Philippine Airlines, Inc. vs.

Civil Aeronautics Board (270 SCRA 538) power to regulate and control the operation of public services under reasonable
Facts:
Grand Air applied for a Certificate of Public Convenience and Necessity with the
Civil Aeronautics Board (CAB). The Chief Hearing Officer issued a notice of
hearing directing Grand Air to serve a copy of the application and notice to all
scheduled Philippine Domestic operators. Grand Air filed its compliance and
requested for a Temporary Operating Permit (TOP). PAL filed an opposition to the
application on the ground that the CAB had no jurisdiction to hear the application
until Grand Air first obtains a franchise to operate from Congress. The Chief
Hearing Officer denied the opposition and the CAB approved the issuance of the
TOP for a period of 3 months. The opposition for the TOP was likewise denied.
The CAB justified its assumption of jurisdiction over Grand Air’s application on the
basis of Republic Act 776 which gives it the specific power to issue any TOP or
Certificate of Public Convenience and Necessity.
Issue:
Whether or not the CAB can issue a Certificate of Public Convenience and
Necessity or TOP even though the prospective operator does not have a
legislative franchise?
rules and regulations, and as a general rule, courts will not interfere with the
exercise of that discretion when it is just and reasonable and founded upon a legal
right.
The Civil Aeronautics Board has the authority to issue a Certificate of Public
Convenience and Necessity, or Temporary Operating Permit to a domestic air
transport operator, who, though not possessing a legislative franchise, meets all
the other requirements prescribed by the law. Such requirements were
enumerated in Section 21 of R.A. 776. There is nothing in the law nor in the
Constitution, which indicates that a legislative franchise is an indispensable
requirement for an entity to operate as a domestic air transport operator. Although
Section 11 of Article XII recognizes Congress’ control over any franchise,
certificate or authority to operate a public utility, it does not mean Congress has
exclusive authority to issue the same. Franchises issued by Congress are not
required before each and every public utility may operate. In many instances,
Congress has seen it fit to delegate this function to government agencies,
particularly specialized in their respective areas of public service.

Held:
Yes, as mentioned by the CAB, it is duly authorized to do so under Republic Act
776 and a legislative franchise is not necessary before it may do so, since
Congress has delegated the authority to authorize the operation of domestic air
transport services to the CAB, an administrative agency. The delegation of such
authority is not without limits since Congress had set specific standard and
limitations on how such authority should be exercised.

Public convenience and necessity exists when the proposed facility will meet a
reasonable want of the public and supply a need which the existing facilities do not
adequately afford.

Thus, the Board should be allowed to continue hearing the application, since it has
jurisdiction over it provided that the applicant meets all the requirements of the law.

It is generally recognized that a franchise may be derived indirectly from the state
through a duly designated agency, and to this extent, the power to grant franchises
has frequently been delegated, even to agencies other than those of a legislative
nature. In pursuance of this, it has been held that privileges conferred by a grant
by local authorities as agents for the state constitute as much a legislative
franchise as though the grant had been made by an act of the Legislature. The
trend of modern legislation is to vest the Public Service Commissioner with the
Divinagracia v. Consolidated Broadcasting System (G.R. No. 162272) emanated from the Commission did retain the previous authority their predecessor
had exercised. No provision in the Public Service Act thus can be relied upon by
Facts: the petitioner to claim that the NTC has the authority to cancel CPCs or licenses.

Respondents Consolidated Broadcasting System, Inc. (CBS) and People’s

Broadcasting Service, Inc. (PBS) are radio networks both involved in the operation
of radio broadcasting services in the Philippines, they being the grantees of
legislative franchises. Following the enactment of these franchise laws, NTC
issued Provisional Authorities allowing them to install, operate and maintain
various AM and FM broadcast stations in various locations throughout the nation.
Petitioner Santiago C. Divinagracia, alleging
that he was a stockholder of respondent companies, filed two complaints with the
NTC alleging that despite the provisions of the law mandating the public offering of
at least 30% of the common stocks of Respondents, both entities had failed to
make such offering. Petitioner prayed for the cancellation of all the Provisional
Authorities or CPCs of Respondents. The NTC dismissed both complaints, positing
that although it had full jurisdiction to revoke or cancel a Provisional Authority or
CPC for violations or infractions of the terms and conditions, it refrained from
exercising the same.

