Brookhaven Cable TV Inc. v. Kelly
| Decision Date | 09 March 1977 |
| Docket Number | No. 76-CV-154.,76-CV-154. |
| Citation | 428 F. Supp. 1216 |
| Parties | BROOKHAVEN CABLE TV INC. et al., Plaintiffs, United States of America and Federal Communications Commission, Intervenors-Plaintiffs, v. Robert F. KELLY, Chairman, et al., Defendants, National Association of Regulatory Utility Commissioners, Intervenor-Defendant, City of New York, Amicus Curiae. |
| Court | U.S. District Court — Northern District of New York |
Dugan, Lyons, Pentak, Brown & Tobin, Albany, N.Y. and Paul, Weiss, Rifkind, Wharton & Garrison, New York City, for plaintiffs; Stuart Robinowitz, New York City, of counsel.
Rex E. Lee, Asst. Atty. Gen., Dept. of Justice, Washington, D.C., Paul V. French, U.S. Atty., N.D.N.Y., Albany, N.Y., for intervenors-plaintiffs; David J. Anderson, Robert M. Rader, Washington, D.C., Gustave J. DiBianco, Asst. U.S. Atty., Syracuse, N.Y., of counsel.
Louis J. Lefkowitz, Atty. Gen., Albany, N.Y., for defendants; Kenneth J. Connolly, Asst. Atty. Gen., of counsel.
Paul Rogers, Stephen G. Kraskin, Washington, D.C., for intervenor-defendant.
W. Bernard Richland, Corp. Counsel, New York City, for amicus curiae; Alexander Gigante, Jr., Evelyn J. Junge, New York City, of counsel.
The plaintiffs and defendants have both moved for summary judgment on the first claim for relief asserted in the complaint. That claim challenges the right of the defendants, Commissioners of the New York State Commission on Cable Television (State Commission), to regulate the charges for pay cable TV on the ground that the matter has been preempted by the Federal Communications Commission.
The United States and the Federal Communications Commission were granted leave to intervene as parties plaintiff. The National Association of Regulatory Utility Commissioners was granted leave to intervene as a party defendant. The intervenors have joined in the motions for summary judgment. The City of New York was granted leave to appear as amicus curiae in support of the defendants' motions.
Five of the original plaintiffs (Brookhaven, Capitol, Samson, Teleprompter and Warner) are corporations which operate cable television systems in New York State. National Cable Television Association, Inc. (NCTA) and New York State Cable Television Association (NYCTA) are, respectively, national and state trade associations of cable television systems. The remaining plaintiff, Home Box Office (HBO), is an enterprise which supplies pay cable programming to cable television systems both in New York and in other states. Plaintiff intervenors are the United States and the Federal Communications Commission (FCC).
The defendants are the five members of the New York State Commission on Cable Television. See N.Y. Exec. Law § 814 (McKinney Supp. 1975). Defendant intervenor, the National Association of Regulatory Utility Commissioners (NARUC), is a quasi-governmental, nonprofit organization whose membership includes governmental and regulatory bodies throughout the United States.1
Cable TV essentially operates by retransmitting television signals to home viewers by cable, rather than by over-the-air broadcasting. When it originated, cable TV performed two basic functions. It enhanced reception of local television broadcasts, and it also permitted the importation of signals from distant television stations beyond the range of local reception.2 Today, however, cable TV systems may also originate their own programming, which is called "cable-casting",3 or may make available certain "access channels" over which individuals may transmit programming to home viewers.4 Generally, cable TV systems provide these services to their subscribers for a basic monthly fee.5
Pay cable TV augments the basic cable service by providing the home viewer with additional programming for an additional monthly or other charge. The most common pay cable system provides the viewer with an additional channel for a flat monthly fee over the basic cable TV charge. The plaintiffs employ such a system. HBO supplies box-office type programming to local cable TV systems. This programming includes recent motion pictures, sports events not otherwise televised, and other entertainment, all shown without commercial interruption.6 The local cable TV system then distributes this programming to pay cable home viewers over a channel which is accessible only to the pay cable subscribers. In order to receive HBO, the subscribers must pay a monthly fee in addition to the charge for their basic cable TV service.
