Case Summary (G.R. No. 138810)
Background Facts
• In July 1986, the Batangas City Sangguniang Panlungsod enacted Resolution No. 210, granting Batangas CATV, Inc. authority to construct, install, and operate a community antenna television system, with a provision that any rate increases required prior approval of the Sangguniang Panlungsod.
• In November 1993, Batangas CATV raised its subscriber rates from ₱88 to ₱180 per month without securing municipal approval.
• The Mayor threatened to cancel the CATV permit unless the rate hike was ratified by the Sangguniang Panlungsod.
• Batangas CATV sought injunctive relief before the Regional Trial Court (RTC), which, in October 1995, enjoined the LGU from interfering with its rate setting and recognized the NTC as the sole regulator of CATV operations.
• The LGU appealed to the Court of Appeals, which in February 1999 reversed the RTC, holding that the Local Government Code empowered the Sangguniang Panlungsod to fix business rates under its general welfare clause.
• Batangas CATV filed a petition for review on certiorari before the Supreme Court, invoking the exclusive regulatory mandate of the NTC under Executive Order No. 205 and subsequent issuances.
Issue
Whether the power to fix or approve subscriber rates charged by cable television operators lies exclusively with the National Telecommunications Commission under national law and policy, or whether Batangas City, through its Sangguniang Panlungsod and Mayor, may exercise such power under the general welfare provisions of the Local Government Code.
Applicable Law
• 1987 Philippine Constitution – delineation of national police power and local autonomy, supremacy of national law, and prohibition against impairment of contracts (Art. III, Sec. 10).
• Executive Order No. 205 (1987) – vests in the NTC sole authority to grant certificates of authority to CATV operators and to regulate their operations.
• Executive Order No. 436 (1997) – reaffirms that regulation and supervision of the cable television industry “shall remain vested solely with the National Telecommunications Commission.”
• Republic Act No. 7160 (Local Government Code of 1991) – grants LGUs broad legislative powers under the general welfare clause (Sec. 16) and empowers city legislatures to regulate local businesses (Sec. 458), subject to consistency with national law.
Legal and Jurisprudential Analysis
Historical Centralization of CATV Regulation
- P.D. No. 1512 (1978) placed CATV under a national monopoly, terminating all local franchises and prescribing subscriber rates.
- E.O. 546 (1979) consolidated communications regulatory bodies into the NTC.
- E.O. 205 (1987) opened CATV operations to all qualified operators but left regulation entirely with the NTC.
- E.O. 436 (1997) confirmed the NTC’s exclusive regulatory mandate over CATV, including rate setting, certification, service areas, technical qualifications, frequency use, ownership limits, and adjudication of operational issues.
Scope of “Regulatory Power”
- “Regulatory power” entails fixing, establishing, or controlling rates; issuing certificates of authority; prescribing operational areas; and other technically specialized functions.
- Such power, when vested by national law in a specialized agency, excludes municipal bodies from exercising parallel regulatory authority on the same subject.
Local Government Code and the General Welfare Clause
- LGUs possess police power to enact ordinances for health, safety, comfort, convenience, and general welfare of their communities.
- This power permits regulation of local businesses crossing public ways (e.g., utilities using public streets), but always subject to consistency with national statutes or policies.
Subordination of Municipal Ordinances to National Law
- Municipal ordinances that conflict with a general state law are invalid. An LGU cannot occupy a regulatory field fully covered by national legislation.
- E.O. 205 and E.O. 436, emanating from the President’s legislative authority, carry the weight of statutes and demonstrate an unmistakable intent that CATV regulation—including rate fixing—be exclusively national.
- RA 7160 contains no express or implied repeal of E.O. 205; its repealing clause omits E.O. 205. Implied repeal is not favored where legislative intent is not “clear and manifest.”
State Deregulation Policy
- National telecommunications policy, as articulated in Memorandum Circular No. 4-08-88 and MC 06-2-81, treats CATV service rates as deregula
Case Syllabus (G.R. No. 138810)
Facts
- Origin of CATV traced to Pennsylvania appliance dealer John Walson in the late 1940s who erected a community antenna and distributed television signals via coaxial cables.
- CATV technology imported into the Philippines, spawning regulatory questions at the local and national levels.
- On July 28, 1986, the Batangas City Sangguniang Panlungsod enacted Resolution No. 210 granting Batangas CATV, Inc. a permit to construct, install, and operate a CATV system. Section 8 capped its subscriber rates and required Sangguniang Panlungsod approval for any future increase.
- In November 1993, petitioner unilaterally raised its monthly rates from ₱88.00 to ₱180.00.
- The Batangas City Mayor threatened to cancel the permit unless the rate increase was approved by the Sangguniang Panlungsod.
- Petitioner filed Civil Case No. 4254 for injunctive relief in the Regional Trial Court (RTC) Branch 7, Batangas City, alleging exclusive rate‐making power resided with the National Telecommunications Commission (NTC) under Executive Order No. 205.
Procedural History
- RTC Decision (October 29, 1995): Granted petitioner’s injunction, enjoined the Mayor and Sangguniang Panlungsod from interfering with its franchise or rate‐setting, and held only the NTC could regulate CATV rates.
- Court of Appeals Decision (February 12, 1999): Reversed the RTC, holding that under Batas Pambansa Blg. 337 (LGC 1983) and the general welfare clause, the Sangguniang Panlungsod had power to fix and regulate CATV rates.
- CA Resolution (May 26, 1999): Denied petitioner’s motion for reconsideration.
- Petitioner filed a petition for review on certiorari before the Supreme Court (G.R. No. 138810).
Issue
- May a local government unit, specifically the Batangas City Sangguniang Panlungsod or Mayor, regulate and fix the subscriber rates of C