Illinois-Indiana Cable Television Ass'n v. Illinois Commerce Commission

• Decision Date: 01 October 1973
• Docket Number: No. 45274,ILLINOIS-INDIANA,45274
• Citation: 55 Ill.2d 205,302 N.E.2d 334
• Parties: , 61 A.L.R.3d 1136, 28 Rad. Reg. 2d (P & F) 1409 CABLE TELEVISION ASSOCIATION, Appellee, v. ILLINOIS COMMERCE COMMISSION, Appellant. CABLE TELEVISION COMPANY OF ILLINOIS et al., Appellants, v. ILLINOIS COMMERCE COMMISSION, Appellee.
• Court: Illinois Supreme Court

Page 334

302 N.E.2d 334

55 Ill.2d 205, 61 A.L.R.3d 1136, 28

Rad. Reg. 2d (P & F) 1409

ILLINOIS-INDIANA CABLE TELEVISION ASSOCIATION, Appellee, v. ILLINOIS COMMERCE COMMISSION, Appellant.

CABLE TELEVISION COMPANY OF ILLINOIS et al., Appellants, v. ILLINOIS COMMERCE COMMISSION, Appellee.

No. 45274.

Supreme Court of Illinois.

Oct. 1, 1973.

Richard R. Zukowski and H. David Rogers, Crystal Lake (Zukowski, Zukowski & Poer, Crystal Lake, of counsel), for Illinois-Indiana Cable Television Association.

William J. Scott, Atty. Gen., Chicago, and Peter A. Fasseas and James R. Sullivan, Asst. Attys. Gen. (Roland S. Homet, Jr., of Washington, D.C., of counsel), for the Illinois Commerce Commission.

Richard L. Curry, Corp. Counsel, Chicago (William R. Quinlan and Richard F. Friedman, Asst. Corp. Counsels, Chicago, of counsel), for amicus curiae, City of Chicago.

DAVIS, Justice:

The Illinois Commerce Commission initiated proceedings to determine if it should exercise regulatory jurisdiction under authority granted by 'An Act concerning public utilities' (hereinafter referred to as the Public Utilities Act) (Ill.Rev.Stat.1971, ch. 111 2/3, par. 1 et seq.) over community antenna television systems, commonly called CATV or cable television. After extensive hearings, the Commission concluded that cable television was a public utility within the definition of section 10.3(b) of the Act and by its interium opinion and order asserted jurisdiction to regulate the industry.

The Illinois-Indiana Cable Television Association (hereinafter referred to as the Association) appealed from this order to the circuit court of McHenry County. At the same time a number of a cable television companies petitioned the same court for a declaratory judgment that the Commission had no authority to regulate cable television systems.

The trial court consolidated the two cases and indicated that, based upon judicial convenience, it would be more appropriate to determine the principal issue in the administrative review proceeding. The court pointed out that the record in the administrative review proceeding was extensive, and a determination in that proceeding rather than a possible ruling based upon a more narrow, limited, or procedural ruling in the declaratory judgment action was desirable.

The trial court thus granted the Commission's motion to dismiss the petition in the declaratory judgment proceeding. An appeal was taken from that order. The trial court also reversed the interim order of the Commission in the administrative review proceeding, thus holding that the Commission had erred in assuming regulatory jurisdiction over cable television. An appeal also was taken from that order. Both appeals were allowed directly to this court under Supreme Court Rule 302(b) (Ill.Rev.Stat.1971, ch. 110A, par. 302(b)) and were consolidated for determination.

The central issue is whether cable television is a public utility under the statutory definition contained in section 10.3 of the Public Utilities Act. Ill.Rev.Stat.1971, ch. 111 2/3, par. 10.3.

The Illinois Commerce Commission has only that jurisdiction conferred upon it by the legislature. (Lambdin v. Commerce Com. (1933), 352 Ill. 104, 106, 185 N.E. 221.) It may not extend its jursidiction, that being a prerogative of the legislature. Thus, if cable television is not within the statutory definition of a public utility, the Commission is without power to assume jurisdiction over such services.

The relevant portions of section 10.3 of the Act are as follows:

"Public utility' means and includes every corporation, company, association, joint stock company or association, firm, partnership or individual, their lessees, trustees, or receivers appointed by any court whatsoever That owns, controls, operates or manages, within this State, directly or indirectly, for public use, Any plant, equipment or property used or to be used for or in connection with, or owns or controls any franchise, license, permit or right to engage in:

B. the transmission of telegraph or telephone messages between points within this State;

* * *.' (Emphasis ours.)

