Chicago Cable Communications v. Chicago Cable Com'n, 87 C 2591.

• Decision Date: 21 January 1988
• Docket Number: No. 87 C 2591.,87 C 2591.
• Citation: 678 F. Supp. 734
• Parties: CHICAGO CABLE COMMUNICATIONS, South Chicago Cable, Inc., and Communications and Cable of Chicago, Inc., Plaintiffs, v. CHICAGO CABLE COMMISSION and City of Chicago, a municipal corporation, Defendants.
• Court: U.S. District Court — Northern District of Illinois

678 F. Supp. 734

CHICAGO CABLE COMMUNICATIONS, South Chicago Cable, Inc., and Communications and Cable of Chicago, Inc., Plaintiffs, v. CHICAGO CABLE COMMISSION and City of Chicago, a municipal corporation, Defendants.

No. 87 C 2591.

United States District Court, N.D. Illinois, E.D.

January 21, 1988.

COPYRIGHT MATERIAL OMITTED

James E. Betke, McDermott, Will & Emery, Chicago, Ill., for plaintiffs.

Craig J. Hanson, Joel Stein, Asst. Corp. Counsels, Chicago, Ill., for defendants.

MEMORANDUM OPINION AND ORDER

PLUNKETT, District Judge.

The Chicago Cable Commission (the "Commission") regulates cable television ("CATV") services in the City of Chicago. Plaintiffs Chicago Cable Communications, South Chicago Cable, Inc., and Communications and Cable of Chicago, Inc. (collectively, "Chicago Cable TV" or "CCTV"), are affiliated corporations providing CATV to Chicago residents under franchise agreements with the Commission. The Commission assessed a $60,750 fine against CCTV for violating one of the terms of the Franchise Agreement. In this proceeding, CCTV raises several constitutional, federal statutory, and state law objections to the imposition of the fine. For the following reasons, we affirm the Commission's assessment and enter summary judgment for Defendants, the City of Chicago and the Chicago Cable Commission.

FACTS

Local Origination

On February 10, 1982, the Chicago City Council adopted "the Chicago Cable Communications Ordinance" as Chapter 113.1 of the Municipal Code of Chicago ("Chapter 113.1"). Chapter 113.1 provides for the franchising and regulation of CATV systems within Chicago. In 1984 CCTV was awarded the CATV franchise for Areas 1, 4, and 5 of the City.¹ CCTV executed a "Cable Television Franchise Agreement" with the City for each of the areas in which it was awarded the right to provide CATV services (Exh. 15) (hereinafter the "Franchise Agreement").

The Franchise Agreement requires the grantees to produce and program a certain amount of "local origination" (or "L.O.") programming each week.² (Id. section 18.) The Franchise Agreement sets forth a joint plan by CCTV and Group W to govern the provision of L.O. programming. (Exh. G, Attachment G1.) The grantees agreed to commit up to $6,000,000 to produce quality L.O. programming for up to fifteen years. They decided that a centralized approach to L.O. programming was best. They agreed to jointly produce one non-alphanumeric (i.e., video) L.O. channel for the entire City and to individually provide and program two alphanumeric channels for each franchise area. The grantees agreed that each company would produce one-half of the total original local programming that had to be produced each week. The grantees also agreed to equip a central production studio, a mobile camera and production system (minicam), a post-production (editing) facility, a screening facility, a master control facility, and a central video maintenance facility. (Attachment G1.) The estimated cost of the facilities, equipment, and improvements on the central studio was $1,500,000.

In addition to jointly equipping an L.O. production facility, the grantees agreed to provide the staff necessary to develop and produce programming to fulfill their L.O. requirements. The Franchise Agreement stated that the cable operators would use "substantial efforts ... to utilize and develop local talent for local origination purposes. In addition, the use of full-time and part-time internship programs for local residents should increase the local residents sic potential for employment as demand requires." (Attachment G1, ¶ 3.)

The Chicago Cable Commission's Regulatory Efforts

Chapter 113.1 created within the Mayor's Office a department named the Office of Cable Communications ("OCC"). The head of the OCC bore the title of Cable Administrator (during all the relevant times in this case, the Cable Administrator was Robin Charleston) and also served as the Chairman of the Chicago Cable Commission. Chapter 113.1 created the Commission to regulate the provision of CATV services within the City of Chicago. The Commission is required to hold open meetings at least once a month and to act as an intermediary between the subscribing public and the cable operators. The Commission's most important function, as far as we are concerned for this case, is the enforcement of the terms of Chapter 113.1 and the Franchise Agreements against the cable companies.

