Legally Speaking
By Atty. Anthony N. Parungao
In case the Office of the Mayor of a municipality or city requires the grant by its Sanggunian of a local or municipal franchise, or its renewal, before a cable operator - which already has a Certificate of Authority (CA) or a Provisional Authority (PA) - can do or continue doing business in the area, what should the latter do? Must a cable operator first secure the favorable endorsement of the Office of the Mayor in its service area when it applies for such a PA or CA with the National Telecommunications Commission (NTC)?
Ah, questions, questions. Fortunately, we need not look far for the answers.
The Supreme Court ruling in the case 'Batangas CATV, Inc. vs. Court of Appeals' (G.R. No. 1338810) promulgated on 29 September 2004, holds that local government units (LGUs) have absolutely no power or legal authority to grant franchises to cable operators.
There is no law specifically authorizing LGUs to grant franchises to operate cable television (CATV) systems. Such a power is reserved solely to the NTC.
Indeed, as correctly stated in this ruling:
Whatever authority LGUs had before, the same had been withdrawn when President Marcos issued P.D. No. 1512terminating all franchises, permits or certificates for the operation of CATV system previously granted by local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 a 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.
This decision has not been, in any way, reversed, revised, or modified.
On the contrary, this ruling was affirmed, and the foregoing declaration
quoted in full, by the High Tribunal on 14 February 2005 in Zoomzat,
Inc. vs. The People of the Philippines, et al.
(G.R. No. 135535).
In fact, the Department of Justice, through then Secretary Gonzales, had issued an opinion on 29 August 2007 that only the NTC has the power to grant permits authorizing the operation of cable-television (CATV) operators, in response to a query sent to Malacanang, on whether the NTC may require favorable endorsement from the local government units (LGUs) for the establishment of cable-TV system even if the operator had already obtained a franchise to operate in the said locality. Deputy Executive Secretary for Legal Affairs Manuel Gaite had also asked for the opinion of the DOJ if the NTC has legal basis to consider such favorable endorsement as condition precedent before the issuance of a Provisional Authority (PA) to operate the same in light of the said congressional franchise. Both queries were answered in the negative. This means that no such favorable LGU endorsement is now needed in applications for CA and/or PA with the NTC.
This should prove to be great news for PCTA members. So, the next time a representative of the local government in your area approaches you and requires a municipal or local franchise, or its extension (if one had already been issued), just get copies of these Supreme Court decisions and Department of Justice opinion and -very, very gently - shove them down his or her ignorant throat!
