Conford, Michels and Pressler. The opinion of the court was delivered by Conford, P.J.A.D.
[154 NJSuper Page 4] Appellants are a group of subsidiaries, directly or indirectly, of Teleprompter Corporation (collectively referred to as "Teleprompter" or "petitioner"). They severally conduct cable television distribution services in Ocean City, Wildwood, Ventnor and Vineland. They appeal from a determination and order of the Board of Public Utility Commissioners dismissing their application for increases in rates and charges for the services they render. That order and determination was, in turn, based upon the report by a hearing examiner in the Office of Cable Television of the Board recommending the dismissal of the petition, on motion of rate counsel in the office of the Public
Advocate, after extensive submission of proofs in support of the application for rate increases.
Teleprompter acquired these companies from other cable television (CATV) companies prior to the enactment in this State of the Cable Television Act, L. 1972, c. 186 (N.J.S.A. 48:5A-1 et seq.). They had been, and were continuing, as of the filing of the petitions herein in 1974, to operate under franchise granted and rate schedules approved by the individual municipalities, subject to the effect of the new law after its adoption. The Cable Television Act declares that the "rates, services and operations of cable television companies in this State are affected with a public interest." N.J.S.A. 48:5A-2(a); that such companies should be regulated in the interest of the public, id. at (b), and that among the objects of such regulation is "to provide just and reasonable rates and charges for cable television system services without unjust discrimination * * *," id. at (c). An Office of Cable Television, headed by a director, is empowered to administer the regulation of such companies under the Board. N.J.S.A. 48:5A-4 to 7.
The Board, through the Office, is directed to "prescribe just and reasonable rates, charges and classifications for the services rendered by a CATV company * * *" and "from time to time [to] cause the established rates and rate schedules of each CATV company * * * to be reviewed," and if it appears that they may be excessive or unreasonable, to require the company to establish to its satisfaction that such rates are just, reasonable and not excessive. After hearing, upon notice, rate schedules may be amended and superseded. N.J.S.A. 48:5A-11 (a), (b), (c).
Under the act an initial consent to operate in any municipality must be obtained from that municipality. N.J.S.A. 48:5A-22 et seq. Applications must, among other things, specify a schedule of proposed rates of CATV service which shall not be altered for the term of consent except by application to the Board for amendment after public
hearing or as a result of proceedings under N.J.S.A. 48:5A-16 or 11. N.J.S.A. 48:5A-28(g).
After the holding of 12 formal hearing sessions on Teleprompter's petition between May 2, 1975 and September 8, 1975, rate counsel in the Public Advocate's office moved to dismiss the application on the ground that the exhibits and testimony submitted by petitioner in support of its application improperly included, in the statements of the value of the company assets upon which a fair rate of return was sought, the item of "good will," represented in that data as "excess of purchase price [from prior owners] over underlying value of net assets." The position of the movant was that if such good will were excluded from the proposed rate base, the net return to the companies would be adequate and fair. After consideration of briefs and argument the hearing officer rendered a written decision essentially agreeing with the motion and recommending dismissal of the application. He projected a detailed analysis, from petitioner's own books, of the result of deducting the aforesaid "excess of purchase price" (which he denominated good will) from the gross value of assets of the several companies, along with consequent appropriate deductions of interest and other expenses from operating expenses. He accepted petitioner's expert's analysis of the equity portion of Teleprompter's capital structure as being 41.6% thereof. Applying that percentage to the company's consolidated value base as previously adjusted by him, he found the adjusted net income on a consolidated corporate basis to produce a return of 18.15%, which he concluded not to constitute an unjust and unreasonably insufficient return to the company. As noted, these determinations were accepted by the director and the Board after considering exceptions filed by Teleprompter.
Teleprompter's first complaint on appeal is that it has been denied "due process" in that it has been denied the
opportunity to be fully heard on its application and to be afforded "notice as to the ...