Coxcom, Inc. v. Picerne Real Estate Group
| Decision Date | 21 August 2003 |
| Docket Number | C.A. No. PB 02-1537. |
| Parties | COXCOM, INC. d/b/a Cox Communications Rhode Island, Plaintiff v. PICERNE REAL ESTATE GROUP, STARLIGHT COMMUNICATIONS HOLDING, INC. I and STARLIGHT COMMUNICATIONS HOLDING ISP, INC., Defendants. |
| Court | Rhode Island Superior Court |
Before this Court is Plaintiff's, CoxCom, Inc., motion for declaratory judgment and for a preliminary injunction and Defendants' — Picerne Real Estate Group, Starlight Communications Holding, Inc. I and Starlight Communications Holding ISP, Inc. (Defendants) — cross-motion for summary judgment and declaratory judgment. Opposing parties have timely filed objections to each respective motion.
CoxCom, Inc. (Cox)1 owns and operates a franchised cable television system in Rhode Island. Cox provides subscribers with services different from those provided by "free" standard television broadcasting. Specifically, Cox provides basic cable services, which include local broadcast channels, imported signals, and other programming to subscribers for a monthly fee. Additionally, Cox provides premium programming, such as Showtime, Home Box Office (HBO), and Cinemax, for an additional monthly fee.2 The programming companies deliver their programming to a satellite. Cox then receives the signals by means of satellite antenna dishes or "earth stations" and distributes the programming to its subscribers via its coaxial cable television system.
Rhode Island is divided into 13 "Service Areas" for the purpose of granting cable franchises.3 The Division of Public Utilities and Carriers (DPUC) serves as the franchising authority for the State of Rhode Island. In accordance with R.I. Gen. Laws §39-19-4, the DPUC issues a "Cable Television Compliance Order Certificate" (Certificate) to cable operators who meet the requisite criteria for each Service Area. As provided in Section 3.1 of the Rules Governing Community Antenna Television Systems of the Division of Public Utilities and Carriers (CATV Rules), each Certificate is for "an indefinite term."4 Pursuant to Rule 4.1(e) of the CATV Rules, Certificates may not be transferred or assigned. Furthermore, Rule 4.1(e) requires that when one cable company buys out another, the existing Certificate is returned and a new Certificate is issued. Specifically, the rule states, "Upon approval of any such transfer, sale, or assignment, the purchaser, transferee, or assignee shall return all certificates to the Administrator, who shall then issue new certificates in the name of the new certificate holder."
Picerne Realty Group, Inc. (Picerne)5 is the owner or manager of 34 or 366 multi-family properties (Properties) in Rhode Island.7 The record indicates that since 1982 Picerne has allowed Cox to provide cable service to the tenants of the Properties. Between 1982 and 1990, the owners of at least 27 of Picerne's Properties entered into written contracts for cable television service with predecessors-in-interest to Cox.8 The record further indicates that Cox, in 1998, entered into a written Agreement with the owner of one of Picerne's Properties, known as "Shady Oaks." These contracts or "Agreements" bore certain similarities and generally allowed the cable provider, whether Cox or one of its predecessors-in-interest, to provide cable television service to the residents of the Properties. The Agreements also contained certain provisions relating to the installation, maintenance, usage, and ownership of the cable wires and equipment.
The record indicates that between 1982 and 1990, when predecessors-in-interest to Cox entered into the Agreements with respect to Properties now owned or operated by Picerne, Cox did not have Certificates to serve any of the Service Areas where the Properties are located. Apparently, sometime after 1990, Cox became the certified cable television service provider in all 13 of Rhode Island's Service Areas.9
In order for subscribers to a cable television provider, such as Cox, to receive transmissions for viewing, certain equipment, wiring, or other items known as "facilities" are necessary. These facilities include drop cables10, trunk cables11, taps12, pedestals13, and junction boxes14. As of July 2000, all of these facilities had been installed upon each of the Picerne Properties.15
In the summer of 200016, Starlight Communications Holding, Inc. and Starlight Communications Holding ISP, Inc. (Starlight)17 an affiliate of Picerne, introduced a competitive video service in Rhode Island. Starlight constructed a satellite television receiving facility at one of the Properties18 and entered into an agreement with Verizon to have the signals distributed by fiber optic lines from that facility to 16 other Properties. Verizon's fiber optic line terminates at a central point on each of the 17 properties. The record reflects that Starlight installed its own trunk cables on each of the 17 properties running from the fiber optic termination point to each building on the property. The record also reflects that Starlight installed its own taps, pedestals, and junction boxes at the end of its trunk cables. However, Starlight used the existing drop cables at the Properties to provide its service. Specifically, Starlight connected its subscribers to Starlight's facilities by disconnecting the subscriber's drop cable from Cox's taps and reconnecting that same drop cable to Starlight's taps.