Issue:

Whether or not NTC has the power to cancel Provisional Authorities and CPCs of
entities which Congress has issued franchises to operate?

Ruling: NO.

We earlier replicated the various functions of the NTC, as established by E.O. No.
546. One can readily notice that even as the NTC is vested with the power to issue
CPCs to broadcast stations, it is not expressly vested with the power to cancel
such CPCs, or otherwise empowered to prevent broadcast stations with duly
issued franchises and CPCs from operating radio or television stations.

Petitioner relies on the power granted to the Public Service Commission to revoke
CPCs or CPCNs under Section 16(m) of the Public Service Act. That argument
has been irrefragably refuted by Section 14 of the Public Service Act, and by
jurisprudence, most especially RCPI v. NTC. As earlier noted, at no time did radio
companies fall under the jurisdiction of the Public Service Commission as they
were expressly excluded from its mandate under Section 14. In addition, the Court
ruled in RCPI that since radio companies, including broadcast stations and
telegraphic agencies, were never under the jurisdiction of the Public Service
Commission except as to rate-fixing, that Commission’s authority to impose fines
did not carry over to the NTC even while the other regulatory agencies that
THE METROPOLITAN MANILA DEVELOPMENT AUTHORITY vs. VIRON
TRANSPORTATION CO., INC
Facts:
The present petition for review on certiorari, rooted in the traffic congestion
problem, questions the authority of the Metropolitan Manila Development Authority
(MMDA) to order the closure of provincial bus terminals along Epifanio de los
Santos Avenue (EDSA) and major thoroughfares of Metro Manila.
GMA declared Executive Order (E.O.) No. 179 operational, thereby creating the
MMDA in 2003. Due to traffic congestion, the MMDA recommended a plan to
“decongest traffic by eliminating the bus terminals now located along major Metro
Manila thoroughfares and providing more and convenient access to the mass
transport system.” The MMC gave a go signal for the project. Viron Transit, a bus
company assailed the move. They alleged that the MMDA didn’t have the power to
direct operators to abandon their terminals. In doing so they asked the court to
interpret the extent and scope of MMDA’s power under RA 7924. They also asked
if the MMDA law contravened the Public Service Act.
Another bus operator, Mencorp, prayed for a TRO for the implementation in a trial
court. In the Pre-Trial Order17 issued by the trial court, the issues were narrowed
down to whether 1) the MMDA’s power to regulate traffic in Metro Manila included
the power to direct provincial bus operators to abandon and close their duly
established and existing bus terminals in order to conduct business in a common
terminal; (2) the E.O. is consistent with the Public Service Act and the Constitution;
and (3) provincial bus operators would be deprived of their real properties without
due process of law should they be required to use the common bus terminals. The
trial court sustained the constitutionality.
Both bus lines filed for a MFR in the trial court. It, on September 8, 2005, reversed
its Decision, this time holding that the E.O. was "an unreasonable exercise of
police power"; that the authority of the MMDA under Section (5)(e) of R.A. No.
7924 does not include the power to order the closure of Viron’s and Mencorp’s
existing bus terminals; and that the E.O. is inconsistent with the provisions of the
Public Service Act.
MMDA filed a petition in the Supreme Court. Petitioners contend that there is no
justiciable controversy in the cases for declaratory relief as nothing in the body of
the E.O. mentions or orders the closure and elimination of bus terminals along the
major thoroughfares of Metro Manila. To them, Viron and Mencorp failed to
produce any letter or communication from the Executive Department apprising
them of an immediate plan to close down their bus terminals.
And petitioners maintain that the E.O. is only an administrative directive to
government agencies to coordinate with the MMDA and to make available for use
government property along EDSA and South Expressway corridors. They add that
the only relation created by the E.O. is that between the Chief Executive and the