The Commission made the following relevant findings after conducting extensive hearings:

'1. Cable television is a system of delivery of television signals over a grid of coaxial cables possessing a broad frequency bandwidth, which system can also deliver a variety of other video, audio, and data-grade signals. The system as a whole is properly termed 'broadband cable communications.'

3. The business of providing cable television and other forms of broadband cable communications is an engagement 'for public use' in 'the transmission of telegraph or telephone messages within this State', within the meaning of Section 10--3(b) (10.3(b)) of the Public Utilities Act, Ill.Rev.Stats., Ch. 111 2/3, Sec. 1 et seq.

(a) As a matter of practical construction, 'telephone' service within the meaning of the statute has come to mean a total telecommunications service embracing narrowband and broadband transmission of a wide variety of video, audio, and data-grade messages including television signals.

(b) There is at present a significant service overlap between the offerings of cable television and telephone companies, restrained from full competitive relaization by a federal antitrust consent decree entered into by the Bell System and by a cease-and-desist regulation of the Federal Communications Commission affecting independent telephone companies. Neither of these legal restraints is immutable, and present federal policy favors the development of regulated competition for the total telecommunications service each industry is or can become technically equipped to provide.

(c) The huge financial needs of the cable television industry, if it is to meet the objective of wiring the cities and towns of America over the coming decade, will require the adoption of financing techniques similar to those employed by the conventional telephone industry; namely, the floating of high-rated, long-term utility securities.

(d) The methods of operation of the two industries are closely comparable. Both offer a mix of analogue and digital communications. Both have evolved and are evolving from reliance on one dominant medium of transmission to employment of a combination of coaxial cable, wire, and microwave. And the trend in both industries has been and is from the initial offering of party-line service to the development of switched services.'

The Commission argues that its findings of fact are to be accepted by this court if supported by substantial evidence, citing section 68 of the Act (Ill.Rev.Stat.1971, ch. 111 2/3, par. 72). We agree insofar as the contention relates to facts respecting the nature and elements of cable television and its industry. The statutory interpretation of the meaning of the terms 'telegraph or telephone messages' is a question of law for determination by the courts. (Anderson v. City of Park Ridge (1947), 396 Ill. 235, 72 N.E.2d 210; Dwyer v. Dwyer (1937), 366 Ill. 630, 634, 10 N.E.2d 344.) Insofar as the facts found by the Commission are relevant to this determination, they should be considered by the courts. The legal question of the meaning of the words used in the statute is better determined in light of the particular factual setting than in a void. State Public Utilities Com. v. Monarch Refrigerating Co. (1915), 267 Ill. 528, 541, 108 N.E. 716.

The question of whether the words 'telephone or telegraph' as used in the statute can encompass cable television is one of first impression in this State. Similar statutes, however, have been interpreted by the highest courts in other States. In Television Transmission, Inc. v. Public Utilities Com. (1956), 47 Cal.2d 82, 301 P.2d 862, the California Supreme Court had before it the question of whether a cable television system was a public utility under the California constitution and the California Public Utilities Code. The California constitution provided in part: 'Every private corporation * * * owning, operating, managing, or controlling any * * * plant or equipment within this State for * * * the transmission of telephone or telegraph messages * * * either directly or indirectly, to or for the public * * * is hereby declared to be a public utility subject to such control and regulation by the * * * Commission as may be provided by the Legislature, and every class of private corporations * * * hereafter declared by the Legislature to be public utilities shall likewise be subject to such control and regulation.' (Cal.Const. art. XII, sec. 23.) The California legislature further provided that: "Public utility' includes every * * * telephone corporation, telegraph corporation * * * where the service is performed for or the commodity delivered to the public or any portion thereof.' See 47 Cal.2d 82, 85, 301 P.2d 862, 863.

In the California case the cable television company involved in the litigation serviced about 950 television sets. It maintained an antenna at a high elevation to receive available television signals and transmitted signals through a coaxial cable strung on poles owned by utility companies. The cable television company paid the utility companies a fixed charge per pole per year for this service.

The California Public Utilities Commission found that the calbe television company operated as a telephone corporation and was, therefore, subject to its jurisdiction. The court stated that the use of poles, wires and cable in connection with communication did not render the company a telephone corporation unless the use of such facilities was to facilitate communication 'by telephone.' The word, 'telephone' was not defined in the statute.

The California commission urged to the court that television was merely an advanced form of telephony, the art of reproducing sounds at a distance. The court answered:

'It is true that television and telephone have in common the transmission of voices,...