BUREAU OF TELECOMMUNICATIONS, PETITIONER-APPELLANT, VS. THE PUBLIC SERVICE COMMISSION AND THE PHILIPPINE LONG DISTANCE TELEPHONE COMPANY, RESPONDENTS-APPELLEES.

The Bureau of Telecommunications seeks the review of a decision
of the Public Service Commission, the dispositive part of which reads:

“IN VIEW OF THE FOREGOING, the said respondent is hereby
directed to submit to this Commission within thirty (30) days from receipt of
this decision, a copy of the schedule of rates it follows, in the operation of
its tele­phone services, local as well as long distance.  Upon receipt of this decision, the respondent
Bureau of Telecommunications is hereby en­joined from enforcing its present
rates on its long distance service and local telephone service, without the
approval of the PSC previously obtained, unless the said rates are identical to
the rates already authorized by the Commission to the complainant herein and
other parties in the same areas where they are presently op­erating.”

Respondent Philippine Long Distance Telephone Company is a public
utility corporation and the grantee of a legislative franchise to install,
maintain and operate telephone systems throughout the Philippines.  On February 18, 1965, the Com­pany filed,
with the Public Service Commission, a complaint, against the Bureau of
Telecommunications, alleging that the same had “been operating its
telephone services within the City of Manila and other areas in the
Philippines, without submitting” to the Commission, “for its
approval, the rates actually being charged by it” (the Bureau) for
“said telephone services” and that the Bureau had “inaugurated a
long distance service bet­ween the Cities of Iloilo, Bacolod,
Cebu, Davao, and
Manila,” charging therefor rates “very much
lower than those authorized” by the Commission for the Company, and
praying that the Bureau be required to show cause why no disciplinary action
should be taken against it for enforcing or charging rates unauthorized by the
Commission, and to submit for approval the schedule of rates of the Bureau in connection with its long distance services, and
that the Bureau be restrained from engaging in long distance service until such
time as the Commission shall have approved its schedule of rates, or, should
the Bureau be allowed to con­tinue rendering said long distance service, that
it be required “to adopt, charge and follow the rates schedule
authorized” for the Company.

In its answer, the Bureau contested the jurisdiction of the
Commission, upon the ground that it (the Bureau) is in op­eration, not for
general business purposes, but only to serve governmental needs, and alleged, inter
alia, that any income derived by the Bureau
from private sources is incidental to the performance of its governmental
functions, and that its aim is merely to fill the requirements of public
service which other public services can not fully meet.

After appropriate proceedings, the Commission rendered, on November 29, 1965, its
aforementioned decision in favor of the Company and against the Bureau.  A reconsideration of said decision having
been denied, the Bureau filed the present petition for review, with a prayer
that, during the pendency thereof, the execution of
the appealed decision be stayed.  Upon
the filing of said petition, We granted this temporary
relief.

The only question for our determination is whether or not the
Bureau is a “public service” as the term is used in the Public
Service Act, as amended by Republic Act No. 2677, Section 13(b) of which we quote:

“(b)  The term ‘public service’ includes every
person that now or hereafter may own, operate, manage, or control in the
Philippines, for hire or compensation, with general or limit­ed clientele, whether
permanent, occasional or accidental, and done for general business purposes,
any common carrier, railroad, x x x wire or wireless communications system, wire or
wireless broadcasting stations and other similar public services x x x.”^[1]

the authority of
the Commission being limited to the exercise of “jurisdiction, supervision, and
control over all public ser­vices” for section 13(a) of Republic Act No. 2677
reads:

“(a)  The Commission shall have jurisdiction,
supervision, and control over all public services and their franchises,
equipment, and other properties, and in the exercise of its authority, it shall
have the necessary powers and the aid of public force:  Provided, That public services owned or
operated by government entities or government-owned or controlled corporations
shall be regulated by the Commission in the same way as privately-owned public
services, but certificates of public convenience or certificates of public
convenience and necessity shall not be required of such entities or corporations:  And provided, further, That it shall have no
authority to re­quire steamboats, motorships and
steamship lines, whether privately-owned, or owned or operated by any
Government controlled cor­poration or instrumentality to obtain certifi­cate of
public convenience or to prescribe their definite routes or lines of
service.”

