The Court of Appeals declared with finality as null and void an ordinance issued by the local government of Santiago City, Isabela, requiring the payment of tower fees from telcos operating cell sites within the city.
In a resolution promulgated December 18,2014, the former 11th division of the Court of Appeals, chaired by Associate Justice Vicente Veloso, dismissed the motion for reconsideration filed by the Santiago City government relating to the CA’s earlier decision upholding Globe Telecom’s position that the imposition of tower fees as provided by the city ordinance concerned is without proper basis.
The case stemmed from an ordinance passed by the Santiago City government passed in August 2008 requiring telecommunication operators to pay an annual fee of P200,000 for every communications tower or cell site operating within the city. Globe Telecom then sought an appeal with the Department of Justice questioning the legality of the ordinance. The DOJ, however, dismissed Globe Telecom’s appeal. The city government then immediately demanded Globe to pay the amount of P5.9 million as assessed tower fees over its 7 towers covering the period from 2008 to 2010.
This prompted Globe Telecom to file a case with the Regional Trial Court of Santiago City questioning the validity of the same city ordinance. The lower court, decided in May 2012 against Globe, upholding the position taken by the DOJ.
Globe then elevated the case to the Court of Appeals, which ruled in favor of Globe in May 2014, declaring as null and void the city ordinance concerned.
“Evidently, there is no reasonable relation between the city government’s imposition of tower fees and the promotion of health, morals, good order, safety or the general welfare of the people,” the CA said,
noting that the Santiago City government had cited as a basis of imposing the tower fees a provision in the General Welfare clause of Local Government Code of 1991, empowering local government “to adopt ordinances to secure peace, safety, health, morals and the best and highest interests of the municipality.”
“What is more, we cannot allow the imposition of tower fees in the amount of P200,000 as the same is patently oppressive, confiscatory and prohibitive. It bears stressing that a fee, as defined by the Local Government Code, is a charge fixed by law or ordinance for the regulation or inspection of a business or activity,” the CA said.
To be considered as a license fee, such payment must be related to an occupation or activity that involves public interest in health, morals, safety and development, it added.
“There is that need for a reasonable basis in determining the burden imposed by the local government in the exercise of its power. In the absence of justification to provide reasonable relation between the right sought to be regulated and the tower fee being charged, the ordinance must be struck down for being unreasonable, confiscatory and arbitrary in nature,” the CA said in its decision.