doing it must first enter into negotiation or arrangement with the operator or owner of the existing telephone system. xxx When a private person or entity is granted a legislative franchise to operate a telephone system, or any public utility for that matter the government has the correlative obligation to afford the grantee of the franchise all the chances or opportunity to operate profitably, as long as public convenience is properly served rather than promote a competition with the grantee. xxx" This is not to say, however, that the lack of prior negotiation with the existing telephone system operator renders illegal the operation by BUTELCO of a telephone system. After all, the very provision in question phrases the prior negotiation requirement in less than mandatory terms. Section 79 (b) of Executive Order No. 94, Series of 1947 provides: "(b) To x x x negotiate for, operate and maintain wire-telephone or radio telecommunications service throughout the Philippines by utilizing such existing facilities in cities, towns, and provinces as may be found feasible and under such terms and conditions or arrangements with the present owners or operators thereof as may be agreed upon to the satisfaction of all concerned." The right of the prior operator under the aforecited provision is to be unfailingly and seriously considered in case it chooses to propose arrangements or such terms and conditions whereby BUTELCO is to coordinate its efforts to set up and operate a telephone system with the existing operator. BUTELCO, in that case, would be obligated to exercise good faith and exert optimal cooperative efforts so that it may save government some money and prevent competition by "utilizing existing facilities in cities, towns and provinces xxx [of] the present owners or operators," as mandated by Section 79(b) of Executive Order No. 94. [G.R. No. 64888. November 28, 1996]

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