That same summer, on July 27, 200019, counsel for Picerne sent a letter to Cox, asking Cox to produce the plans that had been used to install the facilities and invoking the rules for the disposition of home run wiring20 on a "unit by unit" basis under 47 C.F.R. §76.804(b) (July 27, 2000 Notice). Paragraph (b) provides mechanisms by which a multichannel video programming distributor (MVPD)21 may elect to sell, remove, or abandon existing home run wiring in a multiple dwelling unit (MDU). Pursuant to 47 C.F.R. §76.804(c), "the provisions in paragraph . . . (b) of that section shall apply unless and until the incumbent provider (Cox) obtains a court ruling or an injunction enjoining its displacement within 45 days following the initial notice."22
One month later, on August 23rd, Cox responded with a letter which indicated that contracts between Picerne and Cox precluded Starlight from using any equipment at eight particular Properties.23 The letter further indicated that Picerne should cease interfering with Cox's provision of services, and asserted that Cox would act to protect its contractual rights if interference continued.
Within one week of the Cox responsive letter, on August 29th, counsel for Picerne and Cox met in Atlanta to discuss the matter, and agreed to meet in Rhode Island thereafter for further discussions. The record indicates that following this meeting, counsel for the Defendants sent Cox a letter on August 31st, indicating that until September 14th, Starlight would suspend any further construction activity pending the outcome of another scheduled meeting between counsel on September 11th. (September 11th was the day the 45-day deadline established in 47 C.F.R. §76.804(c) and invoked by the July 27th letter would expire).
In the meantime, on September 7th, Cox and Picerne entered into a written agreement (Extension Agreement) to extend the deadline for ten days, until September 21st. The Extension Agreement also provided that Cox waived any and all rights to be the exclusive provider of any television or communications services at the Properties. The Extension Agreement further provided that Starlight and Picerne may have access to and use of the cable home wiring at the Properties, provided that Cox have the opportunity to exercise any existing rights under the Code of Federal Regulations before Starlight uses the cable home wiring. Additionally, the Extension Agreement contained provisions for the exchange between counsel of certain documents, including any contracts Cox claims applies to the Properties.
Subsequently, the September 11th meeting between counsel took place, apparently leaving unresolved the dispute over usage and ownership of the drop cables.
On February 14, 2002, counsel for Picerne sent a letter to Cox, and as it had previously done on July 27th, Picerne invoked the rules for the disposition of Home Run Wiring24 on a "unit by unit" basis (February 14, 2002 Notice) under 47 C.F.R. §76.804(b).
On March 25, 2002, Cox filed a verified complaint for declaratory and injunctive relief together with a motion for a temporary restraining order and preliminary and permanent injunctive relief. The Plaintiff's motion for a temporary restraining order was heard before this Court on March 27, 2002. After oral argument, this Court held that any deadline contained in 47 C.F.R. §76.804(c) was extended until after the Court ruled on the request for a preliminary injunction. The Court also held that the parties must maintain the status quo at the Properties. The order containing these findings was entered on April 4, 2002.
On June 17, 2002, the Defendants filed an answer and counterclaim. Thereafter, on November 1, 2002, the Defendant Picerne gave the Plaintiff a "building by building" notice (November 1, 2002 Notice) pursuant to 47 C.F.R. §76.804(a). This letter also advised the Plaintiff that Picerne was terminating any and all licenses for Cox's access to the Properties. Additionally, the letter referenced the option available to Cox to exercise its statutory access rights under R.I. Gen. Laws § 39-19-10. According to the letter, the termination was to be effective the later of February 1, 2003 or the date this Court decides the Plaintiff's pending injunction motion.
Later that week, on November 7, 2002, the Defendants filed a memorandum of law in opposition to the Plaintiff's motion for a preliminary injunction and Defendant Picerne filed cross-motions for partial summary judgment and a declaration of ownership.
On November 19, 2002,...
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