Other pay cable systems are also being developed. Some systems provide the viewer with different programming options, e. g., sports programs or recent films, at different prices. Some systems charge the viewer only for those programs actually watched.7
By 1965, the FCC was involved in regulating the growing cable TV industry.8 The agency's jurisdiction over this developing medium was first upheld by the Supreme Court in 1968.9 In 1969, in an effort to encourage diversity of programming on cable TV, the FCC promulgated rules requiring cable TV systems having over a minimum number of subscribers to originate their own programming through cablecasting.10 The Commission envisioned that some of this cablecasting would occur over leased access channels.11 These are channels made available by the cable TV system, for a fee, to a third party who provides programming for home viewers. The FCC announced in 1971 that it had preempted the field of pay cable television cablecasting,12 even though no comprehensive review of pay cable had yet been undertaken.
Having developed a policy of dual jurisdiction over cable TV rate regulation, the FCC in 1972 decided to permit local regulation of the rates for basic cable TV services only.13 These are the services which the cable system regularly supplies to all subscribers. However, because the FCC wanted to encourage experimentation in the new medium of pay cable TV, and because it feared that both federal and local regulation would be confusing and impracticable, the Commission at that time precluded local rate regulation for pay cable TV.14 The FCC's position and its reasoning were stated much more clearly in a subsequent clarification in 1974.
Noting that conventional TV's dependence on advertising and its limited broadcast spectrum confined its programming to mass appeal, the FCC in 1975 further explicated the need for its policy.
Since conventional television often cannot, because of its nature, cater to minority tastes and interests, we encourage the development of new technologies which promise viewing diversity. Subscription television promises to bring both diversity of programming and diversity of format to those who are willing to pay a direct charge for the service. Neither STV nor cable television must attract advertiser support with programming having a broad mass appeal. Cable television, with its abundant channel capacity, is particularly able to program for audiences with specialized interests. Subscription television's potential to expand the public's program choices, to supplement the programming now provided by conventional television, gives it an important role to play in our national communications structure.16
Once again, in the spring of 1976, the FCC emphasized its position. "The Commission has not only declined to regulate the rates for these services including pay cable but has preempted their regulation by state and local authorities."17
In 1972, the New York State Commission on Cable Television (State Commission) was created. N.Y. Exec. Law §§ 811-31 (McKinney Supp. 1975). The State Commission was given rather broad powers to regulate cable TV within New York, see e.g., Id. §§ 816, 824, including the power to regulate the rates charged by cable TV systems. Id. §§ 822, 825. Nowhere within the State Commission's enabling legislation is any distinction drawn between basic cable TV service and pay cable TV. The state statutes require that rates charged by a cable TV company be specified in the company's franchise, Id. § 825(1), and that rates not be changed except by amendment of the franchise. Id. § 825(2). Furthermore, any franchise amendment requires the approval of the State Commission. Id. § 822(1). Thus, any change in the rates charged for cable TV service requires the State Commission's approval.
In March of 1976, the State Commission issued a Clarification of Commission...
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...Ambiguity and court silence do not amount to controlling precedent. The second case the FCC relies upon, Brookhaven Cable TV, Inc. v. Kelly, 428 F.Supp. 1216 (N.D.N.Y.1977), aff'd, 573 F.2d 765 (2d Cir.1978), cert. denied, 441 U.S. 904, 99 S.Ct. 1991, 60 L.Ed.2d 372 (1979) involved, not rul......
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New York State Com'n on Cable Television v. F.C.C.
...Cable TV, Inc. v. Kelly, 573 F.2d 765 (2d Cir.), cert. denied, 441 U.S. 904, 99 S.Ct. 1991, 60 L.Ed.2d 372 (1978), aff'g, 428 F.Supp. 1216 (N.D.N.Y.1977); see National Association of Regulatory Utility Commissioners v. FCC, 525 F.2d 630, 646 (D.C.Cir.), cert. denied, 425 U.S. 992, 96 S.Ct. ......
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New England Tel. & Tel. Co. v. PUC OF MAINE, Civ. A. No. 83-0166-P.
...Bell Telephone Co. v. State Corp. Commission of Kansas, No. 83-4090, (D.Kan. April 8, 1983); Brookhaven Cable TV, Inc. v. Kelly, 428 F.Supp. 1216, 1221, n. 20 (N.D.N.Y.1977), aff'd 573 F.2d 765 (2d Cir.1978), cert. denied 441 U.S. 904, 99 S.Ct. 1991, 60 L.Ed.2d 372 (1978); North Carolina Ut......
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...relief brought by a private party against a state commission is virtually a question of first impression. In Brookhaven Cable TV Inc. v. Kelly, 428 F.Supp. 1216 (N.D.N.Y. 1977), the court was confronted with an action for a declaratory judgment that the FCC had preempted the field of charge......