implementing officials, but not between third persons.
Issues:
1. Is there a justiciable controversy?
2. Is the elimination of bus terminals unconstitutional?
Held: Yes to both. Petition dismissed.
Ratio:
1. Requisites: (a) there must be a justiciable controversy; (b) the controversy must
be between persons whose interests are adverse; (c) the party seeking declaratory
relief must have a legal interest in the controversy; and (d) the issue invoked must
be ripe for judicial determination
It cannot be gainsaid that the E.O. would have an adverse effect on respondents.
The closure of their bus terminals would mean, among other things, the loss of
income from the operation and/or rentals of stalls thereat. Precisely, respondents
claim a deprivation of their constitutional right to property without due process of
law.
Respondents have thus amply demonstrated a "personal and substantial interest
in the case such that [they have] sustained, or will sustain, direct injury as a result
of [the E.O.’s] enforcement." Consequently, the established rule that the
constitutionality of a law or administrative issuance can be challenged by one who
will sustain a direct injury as a result of its enforcement has been satisfied by
respondents.
2. Under E.O. 125 A, the DOTC was given the objective of guiding government
and private investment in the development of the country’s intermodal
transportation and communications systems. It was also tasked to administer all
laws, rules and regulations in the field of transportation and communications.
It bears stressing that under the provisions of E.O. No. 125, as amended, it is the
DOTC, and not the MMDA, which is authorized to establish and implement a
project such as the one subject of the cases at bar. Thus, the President, although
authorized to establish or cause the implementation of the Project, must exercise
the authority through the instrumentality of the DOTC which, by law, is the primary
implementing and administrative entity in the promotion, development and
regulation of networks of transportation, and the one so authorized to establish and
implement a project such as the Project in question.
By designating the MMDA as the implementing agency of the Project, the
President clearly overstepped the limits of the authority conferred by law, rendering
E.O. No. 179 ultra vires. There was no grant of authority to MMDA. It was
delegated only to set the policies concerning traffic in Metro Manila, and shall
coordinate and regulate the implementation of all programs and projects
concerning traffic management, specifically pertaining to enforcement, engineering
and education.
In light of the administrative nature of its powers and functions, the MMDA is
devoid of authority to implement the Project as envisioned by the E.O; hence, it
could not have been validly designated by the President to undertake the Project.
MMDA’s move didn’t satisfy police power requirements such as that (1) the interest
of the public generally, as distinguished from that of a particular class, requires its
exercise; and (2) the means employed are reasonably necessary for the
accomplishment of the purpose and not unduly oppressive upon individuals.
Stated differently, the police power legislation must be firmly grounded on public
interest and welfare and a reasonable relation must exist between the purposes
and the means.
reasonably necessary to solve the traffic problem, this Court has not been
enlightened
In the subject ordinances, however, the scope of the proscription against the
maintenance of terminals is so broad that even entities which might be able to
provide facilities better than the franchised terminal are barred from operating at
all.
Finally, an order for the closure of respondents’ terminals is not in line with the
provisions of the Public Service Act.
Consonant with such grant of authority, the PSC (now the ltfrb) was empowered to
"impose such conditions as to construction, equipment, maintenance, service, or
operation as the public interests and convenience may reasonably require" in
approving any franchise or privilege. The law mandates the ltfrb to require any
public service to establish, construct, maintain, and operate any reasonable
extension of its existing facilities.

