Comcast of California II v. City of San Jose, Cal.
| Decision Date | 29 September 2003 |
| Docket Number | No. 5:03-CV-02532-RS.,5:03-CV-02532-RS. |
| Citation | 286 F.Supp.2d 1241 |
| Parties | COMCAST OF CALIFORNIA II, L.L.C., Plaintiff, v. CITY OF SAN JOSE, CALIFORNIA, Defendant. |
| Court | U.S. District Court — Northern District of California |
John Louis Carlton, Arnold & Potter, Los Angeles, CA, Norman Mark Sinel, Arnold & Potter, Washington, DC, Tricia Anne Cross, Arnold & Potter, Los Angeles, CA, for Plaintiff.
Joseph Van Eaton, Washington, DC, Michael R. Groves, San Jose City Attorney's Office, San Jose, CA, William L. Lowery, Miller & Van Eaton, San Francisco, CA, Allison L. Driver, James N. Horwood, Speigal & McDiarmid, Washington, DC, Kevin E. Smith, Braun & Blaising, Sacramento, CA, Peter J. Hopkins, Spiegal & McDiarmid, Washington, DC, for Defendant.
Russell Naymark, Communications Workers of America, AFL-C, Sacramento, CA, for Intervenor.
ORDER DENYING PLAINTIFF'S MOTION FOR A PRELIMINARY INJUNCTION
In order to establish a national policy concerning cable communications which "assures that cable systems are responsive to the needs and interests of the local community" and "protects cable operators against unfair denials of renewal," Congress enacted the Cable Communications Policy Act of 1984. 47 U.S.C. § 521 et seq. (). The Act establishes a process whereby a cable operator may seek renewal of its franchise by submitting a written request and engaging in formal and/or informal renewal proceedings. In this action, Plaintiff Comcast of California II, L.L.C. ("Comcast") challenges the legality of the formal renewal proceeding that has been instituted by the Defendant City of San Jose ("City"). Comcast seeks to halt the process currently set to begin before a designated hearing officer on the grounds that the proposed procedure violates Comcast's constitutional rights to free speech and due process, as well as the provisions of the FCA. Comcast seeks injunctive relief to stop the proposed hearing and to require the City to draft a new hearing procedure which complies with the FCA and the federal and state constitutions.
The City opposes the motion for injunctive relief and argues that the process it has established fulfills the requirements established by Congress in the FCA and adequately safeguards all of Comcast's constitutional rights. The City also contends that Comcast's request for relief under the FCA is not ripe since the Act permits judicial review only after final denial of a renewal application or where a cable operator has been adversely affected by a failure of the franchising authority to follow the Act's procedural requirements. Neither of these triggering events, according to the City, have occurred in this case.
The Court permitted the Alliance for Communications Democracy, et al. ("Alliance"), as well as the National Cable & Telecommunications Association ("NCTA") and the California Cable & Telecommunications Association ("CCTA"), to file amicus curiae briefs in this case. Alliance's amicus brief is filed in opposition to Comcast's motion for an injunction, while the amicus brief filed by NCTA and CCTA is offered in support of the motion.
Comcast's motion for entry of a preliminary injunction was heard by the Court on September 17, 2003. Based on all papers filed to date, including the amici briefs referenced above, as well as on the oral argument of counsel, the Court denies Comcast's motion for the reasons set forth below.
In December of 1985, Comcast's predecessor cable operator was granted a fifteen year cable franchise by the City. Under the terms of this agreement, the franchise was scheduled to expire on December 31, 2000. On February 25, 1998, the cable operator submitted a letter to the City requesting that it initiate formal renewal procedures pursuant to 47 U.S.C. § 546 of the FCA. Section 546(a)(1) requires that a franchising authority conduct a proceeding to identify future cable-related needs and interests and to review past performances of cable operators. The cable operator also requested that the City conduct informal renewal procedures, as contemplated by § 546(h).
