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BATANGAS CATV v. CA

FACTS:

In the late 1940s, John Walson introduced the Community Antenna Television (CATV) system in Pennsylvania, which later reached the Philippines. Batangas CATV, Inc. filed a petition challenging the Court of Appeals' decision that allowed the local government unit (LGU) to regulate subscriber rates of CATV operators. The petitioner argued that the National Telecommunications Commission (NTC) had exclusive authority over CATV operations. The trial court ruled in favor of the petitioner, but the Court of Appeals reversed the decision, stating that the LGU had the power to regulate CATV operations based on the Local Government Code of 1983.

In another related case, the issue revolved around the LGU's authority to regulate CATV operators in Batangas City. Resolution No. 210 granted a CATV operator a permit to operate, subject to certain conditions. The LGU filed a complaint after the operator increased subscriber rates without approval. The LGU argued that it had the authority to regulate CATV operations, while the respondents believed that only the NTC could regulate CATV operations and that Resolution No. 210 was a contract that could not be amended by Executive Order No. 205.

The NTC has been granted regulatory power over the CATV industry through various presidential issuances. However, LGUs also possess general power to prescribe regulations under the Local Government Code. The respondents argued that the LGUs had the power to regulate CATV operations under the general welfare clause, and the Court of Appeals agreed, recognizing the LGUs' authority to enact ordinances and approve resolutions for the promotion of the general welfare.

ISSUES:

  1. Whether the Sangguniang Panlungsod has the power to regulate CATV operators under the general welfare clause.

  2. Whether Resolution No. 210 violates existing laws and the State's deregulation policy over the CATV industry.

  3. Whether the local government units (LGUs) have the power to regulate CATV operations.

  4. Whether R.A. No. 7160 repealed E.O. No. 205.

  5. Whether Executive Order No. 205 (E.O. No. 205) and Republic Act No. 7160 (R.A. No. 7160) are inconsistent with each other and whether E.O. No. 205 was impliedly repealed by R.A. No. 7160.

  6. Whether Resolution No. 210 violated the State's deregulation policy.

  7. Whether the local government units (LGUs) have the authority to regulate the increase of subscription rates of a cable television system.

  8. Whether Executive Order (E.O.) No. 205 violates the constitutional prohibition against impairment of contracts.

RULING:

  1. The Court held that the Sangguniang Panlungsod has the power to regulate CATV operators under the general welfare clause. However, they also ruled that Resolution No. 210 violates existing laws and the State's deregulation policy over the CATV industry.

  2. No, LGUs do not have the power to regulate CATV operations. The regulatory power over CATV operations is exclusively granted to the National Telecommunications Commission (NTC) by E.O. No. 205. Municipal ordinances in conflict with a state law of general character and statewide application, such as E.O. No. 205, are universally held to be invalid. Municipal ordinances are inferior and subordinate to state laws. The principle is that local councils exercise only delegated legislative powers conferred on them by Congress, and they cannot adopt ordinances that infringe the spirit of a state law or are repugnant to the general policy of the state.

  3. No, R.A. No. 7160 did not repeal E.O. No. 205. The repealing clause in R.A. No. 7160 did not include E.O. No. 205, and thus, it remains in effect.

  4. The Supreme Court held that E.O. No. 205 and R.A. No. 7160 are not inconsistent with each other. There is no explicit provision in R.A. No. 7160 that repeals or modifies E.O. No. 205. Implied repeals are not easily presumed and there must be a clear showing that the intent of the legislature in enacting the new law was to abrogate the old one. Since E.O. No. 436 issued by President Ramos vests the National Telecommunications Commission (NTC) with the power to regulate CATV operation and Memorandum Circular No. 8-9-95, the implementing rules and regulations of R.A. No. 7925, continuously recognize the NTC's regulatory power over CATV operation, it can be inferred that there is no intention to repeal E.O. No. 205. Thus, both laws are to be given effect and harmonized if possible.

  5. The Supreme Court found that Resolution No. 210 violated the State's deregulation policy. Deregulation is the reduction of government regulation to permit freer markets and competition. In the field of telecommunications, the State promotes deregulation to encourage private sectors to venture into this field and stimulate its growth and development. In this case, E.O. No. 436, which affirms the policy of professionalism and self-regulation among existing operators and minimal reasonable government regulations, as well as the NTC's mandate, supports the deregulation policy. Therefore, Resolution No. 210, which imposes government regulation on CATV operation, goes against the State's deregulation policy.

  6. The LGUs do not have the authority to regulate the increase of subscription rates of a cable television system. The power to authorize and regulate cable television systems has been withdrawn by President Marcos when he issued Presidential Decree (P.D.) No. 1512. Only those granted a Provisional Authority or Certificate of Authority by the National Telecommunications Commission (NTC) may operate a cable television system within a service area.

  7. E.O. No. 205 does not violate the constitutional prohibition against impairment of contracts. The protection of this constitutional provision does not extend to privileges, franchises, and grants given by a municipality in excess of its powers or ultra vires. Since there is no law specifically authorizing the LGUs to grant franchises to operate CATV systems, Resolution No. 210 of Batangas City Sangguniang Panlungsod granting a franchise to the petitioner is invalid.

PRINCIPLES:

  • LGUs may prescribe regulations under the general welfare clause to protect the lives, health, and property of their constituents and maintain peace and order.

  • CATV operations, like any other enterprise, may be regulated by LGUs.

  • The power of LGUs under the general welfare clause must conform to the will of its principal and must not violate existing laws or the policy of the State.

  • Where the state legislature has made provisions for the regulation of conduct, a municipality, under its general powers, cannot regulate the same conduct.

  • Municipal ordinances are inferior and subordinate to state laws.

  • Municipal ordinances in conflict with a state law of general character and statewide application are invalid.

  • Local government units exercise delegated legislative powers from Congress and cannot adopt ordinances that infringe the spirit of a state law.

  • Congress retains control over local government units, although in a significantly reduced degree compared to previous Constitutions.

  • The power to create still includes the power to destroy, and the power to grant still includes the power to withhold or recall.

  • The regulatory power over CATV operations is exclusively granted to the NTC.

  • Implied repeal is not easily presumed and there must be a clear showing of intent to abrogate a prior law.

  • When there is a conflict between two laws, the proper action is not to annul one and uphold the other, but to give effect to both by harmonizing them if possible.

  • The NTC has exclusive jurisdiction over matters affecting CATV operation, including fixing subscriber rates, while LGUs have the general power to regulate matters to promote the general welfare of their constituents.

  • The grant of regulatory power to the NTC is justified because the CATV industry is a technical field and the NTC, being a specialized agency, is in a better position to regulate it.

  • Deregulation is the reduction of government regulation to promote freer markets and competition.

  • Deregulation is a policy promoted by the State to encourage private sectors to venture in the field of telecommunications and stimulate its growth and development.

  • Municipal corporations are bodies politic and corporate, created as governmental agencies of the state. They do not possess power or sovereignty beyond what is vested in them by the State.

  • The devolution of powers to LGUs does not create an imperium in imperio or an independent political subdivision; LGUs are part of the whole and must follow national policies.