As early as Calalang v. Williams, this Court recognized that traffic congestion is a

public, not merely a private, concern. The Court therein held that public welfare
underlies the contested statute authorizing the Director of Public Works to
promulgate rules and regulations to regulate and control traffic on national roads.

Likewise, in Luque v. Villegas,46 this Court emphasized that public welfare lies at
the bottom of any regulatory measure designed "to relieve congestion of traffic,
which is, to say the least, a menace to public safety." As such, measures
calculated to promote the safety and convenience of the people using the
thoroughfares by the regulation of vehicular traffic present a proper subject for the
exercise of police power.

Notably, the parties herein concede that traffic congestion is a public concern that
needs to be addressed immediately. Are the means employed appropriate and
reasonably necessary for the accomplishment of the purpose. Are they not duly
oppressive?

De la Cruz v. Paras- Bus terminals per se do not, however, impede or help impede
the flow of traffic. How the outright proscription against the existence of all
terminals, apart from that franchised to petitioner, can be considered as
PILIPINO TELEPHONE CORPORATION v. NATIONAL
TELECOMMUNICATIONS COMMISSION, GR No. 138295, 2003-08-28
Facts:
National Telecommunications Commission ("NTC") issued PILTEL a Provisional
Authority ("PA") to install, operate and maintain telephone exchanges and public
calling offices. The areas covered by PILTEL's PA included Sulu, Zamboanga del
Norte, Zamboanga del Sur, Tawi-Tawi, Misamis Occidental, Davao del Sur, South
Cotabato, Saranggani and Davao City... while PILTEL's PA was still valid and
subsisting, the International Communications Corporation ("ICC") applied with the
NTC for a PA to construct, operate and maintain local exchange services in some
of the areas covered by PILTEL's PA.
PILTEL filed its Opposition to ICC's PA application.
NTC issued an Order ("NTC Order") granting ICC a PA to establish local exchange
services in areas that included Misamis Occidental, Zamboanga del Sur, Davao
del Sur, South Cotabato and Saranggani.
PILTEL filed a petition for certiorari with prayer for the issuance of a temporary
restraining order or writ of preliminary injunction with the Court of Appeals... the
Court of Appeals issued a Joint Decision... for finding no grave abuse of discretion,
tantamount to lack xxx or excess of jurisdiction, on the part of the National
Telecommunications Commission in issuing its challenged Order dated March 9,
1998 in NTC Case No. 96-194 which granted a provisional... authority to
International Communications Corporation,... PILTEL claimed that the NTC acted
with grave abuse of discretion amounting to lack of jurisdiction in granting ICC a
PA to operate local exchange service in areas previously assigned to PILTEL.
PILTEL also claimed that the NTC Order is tantamount to an unwarranted taking of
property without due process of law and violates the equal protection... clause of
the Constitution. Lastly, PILTEL alleged that the implementation of the NTC Order
would foster ruinous competition.
Issues:
THE NATIONAL TELECOMMUNICATIONS COMMISSION ACTED WITH GRAVE
ABUSE OF DISCRETION AMOUNTING TO LACK OR EXCESS OF
JURISDICTION CONSIDERING THAT:
THE GRANT OF THE PROVISIONAL AUTHORITY TO ICC TO OPERATE
LOCAL EXCHANGE SERVICE IN AREAS PREVIOUSLY ASSIGNED TO PILTEL
UNDER ITS OWN PROVISIONAL AUTHORITY IS VIOLATIVE OF NTC
MEMORANDUM CIRCULAR NO. 11-9-93.
THE GRANT OF THE PROVISIONAL AUTHORITY TO ICC TO OPERATE
LOCAL EXCHANGE SERVICE IN AREAS PREVIOUSLY ASSIGNED TO PILTEL
IS TANTAMOUNT TO CONFISCATION OF PROPERTY WITHOUT DUE
PROCESS OF LAW.
THE GRANT OF THE PROVISIONAL AUTHORITY TO ICC TO OPERATE
LOCAL EXCHANGE SERVICE IN AREAS PREVIOUSLY ASSIGNED TO PILTEL
WOULD VIOLATE THE LATTER'S RIGHTS AS A PRIOR OPERATOR AND ITS
RIGHT TO BE PROTECTED IN ITS INVESTMENT.[8]
Ruling:
Assuming that PILTEL's petition for certiorari was proper, PILTEL nevertheless
miserably failed to show that the NTC gravely abused its discretion amounting to
lack or excess of jurisdiction in issuing the NTC Order. The NTC is the regulatory
agency of the national government... with jurisdiction over all telecommunications
entities. [19] The law expressly vests in the NTC the power and discretion to grant
a provisional permit or authority.[20] In this case, the NTC did not commit grave
abuse of discretion... when it issued the questioned Order. The NTC Order
