G.R. No.

138810

September 29, 2004

Batangas CATV v. CA
Facts:
Batangas City Sangguniang Panlungsod (R) enacted Resolution No. 210 granting Batangas
CATV (P) franchise to operate cable system in the city. Sec. 8 of the Resolution provides that P
is authorized to charge subscribers maximum rates but increase shall be subject to Rs review.
P then increased subscriber rates from P88.00 to P180.00 per month so R threatened it to get
approval from the latter.
P:
P filed with the RTC a petition for injunction alleging that R has no authority to regulate
subscriber rates charged by CATV operators because under E.O. No. 205, the NTC has sole
authority to regulate CATV in the Philippines. Also, the LGC extends to LGUs the general power
to perform any act that would benefit constituents but doesnt authorize them to regulate CATV
operation.
R:
R argues that Resolution was enacted pursuant to Sec. 177(c) & (d) of BP 337 (LGC of 1983)
which authorizes LGUs to regulate businesses and is in the nature of a contract between P & R.
Issue:
Whether R can regulate CATV franchise.
Ruling:
No. The resolution is an enactment of an LGU acting only as agent of the national legislature.
There is no law authorizing LGUs to grant franchises to operate CATV. Whatever authority the
LGUs had before, the same had been withdrawn when President Marcos issued P.D. No. 1512
terminating all franchises, permits or certificates for the operation of CATV system previously
granted by local governments. Today, pursuant to Section 3 of E.O. No. 436, only persons,
associations, partnerships, corporations or cooperatives granted a Provisional Authority or
Certificate of Authority by the NTC may install, operate and maintain a cable television system
or render cable television service within a service area. It is clear that in the absence of
constitutional or legislative authorization, municipalities have no power to grant franchises.

Consequently, the protection of the constitutional provision as to impairment of the obligation of

a contract does not extend to privileges, franchises and grants given by a municipality in excess
of its powers, or ultra vires.