Cox Cable Cleveland Area, Inc. v. King
| Decision Date | 18 October 1983 |
| Docket Number | No. C83-3604.,C83-3604. |
| Parties | COX CABLE CLEVELAND AREA, INC., Plaintiff, v. Donald S. KING, a/k/a Donald L. Smith, a/k/a William L. Rodges, a/k/a William L. Rogers, d/b/a American Hy-Tech and d/b/a Cleveland Cable Co., Defendant. |
| Court | U.S. District Court — Northern District of Ohio |
Anthony F. LoFrisco, Breed, Abbott & Morgan, New York City, Barry L. Springel, Jones, Day, Reavis & Pogue, Cleveland, Ohio, James A. Hatcher, Atlanta, Ga., for plaintiff.
Joan B. Sebelin, Wessman, Simon & Sebelin, Cleveland, Ohio, for defendant.
This matter having come on for hearing on plaintiff's motion for preliminary injunction and the Court, having consolidated the hearing with a trial on the merits pursuant to Fed.R.Civ.P. 65(a)(2) and have heard the testimony of witnesses and arguments of counsel, makes the following findings of fact and conclusions of law in accordance with Rule 52 of the Fed.R.Civ.P.
The parties have stipulated to the first twelve numbered findings.
1. Plaintiff is a corporation organized and existing under the laws of the State of Ohio with its principal place of business at 12423 Plaza Drive, Parma, Ohio.
2. Defendant Donald S. King ("King"), whose real name is Donald L. Smith has used the other names of Don King, and William L. Rogers and is doing business as American Hy-Tech. Defendant resides and conducts business at 1821 Marloes Avenue, East Cleveland, Ohio. King has used and now uses other names, to wit, Donald L. Smith, William L. Rodgers, and William L. Rogers. Defendant is a citizen of the State of Ohio. The defendant's acts complained of have occurred and are occurring in the State of Ohio.
3. Plaintiff is in the business, among other things, of operating a cable television system in the Cleveland, Ohio area.
4. In order to provide cable television service, plaintiff has constructed facilities, which include a network of coaxial cable which starts at each individual subscriber's television set, feeds into a truck line and terminates ultimately at a local antenna of plaintiff. Plaintiff's subscribers of premium programming view the premium channels by means of interstate through-the-air broadcasts received by plaintiff's centrally located antennas attached principally by cable to the subscriber's home television set.
5. Plaintiff operates its cable television system pursuant to authority granted by the localities of Rocky River, Parma, Parma Heights, Lakewood, Seven Hills, Fairview Park, Olmsted Falls, Olmsted Township, Broadview Heights, and Brooklyn Heights, all of which are localities in the Cleveland, Ohio area.
6. Plaintiff offers its paying subscribers two levels of service:
Premium Programming includes first run movies, special entertainment programs and other features not available to the general public by the television networks, super stations or other generally available television services. Plaintiff purchases Premium Programming from four suppliers, namely, Home Box Office, Cinemax, Playboy and Spotlight. Each of the four Premium Programming services are supplied to paying subscribers on a separate channel.
7. Plaintiff is authorized by each of the Premium Programming suppliers to provide the Premium Programming to those paying subscribers of plaintiff who pay an additional monthly fee for each Premium Programming channel selected.
8. Plaintiff is required to pay to each supplier of Premium Programming a portion of the applicable monthly subscription fee received by it.
9. Plaintiff supplies to each of its paying subscribers a device known as a "converter" or "converter/decoder," which enables a subscriber to receive intelligible signals on an ordinary television set when the device is connected between the subscriber's television set and the plaintiff's cable outlet.
10. Plaintiff specially adjusts its devices so that a paying subscriber will receive only the specific programming to which it has subscribed and no other.
11. The transmission of the Premium Programming supplied by Home Box Office, Cinemax, Spotlight and Playboy constitutes a common carrier transmission, (all of which originate outside of Ohio) via the Satcom F3 satellite, the Satcom F4 satellite and the Westar 5 satellite.
12. Defendant has advertised, offered for sale, and sold to the public one or more types of devices consisting of converters, converter/descramblers, converter/decoders, decoders and descramblers, including Oak Industries model M35B, which are capable of, used for and intended to be used for the unauthorized interception and reception of plaintiff's private signals, including the Premium Programming signals.