explicitly provides for the basis of the issuance of the PA, as follows:
The Commission has noted that the present application received favorable
endorsements/resolutions from twenty-three (23) Local Government Units (LGU)
and non-Government Organizations (NGOs) in the Visayas and Mindanao Regions
manifesting support for the applicant's proposed... projects.
In determining the service areas to be assigned to herein applicant with a view to
rationalizing the distribution thereof to qualified applicants, the Commission took
into consideration the other pending applications for LEC services, the existing
number of authorized LEC... applicants, the need to provide LEC service to all
areas of the country the soonest time possible, as well as the fact that earlier on,
this Commission had occasion to commend in another case herein applicant ICC
for being the first to have completed, nay exceeded, its... compliance with its
commitments under Executive Order 109 and NTC Memorandum Circular No. 11-
9-93.
Section 23 of EO 109 does not categorically state that the issuance of a PA is
exclusive to any telecommunications company. Neither Congress nor the NTC can
grant an exclusive "franchise, certificate, of any other form of authorization" to
operate a public utility. In Republic v. Express Telecommunications Co.,[25] the
Court held that "the Constitution is quite emphatic that the operation of a public
utility shall not be exclusive."[26] Section 11, Article XII of the
Constitution provides:
Thus, in Radio Communications of the Philippines, Inc. v. National
Telecommunications Commission,[28] the Court ruled that the "Constitution
mandates that a franchise cannot be exclusive in nature."
Even PILTEL's franchise, Republic Act No. 6030 ("RA 6030"), expressly declares
that PILTEL's right to provide telecommunications services is not exclusive.
Section 13 of RA 6030 states:
SECTION 13. The rights herein granted shall not be exclusive, and the right and
power to grant to any corporation, association or person other than the grantee
franchise for the telephone or electrical transmission of messages and signals
shall not be... impaired or affected by the granting of this franchise: xxx."
(Emphasis supplied)
Moreover, Section 1 of RA 6030[29] expressly states that the grant of a franchise
to PITEL is "[s]ubject to the conditions established xxx in the Constitution."
Consequently, PILTEL does not enjoy any exclusive right to operate
telecommunications services... in the areas covered by its PA.
Obviously, "the need for a healthy competitive environment in telecommunications
is sufficient impetus for the NTC to consider all those applicants, who are willing to
offer competition, develop the market and provide the environment necessary for
greater public... service."
PILTEL's contention that the NTC Order amounts to a confiscation of property
without due process of law is untenable. "Confiscation" means the seizure of
private property by the government without compensation to the owner.[33] A
franchise to operate a... public utility is not an exclusive private property of the
franchisee. Under the Constitution, no franchisee can demand or acquire
exclusivity in the operation of a public utility. Thus, a franchisee of a public utility
cannot complain of seizure or taking of property because of... the issuance of
another franchise to a competitor. Every franchise, certificate or authority to
operate a public utility is, by constitutional mandate, non-exclusive. PILTEL cannot
complain of a taking of an exclusive right that it does not own and which no
franchisee can ever... own.
Likewise, PILTEL's argument that the NTC Order violates PILTEL's rights as a
prior operator has no merit. The Court resolved a similar question in Republic v.
Republic Telephone Company, Inc.[34] In striking down Retelco's claim that it...
had a right to be protected in its investment as a franchise-holder and prior
operator of a telephone service in Malolos, Bulacan, the Court held:
There is no clear showing by RETELCO, however, that its franchises are of an
exclusive... character. xxx At any rate, it may very well be pointed out as well that
neither did the franchise of PLDT at the time of the controversy confer exclusive
rights upon PLDT in the operation of a telephone system. In fact, we have made it
a matter of judicial notice that all... legislative franchises for the operation of a
telephone system contain the following provision:
"It is expressly provided that in the event the Philippine Government should desire
