From the get-go, the Americans, after arriving in Davao in 1900, launched the agenda to open roads for transport and the installation of telephone lines along the beachlines. For areas separated by riverways and ravines, the plan was to construct appropriate bridges to facilitate passage. The construction of passable roads later led to the introduction of wheeled vehicles.
Telephone lines, as communication links, were also installed for telegraph and cable wires. To connect the southwest part and the eastern seaboard of the district of Davao, the plan was to open telephone and telegraph lines from Davao on the north towards Cuabo, in Lupon, Davao Oriental, to Boston town at the extreme end of the district, and from Davao to the south, to as far as Makar, Gen. Santos City, through the dense forests.
When Maj. C.D. Cowles, commander of the U.S. 17th Infantry Regiment, reached Davao on September 30, 1901, he observed that 15 miles of telegraph lines in the south had been completed. Decades later, weather conditions and other elements eventually affected the poles that held the lines. By February 1906, The Far Eastern Review reported, the Santa Cruz telephone line was completed but only the stretch between Davao and Tagulaya was operational.
The Bureau of Public Works (BPW) reports from 1917 to 1931 say more about the projects. In 1917, over 400 telephone poles on the Davao-South line were replaced due to rotting and falling down, exclusive of the other 200 poles also needing similar attention. That year the Davao-North telephone line was finished. The following year, an additional 20 miles of lines were built on the Davao-North line that started at the Cuabo wireless station.
On November 27, 1931, Congress, under Act No. 3913, granted Davao Telephone Company a franchise to install, operate, and maintain a telephone system in the Province of Davao and its municipalities. Cyrus Hale McLean was the chairman of the Board. Four years later, it was purchased by the Philippine Long Distance Telephone Company (PLDT), which assured the installation of a radio-telephone station to give the city wired contact with the outside world.
Nearly three decades later, the Davao City Council passed Resolutions 664 and 2015 on August 7, 1963, and December 27, 1963, respectively, allowing the operation and maintenance of a city-wide telephone system, owned, maintained, and operated by Davao City. To put on track the mandate, the city, on February 26, 1964, entered into a contract with ITT Philippines, Inc. for the latter to install and deliver the telephone system in the amount of P3.587 million. The company was given until November 29, 1966, to deliver the agreed package.
The deal, however, was contested. PLDT, on June 23, 1964, filed a case for prohibition and mandamus against the city and the Public Service Commission (PSC), which approved the deal. The phone company enjoined the city from fulfilling its agreement with ITT Philippines, Inc. and asked the PSC to require the city to obtain a certificate of public convenience and necessity.
The PLDT, as petitioner, anchored its case on two issues, namely: (1) the city has no power to establish and operate a telephone system; and (2) the city has first to secure a PSC certificate of public convenience and necessity. It also applied for preliminary injunction twice but was denied.
In denying PLDT’s petition, the Supreme Court ruled that the city, as ‘a municipal corporation is not prevented from constructing and operating a competing plant’ and the city, under the Public Service Act, is exempted from the PSC certificate of public convenience and necessity, particularly citing Section 14(e) of the law which states: ‘Public service owned or operated by any instrumentality of the National Government or by any government-owned or controlled corporations, except with respect to the fixing of rates.’