Based on the cable operator's request, as well as the requirements of § 546(a)(1), the City conducted a study, identified its future needs and interests, reviewed the operator's past performance, and issued a draft 84-page "Needs and Interest Report" in June of 2001. The City sought comments on the Report and Comcast's predecessor, AT & T, submitted a response. The City considered the response and addressed it in a Final Report, issued on June 11, 2002. The San Jose City Council ("Council"), the franchising authority in this case, adopted the needs and interests findings in the Final Report, concluded the first stage of the formal renewal process, and issued a Request For a Renewal Proposal ("RFRP"), as required under 47 U.S.C. § 546(b). The RFRP describes a model that would satisfy all the needs and interests identified by the City. The City contends that a cable operator is not required to follow the model, but must satisfy the needs and interests identified by the City and provide certain information, including financial disclosures.
On September 11, 2002, AT & T submitted its "Formal Proposal for Renewal of Cable Television Franchise." The City contends that the proposal did not provide all of the information required. Specifically, the City requested certain financial information which the cable operator declined to provide. Nevertheless, the City assumed that it was required either to accept or preliminarily to reject the proposal within four (4) months, pursuant to 47 U.S.C. § 546(c)(1). On November 18, 2002, Comcast and AT & T merged to form the Comcast entity named as Plaintiff in this litigation. Shortly before the Council was to act regarding AT & T's proposal, Comcast asked the City to delay action. On December 10, 2002, the Council adopted a resolution of preliminary denial, but provided that the effective date of the denial could be deferred by agreement until January 31, 2003.
The parties signed an agreement of deferral. However, the informal renewal negotiations which had been commenced in 1999 failed to resolve the renewal issues. Therefore, the preliminary denial by the Council became effective on January 31, 2003. The preliminary denial resolution authorized the City Manager to commence the formal administrative hearing required by 47 U.S.C. § 546(c). Pursuant to the resolution, a hearing officer was selected and appointed. A set of Rules and Procedures ("Rules") was developed and sent to Comcast for comment. Comcast returned its comments to the Rules, noting its objections to the proposed procedure. The Rules provide that the hearing officer will conduct the evidentiary phase of the proceeding and will then make a recommendation to the Council. Comcast contends that this procedure is improper because only the City Council itself, as the franchising authority, may conduct the hearing.
After unsuccessfully attempting to negotiate with the City to change the Rules, Comcast filed a complaint against the City in this Court, seeking declaratory and injunctive relief. In its complaint, Comcast requests that the Court enjoin the City from continuing its formal renewal proceeding. Comcast also seeks a declaration that the City's RFRP, Model Ordinance, and Rules violate the FCA, as well as both the federal and state constitutions.
More specifically, Comcast contends that the RFRP is illegal because it demands goods and services which exceed the scope and purpose of the FCA. In particular, Comcast argues that the City improperly demands: (1) up to 10 channels to be designated for public, educational or governmental ("PEG") use; (2) non-cable services, such as access to the Internet; (3) a full service telecommunications network; (4) specific fiber transmission technology; and, (5) a parental control device at no charge to the subscriber. Comcast contends that these requirements exceed the scope of the City's authority and contravene the requirements of the FCA.
In addition, Comcast argues that the Rules which the City intends to utilize at the upcoming scheduled hearing are illegal because they: (1) fail to provide adequate notice to Comcast of the City's claims which support its preliminary denial of the renewal application; (2) are not grounded in any state or federal law; (3) improperly delegate authority to a hearing officer; (4) fail to establish a process which affords Comcast an opportunity to participate in a hearing before the City Council; and, (5) fail to delineate the claims, evidence, and defenses which Comcast will be permitted to present at the hearing.
Apart from the FCA's requirements, Comcast also asserts that the City's proposed hearing procedure violates Comcast's constitutional rights to free speech and due process. Comcast contends that the City's requirements regarding the number, use, location, management of, and trigger for, the PEG channels violate the First Amendment. Comcast also argues that its rights to due process are not afforded or protected by the hearing procedure because it is not guaranteed adequate notice of the claims that the City intends to assert in support of its preliminary denial of Comcast's renewal application. Comcast additionally alleges that it is not afforded an opportunity to be heard since the City's Rules do not provide that Comcast may appear at a hearing before the City Council. As a result of these alleged violations, Comcast contends that it "stands to suffer significant and immediate irreparable harm to its First Amendment rights and financial interests if the administrative process is not enjoined." Comcast's Memorandum at p. 29, lines 1-3.
The City opposes Comcast's motion for injunctive relief on several grounds. First, the City argues that Comcast's request is untimely under the FCA...
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