to maintain and operate for itself the system and enterprise herein authorized, the
grantee shall surrender his franchise and will turn over to the Government said
system and all... serviceable equipment therein, at cost, less reasonable
depreciation."
Principles:
In Benito v. Commission on Elections,[18] the Court defined grave abuse of
discretion as follows:
Grave abuse of discretion means such capricious and whimsical exercise of
judgment as is equivalent to lack of jurisdiction, or, in other words where the power
is exercised in an arbitrary or despotic manner by reason of passion or personal
hostility,... and it must be so patent and gross as to amount to an evasion of
positive duty or to a virtual refusal to perform the duty enjoined or to act at all in
contemplation of law. It is not sufficient that a tribunal, in the exercise of its power,
abused its discretion, such abuse... must be grave. (Emphasis supplied)
PILTEL contends that the NTC violated Section 23 of NTC Memorandum Circular
No. 11-9-93, otherwise known as the "Implementing Guidelines on the Provisions
of EO 109," which states:
Section 23. No other company or entity shall be authorized to provide local
exchange service in areas where the LECs comply with the relevant provisions of
NTC MC No. 10-17-90 and NTC MC No. 10-16-90 and that the local exchange
service area is not... underserved. (Emphasis supplied)
Among the declared national policies in Republic Act No. 7925, otherwise known
as the "Public Telecommunications Policy Act of the Philippines," is the healthy
competition among telecommunications carriers, to wit:[30]
A healthy competitive environment shall be fostered, one in which
telecommunications carriers are free to make business decisions and to interact
with one another in providing telecommunications services, with the end in view of
encouraging their financial viability... while maintaining affordable rates.
KMU VS GARCIA
FACTS
Then Secretary of DOTC, Oscar M. Orbos, issued Memorandum Circular No. 90-
395 to then LTFRB Chairman, Remedios A.S. Fernando allowing provincial bus
operators to charge passengers rates within a range of 15% above and 15% below
the LTFRB official rate for a period of one (1) year.
This range was later increased by LTFRB thru a Memorandum Circular No. 92-009
providing, among others, that "The existing authorized fare range system of plus or
minus 15 per cent for provincial buses and jeepneys shall be widened to 20% and
-25% limit in 1994 with the authorized fare to be replaced by an indicative or
reference rate as the basis for the expanded fare range."
Sometime in March, 1994, private respondent PBOAP, availing itself of the
deregulation policy of the DOTC allowing provincial bus operators to collect plus
20% and minus 25% of the prescribed fare without first having filed a petition for
the purpose and without the benefit of a public hearing, announced a fare increase
of twenty (20%) percent of the existing fares. On March 16, 1994, petitioner KMU
filed a petition before the LTFRB opposing the upward adjustment of bus fares,
which the LTFRB dismissed for lack of merit.
ISSUE:
Whether or not administrative issuances and orders of the LTFRB and DOT giving
public utilities the power to determine rate fare is valid and constitutional
RULING:
No.
The Legislature delegated to the defunct Public Service Commission the power of
fixing the rates of public services. Respondent LTFRB, the existing regulatory body
today, is likewise vested with the same under Executive Order No. 202 dated June
19, 1987. Section 5(c) of the said executive order authorizes LTFRB “to determine,
prescribe, approve and periodically review and adjust, reasonable fares, rates and
other related charges, relative to the operation of public land transportation
services provided by motorized vehicles.”
Such delegation of legislative power to an administrative agency is permitted in
order to adapt to the increasing complexity of modern life. With this authority, an
administrative body and in this case, the LTFRB, may implement broad policies
laid down in a statute by “filling in” the details which the Legislature may neither
have time or competence to provide. However, nowhere under the aforesaid
provisions of law are the regulatory bodies, the PSC and LTFRB alike, authorized
to delegate that power to a common carrier, a transport operator, or other public
service.
In the case at bench, the authority given by the LTFRB to the provincial bus
operators to set a fare range over and above the authorized existing fare, is illegal
