Batangas Cable Television, Inc.

vs Court of Appeals

Facts: On July 28, 1986, respondent Sangguniang Panlungsod enacted Resolution No. 2107 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 ₱88.00 to ₱180.00 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 docketed as Civil
Case No. 4254. It alleged 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. The Trial Court favored the petitioners. Unsatisfied, the respondents elevated the case to
the Court of Appeals.

Issue: whether respondents can justify their exercise of regulatory power over petitioner’s CATV
operation under the general welfare clause of the Local Government Code of 1983.

Ruling: The general welfare clause is the delegation in statutory form of the police power of the State to
LGUs.28 Through this, LGUs may prescribe regulations to protect the lives, health, and property of their
constituents and maintain peace and order within their respective territorial jurisdictions. Accordingly,
we have upheld enactments providing, for instance, the regulation of gambling,29 the occupation of rig
drivers,30 the installation and operation of pinball machines,31 the maintenance and operation of
cockpits,32 the exhumation and transfer of corpses from public burial grounds,33 and the operation of
hotels, motels, and lodging houses34 as valid exercises by local legislatures of the police power under
the general welfare clause.

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 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.35 This is the same regulation that it
exercises over all private enterprises within its territory.

But, while the Court recognizes the LGUs’ power under the general welfare clause, it cannot sustain
Resolution No. 210. The Court 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.