Zoomzat v. People
REITERATIONFacts
The Antecedents: Petitioner Zoomzat, Inc. alleged that on December 20, 1991, the Sangguniang Panlungsod of Gingoog City passed Resolution No. 261 expressing its willingness to allow Zoomzat to install and operate a cable TV system. Zoomzat applied for a mayor's permit, which was not acted upon. Subsequently, on April 6, 1993, respondents, members of the Sangguniang Panlungsod, enacted Ordinance No. 19, granting a franchise to Gingoog Spacelink Cable TV, Inc. to operate a cable television for ten (10) years, subject to automatic renewal. Zoomzat filed a complaint with the Ombudsman, alleging that Ordinance No. 19 gave unwarranted benefits to Spacelink to the prejudice of Zoomzat, a prior grantee-applicant, thus violating Section 3(e) of R.A. No. 3019. Procedural History: The Graft Investigation Officer recommended indictment, which was affirmed on review. A criminal information was filed before the Sandiganbayan. However, upon directive to restudy the case, subsequent recommendations were made to dismiss the case for lack of probable cause and insufficiency of evidence. The Sandiganbayan issued a resolution approving the withdrawal of the Information and dismissing the case, which was later denied reconsideration. The Petition: Petitioner assails the Sandiganbayan's findings, arguing that while the National Telecommunications Commission (NTC) has the authority to grant franchises for cable television operations, local government units also have the power to grant permits and franchises under the Local Government Code. Petitioner further contends that the grant of an exclusive franchise to Spacelink for ten years, subject to automatic renewal, contravenes Executive Order No. 205, which mandates non-exclusive franchises for a period not exceeding 15 years, thereby giving Spacelink an undue advantage and stifling competition.
Issue(s)
Whether the members of the Sangguniang Panlungsod of Gingoog City can be held liable under Section 3(e) of R.A. No. 3019 for enacting Ordinance No. 19, which granted a franchise to Gingoog Spacelink Cable TV, Inc. Whether the Sangguniang Panlungsod has the authority to grant a franchise for the operation of a cable television system.
Ruling
The petition is denied. The Resolution of the Sandiganbayan dated June 17, 1998, approving the withdrawal of the Information and the dismissal of Crim. Case No. 22026, and the Resolution dated September 9, 1998, denying reconsideration thereof, are affirmed.
Ratio Decidendi
On whether the members of the Sangguniang Panlungsod of Gingoog City can be held liable under Section 3(e) of R.A. No. 3019 for enacting Ordinance No. 19: The Court held that for one to be liable under Section 3(e) of R.A. No. 3019, he must be an officer or employee of offices or government corporations charged with the grant of licenses or permits or other concessions. Executive Order No. 205 clearly provides that only the National Telecommunications Commission (NTC) could grant certificates of authority to cable television operators. Executive Order No. 436 also vests the NTC with the regulation and supervision of the cable television industry. Since the respondents were members of the Sangguniang Panlungsod and not employees of the NTC, they could not be charged under Section 3(e) for enacting Ordinance No. 19. The Court reiterated its pronouncement in Batangas CATV, Inc. v. Court of Appeals that there is no law specifically authorizing Local Government Units (LGUs) to grant franchises to operate CATV systems, and whatever authority they had was withdrawn. Today, only entities granted a Provisional Authority or Certificate of Authority by the NTC may install, operate, and maintain a cable television system. Municipalities have no power to grant franchises in the absence of constitutional or legislative authorization, and such grants are ultra vires. On whether the Sangguniang Panlungsod has the authority to grant a franchise for the operation of a cable television system: The Court affirmed that while the Sangguniang Panlungsod, under the general welfare clause of the Local Government Code, has the power to enact ordinances and approve resolutions, this power is limited. The general welfare clause allows regulation of cable television operations only when it encroaches on public properties, such as the use of public streets, rights of way, the founding of structures, and the parceling of large regions. Beyond these parameters, its acts, such as the grant of a franchise to Spacelink, would be ultra vires. In this case, the Sangguniang Panlungsod of Gingoog City overstepped its authority when it usurped the powers of the NTC by enacting Ordinance No. 19. Being a void legislative act, Ordinance No. 19 did not confer any right nor vest any privilege to Spacelink, rendering petitioner's claim of prejudice or injury baseless. Furthermore, the Court noted that Spacelink did not commence operations despite the grant of the franchise, further weakening the claim of undue injury. The Court also found that Resolution No. 261 merely expressed willingness to allow Zoomzat to operate, not a grant of franchise, unlike the clear and unequivocal grant in Ordinance No. 19 to Spacelink. Therefore, Zoomzat could not claim a prior right.
Main Doctrine
Members of the Sangguniang Panlungsod cannot be charged with violation of Section 3(e) of R.A. No. 3019 for enacting an ordinance granting a franchise to operate a cable television system if such grant is ultra vires, as it usurped the exclusive regulatory power of the National Telecommunications Commission (NTC). An ultra vires act does not confer any right nor vest any privilege, and thus, cannot be the basis for claiming prejudice or undue injury.