and invalid as it is tantamount to an undue delegation of legislative authority.
Potestas delegata non delegari potest. What has been delegated cannot be
delegated. This doctrine is based on the ethical principle that such a delegated
power constitutes not only a right but a duty to be performed by the delegate
through the instrumentality of his own judgment and not through the intervening
mind of another. A further delegation of such power would indeed constitute a
negation of the duty in violation of the trust reposed in the delegate mandated to
discharge it directly. The policy of allowing the provincial bus operators to change
and increase their fares at will would result not only to a chaotic situation but to an
anarchic state of affairs. This would leave the riding public at the mercy of
transport operators who may increase fares every hour, every day, every month or
every year, whenever it pleases them or whenever they deem it “necessary” to do
so.
Moreover, rate making or rate fixing is not an easy task. It is a delicate and
sensitive government function that requires dexterity of judgment and sound
discretion with the settled goal of arriving at a just and reasonable rate acceptable
to both the public utility and the public. Several factors, in fact, have to be taken
into consideration before a balance could be achieved. A rate should not be
confiscatory as would place an operator in a situation where he will continue to
operate at a loss. Hence, the rate should enable public utilities to generate
revenues sufficient to cover operational costs and provide reasonable return on the
investments. On the other hand, a rate which is too high becomes discriminatory. It
is contrary to public interest. A rate, therefore, must be reasonable and fair and
must be affordable to the end user who will utilize the services.
Given the complexity of the nature of the function of rate-fixing and its far-reaching
effects on millions of commuters, government must not relinquish this important
function in favor of those who would benefit and profit from the industry. Neither
should the requisite notice and hearing be done away with. The people,
represented by reputable oppositors, deserve to be given full opportunity to be
heard in their opposition to any fare increase.
BATANGAS CATV, INC. vs. THE COURT OF APPEALS, THE BATANGAS
CITY SANGGUNIANG PANLUNGSOD and BATANGAS CITY MAYOR [G.R. No.
138810. September 29, 2004]
FACTS:
On July 28, 1986, respondent Sangguniang Panlungsod enacted Resolution No.
210 granting petitioner a permit to construct, install, and operate a CATV system in
Batangas City. Section 8 of the Resolution provides that petitioner is authorized to
charge its subscribers the maximum rates specified therein, “provided, however,
that any increase of rates shall be subject to the approval of the Sangguniang
Panlungsod.
Sometime in November 1993, petitioner increased its subscriber rates from P88.00
to P180.00 per month. As a result, respondent Mayor wrote petitioner a letter
threatening to cancel its permit unless it secures the approval of respondent
Sangguniang Panlungsod, pursuant to Resolution No. 210.
Petitioner then filed with the RTC, Branch 7, Batangas City, a petition for injunction
alleging that respondent Sangguniang Panlungsod has no authority to regulate the
subscriber rates charged by CATV operators because under Executive Order No.
205, the National Telecommunications Commission (NTC) has the sole authority to
regulate the CATV operation in the Philippines.
of public streets, rights of ways, the founding of structures, and the parceling of
large regions – allow an LGU a certain degree of regulation over CATV operators.
xxx
But, while we recognize the LGUs’ power under the general welfare clause, we
cannot sustain Resolution No. 210. We are convinced that respondents strayed
from the well-recognized limits of its power. The flaws in Resolution No. 210 are:
(1) it violates the mandate of existing laws and (2) it violates the State’s
deregulation policy over the CATV industry.
LGUs must recognize that technical matters concerning CATV operation are within
the exclusive regulatory power of the NTC.
In order for an ordinance to be valid in substance, it (1) must not contravene the
Constitution or any statute; (2) must not be unfair or oppressive; (3) must not be
partial or discriminatory; (4) must not prohibit, but may regulate trade; (5) must be
general and consistent with public policy; and (6) must not be unreasonable