The Commission began active regulation and supervision of L.O. in the summer of 1986. (Exh. 14, Letters of June 5, 1986, and July 25, 1986).³ That was the time during which CCTV and Group W began seriously preparing for the oncoming October 2, 1986, start-up date for L.O. programming.

The Commission first listed "Local Origination" on the agenda for its monthly meeting in July 1986. (Exh. 7, pp. 4, 112-143.) At the July meeting, representatives of Group W and CCTV/TCI⁴ described their L.O. preparation efforts to date. These efforts included hiring employees, contacting community organizations for ideas for possible L.O. programming, contacting area schools for interns, and so on. (Id. at 114-116.) Group W described the studio and production facility it was building at its headend location.⁵ (Id. at 117-121.) The Commission members inquired at great length regarding the kinds of L.O. programming the cable operators were planning to transmit to their customers. Suggestions were made regarding foreign language programming (Polish, Lithuanian, Spanish, Vietnamese, etc.), for example. (Id. at 116, 136.) In that vein, Commissioner Delgado stated:

LO doesn't necessarily have to be for not-for-profit purposes, an example being if you were to take the format of Chicago Magazine, which is a ... local magazine that deals with the local restaurants, parks, community events, festivals, politics, anything that has to do with the metropolitan Chicago area, and so that LO would be used to cover those areas that have a local impact.

(Id. at 138-139.)

After the July Commission meeting, Robin Charleston wrote to Group W and CCTV requesting the submission of monthly reports on L.O. (Exh. 14, Letter of July 25, 1986.) In August, Group W responded on behalf of itself and CCTV. (Exh. 14, Letter of August 7, 1986.) In their report, Group W described the ongoing renovation of a central studio to be used by all the grantees, and the renovation of a smaller facility at Group W's headend location for use by the Area 2 and 3 franchisees. (Id.) Group W also reported that "Chicago Cable TV is presently considering contracting its program production efforts to a third party who would supply all necessary production manpower." (Id., p. 2.)

On September 5, 1986, Group W (again on behalf of itself and CCTV) submitted its monthly L.O. report for September. (Exh. 14, Letter of September 5, 1986.) This report mostly discussed Group W's L.O. efforts, but reiterated that CCTV "is presently engaged in discussions with third parties regarding the provision of similar production services to generate local origination programming for Areas 4 and 5." (Id.) The report also provided a description of some of the programs Group W produced and planned to use to fulfill its L.O. obligations.⁶

On October 2, 1986, the grantees began transmitting nine hours of L.O. programming per week to their subscribers in Chicago. At the October Commission meeting, the Commission congratulated the grantees on commencing local origination programming on schedule on October 2. (Exh. 8, pp. 116-117.)⁷

At the November Commission meeting (on November 12, 1986), Michael Green appeared on behalf of CCTV. (See Exh. 9.) Although Mr. Green had been hired as CCTV's general manager the previous day, he appeared at the monthly meeting on behalf of CCTV. At the meeting, the Commission inquired as to the source of some of CCTV's L.O. programming. Ms. Charleston stated:

Well, my understanding of what is going on in Area 5 with local origination is that Group W local origination programming is being shown in Area 5, and some of what Chicago Cable TV says is local origination originated by it is shown in Area 5, and that I understand to be Cablenet⁸ programming, programming from another system entirely.

And, as I said, this is information that I have gotten orally, you know, from being out at the headend, and ... I do hope ... that can be straightened out by written submissions as to what is being shown, because that is a concern.

(Exh. 9, p. 129.)

In response, Mr. Green initiated the following colloquy:

MR. GREEN: ... And I guess the only other thing, for the record, I concur. And I was in attendance at a meeting, at a brief meeting with the Chairman, concerning the L.O. and where the programming comes from.

And I just want to go on the record for saying that as far as I am concerned, it should be local City of Chicago programming.

CHAIRMAN CHARLESTON: That's real important.

MR. GREEN: And that's what we intend to do.

CHAIRMAN CHARLESTON: I really appreciate that.

Id. at 131.

A few days later, Mr. Green wrote to Ms. Charleston, further explaining CCTV's position on L.O. (Exh. 14, Letter of November 17, 1986):

The concerns expressed by you and the Commissioners at the last Commission meeting have prompted us to reevaluate our approach to local origination programming. We are currently establishing an internal plan for L.O. and soon will be approaching outside sources for their input.

Roughly our L.O. program will involve contracting with several companies who have either the necessary equipment or the production talent that is needed. We hope to approach local producers' associations and minority producers to establish a base of production talent.

We will supply you with more details and a clear time frame when we have solidified some of our ideas. Any suggestions the Commission may have are greatly appreciated.

It is important to note that the local origination programming which is currently aired on our L.O.

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