Local Government vs National Authority Defining Cable TV Franchising Powers

The Supreme Court has drawn a clear line between the powers of local governments and national authorities over cable television franchises. In Zoomzat, Inc. v. People (G.R. No. 135535, February 14, 2005), the Court ruled that only the National Telecommunications Commission (NTC) may grant franchises to operate cable TV systems. A city council that enacts its own franchise ordinance acts beyond its authority, and such an ordinance is void.

The Dispute: Two Applicants, One Franchise

In 1991, the Sangguniang Panlungsod of Gingoog City passed Resolution No. 261, expressing willingness to allow Zoomzat, Inc. to install and operate a cable TV system. Zoomzat applied for a mayor's permit, but the mayor's office never acted on it.

Two years later, in 1993, the same city council enacted Ordinance No. 19, granting an exclusive franchise to a different company—Gingoog Spacelink Cable TV, Inc.—to operate cable television for ten years, subject to automatic renewal.

Zoomzat filed a criminal complaint with the Ombudsman against the council members, alleging violation of Section 3(e) of the Anti-Graft and Corrupt Practices Act (R.A. No. 3019). The charge: the council gave unwarranted benefits to Spacelink, to the prejudice of Zoomzat, who claimed to be a prior grantee-applicant.

The Sandiganbayan initially allowed the prosecution, but later approved the withdrawal of the Information for lack of probable cause. Zoomzat elevated the case to the Supreme Court.

The Legal Question

The central issue was whether the city council members could be held liable under Section 3(e) of R.A. No. 3019 for enacting a franchise ordinance for cable TV.

Section 3(e) penalizes public officers who cause undue injury or give unwarranted benefits through manifest partiality, evident bad faith, or gross inexcusable negligence. Critically, the provision applies only to officers and employees of offices or government corporations charged with the grant of licenses or permits or other concessions.

The Ruling: NTC Has Exclusive Franchise Power

The Supreme Court denied Zoomzat's petition and affirmed the dismissal of the criminal case. The Court's reasoning rested on the allocation of power over cable TV franchises.

Under Executive Order No. 205, only the NTC may grant certificates of authority to cable TV operators. Executive Order No. 436 vests in the NTC the regulation and supervision of the cable television industry. As the Court noted, citing Batangas CATV, Inc. v. Court of Appeals (G.R. No. 138810, September 29, 2004), there is no law specifically authorizing local government units to grant CATV franchises. Whatever authority local governments previously had was withdrawn by P.D. No. 1512, which terminated all franchises previously granted by local governments.

Since the respondents were city council members—not employees of the NTC—they could not be charged under Section 3(e) for enacting the franchise ordinance. The Court held that the ordinance was void for being ultra vires, or beyond the council's powers.

Local Governments Still Have Some Regulatory Role

The Court was careful, however, not to strip local governments of all power over cable TV operations. Under the general welfare clause of the Local Government Code, a local government unit may regulate cable TV operations when they encroach on public properties—such as the use of public streets, rights of way, the construction of structures, and the subdivision of large areas.

But beyond those parameters, a local government's acts—such as granting a franchise to a cable TV operator—are void. The NTC's regulatory power over matters within its competence is exclusive.

Practical Takeaways

• Only the NTC grants cable TV franchises. Local governments cannot issue their own franchises for cable TV operations, even if they believe it serves local interests.
• Local governments may still regulate cable TV's use of public property. The general welfare clause allows regulation of streets, rights of way, and structures—but not the grant of operating franchises.
• A void ordinance confers no rights. Since Ordinance No. 19 was ultra vires, it did not vest any privilege in Spacelink, and Zoomzat could not claim injury from it.
• Criminal liability under the Anti-Graft law requires the right office. Section 3(e) applies to officers charged with granting licenses or permits. Local legislators acting beyond their authority are not covered by this provision.
• A mere resolution of willingness is not a franchise. Resolution No. 261 only expressed the city's willingness to allow Zoomzat to operate; it did not grant a franchise, so Zoomzat had no prior right to claim.

This article is general information and not legal advice. For your specific situation, consult a lawyer or ask ASG Legal AI.