13. Defendant has sold Oak Industries M35B converter/decoders since at least March 1983, as follows: three in or about June 1983 and four or five additional in the period June 1983-August 1983 for a total of seven or eight or as many as ten from early 1983 to date. In addition defendant recommended to an undetermined number of potential purchasers, numbering between twenty and thirty, that they purchase M35B converter/decoder from another supplier, for which defendant was to receive a portion of the sales price as credit against equipment brought from the supplier.
14. Plaintiff arranges and pays for the reception of the interstate common carrier transmission of the Premium Programming supplied by Home Box Office, Cinemax, Playboy and Spotlight, with the express intent that the transmissions are to be received only by persons who pay to subscribe to plaintiff's Premium Programming service. The plaintiff does not intend that the signals be received by the public at large.
15. Plaintiff's paying subscribers receive Premium Programming through interstate common carrier transmissions by means of the plaintiff's facilities, including the cable network installed by plaintiff.
16. In an attempt to avoid theft of its Premium Programming services, plaintiff scrambles its Premium Programming signals so that an ordinary television set will require a descrambler or decoder, among other things, to receive an intelligible signal.
17. An Oak M35B converting/decoder has a useful life of about seven to ten years.
18. When an unauthorized converter/decoder is connected to a purchaser's television set and plaintiff's cable facility, a purchaser can intercept all of the plaintiff's cable television programming, including Premium Programming signals which are intended solely for the paying subscribers and not for the general public.
19. Once defendant has sold an unauthorized converter/decoder it is virtually impossible for plaintiff to detect the purchasers' unauthorized use of the converter/decoder.
20. Plaintiff has made a substantial and continuing investment to bring Premium Programming to the Cleveland, Ohio area.
21. Under the terms of the authorizations granted to plaintiff by the localities in the Cleveland Ohio, area, the plaintiff is obliged to pay a portion of subscription fees to those localities.
22. Defendant is unable to identify any of the purchasers who bought M35B converter/decoders from him.
23. The jurisdiction of this Court is based on the existence of a federal question under 28 U.S.C. § 1331.
24. Section 605 of the Communication Act of 1934 ("the Act"), 47 U.S.C. § 605 protects radio communications (including television communications, see Allen B. DuMont Laboratories v. Carrol, 184 F.2d 153 (3rd Cir.1950), cert. denied, 340 U.S. 929, 71 S.Ct. 490, 95 L.Ed. 670 (1951)) from unauthorized reception, interception, publication or divulgence except where the broadcast is transmitted for the use of the general public. 47 U.S.C. § 605.1 Subscription television, is not "a communication ... broadcast ... for the use of the general public" within the meaning of § 605 protecting radio communications from unauthorized reception. Chartwell Communications Group v. Westbrook, 637 F.2d 459 (6th Cir.1980).
25. The fact that the plaintiff's programming is transmitted in such a manner that the signal is meaningless without the use of special equipment i.e. converters or converter/decoders, negates a finding that it is intended for use of the general public. The transmissions of plaintiff's programming are private, and not intended to be received by the public at large, but rather are intended to be received only by such persons as are authorized by plaintiff. 47 U.S.C. § 605. Movie Systems v. Heller, 710 F.2d 492 (8th Cir.1983); National Subscription Television v. S & H TV, 644 F.2d 820 (9th Cir.1981); Chartwell Communications Group v. Westbrook, 637 F.2d 459 (6th Cir.1980).
26. Section 605 of the Act also prohibits, inter alia, any person not entitled thereto from receiving or assisting in receiving any interstate or foreign radio communication and using such communication for his own benefit or the benefit of another not entitled thereto. 47 U.S.C. § 605.
27. Defendant's advertisement, offer for sale, sale installation and use of devices capable of, used for, and intended to be used for unauthorized interception and reception of Premium Programming transmissions violates § 605 of the Act. Movie Systems v. Heller, supra; National Subscription Television v. S & H TV, supra; Chartwell Communications Group v. Westbrook, supra. See also Home Box Office, Inc. v. Pay TV of Greater New York, Inc., 467 F.Supp. 525 (E.D.N.Y.1979).
28. Plaintiff utilizes coaxial wire to...
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