Caro vs. Rilloraza,^[2] described a “business” as
“the means by which a party habitually or regularly earns a liveli­hood
or some gain,” whereas, in Collector of Internal Revenue vs. Manila, Lodge,^[3] we declared that “the plain, ordinary
meaning of business is restricted to activities or affairs where profit is
the purpose, or livelihood is the motive.” Substantially to the same
effect is Collector of Internal Revenue vs. St. Paul‘s Hospital,^[4] in which it was held that business is
“that which occu­pies time, attention, and labor of men for the purpose
of liveli­hood or profit.”

There is no allegation in the complaint of the Company that the
Bureau is engaged in telephone operation, either for the purpose of gain or
profit, or as a means of livelihood.  In
fact, the Bureau is not even authorized to use its income, or any part thereof,
and its expenses are met through
annual appropriations made by Congress. 
Indeed, the Bureau has no corporate existence and it is admittedly
“discharging a governmental or State responsibility” or function,^[5]
which, as such, “is not business.”^[6]

Pursuant to Republic Act No. 51, otherwise known as the
Reorganization Act of 1947, the Bureau was created by Executive Order No. 94 of
the President, series of 1947, Section 81 of which transferred to the Bureau
“(a)ll the personnel, powers, functions,
activities, appropriations, properties, equipment, supplies, records and
documents pertaining to or intended for the
electrical communication service under the Bureau of Posts,” the duties
and functions of which, as well as those enumerated in said Executive Order No.
94, as pertaining specifically to the Bureau of Telecommunications,^[7] do not indicate or suggest that the latter
has been created for “general business purposes.” Indeed, its rates are
much lower than those of the Company and, although 20% to 30% of its telephone
subscribers are private subscribers, the services given thereto are merely
incidental to its governmental
function, to meet the telecommunication needs of the Government and the people.^[8]

WHEREFORE, it is our considered view that the Bureau
of Telecommunications is neither a “public service” nor engaged in
the operation of telephone services for “general business purposes,”
as the two (2) terms are used in the Public Service Act, and, hence, is not
subject to the jurisdiction of the Public Service Commission, and that the
appealed decision thereof should be, as it is hereby reversed, and the complaint
of the Philippine Long Distance Telephone Company dismissed, with costs against
the same.

IT IS SO ORDERED.

Reyes, J.B.L., Dizon, Makalintal, Zaldivar, Sanchez,
Castro, Fernando, and Teehankee, JJ., concur.

Barredo, J., did not take part.

^[1]
Underscoring ours.

^[2]
102 Phil. 61.

^[3]
105 Phil. 93.

^[4]
L-12127, May 25, 1959.

^[5]
Brief for the Company, pp. 18-19.

^[6]
Hazen v. National
Rifle Ass’n. of America,
101 Fed. 2d 432, 437-438.

^[7]
“SEC. 79.  The
Bureau of Telecommunications shall exercise the following powers and duties:

“(a) To operate and maintain existing wire-telegraph and
radio-telegraph offices, stations, and facilities, and those to be established
to restore the pre-war telecommunication service under the Bureau of Posts, as
well as such additional offices or stations as may hereafter be established to
provide telecommunication service in places requiring such service;

“(b) To investigate, consolidate, negotiate for, operate and
maintain wire-telephone or radio telephone communication 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;

“(c) To prescribe, subject to approval by the Department
Head, equitable rates of charges for messages handled by the system and/or for timecalls and other services that may be rendered by said
system;

“(d) To establish and maintain coastal stations to serve
ships at sea or aircrafts and, when public interest so requires, to engage in
the international telecommunication service in agreement with other countries
desiring to establish such service with the Republic of the Philippines; and

“(e) To abide by all existing rules or regulations
prescribed by the International Telecommunication Convention relative to the
accounting, disposition and exchange of messages handled in the international
service, and those that may hereafter be promulgated by said Convention and
adhered to by the Government of the Republic of the Philippines.”

^[8]
See Bureau of Printing vs. Bureau of
Printing Employees Association, L-15751, January 28, 1961.