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Princeton Cablevision Inc. v. Union Valley Corp.

December 29, 1983


Cohen, J.s.c.


[195 NJSuper Page 261] This case involves a franchised cable antenna television (CATV) system, an uncertificated satellite master antenna television (SMATV) system that seeks to serve a condominium development in the CATV's franchise area, the condominium developer whose owners also own the SMATV system, and the Board of Public Utility Commissioners (BPU), the agency that

oversees New Jersey's cable television industry. N.J.S.A. 48:5A-1 et seq. The focus of the litigation is on a recent decision of the Federal Communications Commission and its effect on the parties. The decision was to preempt all state regulation of SMATV systems.

Some definitions are liminally necessary. A CATV system is defined by the New Jersey statute. It is

any facility . . . operated to perform the service of receiving and amplifying the signals broadcast by one or more television stations and redistributing such signals by wire, cable or other device or means . . . to members of the public who subscribe to such service, or distributing through its facility any television signals whether broadcast or not . . . . [ N.J.S.A. 48:5A-3(d) ].

SMATV systems are described by the Federal Communications Commission:

An SMATV system normally serves residents of private multi-unit dwellings. It consists of a receive-only satellite earth station that provides premium programming signals transmitted to the receive station via satellite and a master antenna for the receipt of over-the-air television broadcast signals. These signals are combined and distributed through cable to subscribers residing in the multi-unit dwellings. [ In re Earth Satellite Communications, Inc., CSR-2347, F.C.C. 83-526 (1983) ].

Plaintiff has a local franchise and a non-exclusive certificate of approval from the BPU to operate a CATV system throughout Monroe Township. Defendant, Union Valley Corporation, is the developer of a condominium housing project located there and known as Communities of Concordia. Defendant, Communities of Concordia Homeowners' Association, is the association that was established, as required by statute, to administer and manage the condominium community. N.J.S.A. 46:8B-9(k), -12. Defendant, Communities of Concordia Television Corporation, is the owner of an SMATV system it intends to operate in the condominium community. All defendants are owned or controlled by the same principals. They are represented by one attorney in this lawsuit and take the same position on all litigated issues.

Communities of Concordia is an adult community which is planned for a total of some 2850 dwelling units. In early 1983, when less than 200 units were occupied, Plaintiff filed the

complaint that started this suit. Its gravamen was that an SMATV system was being constructed to serve the condominium community without BPU approval and therefore should be enjoined. The BPU and the New Jersey Cable Television Association intervened, generally in support of plaintiff's positions.

In February, I tentatively concluded that the SMATV was subject to New Jersey's Cable Television Act. I therefore temporarily enjoined expansion of the system until BPU approval could be obtained. I felt it unnecessarily harsh, however, to terminate cable service to current subscribers. In April, the BPU's Office of Cable Television granted temporary operating authority to the SMATV system for current subscribers and persons who had already negotiated for condominium purchases. By its terms, the temporary authority would terminate upon the entry by this court of a permanent injunction or upon disposition by BPU of an application that the SMATV had made for approval to operate.

In the Autumn, defendants moved to dismiss this suit. Since they were preliminarily halted by BPU and since they had applied for a certificate of approval from BPU, they argued, all further proceedings should take place in that agency. Plaintiff also moved. It sought an order for final judgment barring construction and operation of the SMATV system without BPU approval and an order requiring defendants to afford it access to the condominium community for the purpose of installing its CATV facilities.

While the motion was pending, I was advised that the Federal Communications Commission was about to render a decision that would have significant effect on the outcome of the litigation here. The decision, In re Earth Satellite Communications, Inc., CSR-2347, F.C.C. 83-526 (1983), was released on November 17.

Earth Satellite arose out of New Jersey. Suburban Cablevision was franchised and certificated to operate a CATV system

in East Orange. It was refused access to an apartment complex because the owner had already made arrangements with Earth Satellite Communications, Inc., for installation of an SMATV system solely to serve the complex. Earth Satellite had no municipal franchise or BPU certificate of approval. Suburban Cablevision sought judicial protection. It obtained favorable rulings that were founded on the conclusion that the restrictions of the Cable Television Act applied to the SMATV system. Earth Satellite then sought a declaratory ruling from the Federal Communications Commission.

The question before the FCC in Earth Satellite was whether it should preempt New Jersey's Cable Television Act so as to bar its application to SMATV systems. It said that there was a significant federal concern with the unfettered development of interstate transmission of satellite signals and of facilities for their reception. It therefore decided to preempt all state and local regulation of SMATVs to avoid frustration of that development. It focused its disapproval on barriers created by state licensing and regulation and expressed its adherence to "open entry policies in the satellite field for the purpose of creating a more diverse and competitive telecommunications environment."

The impact of Earth Satellite on the present case is to free the Concordia SMATV system from any local or state control of its operations. It is, further, to require the vacation of my preliminary injunction barring extension of the SMATV system and to obviate all application proceedings pending before the BPU. As to the authority of FCC to preempt state action in areas to which its authority extends, see Fidelity Federal Sav. & Loan Ass'n v. De La Questa, 458 U.S. 141, 102 S. Ct. 3014, 73 L. Ed. 2d 664 (1982); New York Commission of Cable Television v. FCC, 669 F.2d 58 (2 Cir.1982).

What remains? Three issues of importance survive the Earth Satellite decision. The first is whether ยง 49 of the Cable Television Act grants ...

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