ISSUE:
May a local government unit (LGU) regulate the subscriber rates charged by CATV
operators within its territorial jurisdiction?

HELD:
No.

xxx

The logical conclusion, therefore, is that in light of the above laws and E.O. No.
436, the NTC exercises regulatory power over CATV operators to the exclusion of
other bodies.

xxx

Like any other enterprise, CATV operation maybe regulated by LGUs under the
general welfare clause. This is primarily because the CATV system commits the
indiscretion of crossing public properties. (It uses public properties in order to
reach subscribers.) The physical realities of constructing CATV system – the use
GMA Network, Inc. vs. ABS-CBN, et al.
G.R. No. 160703
September 23, 2005
Facts:
Petitioner GMA Network, Inc. (GMA') filed on May 6, 2003 before the Regional
Trial Court of Quezon City a complaint for damages against respondents ABS-
CBN Broadcasting Corporation (ABS-CBN'), Central CATV, Inc. (SkyCable'),
Philippine Home Cable Holdings, Inc. (Home Cable') and Pilipino Cable
Corporation (Sun Cable').
In its complaint, GMA alleged that respondents engaged in unfair competition
when the cable companies arbitrarily re-channeled petitioner's cable television
broadcast on February 1, 2003, in order to arrest and destroy its upswing
performance in the television industry.
GMA argued that respondents were able to perpetrate such unfair business
practice through a common ownership and interlocking businesses. SkyCable and
Sun Cable are wholly-owned subsidiaries of Sky Vision Corporation (Sky Vision')
which is allegedly controlled by Lopez, Inc. On the other hand, Home Cable is a
wholly-owned subsidiary of Unilink Communications Corporation (Unilink'), which
is owned by Mediaquest Holdings, Inc., a company controlled by the Pension Trust
Fund of the PLDT Employees (PLDT Group').
Pursuant to a Master Consolidation Agreement, the ownership, rights and interests
in Sky Vision and Unilink were purportedly placed under a holding company known
as 'Beyond Cable', 66.5 % of which is owned by the Benpres Group, composed of
Lopez Inc., Benpres Holdings and ABS-CBN, while 33.5% thereof is owned by the
PLDT Group. As a result of this business combination, respondents have cornered
at least 71% of the total cable television market in Mega Manila. They are thus
able to dictate the signal transmission, channel position, and the airing of shows,
programs, and broadcast of non-cable companies like ABS-CBN and GMA, which
the law requires them to carry.
GMA alleged that the re-channeling of its cable television broadcast resulted in
damage to its business operations.
Issues:
(a) Should the complaint be adjudicated under the jurisdiction of the trial court or
the NTC?
(b) Is GMA entitled to an award of damages, it would have to initially ascertain
whether there was arbitrary re-channeling which distorted and downgraded GMA's
signal?
Held:
Jurisdiction of the National Telecommunications Commission
Consequently, while it is true that the regular courts are possessed of general
jurisdiction over actions for damages, it would nonetheless be proper for the courts
to yield its jurisdiction in favor of an administrative body when the determination of
underlying factual issues requires the special competence or knowledge of the
latter. In this era of clogged court dockets, administrative boards or commissions
with special knowledge, experience and capability to promptly hear and determine
disputes on technical matters or intricate questions of facts, subject to judicial
review in case of grave abuse of discretion, are well nigh indispensable. Between
the power lodged in an administrative body and a court, therefore, the
unmistakable trend is to refer it to the former.
In this regard, we note that there is a pending case before the NTC in which the
factual issues raised in petitioner's complaint have also been pleaded. Although
petitioner prays in the NTC case for the administrative remedy of cancellation of
the cable companies' certificates of authority, licenses and permits, it is inevitable
that, in granting or denying this prayer, the NTC would have to pass upon the
same factual issues posed in petitioner's complaint before the trial court. The latter
was thus correct in applying the doctrine of primary jurisdiction if only to avoid
conflicting factual findings between the court and the NTC.
The regulation of ownership of television and cable television companies is
likewise within the exclusive concern of the NTC, pursuant to its broader regulatory
power of ensuring and promoting a 'larger and more effective use of
communications, radio and television broadcasting facilities' in order that the public
interest may well be served. The NTC is mandated to maintain effective
competition among private entities engaged in the operation of public service
communications. It is also the agency tasked to grant certificates of authority to
cable television operators, provided that the same 'does not infringe on the
television and broadcast markets.
Ruling on Damages
Finally, the complaint failed to state a cause of action against ABS-CBN and the
other respondents, considering that the ultimate facts upon which the complaint for
damages depends fall within the technical competence of an administrative body.
Otherwise stated, pending determination by the NTC of the factual questions
involved in the case, petitioner's complaint, which is founded upon such factual
issues, would be premature.

WHEREFORE, the petition is DENIED. The assailed resolution dated October 30,
2003 of the Regional Trial Court of Quezon City, Branch 97, is AFFIRMED.